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

November 2, 2004

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 of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

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

(Address of principal executive offices) (Zip Code)

(215) 448-1400

(Registrant’s telephone number)

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 (see General Instruction A.2. below):

¨ 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 November 2, 2004, the registrant issued a press release announcing its financial results for the quarter ended September 30, 2004, a copy of which is attached as Exhibit 99.1 and is incorporated herein by reference, and the registrant’s statistical supplement for the quarter ended September 30, 2004 is attached as Exhibit 99.2 and is incorporated herein by reference. This Form 8-K is also being posted on Lincoln Financial Group’s website.

The information, including exhibits attached hereto, furnished under this Item 12 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. The furnishing of the information contained in the attached exhibit (statistical supplement) is not intended and should not be construed to imply that such information is material.

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	Lincoln Financial Group press release dated November 2, 2004, announcing Lincoln National Corporation’s financial results for the quarter ended September 30, 2004.
99.2	Lincoln National Corporation Statistical Supplement for the Quarter Ended September 30, 2004.

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, Controller, and Chief Accounting Officer

Date: November 2, 2004

EXHIBIT INDEX

Exhibit Number	Description
99.1	Lincoln Financial Group press release dated November 2, 2004, announcing Lincoln National Corporation’s financial results for the quarter ended September 30, 2004.
99.2	Lincoln National Corporation Statistical Supplement for the quarter ended September 30, 2004.

EX-99.1

Exhibit 99.1

NEWS RELEASE

Lincoln Financial Group Reports Third Quarter Earnings

Solid Quarter Despite Economic Pressures

Philadelphia, PA, November 2, 2004 - Lincoln National Corporation (NYSE:LNC), the parent company of the Lincoln Financial Group of companies, today reported net income of $199.7 million, or $1.12 per diluted share, for its third quarter of 2004. By comparison, net income for the third quarter of 2003 was $133.3 million, or $0.74 per diluted share.

Income from operations for the third quarter of 2004 was $178.2 million, after-tax, or $1.00 per diluted share, compared with $156.0 million, after-tax, or $0.87 per diluted share, in the third quarter of 2003. The attached table defines and reconciles income from operations for the corporation and business segments to GAAP net income.

For the third quarter, investment income in the Life and Retirement segments from commercial mortgage loan prepayment and bond make-whole premiums continued to contribute to strong results. The quarter was also positively impacted by $0.05 per diluted share related to the cumulative amortization from an adjustment of the deferred gain on the sale of the reinsurance business. These positive contributors, in the quarter, were partially offset by higher expenses, including increased expenses related to Guaranteed Minimum Death Benefit (GMDB) reserves, now substantially hedged and not expected to be a significant item in future quarters.

After adjusting for the sale of Delaware International Advisors Ltd. (DIAL), consolidated domestic deposits, which include annuities, mutual funds, life insurance and other personal wealth accumulation products, reached a third quarter record of $5.75 billion. In addition, total net flows in the quarter increased 50 percent over the year ago period, which established a third quarter record. As of September 30, 2004, assets under management were $132.6 billion.

“Our deposits and net flows maintained the strong pace established earlier this year and also set third quarter records, despite the challenges of lackluster equity markets

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and stubborn interest rates,” said Jon A. Boscia, chairman and chief executive officer of Lincoln Financial Group. “We continue to build market share in our Retirement and Investment Management segments while our Life segment results reflect the competitive pressures that continue to dominate the Universal Life (UL) marketplace,” added Boscia.

Lincoln completed its annual comprehensive review of prospective assumptions underlying the amortization of Deferred Acquisition Costs (DAC), Present Value of In-Force (PVIF), Deferred Front-End Loads (DFEL) and GMDB reserves. The overall effect on earnings was virtually neutral when combined with the results from the retrospective unlocking of DAC and GMDB reserves, which included the impact from the movement in the equity markets during the quarter. While neutral overall, it did have a substantial effect on individual segments.

Lincoln Retirement

Net income for the Retirement segment was $90.8 million, compared to $102.0 million for the third quarter of 2003. Third quarter income from operations for the segment was $110.2 million versus $94.3 million in the year ago period.

The Retirement segment’s results for the third quarter were favorably impacted by DAC unlocking and income from commercial mortgage loan prepayment and bond make-whole premiums.

In the quarter, variable annuity deposits reached a record $2 billion, with variable annuity net flows achieving a record level of $782 million. “The Retirement segment delivered solid deposits and had record net flows in the third quarter, which underscores the importance of innovative products and distribution strength,” said Boscia.

Life Insurance

Life Insurance net income was $52.0 million versus $55.8 million for the same period a year ago. Income from operations for the segment was $55.4 million, compared to $58.7 million in the third quarter of 2003.

Third quarter 2004 income for this segment was negatively impacted by DAC unlocking and higher expenses, partially offset by continued income from commercial mortgage loan prepayment and bond make-whole premiums.

Total retail life first year premiums declined in the quarter due to competitive pressure in the UL marketplace. “Despite the competitive pressures, we remain focused on maintaining the balance between sound risk management and pricing discipline in order to create long-term value for our clients and shareholders,” Boscia added.

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Investment Management

The Investment Management segment reported net income of $58.1 million in the quarter, up from $6.3 million in the same period a year ago. Income from operations for the segment was $12.5 million in the third quarter, which compares to $9.7 million in the third quarter of 2003.

During the quarter, Lincoln completed the sale of DIAL and recognized $45.8 million, after-tax, of gain. Also, in the quarter, Lincoln migrated $776 million in assets previously administered by this segment to third parties, primarily to BISYS under a previously announced outsourcing arrangement. “We are focused on research and portfolio management, our core areas of expertise, which resulted in strong investment performance in our retail and institutional products,” said Boscia.

Lincoln UK

For the third quarter, the UK segment’s net income was $9.9 million versus $11.5 million in the third quarter of 2003. Income from operations was $10.1 million for the quarter, versus $11.3 million in the same year ago period.

Corporate and Other

Corporate and Other, which includes financing, distribution losses, and the results flowing from the reinsurance business sold in 2001, reported a net loss of $11.1 million for the third quarter versus a net loss of $42.3 million for the same period a year ago. The operating loss for the third quarter of 2004 was $10.0 million, of which $9.8 million was related to distribution losses. For the third quarter of 2003, the company reported an operating loss of $18.0 million, with $15.0 million attributed to distribution losses.

As of September 30, 2004, the book value of Lincoln National Corporation common stock, excluding accumulated other comprehensive income, was $29.23, compared with $26.87 a year ago. Book value, including accumulated other comprehensive income, was $34.15, compared with $31.34 a year ago. In the third quarter, 1.638 million shares were repurchased at a total cost of $73.2 million.

Lincoln National Corporation will discuss the company’s third quarter results with investors in a conference call beginning at 10 a.m. (EST) on Wednesday, November 3, 2004. The conference call will be available via a live webcast on the company’s Website, www.LFG.com/webcast. The company’s third quarter 2004 statistical supplement will be available on its Website, www.LFG.com/investor.

Lincoln Financial Group is the marketing name for Lincoln National Corporation (NYSE:LNC) and its affiliates. With headquarters in Philadelphia, Lincoln Financial

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Group has consolidated assets of $110 billion at September 30, 2004, and had annual consolidated revenues of $5.3 billion in 2003. Through its wealth accumulation and protection businesses, the company provides annuities, life insurance, 401(k) and 403(b) plans, 529 college savings plans, mutual funds, managed accounts, institutional investment and financial planning and advisory services.

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Contact:

Priscilla Brown

Vice President, Investor Relations

& Strategic Communications

215 448-1422

investorrelations@LFG.com

Tom Johnson

Second Vice President, Media Relations

215-448-1454

mediarelations@LFG.com

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Definition of Income from Operations

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

(amounts in millions, except EPS)	Lincoln Retirement			Life Insurance			Investment Management			Lincoln UK			Corporate & Other		Total
For the Quarter Ended September 30, 2004
Net Income	$	90.8		$	52.0		$	58.1		$	9.9		($11.1	)	$	199.7
Less:
Net realized gain/loss on investments and derivatives		(15.6	)		(1.6	)		(0.2	)		(0.2	)	(0.2	)		(17.8	)
Restructuring charges		(1.7	)		(0.6	)		—			—		(0.6	)		(2.9	)
Reserve development and related amortization on business sold through reinsurance		—			—			—			—		0.2			0.2
Net Change in Mark-to-Market on Reinsurance Embedded Derivative/Trading Account Securities		(2.1	)		(1.2	)		—			—		(0.5	)		(3.8	)
Gain on Sale of Subsidiary		—			—			45.8			—		—			45.8
Income from Operations	$	110.2		$	55.4		$	12.5		$	10.1		($10.0	)	$	178.2
Earnings per share (diluted)
Net Income															$	1.12
Income from Operations															$	1.00
(amounts in millions, except EPS)	Lincoln Retirement			Life Insurance			Investment Management			Lincoln UK			Corporate & Other		Total
For the Quarter Ended September 30, 2003
Net Income	$	102.0		$	55.8		$	6.3		$	11.5		($42.3	)	$	133.3
Less:
Net realized gain/loss on investments and derivatives		13.2			(1.3	)		0.1			0.2		0.1			12.3
Restructuring charges		(5.5	)		(1.6	)		(3.5	)		—		(2.3	)		(12.9	)
Loss on retirement of subordinated debt													(3.7	)		(3.7	)
Reserve development and related amortization on business sold through reinsurance		—			—			—			—		(18.4	)		(18.4	)
Income from Operations	$	94.3		$	58.7		$	9.7		$	11.3		($18.0	)	$	156.0
Earnings per share (diluted)
Net Income															$	0.74
Income from Operations															$	0.87

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LINCOLN NATIONAL CORPORATION

Digest of Earnings

	For the Quarter Ended September 30
	2004		2003
Revenue		1,406,058,000		1,268,849,000
Net Income		199,677,000		133,313,000
Share Earnings (Basic)
Net Income	$	1.14	$	0.75
Share Earnings (Diluted)
Net Income	$	1.12	$	0.74
Average Number of Shares (Basic)		175,173,100		177,483,351
Average Number of Shares (Diluted)		177,695,247		179,857,804
	For the Nine Months Ended September 30
	2004		2003
Revenue		4,023,808,000		3,581,329,000
Net Income		517,138,000		317,604,000
Share Earnings (Basic)
Net Income	$	2.92	$	1.79
Share Earnings (Diluted)
Net Income	$	2.88	$	1.77
Average Number of Shares (Basic)		176,928,001		177,238,951
Average Number of Shares (Diluted)		179,713,761		179,122,313

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Forward-Looking Statements – Cautionary Language

Certain statements made in this press release and in other written or oral statements made by Lincoln National Corporation (“LNC”) or on LNC’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. LNC 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 with the forward-looking statements include, among others:

• Legislative, regulatory or tax changes, both domestic and foreign, that affect the cost of, or demand for, our products, the required amount of reserves and/or surplus, or otherwise affect our ability to conduct business, including changes to statutory reserves and/or risk-based capital requirements related to secondary guarantees underuniversal life and variable annuity products; restrictions on revenue sharing and 12b-1 payments; and the repeal of the federal estate tax;

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

• Changes in interest rates causing a reduction of investment income, asset fees and demand for our products as well as on the margins of LNC’s fixed annuity and life insurance businesses;

• A decline in the equity markets causing a reduction of asset fees that LNC charges on various investment and insurance products, an acceleration of amortization of deferred acquisition costs (DAC) and an increase in liabilities related to guaranteed benefit features of LNC’s variable annuity products as well as related to the effectiveness of LNC’s various hedging strategies used to offset the impact of changes in the equity markets;

• A deviation in actual experience regarding future persistency, mortality, morbidity, interest rates and equity market returns from LNC’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;

• Changes in accounting principles generally accepted in the United States that may result in unanticipated changes to LNC’s net income;

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

• Lowering of one or more of the insurer financial strength ratings of LNC’s insurance subsidiaries, and the adverse impact such action may have on the premium writings 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 LNC’s companies requiring that LNC realize losses on such investments;

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

• The adequacy and collectibility of reinsurance that LNC has purchased;

• Acts of terrorism or war that may adversely affect LNC’s businesses and the cost and availability of reinsurance;

• Competitive conditions that may affect the level of premiums and fees that LNC can charge for its products;

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

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

The risks included here are not exhaustive. LNC’s annual reports on Form 10-K, current reports on Form 8-K and other documents filed with the Securities and Exchange Commission include additional factors which could impact LNC’s business and financial performance. Moreover, LNC 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 LNC’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 undo reliance on forward-looking statements as a prediction of actual results. In addition, LNC disclaims any obligation to update any forward-looking statements to reflect events or circumstances that occur after the date of this report.

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EX-99.2

Exhibit 99.2

Lincoln Statistical Report

Third Quarter

2004

Lincoln Financial Group

This document is dated November 2, 2004. It may not be accurate after such date and LNC

does not undertake any duty to update or keep it accurate after such date.

Lincoln Financial Group

Statistical Report

Third Quarter

2004

Table of Contents

LFG Analyst Coverage
Notes	3
Financial Highlights	4-8
Eleven-Year Summary	9
Quarterly Summary	10
Reconciliation of Business Segments to Consolidated Income Statement	11-14
Statement of Consolidated Income	15-16
Reconciliation of Business Segments to Consolidated Balance Sheets	17-18
Five-Year Comparative Balance Sheet	19
Quarterly Balance Sheet	20
Lincoln Retirement
Income Statement & Operational Data	21-22
Account Value Roll Forward	23-24
Life Insurance
Income Statement	25-26
Operational Data	27
Account Value Roll Forward	28-29
Investment Management
Income Statement	30-31
Assets Under Management Roll Forward	32-35
Lincoln UK
Income Statement	36-37
Operational Data	38
Other Operations	39
Consolidated
Domestic Retail Deposits / Account Balances	40
Total Domestic Net Flows	41
Assets Managed	42
Investment Data	44
Common Stock / Debt Information	45

NOTES

Definitions and Presentation

“Income from Operations,” “Operating Revenue,” and “Return on Capital” are non-GAAP financial measures and do not replace GAAP net income (loss) and revenues. Detailed reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measure is 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 or losses on investments and derivatives,

• Restructuring charges,

• Gains (losses) related to reinsurance embedded derivatives/trading account assets,

• The cumulative effect of accounting changes,

• Reserve changes on business sold through reinsurance net of related deferred gain amortization,

• Gains (losses) on the sale of subsidiaries and blocks of business,

• Loss on early retirement of debt, including subordinated debt

• Operating revenue represents revenue excluding the following, as applicable:

• Realized gains or losses on investments and derivatives,

• Gains (losses) related to reinsurance embedded derivatives/trading account assets,

• Gains (losses) on the sale of subsidiaries and blocks of business,

• Deferred gain amortization related to reserve changes on business sold through reinsurance,

• Return on capital measures the effectiveness of LNC’s use of its total capital, which includes equity (excluding accumulated other comprehensive income), debt and junior subordinated debentures issued to affiliated trusts. Return on capital is calculated by dividing income from operations (after adding back interest expense) by average capital. The difference between return on capital and return on shareholders’ equity represents the effect of leveraging on LNC’s consolidated results.

Income from operations, operating revenue and return on capital are internal measures used by LNC in the management of its operations. Management believes that these performance measures explain the results of operations of the LNC’s ongoing operations in a manner that allows for a better understanding of the underlying trends in LNC’s current business because the excluded items are either unpredictable and/or not related to decisions regarding the underlying businesses.

• Certain operating and statistical measures are included in this report to provide supplemental data regarding the performance of LNC’s current business. These measures include deposits, sales, net flows, first year premium, inforce, spread, and assets under management.

• On September 24, 2004, LNC completed the sale of its London-based international investment unit to its management. Certain metrics pages (2, 27A, 28A, 33A, 34A) have been presented excluding the investment assets managed by the London-based international investment unit to provide more consistent comparisons between periods.

• Certain reclassifications have been made to the prior periods presented to conform to the September 30, 2004 presentation.

Accounting Changes

• Effective January 1, 2004 LNC Implemented the Statement of Position 03-1, “Accounting and reporting by Insurance Enterprises for certain nontraditional long-duration contracts and for Separate Accounts (“the SOP”). Among other things, the SOP establishes standards for computing reserves for products with guaranteed benefits such as GMDB and for certain riders for Universal Life contracts. The effects of implementing the SOP, including any related effects on DAC from changes in estimated gross profits resulting from implementing the provisions of the SOP are to be recorded as a cumulative effect adjustment. In the first quarter of 2004, LNC recorded a cumulative effect adjustment of $24.5 million ($21.8 million in Lincoln Retirement and $2.7 million in Life Insurance segments) upon implementation of the SOP.

Financial Highlights

Unaudited [Millions of Dollars, except Common Share Data]

	For the Quarter Ended September 30											For the Nine Months Ended September 30
	2004 Amount			2003 Amount			Change			% Change		2004 Amount			2003 Amount			Change			% Change
Net Income	$	199.7		$	133.3		$	66.4		49.8	%	$	517.1		$	317.6		$	199.5		62.8	%
Less:
Realized gains (losses) on investments		(14.5	)		6.4			(20.9	)				(33.9	)		(53.0	)		19.1
Gains (losses) on derivatives		(3.4	)		5.9			(9.3	)				(7.7	)		4.1			(11.8	)
Net gain (loss) on reinsurance derivative/trading account securities		(3.7	)		—			(3.7	)				0.2			—			0.2
Reserve development/ amortization of related deferred gain		0.2			(18.5	)		18.7					0.6			(18.7	)		19.3
Gain on sale of subsidiaries/ businesses		45.9			—			45.9					61.5			—			61.5
Restructuring charges		(2.9	)		(12.9	)		10.0					(13.9	)		(25.3	)		11.4
Loss on early retirement of subordinated debt		—			(3.7	)		3.7					—			(3.7	)		3.7
Cumulative effect of accounting change		0.0			—			0.0					(24.5	)		—			(24.5	)
Income from Operations	$	178.2		$	156.0		$	22.2		14.2	%	$	534.9		$	414.1		$	120.7		29.1	%
Net Income - By Segment
Lincoln Retirement	$	90.8		$	102.0		$	(11.2	)	(11.0	)%	$	256.8		$	190.6		$	66.1		34.7	%
Life Insurance		52.0			55.8			(3.8	)	(6.8	)%		191.6			169.9			21.6		12.7	%
Investment Management		58.1			6.3			51.7		814.6	%		82.6			12.0			70.6		590.5	%
Lincoln UK		9.9			11.5			(1.6	)	(13.9	)%		33.0			30.7			2.3		7.5	%
Corporate & Other		(11.1	)		(42.4	)		31.3					(46.8	)		(85.6	)		38.8
Total	$	199.7		$	133.3		$	66.4		49.8	%	$	517.1		$	317.6		$	199.5		62.8	%
Income from Operations - By Segment
Lincoln Retirement	$	110.2		$	94.3		$	15.8		16.8	%	$	314.1		$	237.8		$	76.3		32.1	%
Life Insurance		55.4			58.7			(3.3	)	(5.6	)%		206.3			191.2			15.2		8.0	%
Investment Management		12.5			9.7			2.8		29.0	%		38.3			15.5			22.8		147.0	%
Lincoln UK		10.1			11.3			(1.2	)	(10.6	)%		27.0			30.6			(3.6	)	(11.8	)%
Corporate & Other		(9.9	)		(18.0	)		8.1					(50.9	)		(61.0	)		10.1
Total	$	178.2		$	156.0		$	22.2		14.2	%	$	534.9		$	414.1		$	120.7		29.1	%
Earnings per share (diluted)
Net Income	$	1.12		$	0.74		$	0.38		51.3	%	$	2.88		$	1.77		$	1.10		62.0	%
Less:
Realized gains (losses) on investments	$	(0.08	)	$	0.03		$	(0.11	)			$	(0.17	)	$	(0.30	)	$	0.12
Gains (losses) on derivatives	$	(0.02	)	$	0.03		$	(0.05	)			$	(0.04	)	$	0.02		$	(0.06	)
Net gain (loss) on reinsurance derivative/trading account securities	$	(0.02	)		—		$	(0.02	)				—			—		$	—
Reserve development/ amortization of related deferred gain		—		$	(0.10	)	$	0.10					—		$	(0.10	)	$	0.10
Gain on sale of subsidiaries/ businesses	$	0.26			—		$	0.26				$	0.34			—		$	0.34
Restructuring charges	$	(0.02	)	$	(0.07	)	$	0.05				$	(0.08	)	$	(0.14	)	$	0.06
Loss on early retirement of subordinated debt		—		$	(0.02	)	$	0.02					—		$	(0.02	)	$	0.02
Cumulative effect of accounting change		—			—							$	(0.14	)		—		$	(0.14	)
Income from Operations	$	1.00		$	0.87		$	0.13		14.9	%	$	2.97		$	2.31		$	0.66		28.6	%
Revenue	$	1,406.1		$	1,268.8		$	137.2		10.8	%	$	4,023.8		$	3,581.3		$	442.5		12.4	%
Less:
Realized gains (losses) on investments		(23.0	)		9.8			(32.8	)				(52.9	)		(81.5	)		28.7
Gains (losses) on derivatives		(4.5	)		9.1			(13.6	)				(11.1	)		6.3			(17.4	)
Gain (loss) on reinsurance derivative/trading account securities		(5.6	)		—			(5.6	)				0.5			—			0.5
Amortization of deferred gain-reserve development		0.3			3.7			(3.4	)				1.0			3.3			(2.3	)
Gain on sale of subsidiaries/ businesses		110.3			—			110.3					134.4			—			134.4
Operating Revenue	$	1,328.5		$	1,246.2		$	82.3		6.6	%	$	3,952.0		$	3,653.2		$	298.7		8.2	%
Revenue - By Segment
Lincoln Retirement	$	499.0		$	536.3		$	(37.2	)	(6.9	)%	$	1,540.0		$	1,420.5		$	119.6		8.4	%
Life Insurance		476.8			468.9			7.9		1.7	%		1,434.8			1,400.5			34.4		2.5	%
Investment Management		242.9			121.7			121.3		99.7	%		516.6			340.2			176.4		51.9	%
Lincoln UK		95.7			67.3			28.5		42.3	%		262.5			196.3			66.2		33.7	%
Corporate & Other		91.6			74.8			16.8		22.5	%		269.9			223.9			45.9		20.5	%
Total	$	1,406.1		$	1,268.8		$	137.2		10.8	%	$	4,023.8		$	3,581.3		$	442.5		12.4	%
Operating Revenue - By Segment
Lincoln Retirement	$	526.2		$	516.0		$	10.2		2.0	%	$	1,588.7		$	1,478.5		$	110.1		7.4	%
Life Insurance		481.1			470.8			10.2		2.2	%		1,449.2			1,417.8			31.4		2.2	%
Investment Management		133.0			121.4			11.5		9.5	%		407.2			340.3			66.9		19.7	%
Lincoln UK		95.8			67.0			28.8		43.0	%		252.9			196.1			56.8		29.0	%
Corporate & Other		92.4			70.9			21.4		30.2	%		254.0			220.5			33.5		15.2	%
Total	$	1,328.5		$	1,246.2		$	82.3		6.6	%	$	3,952.0		$	3,653.2		$	298.7		8.2	%

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Financial Highlights

Unaudited [Billions of Dollars]

Operational Data by Segment

	For the Quarter Ended September 30									For the Nine Months Ended September 30
	2004 Amount		2003 Amount		Change			% Change		2004 Amount		2003 Amount		Change			% Change
Lincoln Retirement
Gross Deposits	$	2.207	$	1.578	$	0.628		39.8	%	$	6.633	$	4.365	$	2.268		52.0	%
Net Flows		0.716		0.277		0.439		158.3	%		2.128		0.472		1.656		350.9	%
Account Values (Gross)		60.331		52.841		7.490		14.2	%		58.900		52.841		6.058		11.5	%
Account Values (Net of Reinsurance)		58.015		50.577		7.438		14.7	%		56.549		50.577		5.972		11.8	%
Life Insurance Segment
First Year Premium - Retail (in millions)	$	188.074	$	207.974	$	(19.901	)	(9.6	)%	$	581.404	$	552.157	$	29.247		5.3	%
First Year Premium - COLI (in millions)		29.199		23.692		5.507		23.2	%		53.281		96.049		(42.768	)	(44.5	)%
First Year Premium - Total (in millions)		217.273		231.666		(14.394	)	(6.2	)%		634.685		648.206		(13.521	)	(2.1	)%
In-force		298.967		273.335		25.633		9.4	%		298.967		273.335		25.633		9.4	%
Account Values		13.912		12.958		0.955		7.4	%		13.912		12.958		0.955		7.4	%
Investment Management Segment
Retail Deposits	$	1.905	$	1.494	$	0.411		27.5	%	$	6.473	$	3.917	$	2.556		65.3	%
Retail Net Flows		0.381		0.370		0.010		2.7	%		1.966		0.686		1.280		186.5	%
Institutional In-flows		2.859		1.943		0.916		47.2	%		8.813		3.881		4.931		127.0	%
Institutional Net Flows		1.379		0.799		0.581		72.7	%		5.083		1.417		3.666		258.6	%
Total Net Flows		1.760		1.169		0.591		50.6	%		7.049		2.104		4.945		235.1	%
Assets Under Management - Retail and Inst’l		49.076		55.129		(6.053	)	(11.0	)%		49.076		55.129		(6.053	)	(11.0	)%
Assets Under Management - Insurance-related Assets		44.047		42.984		1.063		2.5	%		44.047		42.984		1.063		2.5	%
Assets Under Management - Total Segment		93.123		98.113		(4.990	)	(5.1	)%		93.123		98.113		(4.990	)	(5.1	)%
Consolidated
Domestic Retail Deposits	$	4.436	$	3.370	$	1.066		31.6	%	$	13.990	$	9.210	$	4.780		51.9	%
Domestic Retail Account Balances		95.393		83.787		11.606		13.9	%		95.393		83.787		11.606		13.9	%
Domestic Retail Net Flows		1.308		0.965		0.344		35.7	%		4.809		2.256		2.553		113.2	%
Domestic Deposits		6.988		5.288		1.700		32.1	%		22.441		12.988		9.453		72.8	%
Domestic Net Flows		2.682		1.799		0.883		49.1	%		9.922		3.687		6.235		169.1	%
Assets Under Management		132.641		130.844		1.797		1.4	%		132.641		130.844		1.797		1.4	%
Operational Data (excluding Assets Managed by Delaware’s London-based International Investment Unit)
Investment Management Segment
Retail Deposits	$	1.903	$	1.491	$	0.412		27.6	%	$	6.468	$	3.908	$	2.560		65.5	%
Retail Net Flows		0.386	$	0.375		0.010		2.7	%		1.991		0.727		1.264		174.0	%
Institutional In-flows		1.583	$	1.088		0.496		45.6	%		4.161		2.446		1.716		70.2	%
Institutional Net Flows		0.850	$	0.430		0.420		97.6	%		1.789		0.976		0.813		83.3	%
Total Net Flows		1.236	$	0.805		0.430		53.4	%		3.780		1.702		2.077		122.0	%
Assets Under Management - Retail and Inst’l		49.076		40.416		8.661		21.4	%		49.076		40.416		8.660		21.4	%
Assets Under Management - Insurance-related Assets		44.047		42.984		1.063		2.5	%		44.047		42.984		1.063		2.5	%
Assets Under Management - Total Segment		93.123		83.400		9.723		11.7	%		93.123		83.400		9.723		11.7	%
Consolidated
Domestic Retail Deposits	$	4.435	$	3.367	$	1.068		31.7	%	$	13.985	$	9.200	$	4.784		52.0	%
Domestic Retail Account Balances		95.393		83.499		11.894		14.2	%		95.393		83.499		11.894		14.2	%
Domestic Retail Net Flows		1.313		0.970		0.344		35.5	%		4.834		2.296		2.538		110.5	%
Domestic Deposits		5.749		4.430		1.320		29.8	%		17.785		11.543		6.242		54.1	%
Domestic Net Flows		2.157		1.435		0.722		50.3	%		6.653		3.286		3.367		102.5	%
Assets Under Management		132.641		116.131		16.510		14.2	%		132.641		116.131		16.510		14.2	%

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Financial Highlights

Unaudited [Millions of Dollars, except Common Share Data]

	For the Quarter Ended September 30											For the Nine Months Ended September 30
	2004 Amount			2003 Amount			Change			% Change		2004 Amount			2003 Amount			Change			% Change
Balance Sheet Assets - End of Period	$	110,377.1		$	100,825.5		$	9,551.7		9.5	%	$	110,377.1		$	100,825.5		$	9,551.7		9.5	%
Shareholders’ Equity
Beg of Period (including AOCI)	$	5,518.9		$	5,815.9		$	(297.1	)			$	5,811.6		$	5,347.5		$	464.1
End of Period (including AOCI)		5,970.8			5,586.4			384.5					5,970.8			5,586.4			384.5
End of Period (excluding AOCI)		5,109.8			4,790.6			319.1					5,109.8			4,790.6			319.1
Average Equity (excluding AOCI)	$	5,075.7		$	4,784.5		$	291.2				$	5,039.0		$	4,712.8		$	326.2
Return on Equity
Net Income/Average Equity (excluding AOCI)		15.7	%		11.1	%		4.6	%				13.7	%		9.0	%		4.7	%
Inc from Operations/Average Equity (excluding AOCI)		14.0	%		13.0	%		1.0	%				14.2	%		11.7	%		2.4	%
Return on Capital
Inc from Operations/Average Capital		11.5	%		10.6	%		0.9	%				11.6	%		9.7	%		1.9	%
Common Stock Outstanding
Average for the Period - Diluted	$	177.7		$	179.9		$	(2.2	)	(1.2	)%	$	179.7		$	179.1		$	0.6		0.3	%
End of Period- Assuming Conv of Pref.		174.8			178.3			(3.4	)	(1.9	)%		174.8			178.3			(3.4	)	(1.9	)%
End of Period - Diluted		177.1			179.9			(2.8	)	(1.6	)%		177.1			179.9			(2.8	)	(1.6	)%
Book Value (including AOCI)	$	34.15		$	31.34		$	2.82		9.0	%	$	34.15		$	31.34		$	2.82		9.0	%
Book Value (excluding AOCI)	$	29.23		$	26.87		$	2.35		8.7	%	$	29.23		$	26.87		$	2.35		8.7	%
Cash Returned to Shareholders
Share Repurchase - dollar amount	$	73.2			—		$	73.2				$	286.2			—		$	286.2
Dividends Declared to Shareholders		61.4			59.6			1.8					186.3			180.4			5.8
Total Cash Returned to Shareholders	$	134.5		$	59.6		$	75.0				$	472.5		$	180.4		$	292.0
Share Repurchase - number of shares		1.638			—			1.638					6.233			—			6.233
Dividend Declared on Common Stock-per share	$	0.350		$	0.335		$	0.015		4.5	%	$	1.050		$	1.005		$	0.045		4.5	%
	For the Quarter Ended September 30											For the Nine Months Ended September 30
	2004 Amount			2003 Amount								2004 Amount			2003 Amount
Comprehensive Income
Net Income	$	199.7		$	133.3							$	517.1		$	317.6
Foreign Currency Translation		(3.8	)		(1.3	)							7.9			16.2
Net Unrealized Gains (Losses) on Securities		368.1			(313.4	)							(257.9	)		(67.5	)
Gains (Losses) on Derivatives		1.3			(5.6	)							(9.2	)		(1.8	)
Minimum Pension Liability Adjustment		0.2			(0.2	)							0.8			(1.7	)
Comprehensive Income	$	565.4		$	(187.0	)						$	258.8		$	262.8

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Financial Highlights

Unaudited [Millions of Dollars]

	For the Quarter Ended September 30											For the Nine Months Ended September 30
	2004 Amount			2003 Amount			Change			% Change		2004 Amount			2003 Amount			Change			% Change
Consolidated Condensed Statements of Income
Revenue:
Insurance Premiums and Fees	$	463.0		$	427.4		$	35.6		8.3	%	$	1,386.5		$	1,244.3		$	142.2		11.4	%
Investment Advisory Fees		67.4			53.2			14.2		26.6	%		196.5			146.8			49.8		33.9	%
Net Investment Income		669.4			664.4			5.0		0.7	%		2,030.0			1,979.3			50.7		2.6	%
Realized Gains (Losses) on Investments		(23.0	)		9.8			(32.8	)				(52.9	)		(81.5	)		28.7
Gains (Losses) on Derivatives		(4.5	)		9.1			(13.6	)				(11.1	)		6.3			(17.4	)
Gain on Reinsurance Derivative/Trading Account Securities		(5.6	)		—			(5.6	)				0.5			—			0.5
Amortization of Deferred Gain on Indemnity Reinsurance		32.1			18.3			13.8		75.2	%		67.9			54.9			13.0		23.6	%
Gain on Sale of Subsidiaries/ Businesses		110.3			—			110.3					134.4			—			134.4
Other		96.9			86.6			10.4		12.0	%		272.0			231.3			40.7		17.6	%
Total Revenue		1,406.1			1,268.8			137.2		10.8	%		4,023.8			3,581.3			442.5		12.4	%
Benefits and Expenses:
Benefits		556.1			636.4			(80.3	)	(12.6	)%		1,722.7			1,836.9			(114.2	)	(6.2	)%
Underwriting, Acquisition, Insurance and Other Expenses		531.6			453.8			77.8		17.1	%		1,514.5			1,342.6			171.9		12.8	%
Total Benefits and Expenses		1,087.7			1,090.2			(2.5	)	(0.2	)%		3,237.2			3,179.5			57.7		1.8	%
Income before Federal Taxes		318.4			178.7			139.7					786.6			401.8			384.8
Federal Income Taxes		118.7			45.4			73.3					245.0			84.2			160.7
Income before Accounting Changes		199.7			133.3			66.4					541.6			317.6			224.0
Cumulative Effect of Accounting Changes		—			—			—					(24.5	)		—			(24.5	)
Net Income	$	199.7		$	133.3		$	66.4		49.8	%	$	517.1		$	317.6		$	199.5		62.8	%
Income before Tax and Cumulative Effect of Accounting Changes By Segment
Lincoln Retirement	$	115.3		$	135.9		$	(20.7	)			$	357.7		$	221.7		$	136.0
Life Insurance		75.5			80.8			(5.2	)				284.9			245.2			39.8
Investment Management		128.1			10.3			117.7					164.2			19.4			144.8
Lincoln UK		15.4			17.6			(2.2	)				51.1			47.2			3.9
Corporate and Other		(15.9	)		(66.0	)		50.1					(71.3	)		(131.7	)		60.4
Income before Tax and Cumulative Effect of Accounting Changes	$	318.4		$	178.7		$	139.7				$	786.6		$	401.8		$	384.8
Pre-Tax Realized Gains (Losses) by Segment*
Lincoln Retirement	$	(24.2	)	$	20.3		$	(44.5	)			$	(50.9	)	$	(58.1	)	$	7.1
Life Insurance		(2.5	)		(1.9	)		(0.5	)				(12.3	)		(17.4	)		5.1
Investment Management		(0.3	)		0.2			(0.6	)				(0.9	)		(0.1	)		(0.7	)
Lincoln UK		(0.1	)		0.3			(0.3	)				(0.5	)		0.2			(0.7	)
Corporate and Other		(0.3	)		0.1			(0.5	)				0.6			0.1			0.5
Pre-Tax Realized Gains (Losses) on Investments and Derivatives	$	(27.5	)	$	18.9		$	(46.4	)			$	(64.0	)	$	(75.2	)	$	11.2
After-Tax Realized Gains (Losses) by Segment*
Lincoln Retirement	$	(15.6	)	$	13.2		$	(28.8	)			$	(33.0	)	$	(37.7	)	$	4.8
Life Insurance		(1.6	)		(1.3	)		(0.4	)				(8.0	)		(11.3	)		3.3
Investment Management		(0.2	)		0.1			(0.3	)				(0.6	)		(0.1	)		(0.5	)
Lincoln UK		(0.2	)		0.2			(0.3	)				(0.5	)		0.2			(0.7	)
Corporate and Other		(0.2	)		0.1			(0.3	)				0.4			0.1			0.3
After-Tax Realized Gains (Losses) on Investments and Derivatives	$	(17.9	)	$	12.3		$	(30.2	)			$	(41.6	)	$	(48.9	)	$	7.2

* Includes both realized gains (losses) on investments and gains (losses) on derivatives.

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Financial Highlights

Unaudited [Millions of Dollars]

	As of
	September 2004 Amount			December 2003 Amount			Change			% Change
Consolidated Condensed Balance Sheets
Assets:
Investments:
Available for Sale Securities:
Fixed Maturities	$	34,222.7		$	32,769.5		$	1,453.2		4.4	%
Equities		178.1			199.1			(21.0	)	(10.5	)%
Trading Securities		3,223.6			3,120.1			103.5		3.3	%
Mortgage Loans on Real Estate		3,831.3			4,195.0			(363.7	)	(8.7	)%
Real Estate		135.1			112.9			22.2		19.7	%
Policy Loans		1,871.9			1,924.4			(52.5	)	(2.7	)%
Other Long-Term Investments		463.8			456.7			7.2		1.6	%
Total Investments		43,926.6			42,777.6			1,148.9		2.7	%
Assets Held in Separate Accounts		49,657.9			46,565.2			3,092.7		6.6	%
Other Assets		16,792.6			17,402.1			(609.4	)	(3.5	)%
Total Assets	$	110,377.1		$	106,744.9		$	3,632.3		3.4	%
Liabilities and Shareholders’ Equity
Liabilities:
Insurance and Investment Contract Liabilities	$	47,172.2		$	47,318.1		$	(145.8	)	(0.3	)%
Liabilities Related to Separate Accounts		49,657.9			46,565.2			3,092.7		6.6	%
Other Liabilities		7,576.2			7,050.0			526.1		7.5	%
Total Liabilities		104,406.3			100,933.2			3,473.1		3.4	%
Shareholders’ Equity:
Net Unrealized Gains on Securities and Derivatives		799.9			815.1			(15.3	)	(1.9	)%
Minimum Pension Liability Adjustment		(55.8	)		(55.1	)		(0.7	)	(1.2	)%
Foreign Currency Translation Adjustment		116.9			109.0			7.9		7.2	%
Other Shareholders’ Equity		5,109.8			4,942.6			167.2		3.4	%
Total Shareholders’ Equity		5,970.8			5,811.6			159.2		2.7	%
Total Liabilities and Shareholders’ Equity	$	110,377.1		$	106,744.9		$	3,632.3		3.4	%
	As of
	September 2004 Amount			December 2003 Amount			Change			% Change
Roll Forward of Deferred Acquisition Costs
Balance at beginning-of-year	$	3,147.1		$	2,939.7		$	207.4		7.1	%
Deferral		606.8			658.7			(52.0	)	(7.9	)%
Amortization		(337.6	)		(337.2	)		(0.4	)	(0.1	)%
Included in Total Benefits and Expenses		269.2			321.6			(52.4	)	(16.3	)%
Adjustment related to realized (gains) losses on available-for-sale securities		(29.9	)		(50.2	)		20.3		40.5	%
Adjustment related to unrealized (gains) losses on available-for-sale securities		(29.4	)		(126.1	)		96.7		76.7	%
Foreign currency translation adjustment		9.1			62.0			(52.9	)	(85.3	)%
Cumulative effect of accounting change		(39.3	)		—			(39.3	)
Balance at end-of-period	$	3,326.8		$	3,147.1		$	179.7		5.7	%
Roll Forward of Present Value of In-Force
Balance at beginning-of-year	$	1,196.5		$	1,250.1		$	(53.6	)	(4.3	)%
Amortization		(96.1	)		(80.2	)		(15.9	)	(19.8	)%
Foreign currency translation adjustment		4.0			26.6			(22.5	)	(84.8	)%
Cumulative effect of accounting change		(0.6	)		—			(0.6	)
Balance at end-of-period	$	1,103.9		$	1,196.5		$	(92.6	)	(7.7	)%

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Eleven-Year Summary

Unaudited [Millions of Dollars, except Common Share Data]

For the Year Ended December 31	2003			2002			2001			2000			1999			1998
Revenue
Lincoln Retirement	$	2,054.7		$	1,787.7		$	1,968.3		$	2,133.7		$	2,115.8		$	2,068.1
Life Insurance		1,905.5			1,785.0			1,840.6			1,819.0			1,760.4			1,378.5
Investment Management		474.4			413.1			451.2			513.7			514.9			509.6
Lincoln UK		273.5			277.2			290.7			433.8			446.6			439.7
Corporate & Other		575.8			372.4			1,827.3			1,946.9			1,966.0			1,691.1
Total Revenue	$	5,283.9		$	4,635.5		$	6,378.0		$	6,847.1		$	6,803.7		$	6,087.1
Net Income
Lincoln Retirement	$	300.5		$	53.7		$	265.1		$	354.7		$	291.5		$	273.8
Life Insurance		252.1			206.1			229.3			246.0			211.5			127.5
Investment Management		30.2			(1.4	)		(9.0	)		17.9			51.6			44.4
Lincoln UK		42.9			37.7			66.8			(15.1	)		(18.2	)		71.7
Corporate & Other		(113.7	)		(247.3	)		(6.6	)		(18.2	)		(76.1	)		(7.6	)
Total Net Inc from Cont Oper		511.9			48.8			545.7			585.3			460.4			509.8
Discontinued Operations		—			—			—			—			—			—
Total Net Income	$	511.9		$	48.8		$	545.7		$	585.3		$	460.4		$	509.8
Income from Operations
Lincoln Retirement	$	331.9		$	183.4		$	316.2		$	358.1		$	299.4		$	262.4
Life Insurance		264.5			269.0			275.3			256.7			212.0			149.2
Investment Management		34.5			1.8			(6.1	)		25.0			61.0			43.9
Lincoln UK		43.6			34.6			58.1			59.2			(13.9	)		70.9
Corporate & Other		(81.8	)		(57.2	)		1.0			(16.0	)		(83.1	)		4.0
Total Income from Cont Oper		592.8			431.6			644.4			683.0			475.5			530.4
Discontinued Operations		—			—			—			—			—			—
Income from Operations	$	592.8		$	431.6		$	644.4		$	683.0		$	475.5		$	530.4
OTHER DATA
Assets	$	106,744.9		$	93,184.6		$	98,041.6		$	99,870.6		$	103,095.7		$	93,836.3
Shareholders’ Equity
Including AOCI	$	5,811.6		$	5,347.5		$	5,303.8		$	4,980.6		$	4,263.9		$	5,387.9
Excluding AOCI	$	4,942.6		$	4,612.9		$	5,130.6		$	4,946.6		$	4,699.5		$	4,785.5
Average Equity (excluding AOCI)	$	4,756.7		$	4,983.3		$	5,057.1		$	4,831.4		$	4,786.2		$	4,636.3
Common Shares Outstanding (millions)
End of Period - Diluted		180.7			178.5			189.3			193.2			197.0			203.4
Average for the Period - Diluted		179.4			184.6			191.5			193.0			200.4			203.3
Per Share Data (Diluted)
Net Income from Continuing Operations	$	2.85		$	0.26		$	2.85		$	3.03		$	2.30		$	2.51
Net Income	$	2.85		$	0.26		$	2.85		$	3.03		$	2.30		$	2.51
Income (Loss) from Continuing Operations	$	3.30		$	2.34		$	3.37		$	3.54		$	2.37		$	2.61
Income from Operations	$	3.30		$	2.34		$	3.37		$	3.54		$	2.37		$	2.61
Shareholders’ Equity Per Share
Shareholders’ Equity (Including AOCI)	$	32.56		$	30.10		$	28.32		$	26.05		$	21.76		$	26.59
Shareholders’ Equity (Excluding accum AOCI)	$	27.69		$	25.97		$	27.39		$	25.88		$	23.98		$	23.62
Dividends Declared (Common Stock)	$	1.36		$	1.30		$	1.24		$	1.18		$	1.12		$	1.06
Return on Equity
Net Income/Average Equity		10.8	%		1.0	%		10.8	%		12.1	%		9.6	%		11.0	%
Inc from Operations/Average Equity		12.5	%		8.7	%		12.7	%		14.1	%		9.9	%		11.4	%
Market Value of Common Stock
High for the Year	$	41.32		$	53.65		$	52.75		$	56.38		$	57.50		$	49.44
Low for the Year	$	24.73		$	25.15		$	38.00		$	22.63		$	36.00		$	33.50
Close for the Year	$	40.37		$	31.58		$	48.57		$	47.31		$	40.00		$	40.91

For the Year Ended December 31	1997			1996			1995			1994			1993			Ten-year compound annual growth
Revenue
Lincoln Retirement	$	2,023.0		$	1,805.0		$	1,877.1		$	1,506.2		$	1,603.8		2.5	%
Life Insurance		544.8			549.2			514.9			466.2			477.5		14.8	%
Investment Management		459.1			410.5			290.5
Lincoln UK		427.3			393.2			351.5			216.0			174.9		4.6	%
Corporate & Other		1,444.3			1,575.6			1,552.5			1,744.1			2,680.9
Total Revenue	$	4,898.5		$	4,733.6		$	4,586.5		$	3,932.5		$	4,937.1		0.7	%
Net Income
Lincoln Retirement	$	263.3		$	204.3		$	248.8		$	142.4		$	127.1		9.0	%
Life Insurance		39.1			51.8			40.6			34.2			37.8		20.9	%
Investment Management		25.1			25.0			27.4
Lincoln UK		(106.8	)		66.0			45.7			18.5			12.6
Corporate & Other		(198.4	)		9.3			(61.0	)		(29.6	)		(101.1	)
Total Net Inc from Cont Oper		22.2			356.4			301.4			165.5			76.4		21.0	%
Discontinued Operations		911.8			157.2			180.8			184.4			242.5
Total Net Income	$	934.0		$	513.6		$	482.2		$	349.9		$	318.9		4.8	%
Income from Operations
Lincoln Retirement	$	223.0		$	174.6		$	175.2		$	142.4		$	127.1		10.1	%
Life Insurance		39.9			41.2			35.4			34.2			37.8		21.5	%
Investment Management		18.1			18.6			20.6
Lincoln UK		(108.3	)		66.0			45.9			17.2			11.9		13.9	%
Corporate & Other		(223.3	)		(1.7	)		(136.2	)		24.8			20.8
Total Income from Cont Oper		(50.6	)		298.8			140.8			218.6			197.6		11.6	%
Discontinued Operations		110.1			135.3			165.6			171.1			145.9
Income from Operations	$	59.4		$	434.1		$	306.5		$	389.7		$	343.5		5.6	%
OTHER DATA
Assets	$	77,174.7		$	71,713.4		$	63,257.7		$	48,864.8		$	47,825.1		8.4	%
Shareholders’ Equity
Including AOCI	$	4,982.9		$	4,470.0		$	4,378.1		$	3,042.1		$	4,072.3		3.6	%
Excluding AOCI	$	4,500.7		$	3,990.6		$	3,669.2		$	3,353.1		$	3,157.6		4.6	%
Average Equity (excluding AOCI)	$	4,172.7		$	3,851.7		$	3,400.3		$	3,288.6		$	3,009.0		4.7	%
Common Shares Outstanding (millions)
End of Period - Diluted		204.7			209.5			210.3			208.3			208.3
Average for the Period - Diluted		208.0			208.0			210.7			208.7			206.1
Per Share Data (Diluted)
Net Income from Continuing Operations	$	0.11		$	1.71		$	1.43		$	0.79		$	0.37		22.6	%
Net Income	$	4.49		$	2.47		$	2.29		$	1.68		$	1.55		6.3	%
Income (Loss) from Continuing Operations	$	(0.24	)	$	1.44		$	0.67		$	1.05		$	0.96		13.2	%
Income from Operations	$	0.29		$	2.09		$	1.45		$	1.87		$	1.67		7.1	%
Shareholders’ Equity Per Share
Shareholders’ Equity (Including AOCI)	$	24.63		$	21.50		$	20.95		$	14.67		$	19.69		5.2	%
Shareholders’ Equity (Excluding accum AOCI)	$	22.25		$	19.19		$	17.55		$	16.17		$	15.27		6.1	%
Dividends Declared (Common Stock)	$	1.00		$	0.94		$	0.875		$	0.830		$	0.775		5.7	%
Return on Equity
Net Income/Average Equity		22.4	%		13.3	%		15.5	%		10.6	%		10.6	%
Inc from Operations/Average Equity		1.4	%		11.3	%		9.8	%		11.8	%		11.4	%
Market Value of Common Stock
High for the Year	$	39.06		$	28.50		$	26.88		$	22.19		$	24.13
Low for the Year	$	24.50		$	20.38		$	17.31		$	17.31		$	17.34
Close for the Year	$	39.06		$	26.25		$	26.88		$	17.50		$	21.75		6.4	%

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Quarterly Summary

Unaudited [Millions of Dollars, except Common Share Data]

For the Quarter Ended	Sep 2002			Dec 2002			Mar 2003			Jun 2003			Sep 2003			Dec 2003			Mar 2004			Jun 2004			Sep 2004
Revenue
Lincoln Retirement	$	440.7		$	451.4		$	397.8		$	486.4		$	536.3		$	634.2		$	516.5		$	524.5		$	499.0
Life Insurance		441.6			479.6			457.5			474.0			468.9			505.0			479.2			478.9			476.8
Investment Management		97.5			102.2			102.1			116.4			121.7			134.3			132.9			140.8			242.9
Lincoln UK		91.8			51.8			68.9			60.2			67.3			77.1			75.8			91.0			95.7
Corporate & Other		91.8			103.6			73.0			76.1			74.8			351.9			54.7			123.6			91.6
Total Revenue	$	1,163.4		$	1,188.6		$	1,099.3		$	1,213.2		$	1,268.8		$	1,702.6		$	1,259.0		$	1,358.7		$	1,406.1
Net Income(Loss)
Lincoln Retirement	$	(7.0	)	$	5.0		$	6.9		$	81.7		$	102.0		$	109.9		$	71.8		$	94.2		$	90.8
Life Insurance		46.4			59.5			48.5			65.6			55.8			82.2			67.5			72.0			52.0
Investment Management		(3.9	)		1.1			1.0			4.6			6.3			18.2			10.0			14.5			58.1
Lincoln UK		0.2			17.9			6.8			12.4			11.5			12.2			5.9			17.2			9.9
Corporate & Other		(172.1	)		(32.6	)		(21.7	)		(21.6	)		(42.4	)		(28.1	)		(24.8	)		(10.9	)		(11.1	)
Total Net Income (Loss)	$	(136.4	)	$	51.0		$	41.6		$	142.7		$	133.3		$	194.3		$	130.5		$	187.0		$	199.7
Income (Loss) from Operations
Lincoln Retirement	$	21.8		$	35.4		$	57.4		$	86.1		$	94.3		$	94.1		$	102.2		$	101.8		$	110.2
Life Insurance		62.7			63.1			60.7			71.8			58.7			73.4			74.8			76.2			55.4
Investment Management		(3.0	)		2.1			1.3			4.5			9.7			19.0			12.5			13.4			12.5
Lincoln UK		(0.6	)		15.3			6.8			12.4			11.3			13.0			6.2			10.7			10.1
Corporate & Other		(18.8	)		(15.9	)		(21.5	)		(21.5	)		(18.0	)		(20.8	)		(20.3	)		(20.7	)		(9.9	)
Income (Loss) from Operations	$	62.1		$	100.0		$	104.8		$	153.3		$	156.0		$	178.7		$	175.3		$	181.4		$	178.2
OTHER DATA
Assets	$	90,483.9		$	93,184.6		$	92,497.6		$	99,532.8		$	100,825.5		$	106,744.9		$	109,869.9		$	109,317.9		$	110,377.1
Shareholders’ Equity
Beg of Period (including AOCI)	$	5,352.8		$	5,436.8		$	5,347.5		$	5,450.0		$	5,815.9		$	5,586.4		$	5,811.6		$	6,143.5		$	5,518.9
End of Period (including AOCI)		5,436.8			5,347.5			5,450.0			5,815.9			5,586.4			5,811.6			6,143.5			5,518.9			5,970.8
End of Period (excluding AOCI)		4,591.8			4,612.9			4,610.5			4,699.8			4,790.6			4,942.6			5,004.2			5,023.6			5,109.8
Average Equity (excluding AOCI)		4,944.0			4,643.6			4,682.0			4,672.0			4,784.5			4,888.2			5,016.8			5,024.6			5,075.7
Common Shares Outstanding
Average for the Period - Diluted		183.2			178.4			178.3			179.2			179.9			180.4			181.2			180.3			177.7
End of Period - Diluted		178.2			178.5			178.4			179.5			179.9			180.7			181.4			178.8			177.1
Per Share Data (Diluted)
Net Income	$	(0.74	)	$	0.29		$	0.23		$	0.80		$	0.74		$	1.08		$	0.72		$	1.04		$	1.12
Income from Operations	$	0.34		$	0.56		$	0.59		$	0.86		$	0.87		$	0.99		$	0.97		$	1.00		$	1.00
Shareholders’ Equity Per Share
Shareholders’ Equity (including AOCI)	$	30.64		$	30.10		$	30.66		$	32.68		$	31.34		$	32.56		$	34.36		$	31.32		$	34.15
Shareholders’ Equity (excluding AOCI)	$	25.87		$	25.97		$	25.94		$	26.41		$	26.87		$	27.69		$	27.99		$	28.51		$	29.23
Dividends Declared (Common Stock)	$	0.320		$	0.335		$	0.335		$	0.335		$	0.335		$	0.350		$	0.350		$	0.350		$	0.350
Return on Equity
Net Income/Average Equity		(11.0	)%		4.4	%		3.6	%		12.2	%		11.1	%		15.9	%		10.4	%		14.9	%		15.7	%
Inc from Operations/Average Equity		5.0	%		8.6	%		8.9	%		13.1	%		13.0	%		14.6	%		14.0	%		14.4	%		14.0	%
Market Value of Common Stock
Highest Price	$	42.080		$	35.950		$	35.700		$	37.500		$	38.640		$	41.320		$	48.870		$	50.380		$	47.500
Lowest Price	$	29.120		$	25.150		$	24.730		$	27.870		$	34.630		$	35.410		$	40.060		$	43.260		$	41.900
Closing Price	$	30.550		$	31.580		$	28.000		$	35.630		$	35.380		$	40.370		$	47.320		$	47.250		$	47.000

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Reconciliation of Business Segments to Consolidated Income Statement

Unaudited [Millions of Dollars]

	Lincoln Retirement						Life Insurance						Investment Management						Lincoln UK
For the Quarter Ended September 30	Sep 2004			Sep 2003			Sep 2004			Sep 2003			Sep 2004			Sep 2003			Sep 2004			Sep 2003
Revenue
Life and annuity premiums	$	9.2		$	7.8		$	44.2		$	45.2		$	—		$	—		$	17.3		$	16.1
Surrender charges		6.7			7.4			11.1			13.7
Mortality assessments								130.1			130.2									9.7			8.7
Expense assessments		145.2			115.2			49.8			48.9									27.0			23.2
Health premiums																				0.4			0.3
Investment advisory fees														93.8			78.7
Other revenue and fees		(1.3	)		8.3			7.3			6.4			26.6			29.5			22.8			2.6
Net investment income		366.5			377.4			238.4			226.4			12.7			13.2			18.7			16.0
Realized gains (losses) on investments		(21.2	)		18.6			(2.6	)		(1.7	)		(0.3	)		0.2			(0.1	)		0.3
Gains (losses) on derivatives		(3.1	)		1.7			0.1			(0.3	)
Gain (loss) on reins. derivative/trading account securities		(3.0	)					(1.8	)
Gain on sale of subsidiaries/ businesses								0.0						110.3						0.0
Total Revenue		499.0			536.3			476.8			468.9			242.9			121.7			95.7			67.3
Operating Benefits and Expenses
Ins. benefits paid or provided:
Life and annuity policy benefits		40.5			44.6			95.8			118.5									17.7			21.4
Div accum & div to policyholders								16.7			15.9
Interest credited to policy bal.		209.9			216.5			143.8			150.7
Health policy benefits																				3.7			1.3
Def. sales inducements net of amortization		(10.4	)		(2.8	)
Total insurance benefits		240.0			258.2			256.3			285.1									21.4			22.7
Underwriting, acquisition, insurance and other expenses:
Commissions		103.5			80.7			34.8			34.4									0.7			1.0
Other volume related expenses		37.8			16.1			45.9			48.3
Operating and administrative expenses		62.4			57.0			46.5			41.7			108.3			101.6			21.6			19.6
Restructuring charges		2.6			8.4			0.9			2.5			—			5.3
Taxes, licenses and fees		3.2			3.7			12.8			16.1			4.6			2.4
Subtotal		209.5			166.0			140.9			143.0			112.9			109.3			22.4			20.6
Deferral of acquisition costs		(101.5	)		(58.9	)		(90.8	)		(88.0	)								(1.4	)		(0.2	)
DAC amortization		24.2			31.6			64.9			21.1									28.6			7.3
Net DAC (deferral) amortization		(77.3	)		(27.2	)		(25.9	)		(66.9	)								27.2			7.1
PVIF amortization		11.5			3.3			29.8			26.9									9.4			(0.7	)
Other intangibles amortization														2.0			2.0
Total underwriting, acquisition, insurance and other expenses		143.7			142.1			144.9			103.0			114.8			111.3			59.0			27.0
Interest
Benefits and Expenses		383.7			400.3			401.2			388.1			114.8			111.3			80.3			49.6
Income Before Federal Income Tax and Cumulative Effect of Accounting Change		115.3			135.9			75.5			80.8			128.1			10.3			15.4			17.6
Federal income taxes		24.5			33.9			23.5			24.9			70.0			4.0			5.5			6.1
Income Before Cumulative Effect of Accounting Change		90.8			102.0			52.0			55.8			58.1			6.3			9.9			11.5
Cumulative effect of accounting change		—
Net Income	$	90.8		$	102.0		$	52.0		$	55.8		$	58.1		$	6.3		$	9.9		$	11.5
Less:
Restructuring charges	$	(1.7	)	$	(5.5	)	$	(0.6	)	$	(1.6	)		—		$	(3.5	)
Realized gains (losses) on investments		(13.6	)		12.1			(1.8	)		(1.1	)		(0.2	)		0.1			(0.2	)		0.2
Gains (losses) on derivatives		(2.0	)		1.1			0.1			(0.2	)
Net gain (loss) on reinsurance derivative/trading account securities		(2.0	)					(1.2	)
Reserve development on business sold through reinsurance/ amortization of deferred gain
Gain on sale of subsidiaries/ businesses								—						45.8						—
Cumulative effect of accounting change
Income from Operations	$	110.2		$	94.3		$	55.4		$	58.7		$	12.5		$	9.7		$	10.1		$	11.3

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Reconciliation of Business Segments to Consolidated Income Statement

Unaudited [Millions of Dollars]

For the Quarter Ended September 30	Corporate and Other Operations						Consolidating Adjustments						Consolidated
	Sep 2004			Sep 2003			Sep 2004			Sep 2003			Sep 2004			Sep 2003
Revenue
Life and annuity premiums	$	—		$	—		$	—		$	—		$	70.7		$	69.1
Surrender charges								0.4			0.5			18.2			21.5
Mortality assessments					(1.0	)								139.8			137.9
Expense assessments					1.0			12.5			10.2			234.5			198.5
Health premiums		(0.5	)		(0.0	)								(0.1	)		0.4
Investment advisory fees								(26.4	)		(25.5	)		67.4			53.2
Amortization of deferred gain		32.1			18.3									32.1			18.3
Amortization of deferred gain-reserve development		0.3			3.7									0.3			3.7
Other revenue and fees		152.4			110.0			(111.2	)		(74.0	)		96.6			82.9
Net investment income		33.6			32.3			(0.4	)		(0.8	)		669.4			664.4
Realized gains (losses) on investments		1.2			(7.6	)								(23.0	)		9.8
Gains (losses) on derivatives		(1.5	)		7.7									(4.5	)		9.1
Gain (loss) on reins. derivative/trading account securities		(0.8	)											(5.6	)
Gain on sale of subsidiaries/ businesses														110.3
Total Revenue		216.8			164.4			(125.2	)		(89.6	)		1,406.1			1268.8
Benefits and Expenses
Ins. benefits paid or provided:
Life and annuity policy benefits		(0.9	)		42.7									153.1			227.1
Div accum & div to policyholders		0.0			0.0									16.7			15.9
Interest credited to policy bal.		31.9			31.8			6.9			6.6			392.5			405.6
Health policy benefits		0.5			(42.8	)								4.2			(41.5	)
Reserve developments on Reins. business sold					32.1												32.1
Def. sales inducements net of amortization														(10.4	)		(2.8	)
Total insurance benefits		31.5			63.8			6.9			6.6			556.1			636.4
Underwriting, acquisition, insurance and other expenses:
Commissions		22.2			20.0			9.7			7.8			171.0			144.1
Other volume related expenses		45.5			55.7			(55.1	)		(29.5	)		74.1			90.5
Operating and administrative expenses		102.4			55.6			(76.7	)		(65.7	)		264.6			209.8
Restructuring charges		1.0			3.6									4.5			19.8
Taxes, licenses and fees		5.0			4.2									25.6			26.4
Subtotal		176.2			139.1			(122.1	)		(87.4	)		539.8			490.6
Deferral of acquisition costs								(12.5	)		(13.9	)		(206.2	)		(160.9	)
DAC amortization		0.1			0.1			3.0			5.9			120.8			65.9
Net DAC (deferral) amortization		0.1			0.1			(9.5	)		(8.0	)		(85.4	)		(95.0	)
PVIF amortization														50.8			29.6
Other intangibles amortization														2.0			2.0
Total underwriting, acquisition, insurance and other expenses		176.3			139.2			(131.6	)		(95.4	)		507.1			427.1
Interest		24.9			21.8			(0.4	)		(0.8	)		24.4			21.0
Loss on early retirement of subordinated debt					5.6												5.6
Total Benefits and Expenses		232.7			230.4			(125.2	)		(89.6	)		1,087.7			1090.2
Income Before Federal Income Tax and Cumulative Effect of Accounting Change		(15.9	)		(66.0	)					—			318.4			178.7
Federal income taxes		(4.8	)		(23.6	)					—			118.7			45.4
Income Before Cumulative Effect of Accounting Change		(11.1	)		(42.4	)		—			—			199.7			133.3
Cumulative effect of accounting change														0.0
Net Income	$	(11.1	)	$	(42.4	)	$	—		$	—		$	199.7		$	133.3
Less:
Restructuring charges		(0.7	)		(2.4	)								(2.9	)		(12.9	)
Realized gains (losses) on investments		1.4			(4.9	)					—			(14.5	)		6.4
Gains (losses) on derivatives		(1.6	)		5.0									(3.4	)		5.9
Net gain (loss) on reinsurance derivative/trading account securities		(0.5	)											(3.7	)
Reserve development on business sold through reinsurance/ amortization of related deferred gain		0.2			(18.5	)								0.2			(18.5	)
Gain on sale of subsidiaries/ businesses														45.9
Cumulative effect of accounting change														0.0
Loss on early retirement of subordinated debt					(3.7	)		—			—						(3.7	)
Income from Operations	$	(9.9	)	$	(18.0	)	$	0.0		$	(0.0	)	$	178.2		$	156.0

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Reconciliation of Business Segments to Consolidated Income Statement

Unaudited [Millions of Dollars]

	Lincoln Retirement						Life Insurance						Investment Management						Lincoln UK
For the Nine Months Ended September 30	Sep 2004			Sep 2003			Sep 2004			Sep 2003			Sep 2004			Sep 2003			Sep 2004			Sep 2003
Revenue
Life and annuity premiums	$	23.1		$	16.3		$	140.4		$	142.6		$	—		$	—		$	54.0		$	41.4
Surrender charges		18.6			22.7			37.6			37.5
Mortality assessments								388.2			388.2									29.7			27.0
Expense assessments		423.4			317.1			150.6			146.8									75.6			69.2
Health premiums								0.1			0.1									1.4			1.5
Investment advisory fees														275.5			221.8
Other revenue and fees		(4.3	)		8.2			23.4			19.5			92.2			81.1			36.8			9.0
Net investment income		1,127.9			1114.2			709.0			683.0			39.4			37.4			55.4			47.9
Realized gains (losses) on investments		(41.4	)		(57.3	)		(12.4	)		(16.9	)		(0.9	)		(0.1	)		(0.5	)		0.2
Gains (losses) on derivatives		(9.5	)		(0.8	)		0.1			(0.4	)
Gain (loss) on reins. derivative/trading account securities		2.3						(2.1	)
Gain on sale of subsidiaries/ businesses								0.0						110.3						10.1
Total Revenue		1,540.0			1,420.46			1,434.85			1,400.45			516.6			340.2			262.5			196.3
Operating Benefits and Expenses
Ins. benefits paid or provided:
Life and annuity policy benefits		146.5			144.5			297.6			332.8									68.7			59.0
Div accum & div to policyholders								53.8			47.8
Interest credited to policy bal.		625.6			653.6			432.6			450.7
Health policy benefits								0.0			0.0									10.5			6.2
Def. sales inducements net of amortization		(29.1	)		(8.5	)
Total insurance benefits		743.0			789.6			784.0			831.3									79.2			65.2
Underwriting, acquisition, insurance and other expenses:
Commissions		312.6			221.7			94.5			97.5									1.9			2.9
Other volume related expenses		117.4			44.7			137.3			145.7
Operating and administrative expenses		172.2			167.7			125.7			120.8			330.9			301.3			66.9			58.3
Restructuring charges		6.1			14.6			4.1			15.3			1.6			5.3
Taxes, licenses and fees		12.1			13.7			36.7			44.3			14.0			8.2
Subtotal		620.4			462.4			398.3			423.6			346.4			314.8			68.8			61.3
Deferral of acquisition costs		(309.0	)		(149.9	)		(255.5	)		(258.7	)								(4.6	)		(1.9	)
DAC amortization		110.0			88.9			157.4			97.5									55.5			27.9
Net DAC (deferral) amortization		(198.9	)		(60.9	)		(98.2	)		(161.2	)								50.9			26.0
PVIF amortization		17.8			7.7			65.8			61.5									12.5			(3.4	)
Other intangibles amortization														5.9			6.0
Total underwriting, acquisition, insurance and other expenses		439.3			409.2			365.9			324.0			352.3			320.7			132.3			83.9
Interest
Benefits and Expenses		1,182.3			1,198.7			1,149.9			1,155.2			352.3			320.7			211.4			149.1
Income Before Federal Income Tax and Cumulative Effect of Accounting Change		357.7			221.7			284.9			245.2			164.2			19.4			51.1			47.2
Federal income taxes		79.2			31.1			90.6			75.3			81.6			7.5			18.1			16.5
Income Before Cumulative Effect of Accounting Change		278.5			190.6			194.3			169.9			82.6			12.0			33.0			30.7
Cumulative effect of accounting change		(21.8	)					(2.7	)
Net Income	$	256.8		$	190.6		$	191.6		$	169.9		$	82.6		$	12.0		$	33.0		$	30.7
Less:
Restructuring charges		(4.0	)		(9.5	)		(2.7	)		(10.0	)		(1.0	)		(3.5	)
Realized gains (losses) on investments		(26.8	)		(37.2	)		(8.1	)		(11.0	)		(0.6	)		(0.1	)		(0.5	)		0.2
Gains (losses) on derivatives		(6.2	)		(0.5	)		0.1			(0.3	)
Net gain (loss) on reinsurance derivative/trading account securities		1.4						(1.4	)
Reserve development on business sold through reinsurance/ amortization of deferred gain
Gain on sale of subsidiaries/ businesses														45.8						6.6
Cumulative effect of accounting change		(21.8	)					(2.7	)
Income from Operations	$	314.1		$	237.8		$	206.3		$	191.2		$	38.3		$	15.5		$	27.0		$	30.6

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Reconciliation of Business Segments to Consolidated Income Statement

Unaudited [Millions of Dollars]

For the Nine Months Ended September 30	Corporate and Other Operations						Consolidating Adjustments						Consolidated
	Sep 2004			Sep 2003			Sep 2004			Sep 2003			Sep 2004			Sep 2003
Revenue
Life and annuity premiums	$	—		$	—		$	—		$	—		$	217.4		$	200.3
Surrender charges								1.4			1.5			57.6			61.8
Mortality assessments		0.0			(2.9	)								417.9			412.4
Expense assessments		0.0			2.9			41.2			30.4			690.9			566.4
Health premiums		1.3			1.8									2.7			3.4
Investment advisory fees								(79.0	)		(75.0	)		196.5			146.8
Amortization of deferred gain		67.9			54.9									67.9			54.9
Amortization of deferred gain-reserve development		1.0			3.3									1.0			3.3
Other revenue and fees		457.5			320.9			(334.6	)		(210.7	)		271.0			227.9
Net investment income		99.6			99.6			(1.2	)		(2.9	)		2,030.0			1,979.3
Realized gains (losses) on investments		2.3			(7.4	)								(52.9	)		(81.5	)
Gains (losses) on derivatives		(1.7	)		7.5									(11.1	)		6.3
Gain (loss) on reins. derivative/trading account securities		0.3												0.5
Gain on sale of subsidiaries/ businesses		14.0												134.4
Total Revenue		642.0			480.6			(372.1	)		(256.7	)		4,023.8			3,581.3
Benefits and Expenses
Ins. benefits paid or provided:
Life and annuity policy benefits		0.2			33.0									513.0			569.3
Div accum & div to policyholders		0.0			0.0									53.8			47.8
Interest credited to policy bal.		94.9			97.2			20.1			19.8			1,173.2			1,221.2
Health policy benefits		1.3			(31.3	)								11.8			(25.0	)
Reserve developments on Reins. business sold					32.1												32.1
Def. sales inducements net of amortization														(29.1	)		(8.5	)
Total insurance benefits		96.4			131.0			20.1			19.8			1,722.7			1,836.9
Underwriting, acquisition, insurance and other expenses:
Commissions		70.5			58.0			31.3			22.5			510.8			402.7
Other volume related expenses		158.9			153.9			(122.5	)		(116.7	)		194.8			227.5
Operating and administrative expenses		285.0			175.9			(276.5	)		(160.9	)		800.5			663.0
Restructuring charges		9.5			3.6									21.3			38.8
Taxes, licenses and fees		19.6			14.0									82.3			80.2
Subtotal		543.5			405.3			(367.8	)		(255.2	)		1,609.7			1,412.1
Deferral of acquisition costs								(37.6	)		(31.8	)		(606.8	)		(442.2	)
DAC amortization		0.3			0.2			14.4			13.4			337.6			227.9
Net DAC (deferral) amortization		0.3			0.2			(23.3	)		(18.4	)		(269.2	)		(214.2	)
PVIF amortization														96.1			65.8
Other intangibles amortization														5.9			6.0
Total underwriting, acquisition, insurance and other expenses		543.8			405.6			(391.0	)		(273.6	)		1,442.6			1,269.7
Interest		73.1			70.2			(1.2	)		(2.9	)		71.9			67.3
Loss on early retirement of subordinated debt					5.6												5.6
Total Benefits and Expenses		713.3			612.3			(372.1	)		(256.7	)		3,237.2			3,179.5
Income Before Federal Income Tax and Cumulative Effect of Accounting Change		(71.3	)		(131.7	)		—			—			786.6			401.8
Federal income taxes		(24.5	)		(46.1	)		—			—			245.0			84.2
Income Before Cumulative Effect of Accounting Change		(46.8	)		(85.6	)		—			—			541.6			317.6
Cumulative effect of accounting change														(24.5	)
Net Income	$	(46.8	)	$	(85.6	)		—			—		$	517.1		$	317.6
Less:
Restructuring charges		(6.2	)		(2.4	)								(13.9	)		(25.3	)
Realized gains (losses) on investments		2.1			(4.8	)		—			—			(33.9	)		(53.0	)
Gains (losses) on derivatives		(1.6	)		4.9									(7.7	)		4.1
Net gain (loss) on reinsurance derivative/trading account securities		0.2												0.2
Reserve development on business sold through reinsurance/ amortization of related deferred gain		0.6			(18.7	)								0.6			(18.7	)
Gain on sale of subsidiaries/ businesses		9.0												61.5
Cumulative effect of accounting change														(24.5	)
Loss on early retirement of subordinated debt					(3.7	)											(3.7	)
Income from Operations	$	(50.9	)	$	(61.0	)		—			—		$	534.9		$	414.1

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Statement of Consolidated Income

Unaudited [Millions of Dollars]

For the Year Ended December 31	1999			2000			2001			2002			2003			YTD Sep 2003			YTD Sep 2004
Revenue
Life and annuity premiums	$	1,183.0		$	1,403.3		$	1,363.4		$	295.6		$	277.0		$	200.3		$	217.4
Surrender charges		110.2			114.7			101.5			87.8			84.7			61.8			57.6
Mortality assessments		496.4			496.5			533.3			530.3			550.5			412.4			417.9
Expense assessments		896.0			1,013.1			880.1			792.7			782.3			566.4			690.9
Health premiums		698.5			409.8			340.6			20.3			4.0			3.4			2.7
Investment advisory fees		223.8			213.1			197.2			183.3			205.0			146.8			196.5
Amortization of deferred gain								20.4			75.2			72.3			54.9			67.9
Amortization of deferred gain-reserve development											(0.8	)		3.6			3.3			1.0
Other revenue and fees		344.5			441.1			328.7			299.5			309.7			227.9			271.0
Net investment income		2,842.5			2,784.1			2,708.7			2,631.9			2,638.5			1,979.3			2,030.0
Earnings in unconsolidated affiliates		5.8			(0.4	)		5.7			(0.6	)
Realized gains (losses) on investments		3.0			(28.3	)		(105.2	)		(272.7	)		(16.7	)		(81.5	)		(52.9	)
Gains (losses) on derivatives								(9.3	)		1.2			(2.5	)		6.3			(11.1	)
Gain (loss) on reinsurance derivative/trading account securities														4.1						0.5
Mark-to-market adjustment on reclassification from AFS to trading account securities														371.5
Gain on sale of subsidiaries/ businesses								12.8			(8.3	)								134.4
Total Revenue		6,803.7			6,847.1			6,378.0			4,635.5			5,283.9			3,581.3			4,023.8
Benefits and Expenses
Ins. benefits paid or provided:
Life and annuity policy benefits		1,546.6			1,546.4			1,517.9			811.3			683.7			569.3			513.0
Div accum & div to policyholders		88.4			87.6			83.7			76.0			81.6			47.8			53.8
Interest credited to policy bal.		1,510.4			1,474.2			1,506.0			1,617.1			1,617.0			1,221.2			1,173.2
Health policy benefits		659.7			449.0			302.1			49.7			14.1			(25.0	)		11.8
Reserve developments on reins. business sold		—			—			—			305.4			32.1			32.1			—
Def. sales inducements net of amortization								(12.1	)		(12.6	)		(14.1	)		(8.5	)		(29.1	)
Total insurance benefits		3,805.0			3,557.2			3,397.7			2,846.9			2,414.4			1,836.9			1,722.7
Underwriting, acquisition, insurance and other expenses:
Commissions		961.0			919.1			860.3			579.4			576.1			402.7			510.8
Other volume related expenses		197.1			253.8			184.8			256.8			328.4			227.5			194.8
Operating and administrative expenses		1,165.3			1,208.4			1,114.5			928.0			894.4			663.0			800.5
Restructuring charges		27.4			104.9			38.0			(2.2	)		53.8			38.8			21.3
Taxes, licenses and fees		77.9			107.5			122.9			106.8			107.4			80.2			82.3
Par policyholder interests		3.3			1.1
Foreign exchange		1.9			(2.9	)		(1.4	)		0.3			—			—			—
Subtotal		2,433.8			2,592.0			2,319.1			1,869.0			1,960.2			1,412.1			1,609.7
Deferral of acquisition costs								(701.0	)		(612.4	)		(639.6	)		(442.2	)		(606.8	)
DAC amortization								366.8			344.4			318.0			227.9			337.6
DAC deferral net of amortization		(314.6	)		(427.5	)		(334.2	)		(268.0	)		(321.6	)		(214.2	)		(269.2	)
PVIF amortization		102.5			132.6			113.1			136.5			80.2			65.8			96.1
Other intangibles amortization		18.0			17.7			12.1			8.2			7.9			6.0			5.9
Total underwriting, acquisition, insurance and other expenses		2,239.7			2,314.9			2,110.1			1,745.8			1,726.8			1,269.7			1,442.6
Goodwill amortization		49.2			45.1			43.4
Interest		133.7			139.5			121.0			96.6			89.5			67.3			71.9
Loss on early retirement of subordinated debt														5.6			5.6
Total Benefits and Expenses		6,227.6			6,056.7			5,672.1			4,689.3			4,236.3			3,179.5			3,237.2
Income Before Federal Income Tax and Cumulative Effect of Accounting Change		576.1			790.5			705.9			(53.8	)		1,047.6			401.8			786.6
Federal income taxes		115.7			205.2			144.7			(102.6	)		280.4			84.2			245.0
Income Before Cumulative Effect of Accounting Change		460.4			585.3			561.2			48.8			767.2			317.6			541.6
Cumulative effect of accounting change								(15.6	)					(255.2	)					(24.5	)
Net Income	$	460.4		$	585.3		$	545.7		$	48.8		$	511.9		$	317.6		$	517.1
Less:
Restructuring charges		(18.9	)		(80.2	)		(24.7	)		2.0			(35.0	)		(25.3	)		(13.9	)
Realized gains (losses) on investments		3.8			(17.5	)		(68.7	)		(177.2	)		(11.0	)		(53.0	)		(33.9	)
Gains (losses) on derivatives								(4.9	)		0.8			(1.6	)		4.1			(7.7	)
Net gain (loss) on reinsurance derivative/trading account securities														2.7						0.2
Reserve development on business sold through reinsurance/ amortization of deferred gain											(199.1	)		(18.5	)		(18.7	)		0.6
Gain on sale of subsidiaries/ businesses								15.0			(9.4	)								61.5
Loss on early retirement of subordinated debt														(3.7	)		(3.7	)
Mark-to-market adjustment on reclassification from AFS to trading account securities														241.5
Cumulative effect of accounting change								(15.6	)					(255.2	)					(24.5	)
Income from Operations	$	475.5		$	683.0		$	644.4		$	431.6		$	592.8		$	414.1		$	534.9
Roll Forward of Deferred Acquisition Costs
Balance at beginning-of-year							$	3,070.5		$	2,866.8		$	2,939.7		$	2,939.7		$	3,147.1
Deferral								701.0			612.4			639.6			442.2			606.8
Amortization								(366.8	)		(344.4	)		(318.0	)		(227.9	)		(337.6	)
Included in Total Benefits and Expenses								334.2			268.0			321.6			214.2			269.2
Adjustment related to realized (gains) losses on available-for-sale securities								112.9			115.0			(50.2	)		(22.2	)		(29.9	)
Adjustment related to unrealized (gains) losses on available-for-sale securities								(187.2	)		(338.6	)		(126.1	)		(271.3	)		(29.5	)
Foreign currency translation adjustment								(16.0	)		56.9			62.0			19.1			9.2
Disposition of business								(425.9	)
Other								(21.7	)		(28.4	)								(39.3	)
Balance at end-of-year							$	2,866.8		$	2,939.7		$	3,147.1		$	2,879.7		$	3,326.8
Roll Forward of Present Value of In-Force
Balance at beginning-of-year							$	1,483.3		$	1,362.5		$	1,250.1		$	1,250.1		$	1,196.5
Amortization								(113.1	)		(136.5	)		(80.2	)		(65.8	)		(96.1	)
Foreign currency translation adjustment								(7.0	)		24.1			26.6			8.2			4.0
Other								(0.7	)											(0.6	)
Balance at end-of-year							$	1,362.5		$	1,250.1		$	1,196.5		$	1,192.5		$	1,103.9

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Statement of Consolidated Income

Unaudited [Millions of Dollars]

For the Quarter Ended	Sep 2002			Dec 2002			Mar 2003			Jun 2003			Sep 2003			Dec 2003			Mar 2004			Jun 2004			Sep 2004
Revenue
Life and annuity premiums	$	71.6		$	80.7		$	65.3		$	65.9		$	69.1		$	76.6		$	72.0		$	74.7		$	70.7
Surrender charges		22.8			23.5			18.9			21.3			21.5			23.0			20.2			19.2			18.2
Mortality assessments		134.1			135.3			138.9			135.6			137.9			138.1			137.9			140.1			139.8
Expense assessments		193.2			187.6			177.1			190.9			198.5			215.9			225.5			230.9			234.5
Health premiums		(9.6	)		19.1			3.0			0.1			0.4			0.5			3.6			(0.7	)		(0.1	)
Investment advisory fees		42.9			44.7			44.2			49.4			53.2			58.3			62.7			66.4			67.4
Amortization of deferred gain		22.1			6.9			18.4			18.2			18.3			17.4			17.9			17.9			32.1
Amortization of deferred gain-reserve development		(1.4	)		0.5			(0.2	)		(0.2	)		3.7			0.3			0.3			0.3			0.3
Other revenue and fees		72.1			81.5			70.6			74.5			82.9			81.7			61.4			112.9			96.6
Net investment income		652.4			667.3			654.6			660.2			664.4			659.2			677.5			683.1			669.4
Earnings in unconsolidated affiliates
Realized gains (losses) on investments		(37.1	)		(50.7	)		(89.6	)		(1.7	)		9.8			64.8			(12.0	)		(17.8	)		(23.0	)
Gains (losses) on derivatives		0.3			0.3			(1.9	)		(1.0	)		9.1			(8.8	)		(3.8	)		(2.8	)		(4.5	)
Gain (loss) on reinsurance derivative/trading account securities																	4.1			(4.2	)		10.3			(5.6	)
Mark-to-market adjustment on reclassification from AFS to trading account securities																	371.5
Gain on sale of subsidiaries/ businesses					(8.3	)																	24.1			110.3
Total Revenue		1,163.4			1,188.6			1,099.3			1,213.2			1,268.8			1,702.6			1,259.0			1,358.7			1,406.1
Benefits and Expenses
Ins. benefits paid or provided:
Life and annuity policy benefits		229.7			214.0			187.1			155.1			227.1			114.5			179.9			180.0			153.1
Div accum & div to policyholders		17.2			22.8			14.4			17.6			15.9			33.8			18.5			18.6			16.7
Interest credited to policy bal.		417.4			411.1			409.3			406.3			405.6			395.7			390.4			390.4			392.5
Health policy benefits		7.3			5.1			2.3			14.2			(41.5	)		39.1			3.5			4.1			4.2
Reserve developments on reins. business sold		270.0			13.2									32.1
Def. sales inducements net of amortization		(2.9	)		(3.2	)		(3.3	)		(2.4	)		(2.8	)		(5.6	)		(9.0	)		(9.8	)		(10.4	)
Total insurance benefits		938.7			663.0			609.7			590.8			636.4			577.5			583.3			583.3			556.1
Underwriting, acquisition, insurance and other expenses:
Commissions		124.6			162.0			125.7			132.9			144.1			173.5			169.1			170.7			171.0
Other volume related expenses		63.9			72.6			71.5			65.4			90.5			101.0			109.9			107.0			74.1
Operating and administrative expenses		228.1			259.7			217.8			235.5			209.8			231.4			187.4			252.3			264.6
Restructuring charges		(2.1	)		(1.7	)		5.5			13.5			19.8			15.0			11.5			5.3			4.5
Taxes, licenses and fees		24.1			22.6			30.6			23.1			26.4			27.3			29.5			27.2			25.6
Foreign exchange		0.4			(0.6	)		(0.0	)														0.0
Subtotal		439.1			514.6			451.2			470.3			490.6			548.1			507.4			562.6			539.8
Deferral of acquisition costs		(152.4	)		(163.4	)		(144.3	)		(136.9	)		(160.9	)		(197.4	)		(198.7	)		(201.8	)		(206.2	)
DAC amortization		112.9			61.5			99.2			62.8			65.9			90.1			108.8			108.0			120.8
DAC deferral net of amortization		(39.5	)		(101.9	)		(45.1	)		(74.2	)		(95.0	)		(107.3	)		(89.9	)		(93.9	)		(85.4	)
PVIF amortization		40.2			43.0			22.7			13.6			29.6			14.4			24.8			20.5			50.8
Other intangibles amortization		2.0			2.0			2.0			2.0			2.0			2.0			2.0			2.0			2.0
Total underwriting, acquisition, insurance and other expenses		441.8			457.7			430.8			411.7			427.1			457.1			444.3			491.2			507.1
Interest		23.7			23.5			23.3			23.0			21.0			22.2			22.8			24.7			24.4
Loss on early retirement of subordinated debt														5.6
Total Benefits and Expenses		1,404.1			1,144.2			1,063.9			1,025.5			1,090.2			1,056.8			1,050.4			1,099.1			1,087.7
Income Before Federal Income Tax and Cumulative Effect of Accounting Change		(240.7	)		44.4			35.4			187.7			178.7			645.7			208.6			259.6			318.4
Federal income taxes		(104.3	)		(6.6	)		(6.1	)		45.0			45.4			196.2			53.7			72.6			118.7
Income Before Cumulative Effect of Accounting Change		(136.4	)		51.0			41.6			142.7			133.3			449.6			155.0			187.0			199.7
Cumulative effect of accounting change																	(255.2	)		(24.5	)		—			—
Net Income	$	(136.4	)	$	51.0		$	41.6		$	142.7		$	133.3		$	194.3		$	130.5		$	187.0		$	199.7
Less:
Restructuring charges		1.3			1.7			(3.6	)		(8.8	)		(12.9	)		(9.8	)		(7.5	)		(3.5	)		(2.9	)
Realized gains (losses) on investments		(23.6	)		(33.3	)		(58.2	)		(1.1	)		6.4			42.0			(7.9	)		(11.6	)		(14.5	)
Gains (losses) on derivatives		0.1			0.2			(1.2	)		(0.6	)		5.9			(5.7	)		(2.5	)		(1.8	)		(3.4	)
Net gain on reinsurance derivative/trading account securities																	2.7			(2.7	)		6.7			(3.7	)
Reserve development on business sold through reinsurance/ amortization of deferred gain		(176.4	)		(8.2	)		(0.1	)		(0.1	)		(18.5	)		0.2			0.2			0.2			0.2
Gain on sale of subsidiaries/ businesses					(9.4	)																	15.6			45.9
Loss on early retirement of subordinated debt														(3.7	)
Mark-to-market adjustment on reclassification from AFS to trading account securities																	241.5
Cumulative effect of accounting change																	(255.2	)		(24.5	)		—			—
Income from Operations	$	62.1		$	100.0		$	104.8		$	153.3		$	156.0		$	178.7		$	175.3		$	181.4		$	178.2
Roll Forward of Deferred Acquisition Costs
Balance at beginning-of-period	$	3,031.6		$	2,840.7		$	2,939.7		$	2,884.5		$	2,660.3		$	2,879.7		$	3,147.1		$	2,999.0		$	3,521.4
Deferral		152.4			163.4			144.3			136.9			160.9			197.4			198.7			201.8			206.2
Amortization		(112.9	)		(61.5	)		(99.2	)		(62.8	)		(65.9	)		(90.1	)		(108.8	)		(108.0	)		(120.8	)
Included in Total Benefits and Expenses		39.5			101.9			45.1			74.2			95.0			107.3			89.9			93.9			85.4
Adjustment related to realized (gains) losses on available-for-sale securities		22.9			17.8			30.0			8.3			(60.6	)		(27.9	)		(17.6	)		(6.0	)		(6.2	)
Adjustment related to unrealized (gains) losses on available-for-sale securities		(267.1	)		(34.2	)		(119.4	)		(334.0	)		182.2			145.2			(201.1	)		442.7			(271.2	)
Foreign currency translation adjustment		13.8			13.7			(10.9	)		27.2			2.8			42.8			19.9			(8.4	)		(2.5	)
Other		(0.0	)																	(39.3	)		0.2			(0.1	)
Balance at end-of-period	$	2,840.8		$	2,939.7		$	2,884.5		$	2,660.3		$	2,879.7		$	3,147.1		$	2,999.0		$	3,521.4		$	3,326.8
Roll Forward of Present Value of In-Force
Balance at beginning-of-period	$	1,321.4		$	1,286.9		$	1,250.1		$	1,223.1		$	1,220.8		$	1,192.5		$	1,196.5		$	1,180.0		$	1,155.8
Amortization		(40.2	)		(43.0	)		(22.7	)		(13.6	)		(29.6	)		(14.4	)		(24.8	)		(20.5	)		(50.8	)
Foreign currency translation adjustment		5.7			6.1			(4.3	)		11.2			1.3			18.4			8.9			(3.7	)		(1.1	)
Other					0.1															(0.6	)
Balance at end-of-period	$	1,286.9		$	1,250.1		$	1,223.1		$	1,220.8		$	1,192.5		$	1,196.5		$	1,180.0		$	1,155.8		$	1,103.9

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Reconciliation of Business Segments to Consolidated Balance Sheets

Unaudited [Millions of Dollars]

	Lincoln Retirement						Life Insurance						Investment Management				Lincoln UK
	Sep 2004			Dec 2003			Sep 2004			Dec 2003			Sep 2004		Dec 2003		Sep 2004			Dec 2003
ASSETS
Investments
Corporate bonds	$	13,508.6		$	13,111.1		$	8,829.9		$	8,365.3		$	511.0	$	518.1	$	719.1		$	697.8
U.S. government bonds		12.1			51.8			63.7			68.8			0.0		0.0		(0.0	)		20.0
Foreign government bonds		291.7			275.9			184.0			158.1			6.7		4.0		318.4			342.1
Asset/mortgage backed securities		3,368.6			3,168.4			1,688.4			1,390.6			100.8		65.3
State and municipal bonds		97.6			89.2			52.8			50.0			1.2		1.2
Preferred stocks-redeemable		37.3			35.4			25.5			24.0
Common stocks		0.3			—			0.2			—							46.9			50.2
Preferred stocks-equity		43.4			43.4			14.7			14.3			2.7		2.8
Total AFS Securities		17,359.6			16,775.3			10,859.1			10,071.2			622.4		591.5		1,084.5			1,110.1
Trading Securities		1,176.3			1,195.9
Mortgage loans		1,936.5			2,201.7			1,528.8			1,577.0			64.0		75.0		0.1			0.3
Real estate					—													0.2			0.2
Policy loans		442.3			446.4			1,424.0			1,471.5							5.6			6.6
Allocated investments		3,750.9			3,577.8			1,330.1			1,223.4			126.6		102.8
Other long-term investments		34.7			33.4			12.1			14.9
Total Investments		24,700.2			24,230.4			15,154.1			14,358.0			813.0		769.3		1,090.4			1,117.2
Notes receivable from LNC		194.4			271.3			75.2			202.6			132.3		45.5
Cash and invested cash		(39.8	)		(120.2	)		(30.0	)		(25.4	)		43.9		89.1		209.8			160.2
Property and equipment		10.4			7.5			2.1			2.8			33.1		38.2		18.8			19.5
Premium and fees receivable		0.8			9.8			19.3			33.2			34.7		51.3
Accrued investment income		250.0			243.9			196.7			174.0			9.1		8.5		30.4			21.6
Assets held in separate accounts		36,849.5			34,459.0			1,913.8			1,795.8							6,467.7			6,390.3
Federal income tax recoverable
Amount recoverable from reinsurers		1,135.5			1,348.6			1,112.3			1,026.8
Deferred acquisition costs		984.6			854.6			1,646.4			1,578.3							578.9			620.7
Other intangible assets		74.0			45.2									24.7		33.9
Present value of in-force		94.9			113.2			742.8			808.6							266.2			274.7
Goodwill		64.1			64.1			855.1			855.1			260.8		300.7		15.0			14.8
Other		130.5			130.6			436.2			429.9			201.3		224.5		68.2			65.7
Total Assets	$	64,449.1		$	61,657.9		$	22,124.1		$	21,239.8		$	1,553.0	$	1,561.1	$	8,745.4		$	8,684.7

	Corporate and Other Operations						Consolidating Adjustments						Consolidated
	Sep 2004			Dec 2003			Sep 2004			Dec 2003			Sep 2004		Dec 2003
ASSETS
Investments
Corporate bonds	$	3,181.4		$	3,176.2		$	—		$	—		$	26,750.0	$	25,868.5
U.S. government bonds		87.0			85.2									162.9		225.8
Foreign government bonds		433.0			414.5									1,233.8		1,194.6
Asset/mortgage backed securities		635.6			571.4									5,793.4		5,195.6
State and municipal bonds		17.2			12.3									168.8		152.8
Preferred stocks-redeemable		51.1			72.7									113.9		132.2
Common stocks		39.1			48.1									86.5		98.4
Preferred stocks-equity		30.7			40.1									91.6		100.7
Total AFS Securities		4,475.2			4,420.5									34,400.8		32,968.6
Trading securities		2,047.4			1,924.3									3,223.6		3120.1
Mortgage loans		301.9			341.0									3,831.3		4,195.0
Real estate		134.8			112.7									135.1		112.9
Policy loans														1,871.9		1,924.4
Allocated investments		(5,207.6	)		(4,904.0	)								—		—
Other long-term investments		417.1			408.5									463.8		456.7
Total Investments		2,168.8			2,302.9									43,926.6		42,777.6
Investments In Consolidated Subs		5,387.6			5,058.0			(5,387.6	)		(5,058.0	)
Notes receivable from LNC		(262.2	)		(382.7	)		(139.7	)		(136.6	)		—		—
Cash and invested cash		1,795.0			1,607.5			17.0			—			1,996.0		1,711.2
Property and equipment		153.3			167.2			—			—			217.7		235.2
Premium and fees receivable		194.0			257.8			—			—			248.8		352.1
Accrued investment income		87.0			74.7			—			—			573.2		522.7
Assets held in separate accounts		—			—			4,426.8			3,920.0			49,657.9		46,565.2
Federal income tax recoverable		—			—			—			45.9			—		45.9
Amount recoverable from reinsurers		4,926.9			5,712.7			(142.7	)		(248.9	)		7,031.9		7,839.2
Deferred acquisition costs		1.5			1.8			115.3			91.8			3,326.8		3,147.1
Other intangible assets		—			—			—			—			98.7		79.1
Present value of in-force		—			—			—			—			1,103.9		1,196.5
Goodwill		—			—			—			—			1,195.0		1,234.7
Other		290.3			290.5			(125.7	)		(102.9	)		1,000.7		1,038.3
Total Assets	$	14,742.2		$	15,090.1		$	(1,236.7	)	$	(1,488.7	)	$	110,377.1	$	106,744.9

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Reconciliation of Business Segments to Consolidated Balance Sheets

Unaudited [Millions of Dollars]

	Lincoln Retirement				Life Insurance					Investment Management				Lincoln UK
	Sep 2004		Dec 2003		Sep 2004		Dec 2003			Sep 2004		Dec 2 003		Sep 2004			Dec 2003
LIABILITIES and SHAREHOLDERS’ EQUITY
Liabilities
Insurance and Inv Contract Liabilities:
Life and annuity reserves	$	2,299.8	$	2,598.1	$	15,160.8	$	14,690.4		$	—	$	—	$	1,385.2		$	1,400.3
Health reserves						0.3		0.3							46.5			49.2
Unpaid claims - life and health		43.0		50.8		126.3		112.0							46.4			49.3
Unearned premiums						0.0		0.0
Premium deposit funds		21,484.1		21,050.4		18.0		18.4							27.5			29.5
Participating policyholders’ funds						165.2		155.1
Other policyholders’ funds						695.5		673.0
Liability related to separate accounts		36,849.5		34,459.0		1,913.8		1,795.8							6,467.7			6,390.3
Total Insurance and Inv Contract Liabilities		60,676.4		58,158.3		18,080.1		17,445.1			—		—		7,973.2			7,918.6
Federal income taxes		394.0		346.6		178.0		167.3			79.6		28.1		38.5			19.0
Notes payable to LNC		21.4		1.0				8.5
Embedded derivative - modco		80.8		85.2		1.8		(0.3	)
Other liabilities		180.7		159.3		539.0		487.2			934.9		904.3		216.1			227.9
Deferred gain on indemnity reinsurance
Total Liabilities		61,353.4		58,750.4		18,798.9		18,107.8			1,014.5		932.3		8,227.7			8,165.5
Net unrealized gains (losses) on securities		457.7		465.6		223.0		235.1			2.7		2.9		26.6			26.8
Gains (losses) on derivatives		7.5		8.2		10.5		12.1
Foreign currency translation adjustment		—		—		—		—			—		1.0		99.0			90.1
Other shareholders’ equity		2,630.6		2,433.7		3,091.7		2,884.7			535.8		624.8		438.6			448.1
Minimum pension liability adjustment															(46.5	)		(45.8	)
Shareholders’ Equity		3,095.7		2,907.5		3,325.2		3,131.9			538.5		628.7		517.7			519.2
Total Liabilities and S/Hs’ Equity	$	64,449.1	$	61,657.9	$	22,124.1	$	21,239.8		$	1,553.0	$	1,561.1	$	8,745.4		$	8,684.7

	Corporate and Other Operations						Consolidating Adjustments						Consolidated
	Sep 2004			Dec 2003			Sep 2004			Dec 2003			Sep 2004			Dec 2003
LIABILITIES and SHAREHOLDERS’ EQUITY
Liabilities
Insurance and Inv Contract Liabilities:
Life and annuity reserves	$	1,367.2		$	2,123.4			—		$	(93.9	)	$	20,213.0		$	20,718.3
Health reserves		2,750.3			2,782.0			—			—			2,797.1			2,831.5
Unpaid claims - life and health		853.4			848.9			(2.1	)		(2.6	)		1,067.0			1,058.4
Unearned premiums		7.5			104.5			—			—			7.5			104.5
Premium deposit funds		114.4			133.7			574.9			537.4			22,218.9			21,769.3
Participating policyholders’ funds		—			—			—			—			165.2			155.1
Other policyholders’ funds		7.9			7.9			—			—			703.4			680.9
Liability related to separate accounts		—			—			4,426.8			3,920.0			49,657.9			46,565.2
Total Insurance and Inv Contract Liabilities		5,100.8			6,000.2			4,999.6			4,360.9			96,830.1			93,883.2
Federal income taxes		(607.0	)		(607.6	)		0.8			46.7			83.8			—
Short-term debt		—			44.4			—			(0.4	)		0.0			44.0
Long-term debt		1,315.4			1,117.5			—			—			1,315.4			1,117.5
Junior subordinated debentures issued to affiliated trusts		341.1			341.3			—			—			341.1			341.3
Notes payable to LNC		101.0			126.8			(122.4	)		(136.2	)		(0.0	)		—
Embedded derivative - modco		282.9			267.3			—			—			365.5			352.3
Other liabilities		3,393.5			3,192.3			(726.3	)		(700.9	)		4,537.9			4,270.1
Deferred gain on indemnity reinsurance		932.4			924.8			—			—			932.4			924.8
Total Liabilities		10,860.1			11,407.1			4,151.7			3,570.1			104,406.3			100,933.2
Net unrealized gains (losses) on securities		70.1			57.5			—			5.2			780.1			793.1
Gains (losses) on derivatives		1.8			1.8			—			—			19.8			22.1
Foreign currency translation adjustment		10.4			10.4			7.5			7.5			116.9			109.0
Other shareholders’ equity		3,809.1			3,622.6			(5,396.0	)		(5,071.5	)		5,109.8			4,942.6
Minimum pension liability adjustment		(9.3	)		(9.3	)		—			—			(55.8	)		(55.1	)
Shareholders’ Equity		3,882.2			3,683.1			(5,388.5	)		(5,058.8	)		5,970.8			5,811.6
Total Liabilities and S/Hs’ Equity	$	14,742.2		$	15,090.1		$	(1,236.7	)	$	(1,488.7	)	$	110,377.1		$	106,744.9

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Five Year Comparative Balance Sheet

Unaudited [Millions of Dollars except Common Share Data]

	1999			2000		2001			2002			2003
ASSETS
Investments
Corporate bonds	$	21,119.5		$	21,249.7	$	23,105.1		$	25,934.7		$	25,868.5
U.S. government bonds		538.3			542.9		410.5			513.6			225.8
Foreign government bonds		1,447.5			1,321.1		1,174.7			1,110.2			1,194.6
Mortgage backed securities		4,404.0			4,160.4		3,524.7			5,015.5			5,195.6
State and municipal bonds		14.7			14.6		44.7			114.4			152.8
Preferred stocks-redeemable		164.7			161.2		85.9			79.0			132.2
Common stocks		514.5			436.6		319.3			228.0			98.4
Preferred stocks-equity		89.5			113.1		151.2			109.2			100.7
Total AFS Securities		28,292.6			27,999.5		28,816.1			33,104.7			32,968.6
Trading securities													3,120.1
Mortgage loans		4,735.4			4,663.0		4,535.5			4,205.5			4,195.0
Real estate		256.2			282.0		267.9			279.7			112.9
Policy loans		1,892.4			1,960.9		1,939.7			1,945.6			1,924.4
Other long-term investments		401.8			463.3		553.8			464.4			456.7
Total Investments		35,578.4			35,368.6		36,113.1			39,999.9			42,777.6
Invest in unconsol affiliates		25.8			6.4		8.1
Cash and invested cash		1,895.9			1,927.4		3,095.5			1,690.5			1,711.2
Property and equipment		203.8			228.2		257.5			242.1			235.2
Premiums and fees receivable		259.6			296.7		400.1			212.9			352.1
Accrued investment income		533.2			546.4		563.5			536.7			522.7
Assets held in separate accounts		53,654.2			50,579.9		44,833.4			36,178.3			46,565.2
Federal income taxes recoverable		345.0			234.1		55.5			317.7			45.9
Amounts recoverable from reinsurers		3,954.3			3,747.7		6,030.4			7,280.0			7,839.2
Deferred acquisition costs		2,800.3			3,070.5		2,866.8			2,939.7			3,147.1
Other intangible assets		92.3			73.7		68.6			73.0			79.1
Present value of in-force		1,654.2			1,483.3		1,362.5			1,250.1			1,196.5
Goodwill		1,423.0			1,286.0		1,211.8			1,233.2			1,234.7
Other		675.7			1,021.6		1,174.9			1,230.3			1,038.3
Total Assets	$	103,095.7		$	99,870.6	$	98,041.6		$	93,184.6		$	106,744.9
LIABILITIES and SHAREHOLDERS’ EQUITY
Liabilities
Insurance and Investment Contract Liabilities:
Life and annuity reserves	$	17,071.4		$	17,841.2	$	17,917.0		$	19,950.3		$	20,718.3
Health reserves		2,507.8			2,523.8		2,537.9			2,689.0			2,831.5
Unpaid claims-life and health		1,269.8			1,316.6		1,087.5			778.4			1,058.4
Unearned premiums		75.8			46.5		66.9			141.2			104.5
Premium deposit funds		19,624.1			17,715.5		18,585.0			20,518.8			21,769.3
Participating policyholders’ funds		132.0			139.4		100.2			156.7			155.1
Other policyholders’ funds		472.6			522.2		562.7			610.9			680.9
Liability related to separate accounts		53,654.2			50,579.9		44,833.4			36,178.3			46,565.2
Total Ins and Inv Contr Liabilities		94,807.7			90,685.1		85,690.6			81,023.6			93,883.2
Short-term debt		460.2			312.9		350.2			153.0			44.0
Long-term debt		712.0			712.2		861.8			1,119.2			1,117.5
Junior subordinated debentures issued to affiliated trusts		745.0			745.0		474.7			392.7			341.3
Embedded derivative - modco													352.3
Other liabilities		2,107.0			2,434.7		4,216.1			4,171.5			4,270.1
Deferred gain on indemnity reinsurance							1,144.5			977.1			924.8
Total Liabilities		98,831.9			94,890.0		92,737.8			87,837.2			100,933.2
Unrealized gains (losses)		(465.7	)		12.0		217.2			781.6			815.1
Foreign currency		30.1			22.0		(8.0	)		50.8			109.0
Minimum pension liability adjustment							(36.0	)		(97.8	)		(55.1	)
S/Hs’ equity-other		4,699.5			4,946.6		5,130.6			4,612.9			4,942.6
Total Shareholders’ Equity		4,263.9			4,980.6		5,303.8			5,347.5			5,811.6
Total Liabilities and Shareholders’ Equity	$	103,095.7		$	99,870.6	$	98,041.6		$	93,184.6		$	106,744.9
Shareholders’ Equity Per Share
Book Value, Excluding AOCI	$	23.98		$	25.88	$	27.39		$	25.97		$	27.69
Common shares outstanding (in millions)		196.0			191.2		187.3			177.6			178.5

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Quarterly Balance Sheet

Unaudited [Millions of Dollars, except Common Share Data]

	Sep 2002			Dec 2002			Mar 2003			Jun 2003			Sep 2003			Dec 2003			Mar 2004			Jun 2004			Sep 2004
ASSETS
Investments
Corporate bonds	$	25,484.6		$	25,934.7		$	26,936.1		$	28,419.3		$	28,286.3		$	25,868.5		$	26,209.2		$	25,638.1		$	26,750.0
U.S. government bonds		495.3			513.6			537.0			561.9			522.5			225.8			234.2			156.3			162.9
Foreign government bonds		1,038.6			1,110.2			1,206.6			1,349.4			1,352.9			1,194.6			1,321.0			1,223.8			1,233.8
Mortgage backed securities		4,843.7			5,015.5			4,960.1			4,754.9			4,992.7			5,195.6			5,617.0			5,524.1			5,793.4
State and municipal bonds		97.8			114.4			134.9			150.4			164.0			152.8			164.1			164.8			168.8
Preferred stocks-redeemable		76.8			79.0			112.0			118.5			65.6			132.2			120.9			100.7			113.9
Common stocks		237.2			228.0			145.0			146.6			131.8			98.4			97.4			92.3			86.5
Preferred stocks - equity		160.3			109.2			104.5			110.7			111.2			100.7			100.2			90.5			91.6
Total AFS Securities		32,434.3			33,104.7			34,136.2			35,611.8			35,626.9			32,968.6			33,864.1			32,990.5			34,400.8
Trading securities																	3120.1			3191.3			3087.9			3,223.6
Mortgage loans		4,285.2			4,205.5			4,235.5			4,314.3			4,151.5			4,195.0			3,988.5			3,865.4			3,831.3
Real estate		286.4			279.7			242.0			240.3			249.8			112.9			104.8			104.3			135.1
Policy loans		1,899.0			1,945.6			1,928.8			1,919.6			1,910.5			1,924.4			1,876.7			1,871.3			1,871.9
Other long-term investments		457.7			464.4			465.7			505.6			484.7			456.7			476.3			442.9			463.8
Total Investments		39,362.6			39,999.9			41,008.4			42,591.6			42,423.3			42,777.6			43,501.7			42,362.5			43,926.6
Cash and invested cash		1,599.9			1,690.5			1,635.5			1,945.8			1,960.6			1,711.2			2,255.5			2,213.7			1,996.0
Property and equipment		252.7			242.1			239.4			239.1			237.3			235.2			229.5			225.5			217.7
Premiums and fees receivable		577.2			212.9			194.0			396.0			306.5			352.1			337.5			265.2			248.8
Accrued investment income		568.2			536.7			567.2			555.1			560.2			522.7			547.9			543.7			573.2
Assets held in separate accounts		34,069.0			36,178.3			34,775.2			39,942.8			41,283.4			46,565.2			48,557.9			49,343.7			49,657.9
Federal income taxes recoverable		340.7			317.7			89.1									45.9						204.0
Amount recoverable from reinsurers		7,094.5			7,280.0			7,323.5			7,377.1			7,537.9			7,839.2			7,865.7			7,138.7			7,031.9
Deferred acquisition costs		2,840.7			2,939.7			2,884.5			2,660.3			2,879.7			3,147.1			2,999.0			3,521.4			3,326.8
Other intangible assets		71.8			73.0			74.2			74.7			75.5			79.1			85.8			93.6			98.7
Present value of in-force		1,286.9			1,250.1			1,223.1			1,220.8			1,192.5			1,196.5			1,180.0			1,155.8			1,103.9
Goodwill		1,232.7			1,233.2			1,233.0			1,233.6			1,233.7			1,234.7			1,235.2			1,235.0			1,195.0
Other		1,187.1			1,230.3			1,250.6			1,295.9			1,134.9			1,038.3			1,074.2			1,015.1			1,000.7
Total Assets	$	90,483.9		$	93,184.6		$	92,497.6		$	99,532.8		$	100,825.5		$	106,744.9		$	109,869.9		$	109,317.9		$	110,377.1
LIABILITIES and SHAREHOLDERS’ EQUITY
Liabilities
Insurance and Inv Contract Liabilities:
Life and annuity reserves	$	19,142.5		$	19,950.3		$	20,025.6		$	20,194.5		$	20,459.2		$	20,718.3		$	20,882.5		$	20,324.0		$	20,213.0
Health reserves		2,448.3			2,689.0			2,689.9			2,703.3			2,657.9			2,831.5			2,822.1			2,841.1			2,797.1
Unpaid claims - life and health		1,100.9			778.4			763.1			997.1			1,041.2			1,058.4			1,076.8			1,083.5			1,067.0
Unearned premiums		185.8			141.2			141.1			24.0			26.9			104.5			104.3			9.3			7.5
Premium deposit funds		20,054.4			20,518.8			21,070.5			21,437.7			21,680.2			21,769.3			21,827.4			22,017.0			22,218.9
Participating policyholders’ funds		90.5			156.7			166.3			193.8			179.2			155.1			171.1			165.9			165.2
Other policyholders’ funds		595.7			610.9			607.1			621.8			671.5			680.9			688.1			698.5			703.4
Liab related to separate accounts		34,069.0			36,178.3			34,775.2			39,942.8			41,283.4			46,565.2			48,557.9			49,343.7			49,657.9
Total Ins and Inv Contr Liabilities		77,687.1			81,023.6			80,238.8			86,115.0			87,999.6			93,883.2			96,130.3			96,483.1			96,830.1
Federal income taxes											72.0			37.1						108.1						83.8
Short-term debt		120.0			153.0			125.4			83.4			76.5			44.0			38.0			30.0			0.0
Long-term debt		1,118.1			1,119.2			1,118.6			1,121.4			1,118.5			1,117.5			1,317.7			1,313.7			1,315.4
Junior subordinated debentures issued to affiliated trusts		390.6			392.7			390.8			397.1			333.6			341.3			344.7			337.6			341.1
Embedded derivative - modco																	352.3			440.6			252.6			365.5
Other liabilities		4,661.9			4,171.5			4,214.8			4,989.0			4,724.8			4,270.1			4,440.4			4,493.6			4,537.9
Deferred gain on indemnity reinsurance		1,069.5			977.1			959.0			938.9			949.0			924.8			906.6			888.4			932.4
Total Liabilities		85,047.1			87,837.2			87,047.6			93,716.9			95,239.1			100,933.2			103,726.4			103,799.0			104,406.3
Unrealized gns-inv.		817.5			753.3			872.0			1,117.8			804.5			793.1			1,038.0			412.0			780.1
Gains - derivatives		27.3			28.3			25.0			28.8			23.2			22.1			29.0			18.5			19.8
Foreign currency		35.4			50.8			39.8			68.4			67.0			109.0			128.9			120.8			116.9
Minimum pension liability adj		(35.2	)		(97.8	)		(97.2	)		(98.8	)		(99.0	)		(55.1	)		(56.6	)		(56.0	)		(55.8	)
S/Hs’ equity-other		4,591.8			4,612.9			4,610.5			4,699.8			4,790.6			4,942.6			5,004.2			5,023.6			5,109.8
Total Shareholders’ Equity		5,436.8			5,347.5			5,450.0			5,815.9			5,586.4			5,811.6			6,143.5			5,518.9			5,970.8
Total Liabilities and Shareholders’ Equity	$	90,483.9		$	93,184.6		$	92,497.6		$	99,532.8		$	100,825.5		$	106,744.9		$	109,869.9		$	109,317.9		$	110,377.1
Shareholders’ Equity Per Share
Book Value, Excluding AOCI	$	25.87		$	25.97		$	25.94		$	26.41		$	26.87		$	27.69		$	27.99		$	28.51		$	29.23
Common shares outstanding (in millions)		177.5			177.6			177.7			178.0			178.3			178.5			178.8			176.2			174.8

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Lincoln Retirement

Income Statements & Operational Data

Unaudited [Millions of Dollars]

For the Year Ended December 31	1999			2000			2001			2002			2003			YTD Sep 2003			YTD Sep 2004
Revenue
Premiums	$	65.2		$	64.3		$	77.5		$	47.4		$	21.9		$	16.3		$	23.1
Surrender charges		37.9			41.8			31.2			31.2			28.9			22.7			18.6
Expense assessments		501.3			591.3			508.6			446.2			441.9			317.1			423.4
Other revenue and fees		14.5			11.0			16.7			3.3			8.7			8.2			(4.3	)
Net investment income		1,509.1			1,430.5			1,399.1			1,457.5			1,483.7			1,114.2			1,127.9
Realized gains (losses) on investments		(12.1	)		(5.2	)		(64.5	)		(196.6	)		(12.5	)		(57.3	)		(41.4	)
Gains (losses) on derivatives								(0.3	)		(1.2	)		(6.6	)		(0.8	)		(9.5	)
Gain (loss) on reinsurance derivative/trading account securities														2.8						2.3
Mark-to-market adjustment on reclassification from AFS to trading account securities														86.0
Total Revenue		2,115.8			2,133.7			1,968.3			1,787.7			2,054.7			1,420.5			1,540.0
Operating Benefits and Expenses
Benefits paid or provided:
Benefits		259.1			254.7			263.9			314.1			181.5			144.5			146.5
Interest credited to policy bal.		925.2			866.1			863.8			903.8			867.7			653.6			625.6
Def. sales inducements net of amortization								(12.1	)		(12.6	)		(14.1	)		(8.5	)		(29.1	)
Total insurance benefits		1,184.3			1,120.8			1,115.7			1,205.3			1,035.1			789.6			743.0
Underwriting, acquisition, insurance and other expenses
Commissions		341.4			326.8			336.3			320.8			318.5			221.7			312.6
Other volume related expenses		42.8			52.0			49.7			64.6			67.5			44.7			117.4
Operating and administrative expenses		208.6			206.6			231.8			231.3			226.2			167.7			172.2
Restructuring charges								2.0			1.6			20.1			14.6			6.1
Taxes, licenses and fees		0.3			9.3			13.7			11.5			17.7			13.7			12.1
Subtotal		593.2			594.8			633.6			629.8			650.0			462.4			620.4
Deferral of acquisition costs								(227.8	)		(229.0	)		(223.4	)		(149.9	)		(309.0	)
DAC amortization								124.4			155.4			120.4			88.9			110.0
DAC deferral net of amortization		(47.7	)		(37.5	)		(103.4	)		(73.6	)		(103.0	)		(60.9	)		(198.9	)
PVIF amortization		15.3			24.2			14.7			31.8			9.5			7.7			17.8
Total underwriting, acquisition, insurance and other expenses		560.8			581.5			544.9			587.9			556.5			409.2			439.3
Goodwill amortization		2.0			(0.6	)		1.2
Total Benefits and Expenses		1,747.1			1,701.7			1,661.8			1,793.3			1,591.7			1,198.8			1,182.3
Income Before Federal Income Tax and Cumulative Effect of Accounting Change		368.7			432.0			306.5			(5.6	)		463.0			221.7			357.7
Federal income taxes		77.2			77.3			34.1			(59.3	)		98.9			31.1			79.2
Income Before Cumulative Effect of Accounting Change		291.5			354.7			272.4			53.7			364.1			190.6			278.5
Cumulative effect of accounting change								(7.3	)					(63.6	)					(21.8	)
Net Income	$	291.5		$	354.7		$	265.1		$	53.7		$	300.5		$	190.6		$	256.8
Less:
Restructuring charges								(1.3	)		(1.0	)		(13.1	)		(9.5	)		(4.0	)
Realized gains (losses) on investments		(7.9	)		(3.4	)		(42.3	)		(127.8	)		(8.2	)		(37.2	)		(26.8	)
Gains (losses) on derivatives								(0.2	)		(0.8	)		(4.3	)		(0.5	)		(6.2	)
Net gain (loss) on reinsurance derivative/trading account securities														1.8						1.4
Mark-to-market adjustment on reclassification from AFS to trading account securities														55.9
Cumulative effect of accounting change								(7.3	)					(63.6	)					(21.8	)
Income from Operations	$	299.4		$	358.1		$	316.2		$	183.4		$	331.9		$	237.8		$	314.1
Effective tax rate on Income from Operations		21.4	%		18.1	%		15.3	%		5.4	%		19.7	%		19.2	%		23.8	%
Revenue	$	2,115.8		$	2,133.7		$	1,968.3		$	1,787.7		$	2,054.7		$	1,420.5		$	1,540.0
Less:
Realized gains (losses) on investments		(12.1	)		(5.2	)		(64.5	)		(196.6	)		(12.5	)		(57.3	)		(41.4	)
Gains (losses) on derivatives								(0.3	)		(1.2	)		(6.6	)		(0.8	)		(9.5	)
Gain (loss) on reinsurance derivative/trading account securities														2.8						2.3
Mark-to-market adjustment on reclassification from AFS to trading account securities														86.0
Operating Revenue	$	2,128.0		$	2,138.9		$	2,033.1		$	1,985.5		$	1,985.1		$	1,478.5		$	1,588.7
Average capital	$	1,562.0		$	1,602.9		$	1,831.4		$	2,339.6		$	2,400.3		$	2,391.9		$	2,556.0
Net Income return on average capital		18.7	%		22.1	%		14.5	%		2.3	%		12.5	%		10.6	%		13.4	%
Income from operations return on average capital		19.2	%		22.3	%		17.3	%		7.8	%		13.8	%		13.3	%		16.4	%
Roll Forward of Deferred Acquisition Costs
Balance at beginning-of-period							$	812.5		$	894.3		$	824.7		$	824.7		$	854.6
Deferral								227.8			229.0			223.4			149.9			309.0
Amortization								(124.4	)		(155.4	)		(120.4	)		(88.9	)		(110.0	)
Included in Total Benefits and Expenses								103.4			73.6			103.0			60.9			198.9
Adjustment related to realized (gains) losses on available-for-sale securities								68.2			73.0			(18.7	)		(2.0	)		(18.0	)
Adjustment related to unrealized (gains) losses on available-for-sale securities								(90.0	)		(201.3	)		(54.3	)		(161.9	)		(8.7	)
Other*								0.2			(14.8	)		—			—			—
Cumulative effect of accounting change																	—			(42.3	)
Balance at end-of-period							$	894.3		$	824.7		$	854.6		$	721.7		$	984.6
Roll Forward of Present Value of In-Force
Balance at beginning-of-period							$	169.2		$	154.5		$	122.7		$	122.7		$	113.2
Amortization								(14.7	)		(31.8	)		(9.5	)		(7.7	)		(17.8	)
Cumulative effect of accounting change																				(0.6	)
Balance at end-of-period							$	154.5		$	122.7		$	113.2		$	115.0		$	94.9

* Includes the transfer of the Legacy Life block of business to the Life Insurance segment in the first quarter of 2002.

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Lincoln Retirement

Income Statements & Operational Data

Unaudited [Millions of Dollars]

For the Quarter Ended	Sep 2002			Dec 2002			Mar 2003			Jun 2003			Sep 2003			Dec 2003			Mar 2004			Jun 2004			Sep 2004
Revenue
Premiums	$	13.4		$	8.7		$	5.5		$	3.0		$	7.8		$	5.6		$	6.5		$	7.4		$	9.2
Surrender charges		8.7			7.4			6.9			8.5			7.4			6.2			5.9			6.0			6.7
Expense assessments		103.9			100.6			97.6			104.3			115.2			124.8			137.3			140.9			145.2
Other revenue and fees		(4.0	)		2.7			(1.4	)		1.3			8.3			0.5			(0.8	)		(2.1	)		(1.3	)
Net investment income		363.5			378.3			367.0			369.8			377.4			369.5			379.0			382.3			366.5
Realized gains (losses) on investments		(43.8	)		(46.1	)		(76.8	)		0.9			18.6			44.7			(5.7	)		(14.5	)		(21.2	)
Gains (losses) on derivatives		(1.1	)		(0.1	)		(1.0	)		(1.5	)		1.7			(5.8	)		(3.7	)		(2.8	)		(3.1	)
Gain (loss) on reinsurance derivative/trading account securities																	2.8			(2.1	)		7.4			(3.0	)
Mark-to-market adjustment on reclassification from AFS to trading account securities																	86.0
Total Revenue		440.7			451.4			397.8			486.4			536.3			634.2			516.5			524.5			499.0
Benefits and Expenses
Benefits paid or provided:
Benefits		107.8			78.4			65.0			34.8			44.6			37.1			54.1			52.0			40.5
Interest credited to policy balances		224.2			231.7			220.1			217.1			216.5			214.0			207.8			208.0			209.9
Def. sales inducements net of amortization		(2.9	)		(3.2	)		(3.3	)		(2.4	)		(2.8	)		(5.6	)		(9.0	)		(9.8	)		(10.4	)
Total insurance benefits		329.1			306.9			281.8			249.5			258.2			245.5			252.8			250.2			240.0
Underwriting, acquisition, insurance and other expenses:
Commissions		83.0			72.8			66.8			74.2			80.7			96.8			102.9			106.2			103.5
Other volume related expenses		19.6			18.1			14.0			14.7			16.1			22.8			38.8			40.7			37.8
Operating and administrative expenses		53.0			69.9			54.0			56.6			57.0			58.5			51.7			58.1			62.4
Restructuring charges											6.2			8.4			5.5			1.8			1.8			2.6
Taxes, licenses and fees		3.0			(0.5	)		5.7			4.3			3.7			4.0			5.2			3.7			3.2
Subtotal		158.6			160.4			140.4			156.0			166.0			187.6			200.5			210.4			209.5
Deferral of acquisition costs		(62.9	)		(50.9	)		(43.6	)		(47.4	)		(58.9	)		(73.5	)		(101.9	)		(105.5	)		(101.5	)
DAC amortization		47.0			28.4			30.1			27.2			31.6			31.5			41.5			44.4			24.2
DAC deferral net of amortization		(16.0	)		(22.5	)		(13.5	)		(20.2	)		(27.2	)		(42.0	)		(60.4	)		(61.2	)		(77.3	)
PVIF amortization		4.1			20.0			2.3			2.1			3.3			1.8			3.3			2.9			11.5
Total underwriting, acquisition, insurance and other expenses		146.7			157.9			129.2			137.9			142.1			147.4			143.4			152.2			143.7
Total Benefits and Expenses		475.8			464.8			411.0			387.4			400.3			392.9			396.2			402.4			383.7
Income Before Federal Income Tax and Cumulative Effect of Accounting Change		(35.1	)		(13.4	)		(13.3	)		99.0			135.9			241.4			120.3			122.1			115.3
Federal income taxes		(28.0	)		(18.4	)		(20.1	)		17.3			33.9			67.9			26.7			28.0			24.5
Income Before Cumulative Effect of Accounting Change		(7.0	)		5.0			6.9			81.7			102.0			173.5			93.6			94.2			90.8
Cumulative effect of accounting change																	(63.6	)		(21.8	)		—			—
Net Income	$	(7.0	)	$	5.0		$	6.9		$	81.7		$	102.0		$	109.9		$	71.8		$	94.2		$	90.8
Less:
Restructuring charges											(4.0	)		(5.5	)		(3.6	)		(1.2	)		(1.2	)		(1.7	)
Realized gains (losses) on investments		(28.0	)		(30.4	)		(50.3	)		1.0			12.1			29.1			(3.7	)		(9.4	)		(13.6	)
Gains (losses) on derivatives		(0.8	)					(0.2	)		(1.4	)		1.1			(3.8	)		(2.4	)		(1.8	)		(2.0	)
Net gain (loss) on reinsurance derivative/trading account securities																	1.8			(1.4	)		4.8			(2.0	)
Mark-to-market adjustment on reclassification from AFS to trading account securities																	55.9
Cumulative effect of accounting change																	(63.6	)		(21.8	)		—			—
Income from Operations	$	21.8		$	35.4		$	57.4		$	86.1		$	94.3		$	94.1		$	102.2		$	101.8		$	110.2
Effective tax rate on Income from Operations		(121.8	)%		(8.1	)%		11.0	%		18.6	%		24.0	%		21.1	%		23.5	%		24.0	%		24.1	%
Revenue	$	440.7		$	451.4		$	397.8		$	486.4		$	536.3		$	634.2		$	516.5		$	524.5		$	499.0
Less:
Realized gains (losses) on investments		(43.8	)		(46.1	)		(76.8	)		0.9			18.6			44.7			(5.7	)		(14.5	)		(21.2	)
Gains (losses) on derivatives		(1.1	)		(0.1	)		(1.0	)		(1.5	)		1.7			(5.8	)		(3.7	)		(2.8	)		(3.1	)
Gain (loss) on reinsurance derivative/trading account securities																	2.8			(2.1	)		7.4			(3.0	)
Mark-to-market adjustment on reclassification from AFS to trading account securities																	86.0
Operating Revenue	$	485.6		$	497.6		$	475.5		$	487.0		$	516.0		$	506.6		$	528.0		$	534.4		$	526.2
Average capital	$	2,411.1		$	2,504.9		$	2,526.7		$	2,262.3		$	2,386.7		$	2,425.4		$	2,532.6		$	2,575.1		$	2,560.5
Net Income return on average capital		(1.2	)%		0.8	%		1.1	%		14.4	%		17.1	%		18.1	%		11.3	%		14.6	%		14.2	%
Income from operations return on average capital		3.6	%		5.7	%		9.1	%		15.2	%		15.8	%		15.5	%		16.1	%		15.8	%		17.2	%
Roll Forward of Deferred Acquisition Costs
Balance at beginning-of-quarter	$	942.7		$	816.0		$	824.7		$	786.2		$	616.3		$	721.7		$	854.6		$	748.7		$	1,056.2
Deferral		62.9			50.9			43.6			47.4			58.9			73.5			101.9			105.5			101.5
Amortization		(47.0	)		(28.4	)		(30.1	)		(27.2	)		(31.6	)		(31.5	)		(41.5	)		(44.4	)		(24.2	)
Included in Total Benefits and Expenses		16.0			22.5			13.5			20.2			27.2			42.0			60.4			61.2			77.3
Adjustment related to realized (gains) losses on available-for-sale securities		10.3			16.1			21.8			7.9			(31.8	)		(16.7	)		(10.2	)		(6.0	)		(1.8	)
Adjustment related to unrealized (gains) losses on available-for-sale securities		(153.1	)		(29.9	)		(73.9	)		(197.9	)		109.9			107.6			(113.9	)		252.4			(147.2	)
Cumulative effect of accounting change																				(42.3	)
Balance at end-of-quarter	$	816.0		$	824.7		$	786.2		$	616.3		$	721.7		$	854.6		$	748.7		$	1,056.2		$	984.6
Roll Forward of Present Value of In-Force
Balance at beginning-of-quarter	$	146.8		$	142.7		$	122.7		$	120.4		$	118.3		$	115.0		$	113.2		$	109.4		$	106.4
Amortization		(4.1	)		(20.0	)		(2.3	)		(2.1	)		(3.3	)		(1.8	)		(3.3	)		(2.9	)		(11.5	)
Cumulative effect of accounting change																				(0.6	)
Balance at end-of-quarter	$	142.7		$	122.7		$	120.4		$	118.3		$	115.0		$	113.2		$	109.4		$	106.4		$	94.9

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Lincoln Retirement

Annuity Account Value Rollforward

Unaudited [Billions of Dollars]

	1999			2000			2001			2002			2003			YTD Sep 2003			YTD Sep 2004
Fixed Annuities- Bal Beg-of-Year	$	18.111		$	18.210		$	16.615		$	18.004		$	20.087		$	20.087		$	21.220
Gross Deposits		2.563			2.074			3.342			3.672			3.125			2.333			2.379
Withdrawals (incl charges) & deaths		(2.521	)		(3.283	)		(2.448	)		(2.637	)		(2.074	)		(1.517	)		(1.640	)
Net flows		0.042			(1.209	)		0.894			1.035			1.051			0.816			0.739
Transfer from (to) var annuities		(0.783	)		(1.329	)		(0.428	)		0.108			(0.817	)		(0.448	)		(0.966	)
Interest credited		0.840			0.944			0.923			0.940			0.899			0.676			0.640
Fixed Annuities-Gross		18.210			16.615			18.004			20.087			21.220			21.131			21.633
Reinsurance Ceded		(1.419	)		(1.221	)		(1.514	)		(2.003	)		(2.353	)		(2.264	)		(2.316	)
Fixed Annuities-Bal End-of-Year	$	16.791		$	15.394		$	16.491		$	18.085		$	18.868		$	18.868		$	19.317
Fixed Annuities Incremental Deposits *		2.310			1.918			3.213			3.600			3.067			2.288			2.328
Variable Annuities-Bal Beg-of-Year	$	33.358		$	41.493		$	39.427		$	34.638		$	27.438		$	27.438		$	35.786
Gross Deposits		2.553			3.165			3.067			2.743			3.119			2.032			4.255
Withdrawals (incl charges) & deaths		(3.760	)		(4.830	)		(3.856	)		(3.325	)		(3.162	)		(2.376	)		(2.865	)
Net flows		(1.207	)		(1.665	)		(0.789	)		(0.582	)		(0.044	)		(0.344	)		1.390
Transfer from (to) fixed annuities		0.787			1.320			0.428			(0.122	)		0.809			0.444			0.928
Invest inc & change in mkt value		8.555			(1.721	)		(4.428	)		(6.497	)		7.583			4.171			0.594
Var Annuities-Bal End-of-Year	$	41.493		$	39.427		$	34.638		$	27.438		$	35.786		$	31.709		$	38.698
Variable Annuities Incremental Deposits *	$	2.409		$	2.667		$	2.624		$	2.569		$	3.019		$	1.965		$	4.131
Total Annuities - Bal Beg-of-Year	$	51.469		$	59.703		$	56.042		$	52.642		$	47.525		$	47.525		$	57.007
Gross Deposits		5.116			5.239			6.409			6.415			6.244			4.365			6.633
Withdrawals (incl charges) & deaths		(6.281	)		(8.113	)		(6.304	)		(5.962	)		(5.236	)		(3.893	)		(4.505	)
Net flows		(1.165	)		(2.874	)		0.105			0.453			1.007			0.472			2.128
Transfers		0.004			(0.009	)					(0.013	)		(0.008	)		(0.003	)		(0.038	)
Interest credited & change in mkt value		9.395			(0.777	)		(3.505	)		(5.558	)		8.482			4.848			1.234
Total Gross Annuities-Bal End-of-Year		59.703			56.042			52.642			47.525			57.007			52.841			60.331
Reinsurance Ceded		(1.419	)		(1.221	)		(1.514	)		(2.003	)		(2.353	)		(2.264	)		(2.316	)
Total Annuities (Net of Ceded) - Bal End-of-Year	$	58.284		$	54.821		$	51.128		$	45.522		$	54.654		$	50.577		$	58.016
Total Annuities Incremental Deposits *		4.719			4.585			5.837			6.169			6.086			4.253			6.460
Var Ann Under Agree - Included above		0.719			0.941			1.077			1.186			2.166			1.820			2.692
*       Incremental Deposits represent gross deposits reduced by transfers from other Lincoln Retirement products.
Fixed Annuities - excluding fixed portion of variable contracts
Deposits	$	0.709		$	0.459		$	1.712		$	1.844		$	1.415		$	1.068		$	0.834
Withdrawals		(1.367	)		(2.271	)		(1.604	)		(1.473	)		(0.934	)		(0.681	)		(0.817	)
Net Flows	$	(0.658	)	$	(1.812	)	$	0.108		$	0.371		$	0.481		$	0.387		$	0.017
Gross Fixed Account Values										$	10.475		$	11.440		$	11.226		$	11.811
Reinsurance Ceded											(2.003	)		(2.353	)		(2.264	)		(2.316	)
Net Fixed Account Values										$	8.473		$	9.087		$	8.962		$	9.495
Variable Annuities - including fixed portion of variable contracts
Deposits	$	4.407		$	4.780		$	4.697		$	4.571		$	4.829		$	3.297		$	5.799
Withdrawals		(4.915	)		(5.842	)		(4.700	)		(4.489	)		(4.302	)	$	(3.212	)		(3.688	)
Net Flows	$	(0.508	)	$	(1.062	)	$	(0.003	)	$	0.082		$	0.527		$	0.085		$	2.111
Variable Account Values										$	37.050		$	45.781		$	41.616		$	48.521
Fixed Portion of Variable Contracts
Deposits	$	1.853		$	1.615		$	1.630		$	1.828		$	1.710		$	1.265		$	1.545
Withdrawals		(1.154	)		(1.012	)		(0.844	)		(1.164	)		(1.140	)		(0.836	)		(0.823	)
Net Flows	$	0.699		$	0.603		$	0.786		$	0.664		$	0.570		$	0.429		$	0.722
Fixed Portion of Variable Account Values										$	9.612		$	9.781		$	9.906		$	9.822
Average Daily Variable Account Values	$	35.932		$	41.776		$	35.573		$	30.826		$	30.372		$	29.197		$	37.467
Annuity Product Spread Information (1)
Net Investment Income (2)		7.22	%		7.38	%		7.38	%		6.98	%		6.41	%		6.51	%		6.30	%
Interest Credited to Policyholders		5.13	%		5.24	%		5.33	%		4.87	%		4.25	%		4.30	%		3.93	%
Spread (2)		2.09	%		2.14	%		2.05	%		2.11	%		2.16	%		2.20	%		2.37	%

(1) For the annuity products spread, the yield on earning assets is calculated as net investment income on fixed product investment portfolios divided by average earning assets. The average crediting rate is calculated using interest credited on annuity products less bonus credits and excess DCA interest, divided by average fixed account values net of co-insured account values. Fixed account values reinsured under modified co-insurance agreements are included in account values for this calculation since assets

(and therefore margin) are retained under these agreements.

(2) The net investment income and spread reported above includes earnings from commercial mortgage loan prepayment and bond make-whole premiums. The impact of these premiums on investment income and spread was 21 bps in the first nine months of 2004, 6 bps in 2003 and 7 bps in 2002.

(3) YTD 2004 includes income from contingent interest received, which contributed $13 million to net investment income or 8 bps to the yield and spread.

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Lincoln Retirement

Annuity Account Value Rollforward

Unaudited [Billions of Dollars]

	Dec 2001			Mar 2002			Jun 2002			Sep 2002			Dec 2002			Mar 2003			Jun 2003			Sep 2003			Dec 2003			Mar 2004			Jun 2004			Sep 2004
Fixed Annuities-Bal Beg-of-Quarter	$	17.317		$	18.004		$	18.178		$	18.680		$	19.562		$	20.087		$	20.612		$	20.864		$	21.132		$	21.220		$	21.280		$	21.476
Gross Deposits		1.218			0.906			0.853			1.091			0.822			0.776			0.778			0.778			0.792			0.817			0.779			0.783
Withdrawals (incl charges) & deaths		(0.562	)		(0.730	)		(0.551	)		(0.825	)		(0.531	)		(0.524	)		(0.501	)		(0.492	)		(0.557	)		(0.571	)		(0.515	)		(0.554	)
Net flows		0.656			0.176			0.302			0.265			0.291			0.253			0.277			0.286			0.235			0.246			0.264			0.228
Transfer from (to) var annuities		(0.213	)		(0.232	)		(0.032	)		0.379			(0.007	)		0.046			(0.250	)		(0.243	)		(0.369	)		(0.399	)		(0.280	)		(0.287	)
Interest credited		0.244			0.230			0.231			0.238			0.240			0.226			0.226			0.225			0.223			0.213			0.211			0.215
Fixed Annuities-Gross		18.004			18.178			18.680			19.562			20.087			20.612			20.864			21.132			21.220			21.280			21.476			21.633
Reinsurance Ceded		(1.514	)		(1.645	)		(1.770	)		(1.913	)		(2.003	)		(2.075	)		(2.169	)		(2.264	)		(2.353	)		(2.350	)		(2.333	)		(2.316	)
Fixed Annuities-Bal End-of-Quarter	$	16.491		$	16.534		$	16.910		$	17.650		$	18.085		$	18.537		$	18.696		$	18.868		$	18.868		$	18.930		$	19.143		$	19.317
Fixed Annuities Incremental Deposits *	$	1.193		$	0.881		$	0.839		$	1.072		$	0.808		$	0.753		$	0.768		$	0.767		$	0.779		$	0.795		$	0.767		$	0.767
Variable Annuities-Bal Beg-of-Quarter	$	30.506		$	34.638		$	35.150		$	31.206		$	25.942		$	27.438		$	26.474		$	30.457		$	31.709		$	35.786		$	37.619		$	38.398
Gross Deposits		0.793			0.808			0.787			0.603			0.545			0.648			0.584			0.800			1.087			1.407			1.424			1.424
Withdrawals (incl charges) & deaths		(0.818	)		(0.896	)		(0.866	)		(0.800	)		(0.763	)		(0.806	)		(0.762	)		(0.809	)		(0.786	)		(0.941	)		(0.988	)		(0.936	)
Net flows		(0.025	)		(0.088	)		(0.079	)		(0.197	)		(0.217	)		(0.158	)		(0.178	)		(0.009	)		0.300			0.465			0.436			0.488
Transfer from (to) fixed annuities		0.213			0.234			0.032			(0.388	)		0.000			(0.048	)		0.249			0.243			0.365			0.400			0.266			0.262
Invest inc & change in mkt value		3.944			0.366			(3.897	)		(4.679	)		1.713			(0.759	)		3.912			1.018			3.412			0.968			0.076			(0.450	)
Var Annuities-Bal End-of-Quarter	$	34.638		$	35.150		$	31.206		$	25.942		$	27.438		$	26.474		$	30.457		$	31.709		$	35.786		$	37.619		$	38.398		$	38.698
Variable Annuities Incremental Deposits *	$	0.725		$	0.725		$	0.744		$	0.573		$	0.528		$	0.629		$	0.560		$	0.776		$	1.053		$	1.370		$	1.381		$	1.380
Total Annuities - Bal Beg-of-Quarter	$	47.824		$	52.643		$	53.329		$	49.886		$	45.504		$	47.525		$	47.086		$	51.321		$	52.841		$	57.007		$	58.900		$	59.874
Gross Deposits		2.011			1.714			1.640			1.694			1.368			1.424			1.363			1.578			1.879			2.223			2.203			2.207
Withdrawals (incl charges) & deaths		(1.380	)		(1.626	)		(1.417	)		(1.626	)		(1.294	)		(1.329	)		(1.263	)		(1.301	)		(1.343	)		(1.512	)		(1.503	)		(1.490	)
Net flows		0.631			0.088			0.223			0.068			0.074			0.095			0.099			0.277			0.536			0.712			0.701			0.716
Transfers					0.002			0.000			(0.009	)		(0.006	)		(0.002	)		(0.002	)		0.001			(0.004	)		0.001			(0.014	)		(0.024	)
Interest credited & change in mkt value		4.188			0.596			(3.666	)		(4.441	)		1.953			(0.532	)		4.137			1.243			3.634			1.181			0.288			(0.235	)
Total Gross Annuities - Bal End-of-Quarter		52.643			53.329			49.886			45.504			47.525			47.086			51.321			52.841			57.007			58.900			59.874			60.331
Reinsurance Ceded		(1.514	)		(1.645	)		(1.770	)		(1.913	)		(2.003	)		(2.075	)		(2.169	)		(2.264	)		(2.353	)		(2.350	)		(2.333	)		(2.316	)
Total Annuities (Net of Ceded) - Bal End-of-Qtr	$	51.129		$	51.684		$	48.116		$	43.591		$	45.522		$	45.011		$	49.152		$	50.577		$	54.654		$	56.549		$	57.541		$	58.015
Total Annuities Incremental Deposits *		1.918			1.606			1.583			1.645			1.336			1.382			1.328			1.543			1.833			2.165			2.148			2.146
Var Ann Under Agree - Included above		1.077			1.207			1.175			1.083			1.186			1.355			1.637			1.820			2.166			2.463			2.618			2.692
*  Incremental Deposits represent gross deposits reduced by transfers from other Lincoln Retirement products.
Fixed Annuities - excluding fixed portion of variable contracts
Deposits	$	0.734		$	0.505		$	0.430		$	0.559		$	0.351		$	0.368		$	0.356		$	0.344		$	0.347		$	0.365		$	0.249		$	0.220
Withdrawals		(0.352	)		(0.463	)		(0.267	)		(0.516	)		(0.228	)		(0.208	)		(0.235	)		(0.238	)		(0.253	)		(0.269	)		(0.261	)		(0.286	)
Net Flows	$	0.382		$	0.042		$	0.163		$	0.042		$	0.123		$	0.160		$	0.121		$	0.106		$	0.094		$	0.096		$	(0.013	)	$	(0.066	)
Gross Fixed Account Values				$	9.761		$	10.048		$	10.219		$	10.475		$	10.759		$	11.001		$	11.226		$	11.440		$	11.649		$	11.755		$	11.811
Reinsurance Ceded					(1.645	)		(1.770	)		(1.913	)		(2.003	)		(2.075	)		(2.169	)		(2.264	)		(2.353	)		(2.350	)		(2.333	)		(2.316	)
Net Fixed Account Values				$	8.116		$	8.278		$	8.306		$	8.473		$	8.684		$	8.832		$	8.962		$	9.087		$	9.299		$	9.422		$	9.495
Variable Annuities - including fixed portion of variable contracts
Deposits	$	1.277		$	1.209		$	1.210		$	1.135		$	1.017		$	1.056		$	1.007		$	1.234		$	1.532		$	1.859		$	1.954		$	1.986
Withdrawals		(1.028	)		(1.163	)		(1.150	)		(1.109	)		(1.066	)		(1.121	)		(1.028	)		(1.063	)		(1.090	)		(1.243	)		(1.241	)		(1.204	)
Net Flows	$	0.249		$	0.046		$	0.060		$	0.026		$	(0.049	)	$	(0.065	)	$	(0.022	)	$	0.172		$	0.442		$	0.616		$	0.713		$	0.782
Variable Account Values				$	43.568		$	39.839		$	35.286		$	37.050		$	36.327		$	40.320		$	41.616		$	45.567		$	47.251		$	48.120		$	48.521
Fixed Portion of Variable Contracts
Deposits	$	0.484		$	0.401		$	0.423		$	0.532		$	0.472		$	0.408		$	0.422		$	0.434		$	0.445		$	0.452		$	0.530		$	0.563
Withdrawals		(0.210	)		(0.267	)		(0.284	)		(0.309	)		(0.303	)		(0.316	)		(0.266	)		(0.254	)		(0.304	)		(0.302	)		(0.253	)		(0.268	)
Net Flows	$	0.274		$	0.134		$	0.139		$	0.223		$	0.169		$	0.093		$	0.156		$	0.180		$	0.141		$	0.151		$	0.277		$	0.294
Fixed Portion of Variable Account Values				$	8.418		$	8.632		$	9.344		$	9.612		$	9.853		$	9.864		$	9.906		$	9.781		$	9.631		$	9.721		$	9.822
Average Daily Variable Account Values	$	33.216		$	34.341		$	33.502		$	28.023		$	27.431		$	26.907		$	29.195		$	31.490		$	33.897		$	37.160		$	37.565		$	37.675
Annuity Product Spread Information (1)
Net Investment Income (2)(3)		7.26	%		7.15	%		7.11	%		6.87	%		6.89	%		6.61	%		6.49	%		6.42	%		6.13	%		6.43	%		6.34	%		6.14	%
Interest Credited to Policyholders		5.28	%		5.14	%		4.92	%		4.76	%		4.72	%		4.42	%		4.29	%		4.20	%		4.09	%		3.97	%		3.93	%		3.90	%
Spread (2)(3)		1.98	%		2.01	%		2.18	%		2.11	%		2.17	%		2.19	%		2.20	%		2.22	%		2.04	%		2.46	%		2.41	%		2.24	%

(1) For the annuity products spread, the yield on earning assets is calculated as net investment income on fixed product investment portfolios divided by average earning assets. The average crediting rate is calculated using interest credited on annuity products less bonus credits and excess DCA interest, divided by average fixed account values net of co-insured account values. Fixed account values reinsured under modified co-insurance agreements are included in account values for this calculation since assets (and therefore margin) are retained under these agreements.

(2) The net investment income and spread reported above includes earnings from commercial mortgage loan prepayment and bond make-whole premiums. The impact of these premiums on investment income and spread was 19 bps in the 3rd quarter of 2004, 38 bps in the 2nd quarter of 2004, 7 bps in the 1st quarter of 2004, 15 bps in the 3rd quarter of 2003 and 5 bps in the 2nd quarter of 2003.

(3) 1st quarter 2004 includes income from contingent interest received, which contributed $13 million to net investment income or 27 bps to the yield and spread.

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Life Insurance Segment

Income Statements

Unaudited [Millions of Dollars]

For the Year Ended December 31	1999			2000			2001			2002			2003			YTD Sep 2003			YTD Sep 2004
Revenue
Premiums	$	235.8		$	227.3		$	212.4		$	203.8		$	194.9		$	142.7		$	140.4
Surrender charges		66.3			66.4			66.1			54.1			53.6			37.5			37.6
Mortality assessments		444.6			465.2			499.4			501.5			516.7			388.2			388.2
Expense assessments		165.8			191.8			191.4			199.5			201.8			146.8			150.6
Other revenue and fees		9.8			14.2			17.9			23.7			28.0			19.5			23.4
Net investment income		840.1			871.5			910.2			899.1			911.1			683.0			709.0
Realized gains (losses) on investments		(2.2	)		(17.4	)		(57.6	)		(98.2	)		3.6			(16.9	)		(12.4	)
Gains (losses) on derivatives								0.7			1.5			(3.6	)		(0.4	)		0.1
Gain (loss) on reinsurance derivative/trading account securities														(0.6	)					(2.1	)
Total Revenue		1,760.4			1,819.0			1,840.6			1,785.0			1,905.5			1,400.5			1,434.8
Benefits and Expenses
Benefits paid or provided:
Benefits		430.4			411.5			418.6			427.4			416.0			332.8			297.6
Div accum & div to policyholders		81.5			80.8			78.5			76.0			81.6			47.8			53.8
Interest credited to policy bal.		493.8			525.4			569.9			598.6			598.2			450.7			432.6
Total insurance benefits		1,005.8			1,017.8			1,067.0			1,101.9			1,095.8			831.3			784.0
Underwriting, acquisition, insurance and other expenses:
Commissions		163.4			152.8			142.1			139.8			141.8			97.5			94.5
Other volume related expenses		185.6			200.9			176.4			190.4			208.3			145.7			137.3
Operating and administrative expenses		171.2			169.4			166.8			162.2			166.2			120.8			125.7
Restructuring Charges								5.4						19.5			15.3			4.1
Taxes, licenses and fees		51.8			48.5			49.2			53.2			62.2			44.3			36.7
Par policyholder interests		3.3			1.1
Subtotal		575.2			572.6			539.9			545.6			598.0			423.6			398.3
Deferral of acquisition costs								(324.8	)		(336.5	)		(370.8	)		(258.7	)		(255.5	)
DAC amortization								95.0			105.8			135.5			97.5			157.4
DAC deferral net of amortization		(235.0	)		(286.5	)		(229.8	)		(230.7	)		(235.2	)		(161.2	)		(98.2	)
PVIF amortization		58.8			103.7			75.9			73.9			81.4			61.5			65.8
Total underwriting, acquisition, insurance and other expenses		399.1			389.8			385.9			388.8			444.2			324.0			365.9
Goodwill amortization		23.4			23.7			23.7
Total Benefits and Expenses		1,428.2			1,431.4			1,476.6			1,490.8			1,540.1			1,155.3			1,149.9
Income Before Federal Income Tax and Cumulative Effect of Accounting Change		332.2			387.6			364.0			294.2			365.4			245.2			284.9
Federal income taxes		120.6			141.6			129.2			88.1			113.9			75.3			90.6
Income Before Cumulative Effect of Accounting Change		211.5			246.0			234.8			206.1			251.5			169.9			194.3
Cumulative effect of accounting changes								(5.5	)					0.6						(2.7	)
Net Income	$	211.5		$	246.0		$	229.3		$	206.1		$	252.1		$	169.9		$	191.6
Less:
Restructuring charges								(3.5	)					(12.7	)		(10.0	)		(2.7	)
Realized gains (losses) on investments		(0.5	)		(10.7	)		(38.5	)		(63.8	)		2.3			(11.0	)		(8.1	)
Gains (losses) on derivatives								1.6			1.0			(2.3	)		(0.3	)		0.1
Net gain (loss) on reinsurance derivative/trading account securities														(0.4	)					(1.4	)
Cumulative effect of accounting change								(5.5	)					0.6						(2.7	)
Income from Operations	$	212.0		$	256.7		$	275.3		$	269.0		$	264.5		$	191.2		$	206.3
Effective tax rate on Income from Operations		36.6	%		36.6	%		35.4	%		31.2	%		31.4	%		31.2	%		32.0	%
Revenue	$	1,760.4		$	1,819.0		$	1,840.6		$	1,785.0		$	1,905.5		$	1,400.5		$	1,434.8
Less:
Realized gains (losses) on investments		(2.2	)		(17.4	)		(57.6	)		(98.2	)		3.6			(16.9	)		(12.4	)
Gains (losses) on derivatives								0.7			1.5			(3.6	)		(0.4	)		0.1
Gain (loss) on reinsurance derivative/trading account securities														(0.6	)					(2.1	)
Operating Revenue	$	1,762.6		$	1,836.4		$	1,897.5		$	1,881.7		$	1,906.1		$	1,417.8		$	1,449.2
Average capital	$	2,712.3		$	2,641.3		$	2,734.4		$	2,846.3		$	2,849.9		$	2,835.3		$	3,002.4
Net Income return on average capital		7.8	%		9.3	%		8.4	%		7.2	%		8.8	%		8.0	%		8.5	%
Income from operations return on average capital		7.8	%		9.7	%		10.1	%		9.4	%		9.3	%		9.0	%		9.2	%
Roll Forward of Deferred Acquisition Costs
Balance at beginning-of-period							$	1,079.3		$	1,265.7		$	1,424.5		$	1,424.5		$	1,578.3
Deferral								324.8			336.5			370.8			258.7			255.5
Amortization								(95.0	)		(105.8	)		(135.5	)		(97.5	)		(157.4	)
Included in Total Benefits and Expenses								229.8			230.7			235.2			161.2			98.2
Adjustment related to realized (gains) losses on available-for-sale securities								43.0			39.7			(31.9	)		(20.9	)		(11.3	)
Adjustment related to unrealized (gains) losses on available-for-sale securities								(89.0	)		(130.9	)		(49.5	)		(81.4	)		(21.7	)
Other*								2.5			19.3						—			3.0
Balance at end-of-period							$	1,265.7		$	1,424.5		$	1,578.3		$	1,483.4		$	1,646.4
Roll Forward of Present Value of In-Force
Balance at beginning-of-period							$	1,040.5		$	964.0		$	890.1		$	890.1		$	808.6
Amortization								(75.9	)		(73.9	)		(81.4	)		(61.5	)		(65.8	)
Other								(0.7	)		(0.0	)					—			—
Balance at end-of-period							$	964.0		$	890.1		$	808.6		$	828.5		$	742.8

* Includes the transfer of the Legacy Life block of business from the Lincoln Retirement segment in the first quarter of 2002. Year-to-date 2004 reflects the DAC unlocking resulting from the implementation of SOP 03-1.

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Life Insurance Segment

Income Statements

Unaudited [Millions of Dollars]

For the Quarter Ended	Sep 2002			Dec 2002			Mar 2003			Jun 2003			Sep 2003			Dec 2003			Mar 2004			Jun 2004			Sep 2004
Revenue
Premiums	$	48.6		$	56.4		$	47.8		$	49.7		$	45.2		$	52.2		$	47.9		$	48.3		$	44.3
Surrender charges		13.4			15.5			11.4			12.4			13.7			16.1			13.8			12.7			11.1
Mortality assessments		126.3			127.3			129.7			128.4			130.2			128.4			128.5			129.6			130.1
Expense assessments		49.2			56.3			48.3			49.6			48.9			55.0			49.8			51.0			49.8
Other revenue and fees		5.1			6.2			5.8			7.3			6.4			8.4			7.8			8.2			7.3
Net investment income		224.1			223.3			227.6			229.0			226.4			228.1			235.7			234.9			238.4
Realized gains (losses) on investments		(25.9	)		(5.5	)		(12.7	)		(2.6	)		(1.7	)		20.5			(3.9	)		(5.8	)		(2.6	)
Gains (losses) on derivatives		0.7			0.1			(0.5	)		0.3			(0.3	)		(3.1	)		—			—			0.1
Gain (loss) on reinsurance derivative/trading account securities																	(0.6	)		(0.3	)					(1.8	)
Total Revenue		441.6			479.6			457.5			474.0			468.9			505.0			479.2			478.9			476.8
Benefits and Expenses
Benefits paid or provided:
Benefits		105.2			114.6			103.8			110.5			118.5			83.2			97.4			104.4			95.8
Div accum & div to policyholders		17.2			22.8			14.4			17.6			15.9			33.8			18.5			18.6			16.7
Interest credited to policy bal.		152.6			150.7			150.1			149.8			150.7			147.5			144.8			143.9			143.8
Total insurance benefits		275.1			288.0			268.3			277.9			285.1			264.5			260.7			267.0			256.3
Underwriting, acquisition, insurance and other expenses:
Commissions		31.8			38.6			32.4			30.7			34.4			44.3			31.4			28.2			34.8
Other volume related expenses		45.8			58.3			54.2			43.2			48.3			62.6			46.5			44.8			45.9
Operating and administrative expenses		41.1			44.7			40.6			38.5			41.7			45.4			38.5			40.7			46.5
Restructuring charges								5.5			7.3			2.5			4.2			2.7			0.5			0.9
Taxes, licenses and fees		13.2			11.5			14.4			13.8			16.1			18.0			12.4			11.5			12.8
Subtotal		131.8			153.2			147.1			133.4			143.0			174.4			131.6			125.8			140.9
Deferral of acquisition costs		(78.6	)		(101.4	)		(91.0	)		(79.7	)		(88.0	)		(112.1	)		(83.7	)		(81.1	)		(90.8	)
DAC amortization		23.9			36.3			47.0			29.5			21.1			38.0			48.7			43.8			64.9
DAC deferral net of amortization		(54.8	)		(65.1	)		(44.0	)		(50.2	)		(66.9	)		(74.1	)		(35.0	)		(37.3	)		(25.9	)
PVIF amortization		23.3			17.4			17.4			17.2			26.9			19.9			18.5			17.5			29.8
Total underwriting, acquisition, insurance and other expenses		100.4			105.5			120.5			100.4			103.0			120.2			115.1			105.9			144.9
Total Benefits and Expenses		375.5			393.6			388.8			378.3			388.1			384.8			375.8			372.9			401.2
Income Before Federal Income Tax and Cumulative Effect of Accounting Change		66.1			86.0			68.7			95.7			80.8			120.3			103.4			106.0			75.5
Federal income taxes		19.7			26.5			20.2			30.1			24.9			38.7			33.1			34.0			23.5
Income Before Cumulative Effect of Accounting Change		46.4			59.5			48.5			65.6			55.8			81.6			70.3			72.0			52.0
Cumulative effect of accounting change																	0.6			(2.7	)
Net Income	$	46.4		$	59.5		$	48.5		$	65.6		$	55.8		$	82.2		$	67.5		$	72.0		$	52.0
Less:
Restructuring charges								(3.6	)		(4.7	)		(1.6	)		(2.7	)		(1.8	)		(0.4	)		(0.6	)
Realized gains (losses) on investments		(16.9	)		(3.6	)		(8.1	)		(1.9	)		(1.1	)		13.4			(2.6	)		(3.8	)		(1.7	)
Gains (losses) on derivatives		0.6			0.1			(0.5	)		0.4			(0.2	)		(2.0	)		—			—			0.1
Net gain (loss) on reinsurance derivative/trading account securities																	(0.4	)		(0.2	)					(1.2	)
Cumulative effect of accounting change																	0.6			(2.7	)
Income from Operations	$	62.7		$	63.1		$	60.7		$	71.8		$	58.7		$	73.4		$	74.8		$	76.2		$	55.4
Effective tax rate on Income from Operations		31.3	%		31.0	%		30.6	%		31.8	%		31.1	%		31.8	%		32.2	%		32.2	%		31.4	%
Revenue	$	441.6		$	479.6		$	457.5		$	474.0		$	468.9		$	505.0		$	479.2		$	478.9		$	476.8
Less:
Realized gains (losses) on investments		(25.9	)		(5.5	)		(12.7	)		(2.6	)		(1.7	)		20.5			(3.9	)		(5.8	)		(2.6	)
Gains (losses) on derivatives		0.7			0.1			(0.5	)		0.3			(0.3	)		(3.1	)		(0.0	)		(0.0	)		0.1
Gain (loss) on reinsurance derivative/trading account securities																	(0.6	)		(0.3	)					(1.8	)
Operating Revenue	$	466.8		$	485.0		$	470.7		$	476.2		$	470.8		$	488.2		$	483.4		$	484.8		$	481.1
Average capital	$	2,857.6		$	2,851.5		$	2,864.2		$	2,792.7		$	2,849.0		$	2,893.7		$	2,927.4		$	2,993.5		$	3,086.4
Net Income return on average capital		6.5	%		8.3	%		6.8	%		9.4	%		7.8	%		11.4	%		9.2	%		9.6	%		6.7	%
Income from operations return on average capital		8.8	%		8.8	%		8.5	%		10.3	%		8.2	%		10.1	%		10.2	%		10.2	%		7.2	%
Roll Forward of Deferred Acquisition Costs
Balance at beginning-of-quarter	$	1,404.9		$	1,362.2		$	1,424.5		$	1,447.7		$	1,381.3		$	1,483.4		$	1,578.3		$	1,534.8		$	1,734.8
Deferral		78.6			101.4			91.0			79.7			88.0			112.1			83.7			81.1			90.8
Amortization		(23.9	)		(36.3	)		(47.0	)		(29.5	)		(21.1	)		(38.0	)		(48.7	)		(43.8	)		(64.9	)
Included in Total Benefits and Expenses		54.8			65.1			44.0			50.2			66.9			74.1			35.0			37.3			25.9
Adjustment related to realized (gains) losses on available-for-sale securities		11.7			1.0			7.0			(0.3	)		(27.6	)		(11.0	)		(3.8	)		(2.4	)		(5.1	)
Adjustment related to unrealized (gains) losses on available-for-sale securities		(109.3	)		(3.7	)		(27.9	)		(116.3	)		62.8			31.9			(77.6	)		165.0			(109.0	)
Other*																				3.0			0.2			(0.1	)
Balance at end-of-quarter	$	1,362.2		$	1,424.5		$	1,447.7		$	1,381.3		$	1,483.4		$	1,578.3		$	1,534.8		$	1,734.8		$	1,646.4
Roll Forward of Present Value of In-Force
Balance at beginning-of-quarter	$	930.7		$	907.4		$	890.1		$	872.7		$	855.5		$	828.5		$	808.6		$	790.1		$	772.6
Amortization		(23.3	)		(17.4	)		(17.4	)		(17.2	)		(26.9	)		(19.9	)		(18.5	)		(17.5	)		(29.8	)
Other					0.1
Balance at end-of-quarter	$	907.4		$	890.1		$	872.7		$	855.5		$	828.5		$	808.6		$	790.1		$	772.6		$	742.8

* First quarter of 2004 reflects the DAC unlocking resulting from the implementation of SOP 03-1.

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Life Insurance Segment

Operational Data

Unaudited [Millions of Dollars]

For the Year Ended December 31	1999		2000		2001		2002		2003		YTD Sep 2003		YTD Sep 2004
First Year Premiums by Product (Millions)
Universal Life
Excluding MoneyGuard	$	229.4	$	195.1	$	184.7	$	356.9	$	417.0	$	292.4	$	286.5
MoneyGuard		113.5		94.1		107.9		138.4		224.7		153.3		177.9
Total		342.9		289.3		292.7		495.3		641.6		445.8		464.4
Variable Universal Life		142.2		218.7		228.6		134.5		79.4		55.0		57.4
Whole Life		23.9		22.4		26.3		30.3		34.4		22.0		28.0
Term		45.9		41.9		30.8		32.3		40.2		29.3		31.5
Total Retail		555.0		572.3		578.4		692.3		795.7		552.2		581.4
Corporate Owned Life Insurance (COLI)		14.7		87.0		47.3		88.1		125.7		96.0		53.3
Total	$	569.7	$	659.3	$	625.6	$	780.4	$	921.3	$	648.2	$	634.7
First Year Premiums by Distribution (Millions)
Lincoln Financial Advisors	$	188.3	$	200.6	$	196.1	$	201.7	$	223.5	$	155.0		143.2
Lincoln Financial Distributors		367.9		444.7		413.0		556.3		632.0		436.7		456.3
Other*		13.5		14.0		16.6		22.4		65.8		56.4		35.2
Total by Distribution	$	569.7	$	659.3	$	625.6	$	780.4	$	921.3	$	648.2	$	634.7
Life Insurance In-Force (Billions)
Universal Life & Other	$	109.288	$	115.872	$	121.168	$	126.016	$	129.623	$	127.855	$	130.989
Term Insurance		85.701		100.130		113.226		127.880		151.717		145.480		167.979
Total Life Segment In-Force	$	194.988	$	216.002	$	234.394	$	253.896	$	281.340	$	273.335	$	298.967

For the Quarter Ended	Dec 2001		Mar 2002		Jun 2002		Sep 2002		Dec 2002		Mar 2003		Jun 2003		Sep 2003		Dec 2003		Mar 2004		Jun 2004		Sep 2004
First Year Premiums by Product (Millions)
Universal Life
Excluding MoneyGuard	$	65.7	$	57.4	$	63.8	$	98.0	$	137.8	$	84.5	$	93.8	$	114.2	$	124.5	$	95.7	$	100.7	$	90.1
MoneyGuard		31.9		29.0		35.1		34.9		39.3		46.3		48.9		58.2		71.4		56.2		61.1		60.7
Total		97.5		86.4		98.9		132.9		177.1		130.8		142.7		172.3		195.9		151.9		161.8		150.8
Variable Universal Life		70.2		39.0		42.4		26.1		27.0		24.4		14.1		16.6		24.4		22.5		17.7		17.2
Whole Life		10.4		5.2		6.4		7.7		11.0		6.5		7.1		8.5		12.3		10.8		7.6		9.7
Term		9.1		8.7		8.1		7.3		8.1		9.1		9.6		10.5		10.9		10.5		10.6		10.4
Total Retail		187.2		139.4		155.8		174.0		223.2		170.7		173.5		208.0		243.5		195.6		197.8		188.1
Corporate Owned Life Insurance (COLI)		14.2		6.9		46.6		7.8		26.8		10.6		61.8		23.7		29.6		14.2		9.9		29.2
Total	$	201.3	$	146.3	$	202.4	$	181.8	$	249.9	$	181.3	$	235.3	$	231.7	$	273.1	$	209.8	$	207.6	$	217.3
First Year Premiums by Distribution (Millions)
Lincoln Financial Advisors	$	68.0	$	41.5	$	48.3	$	46.9	$	64.9	$	42.1	$	46.8	$	66.2	$	68.5	$	47.7	$	47.2	$	48.2
Lincoln Financial Distributors		129.5		100.9		151.6		132.7		171.1		131.7		148.3		156.8		195.3		151.4		152.9		151.9
Other*		3.8		3.8		2.6		2.2		13.9		7.5		40.2		8.7		9.4		10.6		7.5		17.1
Total by Distribution	$	201.3	$	146.3	$	202.4	$	181.8	$	249.9	$	181.3	$	235.3	$	231.7	$	273.1	$	209.8	$	207.6	$	217.3
Insurance In-Force (Billions)
Universal Life & Other	$	121.168	$	122.316	$	123.674	$	124.085	$	126.016	$	126.414	$	127.276	$	127.855	$	129.623	$	129.669	$	130.294	$	130.989
Term Insurance		113.226		117.752		121.076		123.945		127.880		133.251		139.191		145.480		151.717		157.338		162.953		167.979
Total Segment In-Force	$	234.394	$	240.068	$	244.750	$	248.030	$	253.896	$	259.666	$	266.467	$	273.335	$	281.340	$	287.007	$	293.247	$	298.967

* Other consists of distribution arrangements with third-party intermediaries.

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Life Insurance Segment

Life Insurance Account Value Rollforward

Unaudited [Billions of Dollars]

	1999			2000			2001			2002			2003			YTD Sep 2003			YTD Sep 2004
Universal Life-Bal Beg-of-Year	$	6.259		$	6.650		$	6.976		$	7.508		$	8.211		$	8.211		$	9.030
Deposits		1.017			0.955			1.043			1.332			1.532			1.092			1.020
Withdrawals & deaths		(0.452	)		(0.426	)		(0.319	)		(0.426	)		(0.437	)		(0.325	)		(0.357	)
Net flows		0.564			0.528			0.724			0.906			1.095			0.768			0.663
Policyholder assessments		(0.544	)		(0.584	)		(0.598	)		(0.648	)		(0.702	)		(0.517	)		(0.557	)
Interest credited		0.370			0.382			0.405			0.428			0.427			0.321			0.308
Acq of new business/transfers between segments											0.018
Universal Life-Bal End of Year (1)	$	6.650		$	6.976		$	7.508		$	8.211		$	9.030		$	8.782		$	9.444
Variable Universal Life-Bal Beg-of-Year	$	1.200		$	1.605		$	1.808		$	1.746		$	1.690		$	1.690		$	2.195
Deposits		0.326			0.607			0.584			0.504			0.448			0.325			0.369
Withdrawals & deaths		(0.099	)		(0.132	)		(0.251	)		(0.193	)		(0.208	)		(0.135	)		(0.204	)
Net flows		0.228			0.475			0.332			0.311			0.240			0.190			0.165
Policyholder assessments		(0.084	)		(0.141	)		(0.170	)		(0.186	)		(0.191	)		(0.143	)		(0.144	)
Invest inc & chg in mkt value		0.370			(0.130	)		(0.225	)		(0.313	)		0.457			0.253			0.060
Acq of new business/transfers between segments		(0.110	)								0.132
Variable Universal Life -Bal End-of-Year	$	1.605		$	1.808		$	1.746		$	1.690		$	2.195		$	1.991		$	2.275
Interest Sensitive Whole Life - Bal Beg-of-Year	$	1.784		$	1.963		$	2.062		$	2.123		$	2.186		$	2.186		$	2.195
Deposits		0.355			0.322			0.307			0.301			0.279			0.181			0.168
Withdrawals & deaths		(0.162	)		(0.168	)		(0.200	)		(0.199	)		(0.236	)		(0.163	)		(0.157	)
Net flows		0.193			0.154			0.107			0.103			0.043			0.018			0.011
Policyholder assessments		(0.168	)		(0.168	)		(0.164	)		(0.167	)		(0.159	)		(0.112	)		(0.108	)
Interest credited		0.109			0.113			0.118			0.127			0.125			0.094			0.095
Acq of new business/transfers between segments		0.045
Int Sensitive Whole Life-Bal End -of -Year	$	1.963		$	2.062		$	2.123		$	2.186		$	2.195		$	2.185		$	2.193
Total Segment - Life Insurance Account Values
Bal Beg-of-Year	$	9.243		$	10.217		$	10.847		$	11.377		$	12.086		$	12.086		$	13.420
Deposits		1.698			1.884			1.934			2.138			2.259			1.598			1.557
Withdrawals & deaths		(0.713	)		(0.727	)		(0.771	)		(0.818	)		(0.881	)		(0.622	)		(0.718	)
Net flows		0.985			1.158			1.163			1.320			1.377			0.976			0.839
Policyholder assessments		(0.795	)		(0.893	)		(0.931	)		(1.002	)		(1.053	)		(0.772	)		(0.809	)
Invest inc & change in market value		0.849			0.364			0.299			0.241			1.009			0.668			0.463
Acq of new business/transfers between segments		(0.065	)								0.150
Total Segment -Bal End-of-Year	$	10.217		$	10.847		$	11.377		$	12.086		$	13.420		$	12.958		$	13.912
Life Product Spread Information (2)
Interest Sensitive Products
Net Investment Income (3)(4)								7.63	%		7.30	%		6.97	%		7.06	%		6.73	%
Interest Credited to Policyholders								5.86	%		5.77	%		5.36	%		5.43	%		4.88	%
Spread (3)(4)								1.77	%		1.53	%		1.61	%		1.63	%		1.84	%
Traditional Products
Net Investment Income (3)(4)								7.49	%		7.42	%		6.99	%		7.09	%		6.98	%

(1) Includes fixed investment option of VUL products.

(2) Interest Sensitive Products - For the life products spread, the yield on earning assets is calculated as net investment income on fixed product investment portfolios divided by average earning assets. The average crediting rate is calculated using interest credited on life products divided by average fixed account values.

Traditional Products - the yield on earning assets is calculated as net investment income on non-par investment portfolios divided by average earning assets.

As of year ends 2001, 2002, and 2003, interest sensitive products represented 86%, 87%, and 88%, respectively, of total interest sensitive and traditional non-par earning assets.

(3) The net investment income and spread reported above includes earnings from commercial mortgage loan prepayment and bond make-whole premiums. The impact of these premiums on investment income and spread for interest sensitive products was 23 bps in the first nine months of 2004, 3 bps in 2003, 4 bps in 2002, and 6 bps in 2001.

The impact for traditional products was 21 bps in the first nine months of 2004, 6 bps in 2003, 5 bps in 2002, and 13 bps in 2001.

(4) YTD 2004 includes income from contingent interest received, which contributed $6.5 million to net investment income or 13 bps to the yield and spread on Interest Sensitive Products and $2.4 million to net investment income or 36 bps to the yield and spread on Traditional Products.

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Life Insurance Segment

Life Insurance Account Value Roll Forward

Unaudited [Billions of Dollars]

	Dec 2001			Mar 2002			Jun 2002			Sep 2002			Dec 2002			Mar 2003			Jun 2003			Sep 2003			Dec 2003			Mar 2004			Jun 2004			Sep 2004
Universal Life-Bal Beg-of-Quarter	$	7.315		$	7.508		$	7.622		$	7.838		$	7.987		$	8.211		$	8.359		$	8.542		$	8.782		$	9.030		$	9.175		$	9.308
Deposits		0.314			0.248			0.364			0.310			0.410			0.316			0.350			0.426			0.440			0.342			0.345			0.333
Withdrawals & deaths		(0.073	)		(0.097	)		(0.096	)		(0.108	)		(0.125	)		(0.107	)		(0.101	)		(0.117	)		(0.113	)		(0.117	)		(0.128	)		(0.112	)
Net flows		0.241			0.150			0.268			0.201			0.286			0.210			0.249			0.309			0.327			0.225			0.217			0.221
Policyholder assessments		(0.153	)		(0.158	)		(0.158	)		(0.162	)		(0.170	)		(0.168	)		(0.171	)		(0.178	)		(0.185	)		(0.183	)		(0.187	)		(0.188	)
Interest credited		0.105			0.104			0.106			0.110			0.108			0.106			0.106			0.108			0.106			0.103			0.102			0.103
Acq of new business/transfers between segments					0.018
Universal Life-Bal End-of-Quarter (1)	$	7.508		$	7.622		$	7.838		$	7.987		$	8.211		$	8.359		$	8.542		$	8.782		$	9.030		$	9.175		$	9.308		$	9.444
Variable Universal Life-Bal Beg of Quarter	$	1.527		$	1.746		$	1.919		$	1.776		$	1.575		$	1.690		$	1.689		$	1.930		$	1.991		$	2.195		$	2.249		$	2.277
Deposits		0.186			0.129			0.147			0.102			0.126			0.118			0.114			0.093			0.123			0.106			0.108			0.156
Withdrawals & deaths		(0.088	)		(0.055	)		(0.057	)		(0.034	)		(0.047	)		(0.036	)		(0.050	)		(0.048	)		(0.074	)		(0.073	)		(0.042	)		(0.089	)
Net flows		0.098			0.074			0.090			0.068			0.079			0.082			0.064			0.045			0.049			0.032			0.066			0.067
Policyholder assessments		(0.045	)		(0.047	)		(0.046	)		(0.046	)		(0.047	)		(0.049	)		(0.048	)		(0.046	)		(0.049	)		(0.048	)		(0.048	)		(0.048	)
Invest inc & chg in mkt value		0.166			0.013			(0.186	)		(0.224	)		0.083			(0.034	)		0.225			0.062			0.204			0.070			0.011			(0.021	)
Acq of new business/transfers between segments		—			0.1			—			—						—			—			—			—			—			—			—
Variable Universal Life - Bal End-of-Quarter	$	1.746		$	1.919		$	1.776		$	1.575		$	1.690		$	1.689		$	1.930		$	1.991		$	2.195		$	2.249		$	2.277		$	2.275
Interest Sensitive Whole Life - Bal Beg-of-Quarter	$	2.096		$	2.123		$	2.126		$	2.145		$	2.164		$	2.186		$	2.185		$	2.191		$	2.185		$	2.195		$	2.182		$	2.185
Deposits		0.105			0.063			0.066			0.073			0.100			0.051			0.062			0.067			0.098			0.054			0.055			0.059
Withdrawals & deaths		(0.061	)		(0.051	)		(0.039	)		(0.045	)		(0.063	)		(0.046	)		(0.050	)		(0.066	)		(0.073	)		(0.063	)		(0.047	)		(0.047	)
Net flows		0.044			0.012			0.026			0.027			0.037			0.005			0.012			0.001			0.026			(0.009	)		0.008			0.012
Policyholder assessments		(0.047	)		(0.042	)		(0.039	)		(0.040	)		(0.046	)		(0.036	)		(0.038	)		(0.039	)		(0.047	)		(0.036	)		(0.036	)		(0.036	)
Interest credited		0.030			0.033			0.032			0.031			0.031			0.030			0.032			0.032			0.031			0.032			0.031			0.032
Int Sensitive Whole Life-Bal End-of-Quarter	$	2.123		$	2.126		$	2.145		$	2.164		$	2.186		$	2.185		$	2.191		$	2.185		$	2.195		$	2.182		$	2.185		$	2.193
Total Segment - Life Insurance Account Values
Bal Beg-of-Quarter	$	10.939		$	11.377		$	11.667		$	11.759		$	11.726		$	12.086		$	12.233		$	12.663		$	12.958		$	13.420		$	13.606		$	13.770
Deposits		0.605			0.440			0.577			0.484			0.636			0.486			0.526			0.586			0.661			0.501			0.507			0.548
Withdrawals & deaths		(0.222	)		(0.204	)		(0.192	)		(0.187	)		(0.234	)		(0.190	)		(0.202	)		(0.231	)		(0.259	)		(0.254	)		(0.217	)		(0.248	)
Net flows		0.383			0.236			0.385			0.297			0.402			0.296			0.324			0.355			0.402			0.248			0.291			0.300
Policyholder assessments		(0.246	)		(0.246	)		(0.244	)		(0.248	)		(0.263	)		(0.252	)		(0.257	)		(0.262	)		(0.280	)		(0.267	)		(0.271	)		(0.272	)
Invest inc & change in market value		0.301			0.151			(0.049	)		(0.082	)		0.222			0.103			0.363			0.202			0.341			0.205			0.145			0.114
Acq of new business/transfers between segments		—			0.1			—			—			—			—			—			—			—			—			—			—
Total Segment- Bal End-of-Quarter	$	11.377		$	11.667		$	11.759		$	11.726		$	12.086		$	12.233		$	12.663		$	12.958		$	13.420		$	13.606		$	13.770		$	13.912
Life Product Spread Information (2)
Interest Sensitive Products
Net Investment Income (3)(4)		7.60	%		7.47	%		7.39	%		7.26	%		7.15	%		7.21	%		7.09	%		6.90	%		6.73	%		6.84	%		6.70	%		6.62	%
Interest Credited to Policyholders		5.90	%		5.82	%		5.83	%		5.82	%		5.63	%		5.56	%		5.43	%		5.37	%		5.12	%		4.97	%		4.89	%		4.79	%
Spread (3)(4)		1.70	%		1.65	%		1.56	%		1.44	%		1.52	%		1.65	%		1.65	%		1.53	%		1.61	%		1.87	%		1.81	%		1.83	%
Traditional Products
Net Investment Income (3)(4)		7.51	%		7.42	%		7.37	%		7.58	%		7.28	%		7.16	%		7.13	%		6.99	%		6.72	%		7.33	%		6.61	%		6.97	%

(1) Includes fixed investment option of VUL products.

(2) Interest Sensitive Products - For the life products spread, the yield on earning assets is calculated as net investment income on fixed product investment portfolios divided by average earning assets. The average crediting rate is calculated using interest credited on life products divided by average fixed account values. Traditional Products - the yield on earning assets is calculated as net investment income on non-par investment portfolios divided by average earning assets. As of September 30, 2004, interest sensitive products represented 88.3% of total interest sensitive and traditional non-par earning assets.

(3) The net investment income and spread reported above includes earnings from commercial mortgage loan prepayment and bond make-whole premiums. The impact of these premiums on investment income and spread for interest sensitive products was 29 bps in the 3rd quarter of 2004, 32 bps in the 2nd quarter of 2004, 7 bps in the 1st quarter of 2004, and 8 bps in the 2nd quarter of 2003. There was an impact on traditional products of 59 bps in the 3rd quarter of 2004, 5 bps in the 2nd quarter of 2004, no impact during the 1st quarter of 2004, and no impact during the 2nd quarter of 2003.

(4) First quarter 2004 includes income from contingent interest received, which contributed $6.5 million to net investment income or 25 bps to the yield and spread on Interest Sensitive Products and $2.4 million to net investment income or 72 bps to the yield and spread on Traditional Products.

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Investment Management

Income Statements

Unaudited [Millions of Dollars]

For the Year Ended December 31	1999			2000			2001			2002			2003			YTD Sep 2003			YTD Sep 2004
Revenue
Investment advisory fees - External	$	248.6		$	231.6		$	197.2		$	183.3		$	205.0		$	146.8		$	196.5
Investment advisory fees - Insurance-related Assets		103.0			112.4			105.0			97.7			101.2			75.0			79.0
Other revenue and fees		106.6			115.9			99.2			87.0			117.9			81.1			92.2
Net investment income		56.9			57.7			53.6			50.5			49.9			37.4			39.4
Realized gains (losses) on investments		(0.1	)		(3.9	)		(3.7	)		(5.4	)		0.4			(0.1	)		(0.9	)
Sale of subsidiary																				110.3
Total Revenue		514.9			513.7			451.2			413.1			474.4			340.2			516.6
Benefits and Expenses
Underwriting, acquisition, insurance and other expenses:
Operating and administrative expenses		369.6			424.9			410.2			393.2			414.6			301.3			330.9
Restructuring charges		12.5			7.1			0.6			(0.4	)		7.1			5.3			1.6
Taxes, licenses and fees		10.3			11.6			16.8			13.0			10.3			8.2			14.0
Subtotal		392.4			443.6			427.5			405.8			431.9			314.8			346.4
Other intangibles amortization		17.7			16.3			10.8			8.2			7.9			6.0			5.9
Total underwriting, acquisition, insurance and other expenses		410.1			459.9			438.3			414.0			439.8			320.7			352.3
Goodwill amortization		16.2			16.2			16.2
Total Benefits and Expenses		426.3			476.1			454.6			414.0			439.8			320.7			352.3
Income Before Federal Income Tax and Cumulative Effect of Accounting Change		88.6			37.6			(3.3	)		(0.9	)		34.6			19.4			164.2
Federal income taxes		37.0			19.8			5.5			0.5			4.5			7.5			81.6
Income Before Cumulative Effect of Accounting Change		51.6			17.9			(8.9	)		(1.4	)		30.2			12.0			82.6
Cumulative effect of accounting change								(0.1	)
Net Income	$	51.6		$	17.9		$	(9.0	)	$	(1.4	)	$	30.2		$	12.0		$	82.6
Less:
Realized gains (losses) on investments		(0.1	)		(2.5	)		(2.4	)		(3.5	)		0.3			(0.1	)		(0.6	)
Gain on sale of subsidiary																				45.8
Restructuring charges		(9.2	)		(4.6	)		(0.4	)		0.3			(4.6	)		(3.5	)		(1.0	)
Cumulative effect of accounting change								(0.1	)
Income from Operations	$	61.0		$	25.0		$	(6.1	)	$	1.8		$	34.5		$	15.5		$	38.3
Net Income-before
- Goodwill Amortization	$	67.9		$	34.1		$	7.3		$	(1.4	)	$	30.2		$	12.0		$	82.6
- Goodwill & Intang. Amort.	$	79.4		$	44.7		$	14.3		$	3.9		$	35.3		$	15.8		$	86.4
Income from Operations-before
- Goodwill Amortization	$	77.2		$	41.3		$	10.1		$	1.8		$	34.5		$	15.5		$	38.3
- Goodwill & Intang. Amort	$	88.7		$	51.8		$	17.1		$	7.2		$	39.7		$	19.4		$	42.2
Revenue	$	514.9		$	513.7		$	451.2		$	413.1		$	474.4		$	340.2		$	516.6
Less:
Realized gains (losses) on investments		(0.1	)		(3.9	)		(3.7	)		(5.4	)		0.4			(0.1	)		(0.9	)
Sale of subsidiary																				110.3
Operating Revenue	$	515.0		$	517.6		$	454.9		$	418.5		$	474.0		$	340.3		$	407.2
Average Capital (Securities at Cost)	$	593.7		$	582.0		$	557.0		$	581.2		$	602.4		$	595.5		$	632.1
Net Income return on average capital		8.7	%		3.1	%		(1.6	)%		(0.2	)%		5.0	%		2.7	%		17.4	%
Inc. from oper. return on average capital		10.3	%		4.3	%		(1.1	)%		0.3	%		5.7	%		3.5	%		8.1	%

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Investment Management

Income Statements

Unaudited [Millions of Dollars]

For the Quarter Ended	Sep 2002			Dec 2002			Mar 2003			Jun 2003			Sep 2003			Dec 2003			Mar 2004			Jun 2004			Sep 2004
Revenue
Investment advisory fees - External	$	42.9		$	44.7		$	44.2		$	49.4		$	53.2		$	58.3		$	62.7		$	66.4		$	67.4
Investment advisory fees - Insurance-related Assets		24.1			24.2			24.1			25.4			25.5			26.2			26.5			26.1			26.4
Other revenue and fees		19.9			22.1			22.0			29.5			29.5			36.9			33.7			31.9			26.6
Net investment income		12.4			12.7			12.1			12.1			13.2			12.5			12.2			14.6			12.7
Realized gains (losses) on investments		(1.8	)		(1.5	)		(0.4	)		0.1			0.2			0.5			(2.3	)		1.8			(0.3	)
Sale of subsidiary																										110.3
Total Revenue		97.5			102.2			102.1			116.4			121.7			134.3			132.9			140.8			242.9
Benefits and Expenses
Underwriting, acquisition, insurance and other expenses:
Operating and administrative expenses		99.4			95.8			95.2			104.4			101.6			113.3			111.1			111.5			108.3
Restructuring charges		(0.4	)											5.3			1.7			1.5			—			—
Taxes, licenses and fees		1.9			2.4			3.0			2.8			2.4			2.1			3.9			5.5			4.6
Subtotal		100.9			98.2			98.2			107.2			109.3			117.1			116.5			117.0			112.9
Other intangibles amortization		2.0			2.0			2.0			2.0			2.0			2.0			2.0			2.0			2.0
Total underwriting, acquisition, insurance and other expenses		102.9			100.2			100.2			109.2			111.3			119.1			118.5			118.9			114.8
Total Benefits and Expenses		102.9			100.2			100.2			109.2			111.3			119.1			118.5			119.0			114.8
Income Before Federal Income Tax and Cumulative Effect of Accounting Change		(5.4	)		2.0			1.9			7.2			10.3			15.2			14.4			21.8			128.1
Federal income taxes		(1.5	)		0.9			0.8			2.6			4.0			(3.0	)		4.3			7.3			70.0
Income Before Cumulative Effect of Accounting Change		(3.9	)		1.1			1.0			4.6			6.3			18.2			10.0			14.5			58.1
Cumulative effect of accounting change
Net Income	$	(3.9	)	$	1.1		$	1.0		$	4.6		$	6.3		$	18.2		$	10.0		$	14.5		$	58.1
Less:
Realized gains (losses) on investments		(1.2	)		(0.9	)		(0.3	)		0.0			0.1			0.3			(1.5	)		1.2			(0.2	)
Gain on sale of subsidiary																										45.8
Restructuring charges		0.3			0.0									(3.5	)		(1.1	)		(1.0	)		—			—
Income from Operations	$	(3.0	)	$	2.1		$	1.3		$	4.5		$	9.7		$	19.0		$	12.5		$	13.4		$	12.5
Net Income - before
Intangible Amortization	$	(2.6	)	$	2.4		$	2.4		$	5.8		$	7.6		$	19.5		$	11.3		$	15.8		$	59.3
Income from Operations - before
Intangible Amortization	$	(1.7	)	$	3.4		$	2.6		$	5.8		$	11.0		$	20.3		$	13.8		$	14.6		$	13.8
Revenue	$	97.5		$	102.2		$	102.1		$	116.4		$	121.7		$	134.3		$	132.9		$	140.8		$	242.9
Less:
Realized gains (losses) on investments		(1.8	)		(1.5	)		(0.4	)		0.1			0.2			0.5			(2.3	)		1.8			(0.3	)
Sale of Subsidiary																										110.3
Operating Revenue	$	99.3		$	103.6		$	102.5		$	116.3		$	121.4		$	133.8		$	135.2		$	139.0		$	133.0
Average Capital (Securities at Cost)	$	586.3		$	588.8		$	597.7		$	588.6		$	600.4		$	623.0		$	634.2		$	634.8		$	627.2
Net Income return on average capital		(2.6	%)		0.8	%		0.7	%		3.1	%		4.2	%		11.7	%		6.3	%		9.1	%		37.0	%
Income from operations return on average capital		(2.0	%)		1.4	%		0.9	%		3.1	%		6.4	%		12.2	%		7.9	%		8.4	%		8.0	%

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Investment Management

Assets Under Management Rollforward

Unaudited [Billions of Dollars]

	1999			2000			2001			2002			2003			YTD Sep 2003			YTD Sep 2004
Retail Fixed - Bal Beg-of-Period	$	8.218		$	7.422		$	6.605		$	7.118		$	7.631		$	7.631		$	8.186
Fund Sales		0.991			0.769			0.876			1.218			1.792			1.336			1.389
Redemptions		(1.424	)		(1.401	)		(1.051	)		(1.182	)		(1.442	)		(1.081	)		(1.221	)
Net Money Market		(0.111	)		(0.207	)		(0.046	)		(0.050	)		(0.028	)		(0.014	)		(0.093	)
Transfers		0.177			(0.168	)		0.405			0.206			(0.168	)		(0.080	)		(0.173	)
Net Flows		(0.367	)		(1.007	)		0.184			0.192			0.154			0.162			(0.098	)
Market		(0.429	)		0.096			0.330			0.321			0.401			0.290			0.165
Transfer of Assets Under Administration(1)					0.094															(0.194	)
Balance End-of-Period	$	7.422		$	6.605		$	7.118		$	7.631		$	8.186		$	8.083		$	8.060
Retail Equity - Bal Beg-of-Period	$	22.081		$	23.384		$	21.525		$	17.990		$	14.917		$	14.917		$	20.887
Fund Sales		3.270			4.116			2.817			4.477			3.791			2.581			5.084
Redemptions		(4.972	)		(4.431	)		(2.838	)		(3.690	)		(2.830	)		(2.120	)		(3.101	)
Net Money Market		(0.001	)		0.001
Transfers		(0.144	)		(0.178	)		(0.538	)		(0.173	)		0.156			0.064			0.080
Net Flows		(1.847	)		(0.492	)		(0.560	)		0.614			1.117			0.524			2.063
Market		3.150			(1.709	)		(2.975	)		(3.688	)		4.854			2.520			0.571
Sale of subsidiary/Transfer of Assets Under Administration (1) (2)					0.342															(0.901	)
Balance at End-of-Period	$	23.384		$	21.525		$	17.990		$	14.917		$	20.887		$	17.961		$	22.620
Total Retail - Bal Beg-of-Period	$	30.299		$	30.807		$	28.129		$	25.108		$	22.547		$	22.547		$	29.073
Retail Sales-Annuities		1.561			1.782			1.701			2.751			2.151			1.589			2.020
Retail Sales-Mutual Funds		2.151			2.577			1.523			1.829			2.315			1.652			2.314
Retail Sales-Managed Acct. & Other		0.549			0.525			0.469			1.115			1.116			0.676			2.139
Total Retail Sales		4.261			4.885			3.693			5.695			5.583			3.917			6.473
Redemptions		(6.396	)		(5.832	)		(3.889	)		(4.873	)		(4.272	)		(3.201	)		(4.322	)
Net Money Market		(0.112	)		(0.206	)		(0.046	)		(0.050	)		(0.028	)		(0.014	)		(0.093	)
Transfers		0.033			(0.346	)		(0.133	)		0.033			(0.012	)		(0.016	)		(0.093	)
Net Flows		(2.214	)		(1.500	)		(0.375	)		0.806			1.271			0.686			1.965
Market		2.721			(1.613	)		(2.646	)		(3.366	)		5.255			2.810			0.736
Sale of subsidiary/Transfer of Assets Under Administration (1) (2)					0.435															(1.095	)
Balance at End-of-Period(1) (2)	$	30.807		$	28.129		$	25.108		$	22.547		$	29.073		$	26.044		$	30.680
Institutional Fixed - Bal Beg-of-Period	$	6.955		$	6.936		$	6.111		$	5.489		$	7.237		$	7.237		$	8.399
Inflows		2.001			0.771			0.643			2.281			1.937			1.274			3.034
Withdrawals/Terminations		(1.700	)		(1.973	)		(1.229	)		(1.146	)		(1.226	)		(0.722	)		(0.516	)
Transfers		(0.001	)		(0.005	)		0.017			0.004			0.005			0.005			0.008
Net Flows (2)		0.300			(1.207	)		(0.569	)		1.139			0.716			0.557			2.525
Market		(0.319	)		0.382			(0.053	)		0.608			0.447			0.284			0.105
Sale of Subsidiary (2)																				(3.124	)
Balance at End-of-Period (2)	$	6.936		$	6.111		$	5.489		$	7.237		$	8.399		$	8.077		$	7.906
Institutional Equity - Bal Beg-of-Period	$	24.236		$	23.632		$	19.114		$	17.815		$	16.711		$	16.711		$	25.322
Inflows		5.249			2.730			3.183			2.913			3.922			2.607			5.779
Withdrawals/Terminations		(7.800	)		(7.209	)		(2.879	)		(1.991	)		(2.178	)		(1.760	)		(3.250	)
Transfers		0.012			(0.008	)		0.035			0.045			0.018			0.013			0.028
Net Flows		(2.539	)		(4.486	)		0.338			0.967			1.762			0.861			2.557
Market		1.935			(0.031	)		(1.637	)		(2.071	)		6.849			3.436			1.274
Sale of Subsidiary (2)																				(18.664	)
Balance at End-of-Period	$	23.632		$	19.114		$	17.815		$	16.711		$	25.322		$	21.008		$	10.490
Total Institutional - Bal Beg-of-Period	$	31.191		$	30.568		$	25.225		$	23.305		$	23.948		$	23.948		$	33.722
Inflows		7.250			3.501			3.826			5.194			5.859			3.881			8.813
Withdrawals/Terminations		(9.500	)		(9.182	)		(4.109	)		(3.137	)		(3.404	)		(2.482	)		(3.766	)
Transfers		0.011			(0.013	)		0.052			0.050			0.023			0.018			0.036
Net Flows		(2.239	)		(5.693	)		(0.231	)		2.106			2.478			1.417			5.083
Market		1.616			0.351			(1.690	)		(1.463	)		7.296			3.720			1.378
Sale of Subsidiary (2)																				(21.787	)
Balance at End-of-Period	$	30.568		$	25.225		$	23.305		$	23.948		$	33.722		$	29.085		$	18.396
Total Retail/Institutional - At End-of-Period	$	61.375		$	53.355		$	48.412		$	46.495		$	62.794		$	55.129		$	49.076
Insurance-related Assets - At End-of-Period	$	35.934		$	35.686		$	38.119		$	41.104		$	43.024		$	42.984		$	44.047
Total Retail/Inst - Net Flows	$	(4.453	)	$	(7.193	)	$	(0.606	)	$	2.912		$	3.749		$	2.104		$	7.048
Total Assets Under Management At End-of-Period	$	97.309		$	89.041		$	86.531		$	87.599		$	105.818		$	98.113		$	93.123

(1) Retail assets under management have been restated to include assets under administration beginning in January of 2000. In the third quarter of 2004, Investment Management outsourced its mutual fund 401(k) record-keeping business. As a result, the third quarter of 2004 had net outflows of approximately $0.776 billion of assets under administration. Assets under administration were $0.250 billion at September 31, 2004.

(2) In the third quarter of 2004, the Investment Management segment sold its London-based international investment unit. Assets under management transferred as a result of the sale were $22.1 billion. See page 27A for assets under management without the London-based international investment unit.

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Investment Management (excluding Assets

Managed by Delaware’s London-based International Investment Unit)

Assets Under Management Rollforward

Unaudited [Billions of Dollars]

																YTD Sep 2003			YTD Sep 2004
	1999			2000			2001			2002			2003
Retail Fixed - Bal Beg-of-Period	$	8.218		$	7.422		$	6.605		$	7.118		$	7.631		$	7.631		$	8.186
Fund Sales		0.991			0.769			0.876			1.218			1.792			1.336			1.389
Redemptions		(1.424	)		(1.401	)		(1.051	)		(1.182	)		(1.442	)		(1.081	)		(1.221	)
Net Money Market		(0.111	)		(0.207	)		(0.046	)		(0.050	)		(0.028	)		(0.014	)		(0.093	)
Transfers		0.177			(0.168	)		0.405			0.206			(0.168	)		(0.080	)		(0.173	)
Net Flows		(0.367	)		(1.007	)		0.184			0.192			0.154			0.162			(0.097	)
Market		(0.429	)		0.096			0.330			0.321			0.401			0.290			0.165
Transfer of Assets Under Administration (1)					0.094															(0.194	)
Balance End-of-Period	$	7.422		$	6.605		$	7.118		$	7.631		$	8.186		$	8.083		$	8.060
Retail Equity - Bal Beg-of-Period	$	22.081		$	23.384		$	21.525		$	17.990		$	14.624		$	14.624		$	20.564
Fund Sales		3.270			4.116			2.817			4.182			3.780			2.572			5.079
Redemptions		(4.972	)		(4.431	)		(2.838	)		(3.684	)		(2.765	)		(2.071	)		(3.071	)
Net Money Market		(0.001	)		0.001
Transfers		(0.144	)		(0.178	)		(0.538	)		(0.173	)		0.156			0.064			0.080
Net Flows		(1.847	)		(0.492	)		(0.560	)		0.325			1.171			0.565			2.087
Market		3.150			(1.709	)		(2.975	)		(3.691	)		4.769			2.484			0.550
Transfer of Assets Under Administration (1)					0.342															(0.582	)
Balance at End-of-Period	$	23.384		$	21.525		$	17.990		$	14.624		$	20.564		$	17.673		$	22.620
Total Retail - Bal Beg-of-Period	$	30.299		$	30.807		$	28.129		$	25.108		$	22.255		$	22.255		$	28.750
Retail Sales-Annuities		1.561			1.782			1.701			2.456			2.140			1.580			2.015
Retail Sales-Mutual Funds		2.151			2.577			1.523			1.829			2.315			1.652			2.314
Retail Sales-Managed Acct. & Other		0.549			0.525			0.469			1.115			1.116			0.676			2.139
Total Retail Sales		4.261			4.885			3.693			5.399			5.572			3.908			6.468
Redemptions		(6.396	)		(5.832	)		(3.889	)		(4.867	)		(4.207	)		(3.152	)		(4.292	)
Net Money Market		(0.112	)		(0.206	)		(0.046	)		(0.050	)		(0.028	)		(0.014	)		(0.093	)
Transfers		0.033			(0.346	)		(0.133	)		0.033			(0.012	)		(0.016	)		(0.093	)
Net Flows		(2.214	)		(1.500	)		(0.375	)		0.517			1.325			0.727			1.991
Market		2.721			(1.613	)		(2.646	)		(3.370	)		5.171			2.774			0.715
Transfer of Assets Under Administration (1)					0.435															(0.776	)
Balance at End-of-Period	$	30.807		$	28.129		$	25.108		$	22.255		$	28.750		$	25.756		$	30.680
Institutional Fixed - Bal Beg-of-Period	$	3.461		$	4.013		$	3.590		$	3.377		$	5.147		$	5.147		$	5.981
Inflows		1.591			0.455			0.388			2.177			1.540			1.189			2.256
Withdrawals/Terminations		(1.021	)		(1.248	)		(0.586	)		(0.541	)		(0.635	)		(0.399	)		(0.374	)
Transfers		(0.001	)		(0.005	)		0.017			0.004			(0.126	)		(0.153	)		0.008
Net Flows		0.570			(0.798	)		(0.181	)		1.640			0.779			0.636			1.889
Market		(0.018	)		0.375			(0.032	)		0.130			0.055			0.051			0.036
Balance at End-of-Period	$	4.013		$	3.590		$	3.377		$	5.147		$	5.981		$	5.834		$	7.906
Institutional Equity - Bal Beg-of-Period	$	18.686		$	13.909		$	9.664		$	8.186		$	7.201		$	7.201		$	10.318
Inflows		2.022			1.469			1.555			1.532			1.780			1.257			1.905
Withdrawals/Terminations		(7.484	)		(5.784	)		(2.334	)		(1.333	)		(1.161	)		(0.930	)		(2.095	)
Transfers		0.012			(0.008	)		0.035			0.045			0.034			0.013			0.090
Net Flows		(5.450	)		(4.323	)		(0.744	)		0.245			0.653			0.340			(0.100	)
Market		0.674			0.078			(0.735	)		(1.229	)		2.463			1.285			0.272
Balance at End-of-Period	$	13.909		$	9.664		$	8.186		$	7.201		$	10.318		$	8.826		$	10.490
Total Institutional - Bal Beg-of-Period	$	22.147		$	17.923		$	13.255		$	11.562		$	12.348		$	12.348		$	16.299
Inflows		3.614			1.924			1.943			3.709			3.320			2.446			4.161
Withdrawals/Terminations		(8.505	)		(7.032	)		(2.920	)		(1.874	)		(1.796	)		(1.329	)		(2.470	)
Transfers		0.011			(0.013	)		0.052			0.050			(0.092	)		(0.140	)		0.097
Net Flows		(4.880	)		(5.120	)		(0.925	)		1.885			1.433			0.976			1.789
Market		0.656			0.453			(0.767	)		(1.099	)		2.518			1.336			0.308
Balance at End-of-Period	$	17.923		$	13.255		$	11.562		$	12.348		$	16.299		$	14.660		$	18.396
Total Retail/Institutional - At End-of-Period	$	48.729		$	41.384		$	36.670		$	34.602		$	45.049		$	40.416		$	49.076
Insurance-related Assets - At End-of-Period	$	35.934		$	35.686		$	38.119		$	41.104		$	43.024		$	42.984		$	44.047
Total Retail/Inst - Net Flows	$	(7.094	)	$	(6.620	)	$	(1.301	)	$	2.402		$	2.757		$	1.702		$	3.780
Total Assets Under Management At End-of-Period	$	84.663		$	77.070		$	74.789		$	75.706		$	88.072		$	83.400		$	93.123

(1) Retail assets under management have been restated to include assets under administration beginning in January of 2000. In the third quarter of 2004, Investment Management outsourced its mutual fund 401(k) record-keeping business. As a result, the third quarter of 2004 had net outflows of approximately $0.776 billion of assets under administration. Assets under administration were $0.250 billion at September 31, 2004.

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Investment Management

Assets Under Management Roll Forward

Unaudited [Billions of Dollars]

	Dec 2001			Mar 2002			Jun 2002			Sep 2002			Dec 2002			Mar 2003			Jun 2003			Sep 2003			Dec 2003			Mar 2004			Jun 2004			Sep 2004
Retail Fixed - Bal-Beg-of-Qtr	$	7.203		$	7.118		$	7.086		$	7.167		$	7.514		$	7.631		$	7.907		$	8.190		$	8.083		$	8.186		$	8.313		$	8.152
Fund Sales		0.218			0.292			0.272			0.325			0.328			0.424			0.469			0.443			0.456			0.513			0.452			0.425
Redemptions		(0.242	)		(0.289	)		(0.306	)		(0.277	)		(0.311	)		(0.327	)		(0.318	)		(0.435	)		(0.361	)		(0.418	)		(0.462	)		(0.341	)
Net Money Market		(0.031	)		(0.003	)		(0.002	)		(0.009	)		(0.035	)		0.001			(0.006	)		(0.008	)		(0.014	)		(0.036	)		0.012			(0.069	)
Transfers		(0.027	)		(0.041	)		0.021			0.134			0.092			0.062			(0.055	)		(0.086	)		(0.088	)		(0.035	)		(0.019	)		(0.119	)
Net Flows		(0.083	)		(0.041	)		(0.015	)		0.174			0.074			0.159			0.090			(0.087	)		(0.008	)		0.024			(0.017	)		(0.104	)
Market		(0.002	)		0.009			0.096			0.174			0.043			0.117			0.193			(0.020	)		0.111			0.103			(0.144	)		0.207
Transfer of Assets Under Administration(1)																																			(0.194	)
Balance at End-of-Qtr	$	7.118		$	7.086		$	7.167		$	7.514		$	7.631		$	7.907		$	8.190		$	8.083		$	8.186		$	8.313		$	8.152		$	8.060
Retail Equity - Bal-Beg-of-Qtr	$	15.873		$	17.990		$	18.255		$	16.613		$	13.705		$	14.917		$	14.286		$	16.906		$	17.961		$	20.887		$	22.546		$	23.223
Fund Sales		0.580			0.908			1.084			1.140			1.345			0.717			0.813			1.051			1.210			1.938			1.666			1.480
Redemptions		(0.607	)		(0.791	)		(0.881	)		(1.137	)		(0.881	)		(0.803	)		(0.612	)		(0.706	)		(0.710	)		(0.992	)		(1.028	)		(1.081	)
Net Money Market
Transfers		0.019			0.014			(0.022	)		(0.128	)		(0.036	)		(0.059	)		0.011			0.112			0.092			(0.002	)		(0.004	)		0.085
Net Flows		(0.008	)		0.130			0.182			(0.126	)		0.428			(0.145	)		0.213			0.457			0.592			0.944			0.634			0.485
Market		2.125			0.134			(1.824	)		(2.782	)		0.784			(0.486	)		2.408			0.598			2.334			0.715			0.044			(0.188	)
Sale of Subsidiary/Transfer of Assets Under Administration (1) (2)																																			(0.901	)
Balance at End-of-Qtr	$	17.990		$	18.255		$	16.613		$	13.705		$	14.917		$	14.286		$	16.906		$	17.961		$	20.887		$	22.546		$	23.223		$	22.620
Total Retail - Bal-Beg-of-Qtr	$	23.076		$	25.108		$	25.340		$	23.779		$	21.219		$	22.547		$	22.193		$	25.096		$	26.044		$	29.073		$	30.859		$	31.375
Retail Sales-Annuities		0.323			0.589			0.601			0.756			0.806			0.488			0.528			0.573			0.562			0.753			0.668			0.600
Retail Sales-Mutual Funds		0.348			0.452			0.562			0.416			0.399			0.450			0.558			0.644			0.663			0.905			0.729			0.680
Retail Sales-Managed Acct. & Other		0.127			0.159			0.194			0.293			0.469			0.202			0.196			0.277			0.441			0.793			0.721			0.625
Total Retail Sales		0.798			1.200			1.356			1.465			1.673			1.141			1.282			1.494			1.666			2.451			2.117			1.905
Redemptions		(0.850	)		(1.081	)		(1.186	)		(1.414	)		(1.192	)		(1.130	)		(0.930	)		(1.141	)		(1.071	)		(1.409	)		(1.491	)		(1.422	)
Net Money Market		(0.031	)		(0.003	)		(0.002	)		(0.009	)		(0.035	)		0.001			(0.006	)		(0.008	)		(0.014	)		(0.036	)		0.012			(0.069	)
Transfers		(0.009	)		(0.027	)		(0.001	)		0.006			0.056			0.003			(0.044	)		0.025			0.004			(0.037	)		(0.022	)		(0.034	)
Net Flows		(0.091	)		0.089			0.167			0.048			0.502			0.014			0.302			0.370			0.584			0.969			0.617			0.381
Market		2.123			0.143			(1.728	)		(2.608	)		0.826			(0.369	)		2.601			0.578			2.444			0.818			(0.101	)		0.019
Sale of Subsidiary/Transfer of Assets Under Administration (1) (2)																																			(1.095	)
Balance at End-of-Qtr	$	25.108		$	25.340		$	23.779		$	21.219		$	22.547		$	22.193		$	25.096		$	26.044		$	29.073		$	30.859		$	31.375		$	30.680
Institutional Fixed - Bal-Beg-of-Qtr	$	5.640		$	5.489		$	6.018		$	6.844		$	7.207		$	7.237		$	7.605		$	7.753		$	8.077		$	8.399		$	9.028		$	9.906
Inflows		0.080			0.804			0.663			0.530			0.283			0.592			0.126			0.556			0.663			0.806			1.281			0.947
Withdrawals/Terminations		(0.192	)		(0.239	)		(0.161	)		(0.308	)		(0.438	)		(0.308	)		(0.188	)		(0.226	)		(0.503	)		(0.218	)		(0.135	)		(0.163	)
Transfers		0.002			(0.001	)		0.000			0.007			(0.002	)		0.002			0.003			(0.000	)		(0.000	)		0.005			0.002			0.001
Net Flows		(0.109	)		0.565			0.503			0.229			(0.157	)		0.286			(0.059	)		0.330			0.160			0.593			1.148			0.784
Market		(0.041	)		(0.036	)		0.323			0.134			0.187			0.083			0.207			(0.006	)		0.163			0.036			(0.271	)		0.339
Sale of Subsidiary (2)																																			(3.124	)
Balance at End-of-Qtr	$	5.489		$	6.018		$	6.844		$	7.207		$	7.237		$	7.605		$	7.753		$	8.077		$	8.399		$	9.028		$	9.906		$	7.906
Institutional Equity - Bal-Beg-of-Qtr	$	16.242		$	17.815		$	18.644		$	18.120		$	14.937		$	16.711		$	15.920		$	19.607		$	21.008		$	25.322		$	27.188		$	28.362
Inflows		0.615			0.672			0.569			0.631			1.040			0.494			0.727			1.386			1.315			1.817			2.049			1.912
Withdrawals/Terminations		(0.624	)		(0.512	)		(0.635	)		(0.523	)		(0.322	)		(0.459	)		(0.381	)		(0.921	)		(0.419	)		(0.762	)		(1.161	)		(1.327	)
Transfers		0.016			0.006			0.018			0.011			0.010			0.008			0.002			0.003			0.005			0.012			0.006			0.010
Net Flows		0.007			0.167			(0.047	)		0.119			0.728			0.044			0.348			0.469			0.901			1.068			0.895			0.595
Market		1.567			0.661			(0.476	)		(3.302	)		1.046			(0.835	)		3.339			0.932			3.413			0.798			0.280			0.196
Sale of Subsidiary (2)																																			(18.664	)
Balance at End-of-Qtr	$	17.815		$	18.644		$	18.120		$	14.937		$	16.711		$	15.920		$	19.607		$	21.008		$	25.322		$	27.188		$	28.362		$	10.490
Total Institutional - Bal-Beg-of-Qtr	$	21.881		$	23.305		$	24.661		$	24.963		$	22.143		$	23.948		$	23.526		$	27.360		$	29.085		$	33.722		$	36.216		$	38.268
Inflows		0.696			1.476			1.232			1.162			1.323			1.086			0.853			1.943			1.978			2.623			3.331			2.859
Withdrawals/Terminations		(0.816	)		(0.751	)		(0.796	)		(0.831	)		(0.760	)		(0.767	)		(0.568	)		(1.147	)		(0.922	)		(0.980	)		(1.296	)		(1.490	)
Transfers		0.018			0.006			0.019			0.017			0.008			0.010			0.005			0.003			0.005			0.017			0.008			0.011
Net Flows		(0.103	)		0.731			0.455			0.348			0.572			0.330			0.289			0.799			1.061			1.661			2.043			1.379
Market		1.526			0.625			(0.153	)		(3.168	)		1.233			(0.752	)		3.546			0.926			3.576			0.834			0.009			0.535
Sale of Subsidiary (2)																																			(21.787	)
Balance at End-of-Qtr	$	23.305		$	24.661		$	24.963		$	22.143		$	23.948		$	23.526		$	27.360		$	29.085		$	33.722		$	36.216		$	38.268		$	18.396
Total Retail/Inst - At End-of-Qtr	$	48.412		$	50.002		$	48.742		$	43.362		$	46.495		$	45.718		$	52.456		$	55.129		$	62.794		$	67.075		$	69.643		$	49.076
Insurance-related Assets-End-of-Qtr	$	38.119		$	37.171		$	38.476		$	40.416		$	41.104		$	42.130		$	43.857		$	42.984		$	43.024		$	44.006		$	42.528		$	44.047
Total Retail/Inst - Net Flows	$	(0.194	)	$	0.821		$	0.622		$	0.396		$	1.074		$	0.344		$	0.591		$	1.169		$	1.645		$	2.629		$	2.660		$	1.760
Total Assets Under Management At End-of-Qtr	$	86.531		$	87.172		$	87.218		$	83.778		$	87.599		$	87.848		$	96.313		$	98.113		$	105.818		$	111.081		$	112.172		$	93.123

(1) Retail assets under management have been restated to include assets under administration beginning in January of 2000. In the third quarter of 2004, Investment Management outsourced its mutual fund 401(k) record-keeping business. As a result, the third quarter of 2004 had net outflows of approximately $0.776 billion of assets under administration. Assets under administration were $0.250 billion at September 31, 2004.

(2) In the third quarter of 2004, the Investment Management segment sold its London-based international investment unit. Assets under management transferred as a result of the sale were $22.1 billion. See page 28A for assets under management without the London-based international investment unit.

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Investment Management (excluding Assets

Managed by Delaware’s London-based International Investment Unit)

Assets Under Management Roll Forward

Unaudited [Billions of Dollars]

	Dec 2001			Mar 2002			Jun 2002			Sep 2002			Dec 2002			Mar 2003			Jun 2003			Sep 2003			Dec 2003			Mar 2004			Jun 2004			Sep 2004
Retail Fixed - Bal-Beg-of-Qtr	$	7.203		$	7.118		$	7.086		$	7.167		$	7.514		$	7.631		$	7.907		$	8.190		$	8.083		$	8.186		$	8.313		$	8.152
Fund Sales		0.218			0.292			0.272			0.325			0.328			0.424			0.469			0.443			0.456			0.513			0.452			0.425
Redemptions		(0.242	)		(0.289	)		(0.306	)		(0.277	)		(0.311	)		(0.327	)		(0.318	)		(0.435	)		(0.361	)		(0.418	)		(0.462	)		(0.341	)
Net Money Market		(0.031	)		(0.003	)		(0.002	)		(0.009	)		(0.035	)		0.001			(0.006	)		(0.008	)		(0.014	)		(0.036	)		0.012			(0.069	)
Transfers		(0.027	)		(0.041	)		0.021			0.134			0.092			0.062			(0.055	)		(0.086	)		(0.088	)		(0.035	)		(0.019	)		(0.119	)
Net Flows		(0.083	)		(0.041	)		(0.015	)		0.174			0.074			0.159			0.090			(0.087	)		(0.008	)		0.024			(0.017	)		(0.104	)
Market		(0.002	)		0.009			0.096			0.174			0.043			0.117			0.193			(0.020	)		0.111			0.103			(0.144	)		0.207
Transfer of Assets Under Administration (1)																																			(0.194	)
Balance at End-of-Qtr	$	7.118		$	7.086		$	7.167		$	7.514		$	7.631		$	7.907		$	8.190		$	8.083		$	8.186		$	8.313		$	8.152		$	8.060
Retail Equity - Bal-Beg-of-Qtr	$	15.873		$	17.990		$	18.255		$	16.613		$	13.705		$	14.624		$	14.048		$	16.622		$	17.673		$	20.564		$	22.225		$	22.905
Fund Sales		0.580			0.908			1.084			1.140			1.050			0.712			0.812			1.048			1.208			1.936			1.664			1.478
Redemptions		(0.607	)		(0.791	)		(0.881	)		(1.137	)		(0.875	)		(0.765	)		(0.608	)		(0.698	)		(0.694	)		(0.979	)		(1.019	)		(1.074	)
Net Money Market
Transfers		0.019			0.014			(0.022	)		(0.128	)		(0.036	)		(0.059	)		0.011			0.112			0.092			(0.002	)		(0.004	)		0.085
Net Flows		(0.008	)		0.130			0.182			(0.126	)		0.139			(0.111	)		0.214			0.462			0.606			0.956			0.641			0.490
Market		2.125			0.134			(1.824	)		(2.782	)		0.780			(0.465	)		2.359			0.589			2.285			0.706			0.039			(0.194	)
Transfer of Assets Under Administration (1)																																			(0.582	)
Balance at End-of-Qtr	$	17.990		$	18.255		$	16.613		$	13.705		$	14.624		$	14.048		$	16.622		$	17.673		$	20.564		$	22.225		$	22.906		$	22.620
Total Retail - Bal-Beg-of-Qtr	$	23.076		$	25.108		$	25.340		$	23.779		$	21.219		$	22.255		$	21.955		$	24.812		$	25.756		$	28.750		$	30.538		$	31.057
Retail Sales-Annuities		0.323			0.589			0.601			0.756			0.510			0.484			0.526			0.570			0.560			0.751			0.666			0.598
Retail Sales-Mutual Funds		0.348			0.452			0.562			0.416			0.399			0.450			0.558			0.644			0.663			0.905			0.729			0.680
Retail Sales-Managed Acct. & Other		0.127			0.159			0.194			0.293			0.469			0.202			0.196			0.277			0.441			0.793			0.721			0.625
Total Retail Sales		0.798			1.200			1.356			1.465			1.378			1.136			1.280			1.491			1.664			2.449			2.115			1.903
Redemptions		(0.850	)		(1.081	)		(1.186	)		(1.414	)		(1.186	)		(1.092	)		(0.926	)		(1.133	)		(1.055	)		(1.396	)		(1.481	)		(1.415	)
Net Money Market		(0.031	)		(0.003	)		(0.002	)		(0.009	)		(0.035	)		0.001			(0.006	)		(0.008	)		(0.014	)		(0.036	)		0.012			(0.069	)
Transfers		(0.009	)		(0.027	)		(0.001	)		0.006			0.056			0.003			(0.044	)		0.025			0.004			(0.037	)		(0.022	)		(0.034	)
Net Flows		(0.091	)		0.089			0.167			0.048			0.213			0.048			0.304			0.375			0.598			0.980			0.624			0.386
Market		2.123			0.143			(1.728	)		(2.608	)		0.823			(0.347	)		2.552			0.569			2.396			0.808			(0.105	)		0.013
Transfer of Assets Under Administration (1)																																			(0.776	)
Balance at End-of-Qtr	$	25.108		$	25.340		$	23.779		$	21.219		$	22.255		$	21.955		$	24.812		$	25.756		$	28.750		$	30.538		$	31.057		$	30.680
Institutional Fixed - Bal-Beg-of-Qtr	$	3.468		$	3.377		$	4.062		$	4.653		$	5.010		$	5.147		$	5.530		$	5.481		$	5.834		$	5.981		$	6.501		$	6.980
Inflows		0.061			0.798			0.635			0.493			0.251			0.553			0.120			0.516			0.351			0.655			0.776			0.825
Withdrawals/Terminations		(0.130	)		(0.082	)		(0.102	)		(0.196	)		(0.162	)		(0.158	)		(0.152	)		(0.089	)		(0.236	)		(0.138	)		(0.109	)		(0.127	)
Transfers		0.002			(0.001	)		0.000			0.007			(0.002	)		0.002			(0.099	)		(0.056	)		0.028			0.005			0.002			0.001
Net Flows		(0.067	)		0.715			0.534			0.304			0.087			0.397			(0.132	)		0.371			0.143			0.521			0.669			0.699
Market		(0.025	)		(0.030	)		0.057			0.054			0.050			(0.013	)		0.083			(0.018	)		0.004			(0.001	)		(0.191	)		0.227
Balance at End-of-Qtr	$	3.377		$	4.062		$	4.653		$	5.010		$	5.147		$	5.530		$	5.481		$	5.834		$	5.981		$	6.501		$	6.980		$	7.906
Institutional Equity - Bal-Beg-of-Qtr	$	7.608		$	8.186		$	8.299		$	7.419		$	6.116		$	7.201		$	7.041		$	8.462		$	8.826		$	10.318		$	10.713		$	10.435
Inflows		0.193			0.189			0.228			0.373			0.743			0.339			0.347			0.571			0.524			0.552			0.596			0.758
Withdrawals/Terminations		(0.447	)		(0.363	)		(0.453	)		(0.351	)		(0.167	)		(0.182	)		(0.232	)		(0.516	)		(0.231	)		(0.501	)		(0.959	)		(0.635	)
Transfers		0.016			0.006			0.018			0.011			0.010			0.008			0.002			0.003			0.021			(0.012	)		0.073			0.029
Net Flows		(0.238	)		(0.168	)		(0.206	)		0.033			0.586			0.165			0.116			0.059			0.314			0.038			(0.290	)		0.152
Market		0.816			0.281			(0.674	)		(1.336	)		0.499			(0.326	)		1.305			0.305			1.178			0.357			0.012			(0.097	)
Balance at End-of-Qtr	$	8.186		$	8.299		$	7.419		$	6.116		$	7.201		$	7.041		$	8.462		$	8.826		$	10.318		$	10.713		$	10.435		$	10.490
Total Institutional - Bal-Beg-of-Qtr	$	11.076		$	11.562		$	12.361		$	12.072		$	11.126		$	12.348		$	12.571		$	13.943		$	14.660		$	16.299		$	17.215		$	17.414
Inflows		0.254			0.986			0.863			0.866			0.994			0.892			0.466			1.088			0.874			1.206			1.372			1.583
Withdrawals/Terminations		(0.576	)		(0.445	)		(0.554	)		(0.547	)		(0.328	)		(0.340	)		(0.385	)		(0.604	)		(0.466	)		(0.640	)		(1.068	)		(0.762	)
Transfers		0.018			0.006			0.019			0.017			0.008			0.010			(0.098	)		(0.053	)		0.049			(0.007	)		0.075			0.030
Net Flows		(0.305	)		0.547			0.328			0.337			0.673			0.562			(0.016	)		0.430			0.457			0.560			0.379			0.850
Market		0.791			0.251			(0.617	)		(1.282	)		0.548			(0.339	)		1.388			0.287			1.182			0.356			(0.179	)		0.131
Balance at End-of-Qtr	$	11.562		$	12.361		$	12.072		$	11.126		$	12.348		$	12.571		$	13.943		$	14.660		$	16.299		$	17.215		$	17.414		$	18.396
Total Retail/Inst - At End-of-Qtr	$	36.670		$	37.701		$	35.851		$	32.345		$	34.602		$	34.527		$	38.755		$	40.416		$	45.049		$	47.753		$	48.471		$	49.076
Insurance-related Assets-End-of-Qtr	$	38.119		$	37.171		$	38.476		$	40.416		$	41.104		$	42.130		$	43.857		$	42.984		$	43.024		$	44.006		$	42.528		$	44.047
Total Retail/Inst - Net Flows	$	(0.396	)	$	0.637		$	0.494		$	0.385		$	0.886		$	0.610		$	0.288		$	0.805		$	1.055		$	1.540		$	1.003		$	1.236
Total Assets Under Management At End-of-Qtr	$	74.789		$	74.872		$	74.327		$	72.761		$	75.706		$	76.656		$	82.612		$	83.400		$	88.072		$	91.759		$	91.000		$	93.123

(1) Retail assets under management have been restated to include assets under administration beginning in January of 2000. In the third quarter of 2004, Investment Management outsourced its mutual fund 401(k) record-keeping business. As a result, the third quarter of 2004 had net outflows of approximately $0.776 billion of assets under administration. Assets under administration were $0.250 billion at September 31, 2004.

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Lincoln UK

Income Statements

Unaudited [Millions of Dollars]

For the Year Ended December 31	1999			2000			2001			2002			2003			YTD Sep 2003			YTD Sep 2004
Revenue
Premiums	$	145.1		$	148.4		$	46.1		$	50.6		$	62.2		$	42.9		$	55.4
Mortality assessments		27.1			31.4			33.9			32.4			35.7			27.0			29.7
Expense assessments		182.3			178.1			134.8			105.3			93.9			69.2			75.6
Other revenue and fees		13.8			2.6			(1.4	)		24.9			18.6			9.0			36.8
Net investment income		75.3			70.3			64.8			62.1			64.1			47.9			55.4
Realized gains (losses) on investments		3.0			3.2			12.4			1.9			(1.1	)		0.2			(0.5	)
Gain on sale of subsidiaries/ businesses																				10.1
Total Revenue		446.6			433.8			290.7			277.2			273.5			196.3			262.5
Benefits and Expenses
Benefits paid or provided:
Benefits		306.2			178.5			83.4			84.2			98.6			65.2			79.2
Underwriting, acquisition, insurance and other expenses:
Commissions		54.5			37.7			10.8			6.1			3.8			2.9			1.9
Operating and administrative expenses		153.0			142.5			82.5			77.0			78.3			58.3			66.9
Restructuring charges		10.0			99.4						(1.7	)
Subtotal		217.4			279.5			93.2			81.4			82.1			61.3			68.8
Deferral of acquisition costs								(4.2	)		(3.4	)		(3.5	)		(1.9	)		(4.6	)
DAC amortization								35.9			50.0			42.5			27.9			55.5
DAC deferral net of amortization		(12.4	)		(7.2	)		31.7			46.5			39.1			26.0			50.9
PVIF amortization		28.4			4.7			22.5			30.8			(10.7	)		(3.4	)		12.5
Total underwriting, acquisition, insurance and other expenses		233.5			277.0			147.4			158.7			110.4			83.9			132.3
Goodwill amortization		7.0			4.0			0.6
Total Benefits and Expenses		546.7			459.6			231.5			242.9			209.0			149.1			211.4
Federal income taxes		(81.8	)		(10.6	)		(7.6	)		(3.4	)		21.6			16.5			18.1
Net Income	$	(18.2	)	$	(15.1	)	$	66.8		$	37.7		$	42.9		$	30.7		$	33.0
Less:
Realized gains (losses) on investments		2.1			2.3			8.7			1.3			(0.7	)		0.2			(0.5	)
Gain on sale of subsidiaries/ businesses																				6.6
Restructuring charges		(6.5	)		(76.5	)					1.7
Income from Operations	$	(13.9	)	$	59.2		$	58.1		$	34.6		$	43.6		$	30.6		$	27.0
Effective tax rate on Income from Operations		85.1	%		15.9	%		(24.2	)%		(12.8	)%		33.4	%		35.0	%		35.0	%
Revenue	$	446.6		$	433.8		$	290.7		$	277.2		$	273.5		$	196.3		$	262.5
Less:
Realized gains (losses) on investments		3.0			3.2			12.4			1.9			(1.1	)		0.2			(0.5	)
Gain on sale of subsidiaries/ businesses																				10.1
Operating Revenue	$	443.6		$	430.6		$	278.2		$	275.4		$	274.5		$	196.1		$	252.9
Average capital	$	520.4		$	494.0		$	593.8		$	549.9		$	478.9		$	490.9		$	433.9
Net Income return on average capital		(3.5	)%		(3.1	)%		11.3	%		6.9	%		9.0	%		8.3	%		10.2	%
Income from operations return on average capital		(2.7	)%		12.0	%		9.8	%		6.3	%		9.1	%		8.3	%		8.3	%
Roll Forward of Deferred Acquisition Costs
Balance at beginning-of-year							$	635.0		$	587.3		$	597.6		$	597.6		$	620.6
Deferral								4.2			3.4			3.5			1.9			4.6
Amortization								(35.9	)		(50.0	)		(42.5	)		(27.9	)		(55.5	)
Included in Total Benefits and Expenses								(31.7	)		(46.5	)		(39.1	)		(26.0	)		(50.9	)
Foreign currency translation adjustment								(16.0	)		56.8			62.0			19.1			9.2
Balance at end-of-year							$	587.3		$	597.6		$	620.6		$	590.8		$	578.9
Roll Forward of Present Value of In-Force
Balance at beginning-of-year							$	273.6		$	244.0		$	237.3		$	237.3		$	274.7
Amortization								(22.5	)		(30.8	)		10.7			3.4			(12.5	)
Foreign currency translation adjustment								(7.0	)		24.1			26.7			8.3			4.0
Balance at end-of-year							$	244.0		$	237.3		$	274.7		$	249.0		$	266.2

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Lincoln UK

Income Statements

Unaudited [Millions of Dollars]

For the Quarter Ended	Sep 2002			Dec 2002			Mar 2003			Jun 2003			Sep 2003			Dec 2003			Mar 2004			Jun 2004			Sep 2004
Revenue
Premiums		12.4			14.2			12.7			13.8			16.5			19.3			18.1			19.6			17.7
Mortality assessments		8.7			8.9			9.1			9.2			8.7			8.7			9.6			10.4			9.7
Expense assessments		29.4			22.8			21.6			24.5			23.2			24.6			24.2			24.4			27.0
Other revenue and fees		24.5			(11.9	)		10.3			(3.9	)		2.6			9.6			5.8			8.3			22.8
Net investment income		15.6			16.6			15.2			16.7			16.0			16.2			18.5			18.3			18.7
Realized gains (losses) on investments		1.2			1.2			(0.0	)		0.0			0.3			(1.3	)		(0.4	)		(0.1	)		(0.1	)
Gain on sale of subsidiaries/ businesses																							10.1			—
Total Revenue		91.8			51.8			68.9			60.2			67.3			77.1			75.8			91.0			95.7
Benefits and Expenses
Benefits paid or provided:
Benefits		23.8			23.1			18.2			24.3			22.7			33.3			29.0			28.8			21.4
Underwriting, acquisition, insurance and other expenses:
Commissions		1.6			1.3			1.1			0.8			1.0			0.8			0.6			0.6			0.7
Operating and administrative expenses		20.2			20.6			18.3			20.5			19.6			20.0			23.0			22.3			21.6
Restructuring charges					(1.7	)
Subtotal		21.8			20.2			19.4			21.3			20.6			20.8			23.5			22.9			22.4
Deferral of acquisition costs		(0.9	)		(0.6	)		(0.8	)		(0.8	)		(0.2	)		(1.6	)		(1.5	)		(1.8	)		(1.4	)
DAC amortization		33.8			(11.5	)		18.6			2.0			7.3			14.7			12.5			14.4			28.6
DAC deferral net of amortization		33.0			(12.1	)		17.7			1.2			7.1			13.1			11.0			12.6			27.2
PVIF amortization		12.8			5.5			3.0			(5.7	)		(0.7	)		(7.3	)		3.0			0.1			9.4
Total underwriting, acquisition, insurance and other expenses		67.6			13.6			40.1			16.8			27.0			26.6			37.6			35.7			59.0
Total Benefits and Expenses		91.4			36.7			58.3			41.1			49.6			59.9			66.6			64.5			80.3
Federal income taxes		0.2			(2.8	)		3.8			6.6			6.1			5.1			3.2			9.3			5.5
Net Income	$	0.2		$	17.9		$	6.8		$	12.4		$	11.5		$	12.2		$	5.9		$	17.2		$	9.9
Less:
Realized gains (losses) on investments		0.9			0.8			(0.0	)		0.0			0.2			(0.9	)		(0.3	)		(0.0	)		(0.2	)
Gain on sale of subsidiaries/ businesses																							6.6			0.0
Restructuring charges					1.7
Income from Operations	$	(0.6	)	$	15.3		$	6.8		$	12.4		$	11.3		$	13.0		$	6.2		$	10.7		$	10.1
Effective tax rate on Income from Operations		25.4	%		(26.1	)%		35.5	%		34.7	%		35.0	%		29.5	%		35.0	%		35.0	%		35.0	%
Revenue	$	91.8		$	51.8		$	68.9		$	60.2		$	67.3		$	77.1		$	75.8		$	91.0		$	95.7
Less:
Realized gains (losses) on investments		1.2			1.2			(0.0	)		0.0			0.3			(1.3	)		(0.4	)		(0.1	)		(0.1	)
Gain on sale of subsidiaries/ businesses																							10.1			—
Operating Revenue	$	90.6		$	50.6		$	68.9		$	60.2		$	67.0		$	78.4		$	76.1		$	81.0		$	95.8
Average capital	$	525.3		$	544.0		$	532.6		$	487.9		$	452.2		$	443.1		$	447.9		$	421.2		$	432.5
Net Income return on average capital		0.2	%		13.2	%		5.1	%		10.2	%		10.2	%		11.0	%		5.3	%		16.4	%		9.1	%
Income from operations return on average capital		(0.5	)%		11.3	%		5.1	%		10.2	%		10.0	%		11.8	%		5.5	%		10.2	%		9.3	%
Roll Forward of Deferred Acquisition Costs
Balance at beginning-of-year	$	591.0		$	571.8		$	597.6		$	569.1		$	595.1		$	590.9		$	620.7		$	629.6		$	608.6
Deferral		0.9			0.6			0.8			0.8			0.2			1.6			1.5			1.8			1.4
Amortization		(33.8	)		11.5			(18.6	)		(2.0	)		(7.3	)		(14.7	)		(12.5	)		(14.4	)		(28.6	)
Included in Total Benefits and Expenses		(33.0	)		12.1			(17.7	)		(1.2	)		(7.1	)		(13.1	)		(11.0	)		(12.6	)		(27.2	)
Foreign currency translation adjustment		13.8			13.7			(10.8	)		27.2			2.8			42.8			19.9			(8.4	)		(2.5	)
Balance at end-of-year	$	571.8		$	597.6		$	569.1		$	595.1		$	590.9		$	620.7		$	629.6		$	608.6		$	578.9
Roll Forward of Present Value of In-Force
Balance at beginning-of-year	$	243.9		$	236.8		$	237.4		$	230.1		$	247.0		$	249.0		$	274.7		$	280.5		$	276.7
Amortization		(12.8	)		(5.5	)		(3.0	)		5.7			0.7			7.3			(3.0	)		(0.1	)		(9.4	)
Foreign currency translation adjustment		5.7			6.1			(4.3	)		11.2			1.3			18.4			8.9			(3.7	)		(1.1	)
Balance at end-of-year	$	236.8		$	237.4		$	230.1		$	247.0		$	249.0		$	274.7		$	280.5		$	276.7		$	266.2

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Lincoln UK

Operational Data

Unaudited [Billions of Dollars]

For the Year Ended December 31	1999			2000			2001			2002			2003
Unit Linked Assets - Beg-of-Year	$	6.265		$	7.220		$	6.441		$	5.607		$	5.079
Deposits		0.537			0.554			0.481			0.453			0.392
Withdrawals (incl. chgs) & Deaths		(0.566	)		(0.644	)		(0.529	)		(0.519	)		(0.614	)
Net Flows		(0.029	)		(0.090	)		(0.048	)		(0.066	)		(0.222	)
Inv Inc & Chg in Mkt Val		1.154			(0.154	)		(0.617	)		(1.004	)		0.918
Foreign Currency Adjustment		(0.170	)		(0.536	)		(0.169	)		0.542			0.616
Unit Linked Assets - End-of-Year	$	7.220		$	6.441		$	5.607		$	5.079		$	6.390
Individual Life In-force		25.698			24.290			20.878			18.896			20.393
Exchange Rate - Dollars to Pounds
For-the-Period		1.617			1.518			1.441			1.503			1.638
End-of-Period		1.615			1.493			1.456			1.610			1.786

For the Quarter Ended	Dec 2001			Mar 2002			Jun 2002			Sep 2002			Dec 2002			Mar 2003			Jun 2003			Sep 2003			Dec 2003			Mar 2004			Jun 2004			Sep 2004
Unit Linked Assets
Balance-Beg-of-Quarter	$	5.218		$	5.607		$	5.618		$	5.520		$	4.825		$	5.079		$	4.748		$	5.468		$	5.692		$	6.390		$	6.528		$	6.476
Deposits		0.111			0.114			0.115			0.119			0.104			0.094			0.090			0.113			0.095			0.083			0.085			0.102
Withdrawals (incl. chgs) & Deaths		(0.115	)		(0.127	)		(0.137	)		(0.126	)		(0.129	)		(0.153	)		(0.137	)		(0.152	)		(0.172	)		(0.172	)		(0.177	)		(0.175	)
Net Flows		(0.004	)		(0.013	)		(0.022	)		(0.006	)		(0.025	)		(0.059	)		(0.047	)		(0.039	)		(0.077	)		(0.090	)		(0.092	)		(0.074	)
Inv Inc & Chg in Mkt Val		0.457			0.141			(0.479	)		(0.812	)		0.146			(0.184	)		0.549			0.205			0.348			0.020			0.127			0.091
Foreign Currency Adjustment		(0.063	)		(0.117	)		0.403			0.123			0.133			(0.087	)		0.218			0.059			0.427			0.207			(0.087	)		(0.120	)
Unit Linked Assets - End-of-Quarter	$	5.607		$	5.618		$	5.520		$	4.825		$	5.079		$	4.748		$	5.468		$	5.692		$	6.390		$	6.528		$	6.476		$	6.373
Individual Life In-force		20.878			20.010			20.401			19.815			18.896			18.512			19.138			19.258			20.393			20.522			19.846			19.380
Exchange Rate - Dollars to Pounds
For-the-Quarter		1.448			1.423			1.464			1.555			1.570			1.605			1.618			1.615			1.714			1.836			1.814			1.813
End-of-Quarter		1.456			1.426			1.532			1.569			1.610			1.580			1.656			1.664			1.786			1.844			1.819			1.812

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Other Operations

Unaudited [Millions of Dollars]

For the Year Ended December 31	1999			2000			2001			2002			2003			YTD Sep 2003			YTD Sep 2004
Revenue	$	1,966.0		$	1,946.9		$	1,827.3		$	372.4		$	575.8		$	223.9		$	269.9
Less:
Realized gains (losses) on investments		14.4			(5.0	)		8.2			25.6			(7.1	)		(7.4	)		2.3
Gains (losses) on derivatives								(9.7	)		0.9			7.6			7.5			(1.7	)
Gain (loss) on reinsurance derivative/trading account securities														1.9						(0.3	)
Amortization of deferred gain-reserve development											(0.8	)		3.6			3.3			1.0
Gain on sale of subsidiaries/ businesses								12.8			(8.3	)								14.0
Mark-to-market adjustment on reclass. from AFS to trading account securities								285.5
Operating Revenue	$	1,951.6		$	1,951.9		$	1,815.9		$	355.0		$	284.2		$	220.5		$	254.0
Operating Revenue by Source:
Lincoln Financial Advisors	$	317.0		$	377.5		$	360.7		$	318.0		$	316.9		$	221.3		$	279.7
Lincoln Financial Distributors		107.5			119.9			113.4			127.3			140.9			97.0			175.8
Total Distribution		424.4			497.4			474.0			445.4			457.8			318.3			455.5
Reinsurance		1,824.1			1,770.6			1,699.4
Amortization of deferred gain on indemnity reinsurance*								20.4			75.2			72.3			54.9			67.9
Other [Including Consolidating Adjustments]		(296.9	)		(316.0	)		(377.9	)		(165.6	)		(245.8	)		(152.7	)		(269.4	)
Total Operating Revenue	$	1,951.6		$	1,951.9		$	1,815.9		$	355.0		$	284.2		$	220.5		$	254.0
Income (Loss)
Net Loss	$	(76.1	)	$	(18.2	)	$	(6.6	)	$	(247.3	)	$	(113.7	)	$	(85.6	)	$	(46.8	)
Less:
Restructuring charges		(3.2	)		1.0			(19.5	)		1.1			(4.7	)		(2.4	)		(6.2	)
Realized gains (losses) on investments		10.2			(3.2	)		5.9			16.7			(4.7	)		(4.8	)		2.1
Gains (losses) on derivatives								(6.3	)		0.6			5.0			4.9			(1.6	)
Net gain (loss) on reinsurance derivative/trading account securities														1.3						0.2
Gain on sale of subsidiaries/ businesses								15.0			(9.4	)								9.0
Reserve development/ amortization of deferred gain											(199.1	)		(18.5	)		(18.7	)		0.6
Mark-to-market adjustment on reclass. from AFS to trading account securities														185.6
Cumulative effect of accounting change								(2.7	)					(192.2	)
Loss on early retirement of subordinated debt														(3.7	)		(3.7	)
Operating Income (Loss)	$	(83.1	)	$	(16.0	)	$	1.0		$	(57.2	)	$	(81.8	)	$	(61.0	)	$	(50.9	)
Income (Loss) from Operations by Source:
Lincoln Financial Advisors		(20.8	)		(15.4	)		(20.1	)		(31.4	)		(33.2	)		(25.2	)		(17.5	)
Lincoln Financial Distributors		(14.0	)		(19.6	)		(33.2	)		(35.2	)		(33.4	)		(26.3	)		(17.4	)
Total Distribution		(34.8	)		(35.0	)		(53.3	)		(66.6	)		(66.6	)		(51.5	)		(34.9	)
Reinsurance		40.1			122.5			128.8
Amortization of deferred gain on indemnity reinsurance*								12.9			48.9			47.0			35.7			44.1
LNC Financing		(83.5	)		(84.9	)		(77.9	)		(43.0	)		(56.7	)		(43.1	)		(45.9	)
Other Corporate		(5.0	)		(18.6	)		(9.5	)		3.5			(5.4	)		(2.0	)		(14.2	)
Income (Loss) from Operations	$	(83.1	)	$	(16.0	)	$	1.0		$	(57.2	)	$	(81.8	)	$	(61.0	)	$	(50.9	)

For the Quarter Ended	Sep 2002			Dec 2002			Mar 2003			Jun 2003			Sep 2003			Dec 2003			Mar 2004			Jun 2004			Sep 2004
Revenue	$	91.8		$	103.6		$	73.0		$	76.1		$	74.8		$	351.9		$	54.7		$	123.6		$	91.6
Less:
Realized gains (losses) on investments		33.2			1.2			0.4			(0.2	)		(7.6	)		0.3			0.3			0.8			1.2
Gains (losses) on derivatives		0.6			0.3			(0.4	)		0.2			7.7			0.2			(0.2	)		0.0			(1.5	)
Gain (loss) on reinsurance derivative/trading account securities																	1.9			(1.9	)		2.9			(0.8	)
Amort. of deferred gain-reserve development		(1.4	)		0.5			(0.2	)		(0.2	)		3.7			0.3			0.3			0.3			0.3
Gain on sale of subsidiaries/ businesses					(8.3	)																	14.0
Mark-to-market adjustment on reclassification from AFS to trading account securities																	285.5
Operating Revenue	$	59.4		$	109.8		$	73.3		$	76.3		$	70.9		$	63.7		$	56.1		$	105.5		$	92.4
Operating Revenue by Source:
Lincoln Financial Advisors		74.4			89.6			69.4			75.3			76.7			95.5			92.0			96.0			91.7
Lincoln Financial Distributors		31.8			36.9			35.4			29.4			32.2			43.9			57.5			58.4			59.9
Total Distribution		106.2			126.5			104.8			104.6			108.9			139.5			149.6			154.4			151.6
Reinsurance
Amortization of deferred gain on indemnity reinsurance*		22.1			6.9			18.4			18.2			18.3			17.4			17.9			17.9			32.1
Other [Including Consolidating Adjustments]		(68.9	)		(23.6	)		(49.9	)		(46.6	)		(56.2	)		(93.1	)		(111.3	)		(66.8	)		(91.2	)
Total Operating Revenue	$	59.4		$	109.8		$	73.3		$	76.3		$	70.9		$	63.7		$	56.1		$	105.5		$	92.4
Income (Loss)
Net Income (Loss)	$	(172.1	)	$	(32.6	)	$	(21.7	)	$	(21.6	)	$	(42.4	)	$	(28.1	)	$	(24.8	)	$	(10.9	)	$	(11.1	)
Less:
Restructuring charges		1.1			0.0									(2.4	)		(2.4	)		(3.6	)		(1.9	)		(0.7	)
Realized gains (losses) on investments		21.6			0.8			0.5			(0.4	)		(4.9	)		0.1			0.2			0.5			1.4
Gains (losses) on derivatives		0.4			0.2			(0.5	)		0.4			5.0			0.1			(0.1	)		0.0			(1.6	)
Net gain (loss) on reinsurance derivative/trading account securities																	1.3			(1.2	)		1.9			(0.5	)
Gain on sale of subsidiaries/ businesses					(9.4	)																	9.0
Reserve development/ amortization of deferred gain		(176.4	)		(8.2	)		(0.1	)		(0.1	)		(18.5	)		0.2			0.2			0.2			0.2
Mark-to-market adjustment on reclassification from AFS to trading account securities																	185.6
Cumulative effect - reinsurance embedded derivative acctg.																	(192.2	)
Loss on early retirement of subordinated debt														(3.7	)
Income (Loss) from Operations	$	(18.8	)	$	(15.9	)	$	(21.5	)	$	(21.5	)	$	(18.0	)	$	(20.8	)	$	(20.3	)	$	(20.7	)	$	(9.9	)
Income from Operations by Source:
Lincoln Financial Advisors	$	(8.9	)	$	(3.7	)	$	(10.4	)	$	(7.4	)	$	(7.4	)	$	(8.0	)	$	(8.7	)	$	(5.3	)	$	(3.5	)
Lincoln Financial Distributors		(13.1	)		(8.0	)		(8.1	)		(10.7	)		(7.5	)		(7.1	)		(4.6	)		(6.4	)		(6.3	)
Total Distribution		(22.0	)		(11.7	)		(18.4	)		(18.1	)		(15.0	)		(15.1	)		(13.3	)		(11.8	)		(9.8	)
Reinsurance
Amortization of deferred gain on indemnity reinsurance*		14.4			4.5			11.9			11.9			11.9			11.3			11.6			11.7			20.8
LNC Financing		(11.0	)		(13.5	)		(15.3	)		(14.4	)		(13.3	)		(13.7	)		(14.6	)		(15.6	)		(15.7	)
Other Corporate		(0.2	)		4.9			0.3			(0.8	)		(1.5	)		(3.4	)		(4.0	)		(5.0	)		(5.2	)
Income(Loss) from Operations	$	(18.8	)	$	(15.9	)	$	(21.5	)	$	(21.5	)	$	(18.0	)	$	(20.8	)	$	(20.3	)	$	(20.7	)	$	(9.9	)

* The amortization of deferred gain on sale of reinsurance business represents the amortization of deferred gain recognized on the business sold through indemnity reinsurance to Swiss Re.

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Consolidated Domestic Deposits/Account Balances

Unaudited [Billions of Dollars]

Deposits - For the Year																1999			2000			2001			2002			2003			YTD Sep 2003			YTD Sep 2004
Lincoln Retirement - Fixed Annuities																$	2.563		$	2.074		$	3.342		$	3.672		$	3.125		$	2.333		$	2.379
Lincoln Retirement - Variable Annuities																	2.553			3.165			3.067			2.743			3.119			2.032			4.255
Lincoln Retirement - Life Insurance																	0.017			0.014			0.012
Life Insurance Segment - Life Insurance																	1.698			1.884			1.934			2.138			2.259			1.598			1.557
Inv Mgmt - Annuities																	1.561			1.782			1.701			2.751			2.151			1.589			2.020
Inv Mgmt - Mutual Funds																	2.151			2.577			1.523			1.829			2.315			1.652			2.314
Inv Mgmt - Managed Acct. & Other																	0.549			0.525			0.469			1.115			1.116			0.676			2.139
Consolidating Adjustments																	(0.499	)		(0.765	)		(0.608	)		(1.576	)		(0.864	)		(0.671	)		(0.673	)
Total Gross Retail Deposits																	10.593			11.256			11.439			12.671			13.222			9.210			13.990
Investment Management Segment- Instit.																	7.250			3.501			3.826			5.194			5.859			3.881			8.813
Consolidating Adjustments																				(0.152	)		(0.207	)		(0.232	)		(0.150	)		(0.103	)		(0.361	)
Total Gross Deposits																$	17.843		$	14.605		$	15.058		$	17.634		$	18.931		$	12.988		$	22.441
Account Balances - End of Year
Lincoln Retirement - Fixed Annuities																$	16.791		$	15.394		$	16.491		$	18.085		$	18.868
Lincoln Retirement - Variable Annuities																	41.493			39.427			34.638			27.438			35.786
Lincoln Retirement - Life Insurance																	0.155			0.160			0.149
Life Insurance Segment - Life Insurance																	10.217			10.847			11.377			12.086			13.420
Inv Mgmt - Annuities																	15.557			13.527			11.835			9.981			12.691
Inv Mgmt - Mutual Funds																	13.633			13.260			11.554			10.296			12.614
Inv Mgmt - Managed Acct. & Other																	1.618			1.342			1.719			2.270			3.768
Consolidating Adjustments																	(9.175	)		(7.757	)		(6.676	)		(5.123	)		(6.553	)
Total Retail Account Balances																	90.289			86.200			81.088			75.033			90.593
Investment Management Segment- Instit.																	30.568			25.225			23.305			23.948			33.722
Consolidating Adjustments																	(1.014	)		(1.434	)		(1.211	)		(0.924	)		(1.183	)
Total Account Balances																$	119.843		$	109.991		$	103.181		$	98.057		$	123.132
Deposits - For the Quarter	Dec 2001			Mar 2002			Jun 2002			Sep 2002			Dec 2002			Mar 2003			Jun 2003			Sep 2003			Dec 2003			Mar 2004			Jun 2004			Sep 2004
Lincoln Retirement - Fixed Annuities	$	1.218		$	0.906		$	0.853		$	1.091		$	0.822		$	0.776		$	0.778		$	0.778		$	0.792		$	0.817		$	0.779		$	0.783
Lincoln Retirement - Variable Annuities		0.793			0.808			0.787			0.603			0.545			0.648			0.584			0.800			1.087			1.407			1.424			1.424
Lincoln Retirement - Life Insurance		0.002
Life Insurance Segment - Life Insurance		0.605			0.440			0.577			0.484			0.636			0.486			0.526			0.586			0.661			0.501			0.507			0.548
Inv Mgmt - Annuities		0.323			0.589			0.601			0.756			0.806			0.488			0.528			0.573			0.562			0.753			0.668			0.600
Inv Mgmt - Mutual Funds		0.348			0.452			0.562			0.416			0.399			0.450			0.558			0.644			0.663			0.905			0.729			0.680
Inv Mgmt - Managed Acct. & Other		0.127			0.159			0.194			0.293			0.469			0.202			0.196			0.277			0.441			0.793			0.721			0.625
Consolidating Adjustments		(0.159	)		(0.280	)		(0.333	)		(0.437	)		(0.525	)		(0.171	)		(0.211	)		(0.288	)		(0.193	)		(0.271	)		(0.180	)		(0.223	)
Total Gross Retail Deposits		3.258			3.074			3.240			3.206			3.151			2.880			2.960			3.370			4.012			4.905			4.648			4.436
Investment Management Segment- Instit.		0.696			1.476			1.232			1.162			1.323			1.086			0.853			1.943			1.978			2.623			3.331			2.859
Consolidating Adjustments		(0.035	)		(0.046	)		(0.069	)		(0.040	)		(0.076	)		(0.053	)		(0.025	)		(0.025	)		(0.047	)		(0.020	)		(0.035	)		(0.307	)
Total Gross Deposits	$	3.918		$	4.505		$	4.403		$	4.328		$	4.398		$	3.913		$	3.788		$	5.288		$	5.943		$	7.509		$	7.945		$	6.988
Account Balances - End of Quarter
Lincoln Retirement - Fixed Annuities	$	16.491		$	16.534		$	16.910		$	17.650		$	18.085		$	18.537		$	18.696		$	18.868		$	18.868		$	18.930		$	19.143		$	19.317
Lincoln Retirement - Variable Annuities		34.638			35.150			31.206			25.942			27.438			26.474			30.457			31.709			35.786			37.619			38.398			38.698
Lincoln Retirement - Life Insurance		0.149
Life Insurance Segment - Life Insurance		11.377			11.667			11.759			11.726			12.086			12.233			12.663			12.958			13.420			13.606			13.770			13.912
Inv Mgmt - Annuities		11.835			11.920			10.896			9.327			9.981			9.660			11.002			11.392			12.691			13.294			13.355			13.074
Inv Mgmt - Mutual Funds		11.554			11.599			11.036			10.072			10.296			10.241			11.356			11.615			12.614			13.199			12.971			12.234
Inv Mgmt - Managed Acct. & Other		1.719			1.821			1.847			1.820			2.270			2.292			2.737			3.037			3.768			4.366			5.051			5.374
Consolidating Adjustments		(6.676	)		(6.640	)		(6.000	)		(4.940	)		(5.123	)		(4.891	)		(5.628	)		(5.792	)		(6.553	)		(6.881	)		(6.829	)		(7.216	)
Total Retail Account Balances		81.088			82.051			77.654			71.597			75.033			74.546			81.283			83.787			90.593			94.133			95.860			95.393
Investment Management Segment- Instit.		23.305			24.661			24.963			22.143			23.948			23.526			27.360			29.085			33.722			36.216			38.268			18.396
Consolidating Adjustments		(1.211	)		(1.186	)		(1.045	)		(0.866	)		(0.924	)		(0.933	)		(1.049	)		(1.044	)		(1.183	)		(1.176	)		(1.168	)		(1.140	)
Total Account Balances	$	103.181		$	105.527		$	101.573		$	92.874		$	98.057		$	97.140		$	107.595		$	111.828		$	123.132		$	129.173		$	132.961		$	112.649

Total Domestic Net Flows

Unaudited [Billions of Dollars]

For the Year														1999			2000			2001			2002			2003			YTD Sep 2003			YTD Sep 2004
Lincoln Retirement														$	(1.165	)	$	(2.874	)	$	0.105		$	0.453		$	1.007		$	0.472		$	2.128
Life Insurance Segment															0.985			1.158			1.163			1.320			1.377			0.976			0.839
Investment Management Segment- Retail															(2.214	)		(1.500	)		(0.375	)		0.806			1.271			0.686			1.965
Consolidating Adjustments															1.276			1.022			0.035			(0.082	)		0.064			0.122			(0.124	)
Total Retail Net Flows															(1.118	)		(2.194	)		0.927			2.496			3.719			2.256			4.808
Investment Management Segment- Institutional															(2.239	)		(5.693	)		(0.231	)		2.106			2.478			1.417			5.083
Consolidating Adjustments																		0.035			(0.015	)		0.005			(0.002	)		0.014			0.031
Total Net Flows														$	(3.357	)	$	(7.853	)	$	0.681		$	4.608		$	6.195		$	3.687		$	9.922
For the Quarter	Dec 2001			Mar 2002		Jun 2002			Sep 2002		Dec 2002			Mar 2003			Jun 2003			Sep 2003			Dec 2003			Mar 2004			Jun 2004			Sep 2004
Lincoln Retirement	$	0.631		$	0.088	$	0.223		$	0.068	$	0.074		$	0.095		$	0.099		$	0.277		$	0.536		$	0.712		$	0.701		$	0.716
Life Insurance Segment		0.383			0.236		0.385			0.297		0.402			0.296			0.324			0.355			0.402			0.248			0.291			0.300
Investment Management Segment- Retail		(0.091	)		0.089		0.167			0.048		0.502			0.014			0.302			0.370			0.584			0.969			0.617			0.381
Consolidating Adjustments		(0.169	)		0.009		(0.038	)		0.133		(0.187	)		0.162			(0.003	)		(0.038	)		(0.058	)		(0.096	)		0.060			(0.089	)
Total Retail Net Flows		0.754			0.423		0.737			0.545		0.791			0.568			0.723			0.965			1.464			1.832			1.669			1.308
Investment Management Segment- Instit.		(0.103	)		0.731		0.455			0.348		0.572			0.330			0.289			0.799			1.061			1.661			2.043			1.379
Consolidating Adjustments		0.016			0.022		(0.026	)		0.008		0.001			(0.030	)		0.009			0.035			(0.017	)		0.038			(0.001	)		(0.006	)
Total Net Flows	$	0.667		$	1.176	$	1.166		$	0.901	$	1.364		$	0.868		$	1.021		$	1.799		$	2.508		$	3.530		$	3.710		$	2.682

NOTE: Excludes amounts reported as Assets Under Management - Insurance-related Assets

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Consolidated Domestic Deposits/Account Balances (excluding Institutional Assets

Managed by Delaware’s London-based International Investment Unit)

Unaudited [Billions of Dollars]

	1999			2000			2001			2002			2003			YTD Sep 2003			YTD Sep 2004
Deposits - For the Year
Lincoln Retirement - Fixed Annuities	$	2.563		$	2.074		$	3.342		$	3.672		$	3.125		$	2.333		$	2.379
Lincoln Retirement - Variable Annuities		2.553			3.165			3.067			2.743			3.119			2.032			4.255
Lincoln Retirement - Life Insurance		0.017			0.014			0.012
Life Insurance Segment - Life Insurance		1.698			1.884			1.934			2.138			2.259			1.598			1.557
Inv Mgmt - Annuities		1.561			1.782			1.701			2.456			2.140			1.580			2.015
Inv Mgmt - Mutual Funds		2.151			2.577			1.523			1.829			2.315			1.652			2.314
Inv Mgmt - Managed Acct. & Other		0.549			0.525			0.469			1.115			1.116			0.676			2.139
Consolidating Adjustments		(0.499	)		(0.765	)		(0.608	)		(1.576	)		(0.864	)		(0.671	)		(0.673	)
Total Gross Retail Deposits		10.593			11.256			11.439			12.376			13.210			9.200			13.985
Investment Management Segment - Instit.		3.614			1.924			1.943			3.709			3.320			2.446			4.161
Consolidating Adjustments					(0.152	)		(0.207	)		(0.232	)		(0.150	)		(0.103	)		(0.361	)
Total Gross Deposits	$	14.207		$	13.029		$	13.175		$	15.854		$	16.380		$	11.543		$	17.785
Account Balances - End of Year
Lincoln Retirement - Fixed Annuities	$	16.791		$	15.394		$	16.491		$	18.085		$	18.868
Lincoln Retirement - Variable Annuities		41.493			39.427			34.638			27.438			35.786
Lincoln Retirement - Life Insurance		0.155			0.160			0.149
Life Insurance Segment - Life Insurance		10.217			10.847			11.377			12.086			13.420
Inv Mgmt - Annuities		15.557			13.527			11.835			9.688			12.368
Inv Mgmt - Mutual Funds		13.633			13.260			11.554			10.296			12.614
Inv Mgmt - Managed Acct. & Other		1.618			1.342			1.719			2.270			3.768
Consolidating Adjustments		(9.175	)		(7.757	)		(6.676	)		(5.123	)		(6.553	)
Total Retail Account Balances		90.289			86.200			81.088			74.741			90.271
Investment Management Segment - Instit.		30.568			25.225			11.562			12.348			16.299
Consolidating Adjustments		(1.014	)		(1.434	)		(1.211	)		(0.924	)		(1.183	)
Total Account Balances	$	119.843		$	109.991		$	91.439		$	86.165		$	105.387

	Dec 2001			Mar 2002			Jun 2002			Sep 2002			Dec 2002			Mar 2003			Jun 2003			Sep 2003			Dec 2003			Mar 2004			Jun 2004			Sep 2004
Deposits - For the Quarter
Lincoln Retirement - Fixed Annuities	$	1.218		$	0.906		$	0.853		$	1.091		$	0.822		$	0.776		$	0.778		$	0.778		$	0.792		$	0.817		$	0.779		$	0.783
Lincoln Retirement - Variable Annuities		0.793			0.808			0.787			0.603			0.545			0.648			0.584			0.800			1.087			1.407			1.424			1.424
Lincoln Retirement - Life Insurance		0.002
Life Insurance Segment - Life Insurance		0.605			0.440			0.577			0.484			0.636			0.486			0.526			0.586			0.661			0.501			0.507			0.548
Inv Mgmt - Annuities		0.323			0.589			0.601			0.756			0.510			0.484			0.526			0.570			0.560			0.751			0.666			0.598
Inv Mgmt - Mutual Funds		0.348			0.452			0.562			0.416			0.399			0.450			0.558			0.644			0.663			0.905			0.729			0.680
Inv Mgmt - Managed Acct. & Other		0.127			0.159			0.194			0.293			0.469			0.202			0.196			0.277			0.441			0.793			0.721			0.625
Consolidating Adjustments		(0.159	)		(0.280	)		(0.333	)		(0.437	)		(0.525	)		(0.171	)		(0.211	)		(0.288	)		(0.193	)		(0.271	)		(0.180	)		(0.223	)
Total Gross Retail Deposits		3.258			3.074			3.240			3.206			2.856			2.875			2.958			3.367			4.010			4.903			4.646			4.435
Investment Management Segment - Instit.		0.254			0.986			0.863			0.866			0.994			0.892			0.466			1.088			0.874			1.206			1.372			1.583
Consolidating Adjustments		(0.035	)		(0.046	)		(0.069	)		(0.040	)		(0.076	)		(0.053	)		(0.025	)		(0.025	)		(0.047	)		(0.020	)		(0.035	)		(0.307	)
Total Gross Deposits	$	3.476		$	4.014		$	4.034		$	4.032		$	3.773		$	3.714		$	3.400		$	4.430		$	4.837		$	6.090		$	5.983		$	5.749
Account Balances - End of Quarter
Lincoln Retirement - Fixed Annuities	$	16.491		$	16.534		$	16.910		$	17.650		$	18.085		$	18.537		$	18.696		$	18.868		$	18.868		$	18.930		$	19.143		$	19.317
Lincoln Retirement - Variable Annuities		34.638			35.150			31.206			25.942			27.438			26.474			30.457			31.709			35.786			37.619			38.398			38.698
Lincoln Retirement - Life Insurance		0.149
Life Insurance Segment - Life Insurance		11.377			11.667			11.759			11.726			12.086			12.233			12.663			12.958			13.420			13.606			13.770			13.912
Inv Mgmt - Annuities		11.835			11.920			10.896			9.327			9.688			9.423			10.718			11.104			12.368			12.973			13.037			13.074
Inv Mgmt -Mutual Funds		11.554			11.599			11.036			10.072			10.296			10.241			11.356			11.615			12.614			13.199			12.971			12.234
Inv Mgmt - Managed Acct. & Other		1.719			1.821			1.847			1.820			2.270			2.292			2.737			3.037			3.768			4.366			5.051			5.374
Consolidating Adjustments		(6.676	)		(6.640	)		(6.000	)		(4.940	)		(5.123	)		(4.891	)		(5.628	)		(5.792	)		(6.553	)		(6.881	)		(6.829	)		(7.216	)
Total Retail Account Balances		81.088			82.051			77.654			71.597			74.741			74.309			80.999			83.499			90.271			93.812			95.542			95.393
Investment Management Segment - Instit.		11.562			12.361			12.072			11.126			12.348			12.571			13.943			14.660			16.299			17.215			17.414			18.396
Consolidating Adjustments		(1.211	)		(1.186	)		(1.045	)		(0.866	)		(0.924	)		(0.933	)		(1.049	)		(1.044	)		(1.183	)		(1.176	)		(1.168	)		(1.140	)
Total Account Balances	$	91.439		$	93.226		$	88.681		$	81.857		$	86.165		$	85.948		$	93.894		$	97.115		$	105.387		$	109.851		$	111.789		$	112.649
Total Domestic Net Flows (excluding Institutional Assets Managed by Delaware’s London-based International Investment Unit)
																1999			2000			2001			2002			2003			YTD Sep 2003			YTD Sep 2004
For the Year
Lincoln Retirement																($	1.165	)	($	2.874	)	$	0.105		$	0.453		$	1.007		$	0.472		$	2.128
Life Insurance Segment																	0.985			1.158			1.163			1.320			1.377			0.976			0.839
Investment Management Segment - Retail																	(2.214	)		(1.500	)		(0.375	)		0.517			1.325			0.727			1.991
Consolidating Adjustments																	1.276			1.022			0.035			(0.082	)		0.064			0.122			(0.124	)
Total Retail Net Flows																	(1.118	)		(2.194	)		0.927			2.207			3.773			2.296			4.834
Investment Management Segment - Institutional																	(4.880	)		(5.120	)		(0.925	)		1.885			1.433			0.976			1.789
Consolidating Adjustments																	—			0.035			(0.015	)		0.005			(0.002	)		0.014			0.031
Total Net Flows																($	5.998	)	($	7.280	)	($	0.013	)	$	4.097		$	5.203		$	3.286		$	6.653
	Dec 2001			Mar 2002			Jun 2002			Sep 2002			Dec 2002			Mar 2003			Jun 2003			Sep 2003			Dec 2003			Mar 2004			Jun 2004			Sep 2004
For the Quarter
Lincoln Retirement	$	0.631		$	0.088		$	0.223		$	0.068		$	0.074		$	0.095		$	0.099		$	0.277		$	0.536		$	0.712		$	0.701		$	0.716
Life Insurance Segment		0.383			0.236			0.385			0.297			0.402			0.296			0.324			0.355			0.402			0.248			0.291			0.300
Investment Management Segment - Retail		(0.091	)		0.089			0.167			0.048			0.213			0.048			0.304			0.375			0.598			0.980			0.624			0.386
Consolidating Adjustments		(0.169	)		0.009			(0.038	)		0.133			(0.187	)		0.162			(0.003	)		(0.038	)		(0.058	)		(0.096	)		0.060			(0.089	)
Total Retail Net Flows		0.754			0.423			0.737			0.545			0.502			0.602			0.725			0.970			1.478			1.843			1.676			1.313
Investment Management Segment - Instit.		(0.305	)		0.547			0.328			0.337			0.673			0.562			(0.016	)		0.430			0.457			0.560			0.379			0.850
Consolidating Adjustments		0.016			0.022			(0.026	)		0.008			0.001			(0.030	)		0.009			0.035			(0.017	)		0.038			(0.001	)		(0.006	)
Total Net Flows	$	0.465		$	0.992		$	1.039		$	0.890		$	1.176		$	1.134		$	0.718		$	1.435		$	1.918		$	2.441		$	2.054		$	2.157

NOTE: Excludes amounts reported as Assets Under Management - Insurance-related Assets

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Consolidated Investment Data-Assets Managed

Unaudited [Billions of Dollars]

For the Year Ended December 31	1999		2000		2001		2002		2003
Assets Managed by Source
LNC’s Investments and Cash
Fixed maturity securities - available for sale	$	27.689	$	27.450	$	28.346	$	32.767	$	32.769
Equity securities - available for sale		0.604		0.550		0.470		0.337		0.199
Trading securities										3.120
Other investments		7.286		7.369		7.297		6.895		6.689
Total LNC Investments		35.578		35.369		36.113		40.000		42.778
Separate accounts		53.654		50.580		44.833		36.178		46.565
Cash and invested cash		1.896		1.927		3.095		1.691		1.711
Discontinued operations
Total LNC		91.128		87.876		84.042		77.869		91.054
Non-affiliate assets managed		49.314		41.861		38.421		38.052		49.587
Total Assets Managed	$	140.443	$	129.737	$	122.463	$	115.921	$	140.641
Assets Managed by Advisor
Investment Management segment (See page 28 for additional detail)		61.375		53.355		48.412		46.495		62.794
DLIA-Corp (Assets managed internally-see page 28)		35.934		35.686		38.119		41.104		43.024
Lincoln (UK)		8.589		7.873		6.847		6.351		7.668
Policy Loans (within business units)		1.892		1.961		1.940		1.946		1.924
Non-LNC Affiliates		32.653		30.862		27.145		20.026		25.231
Total Assets Managed	$	140.443	$	129.737	$	122.463	$	115.921	$	140.641

For the Quarter Ended	Dec 2001		Mar 2002		Jun 2002		Sep 2002		Dec 2002		Mar 2003		Jun 2003		Sep 2003		Dec 2003		Mar 2004		Jun 2004		Sep 2004
Assets Managed by Source
LNC’s Investments and Cash:
Fixed maturity securities - available for sale	$	28.346	$	28.841	$	29.725	$	32.037	$	32.767	$	33.887	$	35.355	$	35.384	$	32.769	$	33.667	$	32.808	$	34.223
Equity securities - available for sale		0.470		0.439		0.419		0.397		0.337		0.249		0.257		0.243		0.199		0.198		0.183		0.178
Trading securities																		3.120		3.191		3.088		3.224
Other investments		7.297		7.084		7.016		6.928		6.895		6.872		6.980		6.796		6.689		6.446		6.284		6.302
Total LNC Investments		36.113		36.363		37.160		39.363		40.000		41.008		42.592		42.423		42.778		43.502		42.362		43.927
Separate accounts		44.833		44.917		40.580		34.069		36.178		34.775		39.943		41.283		46.565		48.558		49.344		49.658
Cash and invested cash		3.095		1.700		2.265		1.600		1.691		1.635		1.946		1.961		1.711		2.256		2.214		1.996
Total LNC		84.042		82.979		80.005		75.031		77.869		77.419		84.480		85.667		91.054		94.315		93.920		95.580
Non-affiliate assets managed		38.421		39.853		39.531		35.650		38.052		37.501		42.917		45.176		49.587		54.977		57.361		37.060
Total Assets Managed	$	122.463	$	122.832	$	119.536	$	110.682	$	115.921	$	114.920	$	127.397	$	130.844	$	140.641	$	149.292	$	151.281	$	132.641
Assets Managed by Advisor
Investment Management segment (See page 28 for additional detail)		48.412		50.002		48.742		43.362		46.495		45.718		52.456		55.129		62.794		67.075		69.643		49.076
DLIA-Corp (Assets managed internally-see page 28)		38.119		37.171		38.476		40.416		41.104		42.130		43.857		42.984		43.024		44.006		42.528		44.047
Lincoln (UK)		6.847		6.772		6.753		6.068		6.351		5.962		6.726		6.887		7.668		7.837		7.763		7.768
Policy Loans (within business units)		1.940		1.918		1.906		1.899		1.946		1.929		1.920		1.910		1.924		1.877		1.871		1.872
Non-LNC Affiliates		27.145		26.970		23.659		18.937		20.026		19.181		22.439		23.933		25.231		28.497		29.476		29.877
Total Assets Managed	$	122.463	$	122.832	$	119.536	$	110.682	$	115.921	$	114.920	$	127.397	$	130.844	$	140.641	$	149.292	$	151.281	$	132.641

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Consolidated Investment Data - Assets Managed (excluding Institutional Assets

Managed by Delaware’s London-based International Investment Unit)

Unaudited [Billions of Dollars]

For the Year Ended December 31	1999		2000		2001		2002		2003
Assets Managed by Source
LNC’s Investments and Cash
Fixed maturity securities - available for sale	$	27.689	$	27.450	$	28.346	$	32.767	$	32.769
Equity securities - available for sale		0.604		0.550		0.470		0.337		0.199
Trading securities										3.120
Other investments		7.286		7.369		7.297		6.895		6.689
Total LNC Investments		35.578		35.369		36.113		40.000		42.778
Separate accounts		53.654		50.580		44.833		36.178		46.565
Cash and invested cash		1.896		1.927		3.095		1.691		1.711
Discontinued operations
Total LNC		91.128		87.876		84.042		77.869		91.054
Non-affiliate assets managed		36.669		29.891		26.679		26.159		31.842
Total Assets Managed	$	127.797	$	117.767	$	110.721	$	104.028	$	122.896
Assets Managed by Advisor
Investment Management segment (See page 28A for additional detail)	$	48.729	$	41.384	$	36.670	$	34.602	$	45.049
DLIA-Corp (Assets managed internally-see page 28A)		35.934		35.686		38.119		41.104		43.024
Lincoln (UK)		8.589		7.873		6.847		6.351		7.668
Policy Loans (within business units)		1.892		1.961		1.940		1.946		1.924
Non-LNC Affiliates		32.653		30.862		27.145		20.026		25.231
Total Assets Managed	$	127.797	$	117.767	$	110.721	$	104.028	$	122.896

For the Quarter Ended	Dec 2001		Mar 2002		Jun 2002		Sep 2002		Dec 2002		Mar 2003		Jun 2003		Sep 2003		Dec 2003		Mar 2004		Jun 2004		Sep 2004
Assets Managed by Source
LNC’s Investments and Cash:
Fixed maturity securities - available for sale	$	28.346	$	28.841	$	29.725	$	32.037	$	32.767	$	33.887	$	35.355	$	35.384	$	32.769	$	33.667	$	32.808	$	34.223
Equity securities - available for sale		0.470		0.439		0.419		0.397		0.337		0.249		0.257		0.243		0.199		0.198		0.183		0.178
Trading securities																		3.120		3.191		3.088		3.224
Other investments		7.297		7.084		7.016		6.928		6.895		6.872		6.980		6.796		6.689		6.446		6.284		6.302
Total LNC Investments		36.113		36.363		37.160		39.363		40.000		41.008		42.592		42.423		42.778		43.502		42.362		43.927
Separate accounts		44.833		44.917		40.580		34.069		36.178		34.775		39.943		41.283		46.565		48.558		49.344		49.658
Cash and invested cash		3.095		1.700		2.265		1.600		1.691		1.635		1.946		1.961		1.711		2.256		2.214		1.996
Total LNC		84.042		82.979		80.005		75.031		77.869		77.419		84.480		85.667		91.054		94.315		93.920		95.580
Non-affiliate assets managed		26.679		27.552		26.639		24.633		26.159		26.309		29.216		30.463		31.842		35.655		36.190		37.060
Total Assets Managed	$	110.721	$	110.532	$	106.645	$	99.665	$	104.028	$	103.728	$	113.696	$	116.131	$	122.896	$	129.970	$	130.110	$	132.641
Assets Managed by Advisor
Investment Management segment (See page 28A for additional detail)	$	36.670	$	37.701	$	35.851	$	32.345	$	34.602	$	34.527	$	38.755	$	40.416	$	45.049	$	47.753	$	48.471	$	49.076
DLIA-Corp (Assets managed internally-see page 28A)		38.119		37.171		38.476		40.416		41.104		42.130		43.857		42.984		43.024		44.006		42.528		44.047
Lincoln (UK)		6.847		6.772		6.753		6.068		6.351		5.962		6.726		6.887		7.668		7.837		7.763		7.768
Policy Loans (within business units)		1.940		1.918		1.906		1.899		1.946		1.929		1.920		1.910		1.924		1.877		1.871		1.872
Non-LNC Affiliates		27.145		26.970		23.659		18.937		20.026		19.181		22.439		23.933		25.231		28.497		29.476		29.877
Total Assets Managed	$	110.721	$	110.532	$	106.645	$	99.665	$	104.028	$	103.728	$	113.696	$	116.131	$	122.896	$	129.970	$	130.110	$	132.641

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Consolidated Investment Data

Unaudited [Millions of Dollars]

For the Year Ended December 31	1999			2000			2001			2002			2003			YTD Sep 2003			YTD Sep 2004
Net Investment Income
Fixed maturity AFS securities	$	2,232.9		$	2,148.7		$	2,121.0		$	2,117.0		$	2,113.2		$	1,625.7		$	1,490.9
Equity AFS securities		20.1			19.5			17.6			15.4			12.3			9.6			6.5
Trading securities														46.5						143.7
Mortgage loans on real estate		369.2			373.8			374.5			356.8			338.3			260.4			276.4
Real estate		64.1			51.8			49.5			47.4			43.9			30.7			21.5
Policy loans		116.5			125.0			125.3			134.5			123.2			92.4			88.5
Invested cash		110.3			87.2			68.4			37.6			7.8			6.0			14.3
Other investments		51.8			66.8			69.4			16.3			48.8			27.8			52.9
Investment revenue		2,964.8			2,872.8			2,825.9			2,725.0			2,734.0			2,052.7			2,094.7
Investment expense		(122.4	)		(88.7	)		(117.1	)		(93.1	)		(95.4	)		(73.4	)		(64.6	)
Net Investment Income	$	2,842.5		$	2,784.1		$	2,708.7		$	2,631.9		$	2,638.5		$	1,979.3		$	2,030.0
Gross-up of Tax Exempt Income		8.1			7.8			7.2			7.5			7.7			5.9			5.1
Adjusted Net Investment Income	$	2,850.5		$	2,791.9		$	2,715.9		$	2,639.4		$	2,646.2		$	1,985.2		$	2,035.1
Mean Invested Assets (Amortized Cost)	$	39,027.5		$	37,471.3		$	37,616.9		$	38,828.5		$	41,042.8		$	41,798.5		$	43,034.1
Ratio of Adjusted Net Invest Inc Over Mean Invested Assets		7.30	%		7.45	%		7.22	%		6.80	%		6.45	%		6.33	%		6.31	%
Investment Gains (Losses)
Realized Gains (Losses) on Investments	$	3.8		$	(17.5	)	$	(68.7	)	$	(177.2	)	$	(11.0	)	$	(53.0	)	$	(33.9	)
Gains(Losses) on Derivatives								(4.9	)		0.8			(1.6	)		4.1			(7.7	)
Incr (Decr) in Unreal Gains on Sec Avail-for-Sale (after DAC/Tax)		(1,018.1	)		477.7			183.7			557.6			39.8			51.2			(13.0	)
Incr (Decr) on Derivatives								21.4			24.4			(6.3	)		(5.1	)		(2.3	)
Securities Available-for-Sale
[Billions of Dollars]
Fixed Maturity Sec (Fair Value)		27.689			27.450			28.346			32.767			35.887			35.384			37.444
Fixed Maturity Sec (Amortized Cost)		28.357			27.373			27.956			31.103			33.743			32.896			35.256
Equity Securities (Fair Value)		0.604			0.550			0.470			0.337			0.201			0.243			0.180
Equity Securities (Amortized Cost)		0.481			0.458			0.444			0.334			0.176			0.223			0.156
% of Fixed Maturity Securities (Based on Fair Value)
Treasuries and AAA		22.8	%		22.1	%		17.2	%		20.1	%		22.8	%		20.4	%		23.6	%
AA or better		29.8	%		29.2	%		23.6	%		25.8	%		29.3	%		26.4	%		29.7	%
BB or less		8.0	%		6.7	%		8.3	%		6.6	%		6.8	%		6.9	%		6.9	%

For the Quarter Ended	Sep 2002			Dec 2002			Mar 2003			Jun 2003			Sep 2003			Dec 2003			Mar 2004			Jun 2004			Sep 2004
Net Investment Income
Fixed maturity AFS securities	$	533.6		$	537.0		$	542.3		$	546.8		$	536.6		$	487.5		$	493.0		$	496.4		$	501.5
Equity AFS securities		2.7			5.1			2.8			2.9			3.9			2.7			2.4			2.0			2.2
Trading securities																	46.5			47.5			48.6			47.7
Mortgage loans on real estate		90.8			86.4			81.6			84.3			94.5			77.9			100.4			92.1			83.8
Real estate		10.0			13.2			10.7			10.0			10.0			13.2			7.6			5.9			8.0
Policy loans		31.1			42.0			30.9			30.6			30.9			30.8			29.2			29.6			29.7
Invested cash		7.9			8.2			4.5			(1.7	)		3.2			1.7			3.5			5.2			5.6
Other investments		(1.2	)		(0.1	)		8.2			10.7			8.9			20.9			15.0			23.8			14.0
Investment revenue		675.0			691.7			681.0			683.5			688.2			681.3			698.6			703.6			692.4
Investment expense		(22.7	)		(24.4	)		(26.3	)		(23.3	)		(23.8	)		(22.1	)		(21.0	)		(20.5	)		(23.0	)
Net Investment Income	$	652.4		$	667.3		$	654.6		$	660.2		$	664.4		$	659.2		$	677.5		$	683.1		$	669.4
Gross-up of Tax Exempt Income		1.5			2.6			1.7			1.8			2.3			1.8			1.7			1.6			1.7
Adjusted Net Investment Income	$	653.9		$	669.9		$	656.4		$	662.0		$	666.8		$	661.0		$	679.3		$	684.8		$	671.1
Mean Invested Assets (Amortized Cost)	$	39,175.8		$	39,733.1		$	40,342.2		$	40,966.9		$	41,597.9		$	41,999.1		$	42,615.7		$	42,987.4		$	43,499.3
Ratio of Adjusted Net Invest Inc Over Mean Invested Assets		6.68	%		6.74	%		6.51	%		6.46	%		6.41	%		6.30	%		6.38	%		6.37	%		6.17	%
Investment Gains (Losses)
Realized Gains (Losses) on Investments		(23.6	)		(33.3	)		(58.2	)		(1.1	)		6.4			42.0			(7.9	)		(11.6	)		(11.6	)
Gains (Losses) on Derivatives		0.1			0.2			(1.2	)		(0.6	)		5.9			(5.7	)		(2.5	)		(1.8	)		(3.4	)
Incr (Decr) in Unreal Gains on Sec Avail-for-Sale (after DAC/Tax)		491.9			(64.3	)		118.7			245.9			(313.4	)		(11.4	)		244.9			(626.0	)		368.1
Incr (Decr) on Derivatives		4.6			1.0			(3.4	)		3.8			(5.6	)		(1.1	)		6.9			(10.5	)		1.3
Available-for-Sale and Trading Securities [Billions of Dollars]
Fixed Maturity Sec (Fair Value)		32.037			32.767			33.887			35.355			35.384			35.887			36.856			35.894			37.444
Fixed Maturity Sec (Amortized Cost)		30.431			31.103			31.905			32.257			32.896			33.743			34.031			34.648			35.256
Equity Securities (Fair Value)		0.397			0.337			0.249			0.257			0.243			0.201			0.200			0.185			0.180
Equity Securities (Amortized Cost)		0.374			0.334			0.241			0.244			0.223			0.176			0.171			0.162			0.156
% of Fixed Maturity Securities (Based on Fair Value)
Treasuries and AAA		20.0	%		20.1	%		20.3	%		19.5	%		20.4	%		22.8	%		23.4	%		23.3	%		23.6	%
AA or better		26.7	%		25.8	%		25.8	%		25.1	%		26.4	%		29.3	%		29.6	%		29.5	%		29.7	%
BB or less		6.6	%		6.6	%		6.6	%		6.6	%		6.9	%		6.8	%		6.9	%		7.1	%		6.9	%

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Common Stock / Debt Information

Unaudited [Dollars per Share, except Percentages]

For the Year Ended December 31	1993			1994			1995			1996			1997			1998			1999			2000			2001			2002			2003
Common Stock [1]
Highest Price	$	24.125		$	22.188		$	26.875		$	28.500		$	39.063		$	49.438		$	57.500		$	56.375		$	52.750		$	53.650		$	41.320
Lowest Price		17.344			17.313			17.313			20.375			24.500			33.500			36.000			22.625			38.000			25.150			24.730
Closing Price	$	21.750		$	17.500		$	26.875		$	26.250		$	39.063		$	40.907		$	40.000		$	47.313		$	48.570		$	31.580		$	40.370
Dividend Payout Ratio [2]		52.6	%		51.0	%		39.7	%		38.2	%		22.8	%		43.9	%		50.5	%		38.3	%		44.9	%		273.5	%		49.1	%
Yield [3]		3.8	%		4.9	%		3.4	%		3.7	%		2.7	%		2.7	%		2.9	%		2.6	%		2.6	%		4.2	%		3.5	%
Preferred Stock Dividend (Millions)	$	17.212		$	17.119		$	8.644		$	0.112		$	0.106		$	0.100		$	0.089		$	0.078		$	0.071		$	0.061		$	0.057
Debt: (End of Period)
Senior Debt Ratings
A.M. Best																							a			a			a			a-
Fitch		AA-			AA-			AA-			AA-			AA-			A+			A+			A+			A+			A			A
Moody’s		A2			A1			A2			A2			A2			A2			A2			A3			A3			A3			A3
Standard and Poors		A+			A+			A			A			A			A-			A-			A-			A-			A-			A-
Claims Paying Ratings:
Lincoln Life - A.M. Best		A+			A+			A+			A+			A+			A			A			A			A			A+			A+
Lincoln Life - Fitch		AAA			AAA			AA+			AA+			AA+			AA+			AA+			AA			AA			AA			AA
Lincoln Life - Moody’s		A1			Aa3			Aa3			Aa3			Aa3			Aa3			Aa3			Aa3			Aa3			Aa3			Aa3
Lincoln Life - Standard & Poors		AA-			AA-			AA-			AA-			AA-			AA-			AA-			AA-			AA-			AA-			AA-
First Penn - A.M. Best*		A+			A+			A+			A+			A+			A			A			A			A			A+			A+
First Penn - Fitch														AA+			AA+			AA+			AA			AA			AA			AA
First Penn - Moody’s														A1			A1			A1			A1			A1			A1			A1
First Penn - Standard & Poors*		AA-			AA-			AA-			AA-			AA-			AA-			AA-			AA-			AA-			AA-			AA-
LLA of New York - A.M. Best*											A+			A+			A			A			A			A			A+			A+
LLA of New York - Fitch*														AA+			AA+			AA+			AA			AA			AA			AA
LLA of New York - Moody’s											A1			A1			A1			A1			A1			A1			A1			A1
LLA of New York - Standard & Poors*											AA-			AA-			AA-			AA-			AA-			AA-			AA-			AA-
Ratios
Debt to Total Capitalization [4]		21.1	%		19.9	%		22.8	%		18.8	%		17.0	%		21.2	%		23.2	%		20.8	%		21.3	%		23.4	%		20.7	%
Debt to Equity [4]		26.7	%		24.9	%		29.5	%		23.1	%		20.5	%		26.9	%		30.3	%		26.3	%		27.0	%		30.5	%		26.1	%

For the Quarter Ended	Dec 2001			Mar 2002			Jun 2002			Sep 2002			Dec 2002			Mar 2003			Jun 2003			Sep 2003			Dec 2003			Mar 2004			Jun 2004			Sep 2004
Common Stock:
Highest Price	$	49.450		$	53.650		$	52.540		$	42.080		$	35.950		$	35.700		$	37.500		$	38.640		$	41.320		$	48.870		$	50.380		$	47.500
Lowest Price		40.000			47.200			40.750			29.120			25.150			24.730			27.870			34.630			35.410			40.060			43.260			41.900
Closing Price	$	48.570		$	50.730		$	42.000		$	30.550		$	31.580		$	28.000		$	35.630		$	35.380		$	40.370		$	47.320		$	47.250		$	47.000
Yield [3]		2.6	%		2.5	%		3.0	%		4.2	%		4.2	%		4.8	%		3.8	%		3.8	%		3.5	%		3.0	%		3.0	%		3.0	%
Preferred Stock Dividend (Millions)	$	0.017		$	0.016		$	0.015		$	0.015		$	0.015		$	0.014		$	0.016		$	0.014		$	0.014		$	0.013		$	0.013		$	0.013
Debt: (End of Period)
Senior Debt Ratings
A.M. Best		a			a			a			a			a			a			a			a			a-			a-			a-			a-
Fitch		A+			A+			A+			A			A			A			A			A			A			A			A			A
Moody’s		A3			A3			A3			A3			A3			A3			A3			A3			A3			A3			A3			A3
Standard and Poors		A-			A-			A-			A-			A-			A-			A-			A-			A-			A-			A-			A-
Claims Paying Ratings:
Lincoln Life - A.M. Best		A			A			A+			A+			A+			A+			A+			A+			A+			A+			A+			A+
Lincoln Life - Fitch		AA			AA			AA			AA			AA			AA			AA			AA			AA			AA			AA			AA
Lincoln Life - Moody’s		Aa3			Aa3			Aa3			Aa3			Aa3			Aa3			Aa3			Aa3			Aa3			Aa3			Aa3			Aa3
Lincoln Life - Standard & Poors		AA-			AA-			AA-			AA-			AA-			AA-			AA-			AA-			AA-			AA-			AA-			AA-
First Penn - A.M. Best*		A			A			A+			A+			A+			A+			A+			A+			A+			A+			A+			A+
First Penn - Fitch		AA			AA			AA			AA			AA			AA			AA			AA			AA			AA			AA			AA
First Penn - Moody’s		A1			A1			A1			A1			A1			A1			A1			A1			A1			A1			A1			A1
First Penn - Standard & Poors*		AA-			AA-			AA-			AA-			AA-			AA-			AA-			AA-			AA-			AA-			AA-			AA-
LLA of New York - A.M. Best*		A			A			A+			A+			A+			A+			A+			A+			A+			A+			A+			A+
LLA of New York - Fitch*		AA			AA			AA			AA			AA			AA			AA			AA			AA			AA			AA			AA
LLA of New York - Moody’s		A1			A1			A1			A1			A1			A1			A1			A1			A1			A1			A1			A1
LLA of New York - Standard & Poors*		AA-			AA-			AA-			AA-			AA-			AA-			AA-			AA-			AA-			AA-			AA-			AA-
Ratios
Debt to Total Capitalization [4]		21.3	%		22.5	%		22.5	%		23.0	%		23.4	%		23.1	%		22.3	%		21.5	%		20.7	%		22.8	%		22.6	%		22.0	%
Debt to Equity [4]		27.0	%		29.1	%		29.0	%		29.9	%		30.5	%		30.0	%		28.7	%		27.5	%		26.1	%		29.5	%		29.1	%		28.1	%

* Rating based on affiliation with Lincoln Life

[1] Stock prices include 2-for-1 splits in June 1993 and June 1999

[2] Indicated dividend divided by net income

[3] Indicated dividend divided by the closing price

[4] Equity used in calculation excludes accumulated other comprehensive income(loss). Junior subordinated debentures issued to affiliated trusts (hybrid securities) are considered 50% debt and 50% equity.

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.