12. Shares and Stockholder’s Equity

All authorized and issued shares of LNL are owned by LNC.

AOCI

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



	For the Three
	Months Ended
	March 31,
	2019			2018
Unrealized Gain (Loss) on AFS Securities
Balance as of beginning-of-year	$	536		$	3,283
Cumulative effect from adoption of new accounting standards		-			634
Unrealized holding gains (losses) arising during the period		3,406			(2,924	)
Change in foreign currency exchange rate adjustment		13			53
Change in DAC, VOBA, DSI, future contract benefits and other contract holder funds		(925	)		957
Income tax benefit (expense)		(531	)		403
Less:
Reclassification adjustment for gains (losses) included in net income (loss)		(14	)		(19	)
Associated amortization of DAC, VOBA, DSI and DFEL		1			(4	)
Income tax benefit (expense)		3			5
Balance as of end-of-period	$	2,509		$	2,424
Unrealized OTTI on AFS Securities
Balance as of beginning-of-year	$	29		$	39
(Increases) attributable to:
Cumulative effect from adoption of new accounting standards		-			9
Gross OTTI recognized in OCI during the period		(14	)		-
Change in DAC, VOBA, DSI and DFEL		1			-
Income tax benefit (expense)		4			(1	)
Decreases attributable to:
Changes in fair value, sales, maturities or other settlements of AFS securities		5			(9	)
Change in DAC, VOBA, DSI and DFEL		(2	)		(10	)
Income tax benefit (expense)		(1	)		4
Balance as of end-of-period	$	22		$	32
Unrealized Gain (Loss) on Derivative Instruments
Balance as of beginning-of-year	$	119		$	27
Cumulative effect from adoption of new accounting standard		-			6
Unrealized holding gains (losses) arising during the period		53			(83	)
Change in foreign currency exchange rate adjustment		(14	)		(50	)
Change in DAC, VOBA, DSI and DFEL		4			4
Income tax benefit (expense)		(9	)		28
Less:
Reclassification adjustment for gains (losses) included in net income (loss)		9			6
Associated amortization of DAC, VOBA, DSI and DFEL		(3	)		(1	)
Income tax benefit (expense)		(1	)		(1	)
Balance as of end-of-period	$	148		$	(72	)
Funded Status of Employee Benefit Plans
Balance as of beginning-of-year	$	(25	)	$	(22	)
Cumulative effect from adoption of new accounting standard		-			(5	)
Balance as of end-of-period	$	(25	)	$	(27	)

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



	For the Three
	Months Ended
	March 31,
		2019		2018
Unrealized Gain (Loss) on AFS Securities
Gross reclassification	$	(14	)	$	(19	)	Total realized gain (loss)
Associated amortization of DAC,
VOBA, DSI and DFEL		1			(4	)	Total realized gain (loss)
Reclassification before income							Income (loss) from continuing
tax benefit (expense)		(13	)		(23	)	operations before taxes
Income tax benefit (expense)		3			5		Federal income tax expense (benefit)
Reclassification, net of income tax	$	(10	)	$	(18	)	Net income (loss)

Unrealized OTTI on AFS Securities
Gross reclassification	$	-		$	-		Total realized gain (loss)
Change in DAC, VOBA, DSI and DFEL		-			-		Total realized gain (loss)
Reclassification before income							Income (loss) from continuing
tax benefit (expense)		-			-		operations before taxes
Income tax benefit (expense)		-			-		Federal income tax expense (benefit)
Reclassification, net of income tax	$	-		$	-		Net income (loss)

Unrealized Gain (Loss) on Derivative Instruments
Gross reclassifications:
Interest rate contracts	$	1		$	1		Net investment income
Foreign currency contracts		7			5		Net investment income
Foreign currency contracts		1			-		Total realized gain (loss)
Total gross reclassifications		9			6
Associated amortization of DAC,
VOBA, DSI and DFEL		(3	)		(1	)	Commissions and other expenses
Reclassifications before income							Income (loss) from continuing
tax benefit (expense)		6			5		operations before taxes
Income tax benefit (expense)		(1	)		(1	)	Federal income tax expense (benefit)
Reclassifications, net of income tax	$	5		$	4		Net income (loss)