SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

12 Months Ended

Dec. 31, 2017

Condensed Financial Information Of Registrant [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,
	2017		2016
ASSETS
Investments in subsidiaries (1)	$	20,488	$	17,576
Derivative investments		187		213
Other investments		77		51
Cash and invested cash		620		611
Loans and accrued interest to subsidiaries (1)		2,328		2,542
Other assets		16		27
Total assets	$	23,716	$	21,020
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Common dividends payable	$	72	$	66
Short-term debt		450		-
Long-term debt		4,894		5,343
Loans from subsidiaries (1)		476		625
Payables for collateral on investments		65		81
Other liabilities		437		427
Total liabilities		6,394		6,542
Contingencies and Commitments
Stockholders’ Equity
Preferred stock – 10,000,000 shares authorized		-		-
Common stock – 800,000,000 shares authorized		5,693		5,869
Retained earnings		8,399		7,043
Accumulated other comprehensive income (loss)		3,230		1,566
Total stockholders’ equity		17,322		14,478
Total liabilities and stockholders’ equity	$	23,716	$	21,020

⁽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,
	2017			2016			2015
Revenues
Dividends from subsidiaries (1)	$	1,069		$	1,035		$	1,175
Interest from subsidiaries (1)		133			123			111
Net investment income		2			3			-
Realized gain (loss)		(3	)		-			-
Other revenues		-			-			25
Total revenues		1,201			1,161			1,311
Expenses
Operating and administrative expenses		40			46			38
Interest – subsidiaries (1)		21			16			7
Interest – other		247			327			270
Total expenses		308			389			315
Income (loss) before federal income taxes, equity in income (loss) of
subsidiaries, less dividends		893			772			996
Federal income tax expense (benefit)		(20	)		(95	)		(66	)
Income (loss) before equity in income (loss) of subsidiaries, less dividends		913			867			1,062
Equity in income (loss) of subsidiaries, less dividends		1,166			325			92
Net income (loss)		2,079			1,192			1,154
Other comprehensive income (loss), net of tax:
Unrealized investment gains (losses)		1,643			709			(2,229	)
Foreign currency translation adjustment		13			(22	)		(2	)
Funded status of employee benefit plans		8			34			(20	)
Total other comprehensive income (loss), net of tax		1,664			721			(2,251	)
Comprehensive income (loss)	$	3,743		$	1,913		$	(1,097	)

⁽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,
	2017			2016			2015
Cash Flows from Operating Activities
Net income (loss)	$	2,079		$	1,192		$	1,154
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Equity in (income) loss of subsidiaries greater than distributions (1)		(1,166	)		(325	)		(92	)
Realized (gain) loss		3			-			-
Change in federal income tax accruals		107			120			106
Other		20			54			(74	)
Net cash provided by (used in) operating activities		1,043			1,041			1,094
Cash Flows from Investing Activities
Net change in collateral on derivatives		3			-			-
Capital contribution to subsidiaries (1)		(60	)		-			(75	)
Increase (decrease) in collateral on investments		(45	)		(23	)		(38	)
Net cash provided by (used in) investing activities		(102	)		(23	)		(113	)
Cash Flows from Financing Activities
Payment of long-term debt, including current maturities		-			(350	)		(250	)
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)		(230	)		37			68
Increase (decrease) in loans to subsidiaries, net (1)		239			(20	)		(27	)
Common stock issued for benefit plans		46			26			47
Repurchase of common stock		(725	)		(879	)		(900	)
Dividends paid to common stockholders		(262	)		(238	)		(204	)
Net cash provided by (used in) financing activities		(932	)		(1,088	)		(966	)
Net increase (decrease) in cash and invested cash		9			(70	)		15
Cash and invested cash as of beginning-of-year		611			681			666
Cash and invested cash as of end-of-year	$	620		$	611		$	681

⁽¹⁾ Eliminated in consolidation.