8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

                May 1, 2007                

Date of Report (Date of earliest event reported)

                  Lincoln National Corporation              

(Exact name of registrant as specified in its charter)

Indiana	1-6028	35-1140070
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

1500 Market Street, West Tower, Suite 3900, Philadelphia, Pennsylvania 19102-2112

(Address of principal executive offices) (Zip Code)

(215) 448-1400

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On May 1, 2007, the registrant issued a press release announcing its financial results for the quarter ended March 31, 2007, a copy of which is attached as Exhibit 99.1 and is incorporated herein by reference, and the registrant’s statistical supplement for the quarter ended March 31, 2007 is attached as Exhibit 99.2 and is incorporated herein by reference.

The information, including exhibits attached hereto, furnished under this Item 2.02 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, except as otherwise expressly stated in such filing.

Item 9.01. Financial Statements and Exhibits

(c)   Exhibits.

The following exhibits are being furnished with this Form 8-K.

Exhibit Number	Description
99.1	Press release dated May 1, 2007, announcing Lincoln National Corporation’s financial results for the quarter ended March 31, 2007.
99.2	Lincoln National Corporation Statistical Supplement for the Quarter Ended March 31, 2007.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

LINCOLN NATIONAL CORPORATION

By /s/ Douglas N. Miller

Name: Douglas N. Miller

Title: Vice President and

Chief Accounting Officer

Date: May 1, 2007

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press release dated May 1, 2007, announcing Lincoln National Corporation’s financial results for the quarter ended March 31, 2007.
99.2	Lincoln National Corporation Statistical Supplement for the Quarter Ended March 31, 2007.

EX-99.1

NEWS RELEASE

Lincoln Financial Group Reports First Quarter 2007 Earnings

Momentum Continues into 2007 with Strong Sales and Earnings Growth

Philadelphia, PA, May 1, 2007 - Lincoln Financial Group (NYSE:LNC) today reported net income of $396.5 million, or $1.42 per diluted share, for the first quarter of 2007. By comparison, net income for the first quarter of 2006 was $221.2 million, or $1.24 per diluted share.

Income from operations for the first quarter of 2007 was $379.1 million, or $1.36 per diluted share, compared to first quarter 2006 income from operations of $221.4 million, or $1.25 per diluted share. The growth in income from operations was positively impacted by the merger with Jefferson-Pilot that closed on April 3, 2006. Return on equity (ROE), based on income from operations, was 13.2%. The attached table defines and reconciles income from operations and ROE, non-GAAP measures, to net income and ROE calculated in accordance with GAAP.

Consolidated Domestic Deposits and Net Flows

Consolidated retail deposits, which include individual annuities, mutual funds, life insurance and other personal wealth accumulation products together with retirement products sold into the employer-sponsored marketplace, were $8.2 billion, driven by double-digit increases in retail mutual funds, individual variable annuities, 401(k) mutual fund sales, and individual life insurance sales over the first quarter of 2006. Investment management institutional deposits were $2.4 billion. Consolidated domestic net flows were $1.6 billion with positive flows across all retail lines of business. At March 31, 2007, consolidated assets under management were $237 billion.

“We continue to leverage our increased scale, investing in distribution expansion, retirement income security initiatives, and back office efficiencies, all of which are reflected in this quarter’s results,” said Jon A. Boscia, chairman and chief executive officer of Lincoln Financial Group.

Individual Markets

Individual Annuities

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Income from operations for the Individual Annuities segment was $121.0 million in the first quarter of 2007 versus $66.4 million in the year ago period. The current quarter included approximately $4 million, after tax, of net positive items, primarily related to better than expected hedge program performance.

In the quarter, gross deposits were $2.8 billion, a 32% increase over the first quarter of 2006, and net flows for the segment were $754 million. Deposits into variable annuity products reached $2.5 billion, fueled by record March sales in both the multi-manager variable annuity, Lincoln Choice Plus^SM, and the single-manager variable annuity, American Legacy^®.

Lincoln’s patented retirement income management tool, i4LIFE^®Advantage, recorded elections of $460 million, up 31% over the prior year period, and guaranteed minimum withdrawal benefit (GMWB) elections, including the new lifetime withdrawal feature, were made on 43% of first quarter variable annuity deposits.

“This quarter marked the fourth consecutive quarter of variable annuity product net flows in excess of $1 billion, a testament to our innovative solutions and distribution leadership, while adhering to our risk management platform,” said Boscia.

Individual Life Insurance

Individual Life Insurance income from operations was $166.6 million, compared to $69.0 million in the first quarter of 2006. The current quarter included approximately $11 million, after tax, of net positive items primarily driven by better than expected investment income and favorable DAC unlocking.

Individual life insurance sales, reported as paid annualized premium, were $203.5 million in the first quarter, up 70% over combined Lincoln and Jefferson-Pilot sales in the same period last year, driven by strong sales in most product lines.

“The individual life insurance segment delivered another strong quarter, as all distribution channels achieved significant sales growth,” said Boscia. “On April 2, 2007, we launched the first phase of our unified product portfolio, a platform that combines the expertise of both companies and delivers a versatile portfolio of solutions which will continue to position us ahead of the competition,” added Boscia.

Employer Markets

Retirement Products

Defined Contribution

First quarter income from operations for Defined Contribution was $49.7 million, versus $52.5 million for the same period a year ago.

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In the quarter, gross deposits were $1.5 billion, fueling a 22% increase in total net flows as compared to the previous year’s results. Increases in new cases sold and contribution levels drove deposits of $711 million into the Lincoln Alliance^® Program, a medium to large case employer-sponsored retirement plan solution. These record-setting sales combined with lower terminations to boost year-over-year net flows by 83%.

“Successful recruitment of wholesalers and increased shelf space in key distribution firms aligned to enhance production in targeted market segments,” said Boscia. “As the Employer Markets division continues to build product and distribution capabilities, leading indicators, including sales activity and proposal volume, are headed in the right direction,” added Boscia.

Executive Benefits

In the quarter, income from operations for Executive Benefits was $14.4 million, compared to $7.5 million in the first quarter of 2006.

Group Protection

For the first quarter, Group Protection’s income from operations was $23.1 million, versus $29.5 million in the prior year period for Jefferson-Pilot. The current quarter’s results included a modest negative impact from the adoption of SOP 05-1 and a non-medical loss ratio of 72.7%, consistent with previous guidance. The first quarter of 2006 benefited from better than expected non-medical loss ratios.

In the quarter, annualized premiums for new business were $60.7 million, down 5% versus the 2006 quarter, as gains in the small-case markets were more than offset by decreases in the large-case segments. “We continue to opportunistically look for multi-line cases in the larger market segments that fit our business model and profitability hurdles, but are focused on building off our strengths in the smaller market segments, where cases sold and premium levels increased over the prior-year period,” said Boscia.

Investment Management

The Investment Management segment reported income from operations of $16.2 million in the first quarter of 2007, which compares to $15.3 million in the prior year period. The pre-tax operating margin was 17.0%, benefiting from expense management and asset growth yielding a 16% increase in third-party investment advisory fees.

Total deposits for the quarter were $6.0 billion, driven by strong retail mutual fund sales and deposits into mutual funds within variable annuities products. In the current period, flows for the segment were pressured by negative institutional net flows, which can vary from period to period.

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“Delaware Investments received seven Lipper Fund awards in 2007, placing the company in the top five among fund company peers,” said Boscia. “Superior performance and targeted wholesaling continued to raise Delaware’s profile in many key distributors, including our retail, open-architecture platform, Lincoln Financial Network, where Delaware mutual fund sales increased 72% over the first quarter of 2006,” added Boscia.

Lincoln UK

For the first quarter, the UK segment’s income from operations was $10.9 million, versus $10.7 million in the same year ago period. The first quarter of 2007 included the impact of a favorable foreign currency exchange rate.

Lincoln Financial Media

Lincoln Financial Media income from operations was $12.4 million in the first quarter of 2007, compared to $11.2 in the prior year period for Jefferson-Pilot. The current quarter benefited from strong results in the sports division despite the impact of purchase accounting.

Other Operations

The operating loss in Other Operations was $35.2 million in the quarter. The quarter included merger-related expenses of $9.1 million, after tax.

Capital and Share Repurchase

As of March 31, 2007, the book value per share of Lincoln National Corporation common stock, excluding accumulated other comprehensive income, was $41.98, compared with $34.37 a year ago. Book value per share, including accumulated other comprehensive income, was $44.42, compared with $35.99 a year ago. Lincoln repurchased 7.2 million shares in the quarter at a total cost of $512 million. Repurchase activity included a $350 million accelerated stock repurchase program which was executed in mid-March.

2007 Outlook

Statement Of Position (SOP) 05-1

In the first quarter of 2007, Lincoln adopted SOP 05-1, which addresses the accounting for deferred acquisition costs (DAC) on internal replacements of insurance and annuity contracts. The adoption resulted in reductions to the net DAC and VOBA assets of $63 million, pre tax, which was recorded as a direct reduction to retained earnings. The SOP 05-1 is expected to decrease income from operations for the full-year of 2007 by approximately $14 million, including approximately $4 million in the first quarter of 2007.

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Merger Integration

Annualized savings at the end of the first quarter of 2007 were $125 million, pre tax, exceeding Lincoln’s targeted $90 million pre tax savings in the first year after closing the merger. The company maintains its guidance on merger-related annualized savings of $180 million, pre tax, at the end of three years following the merger, with approximately 80% achieved by the end of the second year of the merger. Merger-related expenses are expected to be in the range of $25-30 million, pre tax, in the second quarter, and $90-110 million, pre tax, for the full year of 2007.

Employee Pension Plan

Given the changing dynamic of the retirement landscape, and the greater need by today’s employees for flexibility and portability of their retirement assets, Lincoln has decided to launch an enhanced defined contribution plan for all employees effective January 1, 2008. The existing traditional pension plans will be frozen as a result of this change. The change is not expected to be material to the company’s future earnings, but will result in a one-time curtailment gain of approximately $9 million, pre tax, in the second quarter of 2007. The gain reflects the change in the pension liability that the company carries on its balance sheet today, but does not affect pension benefits already accrued by Lincoln employees.

Individual Annuities

Lincoln expects results to benefit from solid variable flows and growth in account values, recognizing results are sensitive to equity markets. Fixed annuity spreads are expected to remain stable throughout 2007.

Individual Life Insurance

Lincoln anticipates income from operations to steadily build off mid-single-digit growth in in-force and account values, but expects the high production levels in the first quarter to moderate in the second and third quarters. Investment spreads are expected to remain stable.

Employer Markets

In 2007, Lincoln expects to continue its investment in the new Employer Markets’ businesses to implement strategic and tactical initiatives, including information technology improvements and wholesaling capabilities, which should support continued production gains in 2007 and earnings expansion in the longer term.

For the Group Protection segment, Lincoln continues to anticipate non-medical loss ratios will be in the 71-74% range.

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Earnings Estimates

For Investment Management, Lincoln continues to anticipate income from operations in the low $60 million range, recognizing results are sensitive to equity markets.

For the UK segment, Lincoln has not changed its outlook for earnings in the upper $30 million range, but recognizes results could be favorably impacted should the current exchange rate environment persist. This estimate includes investments in retirement income security initiatives.

For Lincoln Financial Media, Lincoln continues to expect income from operations to be in the mid $50 million range, recognizing this segment’s earnings are seasonally higher in the fourth quarter and lower in the first quarter of the year.

The company does not anticipate any significant changes to previous guidance for the deferred gain amortization and interest expense, both of which are recorded in Other Operations.

This outlook contains estimates that are forward-looking, and actual results may differ materially. Lincoln’s actual experience in 2007 will almost certainly differ from many of the assumptions utilized in the outlook and the company’s expectations for these and a large number of other factors will probably change, leading us to revise our estimates over time. Please see the Forward-Looking Statements - Cautionary Language that follow for additional factors that may cause actual results to differ materially from our current expectations.

Lincoln National Corporation will discuss the company’s first quarter results and outlook for 2007 with investors in a conference call beginning at 11:00 a.m. (ET) on Wednesday, May 2, 2007. The company will also post its first quarter 2007 statistical supplement on its Web site, www.LFG.com.

 Lincoln Financial Group is the marketing name for Lincoln National Corporation (NYSE:LNC) and its affiliates. With headquarters in Philadelphia, the companies of Lincoln Financial Group had assets under management of $237 billion as of March 31, 2007. Through its affiliated companies, Lincoln Financial Group offers: annuities; life, group life and disability insurance; 401(k) and 403(b) plans; savings plans; mutual funds; managed accounts; institutional investments; and comprehensive financial planning and advisory services.  Affiliates also include: Delaware Investments, the marketing name for Delaware Management Holdings, Inc. and its subsidiaries; Lincoln Financial Media, which owns and operates three television stations, 17 radio stations, and the Lincoln

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Financial Sports production and syndication business; and Lincoln UK. For more information please visit www.LFG.com.

Contacts: Jim Sjoreen	Laurel O’Brien
215 448-1420	215 255-1520
Investor Relations	Media Relations
investorrelations@LFG.com	mediarelations@LFG.com

7

Definition of Income (Loss) from Operations and ROE

Income (loss) from operations and ROE, as used in the earnings release, are non-GAAP financial measures and are not substitutes for net income (loss) and ROE, calculated using GAAP measures. Income (loss) from operations represents after tax results excluding, as applicable, realized gains or losses on investments and derivatives, cumulative effect of accounting changes, reserve changes on business sold through reinsurance, gain on sale of subsidiaries and book of business and loss on early retirement of debt. The earnings used to calculate ROE, as used in the earnings release, are income (loss) from operations. Income (loss) from operations is an internal measure used by the company in the management of its operations. Management believes that this performance measure explains the results of the company's ongoing operations in a manner that allows for a better understanding of the underlying trends in the company's current business because the excluded items are either unpredictable and/or not related to decisions regarding the underlying businesses.

	For the Quarter Ended
($ in millions, except per share data)	March 31,
	2007			2006
Net Income	$	396.5		$	221.2
Less:
Net realized gains (losses) on investments and derivatives		17.2			(4.2	)
Net gain on reinsurance derivative/trading account securities		-			3.8
Reserve development and related amortization
on business sold through reinsurance		0.2			0.2
Income from Operations	$	379.1		$	221.4
Earnings per share (diluted)
Net Income	$	1.42		$	1.24
Income from Operations	$	1.36		$	1.25
Average Equity (Excluding accumulated other comprehensive income)	$	11,480.2		$	5,954.9
Return on Equity
Net Income		13.8	%		14.9	%
Income from Operations		13.2	%		14.9	%

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LINCOLN NATIONAL CORPORATION

DIGEST OF EARNINGS

	For the Quarter Ended
$ in millions, except per share data	March 31,
	2007		2006
Revenue	$	2,670.4	$	1,421.8
Net Income	$	396.5	$	221.2
EPS - Basic	$	1.44	$	1.27
EPS - Diluted	$	1.42	$	1.24
Avg. Shares - Basic		274,889,645		174,577,421
Avg. Shares - Diluted		279,476,814		177,929,653

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Forward-Looking Statements - Cautionary Language

This press release and oral statements made by company officials may contain information that includes or is based upon forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other words and terms of similar meaning in connection with a discussion of future operating or financial performance. In particular, these include statements relating to future actions, prospective services or products, future results of sales efforts, the outcome of contingencies, such as legal proceedings, trends in operations and financial results.

Any or all forward-looking statements may turn out to be wrong. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Many such factors will be important in determining our actual future results. These statements are based on current expectations and the current economic environment. They involve a number of risks and uncertainties that are difficult to predict. These statements are not guarantees of future performance. Actual results could differ materially from those expressed or implied in the forward-looking statements. Among factors that could cause actual results to differ materially are:

•   Problems arising with the ability to successfully integrate our and Jefferson-Pilot Corporation’s businesses, which may affect our ability to operate as effectively and efficiently as expected or to achieve the expected synergies from the merger or to achieve such synergies within our expected timeframe;

•   Legislative, regulatory or tax changes, both domestic and foreign, that affect the cost of, or demand for, our products, the required amount of reserves and/or surplus, or otherwise affect our ability to conduct business, including changes to statutory reserves and/or risk-based capital requirements related to secondary guarantees under universal life and variable annuity products such as Actuarial Guideline VACARVM; restrictions on revenue sharing and 12b-1 payments; and the potential for U.S. Federal tax reform;

•   The initiation of legal or regulatory proceedings against Lincoln or its subsidiaries and the outcome of any legal or regulatory proceedings, such as: (a) adverse actions related to present or past business practices common in businesses in which Lincoln and its subsidiaries compete; (b) adverse decisions in significant actions including, but not limited to, actions brought by federal and state authorities, and extra-contractual and class action damage cases; (c) new decisions that result in changes in law; and (d) unexpected trial court rulings;

•   Changes in interest rates causing a reduction of investment income, the margins of our fixed annuity and life insurance businesses and demand for our products;

•   A decline in the equity markets causing a reduction in the sales of our products, a reduction of asset fees that Lincoln charges on various investment and insurance products, an acceleration of amortization of deferred acquisition costs, the value of business acquired, deferred sales inducements and deferred front-end loads and an increase in liabilities related to guaranteed benefit features of our variable annuity products;

•   Ineffectiveness of our various hedging strategies used to offset the impact of declines in the equity markets;

•   A deviation in actual experience regarding future persistency, mortality, morbidity, interest rates or equity market returns from our assumptions used in pricing our products, in establishing related insurance reserves, and in the amortization of intangibles that may result in an increase in reserves and a decrease in net income;

•   Changes in accounting principles generally accepted in the U.S. that may result in unanticipated changes to our net income, including the impact of the applications of Statement Of Position 05-1 and Statements of Financial Accounting Standard 157 and 159;

•   Lowering of one or more of our debt ratings issued by nationally recognized statistical rating organizations, and the adverse impact such action may have on our ability to raise capital and on our liquidity and financial condition;

•   Lowering of one or more of the insurer financial strength ratings of our insurance subsidiaries, and the adverse impact such action may have on the premium writings, policy retention, and profitability of our insurance subsidiaries;

•   Significant credit, accounting, fraud or corporate governance issues that may adversely affect the value of certain investments in the portfolios of our companies requiring that Lincoln realize losses on such investments;

•   The impact of acquisitions and divestitures, restructurings, product withdrawals and other unusual items, including our ability to integrate acquisitions and to obtain the anticipated results and synergies from acquisitions;

•   The adequacy and collectibility of reinsurance that we have purchased;

•   Acts of terrorism or war, pandemics, or other man-made and natural catastrophes that may adversely affect our businesses and the cost and availability of reinsurance;

•   Competitive conditions, including pricing pressures, new product offerings and the emergence of new competitors, that may affect the level of premiums and fees that we can charge for our products;

•   The unknown impact on our business resulting from changes in the demographics of our client base, as aging baby-boomers move from the asset-accumulation stage to the asset-distribution stage of life;

•   Loss of key management, portfolio managers in the Investment Management segment, financial planners or wholesalers; and

•   Changes in general economic or business conditions, both domestic and foreign, that may be less favorable than expected and may affect foreign exchange rates, premium levels, claims experience, the level of pension benefit costs and funding, and investment results.

The risks included here are not exhaustive. We describe additional risks in our recent Forms 10-K, 10-Q and 8-K and other documents filed with the Securities and Exchange Commission. Moreover, we operate in a rapidly changing and competitive environment. New risk factors emerge from time to time and it is not possible for management to predict all such risk factors.

Further, it is not possible to assess the impact of all risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. In addition, we disclaim any current intention to update any forward-looking statements to reflect events or circumstances that occur after the date of this document.

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EX-99.2

Lincoln Statistical Report
	first Q U A R T E R
		2 0 0 7
The financial data in this document is dated May 1, 2007 and has not been updated since that date. LNC does not intend to update this document.

Lincoln Financial Group
Statistical Report
First Quarter
2007
Table of Contents
LFG Analyst Coverage
Notes
Financial Highlights	1 - 4
Consolidated Expense Detail	5
Operating Results Summary	6
Consolidated Statements of Income	7
Consolidating Statements of Income from Operations	8-9
Consolidated Balance Sheet	10
Balance Sheet Data - Segment Highlights	11
Individual Markets
Individual Life Insurance
Income Statements & Operational Data	12
Operational Data	13
Account Value Roll Forward	14
Individual Annuities
Income Statements & Operational Data	15
Account Value Roll Forward	16
Account Values	17
Employer Markets
Defined Contribution
Income Statements & Operational Data	18
Account Value Roll Forward	19
Supplemental Data	20
Executive Benefits
Income Statements & Operational Data	21
Account Value Roll Forward and Supplemental Data	22
Group Protection
Income Statements & Operational Data	23
Supplemental Data	24
Investment Management
Income Statements	25
Assets Under Management Roll Forward	26
Lincoln UK
Income Statements	27
Operational Data	28
Lincoln Financial Media	29
Other Operations	29
Domestic Deposits / Account Balances / Net Flows	30
Investment Data
Assets Managed	31
Other Investment Data	32

3/31/2007                       ; ii

NOTES

On April 3, 2006, LNC completed its previously announced merger with Jefferson Pilot Corporation ("JP"). Beginning with the second quarter of 2006, we are reporting results through the following segments: Individual Markets - Annuities, Individual Markets - Life Insurance, Employer Markets - Retirement Products, Employer Markets - Group Protection, Investment Management, Lincoln UK and Lincoln Financial Media. Historical information presented in this report has been restated to reflect the new organizational structure. As described below, certain reclassifications have been made to historically reported items to reflect the new reporting practices of LNC.

Definitions and Presentation

"Income from Operations," "Operating Revenue," "Return on Capital," and "Station Operating Income" are non-GAAP financial measures and do not replace GAAP revenue and net income (loss). Detailed reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measure are included in this statistical supplement.

*We exclude the after-tax effects of the following items from GAAP net income to arrive at income fromoperations:

* Realized gains and losses on investments and derivatives,

* Gains and losses related to reinsurance embedded derivatives/trading account securities,

* The cumulative effect of accounting changes,

* Reserve changes on business sold through reinsurance net of related deferred gain amortization,

* Gains and losses on the sale of subsidiaries and blocks of business, and

* Loss on early retirement of debt, including subordinated debt

NOTE: Income from operations is lower than previously reported as it now includesrestructuring charges previously excluded in the determination of income from operations

*Operating revenue represents revenue excluding the following, as applicable:

* Realized gains or losses on investments and derivatives, 

* Gains and losses related to reinsurance embedded derivatives/trading account securities,

* Gains and losses on the sale of subsidiaries and blocks of business, and

* Deferred gain amortization related to reserve changes on business sold through reinsurance

*Return on capital measures the effectiveness of LNC's use of its total capital, which includes equity (excluding accumulated other comprehensive income), debt, capital securities and junior subordinated debentures issued to affiliated trusts. Return on capital is calculated by dividing annualized income from operations (after adding back interest expense) by averagecapital. The difference between return on capital and return on shareholders' equity represents the effect of leveraging on LNC's consolidated results.

*Station operating income is calculated as communications revenues less operating costs and expenses before depreciation and amortization. 

Income from operations, operating revenue, return on capital, and station operating income are internal measures used by LNC in the management of its operations. Management believes that these performance measures explain the results of operations of LNC's ongoing operations in a manner that allows for a better understanding of the underlying trends in LNC's current business because the excluded items are either unpredictable and/or not related to decisions regarding the underlying businesses.

*Certain operating and statistical measures are included in this report to provide supplemental data regarding the performance of LNC’s current business. These measures include deposits, sales, net flows, first year premium, inforce, spreads, and assets under management.

*Sales as reported consist of the following:

* Universal life ("UL"), including Moneyguard, and COLI - first year commissionable premium plus 5% of excess premium received, including UL internal replacements

* Whole life and term - first year paid premium

* Annuity - deposits from new and existing customers

* Group Protection - annualized first year premium from new policies

* Investment Management Retail Sales and Institutional Inflows - contributions, transfer in kind purchases, and reinvested dividends for new and existing accounts.

Reclassifications

Certain reclassifications have been made in the historical presentation of certain revenue and expense items. The principal reclassifications

consist of the following:

*Deferred Front End Loads ("DFEL") - capitalization and amortization of DFEL is reported as a component of expenseassessments revenue. Depending on the segment, these had previously been reported as a component of either other revenue, benefits expense or DAC amortization.

*Investment Management Advisory Fees and General and Administrative Expenses - certain reclassifications have beenmade between revenue and expenses for such items as distribution fees and management fee waivers to conform to currentindustry practices.

*Commissions and general & administrative expenses - we reclassified certain distribution expenses to commissions which had previously been reported in general & administrative expenses. This change impacted the Individual Markets Life segmentand is also reflected in our consolidated presentation.

*We made several reclassifications within our Other Operations income statement to separately present intersegmenteliminations affecting revenues and expenses and we have also disclosed some additional line items. These changes wereincorporated into all pages that reference Other Operations.

3/31/2007										PAGE 1
Financial Highlights
Unaudited [Millions of Dollars, except Common Share Data]
	For the Quarter Ended March 31
	2007			2006
	Amount			Amount			Change			% Change
Income from Operations - By Segment
Individual Life Insurance	$	166.6		$	69.0		$	97.6			141.4	%
Individual Annuities		121.0			66.4			54.6			82.2	%
Individual Markets		287.6			135.4			152.2			112.4	%
Defined Contribution		49.7			52.5			(2.8	)		-5.3	%
Executive Benefits		14.4			7.5			6.9			92.0	%
Group Protection		23.1			-			23.1			NM
Employer Markets		87.3			60.0			27.3			45.5	%
Investment Management		16.2			15.3			0.9			5.9	%
Lincoln UK		10.9			10.7			0.2			1.9	%
Lincoln Financial Media		12.4			-			12.4			NM
Other Operations		(35.2	)		0.1			(35.3	)		NM
Total Income from Operations (1)		379.1			221.4			157.7			71.2	%
Realized gains (losses)		17.1			(4.2	)		21.3			NM
Net gain (loss) on reinsurance
derivative/trading account securities		-			3.8			(3.8	)		-100.0	%
Reserve development/ amortization of related deferred gain		0.2			0.2			-			-
Net Income	$	396.5		$	221.2		$	175.3			79.2	%
Earnings per share (diluted)
Income from Operations (1)	$	1.36		$	1.25		$	0.11			8.8	%
Realized losses		0.06			(0.03	)		0.09			300.0	%
Net gain (loss) on reinsurance
derivative/trading account securities		-			0.02			(0.02	)		-100.0	%
Net Income	$	1.42		$	1.24		$	0.18			14.5	%
Operating Revenue- By Segment
Individual Life Insurance	$	971.4		$	500.6		$	470.8			94.0	%
Individual Annuities		605.1			374.8			230.3			61.4	%
Individual Markets		1,576.5			875.4			701.1			80.1	%
Defined Contribution		246.8			249.2			(2.4	)		-1.0	%
Executive Benefits		111.7			57.2			54.5			95.3	%
Group Protection		360.4			-			360.4			NM
Employer Markets		718.9			306.4			412.5			134.6	%
Investment Management		150.2			139.6			10.6			7.6	%
Lincoln UK		90.7			69.5			21.2			30.5	%
Lincoln Financial Media		67.5			-			67.5			NM
Other Operations		40.0			31.7			8.3			26.2	%
Total Operating Revenue		2,643.8			1,422.6			1,221.2			85.8	%
Realized losses		26.4			(6.9	)		33.3			NM
Gain (loss) on reinsurance
derivative/trading account securities		(0.2	)		5.9			(6.1	)		NM
Amortization of deferred gain-reserve development		0.3			0.3			-			-
Total Revenue	$	2,670.4		$	1,421.8		$	1,248.6			87.8	%
(1) Income from operations includes after-tax restructuring charges of $2.5 million, or 1 cent per share, and $0.2 million, or -0- cents per share, for the quarters ended March 31, 2007 and 2006, respectively.

 3/31/07 PAGE 2

Financial Highlights
Unaudited [in Billions]
Operational Data by Segment	For the Quarter Ended March 31
	2007			2006
	Amount			Amount		Change			% Change
Individual Markets
Individual Annuities
Gross deposits	$	2.821		$	2.136	$	0.685			32.1	%
Net flows		0.754			0.770		(0.015	)		-1.9	%
Account values (gross)		68.438			51.059		17.380			34.0	%
Account values (net of reinsurance)		66.749			48.857		17.892			36.6	%
Individual Life Insurance
Sales (in millions) (1)		203.5			67.9		135.6			199.7	%
Life insurance in-force		508.411			321.409		187.002			58.2	%
Account values		26.924			14.268		12.655			88.7	%
Employer Markets
Defined Contribution
Gross deposits (2)	$	1.487		$	1.241	$	0.246			19.8	%
Net flows		0.221			0.181		0.040			22.1	%
Account values - annuities		28.669			27.487		1.182			4.3	%
Alliance Mutual Funds		5.807			4.248		1.559			36.7	%
Account values including Alliance Mutual Funds		34.475			31.735		2.741			8.6	%
Executive Benefits
COLI/BOLI sales (in millions)		20.4			16.9		3.5			20.7	%
Life insurance in-force		14.747			7.979		6.768			84.8	%
Account values		4.264			1.387		2.878			207.5	%
Group Protection
Annualized sales (in millions)		60.8			-		60.8			NM
Loss ratio (3)		72.7	%		-		NM			NM
Investment Management Segment
Retail deposits	$	3.603		$	4.019	$	(0.416	)		-10.4	%
Retail net flows		0.233			1.305		(1.073	)		-82.2	%
Institutional in-flows		2.431			5.044		(2.613	)		-51.8	%
Institutional net flows		(0.321	)		3.592		(3.914	)		NM
Total Deposits and In-flows		6.034			9.063		(3.029	)		-33.4	%
Total Net Flows		(0.088	)		4.898		(4.986	)		NM
Assets Under Management- Retail and Institutional		98.146			86.428		11.718			13.6	%
Assets Under Management - General Account		67.292			41.995		25.296			60.2	%
Assets Under Management - Total Segment		165.438			128.423		37.014			28.8	%
Consolidated
Domestic Retail Deposits	$	8.217		$	7.449	$	0.767			10.3	%
Domestic Retail Account Balances		169.282			129.225		40.057			31.0	%
Domestic Retail Net Flows		1.827			2.635		(0.807	)		-30.6	%
Domestic Deposits		10.536			12.236		(1.700	)		-13.9	%
Domestic Net Flows		1.554			6.188		(4.634	)		-74.9	%
Assets Under Management		237.031			182.995		54.036			29.5	%
(1) Sales for Individual Life Insurance consist of first year commissionable premium for Universal life ("UL"), including Moneyguard, and COLI plus 5% of excess premium received, including UL internal replacements, and first year paid premiums for Whole life and Term products
(2) Includes deposits for Alliance Mutual Funds which are not included in separate account liabilities on our balance sheet.
(3) Represents combined loss ratio for Life, Disability and Dental business.

PAGE 3

3/31/2007
Financial Highlights
Unaudited [Millions of Dollars, except Common Share Data]
	For the Quarter Ended March 31
	2007			2006
	Amount			Amount			Change		% Change
Balance Sheet Assets - End of Period	$	181,326.4		$	128,472.0		$	52,854.4		41.1	%
Shareholders' Equity
Beg of period (including AOCI)	$	12,201.0		$	6,384.4		$	5,816.6
End of period (including AOCI)		12,032.2			6,338.2			5,694.0
End of period (excluding AOCI)		11,372.5			6,053.2			5,319.3
Average equity (excluding AOCI)		11,480.2			5,954.9			5,525.3
Return on Equity
Net income/average equity (excluding AOCI)		13.8	%		14.9	%
Inc from operations/average equity (excluding AOCI)		13.2	%		14.9	%
Return on Capital
Inc from operations/average capital		10.6	%		12.8	%
Common Stock Outstanding
Average for the period - diluted		279.5			177.9			101.5		57.1	%
End of period - assuming conv of preferreds		270.9			176.1			94.8		53.8	%
End of period - diluted		274.0			178.5			95.5		53.5	%
Book value (including AOCI)	$	44.42		$	35.99		$	8.43		23.4	%
Book value (excluding AOCI)		41.98			34.37			7.61		22.2	%
Cash Returned to Shareholders
Share repurchase - dollar amount	$	511.7		$	-		$	511.7
Dividends declared to shareholders		106.8			67.5			39.3
Total Cash Returned to Shareholders	$	618.5		$	67.5		$	551.0
Share repurchase - number of shares		7.215			-			7.215
Dividend declared on common stock - per share	$	0.395		$	0.380		$	0.015		3.9	%
Dividend payout ratio (1)		27.8	%		30.6	%
Annualized yield (2)		2.3	%		2.8	%
Comprehensive Income (Loss)
Net income	$	396.5		$	221.2
Net unrealized gains (losses) on securities		35.3			(276.4	)
Gains (losses) on derivatives		7.7			27.8
Foreign currency translation		3.2			6.3
Minimum pension liability adjustment		-			(0.6	)
Funded status of employee benefit plans (4)		0.4			-
Comprehensive Income	$	443.0		$	(21.7	)
Ratios:
Debt to total capitalization (3)		21.9	%		18.1	%
Debt to equity (3)		28.1	%		22.2	%
Ratings as of April 30, 2007:
		A.M. Best			Fitch			Moody's		Standard & Poors
Senior Debt Ratings:		a			A			A3		A+
Financial Strength Ratings:
Lincoln National Life Insurance Company		A+			AA			Aa3		AA
First Penn-Pacific Life Insurance Company		A+			AA			A1		AA-
Lincoln Life & Annuity Company of New York		A+			AA			Aa3		AA
Jefferson-Pilot Life Insurance Company		A+			AA			Aa3		AA
Jefferson Pilot Financial Insurance Company		A+			AA			Aa3		AA
Jefferson Pilot LifeAmerica Insurance Company		A+			AA			N/R		AA
[1] Indicated dividend divided by net income
[2] Indicated dividend divided by the closing price
[3] Equity used in calculation excludes accumulated other comprehensive income (loss). Capital securities are considered 25% debt and 75% equity.
(4) SFAS 158 was adopted effective December 31, 2006 which requires the disclosure of the funded status of our pension and post-retirement benefit plans on the balance sheet.

3/31/2007											PAGE 4
Combined Production Data (1)
Unaudited [in Billions]
	Three Months Ended
	March		June		Sept.		Dec.		March		%
	2006		2006		2006		2006		2007		Change
Individual Markets
Individual Life Insurance
Sales by Product (millions)
Universal Life
Excluding MoneyGuard	$	83.4	$	97.5	$	119.9	$	177.6	$	166.2		99.3	%
MoneyGuard		7.7		7.5		8.3		7.8		7.4		-3.9	%
Total		91.1		105.0		128.2		185.4		173.6		90.6	%
Variable universal life		16.4		15.7		13.0		22.1		20.6		25.6	%
Whole life		1.2		0.4		0.7		0.6		0.1		-91.7	%
Term		11.2		11.3		10.7		10.0		9.3		-17.0	%
Total Sales by Product	$	120.0	$	132.3	$	152.5	$	218.1	$	203.5		69.6	%
Individual Annuity Deposits
Fixed	$	0.560	$	0.644	$	0.818	$	0.855	$	0.661		18.0	%
Variable		1.666		1.867		1.658		2.061		2.000		20.0	%
Indexed annuities		0.173		0.228		0.244		0.245		0.160		-7.5	%
Total Individual Annuities	$	2.399	$	2.739	$	2.720	$	3.161	$	2.821		17.6	%
Employer Markets
Defined Contribution
Fixed	$	0.253	$	0.242	$	0.268	$	0.183	$	0.299		18.2	%
Variable		0.669		0.714		0.583		0.559		0.655		-2.1	%
		0.923		0.955		0.851		0.742		0.953		3.3	%
Alliance Mutual Funds Deposits		0.318		0.204		0.235		0.357		0.533		67.6	%
Total Annuity and Alliance Mutual Funds	$	1.241	$	1.159	$	1.086	$	1.099	$	1.487		19.8	%
Executive Benefits
COLI/BOLI sales (millions)	$	17.5	$	17.2	$	16.3	$	32.5	$	20.4		16.6	%
Group Protection
Annualized Sales (millions)
Life	$	23.6	$	15.3	$	19.4	$	43.1	$	22.7		-3.8	%
Disability		34.2		22.9		24.7		56.9		28.6		-16.4	%
Dental		6.2		7.1		6.1		13.1		9.4		51.6	%
Investment Management
Sales and Inflows
Retail
Annuities	$	0.885	$	0.869	$	0.960	$	0.932	$	1.300		46.9	%
Mutual funds		1.329		1.370		1.151		1.768		1.753		31.9	%
Managed accounts & other		1.806		1.043		0.386		0.493		0.550		-69.5	%
		4.019		3.282		2.497		3.192		3.603		-10.4	%
Institutional		5.044		2.764		2.406		4.888		2.431		-51.8	%
Total Sales and Inflows	$	9.063	$	6.046	$	4.904	$	8.080	$	6.034		-33.4	%
Total Annuity & Alliance
Mutual Fund Deposits
Fixed Annuities
Individual	$	0.733	$	0.872	$	1.062	$	1.100	$	0.821		12.0	%
Employer Markets		0.253		0.242		0.268		0.183		0.299		18.2	%
		0.986		1.114		1.330		1.283		1.120		13.6	%
Variable Annuities
Individual		1.666		1.867		1.658		2.061		2.000		20.0	%
Employer Markets		0.669		0.714		0.583		0.559		0.655		-2.1	%
		2.335		2.581		2.241		2.619		2.655		13.7	%
Total Annuities		3.322		3.695		3.571		3.903		3.775		13.6	%
Alliance Mutual Funds		0.318		0.204		0.235		0.357		0.533		67.6	%
Total Annuity and Alliance Mutual Funds	$	3.640	$	3.898	$	3.806	$	4.259	$	4.308		18.4	%
(1) This schedule combines the previously reported data for LNC and JP and does not reflect any adjustments that may have resulted had the April 4, 2006 merger been completed prior to the periods presented.

3/31/2007																PAGE 5
Consolidated Expense Detail
Unaudited (In Millions)
	Three Months Ended
	March			June			Sept.			Dec.			March			%
	2006			2006			2006			2006			2007			Change
Commissions	$	212.9		$	362.0		$	382.6		$	464.7		$	446.5			109.7	%
General and administrative expenses:
General and administrative expenses		287.7			374.1			400.6			434.4			392.2			36.3	%
Merger-related expenses		-			7.4			12.1			15.8			10.1			NM
Total general and administrative expenses
excluding Broker/Dealer		287.7			381.5			412.7			450.2			402.3			39.8	%
Restructuring charges		0.3			9.6			1.0			3.3			3.9			NM
Taxes, licenses and fees		33.5			47.3			50.3			48.0			66.1			97.3	%
Interest (1)		21.7			65.0			67.3			70.4			61.5			183.4	%
Total commissions and expenses incurred		556.1			865.4			914.0			1,036.6			980.2			76.3	%
Less: commissions and expenses capitalized		(244.5	)		(391.6	)		(424.3	)		(517.9	)		(487.4	)		-99.3	%
Amortization:
DAC/VOBA Amortization		165.0			222.2			225.9			278.5			281.6			70.7	%
Amortization of intangibles		2.0			6.6			3.1			4.4			4.3			115.0	%
Total amortization		167.0			228.7			229.0			282.8			285.9			71.2	%
Broker/Dealer commissions and G&A		46.6			79.3			76.6			80.0			87.2			87.1	%
Total	$	525.1		$	781.9		$	795.3		$	881.5		$	865.9			64.9	%
Merger-related expenses: (2)
Severance and employee-related charges	$	-		$	12.8		$	8.4		$	6.2		$	3.0			NM
Systems integration and related expenses		-			0.8			1.5			5.4			5.6			NM
Other expenses		-			3.1			3.2			7.5			5.4			NM
Total merger-related expenses	$	-		$	16.7		$	13.1		$	19.1		$	14.0			NM
Note: The Consolidated Expense Detail data is presented on a GAAP basis.
(1) Interest expense for the fourth quarter 2006 includes $5.6 million related to losses on early extinguishment of debt.
(2) Represents merger-related expenses included in general and administrative expenses and restructuring charges.

3/31/2007																PAGE 6
Operating Results Summary
Unaudited [Millions of Dollars, except Common Share Data]
	Three Months Ended
	March			June			Sept.			Dec.			March			%
	2006			2006			2006			2006			2007			Change
Operating Revenue
Individual Life Insurance	$	500.6		$	901.4		$	895.3		$	958.4		$	971.4			94.0	%
Individual Annuities		374.8			552.6			596.5			637.3			605.1			61.4	%
Individual Markets		875.4			1,454.0			1,491.8			1,595.7			1,576.5			80.1	%
Defined Contribution		249.2			248.9			245.1			245.0			246.8			-1.0	%
Executive Benefits		57.2			101.2			104.3			109.1			111.7			95.3	%
Group Protection		-			354.9			332.1			344.8			360.4			NM
Employer Markets		306.4			704.9			681.5			698.9			718.9			134.6	%
Investment Management		139.6			134.7			140.4			148.9			150.2			7.6	%
Lincoln UK		69.5			81.4			72.3			84.8			90.7			30.5	%
Lincoln Financial Media		-			57.7			60.0			70.2			67.5			NM
Other Operations		31.7			67.6			51.4			45.6			40.0			26.2	%
Total Operating Revenue		1,422.6			2,500.3			2,497.4			2,644.1			2,643.8			85.8	%
Realized gains (losses) on investments and derivatives		(6.9	)		(6.7	)		(5.8	)		12.8			26.4			NM
Net gain (loss) on reinsurance
derivative/trading account securities		5.9			1.8			(4.7	)		1.2			(0.2	)		NM
Gain on sale of subsidiaries/ businesses		-			-			-			-			-			NM
Amortization of deferred gain-reserve development		0.3			0.3			0.3			0.3			0.3
Total Revenue	$	1,421.8		$	2,495.6		$	2,487.2		$	2,658.4		$	2,670.4			87.8	%
Income from Operations (1)
Individual Life Insurance	$	69.0		$	147.1		$	122.8		$	157.4		$	166.6			141.4	%
Individual Annuities		66.4			89.0			129.4			123.8			121.0			82.2	%
Individual Markets		135.4			236.1			252.2			281.1			287.6			112.4	%
Defined Contribution		52.5			54.3			52.5			44.6			49.7			-5.3	%
Executive Benefits		7.5			16.2			12.8			12.7			14.4			92.0	%
Group Protection		-			37.0			28.8			33.2			23.1			NM
Employer Markets		60.0			107.6			94.0			90.5			87.3			45.5	%
Investment Management		15.3			12.0			13.4			14.4			16.2			5.9	%
Lincoln UK		10.7			9.9			8.3			9.9			10.9			1.9	%
Lincoln Financial Media		-			11.9			14.6			17.5			12.4			NM
Other Operations		0.1			(26.1	)		(11.5	)		(38.4	)		(35.2	)		NM
Income from Operations (1)		221.4			351.4			371.0			375.2			379.1			71.2	%
Realized gains (losses) on investments and derivatives		(4.2	)		(3.8	)		(4.1	)		9.4			17.1			NM
Net gain (loss) on reinsurance
derivative/trading account securities		3.8			1.2			(3.1	)		0.1			-			NM
Gain on sale of subsidiaries/ businesses		-			-			-			-			-			NM
Reserve development/ amortization of related deferred gain		0.2			0.2			0.2			0.2			0.2
Loss on early retirement of debt		-			-			-			(3.6	)		-			NM
Net Income	$	221.2		$	349.0		$	364.1		$	381.3		$	396.5			79.2	%
OTHER DATA
		Three Months Ended
		March			June			Sept.			Dec.			March
		2006			2006			2006			2006			2007
Shareholders' Equity
Beg of period (including AOCI)	$	6,384.4		$	6,338.2		$	11,404.8		$	12,043.2		$	12,201.0
End of period (including AOCI)		6,338.2			11,404.8			12,043.2			12,201.0			12,032.2
End of period (excluding AOCI)		6,053.2			11,439.8			11,436.0			11,587.9			11,372.5
Average equity (excluding AOCI) (2)		5,954.9			11,311.3			11,437.9			11,512.0			11,480.2
Common Shares Outstanding
Average for the period - diluted		177.9			282.6			282.4			280.4			279.5
End of period - diluted		178.5			285.0			281.3			280.2			274.0
Per Share Data (Diluted)
Net Income	$	1.24		$	1.23		$	1.29		$	1.36		$	1.42
Income from Operations (1)		1.25			1.24			1.31			1.34			1.36
Shareholders' Equity Per Share
Shareholders' Equity (including AOCI)	$	35.99		$	40.48		$	43.39		$	44.21		$	44.42
Shareholders' Equity (excluding AOCI)		34.37			40.60			41.20			41.99			41.98
Dividends declared (Common Stock)		0.380			0.380			0.380			0.395			0.395
Return on Equity
Net Income/Average Equity		14.9	%		12.3	%		12.7	%		13.2	%		13.8	%
Inc from Operations/Average Equity		14.9	%		12.4	%		13.0	%		13.0	%		13.2	%
Market Value of Common Stock
Highest price	$	57.97		$	60.52		$	63.47		$	66.72		$	71.18
Lowest price		52.00			54.30			53.94			61.74			64.29
Closing price	$	54.59		$	56.44		$	62.08		$	66.40		$	67.79
(1) Income from operations includes after-tax restructuring charges of $0.2 million, or -0- cents per share, for the first quarter of 2006, $6.2 million, or 2 cents per share, for the second quarter of 2006, $0.6 million, or -0- cents per share, for the third quarter of 2006, $2.1 million, or 1 cent per share, for the fourth quarter of 2006, and $2.5 million, or 1 cent per share, for the first quarter of 2007.
(2) Average equity was adjusted to reflect the merger with Jefferson-Pilot effective April 3, 2006.

3/31/2007																PAGE 7
Consolidated Statements of Income
Unaudited [Millions of Dollars]
	Three Months Ended
	March			June			Sept.			Dec.			March			%
	2006			2006			2006			2006			2007			Change
Revenue
Premiums	$	78.4		$	454.3		$	425.7		$	448.1		$	458.9			NM
Surrender charges		18.7			27.3			26.6			29.9			26.9			43.9	%
Mortality assessments		146.2			294.7			294.9			295.9			311.2			112.9	%
Expense assessments		309.5			370.1			357.8			432.3			441.0			42.5	%
Investment advisory fees		77.8			81.2			82.9			86.1			90.3			16.1	%
Communications revenue		-			57.5			59.8			69.6			67.2			NM
Net investment income		678.4			1,068.2			1,107.9			1,126.3			1,089.5			60.6	%
Other revenue and fees		94.8			128.2			123.1			137.2			140.1			47.8	%
Amortization of deferred gain		18.8			18.8			18.8			18.8			18.6			-1.1	%
Amortization of deferred gain-reserve          development		0.3			0.3			0.3			0.3			0.3
Realized gains (losses)		(1.0	)		(5.0	)		(10.5	)		13.9			26.2			NM
Total Revenue		1,421.8			2,495.6			2,487.2			2,658.4			2,670.4			87.8	%
Benefits and Expenses
Insurance benefits		200.4			589.3			566.2			562.2			588.8			193.8	%
Interest credited to contractholder funds		381.3			589.3			634.4			646.5			604.5			58.5	%
Communications expenses		-			29.8			31.4			36.9			41.2			NM
Operating and acquisition expenses		469.9			669.5			677.6			763.1			738.4			57.1	%
Taxes, licenses and fees		33.5			47.3			50.3			48.0			66.1			97.3	%
Interest and debt expense		21.7			65.0			67.3			70.4			61.5			183.4	%
Total Benefits and Expenses		1,106.8			1,990.3			2,027.3			2,127.2			2,100.5			89.8	%
Income Before Federal Income Tax		315.0			505.3			459.9			531.3			569.9			80.9	%
Federal income taxes		93.9			156.3			95.8			149.9			173.4			84.7	%
Net Income	$	221.2		$	349.0		$	364.1		$	381.3		$	396.5			79.2	%
Roll Forward of Deferred Acquisition Costs		Three Months Ended
& Value of Business Acquired		March			June			Sept.			Dec.			March
		2006			2006			2006			2006			2007
Balance at beginning of period	$	5,163.3		$	5,433.8		$	8,328.4		$	8,171.6		$	8,420.4
Cumulative effect of adoption of SOP 05-1		-			-			-			-			(66.1	)
Deferral		244.5			391.6			424.3			517.9			487.4
Amortization		(165.0	)		(222.2	)		(225.9	)		(278.5	)		(281.6	)
Included in Total Benefits and Expenses		79.6			169.4			198.4			239.5			205.8
Adjustment related to realized (gains) losses
on available-for-sale securities		(10.9	)		(18.9	)		(8.9	)		(8.9	)		(17.9	)
Adjustment related to unrealized (gains) losses
on available-for-sale securities		194.2			221.5			(359.8	)		(17.4	)		(25.5	)
Foreign currency translation adjustment		7.7			48.3			9.7			35.7			4.1
Business acquired		-			2,474.2			3.8			-			14.0
Balance at end of period	$	5,433.8		$	8,328.4		$	8,171.6		$	8,420.4		$	8,534.7
Roll Forward of Deferred Front-End Load
Balance at beginning of period	$	795.7		$	805.8		$	861.0		$	923.9		$	976.9
Cumulative effect of adoption of SOP 05-1		-			-			-			-			(2.0	)
Deferral		31.1			69.1			71.0			77.9			77.2
Amortization		(24.7	)		(37.4	)		(12.7	)		(42.8	)		(36.1	)
Included in Expense Assessments		6.4			31.8			58.3			35.1			41.1
Adjustment related to realized (gains) losses
on available-for-sale securities		-			-			(0.1	)		-			-
Foreign currency translation adjustment		3.8			23.6			4.7			17.9			2.0
Balance at end of period	$	805.8		$	861.0		$	923.9		$	976.9		$	1,017.9
Roll Forward of Deferred Sales Inducements
Balance at beginning of period	$	129.4		$	139.9		$	154.6		$	173.4		$	193.8
Cumulative effect of adoption of SOP 05-1		-			-			-			-			(2.8	)
Deferral		15.7			19.9			22.2			28.4			23.7
Amortization		(5.2	)		(5.2	)		(3.3	)		(7.9	)		(8.2	)
Included in Income from Operations		10.5			14.7			18.9			20.5			15.5
Adjustment related to realized (gains) losses
on available-for-sale securities		-			-			(0.1	)		-			(0.1	)
Balance at end of period	$	139.9		$	154.6		$	173.4		$	193.8		$	206.4

3/31/2007																							PAGE 8
Consolidating Statements of Income from Operations
Unaudited [Millions of Dollars]
For the Quarter Ended March 31, 2007
	Individual Markets				Employer Markets
															Lincoln
					Defined		Executive		Group		Investment		Lincoln		Financial		Other			Consolidating
	Life		Annuities		Contribution		Benefits		Protection		Management		UK		Media		Operations			Adjustments			Consolidated
Operating Revenue
Premiums	$	87.7	$	12.8	$	-	$	0.6	$	331.3	$	-	$	24.2	$	-	$	2.1		$	-		$	458.9
Surrender charges		15.2		9.7		2.0		-		-		-		-		-		-			-			26.9
Mortality assessments		292.3		-		-		8.9		-		-		10.0		-		-			-			311.2
Expense assessments		111.9		226.0		59.8		6.2		-		-		37.1		-		-			-			441.0
Investment advisory fees		-		-		-		-		-		114.9		-		-		-			(24.5	)		90.3
Communications revenue		-		-		-		-		-		-		-		67.2		-			-			67.2
Net investment income		454.0		266.3		180.3		94.8		27.9		-		19.3		0.2		47.4			(0.7	)		1,089.5
Amortization of deferred gain		-		-		-		-		-		-		-		-		18.6			-			18.6
Other revenue and fees		10.2		90.4		4.7		1.2		1.1		35.3		0.1		-		7.5			(10.4	)		140.1
Total Operating Revenue		971.4		605.1		246.8		111.7		360.4		150.2		90.7		67.5		75.7			(35.6	)		2,643.8
Operating Expenses
Insurance benefits		246.0		21.4		-		33.1		246.6		-		36.0		-		5.7			-			588.8
Interest credited to        contractholder funds		251.7		166.5		104.3		44.8		-		-		-		-		37.1			-			604.5
Communications expenses		-		-		-		-		-		-		-		41.2		-			-			41.2
Operating and        acquisition expenses		188.3		247.5		66.5		11.2		68.6		120.5		38.0		5.4		27.2			(34.9	)		738.4
Taxes, licenses and fees		32.9		8.9		5.1		1.5		9.7		4.1		-		1.3		2.7			-			66.1
Interest		-		0.3		-		-		-		-		-		0.4		61.5			(0.7	)		61.5
Total Operating Expenses		718.9		444.6		176.0		90.7		324.9		124.6		74.0		48.3		134.2			(35.6	)		2,100.5
Income (Loss) from Operations before Federal income taxes		252.5		160.5		70.8		21.1		35.5		25.6		16.7		19.2		(58.5	)		-			543.4
Federal income taxes		85.9		39.5		21.1		6.6		12.4		9.3		5.9		6.8		(23.3	)		-			164.2
Income from Operations	$	166.6	$	121.0	$	49.7	$	14.4	$	23.1	$	16.2	$	10.9	$	12.4	$	(35.2	)	$	-		$	379.1

3/31/2007																				PAGE 9
Consolidating Statements of Income from Operations
Unaudited [Millions of Dollars]
For the Quarter Ended March 31, 2006
	Individual Markets				Employer Markets
															Lincoln
					Defined		Executive		Group		Investment		Lincoln		Financial		Other			Consolidating
	Life		Annuities		Contribution		Benefits		Protection		Management		UK		Media		Operations			Adjustments			Consolidated
Operating Revenue
Premiums	$	51.1	$	9.3	$	-	$	1.1	$	-	$	-	$	16.6	$	-	$	0.3		$	-		$	78.4
Surrender charges		10.3		6.2		2.3		-		-		-		-		-		-			-			18.7
Mortality assessments		135.6		-		-		2.8		-		-		7.8		-		-			-			146.2
Expense assessments		54.3		168.0		55.6		3.3		-		-		28.0		-		0.3			-			309.5
Investment advisory fees		-		-		-		-		-		102.9		-		-		-			(25.1	)		77.8
Communications revenue		-		-		-		-		-		-		-		-		-			-			-
Net investment income		239.5		148.0		185.7		48.7		-		-		17.0		-		39.7			(0.2	)		678.4
Amortization of deferred gain		-		-		-		-		-		-		-		-		18.8			-			18.8
Other revenue and fees		9.7		43.4		5.6		1.4		-		36.7		0.1		-		2.0			(4.0	)		94.8
Total Operating Revenue		500.6		374.8		249.2		57.2				139.6		69.5		-		61.0			(29.2	)		1,422.6
Operating Expenses
Insurance benefits		120.2		20.4		-		32.8		-		-		25.4		-		1.6			-			200.4
Interest credited to         contractholder funds		142.2		95.1		100.7		9.3		-		-		-		-		33.9			-			381.3
Communications expenses		-		-		-		-		-		-		-		-		-			-			-
Operating and acquisition        expenses		116.5		167.0		70.4		3.5				111.3		27.6				2.9			(29.2	)		469.9
Taxes, licenses and fees		16.3		5.4		2.9		1.1		-		4.8		-		-		3.0			-			33.5
Interest		-		0.1		-		-		-		-		-		-		21.5			-			21.7
Total Operating Expenses		395.3		288.1		174.0		46.7		-		116.1		53.0		-		63.0			(29.2	)		1,106.9
Income (Loss) from Operations       before Federal income taxes		105.3		86.7		75.2		10.5		-		23.5		16.5		-		(2.0	)		-			315.8
																		0.1
Federal income taxes		36.3		20.3		22.7		3.0		-		8.2		5.8		-		(2.2	)		-			94.4
Income from Operations	$	69.0	$	66.4	$	52.5	$	7.5	$	-	$	15.3	$	10.7	$	-	$	0.1		$	-		$	221.4

3/31/2007													PAGE 10
Consolidated Balance Sheet
Unaudited [Millions of Dollars, except Common Share Data]
	March			June			Sept.			Dec.			March
	2006			2006			2006			2006			2007
ASSETS
Investments
Corporate bonds	$	25,418.0		$	43,881.6		$	45,345.3		$	45,489.4		$	45,484.0
U.S. government bonds		173.4			287.6			291.6			263.4			244.3
Foreign government bonds		1,169.7			1,188.0			1,144.4			1,141.6			1,077.1
Mortgage backed securities		5,868.8			8,370.3			8,765.1			8,691.3			9,186.2
State and municipal bonds		126.0			166.5			160.7			159.4			155.5
Preferred stocks - redeemable		136.9			130.1			117.8			108.3			108.4
Common stocks		61.0			458.8			506.3			525.5			503.8
Preferred stocks-equity		115.0			119.7			155.7			174.7			210.1
Total AFS Securities		33,068.8			54,602.6			56,486.9			56,553.7			56,969.5
Trading securities		3,190.1			3,109.0			3,172.5			3,036.3			2,909.7
Mortgage loans		3,586.2			7,741.2			7,580.5			7,384.3			7,416.0
Real estate		180.4			428.6			424.0			421.3			406.2
Policy loans		1,860.4			2,716.4			2,724.9			2,759.7			2,766.8
Other long-term investments		687.5			1,116.6			1,218.7			1,332.4			1,381.2
Total Investments		42,573.2			69,714.4			71,607.5			71,487.6			71,849.3
Cash and invested cash		1,974.0			1,499.8			1,108.3			1,620.6			900.0
Premiums and fees receivable		363.2			343.9			345.6			356.2			374.9
Accrued investment income		532.1			879.0			928.2			866.2			919.2
Amount recoverable from reinsurers		6,899.4			7,967.2			8,007.3			7,939.1			8,132.1
Deferred acquisition costs and VOBA		5,433.7			8,328.4			8,171.6			8,420.4			8,534.7
Goodwill		1,194.4			4,502.6			4,498.0			4,499.5			4,520.7
Other		1,517.7			3,049.6			2,703.1			2,770.4			2,948.1
Assets held in separate accounts		67,984.2			71,095.2			74,357.1			80,533.7			83,147.5
Total Assets	$	128,472.0		$	167,380.0		$	171,726.6		$	178,493.7		$	181,326.4
LIABILITIES and SHAREHOLDERS' EQUITY
Liabilities
Insurance and Investment Contract Liabilities:
Reserves	$	10,657.2		$	13,512.1		$	13,513.4		$	13,622.1		$	13,864.9
Unpaid claims		981.3			1,211.7			1,206.9			1,149.1			1,149.5
Premium deposit funds		21,448.6			21,198.4			20,708.6			20,541.4			20,115.8
Policyholders' funds		13,991.5			37,430.3			37,808.3			38,275.1			38,612.7
Total Insurance and Investment Contract Liabilities		47,078.6			73,352.5			73,237.2			73,587.7			73,743.0
Short-term debt		10.6			561.0			559.2			657.6			492.8
Long-term debt - senior notes		998.5			2,329.1			2,330.4			2,231.0			2,483.4
Long-term debt - subordinated
Capital securities		-			1,071.8			1,071.9			1,072.0			1,570.7
Junior subordinated debentures issued to
affiliated trusts		332.3			330.5			332.5			154.6			154.6
Embedded derivative - modco		192.0			126.7			232.5			228.7			229.8
Deferred gain on indemnity reinsurance		816.9			797.8			778.7			759.6			740.7
Federal income taxes		-			563.8			911.1			977.9			1,147.6
Other liabilities		4,720.7			5,746.7			5,872.8			6,089.9			5,584.0
Liabilities related to separate accounts		67,984.2			71,095.2			74,357.1			80,533.7			83,147.5
Total Liabilities		122,133.8			155,975.2			159,683.5			166,292.7			169,294.2
Preferred Stock		0.5			0.5			0.5			0.5			0.5
Capital stock		1,817.5			7,425.7			7,448.7			7,450.7			7,318.5
Retained earnings (excl. cumulative effect adjustments)		4,235.2			4,013.7			3,986.7			4,136.7			4,109.8
Cumulative effect of adoption of FIN-48		-			-			-			-			(15.4	)
Cumulative effect of adoption of SOP 05-1		-			-			-			-			(40.9	)
Unrealized gains on investments		220.2			(151.5	)		478.0			492.8			528.1
Gains - derivatives		35.2			51.5			55.9			39.2			46.8
Foreign currency		89.7			128.5			136.5			165.1			168.4
Minimum pension liability		(60.1	)		(63.6	)		(63.2	)		-			-
Funded status of employee benefit plan		-			-			-			(84.0	)		(83.6	)
Total Shareholders' Equity		6,338.2			11,404.8			12,043.2			12,201.0			12,032.2
Total Liabilities and Shareholders' Equity	$	128,472.0		$	167,380.0		$	171,726.6		$	178,493.7		$	181,326.4
Shareholders' Equity Per Share	$	35.99		$	40.48		$	43.39		$	44.21		$	44.42
Book Value, Excluding AOCI	$	34.37		$	40.60		$	41.20		$	41.99		$	41.98
Common shares outstanding -assuming conv of
preferreds (in millions)		176.1			281.8			277.6			276.0			270.9

3/31/2007																	PAGE 11
Balance Sheet Data - Segment Highlights
Unaudited [Millions of Dollars]
	Individual				Employer
	Markets				Markets
As of March 31, 2007	Annuities		Life		Defined Contribution		Executive Benefits		Group Protection		Investment Management		Lincoln UK		Lincoln Financial Media		Other Operations (1)			Consolidated
Assets
Allocated Investments	$	18,388.4	$	28,476.8	$	11,873.0	$	6,101.3	$	1,871.0	$	-	$	1,171.5	$	-	$	3,967.4		$	71,849.3
DAC and VOBA		2,082.0		4,795.8		489.4		260.5		103.7		-		802.6		-		0.7			8,534.7
Goodwill		1,044.9		2,196.7		20.2		-		273.3		261.7		16.3		707.6		-			4,520.7
Other intangibles		206.2		96.0		0.2		-		-		7.9		-		661.2		-			971.5
Amounts recoverable from reinsurers		810.7		1,830.4		-		4.4		27.4		-		72.7		-		5,386.5			8,132.1
Assets held in separate accounts		50,151.7		5,159.3		17,661.0		833.0		-		-		8,906.3		-		436.2			83,147.5
Liabilities and Capital
Insurance and Investment       Contract Liabilities:
Insurance policy & claim reserves		409.7		5,793.0		-		1,767.2		1,207.2		-		1,127.4		-		4,710.0			15,014.4
Contractholder funds		17,800.8		23,701.3		10,969.3		3,981.1		15.4		-		428.5		-		1,832.1			58,728.6
Total Insurance and Inv Contract Liabilities		18,210.4		29,494.3		10,969.3		5,748.3		1,222.6		-		1,555.9		-		6,542.2			73,743.0
Allocated capital (2)		3,452.0		7,770.5		917.1		546.9		907.1		303.6		384.6		1,157.7		(4,067.0	)		11,372.5
As of December 31, 2006
Assets
Allocated Investments	$	18,686.2	$	27,843.9	$	11,762.6	$	6,088.9	$	1,833.6	$	-	$	1,101.1	$	-	$	4,171.4		$	71,487.6
DAC and VOBA		2,050.4		4,659.4		497.6		265.3		137.6		-		809.0		-		1.3			8,420.4
Goodwill		1,031.6		2,181.3		20.2		-		281.0		261.7		16.2		707.6		-			4,499.5
Other intangibles		193.7		97.0		0.1		-		-		9.3		-		663.1		-			963.2
Amounts recoverable from reinsurers		836.9		1,817.7		-		5.3		27.5		-		70.2		-		5,181.5			7,939.1
Assets held in separate accounts		48,014.7		5,040.3		17,459.2		833.4		-		-		8,756.9		-		429.3			80,533.7
Liabilities and Capital
Insurance and Investment         Contract Liabilities:
Insurance policy & claim reserves		438.1		5,640.7		-		1,778.3		1,183.4		-		1,118.8		-		4,611.8			14,771.2
Contractholder funds		18,206.0		23,433.9		10,982.9		4,025.5		16.8		-		435.6		-		1,715.9			58,816.5
Total Insurance and Inv                Contract Liabilities		18,644.1		29,074.6		10,982.9		5,803.8		1,200.2		-		1,554.4		-		6,327.7			73,587.7
Allocated capital (2)		3,432.5		7,345.1		959.8		531.7		923.1		307.8		385.0		1,161.9		(3,458.9	)		11,587.9
(1) Includes consolidating adjustments.
(2) Allocated capital is based on internal economic capital models plus certain other items (principally intangibles including DAC and VOBA, goodwill and other items).

3/31/2007																PAGE 12
Individual Markets - Individual Life Insurance
Income Statements & Operational Data
Unaudited [Millions of Dollars]
	Three Months Ended
	March			June			Sept.			Dec.			March			%
	2006			2006			2006			2006			2007			Change
Operating Revenue
Premiums	$	51.1		$	89.9		$	87.0		$	93.5		$	87.7			71.6	%
Surrender charges		10.3			15.5			18.3			16.1			15.2			47.6	%
Mortality assessments		135.6			277.3			278.9			278.4			292.3			115.6	%
Expense assessments		54.3			93.0			86.1			116.4			111.9			106.1	%
Net investment income		239.5			415.9			414.4			441.1			454.0			89.6	%
Other revenue and fees		9.7			9.7			10.6			13.0			10.2			5.2	%
Total Operating Revenue		500.6			901.4			895.3			958.4			971.4			94.0	%
Operating Expenses
Insurance benefits		120.2			256.0			261.1			249.1			246.0			104.7	%
Interest credited to contractholder funds		142.2			241.5			247.1			251.3			251.7			77.0	%
Operating and acquisition expenses		132.8			182.9			207.6			219.0			221.2			66.6	%
Total Operating Expenses		395.3			680.4			715.7			719.4			718.9			81.9	%
Income from operations before Federal income taxes		105.3			221.0			179.6			239.1			252.5			139.8	%
Federal income taxes		36.3			73.9			56.8			81.7			85.9			136.6	%
Income from Operations	$	69.0		$	147.1		$	122.8		$	157.4		$	166.6			141.4	%
Effective tax rate		34.5	%		33.4	%		31.6	%		34.2	%		34.0	%
Average equity	$	3,266.0		$	7,051.8		$	7,223.9		$	7,292.7		$	7,557.8
Return on average equity		8.5	%		8.3	%		6.8	%		8.6	%		8.8	%
Operating and Acquisition Expenses
Commissions	$	66.8		$	151.2		$	167.1		$	226.5		$	227.1			239.8	%
General and administrative expenses		66.3			97.2			122.5			116.3			111.0			67.5	%
Taxes, licenses and fees		16.3			27.5			28.3			27.0			32.9			101.7	%
Total commissions and expenses incurred		149.4			275.9			317.9			369.8			371.1			148.3	%
Less: commissions and expenses capitalized		(90.1	)		(199.8	)		(226.6	)		(291.3	)		(288.9	)		NM
Amortization of DAC and VOBA		73.6			106.7			116.3			140.5			139.1			89.1	%
Net Operating and Acquisition Expenses	$	132.8		$	182.9		$	207.6		$	219.0		$	221.2			66.5	%
General and administrative expenses -
basis points on account values - Annualized		187			153			191			178			166			(21	)
Roll Forward of Deferred Acquisition Costs & Value of Business Acquired
Balance at beginning of period	$	2,543.9		$	2,643.8		$	4,592.2		$	4,524.7		$	4,659.4
Deferral		90.1			199.8			226.6			291.3			288.9
Amortization		(73.6	)		(106.7	)		(116.3	)		(140.5	)		(139.1	)
Included in Total Operating Expenses		16.6			93.0			110.3			150.8			149.8
Adjustment related to realized (gains) losses
on available-for-sale securities		(3.4	)		(7.9	)		(3.8	)		(6.7	)		(12.5	)
Adjustment related to unrealized (gains) losses
on available-for-sale securities		86.7			96.7			(174.0	)		(9.5	)		(0.9	)
Business acquired		-			1,766.6			-			-			-
Other		-			-			-			-			-
Balance at end of period	$	2,643.8		$	4,592.2		$	4,524.7		$	4,659.4		$	4,795.8
Roll Forward of Deferred Front-End Loads
Balance at beginning of period	$	342.6		$	344.3		$	375.3		$	415.9		$	449.5
Deferral		19.7			57.8			58.9			65.2			65.5
Amortization		(18.0	)		(26.8	)		(18.3	)		(31.6	)		(24.4	)
Included in Expense Assessments		1.7			31.0			40.6			33.6			41.0
Balance at end of period	$	344.3		$	375.3		$	415.9		$	449.5		$	490.6

3/31/2007											PAGE 13
Individual Markets- Individual Life Insurance
Operational Data
Unaudited [Millions of Dollars]
	Three Months Ended
	March		June		Sept.		Dec.		March		%
	2006		2006		2006		2006		2007		Change
Sales by Product(Millions)(1)
Universal Life
Excluding MoneyGuard	$	41.3	$	97.5	$	119.9	$	177.6	$	166.2		NM
MoneyGuard		7.7		7.5		8.3		7.8		7.4		-3.9	%
Total		49.0		105.0		128.2		185.4		173.6		254.3	%
Variable universal life		10.0		15.7		13.0		22.1		20.6		106.0	%
Whole life		0.7		0.4		0.7		0.6		0.1		-85.7	%
Term		8.2		11.3		10.7		10.0		9.3		13.4	%
Total	$	67.9	$	132.3	$	152.5	$	218.1	$	203.5		199.7	%
First-Year Paid Premiums (Millions)
Universal Life
Excluding MoneyGuard	$	108.2	$	261.2	$	269.0	$	351.0	$	367.9		240.0	%
MoneyGuard		51.5		50.0		54.8		52.3		49.2		-4.5	%
Total		159.7		311.2		323.9		403.2		417.1		161.2	%
Variable universal life		27.1		40.5		34.4		53.4		52.5		93.7	%
Whole life		8.3		9.5		12.0		16.5		8.4		1.2	%
Term		8.6		11.5		10.4		9.6		9.1		5.8	%
Total	$	203.7	$	372.7	$	380.6	$	482.7	$	487.0		139.1	%
Life Insurance In-Force (Billions)
Universal life & other	$	129.584	$	260.945	$	263.485	$	267.228	$	272.921		110.6	%
Term insurance		191.825		229.082		232.214		234.148		235.491		22.8	%
Total Life Segment In-Force	$	321.409	$	490.027	$	495.699	$	501.376	$	508.411		58.2	%
(1) Sales for Individual Life Insurance consist of first year commissionable premium for Universal life ("UL"), including Moneyguard, including UL internal replacements, and first year paid premiums for Whole life and Term products.

3/31/2007																PAGE 14
Individual Markets - Individual Life Insurance
Account Value Roll Forward
Unaudited [Billions of Dollars]
	Three Months Ended
	March			June			Sept.			Dec.			March			%
	2006			2006			2006			2006			2007			Change
Interest Sensitive Life-Balance Beginning-of-Period	$	11.809		$	11.913		$	21.285		$	21.516		$	21.890			85.4	%
Business acquired		-			9.150			-			-			-			NM
Deposits		0.401			0.799			0.717			0.948			0.882			120.0	%
Withdrawals & deaths		(0.182	)		(0.317	)		(0.275	)		(0.301	)		(0.264	)		-45.1	%
Net flows		0.219			0.482			0.442			0.647			0.618			182.2	%
Policyholder assessments		(0.248	)		(0.492	)		(0.449	)		(0.516	)		(0.523	)		NM
Interest credited		0.133			0.232			0.239			0.242			0.243			82.7	%
Interest Sensitive Life-Balance End-of- Period (1)	$	11.913		$	21.285		$	21.516		$	21.890		$	22.228			86.6	%
Variable Universal Life-Balance Beginning of Period	$	2.242		$	2.355		$	4.194		$	4.305		$	4.600			105.2	%
Business acquired		-			1.918			-			-			-			NM
Deposits		0.087			0.224			0.036			0.153			0.157			80.5	%
Withdrawals & deaths		(0.049	)		(0.158	)		0.013			(0.073	)		(0.077	)		NM
Net flows		0.038			0.066			0.049			0.080			0.080			110.5	%
Policyholder assessments		(0.044	)		(0.077	)		(0.076	)		(0.079	)		(0.079	)		-79.5	%
Investment income and change in market value		0.119			(0.068	)		0.137			0.294			0.095			-20.2	%
Variable Universal Life -Balance End- of-Period	$	2.355		$	4.194		$	4.305		$	4.600		$	4.696			99.4	%
Total Segment- Life Insurance Account Value Roll Forward
Balance Beginning-of-Period	$	14.051		$	14.268		$	25.479		$	25.821		$	26.490			88.5	%
Business acquired		-			11.068			-			-			-			NM
Deposits		0.488			1.023			0.753			1.101			1.039			112.9	%
Withdrawals & deaths		(0.231	)		(0.476	)		(0.262	)		(0.374	)		(0.341	)		-47.6	%
Net flows		0.257			0.548			0.491			0.727			0.698			171.6	%
Policyholder assessments		(0.292	)		(0.570	)		(0.524	)		(0.595	)		(0.602	)		NM
Investment income and change in market value		0.252			0.164			0.377			0.536			0.338			34.1	%
Total Segment -Balance End-of-Period	$	14.268		$	25.479		$	25.821		$	26.490		$	26.924			88.7	%
Life Product Spread Information (2)
																	Change
Interest Sensitive Products																	(Basis Points	)
Net investment income (3) (4)		6.48	%		6.22	%		6.08	%		6.44	%		6.48	%		-
Interest credited to policyholders		4.60	%		4.46	%		4.52	%		4.52	%		4.46	%		(14	)
Spread (3)(4)		1.88	%		1.76	%		1.57	%		1.92	%		2.02	%		14
Traditional Products
Net investment income (3)		6.72	%		6.59	%		6.60	%		6.51	%		6.41	%		(31	)
(1) Includes universal life, interest sensitive life, and the fixed investment option of VUL products.
(2) Interest Sensitive Products - For the life products spread, the yield on earning assets is calculated as net investment income on fixed product investment portfolios divided by average earning assets. The average crediting rate is calculated using interest credited on life products divided by average fixed account values. Traditional Products - the yield on earning assets is calculated as net investment income on traditional investment portfolios divided by average earning assets. As of March 31, 2007, interest sensitive products represented approximately 81% of total interest sensitive and traditional earning assets.
(3) The net investment income and spread reported above includes earnings from commercial mortgage loan prepayment and bond make-whole premiums. The impact of these premiums on investment income and spread for interest sensitive products was 21 bps in the 1st quarter of 2007, 12 bps in the 4th quarter of 2006, 20 bps in the 3rd quarter of 2006, 13 bps in the 2nd quarter of 2006 and 7 bps in the 1st quarter of 2006. There was an impact on traditional products of 2 bps in the 1st quarter of 2007, 2 bps in the 4th quarter of 2006, 15 bps in the 3rd quarter of 2006, 14 bps in the 2nd quarter of 2006 and 15 bps in the 1st quarter of 2006.
(4) The net investment income and spread above includes incremental yield from special investments. The impact on investment income spreads was 14 bps in the 1st quarter of 2007, 24 bps in the 4th quarter of 2006, -22 bps in the 3rd quarter of 2006, 2 bps in the 2nd quarter of 2006 and 17 bps in the 1st quarter of 2006.

3/31/2007																PAGE 15
Individual Markets - Individual Annuities
Income Statements & Operational Data
Unaudited [Millions of Dollars]
	Three Months Ended
	March			June			Sept.			Dec.			March			%
	2006			2006			2006			2006			2007			Change
Operating Revenue
Premiums	$	9.3		$	15.3		$	12.3		$	10.7		$	12.8			37.6	%
Surrender charges		6.2			9.6			6.6			12.3			9.7			56.5	%
Expense assessments		168.0			182.7			189.3			215.2			226.0			34.5	%
Net investment income		148.0			263.2			312.7			314.8			266.3			79.9	%
Other revenue and fees (1)		43.4			81.8			75.7			84.3			90.4			108.3	%
Total Operating Revenue		374.8			552.6			596.5			637.3			605.1			61.4	%
Operating Expenses
Insurance benefits		20.4			45.3			27.4			11.7			21.4			4.9	%
Interest credited to contractholder funds		95.1			168.8			208.2			211.7			166.5			75.1	%
Operating and acquisition expenses		172.6			216.9			227.3			252.6			256.7			48.7	%
Total Operating Expenses		288.1			431.0			462.9			476.0			444.6			54.3	%
Income from operations before Federal income taxes		86.7			121.5			133.6			161.4			160.5			85.1	%
Federal income taxes		20.3			32.5			4.2			37.6			39.5			94.6	%
Income from Operations	$	66.4		$	89.0		$	129.4		$	123.8		$	121.0			82.2	%
Effective tax rate		23.4	%		26.7	%		3.1	%		23.3	%		24.6	%
Average equity	$	1,744.1		$	3,269.2		$	3,310.4		$	3,388.1		$	3,442.3
Return on average equity		15.2	%		10.9	%		15.6	%		14.6	%		14.1	%
Income from Operations - basis points on
average account values		52			58			84			76			72
Operating and Acquisition Expenses
Commissions	$	111.3		$	140.5		$	146.2		$	167.2		$	152.1			36.7	%
General and administrative expenses		66.2			69.8			81.8			80.9			69.5			5.0	%
Broker-dealer commissions and general and
administrative expenses		46.6			79.3			76.6			80.0			87.2			87.1	%
Taxes, licenses and fees		5.4			4.6			4.8			4.5			8.9			64.8	%
Total commissions and expenses incurred		229.5			294.2			309.4			332.6			317.7			38.4	%
Less: commissions and expenses capitalized		(122.7	)		(150.0	)		(157.6	)		(181.8	)		(157.6	)		-28.4	%
Amortization of DAC and VOBA		65.8			72.7			75.6			101.7			96.6			46.8	%
Net Operating and Acquisition Expenses	$	172.6		$	216.9		$	227.3		$	252.6		$	256.7			48.7	%
General and administrative expenses - basis
points on gross account values - Annualized (2)		52			45			53			50			41			(11	)
Roll Forward of Deferred Acquisition Costs & Value of Business Acquired
Balance at beginning of period	$	1,328.0		$	1,414.9		$	1,994.4		$	1,974.1		$	2,050.4
Cumulative effect of adoption of SOP 05-1		-			-			-			-			(27.2	)
Deferral		122.7			150.0			157.6			181.8			157.6
Amortization		(65.8	)		(72.7	)		(75.6	)		(101.7	)		(96.6	)
Included in Total Operating Expenses		56.9			77.3			82.0			80.0			61.0
Adjustment related to realized (gains) losses
on available-for-sale securities		(2.7	)		(4.1	)		(2.4	)		(1.1	)		(2.2	)
Adjustment related to unrealized (gains) losses
on available-for-sale securities		32.7			57.3			(103.6	)		(2.7	)		(14.0	)
Business acquired		-			448.9			3.8			-			14.0
Balance at end of period	$	1,414.9		$	1,994.4		$	1,974.1		$	2,050.4		$	2,082.0
Roll Forward of Deferred Front-End Loads
Balance at beginning of period	$	72.0		$	78.1		$	84.8		$	94.6		$	100.9
Cumulative effect of adoption of SOP 05-1														(2.0	)
Deferral		9.4			9.8			10.0			10.6			9.8
Amortization		(3.3	)		(3.0	)		(0.1	)		(4.3	)		(3.9	)
Included in Income from Operations		6.1			6.8			9.8			6.3			5.9
Adjustment related to realized (gains) losses
on available-for-sale securities		-			-			(0.1	)		-			-
Balance at end of period	$	78.1		$	84.8		$	94.6		$	100.9		$	104.6
Roll Forward of Deferred Sales Inducements
Balance at beginning of period	$	129.4		$	139.9		$	154.6		$	173.4		$	193.7
Cumulative effect of adoption of SOP 05-1		-			-			-			-			(2.8	)
Deferral		15.7			19.9			22.2			28.2			23.7
Amortization		(5.2	)		(5.2	)		(3.3	)		(7.9	)		(8.2	)
Included in Income from Operations		10.5			14.7			18.9			20.3			15.4
Adjustment related to realized (gains) losses
on available-for-sale securities		-			-			(0.1	)		-			(0.1	)
Balance at end of period	$	139.9		$	154.6		$	173.4		$	193.7		$	206.2
(1) Primarily broker-dealer revenue.
(2) Includes distribution costs.

3/31/2007																PAGE 16
Individual Markets - Individual Annuities
Account Value Roll Forward
Unaudited [Billions of Dollars]
	Three Months Ended
	March			June			Sept.			Dec.			March			%
	2006			2006			2006			2006			2007			Change
Fixed Annuities - Balance at Beginning of Period	$	10.840		$	10.563		$	19.533		$	18.939		$	18.545			71.1	%
Business acquired		-			9.343			-			-			0.040			NM
Gross deposits		0.471			0.872			1.062			1.100			0.821			74.3	%
Withdrawals & deaths		(0.408	)		(1.037	)		(1.405	)		(1.162	)		(0.887	)		NM
Net flows		0.063			(0.164	)		(0.344	)		(0.062	)		(0.066	)		NM
Transfer from (to) variable annuities		(0.451	)		(0.395	)		(0.483	)		(0.561	)		(0.557	)		-23.5	%
Interest credited		0.112			0.186			0.233			0.229			0.177			58.0	%
Fixed Annuities - Gross		10.563			19.533			18.939			18.545			18.139			71.7	%
Reinsurance ceded		(2.202	)		(2.149	)		(2.045	)		(1.812	)		(1.689	)		23.3	%
Fixed Annuities-Balance at End of Period (1)	$	8.362		$	17.384		$	16.894		$	16.733		$	16.449			96.7	%
Variable Annuities - Balance at Beginning of Period	$	37.655		$	40.495		$	41.537		$	43.977		$	48.169			27.9	%
Business acquired		-			0.250			-			-			-			NM
Gross deposits		1.665			1.867			1.658			2.061			2.000			20.1	%
Withdrawals & deaths		(0.959	)		(1.004	)		(1.011	)		(1.107	)		(1.179	)		-22.9	%
Net flows		0.706			0.864			0.648			0.954			0.821			16.3	%
Transfer from (to) fixed annuities		0.451			0.395			0.483			0.560			0.556			23.3	%
Investment increase & change in market value		1.682			(0.467	)		1.309			2.678			0.754			-55.2	%
Variable Annuities-Balance at End of Period (2)	$	40.495		$	41.537		$	43.977		$	48.169		$	50.300			24.2	%
Total Annuities - Balance at Beginning of Period	$	48.495		$	51.059		$	61.070		$	62.916		$	66.714			37.6	%
Business acquired		-			9.593			-			-			0.040			NM
Gross deposits		2.136			2.740			2.720			3.161			2.821			32.1	%
Withdrawals & deaths		(1.366	)		(2.040	)		(2.416	)		(2.269	)		(2.067	)		-51.3	%
Net flows		0.770			0.699			0.304			0.892			0.754			-2.1	%
Transfers		-			-			-			(0.001	)		(0.001	)		NM
Interest credited & change in market value		1.794			(0.281	)		1.542			2.907			0.930			-48.2	%
Total Annuities - Gross		51.059			61.070			62.916			66.714			68.438			34.0	%
Reinsurance ceded		(2.202	)		(2.149	)		(2.045	)		(1.812	)		(1.689	)		23.3	%
Total Annuities (Net of Ceded) -             Balance at End of Period	$	48.857		$	58.921		$	60.872		$	64.902		$	66.749			36.6	%
Variable Annuities Under Agreement -      Included above	$	0.190		$	0.173		$	0.169		$	0.170		$	0.163			-14.2	%
Incremental Deposits (3):
Fixed annuities	$	0.461		$	0.861		$	1.058		$	1.086		$	0.815			76.8	%
Variable annuities		1.650			1.850			1.623			2.036			1.979			19.9	%
Total Incremental Deposits	$	2.111		$	2.711		$	2.681		$	3.122		$	2.794			32.4	%
(1) Includes fixed portion of variable annuities.
(2) Excludes the fixed portion of variable annuities.
(3) Incremental Deposits represent gross deposits reduced by transfers from other Lincoln products.

3/31/2007																PAGE 17
Individual Markets - Individual Annuities
Account Values
Unaudited [Billions of Dollars]
	Three Months Ended
	March			June			Sept.			Dec.			March			%
	2006			2006			2006			2006			2007			Change
Fixed Annuities - excluding fixed portion of variable contracts
Deposits	$	0.021		$	0.137		$	0.258		$	0.280		$	0.126			NM
Withdrawals		(0.243	)		(0.805	)		(1.148	)		(0.943	)		(0.674	)		NM
Net flows	$	(0.222	)	$	(0.668	)	$	(0.890	)	$	(0.663	)	$	(0.548	)		NM
Gross fixed contract account values	$	6.745		$	12.190		$	11.766		$	11.221		$	10.818			60.4	%
Reinsurance ceded		(2.202	)		(2.149	)		(2.045	)		(1.812	)		(1.689	)		23.3	%
Net Fixed Contract Account Values	$	4.543		$	10.041		$	9.721		$	9.409		$	9.129			100.9	%
Indexed Annuities
Deposits	$	-		$	0.228		$	0.244		$	0.245		$	0.160			NM
Withdrawals		-			(0.047	)		(0.068	)		(0.061	)		(0.063	)		NM
Net flows	$	-		$	0.181		$	0.177		$	0.184		$	0.098			NM
Indexed Annuity Account Values	$	-		$	3.210		$	3.454		$	3.711		$	3.844			NM
Fixed Portion of Variable Contracts
Deposits	$	0.449		$	0.507		$	0.559		$	0.575		$	0.535			19.2	%
Withdrawals		(0.164	)		(0.185	)		(0.190	)		(0.158	)		(0.151	)		7.9	%
Net flows	$	0.285		$	0.322		$	0.370		$	0.417		$	0.384			34.7	%
Fixed Portion of Variable Contract Account Values	$	3.819		$	4.132		$	3.719		$	3.613		$	3.476			-9.0	%
Variable Annuities - including fixed portion of variable contracts
Deposits	$	2.114		$	2.374		$	2.218		$	2.635		$	2.535			19.9	%
Withdrawals		(1.123	)		(1.188	)		(1.200	)		(1.265	)		(1.330	)		-18.4	%
Net Flows	$	0.991		$	1.186		$	1.017		$	1.371		$	1.205			21.6	%
Variable Contract Account Values	$	44.314		$	45.669		$	47.697		$	51.782		$	53.776			21.4	%
Average Daily Variable Annuity Account Values	$	39.947		$	41.214		$	42.342		$	46.514		$	49.284			23.4	%
Individual Annuity Product Spread Information																	Change
																	(Basis Point)
Net investment income (1) (2) (3)		5.84	%		5.67	%		5.89	%		5.87	%		5.87	%		3
Interest credited to policyholders (4) (5)		3.93	%		3.81	%		3.81	%		3.77	%		3.75	%		(18	)
Spread (1) (2) (3) (4)		1.91	%		1.86	%		2.08	%		2.10	%		2.12	%		21
(1) For the annuity products spread, the yield on earning assets is calculated as net investment income on fixed product investment portfolios divided by average earning assets. The average crediting rate is calculated using interest credited on annuity products less bonus credits and excess DCA interest, divided by average fixed account values net of co-insured account values. Fixed account values reinsured under modified co-insurance agreements are included in account values for this calculation since assets (and therefore margin) are retained under these agreements.
(2) The net investment income and spread reported above includes earnings from commercial mortgage loan prepayment and bond make-whole premiums. The impact of these premiums on investment income and spread was 5 bps in the first quarter of 2007, 10 bps in the fourth quarter of 2006, 7 bps in the third quarter of 2006, 2 bps in the second quarter of 2006 and 9 bps in the first quarter of 2006.
(3) We exclude the results of our indexed annuity hedge program from our calculation of spreads, the impact of which affects net investment income and interest credited in approximately equal and offsetting amounts.
(4) The third quarter 2006 spreads have been updated to reflect a reclassification of surrender charges within interest credited. No income statement changes were made as a result of this reclassification because the impact was immaterial.
(5) The first quarter 2007 spreads reflect a 9 basis point correction (a decrease) to interest credited to policyholders related to a correction to the opening balance of JP that was finalized in the first quarter of 2007.

3/31/2007																PAGE 18
Employer Markets - Defined Contribution
Income Statements & Operational Data
Unaudited [Millions of Dollars]
	Three Months Ended
	March			June			Sept.			Dec.			March			%
	2006			2006			2006			2006			2007			Change
Operating Revenue
Surrender charges	$	2.3		$	2.1		$	1.7		$	1.5		$	2.0			-13.0	%
Expense assessments		55.6			54.7			54.0			58.4			59.8			7.6	%
Net investment income		185.7			187.5			184.6			180.6			180.3			-2.9	%
Other revenue and fees		5.6			4.6			4.9			4.5			4.7			-16.1	%
Total Operating Revenue		249.2			248.9			245.1			245.0			246.8			-1.0	%
Operating Expenses
Interest credited to contractholder funds		100.7			102.4			103.1			104.4			104.3			3.6	%
Operating and acquisition expenses		73.3			69.5			74.5			80.2			71.6			-2.3	%
Total Operating Expenses		174.0			171.9			177.6			184.6			176.0			1.1	%
Income from operations before Federal income taxes		75.2			77.0			67.5			60.4			70.8			-5.9	%
Federal income taxes		22.7			22.7			15.0			15.8			21.1			-7.0	%
Income from Operations	$	52.5		$	54.3		$	52.5		$	44.6		$	49.7			-5.3	%
Effective tax rate		30.2	%		29.4	%		22.3	%		26.2	%		29.8	%
Average equity	$	1,006.4		$	985.3		$	945.7		$	954.9		$	938.5
Return on average equity		20.9	%		22.0	%		22.2	%		18.7	%		21.2	%
Income from Operations - basis points on
average account values		67			69			66			54			58
Operating and Acquisition Expenses
Commissions	$	26.2		$	22.2		$	23.4		$	20.8		$	19.3			-26.3	%
General and administrative expenses		49.7			47.2			56.4			56.5			49.9			0.4	%
Taxes, licenses and fees		2.9			2.8			1.3			1.9			5.1			NM
Total commissions and expenses incurred		78.8			72.3			81.1			79.2			74.2			-5.8	%
Less: commissions and expenses capitalized		(25.5	)		(22.6	)		(21.5	)		(18.5	)		(22.2	)		12.9	%
Amortization of DAC and VOBA		20.0			19.8			14.9			19.4			19.6			-2.0	%
Net Operating and Acquisition Expenses	$	73.3		$	69.5		$	74.5		$	80.2		$	71.6			-2.3	%
General and administrative expenses - basis
points on account values - Annualized (1)		64			60			71			68			59			(5	)
Roll Forward of Deferred Acquisition Costs & Value of Business Acquired
Balance at beginning of period	$	454.9		$	517.2		$	564.0		$	503.8		$	497.6
Cumulative effect of adoption of SOP 05-1		-			-			-			-			(1.4	)
Deferral		25.5			22.6			21.5			18.5			22.2
Amortization		(20.0	)		(19.8	)		(14.9	)		(19.4	)		(19.6	)
Included in Total Operating Expenses		5.5			2.7			6.6			(0.9	)		2.6
Adjustment related to realized (gains) losses
on available-for-sale securities		(4.4	)		(6.1	)		(2.0	)		(0.2	)		(2.1	)
Adjustment related to unrealized (gains) losses
on available-for-sale securities		61.2			50.2			(64.8	)		(5.1	)		(7.2	)
Business acquired		-			-			-			-			-
Other		-			-			-			-			-
Balance at end of period	$	517.2		$	564.0		$	503.8		$	497.6		$	489.4
(1) Includes distribution costs.

3/31/2007																PAGE 19
Employer Markets - Defined Contribution
Account Value Roll Forward
Unaudited [Billions of Dollars]
	Three Months Ended
	March			June			Sept.			Dec.			March			%
	2006			2006			2006			2006			2007			Change
Fixed Annuities - Balance at Beginning of Period	$	11.009		$	11.033		$	11.050		$	11.061		$	11.006			-
Gross deposits (1)		0.253			0.242			0.268			0.183			0.299			18.2	%
Withdrawals & deaths		(0.328	)		(0.345	)		(0.426	)		(0.340	)		(0.399	)		-21.6	%
Net flows		(0.075	)		(0.103	)		(0.159	)		(0.157	)		(0.101	)		-34.7	%
Transfer from (to) variable annuities		0.014			0.030			0.049			(0.011	)		(0.017	)		NM
Interest credited		0.085			0.090			0.121			0.112			0.104			22.4	%
Fixed Annuities - Balance at End of Period (2)	$	11.033		$	11.050		$	11.061		$	11.006		$	10.993			-0.4	%
Variable Annuities - Balance at Beginning of Period	$	15.692		$	16.454		$	16.144		$	16.530		$	17.475			11.4	%
Gross deposits (1)		0.669			0.714			0.583			0.559			0.655			-2.1	%
Withdrawals & deaths		(0.676	)		(0.647	)		(0.565	)		(0.669	)		(0.813	)		-20.3	%
Net flows		(0.006	)		0.067			0.018			(0.110	)		(0.158	)		NM
Transfer from (to) fixed annuities		(0.015	)		(0.032	)		(0.046	)		0.008			0.004			126.7	%
Investment increase & change in market value		0.783			(0.345	)		0.414			1.047			0.354			-54.8	%
Variable Annuities - Balance at End of Period (3)	$	16.454		$	16.144		$	16.530		$	17.475		$	17.676			7.4	%
Total Annuities - Balance at Beginning of Period	$	26.701		$	27.487		$	27.194		$	27.591		$	28.482			6.7	%
Gross Deposits (1)		0.923			0.955			0.851			0.742			0.953			3.3	%
Withdrawals & deaths		(1.004	)		(0.992	)		(0.992	)		(1.009	)		(1.212	)		-20.7	%
Net flows		(0.081	)		(0.036	)		(0.141	)		(0.267	)		(0.259	)		NM
Transfers		(0.001	)		(0.002	)		0.003			(0.002	)		(0.012	)		NM
Interest credited & change in market value		0.867			(0.255	)		0.535			1.160			0.458			-47.2	%
Total Annuities - Balance at End of Period	$	27.487		$	27.194		$	27.591		$	28.482		$	28.669			4.3	%
Alliance Mutual Funds - Balance at Beginning of Period	$	3.772		$	4.248		$	4.330		$	4.636		$	5.175			37.2	%
Plan/Participant Rollovers		0.125			0.021			0.057			0.168			0.279			123.2	%
Additional contributions		0.193			0.183			0.178			0.189			0.254			31.6	%
Gross deposits		0.318			0.204			0.235			0.357			0.533			67.6	%
Withdrawals & deaths		(0.056	)		(0.054	)		(0.057	)		(0.079	)		(0.054	)		3.6	%
Net flows		0.262			0.150			0.178			0.277			0.480			83.2	%
Transfers		0.005			-			(0.015	)		0.003			0.005			0.0	%
Interest credited & change in market value		0.209			(0.068	)		0.143			0.259			0.147			-29.7	%
Total Alliance Mutual Funds -            Balance at End of Period (4)	$	4.248		$	4.330		$	4.636		$	5.175		$	5.807			36.7	%
Total Defined Contribution Segment Account Values-
including Alliance Mutual Funds
Balance at Beginning of Period	$	30.473		$	31.735		$	31.524		$	32.227		$	33.656			10.4	%
Gross deposits (1)		1.241			1.159			1.086			1.099			1.487			19.8	%
Withdrawals & deaths		(1.060	)		(1.045	)		(1.049	)		(1.089	)		(1.266	)		-19.4	%
Net flows		0.181			0.114			0.037			0.010			0.221			22.1	%
Transfers		0.005			(0.002	)		(0.012	)		0.000			(0.007	)		NM
Interest credited & change in market value		1.077			(0.322	)		0.677			1.419			0.606			-43.7	%
Total Defined Contribution Segment
Account Values- Balance at End of Period	$	31.735		$	31.524		$	32.227		$	33.656		$	34.475			8.6	%
Variable Annuities Under Agreement - Included above		0.018			0.017			0.017			0.017			0.016			-11.1	%
Incremental Deposits (5) :
Fixed Annuities	$	0.254		$	0.226		$	0.253		$	0.173		$	0.282			11.0	%
Variable Annuities		0.654			0.709			0.576			0.551			0.581			-11.2	%
Total Annuities Incremental Deposits		0.908			0.935			0.829			0.724			0.862			-5.1	%
Total Alliance Mutual Funds Incremental Deposits		0.318			0.204			0.235			0.357			0.533			67.6	%
Total Defined Contribution Incremental Deposits	$	1.226		$	1.139		$	1.064		$	1.080		$	1.396			13.9	%
(1) Gross deposits for the second quarter and full year 2006 include approximately $20 million and $110 million of fixed and variable annuity deposits, respectively, resulting from JP employee plan deposits into the LNC employee plan as a result of the merger.
(2) Includes Fixed Annuity products offered under the Alliance mutual funds and the fixed portion of variable annuities.
(3) Excludes the fixed portion of variable annuities.
(4) Represents amounts attributable to Alliance mutual fund net flows. Alliance mutual fund account values are not included in the separate accounts reported on our balance sheet.
(5) Incremental Deposits represent gross deposits reduced by transfers from other Lincoln products.

3/31/2007																PAGE 20
Employer Markets - Defined Contribution
Supplemental Data
Unaudited [Billions of Dollars]
	Three Months Ended
	March			June			Sept.			Dec.			March			%
	2006			2006			2006			2006			2007			Change
Fixed Annuities - excluding fixed portion of variable contracts
Deposits (1)	$	0.135		$	0.121		$	0.157		$	0.093		$	0.198			46.7	%
Withdrawals		(0.108	)		(0.114	)		(0.162	)		(0.118	)		(0.166	)		-53.7	%
Net Flows	$	0.027		$	0.008		$	(0.005	)	$	(0.024	)	$	0.032			18.5	%
Fixed Contract Account Values	$	4.690		$	4.717		$	4.758		$	4.797		$	4.870			3.8	%
Fixed Portion of Variable Contracts
Deposits	$	0.118		$	0.120		$	0.111		$	0.090		$	0.100			-15.3	%
Withdrawals		(0.220	)		(0.231	)		(0.265	)		(0.222	)		(0.233	)		-5.9	%
Net Flows	$	(0.102	)	$	(0.111	)	$	(0.154	)	$	(0.132	)	$	(0.133	)		-30.4	%
Fixed Portion of Variable Contract Account Values	$	6.343		$	6.333		$	6.303		$	6.210		$	6.123			-3.5	%
Variable Annuities - including fixed portion of variable contracts
Deposits (1)	$	0.788		$	0.834		$	0.694		$	0.649		$	0.755			-4.2	%
Withdrawals		(0.896	)		(0.878	)		(0.830	)		(0.891	)		(1.046	)		-16.7	%
Net Flows	$	(0.108	)	$	(0.044	)	$	(0.136	)	$	(0.242	)	$	(0.291	)		NM
Variable Contract Account Values	$	22.797		$	22.477		$	22.833		$	23.685		$	23.799			4.4	%
Average Daily Variable Annuity Account Values	$	16.177		$	16.270		$	16.116		$	17.164		$	17.582			8.7	%
Total Annuity based Retirement Plan Product Spread Information (2)																	Change
																	(Basis Point)
Net investment income (3)		6.34	%		6.31	%		6.39	%		6.23	%		6.20	%		(14	)
Interest credited to policyholders		3.66	%		3.73	%		3.76	%		3.79	%		3.81	%		15
Spread (3)		2.68	%		2.58	%		2.63	%		2.44	%		2.39	%		(29	)
(1) Gross deposits for the second quarter of 2006 include approximately $20 million and $110 million of fixed and variable annuity deposits, respectively, resulting from JP employee plan deposits into the LNC employee plan as a result of the merger.
(2) For the annuity products spread, the yield on earning assets is calculated as net investment income on fixed product investment portfolios divided by average earning assets. The average crediting rate is calculated using interest credited on annuity products less bonus credits and excess DCA interest, divided by average fixed account values.
(3) The net investment income and spread reported above includes earnings from commercial mortgage loan prepayment and bond make-whole premiums. The impact of these premiums on investment income and spread was 3 bps in the 1st quarter of 2007, 4 bps in the 4th quarter of 2006, 13 bps in the 3rd quarter of 2006, 12 bps in the 2nd quarter of 2006 and 15 bps in the 1st quarter of 2006.

3/31/2007																PAGE 21
Employer Markets - Executive Benefits
Income Statements & Operational Data
Unaudited [Millions of Dollars]
	Three Months Ended
	March			June			Sept.			Dec.			March			%
	2006			2006			2006			2006			2007			Change
Operating Revenue
Premiums	$	1.1		$	0.0		$	0.3		$	3.3		$	0.6			-45.5	%
Surrender charges		0.0			0.0			0.0			0.0			(0.0	)		NM
Mortality assessments		2.8			8.5			7.2			8.5			8.9			217.9	%
Expense assessments		3.3			4.9			4.5			5.5			6.2			87.9	%
Net investment income		48.7			86.5			91.0			90.5			94.8			94.7	%
Other revenue and fees		1.4			1.3			1.3			1.3			1.2			-14.3	%
Total Operating Revenue		57.2			101.2			104.3			109.1			111.7			95.3	%
Operating Expenses
Insurance benefits		32.8			30.4			35.6			39.7			33.1			0.9	%
Interest credited to contractholder funds		9.3			40.2			39.9			42.0			44.8			NM
Operating and acquisition expenses		4.6			7.2			11.7			9.1			12.7			176.1	%
Total Operating Expenses		46.7			77.7			87.2			90.8			90.7			94.2	%
Income from operations before Federal income taxes		10.5			23.5			17.1			18.3			21.1			101.0	%
Federal income taxes		3.0			7.3			4.3			5.6			6.6			120.0	%
Income from Operations	$	7.5		$	16.2		$	12.8		$	12.7		$	14.4			92.0	%
Effective tax rate		28.5	%		31.0	%		25.2	%		30.7	%		31.5	%
Average equity	$	334.5		$	524.8		$	519.8		$	528.2		$	539.3
Return on average equity		9.0	%		12.4	%		9.8	%		9.6	%		10.7	%
Operating and Acquisition Expenses
Commissions	$	5.1		$	8.1		$	7.1		$	11.2		$	6.5			27.5	%
General and administrative expenses		3.7			2.8			6.2			4.8			4.0			8.1	%
Taxes, licenses and fees		1.1			1.3			1.4			1.3			1.5			36.4	%
Total commissions and expenses incurred		9.9			12.2			14.6			17.3			11.9			20.2	%
Less: commissions and expenses capitalized		(5.7	)		(8.0	)		(6.7	)		(10.9	)		(6.9	)		-21.1	%
Amortization of DAC and VOBA		0.3			2.9			3.8			2.8			7.7			NM
Net Operating and Acquisition Expenses	$	4.5		$	7.2		$	11.7		$	9.1		$	12.7			182.2	%
General and administrative expenses - basis
points on account values - Annualized (1)		36			16			36			27			23			(13	)
Roll Forward of Deferred Acquisition Costs & Value of Business Acquired
Balance at beginning of period	$	113.6		$	119.0		$	274.1		$	258.0		$	265.3
Deferral		5.7			8.0			6.7			10.9			6.9
Amortization		(0.3	)		(2.9	)		(3.8	)		(2.8	)		(7.7	)
Included in Total Operating Expenses		5.4			5.1			2.9			8.2			(0.8	)
Adjustment related to realized (gains) losses
on available-for-sale securities		-			-			(0.7	)		(0.8	)		(0.5	)
Adjustment related to unrealized (gains) losses
on available-for-sale securities		-			7.6			(18.3	)		(0.1	)		(3.4	)
Business acquired		-			142.5			-			-			-
Other		-			-			-			-			-
Balance at end of period	$	119.0		$	274.1		$	258.0		$	265.3		$	260.5
Roll Forward of Deferred Front-End Loads
Balance at beginning of period	$	17.9		$	18.9		$	19.7		$	20.3		$	21.7
Deferral		1.0			1.0			0.9			1.5			1.1
Amortization		(0.0	)		(0.2	)		(0.3	)		(0.2	)		(0.8	)
Included in Income from Operations		1.0			0.8			0.6			1.4			0.3
Balance at end of period	$	18.9		$	19.7		$	20.3		$	21.7		$	22.0
(1) Includes distribution costs.

3/31/2007													PAGE 22
Employer Markets - Executive Benefits
Account Value Roll Forward and Supplemental Data
Unaudited [Billions of Dollars]
	Three Months Ended
	March			June			Sept.			Dec.			March			%
	2006			2006			2006			2006			2007			Change
COLI/BOLI- Balance Beginning-of-Period	$	1.318		$	1.387		$	4.228		$	4.252		$	4.305			226.6	%
Business acquired		-			2.795			-			-			-			NM
Deposits		0.047			0.077			0.058			0.085			0.065			38.3	%
Withdrawals & deaths		(0.007	)		(0.042	)		(0.069	)		(0.092	)		(0.140	)		NM
Net flows		0.039			0.035			(0.011	)		(0.007	)		(0.075	)		NM
Policyholder assessments		(0.009	)		(0.017	)		(0.016	)		(0.019	)		(0.018	)		NM
Interest credited and change in market value		0.038			0.028			0.051			0.079			0.052			36.8	%
COLI/BOLI-Balance End-of-Period	$	1.387		$	4.228		$	4.252		$	4.305		$	4.264			207.4	%
COLI/BOLI In-Force	$	7.979		$	15.373		$	15.342		$	15.645		$	14.747			84.8	%
Run Off Institutional Pensions Account Values -
Balance at End of Period	$	2.753		$	2.707		$	2.711		$	2.720		$	2.734			-0.7	%

3/31/2007												PAGE 23
Employer Markets - Group Protection
Income Statements & Operational Data
Unaudited [Millions of Dollars]
	Three Months Ended
	March		June			Sept.			Dec.			March			%
	2006		2006			2006			2006			2007			Change
Operating Revenue
Premiums	$	-	$	328.9		$	304.1		$	315.9		$	331.3			NM
Net investment income		-		25.1			27.1			28.0			27.9			NM
Other revenue and fees		-		0.8			0.9			0.8			1.1			NM
Total Operating Revenue		-		354.9			332.1			344.8			360.4			NM
Operating Expenses
Insurance benefits		-		226.0			213.3			224.0			246.6			NM
Operating and acquisition expenses		-		72.0			74.6			69.6			78.3			NM
Total Operating Expenses		-		297.9			287.9			293.6			324.9			NM
Income from operations before Federal income taxes		-		56.9			44.2			51.2			35.5			NM
Federal income taxes		-		19.9			15.5			17.9			12.4			NM
Income from Operations	$	-	$	37.0		$	28.8		$	33.2		$	23.1			NM
Effective tax rate				35.0	%		35.0	%		35.0	%		35.0	%
Average equity			$	861.0		$	896.8		$	913.4		$	915.1
Return on average equity				17.2	%		12.8	%		14.6	%		10.1	%
Operating and Acquisition Expenses
Commissions	$	-	$	37.3		$	36.0		$	36.8		$	39.4			NM
General and administrative expenses		-		31.9			35.5			37.5			32.7			NM
Taxes, licenses and fees		-		8.0			7.8			6.9			9.7			NM
Total commissions and expenses incurred		-		77.1			79.3			81.2			81.8			NM
Less commissions and expenses capitalized		-		(11.2	)		(11.3	)		(14.8	)		(11.2	)		NM
Amortization of DAC and VOBA		-		6.0			6.6			3.2			7.6			NM
Net Operating and Acquisition Expenses	$	-	$	72.0		$	74.6		$	69.6		$	78.3			NM
General and administrative expenses as a
percentage of premiums		-		9.7	%		11.7	%		11.9	%		9.9	%		NM
Roll Forward of Deferred Acquisition Costs & Value of Business Acquired
Balance at beginning of period	$	-	$	-		$	121.4		$	126.1		$	137.6
Cumulative effect of adoption of SOP 05-1		-		-			-			-			(37.5	)
Deferral		-		11.2			11.3			14.8			11.2
Amortization		-		(6.0	)		(6.6	)		(3.2	)		(7.6	)
Included in Total Operating Expenses		-		5.2			4.7			11.5			3.5
Adjustment related to realized (gains) losses
on available-for-sale securities		-		-			-			-			-
Adjustment related to unrealized (gains) losses
on available-for-sale securities		-		-			-			-			-
Business acquired		-		116.2			-			-			-
Other		-		-			-			-			-
Balance at end of period	$	-	$	121.4		$	126.1		$	137.6		$	103.7

3/31/2007												PAGE 24
Employer Markets - Group Protection
Supplemental Data
Unaudited [Millions of Dollars]
	Three Months Ended
	March		June			Sept.			Dec.			March			%
	2006		2006			2006			2006			2007			Change
Annualized Sales
Life	$	-	$	15.3		$	19.4		$	43.1		$	22.7			NM
Disability		-		22.9			24.7			56.9			28.6			NM
Dental		-		7.1			6.1			13.1			9.4			NM
Premiums:
Life	$	-	$	111.6		$	109.9		$	112.5		$	118.6			NM
Disability		-		134.0			134.8			138.5			144.8			NM
Dental		-		31.4			31.7			31.8			32.9			NM
Other		-		51.9			27.8			33.2			35.0			NM
Total	$	-	$	328.9		$	304.1		$	315.9		$	331.3			NM
Product Line Results:
Life	$	-	$	13.5		$	9.8		$	13.6		$	8.6			NM
Disability		-		21.1			16.1			15.5			13.3			NM
Dental		-		1.4			2.2			3.0			0.2			NM
Other		-		1.0			0.7			1.1			0.9			NM
Total	$	-	$	37.0		$	28.8		$	33.2		$	23.1			NM
Loss Ratios:
Life		-		67.8	%		72.3	%		69.0	%		75.0	%		NM
Disability		-		59.4	%		64.5	%		69.3	%		69.5	%		NM
Dental		-		76.3	%		71.7	%		68.7	%		79.2	%		NM
Combined loss ratios		-		64.7	%		68.4	%		69.1	%		72.7	%		NM

3/31/2007													PAGE 25
Investment Management
Income Statements
Unaudited [Millions of Dollars]
	Three Months Ended
	March			June			Sept.			Dec.			March			%
	2006			2006			2006			2006			2007			Change
Operating Revenue
Investment advisory fees - External	$	77.8		$	81.2		$	82.4		$	86.5		$	89.9			15.6	%
Investment advisory fees - Insurance-related		25.1			23.5			23.7			24.7			24.9			-0.8	%
Other revenue and fees		36.7			30.0			34.3			37.7			35.3			-3.8	%
Operating Revenue		139.6			134.7			140.4			148.9			150.2			7.6	%
Operating Expenses
Operating and administrative expenses		116.1			116.4			120.3			126.2			124.6			7.3	%
Total Operating Expenses		116.1			116.4			120.3			126.2			124.6			7.3	%
Income (Loss) from operations before Federal income taxes		23.5			18.3			20.1			22.7			25.6			8.9	%
Federal income taxes		8.2			6.3			6.7			8.3			9.3			13.4	%
Income (Loss) from Operations	$	15.3		$	12.0		$	13.4		$	14.4		$	16.2			5.9	%
Effective tax rate		34.9	%		34.4	%		33.1	%		36.5	%		36.4	%
Pre-tax Operating Margin (1)		16.8	%		13.6	%		14.3	%		15.2	%		17.0	%
After-tax Operating Margin (2)		11.0	%		8.9	%		9.6	%		9.7	%		10.8	%
Operating and Acquisition Expenses
General and administrative expenses	$	96.1		$	99.4		$	104.2		$	109.1		$	106.5			10.8	%
Depreciation and amortization		2.2			2.4			2.2			2.4			2.6			18.2	%
Sub-advisory fees		11.0			10.6			9.8			9.8			10.0			-9.1	%
Total general and administrative expenses		109.3			112.4			116.2			121.3			119.1			9.0	%
Taxes, licenses and fees		4.8			2.4			2.7			3.5			4.1			-14.6	%
Amortization of intangibles		2.0			1.6			1.4			1.4			1.4			-30.0	%
Total expenses incurred	$	116.1		$	116.4		$	120.3		$	126.2		$	124.6			7.3	%
(1) Pre-tax operating margin is calculated as Income (Loss) from Operations before Federal income taxes divided by Operating Revenue.
(2) After-tax operating margin is calculated as Income (Loss) from Operations divided by Operating Revenue.

3/31/2007													PAGE 26
Investment Management
Assets Under Management Roll Forward
Unaudited [Billions of Dollars]
	Three Months Ended
	March			June			Sept.			Dec.			March			%
	2006			2006			2006			2006			2007			Change
Retail Fixed - Balance-Beginning-of-Period	$	9.625		$	9.761		$	10.007		$	10.522		$	10.993			14.2	%
Sales (1)		0.951			1.034			0.981			1.091			1.365			43.5	%
Redemptions		(0.805	)		(0.824	)		(0.810	)		(0.859	)		(0.910	)		-13.0	%
Transfers		(0.056	)		0.030			0.012			0.028			0.014			125.0	%
Net Flows		0.089			0.240			0.183			0.261			0.470			NM
Net investment gains and change in market value		0.046			0.007			0.332			0.211			0.181			293.5	%
Balance at End-of-Period	$	9.761		$	10.007		$	10.522		$	10.993		$	11.644			19.3	%
Retail Equity - Balance-Beginning-of-Period	$	32.732		$	36.500		$	36.035		$	36.954		$	39.627			21.1	%
Sales (1)		3.069			2.249			1.516			2.101			2.238			-27.1	%
Redemptions		(1.840	)		(2.134	)		(1.984	)		(2.472	)		(2.455	)		-33.4	%
Transfers		(0.013	)		(0.032	)		(0.016	)		(0.030	)		(0.020	)		-53.8	%
Net Flows		1.216			0.082			(0.483	)		(0.401	)		(0.237	)		NM
Net investment gains and change in market value		2.552			(0.547	)		1.402			3.074			0.861			-66.3	%
Balance at End-of-Period	$	36.500		$	36.035		$	36.954		$	39.627		$	40.250			10.3	%
Total Retail - Balance-Beginning-of-Period	$	42.357		$	46.261		$	46.042		$	47.476		$	50.620			19.5	%
Retail sales-Annuities		0.885			0.869			0.960			0.932			1.300			46.9	%
Retail sales-Mutual Funds		1.329			1.370			1.151			1.768			1.753			31.9	%
Retail sales-Managed Accounts & Other		1.806			1.043			0.386			0.493			0.550			-69.5	%
Total Retail Sales (1)		4.019			3.282			2.497			3.192			3.603			-10.4	%
Redemptions		(2.645	)		(2.959	)		(2.794	)		(3.330	)		(3.365	)		-27.2	%
Transfers		(0.069	)		(0.002	)		(0.003	)		(0.002	)		(0.005	)		92.8	%
Net Flows		1.305			0.322			(0.300	)		(0.140	)		0.233			-82.1	%
Net investment gains and change in market value		2.598			(0.540	)		1.733			3.285			1.041			-59.9	%
Balance at End-of-Period	$	46.261		$	46.042		$	47.476		$	50.620		$	51.895			12.2	%
Institutional Fixed - Balance-Beginning-of-Period	$	14.699		$	17.262		$	18.154		$	19.387		$	22.841			55.4	%
Inflows (1)		3.080			1.634			1.133			3.644			1.560			-49.4	%
Withdrawals/terminations		(0.447	)		(0.750	)		(0.516	)		(0.487	)		(0.480	)		-7.4	%
Transfers		0.002			0.008			(0.002	)		0.001			0.000			NM
Net Flows		2.636			0.892			0.615			3.157			1.081			-59.0	%
Transfer of assets to an intercompany manager (3)		-			-			-			-			(0.780	)		NM
Net investment gains and change in market value		(0.074	)		0.001			0.618			0.297			0.328			NM
Balance at End-of-Period	$	17.262		$	18.154		$	19.387		$	22.841		$	23.469			36.0	%
Institutional Equity - Balance-Beginning-of-Period	$	20.576		$	22.906		$	21.729		$	22.649		$	23.845			15.9	%
Inflows (1)		1.964			1.130			1.274			1.244			0.870			-55.7	%
Withdrawals/terminations		(1.008	)		(1.327	)		(0.844	)		(1.734	)		(2.273	)		NM
Transfers		-			(0.008	)		0.001			(0.001	)		0.000			NM
Net Flows		0.956			(0.205	)		0.431			(0.490	)		(1.402	)		NM
Net investment gains and change in market value		1.373			(0.971	)		0.489			1.687			0.339			-75.3	%
Balance at End-of-Period	$	22.906		$	21.729		$	22.649		$	23.845		$	22.782			-0.5	%
Total Institutional - Balance-Beginning-of-Period	$	35.276		$	40.167		$	39.883		$	42.035		$	46.686			32.3	%
Inflows (1)		5.044			2.764			2.406			4.888			2.431			-51.8	%
Withdrawals/terminations		(1.454	)		(2.078	)		(1.360	)		(2.221	)		(2.753	)		-89.3	%
Transfers		0.003			0.000			(0.000	)		(0.000	)		0.001			-66.7	%
Net Flows		3.592			0.687			1.046			2.666			(0.321	)		NM
Transfer of assets to an intercompany manager (3)		-			-			-			-			(0.780	)		NM
Net investment gains and change in market value		1.299			(0.971	)		1.107			1.984			0.667			-48.7	%
Balance at End-of-Period	$	40.167		$	39.883		$	42.035		$	46.686		$	46.251			15.1	%
Total Retail and Institutional - At End-of-Period	$	86.428		$	85.926		$	89.511		$	97.307		$	98.146			13.6	%
General Account Assets-End-of-Period (2)	$	41.995		$	65.637		$	67.410		$	67.066		$	67.292			60.2	%
Total Assets Under Management
At End-of-Period	$	128.423		$	151.563		$	156.921		$	164.373		$	165.438			28.8	%
Total Retail and Institutional - Net Flows	$	4.898		$	1.008		$	0.745		$	2.526		$	(0.088	)		NM
Subadvised Assets, included in Assets
Under Management above
Retail	$	17.320		$	16.899		$	16.421		$	18.023		$	18.466			6.6	%
Institutional		5.608			4.593			4.560			4.648			4.645			-17.2	%
Total Subadvised Assets	$	22.928		$	21.491		$	20.982		$	22.671		$	23.111			0.8	%
(1) Sales and in-flows include dividend reinvestments.
(2) Balances reflect $26.1 billion of assets assumed as a result of the merger with Jefferson-Pilot on April 4, 2006.
(3) Transfer does not impact LFG consolidated assets under management.

3/31/2007													PAGE 27
Lincoln UK
Income Statements
Unaudited [Millions of Dollars]
	Three Months Ended
	March			June			Sept.			Dec.			March			%
	2006			2006			2006			2006			2007			Change
Operating Revenue
Premiums	$	16.6		$	19.9		$	21.1		$	21.0		$	24.2			45.8	%
Mortality assessments		7.8			8.9			8.7			9.0			10.0			28.2	%
Expense assessments		28.0			34.7			23.9			36.8			37.1			32.5	%
Net investment income		17.0			17.8			18.6			18.0			19.3			13.5	%
Other revenue and fees		0.1			-			-			-			0.1			-
Total Operating Revenue		69.5			81.4			72.3			84.8			90.7			30.5	%
Operating Expenses
Insurance benefits		25.4			27.5			25.0			30.4			36.0			41.7	%
Operating and acquisition expenses		27.6			38.9			34.5			39.1			38.0			37.7	%
Total Operating Expenses		53.0			66.3			59.5			69.5			74.0			39.6	%
Income from operations before Federal income taxes		16.5			15.1			12.8			15.3			16.7			1.2	%
Federal income taxes		5.8			5.2			4.5			5.4			5.9			1.7	%
Income from Operations	$	10.7		$	9.9		$	8.3		$	9.9		$	10.9			1.9	%
Effective tax rate on
Income from Operations		35.1	%		34.4	%		35.2	%		35.3	%		35.3	%
Average equity	$	427.0		$	417.8		$	406.0		$	392.3		$	384.8
Return on average equity		10.0	%		9.5	%		8.2	%		10.1	%		11.3	%
Operating and Acquisition Expenses
Commissions	$	0.9		$	1.1		$	1.4		$	1.1		$	1.0			11.1	%
General and administrative expenses		22.7			23.9			25.1			27.9			26.5			16.7	%
Total commissions and expenses incurred		23.6			25.0			26.4			29.0			27.6			16.9	%
Less: commissions and expenses capitalized		(0.5	)		(0.1	)		(0.6	)		(0.7	)		(0.6	)		-20.0	%
Amortization of DAC and VOBA		4.5			13.9			8.7			10.8			11.0			144.4	%
Net Operating and Acquisition Expenses	$	27.6		$	38.9		$	34.5		$	39.1		$	38.0			37.7	%
Roll Forward of Deferred Acquisition Costs & Value of Business Acquired
Balance at beginning of period	$	743.4		$	747.2		$	781.7		$	783.4		$	809.0
Deferral		0.5			0.1			0.6			0.7			0.6
Amortization		(4.5	)		(13.9	)		(8.7	)		(10.8	)		(11.0	)
Included in Total Benefits and Expenses		(4.0	)		(13.8	)		(8.0	)		(10.1	)		(10.4	)
Foreign currency translation adjustment		7.7			48.3			9.7			35.7			4.1
Balance at end of period	$	747.2		$	781.7		$	783.4		$	809.0		$	802.6
Roll Forward of Deferred Front-End Load
Balance at beginning of period	$	363.1		$	364.5		$	381.2		$	392.8		$	404.5
Deferral		1.0			0.5			0.8			0.6			0.9
Amortization		(3.4	)		(7.4	)		6.1			(6.8	)		(7.0	)
Included in Income from Operations		(2.4	)		(6.9	)		6.9			(6.2	)		(6.1	)
Foreign currency translation adjustment		3.8			23.6			4.7			17.9			2.0
Balance at end of period	$	364.5		$	381.2		$	392.8		$	404.5		$	400.4

3/31/2007													PAGE 28
Lincoln UK
Operational Data
Unaudited [Billions of Dollars]
	Three Months Ended
	March			June			Sept.			Dec.			March			%
	2006			2006			2006			2006			2007			Change
Unit Linked Assets
Balance-Beg-of-Period	$	7.320		$	7.754		$	7.857		$	8.118		$	8.757			19.6	%
Deposits		0.069			0.073			0.105			0.071			0.068			-1.4	%
Withdrawals (including charges) and Deaths		(0.186	)		(0.201	)		(0.218	)		(0.232	)		(0.240	)		-29.0	%
Net Flows		(0.118	)		(0.128	)		(0.113	)		(0.161	)		(0.172	)		-45.8	%
Investment income and change in market value		0.479			(0.267	)		0.275			0.424			0.277			-42.2	%
Foreign Currency Adjustment		0.072			0.500			0.098			0.376			0.045			-37.5	%
Unit Linked Assets - End-of-Period	$	7.754		$	7.857		$	8.118		$	8.757		$	8.906			14.9	%
Individual Life In-force	$	17.744		$	18.289		$	18.464		$	19.345		$	19.307			8.8	%
Exchange Rate - Dollars to Pounds
For-the-Period		1.754			1.829			1.878			1.930			1.964			12.0	%
End-of-Period		1.737			1.849			1.872			1.958			1.968			13.3	%

3/31/2007													PAGE 29
Lincoln Financial Media
Income Statements
Unaudited [Millions of Dollars]
	Three Months Ended
	March			June			Sept.			Dec.			March			%
	2006			2006			2006			2006			2007			Change
Operating Results
Communications revenues, net	$	-		$	57.5		$	59.8		$	70.0		$	67.2			NM
Cost of sales		-			7.6			10.3			15.2			17.0			NM
Operating expenses		-			22.2			21.0			21.7			24.2			NM
Station operating income		-			27.7			28.5			33.1			26.0			NM
Depreciation and amortization		-			6.0			2.7			2.6			4.2			NM
General and administrative expenses		-			1.8			1.4			1.2			1.3			NM
Taxes, licenses and fees		-			-			1.5			1.8			1.3			NM
Net interest expense and other		-			0.3			0.3			0.3			0.1			NM
Income from operations before Federal income taxes		-			19.6			22.6			27.2			19.2			NM
Federal income taxes		-			7.7			8.0			9.6			6.8			NM
Income from Operations	$	-		$	11.9		$	14.6		$	17.5		$	12.4			NM
Effective tax rate on
Income from Operations					39.3	%		35.4	%		35.4	%		35.5	%
Other Operations (1)
Unaudited [Millions of Dollars]
	Three Months Ended
		March			June			Sept.			Dec.			March			%
		2006			2006			2006			2006			2007			Change
Operating Revenue
Premiums	$	0.3		$	0.3		$	0.9		$	3.8		$	2.1			NM
Net investment income		39.6			72.1			59.6			53.1			46.7			17.9	%
Amortization of deferred gain on
indemnity reinsurance (2)		18.8			18.8			18.8			18.8			18.6			-1.1	%
Other revenue and fees		(1.8	)		(0.1	)		(4.5	)		(4.9	)		(2.9	)		-61.1	%
Inter-segment elimination of investment advisory fees		(25.1	)		(23.5	)		(23.3	)		(25.2	)		(24.5	)		2.4	%
Total Operating Revenue		31.7			67.6			51.4			45.6			40.0			26.2	%
Operating Expenses
Insurance benefits		1.6			4.1			3.9			7.3			5.7			256.3	%
Interest credited to contractholder funds		33.9			36.5			36.1			37.1			37.1			9.4	%
Operating and acquisition expenses		(1.2	)		28.5			(7.3	)		33.8			16.9			NM
Taxes, licenses and fees		3.0			0.6			2.6			1.2			2.7			-10.0	%
Interest		21.5			64.3			66.7			64.3			60.8			182.8	%
Inter-segment elimination of investment advisory fees		(25.1	)		(23.5	)		(23.3	)		(25.2	)		(24.5	)		2.4	%
Total Operating Expenses		33.7			110.6			78.8			118.6			98.6			192.6	%
Income (loss) from operations before Federal income taxes		(2.0	)		(43.1	)		(27.4	)		(73.0	)		(58.5	)		NM
Federal income taxes		(2.2	)		(17.0	)		(15.9	)		(34.5	)		(23.3	)		NM
Income (loss) from Operations	$	0.1		$	(26.1	)	$	(11.5	)	$	(38.4	)	$	(35.2	)		NM
(1) Includes eliminations of intercompany transactions.
(2) Represents the amortization of deferred gain recognized on the business sold through indemnity reinsurance to Swiss Re.

3/31/2007													PAGE 30
Consolidated Domestic Deposits/Account Balances
Unaudited [Billions of Dollars]
	Three Months Ended
	March			June			Sept.			Dec.			March			%
	2006			2006			2006			2006			2007			Change
Deposits - For the Period
Individual Markets - Fixed Annuities	$	0.471		$	0.872		$	1.062		$	1.100		$	0.821			74.3	%
Individual Markets - Variable Annuities		1.665			1.867			1.658			2.061			2.000			20.1	%
Individual Markets - Life Insurance		0.488			1.023			0.753			1.101			1.039			112.9	%
Employer Markets - Fixed Annuities		0.253			0.242			0.268			0.183			0.299			18.2	%
Employer Markets - Variable Products (1)		0.987			0.918			0.818			0.916			1.188			20.4	%
Employer Markets - Executive Benefits		0.047			0.077			0.058			0.085			0.065			38.3	%
Inv Mgmt - Annuities		0.885			0.869			0.960			0.932			1.300			46.9	%
Inv Mgmt - Mutual Funds		1.329			1.370			1.151			1.768			1.753			31.9	%
Inv Mgmt - Managed Acct. & Other		1.806			1.043			0.386			0.493			0.550			-69.5	%
Consolidating Adjustments		(0.481	)		(0.773	)		(0.817	)		(0.833	)		(0.799	)		-66.1	%
Total Gross Retail Deposits		7.449			7.509			6.297			7.805			8.217			10.3	%
Inv Mgmt - Institutional		5.044			2.764			2.406			4.888			2.431			-51.8	%
Consolidating Adjustments		(0.257	)		(0.365	)		(0.202	)		(0.109	)		(0.112	)		56.4	%
Total Gross Deposits	$	12.236		$	9.907		$	8.501		$	12.584		$	10.536			-13.9	%
Account Balances - End of Period
Individual Markets - Fixed Annuities	$	8.362		$	17.384		$	16.894		$	16.733		$	16.449			96.7	%
Individual Markets - Variable Annuities		40.495			41.537			43.977			48.169			50.300			24.2	%
Individual Markets - Life Insurance		14.268			25.479			25.821			26.490			26.924			88.7	%
Employer Markets - Fixed Annuities		11.033			11.050			11.061			11.006			10.993			-0.4	%
Employer Markets - Variable Products (1)		20.702			20.475			21.166			22.650			23.482			13.4	%
Employer Markets - Executive Benefits		1.387			4.228			4.252			4.305			4.264			207.4	%
Inv Mgmt - Annuities		13.998			13.577			14.129			15.151			15.467			10.5	%
Inv Mgmt - Mutual Funds		17.101			16.654			17.068			17.875			18.747			9.6	%
Inv Mgmt - Managed Acct. & Other		15.162			15.812			16.279			17.594			17.681			16.6	%
Consolidating Adjustments		(13.282	)		(13.057	)		(13.649	)		(14.687	)		(15.025	)		-13.1	%
Total Retail Account Balances		129.225			153.137			156.998			165.287			169.282			31.0	%
Inv Mgmt - Institutional		40.167			39.883			42.035			46.686			46.251			15.1	%
Consolidating Adjustments		(3.573	)		(3.557	)		(3.510	)		(3.604	)		(2.829	)		20.8	%
Total Account Balances	$	165.820		$	189.464		$	195.524		$	208.369		$	212.704			28.3	%
Total Domestic Net Flows
Unaudited [Billions of Dollars]
	Three Months Ended
		March			June			Sept.			Dec.			March			%
For the Period Ended		2006			2006			2006			2006			2007			Change
Individual Markets - Life	$	0.257		$	0.548		$	0.491		$	0.727		$	0.698			171.6	%
Individual Markets - Annuities		0.770			0.699			0.304			0.892			0.754			-2.1	%
Employer Markets - Defined Contribution		0.181			0.114			0.037			0.010			0.221			22.1	%
Employer Markets - Executive Benefits		0.039			0.035			(0.011	)		(0.007	)		(0.075	)		NM
Investment Management - Retail		1.305			0.322			(0.300	)		(0.140	)		0.233			-82.1	%
Consolidating Adjustments		0.083			(0.009	)		0.012			(0.092	)		(0.004	)		NM
Total Retail Net Flows		2.635			1.709			0.532			1.390			1.827			-30.7	%
Investment Management - Institutional		3.592			0.687			1.046			2.666			(0.321	)		NM
Consolidating Adjustments		(0.039	)		(0.047	)		0.139			0.068			0.048			223.1	%
Total Net Flows	$	6.188		$	2.349		$	1.717		$	4.125		$	1.554			-74.9	%
(1) Includes amounts attributable to Alliance program mutual fund net flows.
Account values for the Alliance program are not included in the separate accounts reported on our balance sheet.

3/31/2007					PAGE 31
Consolidated Investment Data - Assets Managed
Unaudited [Billions of Dollars]
	As of
	March		June		Sept.		Dec.		March		%
	2006		2006		2006		2006		2007		Change
Assets Managed by Source
LNC's Investments and Cash:
Fixed maturity securities -
available for sale	$	32.893	$	54.024	$	55.825	$	55.853	$	56.256		71.0	%
Equity securities - available for sale		0.176		0.579		0.662		0.700		0.714		NM
Trading securities		3.190		3.109		3.172		3.036		2.910		-8.8	%
Other investments		6.314		12.003		11.948		11.898		11.970		89.6	%
Total LNC Investments		42.573		69.714		71.608		71.488		71.849		68.8	%
Separate accounts		67.984		71.095		74.357		80.534		83.147		22.3	%
Cash and invested cash		1.974		1.500		1.108		1.621		0.900		-54.4	%
Total LNC		112.531		142.309		147.073		153.642		155.897		38.5	%
Non-affiliate assets managed		70.464		70.185		73.227		79.881		81.134		15.1	%
Total Assets Managed	$	182.995	$	212.495	$	220.300	$	233.523	$	237.031		29.5	%
Assets Managed by Advisor
Investment Management segment
(See page 26 for additional detail)	$	86.428	$	85.926	$	89.511	$	97.307	$	98.146		13.6	%
DLIA-Corp
(Assets managed internally-see page 26)		41.995		65.637		67.410		67.066		67.292		60.2	%
Lincoln UK		8.986		9.171		9.440		10.108		10.255		14.1	%
Domestic Policy Loans (excluding Lincoln UK)		1.856		2.712		2.720		2.755		2.763		48.9	%
Non-LNC Affiliates		43.729		49.049		51.219		56.286		58.575		34.0	%
Total Assets Managed	$	182.995	$	212.495	$	220.300	$	233.523	$	237.031		29.5	%

3/31/2007										PAGE 32
Consolidated Investment Data
Unaudited [Millions of Dollars]
	Three Months Ended
	March			June			Sept.			Dec.			March			%
	2006			2006			2006			2006			2007			Change
Net Investment Income
Fixed maturity AFS securities	$	513.7		$	829.0		$	824.8		$	841.7		$	843.8			64.3	%
Equity AFS securities		2.1			8.6			7.9			8.5			8.6			NM
Trading securities		49.7			49.4			49.2			48.6			45.4			-8.7	%
Mortgage loans on real estate		67.2			135.0			137.8			128.5			130.6			94.3	%
Real estate		9.1			13.2			13.3			20.6			15.2			67.0	%
Policy loans		29.7			42.5			43.0			43.7			42.6			43.4	%
Invested cash		22.8			22.2			33.0			15.6			18.2			-20.2	%
Other investments		14.6			10.2			41.3			71.8			29.8			104.1	%
Investment revenue		708.8			1,110.1			1,150.3			1,179.0			1,134.2			60.0	%
Investment expense		(30.4	)		(41.9	)		(42.4	)		(52.6	)		(44.6	)		-46.7	%
Net Investment Income	$	678.3		$	1,068.2		$	1,107.9		$	1,126.3		$	1,089.5			60.6	%
Mean Invested Assets (Amortized Cost)	$	44,363.6		$	70,933.3		$	70,646.9		$	70,451.4		$	69,905.7
Ratio of Net Investment Income Over Mean Invested Assets		6.12	%		6.02	%		6.27	%		6.39	%		6.23	%
	Three Months Ended
		March			June			Sept.			Dec.			March			%
		2006			2006			2006			2006			2007			Change
Realized Investment Gains (Losses)
Fixed maturities	$	4.4		$	8.2		$	6.7		$	10.6		$	44.2			NM
Equity securities		0.2			(1.1	)		-			-			2.2			NM
Other gains (losses), net		3.5			6.5			(5.5	)		3.5			(0.1	)		NM
Policyholders' interest		(1.8	)		(1.4	)		2.0			7.6			(1.9	)		-5.6	%
Capital gains expense		(2.4	)		-			-			-			-			NM
Sale of affiliate		-			-			-			-			-			NM
Total pretax gains (losses)		3.9			12.2			3.1			21.7			44.4			NM
Amortization of DAC, VOBA and deferred
sales inducements		(10.9	)		(18.9	)		(8.9	)		(8.9	)		(17.9	)		-64.2	%
Income taxes		(2.9	)		(3.0	)		(1.7	)		3.4			9.3			NM
Realized investment gains (losses), net of taxes	$	(4.2	)	$	(3.8	)	$	(4.1	)	$	9.4		$	17.1			NM
					As of March 31, 2007									As of December 31, 2006
					Amount			% of Total						Amount			% of Total
Available-for-Sale and Trading Securities [Millions of Dollars]
Fixed Maturity Sec (Fair Value)				$	59,165.3			98.8	%				$	58,889.8			98.8	%
Fixed Maturity Sec (Amortized Cost)					57,951.2			98.9	%					57,725.8			98.9	%
Equity Securities (Fair Value)					713.9			1.2	%					700.2			1.2	%
Equity Securities (Amortized Cost)					655.4			1.1	%					656.8			1.1	%
% of Available-for-Sale Fixed Maturity Securities (Based on Fair Value)
Treasuries and AAA								19.9	%								19.6	%
AA or better								29.2	%								28.1	%
BB or less								5.6	%								6.3	%
General Account Investments					As of March 31, 2007									As of December 31, 2006
					Amount			% of Total						Amount			% of Total
Fixed maturities- security sector:
Corporate bonds				$	45,484.0			80.9	%				$	45,489.4			81.4	%
U.S. government bonds					244.3			0.4	%					263.4			0.5	%
Foreign government bonds					1,077.1			1.9	%					1,141.6			2.0	%
Mortgage backed securities					9,186.2			16.3	%					8,691.3			15.6	%
State and municipal bonds					155.5			0.3	%					159.4			0.3	%
Preferred stocks - redeemable					108.4			0.2	%					108.3			0.2	%
Total				$	56,255.6			100.0	%				$	55,853.4			100.0	%
	As of
		March			June			Sept.			Dec.			March			%
		2006			2006			2006			2006			2007			Change
Composition of Investment Portfolio:
Securities available-for-sale, at fair value:
Fixed Maturity	$	32,892.8		$	54,024.1		$	55,824.9		$	55,853.4		$	56,255.6			71.0	%
Equity		176.0			578.5			662.0			700.2			713.9			NM
Trading securities		3,190.1			3,109.0			3,172.5			3,036.3			2,909.7			-8.8	%
Mortgage loans on real estate & real estate		3,766.5			8,169.7			8,004.5			7,805.6			7,822.2			107.7	%
Policy loans		1,860.4			2,716.4			2,724.9			2,759.7			2,766.8			48.7	%
Derivative Investments		199.3			279.6			349.4			415.3			412.6			107.0	%
Other investments		488.2			837.0			869.3			917.1			968.6			98.4	%
Total	$	42,573.2		$	69,714.4		$	71,607.5		$	71,487.6		$	71,849.3			68.8	%