8-K

UNITED STATES

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

April 30, 2014

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.)

150 N. Radnor Chester Road,  Radnor,  PA19087

(Address of principal executive offices)  (Zip Code)

(484) 583-1400

(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 April 30, 2014, Lincoln National Corporation (the “Company”) issued a press release announcing its financial results for the quarter ended March 31, 2014, a copy of which is attached as Exhibit 99.1 and is incorporated herein by reference.  The Company’s statistical supplement for the quarter ended March 31, 2014, 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 April 30, 2014, announcing Lincoln National Corporation’s financial results for the quarter ended March 31, 2014.
99.2	Lincoln National Corporation Statistical Supplement for the quarter ended  March 31, 2014.

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:	Senior Vice President and
	Chief Accounting Officer

Date:  April 30, 2014

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press release dated April 30, 2014, announcing Lincoln National Corporation’s financial results for the quarter ended March 31, 2014.
99.2	Lincoln National Corporation Statistical Supplement for the quarter ended March 31, 2014.

EX-99.1

NEWS RELEASE

Lincoln Financial Group Reports First Quarter 2014 Results

_______________________________________

Operating EPS of $1.34, up 31%, drives ROE of 12%

Operating Revenues of $3.2 billion up 10%

Book Value per Share, excluding AOCI, of $45.63 up 9%

Radnor, PA, April 30, 2014 –  Lincoln Financial Group (NYSE: LNC) today reported net income for the first quarter of 2014 of $329 million, or $1.21 per diluted share, compared to net income in the first quarter of 2013 of $239 million, or $0.86 per diluted share. First quarter income from operations was $365 million, or $1.34 per diluted share, compared to $285 million, or $1.02 per diluted share, in the first quarter of 2013.

“Lincoln’s strong results in the quarter are a positive start to the year and build on a successful 2013,” said Dennis R. Glass, president and CEO of Lincoln Financial Group.  “The combination of ongoing share repurchases and the recently completed repricing of essentially our entire product portfolio will help expand Lincoln’s return on equity over time.  At the same time, we are diversifying the company’s risk profile by increasing our emphasis on products without long-dated guarantees.”

	As of or For the
	Quarter Ended
(millions of dollars except per share data)	2014			2013
Net Income (Loss)	$	329	$	239
Net Income (Loss) Available to Common Stockholders		328		239
Net Income (Loss) Per Diluted Share		1.21		0.86
Revenues		3,176		2,839
Income (Loss) from Operations		365		285
Income (Loss) from Operations Per Diluted Share		1.34		1.02
Average Diluted Shares		272.1		278.6
ROE (Income from Operations)		12.2%		10.2%
ROE (Net Income)		11.0%		8.5%
Book Value per Share, Including AOCI	$	54.94	$	55.33
Book Value per Share, Excluding AOCI		45.63		42.00

Operating Highlights – First Quarter 2014 versus First Quarter 2013

· Consolidated deposits of $6.4 billion up 5%

· Consolidated account balances of $209 billion up 13%

· Annuities total deposits of $3.4 billion up 5%

· Retirement Plan Services total deposits of $1.8 billion up 5%

· Total Individual Life Insurance sales of $142 million up 14%

· Group Protection non-medical earned premiums of $533 million up 12%

There were no notable items in the quarter. 

First Quarter 2014 – Segment Results

Annuities

The Annuities segment reported income from operations of $216 million in the quarter, up 36% from $159 million in the prior-year quarter.  Positive net flows and equity market performance increased fees on assets under management, which contributed to the growth in revenues and earnings.

Gross annuity deposits in the first quarter of $3.4 billion drove net flows of $695 million and a 15% increase in account values to $117 billion compared to the prior-year quarter.  Variable annuity deposits of $2.9 billion were flat with the prior-year quarter. Fixed annuity deposits of $432 million increased 54% on the strength of indexed annuity sales.

The company continues to focus on shifting the balance of variable annuity sales with and without guaranteed living benefits.  Net of reinsurance, variable annuity deposits without a guaranteed living benefit rider as a percentage of total variable annuity deposits were 40%, compared to 32% in the fourth quarter of 2013.

Retirement Plan Services

Retirement Plan Services reported income from operations of $39 million compared to $35 million in the prior-year quarter. 

Total deposits for the quarter of $1.8 billion were up 5% versus the prior-year quarter.  Several large case terminations in the mid-large market segment led to total net flows of $(361) million in the quarter. These results represent the ordinary fluctuations that occur in this business.   Account values at the end of the quarter were $52 billion, a 12% increase over the prior-year quarter, attributed to strong equity markets and positive net flows over the trailing twelve months. 

Life Insurance

Life Insurance income from operations was $120 million compared to $112 million in the prior-year quarter.

Total life insurance sales in the quarter were $145 million compared to $151 million in the prior-year quarter.  Total individual life sales, which exclude COLI and BOLI, increased 14% from the prior-year period, driven by strong sales results in indexed universal life, term life and variable universal life. COLI and BOLI sales were down from a strong prior-year quarter and will vary in any given period.

Life insurance average in-force of $620 billion grew 5% and average account values of $40 billion increased 7% over the prior-year quarter.

The quarter’s earnings were lower than expectations due to elevated mortality, partially offset by strong alternative investment income.

Group Protection

For the first quarter, Group Protection income from operations was $20 million compared to $14 million in the prior-year period. The non-medical loss ratio was 74.8%, flat with the prior-year quarter.    

Group Protection sales of $64 million for the quarter were down 10% from the same period last year.  The decrease was consistent with expectations following pricing changes implemented at the beginning of the year.  Sales results also reinforced the emphasis on sales of employee-paid products, which represented over 60% of total sales.

Non-medical net earned premiums were $533 million in the first quarter, up 12% over the year-ago period. 

Other Operations

Other Operations reported a loss from operations of $30 million in the quarter versus a loss of $35 million in the prior-year quarter. 

Realized Gains and Losses

Realized gains/losses (after-tax) in the quarter included:

· A net loss from general account investments of $17 million as compared to a $4 million net loss in the prior-year quarter.

· A $7 million variable annuity net derivatives loss, comprising negative hedge program performance of $14 million and a $7 million gain associated with the non-performance risk component.

Unrealized Gains and Losses

The company reported a net unrealized gain of $5.8 billion, pre-tax, on its available-for-sale securities at March 31, 2014. This compares to a net unrealized gain of $8.7 billion at March 31, 2013, with the year-over-year decrease driven by higher Treasury rates. 

Capital

During the quarter, the company repurchased 3.0 million shares of stock at a cost of $150 million. The quarter’s average diluted share count of 272.1 million shares was down 2% from the first quarter of 2013, the result of repurchasing 11.6 million shares of stock at a cost of $500 million since March 31, 2013. 

Book Value

As of March 31, 2014, book value per share, including accumulated other comprehensive income (“AOCI”), of $54.94 decreased 1% from a year ago. Book value per share, excluding AOCI, of $45.63 increased 9% from the prior-year period.

This press release may contain statements that are forward-looking, and actual results may differ materially, especially given the current economic and capital markets conditions.  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.

The tables attached to this release define and reconcile income from operations, return on equity (“ROE”), and book value per share excluding AOCI, non-GAAP measures, to net income, ROE, and book value per share including AOCI calculated in accordance with GAAP.

Lincoln Financial Group will discuss the company’s first quarter results with investors in a conference call beginning at 10:00 a.m. (ET) on Thursday, May 1, 2014.  Interested persons are invited to listen through the internet.  Please go to www.LincolnFinancial.com/webcast at least fifteen minutes prior to the event to register, download and install any necessary streaming media software. Interested persons may also listen to the call by dialing the following numbers:

Dial:	(877) 776-4049 (Domestic)
	(914) 495-8602 (International)
	- Ask for the Lincoln National Conference Call.

The company will also post its first quarter 2014 statistical supplement on its website, www.LincolnFinancial.com/earnings.

Lincoln Financial Group is the marketing name for Lincoln National Corporation (NYSE:LNC) and its affiliates. With headquarters in the Philadelphia region, the companies of Lincoln Financial Group had assets under management of $209 billion as of March 31, 2014. Through its affiliated companies, Lincoln Financial Group offers: annuities; life, group life, disability and dental insurance; employer-sponsored retirement plans; savings plans; and comprehensive financial planning and advisory services. For more information, including a copy of our most recent SEC reports containing our balance sheets, please visit www.LincolnFinancial.com.

Contacts:	Jim Sjoreen	Michael Arcaro
	(484) 583-1420	(484) 583-1799
	Investor Relations	Media Relations
	Investorrelations@LFG.com	michael.arcaro@LFG.com

Definition of Income (Loss) from Operations, Operating Revenues and Return on Equity

Income (loss) from operations, operating revenues and return on equity (“ROE”), as used in the earnings release, are non-GAAP financial measures and do not replace GAAP revenues,  net income (loss) and ROE.  We exclude the after-tax effects of the following items from GAAP net income (loss) to arrive at income (loss) from operations: realized gains and losses associated with the following ("excluded realized gain (loss)"): sale or disposal of securities; impairments of securities; change in the fair value of derivative investments, embedded derivatives within certain reinsurance arrangements and our trading securities; change in the fair value of the derivatives we own to hedge our guaranteed death benefit ("GDB") riders within our variable annuities, which is referred to as "GDB derivatives results"; change in the fair value of the embedded derivatives of our guaranteed living benefit (“GLB”) riders within our variable annuities accounted for under the Derivatives and Hedging and the Fair Value Measurements and Disclosures Topics of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) (“embedded derivative reserves”), net of the change in the fair value of the derivatives we own to hedge the changes in the embedded derivative reserves, the net of which is referred to as “GLB net derivative results”; and changes in the fair value of the embedded derivative liabilities related to index call options we may purchase in the future to hedge contract holder index allocations applicable to future reset periods for our indexed annuity products accounted for under the Derivatives and Hedging and the Fair Value Measurements and Disclosures Topics of the FASB ASC (“indexed annuity forward-starting option”); change in reserves accounted for under the Financial Services - Insurance - Claim Costs and Liabilities for Future Policy Benefits Subtopic of the FASB ASC resulting from benefit ratio unlocking on our GDB and GLB riders ("benefit ratio unlocking"); income (loss) from the initial adoption of new accounting standards; income (loss) from reserve changes (net of related amortization) on business sold through reinsurance; gain (loss) on early extinguishment of debt; losses from the impairment of intangible assets; and income (loss) from discontinued operations.

Operating revenues represent GAAP revenues excluding the pre-tax effects of the following items, as applicable: excluded realized gain (loss); amortization of deferred front-end loads (“DFEL”) arising from changes in GDB and GLB benefit ratio unlocking; amortization of deferred gains arising from the reserve changes on business sold through reinsurance; and revenue adjustments from the initial adoption of new accounting standards.

Return on equity measures how efficiently we generate profits from the resources provided by our net assets.  Return on equity is calculated by dividing annualized income (loss) from operations by average equity, excluding accumulated other comprehensive income (loss) ("AOCI").  Management evaluates return on equity by both including and excluding average goodwill within average equity.

Income (loss) from operations, operating revenues and return on equity (including and excluding average goodwill within average equity), excluding AOCI, using annualized income (loss) from operations are financial measures we use to evaluate and assess our results.  Management believes that these performance measures explain the results of the company's ongoing businesses in a manner that allows for a better understanding of the underlying trends in the company's current business because the excluded items are unpredictable and not necessarily indicative of current operating fundamentals or future performance of the business segments, and, in most instances, decisions regarding these items do not necessarily relate to the operations of the individual segments.

The company uses its prevailing corporate federal income tax rate of 35% while taking into account any permanent differences for events recognized differently in its financial statements and federal income tax returns when reconciling non-GAAP measures to the most comparable GAAP measure.

Lincoln National Corporation
Reconciliation of Net Income to Income from Operations
(millions of dollars, except per share data)
	For the Three Months Ended
	March 31,
	2014		2013
Total Revenues	$	3,176	$	2,839
Less:
Excluded realized gain (loss)		(58)		(91)
Amortization of DFEL on benefit ratio unlocking		-		(1)
Amortization of deferred gains arising from reserve
changes on business sold through reinsurance		1		1
Total Operating Revenues	$	3,233	$	2,930
Net Income (Loss) Available to Common
Stockholders - Diluted	$	328	$	239
Less:
Adjustment for deferred units of LNC stock in our
deferred compensation plans (1)		(1)		-
Net Income (Loss)		329		239
Less (2):
Excluded realized gain (loss)		(38)		(60)
Benefit ratio unlocking		2		14
Income (Loss) from Operations	$	365	$	285
Earnings (Loss) Per Common Share (Diluted)
Income (loss) from operations	$	1.34	$	1.02
Net income (loss)		1.21		0.86
Average Stockholders' Equity
Average equity, including average AOCI	$	13,969	$	14,918
Average AOCI		2,008		3,695
Average equity, excluding AOCI		11,961		11,223
Average goodwill		2,273		2,273
Average equity, excluding AOCI and goodwill	$	9,688	$	8,950
Return on Equity, Excluding AOCI
Net income (loss) with average equity including goodwill		11.0%		8.5%
Income (loss) from operations with average equity
including goodwill		12.2%		10.2%
Income (loss) from operations with average equity
excluding goodwill		15.1%		12.7%
(1) The numerator used in the calculation of our diluted EPS is adjusted to remove the mark-to-market adjustment for deferred units of LNC
stock in our deferred compensation plans if the effect of equity classification would be more dilutive to our diluted EPS.
(2) We use our federal income tax rate of 35% while taking into account any permanent differences for events recognized differently in our
financial statements and federal income tax returns when reconciling our non-GAAP measures to the most comparable GAAP measure.

Definition of Book Value Per Share Excluding AOCI

Book value per share excluding AOCI is calculated based upon a non-GAAP financial measure. It is calculated by dividing (a) stockholders' equity excluding AOCI by (b) common shares outstanding, assuming conversion of Series A preferred shares. We provide book value per share excluding AOCI to enable investors to analyze the amount of our net worth that is primarily attributable to our business operations.  Management believes book value per share excluding AOCI is useful to investors because it eliminates the effect of items that can fluctuate significantly from period to period, primarily based on changes in interest rates.  Book value per share is the most directly comparable GAAP measure. A reconciliation of book value per share to book value per share excluding AOCI as of December 31, 2013 and 2012 is set forth below.

	As of March 31,
	2014		2013
Book value per share, including AOCI	$	54.94	$	55.33
Per share impact of AOCI		9.31		13.33
Book value per share, excluding AOCI		45.63		42.00

Lincoln National Corporation
Digest of Earnings
(millions of dollars, except per share data)
	For the Three Months Ended
	March 31,
	2014		2013
Revenues	$	3,176	$	2,839
Net Income (Loss)	$	329	$	239
Adjustment for deferred units of LNC stock in our
deferred compensation plans (1)		(1)		-
Net Income (Loss) Available to Common
Stockholders - Diluted	$	328	$	239
Earnings (Loss) Per Common Share - Basic	$	1.25	$	0.89
Earnings (Loss) Per Common Share - Diluted (2)		1.21		0.86
Average Shares - Basic		262,738,542		270,265,766
Average Shares - Diluted		272,115,004		278,592,099
(1) The numerator used in the calculation of our diluted EPS is adjusted to remove the mark-to-market adjustment for deferred units of LNC
stock in our deferred compensation plans if the effect of equity classification would be more dilutive to our diluted EPS.
(2) In those periods with a loss from continuing operations, shares used in the earnings per share calculation represent basic shares, since using
diluted shares would have been anti-dilutive.

Forward Looking Statements — Cautionary Language

Certain statements made in this press release and in other written or oral statements made by Lincoln or on Lincoln's behalf are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA"). A forward-looking statement is a statement that is not a historical fact and, without limitation, includes any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain words like: "believe", "anticipate", "expect", "estimate", "project", "will", "shall" and other words or phrases with similar meaning in connection with a discussion of future operating or financial performance. In particular, these include statements relating to future actions, trends in Lincoln's businesses, prospective services or products, future performance or financial results, and the outcome of contingencies, such as legal proceedings. Lincoln claims the protection afforded by the safe harbor for forward-looking statements provided by the PSLRA.

Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from the results contained in the forward-looking statements. Risks and uncertainties that may cause actual results to vary materially, some of which are described within the forward-looking statements include, among others:

· Deterioration in general economic and business conditions that may affect account values, investment results, guaranteed benefit liabilities, premium levels, claims experience and the level of pension benefit costs, funding and investment results;

· Adverse global capital and credit market conditions could affect our ability to raise capital, if necessary, and may cause us to realize impairments on investments and certain intangible assets, including goodwill and the valuation allowance against deferred tax assets, which may reduce future earnings and/or affect our financial condition and ability to raise additional capital or refinance existing debt as it matures;

· Because of our holding company structure, the inability of our subsidiaries to pay dividends to the holding company in sufficient amounts could harm the holding Company’s ability to meet its obligations;

· Legislative, regulatory or tax changes, both domestic and foreign, that affect the cost of, or demand for, our subsidiaries' products, the required amount of reserves and/or surplus, or otherwise affect our ability to conduct business, including changes to statutory reserve requirements related to secondary guarantee universal life and annuities; regulations regarding captive reinsurance arrangements; restrictions on revenue sharing and 12b-1 payments; and the potential for U.S. Federal tax reform;

· Actions taken by reinsurers to raise rates on in force business;

· Declines in or sustained low interest rates causing a reduction in investment income, the interest margins of our businesses,  estimated gross profits and demand for our products;

· Rapidly increasing interest rates causing contract holders to surrender life insurance and annuity policies, thereby causing realized investment losses, and reduced hedge performance related to variable annuities;

· Uncertainty about the effect of rules and regulations to be promulgated under the Dodd-Frank Wall Street Reform and Consumer Protection Act on us and the economy and financial services sector in particular;

· The initiation of legal or regulatory proceedings against us, and the outcome of any legal or regulatory proceedings, such as: adverse actions related to present or past business practices common in businesses in which we compete; adverse decisions in significant actions including, but not limited to, actions brought by federal and state authorities and class action cases; new decisions that result in changes in law; and unexpected trial court rulings;

· A decline in the equity markets causing a reduction in the sales of our subsidiaries' products, a reduction of asset-based fees that our subsidiaries charge on various investment and insurance products, an acceleration of amortization of deferred acquisition costs, or "DAC," value of business acquired, or "VOBA," deferred sales inducements, or "DSI," and deferred front end sales loads, or "DFEL," and an increase in liabilities related to guaranteed benefit features of our subsidiaries' variable annuity products;

· Ineffectiveness of our risk management policies and procedures, including various hedging strategies used to offset the effect of changes in the value of liabilities due to changes in the level and volatility of the equity markets and interest rates;

· A deviation in actual experience regarding future persistency, mortality, morbidity, interest rates or equity market returns from the assumptions used in pricing our subsidiaries' products, in establishing related insurance reserves and in the amortization of DAC, VOBA, DSI and DFEL, which may reduce future earnings;

· Changes in accounting principles generally accepted in the United States, or "GAAP," including convergence with International Financial Reporting Standards (“IFRS”), that may result in unanticipated changes to our net income;

· Lowering of one or more of our debt ratings issued by nationally recognized statistical rating organizations and the adverse effect 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 effect such action may have on the premium writings, policy retention, profitability of our insurance subsidiaries and liquidity;

· Significant credit, accounting, fraud, corporate governance or other issues that may adversely affect the value of certain investments in our portfolios as well as counterparties to which we are exposed to credit risk requiring that we realize losses on investments;

· Inability to protect our intellectual property rights or claims of infringement of the intellectual property rights of others;

· Interruption in telecommunication, information technology or other operational systems or failure to safeguard the confidentiality or privacy of sensitive data on such systems from cyberattacks or other breaches of our data security systems;

· The effect of acquisitions and divestitures, restructurings, product withdrawals and other unusual items;

· The adequacy and collectability of reinsurance that we have purchased;

· Acts of terrorism, a pandemic, war 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 our subsidiaries can charge for their products;

· The unknown effect on our subsidiaries' businesses resulting from changes in the demographics of their client base, as aging baby-boomers move from the asset-accumulation stage to the asset-distribution stage of life; and

· Loss of key management, financial planners or wholesalers.

The risks included here are not exhaustive. Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and other documents filed with the SEC include additional factors which could impact our business and financial performance. 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 businesses 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, Lincoln disclaims any obligation to update any forward-looking statements to reflect events or circumstances that occur after the date of this presentation.

The reporting of RBC measures is not intended for the purpose of ranking any insurance company or for use in connection with any marketing, advertising or promotional activities. 

EX-99.2

Lincoln Financial Group
Table of Contents
Analyst Coverage	1
Notes	2
Consolidated Statements of Income (Loss)	3
Consolidated Balance Sheets	4
Earnings, Shares, Return on Equity and Return to Stockholder Highlights	5
Income (Loss) from Operations, Average Equity and ROE By Segment	6
Sources of Earnings	7
Select Earnings Drivers By Segment	8
Deposits, Net Flows and Account Balances By Segment	9
Sales By Segment	10
Operating Revenues and General and Administrative Expenses By Segment	11
Operating Commissions and Other Expenses	12
Interest Rate Yields and Spreads By Segment	13
Select Investment Data	14
Realized Gain (Loss) and Benefit Ratio Unlocking, After-DAC	15
Select Liquidity and Ratings Agency Data	16
Select Earnings and Operational Data:
Annuities	17
Retirement Plan Services	18
Life Insurance	19
Group Protection	20
Other Operations	21
DAC, VOBA, DSI and DFEL Roll Forwards:
Consolidated	22
Annuities	23
Retirement Plan Services, Life Insurance and Group Protection	24
Account Value Roll Forwards:
Annuities	25
Retirement Plan Services	26
Life Insurance	27
Select Non-GAAP to GAAP Reconciliations	28

	Lincoln Financial Group
	Analyst Coverage
	Firm	Analyst	Phone Number
	Bank of America - Merrill Lynch	Seth Weiss	646-855-3783
	Barclays Capital	Jay Gelb	212-526-1561
	Citi Research	Erik Bass	212-816-5257
	Credit Suisse	Tom Gallagher	212-538-2010
	Deutsche Bank	Yaron Kinar	212-250-7927
	Evercore Partners	Mark Finkelstein	312-445-6440
	FBR Capital Markets	Randy Binner	703-312-1890
	Goldman Sachs and Company	Christopher Giovanni	212-357-3560
	J.P. Morgan Securities	Jimmy Bhullar	212-622-6397
	Janney Capital Markets	Bob Glasspiegel	860-724-1203
	Keefe, Bruyette and Woods	Ryan Krueger	860-722-5930
	Macquarie Capital	Sean Dargan	212-231-0663
	Morgan Stanley	Nigel Dally	212-761-4132
	Raymond James and Associates	Steven Schwartz	312-612-7686
	RBC Capital	Eric Berg	212-618-7593
	Sandler O'Neil and Partners	Edward Shields	312-281-3487
	Scotia Capital	Joanne Smith	212-225-5071
	Sterne, Agee and Leach, Inc.	John Nadel	212-338-4717
	UBS	Suneet Kamath	212-713-1355
	Wells Fargo Securities	John Hall	212-214-8032
	Investor Inquiries May Be Directed To
	Jim Sjoreen, Senior Vice President, Investor Relations
	Email: Jim.Sjoreen@lfg.com
	Voice: 484-583-1420
	Fax: 484-583-3962
	Notes
	This list is provided for informational purposes only.  Lincoln Financial Group does not endorse the analyses, conclusions or recommendations contained in any report issued by these
	or any other analysts.
	Lincoln Financial Group's Statistical Supplement will be available immediately after the release of earnings for each quarter through our Investor Relations website:
	www.lfg.com/investor.
Page 1

	Lincoln Financial Group
	Notes
	Computations
	The quarterly financial information for the current year may not sum to the corresponding year-to-date amount because both are rounded to millions.
	The financial ratios reported herein are calculated using whole dollars instead of dollars rounded to millions.
	If the effect of equity classification would result in a more dilutive Earnings Per Share (“EPS”), the numerator used in the calculation of our diluted EPS is adjusted to remove the mark-to-market
	adjustment for deferred units of LNC stock in our deferred compensation plans.  In addition, for any period where a loss from continuing operations is experienced, shares used in the diluted  EPS
	calculation represent basic shares, as using dilutive shares would be anti-dilutive to the calculation.  In these periods, we would also exclude the deferred compensation adjustment.
	Return on equity (“ROE”) measures how efficiently we generate profits from the resources provided by our net assets.  ROE is calculated by dividing annualized net income (loss) (or
	income (loss) from operations) by average equity, excluding accumulated other comprehensive income (loss) (“AOCI”).  Management evaluates consolidated ROE by both including
	and excluding the effect of average goodwill.
	Book value per share, excluding AOCI, is calculated by dividing stockholders' equity, excluding AOCI, by common shares outstanding assuming the conversion of our Series A preferred
	shares.  We provide book value per share, excluding AOCI, to enable investors to analyze the amount of our net worth that is attributable primarily to our business operations.
	Pre-tax net margin is calculated by dividing income (loss) from operations before taxes by net revenue, which is defined as total operating revenues less interest credited.
	Definitions
	Holding company available liquidity consists of cash and invested cash, excluding cash held as collateral, and certain short-term investments that can be readily converted into cash, net of
	commercial paper outstanding.
	Sales as reported consist of the following:
	•  MoneyGuard®, our linked-benefit product – 15% of total expected premium deposits;
	• Single premium bank-owned universal life and variable universal life (“BOLI”) – 15% of single premium deposits;
	•  Universal life (“UL”), variable universal life (“VUL”), and corporate-owned UL and VUL (“COLI”) – first year commissionable premiums plus 5% of excess premiums received, including an
	adjustment for internal replacements of approximately 50% of commissionable premiums;
	•  Term – 100% of annualized first year premiums;
	•  Annuities – deposits from new and existing customers; and
	•  Group Protection – annualized first year premiums from new policies.
	Throughout the document, “after-DAC” refers to the associated amortization expense of deferred acquisition costs (“DAC”), value of business acquired (“VOBA”), deferred sales
	inducements (“DSI”) and deferred front-end loads (“DFEL”) and changes in other contract holder funds.
	Sources of Earnings are defined as follows:
	•  Investment spread earnings consist primarily of net investment income, net of interest credited earned on the underlying general account investments supporting our fixed products
	less related expenses.
	•  Mortality/morbidity earnings result from mortality margins, morbidity margins, and certain expense assessments and related fees that are a function of the rates priced into the product
	and level of insurance in force.
	•  Fees on Assets Under Management (“AUM”) earnings results consist primarily of asset-based fees charged based on variable account values less associated benefits and related expenses.
	•  Variable Annuity (“VA”) Riders earnings consist of fees charged to the contract holder related to guaranteed benefit rider features, less the net valuation premium and associated change in
	benefit reserves and related expenses.
Page 2a

	Lincoln Financial Group
	Notes
	Non-GAAP Performance Measures
	Non-GAAP measures do not replace the most directly comparable GAAP measures, and we have included detailed reconciliations herein.
	We exclude the after-tax effects of the following items from GAAP net income (loss) to arrive at income (loss) from operations:
	•  Realized gains and losses associated with the following (“excluded realized gain (loss)”):
	▪  Sales or disposals and impairments of securities;
	▪  Changes in the fair value of derivatives, embedded derivatives within certain reinsurance arrangements and trading securities (“gain (loss) on the mark-to-market on certain
	instruments”);
	▪  Changes in the fair value of the derivatives we own to hedge our guaranteed death benefit (“GDB”) riders reflected within variable annuity net derivative results;
	▪  Changes in the fair value of the embedded derivatives of our guaranteed living benefit (“GLB”) riders accounted for at fair value, net of the change in the fair value of the derivatives
	we own to hedge them reflected within variable annuity net derivative results; and
	▪  Changes in the fair value of the embedded derivative liabilities related to index call options we may purchase in the future to hedge contract holder index allocations applicable to
	future reset periods for our indexed annuity products accounted for at fair value (“indexed annuity forward-starting option”);
	•  Changes in reserves resulting from benefit ratio unlocking on our GDB and GLB riders (“benefit ratio unlocking”) reflected within variable annuity net derivative results;
	•  Income (loss) from reserve changes, net of related amortization, on business sold through reinsurance;
	•  Gains (losses) on early extinguishment of debt;
	• Losses from the impairment of intangible assets;
	•  Income (loss) from discontinued operations; and
	•  Income (loss) from the initial adoption of new accounting standards.
	Operating revenues represent GAAP revenues excluding the pre-tax effects of the following items:
	• Excluded realized gain (loss);
	•  Revenue adjustments from the initial adoption of new accounting standards;
	•  Amortization of DFEL arising from changes in GDB and GLB benefit ratio unlocking; and
	•  Amortization of deferred gains arising from reserve changes on business sold through reinsurance.
	We use our federal income tax rate of 35% while taking into account any permanent differences for events recognized differently in our financial statements and federal income tax returns
	when reconciling our non-GAAP measures to the most comparable GAAP measure.
	Management believes that the non-GAAP performance measures discussed above explain the results of our ongoing businesses in a manner that allows for a better understanding of the
	underlying trends in our current business because the excluded items are unpredictable and not necessarily indicative of current operating fundamentals or future performance of the
	business segments, and, in many instances, decisions regarding these items do not necessarily relate to the operations of the individual segments.  In addition, we believe that our
	definitions of operating revenues and income from operations provide investors with more valuable measures of our performance because they better reveal trends in our business.
	Statistical Supplement is Dated
	The financial data in this document is dated April 30, 2014, and has not been updated since that date.  Lincoln Financial Group does not intend to update this document.
Page 2b

	Lincoln Financial Group
	Consolidated Statements of Income (Loss)
	Unaudited (millions of dollars, except per share data)
		For the Three Months Ended
		3/31/13		6/30/13		9/30/13		12/31/13		3/31/14		Change
	Revenues
	Insurance premiums	$	654	$	674	$	672	$	687	$	739	13.0%
	Fee income		958		983		1,032		1,095		1,098	14.6%
	Net investment income		1,150		1,213		1,180		1,211		1,208	5.0%
	Realized gain (loss):
	Other-than-temporary impairment (“OTTI”)		(14)		(19)		(19)		(18)		(3)	78.6%
	Realized gain (loss), excluding OTTI		(45)		2		(9)		(12)		(15)	60.0%
	Total realized gain (loss)		(59)		(17)		(28)		(30)		(18)	69.5%
	Amortization of deferred gains on business
	sold through reinsurance		19		19		19		18		19	0.0%
	Other revenues		117		127		134		141		130	11.1%
	Total revenues		2,839		2,999		3,009		3,122		3,176	11.9%
	Expenses
	Interest credited		617		627		627		639		633	2.6%
	Benefits		958		991		945		968		1,078	12.5%
	Commissions and other expenses		895		898		928		980		971	8.5%
	Interest and debt expense		64		65		67		68		67	4.7%
	Total expenses		2,534		2,581		2,567		2,655		2,749	8.5%
	Income (loss) from continuing operations before taxes		305		418		442		467		427	40.0%
	Federal income tax expense (benefit)		66		101		105		116		98	48.5%
	Net income (loss)	$	239	$	317	$	337	$	351	$	329	37.7%
	Adjustment for LNC stock units in our
	deferred compensation plans		-		-		-		-		(1)	NM
	Net income (loss) available to common
	stockholders – diluted	$	239	$	317	$	337	$	351	$	328	37.2%
	Earnings (Loss) Per Common Share – Diluted
	Net income (loss)	$	0.86	$	1.15	$	1.23	$	1.29	$	1.21	40.7%
Page 3

	Lincoln Financial Group
	Consolidated Balance Sheets
	Unaudited (millions of dollars)
		As of
		3/31/13		6/30/13		9/30/13		12/31/13		3/31/14		Change
	ASSETS
	Investments:
	Available-for-sale (“AFS”) securities:
	Corporate bonds	$	69,274	$	67,938	$	68,525	$	68,937	$	71,681	3.5%
	U.S. government bonds		432		408		368		367		388	-10.2%
	Foreign government bonds		626		564		576		549		559	-10.7%
	Mortgage-backed securities		6,542		5,961		5,445		5,078		4,944	-24.4%
	Asset-backed collateralized debt obligations		173		165		194		225		241	39.3%
	State and municipal bonds		4,430		4,048		3,976		3,918		4,204	-5.1%
	Hybrid and redeemable preferred securities		1,234		1,151		1,051		1,004		971	-21.3%
	VIEs' fixed maturity securities		708		698		699		697		597	-15.7%
	Equity securities		148		209		185		201		207	39.9%
	Total AFS securities		83,567		81,142		81,019		80,976		83,792	0.3%
	Trading securities		2,528		2,391		2,354		2,282		2,316	-8.4%
	Mortgage loans on real estate		7,057		7,033		7,127		7,210		7,089	0.5%
	Real estate		65		60		56		47		42	-35.4%
	Policy loans		2,727		2,700		2,679		2,677		2,687	-1.5%
	Derivative investments		2,268		1,683		1,114		881		1,044	-54.0%
	Other investments		1,073		1,158		1,219		1,218		1,237	15.3%
	Total investments		99,285		96,167		95,568		95,291		98,207	-1.1%
	Cash and invested cash		3,107		2,574		2,650		2,364		1,849	-40.5%
	DAC and VOBA		6,936		8,214		8,500		8,886		8,454	21.9%
	Premiums and fees receivable		440		430		427		420		504	14.5%
	Accrued investment income		1,078		1,052		1,111		1,029		1,116	3.5%
	Reinsurance recoverables		6,489		6,385		6,528		6,041		5,984	-7.8%
	Funds withheld reinsurance assets		798		788		782		776		772	-3.3%
	Goodwill		2,273		2,273		2,273		2,273		2,273	0.0%
	Other assets		2,569		2,655		2,709		2,730		3,822	48.8%
	Separate account assets		101,366		102,783		109,376		117,135		118,968	17.4%
	Total assets	$	224,341	$	223,321	$	229,924	$	236,945	$	241,949	7.8%
Page 4a

	Lincoln Financial Group
	Consolidated Balance Sheets
	Unaudited (millions of dollars)
		As of
		3/31/13		6/30/13		9/30/13		12/31/13		3/31/14		Change
	LIABILITIES AND STOCKHOLDERS’ EQUITY
	Liabilities
	Future contract benefits	$	19,149	$	18,214	$	18,138	$	17,251	$	18,997	-0.8%
	Other contract holder funds		72,760		73,830		74,106		74,548		74,507	2.4%
	Short-term debt		706		506		503		501		-	-100.0%
	Long-term debt by rating agency leverage definitions:
	Operating (see note (1) on page 16 for details)		1,122		1,122		1,122		1,122		1,122	0.0%
	Financial		3,767		3,928		4,243		4,198		4,258	13.0%
	Reinsurance related embedded derivatives		199		131		121		108		135	-32.2%
	Funds withheld reinsurance liabilities		926		926		898		867		843	-9.0%
	Deferred gain on business sold through reinsurance		301		282		263		245		226	-24.9%
	Payables for collateral on investments		4,107		4,252		3,553		3,238		3,519	-14.3%
	VIEs' liabilities		113		101		67		27		22	-80.5%
	Other liabilities		4,963		3,929		4,145		4,252		4,866	-2.0%
	Separate account liabilities		101,366		102,783		109,376		117,135		118,968	17.4%
	Total liabilities		209,479		210,004		216,535		223,492		227,463	8.6%
	Stockholders’ Equity
	Common stock		7,043		6,937		6,886		6,877		6,805	-3.4%
	Retained earnings		4,238		4,487		4,753		5,013		5,228	23.4%
	AOCI:
	Unrealized gain (loss) on AFS securities		3,777		2,033		1,870		1,609		2,523	-33.2%
	Unrealized OTTI on AFS securities		(87)		(84)		(84)		(78)		(79)	9.2%
	Unrealized gain (loss) on derivative instruments		203		259		270		256		239	17.7%
	Foreign currency translation adjustment		(6)		(5)		(5)		(5)		(10)	-66.7%
	Funded status of employee benefit plans		(306)		(310)		(301)		(219)		(220)	28.1%
	Total AOCI		3,581		1,893		1,750		1,563		2,453	-31.5%
	Total stockholders’ equity		14,862		13,317		13,389		13,453		14,486	-2.5%
	Total liabilities and stockholders’ equity	$	224,341	$	223,321	$	229,924	$	236,945	$	241,949	7.8%
Page 4b

	Lincoln Financial Group
	Earnings, Shares, Return on Equity and Return to Stockholder Highlights
	Unaudited (millions of dollars, except per share data)
		As of or For the Three Months Ended
		3/31/13		6/30/13		9/30/13		12/31/13		3/31/14		Change
	Income (Loss)
	Income (loss) from operations	$	285	$	351	$	367	$	382	$	365	28.1%
	Net income (loss)		239		317		337		351		329	37.7%
	Earnings (Loss) Per Diluted Share
	Income (loss) from operations	$	1.02	$	1.27	$	1.34	$	1.40	$	1.34	31.4%
	Net income (loss)		0.86		1.15		1.23		1.29		1.21	40.7%
	Average Stockholders’ Equity
	Average equity, including AOCI	$	14,918	$	14,089	$	13,353	$	13,421	$	13,969	-6.4%
	Average AOCI		3,695		2,737		1,821		1,656		2,008	-45.7%
	Average equity, excluding AOCI	$	11,223	$	11,352	$	11,532	$	11,765	$	11,961	6.6%
	ROE
	Income (loss) from operations		10.2%		12.4%		12.7%		13.0%		12.2%
	Net income (loss)		8.5%		11.2%		11.7%		11.9%		11.0%
	Per Share
	Dividends declared during the period	$	0.12	$	0.12	$	0.12	$	0.16	$	0.16	33.3%
	Book value, including AOCI		55.33		50.37		51.04		51.17		54.94	-0.7%
	Book value, excluding AOCI		42.00		43.21		44.37		45.23		45.63	8.6%
	Shares
	Repurchased during the period		3.4		4.3		2.3		2.0		3.0	-11.4%
	Average for the period – diluted		278.6		275.7		273.7		272.8		272.1	-2.3%
	End-of-period – assuming conversion of preferred		268.6		264.4		262.3		262.9		263.7	-1.8%
	End-of-period – diluted		277.2		273.9		272.5		272.2		270.4	-2.5%
	Cash Returned to Common Stockholders
	Shares repurchased	$	100	$	150	$	100	$	100	$	150	50.0%
	Common dividends		33		32		32		31		42	27.3%
	Total cash returned to common stockholders	$	133	$	182	$	132	$	131	$	192	44.4%
Page 5

	Lincoln Financial Group
	Income (Loss) from Operations, Average Equity and ROE By Segment
	Unaudited (millions of dollars)
		For the Three Months Ended
		3/31/13		6/30/13		9/30/13		12/31/13		3/31/14		Change
	Income (Loss) from Operations
	Annuities	$	159	$	195	$	198	$	199	$	216	35.8%
	Retirement Plan Services		35		39		33		34		39	11.4%
	Life Insurance		112		135		140		157		120	7.1%
	Group Protection		14		22		23		11		20	42.9%
	Other Operations		(35)		(40)		(27)		(19)		(30)	14.3%
	Income (loss) from operations	$	285	$	351	$	367	$	382	$	365	28.1%
	Average Equity, Excluding AOCI
	Segment equity, excluding goodwill:
	Annuities	$	2,977	$	2,978	$	3,009	$	3,079	$	3,225	8.3%
	Retirement Plan Services		908		970		983		979		969	6.7%
	Life Insurance		5,998		6,125		6,196		6,058		5,989	-0.2%
	Group Protection		1,036		1,062		1,083		1,121		1,157	11.7%
	Total segment equity, excluding goodwill		10,919		11,135		11,271		11,237		11,340	3.9%
	Other Operations and goodwill		304		217		261		528		621	104.3%
	Total average equity, excluding AOCI	$	11,223	$	11,352	$	11,532	$	11,765	$	11,961	6.6%
	ROE
	Segment ROE, excluding goodwill:
	Annuities		21.3%		26.1%		26.3%		25.9%		26.8%
	Retirement Plan Services		15.5%		16.2%		13.5%		13.7%		16.1%
	Life Insurance		7.5%		8.8%		9.1%		10.4%		8.0%
	Group Protection		5.6%		8.4%		8.6%		3.9%		6.8%
	Consolidated ROE – income (loss) from operations		10.2%		12.4%		12.7%		13.0%		12.2%
Page 6

	Lincoln Financial Group
	Sources of Earnings
	Unaudited (millions of dollars)
		For the Three Months Ended											For the Twelve Months Ended
		3/31/13		6/30/13		9/30/13		12/31/13		3/31/14		Change	12/31/12		12/31/13		Change
	Income (Loss) from Operations, Before Income Taxes
	Annuities	$	194	$	243	$	239	$	252	$	266	37.1%	$	716	$	927	29.5%
	Retirement Plan Services		48		54		44		44		53	10.4%		168		190	13.1%
	Life Insurance		167		201		211		234		178	6.6%		838		812	-3.1%
	Group Protection		22		34		36		17		30	36.4%		111		109	-1.8%
	Other Operations		(56)		(62)		(42)		(33)		(46)	17.9%		(264)		(192)	27.3%
	Income (loss) from operations, before income taxes	$	375	$	470	$	488	$	514	$	481	28.3%	$	1,569	$	1,846	17.7%
	Sources of Earnings, Before Income Taxes
	Investment spread	$	179	$	206	$	190	$	198	$	181	1.1%	$	765	$	772	0.9%
	Mortality/morbidity		105		130		139		134		118	12.4%		515		507	-1.6%
	Fees on AUM		124		167		181		177		189	52.4%		502		649	29.3%
	VA riders		23		29		20		38		39	69.6%		51		110	115.7%
	Total sources of earnings, before income taxes		431		532		530		547		527	22.3%		1,833		2,038	11.2%
	Other Operations		(56)		(62)		(42)		(33)		(46)	17.9%		(264)		(192)	27.3%
	Total operating earnings, before income taxes	$	375	$	470	$	488	$	514	$	481	28.3%	$	1,569	$	1,846	17.7%
	Sources of Earnings, Before Income Taxes, % By Component
	Investment spread		41.6%		38.5%		35.8%		36.2%		34.2%			41.7%		37.8%
	Mortality/morbidity		24.3%		24.5%		26.2%		24.4%		22.5%			28.1%		24.9%
	Fees on AUM		28.8%		31.5%		34.2%		32.5%		35.9%			27.4%		31.9%
	VA riders		5.3%		5.5%		3.8%		6.9%		7.4%			2.8%		5.4%
	Total		100.0%		100.0%		100.0%		100.0%		100.0%			100.0%		100.0%
Page 7

	Lincoln Financial Group
	Select Earnings Drivers By Segment
	Unaudited (millions of dollars)
		For the Three Months Ended
		3/31/13		6/30/13		9/30/13		12/31/13		3/31/14		Change
	Annuities
	Operating revenues	$	777	$	817	$	842	$	886	$	909	17.0%
	Average account values		99,545		103,561		106,490		111,995		115,282	15.8%
	Net flows		885		1,703		1,235		1,190		695	-21.5%
	Retirement Plan Services
	Operating revenues	$	260	$	271	$	269	$	271	$	271	4.2%
	Average account values		45,374		47,078		48,344		50,496		51,460	13.4%
	Net flows		344		337		219		(107)		(361)	NM
	Life Insurance
	Operating revenues	$	1,241	$	1,284	$	1,301	$	1,344	$	1,337	7.7%
	Average account values		37,671		38,231		38,801		39,636		40,333	7.1%
	Average in-force face amount		592,304		597,542		604,585		612,477		619,715	4.6%
	Net flows		848		889		862		1,112		829	-2.2%
	Group Protection
	Operating revenues	$	550	$	575	$	561	$	575	$	610	10.9%
	Non-medical earned premiums		475		482		494		502		533	12.2%
	Consolidated
	Operating revenues	$	2,930	$	3,049	$	3,073	$	3,187	$	3,233	10.3%
	Average account values		182,590		188,870		193,635		202,127		207,075	13.4%
	Net flows		2,077		2,929		2,316		2,195		1,163	-44.0%
Page 8

	Lincoln Financial Group
	Deposits, Net Flows and Account Balances By Segment
	Unaudited (millions of dollars)
			As of or For the Three Months Ended
		3/31/13		6/30/13		9/30/13		12/31/13		3/31/14		Change
	Deposits
	Annuities	$	3,219	$	4,181	$	3,640	$	3,733	$	3,379	5.0%
	Retirement Plan Services		1,667		1,617		1,860		1,643		1,758	5.5%
	Life Insurance		1,240		1,253		1,230		1,445		1,266	2.1%
	Total deposits	$	6,126	$	7,051	$	6,730	$	6,821	$	6,403	4.5%
	Net Flows
	Annuities	$	885	$	1,703	$	1,235	$	1,190	$	695	-21.5%
	Retirement Plan Services		344		337		219		(107)		(361)	NM
	Life Insurance		848		889		862		1,112		829	-2.2%
	Total net flows	$	2,077	$	2,929	$	2,316	$	2,195	$	1,163	-44.0%
	Account Balances as of End-of-Period
	Annuities	$	101,414	$	103,093	$	108,699	$	115,090	$	116,784	15.2%
	Retirement Plan Services		46,442		47,097		49,309		51,618		51,851	11.6%
	Life Insurance		38,018		38,446		39,157		40,113		40,552	6.7%
	Total account balances	$	185,874	$	188,636	$	197,165	$	206,821	$	209,187	12.5%
	Average Account Balances
	Annuities	$	99,545	$	103,561	$	106,490	$	111,995	$	115,282	15.8%
	Retirement Plan Services		45,374		47,078		48,344		50,496		51,460	13.4%
	Life Insurance		37,671		38,231		38,801		39,636		40,333	7.1%
	Total average account balances	$	182,590	$	188,870	$	193,635	$	202,127	$	207,075	13.4%
Page 9

	Lincoln Financial Group
	Sales By Segment
	Unaudited (millions of dollars)
		For the Three Months Ended
		3/31/13		6/30/13		9/30/13		12/31/13		3/31/14		Change
	Sales
	Annuities:
	Variable	$	2,939	$	3,917	$	3,407	$	3,454	$	2,947	0.3%
	Fixed		280		264		233		279		432	54.3%
	Total Annuities	$	3,219	$	4,181	$	3,640	$	3,733	$	3,379	5.0%
	Retirement Plan Services:
	First year sales	$	447	$	520	$	766	$	566	$	432	-3.3%
	Recurring deposits		1,220		1,097		1,094		1,077		1,326	8.7%
	Total Retirement Plan Services	$	1,667	$	1,617	$	1,860	$	1,643	$	1,758	5.5%
	Life Insurance:
	UL:
	Excluding MoneyGuard® and indexed UL	$	31	$	30	$	32	$	29	$	21	-32.3%
	MoneyGuard®		46		51		44		46		34	-26.1%
	Indexed UL		9		11		17		19		18	100.0%
	Total UL		86		92		93		94		73	-15.1%
	VUL		23		32		36		51		46	100.0%
	Term		16		23		24		26		23	43.8%
	Total individual life insurance		125		147		153		171		142	13.6%
	COLI and BOLI		26		39		15		16		3	-88.5%
	Total Life Insurance	$	151	$	186	$	168	$	187	$	145	-4.0%
	Group Protection:
	Life	$	31	$	33	$	43	$	128	$	31	0.0%
	Disability		31		42		47		108		26	-16.1%
	Dental		9		20		17		32		7	-22.2%
	Total Group Protection	$	71	$	95	$	107	$	268	$	64	-9.9%
Page 10

	Lincoln Financial Group
	Operating Revenues and General and Administrative Expenses By Segment
	Unaudited (millions of dollars)
		For the Three Months Ended
		3/31/13		6/30/13		9/30/13		12/31/13		3/31/14		Change
	Operating Revenues
	Annuities	$	777	$	817	$	842	$	886	$	909	17.0%
	Retirement Plan Services		260		271		269		271		271	4.2%
	Life Insurance		1,241		1,284		1,301		1,344		1,337	7.7%
	Group Protection		550		575		561		575		610	10.9%
	Other Operations		102		102		100		111		106	3.9%
	Total	$	2,930	$	3,049	$	3,073	$	3,187	$	3,233	10.3%
	General and Administrative Expenses,
	Net of Amounts Capitalized
	Annuities	$	97	$	101	$	106	$	116	$	110	13.4%
	Retirement Plan Services		66		72		71		80		69	4.5%
	Life Insurance		98		103		105		114		103	5.1%
	Group Protection		55		63		61		70		60	9.1%
	Other Operations		26		32		7		25		14	-46.2%
	Total	$	342	$	371	$	350	$	405	$	356	4.1%
	General and Administrative Expenses,
	Net of Amounts Capitalized, As a Percentage
	of Operating Revenues
	Annuities		12.4%		12.3%		12.6%		13.1%		12.1%
	Retirement Plan Services		25.6%		26.6%		26.2%		29.4%		25.5%
	Life Insurance		7.9%		8.0%		8.1%		8.5%		7.7%
	Group Protection		10.0%		11.0%		10.9%		12.1%		9.8%
	Other Operations		25.7%		32.4%		6.3%		22.1%		12.7%
	Total		11.7%		12.2%		11.4%		12.7%		11.0%
Page 11

	Lincoln Financial Group
	Operating Commissions and Other Expenses
	Unaudited (millions of dollars)
		For the Three Months Ended
		3/31/13		6/30/13		9/30/13		12/31/13		3/31/14		Change
	Operating Commissions and
	Other Expenses Incurred
	General and administrative expenses	$	395	$	426	$	406	$	493	$	404	2.3%
	Commissions		514		570		564		605		572	11.3%
	Media expenses		15		15		15		16		14	-6.7%
	Taxes, licenses and fees		67		52		70		48		81	20.9%
	Interest and debt expense		64		65		67		68		67	4.7%
	Expenses associated with reserve financing
	and unrelated letters of credit		16		16		16		16		17	6.3%
	Total operating commissions and other
	expenses incurred		1,071		1,144		1,138		1,246		1,155	7.8%
	Less Amounts Capitalized
	General and administrative expenses		(53)		(55)		(56)		(88)		(48)	9.4%
	Commissions		(280)		(339)		(321)		(349)		(310)	-10.7%
	Taxes, licenses and fees		(10)		(10)		(7)		(8)		(8)	20.0%
	Total amounts capitalized		(343)		(404)		(384)		(445)		(366)	-6.7%
	Total expenses incurred, net of amounts
	capitalized, excluding amortization		728		740		754		801		789	8.4%
	Amortization
	Amortization of DAC and VOBA		227		221		239		245		247	8.8%
	Amortization of intangibles		1		1		1		1		1	0.0%
	Total amortization		228		222		240		246		248	8.8%
	Total operating commissions and
	other expenses	$	956	$	962	$	994	$	1,047	$	1,037	8.5%
Page 12

	Lincoln Financial Group
	Interest Rate Yields and Spreads By Segment
	Unaudited
		For the Three Months Ended
		3/31/13		6/30/13		9/30/13		12/31/13		3/31/14		Change
	Annuities
	Investments on reserves, excluding alternative investments		4.78%		4.66%		4.54%		4.55%		4.55%	(23)
	Prepayment and make whole premiums		0.09%		0.37%		0.10%		0.17%		0.08%	(1)
	Net investment income yield on reserves		4.87%		5.03%		4.64%		4.72%		4.63%	(24)
	Interest rate credited to contract holders		2.77%		2.85%		2.86%		2.91%		2.81%	4
	Interest rate spread		2.10%		2.18%		1.78%		1.81%		1.82%	(28)
	Retirement Plan Services
	Investments on reserves, excluding alternative investments		5.02%		5.01%		4.97%		4.85%		4.89%	(13)
	Prepayment and make whole premiums		0.10%		0.24%		0.18%		0.21%		0.12%	2
	Net investment income yield on reserves		5.12%		5.25%		5.15%		5.06%		5.01%	(11)
	Interest rate credited to contract holders		3.14%		3.11%		3.12%		3.08%		3.06%	(8)
	Interest rate spread		1.98%		2.14%		2.03%		1.98%		1.95%	(3)
	Life Insurance
	Attributable to interest-sensitive products:
	Investments on reserves, excluding alternative investments		5.60%		5.57%		5.54%		5.48%		5.46%	(14)
	Prepayment and make whole premiums		0.03%		0.15%		0.08%		0.16%		0.04%	1
	Alternative investments		0.00%		0.18%		0.14%		0.13%		0.18%	18
	Net investment income yield on reserves		5.63%		5.90%		5.76%		5.77%		5.68%	5
	Interest rate credited to contract holders		3.92%		3.92%		3.93%		3.96%		3.94%	2
	Interest rate spread		1.71%		1.98%		1.83%		1.81%		1.74%	3
	Attributable to traditional products:
	Investments on reserves, excluding alternative investments		5.70%		5.60%		5.57%		5.59%		5.87%	17
	Prepayment and make whole premiums		0.05%		0.12%		0.03%		0.37%		0.22%	17
	Net investment income yield on reserves		5.75%		5.72%		5.60%		5.96%		6.09%	34
Page 13

	Lincoln Financial Group
	Select Investment Data
	Unaudited (millions of dollars)
		As of 3/31/13				As of 12/31/13				As of 3/31/14
		Amount		%		Amount		%		Amount		%
	AFS and Trading Securities, at Fair Value
	AFS securities:
	Corporate bonds	$	69,274		80.5%	$	68,937		82.8%	$	71,681		83.3%
	U.S. government bonds		432		0.5%		367		0.5%		388		0.5%
	Foreign government bonds		626		0.7%		549		0.7%		559		0.6%
	Mortgage-backed securities		6,542		7.6%		5,078		6.1%		4,944		5.7%
	Asset-backed collateralized debt obligations		173		0.2%		225		0.3%		241		0.3%
	State and municipal bonds		4,430		5.1%		3,918		4.7%		4,204		4.9%
	Hybrid and redeemable preferred securities		1,234		1.4%		1,004		1.2%		971		1.1%
	VIEs’ fixed maturity securities		708		0.8%		697		0.8%		597		0.7%
	Equity securities		148		0.2%		201		0.2%		207		0.2%
	Total AFS securities		83,567		97.1%		80,976		97.3%		83,792		97.3%
	Trading securities		2,528		2.9%		2,282		2.7%		2,316		2.7%
	Total AFS and trading securities	$	86,095		100.0%	$	83,258		100.0%	$	86,108		100.0%
	AFS and Trading Securities, at Amortized Cost
	Fixed maturity securities	$	76,883		99.8%	$	79,062		99.8%	$	79,876		99.8%
	Equity securities		131		0.2%		182		0.2%		186		0.2%
	Total AFS and trading securities	$	77,014		100.0%	$	79,244		100.0%	$	80,062		100.0%
	Percentage of Fixed Maturity AFS Securities, at Amortized Cost
	Investment grade				94.7%				95.3%				95.2%
	Below investment grade				5.3%				4.7%				4.8%
		For the Three Months Ended
		3/31/13		6/30/13		9/30/13		12/31/13		3/31/14		Change
	Net Investment Income	$	1,150	$	1,213	$	1,180	$	1,211	$	1,208		5.0%
	Average Invested Assets, at Amortized Cost		87,690		89,009		89,910		90,395		91,027		3.8%
	Net Investment Income Yield		5.25%		5.45%		5.25%		5.36%		5.31%		6
Page 14

	Lincoln Financial Group
	Realized Gain (Loss) and Benefit Ratio Unlocking, After-DAC
	Unaudited (millions of dollars)
		For the Three Months Ended
		3/31/13		6/30/13		9/30/13		12/31/13		3/31/14		Change
	Realized Gain (Loss), Pre-Tax
	Total operating realized gain (loss)	$	32	$	34	$	37	$	36	$	40	25.0%
	Total excluded realized gain (loss)		(91)		(51)		(65)		(66)		(58)	36.3%
	Total realized gain (loss), pre-tax	$	(59)	$	(17)	$	(28)	$	(30)	$	(18)	69.5%
	Realized Gain (Loss) Net of Benefit Ratio
	Unlocking, After-Tax
	Realized gain (loss) related to investments	$	(4)	$	(22)	$	(7)	$	2	$	(17)	NM
	Variable annuity net derivative results:
	Hedge program performance, including unlocking
	for GLB reserves hedged		1		5		6		(12)		(14)	NM
	GLB non-performance risk component		(35)		(16)		(22)		(15)		7	120.0%
	Total variable annuity net derivative results		(34)		(11)		(16)		(27)		(7)	79.4%
	Indexed annuity forward-starting option		(8)		(2)		(7)		(6)		(12)	-50.0%
	Excluded realized gain (loss) net of
	benefit ratio unlocking, after-tax	$	(46)	$	(35)	$	(30)	$	(31)	$	(36)	21.7%
	Components of Realized Gain (Loss)
	Related to Investments, After-Tax
	OTTI	$	(9)	$	(12)	$	(12)	$	(12)	$	(2)	78.6%
	Other realized gain (loss) related to
	certain investments		(1)		(4)		(9)		(4)		(2)	NM
	Gain (loss) on the mark-to-market
	on certain instruments		6		(6)		14		18		(13)	NM
	Total realized gain (loss) related
	to investments, after-tax	$	(4)	$	(22)	$	(7)	$	2	$	(17)	NM
Page 15

	Lincoln Financial Group
	Select Liquidity and Rating Agency Data
	Unaudited (millions of dollars)
		As of
		3/31/13		6/30/13		9/30/13		12/31/13		3/31/14		Change
	Leverage Ratio
	Short-term debt	$	706	$	506	$	503	$	501	$	-	-100.0%
	Long-term debt		4,889		5,050		5,365		5,320		5,380	10.0%
	Total debt		5,595		5,556		5,868		5,821		5,380	-3.8%
	Less:
	Long-term operating debt (1)		1,122		1,122		1,122		1,122		1,122	0.0%
	75% of capital securities		908		908		908		909		909	0.1%
	Carrying value of fair value hedges		227		139		105		59		120	-47.1%
	Total numerator	$	3,338	$	3,387	$	3,733	$	3,731	$	3,229	-3.3%
	Stockholders’ equity, excluding AOCI	$	11,281	$	11,424	$	11,639	$	11,890	$	12,033	6.7%
	Total debt		5,595		5,556		5,868		5,821		5,380	-3.8%
	Total denominator	$	16,876	$	16,980	$	17,507	$	17,711	$	17,413	3.2%
	Leverage ratio		19.8%		19.9%		21.3%		21.1%		18.5%
	Holding Company Available Liquidity	$	647	$	693	$	1,041	$	1,186	$	562	-13.1%
							Ratings as of April 30, 2014
												Standard
							A.M. Best		Fitch		Moody's	& Poor's
	Senior Debt Ratings						a-		BBB+		Baa1	A-
	Financial Strength Ratings
	Lincoln National Life Insurance Company						A+		A+		A1	AA-
	First Penn-Pacific Life Insurance Company						A		A+		A1	A-
	Lincoln Life & Annuity Company of New York						A+		A+		A1	AA-
	(1) We have categorized as operating debt the senior notes issued in October 2007 and June 2010 because the proceeds were used as a long-term structured solution to reduce the strain
	on increasing statutory reserves associated with secondary guarantee UL and term policies and the senior note issued in September 2008 by our primary insurance subsidiary.
Page 16

	Lincoln Financial Group
	Annuities – Select Earnings and Operational Data
	Unaudited (millions of dollars)
		As of or For the Three Months Ended
		3/31/13		6/30/13		9/30/13		12/31/13		3/31/14		Change
	Income (Loss) from Operations
	Operating revenues:
	Insurance premiums	$	33	$	24	$	30	$	28	$	45	36.4%
	Fee income		369		391		417		454		464	25.7%
	Net investment income		257		273		254		260		259	0.8%
	Operating realized gain (loss)		31		33		36		36		39	25.8%
	Other revenues		87		96		105		108		102	17.2%
	Total operating revenues		777		817		842		886		909	17.0%
	Operating expenses:
	Interest credited		153		157		153		161		154	0.7%
	Benefits		65		62		78		68		87	33.8%
	Commissions incurred		229		274		250		267		250	9.2%
	Other expenses incurred		194		202		213		234		217	11.9%
	Amounts capitalized		(163)		(213)		(181)		(193)		(165)	-1.2%
	Amortization		105		92		90		97		100	-4.8%
	Total operating expenses		583		574		603		634		643	10.3%
	Income (loss) from operations before taxes		194		243		239		252		266	37.1%
	Federal income tax expense (benefit)		35		48		41		53		50	42.9%
	Income (loss) from operations	$	159	$	195	$	198	$	199	$	216	35.8%
	Effective Federal Income Tax Rate		18.0%		19.8%		17.2%		21.0%		18.7%
	Average Equity, Excluding Goodwill and AOCI	$	2,977	$	2,978	$	3,009	$	3,079	$	3,225	8.3%
	ROE, Excluding Goodwill		21.3%		26.1%		26.3%		25.9%		26.8%
	Return on Average Account Values		64		75		74		71		75	11
	Account Values
	Separate account values:
	Average	$	78,489	$	82,301	$	85,151	$	90,711	$	94,058	19.8%
	End-of-period		80,312		81,764		87,415		93,822		95,512	18.9%
	General account values:
	Average		21,056		21,260		21,339		21,284		21,224	0.8%
	End-of-period		21,102		21,329		21,284		21,268		21,272	0.8%
Page 17

	Lincoln Financial Group
	Retirement Plan Services – Select Earnings and Operational Data
	Unaudited (millions of dollars)
		As of or For the Three Months Ended
		3/31/13		6/30/13		9/30/13		12/31/13		3/31/14		Change
	Income (Loss) from Operations
	Operating revenues:
	Fee income	$	56	$	58	$	59	$	60	$	61	8.9%
	Net investment income		202		211		207		208		207	2.5%
	Other revenues		2		2		3		3		3	50.0%
	Total operating revenues		260		271		269		271		271	4.2%
	Operating expenses:
	Interest credited		117		117		118		118		118	0.9%
	Commissions incurred		18		18		18		18		18	0.0%
	Other expenses incurred		77		79		78		89		80	3.9%
	Amounts capitalized		(9)		(7)		(7)		(9)		(8)	11.1%
	Amortization		9		10		18		11		10	11.1%
	Total operating expenses		212		217		225		227		218	2.8%
	Income (loss) from operations before taxes		48		54		44		44		53	10.4%
	Federal income tax expense (benefit)		13		15		11		10		14	7.7%
	Income (loss) from operations	$	35	$	39	$	33	$	34	$	39	11.4%
	Effective Federal Income Tax Rate		27.2%		27.1%		24.1%		24.3%		26.3%
	Average Equity, Excluding Goodwill and AOCI	$	908	$	970	$	983	$	979	$	969	6.7%
	ROE, Excluding Goodwill		15.5%		16.2%		13.5%		13.7%		16.1%
	Pre-tax Net Margin		33.7%		34.9%		29.0%		28.9%		34.5%
	Return on Average Account Values		31		33		27		27		30	(1)
	Average Account Values
	Separate account	$	13,970	$	14,311	$	14,481	$	14,920	$	15,122	8.2%
	Mutual fund		16,595		17,797		18,741		20,316		20,965	26.3%
	General account		14,809		14,970		15,122		15,260		15,373	3.8%
	Net Flows - Trailing Twelve Months	$	1,119	$	1,261	$	1,249	$	793	$	88	-92.1%
Page 18

	Lincoln Financial Group
	Life Insurance – Select Earnings and Operational Data
	Unaudited (millions of dollars)
			As of or For the Three Months Ended
		3/31/13		6/30/13		9/30/13		12/31/13		3/31/14		Change
	Income (Loss) from Operations
	Operating revenues:
	Insurance premiums	$	113	$	119	$	125	$	129	$	132	16.8%
	Fee income		533		534		556		581		574	7.7%
	Net investment income		585		625		615		627		624	6.7%
	Operating realized gain (loss)		2		-		1		-		1	-50.0%
	Other revenues		8		6		4		7		6	-25.0%
	Total operating revenues		1,241		1,284		1,301		1,344		1,337	7.7%
	Operating expenses:
	Interest credited		320		325		329		332		334	4.4%
	Benefits		505		500		476		496		541	7.1%
	Commissions incurred		139		146		157		174		163	17.3%
	Other expenses incurred		169		168		183		194		182	7.7%
	Amounts capitalized		(157)		(166)		(175)		(204)		(178)	-13.4%
	Amortization		98		110		121		118		117	19.4%
	Total operating expenses		1,074		1,083		1,091		1,110		1,159	7.9%
	Income (loss) from operations before taxes		167		201		210		234		178	6.6%
	Federal income tax expense (benefit)		55		66		70		77		58	5.5%
	Income (loss) from operations	$	112	$	135	$	140	$	157	$	120	7.1%
	Effective Federal Income Tax Rate		32.9%		33.0%		33.4%		32.8%		32.7%
	Average Equity, Excluding Goodwill and AOCI	$	5,998	$	6,125	$	6,196	$	6,058	$	5,989	-0.2%
	ROE, Excluding Goodwill		7.5%		8.8%		9.1%		10.4%		8.0%
	Average Account Values	$	37,671	$	38,231	$	38,801	$	39,636	$	40,333	7.1%
	In-Force Face Amount
	UL and other	$	311,588	$	314,093	$	315,763	$	318,444	$	319,414	2.5%
	Term insurance		282,463		286,939		292,375		298,373		303,200	7.3%
	Total in-force face amount	$	594,051	$	601,032	$	608,138	$	616,817	$	622,614	4.8%
Page 19

	Lincoln Financial Group
	Group Protection – Select Earnings and Operational Data
	Unaudited (millions of dollars)
		For the Three Months Ended
		3/31/13		6/30/13		9/30/13		12/31/13		3/31/14		Change
	Income (Loss) from Operations
	Operating revenues:
	Insurance premiums	$	508	$	531	$	516	$	529	$	562	10.6%
	Net investment income		39		42		41		43		45	15.4%
	Other revenues		3		2		4		3		3	0.0%
	Total operating revenues		550		575		561		575		610	10.9%
	Operating expenses:
	Interest credited		1		1		1		1		1	0.0%
	Benefits		384		397		382		396		423	10.2%
	Commissions incurred		63		62		62		65		66	4.8%
	Other expenses incurred		80		90		90		116		87	8.8%
	Amounts capitalized		(15)		(18)		(20)		(38)		(16)	-6.7%
	Amortization		15		9		10		18		19	26.7%
	Total operating expenses		528		541		525		558		580	9.8%
	Income (loss) from operations before taxes		22		34		36		17		30	36.4%
	Federal income tax expense (benefit)		8		12		13		6		10	25.0%
	Income (loss) from operations	$	14	$	22	$	23	$	11	$	20	42.9%
	Effective Federal Income Tax Rate		35.0%		35.0%		35.0%		34.9%		35.0%
	Average Equity, Excluding Goodwill and AOCI	$	1,036	$	1,062	$	1,083	$	1,121	$	1,157	11.7%
	ROE, Excluding Goodwill		5.6%		8.4%		8.6%		3.9%		6.8%
	Loss Ratios by Product Line
	Life		80.1%		77.1%		74.2%		79.3%		76.1%
	Disability		69.1%		70.1%		73.2%		70.7%		73.6%
	Dental		77.4%		74.1%		71.5%		70.2%		74.0%
	Total non-medical		74.8%		73.5%		73.4%		74.3%		74.8%
	Medical		89.3%		88.8%		88.3%		88.5%		87.6%
Page 20

	Lincoln Financial Group
	Other Operations – Select Earnings and Operational Data
	Unaudited (millions of dollars)
		For the Three Months Ended
		3/31/13		6/30/13		9/30/13		12/31/13		3/31/14		Change
	Other Operations
	Operating revenues:
	Net investment income	$	66	$	63	$	63	$	73	$	73	10.6%
	Amortization of deferred gain on
	business sold through reinsurance		18		18		18		18		18	0.0%
	Media revenues		17		19		18		18		15	-11.8%
	Other revenues		1		2		1		2		-	-100.0%
	Total operating revenues		102		102		100		111		106	3.9%
	Operating expenses:
	Interest credited		27		28		26		27		27	0.0%
	Benefits		27		29		29		28		30	11.1%
	Media expenses		15		15		15		16		14	-6.7%
	Commissions and other expenses		25		26		5		6		14	-44.0%
	Interest and debt expenses		64		65		67		68		67	4.7%
	Total operating expenses		158		163		142		145		152	-3.8%
	Income (loss) from operations before taxes		(56)		(61)		(42)		(34)		(46)	17.9%
	Federal income tax expense (benefit)		(21)		(21)		(15)		(15)		(16)	23.8%
	Income (loss) from operations	$	(35)	$	(40)	$	(27)	$	(19)	$	(30)	14.3%
Page 21

	Lincoln Financial Group
	Consolidated – DAC, VOBA, DSI and DFEL Roll Forwards
	Unaudited (millions of dollars)
		For the Three Months Ended
		3/31/13		6/30/13		9/30/13		12/31/13		3/31/14		Change
	DAC and VOBA
	Balance as of beginning-of-period	$	6,667	$	6,936	$	8,214	$	8,500	$	8,886	33.3%
	Business sold through reinsurance		-		-		2		2		-	NM
	Deferrals		343		404		384		445		366	6.7%
	Operating amortization		(227)		(221)		(239)		(245)		(247)	-8.8%
	Deferrals, net of operating amortization		116		183		145		200		119	2.6%
	Amortization associated with benefit ratio unlocking		(2)		1		(3)		(2)		(1)	50.0%
	Adjustment related to realized (gains) losses		4		(11)		(7)		6		(8)	NM
	Adjustment related to unrealized (gains) losses		151		1,105		149		180		(542)	NM
	Balance as of end-of-period	$	6,936	$	8,214	$	8,500	$	8,886	$	8,454	21.9%
	DSI
	Balance as of beginning-of-period	$	253	$	249	$	266	$	267	$	267	5.5%
	Deferrals		3		3		2		3		3	0.0%
	Operating amortization		(12)		(9)		(2)		(10)		(10)	16.7%
	Deferrals, net of operating amortization		(9)		(6)		-		(7)		(7)	22.2%
	Adjustment related to realized (gains) losses		-		(1)		-		-		-	NM
	Adjustment related to unrealized (gains) losses		5		24		1		7		(4)	NM
	Balance as of end-of-period	$	249	$	266	$	267	$	267	$	256	2.8%
	DFEL
	Balance as of beginning-of-period	$	1,373	$	1,351	$	1,819	$	1,861	$	1,938	41.2%
	Deferrals		83		81		75		81		81	-2.4%
	Operating amortization		(55)		(44)		(68)		(62)		(65)	-18.2%
	Deferrals, net of operating amortization		28		37		7		19		16	-42.9%
	Adjustment related to realized (gains) losses		1		(1)		(1)		-		(2)	NM
	Adjustment related to unrealized (gains) losses		(51)		432		36		58		(245)	NM
	Balance as of end-of-period	$	1,351	$	1,819	$	1,861	$	1,938	$	1,707	26.4%
Page 22

	Lincoln Financial Group
	Annuities – DAC, VOBA, DSI and DFEL Roll Forwards
	Unaudited (millions of dollars)
		For the Three Months Ended
		3/31/13		6/30/13		9/30/13		12/31/13		3/31/14		Change
	DAC and VOBA
	Balance as of beginning-of-period	$	2,092	$	2,196	$	2,507	$	2,609	$	2,770	32.4%
	Deferrals		164		213		182		193		165	0.6%
	Operating amortization		(105)		(92)		(90)		(97)		(100)	4.8%
	Deferrals, net of operating amortization		59		121		92		96		65	10.2%
	Amortization associated with benefit ratio unlocking		(2)		1		(3)		(2)		(1)	50.0%
	Adjustment related to realized (gains) losses		8		(9)		(3)		11		(4)	NM
	Adjustment related to unrealized (gains) losses		39		198		16		56		(46)	NM
	Balance as of end-of-period	$	2,196	$	2,507	$	2,609	$	2,770	$	2,784	26.8%
	DSI
	Balance as of beginning-of-period	$	249	$	246	$	262	$	261	$	259	4.0%
	Deferrals		2		2		2		2		2	0.0%
	Operating amortization		(11)		(9)		(5)		(11)		(10)	9.1%
	Deferrals, net of operating amortization		(9)		(7)		(3)		(9)		(8)	11.1%
	Adjustment related to realized (gains) losses		-		(1)		-		-		-	NM
	Adjustment related to unrealized (gains) losses		6		24		2		7		(3)	NM
	Balance as of end-of-period	$	246	$	262	$	261	$	259	$	248	0.8%
	DFEL
	Balance as of beginning-of-period	$	258	$	261	$	262	$	263	$	265	2.7%
	Deferrals		5		6		7		8		8	60.0%
	Operating amortization		(5)		(4)		(5)		(6)		(7)	-40.0%
	Deferrals, net of operating amortization		-		2		2		2		1	NM
	Adjustment related to realized (gains) losses		2		(2)		(1)		-		(2)	NM
	Adjustment related to unrealized (gains) losses		1		1		-		-		-	-100.0%
	Balance as of end-of-period	$	261	$	262	$	263	$	265	$	264	1.1%
Page 23

	Lincoln Financial Group
	Retirement Plan Services, Life Insurance and Group Protection – DAC, VOBA and DFEL Roll Forwards
	Unaudited (millions of dollars)
		For the Three Months Ended
		3/31/13		6/30/13		9/30/13		12/31/13		3/31/14		Change
	DAC and VOBA – Retirement Plan Services
	Balance as of beginning-of-period	$	102	$	69	$	162	$	160	$	173	69.6%
	Deferrals		9		7		7		9		8	-11.1%
	Operating amortization		(9)		(10)		(18)		(11)		(10)	-11.1%
	Deferrals, net of operating amortization		-		(3)		(11)		(2)		(2)	NM
	Adjustment related to unrealized (gains) losses		(33)		96		9		15		(6)	81.8%
	Balance as of end-of-period	$	69	$	162	$	160	$	173	$	165	139.1%
	DAC and VOBA – Life Insurance
	Balance as of beginning-of-period	$	4,281	$	4,480	$	5,344	$	5,520	$	5,713	33.5%
	Business sold through reinsurance		-		-		2		2		-	NM
	Deferrals		157		166		175		204		178	13.4%
	Operating amortization		(98)		(110)		(121)		(118)		(117)	-19.4%
	Deferrals, net of operating amortization		59		56		54		86		61	3.4%
	Adjustment related to realized (gains) losses		(4)		(1)		(4)		(5)		(4)	0.0%
	Adjustment related to unrealized (gains) losses		144		809		124		110		(492)	NM
	Balance as of end-of-period	$	4,480	$	5,344	$	5,520	$	5,713	$	5,278	17.8%
	DFEL – Life Insurance
	Balance as of beginning-of-period	$	1,115	$	1,090	$	1,556	$	1,597	$	1,673	50.0%
	Deferrals		77		75		68		73		73	-5.2%
	Operating amortization		(49)		(40)		(63)		(55)		(58)	-18.4%
	Deferrals, net of operating amortization		28		35		5		18		15	-46.4%
	Adjustment related to realized (gains) losses		(1)		-		(1)		(1)		(1)	0.0%
	Adjustment related to unrealized (gains) losses		(52)		431		37		59		(244)	NM
	Balance as of end-of-period	$	1,090	$	1,556	$	1,597	$	1,673	$	1,443	32.4%
	DAC and VOBA – Group Protection
	Balance as of beginning-of-period	$	192	$	192	$	201	$	211	$	230	19.8%
	Deferrals		15		18		20		37		16	6.7%
	Operating amortization		(15)		(9)		(10)		(18)		(19)	-26.7%
	Deferrals, net of operating amortization		-		9		10		19		(3)	NM
	Balance as of end-of-period	$	192	$	201	$	211	$	230	$	227	18.2%
Page 24

	Lincoln Financial Group
	Annuities – Account Value Roll Forwards
	Unaudited (millions of dollars)
		For the Three Months Ended
		3/31/13		6/30/13		9/30/13		12/31/13		3/31/14		Change
	Fixed Annuities
	Balance as of beginning-of-period	$	18,438	$	18,539	$	18,494	$	18,457	$	18,552	0.6%
	Gross deposits		280		264		233		279		432	54.3%
	Withdrawals and deaths		(435)		(462)		(462)		(440)		(424)	2.5%
	Net flows		(155)		(198)		(229)		(161)		8	105.2%
	Reinvested interest credited		254		150		190		254		168	-33.9%
	Sales inducements deferred		2		3		2		2		2	0.0%
	Balance as of end-of-period, gross		18,539		18,494		18,457		18,552		18,730	1.0%
	Reinsurance ceded		(811)		(796)		(779)		(759)		(744)	8.3%
	Balance as of end-of-period, net	$	17,728	$	17,698	$	17,678	$	17,793	$	17,986	1.5%
	Variable Annuities
	Balance as of beginning-of-period	$	78,906	$	83,687	$	85,395	$	91,021	$	97,298	23.3%
	Gross deposits		2,939		3,917		3,407		3,454		2,947	0.3%
	Withdrawals and deaths		(1,899)		(2,016)		(1,943)		(2,103)		(2,260)	-19.0%
	Net flows		1,040		1,901		1,464		1,351		687	-33.9%
	Change in market value and reinvestment		3,741		(193)		4,162		4,926		813	-78.3%
	Balance as of end-of-period, gross		83,687		85,395		91,021		97,298		98,798	18.1%
	Reinsurance ceded		(1)		-		-		(1)		-	100.0%
	Balance as of end-of-period, net	$	83,686	$	85,395	$	91,021	$	97,297	$	98,798	18.1%
	Total
	Balance as of beginning-of-period	$	97,344	$	102,226	$	103,889	$	109,478	$	115,850	19.0%
	Gross deposits		3,219		4,181		3,640		3,733		3,379	5.0%
	Withdrawals and deaths		(2,334)		(2,478)		(2,405)		(2,543)		(2,684)	-15.0%
	Net flows		885		1,703		1,235		1,190		695	-21.5%
	Change in market value and reinvestment		3,995		(43)		4,352		5,180		981	-75.4%
	Sales inducements deferred		2		3		2		2		2	0.0%
	Balance as of end-of-period, gross		102,226		103,889		109,478		115,850		117,528	15.0%
	Reinsurance ceded		(812)		(796)		(779)		(760)		(744)	8.4%
	Balance as of end-of-period, net	$	101,414	$	103,093	$	108,699	$	115,090	$	116,784	15.2%
Page 25

	Lincoln Financial Group
	Retirement Plan Services – Account Value Roll Forwards
	Unaudited (millions of dollars)
		For the Three Months Ended
		3/31/13		6/30/13		9/30/13		12/31/13		3/31/14		Change
	Small Market
	Balance as of beginning-of-period	$	7,001	$	7,373	$	7,377	$	7,695	$	8,203	17.2%
	Gross deposits		407		366		362		548		470	15.5%
	Withdrawals and deaths		(409)		(369)		(375)		(434)		(510)	-24.7%
	Net flows		(2)		(3)		(13)		114		(40)	NM
	Transfers between fixed and variable accounts		(14)		1		-		8		-	100.0%
	Change in market value and reinvestment		388		6		331		386		60	-84.5%
	Balance as of end-of-period	$	7,373	$	7,377	$	7,695	$	8,203	$	8,223	11.5%
	Mid – Large Market
	Balance as of beginning-of-period	$	21,050	$	22,776	$	23,486	$	25,059	$	26,468	25.7%
	Gross deposits		1,099		1,093		1,338		945		1,111	1.1%
	Withdrawals and deaths		(532)		(542)		(881)		(884)		(1,213)	NM
	Net flows		567		551		457		61		(102)	NM
	Transfers between fixed and variable accounts		13		7		(14)		(1)		9	-30.8%
	Change in market value and reinvestment		1,146		152		1,130		1,349		333	-70.9%
	Balance as of end-of-period	$	22,776	$	23,486	$	25,059	$	26,468	$	26,708	17.3%
	Multi-Fund®and Other
	Balance as of beginning-of-period	$	15,880	$	16,293	$	16,234	$	16,555	$	16,947	6.7%
	Gross deposits		161		158		160		150		177	9.9%
	Withdrawals and deaths		(382)		(369)		(385)		(432)		(396)	-3.7%
	Net flows		(221)		(211)		(225)		(282)		(219)	0.9%
	Change in market value and reinvestment		634		152		546		674		192	-69.7%
	Balance as of end-of-period	$	16,293	$	16,234	$	16,555	$	16,947	$	16,920	3.8%
	Total
	Balance as of beginning-of-period	$	43,931	$	46,442	$	47,097	$	49,309	$	51,618	17.5%
	Gross deposits		1,667		1,617		1,860		1,643		1,758	5.5%
	Withdrawals and deaths		(1,323)		(1,280)		(1,641)		(1,750)		(2,119)	-60.2%
	Net flows		344		337		219		(107)		(361)	NM
	Transfers between fixed and variable accounts		(1)		8		(14)		7		9	NM
	Change in market value and reinvestment		2,168		310		2,007		2,409		585	-73.0%
	Balance as of end-of-period	$	46,442	$	47,097	$	49,309	$	51,618	$	51,851	11.6%
Page 26

	Lincoln Financial Group
	Life Insurance – Account Value Roll Forwards
	Unaudited (millions of dollars)
		For the Three Months Ended
		3/31/13		6/30/13		9/30/13		12/31/13		3/31/14		Change
	Interest-Sensitive Life
	Balance as of beginning-of-period	$	32,432	$	32,817	$	33,108	$	33,366	$	33,721	4.0%
	Deposits		998		966		938		1,017		869	-12.9%
	Withdrawals and deaths		(187)		(247)		(255)		(208)		(292)	-56.1%
	Net flows		811		719		683		809		577	-28.9%
	Contract holder assessments		(743)		(748)		(752)		(785)		(741)	0.3%
	Reinvested interest credited		317		320		327		331		329	3.8%
	Balance as of end-of-period, gross		32,817		33,108		33,366		33,721		33,886	3.3%
	Reinsurance ceded		(831)		(819)		(813)		(809)		(804)	3.2%
	Balance as of end-of-period, net	$	31,986	$	32,289	$	32,553	$	32,912	$	33,082	3.4%
	VUL
	Balance as of beginning-of-period	$	6,523	$	6,859	$	6,972	$	7,453	$	8,094	24.1%
	Deposits		242		287		292		428		397	64.0%
	Withdrawals and deaths		(205)		(117)		(113)		(125)		(145)	29.3%
	Net flows		37		170		179		303		252	NM
	Contract holder assessments		(85)		(113)		(104)		(119)		(112)	-31.8%
	Change in market value and reinvestment		384		56		406		457		120	-68.8%
	Balance as of end-of-period, gross		6,859		6,972		7,453		8,094		8,354	21.8%
	Reinsurance ceded		(827)		(815)		(849)		(893)		(884)	-6.9%
	Balance as of end-of-period, net	$	6,032	$	6,157	$	6,604	$	7,201	$	7,470	23.8%
	Total
	Balance as of beginning-of-period	$	38,955	$	39,676	$	40,080	$	40,819	$	41,815	7.3%
	Deposits		1,240		1,253		1,230		1,445		1,266	2.1%
	Withdrawals and deaths		(392)		(364)		(368)		(333)		(437)	-11.5%
	Net flows		848		889		862		1,112		829	-2.2%
	Contract holder assessments		(828)		(861)		(856)		(904)		(853)	-3.0%
	Change in market value and reinvestment		701		376		733		788		449	-35.9%
	Balance as of end-of-period, gross		39,676		40,080		40,819		41,815		42,240	6.5%
	Reinsurance ceded		(1,658)		(1,634)		(1,662)		(1,702)		(1,688)	-1.8%
	Balance as of end-of-period, net	$	38,018	$	38,446	$	39,157	$	40,113	$	40,552	6.7%
Page 27

	Lincoln Financial Group
	Select Non-GAAP to GAAP Reconciliations
	Unaudited (millions of dollars)
		For the Three Months Ended
		3/31/13		6/30/13		9/30/13		12/31/13		3/31/14		Change
	Revenues
	Operating revenues	$	2,930	$	3,049	$	3,073	$	3,187	$	3,233	10.3%
	Excluded realized gain (loss)		(91)		(51)		(65)		(66)		(58)	36.3%
	Amortization of DFEL on benefit ratio unlocking		(1)		-		-		-		-	100.0%
	Amortization of deferred gains arising from reserve
	changes on business sold through reinsurance		1		1		1		1		1	0.0%
	Total revenues	$	2,839	$	2,999	$	3,009	$	3,122	$	3,176	11.9%
	Excluded Realized Gain (Loss) Net of
	Benefit Ratio Unlocking, After-Tax
	Total excluded realized gain (loss)	$	(60)	$	(33)	$	(43)	$	(43)	$	(38)	36.7%
	Benefit ratio unlocking		14		(2)		13		12		2	-85.7%
	Net gain (loss), after-tax	$	(46)	$	(35)	$	(30)	$	(31)	$	(36)	21.7%
	Net Income
	Income (loss) from operations	$	285	$	351	$	367	$	382	$	365	28.1%
	Excluded realized gain (loss)		(60)		(33)		(43)		(43)		(38)	36.7%
	Benefit ratio unlocking		14		(2)		13		12		2	-85.7%
	Income (loss) from reserve changes (net of related
	amortization) on business sold through reinsurance		-		1		-		-		-	NM
	Net income (loss)	$	239	$	317	$	337	$	351	$	329	37.7%
	Earnings (Loss) Per Common Share – Diluted
	Income (loss) from operations	$	1.02	$	1.27	$	1.34	$	1.40	$	1.34	31.4%
	Excluded realized gain (loss)		(0.21)		(0.11)		(0.16)		(0.15)		(0.14)	33.3%
	Benefit ratio unlocking		0.05		(0.01)		0.05		0.04		0.01	-80.0%
	Net income (loss)	$	0.86	$	1.15	$	1.23	$	1.29	$	1.21	40.7%
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