LINCOLN NATIONAL CORPORATION

SCHEDULE II – CONDENSED FINANCIAL INFORMATION OF REGISTRANT

BALANCE SHEETS

(Parent Company Only) (in millions, except share data)



	As of December 31,
	2015		2014

ASSETS
Investments in subsidiaries (1)	$	16,499	$	18,488
Derivative investments		253		298
Other investments		40		5
Cash and invested cash		681		666
Loans and accrued interest to subsidiaries (1)		2,522		2,495
Other assets		32		47
Total assets	$	20,027	$	21,999

LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Common dividends payable	$	61	$	51
Short-term debt		-		250
Long-term debt		5,331		5,021
Loans from subsidiaries (1)		521		453
Payables for collateral on investments		94		96
Other liabilities		403		388
Total liabilities		6,410		6,259

Contingencies and Commitments

Stockholders’ Equity
Common stock – 800,000,000 shares authorized		6,298		6,622
Retained earnings		6,474		6,022
Accumulated other comprehensive income (loss)		845		3,096
Total stockholders’ equity		13,617		15,740
Total liabilities and stockholders’ equity	$	20,027	$	21,999

⁽¹⁾

Eliminated in consolidation.

LINCOLN NATIONAL CORPORATION

SCHEDULE II – CONDENSED FINANCIAL INFORMATION OF REGISTRANT (Continued)

STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Parent Company Only) (in millions)



	For the Years Ended December 31,
	2015			2014			2013
Revenues
Dividends from subsidiaries (1)	$	1,175		$	791		$	725
Interest from subsidiaries (1)		111			125			128
Net investment income		-			1			-
Realized gain (loss)		-			1			(9	)
Other revenues		25			-			5
Total revenues		1,311			918			849
Expenses
Operating and administrative		38			39			46
Interest – subsidiaries (1)		7			6			5
Interest – other		270			280			282
Total expenses		315			325			333
Income (loss) before federal income taxes, equity in income (loss) of
subsidiaries, less dividends		996			593			516
Federal income tax expense (benefit)		(66	)		(77	)		(73	)
Income (loss) before equity in income (loss) of subsidiaries, less dividends		1,062			670			589
Equity in income (loss) of subsidiaries, less dividends		92			845			655
Net income (loss)		1,154			1,515			1,244
Other comprehensive income (loss), net of tax:
Unrealized investment gains (losses)		(2,229	)		1,591			(2,335	)
Foreign currency translation adjustment		(2	)		2			(1	)
Funded status of employee benefit plans		(20	)		(60	)		91
Total other comprehensive income (loss), net of tax		(2,251	)		1,533			(2,245	)
Comprehensive income (loss)	$	(1,097	)	$	3,048		$	(1,001	)

⁽¹⁾

Eliminated in consolidation.

LINCOLN NATIONAL CORPORATION

SCHEDULE II – CONDENSED FINANCIAL INFORMATION OF REGISTRANT (Continued)

STATEMENTS OF CASH FLOWS

(Parent Company Only) (in millions)



	For the Years Ended December 31,
	2015			2014			2013
Cash Flows from Operating Activities
Net income (loss)	$	1,154		$	1,515		$	1,244
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Equity in (income) loss of subsidiaries greater than distributions (1)		(92	)		(845	)		(655	)
Realized (gain) loss		-			(1	)		9
Change in federal income tax accruals		106			(32	)		63
Other		(74	)		(1	)		(10	)
Net cash provided by (used in) operating activities		1,094			636			651

Cash Flows from Investing Activities
Sales or maturities of investments		-			50			-
Investment acquisition		-			-			(25	)
Capital contribution to subsidiaries (1)		(75	)		(5	)		(75	)
Increase (decrease) in collateral on investments		(38	)		(278	)		315
Net cash provided by (used in) investing activities		(113	)		(233	)		215

Cash Flows from Financing Activities
Payment of long-term debt, including current maturities		(250	)		(500	)		-
Issuance of long-term debt, net of issuance costs		300			-			400
Increase (decrease) in loans from subsidiaries, net (1)		68			(7	)		405
Increase (decrease) in loans to subsidiaries, net (1)		(27	)		-			(410	)
Common stock issued for benefit plans and excess tax benefits		47			32			32
Repurchase of common stock		(900	)		(650	)		(450	)
Dividends paid to common and preferred stockholders		(204	)		(170	)		(129	)
Net cash provided by (used in) financing activities		(966	)		(1,295	)		(152	)
Net increase (decrease) in cash and invested cash		15			(892	)		714
Cash and invested cash as of beginning-of-year		666			1,558			844
Cash and invested cash as of end-of-year	$	681		$	666		$	1,558

⁽¹⁾

Eliminated in consolidation.