Lincoln National Corporation · NYSE:LNC
Lincoln National — Q2 2024 Earnings Presentation
19 slides from Lincoln National's earnings presentation, Aug 1, 2024
Slide 1: Second Quarter 2024 Earnings Supplement
1©2024 Lincoln National Corporation August 1, 2024 Second Quarter 2024 Earnings Supplement
Slide 2: Forward-looking statements
2©2024 Lincoln National Corporation 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 forward-looking sta
Slide 3: 2Q 2024 Key Messages
3©2024 Lincoln National Corporation Additional progress in executing on our strategic priorities • Accomplished our goal of growing capital to an estimated RBC ratio above 420% • Established Bermuda-based reinsurance subsidiary to help drive longer term FCF • Operating model optimization continues w
Slide 4: 2Q 2024 Metrics, Key Priorities and Highlights
4©2024 Lincoln National Corporation $343 $39 $246 $71 $319 $14 ($164)($192) $343 $231 $232 $235 $319 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 Significant Items Adjusted Income from Operations 2Q 2024 Metrics Key Priorities Key Highlights 1 Represents Adjusted Operating Income Available to Common Stockholders,
Slide 5: Annuities
5©2024 Lincoln National Corporation 24% 28% 56% 34% 44% 44% 39% 23% 33% 29% 13% 13% 8% 14% 11% 19% 20% 13% 19% 16% 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 Fixed RILA VA w/o GLB VA w/ GLB 10% 10% 7% 6% 6% 16% 17% 18% 19% 20% 29% 29% 30% 30% 30% 45% 44% 45% 45% 44% 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 Fixed RILA VA w/
Slide 6: Group Protection
6©2024 Lincoln National Corporation 38% 45% 51% 35% 46% 36% 31% 40% 33% 34% 26% 24% 9% 32% 20% 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 Disability Life Supp Health / Dental $96 $71 $398 $144 $161 72% 81% 67% 76% 76% 71% 76% 83% 74% 70% 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 Life Disability Group Protection Sales ($M)Op
Slide 7: Retirement Plan Services
7©2024 Lincoln National Corporation 25% 26% 24% 22% 22% 75% 74% 76% 78% 78% $97 $94 $101 $107 $108 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 Retirement Plan Services $47 $43 $38 $36 $40 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 Sales ($B)Operating Income ($M) Ending Account Balances ($B) Net G&A Expenses ($M) $81 $81 $84 $
Slide 8: Life Insurance
8©2024 Lincoln National Corporation $136 $138 $143 $130 $125 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 Life Insurance $33 $43 $11 $(29) $4 $(20) $(17) $(5) $(39) 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 Below-Target Alternative Investments Impact $23 $(6) $(34) Sales ($M)Operating Income (Loss)1 ($M) Net G&A Expenses ($M)
Slide 9: Other Operations
9©2024 Lincoln National Corporation $26 $31 $26 $29 $39 $8 $(1) $7 $13 $1 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 Other Deferred Compensation Other Operations $(106) $(105) $(105) $(103) $(102) $(11) $(34) $(11) $(34) $(11) 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 Operating Loss Preferred Dividend Operating Loss1 and Pr
Slide 10: Investment Portfolio
10©2024 Lincoln National Corporation 4.9% 5.3% 5.4% 5.0% 5.3% 0.9% 0.9% 1.0% 1.1% 1.6% 5.8% 6.2% 6.4% 6.1% 6.9% 4.29% 4.33% 4.37% 4.39% 4.50% 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 Yield Pick-up Average Market Yield New Money Yield Fixed Income Portfolio Yield $80 $52 $58 $78 $36 2.5% 1.6% 1.7% 2.3% 1.0% 2Q'
Slide 11: Appendix
11©2024 Lincoln National Corporation Appendix
Slide 12: High quality and well-diversified portfolio
12©2024 Lincoln National Corporation Industrial Other 2% Energy 2% Municipal 2% Communications 2% Basic Industry 2% Transportation 3% Alts 3% Technology 3% Consumer Cyclical 5% Capital Goods 5% Other4 8% Utilities 10% Consumer Non-Cyclical 11% Financials 7% Banking 4% Structured 14% CMLs 15% Resi 2%
Slide 13: Commercial mortgage loan portfolio
13©2024 Lincoln National Corporation Commercial mortgage loan portfolio Conservatively positioned CML portfolio1 Overall CML exposure: • Disciplined portfolio construction delivering consistent loan performance • Robust surveillance process (e.g. loan level financial review, rent roll analysis, stre
Slide 14: Non-GAAP Financial Measures Appendix
14©2024 Lincoln National Corporation Non-GAAP Financial Measures Appendix
Slide 15: Non-GAAP financial measures
15©2024 Lincoln National Corporation Non-GAAP financial measures Reconciliations of the following non-GAAP financial measures to the most directly comparable GAAP financial measures or calculations of such measures, as applicable, are presented herein beginning on slide 16. Adjusted income (loss) fr
Slide 16: Net Income to Adjusted Income from Operations reconciliation
16©2024 Lincoln National Corporation Reconciliation of Net Income Available to Common Stockholders to Adjusted Income from Operations Available to Common Stockholders Unaudited (millions of dollars) 6/30/23 9/30/23 12/31/23 3/31/24 6/30/24 Net Income Net income (loss) available to common stockholder
Slide 17: Adjusted Income excluding Significant Items reconciliation
17©2024 Lincoln National Corporation 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) 6/30/23 9/30/23 12/31/23 3/31/24 6/30/24 Adjusted i
Slide 18: Leverage Ratio
18©2024 Lincoln National Corporation Leverage Ratio Unaudited (millions of dollars) 6/30/23 9/30/23 12/31/23 3/31/24 6/30/24 Leverage Ratio Short-term debt (1) $ 500 $ — $ 250 $ 503 $ 450 Long-term debt 5,954 5,905 5,699 5,726 5,716 Total debt (2) 6,454 5,905 5,949 6,229 6,166 Preferred stock 986 98
Slide 19: Reconciliation of Stockholders' Equity to Adjusted Stockholders' Equity
19©2024 Lincoln National Corporation Reconciliation of Stockholders’ Equity to Adjusted Stockholders’ Equity Unaudited (millions of dollars) 6/30/23 9/30/23 12/31/23 3/31/24 6/30/24 Stockholders’ Equity, End-of-Period Stockholders' equity $ 5,819 $ 3,199 $ 6,893 $ 7,546 $ 7,949 Less: Preferred stock