Lincoln National Corporation · NYSE:LNC
Lincoln National — Q3 2024 Earnings Presentation
20 slides from Lincoln National's earnings presentation, Oct 31, 2024
Slide 1: Earnings Supplement Third Quarter 2024
Earnings Supplement Third Quarter 2024 October 31, 2024 Insurance products issued by: The Lincoln National Life Insurance Company Lincoln Life & Annuity Company of New York
Slide 2: Forward-Looking Statements – Cautionary Language
Forward-Looking Statements – Cautionary Language Certain statements made in this presentation 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 forwar
Slide 3: 3Q24 Key Messages
3Q24 Key Messages Highest earnings quarter in over two years; achieving targeted outcomes through strong execution After- Per • Sustained momentum in every business supported by strong underlying fundamentals and continued tax share progress toward strategic objectives. Adjusted Operating Income, •
Slide 4: 3Q24 Metrics
3Q24 Metrics Adjusted Income from Operations Key Highlights Average Account Balances ($B) Excluding Significant Items1 ($M) • Quarterly adjusted operating income increased to its $350 $316 highest level in over two years, driven by strong $324 $308 underlying performance in all businesses. $298 $301
Slide 5: Annuities
Annuities Key Highlights Operating Income1 ($M) Sales ($B) • Operating income of $300 million increased 15% $297 $300 $4.4 YOY, reflecting account balance growth, increased $290 $3.8 13% spread income, and expense discipline1. 8% 16% $3.4 $260 $265 $2.7 23% $2.8 11% 20% • Sales grew nearly 25% YOY w
Slide 6: Group Protection
Group Protection Key Highlights Operating Income1 ($M) Sales ($M) • Operating income of $110 million more than $130 doubled YOY, resulting in a 500 bp margin increase $110 $398 to 8.5%1. These results were driven by favorable 9% LTD experience and improving mortality in Life. $80 40% $52 $44 $144 $1
Slide 7: Retirement Plan Services
Retirement Plan Services Key Highlights Operating Income ($M) Sales ($B) • Operating income of $44 million increased 10% sequentially, reflecting higher account balances. $43 $44 $1.7 $38 $40 11% $36 $1.1 • First-year sales more than tripled YOY, driven in $0.9 18% $0.8 part by increased sales growt
Slide 8: Life Insurance
Life Insurance Key Highlights Operating Income1 ($M) Sales ($M) • Operating income of $14 million decreased YOY, $23 reflecting a lower run-rate post the Fortitude Re $14 $144 $144 transaction1. $43 $122 $6 17% $105 $11 29% $4 $8 $91 15% • Sales grew 16% sequentially as our ongoing $(17) 9% $(20) $(
Slide 9: Other Operations
Other Operations Key Highlights Operating Loss1,2 and Preferred Dividend ($M) Interest Expense ($M) • Operating loss was $(84) million, a 20% $86 $86 improvement year over year. 1 $84 $(84) $81 $81 $(105) $(100) $(93) $(97) • Non-Spark G&A expenses increased by $3 million YOY driven by project spend
Slide 10: Investment Portfolio
Investment Portfolio Key Highlights General Account ($B) Portfolio Quality • Well-diversified portfolio with 97% investment $138 3% 3% 3% 3% 3% 8% grade securities. 2% $113 $115 $119 $118 13% 7% 7% 8% 36% 36% 35% 35% 35% 10% 2% 3% 3% 3% • New money yield pick-up of 1.6% increased 70 12% 17% 17% 17%
Slide 11: Appendix
Appendix ———
Slide 12: Investment portfolio $118B
Investment portfolio High quality and well-diversified portfolio1 Portfolio allocation by asset class Energy Resi Industrial Other 2% Municipal 3% 2% 2% Communications 2% The portfolio is well-positioned Basic Industry 2% Transportation • Long-term investment strategy is tightly aligned with our lia
Slide 13: Commercial mortgage loan portfolio
Commercial mortgage loan portfolio Conservatively positioned CML portfolio1 Overall CML exposure Property types Portfolio LTV & DSC • Disciplined portfolio construction delivering consistent Other, • Loan-to-values remain strong. Mixed loan performance. Use, 1% 5% • Robust surveillance process (e.g.
Slide 14: Non-GAAP Financial Measures Appendix
Non-GAAP Financial Measures Appendix 14
Slide 15: Non-GAAP Financial Measures
Non-GAAP Financial Measures 15
Slide 16: Non-GAAP Financial Measures, Cont’d
Non-GAAP Financial Measures, Cont’d 16
Slide 17: Reconciliation of Net Income to Adjusted Income from Operations
Reconciliation of Net Income Available to Common Stockholders to Adjusted Income from Operations Available to Common Stockholders Unaudited (millions of dollars, except per share data) 17
Slide 18: Reconciliation of Adjusted Income from Operations, excluding Significant Items
Reconciliation of Adjusted Income from Operations Available to Common Stockholders to Adjusted Income from Operations Available to Common Stockholders, excluding Significant Items Unaudited (millions of dollars) 9/30/23 12/31/23 3/31/24 6/30/24 9/30/24 Adjusted income from operations available to co
Slide 19: Leverage Ratio
Leverage Ratio Unaudited (millions of dollars) 19
Slide 20: Reconciliation of Stockholders’ Equity to Adjusted Stockholders’ Equity
Reconciliation of Stockholders’ Equity to Adjusted Stockholders’ Equity Unaudited (millions of dollars) 20