SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

12 Months Ended

Dec. 31, 2016

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed financial information of registrant

LINCOLN NATIONAL CORPORATION

SCHEDULE II – CONDENSED FINANCIAL INFORMATION OF REGISTRANT

BALANCE SHEETS

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

	As of December 31,
	2016		2015
ASSETS
Investments in subsidiaries (1)	$	17,576	$	16,499
Derivative investments		213		253
Other investments		51		40
Cash and invested cash		611		681
Loans and accrued interest to subsidiaries (1)		2,542		2,522
Other assets		27		3
Total assets	$	21,020	$	19,998
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Common dividends payable	$	66	$	61
Long-term debt		5,343		5,302
Loans from subsidiaries (1)		625		521
Payables for collateral on investments		81		94
Other liabilities		427		403
Total liabilities		6,542		6,381
Contingencies and Commitments
Stockholders’ Equity
Preferred stock – 10,000,000 shares authorized		-		-
Common stock – 800,000,000 shares authorized		5,869		6,298
Retained earnings		7,043		6,474
Accumulated other comprehensive income (loss)		1,566		845
Total stockholders’ equity		14,478		13,617
Total liabilities and stockholders’ equity	$	21,020	$	19,998

⁽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,
	2016			2015			2014
Revenues
Dividends from subsidiaries (1)	$	1,035		$	1,175		$	791
Interest from subsidiaries (1)		123			111			125
Net investment income		3			-			1
Realized gain (loss)		-			-			1
Other revenues		-			25			-
Total revenues		1,161			1,311			918
Expenses
Operating and administrative expenses		46			38			39
Interest – subsidiaries (1)		16			7			6
Interest – other		327			270			280
Total expenses		389			315			325
Income (loss) before federal income taxes, equity in income (loss) of
subsidiaries, less dividends		772			996			593
Federal income tax expense (benefit)		(95	)		(66	)		(77	)
Income (loss) before equity in income (loss) of subsidiaries, less dividends		867			1,062			670
Equity in income (loss) of subsidiaries, less dividends		325			92			845
Net income (loss)		1,192			1,154			1,515
Other comprehensive income (loss), net of tax:
Unrealized investment gains (losses)		709			(2,229	)		1,591
Foreign currency translation adjustment		(22	)		(2	)		2
Funded status of employee benefit plans		34			(20	)		(60	)
Total other comprehensive income (loss), net of tax		721			(2,251	)		1,533
Comprehensive income (loss)	$	1,913		$	(1,097	)	$	3,048

⁽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,
	2016			2015			2014
Cash Flows from Operating Activities
Net income (loss)	$	1,192		$	1,154		$	1,515
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Equity in (income) loss of subsidiaries greater than distributions (1)		(325	)		(92	)		(845	)
Realized (gain) loss		-			-			(1	)
Change in federal income tax accruals		120			106			(32	)
Other		54			(74	)		(1	)
Net cash provided by (used in) operating activities		1,041			1,094			636
Cash Flows from Investing Activities
Sales or maturities of investments		-			-			50
Capital contribution to subsidiaries (1)		-			(75	)		(5	)
Increase (decrease) in collateral on investments		(23	)		(38	)		(278	)
Net cash provided by (used in) investing activities		(23	)		(113	)		(233	)
Cash Flows from Financing Activities
Payment of long-term debt, including current maturities		(350	)		(250	)		(500	)
Issuance of long-term debt, net of issuance costs		395			300			-
Payment related to early extinguishment of debt		(59	)		-			-
Increase (decrease) in loans from subsidiaries, net (1)		37			68			(7	)
Increase (decrease) in loans to subsidiaries, net (1)		(20	)		(27	)		-
Common stock issued for benefit plans and excess tax benefits		26			47			32
Repurchase of common stock		(879	)		(900	)		(650	)
Dividends paid to common stockholders		(238	)		(204	)		(170	)
Net cash provided by (used in) financing activities		(1,088	)		(966	)		(1,295	)
Net increase (decrease) in cash and invested cash		(70	)		15			(892	)
Cash and invested cash as of beginning-of-year		681			666			1,558
Cash and invested cash as of end-of-year	$	611		$	681		$	666

⁽¹⁾ Eliminated in consolidation.