Lincoln Financial Reports 2026 First Quarter Results
RADNOR, Pa.--(BUSINESS WIRE)--Lincoln Financial (NYSE: LNC) today reported financial results for the first quarter ended March 31, 2026.
- Sustained progress against strategic and financial objectives drove solid first quarter performance.
- First quarter net loss available to common stockholders was $(211) million, or $(1.10) per diluted share.
-
First quarter adjusted operating income available to common stockholders was $326 million, or $1.66 per diluted share.
- The difference between net income and adjusted operating income was primarily attributable to the non-economic impact of changes in market risk benefits.
- Holding company available liquidity increased to $805 million, net of prefunding amounts.
“Our first quarter results reflect continued disciplined execution and consistent, meaningful progress against our strategic priorities," said Ellen Cooper, Chairman, President and CEO of Lincoln Financial. "Group Protection delivered record first quarter earnings, while Life Insurance and Retirement Plan Services generated strong earnings growth. In Annuities, we achieved another quarter of diversification in new business with a more balanced mix and less market sensitivity.
"The cumulative impact of the actions we’ve taken — strengthening our capital foundation, optimizing our operating model, and diversifying our business mix — are translating into a more resilient, higher-quality earnings profile. We remain focused on advancing these priorities to further build on this trajectory and create sustainable, long-term value for shareholders.”
Business Highlights
Our 2026 first quarter performance represents sustained, company-wide progress against our strategic and financial objectives.
Retail Solutions
-
Annuities delivered operating income of $275 million, down 5% compared to the prior-year quarter, driven by the impact of the previously disclosed net investment income allocation refinement and unfavorable tax-related items. Adjusting for these items, operating income was up 1%, driven by favorable equity markets and growth in spread income, offset by variable annuity outflows. Annuities recorded $169 billion in ending account balances, net of reinsurance, and sales of $3.9 billion, up 4% year over year. Spread-based products accounted for approximately two-thirds of total sales in the quarter, reflecting our continued strategic shift towards spread-based business.
- Life Insurance delivered operating income of $41 million, a $57 million increase from the prior-year quarter, driven by strong alternative investment income and the impact of the fourth quarter 2025 captive consolidation. Annualized consolidated alternative investment income returns were approximately 12.3%, which is more than 2% higher than our annual target. Total sales were $129 million, up 33% compared to the prior-year quarter, reflecting sales growth across all product lines, most notably in Executive Benefits.
Workplace Solutions
-
Group Protection delivered operating income of $112 million, compared to $101 million in the prior-year quarter, driven by favorable life experience. Premiums were 2% higher year over year, as strong sales over the prior twelve months were partially offset by a large case lapse. Adjusting for the large case lapse, premiums were up 3.4% compared to the first quarter of 2025. Sales of $150 million were 4% lower year over year and demonstrated a disciplined approach to balanced growth in the segment.
- Retirement Plan Services reported operating income of $43 million in the quarter, up 26% year over year, driven by spread expansion and favorable equity markets, partially offset by trailing-twelve-month outflows. Net outflows were $0.2 billion, compared to $2.2 billion in the prior-year quarter. Total deposits were $4.1 billion in the quarter, up 1% over the prior-year quarter, with first-year sales of $1.1 billion, up 3% year over year.
Earnings Summary
(in millions, except per share data) | For the Three Months Ended | |||||
| 3/31/25 | 3/31/26 | ||||
Net income (loss) | $ | (722 | ) | $ | (172 | ) |
Net income (loss) available to common stockholders — diluted |
| (756 | ) |
| (211 | ) |
Net income (loss) per diluted share available to common stockholders | $ | (4.41 | ) | $ | (1.10 | ) |
Adjusted income (loss) from operations |
| 314 |
|
| 360 |
|
Adjusted income (loss) from operations available to common stockholders |
| 280 |
|
| 326 |
|
Adjusted income (loss) from operations per diluted share available to common stockholders | $ | 1.60 |
| $ | 1.66 |
|
Reconciliation of Net Income (Loss) to Adjusted Income (Loss) from Operations(1)
(in millions) | For the Three Months Ended | |||||
| 3/31/25 | 3/31/26 | ||||
Net income (loss) available to common stockholders — diluted | $ | (756 | ) | $ | (211 | ) |
Less: |
|
| ||||
Preferred stock dividends declared |
| (34 | ) |
| (34 | ) |
Adjustment for deferred units of LNC stock in our deferred compensation plans |
| — |
|
| (5 | ) |
Net income (loss) |
| (722 | ) |
| (172 | ) |
Less: |
|
| ||||
Net annuity product features, pre-tax(1) |
| (1,092 | ) |
| (695 | ) |
Net life insurance product features, pre-tax |
| 42 |
|
| 22 |
|
Credit loss-related adjustments, pre-tax |
| (28 | ) |
| (20 | ) |
Investment gains (losses), pre-tax |
| (103 | ) |
| (42 | ) |
Changes in the fair value of reinsurance-related embedded derivatives, trading securities and certain mortgage loans, pre-tax(1) |
| (90 | ) |
| 179 |
|
Gains (losses) on other non-financial assets, pre-tax |
| — |
|
| (6 | ) |
Other items, pre-tax(1) |
| (35 | ) |
| (111 | ) |
Income tax benefit (expense) related to the above pre-tax items |
| 270 |
|
| 141 |
|
Adjusted income (loss) from operations | $ | 314 |
| $ | 360 |
|
Adjusted income (loss) from operations available to common stockholders | $ | 280 |
| $ | 326 |
|
(1) Refer to the full reconciliation at the back of this release for footnotes. | ||||||
Variable Investment Income
Alternative Investment Income, after-tax(1) | For the Three Months Ended | |||||||||
(in millions) | 3/31/25 | 6/30/25 | 9/30/25 | 12/31/25 | 3/31/26 | |||||
Annuities | $ | 2 | $ | 3 | $ | 2 | $ | 3 | $ | 3 |
Life Insurance |
| 55 |
| 74 |
| 75 |
| 90 |
| 95 |
Group Protection |
| 1 |
| 1 |
| 2 |
| 2 |
| 2 |
Retirement Plan Services |
| 1 |
| 2 |
| 1 |
| 3 |
| 2 |
Other Operations |
| — |
| — |
| — |
| — |
| — |
Consolidated | $ | 59 | $ | 80 | $ | 80 | $ | 98 | $ | 102 |
(1) Excludes alternative investment income on investments supporting our modified coinsurance and coinsurance with funds withheld agreements as we have limited economic interest in those investments. | ||||||||||
Prepayment Income, after-tax | For the Three Months Ended | |||||||||
(in millions) | 3/31/25 | 6/30/25 | 9/30/25 | 12/31/25 | 3/31/26 | |||||
Annuities | $ | — | $ | 3 | $ | 3 | $ | 5 | $ | 1 |
Life Insurance |
| 1 |
| — |
| 1 |
| 1 |
| 2 |
Group Protection |
| — |
| 1 |
| — |
| — |
| 1 |
Retirement Plan Services |
| — |
| — |
| 1 |
| 1 |
| — |
Other Operations |
| — |
| — |
| — |
| — |
| — |
Consolidated | $ | 1 | $ | 4 | $ | 5 | $ | 7 | $ | 4 |
Items Impacting Segment and Other Operations Results
| For the Three Months Ended March 31, 2026 | ||||||||||
(in millions, after-tax) | Annuities | Life Insurance | Group Protection | Retirement Plan Services | Other Operations | ||||||
Alternative investment income compared to return target(1) | $ | — |
| $ | 19 | $ | — | $ | — | $ | — |
Prepayment income(2) |
| 1 |
|
| 2 |
| 1 |
| — |
| — |
Annual assumption review |
| — |
|
| — |
| — |
| — |
| — |
Tax items(3) |
| (7 | ) |
| — |
| — |
| — |
| — |
Other |
| — |
|
| — |
| — |
| — |
| — |
Total impact | $ | (6 | ) | $ | 21 | $ | 1 | $ | — | $ | — |
| For the Three Months Ended March 31, 2025 | ||||||||||||
(in millions, after-tax) | Annuities | Life Insurance | Group Protection | Retirement Plan Services | Other Operations | ||||||||
Alternative investment income compared to return target(1) | $ | (1 | ) | $ | (16 | ) | $ | — | $ | (1 | ) | $ | — |
Prepayment income(2) |
| — |
|
| 1 |
|
| — |
| — |
|
| — |
Annual assumption review |
| — |
|
| — |
|
| — |
| — |
|
| — |
Tax items |
| — |
|
| — |
|
| — |
| — |
|
| — |
Other |
| — |
|
| — |
|
| — |
| — |
|
| — |
Total impact | $ | (1 | ) | $ | (15 | ) | $ | — | $ | (1 | ) | $ | — |
(1) Alternative investment income comparison to return target assumes a 10% annual return on the alternative investment portfolio. | |||||||||||||
(2) Prepayment income is actual income reported in the quarter. | |||||||||||||
(3) Tax-related items including dividends-received deduction and foreign tax credit true-ups. | |||||||||||||
Capital and Liquidity
| As of or For the Three Months Ended | |||||||||
(in millions, except percent and per share data) | 3/31/25 | 6/30/25 | 9/30/25 | 12/31/25 | 3/31/26 | |||||
Holding company available liquidity(1) | $ | 466 | $ | 466 | $ | 461 | $ | 1,055 | $ | 1,205 |
Holding company available liquidity, net of prefunding | $ | 466 | $ | 466 | $ | 461 | $ | 655 | $ | 805 |
RBC ratio(2) | >420% | >420% | >420% | >420% | >420% | |||||
Book value per share (BVPS), including AOCI | $ | 41.96 | $ | 44.91 | $ | 49.56 | $ | 51.88 | $ | 47.87 |
Book value per share, excluding AOCI(3) | $ | 67.04 | $ | 67.95 | $ | 69.66 | $ | 73.10 | $ | 71.06 |
Adjusted book value per share(3) | $ | 73.19 | $ | 72.77 | $ | 74.23 | $ | 76.33 | $ | 77.77 |
(1) Holding company available liquidity presented as of 12/31/25 and 3/31/26 includes the $400 million prefunding of a 2026 maturity. | ||||||||||
(2) The RBC ratio is calculated annually as of December 31, but is reported in the March statutory reporting, and as such, the quarterly ratios presented for 3/31/25, 6/30/25, 9/30/25 and 3/31/26 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. | ||||||||||
Annuities
(in millions, except ROA data) | As of or For the Three Months Ended | ||||||||||||||||
| 3/31/25 | 6/30/25 | 9/30/25 | 12/31/25 | 3/31/26 | Change | |||||||||||
Total operating revenues | $ | 1,198 |
| $ | 1,214 |
| $ | 1,270 |
| $ | 1,308 |
| $ | 1,283 |
| 7.1 | % |
Total operating expenses |
| 858 |
|
| 876 |
|
| 902 |
|
| 939 |
|
| 949 |
| 10.6 | % |
Income (loss) from operations before taxes |
| 340 |
|
| 338 |
|
| 368 |
|
| 369 |
|
| 334 |
| (1.8 | )% |
Federal income tax expense (benefit) |
| 50 |
|
| 51 |
|
| 58 |
|
| 58 |
|
| 59 |
| 18.0 | % |
Income (loss) from operations | $ | 290 |
| $ | 287 |
| $ | 310 |
| $ | 311 |
| $ | 275 |
| (5.2 | )% |
Income (loss) from operations, excluding impact of annual assumption review | $ | 290 |
| $ | 287 |
| $ | 318 |
| $ | 311 |
| $ | 275 |
| (5.2 | )% |
Total sales | $ | 3,789 |
| $ | 4,019 |
| $ | 4,467 |
| $ | 4,889 |
| $ | 3,939 |
| 4.0 | % |
Net flows | $ | (1,676 | ) | $ | (1,162 | ) | $ | (1,143 | ) | $ | (1,227 | ) | $ | (2,196 | ) | (31.0 | )% |
Average account balances, net of reinsurance | $ | 163,688 |
| $ | 159,806 |
| $ | 170,318 |
| $ | 174,668 |
| $ | 175,173 |
| 7.0 | % |
Return on average account balances (bps) |
| 71 |
|
| 72 |
|
| 73 |
|
| 71 |
|
| 63 |
|
| |
Return on average account balances (bps), excluding impact of annual assumption review |
| 71 |
|
| 72 |
|
| 75 |
|
| 71 |
|
| 63 |
|
| |
-
Income from operations was $275 million for the first quarter, compared to $290 million in the prior-year quarter, driven by the impact of the previously disclosed net investment income allocation refinement and unfavorable tax-related items. Adjusting for these items, operating income was up 1%, driven by favorable equity markets and growth in spread income, offset by variable annuity outflows.
-
Total sales were $3.9 billion in the quarter, increasing 4% compared to the prior year. Spread-based products comprised nearly two-thirds of total sales.
-
Net outflows were approximately $2.2 billion in the quarter, compared to net outflows of $1.7 billion in the prior-year quarter, primarily driven by traditional variable annuities.
- Average account balances, net of reinsurance, were $175 billion. The year-over-year increase of 7% was driven by growth across all product lines.
Life Insurance
(in millions) | As of or For the Three Months Ended | |||||||||||||
| 3/31/25 | 6/30/25 | 9/30/25 | 12/31/25 | 3/31/26 | Change | ||||||||
|
|
|
|
|
|
| ||||||||
Total operating revenues | $ | 1,587 |
| $ | 1,602 | $ | 1,610 |
| $ | 1,643 | $ | 1,628 | 2.6 | % |
Total operating expenses |
| 1,619 |
|
| 1,568 |
| 1,586 |
|
| 1,555 |
| 1,586 | (2.0 | )% |
Income (loss) from operations before taxes |
| (32 | ) |
| 34 |
| 24 |
|
| 88 |
| 42 | 231.3 | % |
Federal income tax expense (benefit) |
| (16 | ) |
| 2 |
| (1 | ) |
| 11 |
| 1 | 106.3 | % |
Income (loss) from operations | $ | (16 | ) | $ | 32 | $ | 25 |
| $ | 77 | $ | 41 | NM | |
Income (loss) from operations, excluding impact of annual assumption review | $ | (16 | ) | $ | 32 | $ | 54 |
| $ | 77 | $ | 41 | NM | |
Average account balances, net of reinsurance | $ | 44,390 |
| $ | 45,147 | $ | 47,503 |
| $ | 49,150 | $ | 49,232 | 10.9 | % |
Total sales | $ | 97 |
| $ | 121 | $ | 298 |
| $ | 142 | $ | 129 | 33.0 | % |
-
Income from operations was $41 million, compared to a loss of $16 million in the prior-year quarter. The year-over-year improvement was driven by strong alternative investment income and the impact of the fourth quarter 2025 captive consolidation.
-
Total sales were $129 million, up 33% compared to the prior-year quarter, as sales of accumulation products continued to drive growth, most notably in Executive Benefits.
- Average account balances, net of reinsurance, were $49 billion, up 11% versus the prior-year quarter.
Group Protection
(in millions, except margin data) | As of or For the Three Months Ended | ||||||||||||||||
| 3/31/25 | 6/30/25 | 9/30/25 | 12/31/25 | 3/31/26 | Change | |||||||||||
Total operating revenues | $ | 1,521 |
| $ | 1,538 |
| $ | 1,507 |
| $ | 1,535 |
| $ | 1,554 |
| 2.2 | % |
Total operating expenses |
| 1,393 |
|
| 1,319 |
|
| 1,319 |
|
| 1,397 |
|
| 1,412 |
| 1.4 | % |
Income (loss) from operations before taxes |
| 128 |
|
| 219 |
|
| 188 |
|
| 138 |
|
| 142 |
| 10.9 | % |
Federal income tax expense (benefit) |
| 27 |
|
| 46 |
|
| 39 |
|
| 29 |
|
| 30 |
| 11.1 | % |
Income (loss) from operations | $ | 101 |
| $ | 173 |
| $ | 149 |
| $ | 109 |
| $ | 112 |
| 10.9 | % |
Income (loss) from operations, excluding impact of annual assumption review | $ | 101 |
| $ | 173 |
| $ | 110 |
| $ | 109 |
| $ | 112 |
| 10.9 | % |
Insurance premiums | $ | 1,371 |
| $ | 1,386 |
| $ | 1,352 |
| $ | 1,380 |
| $ | 1,399 |
| 2.0 | % |
Total sales | $ | 157 |
| $ | 187 |
| $ | 116 |
| $ | 391 |
| $ | 150 |
| (4.5 | )% |
Total loss ratio |
| 72.4 | % |
| 65.9 | % |
| 68.3 | % |
| 71.4 | % |
| 71.1 | % |
| |
Total loss ratio, excluding the impact of the annual assumption review |
| 72.4 | % |
| 65.9 | % |
| 72.2 | % |
| 71.4 | % |
| 71.1 | % |
| |
Operating margin(1) |
| 7.4 | % |
| 12.5 | % |
| 11.0 | % |
| 7.9 | % |
| 8.0 | % |
| |
Operating margin, excluding the impact of annual assumption review |
| 7.4 | % |
| 12.5 | % |
| 8.1 | % |
| 7.9 | % |
| 8.0 | % |
| |
(1) Operating margin is calculated by dividing income (loss) from operations by insurance premiums. | |||||||||||||||||
-
Income from operations was $112 million in the quarter, 11% higher than the prior-year quarter driven by favorable life experience.
-
Operating margin was 8.0%, 60 basis points higher than the prior-year quarter, and the total loss ratio decreased 130 basis points to 71.1%, driven by favorable life experience partially offset by unfavorable disability severity.
-
Insurance premiums were $1.4 billion in the quarter, increasing 2% year over year, driven by strong sales over the past twelve months. Adjusting for a large case lapse, premiums were up 3.4% compared to the first quarter of 2025.
- Sales decreased 4% year over year, demonstrating a disciplined approach to balanced growth in the segment.
Retirement Plan Services
(in millions, except ROA data) | As of or For the Three Months Ended | |||||||||||||||
| 3/31/25 | 6/30/25 | 9/30/25 | 12/31/25 | 3/31/26 | Change | ||||||||||
Total operating revenues | $ | 327 |
| $ | 331 |
| $ | 343 | $ | 352 |
| $ | 346 |
| 5.8 | % |
Total operating expenses |
| 289 |
|
| 289 |
|
| 290 |
| 298 |
|
| 295 |
| 2.1 | % |
Income (loss) from operations before taxes |
| 38 |
|
| 42 |
|
| 53 |
| 54 |
|
| 51 |
| 34.2 | % |
Federal income tax expense (benefit) |
| 4 |
|
| 5 |
|
| 7 |
| 8 |
|
| 8 |
| 100.0 | % |
Income (loss) from operations | $ | 34 |
| $ | 37 |
| $ | 46 | $ | 46 |
| $ | 43 |
| 26.5 | % |
|
|
|
|
|
|
| ||||||||||
Deposits | $ | 4,115 |
| $ | 3,594 |
| $ | 5,008 | $ | 3,939 |
| $ | 4,142 |
| 0.7 | % |
Net flows | $ | (2,184 | ) | $ | (585 | ) | $ | 755 | $ | (998 | ) | $ | (213 | ) | 90.2 | % |
Average account balances | $ | 113,075 |
| $ | 111,734 |
| $ | 119,259 | $ | 123,533 |
| $ | 124,766 |
| 10.3 | % |
Return on average account balances (bps) |
| 12 |
|
| 13 |
|
| 15 |
| 15 |
|
| 14 |
|
| |
-
Income from operations was $43 million in the quarter, up 26% compared to the prior year, primarily resulting from spread expansion and favorable equity markets, partially offset by outflows.
-
Net outflows were $0.2 billion, compared to $2.2 billion of net outflows in the prior-year quarter.
-
Total deposits were $4.1 billion, up 1% over the prior-year quarter. First-year sales of $1.1 billion were up 3% year over year.
- Average account balances were $125 billion, increasing 10% from the prior year, driven by favorable equity markets.
Other Operations
(in millions) | As of or For the Three Months Ended | ||||||||||||||||
| 3/31/25 | 6/30/25 | 9/30/25 | 12/31/25 | 3/31/26 | Change | |||||||||||
Total operating revenues | $ | 52 |
| $ | 41 |
| $ | 50 |
| $ | 56 |
| $ | 57 |
| 9.6 | % |
Total operating expenses |
| 164 |
|
| 157 |
|
| 177 |
|
| 181 |
|
| 199 |
| 21.3 | % |
Income (loss) from operations before taxes |
| (112 | ) |
| (116 | ) |
| (127 | ) |
| (125 | ) |
| (142 | ) | (26.8 | )% |
Federal income tax expense (benefit) |
| (17 | ) |
| (25 | ) |
| (28 | ) |
| (27 | ) |
| (31 | ) | (82.4 | )% |
Income (loss) from operations(1) | $ | (95 | ) | $ | (91 | ) | $ | (99 | ) | $ | (98 | ) | $ | (111 | ) | (16.8 | )% |
(1) Income (loss) from operations does not include preferred dividends. | |||||||||||||||||
Unrealized Gains and Losses
The company reported a net unrealized loss of $9.1 billion (pre-tax) on its available-for-sale securities as of March 31, 2026, compared to a net unrealized loss of $9.4 billion (pre-tax) as of March 31, 2025. The year-over-year decrease was primarily due to tighter spreads.
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 first quarter 2026 statistical supplement and first quarter 2026 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 first quarter results with the investment community in a call beginning at 8:00 a.m. Eastern Time on Thursday, May 7, 2026.
The 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 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 May 7, 2026, at www.lincolnfinancial.com/webcast.
About Lincoln Financial
Lincoln Financial helps people confidently plan for their vision of a successful financial future. As of December 31, 2025, approximately 17 million customers trust our guidance and solutions across four core businesses – annuities, life insurance, group protection, and retirement plan services. As of March 31, 2026, the company had $340 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.
Non-GAAP Measures
Management believes that the use of the non-GAAP financial measures adjusted income (loss) from operations, adjusted income (loss) from operations available to common stockholders (or adjusted operating income (loss)) and adjusted income (loss) from operations per diluted share available to common stockholders is helpful to investors in evaluating the company’s performance.
Management believes that excluding the following items from adjusted income (loss) from operations enhances understanding of the underlying trends and long-term performance of the company’s business. Management excludes “net annuity product features” as this adjustment primarily represents the difference between the valuation of reserves and the valuation of derivatives utilized for hedging our variable annuity and indexed annuity products, which can fluctuate significantly from period to period based on changes in equity markets and interest rates. This difference is due to the hedge focus on managing risks to statutory capital as opposed to the GAAP reserves. Management excludes “net life insurance product features” for similar reasons. In addition, management excludes “credit loss-related adjustments” and “investment gains (losses)” as the timing of changes in allowances or sales of credit-impaired investments depends largely on market credit cycles and can vary considerably from period to period and the timing of other sales of investments that would result in gains or losses is driven by market conditions, including interest rates, and other factors. Management excludes “changes in the fair value of reinsurance-related embedded derivatives, trading securities and certain mortgage loans” as this adjustment represents the economics of investments in underlying funds withheld portfolios supporting reinsurance agreements that have been transferred to third-party reinsurers, which is not indicative of our ongoing results.
Finally, management excludes from adjusted income (loss) from operations certain additional items (as set forth in the definition below) that are 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 believes excluding these items better explains the results of the company’s ongoing businesses in a manner that allows for enhanced understanding of underlying trends, company performance and business fundamentals.
Management also believes that the use of the non-GAAP financial measures book value per share, excluding accumulated other comprehensive income (“AOCI”), and adjusted book value per share enables investors to analyze the amount of our net worth that is attributable to our business operations. Book value per share, excluding AOCI is useful to investors because it eliminates the effect of items that 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 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, 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
Adjusted income (loss) from operations is GAAP net income (loss) excluding the following items, as applicable:
- Items related to annuity product features, which include changes in market risk benefits (“MRBs”), changes in the fair value of the related hedge instruments inclusive of income allocated to support the cost of hedging or future benefits, and changes in the fair value of the embedded derivative liabilities and the associated index options for our indexed annuity products (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 and certain other investments, the impact of certain derivatives, 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 est
Contacts
John Muething
Investor Relations
Investorrelations@LFG.com
Karyn Baldwin
Media Relations
Media@LFG.com
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