Shares and Stockholders' Equity

6 Months Ended

Jun. 30, 2022

Shares and Stockholders' Equity [Abstract]

Shares and Stockholders' Equity

11. Shares and Stockholders’ Equity

Common Shares

The changes in our common stock (number of shares) were as follows:

	For the Three				For the Six
	Months Ended				Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Common Stock
Balance as of beginning-of-period	171,890,974		191,149,192		177,193,515		192,329,691
Stock compensation/issued for benefit plans	161,566		171,688		676,421		882,826
Retirement/cancellation of shares	(1,828,424	)	(2,230,932	)	(7,645,820	)	(4,122,569	)
Balance as of end-of-period	170,224,116		189,089,948		170,224,116		189,089,948
Common Stock as of End-of-Period
Basic basis	170,224,116		189,089,948		170,224,116		189,089,948
Diluted basis	171,556,357		191,389,750		171,556,357		191,389,750

Our common stock is without par value.

Average Shares

A reconciliation of the denominator (number of shares) in the calculations of basic and diluted earnings (loss) per common share was as follows:

	For the Three				For the Six
	Months Ended				Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Weighted-average shares, as used in basic calculation	171,130,192		189,987,670		172,633,482		190,878,951
Shares to cover non-vested stock	895,347		1,278,175		1,127,609		1,133,618
Average stock options outstanding during the period	1,031,878		1,902,854		1,664,374		1,483,184
Assumed acquisition of shares with assumed
proceeds and benefits from exercising stock
options (at average market price for the period)	(829,921	)	(1,462,891	)	(1,327,773	)	(1,114,026	)
Shares repurchasable from measured but
unrecognized stock option expense	(12,772	)	(38,204	)	(42,013	)	(19,715	)
Average deferred compensation shares	492,269		534,794		506,740		-
Weighted-average shares, as used in diluted calculation	172,706,993		192,202,398		174,562,419		192,362,012

In the event the average market price of LNC common stock exceeds the issue price of stock options and the options have a dilutive effect to our earnings per share (“EPS”), such options will be shown in the table above.

We have participants in our deferred compensation plans who selected LNC stock as the measure for the investment return attributable to all or a portion of their deferral amounts. This obligation is settled in either cash or LNC stock pursuant to the applicable plan document. We exclude deferred units of LNC stock that are antidilutive from our diluted earnings per share calculation. The mark-to-market adjustment of these deferred units excluded from our diluted earnings per share calculation was $7 million for the three and six months ended June 30, 2022.

AOCI

The following summarizes the components and changes in AOCI (in millions):

	For the Six
	Months Ended
	June 30,
	2022			2021
Unrealized Gain (Loss) on Fixed Maturity AFS Securities and Certain Other
Investments
Balance as of beginning-of-year	$	6,777		$	9,611
Unrealized holding gains (losses) arising during the period		(19,862	)		(3,329	)
Change in foreign currency exchange rate adjustment		(370	)		(39	)
Change in DAC, VOBA, DSI, future contract benefits and other contract holder funds		6,030			1,345
Income tax benefit (expense)		3,030			429
Less:
Reclassification adjustment for gains (losses) included in net income (loss)		(4	)		(2	)
Associated amortization of DAC, VOBA, DSI and DFEL		(6	)		(9	)
Income tax benefit (expense)		2			2
Balance as of end-of-period	$	(4,387	)	$	8,026
Unrealized Gain (Loss) on Derivative Instruments
Balance as of beginning-of-year	$	(103	)	$	(402	)
Unrealized holding gains (losses) arising during the period		126			140
Change in foreign currency exchange rate adjustment		373			45
Change in DAC, VOBA, DSI and DFEL		13			(11	)
Income tax benefit (expense)		(107	)		(36	)
Less:
Reclassification adjustment for gains (losses) included in net income (loss)		25			8
Associated amortization of DAC, VOBA, DSI and DFEL		(1	)		(1	)
Income tax benefit (expense)		(5	)		(1	)
Balance as of end-of-period	$	283		$	(270	)
Foreign Currency Translation Adjustment
Balance as of beginning-of-year	$	(14	)	$	(12	)
Foreign currency translation adjustment arising during the period		(18	)		2
Income tax benefit (expense)		(1	)		-
Balance as of end-of-period	$	(33	)	$	(10	)
Funded Status of Employee Benefit Plans
Balance as of beginning-of-year	$	(219	)	$	(266	)
Adjustment arising during the period		13			(1	)
Balance as of end-of-period	$	(206	)	$	(267	)

The following summarizes the reclassifications out of AOCI (in millions) and the associated line item in the Consolidated Statements of Comprehensive Income (Loss):

	For the Six
	Months Ended
	June 30,
	2022			2021
Unrealized Gain (Loss) on Fixed Maturity AFS
Securities and Certain Other Investments
Gross reclassification	$	(4	)	$	(2	)	Realized gain (loss)
Associated amortization of DAC,
VOBA, DSI and DFEL		(6	)		(9	)	Realized gain (loss)
Reclassification before income
tax benefit (expense)		(10	)		(11	)	Income (loss) before taxes
Income tax benefit (expense)		2			2		Federal income tax expense (benefit)
Reclassification, net of income tax	$	(8	)	$	(9	)	Net income (loss)
Unrealized Gain (Loss) on Derivative Instruments
Gross reclassifications:
Interest rate contracts	$	1		$	1		Net investment income
Interest rate contracts		(10	)		(12	)	Interest and debt expense
Foreign currency contracts		30			21		Net investment income
Foreign currency contracts		4			(2	)	Realized gain (loss)
Total gross reclassifications		25			8
Associated amortization of DAC,							Commissions and other
VOBA, DSI and DFEL		(1	)		(1	)	expenses
Reclassifications before income
tax benefit (expense)		24			7		Income (loss) before taxes
Income tax benefit (expense)		(5	)		(1	)	Federal income tax expense (benefit)
Reclassifications, net of income tax	$	19		$	6		Net income (loss)