Nature of Operations, Basis of Presentation and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2022

Nature of Operations, Basis of Presentation and Summary of Significant Accounting Policies [Abstract]

Summary of Restated Consolidated Statements

LINCOLN NATIONAL CORPORATION

CONSOLIDATED BALANCE SHEETS

(in millions, except share data)

	As of December 31, 2021
	As
	Previously		Restatement			As
	Reported		Impacts			Restated
ASSETS
Investments:
Fixed maturity available-for-sale securities, at fair value
(amortized cost: 2021 - $105,142; allowance for credit losses: 2021 - $19)	$	118,746	$	(35	)	$	118,711
Trading securities		4,482		(22	)		4,460
Equity securities		318		57			375
Mortgage loans on real estate, net of allowance for credit losses
(portion at fair value: 2021 - $739)		17,991		-			17,991
Policy loans		2,364		-			2,364
Derivative investments		5,437		260			5,697
Other investments		4,292		(4	)		4,288
Total investments		153,630		256			153,886
Cash and invested cash		2,612		-			2,612
Deferred acquisition costs and value of business acquired		6,081		2			6,083
Accrued investment income		1,189		-			1,189
Reinsurance recoverables, net of allowance for credit losses		20,295		-			20,295
Goodwill		1,778		-			1,778
Other assets		19,133		(614	)		18,519
Separate account assets		182,583		-			182,583
Total assets	$	387,301	$	(356	)	$	386,945
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Future contract benefits	$	41,030	$	-		$	41,030
Other contract holder funds		111,702		8			111,710
Short-term debt		300		-			300
Long-term debt		6,325		-			6,325
Payables for collateral on investments		8,946		-			8,946
Other liabilities		16,143		(846	)		15,297
Separate account liabilities		182,583		-			182,583
Total liabilities		367,029		(838	)		366,191
Contingencies and Commitments (See Note 13)
Stockholders’ Equity
Preferred stock – 10,000,000 shares authorized		-		-			-
Common stock – 800,000,000 shares authorized;
177,193,515 shares issued and outstanding as of December 31, 2021		4,735		-			4,735
Retained earnings		9,096		482			9,578
Accumulated other comprehensive income (loss)		6,441		-			6,441
Total stockholders’ equity		20,272		482			20,754
Total liabilities and stockholders’ equity	$	387,301	$	(356	)	$	386,945

LINCOLN NATIONAL CORPORATION

CONSOLIDATED BALANCE SHEETS

(in millions, except share data)

	As of December 31, 2022
	As
	Previously			Restatement			As
	Reported			Impacts			Restated
ASSETS
Investments:
Fixed maturity available-for-sale securities, at fair value
(amortized cost: 2022 - $111,707; allowance for credit losses: 2022 - $22)	$	99,736		$	-		$	99,736
Trading securities		3,498			-			3,498
Equity securities		427			-			427
Mortgage loans on real estate, net of allowance for credit losses
(portion at fair value: 2022 - $487)		18,301			-			18,301
Policy loans		2,359			-			2,359
Derivative investments		3,736			(142	)		3,594
Other investments		3,739			-			3,739
Total investments		131,796			(142	)		131,654
Cash and invested cash		3,343			-			3,343
Deferred acquisition costs and value of business acquired		13,588			-			13,588
Accrued investment income		1,253			-			1,253
Reinsurance recoverables, net of allowance for credit losses		19,882			-			19,882
Goodwill		1,144			-			1,144
Other assets		20,895			(187	)		20,708
Separate account assets		143,536			-			143,536
Total assets	$	335,437		$	(329	)	$	335,108
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Future contract benefits	$	42,151		$	-		$	42,151
Other contract holder funds		120,800			-			120,800
Short-term debt		500			-			500
Long-term debt		5,955			-			5,955
Payables for collateral on investments		6,712			-			6,712
Other liabilities		11,682			(797	)		10,885
Separate account liabilities		143,536			-			143,536
Total liabilities		331,336			(797	)		330,539
Contingencies and Commitments (See Note 13)
Stockholders’ Equity
Preferred stock – 10,000,000 shares authorized:
Series C preferred stock – 20,000 shares authorized, issued and
outstanding as of December 31, 2022		493			-			493
Series D preferred stock – 20,000 shares authorized, issued and
outstanding as of December 31, 2022		493			-			493
Common stock – 800,000,000 shares authorized;
169,220,511 shares issued and outstanding as of December 31, 2022		4,544			-			4,544
Retained earnings		6,239			468			6,707
Accumulated other comprehensive income (loss)		(7,668	)		-			(7,668	)
Total stockholders’ equity		4,101			468			4,569
Total liabilities and stockholders’ equity	$	335,437		$	(329	)	$	335,108

LINCOLN NATIONAL CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in millions, except per share data)

	For the Year Ended
	December 31, 2021
	As
	Previously			Restatement			As
	Reported			Impacts			Restated
Revenues
Insurance premiums	$	5,617		$	-		$	5,617
Fee income		6,887			18			6,905
Net investment income		6,115			(4	)		6,111
Realized gain (loss)		(212	)		626			414
Amortization of deferred gain on business sold through reinsurance		46			(8	)		38
Other revenues		777			-			777
Total revenues		19,230			632			19,862
Expenses
Interest credited		2,915			18			2,933
Benefits		8,529			-			8,529
Commissions and other expenses		5,791			3			5,794
Interest and debt expense		270			-			270
Spark program expense		87			-			87
Total expenses		17,592			21			17,613
Income (loss) before taxes		1,638			611			2,249
Federal income tax expense (benefit)		233			129			362
Net income (loss)		1,405			482			1,887
Other comprehensive income (loss), net of tax:
Unrealized investment gains (losses)		(2,535	)		-			(2,535	)
Foreign currency translation adjustment		(2	)		-			(2	)
Funded status of employee benefit plans		47			-			47
Total other comprehensive income (loss), net of tax		(2,490	)		-			(2,490	)
Comprehensive income (loss)	$	(1,085	)	$	482		$	(603	)
Net Income (Loss) Per Common Share
Basic	$	7.50		$	2.57		$	10.07
Diluted	$	7.43		$	2.55		$	9.98
Cash Dividends Declared Per Common Share	$	1.71		$	-		$	1.71

LINCOLN NATIONAL CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in millions, except per share data)

	For the Year Ended
	December 31, 2022
	As
	Previously			Restatement			As
	Reported			Impacts			Restated
Revenues
Insurance premiums	$	6,087		$	-		$	6,087
Fee income		6,054			-			6,054
Net investment income		5,511			4			5,515
Realized gain (loss)		336			9			345
Amortization of deferred gain on business sold through reinsurance		74			(32	)		42
Other revenues		722			1			723
Total revenues		18,784			(18	)		18,766
Expenses
Interest credited		2,870			-			2,870
Benefits		12,546			-			12,546
Commissions and other expenses		5,095			1			5,096
Interest and debt expense		283			-			283
Spark program expense		167			-			167
Impairment of intangibles		634			-			634
Total expenses		21,595			1			21,596
Income (loss) before taxes		(2,811	)		(19	)		(2,830	)
Federal income tax expense (benefit)		(584	)		(5	)		(589	)
Net income (loss)		(2,227	)		(14	)		(2,241	)
Other comprehensive income (loss), net of tax:
Unrealized investment gains (losses)		(14,030	)		-			(14,030	)
Foreign currency translation adjustment		(20	)		-			(20	)
Funded status of employee benefit plans		(59	)		-			(59	)
Total other comprehensive income (loss), net of tax		(14,109	)		-			(14,109	)
Comprehensive income (loss)	$	(16,336	)	$	(14	)	$	(16,350	)
Net Income (Loss) Per Common Share
Basic	$	(13.02	)	$	(0.09	)	$	(13.11	)
Diluted	$	(13.10	)	$	(0.09	)	$	(13.19	)
Cash Dividends Declared Per Common Share	$	1.80		$	-		$	1.80

LINCOLN NATIONAL CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in millions)

	For the Year Ended
	December 31, 2021
	As
	Previously			Restatement		As
	Reported			Impacts		Restated
Common Stock
Balance as of beginning-of-year	$	5,082		$	-	$	5,082
Stock compensation/issued for benefit plans		85			-		85
Retirement of common stock/cancellation of shares		(432	)		-		(432	)
Balance as of end-of-year		4,735			-		4,735
Retained Earnings
Balance as of beginning-of-year		8,686			-		8,686
Net income (loss)		1,405			482		1,887
Retirement of common stock		(673	)		-		(673	)
Common stock dividends declared		(322	)		-		(322	)
Balance as of end-of-year		9,096			482		9,578
Accumulated Other Comprehensive Income (Loss)
Balance as of beginning-of-year		8,931			-		8,931
Other comprehensive income (loss), net of tax		(2,490	)		-		(2,490	)
Balance as of end-of-year		6,441			-		6,441
Total stockholders’ equity as of end-of-year	$	20,272		$	482	$	20,754

	For the Year Ended
	December 31, 2022
	As
	Previously			Restatement			As
	Reported			Impacts			Restated
Preferred Stock
Balance as of beginning-of-year	$	-		$	-		$	-
Issuance of Series C preferred stock		493			-			493
Issuance of Series D preferred stock		493			-			493
Balance as of end-of-year		986			-			986
Common Stock
Balance as of beginning-of-year		4,735			-			4,735
Stock compensation/issued for benefit plans		40			-			40
Retirement of common stock/cancellation of shares		(231	)		-			(231	)
Balance as of end-of-year		4,544			-			4,544
Retained Earnings
Balance as of beginning-of-year		9,096			482			9,578
Net income (loss)		(2,227	)		(14	)		(2,241	)
Retirement of common stock		(319	)		-			(319	)
Common stock dividends declared		(311	)		-			(311	)
Balance as of end-of-year		6,239			468			6,707
Accumulated Other Comprehensive Income (Loss)
Balance as of beginning-of-year		6,441			-			6,441
Other comprehensive income (loss), net of tax		(14,109	)		-			(14,109	)
Balance as of end-of-year		(7,668	)		-			(7,668	)
Total stockholders’ equity as of end-of-year	$	4,101		$	468		$	4,569

LINCOLN NATIONAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

	For the Year Ended
	December 31, 2021
	As
	Previously			Restatement			As
	Reported			Impacts			Restated
Cash Flows from Operating Activities
Net income (loss)	$	1,405		$	482		$	1,887
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:
Realized (gain) loss		212			(626	)		(414	)
Sales and maturities (purchases) of trading securities, net		(108	)		21			(87	)
Amortization of deferred gain on business sold through reinsurance		(46	)		8			(38	)
Change in:
Deferred acquisition costs, value of business acquired, deferred sales
inducements and deferred front-end loads deferrals and interest, net
of amortization		315			(3	)		312
Premiums and fees receivable		(93	)		-			(93	)
Accrued investment income		16			-			16
Insurance liabilities and reinsurance-related balances		(1,954	)		(1	)		(1,955	)
Accrued expenses		389			3			392
Federal income tax accruals		232			129			361
Other		(217	)		4			(213	)
Net cash provided by (used in) operating activities		151			17			168
Cash Flows from Investing Activities
Purchases of available-for-sale securities and equity securities		(16,893	)		(22	)		(16,915	)
Sales of available-for-sale securities and equity securities		2,268			-			2,268
Maturities of available-for-sale securities		9,621			-			9,621
Purchases of alternative investments		(757	)		-			(757	)
Sales and repayments of alternative investments		377			-			377
Issuance of mortgage loans on real estate		(3,084	)		5			(3,079	)
Repayment and maturities of mortgage loans on real estate		1,881			-			1,881
Repayment (issuance) of policy loans, net		62			-			62
Net change in collateral on investments, derivatives and related settlements		3,261			-			3,261
Other		(303	)		-			(303	)
Net cash provided by (used in) investing activities		(3,567	)		(17	)		(3,584	)
Cash Flows from Financing Activities
Payment related to modification or early extinguishment of debt		(8	)		-			(8	)
Payment related to sale-leaseback transactions		(59	)		-			(59	)
Proceeds from certain financing arrangements		159			-			159
Deposits of fixed account values, including the fixed portion of variable		12,639			4			12,643
Withdrawals of fixed account values, including the fixed portion of variable		(6,607	)		53			(6,554	)
Transfers from (to) separate accounts, net		(340	)		(57	)		(397	)
Common stock issued for benefit plans		20			-			20
Repurchase of common stock		(1,105	)		-			(1,105	)
Dividends paid to common stockholders		(319	)		-			(319	)
Other		(60	)		-			(60	)
Net cash provided by (used in) financing activities		4,320			-			4,320
Net increase (decrease) in cash, invested cash and restricted cash		904			-			904
Cash, invested cash and restricted cash as of beginning-of-year		1,708			-			1,708
Cash, invested cash and restricted cash as of end-of-year	$	2,612		$	-		$	2,612

LINCOLN NATIONAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

	For the Year Ended
	December 31, 2022
	As
	Previously			Restatement			As
	Reported			Impacts			Restated
Cash Flows from Operating Activities
Net income (loss)	$	(2,227	)	$	(14	)	$	(2,241	)
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:
Realized (gain) loss		(336	)		(9	)		(345	)
Sales and maturities (purchases) of trading securities, net		300			-			300
Amortization of deferred gain on business sold through reinsurance		(74	)		32			(42	)
Impairment of intangibles		634			-			634
Change in:
Deferred acquisition costs, value of business acquired, deferred sales
inducements and deferred front-end loads deferrals and interest, net
of amortization		115			3			118
Premiums and fees receivable		(54	)		-			(54	)
Accrued investment income		(67	)		-			(67	)
Insurance liabilities and reinsurance-related balances		5,956			2			5,958
Accrued expenses		(89	)		-			(89	)
Federal income tax accruals		(530	)		(5	)		(535	)
Other		405			(6	)		399
Net cash provided by (used in) operating activities		4,033			3			4,036
Cash Flows from Investing Activities
Purchases of available-for-sale securities and equity securities		(14,813	)		-			(14,813	)
Sales of available-for-sale securities and equity securities		2,297			-			2,297
Maturities of available-for-sale securities		5,453			-			5,453
Purchases of alternative investments		(664	)		-			(664	)
Sales and repayments of alternative investments		446			-			446
Issuance of mortgage loans on real estate		(2,503	)		(4	)		(2,507	)
Repayment and maturities of mortgage loans on real estate		2,255			-			2,255
Repayment (issuance) of policy loans, net		5			-			5
Net change in collateral on investments, derivatives and related settlements		(4,071	)		1			(4,070	)
Other		(48	)		-			(48	)
Net cash provided by (used in) investing activities		(11,643	)		(3	)		(11,646	)
Cash Flows from Financing Activities
Payment of long-term debt, including current maturities		(300	)		-			(300	)
Issuance of long-term debt, net of issuance costs		296			-			296
Payment related to sale-leaseback transactions		(70	)		-			(70	)
Proceeds from certain financing arrangements		186			-			186
Deposits of fixed account values, including the fixed portion of variable		15,229			-			15,229
Withdrawals of fixed account values, including the fixed portion of variable		(6,913	)		-			(6,913	)
Transfers from (to) separate accounts, net		(195	)		-			(195	)
Common stock issued for benefit plans		(16	)		-			(16	)
Issuance of preferred stock, net of issuance costs		986			-			986
Repurchase of common stock		(550	)		-			(550	)
Dividends paid to common stockholders		(310	)		-			(310	)
Other		(2	)		-			(2	)
Net cash provided by (used in) financing activities		8,341			-			8,341
Net increase (decrease) in cash, invested cash and restricted cash		731			-			731
Cash, invested cash and restricted cash as of beginning-of-year		2,612			-			2,612
Cash, invested cash and restricted cash as of end-of-year	$	3,343		$	-		$	3,343