LINCOLN NATIONAL CORP [LNC] Filings

10-Q 1 lnc-20220930x10q.htm 10-Q lnc-20220930x10q

__________________________________________________________________________________________________________

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_________________

FORM 10-Q

_________________

(Mark One)

x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2022

¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ______ to ______

Commission File Number: 1-6028

_________________

LINCOLN NATIONAL CORPORATION

(Exact name of registrant as specified in its charter)

_________________



Indiana	35-1140070
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

150 N. Radnor-Chester Road, Suite A305, Radnor, Pennsylvania	19087
(Address of principal executive offices)	(Zip Code)

(484) 583-1400

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

__________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock	LNC	New York Stock Exchange

__________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Large Accelerated Filer		Accelerated Filer	
Non-accelerated Filer		Smaller Reporting Company	
		Emerging Growth Company	

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨No x

As of October 31, 2022, there were 169,215,464 shares of the registrant’s common stock outstanding.

_________________________________________________________________________________________________________

Lincoln National Corporation

Table of Contents


		Page
PART I
Item 1.	Financial Statements:
	Consolidated Balance Sheets as of September 30, 2022 (Unaudited) and December 31, 2021	1
	Unaudited Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended
	September 30, 2022 and 2021	2
	Unaudited Consolidated Statements of Stockholders’ Equity for the three and nine months ended
	September 30, 2022 and 2021	3
	Unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021	4
	Notes to Unaudited Consolidated Financial Statements:
	Note 1 – Nature of Operations and Basis of Presentation	5
	Note 2 – New Accounting Standards	6
	Note 3 – Variable Interest Entities	8
	Note 4 – Investments	9
	Note 5 – Derivatives	18
	Note 6 – Federal Income Taxes	28
	Note 7 – Goodwill	28
	Note 8 – Guaranteed Benefit Features	29
	Note 9 – Liability for Unpaid Claims	30
	Note 10 – Debt	30
	Note 11 – Contingencies and Commitments	31
	Note 12 – Shares and Stockholders’ Equity	33
	Note 13 – Realized Gain (Loss)	36
	Note 14 – Fair Value of Financial Instruments	37
	Note 15 – Segment Information	50
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	53
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	100
Item 4.	Controls and Procedures	100

PART II
Item 1.	Legal Proceedings	101
Item 1A.	Risk Factors	101
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	101
Item 6.	Exhibits	101
	Exhibit Index for the Report on Form 10-Q	102
	Signatures	103

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

LINCOLN NATIONAL CORPORATION

CONSOLIDATED BALANCE SHEETS

(in millions, except share data)



		As of				As of
	September 30,				December 31,
		2022				2021

	(Unaudited)
ASSETS
Investments:
Fixed maturity available-for-sale securities, at fair value
(amortized cost: 2022 - $111,058; 2021 - $105,177; allowance for credit losses: 2022 - $18; 2021 - $19)		$	97,572			$	118,746
Trading securities			3,580				4,482
Equity securities			427				318
Mortgage loans on real estate, net of allowance for credit losses
(portion at fair value: 2022 - $495; 2021 - $739)			18,066				17,991
Policy loans			2,347				2,364
Derivative investments			3,681				5,437
Other investments			3,820				4,292
Total investments			129,493				153,630
Cash and invested cash			1,472				2,612
Deferred acquisition costs and value of business acquired			13,676				6,081
Premiums and fees receivable			583				580
Accrued investment income			1,283				1,189
Reinsurance recoverables, net of allowance for credit losses			20,045				20,295
Funds withheld reinsurance assets			501				517
Goodwill			1,144				1,778
Other assets			19,191				18,036
Separate account assets			137,295				182,583
Total assets		$	324,683			$	387,301

LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Future contract benefits		$	41,716			$	41,030
Other contract holder funds			118,174				111,702
Short-term debt			500				300
Long-term debt			5,959				6,325
Reinsurance-related embedded derivatives			-				206
Funds withheld reinsurance liabilities			2,190				2,118
Payables for collateral on investments			6,865				8,946
Other liabilities			9,767				13,819
Separate account liabilities			137,295				182,583
Total liabilities			322,466				367,029

Contingencies and Commitments (See Note 11)

Stockholders’ Equity
Preferred stock – 10,000,000 shares authorized			-				-
Common stock – 800,000,000 shares authorized; 169,214,493 and 177,193,515 shares
issued and outstanding as of September 30, 2022, and December 31, 2021, respectively			4,534				4,735
Retained earnings			6,311				9,096
Accumulated other comprehensive income (loss)			(8,628	)			6,441
Total stockholders’ equity			2,217				20,272
Total liabilities and stockholders’ equity		$	324,683			$	387,301

‎

See accompanying Notes to Consolidated Financial Statements

Table of Contents

LINCOLN NATIONAL CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited, in millions, except per share data)



	For the Three				For the Nine
	Months Ended				Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Revenues
Insurance premiums	$	1,548	$	1,394	$	4,523	$	4,198
Fee income		1,527		1,996		4,602		5,258
Net investment income		1,326		1,576		4,108		4,670
Realized gain (loss)		220		85		771		(97	)
Amortization of deferred gain on business sold through reinsurance		18		9	</

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LINCOLN NATIONAL CORP [LNC] Filings

LINCOLN NATIONAL CORP [LNCDL] Filings

LINCOLN NATIONAL CORP [LNC-PD] Filings