Lincoln(US:LNC)2021-08-05 14:55Financial Performance - Total revenues for the six months ended June 30, 2021, increased to $9,386 million, up 18% from $7,942 million in the same period of 2020[10] - Net income for the six months ended June 30, 2021, was $867 million, compared to a net loss of $42 million for the same period in 2020[10] - Fee income for the six months ended June 30, 2021, rose to $3,262 million, compared to $2,997 million for the same period in 2020, reflecting an increase of 9%[10] - The company reported a comprehensive income of $2,360 million for the three months ended June 30, 2021, compared to $4,225 million for the same period in 2020[10] - The company reported a total increase in payables for collateral on investments of $1.977 billion for the six months ended June 30, 2021, compared to $1.949 billion for the same period in 2020[58] - The company reported a total of $1,383 million in issuances for the six months ended June 30, 2021, compared to $1,032 million for the same period in 2020, indicating a year-over-year increase[178] Assets and Liabilities - Total assets as of June 30, 2021, were $380,148 million, up from $365,948 million as of December 31, 2020[8] - Total liabilities increased to $358,403 million as of June 30, 2021, compared to $343,249 million as of December 31, 2020[8] - Cash and invested cash as of June 30, 2021, amounted to $2,389 million, an increase from $1,708 million at the beginning of the year[14] - The company’s retained earnings as of June 30, 2021, were $9,245 million, an increase from $8,686 million as of December 31, 2020[11] Investments - Total fixed maturity available-for-sale (AFS) securities as of June 30, 2021, had an amortized cost of $106.668 billion and a fair value of $122.215 billion[27] - The gross unrealized gains for fixed maturity AFS securities were $15.884 billion, while the gross unrealized losses were $328 million as of June 30, 2021[27] - The company’s total fixed maturity AFS securities included corporate bonds valued at $101.003 billion as of June 30, 2021[27] - The total carrying value of mortgage loans on real estate was $17,586 million as of June 30, 2021, with an allowance for credit losses of $170 million[40] - The total number of fixed maturity AFS securities in an unrealized loss position was 1,368 as of June 30, 2021[28] Credit Losses and Allowances - The total allowance for credit losses on mortgage loans on real estate decreased to $170 million as of June 30, 2021, from $184 million at the beginning of the period[48] - The provision for credit loss expense decreased by $14 million for the three months ended June 30, 2021, due to improving economic projections[49] - The allowance for credit losses for reinsurance-related assets was $196 million, with no material changes noted for the six months ended June 30, 2021[9] Derivative Instruments and Hedging - The company uses interest rate swaps to hedge against changes in the fair value of certain fixed-rate long-term debt and fixed maturity securities due to interest rate risks[70] - The company maintains a risk management strategy that incorporates the use of derivative instruments to minimize fluctuations in earnings caused by various risks, including interest rate and foreign currency exchange risks[63] - As of June 30, 2021, the total notional amounts of derivative instruments were $168.64 billion, with a fair value of $8.83 billion in assets and $7.99 billion in liabilities[88] - The company reported cash flow hedges with notional amounts of $6.50 billion, including interest rate contracts of $2.94 billion and foreign currency contracts of $3.56 billion[88] Segment Performance - Annuities segment operating revenues for the six months ended June 30, 2021, were $2,453 million, compared to $2,166 million for the same period in 2020, reflecting a 13% increase[193] - Life Insurance segment reported operating revenues of $2,029 million for the three months ended June 30, 2021, a 24% increase from $1,639 million in the same period of 2020[193] - The Retirement Plan Services segment saw operating revenues rise to $333 million for the three months ended June 30, 2021, up from $282 million in the same period of 2020, marking an 18% increase[193] - Group Protection segment operating revenues increased to $1,247 million for the three months ended June 30, 2021, compared to $1,199 million in the same period of 2020, a growth of 4%[193] Shareholder Returns - The company declared cash dividends of $0.42 per common share for the three months ended June 30, 2021, compared to $0.40 for the same period in 2020[10] - The common stock balance as of June 30, 2021, was 189,089,948 shares, down from 193,247,103 shares as of June 30, 2020, reflecting a decrease of approximately 2.0%[143] - The company repurchased 4,122,569 shares during the six months ended June 30, 2021, compared to 3,809,924 shares in the same period of 2020, indicating an increase of about 8.2%[143] Tax and Regulatory Matters - The effective tax rate for the three and six months ended June 30, 2021, was 17% and 16%, respectively, compared to 42% and 67% for the same periods in 2020[6][8] - The company estimates a range of reasonably possible losses related to litigation and regulatory matters to be up to approximately $120 million, after-tax[28]