SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

12 Months Ended

Dec. 31, 2012

Schedule To Financial Statements [Abstract]

Condensed financial information of registrant

LINCOLN NATIONAL CORPORATION

SCHEDULE II – CONDENSED FINANCIAL INFORMATION OF REGISTRANT

BALANCE SHEETS

(Parent Company Only) (in millions, except share data)

			As of December 31,
			2012		2011

ASSETS
Investments in subsidiaries⁽¹⁾			$	17,557	$	15,758
Derivative investments				389		305
Other investments				30		29
Cash and invested cash				844		622
Loans and accrued interest to subsidiaries⁽¹⁾				2,585		2,605
Other assets				27		289
		Total assets	$	21,432	$	19,608

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Common and preferred dividends payable			$	33	$	23
Short-term debt				300		300
Long-term debt				5,589		5,641
Loans from subsidiaries⁽¹⁾				55		58
Payables for collateral on investments				59		(14)
Other liabilities				423		499
	Total liabilities			6,459		6,507

Contingencies and Commitments

Stockholders' Equity
Preferred stock - 10,000,000 shares authorized; Series A				-		-
Common stock - 800,000,000 shares authorized				7,121		7,590
Retained earnings				4,044		2,831
Accumulated other comprehensive income (loss)				3,808		2,680
	Total stockholders' equity			14,973		13,101
		Total liabilities and stockholders' equity	$	21,432	$	19,608

Eliminated in consolidation.

FS-3

LINCOLN NATIONAL CORPORATION

SCHEDULE II – CONDENSED FINANCIAL INFORMATION OF REGISTRANT (Continued)

STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Parent Company Only) (in millions)

								For the Years Ended December 31,
								2012		2011		2010
Revenues
Dividends from subsidiaries⁽¹⁾								$	635	$	875	$	712
Interest from subsidiaries⁽¹⁾									128		125		99
Net investment income									1		2		-
Realized gain (loss)									(6)		(3)		(4)
Other revenue and fees									25		25		25
	Total revenues								783		1,024		832
Expenses
Operating and administrative									10		27		119
Interest - subsidiaries⁽¹⁾									5		5		6
Interest - other									291		310		290
	Total expenses								306		342		415
		Income (loss) before federal income taxes, equity in income (loss) of
			subsidiaries, less dividends						477		682		417
		Federal income tax expense (benefit)							(85)		(68)		(106)
			Income (loss) before equity in income (loss) of subsidiaries, less dividends						562		750		523
			Equity in income (loss) of subsidiaries, less dividends						751		(529)		379
				Net income (loss)					1,313		221		902
				Other comprehensive income (loss), net of tax:
					Unrealized gain (loss) on available-for-sale securities				1,119		1,771		1,127
					Unrealized other-than-temporary impairment on available-for-sale securities				2		25		(19)
					Unrealized gain (loss) on derivatives instruments				44		130		(22)
					Foreign currency translation adjustment				(5)		-		(2)
					Funded status of employee benefit plans				(32)		(97)		29
						Total other comprehensive income (loss), net of tax			1,128		1,829		1,113
							Comprehensive income (loss)	$	2,441	$	2,050	$	2,015

Eliminated in consolidation.

FS-4

LINCOLN NATIONAL CORPORATION

SCHEDULE II – CONDENSED FINANCIAL INFORMATION OF REGISTRANT (Continued)

STATEMENTS OF CASH FLOWS

(Parent Company Only) (in millions)

						For the Years Ended December 31,
						2012		2011		2010
Cash Flows from Operating Activities
Net income (loss)						$	1,313	$	221	$	902
Adjustments to reconcile net income (loss) to net cash provided by
	operating activities:
		Equity in (income) loss of subsidiaries greater than distributions⁽¹⁾					(751)		529		(379)
		Realized (gain) loss					6		3		4
		Change in legal accruals					-		(70)		70
		Change in federal income tax accruals					170		32		(190)
		(Gain) loss on early extinguishment of debt					5		8		5
		Other					(13)		(21)		(22)
			Net cash provided by (used in) operating activities				730		702		390

Cash Flows from Investing Activities
Sales or maturities of investments							-		105		-
Capital contribution to subsidiaries⁽¹⁾							-		(17)		(125)
Proceeds from sale of subsidiaries/businesses, net of cash disposed							-		-		459
Increase (decrease) in payables for collateral on investments							73		-		-
			Net cash provided by (used in) investing activities				73		88		334

Cash Flows from Financing Activities
Payment of long-term debt, including current maturities							(320)		(525)		(405)
Issuance of long-term debt, net of issuance costs							300		300		749
Increase (decrease) in commercial paper, net							-		(100)		1
Increase (decrease) in loans from subsidiaries, net⁽¹⁾							(3)		58		(97)
Increase (decrease) in loans to subsidiaries, net⁽¹⁾							20		154		(683)
Common stock issued for benefit plans and excess tax benefits							5		1		-
Issuance (redemption) of Series B preferred stock and issuance (repurchase
	and cancellation) of associated common stock warrants						-		-		(998)
Issuance of common stock							-		-		368
Repurchase of common stock							(493)		(576)		(25)
Dividends paid to common and preferred stockholders							(90)		(62)		(42)
			Net cash provided by (used in) financing activities				(581)		(750)		(1,132)

				Net increase (decrease) in cash and invested cash			222		40		(408)
				Cash and invested cash as of beginning-of-year			622		582		990
					Cash and invested cash as of end-of-year	$	844	$	622	$	582

Eliminated in consolidation.

- Definition

The entire disclosure for condensed financial information, including the financial position, cash flows, and the results of operations of the registrant (parent company) as of the same dates or for the same periods for which audited consolidated financial statements are being presented. Alternatively, the details of this disclosure can be reported by the specific parent company taxonomy elements, indicating the appropriate date and period contexts in an instance document.

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