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

August 3, 2016

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 August 3, 2016, Lincoln National Corporation (the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 2016, 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 June 30, 2016, 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 August 3, 2016, announcing Lincoln National Corporation’s financial results for the quarterended June 30, 2016.
99.2	Lincoln National Corporation Statistical Supplement for the quarter ended June 30, 2016.

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/ Christine A. Janofsky
Name:	Christine A. Janofsky
Title:	Senior Vice President and
	Chief Accounting Officer

Date:  August 3, 2016

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press release dated August 3, 2016, announcing Lincoln National Corporation’s financial results for the quarterended June 30, 2016.
99.2	Lincoln National Corporation Statistical Supplement for the quarter ended June 30, 2016.

EX-99.1

FOR IMMEDIATE RELEASE

Lincoln Financial Group Reports Second Quarter 2016 Results

_______________________________________

Net income EPS of $1.35, unchanged; Operating EPS of $1.56, up 7%

Book value per share (BVPS), including AOCI, of $68.39, up 17%; BVPS, excluding AOCI, of $54.67, up 8%

Net income ROE, including AOCI, of 8.5%; Operating ROE, excluding AOCI, of 11.7%

Share buybacks of $275 million in the quarter; retired 3% of shares outstanding

Radnor, PA, August 3, 2016 –  Lincoln Financial Group (NYSE: LNC) today reported net income for the second quarter of 2016 of $325 million, or $1.35 per diluted share available to common stockholders, compared to net income in the second quarter of 2015 of $344 million, or $1.35 per diluted share available to common stockholders. Second quarter income from operations was $373 million, or $1.56 per diluted share available to common stockholders, compared to $371 million, or $1.46 per diluted share available to common stockholders, in the second quarter of 2015.

“Earnings significantly recovered from depressed levels in the first quarter, and we achieved strong growth in operating EPS and book value per share compared to the prior year,” said Dennis R. Glass, president and CEO of Lincoln Financial Group. “As highlighted at our recent Investor Day, we remain confident in our ability to generate top and bottom-line growth and actively deploy capital in the current macro environment.”

	As of or For the				As of or For the
	Three Months Ended				Six Months Ended
(in millions, except per share data)	2016			2015	2016		2015
Net Income (Loss)	$	325	$	344	$	533	$	644
Net Income (Loss) Available to Common Stockholders		325		344		526		645
Net Income (Loss) Per Diluted Share Available to Common Stockholders		1.35		1.35		2.17		2.50
Revenues		3,307		3,381		6,551		6,685
Income (Loss) from Operations		373		371		687		724
Income (Loss) from Operations Per Diluted Share Available to Common Stockholders		1.56		1.46		2.80		2.81
Average Diluted Shares		239.9		255.1		242.5		258.3
ROE, including AOCI (Net Income)		8.5%		8.9%		7.2%		8.2%
ROE, excluding AOCI (Income from Operations)		11.7%		11.7%		10.8%		11.5%
Book Value Per Share, Including AOCI	$	68.39	$	58.58	$	68.39	$	58.58
Book Value Per Share, Excluding AOCI		54.67		50.83		54.67		50.83

Operating Highlights – Second Quarter 2016

· Operating EPS of $1.56, up 7% versus the prior year

· Income from operations of $373 million, up 19% sequentially

· Total individual life insurance sales of $164 million, up 6% versus the prior year

· Group Protection sales of $71 million, up 15% versus the prior year

· Share repurchases of $275 million; retired 3% of shares outstanding

There were no notable items in the current quarter. The prior-year quarter included net unfavorable items of approximately $0.03 related to legal expenses.   

Second Quarter 2016 – Segment Results

Annuities

The Annuities segment reported income from operations of $235 million in the quarter, down 8% from $255 million in the prior-year quarter driven primarily by a decrease in fee income from lower average account values.   

Gross annuity deposits in the second quarter of $2.1 billion decreased 37% from the prior-year quarter as a decline in variable annuity sales was partially offset by an increase in fixed annuity sales. Variable annuity sales continue to be negatively impacted by market volatility; however, on a sequential basis sales decreased just 3%. The percentage of variable annuity sales from products without living benefits increased to 29% from 28% in the prior-year quarter. Fixed annuity sales of $478 million were up 31% from the prior-year quarter driven by new product introductions. Net flows of $(452) million were negatively impacted by lower sales. Average account values decreased 3% to $122 billion compared to the prior-year quarter.

Retirement Plan Services

Retirement Plan Services reported income from operations of $31 million compared to $30 million in the prior-year quarter. The increase in earnings is primarily driven by lower expenses compared to the prior-year period.

Total deposits for the quarter of $1.7 billion were down 11% versus the prior year. Small market deposits increased 8% while mid-large market deposits declined due to timing of first-year sales. Total net flows of $4 million in the quarter resulted in average account values remaining flat at $55 billion.

Life Insurance

Life Insurance reported income from operations of $120 million, up 14% from $105 million in the prior-year quarter. The increase in earnings compared to the prior-year period was driven by mortality performing in line with expectations compared to elevated mortality in the prior-year period.

Individual life insurance sales in the quarter were $164 million, a 6% increase from the prior-year quarter.  Increased Term, Linked-benefit, and UL sales were offset by decreases in IUL and VUL.  Executive Benefit sales, which can fluctuate quarter to quarter, added $9 million to total life insurance sales in the quarter while the prior-year quarter contributed $46 million driven by one large case.

Total life insurance in-force of $675 billion grew 4% over the prior-year quarter, and average account values of $44 billion increased 3%.

Group Protection

Group Protection income from operations was $15 million in the quarter compared to $19 million in the prior-year period. The decline in earnings was driven by lower premiums and net investment income offset by the improvement in the non-medical loss ratio to 72.5% from 73.6% in the prior-year quarter.

Group Protection sales of $71 million were up 15% from the same period last year as sales momentum continues following the disruption caused by our repricing actions. Employee-paid product sales as a percentage of total sales were 46% in the quarter, up two percentage points from the prior-year quarter.

Non-medical net earned premiums were $478 million in the second quarter, down 11% from the year-ago period.

Other Operations

Other Operations reported a loss from operations of $28 million versus a loss of $38 million in the prior-year quarter. 

The prior-year results included net unfavorable items of $8 million related to legal expenses.

Realized Gains and Losses

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

· A net loss from general account investments of $47 million compared to a $14 million net loss in the prior-year quarter.

· A $1 million variable annuity net derivatives gain in the quarter.

Unrealized Gains and Losses

The company reported a net unrealized gain of $8.4 billion, pre-tax, on its available-for-sale securities at June 30, 2016. This compares to a net unrealized gain of $5.0 billion at June 30, 2015, with the year-over-year increase driven primarily by a decline in interest rates.

Capital

During the quarter, the company repurchased 6.2 million shares of stock at a cost of $275 million. The quarter’s average diluted share count of 239.9 million shares was down 6% from the second quarter of 2015, the result of repurchasing 19.1 million shares of stock at a cost of $875 million since June 30, 2015. 

Book Value

As of June 30, 2016, book value per share, including accumulated other comprehensive income (“AOCI”), of $68.39 increased 17% from a year ago. Book value per share, excluding AOCI, of $54.67 increased 8% from the prior-year period.

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.

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.

For other financial information, please refer to the company’s second quarter 2016 statistical supplement available on its website, www.LincolnFinancial.com/earnings.  

Lincoln Financial Group will discuss the company’s second quarter results with investors in a conference call beginning at 10:00 a.m. Eastern Time on Thursday, August 4, 2016. 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:(866) 394-4575 (Domestic)

(678) 509-7536 (International)

Ask for the Lincoln National Conference Call.

Audio replay will begin by 1:00 p.m. Eastern Time on August 4, 2016, and it will remain available through midnight Eastern Time on August 11, 2016. To access the re-broadcast:

(855) 859-2056 (Domestic)

(404) 537-3406 (International)

Enter conference code: 38803409

A replay of the call will also be available by 1:00 p.m. Eastern Time on August 4, 2016 at www.LincolnFinancial.com/webcast.  

About Lincoln Financial Group

Lincoln Financial Group provides advice and solutions that help empower Americans to take charge of their financial lives with confidence and optimism. Today, more than 17 million customers trust our retirement, insurance and wealth protection expertise to help address their lifestyle, savings and income goals, as well as to guard against long-term care expenses. Headquartered in Radnor, Pennsylvania, Lincoln Financial Group is the marketing name for Lincoln National Corporation (NYSE:LNC) and its affiliates. The company had $223 billion in assets under management as of June 30, 2016. Learn more at: www.LincolnFinancial.com. Find us on on Facebook,  Twitter,  LinkedIn and YouTube. To sign up for email alerts, please visit our Newsroom at http://newsroom.lfg.com.

Explanatory Notes on Use of Non-GAAP Measures

Management believes that income from operations, return on equity and operating revenues better 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. Management also believes that using book value excluding accumulated other comprehensive income (AOCI) enables investors to analyze the amount of our net worth that is primarily attributable to our business operations. 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. 

For the historical periods, reconciliations of non-GAAP measures used in this press release to the most directly comparable GAAP measure may be included in this Appendix to the press release and/or are included in the Statistical Reports for the corresponding periods contained in the Earning section of the Investor Relations page on our website:  www.LincolnFinancial.com/investor.

Definitions of Non-GAAP Measures Used in this Press Release

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. 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, the most directly comparable GAAP measures. 

Income (Loss) from Operations

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)"):

o Sale or disposal of securities;

o Impairments of securities;

o Change in the fair value of derivative investments, embedded derivatives within certain reinsurance arrangements and our trading securities;

o 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";

o 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”;

o 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;

· Income (loss) from discontinued operations.

Operating Revenues

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;

· Revenue adjustments from the initial adoption of new accounting standards.

Return on Equity

Return on equity measures how efficiently we generate profits from the resources provided by our net assets.

· It 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.

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.

· 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.

Special Note

Sales

Sales as reported consist of the following:

· Linked-benefit – 15% of total expected premium deposits;

· Universal life (UL), indexed universal life (IUL), variable universal life (VUL) – first year commissionable premiums plus 5% of excess premiums received, including an adjustment for internal replacements of approximately 50% of commissionable premiums;

· Executive Benefits - single premium bank-owned UL and VUL, 15% of single premium deposits, and corporate owned UL and VUL, first year commissionable premiums plus 5% of excess premium 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.

Lincoln National Corporation

Reconciliation of Net Income to Income from Operations

(in millions, except per share data)	For the Three				For the Six
	Months Ended				Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
Total Revenues	$	3,307	$	3,381	$	6,551	$	6,685
Less:
Excluded realized gain (loss)		(89)		(37)		(245)		(127)
Amortization of deferred gains arising from reserve
changes on business sold through reinsurance		1		1		1		1
Total Operating Revenues	$	3,395	$	3,417	$	6,795	$	6,811
Net Income (Loss) Available to Common
Stockholders – Diluted	$	325	$	344	$	526	$	645
Less:
Adjustment for deferred units of LNC stock in our
deferred compensation plans (1)		-		-		(7)		1
Net Income (Loss)		325		344		533		644
Less (2):
Excluded realized gain (loss)		(57)		(23)		(159)		(83)
Benefit ratio unlocking		9		(4)		4		2
Income (loss) from reserve changes (net of related
amortization) on business sold through reinsurance		-		-		1		1
Income (Loss) from Operations	$	373	$	371	$	687	$	724
Earnings (Loss) Per Common Share – Diluted
Net income (loss)	$	1.35	$	1.35	$	2.17	$	2.50
Income (loss) from operations		1.56		1.46		2.80		2.81
Average Stockholders' Equity
Average equity, including average AOCI	$	15,289	$	15,461	$	14,713	$	15,721
Average AOCI		2,563		2,799		1,975		3,087
Average equity, excluding AOCI		12,726		12,662		12,738		12,634
Average goodwill		2,273		2,273		2,273		2,273
Average equity, excluding AOCI and goodwill	$	10,453	$	10,389	$	10,465	$	10,361
Return on Equity, Including AOCI
Net income (loss) with average equity including goodwill		8.5%		8.9%		7.2%		8.2%
Return on Equity, Excluding AOCI
Income (loss) from operations with average equity
including goodwill		11.7%		11.7%		10.8%		11.5%
Income (loss) from operations with average equity
excluding goodwill		14.3%		14.3%		13.1%		14.0%
(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 result in a more dilutive EPS.
(2) We use our prevailing 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.

	As of June 30,
	2016		2015
Book value per share, including AOCI	$	68.39	$	58.58
Per share impact of AOCI		13.72		7.75
Book value per share, excluding AOCI		54.67		50.83

Lincoln National Corporation

Digest of Earnings

(in millions, except per share data)
	For the Three
	Months Ended
	June 30,
	2016		2015
Revenues	$	3,307	$	3,381
Net Income (Loss)	$	325	$	344
Adjustment for deferred units of LNC stock in our
deferred compensation plans (1)		-		-
Net Income (Loss) Available to Common
Stockholders – Diluted	$	325	$	344
Earnings (Loss) Per Common Share – Basic	$	1.37	$	1.37
Earnings (Loss) Per Common Share – Diluted		1.35		1.35
Average Shares – Basic		236,463,183		251,849,316
Average Shares – Diluted		239,885,855		255,140,300
	For the Six
	Months Ended
	June 30,
	2016		2015
Revenues	$	6,551	$	6,685
Net Income (Loss)	$	533	$	644
Adjustment for deferred units of LNC stock in our
deferred compensation plans (1)		(7)		1
Net Income (Loss) Available to Common
Stockholders – Diluted	$	526	$	645
Earnings (Loss) Per Common Share – Basic	$	2.23	$	2.54
Earnings (Loss) Per Common Share – Diluted		2.17		2.50
Average Shares – Basic		239,069,774		253,662,410
Average Shares – Diluted		242,503,518		258,344,952
(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.

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, our ability to conduct business and our captive reinsurance arrangements as well as restrictions on revenue sharing and 12b-1 payments, the potential for U.S. Federal tax reform and the effect of the Department of Labor’s regulation defining fiduciary;

· 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 the net 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 net 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 and Credit Ratings	1
Notes	2
Consolidated
Consolidated Statements of Income (Loss)	3
Consolidated Balance Sheets	4
Earnings, Shares and Return on Equity	5
Key Stakeholder Metrics	6
Segment and Sources of Earnings	7
Select Earnings Drivers By Segment	8
Sales By Segment	9
Operating Revenues and General and Administrative Expenses By Segment	10
Operating Commissions and Other Expenses	11
Interest Rate Yields and Spreads By Segment	12
Select Earnings and Operational Data from Business Segments
Annuities	13
Retirement Plan Services	14
Life Insurance	15
Group Protection	16
Other Operations	17
DAC & Account Value Rollforwards
Consolidated DAC, VOBA, DSI and DFEL Roll Forwards	18
Account Value Roll Forwards:
Annuities	19
Retirement Plan Services	20
Life Insurance	21
Other Information
Select Investment Data	22
Realized Gain (Loss) and Benefit Ratio Unlocking, After-DAC	23
Select GAAP to Non-GAAP Reconciliations	24

	Lincoln Financial Group
	Analyst Coverage and Credit Ratings
	Firm	Analyst				Phone Number
	Bank of America Merrill Lynch	Seth Weiss				646-855-3783
	Barclays Capital	Jay Gelb				212-526-1561
	Deutsche Bank	Yaron Kinar				212-250-7927
	Dowling & Partners	Humphrey Lee				860-676-7324
	Evercore	Thomas Gallagher				212-446-9439
	FBR Capital Markets	Randy Binner				703-312-1890
	Goldman Sachs	Michael Kovac				212-902-2303
	J.P. Morgan Securities	Jimmy Bhullar				212-622-6397
	Janney Montgomery Scott	Bob Glasspiegel				860-724-1203
	Keefe, Bruyette and Woods	Ryan Krueger				860-722-5930
	Morgan Stanley	Nigel Dally				212-761-4132
	RBC Capital	Eric Berg				212-618-7593
	Sandler O’Neill & Partners, L.P.	John Barnidge				312-281-3412
	UBS	Suneet Kamath				212-713-1355
	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.
			Ratings as of August 3rd, 2016
						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-
	Investor Inquiries May Be Directed To:
	Chris Giovanni, Senior Vice President, Investor Relations
	Email:  Christopher.Giovanni@lfg.com
	Phone:  484-583-1793
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 as 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.  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.  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.
	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:
	• Linked-benefit – 15% of total expected premium deposits;
	•  Universal life (“UL”), indexed universal life ("IUL"), variable universal life (“VUL”) – first year commissionable premiums plus 5% of excess premiums received, including an adjustment
	for internal replacements of approximately 50% of commissionable premiums;
	•  Executive Benefits - single premium bank-owned UL and VUL, 15% of single premium deposits, and corporate owned UL and VUL, first year commissionable premiums plus
	5% of excess premium 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.
Page 2a

	Lincoln Financial Group
	Notes
	•  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.
	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 our variable annuities;
	▪  Changes in the fair value of the embedded derivatives of our guaranteed living benefit (“GLB”) riders reflected within variable annuity net derivative results accounted for at fair value;
	▪  Changes in the fair value of the derivatives we own to hedge our guaranteed living benefit ("GLB") riders reflected within variable annuity net derivative results;
	▪  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”);
	•  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 prevailing 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 as 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 as they better reveal trends in our business.
	Statistical Supplement is Dated
	The financial data in this document is dated August 3rd, 2016, 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											For the Six Months Ended
		6/30/15		9/30/15		12/31/15		3/31/16		6/30/16		Change	6/30/15		6/30/16		Change
	Revenues
	Insurance premiums	$	782	$	825	$	848	$	816	$	728	-6.9%	$	1,572	$	1,544	-1.8%
	Fee income		1,239		1,469		1,116		1,235		1,288	4.0%		2,460		2,523	2.6%
	Net investment income		1,187		1,254		1,200		1,172		1,199	1.0%		2,374		2,371	-0.1%
	Realized gain (loss):
	Other-than-temporary impairment (“OTTI”)		(7)		(18)		(16)		(36)		(28)	NM		(20)		(64)	NM
	Realized gain (loss), excluding OTTI		17		45		(124)		(78)		(17)	NM		(18)		(95)	NM
	Total realized gain (loss)		10		27		(140)		(114)		(45)	NM		(38)		(159)	NM
	Amortization of deferred gains on business
	sold through reinsurance		18		18		18		18		18	0.0%		37		37	0.0%
	Other revenues		145		123		130		116		119	-17.9%		280		235	-16.1%
	Total revenues		3,381		3,716		3,172		3,243		3,307	-2.2%		6,685		6,551	-2.0%
	Expenses
	Interest credited		629		622		632		633		639	1.6%		1,254		1,272	1.4%
	Benefits		1,220		1,327		1,262		1,331		1,208	-1.0%		2,456		2,540	3.4%
	Commissions and other expenses		1,014		1,432		859		976		978	-3.6%		2,027		1,953	-3.7%
	Interest and debt expense		69		67		68		68		68	-1.4%		137		136	-0.7%
	Total expenses		2,932		3,448		2,821		3,008		2,893	-1.3%		5,874		5,901	0.5%
	Income (loss) from continuing operations before taxes		449		268		351		235		414	-7.8%		811		650	-19.9%
	Federal income tax expense (benefit)		105		41		68		27		89	-15.2%		167		117	-29.9%
	Net income (loss)		344		227		283		208		325	-5.5%		644		533	-17.2%
	Adjustment for LNC stock units in our
	deferred compensation plans		-		(7)		-		(7)		-	NM		1		(7)	NM
	Net income (loss) available to common
	stockholders – diluted	$	344	$	220	$	283	$	201	$	325	-5.5%	$	645	$	526	-18.4%
	Earnings (Loss) Per Common Share – Diluted
	Net income (loss)	$	1.35	$	0.87	$	1.14	$	0.82	$	1.35	0.0%	$	2.50	$	2.17	-13.2%
	ROE, including AOCI
	Net income (loss)		8.9%		6.2%		8.1%		5.9%		8.5%			8.2%		7.2%
Page 3

	Lincoln Financial Group
	Consolidated Balance Sheets
	Unaudited (millions of dollars)
		As of
		6/30/15		9/30/15		12/31/15		3/31/16		6/30/16		Change
	ASSETS
	Investments:
	Available-for-sale (“AFS”) securities:
	Corporate bonds	$	74,169	$	74,432	$	74,032	$	76,956	$	80,129	8.0%
	U.S. government bonds		428		438		429		450		464	8.4%
	Foreign government bonds		540		532		524		532		530	-1.9%
	Mortgage-backed securities		4,476		4,252		4,104		4,028		3,975	-11.2%
	Asset-backed collateralized debt obligations		499		515		589		628		687	37.7%
	State and municipal bonds		4,418		4,480		4,480		4,744		4,985	12.8%
	Hybrid and redeemable preferred securities		892		857		806		726		691	-22.5%
	VIEs' fixed maturity securities		598		598		598		599		600	0.3%
	Equity securities		227		242		237		245		277	22.0%
	Total AFS securities		86,247		86,346		85,799		88,908		92,338	7.1%
	Trading securities		1,949		1,914		1,854		1,864		1,812	-7.0%
	Mortgage loans on real estate		8,171		8,431		8,678		8,916		9,257	13.3%
	Real estate		24		21		17		17		21	-12.5%
	Policy loans		2,654		2,647		2,545		2,533		2,507	-5.5%
	Derivative investments		1,340		2,020		1,537		2,085		2,613	95.0%
	Other investments		1,624		1,820		1,778		2,048		2,039	25.6%
	Total investments		102,009		103,199		102,208		106,371		110,587	8.4%
	Cash and invested cash		2,327		3,772		3,146		3,177		4,113	76.8%
	DAC and VOBA		9,150		8,866		9,510		8,984		8,280	-9.5%
	Premiums and fees receivable		415		383		376		401		370	-10.8%
	Accrued investment income		1,064		1,116		1,070		1,108		1,070	0.6%
	Reinsurance recoverables		5,608		5,559		5,623		5,597		5,540	-1.2%
	Funds withheld reinsurance assets		642		639		629		630		628	-2.2%
	Goodwill		2,273		2,273		2,273		2,273		2,273	0.0%
	Other assets		3,617		3,420		3,454		3,671		5,134	41.9%
	Separate account assets		128,079		120,275		123,619		123,506		125,033	-2.4%
	Total assets	$	255,184	$	249,502	$	251,908	$	255,718	$	263,028	3.1%
Page 4a

	Lincoln Financial Group
	Consolidated Balance Sheets
	Unaudited (millions of dollars)
		As of
		6/30/15		9/30/15		12/31/15		3/31/16		6/30/16		Change
	LIABILITIES AND STOCKHOLDERS’ EQUITY
	Liabilities
	Future contract benefits	$	20,166	$	20,523	$	20,708	$	21,438	$	22,147	9.8%
	Other contract holder funds		76,243		76,451		77,362		77,475		77,458	1.6%
	Short-term debt		-		-		-		-		250	NM
	Long-term debt by rating agency leverage definitions:
	Operating (see note (2) on page 6 for details)		1,115		1,115		1,115		1,115		865	-22.4%
	Financial		4,384		4,459		4,438		4,535		4,595	4.8%
	Reinsurance related embedded derivatives		120		116		87		111		134	11.7%
	Funds withheld reinsurance liabilities		718		676		638		597		2,019	181.2%
	Deferred gain on business sold through reinsurance		134		116		98		79		61	-54.5%
	Payables for collateral on investments		4,587		5,297		4,657		5,017		6,297	37.3%
	VIEs' liabilities		3		2		4		-		-	-100.0%
	Other liabilities		4,936		6,071		5,565		7,187		8,249	67.1%
	Separate account liabilities		128,079		120,275		123,619		123,506		125,033	-2.4%
	Total liabilities		240,485		235,101		238,291		241,060		247,108	2.8%
	Stockholders’ Equity
	Common stock		6,469		6,380		6,298		6,162		6,009	-7.1%
	Retained earnings		6,286		6,358		6,474		6,565		6,716	6.8%
	AOCI:
	Unrealized investment gains (losses)		2,220		1,940		1,149		2,235		3,501	57.7%
	Foreign currency translation adjustment		3		(2)		(5)		(7)		(18)	NM
	Funded status of employee benefit plans		(279)		(275)		(299)		(297)		(288)	-3.2%
	Total AOCI		1,944		1,663		845		1,931		3,195	64.4%
	Total stockholders’ equity		14,699		14,401		13,617		14,658		15,920	8.3%
	Total liabilities and stockholders’ equity	$	255,184	$	249,502	$	251,908	$	255,718	$	263,028	3.1%
Page 4b

	Lincoln Financial Group
	Earnings, Shares and Return on Equity
	Unaudited (millions of dollars, except per share data)
		As of or For the Three Months Ended											As of or For the Six Months Ended
		6/30/15		9/30/15		12/31/15		3/31/16		6/30/16		Change	6/30/15		6/30/16		Change
	Income (Loss)
	Net income (loss)	$	344	$	227	$	283	$	208	$	325	-5.5%	$	644	$	533	-17.2%
	Pre-tax income (loss) from operations		490		364		504		397		489	-0.2%		934		888	-4.9%
	After-tax income (loss) from operations (1)		371		289		382		314		373	0.5%		724		687	-5.1%
	Operating tax rate		24.3%		20.6%		24.2%		20.9%		23.7%			22.5%		22.6%
	Average Stockholders’ Equity
	Average equity, including AOCI	$	15,461	$	14,550	$	14,009	$	14,137	$	15,289	-1.1%	$	15,721	$	14,713	-6.4%
	Average AOCI		2,799		1,804		1,254		1,388		2,563	-8.4%		3,087		1,975	-36.0%
	Average equity, excluding AOCI	$	12,662	$	12,746	$	12,755	$	12,749	$	12,726	0.5%	$	12,634	$	12,738	0.8%
	ROE, excluding AOCI
	Net income (loss)		10.9%		7.1%		8.9%		6.5%		10.2%			10.2%		8.4%
	Income (loss) from operations		11.7%		9.1%		12.0%		9.8%		11.7%			11.5%		10.8%
	Per Share
	Net income (loss) (diluted)	$	1.35	$	0.87	$	1.14	$	0.82	$	1.35	0.0%	$	2.50	$	2.17	-13.2%
	Income (loss) from operations (diluted)		1.46		1.11		1.54		1.25		1.56	6.8%		2.81		2.80	-0.4%
	Dividends declared during the period		0.20		0.20		0.25		0.25		0.25	25.0%		0.40		0.50	25.0%
	Book value, including AOCI	$	58.58	$	58.19	$	55.85	$	61.33	$	68.39	16.7%	$	58.58	$	68.39	16.7%
	Per share impact of AOCI		7.75		6.72		3.47		8.08		13.72	77.0%		7.75		13.72	77.0%
	Book value, excluding AOCI	$	50.83	$	51.47	$	52.38	$	53.25	$	54.67	7.6%	$	50.83	$	54.67	7.6%
	Shares
	Repurchased during the period		2.6		3.7		3.7		5.5		6.2	138.5%		8.6		11.8	37.2%
	End-of-period – basic		250.9		247.5		243.8		239.0		232.8	-7.2%		250.9		232.8	-7.2%
	End-of-period – diluted		254.1		251.2		246.7		242.2		236.3	-7.0%		254.1		236.3	-7.0%
	Average for the period – diluted		255.1		253.2		248.9		245.1		239.9	-6.0%		258.3		242.5	-6.1%
	(1) See reconciliation to net income (loss) on page 24.
Page 5

	Lincoln Financial Group
	Key Stakeholder Metrics
	Unaudited (millions of dollars, except per share data)
		As of or For the Three Months Ended											For the Six Months Ended
		6/30/15		9/30/15		12/31/15		3/31/16		6/30/16		Change	6/30/15		6/30/16		Change
	Cash Returned to Common Stockholders
	Shares repurchased	$	150	$	200	$	200	$	200	$	275	83.3%	$	500	$	475	-5.0%
	Common dividends		51		50		49		61		60	17.6%		102		121	18.6%
	Total cash returned to common stockholders	$	201	$	250	$	249	$	261	$	335	66.7%	$	602	$	596	-1.0%
	Leverage Ratio
	Short-term debt	$	-	$	-	$	-	$	-	$	250	NM
	Long-term debt		5,499		5,574		5,553		5,650		5,460	-0.7%
	Total debt (1)		5,499		5,574		5,553		5,650		5,710	3.8%
	Less:
	Operating debt (2)		1,115		1,115		1,115		1,115		1,115	0.0%
	25% of capital securities		301		302		302		302		302	0.3%
	Carrying value of fair value hedges		217		292		270		365		423	94.9%
	Total numerator	$	3,866	$	3,865	$	3,866	$	3,868	$	3,870	0.1%
	Stockholders’ equity, excluding unrealized
	investment gains (losses)	$	12,479	$	12,461	$	12,468	$	12,423	$	12,419	-0.5%
	Add:  25% of capital securities		301		302		302		302		302	0.3%
	Total numerator		3,866		3,865		3,866		3,868		3,870	0.1%
	Total denominator	$	16,646	$	16,628	$	16,636	$	16,593	$	16,591	-0.3%
	Leverage ratio		23.2%		23.2%		23.2%		23.3%		23.3%
	Holding Company Available Liquidity	$	545	$	505	$	608	$	539	$	523	-4.0%
	(1) Excludes obligations under capital leases of $130 million that are reported in other liabilities on our Consolidated Balance Sheets.
	(2) 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.  During
	the second quarter of 2016, we reclassified the senior note issued by our primary insurance subsidiary into short-term debt.
Page 6

	Lincoln Financial Group
	Segment and Sources of Earnings
	Unaudited (millions of dollars)
		For the Three Months Ended											As of or For the Six Months Ended
		6/30/15		9/30/15		12/31/15		3/31/16		6/30/16		Change	6/30/15		6/30/16		Change
	Income (Loss) from Operations, Pre-Tax
	Annuities	$	328	$	328	$	309	$	272	$	296	-9.8%	$	621	$	568	-8.5%
	Retirement Plan Services		39		57		45		41		41	5.1%		88		83	-5.7%
	Life Insurance		152		46		175		103		175	15.1%		308		278	-9.7%
	Group Protection		30		26		20		8		23	-23.3%		20		31	55.0%
	Other Operations		(59)		(93)		(45)		(27)		(46)	22.0%		(103)		(72)	30.1%
	Income (loss) from operations, before income taxes	$	490	$	364	$	504	$	397	$	489	-0.2%	$	934	$	888	-4.9%
	Income (Loss) from Operations, After-Tax
	Annuities	$	255	$	259	$	243	$	218	$	235	-7.8%	$	494	$	453	-8.3%
	Retirement Plan Services		30		42		33		31		31	3.3%		65		61	-6.2%
	Life Insurance		105		36		119		75		120	14.3%		215		195	-9.3%
	Group Protection		19		17		13		5		15	-21.1%		13		20	53.8%
	Other Operations		(38)		(65)		(26)		(15)		(28)	26.3%		(63)		(42)	33.3%
	Income (loss) from operations	$	371	$	289	$	382	$	314	$	373	0.5%	$	724	$	687	-5.1%
			For the Three Months Ended											For the Trailing Twelve Months
			6/30/15		9/30/15		12/31/15		3/31/16		6/30/16	Change		6/30/15		6/30/16	Change
	Sources of Earnings, Pre-Tax
	Investment spread	$	175	$	136	$	179	$	139	$	161	-8.0%	$	736	$	614	-16.6%
	Mortality/morbidity		110		48		115		65		118	7.3%		478		346	-27.6%
	Fees on AUM		218		282		219		191		220	0.9%		879		913	3.9%
	VA riders		46		(9)		36		29		36	-21.7%		167		92	-44.9%
	Total sources of earnings, before income taxes		549		457		549		424		535	-2.6%		2,260		1,965	-13.1%
	Other Operations		(59)		(93)		(45)		(27)		(46)	22.0%		(188)		(210)	-11.7%
	Income (loss) from operations, before income taxes	$	490	$	364	$	504	$	397	$	489	-0.2%	$	2,072	$	1,755	-15.3%
	Sources of Earnings, Pre-Taxes, Percentage By Component
	Investment spread		32.0%		29.7%		32.6%		32.8%		30.0%			32.6%		31.3%
	Mortality/morbidity		19.9%		10.4%		21.0%		15.3%		22.1%			21.1%		17.6%
	Fees on AUM		39.7%		61.9%		39.9%		45.1%		41.2%			38.9%		46.5%
	VA riders		8.4%		-2.0%		6.5%		6.8%		6.7%			7.4%		4.6%
	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											For the Six Months Ended
		6/30/15		9/30/15		12/31/15		3/31/16		6/30/16		Change	6/30/15		6/30/16		Change
	Annuities
	Operating revenues	$	991	$	1,060	$	1,079	$	1,039	$	983	-0.8%	$	1,981	$	2,022	2.1%
	Deposits		3,380		3,304		3,018		2,353		2,113	-37.5%		6,370		4,466	-29.9%
	Net flows		397		536		435		(35)		(452)	NM		593		(486)	NM
	Average account values		125,820		122,668		122,330		118,189		122,383	-2.7%		124,503		120,286	-3.4%
	Retirement Plan Services
	Operating revenues	$	270	$	282	$	276	$	267	$	270	0.0%	$	543	$	537	-1.1%
	Deposits		1,862		1,884		2,095		1,791		1,660	-10.8%		3,567		3,452	-3.2%
	Net flows		306		251		(221)		78		4	-98.7%		422		82	-80.6%
	Average account values		55,264		54,184		54,396		52,999		55,127	-0.2%		54,717		53,957	-1.4%
	Life Insurance
	Operating revenues	$	1,443	$	1,727	$	1,348	$	1,478	$	1,538	6.6%	$	2,874	$	3,016	4.9%
	Deposits		1,344		1,400		1,542		1,238		1,391	3.5%		2,655		2,630	-0.9%
	Net flows		929		1,019		1,170		830		978	5.3%		1,817		1,808	-0.5%
	Average account values		42,891		42,963		43,269		43,795		44,162	3.0%		42,680		43,979	3.0%
	Average in-force face amount		646,261		651,256		657,846		664,753		671,412	3.9%		644,260		668,083	3.7%
	Group Protection
	Operating revenues	$	617	$	570	$	565	$	534	$	525	-14.9%	$	1,222	$	1,059	-13.3%
	Non-medical earned premiums		535		522		516		489		478	-10.7%		1,070		967	-9.6%
	Consolidated
	Operating revenues (1)	$	3,417	$	3,735	$	3,354	$	3,400	$	3,395	-0.6%	$	6,811	$	6,795	-0.2%
	Deposits		6,586		6,588		6,655		5,382		5,164	-21.6%		12,592		10,548	-16.2%
	Net flows		1,632		1,806		1,384		873		530	-67.5%		2,832		1,404	-50.4%
	Average account values		223,975		219,815		219,995		214,983		221,672	-1.0%		221,900		218,222	-1.7%
	(1) See reconciliation to total revenues on page 24.
Page 8

	Lincoln Financial Group
	Sales By Segment
	Unaudited (millions of dollars)
		For the Three Months Ended											For the Six Months Ended
		6/30/15		9/30/15		12/31/15		3/31/16		6/30/16		Change	6/30/15		6/30/16		Change
	Sales
	Annuities:
	With guaranteed living benefits	$	2,157	$	1,991	$	1,698	$	1,248	$	1,164	-46.0%	$	4,139	$	2,412	-41.7%
	Without guaranteed living benefits		858		747		664		437		471	-45.1%		1,573		908	-42.3%
	Variable		3,015		2,738		2,362		1,685		1,635	-45.8%		5,712		3,320	-41.9%
	Fixed		365		566		656		668		478	31.0%		658		1,146	74.2%
	Total Annuities	$	3,380	$	3,304	$	3,018	$	2,353	$	2,113	-37.5%	$	6,370	$	4,466	-29.9%
	Retirement Plan Services:
	First-year sales	$	673	$	706	$	902	$	393	$	431	-36.0%	$	1,055	$	824	-21.9%
	Recurring deposits		1,189		1,178		1,193		1,398		1,229	3.4%		2,512		2,628	4.6%
	Total Retirement Plan Services	$	1,862	$	1,884	$	2,095	$	1,791	$	1,660	-10.8%	$	3,567	$	3,452	-3.2%
	Life Insurance:
	UL	$	22	$	23	$	25	$	18	$	24	9.1%	$	42	$	43	2.4%
	Linked-benefit		46		52		54		42		51	10.9%		86		94	9.3%
	IUL		23		21		27		18		18	-21.7%		38		36	-5.3%
	VUL		43		47		58		29		41	-4.7%		88		70	-20.5%
	Term		21		20		25		25		30	42.9%		40		54	35.0%
	Total individual life insurance		155		163		189		132		164	5.8%		294		297	1.0%
	Executive Benefits		46		10		9		7		9	-80.4%		60		16	-73.3%
	Total Life Insurance	$	201	$	173	$	198	$	139	$	173	-13.9%	$	354	$	313	-11.6%
	Group Protection:
	Life	$	26	$	24	$	86	$	27	$	25	-3.8%	$	51	$	52	2.0%
	Disability		23		22		94		22		30	30.4%		46		52	13.0%
	Dental		13		15		43		10		16	23.1%		21		26	23.8%
	Total Group Protection	$	62	$	61	$	223	$	59	$	71	14.5%	$	118	$	130	10.2%
	Percent employee-paid		44.2%		49.5%		47.4%		54.5%		46.4%			52.1%		50.1%
Page 9

	Lincoln Financial Group
	Operating Revenues and General and Administrative Expenses By Segment
	Unaudited (millions of dollars)
		For the Three Months Ended											For the Six Months Ended
		6/30/15		9/30/15		12/31/15		3/31/16		6/30/16		Change	6/30/15		6/30/16		Change
	Operating Revenues
	Annuities	$	991	$	1,060	$	1,079	$	1,039	$	983	-0.8%	$	1,981	$	2,022	2.1%
	Retirement Plan Services		270		282		276		267		270	0.0%		543		537	-1.1%
	Life Insurance		1,443		1,727		1,348		1,478		1,538	6.6%		2,874		3,016	4.9%
	Group Protection		617		570		565		534		525	-14.9%		1,222		1,059	-13.3%
	Other Operations		96		96		86		82		79	-17.7%		191		161	-15.7%
	Total	$	3,417	$	3,735	$	3,354	$	3,400	$	3,395	-0.6%	$	6,811	$	6,795	-0.2%
	General and Administrative Expenses,
	Net of Amounts Capitalized (1)
	Annuities	$	118	$	113	$	120	$	114	$	114	-3.4%	$	227	$	229	0.9%
	Retirement Plan Services		78		77		80		74		77	-1.3%		149		150	0.7%
	Life Insurance		114		105		115		111		115	0.9%		222		226	1.8%
	Group Protection		71		70		72		69		71	0.0%		138		140	1.4%
	Other Operations		26		56		18		-		9	-65.4%		40		10	-75.0%
	Total	$	407	$	421	$	405	$	368	$	386	-5.2%	$	776	$	755	-2.7%
	General and Administrative Expenses,
	Net of Amounts Capitalized, as a Percentage
	of Operating Revenues
	Annuities		11.9%		10.6%		11.1%		11.0%		11.6%			11.5%		11.3%
	Retirement Plan Services		28.9%		27.2%		29.0%		27.7%		28.3%			27.4%		27.9%
	Life Insurance		7.9%		6.1%		8.5%		7.5%		7.5%			7.7%		7.5%
	Group Protection		11.4%		12.2%		12.7%		13.0%		13.5%			11.3%		13.2%
	Other Operations		27.5%		57.9%		22.0%		0.6%		11.7%			21.0%		6.0%
	Total		11.9%		11.3%		12.1%		10.8%		11.4%			11.4%		11.1%
	(1) See page 11 for general and administrative expenses capitalized.
Page 10

	Lincoln Financial Group
	Operating Commissions and Other Expenses
	Unaudited (millions of dollars)
		For the Three Months Ended											For the Six Months Ended
		6/30/15		9/30/15		12/31/15		3/31/16		6/30/16		Change	6/30/15		6/30/16		Change
	Operating Commissions and
	Other Expenses Incurred
	General and administrative expenses	$	452	$	468	$	465	$	410	$	429	-5.1%	$	868	$	839	-3.3%
	Commissions		602		598		623		522		546	-9.3%		1,178		1,068	-9.3%
	Media expenses		14		-		-		-		-	-100.0%		28		-	-100.0%
	Taxes, licenses and fees		57		63		46		68		64	12.3%		132		133	0.8%
	Interest and debt expense		69		67		68		68		68	-1.4%		137		136	-0.7%
	Expenses associated with reserve financing
	and unrelated letters of credit		18		18		18		18		19	5.6%		37		37	0.0%
	Total operating commissions and other
	expenses incurred		1,212		1,214		1,220		1,086		1,126	-7.1%		2,380		2,213	-7.0%
	Less Amounts Capitalized
	General and administrative expenses		(45)		(47)		(60)		(42)		(43)	4.4%		(92)		(84)	8.7%
	Commissions		(313)		(320)		(340)		(251)		(274)	12.5%		(609)		(525)	13.8%
	Taxes, licenses and fees		(8)		(8)		(7)		(8)		(9)	-12.5%		(16)		(17)	-6.3%
	Total amounts capitalized		(366)		(375)		(407)		(301)		(326)	10.9%		(717)		(626)	12.7%
	Total expenses incurred, net of amounts
	capitalized, excluding amortization		846		839		813		785		800	-5.4%		1,663		1,587	-4.6%
	Amortization
	Amortization of DAC and VOBA		237		674		110		258		244	3.0%		498		501	0.6%
	Amortization of intangibles		1		1		1		1		1	0.0%		2		2	0.0%
	Total amortization		238		675		111		259		245	2.9%		500		503	0.6%
	Total operating commissions and
	other expenses	$	1,084	$	1,514	$	924	$	1,044	$	1,045	-3.6%	$	2,163	$	2,090	-3.4%
Page 11

	Lincoln Financial Group
	Interest Rate Yields and Spreads By Segment
	Unaudited
		For the Three Months Ended											For the Six Months Ended
		6/30/15		9/30/15		12/31/15		3/31/16		6/30/16		Change	6/30/15		6/30/16		Change
	Annuities
	Earned rate on reserves		4.20%		4.19%		4.12%		4.12%		4.08%	(12)		4.22%		4.10%	(12)
	Variable investment income on reserves (1)		0.06%		0.18%		0.15%		0.06%		0.07%	1		0.13%		0.06%	(7)
	Net investment income yield on reserves		4.26%		4.37%		4.27%		4.18%		4.15%	(11)		4.35%		4.16%	(19)
	Interest rate credited to contract holders		2.61%		2.56%		2.53%		2.60%		2.69%	8		2.63%		2.64%	1
	Interest rate spread		1.65%		1.81%		1.74%		1.58%		1.46%	(19)		1.72%		1.52%	(20)
	Base spreads excluding variable investment income		1.59%		1.63%		1.59%		1.52%		1.39%	(20)		1.59%		1.46%	(13)
	Retirement Plan Services
	Earned rate on reserves		4.61%		4.71%		4.62%		4.58%		4.52%	(9)		4.63%		4.55%	(8)
	Variable investment income on reserves (1)		0.03%		0.19%		0.12%		0.05%		0.06%	3		0.10%		0.05%	(5)
	Net investment income yield on reserves		4.64%		4.90%		4.74%		4.63%		4.58%	(6)		4.73%		4.60%	(13)
	Interest rate credited to contract holders		3.01%		3.01%		3.01%		2.98%		3.01%	-		3.01%		3.00%	(1)
	Interest rate spread		1.63%		1.89%		1.73%		1.65%		1.57%	(6)		1.72%		1.60%	(12)
	Base spreads excluding variable investment income		1.60%		1.70%		1.61%		1.60%		1.51%	(9)		1.62%		1.55%	(7)
	Life Insurance
	Earned rate on reserves		5.31%		5.33%		5.33%		5.26%		5.21%	(10)		5.32%		5.22%	(10)
	Variable investment income on reserves (1)		0.19%		0.42%		0.08%		-0.01%		0.15%	(4)		0.21%		0.08%	(13)
	Net investment income yield on reserves		5.50%		5.75%		5.41%		5.25%		5.36%	(14)		5.53%		5.30%	(23)
	Interest rate credited to contract holders		3.97%		3.92%		3.97%		3.92%		3.92%	(5)		3.93%		3.92%	(1)
	Interest rate spread		1.53%		1.83%		1.44%		1.33%		1.44%	(9)		1.60%		1.38%	(22)
	Base spreads excluding variable investment income		1.34%		1.41%		1.36%		1.34%		1.29%	(5)		1.39%		1.30%	(9)
	Total (2)
	Earned rate (3)		4.80%		4.86%		4.85%		4.78%		4.72%	(8)		4.81%		4.73%	(8)
	Variable investment income (1) (3)		0.17%		0.36%		0.09%		-0.01%		0.12%	(5)		0.19%		0.07%	(12)
	Net investment income yield (3)		4.97%		5.22%		4.94%		4.77%		4.84%	(13)		5.00%		4.80%	(20)
	Interest rate credited to contract holders		3.38%		3.34%		3.35%		3.34%		3.36%	(2)		3.36%		3.35%	(1)
	Interest rate spread		1.59%		1.88%		1.59%		1.43%		1.48%	(11)		1.64%		1.45%	(19)
	Base spreads excluding variable investment income		1.42%		1.52%		1.50%		1.44%		1.36%	(6)		1.45%		1.38%	(7)
	(1) Variable investment income consists of commercial mortgage loan prepayment and bond make-whole premiums and investment income on alternative investments.
	(2) Includes the results of all of our business segments and Other Operations.
	(3) Includes investment yields on reserves and surplus.
Page 12

	Lincoln Financial Group
	Annuities – Select Earnings and Operational Data
	Unaudited (millions of dollars)
		As of or For the Three Months Ended											As of or For the Six Months Ended
		6/30/15		9/30/15		12/31/15		3/31/16		6/30/16		Change	6/30/15		6/30/16		Change
	Income (Loss) from Operations
	Operating revenues:
	Insurance premiums	$	55	$	129	$	154	$	151	$	68	23.6%	$	135	$	219	62.2%
	Fee income		531		520		517		493		510	-4.0%		1,041		1,003	-3.7%
	Net investment income		247		257		252		251		258	4.5%		494		509	3.0%
	Operating realized gain (loss)		45		45		44		44		44	-2.2%		87		87	0.0%
	Other revenues		113		109		112		100		103	-8.8%		224		204	-8.9%
	Total operating revenues		991		1,060		1,079		1,039		983	-0.8%		1,981		2,022	2.1%
	Operating expenses:
	Interest credited		139		134		135		140		144	3.6%		283		283	0.0%
	Benefits		90		219		214		216		136	51.1%		218		353	61.9%
	Commissions incurred		267		261		257		218		216	-19.1%		516		434	-15.9%
	Other expenses incurred		231		220		227		218		210	-9.1%		453		428	-5.5%
	Amounts capitalized		(165)		(160)		(146)		(112)		(105)	36.4%		(311)		(217)	30.2%
	Amortization		101		58		83		87		86	-14.9%		201		173	-13.9%
	Total operating expenses		663		732		770		767		687	3.6%		1,360		1,454	6.9%
	Income (loss) from operations before taxes		328		328		309		272		296	-9.8%		621		568	-8.5%
	Federal income tax expense (benefit)		73		69		66		54		61	-16.4%		127		115	-9.4%
	Income (loss) from operations	$	255	$	259	$	243	$	218	$	235	-7.8%	$	494	$	453	-8.3%
	Effective Federal Income Tax Rate		22.4%		20.9%		21.4%		19.8%		20.6%			20.4%		20.2%
	Average Equity, Excluding Goodwill and AOCI	$	4,073	$	4,262	$	4,335	$	4,381	$	4,502	10.5%	$	3,980	$	4,441	11.6%
	ROE, Excluding Goodwill and AOCI		25.0%		24.3%		22.4%		19.9%		20.9%			24.8%		20.4%
	Return on Average Account Values		81		84		79		74		77	(4)		79		75	(4)
	Account Values
	Variable annuity account values:
	Average	$	108,051	$	104,676	$	104,052	$	99,610	$	103,444	-4.3%	$	106,647	$	101,523	-4.8%
	End-of-period		106,600		100,580		103,145		102,902		103,861	-2.6%		106,600		103,861	-2.6%
	Fixed annuity account values:
	Average		17,769		17,992		18,278		18,579		18,939	6.6%		17,856		18,763	5.1%
	End-of-period		17,935		18,027		18,451		18,829		18,990	5.9%		17,935		18,990	5.9%
Page 13

	Lincoln Financial Group
	Retirement Plan Services – Select Earnings and Operational Data
	Unaudited (millions of dollars)
		As of or For the Three Months Ended											As of or For the Six Months Ended
		6/30/15		9/30/15		12/31/15		3/31/16		6/30/16		Change	6/30/15		6/30/16		Change
	Income (Loss) from Operations
	Operating revenues:
	Fee income	$	61	$	60	$	61	$	55	$	57	-6.6%	$	123	$	112	-8.9%
	Net investment income		206		219		213		207		209	1.5%		414		417	0.7%
	Other revenues		3		3		2		5		4	33.3%		6		8	33.3%
	Total operating revenues		270		282		276		267		270	0.0%		543		537	-1.1%
	Operating expenses:
	Interest credited		123		124		126		125		127	3.3%		245		251	2.4%
	Benefits		1		-		-		-		-	-100.0%		1		1	0.0%
	Commissions incurred		20		19		19		19		19	-5.0%		40		39	-2.5%
	Other expenses incurred		85		83		88		82		84	-1.2%		165		165	0.0%
	Amounts capitalized		(7)		(6)		(9)		(6)		(6)	14.3%		(14)		(13)	7.1%
	Amortization		9		5		7		6		5	-44.4%		18		11	-38.9%
	Total operating expenses		231		225		231		226		229	-0.9%		455		454	-0.2%
	Income (loss) from operations before taxes		39		57		45		41		41	5.1%		88		83	-5.7%
	Federal income tax expense (benefit)		9		15		12		10		10	11.1%		23		22	-4.3%
	Income (loss) from operations	$	30	$	42	$	33	$	31	$	31	3.3%	$	65	$	61	-6.2%
	Effective Federal Income Tax Rate		24.1%		27.3%		25.4%		25.8%		25.6%			25.6%		25.7%
	Average Equity, Excluding Goodwill and AOCI	$	993	$	1,010	$	1,045	$	1,067	$	1,098	10.6%	$	1,000	$	1,083	8.3%
	ROE, Excluding Goodwill and AOCI		12.0%		16.4%		12.8%		11.5%		11.2%			13.0%		11.3%
	Pre-tax Net Margin		26.8%		36.2%		29.8%		29.1%		28.8%			29.4%		28.9%
	Return on Average Account Values		22		31		25		23		22	-		24		23	(1)
	Net Flows by Market
	Small Market		2		88		190		13		(22)	NM	$	(17)	$	(9)	47.1%
	Mid - Large Market		555		359		(185)		215		191	-65.6%		943		406	-56.9%
	Multi-Fund®and Other		(251)		(196)		(226)		(150)		(165)	34.3%		(504)		(315)	37.5%
	Net Flows – Trailing Twelve Months	$	(465)	$	(264)	$	452	$	415	$	112	124.1%	$	(465)	$	112	124.1%
Page 14

	Lincoln Financial Group
	Life Insurance – Select Earnings and Operational Data
	Unaudited (millions of dollars)
		As of or For the Three Months Ended											As of or For the Six Months Ended
		6/30/15		9/30/15		12/31/15		3/31/16		6/30/16		Change	6/30/15		6/30/16		Change
	Income (Loss) from Operations
	Operating revenues:
	Insurance premiums	$	160	$	166	$	174	$	172	$	177	10.6%	$	309	$	350	13.3%
	Fee income		647		890		538		687		721	11.4%		1,297		1,408	8.6%
	Net investment income		626		662		628		611		633	1.1%		1,251		1,244	-0.6%
	Operating realized gain (loss)		2		-		(1)		-		-	-100.0%		2		(1)	NM
	Other revenues		8		9		9		8		7	-12.5%		15		15	0.0%
	Total operating revenues		1,443		1,727		1,348		1,478		1,538	6.6%		2,874		3,016	4.9%
	Operating expenses:
	Interest credited		345		344		352		348		349	1.2%		683		697	2.0%
	Benefits		673		578		661		740		708	5.2%		1,323		1,448	9.4%
	Commissions incurred		160		175		199		147		174	8.8%		322		321	-0.3%
	Other expenses incurred		183		182		181		185		193	5.5%		368		378	2.7%
	Amounts capitalized		(182)		(193)		(224)		(165)		(198)	-8.8%		(362)		(363)	-0.3%
	Amortization		112		595		4		120		137	22.3%		232		257	10.8%
	Total operating expenses		1,291		1,681		1,173		1,375		1,363	5.6%		2,566		2,738	6.7%
	Income (loss) from operations before taxes		152		46		175		103		175	15.1%		308		278	-9.7%
	Federal income tax expense (benefit)		47		10		56		28		55	17.0%		93		83	-10.8%
	Income (loss) from operations	$	105	$	36	$	119	$	75	$	120	14.3%	$	215	$	195	-9.3%
	Effective Federal Income Tax Rate		31.4%		22.5%		31.6%		27.5%		31.3%			30.1%		29.9%
	Average Equity, Excluding Goodwill and AOCI	$	6,422	$	6,506	$	6,435	$	6,405	$	6,320	-1.6%	$	6,324	$	6,362	0.6%
	ROE, Excluding Goodwill and AOCI		6.5%		2.2%		7.4%		4.7%		7.6%			6.8%		6.1%
	Average Account Values	$	42,891	$	42,963	$	43,269	$	43,795	$	44,162	3.0%	$	42,680	$	43,979	3.0%
	In-Force Face Amount
	UL and other	$	326,026	$	328,115	$	331,299	$	331,690	$	333,006	2.1%	$	326,026	$	333,006	2.1%
	Term insurance		322,848		325,522		330,755		335,762		342,366	6.0%		322,848		342,366	6.0%
	Total in-force face amount	$	648,874	$	653,637	$	662,054	$	667,452	$	675,372	4.1%	$	648,874	$	675,372	4.1%
Page 15

	Lincoln Financial Group
	Group Protection – Select Earnings and Operational Data
	Unaudited (millions of dollars)
		For the Three Months Ended											For the Six Months Ended
		6/30/15		9/30/15		12/31/15		3/31/16		6/30/16		Change	6/30/15		6/30/16		Change
	Income (Loss) from Operations
	Operating revenues:
	Insurance premiums	$	567	$	519	$	516	$	489	$	478	-15.7%	$	1,128	$	967	-14.3%
	Net investment income		47		48		45		42		43	-8.5%		90		86	-4.4%
	Other revenues		3		3		4		3		4	33.3%		4		6	50.0%
	Total operating revenues		617		570		565		534		525	-14.9%		1,222		1,059	-13.3%
	Operating expenses:
	Interest credited		1		-		1		1		1	0.0%		1		1	0.0%
	Benefits		421		386		387		340		345	-18.1%		862		685	-20.5%
	Commissions incurred		69		62		63		62		61	-11.6%		135		124	-8.1%
	Other expenses incurred		93		95		104		93		97	4.3%		187		189	1.1%
	Amounts capitalized		(12)		(16)		(27)		(15)		(17)	-41.7%		(30)		(31)	-3.3%
	Amortization		15		17		17		45		15	0.0%		47		60	27.7%
	Total operating expenses		587		544		545		526		502	-14.5%		1,202		1,028	-14.5%
	Income (loss) from operations before taxes		30		26		20		8		23	-23.3%		20		31	55.0%
	Federal income tax expense (benefit)		11		9		7		3		8	-27.3%		7		11	57.1%
	Income (loss) from operations	$	19	$	17	$	13	$	5	$	15	-21.1%	$	13	$	20	53.8%
	Effective Federal Income Tax Rate		35.0%		35.0%		35.0%		35.0%		35.0%			35.0%		35.0%
	Average Equity, Excluding Goodwill and AOCI	$	1,238	$	1,228	$	1,217	$	1,203	$	1,159	-6.4%	$	1,239	$	1,181	-4.7%
	ROE, Excluding Goodwill and AOCI		6.3%		5.4%		4.4%		1.8%		5.1%			2.1%		3.4%
	Loss Ratios by Product Line
	Life		72.0%		70.5%		72.3%		71.1%		70.4%			74.8%		70.8%
	Disability		75.4%		79.3%		79.5%		67.2%		74.8%			77.5%		71.0%
	Dental		72.3%		70.3%		69.1%		73.5%		70.4%			72.6%		71.9%
	Total non-medical		73.6%		74.5%		75.3%		69.6%		72.5%			75.8%		71.0%
Page 16

	Lincoln Financial Group
	Other Operations – Select Earnings and Operational Data
	Unaudited (millions of dollars)
		For the Three Months Ended											For the Six Months Ended
		6/30/15		9/30/15		12/31/15		3/31/16		6/30/16		Change	6/30/15		6/30/16		Change
	Other Operations
	Operating revenues:
	Insurance premiums	$	1	$	11	$	4	$	3	$	4	300.0%	$	1	$	9	NM
	Net investment income		61		67		62		61		56	-8.2%		125		115	-8.0%
	Amortization of deferred gain on
	business sold through reinsurance		18		18		18		18		18	0.0%		35		35	0.0%
	Media revenues		16		-		-		-		-	-100.0%		31		-	-100.0%
	Other revenues		-		-		2		-		1	NM		(1)		2	300.0%
	Total operating revenues		96		96		86		82		79	-17.7%		191		161	-15.7%
	Operating expenses:
	Interest credited		20		20		19		20		19	-5.0%		41		39	-4.9%
	Benefits		30		52		31		29		32	6.7%		57		59	3.5%
	Media expenses		14		-		-		-		-	-100.0%		28		-	-100.0%
	Commissions and other expenses		22		50		13		(8)		6	-72.7%		31		(1)	NM
	Interest and debt expenses		69		67		68		68		68	-1.4%		137		136	-0.7%
	Total operating expenses		155		189		131		109		125	-19.4%		294		233	-20.7%
	Income (loss) from operations before taxes		(59)		(93)		(45)		(27)		(46)	22.0%		(103)		(72)	30.1%
	Federal income tax expense (benefit)		(21)		(28)		(19)		(12)		(18)	14.3%		(40)		(30)	25.0%
	Income (loss) from operations	$	(38)	$	(65)	$	(26)	$	(15)	$	(28)	26.3%	$	(63)	$	(42)	33.3%
Page 17

	Lincoln Financial Group
	Consolidated – DAC, VOBA, DSI and DFEL Roll Forwards
	Unaudited (millions of dollars)
		For the Three Months Ended											For the Six Months Ended
		6/30/15		9/30/15		12/31/15		3/31/16		6/30/16		Change	6/30/15		6/30/16		Change
	DAC, VOBA, and DSI
	Balance as of beginning-of-period	$	8,391	$	9,394	$	9,111	$	9,766	$	9,235	10.1%	$	8,447	$	9,766	15.6%
	Business acquired (sold) through reinsurance		15		2		-		-		-	-100.0%		15		-	-100.0%
	Deferrals		375		380		415		309		332	-11.5%		732		640	-12.6%
	Operating amortization		(246)		(681)		(117)		(265)		(250)	-1.6%		(515)		(514)	0.2%
	Deferrals, net of operating amortization		129		(301)		298		44		82	-36.4%		217		126	-41.9%
	Amortization associated with benefit ratio unlocking		1		15		(3)		2		(1)	NM		-		-	NM
	Adjustment related to realized (gains) losses		(15)		(26)		20		(4)		(1)	93.3%		(12)		(4)	66.7%
	Adjustment related to unrealized (gains) losses		873		27		340		(573)		(793)	NM		727		(1,366)	NM
	Balance as of end-of-period	$	9,394	$	9,111	$	9,766	$	9,235	$	8,522	-9.3%	$	9,394	$	8,522	-9.3%
	DFEL
	Balance as of beginning-of-period	$	1,322	$	1,797	$	1,593	$	1,952	$	1,696	28.3%	$	1,401	$	1,952	39.3%
	Deferrals		128		141		150		136		150	17.2%		247		286	15.8%
	Operating amortization		(73)		(306)		78		(84)		(92)	-26.0%		(149)		(176)	-18.1%
	Deferrals, net of operating amortization		55		(165)		228		52		58	5.5%		98		110	12.2%
	Amortization associated with benefit ratio unlocking		-		2		(1)		-		-	NM		-		-	NM
	Adjustment related to realized (gains) losses		(2)		(3)		1		(1)		1	150.0%		(3)		-	100.0%
	Adjustment related to unrealized (gains) losses		422		(38)		131		(307)		(398)	NM		301		(704)	NM
	Balance as of end-of-period	$	1,797	$	1,593	$	1,952	$	1,696	$	1,357	-24.5%	$	1,797	$	1,357	-24.5%
	DAC, VOBA, DSI, and DFEL Balance as
	of End-of-Period, After-Tax	$	4,938	$	4,887	$	5,079	$	4,900	$	4,657	-5.7%	$	4,938	$	4,657	-5.7%
Page 18

	Lincoln Financial Group
	Annuities – Account Value Roll Forwards
	Unaudited (millions of dollars)
		For the Three Months Ended											For the Six Months Ended
		6/30/15		9/30/15		12/31/15		3/31/16		6/30/16		Change	6/30/15		6/30/16		Change
	Fixed Annuities
	Balance as of beginning-of-period	$	18,651	$	18,597	$	18,672	$	19,082	$	19,448	4.3%	$	18,661	$	19,082	2.3%
	Gross deposits		365		566		656		668		478	31.0%		658		1,146	74.2%
	Full surrenders and deaths		(377)		(357)		(276)		(285)		(345)	8.5%		(682)		(631)	7.5%
	Other contract benefits		(166)		(168)		(176)		(127)		(130)	21.7%		(315)		(256)	18.7%
	Net flows		(178)		41		204		256		3	101.7%		(339)		259	176.4%
	Reinvested interest credited		117		31		200		103		143	22.2%		263		246	-6.5%
	Sales inducements deferred		7		3		6		7		4	-42.9%		12		11	-8.3%
	Balance as of end-of-period, gross		18,597		18,672		19,082		19,448		19,598	5.4%		18,597		19,598	5.4%
	Reinsurance ceded		(662)		(645)		(631)		(619)		(608)	8.2%		(662)		(608)	8.2%
	Balance as of end-of-period, net	$	17,935	$	18,027	$	18,451	$	18,829	$	18,990	5.9%	$	17,935	$	18,990	5.9%
	Variable Annuities
	Balance as of beginning-of-period	$	106,279	$	106,600	$	100,581	$	103,146	$	102,903	-3.2%	$	104,073	$	103,146	-0.9%
	Gross deposits		3,015		2,738		2,362		1,685		1,635	-45.8%		5,712		3,320	-41.9%
	Full surrenders and deaths		(1,501)		(1,299)		(1,122)		(1,030)		(1,160)	22.7%		(2,903)		(2,191)	24.5%
	Other contract benefits		(939)		(944)		(1,009)		(946)		(930)	1.0%		(1,877)		(1,874)	0.2%
	Net flows		575		495		231		(291)		(455)	NM		932		(745)	NM
	Change in market value and reinvestment		(254)		(6,514)		2,334		48		1,413	NM		1,595		1,460	-8.5%
	Balance as of end-of-period, gross		106,600		100,581		103,146		102,903		103,861	-2.6%		106,600		103,861	-2.6%
	Reinsurance ceded		-		(1)		(1)		(1)		-	NM		-		-	NM
	Balance as of end-of-period, net	$	106,600	$	100,580	$	103,145	$	102,902	$	103,861	-2.6%	$	106,600	$	103,861	-2.6%
	Total
	Balance as of beginning-of-period	$	124,930	$	125,197	$	119,253	$	122,228	$	122,351	-2.1%	$	122,734	$	122,228	-0.4%
	Gross deposits		3,380		3,304		3,018		2,353		2,113	-37.5%		6,370		4,466	-29.9%
	Full surrenders and deaths		(1,878)		(1,656)		(1,398)		(1,315)		(1,505)	19.9%		(3,585)		(2,822)	21.3%
	Other contract benefits		(1,105)		(1,112)		(1,185)		(1,073)		(1,060)	4.1%		(2,192)		(2,130)	2.8%
	Net flows		397		536		435		(35)		(452)	NM		593		(486)	NM
	Change in market value and reinvestment		(137)		(6,483)		2,534		151		1,556	NM		1,858		1,706	-8.2%
	Sales inducements deferred		7		3		6		7		4	-42.9%		12		11	-8.3%
	Balance as of end-of-period, gross		125,197		119,253		122,228		122,351		123,459	-1.4%		125,197		123,459	-1.4%
	Reinsurance ceded		(662)		(646)		(632)		(620)		(608)	8.2%		(662)		(608)	8.2%
	Balance as of end-of-period, net	$	124,535	$	118,607	$	121,596	$	121,731	$	122,851	-1.4%	$	124,535	$	122,851	-1.4%
Page 19

	Lincoln Financial Group
	Retirement Plan Services – Account Value Roll Forwards
	Unaudited (millions of dollars)
		For the Three Months Ended											For the Six Months Ended
		6/30/15		9/30/15		12/31/15		3/31/16		6/30/16		Change	6/30/15		6/30/16		Change
	General Account
	Balance as of beginning-of-period	$	16,288	$	16,469	$	16,649	$	16,588	$	16,727	2.7%	$	16,229	$	16,588	2.2%
	Gross deposits		452		425		562		420		448	-0.9%		870		869	-0.1%
	Withdrawals and deaths		(478)		(547)		(821)		(572)		(483)	-1.0%		(1,019)		(1,055)	-3.5%
	Net flows		(26)		(122)		(259)		(152)		(35)	-34.6%		(149)		(186)	-24.8%
	Transfers between fixed and variable accounts		84		176		71		168		178	111.9%		145		344	137.2%
	Reinvestment interest credited		123		126		127		123		126	2.4%		244		250	2.5%
	Balance as of end-of-period	$	16,469	$	16,649	$	16,588	$	16,727	$	16,996	3.2%	$	16,469	$	16,996	3.2%
	Separate Account and Mutual Funds
	Balance as of beginning-of-period	$	38,344	$	38,520	$	36,195	$	37,512	$	37,772	-1.5%	$	37,310	$	37,512	0.5%
	Gross deposits		1,410		1,459		1,533		1,371		1,212	-14.0%		2,697		2,583	-4.2%
	Withdrawals and deaths		(1,078)		(1,086)		(1,495)		(1,141)		(1,173)	-8.8%		(2,126)		(2,315)	-8.9%
	Net flows		332		373		38		230		39	-88.3%		571		268	-53.1%
	Transfers between fixed and variable accounts		(81)		(161)		(62)		(149)		(155)	-91.4%		(155)		(303)	-95.5%
	Change in market value and reinvestment		(75)		(2,537)		1,341		179		778	NM		794		957	20.5%
	Balance as of end-of-period	$	38,520	$	36,195	$	37,512	$	37,772	$	38,434	-0.2%	$	38,520	$	38,434	-0.2%
	Total
	Balance as of beginning-of-period	$	54,632	$	54,989	$	52,844	$	54,100	$	54,499	-0.2%	$	53,539	$	54,100	1.0%
	Gross deposits		1,862		1,884		2,095		1,791		1,660	-10.8%		3,567		3,452	-3.2%
	Withdrawals and deaths		(1,556)		(1,633)		(2,316)		(1,713)		(1,656)	-6.4%		(3,145)		(3,370)	-7.2%
	Net flows		306		251		(221)		78		4	-98.7%		422		82	-80.6%
	Transfers between fixed and variable accounts		3		15		9		19		23	NM		(10)		41	NM
	Change in market value and reinvestment		48		(2,411)		1,468		302		904	NM		1,038		1,207	16.3%
	Balance as of end-of-period	$	54,989	$	52,844	$	54,100	$	54,499	$	55,430	0.8%	$	54,989	$	55,430
Page 20

	Lincoln Financial Group
	Life Insurance – Account Value Roll Forwards
	Unaudited (millions of dollars)
		For the Three Months Ended											For the Six Months Ended
		6/30/15		9/30/15		12/31/15		3/31/16		6/30/16		Change	6/30/15		6/30/16		Change
	General Account
	Balance as of beginning-of-period	$	34,753	$	34,930	$	35,213	$	35,545	$	35,640	2.6%	$	34,612	$	35,545	2.7%
	Deposits		964		1,012		1,082		945		992	2.9%		1,885		1,938	2.8%
	Withdrawals and deaths		(299)		(214)		(208)		(317)		(294)	1.7%		(598)		(612)	-2.3%
	Net flows		665		798		874		628		698	5.0%		1,287		1,326	3.0%
	Contract holder assessments		(830)		(855)		(882)		(868)		(898)	-8.2%		(1,644)		(1,767)	-7.5%
	Reinvested interest credited		342		340		340		335		335	-2.0%		675		671	-0.6%
	Balance as of end-of-period, gross		34,930		35,213		35,545		35,640		35,775	2.4%		34,930		35,775	2.4%
	Reinsurance ceded		(773)		(770)		(763)		(763)		(760)	1.7%		(773)		(760)	1.7%
	Balance as of end-of-period, net	$	34,157	$	34,443	$	34,782	$	34,877	$	35,015	2.5%	$	34,157	$	35,015	2.5%
	Separate Account
	Balance as of beginning-of-period	$	9,635	$	9,766	$	9,213	$	9,696	$	9,830	2.0%	$	9,263	$	9,696	4.7%
	Deposits		380		388		460		293		399	5.0%		770		692	-10.1%
	Withdrawals and deaths		(116)		(167)		(164)		(91)		(119)	-2.6%		(240)		(210)	12.5%
	Net flows		264		221		296		202		280	6.1%		530		482	-9.1%
	Contract holder assessments		(127)		(132)		(143)		(135)		(143)	-12.6%		(258)		(278)	-7.8%
	Change in market value and reinvestment		(6)		(642)		330		67		205	NM		231		272	17.7%
	Balance as of end-of-period, gross		9,766		9,213		9,696		9,830		10,172	4.2%		9,766		10,172	4.2%
	Reinsurance ceded		(864)		(788)		(809)		(786)		(785)	9.1%		(864)		(785)	9.1%
	Balance as of end-of-period, net	$	8,902	$	8,425	$	8,887	$	9,044	$	9,387	5.4%	$	8,902	$	9,387	5.4%
	Total
	Balance as of beginning-of-period	$	44,388	$	44,696	$	44,426	$	45,241	$	45,470	2.4%	$	43,875	$	45,241	3.1%
	Deposits		1,344		1,400		1,542		1,238		1,391	3.5%		2,655		2,630	-0.9%
	Withdrawals and deaths		(415)		(381)		(372)		(408)		(413)	0.5%		(838)		(822)	1.9%
	Net flows		929		1,019		1,170		830		978	5.3%		1,817		1,808	-0.5%
	Contract holder assessments		(957)		(987)		(1,025)		(1,003)		(1,041)	-8.8%		(1,902)		(2,045)	-7.5%
	Change in market value and reinvestment		336		(302)		670		402		540	60.7%		906		943	4.1%
	Balance as of end-of-period, gross		44,696		44,426		45,241		45,470		45,947	2.8%		44,696		45,947	2.8%
	Reinsurance ceded		(1,637)		(1,558)		(1,572)		(1,549)		(1,545)	5.6%		(1,637)		(1,545)	5.6%
	Balance as of end-of-period, net	$	43,059	$	42,868	$	43,669	$	43,921	$	44,402	3.1%	$	43,059	$	44,402	3.1%
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	Lincoln Financial Group
	Select Investment Data
	Unaudited (millions of dollars)
		As of 6/30/15				As of 12/31/15				As of 6/30/16
		Amount		%		Amount		%		Amount		%
	AFS and Trading Securities, at Fair Value
	AFS securities:
	Corporate bonds	$	74,169		84.1%	$	74,032		84.5%	$	80,129		85.2%
	U.S. government bonds		428		0.5%		429		0.5%		464		0.5%
	Foreign government bonds		540		0.6%		524		0.6%		530		0.6%
	Mortgage-backed securities		4,476		5.1%		4,104		4.7%		3,975		4.2%
	Asset-backed collateralized debt obligations		499		0.6%		589		0.7%		687		0.7%
	State and municipal bonds		4,418		5.0%		4,480		5.1%		4,985		5.3%
	Hybrid and redeemable preferred securities		892		1.0%		806		0.9%		691		0.7%
	VIEs’ fixed maturity securities		598		0.7%		598		0.7%		600		0.6%
	Equity securities		227		0.3%		237		0.3%		277		0.3%
	Total AFS securities		86,247		97.9%		85,799		98.0%		92,338		98.1%
	Trading securities		1,949		2.1%		1,854		2.0%		1,812		1.9%
	Total AFS and trading securities	$	88,196		100.0%	$	87,653		100.0%	$	94,150		100.0%
	AFS and Trading Securities, at Amortized Cost
	Fixed maturity securities	$	82,746		99.7%	$	84,241		99.7%	$	85,187		99.7%
	Equity securities		213		0.3%		226		0.3%		259		0.3%
	Total AFS and trading securities	$	82,959		100.0%	$	84,467		100.0%	$	85,446		100.0%
	Percentage of Fixed Maturity AFS Securities, at Amortized Cost
	Investment grade				95.1%				95.1%				94.7%
	Below investment grade				4.9%				4.9%				5.3%
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	Lincoln Financial Group
	Realized Gain (Loss) and Benefit Ratio Unlocking, After-DAC
	Unaudited (millions of dollars)
		For the Three Months Ended											For the Six Months Ended
		6/30/15		9/30/15		12/31/15		3/31/16		6/30/16		Change	6/30/15		6/30/16		Change
	Realized Gain (Loss), Pre-Tax
	Total operating realized gain (loss)	$	47	$	45	$	43	$	44	$	44	-6.4%	$	89	$	86	-3.4%
	Total excluded realized gain (loss)		(37)		(18)		(183)		(158)		(89)	NM		(127)		(245)	-92.9%
	Total realized gain (loss), pre-tax	$	10	$	27	$	(140)	$	(114)	$	(45)	NM	$	(38)	$	(159)	NM
	Excluded Realized Gain (Loss) Net of
	Benefit Ratio Unlocking, After-Tax
	Total excluded realized gain (loss)	$	(23)	$	(11)	$	(118)	$	(102)	$	(57)	NM	$	(83)	$	(159)	-91.6%
	Benefit ratio unlocking		(4)		(51)		19		(4)		9	NM		2		4	100.0%
	Net gain (loss), after-tax	$	(27)	$	(62)	$	(99)	$	(106)	$	(48)	-77.8%	$	(81)	$	(155)	-91.4%
	Realized Gain (Loss) Net of Benefit Ratio
	Unlocking, After-Tax
	Realized gain (loss) related to investments	$	(14)	$	(26)	$	(35)	$	(64)	$	(47)	NM	$	(24)	$	(112)	NM
	Variable annuity net derivative results:
	Hedge program performance, including unlocking
	for GLB reserves hedged		-		(102)		(13)		(94)		(23)	NM		(35)		(117)	NM
	GLB non-performance risk component		(8)		84		(43)		67		24	NM		(1)		91	NM
	Total variable annuity net derivative results		(8)		(18)		(56)		(27)		1	112.5%		(36)		(26)	27.8%
	Indexed annuity forward-starting option		(4)		(18)		(8)		(15)		(2)	50.0%		(19)		(17)	10.5%
	Gain (loss) on sale of subsidiaries/businesses		(1)		-		-		-		-	100.0%		(2)		-	100.0%
	Excluded realized gain (loss) net of
	benefit ratio unlocking, after-tax	$	(27)	$	(62)	$	(99)	$	(106)	$	(48)	-77.8%	$	(81)	$	(155)	-91.4%
	Components of Realized Gain (Loss)
	Related to Investments, After-Tax
	OTTI	$	(5)	$	(12)	$	(10)	$	(23)	$	(18)	NM	$	(13)	$	(42)	NM
	Other realized gain (loss) related to certain investments		4		(4)		(12)		(46)		(24)	NM		(5)		(70)	NM
	Gain (loss) on the mark-to-market on certain instruments		(13)		(10)		(13)		5		(5)	61.5%		(6)		-	100.0%
	Total realized gain (loss) related
	to investments, after-tax	$	(14)	$	(26)	$	(35)	$	(64)	$	(47)	NM	$	(24)	$	(112)	NM
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	Lincoln Financial Group
	Select GAAP to Non-GAAP Reconciliations
	Unaudited (millions of dollars)
		For the Three Months Ended											For the Six Months Ended
		6/30/15		9/30/15		12/31/15		3/31/16		6/30/16		Change	6/30/15		6/30/16		Change
	Revenues
	Total revenues	$	3,381	$	3,716	$	3,172	$	3,243	$	3,307	-2.2%	$	6,685	$	6,551	-2.0%
	Less:
	Excluded realized gain (loss)		(37)		(18)		(183)		(158)		(89)	NM		(127)		(245)	-92.9%
	Amortization of DFEL on benefit ratio unlocking		-		(2)		-		-		-	NM		-		-	NM
	Amortization of deferred gains arising from reserve
	changes on business sold through reinsurance		1		1		1		1		1	0.0%		1		1	0.0%
	Operating revenues	$	3,417	$	3,735	$	3,354	$	3,400	$	3,395	-0.6%	$	6,811	$	6,795	-0.2%
	Net Income
	Net income (loss)	$	344	$	227	$	283	$	208	$	325	-5.5%	$	644	$	533	-17.2%
	Less:
	Excluded realized gain (loss)		(23)		(11)		(118)		(102)		(57)	NM		(83)		(159)	-91.6%
	Benefit ratio unlocking		(4)		(51)		19		(4)		9	NM		2		4	100.0%
	Income (loss) from reserve changes (net of related
	amortization) on business sold through reinsurance		-		-		-		-		-	NM		1		1	0.0%
	Income (loss) from operations	$	371	$	289	$	382	$	314	$	373	0.5%	$	724	$	687	-5.1%
	Earnings (Loss) Per Common Share – Diluted
	Net income (loss)	$	1.35	$	0.87	$	1.14	$	0.82	$	1.35	0.0%	$	2.50	$	2.17	-13.2%
	Less:
	Excluded realized gain (loss)		(0.09)		(0.04)		(0.48)		(0.41)		(0.25)	NM		(0.32)		(0.65)	NM
	Benefit ratio unlocking		(0.02)		(0.20)		0.08		(0.02)		0.04	300.0%		0.01		0.02	100.0%
	Income (loss) from operations	$	1.46	$	1.11	$	1.54	$	1.25	$	1.56	6.8%	$	2.81	$	2.80	-0.4%
Page 24