LINCOLN NATIONAL CORP
For the period ended Jun 30, 2026. Filed Jul 30, 2026.
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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.
Jun 30, 2026 · Filed Jul 30, 2026
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Results of Consolidated Operations
Details underlying the consolidated results (in millions) were as follows:
| For the ThreeMonths Ended June 30, | For the Six Months Ended June 30, | |||
|---|---|---|---|---|
| 2026 | 2025 | 2026 | 2025 | |
| Net Income (Loss) | ||||
| Income (loss) from operations: | ||||
| Annuities | $287 | $287 | $562 | $577 |
| Life Insurance | 57 | 32 | 98 | 16 |
| Group Protection | 147 | 173 | 259 | 274 |
| Retirement Plan Services | 49 | 37 | 92 | 71 |
| Other Operations | (90) | (91) | (201) | (186) |
| Net annuity product features, pre-tax (1) | 1,497 | 405 | 802 | (687) |
| Net life insurance product features, pre-tax | (50) | (58) | (28) | (15) |
| Credit loss-related adjustments, pre-tax | (37) | (25) | (57) | (53) |
| Investment gains (losses), pre-tax | (197) | (81) | (239) | (183) |
| Changes in the fair value of reinsurance-related | ||||
| embedded derivatives, trading securities and | ||||
| certain mortgage loans, pre-tax (2) | (85) | 14 | 94 | (76) |
| Gains (losses) on other non-financial | ||||
| assets, pre-tax | – | – | (6) | – |
| Other items, pre-tax (3)(4)(5)(6)(7) | (12) | 75 | (123) | 40 |
| Income tax benefit (expense) related to the | ||||
| above pre-tax items | (234) | (69) | (93) | 199 |
| Net income (loss) | $1,332 | $699 | $1,160 | $(23) |
(1)For the three months ended June 30, 2026 and 2025, includes changes in MRBs of $1,450 million and $932 million, respectively; changes in the fair value of the related hedge instruments inclusive of income allocated to support the cost of hedging or future benefits of $(115) million and $(605) million, respectively; and changes in the fair value of the embedded derivative liabilities and the associated index options for our indexed annuity products of $162 million and $78 million, respectively. For the six months ended June 30, 2026 and 2025, includes changes in MRBs of $453 million and $(370) million, respectively; changes in the fair value of the related hedge instruments inclusive of income allocated to support the cost of hedging or future benefits of $62 million and $(337) million, respectively; and changes in the fair value of the embedded derivative liabilities and the associated index options for our indexed annuity products of $287 million and $20 million, respectively.
(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 certain legal accruals of $(122) million for the six months ended June 30, 2026.
(4)Includes severance expense related to initiatives to realign the workforce of $(11) million and $(2) million for the three months ended June 30, 2026 and 2025, respectively, and $(18) million and $(8) million for the six months ended June 30, 2026 and 2025, respectively.
(5)Includes transaction, integration and other costs related to mergers, acquisitions, divestitures and certain other corporate initiatives of $(18) million primarily related to the Bain Capital transaction for the three months ended June 30, 2025, and $(20) million related to the sale of our wealth management business and $(18) million primarily related to the Bain Capital transaction for the six months ended June 30, 2025.
(6)Includes deferred compensation mark-to-market adjustment of $(1) million and $1 million for the three months ended June 30, 2026 and 2025, respectively, and $17 million and $(8) million for the six months ended June 30, 2026 and 2025, respectively.
(7)Includes gain on early extinguishment of debt of $94 million for the three and six months ended June 30, 2025.
Net income increased due primarily to the following:
Higher gain in net annuity product features driven by the impact of capital markets.
Improvement in our Life Insurance segment’s income from operations.
The increase in net income was partially offset by the following:
Higher investment losses driven by higher losses on certain investments associated with the fourth quarter 2023 reinsurance transaction.
Unfavorable changes in the fair value of reinsurance-related embedded derivatives, trading securities and certain mortgage loans in 2026 compared to favorable changes in 2025 driven by the fair value of the embedded derivative related to the fourth quarter 2023 reinsurance transaction.
The impact of other items driven by a gain on extinguishment of debt in the second quarter of 2025.
Net income increased due primarily to the following:
Gain in net annuity product features in 2026 compared to loss in 2025 driven by the impact of capital markets.
Favorable changes in the fair value of reinsurance-related embedded derivatives, trading securities and certain mortgage loans in 2026 compared to unfavorable changes in 2025 driven by the fair value of the embedded derivative related to the fourth quarter 2023 reinsurance transaction.
Improvement in our Life Insurance segment’s income from operations.
The increase in net income was partially offset by the following:
The impact of other items driven by certain legal accruals in 2026 and a gain on extinguishment of debt in 2025.
Higher investment losses driven by higher losses on certain investments associated with the fourth quarter 2023 reinsurance transaction.
For information on the fourth quarter 2023 reinsurance transaction, see Note 7.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.