SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

12 Months Ended

Dec. 31, 2020

‎

LINCOLN NATIONAL CORPORATION

SCHEDULE II – CONDENSED FINANCIAL INFORMATION OF REGISTRANT

BALANCE SHEETS

(Parent Company Only) (in millions, except share data)



	As of December 31,
	2020		2019
ASSETS
Investments in subsidiaries ⁽¹⁾	$	27,677	$	24,029
Other investments		933		382
Cash and invested cash		114		577
Loans and accrued interest to subsidiaries ⁽¹⁾		2,960		2,446
Other assets		83		28
Total assets	$	31,767	$	27,462

LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Common stock dividends payable	$	81	$	79
Derivative investments liability		552		110
Short-term debt		-		300
Long-term debt		6,682		6,067
Loans from subsidiaries ⁽¹⁾		1,424		844
Payables for collateral on investments		7		6
Other liabilities		322		367
Total liabilities		9,068		7,773

Contingencies and Commitments

Stockholders’ Equity
Preferred stock – 10,000,000 shares authorized		-		-
Common stock – 800,000,000 shares authorized		5,082		5,162
Retained earnings		8,686		8,854
Accumulated other comprehensive income (loss)		8,931		5,673
Total stockholders’ equity		22,699		19,689
Total liabilities and stockholders’ equity	$	31,767	$	27,462

⁽¹⁾Eliminated in consolidation.

‎

LINCOLN NATIONAL CORPORATION

SCHEDULE II – CONDENSED FINANCIAL INFORMATION OF REGISTRANT (Continued)

STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Parent Company Only) (in millions)



	For the Years Ended December 31,
	2020			2019			2018
Revenues
Dividends from subsidiaries ⁽¹⁾	$	840		$	830		$	1,025
Interest from subsidiaries ⁽¹⁾		127			158			148
Net investment income		4			11			7
Realized gain (loss)		-			2			3
Total revenues		971			1,001			1,183
Expenses
Operating and administrative expenses		50			51			18
Interest – subsidiaries ⁽¹⁾		20			48			34
Interest – other		275			311			288
Total expenses		345			410			340
Income (loss) before federal income taxes, equity in income (loss) of subsidiaries		626			591			843
Federal income tax expense (benefit)		(45	)		(52	)		(42	)
Income (loss) before equity in income (loss) of subsidiaries		671			643			885
Equity in income (loss) of subsidiaries		(172	)		243			756
Net income (loss)		499			886			1,641
Other comprehensive income (loss), net of tax:
Unrealized investment gains (losses)		3,192			5,288			(3,449	)
Foreign currency translation adjustment		5			6			(9	)
Funded status of employee benefit plans		61			(28	)		(7	)
Total other comprehensive income (loss), net of tax		3,258			5,266			(3,465	)
Comprehensive income (loss)	$	3,757		$	6,152		$	(1,824	)

⁽¹⁾Eliminated in consolidation.

‎

LINCOLN NATIONAL CORPORATION

SCHEDULE II – CONDENSED FINANCIAL INFORMATION OF REGISTRANT (Continued)

STATEMENTS OF CASH FLOWS

(Parent Company Only) (in millions)




	For the Years Ended December 31,
	2020			2019			2018
Cash Flows from Operating Activities
Net income (loss)	$	499		$	886		$	1,641
Adjustments to reconcile net income (loss) to net cash provided by (used in)
operating activities:
Equity in (income) loss of subsidiaries greater than distributions ⁽¹⁾		172			(243	)		(756	)
Realized (gain) loss		-			(2	)		(3	)
Change in federal income tax accruals		24			24			15
Other		31			106			(27	)
Net cash provided by (used in) operating activities		726			771			870

Cash Flows from Investing Activities
Capital contribution to subsidiaries ⁽¹⁾		(518	)		(50	)		(502	)
Net change in collateral on investments, derivatives and related settlements		(303	)		(279	)		89
Net cash provided by (used in) investing activities		(821	)		(329	)		(413	)

Cash Flows from Financing Activities
Payment of long-term debt, including current maturities		(1,096	)		(308	)		(537	)
Issuance of long-term debt, net of issuance costs		1,289			744			1,094
Payment related to early extinguishment of debt		(13	)		(42	)		(23	)
Increase (decrease) in loans from subsidiaries, net ⁽¹⁾		565			264			52
Increase (decrease) in loans to subsidiaries, net ⁽¹⁾		(514	)		(70	)		(48	)
Common stock issued for benefit plans		(7	)		(20	)		(6	)
Repurchase of common stock		(275	)		(550	)		(900	)
Dividends paid to common stockholders		(311	)		(303	)		(289	)
Other		(6	)		-			-
Net cash provided by (used in) financing activities		(368	)		(285	)		(657	)
Net increase (decrease) in cash, invested cash and restricted cash		(463	)		157			(200	)
Cash, invested cash and restricted cash as of beginning-of-year		577			420			620
Cash, invested cash and restricted cash as of end-of-year	$	114		$	577		$	420

⁽¹⁾ Eliminated in consolidation.