Shares and Stockholder's Equity

9 Months Ended

Sep. 30, 2019

Shares and Stockholder's Equity [Abstract]

Shares and Stockholder's Equity

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 Nine
	Months Ended
	September 30,
	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		9,407			(5,268	)
Change in foreign currency exchange rate adjustment		(80	)		(68	)
Change in DAC, VOBA, DSI, future contract benefits and other contract holder funds		(2,271	)		1,542
Income tax benefit (expense)		(1,502	)		804
Less:
Reclassification adjustment for gains (losses) included in net income (loss)		(16	)		(36	)
Associated amortization of DAC, VOBA, DSI and DFEL		(11	)		(11	)
Income tax benefit (expense)		6			10
Balance as of end-of-period	$	6,111		$	964
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			-
Decreases attributable to:
Changes in fair value, sales, maturities or other settlements of AFS securities		20			(7	)
Change in DAC, VOBA, DSI and DFEL		(3	)		(9	)
Income tax benefit (expense)		(4	)		3
Balance as of end-of-period	$	33		$	35
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		287			(86	)
Change in foreign currency exchange rate adjustment		80			69
Change in DAC, VOBA, DSI and DFEL		(3	)		4
Income tax benefit (expense)		(77	)		3
Less:
Reclassification adjustment for gains (losses) included in net income (loss)		36			21
Associated amortization of DAC, VOBA, DSI and DFEL		(1	)		(5	)
Income tax benefit (expense)		(7	)		(3	)
Balance as of end-of-period	$	378		$	10
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 Nine
	Months Ended
	September 30,
		2019		2018
Unrealized Gain (Loss) on AFS Securities
Gross reclassification	$	(16	)	$	(36	)	Total realized gain (loss)
Associated amortization of DAC,
VOBA, DSI and DFEL		(11	)		(11	)	Total realized gain (loss)
Reclassification before income							Income (loss) from continuing
tax benefit (expense)		(27	)		(47	)	operations before taxes
Income tax benefit (expense)		6			10		Federal income tax expense (benefit)
Reclassification, net of income tax	$	(21	)	$	(37	)	Net income (loss)
Unrealized OTTI on AFS Securities
Gross reclassification	$	4		$	(1	)	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)		4			(1	)	operations before taxes
Income tax benefit (expense)		(1	)		-		Federal income tax expense (benefit)
Reclassification, net of income tax	$	3		$	(1	)	Net income (loss)
Unrealized Gain (Loss) on Derivative Instruments
Gross reclassifications:
Interest rate contracts	$	2		$	3		Net investment income
Foreign currency contracts		25			18		Net investment income
Foreign currency contracts		9			-		Total realized gain (loss)
Total gross reclassifications		36			21
Associated amortization of DAC,
VOBA, DSI and DFEL		(1	)		(5	)	Commissions and other expenses
Reclassifications before income							Income (loss) from continuing
tax benefit (expense)		35			16		operations before taxes
Income tax benefit (expense)		(7	)		(3	)	Federal income tax expense (benefit)
Reclassifications, net of income tax	$	28		$	13		Net income (loss)