Shares And Stockholders' Equity

9 Months Ended

Sep. 30, 2023

Shares and Stockholders' Equity [Abstract]

16. Shares and Stockholders’ Equity

Preferred Shares

Preferred stock authorized, issued and outstanding (number of shares) was as follows:


	As of September 30, 2023			As of December 31, 2022
	Shares Authorized	Shares Issued	Shares Outstanding	Shares Authorized	Shares Issued	Shares Outstanding
9.250% Fixed Rate Reset Non-Cumulative
Preferred Stock, Series C	20,000	20,000	20,000	20,000	20,000	20,000
9.000% Non-Cumulative Preferred Stock, Series D	20,000	20,000	20,000	20,000	20,000	20,000
Not designated	9,960,000	-	-	9,960,000	-	-
Total preferred shares	10,000,000	40,000	40,000	10,000,000	40,000	40,000

The per share and aggregate dividends declared for preferred stock by series (in millions except per share data) was as follows:


	For the Three Months Ended September 30,
	2023				2022
		Dividend		Aggregate		Dividend		Aggregate
Series		Per Share		Dividend		Per Share		Dividend
Series C	$	1,156.25	$	23	$	-	$	-
Series D		562.50		11		-		-
Total	$	1,718.75	$	34	$	-	$	-

	For the Nine Months Ended September 30,
	2023				2022
		Dividend		Aggregate		Dividend		Aggregate
Series		Per Share		Dividend		Per Share		Dividend
Series C	$	1,792.19	$	36	$	-	$	-
Series D		1,743.75		35		-		-
Total	$	3,535.94	$	71	$	-	$	-

Common Shares

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


	For the Three			For the Nine
	Months Ended			Months Ended
	September 30,			September 30,
	2023	2022		2023	2022
Common Stock
Balance as of beginning-of-period	169,630,880	170,224,116		169,220,511	177,193,515
Stock compensation/issued for benefit plans	27,391	10,052		437,760	686,473
Retirement/cancellation of shares	-	(1,019,675	)	-	(8,665,495
Balance as of end-of-period	169,658,271	169,214,493		169,658,271	169,214,493

Common Stock as of End-of-Period
Basic basis	169,658,271	169,214,493		169,658,271	169,214,493
Diluted basis	171,033,121	170,658,861		171,033,121	170,658,861

Our common stock is without par value.

Average Common 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 Nine
	Months Ended				Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Weighted-average shares, as used in basic calculation	169,645,881		169,706,526		169,529,509		171,647,108
Shares to cover non-vested stock	620,088		779,215		504,949		1,011,546
Average stock options outstanding during the period	42,457		380,706		24,862		1,236,484
Assumed acquisition of shares with assumed
proceeds and benefits from exercising stock
options (at average market price for the period)	(37,461	)	(280,067	)	(21,377	)	(978,538
Shares repurchasable from measured but
unrecognized stock option expense	(2,045	)	-		(682	)	(28,008
Average deferred compensation shares	621,582		508,980		588,183		507,487
Weighted-average shares, as used in diluted calculation ⁽¹⁾	170,890,502		171,095,360		170,625,444		173,396,079

⁽¹⁾Due to reporting a net loss for the three months ended September 30, 2022, basic shares were used in the diluted earnings per share (“EPS”) calculation for those periods as the use of diluted shares would have resulted in a lower loss per share.

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 EPS, such options will be shown in the table above.

The income used in the calculation of our diluted EPS is our net income (loss), reduced by preferred stock dividends. This amount is presented on our Consolidated Statements of Income (Loss).

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 EPS calculation. The mark-to-market adjustment of these deferred units excluded from our diluted EPS calculation was less than $1 million and $1 million for the three months ended September 30, 2023 and 2022, respectively, and $2 million and $8 million for the nine months ended September 30, 2023 and 2022, respectively.

AOCI

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



	For the Nine
	Months Ended
	September 30,
	2023			2022
Unrealized Gain (Loss) on Fixed Maturity AFS Securities and Certain Other
Investments
Balance as of beginning-of-year	$	(8,916	)	$	9,616
Unrealized holding gains (losses) arising during the period		(3,405	)		(27,065	)
Change in foreign currency exchange rate adjustment		(21	)		(620	)
Change in future contract benefits and policyholder account balances		27			2,395
Income tax benefit (expense)		707			5,399
Less:
Reclassification adjustment for gains (losses) included in net income (loss)		(1,145	)		(9	)
Income tax benefit (expense)		240			2
Balance as of end-of-period	$	(10,703	)	$	(10,268	)
Unrealized Gain (Loss) on Derivative Instruments
Balance as of beginning-of-year	$	388		$	(85	)
Unrealized holding gains (losses) arising during the period		231			301
Change in foreign currency exchange rate adjustment		30			623
Income tax benefit (expense)		(55	)		(194	)
Less:
Reclassification adjustment for gains (losses) included in net income (loss)		68			67
Income tax benefit (expense)		(14	)		(14	)
Balance as of end-of-period	$	540		$	592
Market Risk Benefit Non-Performance Risk Gain (Loss)
Balance as of beginning-of-year	$	1,741		$	1,951
Adjustment arising during the period		(944	)		285
Income tax benefit (expense)		202			(61	)
Balance as of end-of-period	$	999		$	2,175
Policyholder Liability Discount Rate Remeasurement Gain (Loss)
Balance as of beginning-of-year	$	747		$	(1,265	)
Adjustment arising during the period		347			2,631
Income tax benefit (expense)		(73	)		(561	)
Balance as of end-of-period	$	1,021		$	805
Foreign Currency Translation Adjustment
Balance as of beginning-of-year	$	(34	)	$	(14	)
Foreign currency translation adjustment arising during the period		1			(32	)
Income tax benefit (expense)		-			(1	)
Balance as of end-of-period	$	(33	)	$	(47	)
Funded Status of Employee Benefit Plans
Balance as of beginning-of-year	$	(278	)	$	(219	)
Adjustment arising during the period		(26	)		22
Balance as of end-of-period	$	(304	)	$	(197	)

‎

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



	For the Nine
	Months Ended
	September 30,
	2023			2022
Unrealized Gain (Loss) on Fixed Maturity AFS
Securities and Certain Other Investments
Reclassification	$	(1,175	)	$	(9	)	Realized gain (loss)
Associated change in future contract benefits		30			-		Benefits
Reclassification before income tax benefit (expense)		(1,145	)		(9	)	Income (loss) before taxes
Income tax benefit (expense)		247			2		Federal income tax expense (benefit)
Reclassification, net of income tax	$	(898	)	$	(7	)	Net income (loss)

Unrealized Gain (Loss) on Derivative Instruments
Interest rate contracts	$	-		$	1		Net investment income
Interest rate contracts		22			(11	)	Interest and debt expense
Foreign currency contracts		42			48		Net investment income
Foreign currency contracts		4			29		Realized gain (loss)
Reclassifications before income tax benefit (expense)		68			67		Income (loss) before taxes
Income tax benefit (expense)		(14	)		(14	)	Federal income tax expense (benefit)
Reclassifications, net of income tax	$	54		$	53		Net income (loss)