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

                February 6, 2007                

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.)

1500 Market Street, West Tower, Suite 3900, Philadelphia, Pennsylvania 19102-2112

(Address of principal executive offices) (Zip Code)

(215) 448-1400

(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 February 6, 2007, the registrant issued a press release announcing its financial results for the quarter ended December 31, 2006, a copy of which is attached as Exhibit 99.1 and is incorporated herein by reference, and the registrant’s statistical supplement for the quarter ended December 31, 2006 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 February 6, 2007, announcing Lincoln National Corporation’s financial results for the quarter ended December 31, 2006.
99.2	Lincoln National Corporation Statistical Supplement for the Quarter Ended December 31, 2006.

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:	Vice President and
	Chief Accounting Officer

Date: February 6, 2007

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press release dated February 6, 2007, announcing Lincoln National Corporation’s financial results for the quarter ended December 31, 2006.
99.2	Lincoln National Corporation Statistical Supplement for the Quarter Ended December 31, 2006.

EX-99.1

Exhibit 99.1

NEWS RELEASE

Lincoln Financial Group Reports Fourth Quarter and Full-Year 2006 Earnings

A Year of Record Individual Variable Annuity Deposits and Net Flows, Strong Individual Life Insurance Sales, and Earnings Over $1.3 Billion

Philadelphia, PA, February 6, 2007 - Lincoln National Corporation (NYSE:LNC) today reported net income of $381.3 million, or $1.36 per diluted share, for the fourth quarter of 2006. By comparison, net income for the fourth quarter of 2005 was $225.4 million, or $1.28 per diluted share. For the full year of 2006, net income was $1.32 billion, or a record $5.13 per diluted share, versus $831.1 million, or $4.72 per diluted share, in 2005.

Income from operations for the fourth quarter of 2006 was $375.2 million, or $1.34 per diluted share, compared to fourth quarter 2005 income from operations of $231.4 million, or $1.31 per diluted share. For the full year of 2006, income from operations reached $1.32 billion, or a record $5.14 per diluted share, compared to $832.7 million, or $4.73 per diluted share, in 2005. The growth in income from operations was positively impacted by the merger with Jefferson-Pilot that closed on April 3, 2006. Return on equity (ROE), based on income from operations, was 13.1% for the year. The attached table defines and reconciles income from operations and ROE, non-GAAP measures, to net income and ROE calculated in accordance with GAAP.

Consolidated Domestic Deposits and Net Flows

Consolidated retail deposits, which include individual annuities, mutual funds, life insurance and other personal wealth accumulation products together with retirement products sold into the employer-sponsored marketplace, were $7.8 billion, up 16% over the fourth quarter of 2005. For the full-year, consolidated retail deposits were $29.1 billion, up 8% over a record year in 2005. While both periods were modestly impacted by the merger, record variable annuity deposits drove most of the growth. Lincoln reported consolidated retail net flows for the quarter of $1.4 billion and $6.3 billion for the full year.

Strong investment management institutional deposits of $4.9 billion combined with lower terminations to drive a 54% increase in institutional net flows in the fourth

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quarter as compared to the year-ago quarter. Full-year institutional deposits and net flows were $15.1 billion and $8.0 billion, respectively.

At December 31, 2006, consolidated assets under management were $234 billion.

“This year was monumental for Lincoln Financial as our employees worked diligently to integrate two great companies, create new reporting structures and align all our businesses under a single guiding strategy, Retirement Income Security. All this was accomplished while delivering uninterrupted performance across our retail product lines, hitting our major integration milestones, and reporting record earnings per share,” said Jon A. Boscia, chairman and chief executive officer of Lincoln Financial Group. “Our strong earnings and capital position allowed us to return $1.4 billion of capital to shareholders in 2006 through stock repurchase activity and dividend payments,” added Boscia.

Individual Markets

Individual Annuities

Fourth Quarter Results

Income from operations for the Individual Annuities segment was $123.8 million in the fourth quarter of 2006 versus $70.9 million in the year ago period. The current quarter included a net positive impact of approximately $11 million, after tax, related to a release in variable annuity living benefit reserves, a tax-related adjustment, and better than expected investment results.

In the quarter, gross deposits were $3.2 billion and net flows for the segment were $892 million. Deposits into variable annuity products reached a record $2.6 billion, fueling record net flows of $1.4 billion in the quarter. The segment’s variable product account value was $51.8 billion at the end of the fourth quarter, a 25% increase over fourth quarter of 2005.

“Variable annuity sales were up 35% over last year’s quarter in the independent planner channel, a distribution outlet that presents a tremendous opportunity for Lincoln to capture market share in 2007,” said Boscia.

Full-year Results

Full-year income from operations for the Individual Annuities segment was $408.5 million, compared to $252.0 million for 2005. The increase in earnings was driven by strong growth in account values and the merger with Jefferson-Pilot which added to fixed annuity account balances and related spread-based income.

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For the year, gross deposits were $10.8 billion and net flows were $2.7 billion, driven by record variable product deposits and net flows, as both increased over 25% year-over-year.

Lincoln’s i4LIFE^®Advantage, a patented retirement income management tool, recorded elections of $1.7 billion in 2006, up 70% over full-year 2005 elections and almost doubling total assets under management to $3.2 billion.

“While the industry has experienced low historical annuitization rates, Lincoln’s unique annuitization solution, i4LIFE^®Advantage, accounted for an impressive 18% of our individual variable annuity deposits, evidence that our next-generation products are meeting the needs of retirement income security,” said Boscia.

Individual Life Insurance

Fourth Quarter Results

Individual Life Insurance income from operations was $157.4 million, compared to $73.8 million in the fourth quarter of 2005. The current quarter benefited by approximately $10 million, after tax, due to better than expected investment income and mortality experience.

Individual life insurance sales, reported as paid annualized premium, were $218.1 million in the fourth quarter, up 37% over combined Lincoln and Jefferson-Pilot sales in the same period last year. Results were driven by strong universal life sales in the quarter, which benefited from year-over-year increases in wholesaler productivity, sales in Lincoln’s retail platform, and efficiency gains in underwriting and new business.

Full-year Results

Income from operations for the Individual Life Insurance segment was $496.3 million in 2006 versus $259.5 million a year ago. The year-over-year variance was primarily driven by the Jefferson-Pilot merger and continued growth in average account value and in-force.

Full-year life insurance sales were up 9% over combined Lincoln and Jefferson Pilot in 2005.“In a product line heavily impacted by integration efforts, our distribution and manufacturing organizations remained focused on new business,” said Boscia. “Following the merger, Lincoln’s leadership in the life insurance industry has increased our presence in all the channels we serve,” added Boscia.

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Employer Markets

Defined Contribution

Fourth Quarter Results

Fourth quarter income from operations for Defined Contribution was $44.6 million, versus $45.2 million for the same period a year ago. The 2006 quarter included approximately $3 million, after tax, of net negative items primarily related to less than expected investment income results and expense-related items.

In the quarter, gross deposits were $1.1 billion, equaling the previous year's results. Results were driven by an increase in the number of cases and overall deposits into Lincoln Alliance^® Program, a medium to large case employer-sponsored retirement plan solution largely focused on the Healthcare and Education markets. These inflows were predominantly offset by lower sales and deposits in Lincoln Director^SM, a small-case group variable annuity product, which underwent changes in its distribution model during 2006.

Full-year Results

Full-year income from operations for Defined Contribution was $203.8 million, compared to $187.1 million for 2005. Positive flows and the market’s impact on average account values contributed to the favorable year-over-year results.

“Lincoln’s Employer Markets segment is well-positioned to leverage its existing position in the defined contribution marketplace and the recent regulatory changes that will serve as a catalyst for long-term growth in this sector. We are committed to investing in this high-potential business to capitalize on these opportunities,” said Boscia.

Executive Benefits

Fourth Quarter and Full-year Results

In the quarter, income from operations for Executive Benefits was $12.7 million, compared to $9.5 million in the fourth quarter of 2005. Executive Benefits reported full-year income from operations of $49.2 million versus $19.6 million in 2005. The growth in results was primarily driven by the Jefferson-Pilot merger in both periods.

Group Protection

Fourth Quarter Results

For the fourth quarter, Group Protection’s income from operations was $33.2 million, up 84% over the prior year period, as reported by Jefferson-Pilot adjusted for purchase accounting. The current quarter continued to benefit from better than expected non-medical loss ratios, contributing approximately $6 million, after tax, to earnings; additional items added approximately $3 million, after tax, to the current period’s results.

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In the quarter, annualized premiums for new business were a record $113 million, up 40% versus the 2005 quarter as reported by Jefferson-Pilot. Sales benefited from the expansion of an existing relationship and targeted pricing adjustments.

Merger-to-Date Results

Merger-to-date income from operations for Group Protection was $99 million, compared to $53.0 million for the same period in 2005 as reported by Jefferson-Pilot. Results in 2006 were driven by very favorable non-medical loss ratios over the course of the period and the positive impact of purchase accounting.

Investment Management

Fourth Quarter Results

The Investment Management segment reported income from operations of $14.4 million in the fourth quarter of 2006, which compares to $8.9 million in the prior year period. The 2006 quarter continued to benefit from strong net flows and positive equity markets, driving growth in assets under management and margin expansion.

Total deposits and net flows for the quarter were $8.1 billion and $2.5 billion, respectively. Third-party assets under management of $97.3 billion grew 25% over the fourth quarter of 2005.

Full-year Results

For 2006, the Investment Management segment reported income from operations of $55.1 million, versus $16.8 million in 2005. The growth in earnings was driven by an increase in third-party assets under management and cost containment initiatives, while last year’s results were negatively impacted by expenses related to talent acquisition. The segment’s pre tax operating margin for 2006 was 15.0%.

For the year, total deposits were $28.1 billion, down only slightly from a record year in 2005, and total net flows reached $9.2 billion.

“Despite the closing of two highly-successful strategies earlier in the year due to capacity constraints, Delaware continued to attract significant deposits for the quarter and the full year. Total net flows in 2006 as a percent of beginning period assets under management was 12%, among the highest in the industry,” said Boscia.

Lincoln UK

Fourth Quarter Results

For the fourth quarter, the UK segment’s income from operations was $9.9 million, versus $13.6 million in the same year ago period. The year ago quarter’s results included a net positive impact primarily related to deferred acquisition cost unlocking.

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Full-year Results

For the year, the UK segment reported income from operations of $38.9 million, versus $43.3 million in 2005.

Lincoln Financial Media

Fourth Quarter Results

Lincoln Financial Media income from operations was $17.5 million in the fourth quarter of 2006, flat compared to prior year period as reported by Jefferson-Pilot. The year-over-year variance was negatively impacted by the amortization of intangibles caused by purchase accounting in the 2006 period.

Merger-to-Date Results

Merger-to-date income from operations for Lincoln Financial Media was $44.0 million, compared to $46.6 million for the same period in 2005 as reported by Jefferson-Pilot. The year-over-year variance was negatively impacted by merger-related purchase accounting adjustments in the 2006 period.

Other Operations

The composition of Other Operations has undergone significant change when compared to prior-year results. The changes include the addition of income from corporate held assets of the former Jefferson-Pilot, income on capital not allocated to other business segments, reallocation of distribution expenses to the business segments, and certain expenses retained in Other Operations.

Fourth Quarter Results

The operating loss in Other Operations was $38.4 million in the quarter, versus income from operations of $9.6 million in the prior-year quarter. The fourth quarter of 2006 included merger-related expenses of $12.4 million, after tax, and approximately $3 million, after tax, of unfavorable expense items. The 2005 quarter included positive tax-related adjustments.

Full-year Results

Other Operations for the full year of 2006 reported an operating loss of $75.8 million compared to income from operations of $54.3 million in 2005. Results in 2006 included $31.8 million, after tax, of merger-related expenses. Results in 2005 were driven by favorable tax benefits recognized throughout the year.

Capital and Share Repurchase

As of December 31, 2006, the book value per share of Lincoln National Corporation common stock, excluding accumulated other comprehensive income, was

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$41.99, compared with $33.66 a year ago. Book value per share, including accumulated other comprehensive income, was $44.21, compared with $36.69 a year ago. Lincoln repurchased 2.5 million shares in the quarter at a total cost of $150 million. For the full year, Lincoln repurchased 16.9 million shares for approximately $1 billion.

2007 Outlook

Statement Of Position (SOP) 05-1 Impact

In the first quarter of 2007, Lincoln will be adopting SOP 05-1, which addresses the accounting for deferred acquisition costs (DAC) on internal replacements of insurance and annuity contracts. The adoption of this new guidance impacts our assumptions of lapsation used in the amortization of DAC and the value of business acquired (VOBA) on some of our blocks of business. The adoption is estimated to result in reductions to our DAC and VOBA assets between $75 million and $100 million, pre tax, which will be recorded as a reduction to retained earnings with no impact on net income or income from operations. The SOP 05-1 will have an impact on income from operations going forward and is expected to result in additional DAC and VOBA amortization of $15-20 million, pre tax, in 2007. The reduction to DAC and VOBA and the impact to income will primarily reside in both the individual annuities and group protection businesses and assumes replacement activity as defined under the SOP 05-1 is comparable to recent years.

Merger Integration

Lincoln Financial remains on track for achieving the $90 million pre tax savings in the first year after closing the merger. The company maintains its run-rate guidance on merger-related savings of $180 million, pre tax, in the three years following the merger, with approximately 80% in the second year of the merger. Merger-related expenses in 2007 are expected to range from $90-110 million, pre tax.

Individual Annuities

Lincoln expects results to benefit from solid variable flows and growth in account values, recognizing results are sensitive to equity markets. Fixed annuity spreads are expected to remain stable throughout 2007. Modest seasonality from customary volume increases in the fourth quarter of 2006 contributed approximately $3 million in income from operations. A similar pattern of seasonality is expected to repeat in 2007.

Individual Life Insurance

Lincoln anticipates income from operations to steadily build off mid-single-digit growth in in-force and account values, while spreads are expected to remain stable.

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Normal seasonality in the business contributed approximately $5 million, after tax, to results in the fourth quarter of 2006; a similar pattern is expected to continue in 2007.

Employer Markets

In 2007, Lincoln expects to continue to invest in the new Employer Markets’ businesses to implement strategic and tactical initiatives, including information technology improvements and wholesaling capabilities. Lincoln anticipates income from operations for the Defined Contribution segment to build modestly on fourth quarter results after adjusting for the negative items in the period.

For the Group Protection segment, Lincoln anticipates non-medical loss ratios will be in the 71-74% range with sales benefiting from distribution enhancements and pricing actions taken in 2006.

Earnings Estimates

For investment management, Lincoln expects income from operations in the low $60 million range and pre tax operating margins to increase by approximately 100 basis points by the end of 2007, recognizing results are sensitive to equity markets.

For the UK segment, Lincoln expects earnings in the upper $30 million range, assuming stable exchange rates and including investments in retirement income security initiatives.

For Lincoln Financial Media, Lincoln anticipates income from operations to be in the mid $50 million range, recognizing this segment’s earnings are seasonally higher in the fourth quarter and lower in the first quarter of the year.

For the full year, Lincoln expects no material change in deferred gain amortization and an estimated interest expense of $65-70 million per quarter, pre tax.

Capital Management

Lincoln intends to repurchase approximately $500 million of stock by the end of the first quarter of 2007 pursuant to an accelerated stock repurchase program.

This outlook contains estimates that are forward-looking, and actual results may differ materially. Lincoln’s actual experience in 2007 will almost certainly differ from many of the assumptions utilized in the outlook and the company’s expectations for these and a large number of other factors will probably change, leading us to revise our estimates over time. 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.

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Lincoln National Corporation will discuss the company’s fourth quarter results and outlook for 2007 with investors in a conference call beginning at 11:00 a.m. (ET) on Wednesday, February 7, 2007. The company will also post its fourth quarter 2006 statistical supplement on its Web site, www.LFG.com.

 Lincoln Financial Group is the marketing name for Lincoln National Corporation (NYSE:LNC) and its affiliates. With headquarters in Philadelphia, the companies of Lincoln Financial Group had assets under management of $234 billion as of December 31, 2006. Through its affiliated companies, Lincoln Financial Group offers: annuities; life, group life and disability insurance; 401(k) and 403(b) plans; savings plans; mutual funds; managed accounts; institutional investments; and comprehensive financial planning and advisory services.  Affiliates also include: Delaware Investments, the marketing name for Delaware Management Holdings, Inc. and its subsidiaries; Lincoln Financial Media, which owns and operates three television stations, 17 radio stations, and the Lincoln Financial Sports production and syndication business; and Lincoln UK. For more information please visit www.LFG.com.

Contacts:	Jim Sjoreen	Laurel O’Brien
	215 448-1420	215 255-1520
	Investor Relations	Media Relations
	investorrelations@LFG.com	mediarelations@LFG.com

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Definition of Income (Loss) from Operations and ROE

Income (loss) from operations and ROE, as used in the earnings release, are non-GAAP financial measures and are not substitutes for net income (loss) and ROE, calculated using GAAP measures. Income (loss) from operations represents after tax results excluding, as applicable, realized gains or losses on investments and derivatives, cumulative effect of accounting changes, reserve changes on business sold through reinsurance, gain on sale of subsidiaries and book of business and loss on early retirement of debt. The earnings used to calculate ROE, as used in the earnings release, are income (loss) from operations. Income (loss) from operations is an internal measure used by the company in the management of its operations. Management believes that this performance measure explains the results of the company's ongoing operations in a manner that allows for a better understanding of the underlying trends in the company's current business because the excluded items are either unpredictable and/or not related to decisions regarding the underlying businesses.

	For the Quarter Ended						For the Year Ended
($ in millions, except per share data)	December 31,						December 31,
	2006			2005			2006			2005
Net Income	$	381.3		$	225.4		$	1,315.6		$	831.1
Less:
Net realized gains (losses) on investments
and derivatives		9.4			(6.2	)		(2.6	)		(14.7	)
Net gain on reinsurance
derivative/trading account securities		0.1			-			2.0			3.0
Reserve development and related amortization
on business sold through reinsurance		0.2			0.2			0.8			0.8
Gain on sale of subsidiaries/ businesses		-			-			-			9.3
Loss on early retirement of debt		(3.6	)		-			(3.6	)		-
Income from Operations	$	375.2		$	231.4		$	1,319.0		$	832.7
Earnings per share (diluted)
Net Income	$	1.36		$	1.28		$	5.13		$	4.72
Income from Operations	$	1.34		$	1.31		$	5.14		$	4.73
Average Equity
(Excluding accumulated other comprehensive income)	$	11,512.0		$	5,760.0		$	10,054.0		$	5,507.1
Return on Equity
Net Income		13.2	%		15.7	%		13.1	%		15.1	%
Income from Operations		13.0	%		16.1	%		13.1	%		15.1	%

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LINCOLN NATIONAL CORPORATION

DIGEST OF EARNINGS

	For the Quarter Ended
($ in millions, except per share data)	December 31
	2006		2005
Revenue	$	2,658.4	$	1,386.3
Net Income	$	381.3	$	225.4
EPS -Basic	$	1.38	$	1.30
EPS - Diluted	$	1.36	$	1.28
Avg. Shares - Basic		275,884,056		173,220,352
Avg. Shares - Diluted		280,418,102		176,603,149
	For the Year Ended
	December 31
		2006		2005
Revenue	$	9,062.9	$	5,474.8
Net Income	$	1,315.6	$	831.1
EPS -Basic	$	5.21	$	4.80
EPS - Diluted	$	5.13	$	4.72
Avg. Shares - Basic		252,363,042		173,069,552
Avg. Shares - Diluted		256,169,266		176,144,243

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This press release and oral statements made by company officials may contain information that includes or is based upon forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other words and terms of similar meaning in connection with a discussion of future operating or financial performance. In particular, these include statements relating to future actions, prospective services or products, future results of sales efforts, the outcome of contingencies, such as legal proceedings, trends in operations and financial results.

Any or all forward-looking statements may turn out to be wrong. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Many such factors will be important in determining our actual future results. These statements are based on current expectations and the current economic environment. They involve a number of risks and uncertainties that are difficult to predict. These statements are not guarantees of future performance. Actual results could differ materially from those expressed or implied in the forward-looking statements. Among factors that could cause actual results to differ materially are:

•   Problems arising with the ability to successfully integrate our and Jefferson-Pilot Corporation’s businesses, which may affect our ability to operate as effectively and efficiently as expected or to achieve the expected synergies from the merger or to achieve such synergies within our expected timeframe and the impact of the application of purchase accounting on results of operations;

•   Legislative, regulatory or tax changes, both domestic and foreign, that affect the cost of, or demand for, our products, the required amount of reserves and/or surplus, or otherwise affect our ability to conduct business, including changes to statutory reserves and/or risk-based capital requirements related to secondary guarantees under universal life and variable annuity products such as Actuarial Guideline VACARVM; restrictions on revenue sharing and 12b-1 payments; and the potential for U.S. Federal tax reform;

•   The initiation of legal or regulatory proceedings against LNC or its subsidiaries and the outcome of any legal or regulatory proceedings, such as: (a) adverse actions related to present or past business practices common in businesses in which LNC and its subsidiaries compete; (b) adverse decisions in significant actions including, but not limited to, actions brought by federal and state authorities, and extra-contractual and class action damage cases; (c) new decisions that result in changes in law; and (d) unexpected trial court rulings;

•   Changes in interest rates causing a reduction of investment income, the margins of our fixed annuity and life insurance businesses and demand for our products;

•   A decline in the equity markets causing a reduction in the sales of our products, a reduction of asset fees that LNC charges on various investment and insurance products, an acceleration of amortization of deferred acquisition costs, the value of business acquired , deferred sales inducements and deferred front-end loads and an increase in liabilities related to guaranteed benefit features of our variable annuity products;

•   Ineffectiveness of our various hedging strategies used to offset the impact of declines in the equity markets;

•   A deviation in actual experience regarding future persistency, mortality, morbidity, interest rates or equity market returns from our assumptions used in pricing our products, in establishing related insurance reserves, and in the amortization of intangibles that may result in an increase in reserves and a decrease in net income;

•   Changes in accounting principles generally accepted in the U.S. that may result in unanticipated changes to our net income, including the impact of the application of the Statement Of Position 05-1;

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

•   Significant credit, accounting, fraud or corporate governance issues that may adversely affect the value of certain investments in the portfolios of our companies requiring that LNC realize losses on such investments;

•   The impact of acquisitions and divestitures, restructurings, product withdrawals and other unusual items, including our ability to integrate acquisitions and to obtain the anticipated results and synergies from acquisitions;

•   The adequacy and collectibility of reinsurance that we have purchased;

•   Acts of terrorism or war, pandemics, 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 we can charge for our products;

•   The unknown impact on our business resulting from changes in the demographics of our client base, as aging baby-boomers move from the asset-accumulation stage to the asset-distribution stage of life;

•   Loss of key management, portfolio managers in the Investment Management segment, financial planners or wholesalers; and

•   Changes in general economic or business conditions, both domestic and foreign, that may be less favorable than expected and may affect foreign exchange rates, premium levels, claims experience, the level of pension benefit costs and funding, and investment results.

The risks included here are not exhaustive. We describe additional risks in our recent Forms 10-K, 10-Q and 8-K and other documents filed with the Securities and Exchange Commission. 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 business 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, we disclaim any current intention to update any forward-looking statements to reflect events or circumstances that occur after the date of this document.

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EX-99.2

Lincoln Statistical Report

......................................Fourth Q U A R T E R...............

      2006

The financial data in this document is dated February 6, 2007 and has not been updated since that date. LNC does not intend to update this document.

Lincoln Financial Group
Statistical Report
Fourth Quarter
2006
Table of Contents
LFG Analyst Coverage
Notes
Financial Highlights	1 - 4
Consolidated Expense Detail	5
Operating Results Summary	6
Consolidated Statements of Income	7
Consolidating Statements of Income from Operations	8-11
Consolidated Balance Sheet	12
Balance Sheet Data - Segment Highlights	13
Individual Markets
Individual Life Insurance
Income Statements & Operational Data	14
Operational Data	15
Account Value Roll Forward	16
Individual Annuities
Income Statements & Operational Data	17
Account Value Roll Forward	18
Account Values	19
Employer Markets
Defined Contribution
Income Statements & Operational Data	20
Account Value Roll Forward	21
Supplemental Data	22
Executive Benefits
Income Statements & Operational Data	23
Account Value Roll Forward and Supplemental Data	24
Group Protection
Income Statements & Operational Data	25
Supplemental Data	26
Investment Management
Income Statements	27
Assets Under Management Roll Forward	28
Lincoln UK
Income Statements	29
Operational Data	30
Lincoln Financial Media	31
Other Operations	31
Domestic Deposits / Account Balances / Net Flows	32
Investment Data
Assets Managed	33
Other Investment Data	34

12/31/2006			ii
NOTES
On April 3, 2006, LNC completed its previously announced merger with Jefferson Pilot Corporation ("JP"). Beginning with the second quarter of 2006, we are reporting results through the following segments: Individual Markets - Annuities, Individual Markets - Life Insurance, Employer markets - Retirement Products, Employer Markets - Group Protection, Investment Management, Lincoln UK and Lincoln Financial Media. Historical information presented in this report has been restated to reflect the new organizational structure. As described below, certain reclassifications have been made to historically reported items to reflect the new reporting practices of LNC.
Definitions and Presentation
"Income from Operations," "Operating Revenue," "Return on Capital," and "Station Operating Income" are non-GAAP financial measures and do not replace GAAP revenue and net income (loss). Detailed reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measure are included in this statistical supplement.
*	We exclude the after-tax effects of the following items from GAAP net income to arrive at income from operations:
		* Realized gains and losses on investments and derivatives,
		* Gains and losses related to reinsurance embedded derivatives/trading account securities,
		* The cumulative effect of accounting changes,
		* Reserve changes on business sold through reinsurance net of related deferred gain amortization,
		* Gains and losses on the sale of subsidiaries and blocks of business, and
		* Loss on early retirement of debt, including subordinated debt
		NOTE: Income from operations is lower than previously reported as it now includes restructuring charges previously excluded in the determination of income from operations
*	Operating revenue represents revenue excluding the following, as applicable:
		* Realized gains or losses on investments and derivatives,
		* Gains and losses related to reinsurance embedded derivatives/trading account securities,
		* Gains and losses on the sale of subsidiaries and blocks of business, and
		* Deferred gain amortization related to reserve changes on business sold through reinsurance
*	Return on capital measures the effectiveness of LNC's use of its total capital, which includes equity (excluding accumulated other comprehensive income), debt, capital securities and junior subordinated debentures issued to affiliated trusts. Return on capital is calculated by dividing annualized income from operations (after adding back interest expense) by average capital. The difference between return on capital and return on shareholders' equity represents the effect of leveraging on LNC's consolidated results.
*	Station operating income is calculated as communications revenues less operating costs and expenses before depreciation and amortization.
Income from operations, operating revenue, return on capital, and station operating income are internal measures used by LNC in the management of its operations. Management believes that these performance measures explain the results of operations of LNC's ongoing operations in a manner that allows for a better understanding of the underlying trends in LNC's current business because the excluded items are either unpredictable and/or not related to decisions regarding the underlying businesses.
*	Certain operating and statistical measures are included in this report to provide supplemental data regarding the performance of LNC’s current business. These measures include deposits, sales, net flows, first year premium, inforce, spreads, and assets under management.
*	Sales as reported consist of the following:
		* Universal life ("UL"), including Moneyguard, and COLI - first year commissionable premium plus 5% of excess premium received, including UL internal replacements
		* Whole life and term - first year paid premium
		* Annuity - deposits from new and existing customers
		* Group Protection - annualized first year premium from new policies
		* Investment Management Retail Sales and Institutional Inflows - contributions, transfer in kind purchases, and reinvested  dividends for new and existing accounts.
Reclassifications
Certain reclassifications have been made in the historical presentation of certain revenue and expense items. The principal reclassifications consist of the following:
*	Deferred Front End Loads ("DFEL") - capitalization and amortization of DFEL is reported as a component of expense assessments revenue. Depending on the segment, these had previously been reported as a component of either other revenue, benefits expense or DAC amortization.
*	Investment Management Advisory Fees and General and Administrative Expenses - certain reclassifications have been made between revenue and expenses for such items as distribution fees and management fee waivers to conform to current industry practices.
*	Commissions and general & administrative expenses - we reclassified certain distribution expenses to commissions which had previously been reported in general & administrative expenses. This change impacted the Individual Markets Life segment and is also reflected in our consolidated presentation.
*	We made several reclassifications within our Other Operations income statement to separately present intersegment eliminations affecting revenues and expenses and we have also disclosed some additional line items. These changes were incorporated into all pages that reference Other Operations.

12/31/2006																									PAGE 1
Financial Highlights
Unaudited [Millions of Dollars, except Common Share Data]
	For the Quarter Ended December 31												For the Year Ended December 31
	2006			2005									2006			2005
	Amount			Amount			Change			% Change			Amount			Amount			Change			% Change
Income from Operations - By Segment
Individual Life Insurance	$	157.4		$	73.8		$	83.6			113.3	%	$	496.3		$	259.5		$	236.8			91.3	%
Individual Annuities		123.8			70.9			52.9			74.6	%		408.5			252.0			156.5			62.1	%
Individual Markets		281.1			144.7			136.4			94.3	%		904.7			511.5			393.2			76.9	%
Defined Contribution		44.6			45.2			(0.6	)		-1.3	%		203.8			187.1			16.7			8.9	%
Executive Benefits		12.7			9.5			3.2			33.7	%		49.2			19.6			29.6			151.0	%
Group Protection		33.2			-			33.2			NM			99.0			-			99.0			NM
Employer Markets		90.5			54.7			35.8			65.4	%		352.0			206.7			145.3			70.3	%
Investment Management		14.4			8.9			5.5			61.8	%		55.1			16.8			38.3			228.0	%
Lincoln UK		9.9			13.6			(3.7	)		-27.2	%		38.9			43.3			(4.4	)		-10.2	%
Lincoln Financial Media		17.5			-			17.5			NM			44.0			-			44.0			NM
Other Operations		(38.4	)		9.6			(48.0	)		NM			(75.8	)		54.3			(130.1	)		NM
Total Income from Operations (1)		375.2			231.4			143.8			62.1	%		1,319.0			832.7			486.3			58.4	%
Realized gains (losses)		9.4			(6.1	)		15.5			254.1	%		(2.6	)		(14.6	)		12.0			82.2	%
Net gain (loss) on reinsurance
derivative/trading account securities		0.1			-			0.1			NM			2.0			3.0			(1.0	)		-33.3	%
Gain on sale of subsidiaries/ businesses		-			-			-			NM			-			9.3			(9.3	)		-100.0	%
Reserve development/ amortization of related deferred gain		0.2			0.2			-			-			0.9			0.8			0.1			12.5	%
Loss on early retirement of subordinated debt		(3.6	)		-			(3.6	)		NM			(3.6	)		-			(3.6	)		NM
Net Income	$	381.3		$	225.4		$	155.9			69.2	%	$	1,315.6		$	831.1		$	484.5			58.3	%
Earnings per share (diluted)
Income from Operations (1)	$	1.34		$	1.31		$	0.03			2.3	%	$	5.14		$	4.73		$	0.41			8.7	%
Realized losses		0.03			(0.03	)		0.06			200.0	%		(0.01	)		(0.08	)		0.07			87.5	%
Net gain (loss) on reinsurance
derivative/trading account securities		-			-			-			NM			0.01			0.02			(0.01	)		-50.0	%
Gain on sale of subsidiaries/ businesses		-			-			-			NM			-			0.05			(0.05	)		-100.0	%
Reserve development/ amortization of related deferred gain		-			-			-			NM			-			-			-			NM
Loss on early retirement of subordinated debt		(0.01	)		-			(0.01	)		NM			(0.01	)		-			(0.01	)		NM
Net Income	$	1.36		$	1.28		$	0.08			6.3	%	$	5.13		$	4.72		$	0.41			8.7	%
Operating Revenue- By Segment
Individual Life Insurance	$	958.4		$	501.1		$	457.3			91.3	%	$	3,255.8		$	1,910.6		$	1,345.2			70.4	%
Individual Annuities		637.3			372.1			265.2			71.3	%		2,161.3			1,422.5			738.8			51.9	%
Individual Markets		1,595.7			873.2			722.5			82.7	%		5,417.1			3,333.1			2,084.0			62.5	%
Defined Contribution		245.0			241.2			3.8			1.6	%		988.0			947.5			40.5			4.3	%
Executive Benefits		109.1			61.6			47.5			77.1	%		371.8			227.4			144.4			63.5	%
Group Protection		344.8			-			344.8			NM			1,031.8			-			1,031.8			NM
Employer Markets		698.9			302.8			396.1			130.8	%		2,391.6			1,174.9			1,216.7			103.6	%
Investment Management		148.9			127.9			21.0			16.4	%		563.5			475.3			88.2			18.6	%
Lincoln UK		84.8			62.6			22.2			35.5	%		308.0			318.4			(10.4	)		-3.3	%
Lincoln Financial Media		70.2			-			70.2			NM			187.8			-			187.8			NM
Other Operations		45.6			28.9			16.7			57.8	%		196.4			175.2			21.2			12.1	%
Total Operating Revenue		2,644.2			1,395.4			1,248.8			89.5	%		9,064.3			5,476.8			3,587.5			65.5	%
Realized losses		12.8			(9.3	)		22.1			237.6	%		(6.7	)		(22.1	)		15.4			69.7	%
Gain (loss) on reinsurance
derivative/trading account securities		1.2			-			1.2			NM			4.1			4.6			(0.5	)		-10.9	%
Gain on sale of subsidiaries/ businesses		-			-			-			NM			-			14.2			(14.2	)		-100.0	%
Amortization of deferred gain-reserve development		0.3			0.3			-			-			1.3			1.2			0.1			8.3	%
Total Revenue	$	2,658.4		$	1,386.4		$	1,272.0			91.7	%	$	9,062.9		$	5,474.8		$	3,588.1			65.5	%

⁽¹⁾ Income from operations includes after-tax restructuring charges of $2.1 million, or 1 cent per share, and $1.1 million, or 1 cent per share, for the quarters ended December 31, 2006 and 2005, respectively, and $9.3 million, or 4 cents per share, and $19.0 million, or 11 cents per share, for the full year ended December 31, 2006 and 2005, respectively.

12/31/2006																					PAGE 2
Financial Highlights
Unaudited [in Billions]
Operational Data by Segment	For the Quarter Ended December 31												For the Year Ended December 31
	2006			2005									2006			2005
	Amount			Amount			Change			% Change			Amount			Amount		Change			% Change
Individual Markets
Individual Annuities
Gross deposits	$	3.161		$	1.999		$	1.161			58.1	%	$	10.756		$	7.526	$	3.230			42.9	%
Net flows		0.892			0.767			0.125			16.3	%		2.665			2.876		(0.211	)		-7.3	%
Account values (gross)		66.714			48.495			18.219			37.6	%		66.714			48.495		18.219			37.6	%
Account values (net of reinsurance)		64.902			46.262			18.640			40.3	%		64.902			46.262		18.640			40.3	%
Individual Life Insurance
Sales (in millions) (1)		218.1			90.7			127.4			140.5	%		570.8			303.2		267.6			88.3	%
Life insurance in-force		501.376			316.641			184.736			58.3	%		501.376			316.641		184.736			58.3	%
Account values		26.490			14.051			12.439			88.5	%		26.490			14.051		12.439			88.5	%
Employer Markets
Defined Contribution
Gross deposits (2)	$	1.099		$	1.078		$	0.021			1.9	%	$	4.585		$	4.403	$	0.182			4.1	%
Net flows		0.010			(0.026	)		0.036			138.5	%		0.342			0.419		(0.078	)		-18.6	%
Account values - annuities		28.482			26.701			1.781			6.7	%		28.482			26.701		1.781			6.7	%
Alliance Mutual Funds		5.175			3.772			1.403			37.2	%		5.175			3.772		1.403			37.2	%
Account values including Alliance Mutual Funds		33.656			30.473			3.184			10.4	%		33.656			30.473		3.184			10.4	%
Executive Benefits
COLI/BOLI sales (in millions)		32.5			11.1			21.4			192.8	%		82.9			49.8		33.1			66.5	%
Life insurance in-force		15.645			7.729			7.917			102.4	%		15.645			7.729		7.917			102.4	%
Account values		4.305			1.318			2.987			226.6	%		4.305			1.318		2.987			226.6	%
Group Protection
Annualized sales (in millions)		113.1			-			113.1			NM			208.7			-		208.7			NM
Loss ratio (3)		69.1	%		-			NM			NM			67.4	%		-		NM			NM
Investment Management Segment
Retail deposits	$	3.192		$	3.629		$	(0.437	)		-12.0	%	$	12.991		$	15.101	$	(2.110	)		-14.0	%
Retail net flows		(0.140	)		1.148			(1.288	)		NM			1.187			6.442		(5.255	)		-81.6	%
Institutional in-flows		4.888			4.833			0.055			1.1	%		15.102			16.302		(1.200	)		-7.4	%
Institutional net flows		2.666			1.733			0.934			53.9	%		7.991			8.778		(0.787	)		-9.0	%
Total Deposits and In-flows		8.080			8.462			(0.382	)		-4.5	%		28.093			31.403		(3.310	)		-10.5	%
Total Net Flows		2.526			2.881			(0.354	)		-12.3	%		9.177			15.220		(6.043	)		-39.7	%
Assets Under Management- Retail and Institutional		97.307			77.633			19.674			25.3	%		97.307			77.633		19.674			25.3	%
Assets Under Management - General Account		67.066			43.086			23.981			55.7	%		67.066			43.086		23.981			55.7	%
Assets Under Management - Total Segment		164.373			120.719			43.654			36.2	%		164.373			120.719		43.654			36.2	%
Consolidated
Domestic Retail Deposits	$	7.805		$	6.737		$	1.068			15.9	%	$	29.060		$	26.835	$	2.225			8.3	%
Domestic Retail Account Balances		165.287			121.858			43.428			35.6	%		165.287			121.858		43.428			35.6	%
Domestic Retail Net Flows		1.390			2.354			(0.964	)		-41.0	%		6.266			11.144		(4.878	)		-43.8	%
Domestic Deposits		12.584			11.305			1.279			11.3	%		43.229			42.107		1.121			2.7	%
Domestic Net Flows		4.125			4.285			(0.160	)		-3.7	%		14.378			20.045		(5.666	)		-28.3	%
Assets Under Management		233.523			171.755			61.768			36.0	%		233.523			171.755		61.768			36.0	%
(1) Sales for Individual Life Insurance consist of first year commissionable premium for Universal life ("UL"), including Moneyguard, and COLI plus 5% of excess premium received, including UL internal replacements, and first year paid premiums for Whole life and Term products
(2) Includes deposits for Alliance Mutual Funds which are not included in separate account liabilities on our balance sheet.
(3) Represents combined loss ratio for Life, Disability and Dental business.

12/31/2006																							PAGE 3
Financial Highlights
Unaudited [Millions of Dollars, except Common Share Data]
	For the Quarter Ended December 31											For the Year Ended December 31
	2006 Amount			2005 Amount			Change		% Change			2006 Amount			2005 Amount			Change		% Change
Balance Sheet Assets - End of Period	$	178,493.7		$	124,859.6		$	53,634.2		43.0	%	$	178,493.7		$	124,859.6		$	53,634.2		43.0	%
Shareholders' Equity
Beg of period (including AOCI)	$	12,043.2		$	6,284.4		$	5,758.7				$	6,384.4		$	6,175.6		$	208.8
End of period (including AOCI)		12,201.0			6,384.4			5,816.6					12,201.0			6,384.4			5,816.6
End of period (excluding AOCI)		11,587.9			5,856.6			5,731.3					11,587.9			5,856.6			5,731.3
Average equity (excluding AOCI)		11,512.0			5,760.0			5,751.9					10,054.0			5,507.1			4,546.9
Return on Equity
Net income/average equity (excluding AOCI)		13.2	%		15.7	%							13.1	%		15.1	%
Inc from operations/average equity (excluding AOCI)		13.0	%		16.1	%							13.1	%		15.1	%
Return on Capital
Inc from operations/average capital		10.6	%		13.6	%							10.7	%		12.6	%
Common Stock Outstanding
Average for the period - diluted		280.4			176.6			103.8		58.8	%		256.2			176.1			80.0		45.4	%
End of period - assuming conv of preferreds		276.0			174.0			101.9		58.6	%		276.0			174.0			101.9		58.6	%
End of period - diluted		280.2			176.9			103.3		58.4	%		280.2			176.9			103.3		58.4	%
Book value (including AOCI)	$	44.21		$	36.69		$	7.52		20.5	%	$	44.21		$	36.69		$	7.52		20.5	%
Book value (excluding AOCI)	$	41.99		$	33.66		$	8.34		24.8	%	$	41.99		$	33.66		$	8.34		24.8	%
Cash Returned to Shareholders
Share repurchase - dollar amount	$	150.0		$	-		$	150.0				$	1,002.5		$	103.6		$	898.9
Dividends declared to shareholders		108.9			66.6			42.3					428.6			257.7			170.8
Total Cash Returned to Shareholders	$	258.9		$	66.6		$	192.3				$	1,431.1		$	361.3		$	1,069.8
Share repurchase - number of shares		2.504			-			2.504					16.877			2.331			14.546
Dividend declared on common stock - per share	$	0.395		$	0.380		$	0.015		3.9	%	$	1.535		$	1.475		$	0.060		4.1	%
Dividend payout ratio (1)		29.0	%		29.7	%							29.9	%		31.3	%
Annualized yield (2)		2.4	%		2.9	%							2.3	%		2.8	%
Comprehensive Income (Loss)
Net income	$	381.3		$	225.4							$	1,315.6		$	831.1
Net unrealized gains (losses) on securities		(8.4	)		(72.4	)							(27.0	)		(326.3	)
Gains (losses) on derivatives		6.5			(1.5	)							55.1			(6.7	)
Foreign currency translation		28.7			(16.1	)							81.7			(70.9	)
Minimum pension liability adjustment		63.2			(2.9	)							59.5			1.0
Adjustment to initially apply SFAS 158 (4)		(84.0	)		-								(84.0	)		-
Comprehensive Income	$	387.3		$	132.4							$	1,400.9		$	428.2
Ratios:
Debt to total capitalization (3)		21.1	%		19.9	%							21.1	%		19.9	%
Debt to equity (3)		26.7	%		24.8	%							26.7	%		24.8	%
Ratings as of February 5, 2007:
		A.M. Best			Fitch			Moody's		Standard & Poors
Senior Debt Ratings:		a			A			A3		A+
Financial Strength Ratings:
Lincoln National Life Insurance Company		A+			AA			Aa3		AA
First Penn-Pacific Life Insurance Company		A+			AA			A1		AA-
Lincoln Life & Annuity Company of New York		A+			AA			Aa3		AA
Jefferson-Pilot Life Insurance Company		A+			AA			Aa3		AA
Jefferson Pilot Financial Insurance Company		A+			AA			Aa3		AA
Jefferson Pilot LifeAmerica Insurance Company		A+			AA			N/R		AA
[1] Indicated dividend divided by net income
[2] Indicated dividend divided by the closing price
[3] Equity used in calculation excludes accumulated other comprehensive income (loss). Capital securities are considered 25% debt and 75% equity. The calculation for the second quarter of 2006 includes adjustments to beginning equity for stock issued in connection with the April 3, 2006 merger with Jefferson-Pilot Corporation ("JP") and the accelerated stock repurchase transaction.
[4] SFAS 158 was adopted effective December 31, 2006 which requires the disclosure of the funded status of our pension and post-retirement benefit plans on the balance sheet.

12/31/2006																		PAGE 4
Combined Production Data (1)
Unaudited [in Billions]
	Three Months Ended													Year Ended
	Dec.		March		June		Sept.		Dec.		%			Dec.		Dec.		%
	2005		2006		2006		2006		2006		Change			2005		2006		Change
Individual Markets
Individual Life Insurance
Sales by Product (millions)
Universal Life
Excluding MoneyGuard	$	117.2	$	83.4	$	97.5	$	119.9	$	177.6		51.5	%	$	422.8	$	478.3		13.1	%
MoneyGuard		9.4		7.7		7.5		8.3		7.8		-17.0	%		33.9		31.3		-7.7	%
Total		126.5		91.1		105.0		128.2		185.4		46.6	%		456.7		509.6		11.6	%
Variable universal life		20.6		16.4		15.7		13.0		22.1		7.3	%		70.4		67.2		-4.5	%
Whole life		0.9		1.2		0.4		0.7		0.6		-33.3	%		3.8		2.9		-23.7	%
Term		10.7		11.2		11.3		10.7		10.0		-6.5	%		41.4		43.1		4.1	%
Total Sales by Product	$	158.7	$	120.0	$	132.3	$	152.5	$	218.1		37.4	%	$	572.3	$	622.9		8.8	%
Individual Annuity Deposits
Fixed	$	0.567	$	0.560	$	0.644	$	0.818	$	0.855		50.8	%	$	2.345	$	2.878		22.7	%
Variable		1.533		1.666		1.867		1.658		2.061		34.4	%		5.596		7.252		29.6	%
Indexed annuities		0.178		0.173		0.228		0.244		0.245		37.6	%		0.788		0.890		12.9	%
Total Individual Annuities	$	2.278	$	2.399	$	2.739	$	2.720	$	3.161		38.8	%	$	8.728	$	11.018		26.2	%
Employer Markets
Defined Contribution
Fixed	$	0.240	$	0.253	$	0.242	$	0.268	$	0.183		-23.8	%	$	1.083	$	0.946		-12.7	%
Variable		0.616		0.669		0.714		0.583		0.559		-9.3	%		2.254		2.525		12.0	%
		0.856		0.923		0.955		0.851		0.742		-13.3	%		3.337		3.471		4.0	%
Alliance Mutual Funds Deposits		0.223		0.318		0.204		0.235		0.357		60.1	%		1.066		1.113		4.4	%
Total Annuity and Alliance Mutual Funds	$	1.078	$	1.241	$	1.159	$	1.086	$	1.099		1.9	%	$	4.403	$	4.585		4.1	%
Executive Benefits
COLI/BOLI sales (millions)	$	12.7	$	17.5	$	17.2	$	16.3	$	32.5		155.9	%	$	52.4	$	83.5		59.4	%
Group Protection
Annualized Sales (millions)
Life	$	29.4	$	23.6	$	15.3	$	19.4	$	43.1		46.6	%	$	86.7	$	101.4		17.0	%
Disability		44.5		34.2		22.9		24.7		56.9		27.9	%		141.0		138.7		-1.6	%
Dental		6.9		6.2		7.1		6.1		13.1		89.9	%		33.7		32.6		-3.3	%
Investment Management
Sales and Inflows
Retail
Annuities	$	0.713	$	0.885	$	0.869	$	0.960	$	0.932		30.7	%	$	2.768	$	3.647		31.8	%
Mutual funds		1.657		1.329		1.370		1.151		1.768		6.7	%		5.994		5.617		-6.3	%
Managed accounts & other		1.260		1.806		1.043		0.386		0.493		-60.9	%		6.339		3.728		-41.2	%
		3.629		4.019		3.282		2.497		3.192		-12.0	%		15.101		12.991		-14.0	%
Institutional		4.833		5.044		2.764		2.406		4.888		1.1	%		16.302		15.102		-7.4	%
Total Sales and Inflows	$	8.462	$	9.063	$	6.046	$	4.904	$	8.080		-4.5	%	$	31.403	$	28.093		-10.5	%
Total Annuity & Alliance
Mutual Fund Deposits
Fixed Annuities
Individual	$	0.745	$	0.733	$	0.872	$	1.062	$	1.100		47.7	%	$	3.133	$	3.767		20.2	%
Employer Markets		0.240		0.253		0.242		0.268		0.183		-23.8	%		1.083		0.946		-12.7	%
		0.985		0.986		1.114		1.330		1.283		30.3	%		4.215		4.713		11.8	%
Variable Annuities
Individual		1.533		1.666		1.867		1.658		2.061		34.4	%		5.596		7.252		29.6	%
Employer Markets		0.616		0.669		0.714		0.583		0.559		-9.3	%		2.254		2.525		12.0	%
		2.148		2.335		2.581		2.241		2.619		21.9	%		7.850		9.777		24.5	%
Total Annuities		3.134		3.322		3.695		3.571		3.903		24.5	%		12.065		14.491		20.1	%
Alliance Mutual Funds		0.223		0.318		0.204		0.235		0.357		60.1	%		1.066		1.113		4.4	%
Total Annuity and Alliance Mutual Funds	$	3.356	$	3.640	$	3.898	$	3.806	$	4.259		26.9	%	$	13.131	$	15.604		18.8	%
(1) This schedule combines the previously reported data for LNC and JP and does not reflect any adjustments that may have resulted had the April 4, 2006 merger been completed prior to the periods presented.

12/31/2006																									PAGE 5
Consolidated Expense Detail
Unaudited (In Millions)
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2005			2006			2006			2006			2006			Change			2005			2006			Change
Commissions	$	216.4		$	212.9		$	362.0		$	382.6		$	464.7			114.7	%	$	790.3		$	1,422.2			80.0	%
General and administrative expenses:
General and administrative expenses		313.7			287.7			374.1			400.6			434.4			38.5	%		1,250.8			1,496.8			19.7	%
Merger-related expenses		-			-			7.4			12.1			15.8			NM			-			35.3			NM
Total general and administrative expenses
excluding Broker/Dealer		313.7			287.7			381.5			412.7			450.2			43.5	%		1,250.8			1,532.1			22.5	%
Restructuring charges		1.5			0.3			9.6			1.0			3.3			120.0	%		29.3			14.2			-51.5	%
Taxes, licenses and fees		17.3			33.5			47.3			50.3			48.0			177.5	%		95.5			179.2			87.6	%
Interest (1)		21.8			21.7			65.0			67.3			70.4			222.9	%		87.2			224.4			157.3	%
Total commissions and expenses incurred		570.7			556.1			865.4			914.0			1,036.6			81.6	%		2,253.0			3,372.1			49.7	%
Less: commissions and expenses capitalized		(263.0	)		(244.5	)		(391.6	)		(424.3	)		(517.9	)		-96.9	%		(937.6	)		(1,578.5	)		-68.4	%
Amortization:
DAC/VOBA Amortization		144.8			165.0			222.2			225.9			278.5			92.3	%		540.7			891.7			64.9	%
Amortization of intangibles		2.0			2.0			6.6			3.1			4.4			120.0	%		7.8			16.0			105.1	%
Total amortization		146.8			167.0			228.7			229.0			282.8			92.6	%		548.5			907.5			65.5	%
Broker/Dealer commissions and G&A		54.2			46.6			79.3			76.6			80.0			47.6	%		204.3			282.5			38.3	%
Total	$	508.8		$	525.1		$	781.9		$	795.3		$	881.5			73.3	%	$	2,068.1		$	2,983.8			44.3	%
Merger-related expenses: (2)
Severance and employee-related charges	$	-		$	-		$	12.8		$	8.4		$	6.2			NM		$	-		$	27.4			NM
Systems integration and related expenses		-			-			0.8			1.5			5.4			NM			-			7.7			NM
Other expenses		-			-			3.1			3.2			7.5			NM			-			13.8			NM
Total merger-related expenses	$	-		$	-		$	16.7		$	13.1		$	19.1			NM		$	-		$	48.9			NM

Note: The Consolidated Expense Detail data is presented on a GAAP basis.

⁽¹⁾ Interest expense for the fourth quarter and full year 2006 includes $5.6 million related to losses on early extinguishment of debt.

⁽²⁾ Represents merger-related expenses included in general and administrative expenses and restructuring charges.

12/31/2006																									PAGE 6
Operating Results Summary
Unaudited [Millions of Dollars, except Common Share Data]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2005			2006			2006			2006			2006			Change			2005			2006			Change
Operating Revenue
Individual Life Insurance	$	501.1		$	500.6		$	901.4		$	895.3		$	958.4			91.3	%	$	1,910.6		$	3,255.8			70.4	%
Individual Annuities		372.1			374.8			552.6			596.5			637.3			71.3	%		1,422.5			2,161.3			51.9	%
Individual Markets		873.2			875.4			1,454.0			1,491.8			1,595.7			82.7	%		3,333.1			5,417.1			62.5	%
Defined Contribution		241.2			249.2			248.9			245.1			245.0			1.6	%		947.5			988.0			4.3	%
Executive Benefits		61.6			57.2			101.2			104.3			109.1			77.1	%		227.4			371.8			63.5	%
Group Protection		-			-			354.9			332.1			344.8			NM			-			1,031.8			NM
Employer Markets		302.8			306.4			704.9			681.5			698.9			130.8	%		1,174.9			2,391.6			103.6	%
Investment Management		127.9			139.6			134.7			140.4			148.9			16.4	%		475.3			563.5			18.6	%
Lincoln UK		62.6			69.5			81.4			72.3			84.8			35.5	%		318.4			308.0			-3.3	%
Lincoln Financial Media		-			-			57.7			60.0			70.2			NM			-			187.8			NM
Other Operations		28.9			31.7			67.6			51.4			45.6			57.8	%		175.2			196.4			12.1	%
Total Operating Revenue		1,395.4			1,422.6			2,500.3			2,497.4			2,644.2			89.5	%		5,476.8			9,064.3			65.5	%
																				-			-
Realized gains (losses) on investments and derivatives		(9.3	)		(6.9	)		(6.7	)		(5.8	)		12.8			237.6	%		(22.1	)		(6.7	)		69.7	%
Net gain (loss) on reinsurance
derivative/trading account securities		-			5.9			1.8			(4.7	)		1.2			NM			4.6			4.1			-10.9	%
Gain on sale of subsidiaries/ businesses		-			-			-			-			-			NM			14.2			-			NM
Amortization of deferred gain-reserve development		0.3			0.3			0.3			0.3			0.3						1.2			1.3			8.3	%
Total Revenue	$	1,386.4		$	1,421.8		$	2,495.6		$	2,487.2		$	2,658.4			91.7	%	$	5,474.8		$	9,062.9			65.5	%
Income from Operations (1)
Individual Life Insurance	$	73.8		$	69.0		$	147.1		$	122.8		$	157.4			113.3	%	$	259.5		$	496.3			91.3	%
Individual Annuities		70.9			66.4			89.0			129.4			123.8			74.6	%		252.0			408.5			62.1	%
Individual Markets		144.7			135.4			236.1			252.2			281.1			94.3	%		511.5			904.7			76.9	%
Defined Contribution		45.2			52.5			54.3			52.5			44.6			-1.3	%		187.1			203.8			8.9	%
Executive Benefits		9.5			7.5			16.2			12.8			12.7			33.7	%		19.6			49.2			151.0	%
Group Protection		-			-			37.0			28.8			33.2			NM			-			99.0			NM
Employer Markets		54.7			60.0			107.6			94.0			90.5			65.4	%		206.7			352.0			70.3	%
Investment Management		8.9			15.3			12.0			13.4			14.4			61.8	%		16.8			55.1			228.0	%
Lincoln UK		13.6			10.7			9.9			8.3			9.9			-27.2	%		43.3			38.9			-10.2	%
Lincoln Financial Media		-			-			11.9			14.6			17.5			NM			-			44.0			NM
Other Operations		9.6			0.1			(26.1	)		(11.5	)		(38.4	)		NM			54.3			(75.8	)		NM
Income from Operations (1)		231.4			221.4			351.4			371.0			375.2			62.1	%		832.7			1,319.0			58.4	%
Realized gains (losses) on investments and derivatives		(6.1	)		(4.2	)		(3.8	)		(4.1	)		9.4			254.1	%		(14.6	)		(2.6	)		82.2	%
Net gain (loss) on reinsurance
derivative/trading account securities		-			3.8			1.2			(3.1	)		0.1			NM			3.0			2.0			-33.3	%
Gain on sale of subsidiaries/ businesses		-			-			-			-			-			NM			9.3			-			-100.0	%
Reserve development/ amortization of related deferred gain		0.2			0.2			0.2			0.2			0.2						0.8			0.9			12.5	%
Loss on early retirement of debt		-			-			-			-			(3.6	)		NM			-			(3.6	)		NM
Net Income	$	225.4		$	221.2		$	349.0		$	364.1		$	381.3			69.2	%	$	831.1		$	1,315.6			58.3	%
OTHER DATA
		Three Months Ended																		Year Ended
		Dec.			March			June			Sept.			Dec.						Dec.			Dec.
		2005			2006			2006			2006			2006						2005			2006
Shareholders' Equity
Beg of period (including AOCI)	$	6,284.4		$	6,384.4		$	6,338.2		$	11,404.8		$	12,043.2					$	6,175.6		$	6,384.4
End of period (including AOCI)		6,384.4			6,338.2			11,404.8			12,043.2			12,201.0						6,384.4			12,201.0
End of period (excluding AOCI)		5,856.6			6,053.2			11,439.8			11,436.0			11,587.9						5,856.6			11,587.9
Average equity (excluding AOCI) (2)		5,760.0			5,954.9			11,311.3			11,437.9			11,512.0						5,507.1			10,054.0
Common Shares Outstanding
Average for the period - diluted		176.6			177.9			282.6			282.4			280.4						176.1			256.2
End of period - diluted		176.9			178.5			285.0			281.3			280.2						176.9			280.2
Per Share Data (Diluted)
Net Income	$	1.28		$	1.24		$	1.23		$	1.29		$	1.36					$	4.72		$	5.13
Income from Operations (1)		1.31			1.25			1.24			1.31			1.34						4.73			5.14
Shareholders' Equity Per Share
Shareholders' Equity (including AOCI)	$	36.69		$	35.99		$	40.48		$	43.39		$	44.21					$	36.69		$	44.21
Shareholders' Equity (excluding AOCI)		33.66			34.37			40.60			41.20			41.99						33.66			41.99
Dividends declared (Common Stock)		0.380			0.380			0.380			0.380			0.395						1.475			1.535
Return on Equity
Net Income/Average Equity		15.7	%		14.9	%		12.3	%		12.7	%		13.2	%					15.1	%		13.1	%
Inc from Operations/Average Equity		16.1	%		14.9	%		12.4	%		13.0	%		13.0	%					15.1	%		13.1	%
Market Value of Common Stock
Highest price	$	54.41		$	57.97		$	60.52		$	63.47		$	66.72					$	54.41		$	66.72
Lowest price		46.94			52.00			54.30			53.94			61.74						41.59			52.00
Closing price	$	53.03		$	54.59		$	56.44		$	62.08		$	66.40					$	53.03		$	66.40
(1) Income from operations includes after-tax restructuring charges of $1.1 million, or 1 cent per share, for the fourth quarter of 2005; $0.2 million, or -0- cents per share, for the first quarter of 2006, $6.2 million, or 2 cents per share, for the second quarter of 2006, $0.6 million, or -0- cents per share, for the third quarter of 2006, and $2.1 million, or 1 cent per share, for the fourth quarter of 2006. Results for the years ended December 31, 2006 and 2005 include $9.3 million, or 4 cents per share and $19.0 million, or 11 cents per share, respectively.
(2) Average equity was adjusted to reflect the merger with Jefferson-Pilot effective April 3, 2006.

12/31/2006																									PAGE 7
Consolidated Statements of Income
Unaudited [Millions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2005			2006			2006			2006			2006			Change			2005			2006			Change
Revenue
Premiums	$	82.4		$	78.4		$	454.3		$	425.7		$	448.1			NM		$	308.4		$	1,406.5			NM
Surrender charges		18.0			18.7			27.3			26.6			29.9			66.1	%		73.3			102.5			39.8	%
Mortality assessments		145.1			146.2			294.7			294.9			295.9			103.9	%		568.3			1,031.7			81.5	%
Expense assessments		294.1			309.5			370.1			357.8			432.3			47.0	%		1,110.0			1,469.8			32.4	%
Investment advisory fees		70.9			77.8			81.2			82.9			86.1			21.4	%		255.9			327.9			28.1	%
Communications revenue		-			-			57.5			59.8			69.6			NM			-			186.9			NM
Net investment income		668.2			678.4			1,068.2			1,107.9			1,126.3			68.6	%		2,702.7			3,980.8			47.3	%
Other revenue and fees		97.6			94.8			128.2			123.1			137.2			40.6	%		382.6			483.2			26.3	%
Amortization of deferred gain		18.9			18.8			18.8			18.8			18.8			-0.5	%		75.7			75.0			-0.9	%
Amortization of deferred gain-reserve development		0.3			0.3			0.3			0.3			0.3						1.2			1.3			8.3	%
Realized gains (losses)		(9.3	)		(1.0	)		(5.0	)		(10.5	)		13.9			249.5	%		(3.3	)		(2.7	)		18.2	%
Total Revenue		1,386.3			1,421.8			2,495.6			2,487.2			2,658.4			91.8	%		5,474.7			9,062.9			65.5	%
Benefits and Expenses
Insurance benefits		198.0			200.4			589.3			566.2			562.2			183.9	%		805.5			1,918.2			138.1	%
Interest credited to contractholder funds		383.4			381.3			589.3			634.4			646.5			68.6	%		1,526.3			2,251.5			47.5	%
Communications expenses		-			-			29.8			31.4			36.9			NM			-			98.1			NM
Operating and acquisition expenses		469.7			469.9			669.5			677.6			763.1			62.5	%		1,885.5			2,580.2			36.8	%
Taxes, licenses and fees		17.3			33.5			47.3			50.3			48.0			177.5	%		95.5			179.2			87.6	%
Interest and debt expense		21.8			21.7			65.0			67.3			70.4			222.9	%		87.2			224.4			157.3	%
Total Benefits and Expenses		1,090.2			1,106.8			1,990.3			2,027.3			2,127.2			95.1	%		4,400.0			7,251.6			64.8	%
Income Before Federal Income Tax		296.1			315.0			505.3			459.9			531.3			79.4	%		1,074.6			1,811.3			68.6	%
Federal income taxes		70.6			93.9			156.3			95.8			149.9			112.3	%		243.6			495.7			103.5	%
Net Income	$	225.4		$	221.2		$	349.0		$	364.1		$	381.3			69.2	%	$	831.0		$	1,315.6			58.3	%
Roll Forward of Deferred Acquisition Costs		Three Months Ended																	Year Ended
& Value of Business Acquired		Dec.			March			June			Sept.			Dec.						Dec.			Dec.
		2005			2006			2006			2006			2006						2005			2006
Balance at beginning of period	$	4,989.1		$	5,163.3		$	5,433.8		$	8,328.4		$	8,171.6					$	4,590.3		$	5,163.3
Deferral		263.0			244.5			391.6			424.3			517.9						937.6			1,578.5
Amortization		(144.8	)		(165.0	)		(222.2	)		(225.9	)		(278.5	)					(540.7	)		(891.7	)
Included in Total Benefits and Expenses		118.2			79.6			169.4			198.4			239.5						396.9			686.8
Adjustment related to realized (gains) losses
on available-for-sale securities		(8.7	)		(10.9	)		(18.9	)		(8.9	)		(8.9	)					(48.5	)		(47.6	)
Adjustment related to unrealized (gains) losses
on available-for-sale securities		84.7			194.2			221.5			(359.8	)		(17.4	)					313.1			38.4
Foreign currency translation adjustment		(20.0	)		7.7			48.3			9.7			35.7						(88.5	)		101.5
Business acquired		-			-			2,474.2			3.8			-						-			2,478.0
Balance at end of period	$	5,163.3		$	5,433.8		$	8,328.4		$	8,171.6		$	8,420.4					$	5,163.3		$	8,420.4
Roll Forward of Deferred Front-End Load
Balance at beginning of period	$	786.9		$	795.7		$	805.8		$	861.0		$	923.9					$	814.2		$	795.7
Deferral		33.2			31.1			69.1			71.0			77.9						124.9			248.9
Amortization		(15.0	)		(24.7	)		(37.4	)		(12.7	)		(42.8	)					(99.6	)		(117.6	)
Included in Expense Assessments		18.2			6.4			31.8			58.3			35.1						25.3			131.3
Adjustment related to realized (gains) losses
on available-for-sale securities		-			-			-			(0.1	)		-						-			(0.1	)
Foreign currency translation adjustment		(9.5	)		3.8			23.6			4.7			17.9						(43.9	)		49.9
Balance at end of period	$	795.7		$	805.8		$	861.0		$	923.9		$	976.9					$	795.7		$	976.9
Roll Forward of Deferred Sales Inducements
Balance at beginning of period	$	118.1		$	129.4		$	139.9		$	154.6		$	173.4					$	85.5		$	129.4
Deferral		15.6			15.7			19.9			22.2			28.4						59.5			86.1
Amortization		(4.4	)		(5.2	)		(5.2	)		(3.3	)		(7.9	)					(15.6	)		(21.6	)
Included in Income from Operations		11.3			10.5			14.7			18.9			20.5						43.9			64.5
Adjustment related to realized (gains) losses
on available-for-sale securities		-			-			-			(0.1	)		-						-			(0.1	)
Balance at end of period	$	129.4		$	139.9		$	154.6		$	173.4		$	193.8					$	129.4		$	193.8

12/31/2006																							PAGE 8
Consolidating Statements of Income from Operations
Unaudited [Millions of Dollars]
For the Quarter Ended December 31, 2006
	Individual Markets				Employer Markets
															Lincoln
					Defined		Executive		Group		Investment		Lincoln		Financial		Other			Consolidating
	Life		Annuities		Contribution		Benefits		Protection		Management		UK		Media		Operations			Adjustments			Consolidated
Operating Revenue
Premiums	$	93.5	$	10.7	$	-	$	3.3	$	315.9	$	-	$	21.0	$	-	$	3.8		$	-		$	448.1
Surrender charges		16.1		12.3		1.5		-		-		-		-		-		-			-			29.9
Mortality assessments		278.4		-		-		8.5		-		-		9.0		-		-			-			295.9
Expense assessments		116.4		215.2		58.4		5.5		-		-		36.8		-		-			-			432.3
Investment advisory fees		-		-		-		-		-		111.2		-		-		-			(25.2	)		86.1
Communications revenue		-		-		-		-		-		-		-		70.0		(0.5	)		-			69.6
Net investment income		441.1		314.8		180.6		90.5		28.0		-		18.0		0.1		54.1			(1.0	)		1,126.3
Amortization of deferred gain		-		-		-		-		-		-		-		-		18.8			-			18.8
Other revenue and fees		13.0		84.3		4.5		1.3		0.8		37.7		-		-		5.8			(10.2	)		137.2
Total Operating Revenue		958.4		637.3		245.0		109.1		344.8		148.9		84.8		70.2		82.0			(36.4	)		2,644.2
Operating Expenses
Insurance benefits		249.1		11.7		-		39.7		224.0		-		30.4		-		7.3			-			562.2
Interest credited to          contractholder funds		251.3		211.7		104.4		42.0		-		-		-		-		37.1			-			646.5
Communications expenses		-		-		-		-		-		-		-		36.9		-			-			36.9
Operating and acquisition expenses		192.0		248.0		78.2		7.8		62.8		122.7		39.1		3.9		44.4			(35.9	)		763.1
Taxes, licenses and fees		27.0		4.5		1.9		1.3		6.9		3.5		-		1.8		1.2			0.0			48.0
Interest		-		0.1		-		-		-		-		-		0.4		64.8			(0.5	)		64.8
Total Operating Expenses		719.4		476.0		184.6		90.8		293.6		126.2		69.5		43.0		154.9			(36.4	)		2,121.6
Income (Loss) from Operations       before Federal income taxes		239.1		161.4		60.4		18.3		51.2		22.7		15.3		27.2		(73.0	)		-			522.6
Federal income taxes		81.7		37.6		15.8		5.6		17.9		8.3		5.4		9.6		(34.5	)		-			147.3
Income from Operations	$	157.4	$	123.8	$	44.6	$	12.7	$	33.2	$	14.4	$	9.9	$	17.5	$	(38.4	)	$	-		$	375.2

12/31/2006																								PAGE 9
Consolidating Statements of Income from Operations
Unaudited [Millions of Dollars]
For the Quarter Ended December 31, 2005
	Individual Markets					Employer Markets
	Life		Annuities			Defined Contribution		Executive Benefits		Group Protection		Investment Management		Lincoln UK		Lincoln Financial Media		Other Operations			Consolidating Adjustments			Consolidated
Operating Revenue
Premiums	$	57.7	$	8.5		$	-	$	0.7	$	-	$	-	$	15.4	$	-	$	0.1		$	-		$	82.4
Surrender charges		11.6		4.4			2.0		-		-		-		-		-		-			-			18.0
Mortality assessments		135.3		-			-		2.5		-		-		7.3		-		-			-			145.1
Expense assessments		58.8		155.5			51.7		6.1		-		-		22.0		-		-			-			294.1
Investment advisory fees		-		-			-		-		-		95.4		-		-		-			(24.5	)		70.9
Communications revenue		-		-			-		-		-		-		-		-		-			-			-
Net investment income		227.5		150.4			181.3		51.0		-		-		17.8		-		41.5			(1.3	)		668.2
Amortization of deferred gain		-		-			-		-		-		-		-		-		18.9			-			18.9
Other revenue and fees		10.3		53.3			6.2		1.3		-		32.5		-		-		1.2			(7.1	)		97.6
Total Operating Revenue		501.1		372.1			241.2		61.6				127.9		62.6		-		61.7			(32.9	)		1,395.4
Operating Expenses
Insurance benefits		118.6		21.2			-		31.2		-		-		27.5		-		(0.5	)		-			198.0
Interest credited to         contractholder funds		142.1		96.3			101.1		9.5		-		-		-		-		34.5			-			383.4
Communications expenses		-		-			-		-		-		-		-		-		-			-			-
Operating and acquisition expenses		117.3		166.1			76.0		6.3				111.9		14.3				9.7			(31.8	)		469.7
Taxes, licenses and fees		12.9		(1.4	)		1.2		1.0		-		2.6		-		-		0.9			-			17.3
Interest		-		-			-		-		-		-		-		-		22.9			(1.0	)		21.8
Total Operating Expenses		390.8		282.2			178.3		48.0		-		114.4		41.8		-		67.4			(32.8	)		1,090.2
Income (Loss) from Operations before     Federal income taxes		110.4		89.9			62.9		13.6		-		13.5		20.8		-		(5.7	)		-			305.3
Federal income taxes		36.5		19.0			17.7		4.1		-		4.6		7.2		-		(15.4	)		-			73.8
Income from Operations	$	73.8	$	70.9		$	45.2	$	9.5	$	-	$	8.9	$	13.6	$	-	$	9.6		$	-		$	231.4

12/31/2006																				PAGE 10
Consolidating Statements of Income from Operations
Unaudited [Millions of Dollars]
Year Ended December 31, 2006
	Individual Markets				Employer Markets
	Life		Annuities		Defined Contribution		Executive Benefits		Group Protection		Investment Management		Lincoln UK		Lincoln Financial Media		Other Operations			Consolidating Adjustments			Consolidated
Operating Revenue
Premiums	$	321.5	$	47.5	$	-	$	4.7	$	949.0	$	-	$	78.6	$	-	$	5.3		$	-		$	1,406.5
Surrender charges		60.3		34.7		7.6		-		-		-		-		-		-			-			102.5
Mortality assessments		970.2		-		-		27.0		-		-		34.4		-		-			-			1,031.7
Expense assessments		350.0		755.4		222.6		18.1		-		-		123.5		-		0.3			-			1,469.8
Investment advisory fees		-		-		-		-		-		424.8		-		-		-			(96.9	)		327.9
Communications revenue		-		-		-		-		-		-		-		187.4		(0.5	)		-			186.9
Net investment income		1,510.9		1,038.6		738.2		316.6		80.2		-		71.4		0.5		225.4			(1.0	)		3,980.8
Amortization of deferred gain		-		-		-		-		-		-		-		-		75.0			-			75.0
Other revenue and fees		43.0		285.1		19.6		5.3		2.5		138.7		0.1		-		18.7			(29.8	)		483.2
Total Operating Revenue		3,255.8		2,161.3		988.0		371.8		1,031.8		563.5		308.0		187.8		324.2			(127.8	)		9,064.3
Operating Expenses
Insurance benefits		886.4		104.8		-		138.5		663.3		-		108.2		-		17.0			-			1,918.2
Interest credited to contractholder funds		882.1		683.8		410.5		131.4		-		-		-		-		143.7			-			2,251.5
Communications expenses		-		-		-		-		-		-		-		98.1		-			-			98.1
Operating and acquisition expenses		643.2		849.6		288.4		27.4		193.6		465.5		140.0		15.7		84.6			(127.8	)		2,580.2
Taxes, licenses and fees		99.1		19.4		9.0		5.0		22.6		13.4		-		3.2		7.4			-			179.2
Interest		-		0.6		-		-		-		-		-		1.4		216.9			-			218.8
Total Operating Expenses		2,510.8		1,658.1		708.0		302.3		879.5		478.9		248.2		118.5		469.5			(127.8	)		7,246.1
Income (Loss) from Operations before       Federal income taxes		745.0		503.2		280.0		69.4		152.3		84.5		59.8		69.4		(145.4	)		-			1,818.2
Federal income taxes		248.7		94.7		76.2		20.2		53.3		29.4		20.9		25.3		(69.5	)		-			499.3
Income from Operations	$	496.3	$	408.5	$	203.8	$	49.2	$	99.0	$	55.1	$	38.9	$	44.0	$	(75.8	)	$	-		$	1,319.0

12/31/2006																					PAGE 11
Consolidating Statements of Income from Operations
Unaudited [Millions of Dollars]
Year Ended December 31, 2005
	Individual Markets				Employer Markets
	Life		Annuities		Defined Contribution		Executive Benefits			Group Protection		Investment Management		Lincoln UK		Lincoln Financial Media		Other Operations			Consolidating Adjustments			Consolidated
Operating Revenue
Premiums	$	198.4	$	37.1	$	-	$	8.6		$	-	$	-	$	63.3	$	-	$	1.0		$	-		$	308.4
Surrender charges		43.9		19.9		9.9		(0.4	)		-		-		-		-		-			-			73.3
Mortality assessments		524.6		-		-		8.9			-		-		34.8		-		-			-			568.3
Expense assessments		189.7		559.4		200.6		18.6			-		-		141.6		-		-			-			1,110.0
Investment advisory fees		-		-		-		-			-		354.6		-		-		-			(98.8	)		255.9
Communications revenue		-		-		-		-			-		-		-		-		-			-			-
Net investment income		908.7		613.8		711.5		186.7			-		-		78.6		-		207.4			(4.2	)		2,702.7
Amortization of deferred gain		-		-		-		-			-		-		-		-		75.7			-			75.7
Other revenue and fees		45.2		192.4		25.5		5.1			-		120.6		0.1		-		4.7			(10.7	)		382.6
Total Operating Revenue		1,910.6		1,422.5		947.5		227.4			-		475.3		318.4		-		288.9			(113.8	)		5,476.8
Operating Expenses
Insurance benefits		461.4		94.3		-		133.7			-		-		116.0		-		0.1			-			805.5
Interest credited to         contractholder funds		559.8		392.7		401.8		38.8			-		-		-		-		133.0			-			1,526.3
Communications expenses		-		-		-		-			-		-		-		-		-			-			-
Operating and acquisition expenses		448.5		600.5		276.7		24.7					438.7		135.7				71.3			(110.6	)		1,885.5
Taxes, licenses and fees		54.6		13.9		7.8		4.5			-		10.4		-		-		4.2			-			95.5
Interest		-		-		-		-			-		-		-		-		90.5			(3.2	)		87.2
Total Operating Expenses		1,524.3		1,101.3		686.3		201.7			-		449.0		251.8		-		299.1			(113.8	)		4,400.0
Income (Loss) from Operations before      Federal income taxes		386.2		321.1		261.2		25.7			-		26.3		66.6		-		(10.2	)		-			1,076.8
Federal income taxes		126.7		69.1		74.1		6.1			-		9.5		23.3		-		(64.5	)		-			244.2
Income from Operations	$	259.5	$	252.0	$	187.1	$	19.6		$	-	$	16.8	$	43.3	$	-	$	54.3		$	-		$	832.7

12/31/2006													PAGE 12
Consolidated Balance Sheet
Unaudited [Millions of Dollars, except Common Share Data]
	Dec.			March			June			Sept.			Dec.
	2005			2006			2006			2006			2006
ASSETS
Investments
Corporate bonds	$	25,860.7		$	25,418.0		$	43,881.6		$	45,345.3		$	45,489.4
U.S. government bonds		161.8			173.4			287.6			291.6			263.4
Foreign government bonds		1,203.3			1,169.7			1,188.0			1,144.4			1,141.6
Mortgage backed securities		5,951.2			5,868.8			8,370.3			8,765.1			8,691.3
State and municipal bonds		128.8			126.0			166.5			160.7			159.4
Preferred stocks - redeemable		137.4			136.9			130.1			117.8			108.3
Common stocks		55.9			61.0			458.8			506.3			525.5
Preferred stocks-equity		88.8			115.0			119.7			155.7			174.7
Total AFS Securities		33,587.9			33,068.8			54,602.6			56,486.9			56,553.7
Trading securities		3,246.0			3,190.1			3,109.0			3,172.5			3,036.3
Mortgage loans		3,662.6			3,586.2			7,741.2			7,580.5			7,384.3
Real estate		182.7			180.4			428.6			424.0			421.3
Policy loans		1,862.2			1,860.4			2,716.4			2,724.9			2,759.7
Other long-term investments		626.9			687.5			1,116.6			1,218.7			1,332.4
Total Investments		43,168.4			42,573.2			69,714.4			71,607.5			71,487.6
Cash and invested cash		2,311.7			1,974.0			1,499.8			1,108.3			1,620.6
Premiums and fees receivable		343.2			363.2			343.9			345.6			356.2
Accrued investment income		526.4			532.1			879.0			928.2			866.2
Amount recoverable from reinsurers		6,926.3			6,899.4			7,967.2			8,007.3			7,939.1
Deferred acquisition costs and VOBA		5,163.2			5,433.7			8,328.4			8,171.6			8,420.4
Goodwill		1,194.2			1,194.4			4,502.6			4,498.0			4,499.5
Other		1,479.3			1,517.7			3,049.6			2,703.1			2,770.4
Assets held in separate accounts		63,746.8			67,984.2			71,095.2			74,357.1			80,533.7
Total Assets	$	124,859.6		$	128,472.0		$	167,380.0		$	171,726.6		$	178,493.7
LIABILITIES and SHAREHOLDERS' EQUITY
Liabilities
Insurance and Investment Contract Liabilities:
Reserves	$	10,659.7		$	10,657.2		$	13,512.1		$	13,513.4		$	13,622.1
Unpaid claims		1,042.9			981.3			1,211.7			1,206.9			1,149.1
Premium deposit funds		21,713.3			21,448.6			21,198.4			20,708.6			20,541.4
Policyholders' funds		13,878.8			13,991.5			37,430.3			37,808.3			38,275.1
Total Insurance and Investment Contract Liabilities		47,294.8			47,078.6			73,352.5			73,237.2			73,587.7
Short-term debt		119.9			10.6			561.0			559.2			657.6
Long-term debt - senior notes		999.0			998.5			2,329.1			2,330.4			2,231.0
Long-term debt - subordinated
Capital securities		-			-			1,071.8			1,071.9			1,072.0
Junior subordinated debentures issued to
affiliated trusts		334.0			332.3			330.5			332.5			154.6
Embedded derivative - modco		292.2			192.0			126.7			232.5			228.7
Deferred gain on indemnity reinsurance		836.0			816.9			797.8			778.7			759.6
Federal income taxes		19.8			-			563.8			911.1			977.9
Other liabilities		4,832.8			4,720.7			5,746.7			5,872.8			6,089.9
Liabilities related to separate accounts		63,746.8			67,984.2			71,095.2			74,357.1			80,533.7
Total Liabilities		118,475.2			122,133.8			155,975.2			159,683.5			166,292.7
Preferred Stock		0.5			0.5			0.5			0.5			0.5
Capital stock		1,774.6			1,817.5			7,425.7			7,448.7			7,450.7
Retained earnings		4,081.5			4,235.2			4,013.7			3,986.7			4,136.7
Unrealized gains on investments		496.6			220.2			(151.5	)		478.0			469.6
Gains - derivatives		7.3			35.2			51.5			55.9			62.4
Foreign currency		83.4			89.7			128.5			136.5			165.1
Minimum pension liability		(59.5	)		(60.1	)		(63.6	)		(63.2	)		-
Adjustment to initially apply SFAS 158		-			-			-			-			(84.0	)
Total Shareholders' Equity		6,384.4			6,338.2			11,404.8			12,043.2			12,201.0
Total Liabilities and Shareholders' Equity	$	124,859.6		$	128,472.0		$	167,380.0		$	171,726.6		$	178,493.7
Shareholders' Equity Per Share	$	36.69		$	35.99		$	40.48		$	43.39		$	44.21
Book Value, Excluding AOCI	$	33.66		$	34.37		$	40.60		$	41.20		$	41.99
Common shares outstanding -assuming conv of
preferreds (in millions)		174.0			176.1			281.8			277.6			276.0

12/31/2006																				PAGE 13
Balance Sheet Data - Segment Highlights
Unaudited [Millions of Dollars]
	Individual				Employer
	Markets				Markets
As of December 31, 2006	Annuities		Life		Defined Contribution		Executive Benefits		Group Protection		Investment Management		Lincoln UK		Lincoln Financial Media		Other Operations (1)			Consolidated
Assets
Allocated Investments	$	18,686.2	$	27,843.9	$	11,762.6	$	6,088.9	$	1,833.6	$	-	$	1,101.1	$	-	$	4,171.4		$	71,487.6
DAC and VOBA		2,050.4		4,659.4		497.6		265.3		137.6		-		809.0		-		1.3			8,420.4
Goodwill		1,031.6		2,181.3		20.2		-		281.0		261.7		16.2		707.6		-			4,499.5
Other intangibles		193.7		97.0		0.1		-		-		9.3		-		663.1		-			963.2
Amounts recoverable from reinsurers		836.9		1,817.7		-		5.3		27.5		-		70.2		-		5,181.5			7,939.1
Assets held in separate accounts		48,014.7		5,040.3		17,459.2		833.4		-		-		8,756.9		-		429.3			80,533.7
Liabilities and Capital
Insurance and Investment Contract Liabilities:
Insurance policy & claim reserves		438.1		5,640.7		-		1,778.3		1,183.4		-		1,118.8		-		4,611.8			14,771.2
Contractholder funds		18,206.0		23,433.9		10,982.9		4,025.5		16.8		-		435.6		-		1,715.9			58,816.5
Total Insurance and Inv Contract Liabilities		18,644.1		29,074.6		10,982.9		5,803.8		1,200.2		-		1,554.4		-		6,327.7			73,587.7
Allocated capital (2)		3,432.5		7,345.1		959.8		531.7		923.1		307.8		385.0		876.6		(3,173.6	)	$	11,587.9
As of December 31, 2005
Assets
Allocated Investments	$	8,104.7	$	14,990.3	$	13,666.6	$	2,879.4	$	-	$	-	$	996.6	$	-	$	2,530.8		$	43,168.4
DAC and VOBA		1,328.0		2,543.9		454.9		113.6		-		-		743.4		-		(20.7	)		5,163.2
Goodwill		43.9		855.1		20.2		-		-		260.8		14.3		-		-			1,194.2
Other intangibles		129.4		-		-		-		-		13.9		-		-		-			143.3
Amounts recoverable from reinsurers		1,085.9		1,270.2		-		2.8		-		-		59.9		-		4,507.5			6,926.3
Assets held in separate accounts		37,903.9		2,482.7		15,243.9		796.7		-		-		7,319.6		-		-			63,746.8
Liabilities and Capital
Insurance and Investment Contract Liabilities:
Insurance policy & claim reserves		439.6		3,561.2		-		1,914.9		-		-		1,013.7		-		4,773.2			11,702.7
Contractholder funds		8,619.8		12,868.0		11,033.4		752.4		-		-		396.4		-		1,922.1			35,592.1
Total Insurance and Inv Contract Liabilities		9,059.4		16,429.2		11,033.4		2,667.3		-		-		1,410.1		-		6,633.0			47,294.8
Allocated capital (2)		1,785.0		3,231.9		978.7		346.0		-		360.0		430.6		-		(1,275.6	)	$	5,856.6
(1) Includes consolidating adjustments.
(2) Allocated capital is based on internal economic capital models plus certain other items (principally intangibles including DAC and VOBA, goodwill and other items).

12/31/2006																									PAGE 14
Individual Markets - Individual Life Insurance
Income Statements & Operational Data
Unaudited [Millions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2005			2006			2006			2006			2006			Change			2005			2006			Change
Operating Revenue
Premiums	$	57.7		$	51.1		$	89.9		$	87.0		$	93.5			62.0	%	$	198.4		$	321.5			62.0	%
Surrender charges		11.6			10.3			15.5			18.3			16.1			38.8	%		43.9			60.3			37.4	%
Mortality assessments		135.3			135.6			277.3			278.9			278.4			105.8	%		524.6			970.2			84.9	%
Expense assessments		58.8			54.3			93.0			86.1			116.4			98.0	%		189.7			350.0			84.5	%
Net investment income		227.5			239.5			415.9			414.4			441.1			93.9	%		908.7			1,510.9			66.3	%
Other revenue and fees		10.3			9.7			9.7			10.6			13.0			26.2	%		45.2			43.0
Total Operating Revenue		501.1			500.6			901.4			895.3			958.4			91.3	%		1,910.6			3,255.8			70.4	%
Operating Expenses
Insurance benefits		118.6			120.2			256.0			261.1			249.1			110.0	%		461.4			886.4			92.1	%
Interest credited to contractholder funds		142.1			142.2			241.5			247.1			251.3			76.8	%		559.8			882.1			57.6	%
Operating and acquisition expenses		130.1			132.8			182.9			207.6			219.0			68.3	%		503.1			742.3			47.5	%
Total Operating Expenses		390.8			395.3			680.4			715.7			719.4			84.1	%		1,524.3			2,510.8			64.7	%
Income from operations before     Federal income taxes		110.4			105.3			221.0			179.6			239.1			116.6	%		386.2			745.0			92.9	%
Federal income taxes		36.5			36.3			73.9			56.8			81.7			123.8	%		126.7			248.7			96.3	%
Income from Operations	$	73.8		$	69.0		$	147.1		$	122.8		$	157.4			113.3	%	$	259.5		$	496.3			91.3	%
Effective tax rate		33.1	%		34.5	%		33.4	%		31.6	%		34.2	%					32.8	%		33.4	%
Average equity	$	3,278.0		$	3,266.0		$	7,051.8		$	7,223.9		$	7,292.7					$	3,206.5		$	6,208.6
Return on average equity		9.0	%		8.5	%		8.3	%		6.8	%		8.6	%					8.1	%		8.0	%
Operating and Acquisition Expenses
Commissions	$	82.2		$	66.8		$	151.2		$	167.1		$	226.5			175.7	%	$	266.9		$	611.6			129.1	%
General and administrative expenses		73.8			66.3			97.2			122.5			116.3			57.7	%		296.9			402.3			35.5	%
Taxes, licenses and fees		12.9			16.3			27.5			28.3			27.0			109.8	%		54.6			99.1			81.5	%
Total commissions and expenses incurred		168.7			149.4			275.9			317.9			369.8			119.1	%		618.3			1,113.0			80.0	%
Less: commissions and expenses capitalized		(113.8	)		(90.1	)		(199.8	)		(226.6	)		(291.3	)		NM			(373.8	)		(807.8	)		NM
Amortization of DAC and VOBA		75.2			73.6			106.7			116.3			140.5			86.8	%		258.7			437.0			68.9	%
Net Operating and Acquisition Expenses	$	130.1		$	132.8		$	182.9		$	207.6		$	219.0			68.3	%	$	503.1		$	742.3			47.5	%
General and administrative expenses -
basis points on account values - Annualized		212			187			153			191			178			(34	)		219			176			(43	)
Roll Forward of Deferred Acquisition Costs & Value of Business Acquired
Balance at beginning of period	$	2,479.9		$	2,543.9		$	2,643.8		$	4,592.2		$	4,524.7					$	2,359.0		$	2,543.9
Deferral		113.8			90.1			199.8			226.6			291.3						373.8			807.8
Amortization		(75.2	)		(73.6	)		(106.7	)		(116.3	)		(140.5	)					(258.7	)		(437.0	)
Included in Total Operating Expenses		38.6			16.6			93.0			110.3			150.8						115.1			370.8
Adjustment related to realized (gains) losses
on available-for-sale securities		(1.2	)		(3.4	)		(7.9	)		(3.8	)		(6.7	)					(15.4	)		(21.8	)
Adjustment related to unrealized (gains) losses
on available-for-sale securities		26.5			86.7			96.7			(174.0	)		(9.5	)					85.0			(0.1	)
Business acquired		-			-			1,766.6			-			-						-			1,766.6
Other		0.1			-			-			-			-						0.1			-
Balance at end of period	$	2,543.9		$	2,643.8		$	4,592.2		$	4,524.7		$	4,659.4					$	2,543.9		$	4,659.4
Roll Forward of Deferred Front-End Loads
Balance at beginning of period	$	338.5		$	342.6		$	344.3		$	375.3		$	415.9					$	311.1		$	342.6
Deferral		21.8			19.7			57.8			58.9			65.2						81.0			201.6
Amortization		(17.6	)		(18.0	)		(26.8	)		(18.3	)		(31.6	)					(49.5	)		(94.7	)
Included in Expense Assessments		4.2			1.7			31.0			40.6			33.6						31.5			106.9
Balance at end of period	$	342.6		$	344.3		$	375.3		$	415.9		$	449.5					$	342.6		$	449.5

12/31/2006																					PAGE 15
Individual Markets- Individual Life Insurance
Operational Data
Unaudited [Millions of Dollars]
	Three Months Ended													Year Ended
	Dec.		March		June		Sept.		Dec.		%			Dec.		Dec.		%
	2005		2006		2006		2006		2006		Change			2005		2006		Change
Sales by Product(Millions)(1)
Universal Life
Excluding MoneyGuard	$	59.6	$	41.3	$	97.5	$	119.9	$	177.6		198.0	%	$	191.7	$	436.2		127.5	%
MoneyGuard		9.4		7.7		7.5		8.3		7.8		-17.0	%		33.9		31.3		-7.7	%
Total		69.0		49.0		105.0		128.2		185.4		168.7	%		225.6		467.5		107.2	%
Variable universal life		13.4		10.0		15.7		13.0		22.1		64.9	%		42.2		60.8		44.1	%
Whole life		0.4		0.7		0.4		0.7		0.6		50.0	%		1.8		2.3		27.8	%
Term		7.9		8.2		11.3		10.7		10.0		26.6	%		33.7		40.2		19.3	%
Total	$	90.7	$	67.9	$	132.3	$	152.5	$	218.1		140.5	%	$	303.2	$	570.8		88.3	%
First-Year Paid Premiums (Millions)
Universal Life
Excluding MoneyGuard	$	144.0	$	108.2	$	261.2	$	269.0	$	351.0		143.8	%	$	436.3	$	989.4		126.8	%
MoneyGuard		62.5		51.5		50.0		54.8		52.3		-16.3	%		226.1		208.6		-7.7	%
Total		206.5		159.7		311.2		323.9		403.2		95.3	%		662.4		1,198.1		80.9	%
Variable universal life		33.4		27.1		40.5		34.4		53.4		59.9	%		106.5		155.4		45.9	%
Whole life		14.4		8.3		9.5		12.0		16.5		14.6	%		40.7		46.3		13.8	%
Term		8.4		8.6		11.5		10.4		9.6		14.3	%		35.9		40.0		11.4	%
Total	$	262.7	$	203.7	$	372.7	$	380.6	$	482.7		83.7	%	$	845.5	$	1,439.8		70.3	%
Life Insurance In-Force (Billions)
Universal life & other	$	128.791	$	129.584	$	260.945	$	263.485	$	267.228		107.5	%	$	128.791	$	267.228		107.5	%
Term insurance		187.850		191.825		229.082		232.214		234.148		24.6	%		187.850		234.148		24.6	%
Total Life Segment In-Force	$	316.641	$	321.409	$	490.027	$	495.699	$	501.376		58.3	%	$	316.641	$	501.376		58.3	%
(1) Sales for Individual Life Insurance consist of first year commissionable premium for Universal life ("UL"), including Moneyguard, including UL internal replacements, and first year paid premiums for Whole life and Term products.

12/31/2006																									PAGE 16
Individual Markets - Individual Life Insurance
Account Value Roll Forward
Unaudited [Billions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2005			2006			2006			2006			2006			Change			2005			2006			Change
Interest Sensitive Life-Balance Beginning-of-Period	$	11.591		$	11.809		$	11.913		$	21.285		$	21.516			85.6	%	$	11.232		$	11.809			5.1	%
Business acquired		-			-			9.150			-			-			NM			-			9.150			NM
Deposits		0.499			0.401			0.799			0.717			0.948			90.0	%		1.685			2.865			70.0	%
Withdrawals & deaths		(0.160	)		(0.182	)		(0.317	)		(0.275	)		(0.301	)		-88.1	%		(0.675	)		(1.075	)		-59.3	%
Net flows		0.339			0.219			0.482			0.442			0.647			90.9	%		1.010			1.790			77.2	%
Policyholder assessments		(0.257	)		(0.250	)		(0.493	)		(0.451	)		(0.523	)		NM			(0.976	)		(1.717	)		-75.9	%
Interest credited		0.136			0.135			0.233			0.241			0.249			83.1	%		0.543			0.858			58.0	%
Interest Sensitive Life-Balance End-of-Period (1)	$	11.809		$	11.913		$	21.285		$	21.516		$	21.890			85.4	%	$	11.809		$	21.890			85.4	%
Variable Universal Life-Balance Beginning of Period	$	2.154		$	2.242		$	2.355		$	4.194		$	4.305			99.9	%	$	2.028		$	2.242			10.6	%
Business acquired		-			-			1.918			-			-			NM			-			1.918			NM
Deposits		0.097			0.087			0.224			0.036			0.153			57.7	%		0.346			0.499			44.2	%
Withdrawals & deaths		(0.036	)		(0.049	)		(0.158	)		0.013			(0.073	)		NM			(0.161	)		(0.267	)		-65.8	%
Net flows		0.061			0.038			0.066			0.049			0.080			31.1	%		0.185			0.233			25.9	%
Policyholder assessments		(0.044	)		(0.044	)		(0.077	)		(0.076	)		(0.079	)		-79.5	%		(0.171	)		(0.276	)		-61.4	%
Investment income and change in market value		0.071			0.119			(0.068	)		0.137			0.294			NM			0.200			0.483			141.5	%
Variable Universal Life -Balance End-of-Period	$	2.242		$	2.355		$	4.194		$	4.305		$	4.600			105.2	%	$	2.242		$	4.600			105.2	%
Total Segment- Life Insurance Account Value Roll Forward
Balance Beginning-of-Period	$	13.745		$	14.051		$	14.268		$	25.479		$	25.821			87.9	%	$	13.259		$	14.051			6.0	%
Business acquired		-			-			11.068			-			-			NM			-			11.068			NM
Deposits		0.596			0.488			1.023			0.753			1.101			84.7	%		2.030			3.365			65.8	%
Withdrawals & deaths		(0.196	)		(0.231	)		(0.476	)		(0.262	)		(0.374	)		-90.8	%		(0.836	)		(1.342	)		-60.5	%
Net flows		0.400			0.257			0.548			0.491			0.727			81.8	%		1.195			2.023			69.3	%
Policyholder assessments		(0.301	)		(0.294	)		(0.571	)		(0.526	)		(0.602	)		-100.0	%		(1.147	)		(1.992	)		-73.7	%
Investment income and change in market value		0.206			0.254			0.165			0.379			0.543			163.6	%		0.743			1.341			80.5	%
Total Segment -Balance End-of-Period	$	14.051		$	14.268		$	25.479		$	25.821		$	26.490			88.5	%	$	14.051		$	26.490			88.5	%
Life Product Spread Information (2)
Interest Sensitive Products																	Change (Basis Points)									Change (Basis Points)
Net investment income (3) (4)		6.26	%		6.48	%		6.22	%		6.08	%		6.44	%		18			6.33	%		6.29	%		(4	)
Interest credited to policyholders		4.66	%		4.60	%		4.46	%		4.52	%		4.52	%		(14	)		4.68	%		4.52	%		(16	)
Spread (3)(4)		1.60	%		1.88	%		1.76	%		1.57	%		1.92	%		32			1.65	%		1.77	%		12
Traditional Products
Net investment income (3)		6.42	%		6.72	%		6.59	%		6.60	%		6.51	%		9			6.55	%		6.60	%		5
(1) Includes universal life, interest sensitive life, and the fixed investment option of VUL products.
(2) Interest Sensitive Products - For the life products spread, the yield on earning assets is calculated as net investment income on fixed product investment portfolios divided by average earning assets. The average crediting rate is calculated using interest credited on life products divided by average fixed account values. Traditional Products - the yield on earning assets is calculated as net investment income on traditional investment portfolios divided by average earning assets. As of December 31, 2006, interest sensitive products represented approximately 81% of total interest sensitive and traditional earning assets.
(3) The net investment income and spread reported above includes earnings from commercial mortgage loan prepayment and bond make-whole premiums. The impact of these premiums on investment income and spread for interest sensitive products was 12 bps in the 4th quarter of 2006, 20 bps in the 3rd quarter of 2006, 13 bps in the 2nd quarter of 2006, 7 bps in the 1st quarter of 2006 and 8 bps in the 4th quarter of 2005. The impact was 14 basis points for the full year 2006 and 6 basis points for the full year 2005. There was an impact on traditional products of 2 bps in the 4th quarter of 2006, 15 bps in the 3rd quarter of 2006, 14 bps in the 2nd quarter of 2006, 15 bps in the 1st quarter of 2006 and 0 bps in the 4th quarter of 2005. The impact was 12 basis points for the full year 2006 and 10 basis points for the full year 2005.
(4) The net investment income and spread for the fourth, third, second and first quarters of 2006 include 24 bps, -22 bps, 2 bps and 17 bps, respectively, of incremental yield from special investments. The impact was 4 bps for the full year 2006 and 2 bps for the full year 2005.

12/31/2006																												PAGE 17
Individual Markets - Individual Annuities
Income Statements & Operational Data
Unaudited [Millions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2005			2006			2006			2006			2006			Change			2005			2006			Change
Operating Revenue
Premiums	$	8.5		$	9.3		$	15.3		$	12.3		$	10.7			25.9	%	$	37.1		$	47.5			28.0	%
Surrender charges		4.4			6.2			9.6			6.6			12.3			179.5	%		19.9			34.7			74.7	%
Expense assessments		155.5			168.0			182.7			189.3			215.2			38.4	%		559.4			755.4			35.0	%
Net investment income		150.4			148.0			263.2			312.7			314.8			109.3	%		613.8			1,038.6			69.2	%
Other revenue and fees (1)		53.3			43.4			81.8			75.7			84.3			58.2	%		192.4			285.1			48.2	%
Total Operating Revenue		372.1			374.8			552.6			596.5			637.3			71.3	%		1,422.5			2,161.3			51.9	%
Operating Expenses
Insurance benefits		21.2			20.4			45.3			27.4			11.7			-44.8	%		94.3			104.8			11.1	%
Interest credited to contractholder funds		96.3			95.1			168.8			208.2			211.7			119.8	%		392.7			683.8			74.1	%
Operating and acquisition expenses		164.7			172.6			216.9			227.3			252.6			53.4	%		614.3			869.5			41.5	%
Total Operating Expenses		282.2			288.1			431.0			462.9			476.0			68.7	%		1,101.3			1,658.1			50.6	%
Income from operations before Federal income taxes		89.9			86.7			121.5			133.6			161.4			79.5	%		321.1			503.2			56.7	%
Federal income taxes		19.0			20.3			32.5			4.2			37.6			97.9	%		69.1			94.7			37.0	%
Income from Operations	$	70.9		$	66.4		$	89.0		$	129.4		$	123.8			74.6	%	$	252.0		$	408.5			62.1	%
Effective tax rate		21.1	%		23.4	%		26.7	%		3.1	%		23.3	%					21.5	%		18.8	%
Average equity	$	1,773.7		$	1,744.1		$	3,269.2		$	3,310.4		$	3,388.1					$	1,714.1		$	2,927.9
Return on average equity		16.0	%		15.2	%		10.9	%		15.6	%		14.6	%					14.7	%		14.0	%
Income from Operations - basis points on average account values		60			52			58			84			76						57			69
Operating and Acquisition Expenses
Commissions	$	100.4		$	111.3		$	140.5		$	146.2		$	167.2			66.5	%	$	383.8		$	565.1			47.2	%
General and administrative expenses		70.9			66.2			69.8			81.8			80.9			14.1	%		271.5			298.8			10.0	%
Broker-dealer commissions and general and
administrative expenses		54.2			46.6			79.3			76.6			80.0			47.6	%		204.3			282.5			38.3	%
Taxes, licenses and fees		(1.4	)		5.4			4.6			4.8			4.5			NM			13.9			19.4			39.6	%
Total commissions and expenses incurred		224.1			229.5			294.2			309.4			332.6			48.4	%		873.5			1,165.7			33.5	%
Less: commissions and expenses capitalized		(118.9	)		(122.7	)		(150.0	)		(157.6	)		(181.8	)		-52.9	%		(441.9	)		(612.0	)		-38.5	%
Amortization of DAC and VOBA		59.5			65.8			72.7			75.6			101.7			70.9	%		182.7			315.8			72.9	%
Net Operating and Acquisition Expenses	$	164.7		$	172.6		$	216.9		$	227.3		$	252.6			53.4	%	$	614.3		$	869.5			41.5	%
General and administrative expenses - basis
points on gross account values - Annualized (2)		60			52			45			53			50			(10	)		61			50			(11	)
Roll Forward of Deferred Acquisition    Costs & Value of Business Acquired
Balance at beginning of period	$	1,250.6		$	1,328.0		$	1,414.9		$	1,994.4		$	1,974.1					$	999.4		$	1,328.0
Deferral		118.9			122.7			150.0			157.6			181.8						441.9			612.0
Amortization		(59.5	)		(65.8	)		(72.7	)		(75.6	)		(101.7	)					(182.7	)		(315.8	)
Included in Total Operating Expenses		59.4			56.9			77.3			82.0			80.0						259.3			296.2
Adjustment related to realized (gains) losses
on available-for-sale securities		(3.5	)		(2.7	)		(4.1	)		(2.4	)		(1.1	)					(17.1	)		(10.4	)
Adjustment related to unrealized (gains) losses
on available-for-sale securities		21.5			32.7			57.3			(103.6	)		(2.7	)					86.5			(16.2	)
Business acquired		-			-			448.9			3.8			-						-			452.7
Balance at end of period	$	1,328.0		$	1,414.9		$	1,994.4		$	1,974.1		$	2,050.4					$	1,328.0		$	2,050.4
Roll Forward of Deferred Front-End Loads
Balance at beginning of period	$	65.6		$	72.0		$	78.1		$	84.8		$	94.6					$	50.1		$	72.0
Deferral		9.5			9.4			9.8			10.0			10.6						35.8			39.7
Amortization		(3.1	)		(3.3	)		(3.0	)		(0.1	)		(4.3	)					(13.8	)		(10.7	)
Included in Income from Operations		6.4			6.1			6.8			9.8			6.3						22.0			29.0
Adjustment related to realized (gains) losses
on available-for-sale securities		-			-			-			(0.1	)		-						-			(0.1	)
Balance at end of period	$	72.0		$	78.1		$	84.8		$	94.6		$	100.9					$	72.0		$	100.9
Roll Forward of Deferred Sales Inducements
Balance at beginning of period	$	118.1		$	129.4		$	139.9		$	154.6		$	173.4					$	85.5		$	129.4
Deferral		15.6			15.7			19.9			22.2			28.2						59.5			86.0
Amortization		(4.4	)		(5.2	)		(5.2	)		(3.3	)		(7.9	)					(15.6	)		(21.6	)
Included in Income from Operations		11.3			10.5			14.7			18.9			20.3						43.9			64.4
Adjustment related to realized (gains) losses
on available-for-sale securities		-			-			-			(0.1	)		-						-			(0.1	)
Balance at end of period	$	129.4		$	139.9		$	154.6		$	173.4		$	193.7					$	129.4		$	193.7
(1) Primarily broker-dealer revenue.
(2) Includes distribution costs.

12/31/2006																												PAGE 18
Individual Markets - Individual Annuities
Account Value Roll Forward
Unaudited [Billions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2005			2006			2006			2006			2006			Change			2005			2006			Change
Fixed Annuities - Balance at Beginning of Period	$	11.375		$	10.840		$	10.563		$	19.533		$	18.939			66.5	%	$	11.448		$	10.840			-5.3	%
Business acquired		-			-			9.343			-			-			NM			-			9.343			NM
Gross deposits		0.486			0.471			0.872			1.062			1.100			126.3	%		1.987			3.505			76.4	%
Withdrawals & deaths		(0.370	)		(0.408	)		(1.037	)		(1.405	)		(1.162	)		NM			(1.410	)		(4.011	)		NM
Net flows		0.116			0.063			(0.164	)		(0.344	)		(0.062	)		NM			0.577			(0.506	)		NM
Transfer from (to) variable annuities		(0.766	)		(0.451	)		(0.395	)		(0.483	)		(0.561	)		26.8	%		(1.650	)		(1.891	)		-14.6	%
Interest credited		0.115			0.112			0.186			0.233			0.229			99.1	%		0.464			0.760			63.8	%
Fixed Annuities - Gross		10.840			10.563			19.533			18.939			18.545			71.1	%		10.840			18.545			71.1	%
Reinsurance ceded		(2.233	)		(2.202	)		(2.149	)		(2.045	)		(1.812	)		18.9	%		(2.233	)		(1.812	)		18.9	%
Fixed Annuities - Balance at End of Period (1)	$	8.607		$	8.362		$	17.384		$	16.894		$	16.733			94.4	%	$	8.607		$	16.733			94.4	%
Variable Annuities - Balance at Beginning of Period	$	35.276		$	37.655		$	40.495		$	41.537		$	43.977			24.7	%	$	30.684		$	37.655			22.7	%
Business acquired		-			-			0.250			-			-			NM			-			0.250			NM
Gross deposits		1.513			1.665			1.867			1.658			2.061			36.2	%		5.539			7.251			30.9	%
Withdrawals & deaths		(0.862	)		(0.959	)		(1.004	)		(1.011	)		(1.107	)		-28.4	%		(3.240	)		(4.080	)		-25.9	%
Net flows		0.651			0.706			0.864			0.648			0.954			46.5	%		2.299			3.171			37.9	%
Transfer from (to) fixed annuities		0.462			0.451			0.395			0.483			0.560			21.2	%		1.649			1.890			14.6	%
Investment increase & change in market value		1.266			1.682			(0.467	)		1.309			2.678			111.5	%		3.024			5.203			72.1	%
Variable Annuities - Balance at End of Period (2)	$	37.655		$	40.495		$	41.537		$	43.977		$	48.169			27.9	%	$	37.655		$	48.169			27.9	%
Total Annuities - Balance at Beginning of Period	$	46.651		$	48.495		$	51.059		$	61.070		$	62.916			34.9	%	$	42.132		$	48.495			15.1	%
Business acquired		-			-			9.593			-			-			NM			-			9.593			NM
Gross deposits		1.999			2.136			2.740			2.720			3.161			58.1	%		7.526			10.756			42.9	%
Withdrawals & deaths		(1.232	)		(1.366	)		(2.040	)		(2.416	)		(2.269	)		-84.2	%		(4.650	)		(8.091	)		-74.0	%
Net flows		0.767			0.770			0.699			0.304			0.892			16.3	%		2.876			2.665			-7.3	%
Transfers		(0.304	)		-			0.000			0.000			(0.001	)		99.7	%		(0.001	)		(0.001	)		0.0	%
Interest credited & change in market value		1.381			1.794			(0.281	)		1.542			2.907			110.5	%		3.488			5.962			70.9	%
Total Annuities - Gross		48.495			51.059			61.070			62.916			66.714			37.6	%		48.495			66.714			37.6	%
Reinsurance ceded		(2.233	)		(2.202	)		(2.149	)		(2.045	)		(1.812	)		18.9	%		(2.233	)		(1.812	)		18.9	%
Total Annuities (Net of Ceded) -   Balance at End of Period	$	46.262		$	48.857		$	58.921		$	60.872		$	64.902			40.3	%	$	46.262		$	64.902			40.3	%
Variable Annuities Under Agreement - Included above	$	0.197		$	0.190		$	0.173		$	0.169		$	0.170			-13.7	%	$	0.197		$	0.170			-13.7	%
Incremental Deposits (3):
Fixed annuities	$	0.472		$	0.461		$	0.861		$	1.058		$	1.086			130.1	%	$	1.931		$	3.466			79.5	%
Variable annuities		1.481			1.650			1.850			1.623			2.036			37.5	%		5.416			7.159			32.2	%
Total Incremental Deposits	$	1.953		$	2.111		$	2.711		$	2.681		$	3.122			59.9	%	$	7.346		$	10.625			44.6	%
Note: The withdrawals, net flows and ending account values for the second quarter of 2006 have been adjusted by $145 million to correct the amounts previously reported. Certain reclassifications have been made to properly distinguish between Fixed and Variable products. These changes did not have any impact on the income from operations of the segment or LFG.
(1) Includes fixed portion of variable annuities.
(2) Excludes the fixed portion of variable annuities.
(3) Incremental Deposits represent gross deposits reduced by transfers from other Lincoln products.

12/31/2006																												PAGE 19
Individual Markets - Individual Annuities
Account Values
Unaudited [Billions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2005			2006			2006			2006			2006			Change			2005			2006			Change
Fixed Annuities - excluding fixed portion of variable contracts
Deposits	$	0.006		$	0.021		$	0.137		$	0.258		$	0.280			NM		$	0.117		$	0.697			NM
Withdrawals		(0.183	)		(0.243	)		(0.805	)		(1.148	)		(0.943	)		NM			(0.777	)		(3.140	)		NM
Net flows	$	(0.177	)	$	(0.222	)	$	(0.668	)	$	(0.890	)	$	(0.663	)		NM		$	(0.660	)	$	(2.443	)		NM
Gross fixed contract account values	$	6.918		$	6.745		$	12.190		$	11.766		$	11.221			62.2	%	$	6.918		$	11.221			62.2	%
Reinsurance ceded		(2.233	)		(2.202	)		(2.149	)		(2.045	)		(1.812	)		18.9	%		(2.233	)		(1.812	)		18.9	%
Net Fixed Contract Account Values	$	4.685		$	4.543		$	10.041		$	9.721		$	9.409			100.8	%	$	4.685		$	9.409			100.8	%
Indexed Annuities
Deposits	$	-		$	-		$	0.228		$	0.244		$	0.245			NM		$	-		$	0.717			NM
Withdrawals		-			-			(0.047	)		(0.068	)		(0.061	)		NM			-			(0.175	)		NM
Net flows	$	-		$	-		$	0.181		$	0.177		$	0.184			NM		$	-		$	0.542			NM
Equity-indexed Contract Account Values	$	-		$	-		$	3.210		$	3.454		$	3.711			NM		$	-		$	3.711			NM
Fixed Portion of Variable Contracts
Deposits	$	0.480		$	0.449		$	0.507		$	0.559		$	0.575			19.8	%	$	1.870		$	2.090			11.8	%
Withdrawals		(0.187	)		(0.164	)		(0.185	)		(0.190	)		(0.158	)		15.5	%		(0.632	)		(0.697	)		-10.3	%
Net flows	$	0.293		$	0.285		$	0.322		$	0.370		$	0.417			42.3	%	$	1.238		$	1.394			12.6	%
Fixed Portion of Variable Contract Account Values	$	3.922		$	3.819		$	4.132		$	3.719		$	3.613			-7.9	%	$	3.922		$	3.613			-7.9	%
Variable Annuities -  including fixed portion of variable contracts
Deposits	$	1.993		$	2.114		$	2.374		$	2.218		$	2.635			32.2	%	$	7.409		$	9.342			26.1	%
Withdrawals		(1.049	)		(1.123	)		(1.188	)		(1.200	)		(1.265	)		-20.6	%		(3.872	)		(4.777	)		-23.4	%
Net Flows	$	0.945		$	0.991		$	1.186		$	1.017		$	1.371			45.1	%	$	3.536		$	4.565			29.1	%
Variable Contract Account Values	$	41.577		$	44.314		$	45.669		$	47.697		$	51.782			24.5	%	$	41.577		$	51.782			24.5	%
Average Daily Variable Annuity Account Values	$	36.089		$	39.947		$	41.214		$	42.342		$	46.514			28.9	%	$	33.255		$	42.504			27.8	%
Individual Annuity Product Spread Information																	Change									Change
																	(Basis Point)									(Basis Point)
Net investment income (1) (2) (3)		5.73	%		5.84	%		5.67	%		5.89	%		5.87	%		14			5.74	%		5.80	%		(6	)
Interest credited to policyholders (4)		3.92	%		3.93	%		3.81	%		3.81	%		3.77	%		(15	)		3.94	%		3.82	%		(12	)
Spread (1) (2) (3) (4)		1.81	%		1.91	%		1.86	%		2.08	%		2.10	%		29			1.80	%		1.98	%		18
Note: The withdrawals, net flows and ending account values for the second quarter of 2006 have been adjusted by $145 million to correct the amounts previously reported. Certain reclassifications have been made to properly distinguish between Fixed and Variable products. These changes did not have any impact on the income from operations of the segment or LFG.
(1) For the annuity products spread, the yield on earning assets is calculated as net investment income on fixed product investment portfolios divided by average earning assets. The average crediting rate is calculated using interest credited on annuity products less bonus credits and excess DCA interest, divided by average fixed account values net of co-insured account values. Fixed account values reinsured under modified co-insurance agreements are included in account values for this calculation since assets (and therefore margin) are retained under these agreements.
(2) The net investment income and spread reported above includes earnings from commercial mortgage loan prepayment and bond make-whole premiums. The impact of these premiums on investment income and spread was 10 bps in the fourth quarter of 2006, 7 bps in the third quarter of 2006, 2 bps in the second quarter of 2006, 9 bps in the first quarter of 2006 and 6 bps in the fourth quarter of 2005. The impact was 7 bps for the full year 2006 and 4 bps for the full year 2005.
(3) Prior period spreads for 2006 and 2005 have been updated to exclude the impact of the SFAS 133 adjustment on the Indexed Annuity business.
(4) The third quarter 2006 spreads have been updated to reflect a reclassification of surrender charges within interest credited. No income statement changes were made as a result of this reclassification because the impact was immaterial.

12/31/2006													PAGE 20
Employer Markets - Defined Contribution
Income Statements & Operational Data
Unaudited [Millions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec			%
	2005			2006			2006			2006			2006			Change			2005			2006			Change
Operating Revenue
Surrender charges	$	2.0		$	2.3		$	2.1		$	1.7		$	1.5			-25.0	%	$	9.9		$	7.6			-23.2	%
Expense assessments		51.7			55.6			54.7			54.0			58.4			13.0	%		200.6			222.6			11.0	%
Net investment income		181.3			185.7			187.5			184.6			180.6			-0.4	%		711.5			738.2			3.8	%
Other revenue and fees		6.2			5.6			4.6			4.9			4.5			-27.4	%		25.5			19.6			-23.1	%
Total Operating Revenue		241.2			249.2			248.9			245.1			245.0			1.6	%		947.5			988.0			4.3	%
Operating Expenses
Interest credited to contractholder funds		101.1			100.7			102.4			103.1			104.4			3.3	%		401.8			410.5			2.2	%
Operating and acquisition expenses		77.2			73.3			69.5			74.5			80.2			3.9	%		284.5			297.4			4.5	%
Total Operating Expenses		178.3			174.0			171.9			177.6			184.6			3.5	%		686.3			708.0			3.2	%
Income from operations before Federal income taxes		62.9			75.2			77.0			67.5			60.4			-4.0	%		261.2			280.0			7.2	%
Federal income taxes		17.7			22.7			22.7			15.0			15.8			-10.7	%		74.1			76.2			2.8	%
Income from Operations	$	45.2		$	52.5		$	54.3		$	52.5		$	44.6			-1.3	%	$	187.1		$	203.8			8.9	%
Effective tax rate		28.2	%		30.2	%		29.4	%		22.3	%		26.2	%					28.4	%		27.2	%
Average equity	$	939.1		$	1,006.4		$	985.3		$	945.7		$	954.9					$	905.5		$	973.1
Return on average equity		19.3	%		20.9	%		22.0	%		22.2	%		18.7	%					20.7	%		20.9	%
Income from Operations - basis points on average account values		60			67			69			66			54						65			64
Operating and Acquisition Expenses
Commissions	$	25.1		$	26.2		$	22.2		$	23.4		$	20.8			-17.1	%	$	102.9		$	92.5			-10.1	%
General and administrative expenses		57.4			49.7			47.2			56.4			56.5			-1.6	%		215.6			209.8			-2.7	%
Taxes, licenses and fees		1.2			2.9			2.8			1.3			1.9			NM			7.8			9.0			15.4	%
Total commissions and expenses incurred		83.7			78.8			72.3			81.1			79.2			-5.4	%		326.2			311.3			-4.6	%
Less: commissions and expenses capitalized		(24.4	)		(25.5	)		(22.6	)		(21.5	)		(18.5	)		24.2	%		(97.3	)		(88.1	)		9.5	%
Amortization of DAC and VOBA		17.9			20.0			19.8			14.9			19.4			8.4	%		55.6			74.1			33.3	%
Net Operating and Acquisition Expenses	$	77.2		$	73.3		$	69.5		$	74.5		$	80.2			3.9	%	$	284.5		$	297.4			4.5	%
General and administrative expenses - basis
points on account values - Annualized (1)		77			64			60			71			68			(9	)		75			66			(9	)
Roll Forward of Deferred Acquisition Costs & Value of Business Acquired
Balance at beginning of period	$	420.1		$	454.9		$	517.2		$	564.0		$	503.8					$	304.1		$	454.9
Deferral		24.4			25.5			22.6			21.5			18.5						97.3			88.1
Amortization		(17.9	)		(20.0	)		(19.8	)		(14.9	)		(19.4	)					(55.6	)		(74.1	)
Included in Total Operating Expenses		6.6			5.5			2.7			6.6			(0.9	)					41.8			13.9
Adjustment related to realized (gains) losses
on available-for-sale securities		(3.9	)		(4.4	)		(6.1	)		(2.0	)		(0.2	)					(16.8	)		(12.8	)
Adjustment related to unrealized (gains) losses
on available-for-sale securities		32.1			61.2			50.2			(64.8	)		(5.1	)					125.8			41.5
Business acquired		-			-			-			-			-						-			-
Other		-			-			-			-			-						-			-
Balance at end of period	$	454.9		$	517.2		$	564.0		$	503.8		$	497.6					$	454.9		$	497.6
(1) Includes distribution costs.

12/31/2006																			PAGE 21
Employer Markets - Defined Contribution
Account Value Roll Forward
Unaudited [Billions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2005			2006			2006			2006			2006			Change			2005			2006			Change
Fixed Annuities - Balance at Beginning of Period	$	10.686		$	11.009		$	11.033		$	11.050		$	11.061			3.5	%	$	10.837		$	11.009			1.6	%
Gross deposits (1)		0.240			0.253			0.242			0.268			0.183			-23.8	%		1.083			0.946			-12.6	%
Withdrawals & deaths		(0.342	)		(0.328	)		(0.345	)		(0.426	)		(0.340	)		0.6	%		(1.463	)		(1.439	)		1.6	%
Net flows		(0.103	)		(0.075	)		(0.103	)		(0.159	)		(0.157	)		-52.4	%		(0.380	)		(0.493	)		-29.9	%
Transfer from (to) variable annuities		0.318			0.014			0.030			0.049			(0.011	)		NM			0.143			0.082			NM
Interest credited		0.108			0.085			0.090			0.121			0.112			3.7	%		0.408			0.408			-
Fixed Annuities - Balance at End of Period (2)	$	11.009		$	11.033		$	11.050		$	11.061		$	11.006			-		$	11.009		$	11.006			-
Variable Annuities - Balance at Beginning of Period	$	15.293		$	15.692		$	16.454		$	16.144		$	16.530			8.1	%	$	14.576		$	15.692			7.7	%
Gross deposits (1)		0.616			0.669			0.714			0.583			0.559			-9.3	%		2.254			2.525			12.0	%
Withdrawals & deaths		(0.553	)		(0.676	)		(0.647	)		(0.565	)		(0.669	)		-21.0	%		(2.110	)		(2.557	)		-21.2	%
Net flows		0.062			(0.006	)		0.067			0.018			(0.110	)		NM			0.144			(0.032	)		NM
Transfer from (to) fixed annuities		(0.011	)		(0.015	)		(0.032	)		(0.046	)		0.008			172.7	%		(0.132	)		(0.084	)		36.1	%
Investment increase & change in market value		0.348			0.783			(0.345	)		0.414			1.047			200.9	%		1.104			1.899			71.9	%
Variable Annuities - Balance at End of Period (3)	$	15.692		$	16.454		$	16.144		$	16.530		$	17.475			11.4	%	$	15.692		$	17.475			11.4	%
Total Annuities - Balance at Beginning of Period	$	25.979		$	26.701		$	27.487		$	27.194		$	27.591			6.2	%	$	25.413		$	26.701			5.1	%
Gross Deposits (1)		0.856			0.923			0.955			0.851			0.742			-13.3	%		3.337			3.471			4.0	%
Withdrawals & deaths		(0.896	)		(1.004	)		(0.992	)		(0.992	)		(1.009	)		-12.6	%		(3.573	)		(3.996	)		-11.8	%
Net flows		(0.040	)		(0.081	)		(0.036	)		(0.141	)		(0.267	)		NM			(0.236	)		(0.525	)		NM
Transfers		0.306			(0.001	)		(0.002	)		0.003			(0.002	)		NM			0.011			(0.002	)		NM
Interest credited & change in market value		0.456			0.867			(0.255	)		0.535			1.160			154.4	%		1.513			2.307			52.5	%
Total Annuities - Balance at End of Period	$	26.701		$	27.487		$	27.194		$	27.591		$	28.482			6.7	%	$	26.701		$	28.482			6.7	%
Alliance Mutual Funds - Balance at Beginning of Period	$	3.672		$	3.772		$	4.248		$	4.330		$	4.636			26.3	%	$	2.861		$	3.772			31.8	%
Plan/Participant Rollovers		0.063			0.125			0.021			0.057			0.168			166.7	%		0.422			0.371			-12.2	%
Additional contributions		0.160			0.193			0.183			0.178			0.189			18.1	%		0.644			0.743			15.4	%
Gross deposits		0.223			0.318			0.204			0.235			0.357			60.1	%		1.066			1.113			4.5	%
Withdrawals & deaths		(0.208	)		(0.056	)		(0.054	)		(0.057	)		(0.079	)		62.0	%		(0.410	)		(0.247	)		39.8	%
Net flows		0.014			0.262			0.150			0.178			0.277			NM			0.656			0.866			32.2	%
Transfers		(0.003	)		0.005			-			(0.015	)		0.003			200.0	%		(0.007	)		(0.007	)		NM
Interest credited & change in market value		0.088			0.209			(0.068	)		0.143			0.259			194.3	%		0.262			0.543			107.2	%
Total Alliance Mutual Funds - Balance at End of Period (4)	$	3.772		$	4.248		$	4.330		$	4.636		$	5.175			37.2	%	$	3.772		$	5.175			37.2	%
Total Defined Contribution Segment Account Values-
including Alliance Mutual Funds
Balance at Beginning of Period	$	29.651		$	30.473		$	31.735		$	31.524		$	32.227			8.7	%	$	28.274		$	30.473			7.8	%
Gross deposits (1)		1.078			1.241			1.159			1.086			1.099			1.9	%		4.403			4.585			4.1	%
Withdrawals & deaths		(1.104	)		(1.060	)		(1.045	)		(1.049	)		(1.089	)		1.4	%		(3.983	)		(4.243	)		-6.5	%
Net flows		(0.026	)		0.181			0.114			0.037			0.010			138.5	%		0.419			0.342			-18.6	%
Transfers		0.304			0.005			(0.002	)		(0.012	)		0.000			-100.0	%		0.005			(0.009	)		NM
Interest credited & change in market value		0.544			1.077			(0.322	)		0.677			1.419			160.8	%		1.775			2.850			60.6	%
Total Defined Contribution Segment Account Values-
Balance at End of Period	$	30.473		$	31.735		$	31.524		$	32.227		$	33.656			10.4	%	$	30.473		$	33.656			10.4	%
Variable Annuities Under Agreement - Included above		0.019			0.018			0.017			0.017			0.017			-10.5	%		0.019			0.017			-10.5	%
Incremental Deposits (5) :
Fixed Annuities	$	0.200		$	0.254		$	0.226		$	0.253		$	0.173			-13.5	%	$	1.020		$	0.905			-11.3	%
Variable Annuities		0.614			0.654			0.709			0.576			0.551			-10.3	%		2.245			2.490			10.9	%
Total Annuities Incremental Deposits		0.814			0.908			0.935			0.829			0.724			-11.1	%		3.265			3.395			4.0	%
Total Alliance Mutual Funds Incremental Deposits		0.223			0.318			0.204			0.235			0.357			60.1	%		1.066			1.114			4.5	%
Total Defined Contribution Incremental Deposits	$	1.036		$	1.226		$	1.139		$	1.064		$	1.080			4.2	%	$	4.331		$	4.509			4.1	%
Note: Certain reclassifications have been made to properly distinguish between Fixed and Variable products.
(1) Gross deposits for the second quarter and full year 2006 include approximately $20 million and $110 million of fixed and variable annuity deposits, respectively, resulting from JP employee plan deposits into the
LNC employee plan as a result of the merger.
(2) Includes Fixed Annuity products offered under the Alliance mutual funds and the fixed portion of variable annuities.
(3) Excludes the fixed portion of variable annuities.
(4) Represents amounts attributable to Alliance mutual fund net flows. Alliance mutual fund account values are not included in the separate accounts reported on our balance sheet.
(5) Incremental Deposits represent gross deposits reduced by transfers from other Lincoln products.

12/31/2006																			PAGE 22
Employer Markets - Defined Contribution
Supplemental Data
Unaudited [Billions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2005			2006			2006			2006			2006			Change			2005			2006			Change
Fixed Annuities - excluding fixed portion of variable contracts
Deposits (1)	$	0.152		$	0.135		$	0.121		$	0.157		$	0.093			-38.8	%	$	0.563		$	0.506			-10.1	%
Withdrawals		(0.190	)		(0.108	)		(0.114	)		(0.162	)		(0.118	)		37.9	%		(0.679	)		(0.501	)		26.2	%
Net Flows	$	(0.039	)	$	0.027		$	0.008		$	(0.005	)	$	(0.024	)		38.5	%	$	(0.116	)	$	0.005			NM
Fixed Contract Account Values	$	4.654		$	4.690		$	4.717		$	4.758		$	4.797			3.1	%	$	4.654		$	4.797			3.1	%
Fixed Portion of Variable Contracts
Deposits	$	0.088		$	0.118		$	0.120		$	0.111		$	0.090			2.3	%	$	0.520		$	0.440			-15.4	%
Withdrawals		(0.152	)		(0.220	)		(0.231	)		(0.265	)		(0.222	)		-46.1	%		(0.784	)		(0.938	)		-19.6	%
Net Flows	$	(0.064	)	$	(0.102	)	$	(0.111	)	$	(0.154	)	$	(0.132	)		NM		$	(0.264	)	$	(0.499	)		-89.0	%
Fixed Portion of Variable Contract Account Values	$	6.355		$	6.343		$	6.333		$	6.303		$	6.210			-2.3	%	$	6.355		$	6.210			-2.3	%
Variable Annuities - including fixed portion of variable contracts
Deposits (1)	$	0.704		$	0.788		$	0.834		$	0.694		$	0.649			-7.8	%	$	2.774		$	2.965			6.9	%
Withdrawals		(0.705	)		(0.896	)		(0.878	)		(0.830	)		(0.891	)		-26.4	%		(2.894	)		(3.495	)		-20.8	%
Net Flows	$	(0.002	)	$	(0.108	)	$	(0.044	)	$	(0.136	)	$	(0.242	)		NM		$	(0.121	)	$	(0.530	)		NM
Variable Contract Account Values	$	22.047		$	22.797		$	22.477		$	22.833		$	23.685			7.4	%	$	22.047		$	23.685			7.4	%
Average Daily Variable Annuity Account Values	$	15.323		$	16.177		$	16.270		$	16.116		$	17.164			12.0	%	$	14.782		$	16.432			11.2	%
Total Annuity based Retirement Plan Product Spread Information (2)																	Change (Basis Point)									Change (Basis Point)
Net investment income (3)		6.36	%		6.34	%		6.31	%		6.39	%		6.23	%		(13	)		6.29	%		6.32	%		3
Interest credited to policyholders		3.67	%		3.66	%		3.73	%		3.76	%		3.79	%		12			3.69	%		3.73	%		4
Spread (3)		2.69	%		2.68	%		2.58	%		2.63	%		2.44	%		(25	)		2.60	%		2.59	%		(1	)
Note: Certain reclassifications have been made to properly distinguish between Fixed and Variable products.
(1) Gross deposits for the second quarter and full year 2006 include approximately $20 million and $110 million of fixed and variable annuity deposits, respectively, resulting from JP employee plan deposits into the LNC employee plan as a result of the merger.
(2) For the annuity products spread, the yield on earning assets is calculated as net investment income on fixed product investment portfolios divided by average earning assets. The average crediting rate is calculated using interest credited on annuity products less bonus credits and excess DCA interest, divided by average fixed account values.
(3) The net investment income and spread reported above includes earnings from commercial mortgage loan prepayment and bond make-whole premiums. The impact of these premiums on investment income and spread was 4 bps in the 4th quarter of 2006, 13 bps in the 3rd quarter of 2006, 12 bps in the 2nd quarter of 2006, 15 bps in the 1st quarter of 2006 and 17 bps in the 4th quarter of 2005.

12/31/2006																			PAGE 23
Employer Markets - Executive Benefits
Income Statements & Operational Data
Unaudited [Millions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2005			2006			2006			2006			2006			Change			2005			2006			Change
Operating Revenue
Premiums	$	0.7		$	1.1		$	0.0		$	0.3		$	3.3			NM		$	8.6		$	4.7			-45.3	%
Surrender charges		0.0			0.0			0.0			0.0			0.0			NM			(0.4	)		0.0			NM
Mortality assessments		2.5			2.8			8.5			7.2			8.5			240.0	%		8.9			27.0			203.4	%
Expense assessments		6.1			3.3			4.9			4.5			5.5			-9.8	%		18.6			18.1			-2.7	%
Net investment income		51.0			48.7			86.5			91.0			90.5			77.5	%		186.7			316.6			69.6	%
Other revenue and fees		1.3			1.4			1.3			1.3			1.3						5.1			5.3			3.9	%
Total Operating Revenue		61.6			57.2			101.2			104.3			109.1			77.1	%		227.4			371.8			63.5	%
Operating Expenses
Insurance benefits		31.2			32.8			30.4			35.6			39.7			27.2	%		133.7			138.5			3.6	%
Interest credited to contractholder funds		9.5			9.3			40.2			39.9			42.0			NM			38.8			131.4			238.7	%
Operating and acquisition expenses		7.3			4.6			7.2			11.7			9.1			24.7	%		29.2			32.5			11.3	%
Total Operating Expenses		48.0			46.7			77.7			87.2			90.8			89.2	%		201.7			302.3			49.9	%
Income from operations before Federal income taxes		13.6			10.5			23.5			17.1			18.3			34.6	%		25.7			69.4			170.0	%
Federal income taxes		4.1			3.0			7.3			4.3			5.6			36.6	%		6.1			20.2			231.1	%
Income from Operations	$	9.5		$	7.5		$	16.2		$	12.8		$	12.7			33.7	%	$	19.6		$	49.2			151.0	%
Effective tax rate		30.0	%		28.5	%		31.0	%		25.2	%		30.7	%					23.6	%		29.1	%
Average equity	$	321.8		$	334.5		$	524.8		$	519.8		$	528.2					$	297.7		$	476.8
Return on average equity		11.8	%		9.0	%		12.4	%		9.8	%		9.6	%					6.6	%		10.3	%
Operating and Acquisition Expenses
Commissions	$	5.1		$	5.1		$	8.1		$	7.1		$	11.2			119.6	%	$	22.0		$	31.5			43.2	%
General and administrative expenses		5.0			3.7			2.8			6.2			4.8			-4.0	%		19.0			17.5			-7.9	%
Taxes, licenses and fees		1.0			1.1			1.3			1.4			1.3			30.0	%		4.5			5.0			11.1	%
Total commissions and expenses incurred		11.1			9.9			12.2			14.6			17.3			55.9	%		45.4			54.0			18.9	%
Less: commissions and expenses capitalized		(5.1	)		(5.7	)		(8.0	)		(6.7	)		(10.9	)		NM			(23.1	)		(31.4	)		-35.9	%
Amortization of DAC and VOBA		1.3			0.3			2.9			3.8			2.8			115.4	%		6.9			9.8			42.0	%
Net Operating and Acquisition Expenses	$	7.3		$	4.5		$	7.2		$	11.7		$	9.1			24.7	%	$	29.2		$	32.5			11.3	%
General and administrative expenses - basis
points on account values - Annualized (1)		49			36			16			36			27			(22	)		47			28			(19	)
Roll Forward of Deferred Acquisition Costs & Value of Business Acquired
Balance at beginning of period	$	109.8		$	113.6		$	119.0		$	274.1		$	258.0					$	97.3		$	113.6
Deferral		5.1			5.7			8.0			6.7			10.9						23.1			31.4
Amortization		(1.3	)		(0.3	)		(2.9	)		(3.8	)		(2.8	)					(6.9	)		(9.8	)
Included in Total Operating Expenses		3.8			5.4			5.1			2.9			8.2						16.2			21.6
Adjustment related to realized (gains) losses
on available-for-sale securities		-			-			-			(0.7	)		(0.8	)					-			(1.5	)
Adjustment related to unrealized (gains) losses
on available-for-sale securities		-			-			7.6			(18.3	)		(0.1	)					-			(10.9	)
Business acquired		-			-			142.5			-			-						-			142.5
Other		-			-			-			-			-						(0.0	)		-
Balance at end of period	$	113.6		$	119.0		$	274.1		$	258.0		$	265.3					$	113.6		$	265.3
Roll Forward of Deferred Front-End Loads
Balance at beginning of period	$	16.9		$	17.9		$	18.9		$	19.7		$	20.3					$	15.5		$	17.9
Deferral		1.2			1.0			1.0			0.9			1.5						3.9			4.4
Amortization		(0.3	)		(0.0	)		(0.2	)		(0.3	)		(0.2	)					(1.5	)		(0.7	)
Included in Income from Operations		0.9			1.0			0.8			0.6			1.4						2.4			3.8
Balance at end of period	$	17.9		$	18.9		$	19.7		$	20.3		$	21.7					$	17.9		$	21.7
(1) Includes distribution costs.

12/31/2006																			PAGE 24
Employer Markets - Executive Benefits
Account Value Roll Forward and Supplemental Data
Unaudited [Billions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2005			2006			2006			2006			2006			Change			2005			2006			Change
COLI/BOLI- Balance Beginning-of-Period	$	1.256		$	1.318		$	1.387		$	4.228		$	4.252			238.5	%	$	1.122		$	1.318			17.5	%
Business acquired		-			-			2.795			-			-			NM			-			2.795			NM
Deposits		0.052			0.047			0.077			0.058			0.085			63.5	%		0.209			0.267			27.8	%
Withdrawals & deaths		(0.002	)		(0.007	)		(0.042	)		(0.069	)		(0.092	)		NM			(0.048	)		(0.210	)		NM
Net flows		0.049			0.039			0.035			(0.011	)		(0.007	)		NM			0.161			0.057			-64.6	%
Policyholder assessments		(0.011	)		(0.009	)		(0.017	)		(0.016	)		(0.019	)		-72.7	%		(0.035	)		(0.060	)		-71.4	%
Interest credited and change in market value		0.023			0.038			0.028			0.051			0.079			243.5	%		0.070			0.196			180.0	%
COLI/BOLI-Balance End-of-Period	$	1.318		$	1.387		$	4.228		$	4.252		$	4.305			226.6	%	$	1.318		$	4.305			226.6	%
COLI/BOLI In-Force	$	7.729		$	7.979		$	15.373		$	15.342		$	15.645			102.4	%	$	7.729		$	15.645			102.4	%
Run Off Institutional Pensions Account Values -
Balance at End of Period	$	2.737		$	2.753		$	2.707		$	2.711		$	2.720			-0.6	%	$	2.737		$	2.720			-0.6	%

 

12/31/2006																PAGE 25
Employer Markets - Group Protection
Income Statements & Operational Data
Unaudited [Millions of Dollars]
	Three Months Ended															Year Ended
	Dec.		March		June			Sept.			Dec.			%		Dec.		Dec.			%
	2005		2006		2006			2006			2006			Change		2005		2006			Change
Operating Revenue
Premiums	$	-	$	-	$	328.9		$	304.1		$	315.9			NM	$	-	$	949.0			NM
Net investment income		-		-		25.1			27.1			28.0			NM		-		80.2			NM
Other revenue and fees		-		-		0.8			0.9			0.8			NM		-		2.5			NM
Total Operating Revenue		-		-		354.9			332.1			344.8			NM		-		1,031.8			NM
						(0.0	)		(0.0	)		(0.0	)
Operating Expenses
Insurance benefits		-		-		226.0			213.3			224.0			NM		-		663.3			NM
Operating and acquisition expenses		-		-		72.0			74.6			69.6			NM		-		216.2			NM
Total Operating Expenses		-		-		297.9			287.9			293.6			NM		-		879.5			NM
Income from operations before Federal income taxes		-		-		56.9			44.2			51.2			NM		-		152.3			NM
Federal income taxes		-		-		19.9			15.5			17.9			NM		-		53.3			NM
Income from Operations	$	-	$	-	$	37.0		$	28.8		$	33.2			NM	$	-	$	99.0			NM
Effective tax rate						35.0	%		35.0	%		35.0	%						35.0	%
Average equity					$	861.0		$	896.8		$	913.4						$	890.4
Return on average equity						17.2	%		12.8	%		14.6	%						14.8	%
Operating and Acquisition Expenses
Commissions	$	-	$	-	$	37.3		$	36.0		$	36.8			NM	$	-	$	110.1			NM
General and administrative expenses		-		-		31.9			35.5			37.5			NM		-		104.8			NM
Taxes, licenses and fees		-		-		8.0			7.8			6.9			NM		-		22.6			NM
Total commissions and expenses incurred		-		-		77.1			79.3			81.2			NM		-		237.6			NM
Less commissions and expenses capitalized		-		-		(11.2	)		(11.3	)		(14.8	)		NM		-		(37.2	)		NM
Amortization of DAC and VOBA		-		-		6.0			6.6			3.2			NM		-		15.9			NM
Net Operating and Acquisition Expenses	$	-	$	-	$	72.0		$	74.6		$	69.6			NM	$	-	$	216.2			NM
General and administrative expenses as a
percentage of premiums		-		-		9.7	%		11.7	%		11.9	%		NM		-		11.0	%		NM
Roll Forward of Deferred Acquisition Costs & Value of Business Acquired
Balance at beginning of period	$	-	$	-	$	-		$	121.4		$	126.1				$	-	$	-
Deferral		-		-		11.2			11.3			14.8					-		37.2
Amortization		-		-		(6.0	)		(6.6	)		(3.2	)				-		(15.9	)
Included in Total Operating Expenses		-		-		5.2			4.7			11.5					-		21.4
Adjustment related to realized (gains) losses
on available-for-sale securities		-		-		-			-			-					-		-
Adjustment related to unrealized (gains) losses
on available-for-sale securities		-		-		-			-			-					-		-
Business acquired		-		-		116.2			-			-					-		116.2
Other		-		-		-			-			-					-		-
Balance at end of period	$	-	$	-	$	121.4		$	126.1		$	137.6				$	-	$	137.6

12/31/2006																PAGE 26
Employer Markets - Group Protection
Supplemental Data
Unaudited [Millions of Dollars]
	Three Months Ended															Year Ended
	Dec.		March		June			Sept.			Dec.			%		Dec.		Dec.			%
	2005		2006		2006			2006			2006			Change		2005		2006			Change
Annualized Sales
Life	$	-	$	-	$	15.3		$	19.4		$	43.1			NM	$	-	$	77.8			NM
Disability		-		-		22.9			24.7			56.9			NM		-		104.5			NM
Dental		-		-		7.1			6.1			13.1			NM		-		26.4			NM
Premiums:
Life	$	-	$	-	$	111.6		$	109.9		$	112.5			NM	$	-	$	334.0			NM
Disability		-		-		134.0			134.8			138.5			NM		-		407.2			NM
Dental		-		-		31.4			31.7			31.8			NM		-		94.9			NM
Other		-		-		51.9			27.8			33.2			NM		-		112.8			NM
Total	$	-	$	-	$	328.9		$	304.1		$	315.9			NM	$	-	$	949.0			NM
												0.0							(0.046	)
Product Line Results:
Life	$	-	$	-	$	13.5		$	9.8		$	13.6			NM	$	-	$	36.9			NM
Disability		-		-		21.1			16.1			15.5			NM		-		52.7			NM
Dental		-		-		1.4			2.2			3.0			NM		-		6.6			NM
Other		-		-		1.0			0.7			1.1			NM		-		2.8			NM
Total	$	-	$	-	$	37.0		$	28.8		$	33.2			NM	$	-	$	99.0			NM
												0.0							0.018
Loss Ratios:
Life		-		-		67.8	%		72.3	%		69.0	%		NM		-		69.7	%		NM
Disability		-		-		59.4	%		64.5	%		69.3	%		NM		-		64.4	%		NM
Dental		-		-		76.3	%		71.7	%		68.7	%		NM		-		72.2	%		NM
Combined loss ratios		-		-		64.7	%		68.4	%		69.1	%		NM		-		67.4	%		NM

12/31/2006																			PAGE 27
Investment Management
Income Statements
Unaudited [Millions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2005			2006			2006			2006			2006			Change			2005			2006			Change
Operating Revenue
Investment advisory fees - External	$	70.9		$	77.8		$	81.2		$	82.4		$	86.5			22.0	%	$	255.8		$	327.8			28.1	%
Investment advisory fees - Insurance-related		24.5			25.1			23.5			23.7			24.7			0.8	%		98.8			97.0			-1.8	%
Other revenue and fees		32.5			36.7			30.0			34.3			37.7			16.0	%		120.6			138.7			15.0	%
Operating Revenue		127.9			139.6			134.7			140.4			148.9			16.4	%		475.3			563.5			18.6	%
Operating Expenses
Operating and administrative expenses		114.4			116.1			116.4			120.3			126.2			10.3	%		449.0			478.9			6.7	%
Total Operating Expenses		114.4			116.1			116.4			120.3			126.2			10.3	%		449.0			478.9			6.7	%
Income (Loss) from operations before Federal income taxes		13.5			23.5			18.3			20.1			22.7			68.1	%		26.3			84.5			221.3	%
Federal income taxes		4.6			8.2			6.3			6.7			8.3			80.4	%		9.5			29.4			209.5	%
Income (Loss) from Operations	$	8.9		$	15.3		$	12.0		$	13.4		$	14.4			61.8	%	$	16.8		$	55.1			228.0	%
Effective tax rate		34.1	%		34.9	%		34.4	%		33.1	%		36.5	%					36.1	%		34.8	%
Pre-tax Operating Margin (1)		10.6	%		16.8	%		13.6	%		14.3	%		15.2	%					5.5	%		15.0	%
After-tax Operating Margin (2)		7.0	%		11.0	%		8.9	%		9.6	%		9.7	%					3.5	%		9.8	%
Operating and Acquisition Expenses
General and administrative expenses	$	97.8		$	96.1		$	99.4		$	104.2		$	109.1			11.6	%	$	384.9		$	408.8			6.2	%
Depreciation and amortization		2.0			2.2			2.4			2.2			2.4			20.0	%		8.7			9.3			6.9	%
Sub-advisory fees		10.1			11.0			10.6			9.8			9.8			-3.0	%		37.3			41.2			10.5	%
Total general and administrative expenses		109.9			109.3			112.4			116.2			121.3			10.4	%		430.9			459.2			6.6	%
Taxes, licenses and fees		2.6			4.8			2.4			2.7			3.5			34.6	%		10.4			13.4			28.8	%
Amortization of intangibles		2.0			2.0			1.6			1.4			1.4			-30.0	%		7.8			6.3			-19.2	%
Total expenses incurred	$	114.4		$	116.1		$	116.4		$	120.3		$	126.2			10.3	%	$	449.0		$	478.9			6.7	%

⁽¹⁾ Pre-tax operating margin is calculated as Income (Loss) from Operations before Federal income taxes divided by Operating Revenue.

⁽²⁾ After-tax operating margin is calculated as Income (Loss) from Operations divided by Operating Revenue.

12/31/2006																			PAGE 28
Investment Management
Assets Under Management Roll Forward
Unaudited [Billions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2005			2006			2006			2006			2006			Change			2005			2006			Change
Retail Fixed - Balance-Beginning-of-Period	$	9.371		$	9.625		$	9.761		$	10.007		$	10.522			12.3	%	$	8.457		$	9.625			13.8	%
Sales (1)		0.965			0.951			1.034			0.981			1.091			13.1	%		3.718			4.057			9.1	%
Redemptions		(0.779	)		(0.805	)		(0.824	)		(0.810	)		(0.859	)		-10.3	%		(2.764	)		(3.298	)		-19.3	%
Transfers		0.026			(0.056	)		0.030			0.012			0.028			7.7	%		0.011			0.014			27.3	%
Net Flows		0.212			0.089			0.240			0.183			0.261			23.1	%		0.965			0.773			-19.9	%
Net investment gains and change in market value		0.043			0.046			0.007			0.332			0.211			NM			0.203			0.595			193.1	%
Balance at End-of-Period	$	9.625		$	9.761		$	10.007		$	10.522		$	10.993			14.2	%	$	9.625		$	10.993			14.2	%
Retail Equity - Balance-Beginning-of-Period	$	30.988		$	32.732		$	36.500		$	36.035		$	36.954			19.3	%	$	24.278		$	32.732			34.8	%
Sales (1)		2.664			3.069			2.249			1.516			2.101			-21.1	%		11.383			8.935			-21.5	%
Redemptions		(1.700	)		(1.840	)		(2.134	)		(1.984	)		(2.472	)		-45.4	%		(5.707	)		(8.430	)		-47.7	%
Transfers		(0.027	)		(0.013	)		(0.032	)		(0.016	)		(0.030	)		-11.1	%		(0.198	)		(0.091	)		54.0	%
Net Flows		0.936			1.216			0.082			(0.483	)		(0.401	)		NM			5.477			0.414			-92.4	%
Net investment gains and change in market value		0.807			2.552			(0.547	)		1.402			3.074			280.9	%		2.977			6.481			117.7	%
Balance at End-of-Period	$	32.732		$	36.500		$	36.035		$	36.954		$	39.627			21.1	%	$	32.732		$	39.627			21.1	%
Total Retail - Balance-Beginning-of-Period	$	40.359		$	42.357		$	46.261		$	46.042		$	47.476			17.6	%	$	32.735		$	42.357			29.4	%
Retail sales-Annuities		0.713			0.885			0.869			0.960			0.932			30.7	%		2.768			3.647			31.8	%
Retail sales-Mutual Funds		1.657			1.329			1.370			1.151			1.768			6.7	%		5.994			5.617			-6.3	%
Retail sales-Managed Accounts & Other		1.260			1.806			1.043			0.386			0.493			-60.9	%		6.339			3.728			-41.2	%
Total Retail Sales		3.629			4.019			3.282			2.497			3.192			-12.0	%		15.101			12.991			-14.0	%
Redemptions		(2.479	)		(2.645	)		(2.959	)		(2.794	)		(3.330	)		-34.3	%		(8.472	)		(11.728	)		-38.4	%
Transfers		(0.002	)		(0.069	)		(0.002	)		(0.003	)		(0.002	)					(0.187	)		(0.077	)		58.8	%
Net Flows		1.148			1.305			0.322			(0.300	)		(0.140	)		NM			6.442			1.187			-81.6	%
Net investment gains and change in market value		0.850			2.598			(0.540	)		1.733			3.285			286.5	%		3.180			7.077			122.5	%
Balance at End-of-Period	$	42.357		$	46.261		$	46.042		$	47.476		$	50.620			19.5	%	$	42.357		$	50.620			19.5	%
Institutional Fixed - Balance-Beginning-of-Period	$	13.964		$	14.699		$	17.262		$	18.154		$	19.387			38.8	%	$	11.547		$	14.699			27.3	%
Inflows (1)		1.175			3.080			1.634			1.133			3.644			210.1	%		5.214			9.490			82.0	%
Withdrawals/terminations		(0.483	)		(0.447	)		(0.750	)		(0.516	)		(0.487	)		-0.8	%		(2.209	)		(2.200	)		0.4	%
Transfers		(0.001	)		0.002			0.008			(0.002	)		0.001			NM			(0.006	)		0.010			NM
Net Flows		0.691			2.636			0.892			0.615			3.157			NM			2.998			7.300			143.5	%
Net investment gains and change in market value		0.044			(0.074	)		0.001			0.618			0.297			NM			0.154			0.842			NM
Balance at End-of-Period	$	14.699		$	17.262		$	18.154		$	19.387		$	22.841			55.4	%	$	14.699		$	22.841			55.4	%
Institutional Equity - Balance-Beginning-of-Period	$	18.951		$	20.576		$	22.906		$	21.729		$	22.649			19.5	%	$	12.849		$	20.576			60.1	%
Inflows (1)		3.658			1.964			1.130			1.274			1.244			-66.0	%		11.089			5.612			-49.4	%
Withdrawals/terminations		(2.617	)		(1.008	)		(1.327	)		(0.844	)		(1.734	)		33.7	%		(5.167	)		(4.913	)		4.9	%
Transfers		0.001			0.000			(0.008	)		0.001			(0.001	)		NM			(0.142	)		(0.007	)		95.1	%
Net Flows		1.041			0.956			(0.205	)		0.431			(0.490	)		NM			5.780			0.691			-88.0	%
Net investment gains and change in market value		0.584			1.373			(0.971	)		0.489			1.687			188.9	%		1.948			2.578			32.3	%
Balance at End-of-Period	$	20.576		$	22.906		$	21.729		$	22.649		$	23.845			15.9	%	$	20.576		$	23.845			15.9	%
Total Institutional - Balance-Beginning-of-Period	$	32.915		$	35.276		$	40.167		$	39.883		$	42.035			27.7	%	$	24.396		$	35.276			44.6	%
Inflows		4.833			5.044			2.764			2.406			4.888			1.1	%		16.302			15.102			-7.4	%
Withdrawals/terminations		(3.100	)		(1.454	)		(2.078	)		(1.360	)		(2.221	)		28.4	%		(7.376	)		(7.113	)		3.6	%
Transfers		(0.001	)		0.003			0.000			(0.000	)		(0.000	)		100.0	%		(0.148	)		0.002			NM
Net Flows		1.733			3.592			0.687			1.046			2.666			53.8	%		8.778			7.991			-9.0	%
Net investment gains and change in market value		0.629			1.299			(0.971	)		1.107			1.984			215.4	%		2.101			3.419			62.7	%
Balance at End-of-Period	$	35.276		$	40.167		$	39.883		$	42.035		$	46.686			32.3	%	$	35.276		$	46.686			32.3	%
Total Retail and Institutional - At End-of-Period	$	77.633		$	86.428		$	85.926		$	89.511		$	97.307			25.3	%	$	77.633		$	97.307			25.3	%
General Account Assets-End-of-Period (2)	$	43.086		$	41.995		$	65.637		$	67.410		$	67.066			55.7	%	$	43.086		$	67.066			55.7	%
Total Assets Under Management
At End-of-Period	$	120.719		$	128.423		$	151.563		$	156.921		$	164.373			36.2	%	$	120.719		$	164.373			36.2	%
Total Retail and Institutional - Net Flows	$	2.881		$	4.898		$	1.008		$	0.745		$	2.526			-12.3	%	$	15.220		$	9.177			-39.7	%
Subadvised Assets, included in Assets
Under Management above
Retail	$	15.388		$	17.320		$	16.899		$	16.421		$	18.023			17.1	%	$	15.388		$	18.023			17.1	%
Institutional		5.114			5.608			4.593			4.560			4.648			-9.1	%		5.114			4.648			-9.1	%
Total Subadvised Assets	$	20.503		$	22.928		$	21.491		$	20.982		$	22.671			10.6	%	$	20.503		$	22.671			10.6	%
(1) Sales and in-flows include dividend reinvestments.
(2) Balances reflect $26.1 billion of assets assumed as a result of the merger with Jefferson-Pilot on April 4, 2006.

12/31/2006																									PAGE 29
Lincoln UK
Income Statements
Unaudited [Millions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2005			2006			2006			2006			2006			Change			2005			2006			Change
Operating Revenue
Premiums	$	15.4		$	16.6		$	19.9		$	21.1		$	21.0			36.4	%	$	63.3		$	78.6			24.2	%
Mortality assessments		7.3			7.8			8.9			8.7			9.0			23.3	%		34.8			34.4			-1.1	%
Expense assessments		22.0			28.0			34.7			23.9			36.8			67.3	%		141.6			123.5			-12.8	%
Net investment income		17.8			17.0			17.8			18.6			18.0			1.1	%		78.6			71.4			-9.2	%
Other revenue and fees		-			0.1			-			-			-			NM			0.1			0.1			-
Total Operating Revenue		62.6			69.5			81.4			72.3			84.8			35.5	%		318.4			308.0			-3.3	%
Operating Expenses
Insurance benefits		27.5			25.4			27.5			25.0			30.4			10.5	%		116.0			108.2			-6.7	%
Operating and acquisition expenses		14.3			27.6			38.9			34.5			39.1			173.4	%		135.7			140.0			3.2	%
Total Operating Expenses		41.8			53.0			66.3			59.5			69.5			66.3	%		251.8			248.2			-1.4	%
Income from operations before Federal income taxes		20.8			16.5			15.1			12.8			15.3			-26.4	%		66.6			59.8			-10.2	%
Federal income taxes		7.2			5.8			5.2			4.5			5.4			-25.0	%		23.3			20.9			-10.3	%
Income from Operations	$	13.6		$	10.7		$	9.9		$	8.3		$	9.9			-27.2	%	$	43.3		$	38.9			-10.2	%
Effective tax rate on
Income from Operations		34.7	%		35.1	%		34.4	%		35.2	%		35.3	%					35.0	%		34.9	%
Average equity	$	447.8		$	427.0		$	417.8		$	406.0		$	392.3					$	446.8		$	410.8
Return on average equity		12.1	%		10.0	%		9.5	%		8.2	%		10.1	%					9.7	%		9.5	%
Operating and Acquisition Expenses
Commissions	$	0.1		$	0.9		$	1.1		$	1.4		$	1.1			NM		$	2.3		$	4.5			95.7	%
General and administrative expenses		24.2			22.7			23.9			25.1			27.9			15.3	%		98.3			99.5			1.2	%
Total commissions and expenses incurred		24.3			23.6			25.0			26.4			29.0			19.3	%		100.6			104.0			3.4	%
Less: commissions and expenses capitalized		(0.7	)		(0.5	)		(0.1	)		(0.6	)		(0.7	)					(2.8	)		(1.9	)		32.1	%
Amortization of DAC and VOBA		(9.3	)		4.5			13.9			8.7			10.8			216.1	%		37.9			37.9
																										NM
Net Operating and Acquisition Expenses	$	14.3		$	27.6		$	38.9		$	34.5		$	39.1			173.4	%	$	135.7		$	140.0			3.2	%
Roll Forward of Deferred Acquisition Costs & Value of Business Acquired
Balance at beginning of period	$	753.5		$	743.4		$	747.2		$	781.7		$	783.4					$	867.0		$	743.4
Deferral		0.7			0.5			0.1			0.6			0.7						2.8			1.9
Amortization		9.3			(4.5	)		(13.9	)		(8.7	)		(10.8	)					(37.9	)		(37.9	)
Included in Total Benefits and Expenses		10.0			(4.0	)		(13.8	)		(8.0	)		(10.1	)					(35.1	)		(36.0	)
Foreign currency translation adjustment		(20.0	)		7.7			48.3			9.7			35.7						(88.5	)		101.5
Balance at end of period	$	743.4		$	747.2		$	781.7		$	783.4		$	809.0					$	743.4		$	809.0
Roll Forward of Deferred Front-End Load
Balance at beginning of period	$	365.8		$	363.1		$	364.5		$	381.2		$	392.8					$	437.5		$	363.1
Deferral		0.7			1.0			0.5			0.8			0.6						4.2			3.0
Amortization		6.0			(3.4	)		(7.4	)		6.1			(6.8	)					(34.8	)		(11.6	)
Included in Income from Operations		6.7			(2.4	)		(6.9	)		6.9			(6.2	)					(30.6	)		(8.5	)
Foreign currency translation adjustment		(9.5	)		3.8			23.6			4.7			17.9						(43.9	)		49.9
Balance at end of period	$	363.1		$	364.5		$	381.2		$	392.8		$	404.5					$	363.1		$	404.5

12/31/2006																									PAGE 30
Lincoln UK
Operational Data
Unaudited [Billions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2005			2006			2006			2006			2006			Change			2005			2006			Change
Unit Linked Assets
Balance-Beg-of-Period	$	7.180		$	7.320		$	7.754		$	7.857		$	8.118			13.1	%	$	7.186		$	7.320			1.9	%
Deposits		0.156			0.069			0.073			0.105			0.071			-54.5	%		0.389			0.318			-18.3	%
Withdrawals (including charges) and Deaths		(0.178	)		(0.186	)		(0.201	)		(0.218	)		(0.232	)		-30.3	%		(0.728	)		(0.838	)		-15.1	%
Net Flows		(0.023	)		(0.118	)		(0.128	)		(0.113	)		(0.161	)		NM			(0.339	)		(0.520	)		-53.4	%
Investment income and change in market value		0.347			0.479			(0.267	)		0.275			0.424			22.2	%		1.243			0.911			-26.7	%
Foreign Currency Adjustment		(0.184	)		0.072			0.500			0.098			0.376			NM			(0.770	)		1.046			NM
Unit Linked Assets - End-of-Period	$	7.320		$	7.754		$	7.857		$	8.118		$	8.757			19.6	%	$	7.320		$	8.757			19.6	%
Individual Life In-force	$	17.521		$	17.744		$	18.289		$	18.464		$	19.345			10.4	%	$	17.521		$	19.345			10.4	%
Exchange Rate - Dollars to Pounds
For-the-Period		1.747			1.754			1.829			1.878			1.930			10.5	%		1.821			1.847			1.4	%
End-of-Period		1.719			1.737			1.849			1.872			1.958			13.9	%		1.719			1.958			13.9	%

12/31/2006																						PAGE 31
Lincoln Financial Media
Income Statements
Unaudited [Millions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2005			2006			2006			2006			2006			Change			2005			2006			Change
Operating Results
Communications revenues, net	$	-		$	-		$	57.5		$	59.8		$	70.0			NM		$	-		$	187.4			NM
Cost of sales		-			-			7.6			10.3			15.2			NM			-			33.1			NM
Operating expenses		-			-			22.2			21.0			21.7			NM			-			65.0			NM
Station operating income		-			-			27.7			28.5			33.1			NM			-			89.2			NM
Depreciation and amortization		-			-			6.0			2.7			2.6			NM			-			11.3			NM
General and administrative expenses		-			-			1.8			1.4			1.2			NM			-			4.4			NM
Taxes, licenses and fees		-			-			-			1.5			1.8			NM			-			3.2			NM
Net interest expense and other		-			-			0.3			0.3			0.3			NM			-			0.9			NM
Income from operations before Federal income taxes		-			-			19.6			22.6			27.2			NM			-			69.4			NM
Federal income taxes		-			-			7.7			8.0			9.6			NM			-			25.3			NM
Income from Operations	$	-		$	-		$	11.9		$	14.6		$	17.5			NM		$	-		$	44.0			NM
Effective tax rate on
Income from Operations								39.3	%		35.4	%		35.4	%								36.5	%
Other Operations (1)
Unaudited [Millions of Dollars]
		Three Months Ended																		Year Ended
		Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
		2005			2006			2006			2006			2006			Change			2005			2006			Change
Operating Revenue
Premiums	$	0.1		$	0.3		$	0.3		$	0.9		$	3.8			NM		$	1.0		$	5.3			NM
Net investment income		40.3			39.6			72.1			59.6			53.1			31.8	%		203.3			224.3			10.3	%
Amortization of deferred gain on
indemnity reinsurance (2)		18.9			18.8			18.8			18.8			18.8			-0.5	%		75.7			75.0			-0.9	%
Other revenue and fees		(6.1	)		(1.8	)		(0.1	)		(4.5	)		(4.9	)		19.7	%		(6.1	)		(11.3	)		-85.2	%
Inter-segment elimination of investment advisory fees		(24.5	)		(25.1	)		(23.5	)		(23.3	)		(25.2	)		-2.9	%		(98.8	)		(96.9	)		1.9	%
Total Operating Revenue		28.9			31.7			67.6			51.4			45.6			57.8	%		175.2			196.4			12.1	%
Operating Expenses
Insurance benefits		(0.5	)		1.6			4.1			3.9			7.3			NM			0.1			17.0			NM
Interest credited to contractholder funds		34.5			33.9			36.5			36.1			37.1			7.5	%		133.0			143.7			8.0	%
Operating and acquisition expenses		2.4			(1.2	)		28.5			(7.3	)		33.8			NM			59.4			53.7			-9.6	%
Taxes, licenses and fees		0.9			3.0			0.6			2.6			1.2			33.3	%		4.3			7.4			72.1	%
Interest		21.8			21.5			64.3			66.7			64.3			195.0	%		87.2			216.9			148.7	%
Inter-segment elimination of investment advisory fees		(24.5	)		(25.1	)		(23.5	)		(23.3	)		(25.2	)		-2.9	%		(98.8	)		(96.9	)		1.9	%
Total Operating Expenses		34.6			33.7			110.6			78.8			118.6			242.8	%		185.4			341.7			84.3	%
Income (loss) from operations before Federal income taxes		(5.7	)		(2.0	)		(43.1	)		(27.4	)		(73.0	)		NM			(10.2	)		(145.4	)		NM
Federal income taxes (3)		(15.4	)		(2.2	)		(17.0	)		(15.9	)		(34.5	)		NM			(64.5	)		(69.5	)		-7.8	%
Income (loss) from Operations	$	9.6		$	0.1		$	(26.1	)	$	(11.5	)	$	(38.4	)		NM		$	54.3		$	(75.8	)		NM

⁽¹⁾ Includes eliminations of intercompany transactions.

⁽²⁾ Represents the amortization of deferred gain recognized on the business sold through indemnity reinsurance to Swiss Re.

⁽³⁾ Includes a reduction of the valuation allowance on the deferred tax asset of our foreign life reinsurance subsidiary of $5.7 million in the 1st quarter of 2005, $23.5 million in the 2nd quarter of 2005, $13.3 million in the 3rd quarter of 2005, $4.3 million in the 4th quarter of 2005, $46.8 million for the full year 2005

12/31/2006																					PAGE 32
Consolidated Domestic Deposits/Account Balances
Unaudited [Billions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2005			2006			2006			2006			2006			Change			2005			2006			Change
Deposits - For the Period
Individual Markets - Fixed Annuities	$	0.486		$	0.471		$	0.872		$	1.062		$	1.100			126.3	%	$	1.987		$	3.505			76.4	%
Individual Markets - Variable Annuities		1.513			1.665			1.867			1.658			2.061			36.2	%		5.539			7.251			30.9	%
Individual Markets - Life Insurance		0.596			0.488			1.023			0.753			1.101			84.7	%		2.030			3.365			65.8	%
Employer Markets - Fixed Annuities		0.240			0.253			0.242			0.268			0.183			-23.8	%		1.083			0.946			-12.7	%
Employer Markets - Variable Products (1)		0.839			0.987			0.918			0.818			0.916			9.2	%		3.320			3.639			9.6	%
Employer Markets - Executive Benefits		0.052			0.047			0.077			0.058			0.085			63.5	%		0.209			0.267			27.8	%
Inv Mgmt - Annuities		0.713			0.885			0.869			0.960			0.932			30.7	%		2.768			3.647			31.8	%
Inv Mgmt - Mutual Funds		1.657			1.329			1.370			1.151			1.768			6.7	%		5.994			5.617			-6.3	%
Inv Mgmt - Managed Acct. & Other		1.260			1.806			1.043			0.386			0.493			-60.9	%		6.339			3.728			-41.2	%
Consolidating Adjustments		(0.617	)		(0.481	)		(0.773	)		(0.817	)		(0.833	)		-35.0	%		(2.435	)		(2.905	)		-19.3	%
Total Gross Retail Deposits		6.737			7.449			7.509			6.297			7.805			15.9	%		26.835			29.060			8.3	%
Inv Mgmt - Institutional		4.833			5.044			2.764			2.406			4.888			1.1	%		16.302			15.102			-7.4	%
Consolidating Adjustments		(0.265	)		(0.257	)		(0.365	)		(0.202	)		(0.109	)		58.9	%		(1.030	)		(0.933	)		9.4	%
Total Gross Deposits	$	11.305		$	12.236		$	9.907		$	8.501		$	12.584			11.3	%	$	42.107		$	43.229			2.7	%
Account Balances - End of Period
Individual Markets - Fixed Annuities	$	8.607		$	8.362		$	17.384		$	16.894		$	16.733			94.4	%	$	8.607		$	16.733			94.4	%
Individual Markets - Variable Annuities		37.655			40.495			41.537			43.977			48.169			27.9	%		37.655			48.169			27.9	%
Individual Markets - Life Insurance		14.051			14.268			25.479			25.821			26.490			88.5	%		14.051			26.490			88.5	%
Employer Markets - Fixed Annuities		11.009			11.033			11.050			11.061			11.006			-			11.009			11.006			-
Employer Markets - Variable Products (1)		19.464			20.702			20.475			21.166			22.650			16.4	%		19.464			22.650			16.4	%
Employer Markets - Executive Benefits		1.318			1.387			4.228			4.252			4.305			226.6	%		1.318			4.305			226.6	%
Inv Mgmt - Annuities		13.287			13.998			13.577			14.129			15.151			14.0	%		13.287			15.151			14.0	%
Inv Mgmt - Mutual Funds		16.231			17.101			16.654			17.068			17.875			10.1	%		16.231			17.875			10.1	%
Inv Mgmt - Managed Acct. & Other		12.839			15.162			15.812			16.279			17.594			37.0	%		12.839			17.594			37.0	%
Consolidating Adjustments		(12.602	)		(13.282	)		(13.057	)		(13.649	)		(14.687	)		-16.5	%		(12.602	)		(14.687	)		-16.5	%
Total Retail Account Balances		121.858			129.225			153.137			156.998			165.287			35.6	%		121.858			165.287			35.6	%
Inv Mgmt - Institutional		35.276			40.167			39.883			42.035			46.686			32.3	%		35.276			46.686			32.3	%
Consolidating Adjustments		(3.422	)		(3.573	)		(3.557	)		(3.510	)		(3.604	)		-5.3	%		(3.422	)		(3.604	)		-5.3	%
Total Account Balances	$	153.712		$	165.820		$	189.464		$	195.524		$	208.369			35.6	%	$	153.712		$	208.369			35.6	%
Total Domestic Net Flows
Unaudited [Billions of Dollars]
	Three Months Ended																			Year Ended
		Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
For the Period Ended		2005			2006			2006			2006			2006			Change			2005			2006			Change
Individual Markets - Life	$	0.400		$	0.257		$	0.548		$	0.491		$	0.727			81.8	%	$	1.195		$	2.023			69.3	%
Individual Markets - Annuities		0.767			0.770			0.699			0.304			0.892			16.3	%		2.876			2.665			-7.3	%
Employer Markets - Defined Contribution		(0.026	)		0.181			0.114			0.037			0.010			138.5	%		0.419			0.342			-18.4	%
Employer Markets - Executive Benefits		0.049			0.039			0.035			(0.011	)		(0.007	)		NM			0.161			0.057			-64.6	%
Investment Management - Retail		1.148			1.305			0.322			(0.300	)		(0.140	)		NM			6.442			1.187			-81.6	%
Consolidating Adjustments		0.015			0.083			(0.009	)		0.012			(0.092	)		NM			0.051			(0.007	)		NM
Total Retail Net Flows		2.354			2.635			1.709			0.532			1.390			-41.0	%		11.144			6.266			-43.8	%
Investment Management - Institutional		1.733			3.592			0.687			1.046			2.666			53.8	%		8.778			7.991			-9.0	%
Consolidating Adjustments		0.198			(0.039	)		(0.047	)		0.139			0.068			-65.7	%		0.123			0.121			NM
Total Net Flows	$	4.285		$	6.188		$	2.349		$	1.717		$	4.125			-3.7	%	$	20.045		$	14.378			-28.3	%

(1) Includes amounts attributable to Alliance program mutual fund net flows.

Account values for the Alliance program are not included in the separate accounts reported on our balance sheet.

12/31/2006									PAGE 33
Consolidated Investment Data - Assets Managed
Unaudited [Billions of Dollars]
	As of
	Dec.		March		June		Sept.		Dec.		%
	2005		2006		2006		2006		2006		Change
Assets Managed by Source
LNC's Investments and Cash:
Fixed maturity securities -
available for sale	$	33.443	$	32.893	$	54.024	$	55.825	$	55.853		67.0	%
Equity securities - available for sale		0.145		0.176		0.579		0.662		0.700		NM
Trading securities		3.246		3.190		3.109		3.172		3.036		-6.5	%
Other investments		6.334		6.314		12.003		11.948		11.898		87.8	%
Total LNC Investments		43.168		42.573		69.714		71.608		71.488		65.6	%
Separate accounts		63.747		67.984		71.095		74.357		80.534		26.3	%
Cash and invested cash		2.312		1.974		1.500		1.108		1.621		-29.9	%
Total LNC		109.227		112.531		142.309		147.073		153.642		40.7	%
Non-affiliate assets managed		62.528		70.464		70.185		73.227		79.881		27.8	%
Total Assets Managed	$	171.755	$	182.995	$	212.495	$	220.300	$	233.523		36.0	%
Assets Managed by Advisor
Investment Management segment
(See page 28 for additional detail)	$	77.633	$	86.428	$	85.926	$	89.511	$	97.307		25.3	%
DLIA-Corp
(Assets managed internally-see page 28)		43.086		41.995		65.637		67.410		67.066		55.7	%
Lincoln UK		8.562		8.986		9.171		9.440		10.108		18.1	%
Domestic Policy Loans (excluding Lincoln UK)		1.858		1.856		2.712		2.720		2.755		48.3	%
Non-LNC Affiliates		40.617		43.729		49.049		51.219		56.286		38.6	%
Total Assets Managed	$	171.755	$	182.995	$	212.495	$	220.300	$	233.523		36.0	%

12/31/2006													PAGE 34
Consolidated Investment Data
Unaudited [Millions of Dollars]
	Three Months Ended
	Dec.			March			June			Sept.			Dec.			%
	2005			2006			2006			2006			2006			Change
Net Investment Income
Fixed maturity AFS securities	$	509.7		$	513.7		$	829.0		$	824.8		$	841.7			65.1	%
Equity AFS securities		3.3			2.1			8.6			7.9			8.5			157.6	%
Trading securities		48.7			49.7			49.4			49.2			48.6			-0.2	%
Mortgage loans on real estate		75.1			67.2			135.0			137.8			128.5			71.1	%
Real estate		5.6			9.1			13.2			13.3			20.6			267.9	%
Policy loans		29.2			29.7			42.5			43.0			43.7			49.7	%
Invested cash		19.2			22.8			22.2			33.0			15.6			-18.8	%
Other investments		7.0			14.6			10.2			41.3			71.8			NM
Investment revenue		697.9			708.8			1,110.1			1,150.3			1,179.0			68.9	%
Investment expense		(29.8	)		(30.4	)		(41.9	)		(42.4	)		(52.6	)		-76.5	%
Net Investment Income	$	668.1		$	678.3		$	1,068.2		$	1,107.9		$	1,126.3			68.6	%
Mean Invested Assets (Amortized Cost)	$	44,035.2		$	44,363.6		$	70,933.3		$	70,646.9		$	70,451.4
Ratio of Net Invest Income Over Mean Invested Assets		6.07	%		6.12	%		6.02	%		6.27	%		6.39	%
		Three Months Ended
		Dec.			March			June			Sept.			Dec.			%
		2005			2006			2006			2006			2006			Change
Realized Investment Gains (Losses)
Fixed maturities	$	(5.6	)	$	4.4		$	8.2		$	6.7		$	10.6			289.3	%
Equity securities		2.2			0.2			(1.1	)		-			-			NM
Other gains (losses), net		6.3			3.5			6.5			(5.5	)		3.5			-44.4	%
Policyholders' interest		(1.3	)		(1.8	)		(1.4	)		2.0			7.6			NM
Capital gains expense		(2.3	)		(2.4	)		-			-			-			NM
Sale of affiliate		-			-			-			-			-			NM
Total pretax gains (losses)		(0.8	)		3.9			12.2			3.1			21.7			NM
Amortization of DAC, VOBA and deferred
sales inducements		(8.8	)		(10.9	)		(18.9	)		(8.9	)		(8.9	)		-1.1	%
Income taxes		(3.3	)		(2.9	)		(3.0	)		(1.7	)		3.4			203.0	%
Realized investment gains (losses), net of taxes	$	(6.2	)	$	(4.2	)	$	(3.8	)	$	(4.1	)	$	9.4			251.6	%
					As of December 31, 2006									As of December 31, 2005
					Amount			% of Total						Amount			% of Total
Available-for-Sale and Trading Securities [Millions of Dollars]
Fixed Maturity Sec (Fair Value)				$	58,889.8			98.8	%				$	36,687.1			99.6	%
Fixed Maturity Sec (Amortized Cost)					57,725.8			98.9	%					35,347.6			99.6	%
Equity Securities (Fair Value)					700.2			1.2	%					146.9			0.4	%
Equity Securities (Amortized Cost)					656.8			1.1	%					139.0			0.4	%
% of Available-for-Sale Fixed Maturity Securities (Based on Fair Value)
Treasuries and AAA								19.6	%								23.4	%
AA or better								28.1	%								30.9	%
BB or less								6.3	%								7.4	%
General Account Investments					As of December 31, 2006									As of December 31, 2005
					Amount			% of Total						Amount			% of Total
Fixed maturities- security sector:
Corporate bonds				$	45,489.4			81.4	%				$	25,860.7			77.3	%
U.S. government bonds					263.4			0.5	%					161.8			0.5	%
Foreign government bonds					1,141.6			2.0	%					1,203.3			3.6	%
Mortgage backed securities					8,691.3			15.6	%					5,951.2			17.8	%
State and municipal bonds					159.4			0.3	%					128.8			0.4	%
Preferred stocks - redeemable					108.3			0.2	%					137.4			0.4	%
Total				$	55,853.4			100.0	%				$	33,443.2			100.0	%
		As of
		Dec.			March			June			Sept.			Dec.			%
		2005			2006			2006			2006			2006			Change
Composition of Investment Portfolio:
Securities available-for-sale, at fair value:
Fixed Maturity	$	33,443.2		$	32,892.8		$	54,024.1		$	55,824.9		$	55,853.4			67.0	%
Equity		144.7			176.0			578.5			662.0			700.2			NM
Trading securities		3,246.0			3,190.1			3,109.0			3,172.5			3,036.3			-6.5	%
Mortgage loans on real estate & real estate		3,845.3			3,766.5			8,169.7			8,004.5			7,805.6			103.0	%
Policy loans		1,862.2			1,860.4			2,716.4			2,724.9			2,759.7			48.2	%
Derivative Investments		174.7			199.3			279.6			349.4			415.3			137.7	%
Other investments		452.2			488.2			837.0			869.3			917.1			102.8	%
Total	$	43,168.4		$	42,573.2		$	69,714.4		$	71,607.5		$	71,487.6			65.6	%