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].

Core Viewpoint - Lincoln National (LNC) reported a revenue of $4.69 billion for Q1 2025, marking a year-over-year increase of 2.2% and an EPS of $1.60, up from $1.37 a year ago, although slightly below the consensus revenue estimate of $4.71 billion, resulting in a surprise of -0.52% [1] Financial Performance Metrics - Loss Ratio for Group Protection was reported at 72.4%, better than the estimated 74.4% [4] - Net Flows for Annuities were -$1.68 billion, worse than the estimated -$1.54 billion [4] - Net Flows for Life Insurance were $569 million, below the estimated $643.81 million [4] - Net Flows for Retirement Plan Services were -$2.18 billion, significantly worse than the estimated -$493.84 million [4] - Net investment income revenue was $1.46 billion, exceeding the estimate of $1.39 billion, with a year-over-year increase of 8.3% [4] - Fee income revenue was $1.37 billion, matching the average estimate, with a year-over-year change of 3.1% [4] - Insurance premiums revenue was $1.68 billion, slightly above the estimated $1.65 billion, reflecting a year-over-year increase of 4.7% [4] - Life Insurance net investment income was $571 million, slightly below the estimate of $577.29 million, showing a year-over-year decrease of 1.7% [4] - Group Protection revenue was $1.52 billion, exceeding the estimate of $1.47 billion, with a year-over-year increase of 6.7% [4] - Life Insurance revenue was $1.59 billion, slightly below the estimated $1.60 billion, representing a year-over-year increase of 3% [4] - Retirement Plan Services revenue was $327 million, below the estimated $334.72 million, with a year-over-year increase of 1.6% [4] - Annuities insurance premiums revenue was $21 million, significantly below the estimated $33.76 million, reflecting a year-over-year decrease of 19.2% [4] Stock Performance - Lincoln National's shares returned +3% over the past month, compared to the Zacks S&P 500 composite's +11.3% change, with a current Zacks Rank of 3 (Hold) indicating potential performance in line with the broader market [3]

Financial Data and Key Metrics Changes - Adjusted operating income increased by 14% year over year, demonstrating continued execution of strategic initiatives [7][22] - First quarter adjusted operating income available to common stockholders was $280 million, or $1.60 per diluted share [23] - Net loss available to common shareholders was $756 million, or $4.41 per diluted share, primarily due to negative movements in market risk benefits [23][24] Business Line Data and Key Metrics Changes - Group Protection business saw a 26% year-over-year increase in earnings and 120 basis points of margin expansion [10][24] - Annuities reported operating income of $290 million, consistent with the prior year quarter, with total sales of $3.8 billion increasing 33% year over year [11][29] - Life insurance segment reported an operating loss of $16 million, an improvement from a loss of $35 million in the prior year quarter [33] Market Data and Key Metrics Changes - Total deposits in Retirement Plan Services increased by 8%, driven by growth in recurring deposits [20][32] - Group sales grew 9% year over year, with all market segments contributing to this result [16] - Annuity account balances net of reinsurance ended the quarter 5% above the prior year period [29] Company Strategy and Development Direction - The company is focusing on diversifying its business mix and enhancing operational efficiency to manage through market turbulence [6][10] - A long-term partnership with Bain Capital is expected to enhance growth in spread-based products and improve capital deployment [9][39] - The strategic emphasis on growing group business has increased its contribution to operating earnings from less than 10% pre-COVID to over 25% today [45] Management's Comments on Operating Environment and Future Outlook - Management acknowledged high market volatility and an uncertain external backdrop but expressed confidence in the company's resilience and strategic positioning [5][6] - The company is well-prepared to navigate potential economic downturns, maintaining a capital buffer above its 400% target [7][44] - Management remains focused on disciplined execution and advancing strategic priorities to deliver long-term shareholder value [21][46] Other Important Information - The alternative investments portfolio delivered a 7.6% annualized return in the quarter, though it was below the target [23][38] - The company ended the quarter with an estimated RBC ratio well above 420%, consistent with its strategy [37] Q&A Session Summary Question: Insights on Bain partnership and expected free cash flow improvement - Management indicated that the improvement in free cash flow per share is driven by capital deployment into growth areas, not share repurchases [48] Question: Favorability of mortality in the life business - Management noted that mortality was favorable relative to expectations, with first quarter typically being seasonally higher [50] Question: Rationale for issuing new equity to Bain instead of open market purchase - Management emphasized the importance of alignment and the ability to utilize capital for growth, which would not be feasible through open market purchases [56][58] Question: Impact of large plan termination on Retirement Plan Services - Management confirmed that a large case termination affected net outflows but noted that excluding this, flows were positive [78] Question: Update on expense initiatives and their impact - Management confirmed that expense reductions are emerging from operational efficiencies and that reinvestments are being made in growth areas [83]

Financial Data and Key Metrics Changes - Adjusted operating income increased by 14% year over year, demonstrating continued execution of strategic initiatives [6][10] - First quarter adjusted operating income available to common stockholders was $280 million, or $1.60 per diluted share [24] - Net loss available to common shareholders was $756 million, or $4.41 per diluted share, primarily due to negative movements in market risk benefits [25][26] Business Line Data and Key Metrics Changes - Group Protection business saw a 26% year-over-year increase in earnings and 120 basis points of margin expansion [10][16] - Annuities reported first quarter operating income of $290 million, consistent with the prior year quarter [30] - Life insurance segment reported a first quarter operating loss of $16 million, an improvement from a loss of $35 million in the prior year [34] Market Data and Key Metrics Changes - Total deposits in Retirement Plan Services grew by 8%, driven by a 13% increase in recurring deposits [33] - Group sales grew by 9% year over year, with all market segments contributing to this result [17] - Annuities total sales reached $3.8 billion, a 33% increase from the prior year quarter [11] Company Strategy and Development Direction - The company is focusing on diversifying its business mix and enhancing operational efficiency to manage market volatility [5][10] - A long-term partnership with Bain Capital is expected to enhance growth in spread-based products and improve capital deployment [9][40] - The strategic emphasis on growing group business has increased its contribution to operating earnings from less than 10% pre-COVID to over 25% today [46] Management's Comments on Operating Environment and Future Outlook - Management acknowledged high market volatility and an uncertain external backdrop but expressed confidence in the company's resilience and strategic positioning [4][10] - The company is well-prepared to navigate potential economic downturns due to proactive capital management and diversified earnings sources [38][46] - Management remains focused on disciplined execution and believes current actions will lead to sustainable long-term value [47] Other Important Information - The company maintains an estimated RBC ratio well above 420%, providing a buffer against adverse economic conditions [7][38] - The alternative investments portfolio delivered a 7.6% annualized return in the quarter, though it was below the target [25][39] Q&A Session Summary Question: Insights on the Bain partnership and expected free cash flow improvements - Management indicated that the capital from Bain will be deployed to grow spread-based earnings and optimize the legacy LifeBlock, with no immediate plans for share repurchases [49] Question: Favorability of mortality in the life business - Management noted that mortality was better than expected, with first quarter typically being seasonally higher [50][51] Question: Rationale for issuing new equity to Bain instead of open market purchases - Management emphasized the importance of alignment with Bain and the ability to utilize capital for growth, which would not be feasible through open market purchases [56][59] Question: Annuity business ROA trends - Management acknowledged that the decline in ROA is due to a shift in business mix, with a focus on growing RILA and fixed annuities [64] Question: RBC ratio sensitivity to macro volatility - Management clarified that the RBC ratio remains stable and is not materially affected by recent market conditions [69] Question: Impact of large plan termination on Retirement Plan Services - Management confirmed that a large case termination affected net outflows but overall flows were positive excluding this event [80]

Lincoln National (LNC) came out with quarterly earnings of $1.60 per share, beating the Zacks Consensus Estimate of $1.54 per share. This compares to earnings of $1.37 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 3.90%. A quarter ago, it was expected that this insurance and retirement business would post earnings of $1.74 per share when it actually produced earnings of $1.91, delivering a surprise of 9.77%.Over the last fou ...

Financial Performance - Adjusted operating income increased by 14% year-over-year[9,16] - Group Protection earnings increased by 26% year-over-year, with a margin of 74%, expanding 120 basis points[9,15,16] - Annuities sales increased by 33% year-over-year, supported by a diversified product mix[9,15,16] Sales Growth - Group Protection sales were up 9% year-over-year, driven by continued growth in supplemental health products[9,15,16] - Life Insurance sales increased by 7% year-over-year, reflecting continued momentum emphasizing risk-sharing products[9,15,16] Capital and Leverage - The estimated Risk-Based Capital (RBC) ratio is greater than 420%, consistent with the goal to hold a capital buffer above the 400% target[9,15,16] - The leverage ratio improved by 260 basis points year-over-year to 275%, primarily driven by organic equity growth[9,15,16,46] Strategic Initiatives - A strategic partnership with Bain Capital was announced on April 9, including a strategic minority investment expected to create growth capital to support the acceleration of strategic priorities[7,15,16]

Financial Performance - Total revenues for Q1 2025 were $4,691 million, an increase of 14.0% compared to Q4 2024[20] - Net loss available to common stockholders for Q1 2025 was $(756) million, a decrease from net income of $1,675 million in Q4 2024[20] - Net income for the three months ended 3/31/24 was $1,222 million, while for 3/31/25 it was a loss of $722 million, indicating a significant fluctuation[26] - Total adjusted operating revenues for Lincoln Financial increased by 2.2% to $4,685 million for the three months ended March 31, 2025, compared to $4,584 million in the same period of 2024[31] - Net income available to common stockholders for the three months ended March 31, 2024, was $1,191 million, a significant increase compared to the previous quarter's $884 million[47] Revenue Sources - Insurance premiums increased by 4.7% to $1,676 million in Q1 2025 from $1,586 million in Q4 2024[20] - Net investment income rose by 8.2% to $1,457 million in Q1 2025, up from $1,435 million in Q4 2024[20] - Total annuities sales increased by 33.1% to $3,789 million in Q1 2025, driven by strong RILA and traditional variable products[30] - Life insurance operating revenues increased by 3.0% to $1,541 million in Q1 2024, with average in-force face amount slightly declining by 1.2%[28] - Group protection operating revenues rose by 6.7% to $1,425 million in Q1 2024, with insurance premiums also increasing by 6.7%[28] Expenses and Losses - Total expenses surged by 117.9% to $5,640 million in Q1 2025, compared to $2,963 million in Q4 2024[20] - Adjusted income from operations available to common stockholders for 3/31/25 was $280 million, reflecting a 33.3% decrease from the previous quarter[26] - Pre-tax adjusted income from operations for 3/31/25 was $362 million, a 24.4% decrease from the previous quarter[26] - Total operating commissions and other expenses incurred decreased by 5.6% to $1,405 million for the three months ended March 31, 2025, down from $1,488 million in the same period of 2024[32] Assets and Liabilities - Total assets as of 3/31/25 decreased by 0.1% to $382,898 million compared to 12/31/24[21] - Total liabilities as of 3/31/25 decreased by 0.3% to $374,705 million compared to 12/31/24[23] - Total stockholders' equity as of 3/31/25 was $8,193 million, an 8.6% decrease from the previous quarter[24] - The average account balances, net of reinsurance, for Lincoln Financial increased by 5.0% to $44,390 million for the three months ended March 31, 2025, compared to $42,280 million for the same period in 2024[34] Market and Investment Outlook - Future outlook includes continued focus on annuities and retirement plan services, with deposits from new and existing customers expected to drive growth[17] - The company reported a leverage ratio to monitor debt relative to total capitalization, indicating financial health and risk management[14] - Credit ratings as of May 8, 2025, include a senior debt rating of bbb+ from AM Best and BBB+ from Fitch[18] - Investment gains (losses) decreased by 27.2% in Q1 2025 compared to the previous year, indicating a challenging investment environment[48] Shareholder Information - Cash returned to common stockholders through common dividends remained stable at $77 million for the next four quarters, reflecting a 1.3% increase[27] - Book value per share as of 3/31/25 was $41.96, a 9.1% increase from 12/31/24[26] - Stockholders' equity at the end of Q1 2025 was $8,193 million, showing an 8.6% increase year-over-year[50] - Adjusted stockholders' equity reached $12,569 million by Q1 2025, marking a 13.4% increase from the previous year[50] Operational Highlights - The effective federal income tax rate for the three months ended March 31, 2025, was 14.7%, down from 18.5% in the same period of 2024[33] - The loss ratio for Lincoln Financial's Life product line improved to 75.2% for the three months ended March 31, 2025, compared to 76.1% for the same period in 2024[36] - The balance of DAC, VOBA, and DSI at the end of the period increased by 1.3% from $12,475 million on 12/31/24 to $12,563 million on 3/31/25[39] - The company reported a significant increase in revenue adjustments from annuity and life insurance product features, with a change of 139.1% in Q1 2025[48]

Core Viewpoint - Lincoln National (LNC) is expected to report quarterly earnings of $1.54 per share, a 12.4% increase year-over-year, with revenues projected at $4.71 billion, reflecting a 2.7% increase from the previous year [1]. Earnings Estimates - The consensus EPS estimate has been revised downward by 3.7% over the past 30 days, indicating a collective reassessment by analysts [2]. - Changes in earnings estimates are crucial for predicting investor reactions, as empirical research shows a strong correlation between earnings estimate revisions and short-term stock performance [3]. Revenue Projections - Analysts forecast 'Revenues- Net investment income' to reach $1.39 billion, a 3.5% increase year-over-year [5]. - 'Revenues- Fee income' is expected to be $1.37 billion, indicating a 3.8% increase from the previous year [5]. - 'Revenues- Insurance premiums' are projected to be $1.65 billion, reflecting a 3.4% year-over-year change [5]. - 'Revenues- Life Insurance- Net investment income' is estimated at $577.29 million, showing a slight decline of 0.6% year-over-year [6]. - 'Revenues- Group Protection' is expected to reach $1.47 billion, a 3% increase from the previous year [6]. - 'Revenues- Life Insurance' is projected at $1.60 billion, indicating a 3.6% increase year-over-year [6]. - 'Revenues- Retirement Plan Services' is expected to be $334.72 million, a 4% increase from the previous year [7]. - 'Revenues- Annuities- Insurance premiums' are projected at $33.76 million, reflecting a significant increase of 29.9% year-over-year [7]. - 'Revenues- Annuities- Fee income' is expected to be $602.05 million, indicating a 3.8% increase from the previous year [7]. Key Metrics - The 'Loss Ratio - Group Protection' is projected to be 74.4%, down from 75% year-over-year [8]. - 'Net Flows - Life Insurance' is estimated at $643.81 million, compared to $741 million in the previous year [8]. - 'Net Flows - Retirement Plan Services' is expected to be -$493.84 million, a decline from $391 million year-over-year [8]. - Over the past month, shares of Lincoln National have returned +13.9%, outperforming the Zacks S&P 500 composite's +10.6% change [8].

Core Points - Ford Motor is recalling over 148,000 vehicles in the US due to safety concerns related to braking performance and powertrain control issues [1][3] Group 1: Recall Details - The first recall involves 123,611 vehicles, specifically certain 2017–18 Ford F-150, Expedition, and Lincoln Navigator models, due to a fluid leak that may reduce braking performance and increase stopping distance [1][4] - The second recall affects 24,655 of the 2025 Explorer vehicles, where a powertrain control module (PCM) may reset while driving, potentially damaging the vehicle's park system or causing an engine stall [3] Group 2: Dealer Actions - Dealers are expected to replace affected parts such as the master cylinder or brake booster free of charge for the first recall [2] - For the second recall, dealers will fix the software issue at no cost, with owners being notified by May 26 [3]