UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549  

FORM 10-Q

(Mark One)

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2024

OR

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _________ to _________.

Commission File Number: 1-6028  

_______________________________________________________________________________________________________

LINCOLN NATIONAL CORPORATION

(Exact name of registrant as specified in its charter)

_______________________________________________________________________________________________________  

Indiana	35-1140070
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
150 N. Radnor-Chester Road, Suite A305, Radnor, Pennsylvania	19087
(Address of principal executive offices)	(Zip Code)

(484) 583-1400  

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

_____________________________________________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock	LNC	New York Stock Exchange
Depositary Shares, each representing a 1/1000th interest in a share of 9.000% Non-Cumulative Preferred Stock, Series D	LNC PRD	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. 

Large Accelerated Filer	☒	Accelerated Filer	☐
Non-accelerated Filer	☐	Smaller Reporting Company	☐
		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐   No  ☒  

As of July 29, 2024, there were 170,197,108 shares of the registrant’s common stock outstanding.

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Lincoln National Corporation

Table of Contents

		Page
PART I
Item 1.	Financial Statements:
	Consolidated Balance Sheets as of June 30, 2024 (Unaudited) and December 31, 2023	1
	Unaudited Consolidated Statements of Comprehensive Income (Loss) for the three and six months
	ended June 30, 2024 and 2023	2
	Unaudited Consolidated Statements of Stockholders’ Equity for the three and six months
	ended June 30, 2024 and 2023	3
	Unaudited Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023	4
	Notes to Unaudited Consolidated Financial Statements:
	Note 1 – Nature of Operations and Basis of Presentation	5
	Note 2 – New Accounting Standards	6
	Note 3 – Investments	7
	Note 4 – Variable Interest Entities	17
	Note 5 – Derivative Instruments	17
	Note 6 – DAC, VOBA, DSI and DFEL	27
	Note 7 – Reinsurance	30
	Note 8 – MRBs	30
	Note 9 – Separate Accounts	32
	Note 10 – Policyholder Account Balances	33
	Note 11 – Future Contract Benefits	37
	Note 12 – Debt	42
	Note 13 – Fair Value of Financial Instruments	43
	Note 14 – Contingencies and Commitments	58
	Note 15 – Shares and Stockholders’ Equity	62
	Note 16 – Segment Information	65
	Note 17 – Realized Gain (Loss)	68
	Note 18 – Federal Income Taxes	68
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	70
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	119
Item 4.	Controls and Procedures	119
PART II
Item 1.	Legal Proceedings	120
Item1A.	Risk Factors	120
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	121
Item 5.	Other Information	122
Item 6.	Exhibits	122
	Exhibit Index for the Report on Form 10-Q	123
	Signatures	124

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

LINCOLN NATIONAL CORPORATION

CONSOLIDATED BALANCE SHEETS

(in millions, except share data)

	As of		As of
	June 30,		December 31,
	2024		2023
	(Unaudited)
ASSETS
Investments:
Fixed maturity available-for-sale securities, at fair value
(amortized cost: 2024 - $97,723; 2023 - $97,433; allowance for credit losses: 2024 - $39; 2023 - $19)	$	87,174	$	88,738
Trading securities	2,201		2,359
Equity securities	295		306
Mortgage loans on real estate, net of allowance for credit losses
(portion at fair value: 2024 - $258; 2023 - $288)	20,152		18,963
Policy loans	2,513		2,476
Derivative investments	8,608		6,474
Other investments	5,652		5,015
Total investments	126,595		124,331
Cash and invested cash	5,475		3,365
Deferred acquisition costs, value of business acquired and deferred sales inducements	12,435		12,397
Reinsurance recoverables, net of allowance for credit losses	29,126		29,843
Deposit assets, net of allowance for credit losses	29,888		28,789
Market risk benefit assets	4,754		3,894
Accrued investment income	1,135		1,082
Goodwill	1,144		1,144
Other assets	8,782		9,311
Separate account assets	165,199		158,257
Total assets	$	384,533	$	372,413
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Policyholder account balances	$	124,113	$	120,737
Future contract benefits	38,560		39,864
Funds withheld reinsurance liabilities	17,044		17,641
Market risk benefit liabilities	1,275		1,716
Deferred front-end loads	6,306		5,901
Payables for collateral on investments	11,114		8,105
Short-term debt	450		250
Long-term debt	5,716		5,699
Other liabilities	6,807		7,350
Separate account liabilities	165,199		158,257
Total liabilities	376,584		365,520
Contingencies and Commitments (See Note 14)
Stockholders’ Equity
Preferred stock – 10,000,000 shares authorized:
Series C preferred stock – 20,000 shares authorized, issued and outstanding
as of June 30, 2024, and December 31, 2023	493		493
Series D preferred stock – 20,000 shares authorized, issued and outstanding
as of June 30, 2024, and December 31, 2023	493		493
Common stock – 800,000,000 shares authorized; 170,188,487 and 169,666,137 shares
issued and outstanding as of June 30, 2024, and December 31, 2023, respectively	4,641		4,605
Retained earnings	6,691		4,778
Accumulated other comprehensive income (loss)	(4,369)		(3,476)
Total stockholders’ equity	7,949		6,893
Total liabilities and stockholders’ equity	$	384,533	$	372,413

See accompanying Notes to Consolidated Financial Statements

1

Table of Contents

LINCOLN NATIONAL CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited, in millions, except per share data)

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2024		2023		2024		2023
Revenues
Insurance premiums	$	1,625	$	1,612	$	3,226	$	3,191
Fee income	1,339		1,365		2,662		2,744
Net investment income	1,332		1,508		2,679		2,974
Realized gain (loss)	663		(1,784)		230		(2,612)
Amortization of deferred gain (loss) on business sold through
reinsurance	(12)		9		(24)		19
Other revenues	206		219		496		427
Total revenues	5,153		2,929		9,269		6,743
Expenses
Benefits	2,008		2,192		4,011		4,483
Interest credited	853		808		1,675		1,593
Market risk benefit (gain) loss	(136)		(2,023)		(2,043)		(1,404)
Policyholder liability remeasurement (gain) loss	(105)		(110)		(117)		(228)
Commissions and other expenses	1,351		1,376		2,951		2,701
Interest and debt expense	86		84		167		166
Total expenses	4,057		2,327		6,644		7,311
Income (loss) before taxes	1,096		602		2,625		(568)
Federal income tax expense (benefit)	201		91		509		(198)
Net income (loss)	895		511		2,116		(370)
Other comprehensive income (loss), net of tax:
Unrealized investment gain (loss)	(313)		(513)		(440)		1,261
Market risk benefit non-performance risk gain (loss)	(197)		(924)		(661)		101
Policyholder liability discount rate remeasurement gain (loss)	92		112		208		(90)
Foreign currency translation adjustment	–		5		(1)		8
Funded status of employee benefit plans	–		(30)		1		(32)
Total other comprehensive income (loss), net of tax	(418)		(1,350)		(893)		1,248
Comprehensive income (loss)	$	477	$	(839)	$	1,223	$	878
Net Income (Loss) Available to Common Stockholders
Net income (loss)	$	895	$	511	$	2,116	$	(370)
Preferred stock dividends declared	(11)		(11)		(46)		(36)
Deferred units of LNC stock in our deferred compensation plans	–