Shares and Stockholder's Equity

3 Months Ended

Mar. 31, 2020

Shares and Stockholder's Equity [Abstract]

Shares and Stockholder's Equity

11. 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,
	2020			2019
Unrealized Gain (Loss) on AFS Securities
Balance as of beginning-of-year	$	5,637		$	536
Cumulative effect from adoption of new accounting standard		40			-
Unrealized holding gains (losses) arising during the period		(4,357	)		3,406
Change in foreign currency exchange rate adjustment		(150	)		13
Change in DAC, VOBA, DSI, future contract benefits and other contract holder funds		1,263			(925	)
Income tax benefit (expense)		691			(531	)
Less:
Reclassification adjustment for gains (losses) included in net income (loss)		(3	)		(14	)
Associated amortization of DAC, VOBA, DSI and DFEL		27			1
Income tax benefit (expense)		(5	)		3
Balance as of end-of-period	$	3,105		$	2,509
Unrealized OTTI on AFS Securities
Balance as of beginning-of-year	$	40		$	29
(Increases) attributable to:
Cumulative effect from adoption of new accounting standard		(40	)		-
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		-			5
Change in DAC, VOBA, DSI and DFEL		-			(2	)
Income tax benefit (expense)		-			(1	)
Balance as of end-of-period	$	-		$	22
Unrealized Gain (Loss) on Derivative Instruments
Balance as of beginning-of-year	$	181		$	119
Unrealized holding gains (losses) arising during the period		553			53
Change in foreign currency exchange rate adjustment		153			(14	)
Change in DAC, VOBA, DSI and DFEL		(48	)		4
Income tax benefit (expense)		(140	)		(9	)
Less:
Reclassification adjustment for gains (losses) included in net income (loss)		12			9
Associated amortization of DAC, VOBA, DSI and DFEL		(1	)		(3	)
Income tax benefit (expense)		(2	)		(1	)
Balance as of end-of-period	$	690		$	148
Funded Status of Employee Benefit Plans
Balance as of beginning-of-year	$	(22	)	$	(25	)
Adjustment arising during the period		-			-
Balance as of end-of-period	$	(22	)	$	(25	)

‎

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,
	2020			2019
Unrealized Gain (Loss) on AFS Securities
Gross reclassification	$	(3	)	$	(14	)	Total realized gain (loss)
Associated amortization of DAC,
VOBA, DSI and DFEL		27			1		Total realized gain (loss)
Reclassification before income							Income (loss) from continuing
tax benefit (expense)		24			(13	)	operations before taxes
Income tax benefit (expense)		(5	)		3		Federal income tax expense (benefit)
Reclassification, net of income tax	$	19		$	(10	)	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		Net investment income
Foreign currency contracts		11			7		Net investment income
Foreign currency contracts		1			1		Total realized gain (loss)
Total gross reclassifications		12			9
Associated amortization of DAC,
VOBA, DSI and DFEL		(1	)		(3	)	Commissions and other expenses
Reclassifications before income							Income (loss) from continuing
tax benefit (expense)		11			6		operations before taxes
Income tax benefit (expense)		(2	)		(1	)	Federal income tax expense (benefit)
Reclassifications, net of income tax	$	9		$	5		Net income (loss)