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林肯金融報告2024年第三季度業績
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賓夕法尼亞州， 2024年10月31日: 林肯金融（紐交所：LNC）今日公佈了截至2024年9月30日的第三季度財務業績。
•普通股東可獲得的淨利潤(虧損)爲5.62億美元，每股攤薄分額爲3.29美元。
•調整後的可供普通股股東的營業收入（虧損）爲35800萬美元，每股稀釋後2.06美元。
•淨利潤（虧損）和調整後營業利潤（虧損）之間的主要區別主要源於以下因素：
◦控制支出，同時繼續在我們認爲對長期成功至關重要的領域進行投資。4.46億美元的稅前淨損失，每股稀釋盈虧爲$(2.61)，主要是由於與Fortitude Re再保險交易相關的嵌入式衍生工具公允價值變動造成的，其在其他全面收益中有直接對沖。
◦控制支出，同時繼續在我們認爲對長期成功至關重要的領域進行投資。$(3.81億)美元的稅前淨損失，每股攤薄虧損$(2.23)，主要是由於利率期貨下降導致市場風險利益變化，產生了非經濟影響。
•年度假設審核結果對本季度的淨利潤（虧損）和調整後營業收入（虧損）均產生了積極影響。
•林肯在季末估計的RBC比率超過420%。
林肯金融董事長、總裁兼CEO Ellen Cooper 表示：“我們第三季度的業績超出了預期，重新確立了我們堅定的戰略執行力，得益於每個業務領域的勢頭和強勁的基本面。集團保護業務交出了創紀錄的第三季度業績，收益同比翻一番。年金業務收益增長了15%，銷售額增長近25%。養老計劃服務業務連續交出了業績增長的季度，並且首年銷售額環比增長了近80%。人壽保險連續兩個季度實現了銷售增長。(1)
我們正在利用我們的競爭優勢實現增長，提高運營效率，構建資本靈活性，繼續爲實現可持續增長和增長的長期價值創造重新定位林肯。
(1) 報價中的運營利潤指標不包括年度假設審查的影響。
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業務亮點
我們的業務取得了強勁的營運收入，這反映了持續執行各自戰略計劃。以下項目的業務運營結果中不包括年度假設審查的影響。請參閱後續的區域討論以獲取更多信息。
•年金業務 營業收入達到30000萬美元，同比增長15%，反映了持續增長的帳戶餘額、強勁的市場和更高的利差收入。總銷售額爲34億美元，同比增長24%，我們的三大主要產品類別中每類銷售額超過10億美元，反映了我們多元化產品組合的優勢。按利差計算的產品佔本季度年金銷售額的66%。
•集團保護 交付的營業利潤爲11000萬美元，較2023財年第三季度的營業收入翻了一番，這歸功於戰略執行和持續支持性業務趨勢。 第三季度毛利擴大至8.5%，增長了500個點子，原因是長期殘疾的有利結果、改善的死亡率趨勢和強勁的運營執行。 保費同比增長3%，反映了在新銷售上持續實施定價紀律，同時符合我們的預期的續存率。
•人壽保險 上一年同期營業收入爲2300萬美元，本季度營業收入爲1400萬美元，不考慮上一年同期的重大事項影響。人壽保險經營收入符合預期，輕微不利的死亡率部分抵消了高於預期的另類投資收入。總銷售額按順序增長16％，導致連續第二個季度的順序增長，由於我們的分銷和產品重新定位進一步獲得動力。
•退休計劃服務 報告的營業收入爲4400萬美元，同比增長2%，環比增長10%，這是由帳戶餘額增加、較高的股市以及持續控制費用所推動的。本季度首年銷售額爲17億美元，反映了本年早些時候溝通的強勁項目儲備。因此，養老服務提供商經歷了陽性淨流入65100萬美元。
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收益總結
| （單位：百萬美元，除每股數據外） | 截至或三個月結束時 | 截至或爲期九個月結束時 | ||||||||||||
9/30/23(1) | 9/30/24 | 9/30/23(1) | 9/30/24 | |||||||||||
| $ | 853 | $ | (528) | $ | 483 | $ | 1,588 | |||||||
| 淨利潤(可供普通股股東使用) | 819 | (562) | 410 | 1,511 | ||||||||||
每股稀釋盈利（損失）可供普通股東分配的淨收入(2) | $ | 4.79 | $ | (3.29) | $ | 2.40 | $ | 8.75 | ||||||
| 調整後的營業收入（虧損） | 84 | 392 | 728 | 971 | ||||||||||
| 調整後的營業收入（虧損）可供普通股東分配 | 50 | 358 | 657 | 891 | ||||||||||
| Adjusted income (loss) from operations per diluted share available to common stockholders | $ | 0.29 | $ | 2.06 | $ | 3.85 | $ | 5.16 | ||||||
(1) 過往期間影響已經重新調整以符合當前期間的報告格式。
(2) 在呈現淨虧損的期間，基本股份用於攤薄後每股收益和調整攤薄後每股收益的計算，因爲使用攤薄後股份將導致每股虧損更低。
淨利潤與調整運營收入的對賬(1)
| （單位：百萬） | 在已結束的三個月中 | 在結束的九個月裏 | |||||||||||||||
9/30/23(1) | 9/30/24 | 9/30/23(1) | 9/30/24 | ||||||||||||||
| 普通股股東可獲得的淨收益（虧損）——攤薄後 | $ | 819 | $ | (562) | $ | 410 | $ | 1,511 | |||||||||
| 更少： | |||||||||||||||||
| 已宣佈的優先股分紅 | (34) | (34) | (71) | (80) | |||||||||||||
| 根據我們的遞延薪酬計劃中LNC股票的遞延單位進行了調整 | — | — | (2) | 3 | |||||||||||||
| 淨收益（虧損） | 853 | (528) | 483 | 1,588 | |||||||||||||
| 更少： | |||||||||||||||||
| 淨年金產品特徵，稅前 | 1,322 | (381) | 1,076 | 1,319 | |||||||||||||
| 淨人壽保險產品特徵，稅前 | 108 | (125) | (168) | (253) | |||||||||||||
| 稅前信用損失相關調整 | (27) | (88) | (53) | (124) | |||||||||||||
稅前投資收益（虧損）(2) | (400) | (105) | (1,126) | (416) | |||||||||||||
| 再保險相關嵌入式衍生品公允價值的變化， | |||||||||||||||||
交易證券和某些抵押貸款，稅前(2) | (29) | (446) | (27) | (51) | |||||||||||||
| 其他非金融資產的收益（虧損）——出售 | |||||||||||||||||
子公司/企業，稅前(2) | — | (2) | — | 582 | |||||||||||||
其他稅前項目(2) | (12) | (19) | (23) | (238) | |||||||||||||
| 與上述稅前項目相關的所得稅優惠（支出） | (193) | 246 | 76 | (202) | |||||||||||||
| 調整後的運營收入（虧損） | $ | 84 | $ | 392 | $ | 728 | $ | 971 | |||||||||
| 普通股股東可獲得的業務調整後收益（虧損） | $ | 50 | $ | 358 | $ | 657 | $ | 891 | |||||||||
(1) 請查看本新聞稿背後的經營調整後收入的定義，以了解對2024年第三季度定義的修訂以及調解行項目的進一步解釋。之前的影響已經重新整理以符合當前期間的展示。
(2) 請查閱本公告背面的完整調節表以了解腳註。
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變量投資收益
其他投資收入，稅後(1) | 截至三個月的時間 | 截至九個月的營業收入 | ||||||||||||||||||||||||
| （單位百萬） | 9/30/23 | 12/31/23 | 3/31/24 | 6/30/24 | 9/30/24 | 9/30/23 | 9/30/24 | |||||||||||||||||||
| 年金業務 | $ | 3 | $ | 3 | $ | 2 | $ | 1 | $ | 3 | $ | 10 | $ | 6 | ||||||||||||
| 人壽保險 | 34 | 39 | 58 | 26 | 73 | 125 | 157 | |||||||||||||||||||
| 集團保護 | 2 | 2 | 1 | 1 | 1 | 5 | 3 | |||||||||||||||||||
| 退休計劃服務 | 2 | 2 | 1 | — | 2 | 6 | 3 | |||||||||||||||||||
| 其他經營 | — | — | — | — | — | — | — | |||||||||||||||||||
| 合併後的 | $ | 41 | $ | 46 | $ | 62 | $ | 28 | $ | 79 | $ | 146 | $ | 169 | ||||||||||||
(1) 在我們受限於對這些投資的經濟利益的修改分保和暫扣基金再保協議中，排除用於支持我們所有基金類型的替代投資收入。
稅後預付收入 | 截至三個月的時間 | 截至九個月的營業收入 | ||||||||||||||||||||||||
（單位百萬） | 9/30/23 | 12/31/23 | 3/31/24 | 6/30/24 | 9/30/24 | 9/30/23 | 9/30/24 | |||||||||||||||||||
年金業務 | $ | 1 | $ | 1 | $ | 1 | $ | — | $ | — | $ | 1 | $ | 1 | ||||||||||||
人壽保險 | — | 2 | — | 2 | 3 | 2 | 5 | |||||||||||||||||||
集團保護 | — | — | — | — | 1 | 1 | — | |||||||||||||||||||
退休計劃服務 | — | — | 1 | — | — | 1 | 1 | |||||||||||||||||||
其他經營 | — | — | — | — | — | — | — | |||||||||||||||||||
合併後的 | $ | 1 | $ | 3 | $ | 2 | $ | 2 | $ | 4 | $ | 5 | $ | 7 | ||||||||||||
影響部門和其他操作結果的項目
截至2024年9月30日三個月的財務報告 | |||||||||||||||||
（單位百萬） | 年金業務 | 人壽保險 | 集團保護 | 退休計劃服務 | 其他經營 | ||||||||||||
稅後影響： | |||||||||||||||||
替代投資收入與回報目標相比(1) | $ | 1 | $ | 6 | $ | — | $ | — | $ | — | |||||||
提前償還收入(2) | — | 3 | 1 | — | — | ||||||||||||
年度假設審查 | 1 | 8 | (1) | — | — | ||||||||||||
| 稅務事項 | — | — | — | — | — | ||||||||||||
| 其他 | — | — | — | — | — | ||||||||||||
總影響 | $ | 2 | $ | 17 | $ | — | $ | — | $ | — | |||||||
(1) 與目標回報比較的替代投資收入假設替代投資組合年回報率爲10%。
(2) 預付款收入是在該季度報告的實際收入。
4
Capital and Liquidity
| For the Three Months Ended | |||||||||||||||||
| (in millions, except percent and per share data) | 9/30/23 | 12/31/23 | 3/31/24 | 6/30/24 | 9/30/24 | ||||||||||||
Holding company available liquidity(1) | $ | 455 | $ | 458 | $ | 466 | $ | 463 | $ | 459 | |||||||
RBC ratio(2) | 375-385% | 407 | % | 400-410% | >420% | >420% | |||||||||||
| Book value per share (BVPS), including AOCI | $ | 13.04 | $ | 34.81 | $ | 38.46 | $ | 40.78 | $ | 46.97 | |||||||
Book value per share, excluding AOCI(3) | $ | 63.03 | $ | 55.30 | $ | 61.63 | $ | 66.37 | $ | 62.67 | |||||||
Adjusted book value per share(3),(4) | $ | 63.53 | $ | 64.97 | $ | 65.01 | $ | 68.51 | $ | 70.04 | |||||||
(1) Holding company available liquidity presented as of 3/31/2024, 6/30/2024 and 9/30/2024 does not include the $300 million prefunding of a 2025 maturity.
(2) The RBC ratio is calculated as of December 31 annually, but is reported in the March statutory reporting, and as such, the quarterly ratios presented for 9/30/2023, 3/31/2024, 6/30/2024, and 9/30/2024 are considered estimates based on information known at the time of reporting.
(3) Refer to the reconciliation to book value per share, including AOCI, at the back of this release.
(4) This measure has been updated, effective beginning with the fourth quarter of 2023, to exclude reinsurance-related embedded derivatives and the underlying portfolio gains (losses), given the size of the impact of the fourth quarter 2023 reinsurance transaction. Such amounts in the prior periods presented, and the impact of this change to such prior periods, was not meaningful.
Annuities
| (in millions, except ROA data) | As of or For the Three Months Ended | As of or For the Nine Months Ended | ||||||||||||||||||||||||||||||
| 9/30/23 | 12/31/23(1) | 3/31/24 | 6/30/24 | 9/30/24 | Change | 9/30/23 | 9/30/24 | Change | ||||||||||||||||||||||||
| Total operating revenues | $ | 1,197 | $ | (525) | $ | 1,269 | $ | 1,209 | $ | 1,195 | (0.2) | % | $ | 3,528 | $ | 3,673 | 4.1 | % | ||||||||||||||
| Total operating expenses | 915 | (846) | 952 | 858 | 836 | (8.6) | % | 2,636 | 2,645 | 0.3 | % | |||||||||||||||||||||
| Income (loss) from operations before taxes | 282 | 321 | 317 | 351 | 359 | 27.3 | % | 892 | 1,028 | 15.2 | % | |||||||||||||||||||||
| Federal income tax expense (benefit) | 34 | 42 | 58 | 54 | 58 | 70.6 | % | 98 | 171 | 74.5 | % | |||||||||||||||||||||
| Income (loss) from operations | $ | 248 | $ | 279 | $ | 259 | $ | 297 | $ | 301 | 21.4 | % | $ | 794 | $ | 857 | 7.9 | % | ||||||||||||||
| Income (loss) from operations, excluding impact of annual assumption review | $ | 260 | $ | 265 | $ | 259 | $ | 297 | $ | 300 | 15.3 | % | $ | 806 | $ | 856 | 6.2 | % | ||||||||||||||
| Total sales | $ | 2,728 | $ | 4,365 | $ | 2,847 | $ | 3,817 | $ | 3,375 | 23.7 | % | $ | 8,475 | $ | 10,038 | 18.4 | % | ||||||||||||||
| Net flows | $ | (874) | $ | 285 | $ | (1,993) | $ | (954) | $ | (1,637) | (87.3) | % | $ | (2,312) | $ | (4,584) | (98.3) | % | ||||||||||||||
| Average account balances, net of reinsurance | $ | 151,312 | $ | 147,419 | $ | 155,291 | $ | 158,370 | $ | 161,680 | 6.9 | % | $ | 148,613 | $ | 158,245 | 6.5 | % | ||||||||||||||
| Return on average account balances (bps) | 66 | 76 | 67 | 75 | 74 | 71 | 72 | |||||||||||||||||||||||||
(1) Day one impacts related to the reinsurance transaction with Fortitude Re caused line-item volatility in the fourth quarter 2023.
•Income from operations was $301 million for the third quarter, up 21% over the prior year. The year-over-year increase was primarily driven by account balance growth due to favorable equity markets.
•Total sales were $3.4 billion, an increase of 24% year over year driven by strong growth within spread-based products.
•RILA sales increased 13% year over year and 10% sequentially, following the successful launch of our second-generation RILA product.
5
•Net outflows were approximately $1.6 billion in the quarter, compared to net outflows of $874 million in the prior-year quarter, primarily the result of higher account balances.
•Average account balances, net of reinsurance, for the quarter were $162 billion, up 7%, compared to $151 billion in the prior-year quarter, primarily driven by growth in variable annuities and RILA. RILA represented 20% of total annuity ending account balances, net of reinsurance, an increase of 3 percentage points compared to the prior-year quarter.
Life Insurance
| (in millions) | As for or For the Three Months Ended | As of or For the Nine Months Ended | ||||||||||||||||||||||||||||||
| 9/30/23 | 12/31/23 | 3/31/24 | 6/30/24 | 9/30/24 | Change | 9/30/23 | 9/30/24 | Change | ||||||||||||||||||||||||
| Total operating revenues | $ | 1,723 | $ | 1,667 | $ | 1,541 | $ | 1,511 | $ | 1,589 | (7.8) | % | $ | 5,241 | $ | 4,640 | (11.5) | % | ||||||||||||||
| Total operating expenses | 1,952 | 1,681 | 1,591 | 1,562 | 1,568 | (19.7) | % | 5,458 | 4,719 | (13.5) | % | |||||||||||||||||||||
| Income (loss) from operations before taxes | (229) | (14) | (50) | (51) | 21 | 109.2 | % | (217) | (79) | 63.6 | % | |||||||||||||||||||||
| Federal income tax expense (benefit) | (56) | (8) | (15) | (16) | (1) | 98.2 | % | (64) | (31) | 51.6 | % | |||||||||||||||||||||
| Income (loss) from operations | $ | (173) | $ | (6) | $ | (35) | $ | (35) | $ | 22 | 112.7 | % | $ | (153) | $ | (48) | 68.6 | % | ||||||||||||||
| Income (loss) from operations, excluding the impact of annual assumption review | $ | (17) | $ | (6) | $ | (35) | $ | (35) | $ | 14 | NM | $ | 3 | $ | (56) | NM | ||||||||||||||||
| Average account balances, net of reinsurance | $ | 50,130 | $ | 45,608 | $ | 42,280 | $ | 43,230 | $ | 44,055 | (12.1) | % | $ | 49,760 | $ | 43,188 | (13.2) | % | ||||||||||||||
| Total sales | $ | 144 | $ | 144 | $ | 91 | $ | 105 | $ | 122 | (15.3) | % | $ | 397 | $ | 319 | (19.6) | % | ||||||||||||||
•Income from operations was $22 million for the quarter, compared to an operating loss of $173 million in the prior-year quarter. The third quarter 2024 annual assumption review had an $8 million favorable impact, compared to an unfavorable impact of $156 million in the prior-year quarter. The operating loss in the third quarter of 2023 also included $40 million of unfavorable significant items, including $25 million in unclaimed property expense and $15 million related to a surrender benefit program.
•Not including the impact of the annual assumption review and prior-year quarter significant items, operating income in the third quarter of 2024 was $14 million compared to operating income of $23 million in the prior-year quarter, reflecting a lower run-rate post the Fortitude Re transaction.
•Total sales grew 16% sequentially, achieving a second consecutive quarter of sequential growth, as our distribution and product repositioning gained further traction.
•Average account balances, net of reinsurance, were $44 billion, down 12% compared to the prior-year quarter, driven by the impact of the Fortitude Re transaction.
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Group Protection
| (in millions, except margin data) | As of or For the Three Months Ended | As of or For the Nine Months Ended | ||||||||||||||||||||||||||||||
| 9/30/23 | 12/31/23 | 3/31/24 | 6/30/24 | 9/30/24 | Change | 9/30/23 | 9/30/24 | Change | ||||||||||||||||||||||||
| Total operating revenues | $ | 1,388 | $ | 1,387 | $ | 1,425 | $ | 1,441 | $ | 1,432 | 3.2 | % | $ | 4,176 | $ | 4,299 | 2.9 | % | ||||||||||||||
| Total operating expenses | 1,302 | 1,322 | 1,324 | 1,276 | 1,295 | (0.5) | % | 3,863 | 3,896 | 0.9 | % | |||||||||||||||||||||
| Income (loss) from operations before taxes | 86 | 65 | 101 | 165 | 137 | 59.3 | % | 313 | 403 | 28.8 | % | |||||||||||||||||||||
| Federal income tax expense (benefit) | 18 | 13 | 21 | 35 | 28 | 55.6 | % | 66 | 85 | 28.8 | % | |||||||||||||||||||||
| Income (loss) from operations | $ | 68 | $ | 52 | $ | 80 | $ | 130 | $ | 109 | 60.3 | % | $ | 247 | $ | 318 | 28.7 | % | ||||||||||||||
| Income (loss) from operations, excluding the impact of annual assumption review | $ | 44 | $ | 52 | $ | 80 | $ | 130 | $ | 110 | NM | $ | 223 | $ | 319 | 43.0 | % | |||||||||||||||
| Insurance premiums | $ | 1,251 | $ | 1,250 | $ | 1,285 | $ | 1,298 | $ | 1,288 | 3.0 | % | $ | 3,765 | $ | 3,871 | 2.8 | % | ||||||||||||||
| Total sales | $ | 71 | $ | 398 | $ | 144 | $ | 161 | $ | 84 | 18.3 | % | $ | 295 | $ | 389 | 31.9 | % | ||||||||||||||
| Total loss ratio | 75.2 | % | 76.6 | % | 75.0 | % | 70.1 | % | 71.4 | % | 73.8 | % | 72.2 | % | ||||||||||||||||||
Operating margin(1) | 5.4 | % | 4.1 | % | 6.2 | % | 10.0 | % | 8.4 | % | 6.6 | % | 8.2 | % | ||||||||||||||||||
| Operating margin, excluding the impact of annual assumption review | 3.5 | % | 4.1 | % | 6.2 | % | 10.0 | % | 8.5 | % | 5.9 | % | 8.2 | % | ||||||||||||||||||
(1) Operating margin is calculated by dividing income (loss) from operations by insurance premiums.
•Income from operations was $109 million in the quarter, compared to earnings of $68 million in the prior-year quarter. The annual assumption review had a $1 million unfavorable impact in the current quarter and a $24 million favorable impact in the third quarter of 2023.
•Not including the impact of the annual assumption review, operating income was up $66 million year over year due to the benefits from strategic and operational actions.
•Operating margin was 8.4%, 300 basis points higher than the third quarter of 2023.
•The total loss ratio was 71.4% in the quarter, 380 basis points lower than the prior-year quarter.
•Insurance premiums were $1.3 billion in the quarter, up 3% compared to the prior-year quarter.
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Retirement Plan Services
| (in millions, except ROA data) | As of or For the Three Months Ended | As of or For the Nine Months Ended | ||||||||||||||||||||||||||||||
| 9/30/23 | 12/31/23 | 3/31/24 | 6/30/24 | 9/30/24 | Change | 9/30/23 | 9/30/24 | Change | ||||||||||||||||||||||||
| Total operating revenues | $ | 327 | $ | 322 | $ | 322 | $ | 327 | $ | 335 | 2.4 | % | $ | 988 | $ | 984 | (0.4) | % | ||||||||||||||
| Total operating expenses | 277 | 278 | 281 | 281 | 286 | 3.2 | % | 831 | 847 | 1.9 | % | |||||||||||||||||||||
| Income (loss) from operations before taxes | 50 | 44 | 41 | 46 | 49 | (2.0) | % | 157 | 137 | (12.7) | % | |||||||||||||||||||||
| Federal income tax expense (benefit) | 7 | 6 | 5 | 6 | 5 | (28.6) | % | 24 | 17 | (29.2) | % | |||||||||||||||||||||
| Income (loss) from operations | $ | 43 | $ | 38 | $ | 36 | $ | 40 | $ | 44 | 2.3 | % | $ | 133 | $ | 120 | (9.8) | % | ||||||||||||||
| Deposits | $ | 2,700 | $ | 2,972 | $ | 3,802 | $ | 3,282 | $ | 4,180 | 54.8 | % | $ | 8,806 | $ | 11,265 | 27.9 | % | ||||||||||||||
| Net flows | $ | (272) | $ | (332) | $ | 391 | $ | (197) | $ | 651 | NM | $ | 464 | $ | 845 | 82.1 | % | |||||||||||||||
| Average account balances | $ | 96,473 | $ | 96,045 | $ | 103,240 | $ | 106,374 | $ | 110,550 | 14.6 | % | $ | 93,897 | $ | 106,595 | 13.5 | % | ||||||||||||||
| Return on average account balances (bps) | 18 | 16 | 14 | 15 | 16 | 19 | 15 | |||||||||||||||||||||||||
•Income from operations was $44 million in the quarter, a 2% improvement compared to the prior-year quarter, primarily driven by higher account balances. Sequentially, income from operations was up 10%, driven by higher account balances.
•Total deposits for the quarter were $4.2 billion, an increase of 55% over the prior-year quarter driven by increased first-year sales in full-service segments.
•Net inflows totaled $651 million for the quarter driven by first-year sales growth.
•Average account balances for the quarter were $111 billion, increasing 15% from the prior-year quarter.
Other Operations
| (in millions) | As of or For the Three Months Ended | As of or For the Nine Months Ended | ||||||||||||||||||||||||||||||
| 9/30/23 | 12/31/23(1) | 3/31/24 | 6/30/24 | 9/30/24 | Change | 9/30/23 | 9/30/24 | Change | ||||||||||||||||||||||||
| Total operating revenues | $ | 38 | $ | (884) | $ | 27 | $ | 39 | $ | 52 | 36.8 | % | $ | 127 | $ | 118 | (7.1) | % | ||||||||||||||
Total operating expenses (2) | 170 | (751) | 146 | 161 | 157 | (7.6) | % | 499 | 466 | (6.6) | % | |||||||||||||||||||||
Income (loss) from operations before taxes (2) | (132) | (133) | (119) | (122) | (105) | 20.5 | % | (372) | (348) | 6.5 | % | |||||||||||||||||||||
Federal income tax expense (benefit) (2) | (30) | (33) | (23) | (25) | (21) | 30.0 | % | (79) | (72) | 8.9 | % | |||||||||||||||||||||
Income (loss) from operations(2),(3) | $ | (102) | $ | (100) | $ | (96) | $ | (97) | $ | (84) | 17.6 | % | $ | (293) | $ | (276) | 5.8 | % | ||||||||||||||
(1) Day one impacts related to the reinsurance transaction with Fortitude Re caused line-item volatility in the fourth quarter of 2023.
(2) The prior period presentation has been recast to conform to the revised definition of income (loss) from operations. See Definitions of Non-GAAP Measures at the back of this press release.
(3) Income (loss) from operations does not include preferred dividends.
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Unrealized Gains and Losses
The Company reported a net unrealized loss of $7.0 billion (pre-tax) on its available-for-sale securities as of September 30, 2024. This compared to a net unrealized loss of $14.2 billion (pre-tax) as of September 30, 2023, with the year-over-year increase primarily due to lower treasury rates.
The tables attached to this release define and reconcile the non-GAAP measures adjusted income (loss) from operations, adjusted income (loss) from operations available to common stockholders, book value per share, excluding AOCI, and adjusted book value per share to net income (loss), net income (loss) available to common stockholders, and book value per share, including AOCI, calculated in accordance with GAAP.
This press release contains statements that are forward-looking, and actual results may differ materially. Please see the Forward-looking Statements – Cautionary Language at the end of this release for factors that may cause actual results to differ materially from the company’s current expectations.
For other financial information, please refer to the company’s third quarter 2024 statistical supplement and third quarter 2024 earnings supplement, which are available in the investor relations section of its website http://www.lincolnfinancial.com/investor.
Conference Call Information
Lincoln Financial will discuss the company’s third-quarter 2024 results with the investment community in a conference call beginning at 8:00 a.m. Eastern Time on Thursday, October 31, 2024.
The conference call will be broadcast live through the company’s website at www.lincolnfinancial.com/webcast. Please log on to the webcast at least 15 minutes prior to the start of the conference call to download and install any necessary streaming media software. A replay of the call will be available by 10:30 a.m. Eastern Time on October 31, 2024, at www.lincolnfinancial.com/webcast.
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About Lincoln Financial
Lincoln Financial helps people to plan, protect and retire with confidence. As of December 31, 2023, approximately 17 million customers trust our guidance and solutions across four core businesses – annuities, life insurance, group protection, and retirement plan services. As of September 30, 2024, the company had $324 billion in end-of-period account balances, net of reinsurance. Headquartered in Radnor, Pa., Lincoln Financial is the marketing name for Lincoln National Corporation (NYSE: LNC) and its affiliates. Learn more at LincolnFinancial.com.
| Contacts: | ||||||||||||||
| Tina Madon | Sarah Boxler | |||||||||||||
| 445-280-0488 | 215-495-8439 | |||||||||||||
| Investor Relations | Media Relations | |||||||||||||
| Tina.Madon@LFG.com | Sarah.Boxler@LFG.com | |||||||||||||
Non-GAAP Measures
Management believes that adjusted income (loss) from operations (or adjusted operating income), adjusted income (loss) from operations available to common stockholders, and adjusted income (loss) from operations per diluted share available to common stockholders better explain the results of the company’s ongoing businesses in a manner that allows for a better understanding of the underlying trends in the company’s current business as the excluded items are unpredictable and not necessarily indicative of current operating fundamentals or future performance of the business segments, and, in most instances, decisions regarding these items do not necessarily relate to the operations of the individual segments. Management also believes that using book value, excluding accumulated other comprehensive income (“AOCI”), and adjusted book value per share enables investors to analyze the amount of our net worth that is primarily attributable to our business operations. Book value per share, excluding AOCI is useful to investors because it eliminates the effect of items that are unpredictable and can fluctuate significantly from period to period, primarily based on changes in interest rates. Adjusted book value per share is useful to investors because it eliminates the effect of items that are unpredictable and can fluctuate significantly from period to period, primarily based on changes in equity markets and interest rates.
For the historical periods, reconciliations of non-GAAP measures used in this press release to the most directly comparable GAAP measure may be included in this Appendix to the press release and/or are included in the Statistical Supplements for the corresponding periods contained in the Earnings section of the Investor Relations page on our website: http://www.lincolnfinancial.com/investor.
Definitions of Non-GAAP Measures Used in this Press Release
Adjusted income (loss) from operations, adjusted income (loss) from operations available to common stockholders, book value per share, excluding AOCI, and adjusted book value per share are financial measures we use to evaluate and assess our results. Adjusted income (loss) from operations, adjusted income (loss) from operations available to common
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stockholders, book value per share, excluding AOCI, and adjusted book value per share, as used in the press release, are non-GAAP financial measures and do not replace GAAP net income (loss), net income (loss) available to common stockholders, and book value per share, including AOCI, the most directly comparable GAAP measures.
Adjusted Income (Loss) from Operations
In the third quarter of 2024, we revised our definition of adjusted income (loss) from operations to exclude the impact of certain items that are not indicative of the ongoing operations of the business and may obscure trends in the underlying performance of the Company. The revised definition now excludes, as applicable, certain legal accruals, severance expense related to initiatives that realign the workforce, mark-to-market adjustment related to the LNC stock component of our deferred compensation plans, impacts from the settlement or curtailment of defined benefit obligations and the effect of tax adjustments such as changes to deferred tax valuation allowances from the definition of adjusted income (loss) from operations. The presentation of prior period adjusted income (loss) from operations has been recast to conform to the current period presentation.
Adjusted income (loss) from operations is GAAP net income excluding the following items, as applicable:
•Items related to annuity product features, which include changes in MRBs, including gains and losses and benefit payments, changes in the fair value of the derivative instruments we hold to hedge GLB and GDB riders, net of fee income allocated to support the cost of hedging them, and changes in the fair value of the embedded derivative liabilities of our indexed annuity contracts and the associated index options we hold to hedge them, including collateral expense associated with the hedge program (collectively, “net annuity product features”);
•Items related to life insurance product features, which include changes in the fair value of derivatives we hold as part of VUL hedging, changes in reserves resulting from benefit ratio unlocking associated with the impact of capital markets, and changes in the fair value of the embedded derivative liabilities of our IUL contracts and the associated index options we hold to hedge them (collectively, “net life insurance product features”);
•Credit loss-related adjustments on fixed maturity AFS securities, mortgage loans on real estate and reinsurance-related assets (“credit loss-related adjustments”);
•Changes in the fair value of equity securities, certain derivatives, certain other investments and realized gains (losses) on sales, disposals and impairments of financial assets (collectively, “investment gains (losses)”);
•Changes in the fair value of reinsurance-related embedded derivatives, trading securities and mortgage loans on real estate electing the fair value option (“changes in the fair value of reinsurance-related embedded derivatives, trading securities and certain mortgage loans”);
•Income (loss) from the initial adoption of new accounting standards, accounting policy changes and new regulations, including changes in tax law;
•Income (loss) from reserve changes, net of related amortization, on business sold through reinsurance;
•Losses from the impairment of intangible assets and gains (losses) on other non-financial assets;
•Income (loss) from discontinued operations;
•Other items, which include the following: certain legal accruals; severance expense related to initiatives that realign the workforce; transaction and integration costs related to mergers and acquisitions including the acquisition or divestiture, through reinsurance or other means, of businesses or blocks of business; mark-to-market adjustment related to the LNC stock component of our deferred compensation plans (“deferred compensation mark-to-market adjustment”); gains (losses) on modification or early extinguishment of debt; and impacts from settlement or curtailment of defined benefit obligations; and
•Income tax benefit (expense) related to the above pre-tax items, including the effect of tax adjustments such as changes to deferred tax valuation allowances.
Adjusted Income (Loss) from Operations Available to Common Stockholders
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Adjusted income (loss) from operations available to common stockholders is defined as after-tax adjusted income (loss) from operations less preferred stock dividends.
Book Value Per Share, Excluding AOCI
Book value per share, excluding AOCI, is calculated based upon a non-GAAP financial measure.
•It is calculated by dividing (a) stockholders’ equity, excluding AOCI and preferred stock, by (b) common shares outstanding.
•We provide book value per share, excluding AOCI, to enable investors to analyze the amount of our net worth that is attributable primarily to our business operations.
•Management believes book value per share, excluding AOCI, is useful to investors because it eliminates the effect of items that are unpredictable and can fluctuate significantly from period to period, primarily based on changes in interest rates.
•Book value per share is the most directly comparable GAAP measure.
Adjusted Book Value Per Share
Adjusted book value per share is calculated based upon a non-GAAP financial measure.
•It is calculated by dividing (a) stockholders’ equity, excluding AOCI, preferred stock, MRB-related impacts, GLB and GLB hedge instrument gains (losses), and the difference between amounts recognized in net income (loss) on reinsurance-related embedded derivatives and the underlying asset portfolios (“reinsurance-related embedded derivatives and portfolio gains (losses)”) by (b) common shares outstanding.
•We provide adjusted book value per share to enable investors to analyze the amount of our net worth that is primarily attributable to our business operations.
•Management believes adjusted book value per share is useful to investors because it eliminates the effect of market movements that are unpredictable that can fluctuate significantly from period to period, primarily based on changes in equity markets and interest rates.
•Book value per share is the most directly comparable GAAP measure.
Other Definitions
Holding Company Available Liquidity
Holding company available liquidity consists of cash and invested cash, excluding cash held as collateral, and certain short-term investments that can be readily converted into cash, net of commercial paper outstanding.
Sales
Sales as reported consist of the following:
•Annuities and Retirement Plan Services – deposits from new and existing customers;
•Universal life insurance (“UL”), indexed universal life insurance (“IUL”), variable universal life insurance (“VUL”) – first-year commissionable premiums plus 5% of excess premiums received;
•MoneyGuard® linked-benefit products – MoneyGuard® (UL), 15% of total expected premium deposits, and MoneyGuard Market AdvantageSM (VUL), 150% of commissionable premiums;
•Executive Benefits – insurance and corporate-owned UL and VUL, first-year commissionable premiums plus 5% of excess premium received, and single premium bank-owned UL and VUL, 15% of single premium deposits;
•Term – 100% of annualized first-year premiums; and
•Group Protection – annualized first-year premiums from new policies.
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Lincoln National Corporation
Reconciliation of Net Income to Adjusted Income from Operations and
Average Stockholders' Equity to Adjusted Average Stockholders' Equity
| For the | For the | ||||||||||||||||||||||
| (in millions, except per share data) | Three Months Ended | Nine Months Ended | |||||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||||||
| 2024 | 2023 (1) | 2024 | 2023 (1) | ||||||||||||||||||||
| Net Income (Loss) Available to Common | |||||||||||||||||||||||
| Stockholders – Diluted | $ | (562) | $ | 819 | $ | 1,511 | $ | 410 | |||||||||||||||
| Less: | |||||||||||||||||||||||
| Preferred stock dividends declared | (34) | (34) | (80) | (71) | |||||||||||||||||||
| Adjustment for deferred units of LNC stock in our | |||||||||||||||||||||||
| deferred compensation plans | — | — | 3 | (2) | |||||||||||||||||||
| Net Income (Loss) | (528) | 853 | 1,588 | 483 | |||||||||||||||||||
| Less: | |||||||||||||||||||||||
| Net annuity product features, pre-tax | (381) | 1,322 | 1,319 | 1,076 | |||||||||||||||||||
| Net life insurance product features, pre-tax | (125) | 108 | (253) | (168) | |||||||||||||||||||
| Credit loss-related adjustments, pre-tax | (88) | (27) | (124) | (53) | |||||||||||||||||||
Investment gains (losses), pre-tax (2) | (105) | (400) | (416) | (1,126) | |||||||||||||||||||
| Changes in the fair value of reinsurance-related | |||||||||||||||||||||||
| embedded derivatives, trading securities and certain | |||||||||||||||||||||||
mortgage loans, pre-tax (3) | (446) | (29) | (51) | (27) | |||||||||||||||||||
| Gains (losses) on other non-financial assets – sale of | |||||||||||||||||||||||
subsidiaries/businesses, pre-tax (4) | (2) | — | 582 | — | |||||||||||||||||||
Other items, pre-tax (5)(6)(7)(8) | (19) | (12) | (238) | (23) | |||||||||||||||||||
| Income tax benefit (expense) related | |||||||||||||||||||||||
| to the above pre-tax items | 246 | (193) | (202) | 76 | |||||||||||||||||||
| Total adjustments | (920) | 769 | 617 | (245) | |||||||||||||||||||
| Adjusted Income (Loss) from Operations | $ | 392 | $ | 84 | $ | 971 | $ | 728 | |||||||||||||||
| Add: | |||||||||||||||||||||||
| Preferred stock dividends declared | (34) | (34) | (80) | (71) | |||||||||||||||||||
| Adjusted Income (Loss) from Operations Available to Common Stockholders | $ | 358 | $ | 50 | $ | 891 | $ | 657 | |||||||||||||||
Earnings (Loss) Per Common Share – Diluted (9) | |||||||||||||||||||||||
| Net income (loss) | $ | (3.29) | $ | 4.79 | $ | 8.75 | $ | 2.40 | |||||||||||||||
| Adjusted income (loss) from operations | 2.06 | 0.29 | 5.16 | 3.85 | |||||||||||||||||||
| Stockholders’ Equity, Average | |||||||||||||||||||||||
| Stockholders' equity | $ | 8,481 | $ | 4,509 | $ | 7,816 | $ | 5,567 | |||||||||||||||
| Less: | |||||||||||||||||||||||
| Preferred stock | 986 | 986 | 986 | 986 | |||||||||||||||||||
| AOCI | (3,526) | (6,792) | (3,800) | (5,425) | |||||||||||||||||||
| Stockholders’ equity, excluding AOCI and preferred stock | 11,021 | 10,315 | 10,630 | 10,006 | |||||||||||||||||||
| MRB-related impacts | 2,410 | 986 | 2,288 | (95) | |||||||||||||||||||
| GLB and GDB hedge instruments gains (losses) | (2,767) | (1,519) | (2,623) | (921) | |||||||||||||||||||
Reinsurance-related embedded derivatives and portfolio gains (losses)(10) | (455) | NM | (462) | NM | |||||||||||||||||||
Adjusted average stockholders' equity(10) | $ | 11,833 | $ | 10,848 | $ | 11,427 | $ | 11,022 | |||||||||||||||
(1)Prior period impacts have been recast to conform to the current period presentation. See definitions of Non-GAAP measures earlier in this release.
(2)The three and nine months ended September 30, 2023, include impairments of certain fixed maturity AFS securities in an unrealized loss position, resulting from the Company’s intent to sell these securities as part of the fourth quarter 2023 reinsurance transaction.
(3)Includes primarily changes in the fair value of the embedded derivative related to the fourth quarter 2023 reinsurance transaction.
(4)Relates to the sale of our wealth management business, which provided approximately $650 million of statutory capital benefit.
(5)Includes certain legal accruals of $(12) million in the third quarter of 2023 and $(114) million primarily related to the settlement of cost of insurance litigation in the first quarter of 2024.
(6)Includes severance expense related to initiatives that realign the workforce of $(3) million, $(3) million, $(49) million, $(7) million and $(16) million in the first quarter of 2023, second quarter of 2023, first quarter of 2024, second quarter of 2024 and third quarter of 2024, respectively.
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(7)Includes transaction and integration costs related to mergers, acquisitions and divestitures of $(9) million, $(1) million, $(10) million, $(27) million and $(2) million for the second quarter of 2023, third quarter of 2023, first quarter of 2024, second quarter of 2024 and third quarter of 2024, respectively.
(8)Includes deferred compensation mark-to-market adjustment of $12 million, $(8) million, $1 million, $(13) million, $1 million and $(1) million in the first quarter of 2023, second quarter of 2023, third quarter of 2023, first quarter of 2024, second quarter of 2024 and third quarter of 2024, respectively.
(9)In periods where a net loss or adjusted loss from operations is presented, basic shares are used in the diluted EPS and adjusted diluted EPS calculations, as the use of diluted shares would result in a lower loss per share.
(10)This measure has been updated, effective beginning with the fourth quarter of 2023, to exclude reinsurance-related embedded derivatives and the underlying portfolio gains (losses), given the size of the impact of the fourth quarter 2023 reinsurance transaction. Such amounts in the prior periods presented, and the impact of this change to such prior periods, was not meaningful.
Lincoln National Corporation
Reconciliation of Book Value per Share
| As of the Three Months Ended | ||||||||||||||||||||||||||||||||
| 9/30/23 | 12/31/23 | 3/31/24 | 6/30/24 | 9/30/24 | ||||||||||||||||||||||||||||
| Book Value Per Common Share | ||||||||||||||||||||||||||||||||
| Book value per share | $ | 13.04 | $ | 34.81 | $ | 38.46 | $ | 40.78 | $ | 46.97 | ||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||||||||
| AOCI | (49.99) | (20.49) | (23.17) | (25.59) | (15.70) | |||||||||||||||||||||||||||
| Book value per share, excluding AOCI | 63.03 | 55.30 | 61.63 | 66.37 | 62.67 | |||||||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||||||||
| MRB-related gains (losses) | 9.11 | 6.38 | 15.10 | 15.66 | 12.56 | |||||||||||||||||||||||||||
| GLB and GDB hedge instruments gains (losses) | (9.61) | (12.29) | (15.69) | (16.22) | (16.17) | |||||||||||||||||||||||||||
Reinsurance-related embedded derivatives and portfolio gains (losses)(1) | NM | (3.76) | (2.79) | (1.58) | (3.76) | |||||||||||||||||||||||||||
Adjusted book value per share(1) | $ | 63.53 | $ | 64.97 | $ | 65.01 | $ | 68.51 | $ | 70.04 | ||||||||||||||||||||||
(1) This measure has been updated, effective beginning with the fourth quarter of 2023, to exclude reinsurance-related embedded derivatives and the underlying portfolio gains (losses), given the size of the impact of the fourth quarter 2023 reinsurance transaction. Such amounts in the prior periods presented, and the impact of this change to such prior periods, were not meaningful (NM).
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Lincoln National Corporation
Digest of Earnings
| For the | |||||||||||
| (in millions, except per share data) | Three Months Ended | ||||||||||
| September 30, | |||||||||||
| 2024 | 2023 | ||||||||||
| Revenues | $ | 4,111 | $ | 4,203 | |||||||
| Net Income (Loss) | $ | (528) | $ | 853 | |||||||
| Preferred stock dividends declared | (34) | (34) | |||||||||
| Net Income (Loss) Available to Common | |||||||||||
| Stockholders – Diluted | $ | (562) | $ | 819 | |||||||
| Net Income (Loss) Per Common Share – Basic | $ | (3.29) | $ | 4.82 | |||||||
Net Income (Loss) Per Common Share – Diluted (2) | $ | (3.29) | $ | 4.79 | |||||||
| Average Shares – Basic | 170,773,438 | 169,645,881 | |||||||||
| Average Shares – Diluted | 172,848,870 | 170,890,502 | |||||||||
| For the | |||||||||||
| Nine Months Ended | |||||||||||
| September 30, | |||||||||||
| 2024 | 2023 | ||||||||||
| Revenues | $ | 13,380 | $ | 10,946 | |||||||
| Net Income (Loss) | $ | 1,588 | $ | 483 | |||||||
| Preferred stock dividends declared | (80) | (71) | |||||||||
| Adjustment for deferred units of LNC stock in our | |||||||||||
deferred compensation plans (1) | 3 | (2) | |||||||||
| Net Income (Loss) Available to Common | |||||||||||
| Stockholders – Diluted | $ | 1,511 | $ | 410 | |||||||
| Net Income (Loss) Per Common Share – Basic | $ | 8.85 | $ | 2.43 | |||||||
| Net Income (Loss) Per Common Share – Diluted | $ | 8.75 | $ | 2.40 | |||||||
| Average Shares – Basic | 170,482,264 | 169,529,509 | |||||||||
| Average Shares – Diluted | 172,767,554 | 170,625,444 | |||||||||
(1) We exclude deferred units of LNC stock that are antidilutive from our diluted earnings per share calculation.
(2) In periods where a net loss or adjusted loss from operations is presented, basic shares are used in the diluted EPS and adjusted diluted EPS calculations, as the use of diluted shares would result in a lower loss per share.
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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 or on Lincoln’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. Forward-looking statements may contain words like: “anticipate,” “believe,” “estimate,” “expect,” “project,” “shall,” “will” and other words or phrases with similar meaning in connection with a discussion of future operating or financial performance. In particular, these include statements relating to future actions, trends in Lincoln’s businesses, prospective services or products, future performance or financial results and the outcome of contingencies, such as legal proceedings. Lincoln claims the protection afforded by the safe harbor for forward-looking statements provided by the PSLRA.
Forward-looking statements are subject to risks and uncertainties. Actual results could differ materially from those expressed in or implied by such forward-looking statements due to a variety of factors, including:
•Weak general economic and business conditions that may affect demand for our products, account balances, investment results, guaranteed benefit liabilities, premium levels and claims experience;
•Adverse global capital and credit market conditions that may affect our ability to raise capital, if necessary, and may cause us to realize impairments on investments and certain intangible assets, including goodwill and the valuation allowance against deferred tax assets, which may reduce future earnings and/or affect our financial condition and ability to raise additional capital or refinance existing debt as it matures;
•The inability of our subsidiaries to pay dividends to the holding company in sufficient amounts, which could harm the holding company’s ability to meet its obligations;
•Legislative, regulatory or tax changes, both domestic and foreign, that affect: the cost of, or demand for, our subsidiaries’ products; the required amount of reserves and/or surplus; our ability to conduct business and our captive reinsurance arrangements as well as restrictions on the payment of revenue sharing and 12b-1 distribution fees;
•Changes in tax law or the interpretation of or application of existing tax laws that could impact our tax costs and the products that we sell;
•The impact of regulations adopted by the Securities and Exchange Commission (“SEC”), the Department of Labor or other federal or state regulators or self-regulatory organizations that could adversely affect our distribution model and sales of our products and result in additional disclosure and other requirements related to the sale and delivery of our products;
•The impact of new and emerging rules, laws and regulations relating to privacy, cybersecurity and artificial intelligence that may lead to increased compliance costs, reputation risk and/or changes in business practices;
•Increasing scrutiny and evolving expectations and regulations regarding ESG matters that may adversely affect our reputation and our investment portfolio;
•Actions taken by reinsurers to raise rates on in-force business;
•Declines in or sustained low interest rates causing a reduction in investment income, the interest margins of our businesses and demand for our products;
•Rapidly increasing or sustained high interest rates that may negatively affect our profitability, value of our investment portfolio and capital position and may cause policyholders to surrender annuity and life insurance policies, thereby causing realized investment losses;
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•The impact of the implementation of the provisions of the European Market Infrastructure Regulation relating to the regulation of derivatives transactions;
•The initiation of legal or regulatory proceedings against us, and the outcome of any legal or regulatory proceedings, such as: adverse actions related to present or past business practices common in businesses in which we compete; adverse decisions in significant actions including, but not limited to, actions brought by federal and state authorities and class action cases; new decisions that result in changes in law; and unexpected trial court rulings;
•A decline or continued volatility in the equity markets causing a reduction in the sales of our subsidiaries’ products; a reduction of asset-based fees that our subsidiaries charge on various investment and insurance products; and an increase in liabilities related to guaranteed benefit riders, which are accounted for as market risk benefits, of our subsidiaries’ variable annuity products;
•Ineffectiveness of our risk management policies and procedures, including our various hedging strategies;
•A deviation in actual experience regarding future policyholder behavior, mortality, morbidity, interest rates or equity market returns from the assumptions used in pricing our subsidiaries’ products and in establishing related insurance reserves, which may reduce future earnings;
•Changes in accounting principles that may affect our consolidated financial statements;
•Lowering of one or more of our debt ratings issued by nationally recognized statistical rating organizations and the adverse effect such action may have on our ability to raise capital and on our liquidity and financial condition;
•Lowering of one or more of the insurer financial strength ratings of our insurance subsidiaries and the adverse effect such action may have on the premium writings, policy retention, profitability of our insurance subsidiaries and liquidity;
•Significant credit, accounting, fraud, corporate governance or other issues that may adversely affect the value of certain financial assets, as well as counterparties to which we are exposed to credit risk, requiring that we realize losses on financial assets;
•Interruption in telecommunication, information technology or other operational systems or failure to safeguard the confidentiality or privacy of sensitive data on such systems, including from cyberattacks or other breaches of our data security systems;
•The effect of acquisitions and divestitures, including the inability to realize the anticipated benefits of acquisitions and dispositions of businesses and potential operating difficulties and unforeseen liabilities relating thereto, as well as the effect of restructurings, product withdrawals and other unusual items;
•The inability to realize or sustain the benefits we expect from, greater than expected investments in, and the potential impact of efforts related to, our strategic initiatives;
•The adequacy and collectability of reinsurance that we have obtained;
•Pandemics, acts of terrorism, war or other man-made and natural catastrophes that may adversely impact liabilities for policyholder claims, affect our businesses and increase the cost and availability of reinsurance;
•Competitive conditions, including pricing pressures, new product offerings and the emergence of new competitors, that may affect the level of premiums and fees that our subsidiaries can charge for their products;
•The unknown effect on our subsidiaries’ businesses resulting from evolving market preferences and the changing demographics of our client base; and
•The unanticipated loss of key management or wholesalers.
The risks and uncertainties included here are not exhaustive. Our most recent Form 10-K, as well as other reports that we file with the SEC, include additional factors that could affect our businesses and
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financial performance. Moreover, we operate 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 effect of all risk factors on our businesses 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 undue reliance on forward-looking statements as a prediction of actual results. In addition, Lincoln disclaims any obligation to correct or update any forward-looking statements to reflect events or circumstances that occur after the date of this press release.
The reporting of Risk-Based Capital (“RBC”) measures is not intended for the purpose of ranking any insurance company or for use in connection with any marketing, advertising or promotional activities.
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