Lincoln National Corporation · NYSE:LNC
Lincoln National — Q1 2025 Earnings Presentation
22 slides from Lincoln National's earnings presentation, May 8, 2025
Slide 1: Earnings Supplement First Quarter 2025
Earnings Supplement First Quarter 2025 May 8, 2025
Slide 2: Forward-Looking Statements – Cautionary Language
Forward-Looking Statements – Cautionary Language Certain statements made in this press release 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 forwa
Slide 3: Executing on our strategic priorities
Executing on our strategic priorities Long-term value creation built upon a strong capital foundation, an optimized operating model, and a strategy for profitable growth Foundational capital Optimized operating model Profitable growth Build and maintain capital required to Advance a scalable framewo
Slide 4: 1Q25 Scorecard
1Q25 Scorecard Estimated Adjusted Leverage RBC Ratio1 Operating Income2 Ratio3 >420% +14% YoY -260bp YoY Significant buffer Double digit Continued reduction in above capital target earnings growth balance sheet leverage Average Account Balances Annuities Group Protection (Net of Reinsurance) Sales O
Slide 5: 1Q25 Key Messages
1Q25 Key Messages Earnings growth as strategy to expand profitability delivered strong results • Adjusted operating income1 increased 14% YoY. After- Per • Group Protection earnings were up 26% YoY, and margin was 7.4%, expanding 120 bps. tax share $ in millions • Annuities2 and Retirement Plan Serv
Slide 6: 1Q25 Earnings Drivers
1Q25 Earnings Drivers $ in millions Annuities Group Protection Operating Income1 Primary Drivers Operating Income Primary Drivers $101 $290 $290 • Market appreciation $80 • Favorable disability results • Spread expansion driven by • Continued growth in higher interest rates supplemental health • Tra
Slide 7: Annuities
Annuities Key Highlights Operating Income1 ($M) Sales ($B) • Operating income1 was essentially unchanged YoY, $300 $303 $297 $3.8 as market appreciation and spread expansion were $290 $290 $3.7 $3.8 $3.4 offset by the impact of traditional annuity outflows. $2.8 16% 34% 29% 11% 20% 19% 14% • Sales i
Slide 8: Group Protection
Group Protection Key Highlights Operating Income1 ($M) Sales ($M) • Operating income increased by 26% and margin $130 $467 by 120 bps YoY, primarily due to continued 9% favorable LTD results. $110 $107 $101 37% $80 • Premiums were 7% higher YoY driven by strong persistency and prior-year sales. $144
Slide 9: Retirement Plan Services
Retirement Plan Services Key Highlights Operating Income ($M) First-year Sales ($B) • Operating income decreased by 6% YoY, primarily $44 $1.7 $43 due to the impact of a plan termination. Excluding $40 11% $36 $34 $1.3 this impact, earnings were in line as continued $1.1 $1.1 20% stable value outflo
Slide 10: Life Insurance
Life Insurance Key Highlights Operating Income (Loss)1 ($M) Sales ($M) 19% • Operating loss1 improved by $18 million YoY as $14 8% 13% 14% $122 $119 15% $6 $105 improved mortality and lower net G&A expenses 13% 20% 9% 19% $91 15% 20% $97 $(1)14% $4 $8 $7 were partially offset by lower alternative 8%
Slide 11: Other Operations
Other Operations Key Highlights Operating Loss1 and Preferred Dividend ($M) Interest Expense ($M) • Operating loss1 was $95 million, essentially $86 $86 unchanged YoY. $83 ($84) $81 $80 ($93) ($97) ($95) ($95) • Interest expense decreased $3 million sequentially, reflecting lower outstanding debt an
Slide 12: Investment Portfolio
Investment Portfolio Key Highlights Investment Portfolio ($B) Rated Assets Portfolio Quality • Well-diversified portfolio with 97% investment 3% 3% 3% 3% 3% grade rated assets. $115 $119 $118 $119 $119 8% 10% 9% 9% 8% 35% 35% 35% 35% 35% 3% 3% 3% 3% 3% • Achieved a 6.0% new money yield; ~140bps abov
Slide 13: Appendix
Appendix 13
Slide 14: Investment Portfolio $119B
Investment Portfolio High quality and well-diversified portfolio1 Portfolio allocation by asset class Energy RMLs 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 15: Non-GAAP Financial Measures Appendix
Non-GAAP Financial Measures Appendix 15
Slide 16: Non-GAAP Financial Measures
Non-GAAP Financial Measures 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 18. Adjusted Income (Loss) From Operat
Slide 17: Non-GAAP Financial Measures, Cont’d
Non-GAAP Financial Measures, Cont’d Adjusted Stockholders’ Equity Adjusted stockholders’ equity is stockholders’ equity, excluding AOCI, preferred stock, MRB-related impacts, GLB and GDB hedge instruments gains (losses) and the difference between amounts recognized in net income (loss) on reinsuranc
Slide 18: Reconciliation of Net Income (Loss) to Adjusted Income from Operations
Reconciliation of Net Income (Loss) Available to Common Stockholders to Adjusted Income (Loss) from Operations Available to Common Stockholders Unaudited (millions of dollars, except per share data) For the Three Months Ended 3/31/24 6/30/24 9/30/24 12/31/24 3/31/25 Net Income Net income (loss) avai
Slide 19: Reconciliation of Net Income (Loss) to Adjusted Income (continued)
Reconciliation of Net Income (Loss) Available to Common Stockholders to Adjusted Income (Loss) from Operations Available to Common Stockholders (continued from previous slide) Unaudited (millions of dollars) (1) Includes primarily changes in the fair value of the embedded derivative related to the f
Slide 20: Reconciliation of Adjusted Income excluding Significant Items
Reconciliation of Adjusted Income (Loss) from Operations Available to Common Stockholders to Adjusted Income (Loss) from Operations Available to Common Stockholders, excluding Significant Items Unaudited (millions of dollars) For the Three Months Ended 3/31/24 6/30/24 9/30/24 12/31/24 3/31/25 Adjust
Slide 21: Leverage Ratio
Leverage Ratio Unaudited (millions of dollars) As of or For the Three Months Ended 3/31/24 6/30/24 9/30/24 12/31/24 3/31/25 Leverage Ratio Short-term debt $ 503 $ 450 $ 300 $ 300 $ — Long-term debt 5,726 5,716 5,897 5,856 5,868 Total debt 6,229 6,166 6,197 6,156 5,868 Preferred stock 986 986 986 986
Slide 22: Reconciliation of Stockholders’ Equity to Adjusted Stockholders’ Equity
Reconciliation of Stockholders’ Equity to Adjusted Stockholders’ Equity Unaudited (millions of dollars) As of or For the Three Months Ended 3/31/24 6/30/24 9/30/24 12/31/24 3/31/25 Stockholders’ Equity, End-of-Period Stockholders’ equity $ 7,546 $ 7,949 $ 9,013 $ 8,269 $ 8,193 Less: Preferred stock