Core Viewpoint - Lincoln National (LNC) reported quarterly earnings of $2.36 per share, exceeding the Zacks Consensus Estimate of $1.91 per share, and showing an increase from $1.84 per share a year ago, resulting in an earnings surprise of +23.56% [1][2] Financial Performance - The company achieved revenues of $4.73 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.23%, compared to $4.53 billion in the same quarter last year [2] - Over the last four quarters, Lincoln National has exceeded consensus EPS estimates four times, but has only topped consensus revenue estimates once [2] Stock Performance - Since the beginning of the year, Lincoln National shares have increased by approximately 7.9%, while the S&P 500 has gained 8.2% [3] - The current Zacks Rank for Lincoln National is 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $1.75 on revenues of $4.73 billion, and for the current fiscal year, it is $7.02 on revenues of $18.83 billion [7] - The trend of estimate revisions for Lincoln National was mixed prior to the earnings release, which may change following the recent results [6] Industry Context - The Insurance - Life Insurance industry, to which Lincoln National belongs, is currently ranked in the top 10% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Financial Performance - Adjusted operating income increased by 32% year-over-year (YoY), marking the fourth consecutive quarter of YoY growth[7, 13] - Adjusted operating income was $427 million, or $2.36 per share[12] - Group Protection achieved record earnings, up 33% YoY, with a record margin of 12.5%, a 250 basis points increase[13] - Life Insurance reported earnings of $32 million, supported by in-line alternative investment income and favorable mortality[7, 13] Sales and Growth - Annuities sales increased by 5% YoY, driven by a diversified product mix[7, 13] - Group Protection sales increased by 16% YoY, fueled by local market and supplemental health sales[13] - Life Insurance sales increased by 15% YoY, driven by momentum in risk-sharing products[13] - Retirement Plan Services experienced strong deposit growth, up 10% YoY[13] Capital and Leverage - Estimated Risk-Based Capital (RBC) ratio is greater than 420%, exceeding the 400% target[7, 13] - Leverage ratio improved by 330 basis points YoY to 25.6%, primarily due to equity growth[7, 13] - The company issued $1 billion in P-Caps, increasing access to on-demand capital and extending duration to 2055[13]

[Notes](index=3&type=section&id=Notes) This section provides explanations for non-GAAP financial measures and definitions for key financial computations and metrics used in the report [Non-GAAP Measures](index=3&type=section&id=Non-GAAP%20Measures) This section explains the company's non-GAAP financial measures, including adjusted income (loss) from operations, adjusted operating revenues, stockholders' equity excluding AOCI and preferred stock, adjusted stockholders' equity, and related per-share and ROE metrics, detailing why these adjustments are made to provide a clearer view of underlying business performance - The definition of adjusted income (loss) from operations was revised in Q3 2024 to exclude certain additional items not indicative of ongoing business operations, with the six-month period ended June 30, 2024, recast to conform to the new presentation[4](index=4&type=chunk) - Adjusted income (loss) from operations excludes items such as net annuity product features, net life insurance product features, credit loss-related adjustments, investment gains (losses), and changes in the fair value of reinsurance-related embedded derivatives, trading securities, and certain mortgage loans[7](index=7&type=chunk) - Management believes these non-GAAP measures are helpful for investors in evaluating the company's performance and understanding underlying trends by removing the effect of market movements and non-recurring items[8](index=8&type=chunk)[9](index=9&type=chunk)[12](index=12&type=chunk) - Stockholders' equity, excluding AOCI and preferred stock, is used to analyze net worth by eliminating market movements primarily related to changes in interest rates[13](index=13&type=chunk) - Adjusted stockholders' equity further excludes changes in market risk benefits (MRBs), guaranteed living benefit (GLB) and guaranteed death benefit (GDB) hedge instrument gains (losses), and reinsurance-related embedded derivatives and portfolio gains (losses) to eliminate the effect of market movements from equity markets and interest rates[14](index=14&type=chunk)[15](index=15&type=chunk) [Computations & Definitions](index=5&type=section&id=Computations%20%26%20Definitions) This section provides definitions for key financial computations and metrics used in the report, including holding company available liquidity, return on equity (ROE), leverage ratio, and details on how 'Sales as reported' are calculated across various product lines - Holding company available liquidity consists of cash and invested cash (excluding collateral) and certain short-term investments readily convertible to cash, net of commercial paper outstanding[21](index=21&type=chunk) - Return on equity (ROE) measures the efficiency of generating profits from net assets, with management evaluating consolidated ROE both including and excluding the effect of average goodwill[22](index=22&type=chunk) - The leverage ratio monitors the level of debt relative to total capitalization, with debt and total capitalization adjusted for certain items[23](index=23&type=chunk) - Sales as reported include deposits from new and existing customers for Annuities and Retirement Plan Services, first-year commissionable premiums for various life insurance products, and annualized first-year premiums for Group Protection[25](index=25&type=chunk) [Credit Ratings](index=6&type=section&id=Credit%20Ratings) This section presents the company's credit ratings from major agencies for senior debt and financial strength ratings for its life insurance subsidiaries [Ratings as of July 31, 2025](index=6&type=section&id=Ratings%20as%20of%20July%2031%2C%202025) This section presents the credit ratings from major agencies (AM Best, Fitch, Moody's, Standard & Poor's) for the company's senior debt and financial strength ratings for its life insurance subsidiaries as of July 31, 2025 Credit Ratings as of July 31, 2025 | | Ratings as of July 31, 2025 | | | Standard | | --- | --- | --- | --- | --- | | | AM Best | Fitch | Moody's | & Poor's | | Senior Debt Ratings | bbb+ | BBB+ | Baa2 | BBB+ | | Financial Strength Ratings | | | | | | The Lincoln National Life Insurance Company | A | A+ | A2 | A+ | | First Penn-Pacific Life Insurance Company | A | A+ | A2 | A | | Lincoln Life & Annuity Company of New York | A | A+ | A2 | A+ | [Consolidated Financial Statements](index=7&type=section&id=Consolidated%20Financial%20Statements) This section provides a consolidated overview of the company's financial performance and position through its income statements and balance sheets [Consolidated Statements of Income (Loss)](index=7&type=section&id=Consolidated%20Statements%20of%20Income%20(Loss)) This section provides a consolidated overview of the company's revenues, expenses, and net income (loss) for the three and six months ended June 30, 2025, compared to the prior year, showing a decrease in total revenues and a significant change from net income to net loss for the six-month period Consolidated Statements of Income (Loss) Summary (in millions of USD, except per share data) | Metric | 3 Months Ended 6/30/24 | 3 Months Ended 6/30/25 | Change (3M) | 6 Months Ended 6/30/24 | 6 Months Ended 6/30/25 | Change (6M) | | :-------------------------------- | :--------------------- | :--------------------- | :---------- | :--------------------- | :--------------------- | :---------- | | Total revenues | $5,153 | $4,044 | -21.5% | $9,269 | $8,735 | -5.8% | | Total expenses | $4,057 | $3,196 | -21.2% | $6,644 | $8,836 | 33.0% | | Net income (loss) | $895 | $699 | -21.9% | $2,116 | $(23) | NM | | Net income (loss) available to common stockholders – diluted | $884 | $688 | -22.2% | $2,073 | $(69) | NM | | Earnings (Loss) Per Common Share – Diluted | $5.11 | $3.80 | -25.6% | $12.03 | $(0.39) | NM | [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) This section presents the consolidated balance sheet data, highlighting assets, liabilities, and stockholders' equity as of June 30, 2025, compared to previous quarters, with total assets increasing by 3.8% year-over-year, driven by increases in cash and invested cash, and separate account assets Consolidated Balance Sheet Summary (in millions of USD) | Metric | As of 6/30/24 | As of 6/30/25 | Change | | :-------------------------------------------------------------------------------- | :------------ | :------------ | :----- | | Total investments | $126,595 | $131,144 | 3.6% | | Cash and invested cash | $5,475 | $7,143 | 30.5% | | Separate account assets | $165,199 | $172,942 | 4.7% | | Total assets | $384,533 | $399,065 | 3.8% | | Policyholder account balances | $124,113 | $129,209 | 4.1% | | Total liabilities | $376,584 | $389,517 | 3.4% | | Total stockholders' equity | $7,949 | $9,548 | 20.1% | [Performance Metrics](index=10&type=section&id=Performance%20Metrics) This section details key financial performance indicators, including earnings, share metrics, return on equity, and stakeholder-focused ratios [Earnings, Shares and Return on Equity](index=10&type=section&id=Earnings%2C%20Shares%20and%20Return%20on%20Equity) This section details key earnings, share, and return on equity metrics, including GAAP and adjusted figures, showing adjusted income from operations available to common stockholders increased by 31.8% for the three months and 32.2% for the six months ended June 30, 2025, with adjusted book value per share also seeing a 6.2% increase year-over-year Key Earnings, Shares, and Return on Equity Metrics (in millions of USD, except per share and share data) | Metric | 3 Months Ended 6/30/24 | 3 Months Ended 6/30/25 | Change (3M) | 6 Months Ended 6/30/24 | 6 Months Ended 6/30/25 | Change (6M) | | :-------------------------------------------------------------------------------- | :--------------------- | :--------------------- | :---------- | :--------------------- | :--------------------- | :---------- | | Net income (loss) | $895 | $699 | -21.9% | $2,116 | $(23) | NM | | Pre-tax adjusted income (loss) from operations | $389 | $517 | 32.9% | $680 | $879 | 29.3% | | Adjusted income (loss) from operations available to common stockholders | $324 | $427 | 31.8% | $534 | $706 | 32.2% | | Adjusted income (loss) from operations (diluted) per share | $1.87 | $2.36 | 26.2% | $3.10 | $3.97 | 28.1% | | Book value per share, excluding AOCI | $66.37 | $67.95 | 2.4% | $66.37 | $67.95 | 2.4% | | Adjusted book value per share | $68.51 | $72.77 | 6.2% | $68.51 | $72.77 | 6.2% | | End-of-period – basic common shares | 170.7 | 190.6 | 11.7% | 170.7 | 190.6 | 11.7% | [Key Stakeholder Metrics](index=11&type=section&id=Key%20Stakeholder%20Metrics) This section provides insights into cash returned to stockholders, leverage ratio, and holding company available liquidity, noting the leverage ratio improved to 25.6% as of June 30, 2025, from 28.9% a year prior, while holding company available liquidity decreased significantly Key Stakeholder Metrics Summary (in millions of USD, except percentages) | Metric | As of 6/30/24 | As of 6/30/25 | Change | | :------------------------------------------ | :------------ | :------------ | :----- | | Cash Returned to Common Stockholders – Common Dividends | $77 | $77 | 0.0% | | Cash Returned to Preferred Stockholders – Preferred Dividends | $11 | $11 | 0.0% | | Total debt and preferred stock | $7,152 | $6,753 | -5.6% | | Adjusted stockholders' equity | $11,698 | $13,873 | 18.6% | | Leverage ratio | 28.9% | 25.6% | -3.3 ppt | | Holding Company Available Liquidity | $763 | $466 | -38.9% | [Segment Performance](index=12&type=section&id=Segment%20Performance) This section analyzes the financial and operational performance of the company's individual business segments, including Annuities, Life Insurance, Group Protection, and Retirement Plan Services [Select Earnings Drivers By Segment](index=12&type=section&id=Select%20Earnings%20Drivers%20By%20Segment) This section presents key earnings drivers and operational data across Annuities, Life Insurance, Group Protection, and Retirement Plan Services segments, with consolidated adjusted operating revenues increasing by 3.3% for the six months ended June 30, 2025, while consolidated net flows experienced a significant outflow Segment Operating Revenues, Deposits, and Net Flows (in millions of USD) | Segment | Operating Revenues (6M 2024) | Operating Revenues (6M 2025) | Change | Deposits (6M 2024) | Deposits (6M 2025) | Change | Net Flows (6M 2024) | Net Flows (6M 2025) | Change | | :---------------------- | :--------------------------- | :--------------------------- | :----- | :----------------- | :----------------- | :----- | :------------------ | :------------------ | :----- | | Annuities | $2,477 | $2,412 | -2.6% | $6,672 | $7,823 | 17.3% | $(2,946) | $(2,838) | 3.7% | | Life Insurance | $3,052 | $3,188 | 4.5% | $2,438 | $2,500 | 2.5% | $1,492 | $1,202 | -19.4% | | Group Protection | $2,867 | $3,059 | 6.7% | N/A | N/A | N/A | N/A | N/A | N/A | | Retirement Plan Services | $649 | $658 | 1.4% | $7,085 | $7,709 | 8.8% | $194 | $(2,768) | NM | | Consolidated Adjusted Operating Revenues | $9,111 | $9,411 | 3.3% | $16,195 | $18,032 | 11.3% | $(1,260) | $(4,404) | NM | [Sales By Segment](index=13&type=section&id=Sales%20By%20Segment) This section details sales performance across Annuities, Life Insurance, Group Protection, and Retirement Plan Services, highlighting that Annuities sales increased by 17.2% for the six months ended June 30, 2025, driven by a 34.4% rise in RILA sales and a 72.4% increase in traditional variable with GLBs, and Life Insurance sales also grew by 10.7%, primarily due to Executive Benefits Sales by Segment (in millions of USD) | Segment | Sales (6M 2024) | Sales (6M 2025) | Change | | :-------------------------- | :-------------- | :-------------- | :----- | | Total Annuities | $6,663 | $7,807 | 17.2% | | RILA | $2,038 | $2,739 | 34.4% | | Traditional variable with GLBs | $1,179 | $2,033 | 72.4% | | Total Life Insurance | $197 | $218 | 10.7% | | Executive Benefits | $16 | $50 | 212.5% | | Total Group Protection | $306 | $344 | 12.4% | | Total Retirement Plan Services | $7,085 | $7,709 | 8.8% | [Operating Revenues and General and Administrative Expenses By Segment](index=14&type=section&id=Operating%20Revenues%20and%20General%20and%20Administrative%20Expenses%20By%20Segment) This section provides a breakdown of operating revenues and general and administrative expenses by segment, showing consolidated adjusted operating revenues increased by 3.3% for the six months ended June 30, 2025, while total general and administrative expenses, net of amounts capitalized, decreased by 1.3% Operating Revenues and G&A Expenses by Segment (in millions of USD) | Segment | Operating Revenues (6M 2024) | Operating Revenues (6M 2025) | Change | G&A Expenses (6M 2024) | G&A Expenses (6M 2025) | Change | | :----------------------- | :--------------------------- | :--------------------------- | :----- | :----------------------- | :----------------------- | :----- | | Annuities | $2,477 | $2,412 | -2.6% | $246 | $218 | -11.4% | | Life Insurance | $3,052 | $3,188 | 4.5% | $256 | $241 | -5.9% | | Group Protection | $2,867 | $3,059 | 6.7% | $380 | $408 | 7.4% | | Retirement Plan Services | $649 | $658 | 1.4% | $161 | $161 | 0.0% | | Other Operations | $66 | $94 | 42.4% | $120 | $120 | 0.0% | | Total adjusted operating revenues | $9,111 | $9,411 | 3.3% | $1,163 | $1,148 | -1.3% | [Operating Commissions and Other Expenses](index=15&type=section&id=Operating%20Commissions%20and%20Other%20Expenses) This section details the operating commissions and other expenses incurred, as well as amounts capitalized and amortization, noting total adjusted operating commissions and other expenses incurred decreased by 2.9% for the six months ended June 30, 2025, while amortization of DAC, VOBA, and other intangibles increased by 13.4% Operating Commissions and Other Expenses Summary (in millions of USD) | Metric | 6 Months Ended 6/30/24 | 6 Months Ended 6/30/25 | Change | | :---------------------------------------------------------------- | :--------------------- | :--------------------- | :----- | | Total adjusted operating commissions and other expenses incurred | $2,871 | $2,787 | -2.9% | | Total amounts capitalized | $(559) | $(614) | -9.8% | | Amortization of DAC, VOBA and other intangibles | $544 | $617 | 13.4% | | Total operating commissions and other expenses | $2,856 | $2,790 | -2.3% | [Select Earnings and Operational Data from Business Segments and Other Operations](index=16&type=section&id=Select%20Earnings%20and%20Operational%20Data%20from%20Business%20Segments%20and%20Other%20Operations) This section provides detailed earnings and operational data for each business segment: Annuities, Life Insurance, Group Protection, and Retirement Plan Services, as well as Other Operations [Annuities](index=16&type=section&id=Annuities) The Annuities segment reported a 3.8% increase in income from operations for the six months ended June 30, 2025, reaching $577 million, despite total operating revenues decreasing by 2.6%, with net investment income growing by 11.5% and total account balances increasing by 5.0% year-over-year Annuities Segment Operational Data (in millions of USD) | Metric | 6 Months Ended 6/30/24 | 6 Months Ended 6/30/25 | Change | | :------------------------------------ | :--------------------- | :--------------------- | :----- | | Total operating revenues | $2,477 | $2,412 | -2.6% | | Net investment income | $855 | $953 | 11.5% | | Income (loss) from operations | $556 | $577 | 3.8% | | Total account balances (End-of-Period) | $159,869 | $167,793 | 5.0% | | RILA account balances (End-of-Period) | $31,633 | $36,256 | 14.6% | [Life Insurance](index=17&type=section&id=Life%20Insurance) The Life Insurance segment saw a significant turnaround, moving from a loss of $70 million in operations for the six months ended June 30, 2024, to a gain of $16 million in the same period of 2025, with total operating revenues increasing by 4.5%, driven by growth in fee income and net investment income, while total in-force face amount decreased by 1.5% Life Insurance Segment Operational Data (in millions of USD) | Metric | 6 Months Ended 6/30/24 | 6 Months Ended 6/30/25 | Change | | :------------------------------------ | :--------------------- | :--------------------- | :----- | | Total operating revenues | $3,052 | $3,188 | 4.5% | | Fee income | $1,349 | $1,386 | 2.7% | | Net investment income | $1,114 | $1,172 | 5.2% | | Income (loss) from operations | $(70) | $16 | 122.9% | | Total in-force face amount | $1,084,515 | $1,067,972 | -1.5% | [Group Protection](index=18&type=section&id=Group%20Protection) The Group Protection segment reported a 30.5% increase in income from operations for the six months ended June 30, 2025, reaching $274 million, with total operating revenues growing by 6.7%, primarily from insurance premiums, and the total loss ratio improving to 65.9% for the three months ended June 30, 2025, from 70.1% in the prior year Group Protection Segment Operational Data (in millions of USD, except percentages) | Metric | 6 Months Ended 6/30/24 | 6 Months Ended 6/30/25 | Change | | :------------------------------------ | :--------------------- | :--------------------- | :----- | | Total operating revenues | $2,867 | $3,059 | 6.7% | | Insurance premiums | $2,583 | $2,757 | 6.7% | | Income (loss) from operations | $210 | $274 | 30.5% | | Operating Margin (3M 6/30/25) | 10.0% (6/30/24) | 12.5% (6/30/25) | 2.5 ppt | | Total Loss Ratio (3M 6/30/25) | 70.1% (6/30/24) | 65.9% (6/30/25) | -4.2 ppt | [Retirement Plan Services](index=19&type=section&id=Retirement%20Plan%20Services) The Retirement Plan Services segment experienced a 6.6% decrease in income from operations for the six months ended June 30, 2025, totaling $71 million, as total operating revenues increased slightly by 1.4%, but net flows turned significantly negative, moving from an inflow of $194 million to an outflow of $2,768 million for the six-month period Retirement Plan Services Segment Operational Data (in millions of USD) | Metric | 6 Months Ended 6/30/24 | 6 Months Ended 6/30/25 | Change | | :------------------------------------ | :--------------------- | :--------------------- | :----- | | Total operating revenues | $649 | $658 | 1.4% | | Income (loss) from operations | $76 | $71 | -6.6% | | Net Flows | $194 | $(2,768) | NM | | Total account balances (End-of-Period) | $107,872 | $116,383 | 7.9% | [Other Operations](index=20&type=section&id=Other%20Operations) Other Operations reported a 3.1% improvement in income from operations for the six months ended June 30, 2025, reducing the loss to $186 million, with total operating revenues increasing by 42.4%, primarily driven by net investment income and other revenues Other Operations Segment Data (in millions of USD) | Metric | 6 Months Ended 6/30/24 | 6 Months Ended 6/30/25 | Change | | :------------------------------------ | :--------------------- | :--------------------- | :----- | | Total operating revenues | $66 | $94 | 42.4% | | Net investment income | $43 | $67 | 55.8% | | Income (loss) from operations | $(192) | $(186) | 3.1% | [DAC and Account Balance Roll Forwards](index=21&type=section&id=DAC%20and%20Account%20Balance%20Roll%20Forwards) This section details the changes in Deferred Acquisition Costs (DAC) and various account balances across segments, providing insights into asset and liability movements [Consolidated DAC, VOBA, DSI and DFEL Roll Forwards](index=21&type=section&id=Consolidated%20DAC%2C%20VOBA%2C%20DSI%20and%20DFEL%20Roll%20Forwards) This section provides a consolidated view of the roll forwards for Deferred Acquisition Costs (DAC), Value of Business Acquired (VOBA), Deferred Sales Inducements (DSI), and Deferred Front-End Loads (DFEL), showing the end-of-period balance for DAC, VOBA, and DSI increased by 1.4% year-over-year, while DFEL increased by 12.9% Consolidated DAC, VOBA, DSI, and DFEL Balances (in millions of USD) | Metric | As of 6/30/24 | As of 6/30/25 | Change | | :------------------------------------ | :------------ | :------------ | :----- | | DAC, VOBA and DSI Balance | $12,435 | $12,604 | 1.4% | | DFEL Balance | $6,306 | $7,119 | 12.9% | | DAC, VOBA, DSI and DFEL Balance, After-Tax | $4,842 | $4,333 | -10.5% | [Account Balance Roll Forwards](index=22&type=section&id=Account%20Balance%20Roll%20Forwards) This section details the changes in account balances for Annuities, Life Insurance, and Retirement Plan Services, showing gross deposits, surrenders, benefits, net flows, and market value changes [Annuities - Account Balance Roll Forwards](index=22&type=section&id=Annuities%20-%20Account%20Balance%20Roll%20Forwards) Total Annuities account balances, net of reinsurance, increased by 5.0% to $167,793 million as of June 30, 2025, with gross deposits increasing by 17.3% for the six-month period, and net flows improving by 3.7% (less negative outflow) Annuities Account Balance Roll Forward (in millions of USD) | Metric | 6 Months Ended 6/30/24 | 6 Months Ended 6/30/25 | Change | | :------------------------------------ | :--------------------- | :--------------------- | :----- | | Total Balance (End-of-Period, net) | $159,869 | $167,793 | 5.0% | | Gross deposits | $6,672 | $7,823 | 17.3% | | Net flows | $(2,946) | $(2,838) | 3.7% | [Life Insurance - Account Balance Roll Forwards](index=24&type=section&id=Life%20Insurance%20-%20Account%20Balance%20Roll%20Forwards) Total Life Insurance account balances, net of reinsurance, increased by 9.0% to $47,295 million as of June 30, 2025, with gross deposits increasing by 2.5% for the six-month period, but net flows decreasing by 19.4% Life Insurance Account Balance Roll Forward (in millions of USD) | Metric | 6 Months Ended 6/30/24 | 6 Months Ended 6/30/25 | Change | | :------------------------------------ | :--------------------- | :--------------------- | :----- | | Total Balance (End-of-Period, net) | $43,391 | $47,295 | 9.0% | | Gross deposits | $2,438 | $2,500 | 2.5% | | Net flows | $1,492 | $1,202 | -19.4% | [Retirement Plan Services - Account Balance Roll Forwards](index=25&type=section&id=Retirement%20Plan%20Services%20-%20Account%20Balance%20Roll%20Forwards) Total Retirement Plan Services account balances increased by 7.9% to $116,383 million as of June 30, 2025, with gross deposits increasing by 8.8% for the six-month period, but net flows experiencing a significant negative shift, moving from an inflow of $194 million to an outflow of $2,768 million Retirement Plan Services Account Balance Roll Forward (in millions of USD) | Metric | 6 Months Ended 6/30/24 | 6 Months Ended 6/30/25 | Change | | :------------------------------------ | :--------------------- | :--------------------- | :----- | | Total Balance (End-of-Period) | $107,872 | $116,383 | 7.9% | | Gross deposits | $7,085 | $7,709 | 8.8% | | Net flows | $194 | $(2,768) | NM | [Investment Information](index=26&type=section&id=Investment%20Information) This section provides details on the company's investment portfolio, focusing on fixed-income asset classes and their credit quality [Fixed-Income Asset Class](index=26&type=section&id=Fixed-Income%20Asset%20Class) This section provides a breakdown of the company's fixed-income asset class, including fixed maturity AFS securities, trading securities, and equity securities, net of modified coinsurance and funds withheld investments, showing total fixed maturity AFS securities, net of allowance for credit losses, increased by 2.5% to $89,386 million as of June 30, 2025 Fixed-Income Asset Class Breakdown (in millions of USD) | Industry Corporate Bonds | As of 6/30/24 (Amount) | As of 6/30/25 (Amount) | Change | | :----------------------- | :--------------------- | :--------------------- | :----- | | Financial services | $12,552 | $12,685 | 1.1% | | Consumer non-cyclical | $12,751 | $12,438 | -2.4% | | Utilities | $11,283 | $11,399 | 1.0% | | Total fixed maturity AFS securities, net of modified coinsurance and funds withheld investments and allowance for credit losses, at amortized cost | $86,942 | $88,558 | 1.9% | [Fixed-Income Credit Quality](index=27&type=section&id=Fixed-Income%20Credit%20Quality) This section details the credit quality of fixed maturity AFS securities and commercial mortgage loans, reporting that as of June 30, 2025, 96.5% of fixed maturity AFS securities were investment grade (NAIC 1-2), and 99.7% of commercial mortgage loans were investment grade (CM1-2) Fixed Maturity AFS Securities Credit Quality (in millions of USD, except percentages) | Rating | As of 6/30/24 (Amount) | As of 6/30/24 (%) | As of 6/30/25 (Amount) | As of 6/30/25 (%) | | :---------------------- | :--------------------- | :---------------- | :--------------------- | :---------------- | | NAIC 1 (AAA-A) | $51,419 | 59.1% | $53,585 | 60.4% | | NAIC 2 (BBB) | $32,686 | 37.6% | $31,935 | 36.1% | | Total investment grade | $84,105 | 96.7% | $85,520 | 96.5% | | Total below investment grade | $2,837 | 3.3% | $3,038 | 3.5% | | Total | $86,942 | 100.0% | $88,558 | 100.0% | Commercial Mortgage Loans Credit Quality (in millions of USD, except percentages) | Rating | As of 6/30/24 (Amount) | As of 6/30/24 (%) | As of 6/30/25 (Amount) | As of 6/30/25 (%) | | :---------------------- | :--------------------- | :---------------- | :--------------------- | :---------------- | | CM1 (AAA-A) | $13,515 | 78.1% | $13,329 | 76.3% | | CM2 (BBB) | $3,758 | 21.7% | $4,083 | 23.4% | | CM3-7 (BB and lower) | $40 | 0.2% | $61 | 0.3% | | Total | $17,313 | 100.0% | $17,473 | 100.0% | [GAAP to Non-GAAP Reconciliations](index=28&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliations) This section provides reconciliations between GAAP financial measures and the company's non-GAAP adjusted measures, offering a clearer view of underlying operational performance [Select GAAP to Non-GAAP Reconciliations - Net Income](index=28&type=section&id=Select%20GAAP%20to%20Non-GAAP%20Reconciliations%20-%20Net%20Income) This section reconciles GAAP net income (loss) to adjusted income (loss) from operations, showing that for the six months ended June 30, 2025, adjusted income from operations available to common stockholders was $706 million, a 32% increase from the prior year, despite a GAAP net loss GAAP to Non-GAAP Net Income Reconciliation (in millions of USD) | Metric | 6 Months Ended 6/30/24 | 6 Months Ended 6/30/25 | Change | | :---------------------------------------------------------------- | :--------------------- | :--------------------- | :----- | | Net income (loss) available to common stockholders – diluted | $2,073 | $(69) | NM | | Total adjustments | $1,536 | $(775) | NM | | Adjusted income (loss) from operations | $580 | $752 | 30% | | Adjusted income (loss) from operations available to common stockholders | $534 | $706 | 32% | [Select GAAP to Non-GAAP Reconciliations - Revenues](index=29&type=section&id=Select%20GAAP%20to%20Non-GAAP%20Reconciliations%20-%20Revenues) This section reconciles total GAAP revenues to adjusted operating revenues, indicating that adjusted operating revenues increased by 3.3% for the six months ended June 30, 2025, reaching $9,411 million, while total GAAP revenues decreased by 5.8% GAAP to Non-GAAP Revenues Reconciliation (in millions of USD) | Metric | 6 Months Ended 6/30/24 | 6 Months Ended 6/30/25 | Change | | :------------------------------------ | :--------------------- | :--------------------- | :----- | | Total revenues | $9,269 | $8,735 | -5.8% | | Revenue adjustments from annuity and life insurance product features | $(474) | $(364) | 23.2% | | Investment gains (losses) | $(311) | $(183) | 41.2% | | Adjusted operating revenues | $9,111 | $9,411 | 3.3% | [Select GAAP to Non-GAAP Reconciliations - Earnings Per Share](index=30&type=section&id=Select%20GAAP%20to%20Non-GAAP%20Reconciliations%20-%20Earnings%20Per%20Share) This section reconciles GAAP diluted earnings (loss) per common share to adjusted income (loss) from operations per diluted share, demonstrating that adjusted income from operations per diluted share increased by 28.1% for the six months ended June 30, 2025, reaching $3.97, contrasting with a GAAP net loss per share GAAP to Non-GAAP Earnings Per Share Reconciliation (per share) | Metric | 6 Months Ended 6/30/24 | 6 Months Ended 6/30/25 | Change | | :---------------------------------------------------------------- | :--------------------- | :--------------------- | :----- | | Net income (loss) | $12.03 | $(0.39) | NM | | Adjusted income (loss) from operations | $3.10 | $3.97 | 28.1% | [Select GAAP to Non-GAAP Reconciliations - Stockholders' Equity and Book Value Per Share](index=32&type=section&id=Select%20GAAP%20to%20Non-GAAP%20Reconciliations%20-%20Stockholders%27%20Equity%20and%20Book%20Value%20Per%20Share) This section reconciles GAAP stockholders' equity and book value per share to adjusted stockholders' equity and adjusted book value per share, showing adjusted stockholders' equity increased by 18.6% to $13,873 million as of June 30, 2025, and adjusted book value per share increased by 6.2% to $72.77 GAAP to Non-GAAP Stockholders' Equity and Book Value Per Share Reconciliation (in millions of USD, except per share data) | Metric | As of 6/30/24 | As of 6/30/25 | Change | | :---------------------------------------------------------------- | :------------ | :------------ | :----- | | Stockholders' equity | $7,949 | $9,548 | 20.1% | | Adjusted stockholders' equity | $11,698 | $13,873 | 18.6% | | Book value per share | $40.78 | $44.91 | 10.1% | | Adjusted book value per share | $68.51 | $72.77 | 6.2% |

Core Insights - Lincoln National Corporation (LNC) is a diversified life insurance and investment management company, providing a range of wealth accumulation, protection, and retirement products. The company has outperformed the industry average with a year-to-date increase of 9.1% compared to 3.7% [1][2]. Company Overview - LNC is headquartered in Radnor, PA, with a market capitalization of $5.9 billion. The company operates through four business segments: Annuities, Life Insurance, Group Protection, and Retirement Plan Services. Its trailing 12-month price-to-book (P/B) ratio is 0.82X, significantly lower than the industry average of 2.02X [2]. Financial Estimates - The Zacks Consensus Estimate for LNC's 2025 earnings is $7.11 per share, reflecting a 0.6% year-over-year increase. Revenue estimates for 2025 are projected at $18.7 billion. LNC has consistently beaten earnings estimates over the past four quarters, with an average surprise of 10.7% [4]. Growth Drivers - LNC's revenue growth is driven by strong performance in its Annuities and Group Protection segments, supported by higher insurance premiums and fee income. The company is enhancing its in-force book and margin expansion initiatives, positioning itself well for future growth [5]. - The Annuities segment saw a 33% year-over-year increase in total sales, reaching $3.8 billion in Q1 2025. The company is shifting towards a more balanced mix of products, focusing on spread-based offerings [6]. - The Group Protection business reported a 26% year-over-year increase in income from operations in Q1 2025, with improved underwriting results and prudent acquisitions contributing to its growth. The segment's operating margin improved by 120 basis points [7]. Strategic Initiatives - LNC has formed a long-term strategic partnership with Bain Capital, aimed at enhancing private asset origination and accelerating value creation across various streams. This partnership is part of LNC's efforts to reshape its life product portfolio and improve its retirement business capabilities [8]. Shareholder Returns - In Q1 2025, LNC allocated $77 million for dividend payouts, maintaining a quarterly dividend of 45 cents per share, resulting in a dividend yield of 5.2%, which exceeds the industry average of 3.2% [9].

Group 1 - The article discusses the availability of a free trial for active investors to join a chat room with sophisticated traders and investors [1] Group 2 - There is a disclosure indicating that the author has no current stock or derivative positions in the mentioned companies but may initiate a short position in LNC.PR.D within the next 72 hours [2] - The article emphasizes that past performance does not guarantee future results and that no specific investment recommendations are provided [3]

Core Insights - The article discusses the potential investment opportunities in LNC, highlighting the author's intention to initiate a long position in the stock within the next 72 hours [2]. Group 1: Company Overview - LNC is positioned as a company of interest for potential investment, with the author expressing a favorable outlook on its stock performance [2]. Group 2: Market Context - The financial sector is experiencing fluctuations, and the author, with over 18 years of experience, provides insights into the current market dynamics that may affect LNC [1].

Core Insights - Lincoln National Corporation (LNC) has launched the LVIP American Funds Vanguard Active Passive Growth Fund, aimed at enhancing its variable annuity offerings [1][8] - The fund combines active management from Capital Group and passive strategies from Vanguard, providing a balanced approach to long-term growth [2][3] - The introduction of this fund is timely, as financial advisors recognize the complementary nature of active and passive strategies, especially during market volatility [4] Company Strategy - The new fund is expected to boost LNC's annuity business by attracting new customers and retaining existing ones, with annuity sales increasing by 33% year over year in Q1 2025 [5] - LNC's variable annuities are designed to support diverse client objectives and safeguard retirement income, offering various investment options [6] Market Performance - LNC shares have increased by 6.3% over the past six months, outperforming the industry average growth of 3.3% [7]

Group 1 - Lincoln National (NYSE: LNC) shares have recovered nearly 20% over the past year after a prolonged period of underperformance [1] - The company reported better than expected Q1 results, contributing to the continued gains in its stock price [1] Group 2 - The analyst has over fifteen years of experience making contrarian bets based on macro views and stock-specific turnaround stories [1]

Core Viewpoint - Lincoln National Corporation (LNC) reported a decline in shares by 1.9% following its first-quarter 2025 results, primarily due to a significant rise in total expenses, although this was partially offset by higher insurance premiums and strong annuity deposits [1] Financial Performance - Adjusted earnings per share were $1.60, exceeding the Zacks Consensus Estimate by 3.9% and reflecting a year-over-year increase of 31.1% [2] - Adjusted operating revenues grew 2.2% year over year to $4.7 billion, but missed the consensus mark by 0.5% [2] - Total expenses more than doubled year over year to $5.7 billion, while net loss amounted to $722 million compared to a net income of $1.2 billion in the prior year [4] Segment Performance - The Annuities segment reported operating income of $290 million, a 12% increase year over year, but fell short of the consensus estimate [6] - The Life Insurance unit incurred an operating loss of $16 million, an improvement from the previous year's loss of $35 million, with operating revenues growing 3% year over year to $1.6 billion [7] - The Group Protection segment's operating income increased by 26.3% year over year to $101 million, supported by favorable long-term disability results [8] - The Retirement Plan Services segment recorded an operating income of $34 million, down 5.6% year over year, with total deposits advancing 8.2% year over year to $4.1 billion [9] Financial Position - As of March 31, 2025, Lincoln National had cash and invested cash of $4.3 billion, a decrease of 26.2% from the end of 2024 [11] - Total assets were $382.9 billion, down 2% from the previous year-end [11] - Book value per share, excluding accumulated other comprehensive income, was $61.63, a decline of 14.5% from the end of 2024 [12] Dividend and Outlook - Lincoln National paid out quarterly dividends of $77 million [13] - The company anticipates a seasonally higher loss ratio in the Group Protection unit for the fourth quarter of 2025, while favorable mortality results are expected in the Life Insurance segment [14] Long-term Projections - By 2026, the Annuities, Life Insurance, Group Protection, and Retirement Plan Services units are projected to account for 55-65%, 10-15%, 20-30%, and 5-15% of total operating income, respectively [15]

Financial Performance - Income from operations is emphasized as a key profitability measure, reflecting ongoing business performance [218]. - As of March 31, 2025, the company reported a net income loss of $722 million, a significant decrease from a net income of $1,222 million in the same period of 2024 [259]. - The company's annuity segment generated an income from operations of $290 million for the three months ended March 31, 2025, compared to $259 million in 2024, reflecting a year-over-year increase of approximately 12% [262]. - Total net investment income for Q1 2025 was $571 million, a decrease of 1.7% from $581 million in Q1 2024 [282]. - The total net investment income for the three months ended March 31, 2025, was $1,457 million, an increase from $1,346 million in the same period of 2024, reflecting a growth of 8.3% [353]. Investment Portfolio - As of March 31, 2025, Lincoln National Corporation reported total investments valued at approximately $99.1 billion, with 93% priced using observable inputs [227]. - The total fair value of investments includes $76.1 billion priced by third-party services, representing 76.7% of total investments [227]. - The total investment portfolio, including fixed maturity AFS, trading, and equity securities, was valued at $100,194 million, with a fair value of $90,626 million [332]. - The estimated fair value of private placement securities was $21.5 billion, representing 17% of total investments as of March 31, 2025 [341]. - The company emphasizes diversification across asset classes in its investment policy, which includes fixed maturity securities, mortgage loans, and real estate [328]. Risks and Challenges - The company faces risks from economic conditions, including low interest rates that could reduce investment income and affect product demand [212]. - Legislative and regulatory changes are potential risks that could impact product demand and operational costs [212]. - The company faces risks including changes in accounting principles, credit rating downgrades, and competitive pressures that may impact premium levels and profitability [218]. - A hypothetical 10% decrease in equity market return could result in a $600 million decrease in net income, while a 10% increase could result in a $600 million increase [247]. - The company anticipates managing the effects of interest rate spreads on near-term income from operations through portfolio management strategies [267]. Segment Performance - The company operates through four main segments: Annuities, Life Insurance, Group Protection, and Retirement Plan Services [219]. - Total operating revenues for the annuities segment decreased to $1,198 million in Q1 2025 from $1,269 million in Q1 2024, representing a decline of about 5.6% [262]. - Total operating revenues for Life Insurance segment reached $1,587 million in Q1 2025, up from $1,541 million in Q1 2024, indicating a growth of 3% [273]. - Total operating revenues for Group Protection increased to $1,521 million in Q1 2025, up from $1,425 million in Q1 2024, driven by higher insurance premiums [287]. - Income from operations for Group Protection increased to $101 million in Q1 2025, compared to $80 million in Q1 2024, attributed to growth in business in force [288]. Capital and Liquidity - The company’s liquidity and capital resources are critical for meeting obligations and funding growth initiatives [214]. - The company had an estimated maximum borrowing capacity of $7.0 billion under the Federal Home Loan Bank facility, with outstanding borrowings of $2.5 billion as of March 31, 2025 [381]. - The net collateral payable position decreased to $5.5 billion as of March 31, 2025, down from $7.1 billion as of December 31, 2024 [383]. - The company reported total long-term debt of $5.868 billion as of March 31, 2025, which includes senior notes of $4.510 billion and subordinated notes of $995 million [373]. - The company has access to $2.6 billion through committed repurchase agreements, none of which was utilized as of March 31, 2025 [382]. Regulatory and Legislative Factors - The company noted that legislative changes could impact its effective tax rate, highlighting the importance of ongoing analysis of tax laws and regulations [253]. - The liability for future policy benefits (LFPB) is calculated based on assumptions regarding mortality rates, morbidity, and policyholder behavior, with updates conducted quarterly [233]. - The company conducts a comprehensive review of actuarial assumptions annually to ensure adequate reserves for future policy benefits [233]. - The company utilizes derivatives primarily for hedging against various risks, with fair values fluctuating based on market conditions [228]. - The company expects to optimize its legacy life portfolio and enhance asset sourcing capabilities through the capital raised from the Bain Capital transaction [223].