LINCOLN NATIONAL CORP

Details underlying the results for Other Operations (in millions) were as follows:

(1)Includes our disability income business, which has a corresponding offset in benefits and policyholder liability remeasurement for changes in reserves.

(2)Includes our institutional pension business, which has a corresponding offset in premiums and benefits and policyholder liability remeasurement for changes in reserves, and funding agreement activity beginning in 2025, which has a partial offset in interest credited. For information on funding agreements, see Note 10.

(3)Includes certain third-party advisory fees, which has a partial offset in other expenses.

Loss from operations for Other Operations increased due primarily to the following:

•Lower net investment income, net of interest credited, related to lower allocated investments driven by a decrease in excess capital retained by Other Operations.

•Higher other expenses associated with other costs pertaining to business operations.

The increase in loss from operations was partially offset by lower interest and debt expense driven by a decline in average outstanding debt and interest rates.

Loss from operations for Other Operations increased due primarily to higher other expenses associated with other costs pertaining to business operations.

The increase in loss from operations was partially offset by the following:

•Lower interest and debt expense driven by a decline in average outstanding debt and interest rates.

•Higher other revenues due to the effect of market fluctuations on assets held as part of certain compensation plans.

We utilize an internal formula to determine the amount of capital that is allocated to our business segments. Investment income on capital in excess of the calculated amounts is reported in Other Operations. If our business segments require increases in statutory reserves, surplus or investments, the amount of excess capital that is retained by Other Operations would decrease and net investment income would be negatively affected.

Write-downs for impairments decrease the recorded value of investments owned by the business segments. These write-downs are not included in the income from operations of our business segments. When impairment occurs, assets are transferred to the business segments’ portfolios and will reduce the future net investment income for Other Operations. Statutory reserve adjustments for our business segments can also cause allocations of investments between the business segments and Other Operations.

The majority of our interest credited relates to our reinsurance operations sold to Swiss Re Life & Health America, Inc. (“Swiss Re”) in 2001. A substantial amount of the business was sold through indemnity reinsurance transactions, which is still recorded in the consolidated financial statements. The interest credited corresponds to investment income earnings on the assets we continue to hold for this business. There is no effect to income or loss in Other Operations or on a consolidated basis for these amounts because interest earned on the blocks that continue to be reinsured is passed through to Swiss Re in the form of interest credited.

Benefits are recognized when incurred for institutional pension products and disability income business. Policyholder liability remeasurement gains (losses) result from updates in cash flow assumptions and actual variance from expected experience used in the net premium ratio or benefit ratio calculation for future policy benefits associated with institutional pension products.

Other Expenses

Details underlying other expenses (in millions) were as follows:

(1)Includes expenses that are corporate in nature and not allocated to our business segments.

(2)Consists primarily of reimbursements to Other Operations from the Life Insurance segment for the use of proceeds from certain issuances of senior notes that were used as long-term structured solutions, net of expenses incurred by Other Operations for its access to a financing facility and issuance of letters of credit (“LOCs”) and taxes, licenses and fees.

Interest and Debt Expense

Our current level of interest expense may not be indicative of the future due to, among other things, the timing of the use of cash and the future cost of capital. For additional information on our financing activities, see “Liquidity and Capital Resources – Holding Company Sources and Uses of Liquidity and Capital – Debt” below.