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Shares and Stockholders’ Equity | 6 Months Ended
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Jun. 30, 2024
Stockholders' Equity Note [Abstract] |
Shares and Stockholders' Equity | Shares and Stockholders’ Equity Preferred Shares Preferred stock authorized, issued and outstanding (number of shares) was as follows:
| As of June 30, 2024 |  | As of December 31, 2023
| Shares Authorized |  | Shares Issued |  | Shares Outstanding |  | Shares Authorized |  | Shares Issued |  | Shares Outstanding
9.250% Fixed Rate Reset Non-Cumulative |  |  |  |  |  |  |  |  |  |  |
Preferred Stock, Series C | 20,000 |  |  | 20,000 |  |  | 20,000 |  |  | 20,000 |  |  | 20,000 |  |  | 20,000 |
9.000% Non-Cumulative Preferred Stock, Series D | 20,000 |  |  | 20,000 |  |  | 20,000 |  |  | 20,000 |  |  | 20,000 |  |  | 20,000 |
Not designated | 9,960,000 |  |  | – |  |  | – |  |  | 9,960,000 |  |  | – |  |  | – |
Total preferred shares | 10,000,000 |  |  | 40,000 |  |  | 40,000 |  |  | 10,000,000 |  |  | 40,000 |  |  | 40,000 |
The per share and aggregate dividends declared for preferred stock by series (in millions except per share data) was as follows:
| For the Three Months Ended June 30,
| 2024 |  | 2023
| Dividend |  | Aggregate |  | Dividend |  | Aggregate
Series | Per Share |  | Dividend |  | Per Share |  | Dividend
Series C | $ | – |  |  | $ | – |  |  | $ | – |  |  | $ | – |
Series D | 562.50 |  |  | 11 |  |  | 562.50 |  |  | 11 |
Total | $ | 562.50 |  |  | $ | 11 |  |  | $ | 562.50 |  |  | $ | 11 |
|  | For the Six Months Ended June 30,
|  | 2024 |  |  | 2023
|  | Dividend |  |  | Aggregate |  |  | Dividend |  |  | Aggregate
Series |  | Per Share |  |  | Dividend |  |  | Per Share |  |  | Dividend
Series C |  | $ | 1,156.25 |  |  |  | $ | 23 |  |  |  | $ | 635.94 |  |  |  | $ | 13 |
Series D |  | 1,125.00 |  |  |  | 23 |  |  |  | 1,181.25 |  |  |  | 23 |
Total |  | $ | 2,281.25 |  |  |  | $ | 46 |  |  |  | $ | 1,817.19 |  |  |  | $ | 36 |
Common Shares The changes in our common stock (number of shares) were as follows:
| For the Three Months Ended June 30, |  | For the Six Months Ended June 30,
| 2024 |  | 2023 |  | 2024 |  |  | 2023
Common Stock |  |  |  |  |  |  |  |
Balance as of beginning-of-period | 170,016,887 |  |  | 169,537,759 |  |  | 169,666,137 |  |  |  | 169,220,511 |
Stock compensation/issued for benefit plans | 171,600 |  |  | 93,121 |  |  | 522,350 |  |  |  | 410,369 |
Balance as of end-of-period | 170,188,487 |  |  | 169,630,880 |  |  | 170,188,487 |  |  |  | 169,630,880 |
Our common stock is without par value. Earnings Per Share The calculation of earnings per share (“EPS”) was as follows (in millions except per share data):
| For the Three Months Ended June 30, |  |  |  | For the Six Months Ended June 30,
| 2024 |  | 2023 |  |  |  | 2024 |  |  | 2023
Net income (loss) available to common stockholders – basic | $ | 884 |  |  | $ | 500 |  |  |  |  | $ | 2,070 |  |  |  | $ | (406) |
Net income (loss) available to common stockholders – diluted | $ | 884 |  |  | $ | 502 |  |  |  |  | $ | 2,073 |  |  |  | $ | (408) |
Weighted-average shares, as used in basic calculation | 170,620,161 |  | 169,581,636 |  |  |  | 170,335,077 |  |  | 169,470,359
Incremental common shares from assumed exercise or |  |  |  |  |  |  |  |  |  |
issuance of stock-based incentive compensation awards | 1,553,402 |  | 326,870 |  |  |  | 1,324,837 |  |  | 450,109
Average deferred compensation shares | 719,003 |  | 589,001 |  |  |  | 703,742 |  |  | 571,484
Weighted-average shares, as used in diluted calculation (1) | 172,892,566 |  | 170,497,507 |  |  |  | 172,363,656 |  |  | 170,491,952
Net income (loss) per share: |  |  |  |  |  |  |  |  |  |
Basic | $ | 5.18 |  |  | $ | 2.95 |  |  |  |  | $ | 12.16 |  |  |  | $ | (2.40) |
Diluted | 5.11 |  |  | 2.94 |  |  |  |  | 12.03 |  |  |  | (2.41) |
(1) Due to reporting a net loss for the six months ended June 30, 2023, basi c shares were used in the diluted EPS calculation for this period as the use of diluted shares would have resulted in a lower loss per share. In the event the average market price of LNC common stock exceeds the issue price of stock options and the options have a dilutive effect to our EPS, such options will be shown in the table above. We have participants in our deferred compensation plans who selected LNC stock as the measure for the investment return attributable to all or a portion of their deferral amounts. This obligation is settled in either cash or LNC stock pursuant to the applicable plan document. We exclude deferred units of LNC stock that are antidilutive from our diluted EPS calculation. The mark-to-market adjustment of these deferred units excluded from our diluted EPS calculation was less than $1 million and $(2) million for the three months ended June 30, 2024 and 2023, respectively, and $(3) million and $2 million for the six months ended June 30, 2024 and 2023, respectively. AOCI The following summarizes the components and changes in AOCI (in millions):
| For the Six Months Ended June 30,
| 2024 |  | 2023
Unrealized Gain (Loss) on Fixed Maturity AFS Securities and Certain |  |  |
Other Investments |  |  |
Balance as of beginning-of-year | $ | (5,188) |  |  | $ | (8,916) |
Unrealized holding gains (losses) arising during the period | (1,971) |  |  | 803 |
Change in foreign currency exchange rate adjustment | (117) |  |  | 120 |
Change in future contract benefits and policyholder account balances, |  |  |
net of reinsurance | 1,146 |  |  | (82) |
Income tax benefit (expense) | 194 |  |  | (199) |
Less: |  |  |
Reclassification adjustment for gains (losses) included in net income (loss) | (137) |  |  | (707) |
Income tax benefit (expense) | 29 |  |  | 148 |
Balance as of end-of-period | $ | (5,828) |  |  | $ | (7,715) |
Unrealized Gain (Loss) on Derivative Instruments |  |  |
Balance as of beginning-of-year | $ | 375 |  |  | $ | 388 |
Unrealized holding gains (losses) arising during the period | 178 |  |  | 230 |
Change in foreign currency exchange rate adjustment | 117 |  |  | (110) |
Income tax benefit (expense) | (62) |  |  | (26) |
Less: |  |  |
Reclassification adjustment for gains (losses) included in net income (loss) | 42 |  |  | 43 |
Income tax benefit (expense) | (9) |  |  | (9) |
Balance as of end-of-period | $ | 575 |  |  | $ | 448 |
Market Risk Benefit Non-Performance Risk Gain (Loss) |  |  |
Balance as of beginning-of-year | $ | 1,070 |  |  | $ | 1,741 |
Adjustment arising during the period | (841) |  |  | 129 |
Income tax benefit (expense) | 180 |  |  | (28) |
Balance as of end-of-period | $ | 409 |  |  | $ | 1,842 |
Policyholder Liability Discount Rate Remeasurement Gain (Loss) |  |  |
Balance as of beginning-of-year | $ | 587 |  |  | $ | 747 |
Adjustment arising during the period | 264 |  |  | (116) |
Income tax benefit (expense) | (56) |  |  | 26 |
Balance as of end-of-period | $ | 795 |  |  | $ | 657 |
Foreign Currency Translation Adjustment |  |  |
Balance as of beginning-of-year | $ | (26) |  |  | $ | (34) |
Foreign currency translation adjustment arising during the period | (1) |  |  | 8 |
Balance as of end-of-period | $ | (27) |  |  | $ | (26) |
Funded Status of Employee Benefit Plans |  |  |
Balance as of beginning-of-year | $ | (294) |  |  | $ | (278) |
Adjustment arising during the period | 1 |  |  | (32) |
Balance as of end-of-period | $ | (293) |  |  | $ | (310) |
The following summarizes the reclassifications out of AOCI (in millions) and the associated line item on the Consolidated Statements of Comprehensive Income (Loss):
| For the Six Months Ended June 30, |
| 2024 |  | 2023 |
Unrealized Gain (Loss) on Fixed Maturity AFS |  |  |  |
Securities and Certain Other Investments |  |  |  |
Reclassification | $ | (159) |  |  | $ | (707) |  | Realized gain (loss)
Associated change in future contract benefits | 22 |  |  | – |  | Benefits
Reclassification before income tax benefit (expense) | (137) |  |  | (707) |  | Income (loss) before taxes
Income tax benefit (expense) | 29 |  |  | 148 |  | Federal income tax expense (benefit)
Reclassification, net of income tax | $ | (108) |  |  | $ | (559) |  | Net income (loss)
Unrealized Gain (Loss) on Derivative Instruments |  |  |  |
Interest rate contracts | (1) |  |  | – |  | Net investment income
Interest rate contracts | 15 |  |  | 13 |  | Interest and debt expense
Foreign currency contracts | 29 |  |  | 27 |  | Net investment income
Foreign currency contracts | (1) |  |  | 3 |  | Realized gain (loss)
Reclassifications before income tax benefit (expense) | 42 |  |  | 43 |  | Income (loss) before taxes
Income tax benefit (expense) | (9) |  |  | (9) |  | Federal income tax expense (benefit)
Reclassifications, net of income tax | $ | 33 |  |  | $ | 34 |  | Net income (loss)

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