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

                   October 28, 2008                

Date of Report (Date of earliest event reported)

                  Lincoln National Corporation              

(Exact name of registrant as specified in its charter)

Indiana	1-6028	35-1140070
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

150 N. Radnor Chester Road, Radnor, PA 19087

(Address of principal executive offices)  (Zip Code)

(484) 583-1400

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.  Results of Operations and Financial Condition.

On October 28, 2008, the registrant issued a press release announcing its financial results for the quarter ended September 30, 2008, a copy of which is attached as Exhibit 99.1 and is incorporated herein by reference. The registrant’s statistical supplement for the quarter ended September 30, 2008 is attached as Exhibit 99.2 and is incorporated herein by reference, and a general account supplement as of September 30, 2008, is attached as Exhibit 99.3 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 October 28, 2008, announcing Lincoln National Corporation’s financial results for the quarter ended September 30, 2008.
99.2	Lincoln National Corporation Statistical Supplement for the Quarter Ended September 30, 2008.
99.3	Lincoln National Corporation General Account Supplement as of September 30, 2008.

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:  October 28, 2008

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press release dated October 28, 2008, announcing Lincoln National Corporation’s financial results for the quarter ended September 30, 2008.
99.2	Lincoln National Corporation Statistical Supplement for the Quarter Ended September 30, 2008.
99.3	Lincoln National Corporation General Account Supplement as of September 30, 2008.

EX-99.1

Exhibit 99.1

                         NEWS RELEASE

Lincoln Financial Group Reports Third Quarter 2008 Results

_____________________________________________

Solid Retirement and Insurance Deposits with Positive Net Flows

Equity and Credit Markets Pressure Earnings

Philadelphia, PA, October 28, 2008 – Lincoln Financial Group (NYSE:LNC) today reported net income of $148 million, or $0.58 per diluted share, for the third quarter of 2008, versus $330 million, or $1.21 per diluted share, in the prior-year quarter. Net income for the current quarter included $167 million, after DAC and tax, or $0.65 per diluted share, of net realized losses on investments and derivatives, including the results of the variable annuity hedge program, compared to $43 million, after DAC and tax, or $0.15 per diluted share, in the year-ago period.

Income from operations for the third quarter of 2008 was $316 million, or $1.23 per diluted share, compared to third quarter 2007 income from operations of $365 million, or $1.34 per diluted share. Income from operations in the current period included merger-related expenses of $13 million versus $29 million, pre tax, in the prior-year period. Return on equity (ROE), based on income from operations, was 11.2% for the third quarter of 2008.

The table attached to this release defines and reconciles income from operations, ROE, and book value per share excluding accumulated other comprehensive income (AOCI), non-GAAP measures, to net income, ROE, and book value per share including AOCI calculated in accordance with GAAP.

Third quarter earnings include the results of Lincoln Financial’s annual comprehensive review of actuarial assumptions and models underlying insurance-related assets and liabilities.

Consolidated Retail Retirement and Insurance Deposits and Flows

Consolidated retail deposits into retirement and insurance products, which include individual annuities, defined contribution plans, individual life insurance, and other wealth accumulation and protection products, were $5.4 billion in the third quarter of 2008, compared to $6.0 billion a

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year ago. Consolidated retail net flows in retirement and insurance products were $1.7 billion versus $2.1 billion in the 2007 quarter. Retirement and insurance account balances were $131 billion as of September 30, 2008.

Dennis R. Glass, president and CEO, said, “Overall, we were pleased with our third quarter results, which demonstrated the strength of our business model in the face of challenging economic conditions. As we move into the fourth quarter, these same conditions are expected to continue, which will create a challenging business environment. We have taken deliberate steps to preserve capital, enhance liquidity and manage exposures in an already diversified investment portfolio. Recognizing that market and economic conditions are changing rapidly, we will continue to monitor new developments and react as needed while executing on our business strategy.”

Notable Items Affecting 3Q 2008 Income from Operations

($ in millions except per share data)	After-tax Amount			EPS
Insurance Solutions – Life Insurance (DAC, Model Adjustments)	$	(30	)	$	(0.12	)
Investment Management (Seed Capital, Expenses)		(6	)		(0.02	)
Retirement Solutions – Individual Annuities (Tax-related Items, DAC)		13			0.05
Lincoln UK (DAC, Model Adjustments, Tax-related Items)		2			0.01

Year-over-year results were mainly affected by worsening economic conditions and equity markets, with the average of the S&P 500 down almost 9% in the third quarter of 2008 versus the second quarter and down 16% compared to the third quarter of 2007.

Income from operations in the third quarter of 2008 included alternative investment income of $27 million, pre DAC and tax, primarily concentrated in a couple limited partnerships. In the 2007 quarter, the company reported no alternative investment income. The current quarter’s results exceeded the company’s short-term expectations.

Third Quarter 2008 Segment Results

Retirement Solutions

Individual Annuities

Income from operations for the Individual Annuities segment was $131 million in the third quarter of 2008 versus $126 million in the year-ago period. The current quarter’s results included

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a net positive impact of approximately $13 million, after tax, primarily attributable to positive tax-related items, which were partially offset by negative retrospective DAC unlocking from lower fee income. The 2008 period reflects weak year-to-date equity markets, partially offset by positive net flows, driving average variable annuity account balances down $3.0 billion in the current quarter. The year-ago period benefited by approximately $6 million, after tax, primarily related to DAC unlocking.

In the quarter, gross deposits were $2.9 billion, down 15% from the year-ago period. Net flows for the segment were $944 million, down from $1.3 billion in the 2007 quarter, reflecting the decline in sales. Variable annuity product deposits of $2.6 billion were down 14% versus the prior-year period, reflecting soft market conditions which were moderated by growth in key distribution partners where the company recently expanded shelf space.

Defined Contribution

Third quarter income from operations for Defined Contribution was $42 million, versus $41 million for the same period a year ago. The third quarter of 2008 included strong investment income returns and lower expenses, partially offset by weak year-to-date equity markets which drove average variable account balances down $1.4 billion in the current quarter.

In the quarter, overall deposits of $1.3 billion were down 13%, reflecting challenging economic conditions and a seasonally soft third quarter. Total net flows were $93 million, reflecting an improvement in persistency, which was partially offset by a decline in deposits. Deposits of $687 million in the mid-to-large market were down 20% compared to a record 2007 quarter, while net flows were $465 million, up modestly over the second quarter and down compared to $598 million in the year-ago period. Deposits of $389 million in the micro-to-small market were flat sequentially and year-over-year, with a modest improvement in net flows versus the 2007 period.

Insurance Solutions

Life Insurance

Life Insurance income from operations was $137 million in the third quarter of 2008, compared to $183 million in the third quarter of 2007. The current quarter’s results included a net negative impact of approximately $30 million, after tax, primarily related to actuarial model adjustments, which were partially offset by DAC unlocking. The current period’s results also included strong returns in the alternative investment portfolio, as compared to weak returns in the third quarter of

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2007. The year-ago period benefited by approximately $18 million, after tax, primarily related to DAC unlocking.

Life insurance sales, reported as paid annualized premiums, were $190 million in the third quarter, down 4% from the year-ago quarter, reflecting continued weakness in the economy and credit markets. Universal life insurance sales were up modestly versus the prior-year quarter and up 16% sequentially.

Group Protection

For the third quarter, Group Protection’s income from operations was $27 million, versus $33 million in the prior-year period. Both periods benefited from favorable non-medical loss ratios of 71.6% in the 2008 quarter and 68.6% in the 2007 quarter.

Net earned premiums were $371 million in the third quarter, up 10% over the year-ago quarter, reflecting prior quarters of strong sales results and favorable persistency. Annualized written premiums were $68 million, up 13% from the 2007 quarter.

Investment Management

The Investment Management segment reported income from operations of $5 million in the third quarter of 2008, compared to $22 million in the prior-year period. Third quarter 2008 earnings continued to be impacted by equity markets, the sale of certain fixed income assets in the fourth quarter of 2007, and negative net flows. The 2008 quarter included net negative items of approximately $6 million, after tax, primarily related to returns on seed capital and legal expenses. In the current quarter, account balances declined $9.1 billion, primarily due to equity markets and negative net flows.

Total deposits for the quarter were $4.0 billion, compared to $5.7 billion a year ago and $3.5 billion in the second quarter of 2008. Total net flows were negative $3.3 billion in the 2008 quarter, reflecting soft sales and increased redemptions in a challenging economic environment.

Lincoln UK

For the third quarter, the UK segment’s income from operations was $12 million, compared to $10 million in the third quarter of 2007. The current quarter included approximately $2 million,

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after tax, of net positive items primarily attributable to tax-related items, with offsetting DAC unlocking and actuarial model adjustments.

Other Operations

The operating loss in Other Operations was $40 million in the quarter, versus $50 million in the prior-year quarter. Both periods included merger-related expenses. Merger-related expenses are expected to be approximately $12 million, pre tax, in the fourth quarter.

Capital and Share Repurchase

As of September 30, 2008, the book value per share of Lincoln National Corporation common stock, including AOCI, was $37.11, compared with $44.41 a year ago. Book value per share, excluding AOCI, was $44.18, compared with $43.67 a year ago.

The company repurchased 1 million shares in the third quarter at a total cost of $50 million. On October 10, the Lincoln National Board of Directors announced a reduction in the quarterly dividend from $0.415 per share to $0.21 per share, which is expected to add approximately $200 million to capital annually.

Realized and Unrealized Gains and Losses on Investments

Total gross realized losses on investments were $406 million, pre DAC and tax, including losses of $211 million related to financial institutions and $80 million related to residential mortgage backed securities. The company reported a net unrealized loss position for available-for-sale securities, including unrealized gains, of $1.9 billion, after DAC and tax, at the end of the third quarter.

Outlook

Due to volatile market conditions, Lincoln Financial will not be updating its full-year 2008 guidance. Instead, management will comment on overall market conditions during the third quarter earnings call.

This press release may contain statements that are forward-looking, and actual results may differ materially, especially given the current economic and credit conditions. Lincoln Financial’s actual experience in 2008 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

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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.

Lincoln Financial Group will discuss the company’s third quarter results and outlook for 2008 with investors in a conference call beginning at 11:00 a.m. (ET) on Wednesday, October 29, 2008. Interested persons are invited to listen through the internet. Please go to www.LincolnFinancial.com/webcast at least fifteen minutes prior to the event to register, download and install any necessary streaming media software. Interested persons may also listen to the call by dialing the following numbers:

- Dial:	(877)-723-9502 (Domestic)
	(719)-325-4797 (International)
- Ask for the Lincoln National Conference Call.

The company will also post its third quarter 2008 statistical supplement and a general account supplement on its Web site, www.LincolnFinancial.com/investor.

Lincoln Financial Group is the marketing name for Lincoln National Corporation (NYSE:LNC) and its affiliates. With headquarters in the Philadelphia region, the companies of Lincoln Financial Group had assets under management of $200 billion as of September 30, 2008. 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; and Lincoln UK. For more information, including a copy of our most recent SEC reports containing our balance sheets, please visit www.LincolnFinancial.com.

Contacts:	Jim Sjoreen	Laurel O’Brien
	484 583-1420	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 and losses associated with the following: sale or disposal of securities; impairments of securities; change in the fair value of embedded derivatives within certain reinsurance arrangements and the change in the fair value of related trading securities; change in the fair value of the embedded derivatives of our guaranteed living benefits within our variable annuities net of the change in the fair value of the derivatives we own to hedge the changes in the embedded derivative; net difference between the benefit ratio unlocking of SOP 03-1 reserves on our guaranteed death benefit riders within our variable annuities and the change in the fair value of the derivatives excluding our expected cost of the hedging instruments; and changes in the fair value of the embedded derivative liabilities related to index call options we may purchase in the future to hedge contract holder index allocations applicable to future reset periods for our indexed annuity products as required under SFAS 133 and SFAS 157, income (loss) from the initial adoption of changes in accounting principles, income (loss) from reserve changes (net of related amortization) on business sold through reinsurance, losses on early retirement of debt, including subordinated debt, losses from the impairment of intangible assets and income (loss) from discontinued operations.

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 businesses in a manner that allows for a better understanding of the underlying trends in the company's current business because the excluded items are unpredictable and not necessarily indicative of current operating fundamentals or future performance of the business segments, and, in most instances, decisions regarding these items do not necessarily relate to the operations of the individual segments.

($ in millions, except per share data)
	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2008			2007			2008			2007
Net Income	$	148.4		$	329.6		$	562.3		$	1,102.1
Less:
Excluded realized loss, after-tax		(166.8	)		(42.7	)		(274.5	)		(17.3	)
Income (loss) from reserve changes (net of related amortization)
on business sold through reinsurance, after-tax		0.4			0.4			1.3			(7.2	)
Impairment of intangibles, after-tax		-			-			(139.0	)		-
Income (loss) from discontinued operations, after-tax		(1.0	)		6.6			(5.5	)		20.6
Income From Operations	$	315.8		$	365.3		$	980.0		$	1,106.0
Earnings Per Share (Diluted)
Net income	$	0.58		$	1.21		$	2.16		$	4.00
Income from operations		1.23			1.34			3.77			4.01
Average Equity
(Excluding AOCI)	$	11,308.2		$	11,726.3		$	11,371.9		$	11,578.6
Return on Equity
Net income		5.2	%		11.2	%		6.6	%		12.7	%
Income from operations		11.2	%		12.5	%		11.5	%		12.7	%

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Definition of Book Value Per Share Excluding AOCI

Book value per share excluding AOCI is calculated based upon a non-GAAP financial measure. It is calculated by dividing (a) stockholders' equity excluding AOCI, by (b) common shares outstanding. Management provides book value per share excluding AOCI to enable investors to analyze the amount of our net worth that is primarily attributable to our business operations. Management believes book value per share excluding AOCI is useful to investors because it eliminates the effect of items that can fluctuate significantly from period to period, primarily based on changes in interest rates.  Book value per share is the most directly comparable GAAP measure.  A reconciliation of book value per share to book value per share excluding AOCI as of September 30, 2008 and 2007 is set forth below.

	As of September 30,
	2008			2007
Book value per share, including AOCI	$	37.11		$	44.41
Per share impact of AOCI		(7.07	)		0.74
Book value per share, excluding AOCI	$	44.18		$	43.67

LINCOLN NATIONAL CORPORATION

DIGEST OF EARNINGS

($ in millions, except per share data)
	For the Three Months Ended
	September 30,
	2008		2007
Revenues	$	2,436.0	$	2,600.8
Net Income		148.4		329.6
EPS - Basic	$	0.58	$	1.22
EPS - Diluted		0.58		1.21
Average Shares - Basic		255,865,067		269,395,799
Average Shares - Diluted		257,645,254		272,487,687
	For the Nine Months Ended
	September 30,
	2008		2007
Revenues	$	7,609.7	$	7,892.8
Net Income		562.3		1,102.1
EPS - Basic	$	2.18	$	4.06
EPS - Diluted		2.16		4.00
Average Shares - Basic		258,192,178		271,597,197
Average Shares - Diluted		259,962,129		275,437,786

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Forward-Looking Statements—Cautionary Language

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

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

·   Continued deterioration in general economic and business conditions, both domestic and foreign, that may affect foreign exchange rates, premium levels, claims experience, the level of pension benefit costs and funding and investment results;

·   Continued economic declines and credit market illiquidity could cause us to realize additional impairments on investments and certain intangible assets including a valuation allowance against deferred tax assets, which may reduce future earnings and/or affect our financial condition and ability to raise additional capital or refinance existing debt as it matures;

·   Uncertainty about the effectiveness of the U.S. government's plan to purchase large amounts of illiquid, mortgage-backed and other securities from financial institutions;

·   Legislative, regulatory or tax changes, both domestic and foreign, that affect the cost of, or demand for, Lincoln's 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 Lincoln 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 Lincoln 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 Lincoln's fixed annuity and life insurance businesses and demand for Lincoln's products;

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

·   Ineffectiveness of Lincoln's various hedging strategies used to offset the impact of changes in the value of liabilities due to changes in the level and volatility of the equity markets and interest rates;

·   A deviation in actual experience regarding future persistency, mortality, morbidity, interest rates or equity market returns from Lincoln's assumptions used in pricing its 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, including as a result of stranger-originated life insurance business;

·   Changes in GAAP that may result in unanticipated changes to Lincoln's net income, including the impact of Statement of Financial Accounting Standards No. 157, "Fair Value Measurements," and SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities;"

·   Lowering of one or more of Lincoln's debt ratings issued by nationally recognized statistical rating organizations and the adverse impact such action may have on Lincoln's ability to raise capital and on its liquidity and financial condition;

·   Lowering of one or more of the insurer financial strength ratings of Lincoln's insurance subsidiaries and the adverse impact such action may have on the premium writings, policy retention and profitability of its insurance subsidiaries;

·   Significant credit, accounting, fraud or corporate governance issues that may adversely affect the value of certain investments in the portfolios of Lincoln's companies requiring that Lincoln realize losses on such investments;

·   The impact of acquisitions and divestitures, restructurings, product withdrawals and other unusual items, including Lincoln's ability to integrate acquisitions and to obtain the anticipated results and synergies from acquisitions, including Lincoln's ability to successfully integrate Jefferson-Pilot's businesses, to achieve the expected synergies from the merger or to achieve such synergies within our expected timeframe;

·   The adequacy and collectibility of reinsurance that Lincoln has purchased;

·   Acts of terrorism, war or other man-made and natural catastrophes that may adversely affect Lincoln's 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 Lincoln can charge for its products;

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

·   Loss of key management, portfolio managers in the Investment Management segment, financial planners or wholesalers.

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

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EX-99.2

Exhibit 99.2

Lincoln  Statistical Report
	third Q U A R T E R
		2 0 0 8
The financial data in this document is dated October 28, 2008 and has not been updated since that date.  LNC does not intend to update this document.

Lincoln Financial Group
Table of Contents
Third Quarter
2008
LFG Analyst Coverage	i
Notes	ii-iii
Financial Highlights	1 - 3
Consolidated Operating Expense Detail	4
Results Summary	5
Details Underlying Realized Gain (Loss), After-DAC	6
Consolidated Statements of Income	7
Consolidating Statements of Income from Operations - Current Year - Quarter	8
Consolidating Statements of Income from Operations - Prior Year - Quarter	9
Consolidating Statements of Income from Operations - Current Year - Year-to-Date	10
Consolidating Statements of Income from Operations - Prior Year - Year-to-Date	11
Consolidated Balance Sheets	12
Balance Sheet Data - Segment Highlights	13
Retirement Solutions
Consolidated - Income Statements and Operational Data	14
Annuities:
Income Statements and Operational Data	15
Roll Forwards of DAC, VOBA, DFEL and DSI	16
Account Value Roll Forward	17
Account Values, Spread Information, GLB Expense Assessments,
GLB Attributed Fee and GLB Account Values by Type	18
Defined Contribution:
Income Statements and Operational Data	19
Account Value Roll Forward	20
Account Value Roll Forward - By Product and Supplemental Data	21
Insurance Solutions
Life Insurance:
Income Statements and Operational Data	22
Operational Data and Account Value Roll Forward	23
Group Protection:
Income Statements and Operational Data	24
Investment Management
Income Statements and Operational Data	25
Assets Under Management Roll Forward	26-27
Lincoln UK
Income Statements and Operational Data	28
Other Operations	29
Discontinued Operations	29
Domestic Deposits, Account Balances, and Net Flows	30
Consolidated Investment Data
Assets Managed	31
Other Investment Data	32

i

LFG Analyst Coverage

Third Quarter, 2008

FIRM	ANALYST	PHONE NUMBER
Barclays Capital	Eric Berg	212-526-2805
Citigroup	Colin Devine	212-816-1682
Credit Suisse	Tom Gallagher	212-538-2010
Deutsche Bank	Darin Arita	212-250-7321
Dowling & Partners	Paul Goulekas	860-676-8600
Fox-Pitt Kelton Cochran Caronia Waller	Mark Finkelstein	312-425-4079
Goldman Sachs & Company	Tom Cholnoky	212-902-3408
JP Morgan	Jimmy Bhullar	212-622-6397
Keefe, Bruyette & Woods	Jeff Schuman	860-722-5902
Langen McAlenney	Bob Glasspiegel	860-724-1203
Merrill Lynch	Ed Spehar	212-449-4245
Morgan Stanley	Nigel Dally	212-761-6235
Raymond James & Associates	Steven Schwartz	312-612-7686
Sanford C. Bernstein	Suneet Kamath	212-756-4587
Sterne, Agee & Leach	John Nadel	212-338-4717
UBS	Andrew Kligerman	212-713-2492
Wachovia Securities	John Hall	212-214-8032

Investor inquiries may be directed to:

Jim Sjoreen, Vice President, Investor Relations

Email: Jim.Sjoreen@lfg.com

Voice: (484) 583-1420

Fax: (484) 593-3962

Note: This list is provided for informational purposes only.  LFG does not endorse the analyses, conclusions, or recommendations contained in any report issued by these or any other analysts.

**Statistical data will be available immediately after the release of earnings for each quarter through LNC’s Investor Relations website: http://www.LincolnFinancial.com/investor

9/30/2008			ii
NOTES
Definitions and Presentation
"Income from operations," "operating revenues" and "return on capital" are non-GAAP financial measures and do not replace GAAP revenues,
net income (loss) and return on stockholders' equity.  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 associated with the following ("excluded realized gain (loss)"):
		*    Sale or disposal of securities;
		*    Impairments of securities;
		*    Change in the fair value of embedded derivatives within certain reinsurance arrangements and the change in the fair value
		of related trading securities;
		*    Change in the fair value of the embedded derivatives of our guaranteed living benefits within our variable annuities ("GLB")
		net of the change in the fair value of the derivatives we own to hedge the changes in the embedded derivative
		("GLB net derivatives results");
		*    Net difference between the benefit ratio unlocking of SOP 03-1 reserves on our guaranteed death benefit ("GDB") riders
		within our variable annuities and the change in the fair value of the derivatives excluding our expected cost of the hedging
		instruments ("GDB derivative results"); and
		*    Changes in the fair value of the embedded derivative liabilities related to index call options we may purchase in the future to
		hedge contract holder index allocations applicable to future reset periods for our indexed annuity products as required under
		SFAS 133 and SFAS 157 ("indexed annuity forward-starting option");
	*    Income (loss) from the initial adoption of changes in accounting principles;
	*    Income (loss) from reserve changes (net of related amortization) on business sold through reinsurance;
	*    Losses on early retirement of debt, including subordinated debt;
	*    Losses from the impairment of intangible assets; and
	*    Income (loss) from discontinued operations.
*	Operating revenues represent GAAP revenues excluding the pre-tax effects of the following items, as applicable:
	*    Excluded realized gain (loss);
	*    Amortization of deferred gains arising from the reserve changes on business sold through reinsurance; and
	*    Revenue adjustments from the initial impact of the adoption of changes in accounting principles.
*	Return on capital measures the effectiveness of our use of 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 stockholders' equity represents the effect of leveraging on our consolidated results.
Income from operations, operating revenues and return on capital are financial measures we use to evaluate and assess our results.  Our
management and Board of Directors believe that these performance measures explain the results of our ongoing businesses in a manner that
allows for a better understanding of the underlying trends in our current business because the excluded items are unpredictable and not
necessarily indicative of current operating fundamentals or future performance of the business segments, and, in most instances, decisions
regarding these items do not necessarily relate to the operations of the individual segments.
*	Certain operating and statistical measures are included in this report to provide supplemental data regarding the performance of our
	current business.  These measures include deposits, sales, net flows, first-year premiums, in force, spreads and assets under
	management.
*	Sales as reported consist of the following:
	*    Universal life ("UL") (excluding linked-benefit products) and variable universal life ("VUL"), including corporate-owned life
	insurance ("COLI") and bank-owned life insurance ("BOLI") - first year commissionable premiums plus 5% of excess premiums
	received, including an adjustment for internal replacements at approximately 50% of target;
	*    Whole life and term - 100% of first year paid premiums;
	*    Linked-benefit - 15% of premium deposits;
	*    Annuities - deposits from new and existing customers;
	*    Group Protection - annualized first year premiums from new policies; and
	*    Investment Management retail sales and institutional inflows - contributions, transfer in kind purchases
	and reinvested dividends for new and existing accounts.
Our roll forwards of deferred acquisition costs ("DAC") and value of business acquired ("VOBA"), deferred sales inducements ("DSI") and deferred
front-end loads ("DFEL") disclose the net impact of prospective and retrospective unlocking on amortization for these accounts.  This information
helps explain a source of volatility in amortization.
*	Prospective unlocking - In the third quarter of each year, we review and update our assumptions used in projecting our future estimated
	gross profits ("EGPs") used to amortize DAC, VOBA, DFEL, DSI and the calculations of embedded derivatives and reserves for
	annuity and life insurance products with certain guarantees.  These updates to assumptions result in unlocking that represents an
	increase or decrease to our carrying value of DAC, VOBA, DFEL, DSI and other contract holder funds based upon our updated view of
	future EGPs.  The various assumptions that are reviewed include investment margins, mortality, retention and rider utilization.  In
	addition, in the third quarter of each year during our annual prospective unlocking review, we may identify and implement actuarial
	modeling refinements which can result in prospective and retrospective unlocking impacts that impact DAC, VOBA, DSI, DFEL
	and SOP 03-1, SFAS 133 and SFAS 157 reserves.
*	Retrospective unlocking - On a quarterly basis, we “true-up” our models for actual gross profits and in-force experience for the period.
	To the extent that actual experience differs from previously expected, a positive or negative retrospective adjustment to the
	amortization of DAC, VOBA, DSI and DFEL is recorded.  This update to the models may generate a change in the amortization rate
	which results in a catch-up to the cumulative amortization, by recalculating the DAC, VOBA, DSI and DFEL balances assuming that
	the revised amortization rate had been used since issue.

		iii
*	Our unlocking process also includes our reserves for our guaranteed benefit features and is described more fully in “Part II - Item 7 -
	Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and
	Estimates” of our 2007 Form 10-K.
Book value per share excluding accumulated other comprehensive income ("AOCI") is calculated based upon a non-GAAP financial measure. It is
calculated by dividing (a) stockholders' equity excluding AOCI, by (b) common shares outstanding. We provide book value per share excluding
AOCI to enable investors to analyze the amount of our net worth that is primarily attributable to our business operations. We believe book value
per share excluding AOCI is useful to investors because it eliminates the effect of items that can fluctuate significantly from period to period,
primarily based on changes in interest rates.  Book value per share is the most directly comparable GAAP measure.
Pre-tax operating margin is calculated as income (loss) from operations before federal income taxes divided by operating revenues.
After-tax operating margin is calculated as income (loss) from operations divided by operating revenues.
In 2007, we executed plans to divest our television broadcasting, sports programming and Charlotte radio stations.  During the fourth quarter of
2007, we entered into definitive agreements to sell our television broadcasting, Charlotte radio and sports programming businesses.  The
divestiture of the sports programming business closed on November 30, 2007, the Charlotte radio station business closed on January 31, 2008
and the television broadcasting closed on March 31, 2008.  Accordingly, in the periods prior to the closings, the assets and liabilities of these
businesses not sold have been reclassified as held-for-sale for all periods presented, and are reported within other assets and other liabilities on
our Consolidated Balance Sheets.  The results of operations of these businesses have been reclassified into income (loss) from discontinued
operations for all periods presented on the Financial Highlights, Results Summary and Consolidated Statements of Income pages.
Inter-segment transfer refers to a transfer from Retirement Solutions - Annuities to Retirement Solutions - Defined Contribution.
Reclassifications
Subsequent to the second quarter of 2008, we announced the realignment of our segments under our former Individual Markets and Employer
Markets operating businesses into two new operating businesses - Retirement Solutions and Insurance Solutions.  In addition to the realignment,
the results of our Executive Benefits business are no longer reported separately, but are included in our Life Insurance segment.  We have restated
all periods presented to conform to the new alignment of our businesses and segments.  We view the changes to the existing segments as
immaterial.

9/30/2008																						PAGE 1
Financial Highlights
Unaudited (in millions, except per share data)
	For the Three Months Ended September 30,												For the Nine Months Ended September 30,
							Change												Change
	2008			2007			Amount			%			2008			2007			Amount			%
Income from Operations - By Segment
Annuities	$	130.9		$	125.9		$	5.0			4.0	%	$	364.9		$	365.9		$	(1.0	)		-0.3	%
Defined Contribution		42.3			41.2			1.1			2.7	%		123.9			138.2			(14.3	)		-10.3	%
Total Retirement Solutions		173.2			167.1			6.1			3.7	%		488.8			504.1			(15.3	)		-3.0	%
Life Insurance		137.3			182.5			(45.2	)		-24.8	%		458.3			548.3			(90.0	)		-16.4	%
Group Protection		27.2			33.2			(6.0	)		-18.1	%		85.7			85.3			0.4			0.5	%
Total Insurance Solutions		164.5			215.7			(51.2	)		-23.7	%		544.0			633.6			(89.6	)		-14.1	%
Investment Management		5.3			21.8			(16.5	)		-75.7	%		32.4			49.3			(16.9	)		-34.3	%
Lincoln UK		12.3			10.3			2.0			19.4	%		41.0			32.9			8.1			24.6	%
Other Operations		(39.5	)		(49.6	)		10.1			20.4	%		(126.2	)		(113.9	)		(12.3	)		-10.8	%
Total Income From Operations (1)		315.8			365.3			(49.5	)		-13.6	%		980.0			1,106.0			(126.0	)		-11.4	%
Excluded realized gain (loss), after-tax  (2)		(166.8	)		(42.7	)		(124.1	)	NM				(274.5	)		(17.3	)		(257.2	)	NM
Income (loss) from reserve changes (net of related amortization)
on business sold through reinsurance, after-tax		0.4			0.4			-			-			1.3			(7.2	)		8.5			118.1	%
Impairment of intangibles, after-tax (3)		-			-			-		NM				(139.0	)		-			(139.0	)	NM
Income (loss) from discontinued operations, after-tax (4)		(1.0	)		6.6			(7.6	)	NM				(5.5	)		20.6			(26.1	)	NM
Net Income	$	148.4		$	329.6		$	(181.2	)		-55.0	%	$	562.3		$	1,102.1		$	(539.8	)		-49.0	%
Earnings Per Share (Diluted) (5)
Income from operations (1)	$	1.23		$	1.34		$	(0.11	)		-8.2	%	$	3.77		$	4.01		$	(0.24	)		-6.0	%
Excluded realized gain (loss), after-tax  (2)		(0.65	)		(0.15	)		(0.50	)	NM				(1.06	)		(0.05	)		(1.01	)	NM
Income (loss) from reserve changes (net of related amortization)
on business sold through reinsurance, after-tax		-			-			-		NM				-			(0.03	)		0.03			100.0	%
Impairment of intangibles, after-tax (3)		-			-			-		NM				(0.53	)		-			(0.53	)	NM
Income (loss) from discontinued operations, after-tax  (4)		-			0.02			(0.02	)		-100.0	%		(0.02	)		0.07			(0.09	)	NM
Net Income	$	0.58		$	1.21		$	(0.63	)		-52.1	%	$	2.16		$	4.00		$	(1.84	)		-46.0	%
Operating Revenues - By Segment
Annuities	$	675.2		$	647.0		$	28.2			4.4	%	$	1,916.5		$	1,861.0		$	55.5			3.0	%
Defined Contribution		240.8			243.4			(2.6	)		-1.1	%		717.9			742.2			(24.3	)		-3.3	%
Total Retirement Solutions		916.0			890.4			25.6			2.9	%		2,634.4			2,603.2			31.2			1.2	%
Life Insurance		1,071.6			1,056.4			15.2			1.4	%		3,210.7			3,120.6			90.1			2.9	%
Group Protection		402.8			367.5			35.3			9.6	%		1,227.1			1,119.0			108.1			9.7	%
Total Insurance Solutions		1,474.4			1,423.9			50.5			3.5	%		4,437.8			4,239.6			198.2			4.7	%
Investment Management		109.9			150.1			(40.2	)		-26.8	%		354.5			451.2			(96.7	)		-21.4	%
Lincoln UK		79.8			88.6			(8.8	)		-9.9	%		263.3			271.9			(8.6	)		-3.2	%
Other Operations		111.8			112.9			(1.1	)		-1.0	%		339.8			345.3			(5.5	)		-1.6	%
Total Operating Revenues		2,691.9			2,665.9			26.0			1.0	%		8,029.8			7,911.2			118.6			1.5	%
Excluded realized gain (loss), pre-tax (2)		(256.5	)		(65.7	)		(190.8	)	NM				(422.1	)		(27.2	)		(394.9	)	NM
Amortization of deferred gains arising from reserve changes
on business sold through reinsurance, pre-tax		0.6			0.6			-			-			2.0			8.8			(6.8	)		-77.3	%
Total Revenues	$	2,436.0		$	2,600.8		$	(164.8	)		-6.3	%	$	7,609.7		$	7,892.8		$	(283.1	)		-3.6	%

(1)   Income from operations includes restructuring charges, after-tax, of $0.3 million, or -0- cents per share, and $4.8 million, or 2 cents per share, for the quarters ended September 30, 2008 and 2007, respectively and $1.6 million, or 1     cent per share, and $11.3 million, or 4 cents per share, for the nine months ended September 30, 2008 and 2007, respectively.

(2)   See page 6 for detail.

(3)   During the second quarter of 2008, we recorded goodwill impairment of $83.4 million and impairment of our FCC license intangible assets of $91.6 million, pre-tax, and $55.6 million, after-tax, on our remaining radio clusters.  These impairments were attributable primarily to declines in advertising revenues for the entire radio market, which resulted in declines in current and forecasted broadcast cash flows.  Therefore, we updated our impairment review, outside of our annual process normally completed as of October 1 each year, as of April 1, 2008.

(4)  Includes discontinued operations and the loss on disposal.  See Discontinued Operations on page 29 for details.

(5)  The income used in the calculation of our diluted earnings per share is reduced by minority interest adjustments related to outstanding stock options under the Delaware Investments U.S., Inc stock option incentive plan. See page 5 for detail of minority interest adjustments.

9/30/2008																						PAGE 2
Financial Highlights (Continued)
Unaudited (billions of dollars)
Operational Data by Segment	For the Three Months Ended September 30,												For the Nine Months Ended September 30,
							Change												Change
	2008			2007			Amount			%			2008			2007			Amount			%
Retirement Solutions - Annuities
Gross deposits	$	2.948		$	3.478		$	(0.530	)		-15.2	%	$	9.410		$	9.577		$	(0.167	)		-1.7	%
Net flows		0.944			1.291			(0.347	)		-26.9	%		3.714			3.184			0.530			16.6	%
Account values (gross)		67.671			76.106			(8.435	)		-11.1	%		67.671			76.106			(8.435	)		-11.1	%
Account values (net of reinsurance)		66.475			74.676			(8.201	)		-11.0	%		66.475			74.676			(8.201	)		-11.0	%
Retirement Solutions - Defined Contribution
Gross deposits (1)		1.334			1.525			(0.191	)		-12.5	%		4.306			4.285			0.021			0.5	%
Net flows		0.093			0.133			(0.040	)		-30.1	%		0.610			0.427			0.183			42.9	%
Account values - annuities		24.898			29.472			(4.574	)		-15.5	%		24.898			29.472			(4.574	)		-15.5	%
Alliance and Smart Future mutual funds		7.675			7.165			0.510			7.1	%		7.675			7.165			0.510			7.1	%
Total annuities and mutual fund account values		32.573			36.637			(4.064	)		-11.1	%		32.573			36.637			(4.064	)		-11.1	%
Insurance Solutions - Life Insurance
Sales (in millions) (2)	$	190.3		$	197.9		$	(7.6	)		-3.8	%	$	529.7		$	615.4		$	(85.7	)		-13.9	%
Life insurance in force		539.964			531.247			8.717			1.6	%		539.964			531.247			8.717			1.6	%
Account values		32.283			32.266			0.017			0.1	%		32.283			32.266			0.017			0.1	%
Insurance Solutions - Group Protection
Annualized sales (in millions)		68.4			60.5			7.9			13.1	%		187.1			183.4			3.7			2.0	%
Loss ratio (3)		71.6	%		68.6	%	NM			NM				70.9	%		70.7	%	NM			NM
Investment Management
Retail sales	$	2.699		$	2.811		$	(0.112	)		-4.0	%	$	8.790		$	9.687		$	(0.897	)		-9.3	%
Retail net flows		(1.326	)		(0.335	)		(0.991	)	NM				(2.918	)		(0.378	)		(2.540	)	NM
Institutional inflows		1.290			2.936			(1.646	)		-56.1	%		3.428			8.243			(4.815	)		-58.4	%
Institutional net flows		(2.007	)		0.426			(2.433	)	NM				(3.052	)		(0.044	)		(3.008	)	NM
Total sales and inflows		3.989			5.747			(1.758	)		-30.6	%		12.218			17.930			(5.712	)		-31.9	%
Total net flows		(3.333	)		0.091			(3.424	)	NM				(5.970	)		(0.422	)		(5.548	)	NM
Assets under management - retail and institutional		66.599			99.716			(33.117	)		-33.2	%		66.599			99.716			(33.117	)		-33.2	%
Assets under management - general account		63.531			67.324			(3.793	)		-5.6	%		63.531			67.324			(3.793	)		-5.6	%
Assets under management - total segment		130.130			167.040			(36.910	)		-22.1	%		130.130			167.040			(36.910	)		-22.1	%
Consolidated
Domestic retail deposits	$	6.996		$	7.968		$	(0.972	)		-12.2	%	$	22.445		$	24.202		$	(1.757	)		-7.3	%
Domestic retail account balances		159.762			182.459			(22.697	)		-12.4	%		159.762			182.459			(22.697	)		-12.4	%
Domestic retail net flows		0.318			1.789			(1.471	)		-82.2	%		3.169			5.493			(2.324	)		-42.3	%
Domestic deposits		8.234			10.874			(2.640	)		-24.3	%		25.695			32.116			(6.421	)		-20.0	%
Domestic net flows		(1.436	)		2.343			(3.779	)	NM				0.451			5.599			(5.148	)		-91.9	%
Assets under management		199.507			251.479			(51.972	)		-20.7	%		199.507			251.479			(51.972	)		-20.7	%

(1)  Includes deposits for mutual funds, which are not included on our Consolidated Balance Sheets.

(2)  Sales consist of first year commissionable premiums of UL and VUL, including COLI and BOLI, plus 5% of excess premiums received, including an adjustment for internal replacements at approximately 50% of target; first year paid premiums for whole life and term products; and 15% of premium deposits for linked-benefit products.

(3)   Represents combined loss ratio for life, disability and dental businesses.

9/30/2008																						PAGE 3
Financial Highlights (Continued)
Unaudited (millions of dollars)
	For the Three Months Ended September 30,												For the Nine Months Ended September 30,
							Change												Change
	2008			2007			Amount			%			2008			2007			Amount			%
Balance Sheet Assets - End-of-Period	$	173,270.7		$	192,216.8		$	(18,946.1	)		-9.9	%	$	173,270.7		$	192,216.8		$	(18,946.1	)		-9.9	%
Stockholders' Equity
Beginning-of-period (including AOCI)	$	10,497.7		$	11,835.7		$	(1,338.0	)		-11.3	%	$	11,718.4		$	12,201.0		$	(482.6	)		-4.0	%
End-of-period (including AOCI)		9,500.1			11,962.9			(2,462.8	)		-20.6	%		9,500.1			11,962.9			(2,462.8	)		-20.6	%
End-of-period (excluding AOCI)		11,310.4			11,766.0			(455.6	)		-3.9	%		11,310.4			11,766.0			(455.6	)		-3.9	%
Average equity (excluding AOCI)		11,308.2			11,726.3			(418.1	)		-3.6	%		11,371.9			11,578.6			(206.7	)		-1.8	%
Return on Equity
Net income/average equity (excluding AOCI)		5.2	%		11.2	%								6.6	%		12.7	%
Income from operations/average equity (excluding AOCI)		11.2	%		12.5	%								11.5	%		12.7	%
Return on Capital
Income from operations/average capital		8.8	%		10.1	%								9.0	%		10.3	%
Common Stock Outstanding
Average for the period - diluted		257.6			272.5			(14.9	)		-5.5	%		260.0			275.4			(15.4	)		-5.6	%
End-of-period - assuming conversion of preferreds		256.0			269.4			(13.4	)		-5.0	%		256.0			269.4			(13.4	)		-5.0	%
End-of-period - diluted		256.9			271.7			(14.8	)		-5.4	%		256.9			271.7			(14.8	)		-5.4	%
Book value (including AOCI)	$	37.11		$	44.41		$	(7.30	)		-16.4	%	$	37.11		$	44.41		$	(7.30	)		-16.4	%
Book value (excluding AOCI)		44.18			43.67			0.51			1.2	%		44.18			43.67			0.51			1.2	%
Cash Returned to Shareholders
Share repurchase - dollar amount	$	50.0		$	174.6		$	(124.6	)		-71.4	%	$	475.5		$	686.3		$	(210.8	)		-30.7	%
Dividends declared		105.9			106.1			(0.2	)		-0.2	%		320.0			320.4			(0.4	)		-0.1	%
Total Cash Returned to Shareholders	$	155.9		$	280.7		$	(124.8	)		-44.5	%	$	795.5		$	1,006.7		$	(211.2	)		-21.0	%
Share repurchase - number of shares		1.01			3.09			(2.08	)		-67.3	%		9.09			10.31			(1.21	)		-11.8	%
Dividend declared on common stock - per share	$	0.415		$	0.395		$	0.020			5.1	%	$	1.245		$	1.185		$	0.060			5.1	%
Dividend payout ratio (1)		71.6	%		32.6	%								57.6	%		29.6	%
Annualized yield (2)		3.9	%		2.4	%								3.9	%		2.4	%
Comprehensive Income (Loss)
Net income	$	148.4		$	329.6		$	(181.2	)		-55.0	%	$	562.3		$	1,102.1		$	(539.8	)		-49.0	%
Net unrealized loss on available-for-sale securities		(964.3	)		39.4			(1,003.7	)	NM				(1,989.7	)		(437.2	)		(1,552.5	)	NM
Losses on derivatives		12.2			(3.6	)		15.8		NM				1.3			(6.9	)		8.2			118.8	%
Foreign currency translation		(56.0	)		12.2			(68.2	)	NM				(54.4	)		28.4			(82.8	)	NM
Funded status of employee benefit plans		6.3			(0.5	)		6.8		NM				7.3			(0.6	)		7.9		NM
Comprehensive Income (Loss)	$	(853.4	)	$	377.1		$	(1,230.5	)	NM			$	(1,473.2	)	$	685.8		$	(2,159.0	)	NM
Ratios
Debt to total capitalization (3)		22.6	%		21.6	%								22.6	%		21.6	%
Debt to equity (3)		29.3	%		27.5	%								29.3	%		27.5	%
	Ratings as of October 28, 2008
	A.M. Best			Fitch			Moody's			Standard & Poor's
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

(1) Indicated dividend divided by net income.

(2) Indicated dividend divided by the closing price.

(3)  Equity used in calculation excludes AOCI and $375 million of senior notes issued in October of 2007 because the proceeds were reinvested in a pool of long-term assets. Capital securities are considered 25% debt

 and 75% equity.

9/30/2008																									PAGE 4
Consolidated Operating Expense Detail
Unaudited (in millions)
	For the Three Months Ended																		For the Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2007			2007			2008			2008			2008			Change			2007			2008			Change
Commissions	$	470.9		$	501.9		$	426.6		$	434.4		$	434.1			-7.8	%	$	1,380.2		$	1,295.1			-6.2	%
General and Administrative Expenses
General and administrative expenses		418.2			432.7			400.6			401.1			396.9			-5.1	%		1,250.7			1,198.6			-4.2	%
Merger-related expenses		21.9			23.6			13.8			14.9			12.6			-42.5	%		46.6			41.3			-11.4	%
Total General and Administrative Expenses
Excluding Broker-Dealer		440.1			456.3			414.4			416.0			409.5			-7.0	%		1,297.3			1,239.9			-4.4	%
Communications expenses		13.2			13.5			15.5			15.4			14.1			6.8	%		43.0			45.0			4.7	%
Restructuring charges (1)		7.4			2.9			0.9			1.2			0.4			-94.6	%		17.4			2.5			-85.6	%
Taxes, licenses and fees		52.4			48.6			62.3			52.3			60.3			15.1	%		169.5			174.9			3.2	%
Interest and debt expense		68.2			80.3			75.4			64.8			68.6			0.6	%		203.7			208.8			2.5	%
Total Commissions and Expenses Incurred		1,052.2			1,103.5			995.1			984.1			987.0			-6.2	%		3,111.1			2,966.2			-4.7	%
Less: Commissions and Expenses Capitalized		(511.5	)		(554.4	)		(456.5	)		(464.7	)		(464.2	)		9.2	%		(1,503.8	)		(1,385.4	)		7.9	%
Amortization
Amortization of DAC and VOBA, net of interest		283.4			273.0			255.2			309.0			219.6			-22.5	%		792.0			783.8			-1.0	%
Amortization of intangibles		2.6			2.5			1.6			1.6			1.4			-46.2	%		7.7			4.6			-40.3	%
Total Amortization		286.0			275.5			256.8			310.6			221.0			-22.7	%		799.7			788.4			-1.4	%
Broker-Dealer Commissions and G&A		91.8			100.5			89.2			85.1			78.5			-14.5	%		271.8			252.8			-7.0	%
Total	$	918.5		$	925.1		$	884.6		$	915.1		$	822.3			-10.5	%	$	2,678.8		$	2,622.0			-2.1	%
Merger-Related Expenses (2)
Severance and employee-related charges	$	5.6		$	6.2		$	3.1		$	2.5		$	1.2			-78.6	%	$	10.8		$	6.8			-37.0	%
Systems integration and related expenses		17.9			15.1			9.3			12.0			9.6			-46.4	%		32.9			30.9			-6.1	%
Other expenses		5.8			6.6			2.3			1.6			2.2			-62.1	%		13.3			6.1			-54.1	%
Total Merger-Related Expenses	$	29.3		$	27.9		$	14.7		$	16.1		$	13.0			-55.6	%	$	57.0		$	43.8			-23.2	%

(1)   In the fourth quarter of 2007, we released $1.4 million of restructuring reserve that was not merger-related.

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

9/30/2008																									PAGE 5
Results Summary
Unaudited (millions of dollars)
	For the Three Months Ended																		For the Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2007			2007			2008			2008			2008			Change			2007			2008			Change
Operating Revenues
Annuities	$	647.0		$	672.3		$	622.6		$	618.7		$	675.2			4.4	%	$	1,861.0		$	1,916.5			3.0	%
Defined Contribution		243.4			243.3			237.7			239.4			240.8			-1.1	%		742.2			717.9			-3.3	%
Total Retirement Solutions		890.4			915.6			860.3			858.1			916.0			2.9	%		2,603.2			2,634.4			1.2	%
Life Insurance		1,056.4			1,068.2			1,053.1			1,086.0			1,071.6			1.4	%		3,120.6			3,210.7			2.9	%
Group Protection		367.5			380.6			399.4			424.9			402.8			9.6	%		1,119.0			1,227.1			9.7	%
Total Insurance Solutions		1,423.9			1,448.8			1,452.5			1,510.9			1,474.4			3.5	%		4,239.6			4,437.8			4.7	%
Investment Management		150.1			139.0			120.3			124.3			109.9			-26.8	%		451.2			354.5			-21.4	%
Lincoln UK		88.6			98.3			85.6			97.9			79.8			-9.9	%		271.9			263.3			-3.2	%
Other Operations		112.9			128.0			117.9			110.1			111.8			-1.0	%		345.3			339.8			-1.6	%
Total Operating Revenues		2,665.9			2,729.7			2,636.6			2,701.3			2,691.9			1.0	%		7,911.2			8,029.8			1.5	%
Excluded realized gain (loss), pre-tax (1)		(65.7	)		(147.9	)		(45.3	)		(120.3	)		(256.5	)	NM				(27.2	)		(422.1	)	NM
Amortization of deferred gains arising from reserve changes on business sold
through reinsurance, pre-tax		0.6			0.7			0.7			0.7			0.6			0.0	%		8.8			2.0			-77.3	%
Total Revenues	$	2,600.8		$	2,582.5		$	2,592.0		$	2,581.7		$	2,436.0			-6.3	%	$	7,892.8		$	7,609.7			-3.6	%
Income from Operations (2)
Annuities	$	125.9		$	118.9		$	117.8		$	116.2		$	130.9			4.0	%	$	365.9		$	364.9			-0.3	%
Defined Contribution		41.2			43.1			40.4			41.2			42.3			2.7	%		138.2			123.9			-10.3	%
Total Retirement Solutions		167.1			162.0			158.2			157.4			173.2			3.7	%		504.1			488.8			-3.0	%
Life Insurance		182.5			170.6			157.4			163.6			137.3			-24.8	%		548.3			458.3			-16.4	%
Group Protection		33.2			28.2			26.3			32.2			27.2			-18.1	%		85.3			85.7			0.5	%
Total Insurance Solutions		215.7			198.8			183.7			195.8			164.5			-23.7	%		633.6			544.0			-14.1	%
Investment Management		21.8			27.0			12.1			15.0			5.3			-75.7	%		49.3			32.4			-34.3	%
Lincoln UK		10.3			12.7			10.7			18.0			12.3			19.4	%		32.9			41.0			24.6	%
Other Operations		(49.6	)		(59.3	)		(42.3	)		(44.4	)		(39.5	)		20.4	%		(113.9	)		(126.2	)		-10.8	%
Income from Operations (2)		365.3			341.2			322.4			341.8			315.8			-13.6	%		1,106.0			980.0			-11.4	%
Excluded realized gain (loss), after-tax (1)		(42.7	)		(102.3	)		(29.5	)		(78.2	)		(166.8	)	NM				(17.3	)		(274.5	)	NM
Income (loss) from reserve changes (net of related
amortization) on business sold through reinsurance, after-tax		0.4			0.4			0.4			0.4			0.4			0.0	%		(7.2	)		1.3			118.1	%
Impairment of intangibles, after-tax (3)		-			-			-			(139.0	)		-		NM				-			(139.0	)	NM
Income (loss) from discontinued operations, after-tax (4)		6.6			(126.8	)		(4.2	)		(0.3	)		(1.0	)	NM				20.6			(5.5	)	NM
Net Income	$	329.6		$	112.5		$	289.1		$	124.7		$	148.4			-55.0	%	$	1,102.1		$	562.3			-49.0	%

	For the Three Months Ended															For the Nine Months Ended
	Sept.			Dec.			March			June			Sept.				Sept.			Sept.
	2007			2007			2008			2008			2008				2007			2008
Stockholders' Equity
Beginning-of-period (including AOCI)	$	11,835.7		$	11,962.9		$	11,718.4		$	11,086.3		$	10,497.7			$	12,201.0		$	11,718.4
End-of-period (including AOCI)		11,962.9			11,718.4			11,086.3			10,497.7			9,500.1				11,962.9			9,500.1
End-of-period (excluding AOCI)		11,766.0			11,493.1			11,408.0			11,306.0			11,310.4				11,766.0			11,310.4
Average equity (excluding AOCI)		11,726.3			11,629.6			11,450.5			11,357.0			11,308.2				11,578.6			11,371.9
Minority Interest Adjustment  (5)	$	0.5		$	0.9		$	0.3		$	0.2		$	0.1			$	1.2		$	0.6
Common Shares Outstanding
Average for the period - diluted		272.5			269.4			262.8			259.6			257.6				275.4			260.0
End-of-period - diluted		271.7			266.2			260.5			257.8			256.9				271.7			256.9
Per Share Data (Diluted) (5)
Net income	$	1.21		$	0.41		$	1.10		$	0.48		$	0.58			$	4.00		$	2.16
Income from operations (2)		1.34			1.26			1.23			1.32			1.23				4.01			3.77
Stockholders' Equity Per Share
Stockholders' equity (including AOCI)	$	44.41		$	44.32		$	42.74		$	40.85		$	37.11			$	44.41		$	37.11
Stockholders' equity (excluding AOCI)		43.67			43.47			43.98			43.99			44.18				43.67			44.18
Dividends declared (common stock)		0.395			0.415			0.415			0.415			0.415				1.185			1.245
Return on Equity
Net income/average equity		11.2	%		3.9	%		10.1	%		4.4	%		5.2	%			12.7	%		6.6	%
Income from operations/average equity		12.5	%		11.7	%		11.3	%		12.0	%		11.2	%			12.7	%		11.5	%
Market Value of Common Stock
Highest price	$	72.28		$	70.66		$	58.11		$	56.80		$	59.99			$	74.72		$	59.99
Lowest price		54.40			55.84			45.50			45.18			39.83				54.40			39.83
Closing price		65.97			58.22			52.00			45.32			42.81				65.97			42.81

(1)    See page 6 for detail.

(2)    Income from operations includes after-tax restructuring charges of $0.3 million, or -0- cents per share, for the third quarter of 2008, $0.8 million, or -0- cents per share, for the second quarter of 2008, $0.6 million or -0- cents per share, for the first quarter of 2008, $1.9 million, or 1 cent per share, for the fourth quarter of 2007 and $4.8 million, or 2 cents per share, for the third quarter of 2007.

(3)    See page 1 for detail.

(4)     Includes discontinued operations and the loss on disposition. See Discontinued Operations on page 29 for details.

(5)    The income used in the calculation of our diluted earnings per share is reduced by minority interest adjustments related to outstanding stock options under the Delaware Investments U.S., Inc stock option

   incentive plan.

9/30/2008																			PAGE 6
Details Underlying Realized Gain (Loss), After-DAC (1)
Unaudited (millions of dollars)
	For the Three Months Ended																		For the Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2007			2007			2008			2008			2008			Change			2007			2008			Change
Pre-Tax
Operating realized gain (2):
Indexed annuity net derivatives results (3)	$	0.1		$	(0.1	)	$	(1.4	)	$	(0.6	)	$	2.0		NM			$	2.3		$	-			-100.0	%
GLB (4)		1.6			1.8			5.8			10.4			10.9		NM				3.7			27.1		NM
GDB hedge cost (5)		(0.8	)		0.5			5.8			2.6			39.4		NM				(2.5	)		47.8		NM
Total operating realized gain		0.9			2.2			10.2			12.4			52.3		NM				3.5			74.9		NM
Realized gain (loss) related to certain investments (6)		(35.4	)		(108.8	)		(41.1	)		(124.6	)		(313.9	)	NM				(17.6	)		(479.6	)	NM
Gain (loss) on certain reinsurance derivative/trading securities (7)		(1.1	)		(0.8	)		0.4			1.5			(1.8	)		-63.6	%		2.6			0.1			-96.2	%
GLB net derivatives results (8)		(23.1	)		(37.4	)		(6.7	)		1.4			88.8		NM				(10.0	)		83.5		NM
Indexed annuity forward-starting option (9)		(6.2	)		(6.9	)		4.8			2.1			1.6			125.8	%		(3.2	)		8.5		NM
GDB derivative results (5)		0.1			(0.2	)		(5.2	)		(2.5	)		(33.4	)	NM				1.0			(41.1	)	NM
Gain on sale of subsidiaries/businesses		-			6.2			2.5			1.8			2.2		NM				-			6.5		NM
Total excluded realized gain (loss)		(65.7	)		(147.9	)		(45.3	)		(120.3	)		(256.5	)	NM				(27.2	)		(422.1	)	NM
Total Realized Gain (Loss)	$	(64.8	)	$	(145.7	)	$	(35.1	)	$	(107.9	)	$	(204.2	)	NM			$	(23.7	)	$	(347.2	)	NM
After-Tax
Operating realized gain (2):
Indexed annuity net derivatives results (3)	$	0.1		$	(0.1	)	$	(0.9	)	$	(0.4	)	$	1.3		NM			$	1.5		$	-			-100.0	%
GLB (4)		1.0			1.2			3.8			6.8			7.1		NM				2.4			17.7		NM
GDB hedge cost (5)		(0.5	)		0.3			3.8			1.7			25.6		NM				(1.6	)		31.1		NM
Total operating realized gain		0.6			1.4			6.7			8.1			34.0		NM				2.3			48.8		NM
Realized gain (loss) related to certain investments (6)		(23.2	)		(71.4	)		(27.1	)		(80.6	)		(204.0	)	NM				(10.9	)		(311.7	)	NM
Gain (loss) on certain reinsurance derivative/trading securities (7)		(0.5	)		(0.3	)		0.6			0.6			(1.2	)	NM				1.6			-			-100.0	%
GLB net derivatives results (8)		(15.1	)		(24.2	)		(4.2	)		0.9			57.6		NM				(6.6	)		54.3		NM
Indexed annuity forward-starting option (9)		(4.0	)		(4.5	)		3.1			1.4			1.0			125.0	%		(2.1	)		5.5		NM
GDB derivative results (5)		0.1			(0.1	)		(3.4	)		(1.6	)		(21.6	)	NM				0.7			(26.6	)	NM
Gain on sale of subsidiaries/businesses		-			(1.8	)		1.5			1.1			1.4		NM				-			4.0		NM
Total excluded realized gain (loss)		(42.7	)		(102.3	)		(29.5	)		(78.2	)		(166.8	)	NM				(17.3	)		(274.5	)	NM
Total Realized Gain (Loss)	$	(42.1	)	$	(100.9	)	$	(22.8	)	$	(70.1	)	$	(132.8	)	NM			$	(15.0	)	$	(225.7	)	NM
Components of GLB Net Derivatives Results
Net valuation premium (10)	$	14.0		$	17.0		$	19.7		$	22.5		$	24.9			77.9	%	$	37.2		$	67.1			80.4	%
Change in reserves hedged (10):
Unlocking		1.9			-			-			-			79.6		NM				1.9			79.6		NM
Other amortization		(122.8	)		(256.5	)		(374.5	)		213.4			(650.9	)	NM				(48.8	)		(812.0	)	NM
Change in market value of derivative assets (10)		66.7			171.4			312.4			(249.1	)		314.9		NM				(7.0	)		378.2		NM
Hedge program effectiveness (10)		(40.2	)		(68.1	)		(42.4	)		(13.2	)		(231.5	)	NM				(16.7	)		(287.1	)	NM
Change in reserves not hedged (10)		-			-			92.3			16.4			372.0		NM				-			480.7		NM
Loss from the initial impact of adopting SFAS 157 (10)		-			-			(33.5	)		-			-		NM				-			(33.5	)	NM
Associated amortization expense of DAC,
VOBA, DSI and DFEL:
Unlocking		(7.3	)		(11.9	)		10.5			(0.6	)		(100.7	)	NM				(1.3	)		(90.8	)	NM
Other amortization		24.4			42.6			(33.6	)		(1.2	)		49.0			100.8	%		8.0			14.2			77.5	%
GLB Net Derivatives Results (8)	$	(23.1	)	$	(37.4	)	$	(6.7	)	$	1.4		$	88.8		NM			$	(10.0	)	$	83.5		NM
(1) DAC refers to the associated amortization expense of DAC, VOBA, DSI, and DFEL and changes in other contract holder funds and funds withheld reinsurance liabilities.
(2) We exclude from our definitions of income from operations and operating revenues any realized gains (losses) that are not necessarily indicative of current operating fundamentals or future performance of the business segments, and in many instances, decisions regarding these items do not necessarily relate to the operations of the individual segments.
(3) Represents the net difference between the change in the fair value of the S&P 500 Index® call options that we hold and the change in the fair value of the embedded derivative liabilities of our indexed annuities products. The change in the fair value of the liability for the embedded derivative represents the amount that is credited to the indexed annuity contract.
(4) Represents the portion of the GLB rider fees calculated as the attributed fees in excess of the net valuation premium. Net valuation premium represents a level portion of rider fees required to fund potential living benefit claims. The attributed fees are the fees used in the calculation of the embedded derivative and represent net valuation premium plus a margin for risk/profit, as well as the non-performance risk factor required by SFAS 157 benefit costs.
(5) We include the change in the fair value of the derivatives that offsets the benefit ratio unlocking of our SOP 03-1 reserves on our GDB riders, including our expected cost of the hedging instruments in operating realized gain (loss). We exclude from our definition of income from operations the net difference between the benefit ratio unlocking of SOP 03-1 reserves on our GDB riders and the change in the fair value of the derivatives excluding our expected cost of the hedging instruments.
(6)   See page 32 for detail.
(7) Represents changes in the fair values of total return swaps (embedded derivatives) theoretically included in our various modified coinsurance and coinsurance with funds withheld reinsurance arrangements that have contractual returns related to various assets and liabilities associated with these arrangements. Changes in the fair value of these derivatives are offset by the change in fair value of trading securities in the portfolios that support these arrangements.
(8) Represents the net valuation premium, the change in fair value of the embedded derivative liabilities of our GLB products and the change in the fair value of the derivative instruments we own to hedge, including the cost of hedging. Refer to the table above titled "Components of GLB Net Derivatives Results" for a detailed breakout of the GLB net derivatives results line item.
(9) Represents changes in the fair value of embedded derivative liabilities related to index call options we may purchase in the future to hedge contract holder index allocations applicable to future reset periods for our indexed annuity products as required under SFAS 133 and SFAS 157. These fair values represent an estimate of the cost of the options we will purchase in the future, discounted back to the date of the balance sheet, using current market indications of volatility and interest rates, which may vary significantly from period to period due to a number of factors and therefore can provide results that are not indicative of the underlying trends. In addition, $9.6 million, pre-tax, and $6.3 million, after-tax, is included in the first quarter of 2008 due to the initial impact of adopting SFAS 157.
(10) Amounts are before the associated amortization expense of DAC, VOBA, DSI and DFEL.

9/30/2008																									PAGE 7
Consolidated Statements of Income
Unaudited (in millions)
	For the Three Months Ended																		For the Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2007			2007			2008			2008			2008			Change			2007			2008			Change
Revenues
Insurance premiums	$	491.1		$	508.2		$	508.8		$	529.7		$	533.2			8.6	%	$	1,438.9		$	1,571.7			9.2	%
Surrender charges		25.6			25.1			27.3			25.6			30.0			17.2	%		80.6			82.9			2.9	%
Mortality assessments		320.7			328.4			330.8			337.3			340.4			6.1	%		931.5			1,008.5			8.3	%
Expense assessments (1)		489.6			495.1			454.1			479.4			421.0			-14.0	%		1,329.5			1,354.5			1.9	%
Investment advisory fees		89.0			87.7			76.2			75.8			67.7			-23.9	%		272.0			219.7			-19.2	%
Net investment income		1,061.6			1,093.7			1,065.4			1,076.8			1,089.0			2.6	%		3,284.6			3,231.2			-1.6	%
Realized gain (loss)  (2)		(64.8	)		(145.7	)		(35.1	)		(107.9	)		(204.2	)	NM				(23.7	)		(347.2	)	NM
Amortization of deferred gains on business sold
through reinsurance		19.3			19.3			19.1			19.1			19.1			-1.0	%		64.6			57.3			-11.3	%
Other revenues and fees		168.7			170.7			145.4			145.9			139.8			-17.1	%		514.8			431.1			-16.3	%
Total Revenues		2,600.8			2,582.5			2,592.0			2,581.7			2,436.0			-6.3	%		7,892.8			7,609.7			-3.6	%
Benefits and Expenses
Benefits (1)		622.8			696.2			677.5			684.6			836.8			34.4	%		1,866.2			2,198.9			17.8	%
Interest credited		611.3			618.7			611.7			612.7			624.7			2.2	%		1,816.7			1,849.1			1.8	%
Underwriting, acquisition, insurance and other expenses (1)		850.3			844.8			809.1			844.8			753.7			-11.4	%		2,475.2			2,407.6			-2.7	%
Interest and debt expense		68.2			80.3			75.4			64.8			68.6			0.6	%		203.7			208.8			2.5	%
Impairment of intangibles (3)		-			-			-			175.0			-		NM				-			175.0		NM
Total Benefits and Expenses		2,152.6			2,240.0			2,173.7			2,381.9			2,283.8			6.1	%		6,361.8			6,839.4			7.5	%
Income from continuing operations before taxes		448.2			342.5			418.3			199.8			152.2			-66.0	%		1,531.0			770.3			-49.7	%
Federal income taxes (1)		125.2			103.2			125.0			74.8			2.8			-97.8	%		449.5			202.5			-54.9	%
Income From Continuing Operations		323.0			239.3			293.3			125.0			149.4			-53.7	%		1,081.5			567.8			-47.5	%
Income (loss) from discontinued operations,
net of federal income taxes (4)		6.6			(126.8	)		(4.2	)		(0.3	)		(1.0	)	NM				20.6			(5.5	)	NM
Net Income	$	329.6		$	112.5		$	289.1		$	124.7		$	148.4			-55.0	%	$	1,102.1		$	562.3			-49.0	%
Earnings Per Share (Diluted) (5)
Income from continuing operations	$	1.19		$	0.88		$	1.12		$	0.48		$	0.58			-51.3	%	$	3.93		$	2.18			-44.5	%
Income (loss) from discontinued operations,
net of federal income taxes (4)		0.02			(0.47	)		(0.02	)		-			-			100.0	%		0.07			(0.02	)	NM
Net Income	$	1.21		$	0.41		$	1.10		$	0.48		$	0.58			-52.1	%	$	4.00		$	2.16			-46.0	%
Roll Forward of DAC and VOBA
Balance at beginning-of-period	$	9,100.6		$	9,337.0		$	9,579.8		$	9,995.5		$	10,608.1					$	8,420.4		$	9,579.8
Cumulative effect of adoption of SOP 05-1		-			-			-			-			-						(66.1	)		-
Deferrals		511.5			554.4			456.5			464.7			464.2						1,503.8			1,385.4
Amortization, net of interest:
Unlocking		7.9			17.1			(10.9	)		(17.5	)		18.1						47.7			(10.3	)
Other amortization		(291.3	)		(290.1	)		(244.3	)		(291.5	)		(237.7	)					(839.7	)		(773.5	)
Deferrals, net of amortization included in
operating and acquisition expenses		228.1			281.4			201.3			155.7			244.6						711.8			601.6
Adjustment related to realized (gains) losses
on available-for-sale securities and derivatives		21.1			95.6			(1.4	)		4.8			34.4						(16.0	)		37.8
Adjustment related to unrealized (gains) losses
on available-for-sale securities and derivatives		(27.9	)		(111.3	)		216.6			449.5			844.7						237.5			1,510.8
Foreign currency translation adjustment		15.1			(22.9	)		(0.8	)		2.6			(80.1	)					35.4			(78.3	)
Business acquired		-			-			-			-			-						14.0			-
Balance at End-of-Period	$	9,337.0		$	9,579.8		$	9,995.5		$	10,608.1		$	11,651.7					$	9,337.0		$	11,651.7
Roll Forward of DFEL
Balance at beginning-of-period	$	1,105.8		$	1,128.1		$	1,183.1		$	1,235.6		$	1,281.5					$	976.9		$	1,183.1
Cumulative effect of adoption of SOP 05-1		-			-			-			-			-						(2.0	)		-
Deferrals		96.9			112.5			102.0			104.1			110.5						300.0			316.6
Amortization, net of interest:
Unlocking		(30.8	)		(0.4	)		(3.2	)		(10.4	)		15.1						(20.3	)		1.5
Other amortization		(52.5	)		(47.8	)		(46.6	)		(48.7	)		(40.5	)					(143.9	)		(135.8	)
Deferrals, net of amortization included in
expense assessments		13.6			64.3			52.2			45.0			85.1						135.8			182.3
Adjustment related to realized (gains) losses
on available-for-sale securities and derivatives		1.2			2.0			0.8			(0.5	)		(2.4	)					(0.2	)		(2.1	)
Foreign currency translation adjustment		7.5			(11.3	)		(0.5	)		1.4			(39.3	)					17.6			(38.4	)
Balance at End-of-Period	$	1,128.1		$	1,183.1		$	1,235.6		$	1,281.5		$	1,324.9					$	1,128.1		$	1,324.9
Roll Forward of DSI
Balance at beginning-of-period	$	225.0		$	249.1		$	279.2		$	297.6		$	314.2					$	193.8		$	279.2
Cumulative effect of adoption of SOP 05-1		-			-			-			-			-						(2.8	)		-
Deferrals		29.8			35.5			26.0			26.3			24.5						80.9			76.8
Amortization, net of interest:
Unlocking		0.6			(0.9	)		0.5			(0.2	)		(2.7	)					3.0			(2.4	)
Other amortization		(9.1	)		(10.1	)		(6.2	)		(8.5	)		(5.5	)					(25.1	)		(20.2	)
Deferrals, net of amortization included in
insurance benefits or interest credited		21.3			24.5			20.3			17.6			16.3						58.8			54.2
Adjustment related to realized (gains) losses
on available-for-sale securities and derivatives		2.8			5.6			(1.9	)		(1.0	)		(2.2	)					(0.7	)		(5.1	)
Balance at End-of-Period	$	249.1		$	279.2		$	297.6		$	314.2		$	328.3					$	249.1		$	328.3

(1) See pages 14, 15 and 22 for details about fluctuations in the third quarter of 2008 for the following line items:  expense assessments, benefits, underwriting, acquisition, insurance and other expenses and

federal income taxes.

(2)   See page 6 for detail.

(3)  See page 1 for detail.

(4)  Contains discontinued operations and the loss on disposition.  See Discontinued Operations on page 29 for additional details.

(5) The income used in the calculation of our diluted earnings per share is reduced by minority interest adjustments related to outstanding stock options under the Delaware Investments U.S., Inc stock option incentive plan. See page 5 for detail of our minority interest adjustments.

9/30/2008																PAGE 8
Consolidating Statements of Income From Operations
Unaudited (in millions)
For the Quarter Ended September 30, 2008
	Retirement Solutions				Insurance Solutions
													Other
	Annuities		Defined Contribution		Life		Group Protection		Investment Management		Lincoln UK		Opera- tions (1)			Consolidated
Operating Revenues
Insurance premiums	$	52.1	$	-	$	90.9	$	370.6	$	-	$	18.9	$	0.6		$	533.1
Surrender charges		13.0		1.3		15.7		-		-		-		-			30.0
Mortality assessments		-		-		331.9		-		-		8.7		-			340.6
Expense assessments		233.3		54.6		101.4		-		-		31.1		-			420.4
Investment advisory fees - external		-		-		-		-		67.7		-		-			67.7
Investment advisory fees - inter-segment		-		-		-		-		20.6		-		(20.6	)		-
Net investment income		243.1		180.9		522.4		30.8		-		21.1		90.8			1,089.1
Operating realized gain (loss) (2)		52.1		0.2		-		-		-		-		-			52.3
Amortization of deferred gain on business sold
through reinsurance		-		-		-		-		-		-		18.4			18.4
Other revenues and fees		81.6		3.8		9.3		1.4		21.6		-		22.6			140.3
Total Operating Revenues		675.2		240.8		1,071.6		402.8		109.9		79.8		111.8			2,691.9
Operating Expenses
Benefits		112.9		0.2		397.7		268.8		-		26.5		30.7			836.8
Interest credited		170.0		106.8		304.7		0.5		-		-		42.6			624.6
Underwriting, acquisition, insurance and other expenses		253.7		76.8		167.4		91.8		81.2		34.4		48.4			753.7
Expenses for investment advisory fees - inter-segment		-		-		-		-		20.6		-		(20.6	)		-
Interest and debt expense		-		-		-		-		-		-		68.6			68.6
Total Operating Expenses		536.6		183.8		869.8		361.1		101.8		60.9		169.7			2,283.7
Income (loss) from operations before federal income taxes		138.6		57.0		201.8		41.7		8.1		18.9		(57.9	)		408.2
Federal income taxes		7.7		14.7		64.5		14.5		2.8		6.6		(18.4	)		92.4
Income from Operations	$	130.9	$	42.3	$	137.3	$	27.2	$	5.3	$	12.3	$	(39.5	)	$	315.8
(1) Includes inter-segment eliminations.
(2)  For detail, see pages 15 and 19.

9/30/2008																PAGE 9
Consolidating Statements of Income From Operations
Unaudited (in millions)
For the Quarter Ended September 30, 2007
	Retirement Solutions				Insurance Solutions
													Other
	Annuities		Defined Contribution		Life		Group Protection		Investment Management		Lincoln UK		Opera- tions (1)			Consolidated
Operating Revenues
Insurance premiums	$	42.6	$	-	$	84.8	$	336.8	$	-	$	25.5	$	1.3		$	491.0
Surrender charges		9.8		1.8		14.0		-		-		-		-			25.6
Mortality assessments		-		-		311.6		-		-		9.2		-			320.8
Expense assessments		249.4		63.5		143.8		-		-		33.0		-			489.7
Investment advisory fees - external		-		-		-		-		89.0		-		-			89.0
Investment advisory fees - inter-segment		-		-		-		-		22.6		-		(22.6	)		-
Net investment income		249.4		172.9		496.3		29.5		-		20.9		92.6			1,061.6
Operating realized gain (loss) (2)		0.9		-		-		-		-		-		-			0.9
Amortization of deferred gain on business sold
through reinsurance		-		-		-		-		-		-		18.6			18.6
Other revenues and fees		94.9		5.2		5.9		1.2		38.5		-		23.0			168.7
Total Operating Revenues		647.0		243.4		1,056.4		367.5		150.1		88.6		112.9			2,665.9
Operating Expenses
Benefits		56.3		-		265.6		234.9		-		30.2		35.6			622.6
Interest credited		165.3		104.6		292.9		0.1		-		-		48.4			611.3
Underwriting, acquisition, insurance and other expenses		255.4		84.7		227.6		81.4		93.4		42.5		65.3			850.3
Expenses for investment advisory fees - inter-segment		-		-		-		-		22.6		-		(22.6	)		-
Interest and debt expense		-		-		-		-		-		-		68.2			68.2
Total Operating Expenses		477.0		189.3		786.1		316.4		116.0		72.7		194.9			2,152.4
Income (loss) from operations before federal income taxes		170.0		54.1		270.3		51.1		34.1		15.9		(82.0	)		513.5
Federal income taxes		44.1		12.9		87.8		17.9		12.3		5.6		(32.4	)		148.2
Income from Operations	$	125.9	$	41.2	$	182.5	$	33.2	$	21.8	$	10.3	$	(49.6	)	$	365.3
(1) Includes inter-segment eliminations.
(2)  For detail, see page 15.

9/30/2008																PAGE 10
Consolidating Statements of Income From Operations
Unaudited (in millions)
For the Nine Months Ended September 30, 2008
	Retirement Solutions				Insurance Solutions
													Other
	Annuities		Defined Contribution		Life		Group Protection		Investment Management		Lincoln UK		Opera- tions (1)			Consolidated
Operating Revenues
Insurance premiums	$	102.7	$	-	$	266.8	$	1,134.0	$	-	$	64.3	$	3.7		$	1,571.5
Surrender charges		32.2		4.7		46.0		-		-		-		-			82.9
Mortality assessments		-		-		981.7		-		-		26.9		-			1,008.6
Expense assessments		716.9		173.2		352.3		-		-		110.8					1,353.2
Investment advisory fees - external		-		-		-		-		219.7		-		-			219.7
Investment advisory fees - inter-segment		-		-		-		-		61.2		-		(61.2	)		-
Net investment income		736.2		527.4		1,540.9		89.0		-		61.2		276.5			3,231.2
Operating realized gain (loss) (2)		74.7		0.2		-		-		-		-		-			74.9
Amortization of deferred gain on business sold
through reinsurance		-		-		-		-		-		-		55.3			55.3
Other revenues and fees		253.8		12.4		23.0		4.1		73.6		0.1		65.5			432.5
Total Operating Revenues		1,916.5		717.9		3,210.7		1,227.1		354.5		263.3		339.8			8,029.8
Operating Expenses
Benefits		199.5		0.3		1,000.4		823.6		-		87.4		87.5			2,198.7
Interest credited		496.2		319.7		901.8		1.0		-		-		130.2			1,848.9
Underwriting, acquisition, insurance and other expenses		773.6		228.5		620.9		270.7		242.5		112.9		164.1			2,413.2
Expenses for investment advisory fees - inter-segment		-		-		-		-		61.2		-		(61.2	)		-
Interest and debt expense		-		-		-		-		-		-		208.8			208.8
Total Operating Expenses		1,469.3		548.5		2,523.1		1,095.3		303.7		200.3		529.4			6,669.6
Income (loss) from operations before federal income taxes		447.2		169.4		687.6		131.8		50.8		63.0		(189.6	)		1,360.2
Federal income taxes		82.3		45.5		229.3		46.1		18.4		22.0		(63.4	)		380.2
Income from Operations	$	364.9	$	123.9	$	458.3	$	85.7	$	32.4	$	41.0	$	(126.2	)	$	980.0
(1) Includes inter-segment eliminations.
(2)  For detail, see pages 15 and 19.

9/30/2008																PAGE 11
Consolidating Statements of Income From Operations
Unaudited (in millions)
For the Nine Months Ended September 30, 2007
	Retirement Solutions				Insurance Solutions
													Other
	Annuities		Defined Contribution		Life		Group Protection		Investment Management		Lincoln UK		Opera- tions (1)			Consolidated
Operating Revenues
Insurance premiums	$	72.0	$	-	$	260.6	$	1,029.5	$	-	$	74.0	$	2.8		$	1,438.9
Surrender charges		29.6		6.1		44.9		-		-		-		-			80.6
Mortality assessments		-		-		903.5		-		-		28.1		-			931.6
Expense assessments		694.2		186.2		334.9		-		-		110.1		-			1,325.4
Investment advisory fees - external		-		-		-		-		272.0		-		-			272.0
Investment advisory fees - inter-segment		-		-		-		-		66.7		-		(66.7	)		-
Net investment income		780.0		535.4		1,552.5		85.9		-		59.6		271.1			3,284.5
Operating realized gain (loss) (2)		3.5		-		-		-		-		-		-			3.5
Amortization of deferred gain on business sold
through reinsurance		-		-		-		-		-		-		55.8			55.8
Other revenues and fees		281.7		14.5		24.2		3.6		112.5		0.1		82.3			518.9
Total Operating Revenues		1,861.0		742.2		3,120.6		1,119.0		451.2		271.9		345.3			7,911.2
Operating Expenses
Benefits		108.3		-		780.0		747.2		-		100.6		110.1			1,846.2
Interest credited		491.6		313.6		874.9		0.1		-		-		136.5			1,816.7
Underwriting, acquisition, insurance and other expenses		772.4		236.9		638.9		240.3		307.0		120.7		159.0			2,475.2
Expenses for investment advisory fees - inter-segment		-		-		-		-		66.7		-		(66.7	)		-
Interest and debt expense		-		-		-		-		-		-		203.7			203.7
Total Operating Expenses		1,372.3		550.5		2,293.8		987.6		373.7		221.3		542.6			6,341.8
Income (loss) from operations before federal income taxes		488.7		191.7		826.8		131.4		77.5		50.6		(197.3	)		1,569.4
Federal income taxes		122.8		53.5		278.5		46.1		28.2		17.7		(83.4	)		463.4
Income from Operations	$	365.9	$	138.2	$	548.3	$	85.3	$	49.3	$	32.9	$	(113.9	)	$	1,106.0
(1) Includes inter-segment eliminations.
(2)  For detail, see page 15.

9/30/2008													PAGE 12
Consolidated Balance Sheets
Unaudited (millions of dollars)
	As of
	Sept.			Dec.			March			June			Sept.
	2007			2007			2008			2008			2008
ASSETS
Investments:
Corporate bonds	$	44,089.6		$	44,147.9		$	43,535.4		$	42,618.0		$	40,020.7
U.S. Government bonds		239.4			222.0			231.9			203.9			217.0
Foreign government bonds		1,030.0			1,037.5			1,037.4			907.5			786.5
Asset and mortgage-backed securities		10,479.7			10,604.6			10,568.8			10,547.7			10,661.6
State and municipal bonds		152.1			153.1			153.0			141.7			129.7
Preferred stocks - redeemable		95.3			110.7			97.5			98.8			115.6
Common stocks		499.2			413.9			384.2			330.7			433.5
Preferred stocks - equity		171.0			104.1			90.2			133.9			59.1
Total available-for-sale securities		56,756.3			56,793.8			56,098.4			54,982.2			52,423.7
Trading securities		2,716.6			2,730.2			2,713.6			2,550.5			2,393.4
Mortgage loans		7,280.7			7,422.7			7,531.9			7,677.9			7,688.1
Real estate		385.0			258.3			175.3			135.7			126.9
Policy loans		2,841.1			2,885.4			2,854.8			2,852.5			2,870.1
Other long-term investments		1,584.1			1,882.1			2,232.1			2,053.4			2,455.2
Total investments		71,563.8			71,972.5			71,606.1			70,252.2			67,957.4
Cash and invested cash		1,327.5			1,665.5			2,446.8			1,921.4			2,159.7
DAC and VOBA		9,337.0			9,579.8			9,995.5			10,608.1			11,651.7
Premiums and fees receivable		401.2			400.6			468.1			399.3			463.2
Accrued investment income		916.5			843.3			917.3			875.9			921.2
Reinsurance recoverables		8,175.8			8,186.6			8,356.4			8,168.9			8,222.5
Goodwill		4,159.3			4,143.7			4,128.4			4,045.0			4,041.3
Other assets		3,432.6			3,529.8			2,727.6			2,715.0			2,882.9
Separate account assets		92,903.1			91,113.3			84,703.1			85,295.4			74,970.8
Total Assets	$	192,216.8		$	191,435.1		$	185,349.3		$	184,281.2		$	173,270.7
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Future contract benefits	$	15,317.2		$	16,006.3		$	16,501.0		$	16,218.1		$	16,281.2
Other contract holder funds		59,572.7			59,640.6			60,175.8			60,362.5			60,678.0
Short-term debt		327.1			550.2			410.6			900.0			635.2
Long-term debt		4,408.0			4,618.3			4,627.0			4,101.8			4,569.4
Reinsurance related derivative liability		191.5			219.5			205.2			112.5			(9.2	)
Funds withheld reinsurance liabilities		2,136.6			2,117.4			2,117.0			2,068.7			2,062.4
Deferred gain on indemnity reinsurance		715.1			695.8			676.6			657.6			638.5
Payables for collateral under securities loaned and derivatives		1,320.3			1,135.1			1,796.2			1,491.1			1,668.4
Other liabilities		3,362.3			3,620.2			3,050.5			2,575.8			2,275.9
Separate account liabilities		92,903.1			91,113.3			84,703.1			85,295.4			74,970.8
Total liabilities		180,253.9			179,716.7			174,263.0			173,783.5			163,770.6
Stockholders' Equity
Preferred stock		0.5			0.4			0.4			0.4			0.4
Common stock		7,308.6			7,200.5			7,074.8			7,023.1			7,006.4
Retained earnings		4,456.9			4,292.2			4,332.8			4,282.5			4,303.6
Accumulated other comprehensive income (loss):
Net unrealized gain (loss) on available-for-sale securities		56.0			86.0			(452.1	)		(939.4	)		(1,903.7	)
Net unrealized gain on derivative instruments		31.9			52.2			43.9			41.4			53.5
Foreign currency translation adjustment		193.6			175.6			174.4			177.2			121.2
Funded status of employee benefit plans		(84.6	)		(88.5	)		(87.9	)		(87.5	)		(81.3	)
Total accumulated other comprehensive income (loss)		196.9			225.3			(321.7	)		(808.3	)		(1,810.3	)
Total stockholders' equity		11,962.9			11,718.4			11,086.3			10,497.7			9,500.1
Total Liabilities and Stockholders' Equity	$	192,216.8		$	191,435.1		$	185,349.3		$	184,281.2		$	173,270.7
Share Data
Stockholders' equity per share	$	44.41		$	44.32		$	42.74		$	40.85		$	37.11
Book value, excluding AOCI		43.67			43.47			43.98			43.99			44.18
Common shares outstanding - assuming conversion of
preferred shares (in millions)		269.4			264.4			259.4			257.0			256.0

9/30/2008																PAGE 13
Balance Sheet Data - Segment Highlights
Unaudited (in millions)
	Retirement Solutions				Insurance Solutions
As of September 30, 2008	Annuities		Defined Contribution		Life		Group Protection		Investment Management		Lincoln UK		Other Opera- tions (1)			Consolidated
Assets
Allocated investments and cash and invested cash (2)	$	18,338.8	$	11,452.3	$	32,253.4	$	2,007.3	$	171.8	$	1,189.5	$	4,704.0		$	70,117.1
DAC and VOBA		3,157.9		744.8		6,947.8		137.1		-		658.3		5.8			11,651.7
Goodwill		1,039.8		20.2		2,190.4		274.3		247.6		14.7		254.3			4,041.3
DSI and other intangibles		326.3		5.0		90.0		-		5.2		-		294.2			720.7
Amounts recoverable from reinsurers		615.7		-		1,947.7		32.2		-		65.8		5,561.1			8,222.5
Separate account assets		49,884.0		13,468.6		4,817.6		-		-		6,585.4		215.2			74,970.8
Liabilities and Capital
Future contract benefits		1,262.4		2.8		6,004.3		1,348.6		-		1,008.7		6,654.4			16,281.2
Other contract holder funds		17,294.5		11,311.2		30,006.2		138.5		-		343.1		1,584.5			60,678.0
Allocated capital (3)		3,825.9		970.6		8,232.9		1,014.7		349.2		391.9		(3,474.9	)		11,310.3
As of December 31, 2007
Assets
Allocated investments and cash and invested cash (2)	$	18,080.5	$	11,671.5	$	32,972.1	$	1,934.2	$	187.8	$	1,396.1	$	7,395.7		$	73,637.9
DAC and VOBA		2,477.0		513.8		5,691.7		123.4		-		772.1		1.8			9,579.8
Goodwill		1,045.6		20.2		2,201.0		274.3		247.0		16.5		339.1			4,143.7
DSI and other intangibles		278.8		3.4		93.0		-		5.4		-		385.7			766.3
Amounts recoverable from reinsurers		744.4		-		1,914.1		31.3		-		69.8		5,427.0			8,186.6
Separate accounts assets		58,508.4		17,845.2		5,648.2		-		-		8,850.4		261.1			91,113.3
Liabilities and Capital
Future contract benefits		816.9		-		6,254.9		1,273.0		-		1,146.9		6,514.6			16,006.3
Other contract holder funds		17,749.7		10,891.7		28,427.7		17.2		-		402.9		2,151.4			59,640.6
Allocated capital (3)		3,552.7		898.7		8,189.7		968.3		348.5		361.8		(2,826.6	)		11,493.1

(1) Includes inter-segment eliminations.

(2) Includes inter-segment cash management balances our segments utilize to borrow money to meet their short-term needs and also to invest short-term funds with other segments. These balances eliminate in consolidation.

(3) Allocated capital is based on internal economic capital models plus certain other items (principally intangibles, including DAC and VOBA, goodwill and other items).

9/30/2008																									PAGE 14
Retirement Solutions - Consolidated
Income Statements and Operational Data
Unaudited (millions of dollars)
	For the Three Months Ended																		For the Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2007			2007			2008			2008			2008			Change			2007			2008			Change
Operating Revenues
Insurance premiums (1)	$	42.6		$	46.5		$	31.6		$	19.0		$	52.1			22.3	%	$	72.0		$	102.7			42.6	%
Surrender charges		11.6			10.9			11.5			11.1			14.3			23.3	%		35.7			36.9			3.4	%
Expense assessments		312.9			329.9			295.3			306.9			287.9			-8.0	%		880.4			890.1			1.1	%
Net investment income		422.3			425.1			419.5			420.1			424.0			0.4	%		1,315.4			1,263.6			-3.9	%
Operating realized gain (2)		0.9			2.2			10.2			12.4			52.3		NM				3.5			74.9		NM
Other revenues and fees (3)		100.1			101.0			92.2			88.6			85.4			-14.7	%		296.2			266.2			-10.1	%
Total Operating Revenues		890.4			915.6			860.3			858.1			916.0			2.9	%		2,603.2			2,634.4			1.2	%
Operating Expenses
Benefits (1) (4)		56.3			62.0			51.4			35.3			113.1			100.9	%		108.3			199.8			84.5	%
Interest credited		269.9			272.7			269.1			270.0			276.8			2.6	%		805.2			815.9			1.3	%
Underwriting, acquisition, insurance and other expenses		340.1			364.6			328.0			343.6			330.5			-2.8	%		1,009.3			1,002.1			-0.7	%
Total Operating Expenses		666.3			699.3			648.5			648.9			720.4			8.1	%		1,922.8			2,017.8			4.9	%
Income from operations before federal income taxes		224.1			216.3			211.8			209.2			195.6			-12.7	%		680.4			616.6			-9.4	%
Federal income taxes (5)		57.0			54.3			53.6			51.8			22.4			-60.7	%		176.3			127.8			-27.5	%
Income From Operations	$	167.1		$	162.0		$	158.2		$	157.4		$	173.2			3.7	%	$	504.1		$	488.8			-3.0	%
Effective Tax Rate (5)		25.4	%		25.1	%		25.3	%		24.8	%		11.5	%					25.9	%		20.7	%
Average Equity	$	4,439.2		$	4,451.8		$	4,468.0		$	4,452.9		$	4,608.8					$	4,406.6		$	4,509.9
Return on Average Equity		15.1	%		14.6	%		14.2	%		14.1	%		15.0	%					15.3	%		14.5	%
Income from Operations - Basis Points on
Average Account Values - Annualized		61			57			59			57			65			4			63			60			(3	)
Operating Realized Gain (2)
Indexed annuity net derivatives results (6)	$	0.2		$	(0.1	)	$	(1.4	)	$	(0.6	)	$	2.0		NM			$	2.3		$	-			-100.0	%
GLB risk and profit charges (7)		1.6			1.8			5.8			10.3			11.0		NM				3.7			27.1		NM
GDB hedging offset (4)		(0.9	)		0.5			5.8			2.7			39.3		NM				(2.5	)		47.8		NM
Total Operating Realized Gain	$	0.9		$	2.2		$	10.2		$	12.4		$	52.3		NM			$	3.5		$	74.9		NM
Underwriting, Acquisition, Insurance and Other Expenses
Commissions	$	208.9		$	232.6		$	185.3		$	205.8		$	178.1			-14.7	%	$	580.3		$	569.2			-1.9	%
General and administrative expenses		140.7			150.4			132.1			131.9			135.8			-3.5	%		396.8			399.8			0.8	%
Broker-dealer commissions and general and
administrative expenses		91.8			100.5			89.2			85.1			78.5			-14.5	%		271.8			252.8			-7.0	%
Taxes, licenses and fees		8.2			8.2			14.8			10.7			9.5			15.9	%		32.3			35.0			8.4	%
Total commissions and expenses incurred		449.6			491.7			421.4			433.5			401.9			-10.6	%		1,281.2			1,256.8			-1.9	%
Less: commissions and expenses capitalized		(219.9	)		(254.3	)		(196.4	)		(213.9	)		(189.5	)		13.8	%		(611.4	)		(599.8	)		1.9	%
Amortization of DAC and VOBA, net of interest		110.4			127.2			103.0			124.0			118.1			7.0	%		339.5			345.1			1.6	%
Total Underwriting, Acquisition, Insurance
and Other Expenses	$	340.1		$	364.6		$	328.0		$	343.6		$	330.5			-2.8	%	$	1,009.3		$	1,002.1			-0.7	%
General and Administrative Expenses - Basis Points on
Average Account Values - Annualized (8)		51			53			49			48			51			-			50			49			(1	)

(1)   Includes our single premium immediate annuities, which have a corresponding offset to benefits for changes in reserves.

(2)   Included in income from operations.

(3)  Primarily broker-dealer revenues.

(4)  Change in the fair value of the derivatives that offsets the benefit ratio unlocking of our SOP 03-1 reserves on our GMDB riders (included in benefits), including our expected cost of the hedging instruments.

(5)  The third quarter of 2008 included $22.2 million in tax return true-ups and other items.

(6)  Changes in the fair value of the S&P 500 Index® call options that we hold and the change in the fair value of the embedded derivative liabilities of our indexed annuities products excluding the indexed annuity

forward-starting option.

(7)  The portion of the rider fee revenue for GLB calculated as the attributed fee in excess of net valuation premium.  See page 18 for additional details.

(8)  Includes distribution costs.

9/30/2008																									PAGE 15
Retirement Solutions - Annuities
Income Statements and Operational Data
Unaudited (millions of dollars)
	For the Three Months Ended																		For the Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2007			2007			2008			2008			2008			Change			2007			2008			Change
Operating Revenues
Insurance premiums (1)	$	42.6		$	46.5		$	31.6		$	19.0		$	52.1			22.3	%	$	72.0		$	102.7			42.6	%
Surrender charges		9.8			9.1			9.6			9.6			13.0			32.7	%		29.6			32.2			8.8	%
Expense assessments		249.4			265.2			236.0			247.6			233.3			-6.5	%		694.2			716.9			3.3	%
Net investment income		249.4			251.8			247.8			245.3			243.1			-2.5	%		780.0			736.2			-5.6	%
Operating realized gain (2)		0.9			2.2			10.2			12.4			52.1		NM				3.5			74.7		NM
Other revenues and fees (3)		94.9			97.5			87.4			84.8			81.6			-14.0	%		281.7			253.8			-9.9	%
Total Operating Revenues		647.0			672.3			622.6			618.7			675.2			4.4	%		1,861.0			1,916.5			3.0	%
Operating Expenses
Benefits (1) (4)		56.3			62.0			51.4			35.2			112.9			100.5	%		108.3			199.5			84.2	%
Interest credited		165.3			167.9			163.2			163.0			170.0			2.8	%		491.6			496.2			0.9	%
Underwriting, acquisition, insurance and other expenses		255.4			287.3			251.7			268.2			253.7			-0.7	%		772.4			773.6			0.2	%
Total Operating Expenses		477.0			517.2			466.3			466.4			536.6			12.5	%		1,372.3			1,469.3			7.1	%
Income from operations before federal income taxes		170.0			155.1			156.3			152.3			138.6			-18.5	%		488.7			447.2			-8.5	%
Federal income taxes (5)		44.1			36.2			38.5			36.1			7.7			-82.5	%		122.8			82.3			-33.0	%
Income From Operations	$	125.9		$	118.9		$	117.8		$	116.2		$	130.9			4.0	%	$	365.9		$	364.9			-0.3	%
Effective Tax Rate (5)		25.9	%		23.3	%		24.6	%		23.7	%		5.6	%					25.1	%		18.4	%
Average Equity	$	3,537.8		$	3,549.1		$	3,561.6		$	3,519.2		$	3,646.9					$	3,491.9		$	3,575.9
Return on Average Equity		14.2	%		13.4	%		13.2	%		13.2	%		14.4	%					14.0	%		13.6	%
Income from Operations - Basis Points on
Average Account Values - Annualized		68			62			64			62			72			4			69			66			(3	)
Operating Realized Gain (2)
Indexed annuity net derivatives results (6)	$	0.2		$	(0.1	)	$	(1.4	)	$	(0.6	)	$	2.0		NM			$	2.3		$	-			-100.0	%
GLB risk and profit charges (7)		1.6			1.8			5.8			10.3			10.9		NM				3.7			27.0		NM
GDB hedging offset (4)		(0.9	)		0.5			5.8			2.7			39.2		NM				(2.5	)		47.7		NM
Total Operating Realized Gain	$	0.9		$	2.2		$	10.2		$	12.4		$	52.1		NM			$	3.5		$	74.7		NM
Underwriting, Acquisition, Insurance and Other Expenses
Commissions	$	189.0		$	212.3		$	165.6		$	186.4		$	160.9			-14.9	%	$	519.8		$	512.9			-1.3	%
General and administrative expenses		80.9			96.7			80.2			79.9			83.1			2.7	%		232.3			243.2			4.7	%
Broker-dealer commissions and general and
administrative expenses		91.8			100.5			89.2			85.1			78.5			-14.5	%		271.8			252.8			-7.0	%
Taxes, licenses and fees		6.0			6.1			10.4			7.7			6.4			6.7	%		20.6			24.5			18.9	%
Total commissions and expenses incurred		367.7			415.6			345.4			359.1			328.9			-10.6	%		1,044.5			1,033.4			-1.1	%
Less: commissions and expenses capitalized		(196.2	)		(230.6	)		(172.8	)		(191.7	)		(169.8	)		13.5	%		(543.0	)		(534.3	)		1.6	%
Amortization of DAC and VOBA, net of interest		83.9			102.3			79.1			100.8			94.6			12.8	%		270.9			274.5			1.3	%
Total Underwriting, Acquisition, Insurance
and Other Expenses	$	255.4		$	287.3		$	251.7		$	268.2		$	253.7			-0.7	%	$	772.4		$	773.6			0.2	%
General and Administrative Expenses - Basis Points on
Average Account Values - Annualized (8)		44			51			44			42			46			2			44			44			0

(1)   Includes our single premium immediate annuities, which have a corresponding offset to benefits for changes in reserves.

(2)   Included in income from operations.

(3)  Primarily broker-dealer revenues.

(4)  Change in the fair value of the derivatives that offsets the benefit ratio unlocking of our SOP 03-1 reserves on our GMDB riders (included in benefits), including our expected cost of the hedging instruments.

(5)  The third quarter of 2008 included $21.1 million in tax return true-ups and other items.

(6)  Changes in the fair value of the S&P 500 Index® call options that we hold and the change in the fair value of the embedded derivative liabilities of our indexed annuities products excluding the indexed annuity

  forward-starting option.

(7)  The portion of the rider fee revenue for GLB calculated as the attributed fee in excess of net valuation premium.  See page 18 for additional details.

(8)  Includes distribution costs.

9/30/2008																			PAGE 16
Retirement Solutions - Annuities
Roll Forwards of DAC, VOBA, DFEL and DSI
Unaudited (millions of dollars)
	For the Three Months Ended															For the Nine Months Ended
	Sept.			Dec.			March			June			Sept.			Sept.			Sept.
Roll Forward of DAC and VOBA	2007			2007			2008			2008			2008			2007			2008
Balance at beginning-of-period	$	2,236.8		$	2,347.4		$	2,477.0		$	2,570.8		$	2,855.5		$	2,050.4		$	2,477.0
Cumulative effect of adoption of SOP 05-1		-			-			-			-			-			(27.2	)		-
Inter-segment transfer		-			-			(6.9	)		-			-			-			(6.9	)
Deferrals		196.2			230.6			172.8			191.7			169.8			543.0			534.3
Amortization, net of interest:
Unlocking		19.0			10.7			(0.6	)		0.4			(32.8	)		33.6			(33.0	)
Other amortization		(102.9	)		(113.0	)		(78.5	)		(101.2	)		(61.8	)		(304.5	)		(241.5	)
Deferrals, net of amortization included in
operating and acquisition expenses		112.3			128.3			93.7			90.9			75.2			272.1			259.8
Adjustment related to realized (gains) losses
on available-for-sale securities and derivatives		21.1			34.8			(10.5	)		(7.3	)		(25.4	)		2.4			(43.2	)
Adjustment related to unrealized (gains) losses
on available-for-sale securities and derivatives		(22.8	)		(33.5	)		17.5			201.1			252.6			35.7			471.2
Business acquired		-			-			-			-			-			14.0			-
Balance at End-of-Period	$	2,347.4		$	2,477.0		$	2,570.8		$	2,855.5		$	3,157.9		$	2,347.4		$	3,157.9
Roll Forward of DFEL
Balance at beginning-of-period	$	111.9		$	122.0		$	130.9		$	141.6		$	151.0		$	100.9		$	130.9
Cumulative effect of adoption of SOP 05-1		-			-			-			-			-			(2.0	)		-
Deferrals		11.5			11.9			11.9			13.4			13.0			33.1			38.3
Amortization, net of interest:
Unlocking		1.4			(0.4	)		0.7			(0.5	)		(1.8	)		2.1			(1.6	)
Other amortization		(4.0	)		(4.6	)		(2.7	)		(3.0	)		0.7			(11.9	)		(5.0	)
Deferrals, net of amortization included in
expense assessments		8.9			6.9			9.9			9.9			11.9			23.3			31.7
Adjustment related to realized gains (losses)
on available-for-sale securities and derivatives		1.2			2.0			0.8			(0.5	)		(2.4	)		(0.2	)		(2.1	)
Balance at End-of-Period	$	122.0		$	130.9		$	141.6		$	151.0		$	160.5		$	122.0		$	160.5
Roll Forward of DSI
Balance at beginning-of-period	$	224.7		$	248.7		$	278.8		$	295.7		$	312.1		$	193.7		$	278.8
Cumulative effect of adoption of SOP 05-1		-			-			-			-			-			(2.8	)		-
Inter-segment transfer		-			-			(1.3	)		-			-			-			(1.3	)
Deferrals		29.7			35.5			25.7			26.1			24.6			80.6			76.4
Amortization, net of interest:
Unlocking		0.6			(0.9	)		0.5			(0.2	)		(2.7	)		3.0			(2.4	)
Other amortization		(9.1	)		(10.1	)		(6.1	)		(8.5	)		(5.4	)		(25.1	)		(20.0	)
Deferrals, net of amortization included in
interest credited		21.2			24.5			20.1			17.4			16.5			58.5			54.0
Adjustment related to realized (gains) losses
on available-for-sale securities		2.8			5.6			(1.9	)		(1.0	)		(2.3	)		(0.7	)		(5.2	)
Balance at End-of-Period	$	248.7		$	278.8		$	295.7		$	312.1		$	326.3		$	248.7		$	326.3

9/30/2008
																						PAGE 17
Retirement Solutions - Annuities
Account Value Roll Forward
Unaudited (in billions)
	For the Three Months Ended																		For the Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2007			2007			2008			2008			2008			Change			2007			2008			Change
Fixed Annuities
Balance at beginning-of-period	$	17.867		$	17.813		$	17.822		$	17.701		$	17.799			-0.4	%	$	18.545		$	17.822			-3.9	%
Business acquired		-			-			-			-			-		NM				0.040			-			-100.0	%
Gross deposits		1.231			1.288			1.160			1.371			1.276			3.7	%		3.034			3.807			25.5	%
Withdrawals and deaths		(0.891	)		(0.706	)		(0.586	)		(0.618	)		(0.787	)		11.7	%		(2.671	)		(1.991	)		25.5	%
Net flows		0.340			0.582			0.574			0.753			0.489			43.8	%		0.363			1.816		NM
Transfer from (to) variable annuities		(0.589	)		(0.734	)		(0.680	)		(0.797	)		(0.742	)		-26.0	%		(1.706	)		(2.219	)		-30.1	%
Inter-segment transfer		-			-			(0.089	)		-			-		NM				-			(0.089	)	NM
Interest credited		0.165			0.126			0.048			0.116			0.118			-28.5	%		0.490			0.282			-42.4	%
Sales inducements deferred		0.030			0.035			0.026			0.026			0.025			-16.7	%		0.081			0.077			-4.9	%
Balance at End-of-Period (Gross)		17.813			17.822			17.701			17.799			17.689			-0.7	%		17.813			17.689			-0.7	%
Reinsurance ceded		(1.430	)		(1.352	)		(1.306	)		(1.255	)		(1.196	)		16.4	%		(1.430	)		(1.196	)		16.4	%
Balance at End-of-Period (Net of Ceded) (1)	$	16.383		$	16.470		$	16.395		$	16.544		$	16.493			0.7	%	$	16.383		$	16.493			0.7	%
Variable Annuities
Balance at beginning-of-period	$	55.171		$	58.293		$	58.643		$	54.966		$	55.854			1.2	%	$	48.169		$	58.643			21.7	%
Gross deposits		2.247			2.594			1.866			2.065			1.672			-25.6	%		6.543			5.603			-14.4	%
Withdrawals and deaths		(1.296	)		(1.367	)		(1.259	)		(1.229	)		(1.217	)		6.1	%		(3.722	)		(3.705	)		0.5	%
Net flows		0.951			1.227			0.607			0.836			0.455			-52.2	%		2.821			1.898			-32.7	%
Transfer from (to) fixed annuities		0.589			0.734			0.680			0.797			0.742			26.0	%		1.706			2.219			30.1	%
Inter-segment transfer		-			-			(0.206	)		-			-		NM				-			(0.206	)	NM
Investment increase and change in market value		1.582			(1.611	)		(4.758	)		(0.745	)		(7.069	)	NM				5.597			(12.572	)	NM
Balance at End-of-Period (2)	$	58.293		$	58.643		$	54.966		$	55.854		$	49.982			-14.3	%	$	58.293		$	49.982			-14.3	%
Total Annuities
Balance at beginning-of-period	$	73.038		$	76.106		$	76.465		$	72.667		$	73.653			0.8	%	$	66.714		$	76.465			14.6	%
Business acquired		-			-			-			-			-		NM				0.040			-			-100.0	%
Gross deposits		3.478			3.882			3.026			3.436			2.948			-15.2	%		9.577			9.410			-1.7	%
Withdrawals and deaths		(2.187	)		(2.073	)		(1.845	)		(1.847	)		(2.004	)		8.4	%		(6.393	)		(5.696	)		10.9	%
Net flows		1.291			1.809			1.181			1.589			0.944			-26.9	%		3.184			3.714			16.6	%
Inter-segment transfer		-			-			(0.295	)		-			-		NM				-			(0.295	)	NM
Interest credited and change in market value		1.747			(1.485	)		(4.710	)		(0.629	)		(6.951	)	NM				6.087			(12.290	)	NM
Sales inducements deferred		0.030			0.035			0.026			0.026			0.025			-16.7	%		0.081			0.077			-4.9	%
Balance at End-of-Period (Gross)		76.106			76.465			72.667			73.653			67.671			-11.1	%		76.106			67.671			-11.1	%
Reinsurance ceded		(1.430	)		(1.352	)		(1.306	)		(1.255	)		(1.196	)		16.4	%		(1.430	)		(1.196	)		16.4	%
Balance at End-of-Period (Net of Ceded)	$	74.676		$	75.113		$	71.361		$	72.398		$	66.475			-11.0	%	$	74.676		$	66.475			-11.0	%
Variable Annuities Under Agreement - Included Above	$	0.161		$	0.149		$	0.128		$	0.120		$	0.099			-38.5	%	$	0.161		$	0.099			-38.5	%
Incremental Deposits: (3)
Fixed annuities	$	1.224		$	1.282		$	1.156		$	1.365		$	1.265			3.3	%	$	3.015		$	3.786			25.6	%
Variable annuities		2.217			2.558			1.838			2.043			1.651			-25.5	%		6.461			5.532			-14.4	%
Total Incremental Deposits	$	3.441		$	3.840		$	2.994		$	3.408		$	2.916			-15.3	%	$	9.476		$	9.318			-1.7	%
(1)  Includes the fixed portion of variable annuities.
(2) Excludes the fixed portion of variable annuities.
(3) Represents gross deposits reduced by transfers from other Lincoln products.

9/30/2008																									PAGE 18
Retirement Solutions - Annuities
Account Values, Spread Information, GLB Expense Assessments,
GLB Attributed Fee and GLB Account Values by Type
Unaudited (billions of dollars)
	For the Three Months Ended																		For the Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2007			2007			2008			2008			2008			Change			2007			2008			Change
Fixed Annuities - Excluding Fixed Portion of Variable Contracts
Deposits	$	0.286		$	0.231		$	0.086		$	0.137		$	0.164			-42.7	%	$	0.541		$	0.387			-28.5	%
Withdrawals and deaths		(0.651	)		(0.486	)		(0.378	)		(0.406	)		(0.549	)		15.7	%		(2.002	)		(1.333	)		33.4	%
Net flows	$	(0.365	)	$	(0.255	)	$	(0.292	)	$	(0.269	)	$	(0.385	)		-5.5	%	$	(1.461	)	$	(0.946	)		35.2	%
Gross fixed contract account values	$	10.115		$	9.960		$	9.767		$	9.595		$	9.305			-8.0	%	$	10.115		$	9.305			-8.0	%
Reinsurance ceded		(1.430	)		(1.352	)		(1.306	)		(1.255	)		(1.196	)		16.4	%		(1.430	)		(1.196	)		16.4	%
Net fixed contract account values	$	8.685		$	8.608		$	8.461		$	8.340		$	8.109			-6.6	%	$	8.685		$	8.109			-6.6	%
Indexed Annuities
Deposits	$	0.199		$	0.204		$	0.218		$	0.356		$	0.215			8.0	%	$	0.550		$	0.789			43.5	%
Withdrawals and deaths		(0.059	)		(0.062	)		(0.083	)		(0.102	)		(0.114	)		-93.2	%		(0.182	)		(0.299	)		-64.3	%
Net flows	$	0.140		$	0.142		$	0.135		$	0.254		$	0.101			-27.9	%	$	0.368		$	0.490			33.2	%
Indexed Annuity Account Values	$	4.228		$	4.392		$	4.465		$	4.726		$	4.836			14.4	%	$	4.228		$	4.836			14.4	%
Fixed Portion of Variable Contracts
Deposits	$	0.746		$	0.853		$	0.856		$	0.879		$	0.896			20.1	%	$	1.943		$	2.631			35.4	%
Withdrawals and deaths		(0.181	)		(0.158	)		(0.124	)		(0.110	)		(0.124	)		31.5	%		(0.487	)		(0.358	)		26.5	%
Net flows	$	0.565		$	0.695		$	0.732		$	0.769		$	0.772			36.6	%	$	1.456		$	2.273			56.1	%
Fixed Portion of Variable Contract Account Values	$	3.470		$	3.470		$	3.469		$	3.478		$	3.547			2.2	%	$	3.470		$	3.547			2.2	%
Variable Annuities - Including Fixed Portion of Variable Contracts
Deposits	$	2.993		$	3.445		$	2.721		$	2.944		$	2.568			-14.2	%	$	8.485		$	8.233			-3.0	%
Withdrawals and deaths		(1.477	)		(1.525	)		(1.383	)		(1.339	)		(1.340	)		9.3	%		(4.210	)		(4.062	)		3.5	%
Net flows	$	1.516		$	1.920		$	1.338		$	1.605		$	1.228			-19.0	%	$	4.275		$	4.171			-2.4	%
Variable Contract Account Values	$	61.764		$	62.112		$	58.435		$	59.333		$	53.530			-13.3	%	$	61.764		$	53.530			-13.3	%
Average Daily Variable Annuity Separate Account Values	$	55.827		$	58.628		$	55.318		$	57.763		$	54.717			-2.0	%	$	52.922		$	55.929			5.7	%
																Change									Change
Interest Rate Spread (1)																(Basis Point)									(Basis Point)
Fixed maturity securities, mortgage loans on real estate and
other, net of investment expenses		5.82	%		5.85	%		5.85	%		5.88	%		5.82	%		-			5.83	%		5.85	%		2
Commercial mortgage loan prepayment and bond make whole premiums		0.05	%		0.08	%		0.03	%		0.00	%		0.02	%		(3	)		0.06	%		0.02	%		(4	)
Alternative investments		-0.03	%		0.00	%		-0.01	%		-0.01	%		0.00	%		3			0.01	%		-0.01	%		(2	)
Net investment income yield on reserves		5.84	%		5.93	%		5.87	%		5.87	%		5.84	%		-			5.90	%		5.86	%		(4	)
Interest rate credited to contract holders		3.77	%		3.76	%		3.81	%		3.73	%		3.95	%		18			3.71	%		3.83	%		12
Interest rate spread		2.07	%		2.17	%		2.06	%		2.14	%		1.89	%		(18	)		2.19	%		2.03	%		(16	)
Variable Annuity Expense Assessments (in millions) (2)	$	267.2		$	286.6		$	271.4		$	287.0		$	276.0			3.3	%	$	741.7		$	834.4			12.5	%
GLB Expense Assessments (in millions) (3)	$	31.7		$	37.1		$	39.6		$	42.7		$	45.5			43.5	%	$	83.2		$	127.8			53.6	%
Components of Attributed Fees on GLB (in millions)
Attributed fee included in operating revenues and income from operations (4)	$	3.8		$	4.4		$	15.8		$	17.0		$	17.9		NM			$	10.5		$	50.7		NM
Attributed fee excluded from operating revenues and income from operations (5)		14.0			17.0			19.6			22.5			24.8			77.1	%		37.2			66.9			79.8	%
Total Attributed Fees on GLB	$	17.8		$	21.4		$	35.4		$	39.5		$	42.7			139.9	%	$	47.7		$	117.6			146.5	%
GLB Account Values by Type
Guaranteed withdrawal benefits (6)	$	18.364		$	18.935		$	18.255		$	19.301		$	18.163			-1.1	%	$	18.364		$	18.163			-1.1	%
Guaranteed income benefits (7)		7.319			8.372			8.632			9.370			8.358			14.2	%		7.319			8.358			14.2	%
Total GLB Account Values	$	25.683		$	27.307		$	26.887		$	28.671		$	26.521			3.3	%	$	25.683		$	26.521			3.3	%

(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 invested assets on reserves.  We exclude net investment income earned on investments supporting statutory surplus, reverse repurchase agreement interest expense and inter-segment cash management account interest expense from our yield and spread calculations.  The average crediting rate is calculated using interest credited before DSI amortization, plus the immediate annuity reserve change (included within benefits),  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) Comprised of the variable annuity expense assessments included in the expense assessments line item on page 15 and the amounts presented in the components of attributed fees on GLB as described in footnotes 4 and 5 and disclosed above.

(3) Comprised of the GLB expense assessments included in the expense assessments line item on page 15 and the amounts presented in the components of attributed fees on GLB as described in footnotes 4 and 5 and

disclosed above.

(4)  Represents the portion of the GLB rider fees calculated as the attributed fees in excess of the net valuation premium.  Net valuation premium represents a level portion of rider fees required to fund potential claims for living benefits.  The attributed fees are the fees used in the calculation of the embedded derivative and represent net valuation premium plus a margin that a theoretical market participant would include for risk/profit, as well as non-performance risk factor required by SFAS 157 benefit costs.  This portion of the attributed fee is reported in realized gain (loss) and is included in income from operations and operating revenues.

(5)  Represents the portion of rider fee revenue for GLB required to fund the net valuation premium.  This portion of the attributed fee is reported in realized gain (loss) and is excluded in income from operations and

operating revenues.

(6) Guaranteed withdrawal benefits include features that offer the contract holder a guarantee equal to the initial deposit (or contract value, if elected after issue), adjusted for any subsequent purchase payments

or withdrawals.

(7) For our guaranteed income benefits, we offer other product riders allowing variable annuity contract holders access and control during the income distribution phase of their contract.  This added flexibility allows the contract holder to access the account value for transfers, additional withdrawals and other service features, such as portfolio rebalancing.

9/30/2008																									PAGE 19
Retirement Solutions - Defined Contribution
Income Statements and Operational Data
Unaudited (millions of dollars)
	For the Three Months Ended																		For the Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2007			2007			2008			2008			2008			Change			2007			2008			Change
Operating Revenues
Surrender charges	$	1.8		$	1.8		$	1.9		$	1.5		$	1.3			-27.8	%	$	6.1		$	4.7			-23.0	%
Expense assessments		63.5			64.7			59.3			59.3			54.6			-14.0	%		186.2			173.2			-7.0	%
Net investment income		172.9			173.3			171.7			174.8			180.9			4.6	%		535.4			527.4			-1.5	%
Operating realized gain (1)		-			-			-			-			0.2		NM				-			0.2		NM
Other revenues and fees		5.2			3.5			4.8			3.8			3.8			-26.9	%		14.5			12.4			-14.5	%
Total Operating Revenues		243.4			243.3			237.7			239.4			240.8			-1.1	%		742.2			717.9			-3.3	%
Operating Expenses
Benefits		-			-			-			0.1			0.2		NM				-			0.3		NM
Interest credited		104.6			104.8			105.9			107.0			106.8			2.1	%		313.6			319.7			1.9	%
Underwriting, acquisition, insurance and other expenses		84.7			77.3			76.3			75.4			76.8			-9.3	%		236.9			228.5			-3.5	%
Total Operating Expenses		189.3			182.1			182.2			182.5			183.8			-2.9	%		550.5			548.5			-0.4	%
Income from operations before federal income taxes		54.1			61.2			55.5			56.9			57.0			5.4	%		191.7			169.4			-11.6	%
Federal income taxes		12.9			18.1			15.1			15.7			14.7			14.0	%		53.5			45.5			-15.0	%
Income From Operations	$	41.2		$	43.1		$	40.4		$	41.2		$	42.3			2.7	%	$	138.2		$	123.9			-10.3	%
Effective Tax Rate		23.8	%		29.6	%		27.2	%		27.6	%		25.8	%					27.9	%		26.9	%
Average Equity	$	901.4		$	902.7		$	906.4		$	933.7		$	961.9					$	914.7		$	934.0
Return on Average Equity		18.3	%		19.1	%		17.8	%		17.7	%		17.6	%					20.1	%		17.7	%
Income From Operations - Basis Points on
Average Account Values - Annualized		46			47			46			46			49			3			52			47			(5	)
Operating Realized Gain (1)
GLB risk and profit charges (2)	$	-		$	-		$	-		$	-		$	0.1		NM			$	-		$	0.1		NM
GDB hedging offset (3)		-			-			-			-			0.1		NM				-			0.1		NM
Total Operating Realized Gain	$	-		$	-		$	-		$	-		$	0.2		NM			$	-		$	0.2		NM
Underwriting, Acquisition, Insurance and Other Expenses
Commissions	$	19.9		$	20.3		$	19.7		$	19.4		$	17.2			-13.6	%	$	60.5		$	56.3			-6.9	%
General and administrative expenses		59.8			53.7			51.9			52.0			52.7			-11.9	%		164.5			156.6			-4.8	%
Taxes, licenses and fees		2.2			2.1			4.4			3.0			3.1			40.9	%		11.7			10.5			-10.3	%
Total commissions and expenses incurred		81.9			76.1			76.0			74.4			73.0			-10.9	%		236.7			223.4			-5.6	%
Less: commissions and expenses capitalized		(23.7	)		(23.7	)		(23.6	)		(22.2	)		(19.7	)		16.9	%		(68.4	)		(65.5	)		4.2	%
Amortization of DAC and VOBA, net of interest		26.5			24.9			23.9			23.2			23.5			-11.3	%		68.6			70.6			2.9	%
Total Underwriting, Acquisition, Insurance
and Other Expenses	$	84.7		$	77.3		$	76.3		$	75.4		$	76.8			-9.3	%	$	236.9		$	228.5			-3.5	%
General and Administrative Expenses - Basis Points on
Average Account Values - Annualized (4)		67			59			59			59			61			(6	)		62			60			(2	)
Roll Forward of DAC and VOBA
Balance at beginning-of-period	$	541.9		$	531.8		$	513.8		$	564.2		$	629.7					$	497.6		$	513.8
Cumulative effect of adoption of SOP 05-1		-			-			-			-			-						(1.4	)		-
Inter-segment transfer		-			-			6.9			-			-						-			6.9
Deferrals		23.7			23.7			23.6			22.2			19.7						68.4			65.5
Amortization, net of interest:
Unlocking		(5.0	)		(1.2	)		(2.5	)		0.1			(2.8	)					(7.5	)		(5.2	)
Other amortization		(21.5	)		(23.7	)		(21.4	)		(23.3	)		(20.7	)					(61.1	)		(65.4	)
Deferrals, net of amortization included in
operating and acquisition expenses		(2.8	)		(1.2	)		(0.3	)		(1.0	)		(3.8	)					(0.2	)		(5.1	)
Adjustment related to realized (gains) losses
on available-for-sale securities		(0.6	)		3.4			0.6			1.0			4.6						(3.6	)		6.2
Adjustment related to unrealized (gains) losses
on available-for-sale securities		(6.7	)		(20.2	)		43.2			65.5			114.3						39.4			223.0
Balance at End-of-Period	$	531.8		$	513.8		$	564.2		$	629.7		$	744.8					$	531.8		$	744.8
Roll Forward of DSI
Balance at beginning-of-period	$	0.3		$	0.4		$	0.4		$	1.9		$	2.0					$	0.1		$	0.4
Inter-segment transfer		-			-			1.3			-			-						-			1.3
Deferrals		0.1			-			0.2			0.2			-						0.3			0.4
Amortization, net of interest:
Other amortization		-			-			-			(0.1	)		(0.1	)					-			(0.2	)
Deferrals, net of amortization included in
interest credited		0.1			-			0.2			0.1			(0.1	)					0.3			0.2
Adjustment related to realized (gains) losses
on available-for-sale securities		-			-			-			-			0.1						-			0.1
Balance at End-of-Period	$	0.4		$	0.4		$	1.9		$	2.0		$	2.0					$	0.4		$	2.0

(1)    Included in income from operations.

(2)  The portion of the rider fee revenue for GLB calculated as the attributed fee in excess of net valuation premium.

(3)  Change in the fair value of the derivatives that offsets the benefit ratio unlocking of our SOP 03-1 reserves on our GMDB riders, including our expected cost of the hedging instruments.

(4)  Includes distribution costs.

9/30/2008																						PAGE 20
Retirement Solutions - Defined Contribution
Account Value Roll Forward
Unaudited (in billions)
	For the Three Months Ended																		For the Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2007			2007			2008			2008			2008			Change			2007			2008			Change
Fixed Annuities
Balance at beginning-of-period	$	10.940		$	10.891		$	10.889		$	11.217		$	11.294			3.2	%	$	11.006		$	10.889			-1.1	%
Gross deposits		0.305			0.267			0.332			0.280			0.290			-4.9	%		0.836			0.902			7.9	%
Withdrawals and deaths		(0.450	)		(0.411	)		(0.370	)		(0.380	)		(0.411	)		8.7	%		(1.225	)		(1.161	)		5.2	%
Net flows		(0.145	)		(0.144	)		(0.038	)		(0.100	)		(0.121	)		16.6	%		(0.389	)		(0.259	)		33.4	%
Transfer from (to) variable annuities		(0.011	)		0.031			0.172			0.073			0.136		NM				(0.039	)		0.381		NM
Inter-segment transfer		-			-			0.089			-			-		NM				-			0.089		NM
Interest credited		0.107			0.111			0.105			0.104			0.109			1.9	%		0.313			0.318			1.6	%
Balance at End-of-Period  (1)	$	10.891		$	10.889		$	11.217		$	11.294		$	11.418			4.8	%	$	10.891		$	11.418			4.8	%
Variable Annuities
Balance at beginning-of-period	$	18.480		$	18.581		$	17.876		$	16.292		$	16.195			-12.4	%	$	17.475		$	17.876			2.3	%
Gross deposits		0.564			0.560			0.674			0.561			0.532			-5.7	%		1.796			1.767			-1.6	%
Withdrawals and deaths		(0.810	)		(0.842	)		(0.833	)		(0.646	)		(0.723	)		10.7	%		(2.370	)		(2.202	)		7.1	%
Net flows		(0.246	)		(0.282	)		(0.159	)		(0.085	)		(0.191	)		22.4	%		(0.574	)		(0.435	)		24.2	%
Transfer from (to) fixed annuities		(0.028	)		(0.012	)		(0.143	)		(0.058	)		(0.117	)	NM				(0.017	)		(0.318	)	NM
Inter-product transfer (2)		-			-			-			-			(0.553	)	NM				-			(0.553	)	NM
Inter-segment transfer		-			-			0.206			-			-		NM				-			0.206		NM
Investment increase and change in market value		0.375			(0.411	)		(1.488	)		0.046			(1.854	)	NM				1.697			(3.296	)	NM
Balance at End-of-Period (3)	$	18.581		$	17.876		$	16.292		$	16.195		$	13.480			-27.5	%	$	18.581		$	13.480			-27.5	%
Total Annuities
Balance at beginning-of-period	$	29.420		$	29.472		$	28.765		$	27.509		$	27.489			-6.6	%	$	28.481		$	28.765			1.0	%
Gross deposits		0.869			0.827			1.006			0.841			0.822			-5.4	%		2.632			2.669			1.4	%
Withdrawals and deaths		(1.260	)		(1.253	)		(1.203	)		(1.026	)		(1.134	)		10.0	%		(3.595	)		(3.363	)		6.5	%
Net flows		(0.391	)		(0.426	)		(0.197	)		(0.185	)		(0.312	)		20.2	%		(0.963	)		(0.694	)		27.9	%
Transfers between fixed and variable accounts		(0.039	)		0.019			0.029			0.015			0.019			148.7	%		(0.056	)		0.063			212.5	%
Inter-product transfer (2)		-			-			-			-			(0.553	)	NM				-			(0.553	)	NM
Inter-segment transfer		-			-			0.295			-			-		NM				-			0.295		NM
Interest credited and change in market value		0.482			(0.300	)		(1.383	)		0.150			(1.745	)	NM				2.010			(2.978	)	NM
Balance at End-of-Period	$	29.472		$	28.765		$	27.509		$	27.489		$	24.898			-15.5	%	$	29.472		$	24.898			-15.5	%
Alliance and Smart Future Mutual Funds
Balance at beginning-of-period	$	6.543		$	7.165		$	7.293		$	7.255		$	7.553			15.4	%	$	5.175		$	7.293			40.9	%
Plan/participant rollovers		0.411			0.168			0.221			0.285			0.215			-47.7	%		0.907			0.721			-20.5	%
Additional contributions		0.245			0.269			0.324			0.295			0.297			21.2	%		0.746			0.916			22.8	%
Gross deposits		0.656			0.437			0.545			0.580			0.512			-22.0	%		1.653			1.637			-1.0	%
Withdrawals and deaths		(0.132	)		(0.102	)		(0.068	)		(0.158	)		(0.107	)		18.9	%		(0.263	)		(0.333	)		-26.6	%
Net flows		0.524			0.335			0.477			0.422			0.405			-22.7	%		1.390			1.304			-6.2	%
Transfers		(0.013	)		(0.023	)		(0.070	)		(0.026	)		(0.024	)		-84.6	%		0.032			(0.120	)	NM
Inter-product transfer (2)		-			-			-			-			0.553		NM				-			0.553		NM
Interest credited and change in market value		0.111			(0.184	)		(0.445	)		(0.098	)		(0.812	)	NM				0.568			(1.355	)	NM
Balance at End-of-Period (4)	$	7.165		$	7.293		$	7.255		$	7.553		$	7.675			7.1	%	$	7.165		$	7.675			7.1	%
Total Annuities and Mutual Funds
Balance at beginning-of-period	$	35.963		$	36.637		$	36.058		$	34.764		$	35.042			-2.6	%	$	33.656		$	36.058			7.1	%
Gross deposits		1.525			1.264			1.551			1.421			1.334			-12.5	%		4.285			4.306			0.5	%
Withdrawals and deaths		(1.392	)		(1.355	)		(1.271	)		(1.184	)		(1.241	)		10.8	%		(3.858	)		(3.696	)		4.2	%
Net flows		0.133			(0.091	)		0.280			0.237			0.093			-30.1	%		0.427			0.610			42.9	%
Transfers		(0.052	)		(0.004	)		(0.041	)		(0.011	)		(0.005	)		90.4	%		(0.024	)		(0.057	)	NM
Inter-segment transfer		-			-			0.295			-			-		NM				-			0.295		NM
Interest credited and change in market value		0.593			(0.484	)		(1.828	)		0.052			(2.557	)	NM				2.578			(4.333	)	NM
Balance at End-of-Period	$	36.637		$	36.058		$	34.764		$	35.042		$	32.573			-11.1	%	$	36.637		$	32.573			-11.1	%
Variable Annuities Under Agreement - Included Above	$	0.018		$	0.017		$	0.015		$	0.014		$	0.011			-38.9	%	$	0.018		$	0.011			-38.9	%
Incremental Deposits: (5)
Fixed annuities	$	0.220		$	0.197		$	0.285		$	0.258		$	0.225			2.3	%	$	0.725		$	0.768			5.9	%
Variable annuities		0.556			0.551			0.667			0.553			0.524			-5.8	%		1.767			1.745			-1.2	%
Total annuities incremental deposits		0.776			0.748			0.952			0.811			0.749			-3.5	%		2.492			2.513			0.8	%
Total Alliance mutual funds incremental deposits		0.656			0.437			0.545			0.580			0.511			-22.1	%		1.653			1.637			-1.0	%
Total Incremental Deposits	$	1.432		$	1.185		$	1.497		$	1.391		$	1.260			-12.0	%	$	4.145		$	4.150			0.1	%

(1) Includes fixed annuity products offered under our mutual fund products and the fixed portion of variable annuities.

(2) On 9/30/08, the Lincoln Employee 401(k) Plan transferred from Director to Alliance in the amount of $0.653 billion, of which $0.100 billion transferred within fixed annuities and therefore is not depicted on this

rollforward.

(3)  Excludes the fixed portion of variable annuities.

(4) Represents amounts attributable to mutual fund net flows.  Mutual fund account values are not included on our Consolidated Balance Sheets.

(5)  Represents gross deposits reduced by transfers from other Lincoln products.

9/30/2008																			PAGE 21
Retirement Solutions - Defined Contribution
Account Value Roll Forward - By Product and Supplemental Data
Unaudited (in billions)
	For the Three Months Ended																		For the Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2007			2007			2008			2008			2008			Change			2007			2008			Change
Total Micro - Small Segment
Balance at beginning-of-period	$	8.012		$	8.077		$	7.798		$	7.218		$	7.286			-9.1	%	$	7.535		$	7.798			3.5	%
Gross deposits		0.391			0.365			0.498			0.389			0.389			-0.5	%		1.229			1.276			3.8	%
Withdrawals and deaths		(0.481	)		(0.565	)		(0.569	)		(0.395	)		(0.465	)		3.3	%		(1.366	)		(1.429	)		-4.6	%
Net flows		(0.090	)		(0.200	)		(0.071	)		(0.006	)		(0.076	)		15.6	%		(0.137	)		(0.153	)		-11.7	%
Transfers between fixed and variable accounts		-			-			(0.012	)		-			-		NM				(0.005	)		(0.012	)	NM
Inter-product transfer (1)		-			-			-			-			(0.653	)	NM				-			(0.653	)	NM
Investment increase and change in market value		0.155			(0.079	)		(0.497	)		0.074			(0.767	)	NM				0.684			(1.190	)	NM
Balance at End-of-Period	$	8.077		$	7.798		$	7.218		$	7.286		$	5.790			-28.3	%	$	8.077		$	5.790			-28.3	%
Total Mid - Large Segment
Balance at beginning-of-period	$	8.555		$	9.232		$	9.463		$	9.621		$	9.985			16.7	%	$	6.975		$	9.463			35.7	%
Gross deposits		0.861			0.609			0.769			0.748			0.687			-20.2	%		2.162			2.203			1.9	%
Withdrawals and deaths		(0.263	)		(0.212	)		(0.159	)		(0.299	)		(0.222	)		15.6	%		(0.512	)		(0.679	)		-32.6	%
Net flows		0.598			0.397			0.610			0.449			0.465			-22.2	%		1.650			1.524			-7.6	%
Transfers between fixed and variable accounts		(0.051	)		(0.003	)		(0.029	)		(0.011	)		(0.004	)		92.2	%		(0.014	)		(0.044	)	NM
Inter-product transfer (1)		-			-			-			-			0.653		NM				-			0.653		NM
Investment increase and change in market value		0.130			(0.163	)		(0.423	)		(0.074	)		(0.789	)	NM				0.621			(1.286	)	NM
Balance at End-of-Period	$	9.232		$	9.463		$	9.621		$	9.985		$	10.310			11.7	%	$	9.232		$	10.310			11.7	%
Total Multi-Fund® and Other Variable Annuities
Balance at beginning-of-period	$	19.396		$	19.328		$	18.797		$	17.925		$	17.771			-8.4	%	$	19.146		$	18.797			-1.8	%
Gross deposits		0.273			0.290			0.284			0.284			0.258			-5.5	%		0.894			0.827			-7.5	%
Withdrawals and deaths		(0.648	)		(0.578	)		(0.543	)		(0.490	)		(0.554	)		14.5	%		(1.980	)		(1.588	)		19.8	%
Net flows		(0.375	)		(0.288	)		(0.259	)		(0.206	)		(0.296	)		21.1	%		(1.086	)		(0.761	)		29.9	%
Transfers between fixed and variable accounts		(0.001	)		(0.001	)		-			(0.000	)		(0.001	)		0.0	%		(0.005	)		(0.001	)		80.0	%
Inter-segment transfer		-			-			0.295			-			-		NM				-			0.295		NM
Investment increase and change in market value		0.308			(0.242	)		(0.908	)		0.052			(1.001	)	NM				1.273			(1.857	)	NM
Balance at End-of-Period	$	19.328		$	18.797		$	17.925		$	17.771		$	16.473			-14.8	%	$	19.328		$	16.473			-14.8	%
Total Annuities and Mutual Funds
Balance at beginning-of-period	$	35.963		$	36.637		$	36.058		$	34.764		$	35.042			-2.6	%	$	33.656		$	36.058			7.1	%
Gross deposits		1.525			1.264			1.551			1.421			1.334			-12.5	%		4.285			4.306			0.5	%
Withdrawals and deaths		(1.392	)		(1.355	)		(1.271	)		(1.184	)		(1.241	)		10.8	%		(3.858	)		(3.696	)		4.2	%
Net flows		0.133			(0.091	)		0.280			0.237			0.093			-30.1	%		0.427			0.610			42.9	%
Transfers between fixed and variable accounts		(0.052	)		(0.004	)		(0.041	)		(0.011	)		(0.005	)		90.4	%		(0.024	)		(0.057	)	NM
Inter-segment transfer		-			-			0.295			-			-		NM				-			0.295		NM
Investment increase and change in market value		0.593			(0.484	)		(1.828	)		0.052			(2.557	)	NM				2.578			(4.333	)	NM
Balance at End-of-Period (2)	$	36.637		$	36.058		$	34.764		$	35.042		$	32.573			-11.1	%	$	36.637		$	32.573			-11.1	%
Fixed Annuities - Excluding Fixed Portion of Variable Contracts
Deposits	$	0.221		$	0.189		$	0.240		$	0.187		$	0.196			-11.3	%	$	0.565		$	0.623			10.3	%
Withdrawals and deaths		(0.215	)		(0.203	)		(0.160	)		(0.198	)		(0.183	)		14.9	%		(0.521	)		(0.541	)		-3.8	%
Net flows	$	0.006		$	(0.014	)	$	0.080		$	(0.011	)	$	0.013			116.7	%	$	0.044		$	0.082			86.4	%
Fixed Contract Account Values	$	4.943		$	4.996		$	5.166		$	5.221		$	5.304			7.3	%	$	4.943		$	5.304			7.3	%
Fixed Portion of Variable Contracts
Deposits	$	0.084		$	0.079		$	0.093		$	0.092		$	0.094			11.9	%	$	0.272		$	0.279			2.6	%
Withdrawals and deaths		(0.235	)		(0.208	)		(0.210	)		(0.182	)		(0.228	)		3.0	%		(0.704	)		(0.620	)		11.9	%
Net flows	$	(0.151	)	$	(0.129	)	$	(0.117	)	$	(0.090	)	$	(0.134	)		11.3	%	$	(0.432	)	$	(0.341	)		21.1	%
Fixed Portion of Variable Contract Account Values	$	5.948		$	5.893		$	6.051		$	6.073		$	6.114			2.8	%	$	5.948		$	6.114			2.8	%
Variable Annuities - Including Fixed Portion of Variable Contracts
Deposits	$	0.648		$	0.639		$	0.767		$	0.653		$	0.626			-3.4	%	$	2.067		$	2.046			-1.0	%
Withdrawals and deaths		(1.045	)		(1.050	)		(1.043	)		(0.828	)		(0.951	)		9.0	%		(3.074	)		(2.821	)		8.2	%
Net flows	$	(0.397	)	$	(0.411	)	$	(0.276	)	$	(0.175	)	$	(0.325	)		18.1	%	$	(1.007	)	$	(0.775	)		23.0	%
Variable Contract Account Values	$	24.528		$	23.769		$	22.343		$	22.268		$	19.594			-20.1	%	$	24.528		$	19.594			-20.1	%
Average Daily Variable Annuity Account Values	$	18.162		$	18.235		$	16.640		$	16.892		$	15.582			-14.2	%	$	18.043		$	16.369			-9.3	%
Interest Rate Spread (3)																Change (Basis Point)									Change (Basis Point)
Fixed maturity securities, mortgage loans on real estate and other, net of investment expenses		6.04	%		6.00	%		5.93	%		5.89	%		5.94	%		(10	)		6.04	%		5.91	%		(13	)
Commercial mortgage loan prepayment and bond makewhole premiums		0.07	%		0.05	%		0.02	%		0.05	%		0.17	%		10			0.06	%		0.08	%		2
Alternative investments		-0.10	%		0.00	%		-0.03	%		-0.03	%		-0.01	%		9			0.02	%		-0.02	%		(4	)
Net investment income yield on reserves		6.01	%		6.05	%		5.92	%		5.91	%		6.10	%		9			6.12	%		5.97	%		(15	)
Interest rate credited to contract holders		3.84	%		3.84	%		3.81	%		3.80	%		3.77	%		(7	)		3.82	%		3.79	%		(3	)
Interest rate spread		2.17	%		2.21	%		2.11	%		2.11	%		2.33	%		16			2.30	%		2.18	%		(12	)
(1)      On 9/30/08, the Lincoln Employee 401(k) Plan transferred from Director to Alliance in the amount of $0.653 billion.
(2)    Includes mutual fund account values. Mutual funds are not included on our Consolidated Balance Sheets.
(3)    For the annuity products spread, the yield on earning assets is calculated as net investment income on fixed product investment portfolios divided by average invested assets on reserves. We exclude net investment income      earned on investments supporting statutory surplus from our spread calculations. The average crediting rate is calculated as interest credited before DSI amortization, plus the immediate annuity reserve change (included within benefits), divided by the average fixed account values, including the fixed portion of variable annuities.

9/30/2008																			PAGE 22
Insurance Solutions - Life Insurance
Income Statements and Operational Data
Unaudited (millions of dollars)
	For the Three Months Ended																		For the Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2007			2007			2008			2008			2008			Change			2007			2008			Change
Operating Revenues
Insurance premiums	$	84.8		$	90.1		$	86.4		$	89.5		$	90.9			7.2	%	$	260.6		$	266.8			2.4	%
Surrender charges		14.0			14.2			15.7			14.6			15.7			12.1	%		44.9			46.0			2.4	%
Mortality assessments		311.6			319.3			321.7			328.1			331.9			6.5	%		903.5			981.7			8.7	%
Expense assessments (1) (2)		143.8			117.6			121.3			129.6			101.4			-29.5	%		334.9			352.3			5.2	%
Net investment income		496.3			516.3			499.3			519.2			522.4			5.3	%		1,552.5			1,540.9			-0.7	%
Other revenues and fees		5.9			10.7			8.7			5.0			9.3			57.6	%		24.2			23.0			-5.0	%
Total Operating Revenues		1,056.4			1,068.2			1,053.1			1,086.0			1,071.6			1.4	%		3,120.6			3,210.7			2.9	%
Operating Expenses
Benefits (1) (2)		265.6			308.9			298.6			304.1			397.7			49.7	%		780.0			1,000.4			28.3	%
Interest credited		292.9			298.2			296.5			300.6			304.7			4.0	%		874.9			901.8			3.1	%
Underwriting, acquisition, insurance and other expenses (1) (2)		227.6			202.7			219.5			234.0			167.4			-26.4	%		638.9			620.9			-2.8	%
Total Operating Expenses		786.1			809.8			814.6			838.7			869.8			10.6	%		2,293.8			2,523.1			10.0	%
Income from operations before federal income taxes		270.3			258.4			238.5			247.3			201.8			-25.3	%		826.8			687.6			-16.8	%
Federal income taxes		87.8			87.8			81.1			83.7			64.5			-26.5	%		278.5			229.3			-17.7	%
Income From Operations	$	182.5		$	170.6		$	157.4		$	163.6		$	137.3			-24.8	%	$	548.3		$	458.3			-16.4	%
Effective Tax Rate		32.5	%		34.0	%		34.0	%		33.8	%		32.0	%					33.7	%		33.3	%
Average Equity	$	8,247.7		$	8,271.4		$	8,142.5		$	8,095.3		$	8,164.2					$	8,103.3		$	8,134.0
Return on Average Equity		8.9	%		8.3	%		7.7	%		8.1	%		6.7	%					9.0	%		7.5	%
Underwriting, Acquisition, Insurance and Other Expenses
Commissions	$	219.6		$	225.8		$	194.6		$	180.5		$	209.1			-4.8	%	$	671.7		$	584.2			-13.0	%
General and administrative expenses		106.6			110.6			105.3			100.8			101.9			-4.4	%		334.7			308.0			-8.0	%
Taxes, licenses and fees		28.3			25.0			31.8			26.6			36.3			28.3	%		90.1			94.7			5.1	%
Amortization of sales force intangibles		1.0			1.0			1.0			1.0			1.0			0.0	%		3.0			3.0			0.0	%
Total commissions and expenses incurred		355.5			362.4			332.7			308.9			348.3			-2.0	%		1,099.5			989.9			-10.0	%
Less: commissions and expenses capitalized		(277.1	)		(282.2	)		(245.8	)		(237.2	)		(260.8	)		5.9	%		(852.0	)		(743.8	)		12.7	%
Amortization of DAC and VOBA, net of interest (1) (2)		149.2			122.5			132.6			162.3			79.9			-46.4	%		391.4			374.8			-4.2	%
Total Underwriting, Acquisition, Insurance and Other Expenses	$	227.6		$	202.7		$	219.5		$	234.0		$	167.4			-26.4	%	$	638.9		$	620.9			-2.8	%
General and Administrative Expenses - Basis Points on Average Account Values - Annualized		133			136			130			124			126			(7	)		142			127			(15	)

Roll Forward of DAC and VOBA
Balance at beginning-of-period	$	5,402.6		$	5,532.9		$	5,691.7		$	5,968.1		$	6,235.0		$	4,924.6		$	5,691.7
Deferrals		277.1			282.2			245.8			237.2			260.8			852.0			743.8
Amortization, net of interest:
Unlocking		(5.2	)		8.5			(9.1	)		(17.7	)		55.2			21.9			28.4
Other amortization		(144.0	)		(131.0	)		(123.5	)		(144.6	)		(135.1	)		(413.3	)		(403.2	)
Deferrals, net of amortization included in operating and acquisition expenses		127.9			159.7			113.2			74.9			180.9			460.6			369.0
Adjustment related to realized (gains) losses on available-for-sale securities and derivatives		0.7			56.7			7.3			9.3			54.2			(14.8	)		70.8
Adjustment related to unrealized (gains) losses on available-for-sale securities and derivatives		1.7			(57.6	)		155.9			182.7			477.7			162.5			816.3
Balance at End-of-Period	$	5,532.9		$	5,691.7		$	5,968.1		$	6,235.0		$	6,947.8		$	5,532.9		$	6,947.8
Roll Forward of DFEL
Balance at beginning-of-period	$	590.9		$	607.6		$	672.6		$	722.2		$	763.4		$	471.2		$	672.6
Deferrals		84.6			99.7			89.2			90.1			96.6			264.5			275.9
Amortization, net of interest:
Unlocking		(26.9	)		1.0			(3.4	)		(11.1	)		16.5			(18.2	)		2.0
Other amortization		(41.0	)		(35.7	)		(36.2	)		(37.8	)		(36.3	)		(109.9	)		(110.3	)
Deferrals, net of amortization included in expense assessments		16.7			65.0			49.6			41.2			76.8			136.4			167.6
Balance at End-of-Period	$	607.6		$	672.6		$	722.2		$	763.4		$	840.2		$	607.6		$	840.2
(1) The third quarter of 2008 included prospective unlocking model refinements that resulted in a $24.9 million decrease to expense assessments, a $76.4 million increase to benefits and a $49.4 million increase to underwriting, acquisition, insurance and other expenses.
(2) During the third quarter of 2008, model refinements attributable to our SOP 03-1 secondary guarantees resulted in increases to benefits and decreases to amortization of DAC and VOBA, net of interest, reported within underwriting, acquisition, insurance and other expenses and decreases to DFEL amortization, net of interest, reported within expense assessments.

9/30/2008																			PAGE 23
Insurance Solutions - Life Insurance
Operational Data and Account Value Roll Forward
Unaudited (billions of dollars)
	For the Three Months Ended																		For the Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2007			2007			2008			2008			2008			Change			2007			2008			Change
Sales by Product (1) (in millions)
UL
Excluding MoneyGuard®	$	143.9		$	141.3		$	113.7		$	123.7		$	144.7			0.6	%	$	455.0		$	382.1			-16.0	%
MoneyGuard®		10.9			12.1			11.0			12.4			13.7			25.7	%		28.1			37.1			32.0	%
Total		154.8			153.4			124.7			136.1			158.4			2.3	%		483.1			419.2			-13.2	%
VUL		17.7			21.9			15.6			11.4			12.3			-30.5	%		55.5			39.3			-29.2	%
COLI and BOLI (2)		17.9			39.4			28.2			12.8			12.7			-29.1	%		52.0			53.8			3.5	%
Term/Whole Life		7.5			6.9			5.1			5.4			6.9			-8.0	%		24.8			17.4			-29.8	%
Total	$	197.9		$	221.6		$	173.6		$	165.7		$	190.3			-3.8	%	$	615.4		$	529.7			-13.9	%
First Year Paid Premiums (in millions)
UL
Excluding MoneyGuard®	$	303.8		$	304.6		$	245.4		$	254.3		$	270.4			-11.0	%	$	987.4		$	770.1			-22.0	%
MoneyGuard®		72.4			80.4			73.6			82.5			91.6			26.5	%		187.4			247.7			32.2	%
Total		376.2			385.0			319.0			336.8			362.0			-3.8	%		1,174.8			1,017.8			-13.4	%
VUL		46.4			48.9			37.0			28.8			31.1			-33.0	%		146.6			96.9			-33.9	%
COLI and BOLI (2)		31.6			72.8			57.9			26.0			30.3			-4.1	%		83.4			114.2			36.9	%
Term/Whole Life		19.1			24.4			14.0			16.2			20.2			5.8	%		54.8			50.4			-8.0	%
Total	$	473.3		$	531.1		$	427.9		$	407.8		$	443.6			-6.3	%	$	1,459.6		$	1,279.3			-12.4	%
Life Insurance In Force
UL and other	$	294.833		$	299.598		$	302.013		$	303.607		$	306.293			3.9	%	$	294.833		$	306.293			3.9	%
Term insurance		236.414			235.919			234.860			234.109			233.671			-1.2	%		236.414			233.671			-1.2	%
Total	$	531.247		$	535.517		$	536.873		$	537.716		$	539.964			1.6	%	$	531.247		$	539.964			1.6	%
Interest-Sensitive Life
Balance at beginning-of-period	$	25.864		$	26.162		$	26.518		$	26.726		$	26.980			4.3	%	$	25.362		$	26.518			4.6	%
Deposits		0.852			0.977			0.893			0.846			0.875			2.7	%		2.604			2.614			0.4	%
Withdrawals and deaths		(0.299	)		(0.320	)		(0.398	)		(0.277	)		(0.306	)		-2.3	%		(1.065	)		(0.981	)		7.9	%
Net flows		0.553			0.657			0.495			0.569			0.569			2.9	%		1.539			1.633			6.1	%
Contract holder assessments (3)		(0.534	)		(0.583	)		(0.568	)		(0.601	)		(0.613	)		-14.8	%		(1.577	)		(1.782	)		-13.0	%
Interest credited		0.279			0.282			0.281			0.286			0.291			4.3	%		0.838			0.858			2.4	%
Balance at End-of-Period (3)	$	26.162		$	26.518		$	26.726		$	26.980		$	27.227			4.1	%	$	26.162		$	27.227			4.1	%
VUL
Balance at beginning-of-period	$	5.954		$	6.104		$	6.040		$	5.615		$	5.623			-5.6	%	$	5.433		$	6.040			11.2	%
Deposits		0.180			0.217			0.239			0.216			0.207			15.0	%		0.615			0.662			7.6	%
Withdrawals and deaths		(0.104	)		(0.092	)		(0.083	)		(0.108	)		(0.086	)		17.3	%		(0.291	)		(0.277	)		4.8	%
Net flows		0.076			0.125			0.156			0.108			0.121			59.2	%		0.324			0.385			18.8	%
Contract holder assessments		(0.089	)		(0.093	)		(0.095	)		(0.091	)		(0.092	)		-3.4	%		(0.268	)		(0.278	)		-3.7	%
Investment income and change in market value		0.163			(0.096	)		(0.486	)		(0.009	)		(0.596	)	NM				0.615			(1.091	)	NM
Balance at End-of-Period	$	6.104		$	6.040		$	5.615		$	5.623		$	5.056			-17.2	%	$	6.104		$	5.056			-17.2	%
Total Life Insurance
Balance at beginning-of-period	$	31.818		$	32.266		$	32.558		$	32.341		$	32.603			2.5	%	$	30.795		$	32.558			5.7	%
Deposits		1.032			1.194			1.132			1.062			1.082			4.8	%		3.219			3.276			1.8	%
Withdrawals and deaths		(0.403	)		(0.412	)		(0.481	)		(0.385	)		(0.392	)		2.7	%		(1.356	)		(1.258	)		7.2	%
Net flows		0.629			0.782			0.651			0.677			0.690			9.7	%		1.863			2.018			8.3	%
Contract holder assessments (3)		(0.623	)		(0.676	)		(0.663	)		(0.692	)		(0.705	)		-13.2	%		(1.845	)		(2.060	)		-11.7	%
Investment income and change in market value		0.442			0.186			(0.205	)		0.277			(0.305	)	NM				1.453			(0.233	)	NM
Balance at End-of-Period	$	32.266		$	32.558		$	32.341		$	32.603		$	32.283			0.1	%	$	32.266		$	32.283			0.1	%
Interest Rate Yields and Spread
																Change									Change
Interest-Sensitive Products (4)																(Basis Points)									(Basis Points)
Fixed maturity securities, mortgage loans on real estate and other, net of investment expenses		6.01	%		6.04	%		6.00	%		5.89	%		5.92	%		(9	)		6.07	%		5.94	%		(13	)
Commercial mortgage loan prepayment and bond makewhole premiums		0.08	%		0.13	%		0.04	%		0.14	%		0.02	%		(6	)		0.13	%		0.06	%		(7	)
Alternative investments		-0.01	%		0.09	%		0.00	%		0.21	%		0.31	%		32			0.25	%		0.18	%		(7	)
Net investment income yield on reserves		6.08	%		6.26	%		6.04	%		6.24	%		6.25	%		17			6.45	%		6.18	%		(27	)
Interest rate credited to contract holders		4.43	%		4.43	%		4.37	%		4.36	%		4.35	%		(8	)		4.45	%		4.36	%		(9	)
Interest rate spread		1.65	%		1.83	%		1.67	%		1.88	%		1.90	%		25			2.00	%		1.82	%		(18	)
Traditional Products (5)
Fixed maturity securities, mortgage loans on real estate and other, net of investment expenses		6.15	%		6.21	%		6.12	%		6.23	%		6.06	%		(9	)		6.27	%		6.13	%		(14	)
Commercial mortgage loan prepayment and bond makewhole premiums		0.09	%		0.02	%		0.11	%		0.00	%		0.00	%		(9	)		0.08	%		0.04	%		(4	)
Alternative investments		-0.06	%		0.00	%		-0.02	%		-0.02	%		-0.01	%		5			0.01	%		-0.01	%		(2	)
Net investment income yield on reserves		6.18	%		6.23	%		6.21	%		6.21	%		6.05	%		(13	)		6.36	%		6.16	%		(20	)
(1)       Sales consist of first year commissionable premiums of UL and VUL, including COLI and BOLI,plus 5% of excess premiums received, including an adjustment for internal replacements at approximately 50% of target; first year  paid premiums for whole life and term products; and 15% of premium deposits for linked-benefit products.
(2)       COLI and BOLI are interest-sensitive and contain both UL and VUL products.
(3)     Includes UL, interest-sensitive whole life and the fixed investment option of variable universal life products.
(4)       For the interest-sensitive life products spread, the yield on earning assets is calculated as net investment income on fixed product investment portfolios divided by average earning assets. We exclude net investment income earned on investments supporting statutory surplus and reverse repurchase agreement interest expense from our yield and spread calculations. The average crediting rate is calculated using interest credited on life products divided by average fixed account values.
(5)     For the traditional life products, the yield on earning assets is calculated as net investment income on traditional investment portfolios divided by average earning assets. As of September 30, 2008, interest-sensitive products represented approximately 85% of total interest-sensitive and traditional earning assets.

9/30/2008																			PAGE 24
Insurance Solutions - Group Protection
Income Statements and Operational Data
Unaudited (millions of dollars)
	For the Three Months Ended																		For the Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2007			2007			2008			2008			2008			Change			2007			2008			Change
Operating Revenues
Insurance premiums	$	336.8		$	349.7		$	370.4		$	393.0		$	370.6			10.0	%	$	1,029.5		$	1,134.0			10.2	%
Net investment income		29.5			29.5			27.7			30.5			30.8			4.4	%		85.9			89.0			3.6	%
Other revenues and fees		1.2			1.4			1.3			1.4			1.4			16.7	%		3.6			4.1			13.9	%
Total Operating Revenues		367.5			380.6			399.4			424.9			402.8			9.6	%		1,119.0			1,227.1			9.7	%
Operating Expenses
Benefits		234.9			252.1			269.1			285.7			268.8			14.4	%		747.2			823.6			10.2	%
Interest credited		0.1			-			0.2			0.3			0.5		NM				0.1			1.0		NM
Underwriting, acquisition, insurance and other expenses		81.4			85.1			89.6			89.3			91.8			12.8	%		240.3			270.7			12.7	%
Total Operating Expenses		316.4			337.2			358.9			375.3			361.1			14.1	%		987.6			1,095.3			10.9	%
Income from operations before federal income taxes		51.1			43.4			40.5			49.6			41.7			-18.4	%		131.4			131.8			0.3	%
Federal income taxes		17.9			15.2			14.2			17.4			14.5			-19.0	%		46.1			46.1			0.0	%
Income From Operations	$	33.2		$	28.2		$	26.3		$	32.2		$	27.2			-18.1	%	$	85.3		$	85.7			0.5	%
Effective Tax Rate		35.0	%		35.0	%		35.1	%		35.1	%		34.8	%					35.1	%		35.0	%
Average Equity	$	936.2		$	956.4		$	975.8		$	985.3		$	1,001.0					$	922.9		$	987.3
Return on Average Equity		14.2	%		11.8	%		10.8	%		13.1	%		10.9	%					12.3	%		11.6	%
Underwriting, Acquisition, Insurance and Other Expenses
Commissions	$	40.4		$	43.1		$	43.5		$	43.7		$	44.3			9.7	%	$	121.2		$	131.5			8.5	%
General and administrative expenses		37.9			42.8			41.7			40.8			42.4			11.9	%		108.1			124.9			15.5	%
Taxes, licenses and fees		8.1			6.2			10.0			9.0			9.0			11.1	%		27.3			28.0			2.6	%
Total commissions and expenses incurred		86.4			92.1			95.2			93.5			95.7			10.8	%		256.6			284.4			10.8	%
Less: commissions and expenses capitalized		(13.1	)		(16.7	)		(13.7	)		(13.0	)		(13.1	)		0.0	%		(37.7	)		(39.8	)		-5.6	%
Amortization of DAC and VOBA, net of interest		8.1			9.7			8.1			8.8			9.2			13.6	%		21.4			26.1			22.0	%
Total Underwriting, Acquisition, Insurance and Other Expenses	$	81.4		$	85.1		$	89.6		$	89.3		$	91.8			12.8	%	$	240.3		$	270.7			12.7	%

General and Administrative Expenses as a Percentage of Premiums		11.3	%		12.2	%		11.3	%		10.4	%		11.4	%		10.5	%		11.0	%
Roll Forward of DAC and VOBA
Balance at beginning-of-period	$	111.4		$	116.4		$	123.4		$	129.0		$	133.2		$	137.6		$	123.4
Cumulative effect of adoption of SOP 05-1		-			-			-			-			-			(37.5	)		-
Deferrals		13.1			16.7			13.7			13.0			13.1			37.7			39.8
Amortization, net of interest		(8.1	)		(9.7	)		(8.1	)		(8.8	)		(9.2	)		(21.4	)		(26.1	)
Deferrals, net of amortization included in operating and acquisition expenses		5.0			7.0			5.6			4.2			3.9			16.3			13.7
Balance at End-of-Period	$	116.4		$	123.4		$	129.0		$	133.2		$	137.1		$	116.4		$	137.1
Annualized Sales

Life	$	21.8		$	53.9		$	21.3		$	23.4		$	30.6		40.4	%	$	68.3		$	75.3		10.2	%
Disability		30.4			72.1			24.9			29.9			29.8		-2.0	%		87.9			84.6		-3.8	%
Dental		8.3			16.6			7.9			11.3			8.0		-3.6	%		27.2			27.2		0.0	%
Total	$	60.5		$	142.6		$	54.1		$	64.6		$	68.4		13.1	%	$	183.4		$	187.1		2.0	%
Premiums
Life	$	123.4		$	126.5		$	132.9		$	133.8		$	135.7		10.0	%	$	367.0		$	402.4		9.6	%
Disability		151.1			155.2			163.2			167.0			168.4		11.4	%		446.3			498.6		11.7	%
Dental		34.1			35.2			36.5			37.4			38.0		11.4	%		100.5			111.9		11.3	%
Other		28.2			32.8			37.8			54.8			28.5		1.1	%		115.7			121.1		4.7	%
Total	$	336.8		$	349.7		$	370.4		$	393.0		$	370.6		10.0	%	$	1,029.5		$	1,134.0		10.2	%
Product Line Results
Life	$	11.0		$	11.2		$	10.1		$	11.4		$	8.9		-19.1	%	$	29.6		$	30.4		2.7	%
Disability		18.8			13.7			15.4			19.9			16.0		-14.9	%		50.2			51.3		2.2	%
Dental		1.3			2.1			(0.3	)		(0.4	)		1.2		-7.7	%		1.4			0.5		-64.3	%
Other		2.1			1.2			1.1			1.3			1.1		-47.6	%		4.1			3.5		-14.6	%
Total	$	33.2		$	28.2		$	26.3		$	32.2		$	27.2		-18.1	%	$	85.3		$	85.7		0.5	%
Loss Ratios
Life		71.2	%		72.1	%		71.9	%		72.3	%		74.0	%	3.9	%		73.3	%		72.7	%	-0.8	%
Disability		65.0	%		69.1	%		68.1	%		66.1	%		68.6	%	5.5	%		66.9	%		67.6	%	1.0	%
Dental		74.9	%		73.1	%		80.8	%		81.1	%		75.9	%	1.3	%		77.8	%		79.2	%	1.8	%
Combined Loss Ratios		68.6	%		70.7	%		71.0	%		70.2	%		71.6	%	4.4	%		70.7	%		70.9	%	0.3	%

9/30/2008																			PAGE 25
Investment Management
Income Statements and Operational Data
Unaudited (millions of dollars)
	For the Three Months Ended																		For the Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2007			2007			2008			2008			2008			Change			2007			2008			Change
Operating Revenues
Investment advisory fees - external	$	89.0		$	87.7		$	76.2		$	75.8		$	67.7			-23.9	%	$	272.0		$	219.7			-19.2	%
Investment advisory fees - inter-segment		22.6			20.3			20.0			20.6			20.6			-8.8	%		66.7			61.2			-8.2	%
Other revenues and fees		38.5			31.0			24.1			27.9			21.6			-43.9	%		112.5			73.6			-34.6	%
Total Operating Revenues		150.1			139.0			120.3			124.3			109.9			-26.8	%		451.2			354.5			-21.4	%
Operating Expenses
Operating and administrative expenses		116.0			96.8			101.1			100.8			101.8			-12.2	%		373.7			303.7			-18.7	%
Total Operating Expenses		116.0			96.8			101.1			100.8			101.8			-12.2	%		373.7			303.7			-18.7	%
Income from operations before federal income taxes		34.1			42.2			19.2			23.5			8.1			-76.2	%		77.5			50.8			-34.5	%
Federal income taxes		12.3			15.2			7.1			8.5			2.8			-77.2	%		28.2			18.4			-34.8	%
Income From Operations	$	21.8		$	27.0		$	12.1		$	15.0		$	5.3			-75.7	%	$	49.3		$	32.4			-34.3	%
Effective Tax Rate		36.1	%		36.0	%		37.0	%		36.2	%		34.6	%					36.4	%		36.2	%
Pre-Tax Operating Margin		22.7	%		30.4	%		16.0	%		18.9	%		7.4	%					17.2	%		14.3	%
After-Tax Operating Margin		14.5	%		19.4	%		10.1	%		12.1	%		4.8	%					10.9	%		9.1	%
Operating and Administrative Expenses
General and administrative expenses	$	100.5		$	81.0		$	87.6		$	85.9		$	90.3			-10.1	%	$	323.8		$	263.8			-18.5	%
Depreciation and amortization		2.5			2.3			2.2			2.1			1.7			-32.0	%		7.6			6.0			-21.1	%
Sub-advisory fees		7.7			8.1			7.2			7.4			6.5			-15.6	%		26.1			21.1			-19.2	%
Total general and administrative expenses		110.7			91.4			97.0			95.4			98.5			-11.0	%		357.5			290.9			-18.6	%
Taxes, licenses and fees		3.9			4.0			3.6			4.9			2.9			-25.6	%		12.0			11.4			-5.0	%
Amortization of intangibles		1.4			1.4			0.5			0.5			0.4			-71.4	%		4.2			1.4			-66.7	%
Total Operating and Administrative Expenses	$	116.0		$	96.8		$	101.1		$	100.8		$	101.8			-12.2	%	$	373.7		$	303.7			-18.7	%

9/30/2008																			PAGE 26
Investment Management
Assets Under Management Roll Forward
Unaudited (in billions)
	For the Three Months Ended																		For the Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2007			2007			2008			2008			2008			Change			2007			2008			Change
Retail Fixed
Balance at beginning-of-period	$	12.303		$	13.014		$	13.463		$	14.168		$	14.398			17.0	%	$	10.993		$	13.463			22.5	%
Sales (1)		1.466			1.635			1.981			1.533			1.619			10.4	%		4.326			5.133			18.7	%
Redemptions		(1.060	)		(1.330	)		(1.395	)		(1.238	)		(1.293	)		-22.0	%		(3.031	)		(3.926	)		-29.5	%
Exchanges		0.027			0.017			0.054			0.030			0.098			263.0	%		0.036			0.182		NM
Net flows		0.433			0.322			0.640			0.325			0.424			-2.1	%		1.331			1.389			4.4	%
Net investment gains and change in market value		0.278			0.145			0.065			(0.095	)		(0.487	)	NM				0.578			(0.517	)	NM
Transfer of assets to a third-party (2)		-			(0.018	)		-			-			-		NM				(0.054	)		-			100.0	%
Transfer of assets from an inter-company manager (3)		-			-			-			-			-		NM				0.166			-			-100.0	%
Balance at End-of-Period (4)	$	13.014		$	13.463		$	14.168		$	14.398		$	14.335			10.2	%	$	13.014		$	14.335			10.2	%
Retail Equity
Balance at beginning-of-period	$	38.586		$	38.166		$	36.250		$	31.463		$	29.770			-22.8	%	$	39.627		$	36.250			-8.5	%
Sales (1)		1.345			1.957			1.514			1.063			1.080			-19.7	%		5.361			3.657			-31.8	%
Redemptions		(2.084	)		(2.903	)		(2.752	)		(2.292	)		(2.832	)		-35.9	%		(7.026	)		(7.876	)		-12.1	%
Exchanges		(0.029	)		(0.025	)		(0.057	)		(0.033	)		0.002			106.9	%		(0.044	)		(0.088	)		-100.0	%
Net flows		(0.768	)		(0.971	)		(1.295	)		(1.262	)		(1.750	)	NM				(1.709	)		(4.307	)	NM
Net investment gains and change in market value		0.348			(0.915	)		(3.492	)		(0.431	)		(3.279	)	NM				3.398			(7.202	)	NM
Transfer of assets to a third-party (2)		-			(0.030	)		-			-			-		NM				(0.099	)		-			100.0	%
Transfer of assets to an inter-company manager (3)		-			-			-			-			-		NM				(3.051	)		-			100.0	%
Balance at End-of-Period (4)	$	38.166		$	36.250		$	31.463		$	29.770		$	24.741			-35.2	%	$	38.166		$	24.741			-35.2	%
Total Retail
Balance at beginning-of-period	$	50.889		$	51.180		$	49.713		$	45.631		$	44.168			-13.2	%	$	50.620		$	49.713			-1.8	%
Retail sales - annuities		0.891			0.953			1.562			0.786			1.075			20.7	%		3.094			3.423			10.6	%
Retail sales - mutual funds		1.543			2.241			1.592			1.407			1.303			-15.6	%		5.192			4.302			-17.1	%
Retail sales - managed accounts and other		0.377			0.398			0.341			0.403			0.320			-15.1	%		1.402			1.064			-24.1	%
Total retail sales (1)		2.811			3.592			3.495			2.596			2.699			-4.0	%		9.687			8.790			-9.3	%
Redemptions		(3.144	)		(4.233	)		(4.147	)		(3.530	)		(4.125	)		-31.2	%		(10.057	)		(11.802	)		-17.4	%
Exchanges		(0.002	)		(0.008	)		(0.003	)		(0.003	)		0.100		NM				(0.008	)		0.094		NM
Net flows		(0.335	)		(0.649	)		(0.655	)		(0.937	)		(1.326	)	NM				(0.378	)		(2.918	)	NM
Net investment gains and change in market value		0.626			(0.770	)		(3.427	)		(0.526	)		(3.766	)	NM				3.976			(7.719	)	NM
Transfer of assets to a third-party (2)		-			(0.048	)		-			-			-		NM				(0.153	)		-			100.0	%
Transfer of assets to an inter-company manager (3)		-			-			-			-			-		NM				(2.885	)		-			100.0	%
Balance at End-of-Period (4)	$	51.180		$	49.713		$	45.631		$	44.168		$	39.076			-23.6	%	$	51.180		$	39.076			-23.6	%
Institutional Fixed
Balance at beginning-of-period	$	23.565		$	24.837		$	12.746		$	12.409		$	12.070			-48.8	%	$	22.841		$	12.746			-44.2	%
Inflows (1)		2.234			0.577			0.242			0.330			0.592			-73.5	%		5.307			1.164			-78.1	%
Withdrawals/terminations		(1.306	)		(0.673	)		(0.638	)		(0.556	)		(1.152	)		11.8	%		(3.057	)		(2.346	)		23.3	%
Exchanges		(0.001	)		0.138			0.002			-			(0.108	)	NM				(0.001	)		(0.106	)	NM
Net flows		0.927			0.042			(0.394	)		(0.226	)		(0.668	)	NM				2.249			(1.288	)	NM
Net investment gains and change in market value		0.345			0.180			0.057			(0.113	)		(0.258	)	NM				0.527			(0.314	)	NM
Transfer of assets to a third-party (5)		-			(12.313	)		-			-			-		NM				-			-		NM
Transfer of assets (to) from an inter-company manager (3)		-			-			-			-			0.784		NM				(0.780	)		0.784			200.5	%
Balance at End-of-Period (4)	$	24.837		$	12.746		$	12.409		$	12.070		$	11.928			-52.0	%	$	24.837		$	11.928			-52.0	%
Institutional Equity
Balance at beginning-of-period	$	23.271		$	23.699		$	22.898		$	20.498		$	19.453			-16.4	%	$	23.845		$	22.898			-4.0	%
Inflows (1)		0.702			1.653			0.986			0.580			0.698			-0.6	%		2.936			2.264			-22.9	%
Withdrawals/terminations		(1.202	)		(1.996	)		(1.100	)		(0.889	)		(1.984	)		-65.1	%		(5.228	)		(3.973	)		24.0	%
Exchanges		(0.001	)		(0.001	)		(0.002	)		-			(0.053	)	NM				(0.001	)		(0.055	)	NM
Net flows		(0.501	)		(0.344	)		(0.116	)		(0.309	)		(1.339	)	NM				(2.293	)		(1.764	)		23.1	%
Net investment gains and change in market value		0.929			(0.457	)		(2.284	)		(0.736	)		(2.470	)	NM				2.510			(5.490	)	NM
Transfer of assets to a third-party (5)		-			-			-			-			(0.065	)	NM				-			(0.065	)	NM
Transfer of assets (to) from an inter-company manager (3)		-			-			-			-			0.016		NM				(0.363	)		0.016			104.4	%
Balance at End-of-Period (4)	$	23.699		$	22.898		$	20.498		$	19.453		$	15.595			-34.2	%	$	23.699		$	15.595			-34.2	%
Total Institutional
Balance at beginning-of-period	$	46.836		$	48.536		$	35.644		$	32.907		$	31.523			-32.7	%	$	46.686		$	35.644			-23.7	%
Inflows (1)		2.936			2.230			1.228			0.910			1.290			-56.1	%		8.243			3.428			-58.4	%
Withdrawals/terminations		(2.508	)		(2.669	)		(1.738	)		(1.445	)		(3.136	)		-25.0	%		(8.285	)		(6.319	)		23.7	%
Exchanges		(0.002	)		0.137			-			-			(0.161	)	NM				(0.002	)		(0.161	)	NM
Net flows		0.426			(0.302	)		(0.510	)		(0.535	)		(2.007	)	NM				(0.044	)		(3.052	)	NM
Net investment gains and change in market value		1.274			(0.277	)		(2.227	)		(0.849	)		(2.728	)	NM				3.037			(5.804	)	NM
Transfer of assets to a third-party (5)		-			(12.313	)		-			-			(0.065	)	NM				-			(0.065	)	NM
Transfer of assets (to) from an inter-company manager (3)		-			-			-			-			0.800		NM				(1.143	)		0.800			170.0	%
Balance at End-of-Period (4)	$	48.536		$	35.644		$	32.907		$	31.523		$	27.523			-43.3	%	$	48.536		$	27.523			-43.3	%
Total Retail and Institutional - At End-of-Period (4)	$	99.716		$	85.357		$	78.538		$	75.691		$	66.599			-33.2	%	$	99.716		$	66.599			-33.2	%
General Account Assets - At End-of-Period	$	67.324		$	67.417		$	67.339		$	65.997		$	63.531			-5.6	%	$	67.324		$	63.531			-5.6	%
Total Assets Under Management at End-of-Period	$	167.040		$	152.774		$	145.877		$	141.688		$	130.130			-22.1	%	$	167.040		$	130.130			-22.1	%
Total Retail and Institutional - Net Flows	$	0.091		$	(0.951	)	$	(1.165	)	$	(1.472	)	$	(3.333	)	NM			$	(0.422	)	$	(5.970	)	NM
Sub-Advised Assets, Included in Assets
Under Management Above
Retail	$	16.380		$	16.219		$	14.212		$	13.651		$	11.168			-31.8	%	$	16.380		$	11.168			-31.8	%
Institutional		4.734			4.570			4.071			3.794			3.035			-35.9	%		4.734			3.035			-35.9	%
Total Sub-Advised Assets	$	21.114		$	20.789		$	18.283		$	17.445		$	14.203			-32.7	%	$	21.114		$	14.203			-32.7	%
(1) Includes dividend reinvestments.
(2) Reflects assets transferred to a third-party manager (Upromise) as a result of Delaware's decision to exit the 529 Plan business.
(3) Reflects assets that were transferred to an inter-company manager, which did not impact Lincoln's consolidated assets under management.
(4) Includes inter-segment and external assets under management.
(5) In the fourth quarter of 2007, we sold a portion of our institutional fixed-income business to an unaffiliated investment management company. In the third quarter of 2008, a portion of our institutional equity business related to Lincoln's 401(k) plan was transferred to a third-party.

9/30/2008																			PAGE 27
Investment Management
Assets Under Management Roll Forward (Continued) (1)
Unaudited (in billions)
	For the Three Months Ended																		For the Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2007			2007			2008			2008			2008			Change			2007			2008			Change
Inter-Segment Assets - Retail and Institutional
Balance at beginning-of-period	$	10.226		$	10.175		$	9.672		$	9.191		$	8.995			-12.0	%	$	13.729		$	9.672			-29.6	%
Sales/inflows		0.544			0.743			0.718			0.375			0.812			49.3	%		1.753			1.905			8.7	%
Redemptions/withdrawals/terminations		(0.754	)		(1.148	)		(0.679	)		(0.543	)		(0.866	)		-14.9	%		(2.254	)		(2.088	)		7.4	%
Exchanges		-			0.133			-			-			(0.162	)	NM				-			(0.162	)	NM
Net flows		(0.210	)		(0.272	)		0.039			(0.168	)		(0.216	)		-2.9	%		(0.501	)		(0.345	)		31.1	%
Net investment gains and change in market value		0.159			(0.231	)		(0.520	)		(0.028	)		(0.551	)	NM				0.975			(1.099	)	NM
Transfer of assets to a third-party		-			-			-			-			(0.075	)	NM				-			(0.075	)	NM
Transfer of assets (to) from an inter-company manager		-			-			-			-			0.784		NM				(4.028	)		0.784			119.5	%
Balance at End-of-Period	$	10.175		$	9.672		$	9.191		$	8.995		$	8.937			-12.2	%	$	10.175		$	8.937			-12.2	%
Inter-Segment Assets - General Account at End-of-Period	$	67.324		$	67.417		$	67.339		$	65.997		$	63.531			-5.6	%	$	67.324		$	63.531			-5.6	%
Total Inter-Segment Assets at End-of-Period	$	77.499		$	77.089		$	76.530		$	74.992		$	72.468			-6.5	%	$	77.499		$	72.468			-6.5	%
Total External
Balance at beginning-of-period (2)	$	87.499		$	89.541		$	75.686		$	69.346		$	66.696			-23.8	%	$	83.577		$	75.686			-9.4	%
Sales/inflows		5.202			5.081			4.004			3.132			3.176			-38.9	%		16.177			10.312			-36.3	%
Redemptions/withdrawals/terminations		(4.898	)		(5.754	)		(5.207	)		(4.433	)		(6.393	)		-30.5	%		(16.089	)		(16.033	)		0.3	%
Exchanges		(0.003	)		(0.004	)		(0.003	)		(0.002	)		0.101		NM				(0.009	)		0.096		NM
Net flows		0.301			(0.677	)		(1.206	)		(1.303	)		(3.116	)	NM				0.079			(5.625	)	NM
Net investment gains and change in market value		1.741			(0.817	)		(5.134	)		(1.347	)		(5.944	)	NM				6.038			(12.425	)	NM
Transfer of assets (to) from a third-party		-			(12.361	)		-			-			0.010		NM				(0.153	)		0.010			106.5	%
Transfer of assets from an inter-company manager		-			-			-			-			0.016		NM				-			0.016		NM
Balance at End-of-Period	$	89.541		$	75.686		$	69.346		$	66.696		$	57.662			-35.6	%	$	89.541		$	57.662			-35.6	%
(1) This roll forward breaks out total assets under management by inter-segment and external balances, which include both retail and institutional assets under management.
(2) Includes Delaware's VIP funds. Lincoln Financial insurance subsidiaries, as well as unaffiliated insurers, participate in these funds.

9/30/2008																			PAGE 28
Lincoln UK
Income Statements and Operational Data
Unaudited (millions of dollars)
	For the Three Months Ended																		For the Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2007			2007			2008			2008			2008			Change			2007			2008			Change
Operating Revenues
Insurance premiums	$	25.5		$	21.2		$	19.0		$	26.4		$	18.9			-25.9	%	$	74.0		$	64.3			-13.1	%
Mortality assessments		9.2			9.1			9.1			9.1			8.7			-5.4	%		28.1			26.9			-4.3	%
Expense assessments		33.0			46.5			37.1			42.6			31.1			-5.8	%		110.1			110.8			0.6	%
Net investment income		20.9			21.5			20.3			19.8			21.1			1.0	%		59.6			61.2			2.7	%
Other revenues and fees		-			-			0.1			-			-		NM				0.1			0.1			0.0	%
Total Operating Revenues		88.6			98.3			85.6			97.9			79.8			-9.9	%		271.9			263.3			-3.2	%
Operating Expenses
Benefits		30.2			36.9			30.7			30.2			26.5			-12.3	%		100.6			87.4			-13.1	%
Underwriting, acquisition, insurance and other expenses		42.5			41.9			38.5			40.0			34.4			-19.1	%		120.7			112.9			-6.5	%
Total Operating Expenses		72.7			78.8			69.2			70.2			60.9			-16.2	%		221.3			200.3			-9.5	%
Income from operations before federal income taxes		15.9			19.5			16.4			27.7			18.9			18.9	%		50.6			63.0			24.5	%
Federal income taxes		5.6			6.8			5.7			9.7			6.6			17.9	%		17.7			22.0			24.3	%
Income From Operations	$	10.3		$	12.7		$	10.7		$	18.0		$	12.3			19.4	%	$	32.9		$	41.0			24.6	%
Effective Tax Rate		35.2	%		34.9	%		34.8	%		35.0	%		34.9	%					35.0	%		34.9	%
Average Equity	$	379.1		$	368.5		$	375.7		$	384.6		$	385.7					$	383.9		$	382.0
Return on Average Equity		10.9	%		13.8	%		11.4	%		18.7	%		12.8	%					11.4	%		14.3	%
Underwriting, Acquisition, Insurance and Other Expenses
Commissions	$	1.3		$	1.5		$	1.0		$	1.0		$	1.0			-23.1	%	$	3.4		$	3.0			-11.8	%
General and administrative expenses		26.9			28.1			26.6			25.9			21.9			-18.6	%		80.2			74.4			-7.2	%
Total commissions and expenses incurred		28.2			29.6			27.6			26.9			22.9			-18.8	%		83.6			77.4			-7.4	%
Less: commissions and expenses capitalized		(1.5	)		(1.4	)		(0.6	)		(0.7	)		(0.8	)		46.7	%		(2.6	)		(2.1	)		19.2	%
Amortization of DAC and VOBA, net of interest		15.8			13.7			11.5			13.8			12.3			-22.2	%		39.7			37.6			-5.3	%
Total Underwriting, Acquisition, Insurance and Other Expenses	$	42.5		$	41.9		$	38.5		$	40.0		$	34.4			-19.1	%	$	120.7		$	112.9			-6.5	%

Roll Forward of DAC and VOBA
Balance at beginning-of-period	$	806.5		$	807.3		$	772.1		$	760.4		$	749.9		$	809.0		$	772.1
Deferrals		1.5			1.4			0.6			0.7			0.8			2.6			2.1
Amortization, net of interest:
Unlocking		(0.9	)		(0.9	)		1.3			(0.3	)		(1.5	)		(0.3	)		(0.5	)
Other amortization		(14.9	)		(12.8	)		(12.8	)		(13.5	)		(10.8	)		(39.4	)		(37.1	)
Deferrals, net of amortization included in operating and acquisition expenses		(14.3	)		(12.3	)		(10.9	)		(13.1	)		(11.5	)		(37.1	)		(35.5	)
Foreign currency translation adjustment		15.1			(22.9	)		(0.8	)		2.6			(80.1	)		35.4			(78.3	)
Balance at End-of-Period	$	807.3		$	772.1		$	760.4		$	749.9		$	658.3		$	807.3		$	658.3
Roll Forward of DFEL
Balance at beginning-of-period	$	402.6		$	398.2		$	379.3		$	371.5		$	366.8		$	404.5		$	379.3
Deferrals		0.8			0.9			0.9			0.6			0.8			2.4			2.3
Amortization, net of interest:
Unlocking		(5.3	)		(1.0	)		(0.5	)		1.2			0.4			(4.2	)		1.1
Other amortization		(7.4	)		(7.5	)		(7.7	)		(7.9	)		(4.9	)		(22.1	)		(20.5	)
Deferrals, net of amortization included in expense assessments		(11.9	)		(7.6	)		(7.3	)		(6.1	)		(3.7	)		(23.9	)		(17.1	)
Foreign currency translation adjustment		7.5			(11.3	)		(0.5	)		1.4			(39.3	)		17.6			(38.4	)
Balance at End-of-Period	$	398.2		$	379.3		$	371.5		$	366.8		$	323.8		$	398.2		$	323.8

Unit-Linked Assets
Balance at beginning-of-period	$	9.168		$	9.192		$	8.850		$	8.079		$	7.833			-14.6	%	$	8.757		$	8.850			1.1	%
Deposits		0.079			0.075			0.060			0.101			0.081			2.5	%		0.247			0.242			-2.0	%
Withdrawals (including charges) and deaths		(0.251	)		(0.227	)		(0.213	)		(0.227	)		(0.189	)		24.7	%		(0.742	)		(0.629	)		15.2	%
Net flows		(0.172	)		(0.152	)		(0.153	)		(0.126	)		(0.108	)		37.2	%		(0.495	)		(0.387	)		21.8	%
Investment income and change in market value		0.025			0.070			(0.608	)		(0.150	)		(0.304	)	NM				0.531			(1.062	)	NM
Foreign currency adjustment		0.171			(0.260	)		(0.010	)		0.030			(0.836	)	NM				0.399			(0.816	)	NM
Balance at End-of-Period	$	9.192		$	8.850		$	8.079		$	7.833		$	6.585			-28.4	%	$	9.192		$	6.585			-28.4	%
Individual Life In Force	$	19.757		$	19.022		$	18.283		$	18.009		$	15.605			-21.0	%	$	19.757		$	15.605			-21.0	%
Exchange Rate - Dollars to Pounds
For-the-period		2.025			2.051			1.987			1.986			1.897			-6.3	%		1.993			1.957			-1.8	%
End-of-period		2.046			1.987			1.985			1.992			1.778			-13.1	%		2.046			1.778			-13.1	%

9/30/2008																			PAGE 29
Other Operations (1)
Unaudited (in millions)
	For the Three Months Ended																		For the Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2007			2007			2008			2008			2008			Change			2007			2008			Change
Operating Revenues
Insurance premiums	$	1.3		$	0.7		$	1.4		$	1.7		$	0.6			-53.8	%	$	2.8		$	3.7			32.1	%
Net investment income		92.6			101.3			98.6			87.1			90.8			-1.9	%		271.1			276.5			2.0	%
Amortization of deferred gain on business sold through reinsurance (2)		18.6			18.6			18.5			18.4			18.4			-1.1	%		55.8			55.3			-0.9	%
Other revenues and fees		(3.6	)		1.2			(2.3	)		0.6			1.1			130.6	%		2.0			(0.6	)	NM
Communications revenues		26.6			26.5			21.7			22.9			21.5			-19.2	%		80.3			66.1			-17.7	%
Inter-segment elimination of investment advisory fees		(22.6	)		(20.3	)		(20.0	)		(20.6	)		(20.6	)		8.8	%		(66.7	)		(61.2	)		8.2	%
Total Operating Revenues		112.9			128.0			117.9			110.1			111.8			-1.0	%		345.3			339.8			-1.6	%
Operating Expenses
Benefits		35.6			36.4			27.8			29.0			30.7			-13.8	%		110.1			87.5			-20.5	%
Interest credited		48.4			47.8			45.8			41.8			42.6			-12.0	%		136.5			130.2			-4.6	%
Underwriting, acquisition, insurance and other expenses		48.2			55.2			34.9			46.7			31.6			-34.4	%		108.2			113.2			4.6	%
Taxes, licenses and fees		3.9			5.1			2.1			1.1			2.6			-33.3	%		7.8			5.8			-25.6	%
Interest and debt expenses		68.2			80.3			75.4			64.8			68.6			0.6	%		203.7			208.8			2.5	%
Communications expenses		13.2			13.5			15.5			15.4			14.2			7.6	%		43.0			45.1			4.9	%
Inter-segment elimination of investment advisory fees		(22.6	)		(20.3	)		(20.0	)		(20.6	)		(20.6	)		8.8	%		(66.7	)		(61.2	)		8.2	%
Total Operating Expenses		194.9			218.0			181.5			178.2			169.7			-12.9	%		542.6			529.4			-2.4	%
Loss from operations before federal income taxes		(82.0	)		(90.0	)		(63.6	)		(68.1	)		(57.9	)		29.4	%		(197.3	)		(189.6	)		3.9	%
Federal income taxes		(32.4	)		(30.7	)		(21.3	)		(23.7	)		(18.4	)		43.2	%		(83.4	)		(63.4	)		24.0	%
Loss From Operations	$	(49.6	)	$	(59.3	)	$	(42.3	)	$	(44.4	)	$	(39.5	)		20.4	%	$	(113.9	)	$	(126.2	)		-10.8	%
Run Off Institutional Pensions Accounts Values - Balance at End-of-Period	$	2.720		$	2.094		$	2.074		$	2.051		$	2.010			-26.1	%	$	2.720		$	2.010			-26.1	%
Discontinued Operations
Unaudited (in millions)
	For the Three Months Ended																		For the Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2007			2007			2008			2008			2008			Change			2007			2008			Change
Discontinued Operations Before Disposal
Income from discontinued operations before federal income taxes	$	10.2		$	13.9		$	7.4		$	-		$	-			-100.0	%	$	31.8		$	7.4			-76.7	%
Federal income taxes		3.6			4.8			2.6			-			-			-100.0	%		11.2			2.6			-76.8	%
Income From Discontinued Operations Before Disposal		6.6			9.1			4.8			-			-			-100.0	%		20.6			4.8			-76.7	%
Disposal
Gain (loss) on disposal before federal income taxes		-			57.1			(12.3	)		(0.4	)		(0.2	)	NM				-			(12.9	)	NM
Federal income taxes		-			193.0			(3.3	)		(0.1	)		0.8		NM				-			(2.6	)	NM
Loss on Disposal		-			(135.9	)		(9.0	)		(0.3	)		(1.0	)	NM				-			(10.3	)	NM
Income (Loss) From Discontinued Operations	$	6.6		$	(126.8	)	$	(4.2	)	$	(0.3	)	$	(1.0	)	NM			$	20.6		$	(5.5	)	NM
(1) Includes inter-segment eliminations of transactions.
(2) Represents the amortization of deferred gain recognized on the business sold through indemnity reinsurance to Swiss Re.

9/30/2008																			PAGE 30
Consolidated Domestic Deposits, Account Balances, and Net Flows
Unaudited (in billions)
	For the Three Months Ended																		For the Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2007			2007			2008			2008			2008			Change			2007			2008			Change
Deposits
Retirement Solutions:
Annuities - fixed annuities (1)	$	1.231		$	1.288		$	1.160		$	1.371		$	1.276			3.7	%	$	3.034		$	3.807			25.5	%
Defined Contribution - fixed annuities		0.305			0.267			0.332			0.280			0.290			-4.9	%		0.836			0.902			7.9	%
Annuities - variable annuities		2.247			2.594			1.866			2.065			1.672			-25.6	%		6.543			5.603			-14.4	%
Defined Contribution - variable products (2)		1.220			0.997			1.219			1.141			1.044			-14.4	%		3.449			3.404			-1.3	%
Insurance Solutions - Life Insurance		1.032			1.194			1.132			1.062			1.082			4.8	%		3.219			3.276			1.8	%
Investment Management:
Annuities		0.891			0.953			1.562			0.786			1.075			20.7	%		3.094			3.423			10.6	%
Mutual funds		1.543			2.241			1.592			1.407			1.303			-15.6	%		5.192			4.302			-17.1	%
Managed accounts and other		0.377			0.398			0.341			0.403			0.320			-15.1	%		1.402			1.064			-24.1	%
Consolidating adjustments		(0.878	)		(0.926	)		(1.494	)		(0.776	)		(1.066	)		-21.4	%		(2.567	)		(3.336	)		-30.0	%
Total Gross Retail Deposits		7.968			9.006			7.710			7.739			6.996			-12.2	%		24.202			22.445			-7.3	%
Investment Management - institutional		2.936			2.230			1.228			0.910			1.290			-56.1	%		8.243			3.428			-58.4	%
Consolidating adjustments		(0.030	)		(0.192	)		(0.092	)		(0.034	)		(0.052	)		-73.3	%		(0.329	)		(0.178	)		45.9	%
Total Gross Deposits	$	10.874		$	11.044		$	8.846		$	8.615		$	8.234			-24.3	%	$	32.116		$	25.695			-20.0	%

	As of
	Sept.			Dec.			March			June			Sept.			%
	2007			2007			2008			2008			2008			Change
Account Balances
Retirement Solutions:
Annuities - fixed annuities (1)	$	16.383		$	16.470		$	16.395		$	16.544		$	16.493			0.7	%
Defined Contribution - fixed annuities		10.891			10.889			11.217			11.294			11.418			4.8	%
Annuities - variable annuities		58.293			58.643			54.966			55.854			49.982			-14.3	%
Defined Contribution - variable products (2)		25.746			25.169			23.547			23.748			21.155			-17.8	%
Insurance Solutions - Life Insurance		32.266			32.558			32.341			32.603			32.283			0.1	%
Investment Management:
Annuities		12.814			12.282			11.697			11.700			10.952			-14.5	%
Mutual funds		20.274			19.793			18.690			18.176			16.699			-17.6	%
Managed accounts and other		18.092			17.638			15.244			14.292			11.425			-36.9	%
Consolidating adjustments		(12.300	)		(11.798	)		(11.264	)		(11.286	)		(10.645	)		13.5	%
Total Retail Account Balances		182.459			181.645			172.832			172.925			159.762			-12.4	%
Investment Management - institutional		48.536			35.644			32.907			31.523			27.523			-43.3	%
Consolidating adjustments		(2.529	)		(2.357	)		(2.208	)		(2.124	)		(2.423	)		4.2	%
Total Account Balances	$	228.466		$	214.931		$	203.531		$	202.323		$	184.862			-19.1	%

	For the Three Months Ended																		For the Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2007			2007			2008			2008			2008			Change			2007			2008			Change
Net Flows
Retirement Solutions:
Annuities	$	1.291		$	1.809		$	1.181		$	1.589		$	0.944			-26.9	%	$	3.184		$	3.714			16.6	%
Defined Contribution		0.133			(0.091	)		0.280			0.237			0.093			-30.1	%		0.427			0.610			42.9	%
Insurance Solutions - Life Insurance		0.629			0.782			0.651			0.677			0.690			9.7	%		1.863			2.018			8.3	%
Investment Management - retail		(0.335	)		(0.649	)		(0.655	)		(0.937	)		(1.326	)	NM				(0.378	)		(2.918	)	NM
Consolidating adjustments		0.071			0.140			(0.098	)		(0.075	)		(0.083	)	NM				0.397			(0.255	)	NM
Total Retail Net Flows		1.789			1.991			1.359			1.491			0.318			-82.2	%		5.493			3.169			-42.3	%
Investment Management - institutional		0.426			(0.302	)		(0.510	)		(0.535	)		(2.007	)	NM				(0.044	)		(3.052	)	NM
Consolidating adjustments		0.128			0.132			0.030			0.052			0.253			97.7	%		0.150			0.334			122.7	%
Total Net Flows	$	2.343		$	1.821		$	0.879		$	1.008		$	(1.436	)	NM			$	5.599		$	0.451			-91.9	%
(1) Includes fixed portion of variable annuities.
(2) Includes amounts attributable to mutual fund net flows. Mutual fund account values are not included in the separate accounts reported on our Consolidated Balance Sheets.

9/30/2008							PAGE 31
Consolidated Investment Data - Assets Managed
Unaudited (in billions)
	As of
	Sept.		Dec.		March		June		Sept.		%
	2007		2007		2008		2008		2008		Change
Assets Managed by Source
LNC's investments and cash:
Available-for-sale fixed maturity securities	$	56.086	$	56.276	$	55.624	$	54.518	$	51.931		-7.4	%
Available-for-sale equity securities		0.670		0.518		0.474		0.465		0.493		-26.4	%
Trading securities		2.717		2.730		2.714		2.551		2.393		-11.9	%
Other investments		12.091		12.449		12.794		12.720		13.140		8.7	%
Total LNC investments		71.564		71.973		71.606		70.254		67.957		-5.0	%
Separate accounts		92.903		91.113		84.703		85.295		74.971		-19.3	%
Cash and invested cash		1.328		1.666		2.447		1.921		2.160		62.7	%
Total LNC		165.795		164.752		158.756		157.470		145.088		-12.5	%
Non-affiliate assets managed		85.684		71.975		66.020		63.197		54.419		-36.5	%
Total Assets Managed	$	251.479	$	236.727	$	224.776	$	220.667	$	199.507		-20.7	%
Assets Managed by Advisor
Investment Management segment (1)	$	99.716	$	85.357	$	78.538	$	75.691	$	66.599		-33.2	%
DLIA-Corp (2)		67.324		67.417		67.339		65.997		63.531		-5.6	%
Lincoln UK		10.589		10.247		9.445		9.180		7.775		-26.6	%
Domestic policy loans (excluding Lincoln UK)		2.837		2.882		2.851		2.849		2.867		1.1	%
Non-LNC affiliates		71.013		70.824		66.603		66.950		58.735		-17.3	%
Total Assets Managed	$	251.479	$	236.727	$	224.776	$	220.667	$	199.507		-20.7	%
(1) See page 26 for additional detail.
(2) Represents assets managed internally. See page 26 for additional detail.

9/30/2008																			PAGE 32
Consolidated Investment Data - Other Investment Data
Unaudited (millions of dollars)
	For the Three Months Ended																		For the Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2007			2007			2008			2008			2008			Change			2007			2008			Change
Net Investment Income
Available-for-sale fixed maturity securities	$	855.8		$	868.4		$	858.0		$	855.2		$	856.1			0.0	%	$	2,542.8		$	2,569.3			1.0	%
Available-for-sale equity securities		10.4			10.4			9.1			7.8			7.0			-32.7	%		30.8			23.9			-22.4	%
Trading securities		44.0			42.4			42.5			42.1			41.0			-6.8	%		133.8			125.6			-6.1	%
Mortgage loans on real estate		123.0			122.0			121.6			128.6			121.2			-1.5	%		385.4			371.4			-3.6	%
Real estate		15.5			13.3			8.0			6.4			6.0			-61.3	%		43.2			20.4			-52.8	%
Policy loans		43.0			44.6			44.6			43.2			46.1			7.2	%		129.9			133.9			3.1	%
Invested cash		14.4			20.4			18.9			15.3			12.2			-15.3	%		52.3			46.4			-11.3	%
Other investments		4.3			17.4			(2.9	)		9.5			29.0		NM				106.5			35.6			-66.6	%
Investment income		1,110.4			1,138.9			1,099.8			1,108.1			1,118.6			0.7	%		3,424.7			3,326.5			-2.9	%
Investment expense		(48.8	)		(45.2	)		(34.4	)		(31.3	)		(29.6	)		39.3	%		(140.1	)		(95.3	)		32.0	%
Net Investment Income	$	1,061.6		$	1,093.7		$	1,065.4		$	1,076.8		$	1,089.0			2.6	%	$	3,284.6		$	3,231.2			-1.6	%
Average Invested Assets (Amortized Cost)	$	70,619.9		$	70,785.3		$	70,992.0		$	71,318.1		$	71,242.9					$	70,340.5		$	71,184.4
Ratio of Net Investment Income Over Average Invested Assets		6.01	%		6.18	%		6.00	%		6.04	%		6.11	%					6.23	%		6.05	%
Realized Gain (Loss) Related to Investments
Available-for-sale fixed maturity securities:
Gross gains	$	26.4		$	16.7		$	9.1		$	21.7		$	26.8			1.5	%	$	107.8		$	57.6			-46.6	%
Gross losses		(44.2	)		(87.7	)		(100.0	)		(137.8	)		(380.1	)	NM				(97.3	)		(617.9	)	NM
Equity securities:
Gross gains		1.2			0.3			2.7			0.3			1.1			-8.3	%		7.4			4.1			-44.6	%
Gross losses		-			(110.9	)		-			(7.0	)		(26.0	)	NM				(0.4	)		(33.0	)	NM
Gain (loss) on other investments		5.9			11.5			25.1			3.1			(0.9	)	NM				7.0			27.3			290.0	%
Associated amortization of DAC, VOBA, DSI, DFEL and changes in other contract holder funds and funds withheld reinsurance liabilities		(14.3	)		65.2			25.1			24.2			95.1		NM				(35.9	)		144.4		NM
Total realized gain (loss) on investments, excluding trading securities		(25.0	)		(104.9	)		(38.0	)		(95.5	)		(284.0	)	NM				(11.4	)		(417.5	)	NM
Loss on certain derivative instruments		(10.9	)		(4.1	)		(3.1	)		(29.1	)		(29.9	)	NM				(6.7	)		(62.1	)	NM
Associated amortization of DAC, VOBA, DSI, DFEL and changes in other contract holder funds		0.5			0.2			-			-			-			-100.0	%		0.5			-			-100.0	%
Total, pre-tax		(35.4	)		(108.8	)		(41.1	)		(124.6	)		(313.9	)	NM				(17.6	)		(479.6	)	NM
Income taxes		(12.2	)		(37.4	)		(14.0	)		(44.0	)		(109.9	)	NM				(6.7	)		(167.9	)	NM
Total, After-Tax	$	(23.2	)	$	(71.4	)	$	(27.1	)	$	(80.6	)	$	(204.0	)	NM			$	(10.9	)	$	(311.7	)	NM

	As of September 30, 2008					As of December 31, 2007
	Amount		% of Total			Amount		% of Total
Available-for-Sale and Trading Securities
Fixed maturity securities (fair value)	$	54,322.7		99.1	%	$	59,003.9		99.1	%
Fixed maturity securities (amortized cost)		58,571.1		99.0	%		58,578.9		99.1	%
Equity securities (fair value)		494.4		0.9	%		520.1		0.9	%
Equity securities (amortized cost)		614.1		1.0	%		549.9		0.9	%
% of Available-for-Sale Fixed Maturity Securities (Based on Fair Value)
Treasuries and AAA				23.9	%				23.1	%
AA or better				31.4	%				32.9	%
BB or less				4.8	%				5.1	%
General Account Investments	As of September 30, 2008					As of December 31, 2007
	Amount		% of Total			Amount		% of Total
Fixed Maturities - Security Sector:
Corporate bonds	$	40,020.7		77.1	%	$	44,147.9		78.5	%
U.S. Government bonds		217.0		0.4	%		222.0		0.4	%
Foreign government bonds		786.5		1.5	%		1,037.5		1.8	%
Mortgage-backed securities		10,661.6		20.6	%		10,604.6		18.8	%
State and municipal bonds		129.7		0.2	%		153.1		0.3	%
Preferred stocks - redeemable		115.6		0.2	%		110.7		0.2	%
Total	$	51,931.1		100.0	%	$	56,275.8		100.0	%

	As of
	Sept.		Dec.		March		June		Sept.		%
Composition of Investment Portfolio	2007		2007		2008		2008		2008		Change
Available-for-sale securities, at fair value:
Fixed maturity	$	56,086.1	$	56,275.8	$	55,624.0	$	54,517.6	$	51,931.1		-7.4	%
Equity		670.2		518.0		474.4		464.6		492.6		-26.5	%
Trading securities		2,716.6		2,730.2		2,713.6		2,550.5		2,393.4		-11.9	%
Mortgage loans on real estate and real estate		7,665.7		7,681.0		7,707.2		7,813.6		7,815.0		1.9	%
Policy loans		2,841.1		2,885.4		2,854.8		2,852.5		2,870.1		1.0	%
Derivative investments		554.1		807.1		1,091.1		889.9		1,262.2		127.8	%
Other investments		1,030.0		1,075.0		1,141.0		1,163.5		1,193.0		15.8	%
Total	$	71,563.8	$	71,972.5	$	71,606.1	$	70,252.2	$	67,957.4		-5.0	%

EX-99.3

Exhibit 99.3

Lincoln Financial Group

September 30, 2008

General Account Supplement

 

This document is dated October 28, 2008.  The data contained in this document may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Lincoln Financial Group
Available-For-Sale (AFS) by Industry Classifications
Amounts in Millions
	As of 09/30/2008												As of 06/30/2008
	Amortized		Unrealized		Unrealized			Fair		% Fair			Amortized		Unrealized		Unrealized			Fair		% Fair
AFS - Fixed Maturities	Cost		Gains		(Losses)			Value		Value			Cost		Gains		(Losses)			Value		Value
Corporate
Financial Services		10,363		52		(1,351	)		9,064		17.4	%		10,896		82		(681	)		10,297		18.9	%
Basic Industry		2,339		14		(155	)		2,198		4.2	%		2,195		33		(81	)		2,147		3.9	%
Capital Goods		2,675		24		(116	)		2,583		5.0	%		2,683		42		(58	)		2,667		4.9	%
Communications		2,637		22		(170	)		2,489		4.8	%		2,803		63		(100	)		2,766		5.1	%
Consumer Cyclical		2,954		15		(273	)		2,696		5.2	%		2,933		36		(159	)		2,810		5.2	%
Consumer Non-Cyclical		4,269		37		(166	)		4,140		8.0	%		4,110		54		(76	)		4,088		7.5	%
Energy		2,937		47		(143	)		2,841		5.5	%		2,886		71		(43	)		2,914		5.3	%
Technology		737		4		(32	)		709		1.4	%		744		11		(11	)		744		1.4	%
Transportation		1,271		25		(72	)		1,224		2.4	%		1,291		25		(54	)		1,262		2.3	%
Industrial Other		680		7		(26	)		661		1.3	%		675		11		(15	)		671		1.2	%
Utilities		8,374		71		(471	)		7,974		15.3	%		8,391		125		(202	)		8,314		15.3	%
Asset-Backed Securities ("ABS")
Collaterized Debt Obligations ("CDO") / Credit-Linked Notes ("CLN") [1]		797		7		(460	)		344		0.7	%		1,049		9		(418	)		640		1.2	%
Commercial Real Estate ("CRE") CDO		61		-		(12	)		49		0.1	%		62		-		(8	)		54		0.1	%
Credit Card		165		-		(23	)		142		0.3	%		172		1		(11	)		162		0.3	%
Home Equity		1,183		1		(316	)		868		1.7	%		1,185		1		(251	)		935		1.7	%
Manufactured Housing		151		4		(9	)		146		0.3	%		154		4		(8	)		150		0.3	%
Auto Loan		-		-		-			-		0.0	%		1		-		-			1		0.0	%
Other		204		1		(9	)		196		0.4	%		223		4		(7	)		220		0.4	%
Commercial Mortgage-Backed Securities ("CMBS")
Non-Agency Backed		2,588		10		(280	)		2,318		4.5	%		2,628		21		(182	)		2,467		4.5	%
Collaterized Mortgage Obligations ("CMO")
Agency Backed		4,902		50		(54	)		4,898		9.3	%		4,643		66		(37	)		4,672		8.7	%
Non-Agency Backed		2,146		-		(568	)		1,578		3.0	%		2,245		1		(381	)		1,865		3.4	%
Mortgage Pass Throughs
Agency Backed		1,756		20		(6	)		1,770		3.4	%		1,438		13		(10	)		1,441		2.6	%
Non-Agency Backed		147		-		(26	)		121		0.2	%		149		-		(17	)		132		0.2	%
Municipals
Taxable		113		4		(1	)		116		0.2	%		125		4		(1	)		128		0.2	%
Tax-Exempt		5		-		-			5		0.0	%		5		-		-			5		0.0	%
Government/Government Agencies
United States		1,170		91		(14	)		1,247		2.4	%		1,195		93		(7	)		1,281		2.3	%
Foreign		1,456		49		(67	)		1,438		2.8	%		1,570		64		(48	)		1,586		2.9	%
Redeemable Preferred Stock		131		1		(16	)		116		0.2	%		102		2		(5	)		99		0.2	%
AFS - Fixed Maturities		56,211		556		(4,836	)		51,931		100.0	%		56,553		836		(2,871	)		54,518		100.0	%
AFS - Equities		612		9		(128	)		493					617		39		(192	)		464
Total AFS Securities		56,823		565		(4,964	)		52,424					57,170		875		(3,063	)		54,982
Trading Securities [2]		2,362		193		(162	)		2,393					2,423		222		(95	)		2,550
Total AFS & Trading Securities		59,185		758		(5,126	)		54,817					59,593		1,097		(3,158	)		57,532

[1] Includes amortized cost of $600 million and $850 million as of 9/30/08 and 6/30/2008 respectively, related to Credit-Linked Notes.

For additional information, see "Credit-Linked Notes (CLN)" disclosure starting on page 113 of the 2007 Form 10-K.

[2]  The trading securities support our Modco reinsurance agreements and the investment results are passed directly to the reinsurers.

Lincoln Financial Group
AFS - Exposure to Residential MBS ("RMBS") and Related Collateral
As of 9/30/2008
Amounts in Millions
	Total				Prime/Agency				Prime/Non-Agency				Alt-A				Subprime
	Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized
Type	Value		Cost		Value		Cost		Value		Cost		Value		Cost		Value		Cost
RMBS		8,368		8,950		6,588		6,565		1,146		1,500		634		885		-		-
ABS		868		1,183		-		-		-		-		309		427		559		756
Total		9,236		10,133		6,588		6,565		1,146		1,500		943		1,312		559		756
Rating
AAA		8,494		8,883		6,549		6,526		915		1,103		645		785		385		469
AA		368		517		20		20		125		175		119		170		104		152
A		128		231		19		18		46		106		44		75		19		32
BBB		185		317		-		1		47		78		91		144		47		94
BB and below		61		185		-		-		13		38		44		138		4		9
Total		9,236		10,133		6,588		6,565		1,146		1,500		943		1,312		559		756
Origination Year
2004 and prior		4,171		4,336		3,183		3,167		376		430		337		399		275		340
2005		1,534		1,752		865		883		225		273		243		331		201		265
2006		940		1,255		361		361		186		272		310		471		83		151
2007 and forward		2,591		2,790		2,179		2,154		359		525		53		111		-		-
Total		9,236		10,133		6,588		6,565		1,146		1,500		943		1,312		559		756

Note:  This table does not include the fair value of trading securities totaling $196 million which support our Modco reinsurance agreements

          since investment results for these agreements are passed directly to the reinsurers.

          The $196 million in trading securities consisted of $158 million prime, $23 million alt-a, and $15 million subprime.

Lincoln Financial Group
AFS - Asset-Backed Securities - Consumer Loan
As of 9/30/2008
Amounts in Millions
	Total				Credit Card [1]				Auto Loans
	Fair		Amortized		Fair		Amortized		Fair		Amortized
	Value		Cost		Value		Cost		Value		Cost
Rating
AAA		119		139		119		139		-		-
BBB		23		26		23		26		-		-
Total		142		165		142		165		-		-

[1] - Additional indirect credit card exposure through structured securities is excluded from this table.

See "Credit-Linked Notes (CLN)" disclosure starting on page 113 of the 2007 Form 10-K.

Note:  This table does not include the fair value of trading securities totaling $3 million which support

          our Modco reinsurance agreements since investment results for these agreements are passed directly

          to the reinsurers.  The $3 million in trading securities consisted of $3 million credit card securities.

Lincoln Financial Group
AFS - Commercial Mortgage-Backed Securities
As of 9/30/2008
Amounts in Millions
	Total				Multiple Property				Single Property				CRE CDOs
	Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized
Type	Value		Cost		Value		Cost		Value		Cost		Value		Cost
CMBS		2,318		2,588		2,194		2,422		124		166		-		-
CRE CDOs		49		61		-		-		-		-		49		61
Total		2,367		2,649		2,194		2,422		124		166		49		61
Rating
AAA		1,648		1,746		1,553		1,637		68		71		27		38
AA		375		422		372		419		-		-		3		3
A		221		279		151		187		51		72		19		20
BBB		100		163		95		140		5		23		-		-
BB and below		23		39		23		39		-		-		-		-
Total		2,367		2,649		2,194		2,422		124		166		49		61
Origination Year
2004 and prior		1,661		1,750		1,562		1,647		77		80		22		23
2005		360		446		310		370		40		61		10		15
2006		216		290		192		242		7		25		17		23
2007		130		163		130		163		-		-		-		-
Total		2,367		2,649		2,194		2,422		124		166		49		61

Note:  This table does not include the fair value of trading securities totaling $95 million which support our

          Modco reinsurance agreements since investment results for these agreements are passed directly

          to the reinsurers. The $95 million in trading securities consisted of $92 million CMBS and $3 million CRE CDOs.

Lincoln Financial Group
Commercial Mortgage Loan Portfolio, Net of Reserves
As of 9/30/2008
Amounts in Millions
LNC MORTGAGE LOAN DISTRIBUTION
Property Type	Amt $	%	State	Amt $	%
Apartment	727	9%	CA	1,610	21%
Retail	1,839	24%	TX	626	8%
Office Building	2,568	33%	MD	442	6%
Industrial	2,020	26%	FL	337	4%
Hotel/Motel	293	4%	TN	326	4%
Mixed Use	135	2%	NC	324	4%
Other Commercial	106	2%	VA	316	4%
Total	7,688	100%	AZ	315	4%
			WA	299	4%
			IL	287	4%
Geographic Region	Amt $	%	GA	257	3%
New England	191	2%	PA	242	3%
Middle Atlantic	482	6%	OH	221	3%
East North Central	822	11%	NV	215	3%
West North Central	433	6%	IN	195	3%
South Atlantic	1,824	24%	MN	161	2%
East South Central	464	5%	NJ	147	2%
West South Central	676	9%	SC	138	2%
Mountain	746	10%	MA	133	2%
Pacific	2,050	27%	Other states under 2%	1,097	14%
Total	7,688	100%		7,688	100%

Lincoln Financial Group
Additional Disclosure of Insured Bonds and Direct Exposure
As of 9/30/2008
Amounts in Millions
			Insured		Total		Total		Total			Total
Monoline Name	Direct Exposure		Bonds [1]		Amortized Cost		Unrealized Gain		Unrealized (Loss)			Fair Value
AMBAC		-		272		272		2		(49	)		225
ASSURED GUARANTY LTD		30		-		30		-		-			30
CMAC		-		-		-		-		-			-
FGIC		3		100		103		-		(31	)		72
FSA		-		68		68		1		(5	)		64
MBIA		12		125		137		1		(20	)		118
MGIC		11		7		18		1		(4	)		15
PMI GROUP INC		27		-		27		-		(12	)		15
RADIAN GROUP INC		19		-		19		-		(9	)		10
SECURITY CAPITAL ASSURANCE LTD		1		-		1		1		0			2
XL CAPITAL LTD		73		73		146		1		(27	)		120
Total		176		645		821		7		(157	)		671

[1] - Additional indirect insured exposure through structured securities is excluded from this table.  See "Credit-Linked Notes (CLN)" disclosure.

Note:  This table does not include the fair value of trading securities totaling $33 million which support our Modco reinsurance agreements

          since investment results for these agreements are passed directly to the reinsurers.

          The $33 million in trading securities consisted of $10 million of Direct Exposure and $23 million of Insured Exposure.

          This table also excludes insured exposure totaling $15 million for a guaranteed investment tax credit partnership.