LINCOLN NATIONAL CORP
For the period ended Mar 31, 2025. Filed May 8, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 8, 2025
Extracted filing text, with the paragraph anchors used by the comparison.
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Results of Consolidated Operations
Details underlying the consolidated results (in millions) were as follows:
| For the Three Months Ended March 31, | |||
|---|---|---|---|
| 2025 | 2024 (1) | ||
| Net Income (Loss) | |||
| Income (loss) from operations: | |||
| Annuities | $290 | $259 | |
| Life Insurance | (16) | (35) | |
| Group Protection | 101 | 80 | |
| Retirement Plan Services | 34 | 36 | |
| Other Operations | (95) | (96) | |
| Net annuity product features, pre-tax | (1,092) | 1,450 | |
| Net life insurance product features, pre-tax | 42 | (130) | |
| Credit loss-related adjustments, pre-tax | (28) | (1) | |
| Investment gains (losses), pre-tax | (103) | (81) | |
| Changes in the fair value of reinsurance-related | |||
| embedded derivatives, trading securities and | |||
| certain mortgage loans, pre-tax (2) | (90) | 194 | |
| Other items, pre-tax (3) (4) (5) (6) | (35) | (186) | |
| Income tax benefit (expense) related to the | |||
| above pre-tax items | 270 | (268) | |
| Net income (loss) | $(722) | $1,222 | |
(2)Includes primarily changes in the fair value of the embedded derivative related to the fourth quarter 2023 reinsurance transaction. The coinsurance with funds withheld investment portfolio includes fixed maturity securities classified as AFS with changes in fair value recorded in OCI. Since the corresponding and offsetting changes in fair value of the embedded derivative related to the coinsurance with funds withheld investment portfolio are recorded in realized gain (loss), volatility can occur within net income (loss). See Note 7 for more information.
(3)Includes $(114) million primarily related to the settlement of cost of insurance litigation for the three months ended March 31, 2024.
(4)Includes severance expense related to initiatives to realign the workforce of $(6) million and $(49) million for the three months ended March 31, 2025 and 2024, respectively.
(5)Includes transaction and integration costs related to mergers, acquisitions and divestitures of $(20) million and $(10) million for the three months ended March 31, 2025 and 2024, respectively.
(6)Includes deferred compensation mark-to-market adjustment of $(9) million and $(13) million for the three months ended March 31, 2025 and 2024, respectively.
Net income decreased due primarily to the following:
Loss in net annuity product features in 2025 compared to gain in 2024 driven by loss in MRB-related impacts in 2025 compared to gain in 2024 due to unfavorable changes from equity markets and interest rates, partially offset by improvement in the fair value of GLB hedge instruments attributable to the impact of capital markets.
Unfavorable changes in the fair value of reinsurance-related embedded derivatives, trading securities and certain mortgage loans in 2025 compared to favorable changes in 2024 driven by the fair value of the embedded derivative related to the fourth quarter 2023 reinsurance transaction.
Higher credit loss-related adjustments on fixed maturity AFS securities.
The decrease in net income was partially offset by the following:
Gain in net life insurance product features in 2025 compared to loss in 2024 driven by improvement in the fair value of hedges associated with VUL products attributable to the impact of capital markets.
Lower expenses in other items.
Growth in average account balances and improvement in our total loss ratio in our Group Protection segment.
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