Investor presentation - lfg presentation.pdfInvestor presentation February 12, 2020 ©2020 Lincoln National Corporation 2 Areas of focus •Lincoln story ‒Simple, straightforward

1©2020 Lincoln National Corporation©2020 Lincoln National Corporation

This document may not be accurate after its date, and LNC does not undertake to update or keep it accurate after such date.

Chris Giovanni

SVP, Corporate [email protected]

Investor presentationMay 19, 2020

2©2020 Lincoln National Corporation

Forward looking statements – cautionary languageCertain 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 statement is a statement that is not a historical fact and, without limitation, includes any statement that may predict, forecast, indicate or imply future results, performance or achievements. Forward-looking statements may contain words like: "anticipate," "believe," "estimate," "expect," "project," "shall," "will," and other words or phrases with similar meaning in connection with a discussion of future operating or financial performance. In particular, these include statements relating to future actions, trends in Lincoln's businesses, prospective services or products, future performance or financial results, and the outcome of contingencies, such as legal proceedings. Lincoln claims the protection afforded by the safe harbor for forward-looking statements provided by the PSLRA.

Forward-looking statements are subject to risks and uncertainties. Actual results could differ materially from those expressed in or implied by such forward-looking statements due to a variety of factors, including:

• The continuation of the COVID-19 pandemic, or future outbreaks of COVID-19, and uncertainty surrounding the length and severity of future impacts on the global economy, our business and results of operations and financial condition;

• Continued deterioration in general economic and business conditions that may affect account values, investment results, guaranteed benefit liabilities, premium levels and claims experience;• Adverse global capital and credit market conditions could affect our ability to raise capital, if necessary, and may cause us to realize impairments on investments and certain intangible assets,

including goodwill and the valuation allowance against deferred tax assets, which may reduce future earnings and/or affect our financial condition and ability to raise additional capital or refinance existing debt as it matures;

• Because of our holding company structure, the inability of our subsidiaries to pay dividends to the holding company in sufficient amounts could harm the holding company’s ability to meet its obligations;

• Legislative, regulatory or tax changes, both domestic and foreign, that affect: the cost of, or demand for, our subsidiaries' products; the required amount of reserves and/or surplus; our ability to conduct business and our captive reinsurance arrangements as well as restrictions on the payment of revenue sharing and 12b-1 distribution fees; the impact of U.S. Federal tax reform legislation on our business, earnings and capital; and the impact of any “best interest” standards of care adopted by the Securities and Exchange Commission (“SEC”) or other regulations adopted by federal or state regulators or self-regulatory organizations relating to the standard of care owed by investment advisers and/or broker dealers;

• Actions taken by reinsurers to raise rates on in-force business;• Continued declines in or sustained low interest rates causing a reduction in investment income, the interest margins of our businesses, estimated gross profits and demand for our products;• Rapidly increasing interest rates causing contract holders to surrender life insurance and annuity policies, thereby causing realized investment losses, and reduced hedge performance related to

variable annuities; • Uncertainty about the effect of continuing promulgation and implementation of rules and regulations under the Dodd-Frank Wall Street Reform and Consumer Protection Act on us, the economy

and the financial services sector in particular; • The initiation of legal or regulatory proceedings against us, and the outcome of any legal or regulatory proceedings, such as: adverse actions related to present or past business practices common in

businesses in which we compete; adverse decisions in significant actions including, but not limited to, actions brought by federal and state authorities and class action cases; new decisions that result in changes in law; and unexpected trial court rulings;

• A continued decline in the equity markets causing a reduction in the sales of our subsidiaries' products; a reduction of asset-based fees that our subsidiaries charge on various investment and insurance products; an acceleration of the net amortization of deferred acquisition costs ("DAC"), value of business acquired ("VOBA"), deferred sales inducements ("DSI") and deferred front-end loads ("DFEL"); and an increase in liabilities related to guaranteed benefit features of our subsidiaries' variable annuity products;

• Ineffectiveness of our risk management policies and procedures, including various hedging strategies used to offset the effect of changes in the value of liabilities due to changes in the level and volatility of the equity markets and interest rates;


Forward looking statements – cautionary language (contd.)

• A deviation in actual experience regarding future persistency, mortality, morbidity, interest rates or equity market returns from the assumptions used in pricing our subsidiaries' products, in establishing related insurance reserves and in the net amortization of DAC, VOBA, DSI and DFEL, which may reduce future earnings;

• Changes in accounting principles that may affect our financial statements;• Lowering of one or more of our debt ratings issued by nationally recognized statistical rating organizations and the adverse effect such action may have on our ability to raise capital and on our

liquidity and financial condition; • Lowering of one or more of the insurer financial strength ratings of our insurance subsidiaries and the adverse effect such action may have on the premium writings, policy retention, profitability of

our insurance subsidiaries and liquidity; • Significant credit, accounting, fraud, corporate governance or other issues that may adversely affect the value of certain financial assets, as well as counterparties to which we are exposed to credit

risk requiring that we realize losses on financial assets; • Inability to protect our intellectual property rights or claims of infringement of the intellectual property rights of others;• Interruption in telecommunication, information technology or other operational systems, or failure to safeguard the confidentiality or privacy of sensitive data on such systems from cyberattacks or

other breaches of our data security systems;• The effect of acquisitions and divestitures, restructurings, product withdrawals and other unusual items, including the successful implementation of integration strategies or the achievement of

anticipated synergies and operational efficiencies related to an acquisition; • The adequacy and collectability of reinsurance that we have purchased;• The continuation of the COVID-19 pandemic, or future outbreaks of COVID-19 or other pandemics, acts of terrorism, war or other man-made and natural catastrophes that may adversely affect our

businesses and the cost and availability of reinsurance; • Competitive conditions, including pricing pressures, new product offerings and the emergence of new competitors, that may affect the level of premiums and fees that our subsidiaries can charge

for their products; • The unknown effect on our subsidiaries' businesses resulting from evolving market preferences and the changing demographics of our client base; and• The unanticipated loss of key management, financial planners or wholesalers.

The risks and uncertainties included here are not exhaustive. Our most recent Form 10-K, as well as other reports that we file with the SEC, include additional factors that could affect our businesses and financial performance. Moreover, we operate in a rapidly changing and competitive environment. New risk factors emerge from time to time, and it is not possible for management to predict all such risk factors.

Further, it is not possible to assess the effect of all risk factors on our businesses or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. In addition, Lincoln disclaims any obligation to update any forward-looking statements to reflect events or circumstances that occur after the date of this presentation.

The reporting of Risk Based Capital (“RBC”) measures is not intended for the purpose of ranking any insurance company or for use in connection with any marketing, advertising or promotional activities.


Special note regarding investment portfolio data• All information regarding LNC’s investment portfolio excludes assets related to certain modified coinsurance (“Modco”) transactions. The Modco investment portfolio has

counterparty protections in place including investment guidelines, as well as additional support through over-collateralization and a letter of credit that were established to meet LNC’s risk management objectives.


Lincoln story


Lincoln strategy

Annuities Life Insurance

Group ProtectionRetirement Plan Services

Focus on the fastest growing U.S. markets

Invest in our powerful distribution network and product breadth

Maintain industry-leading risk

management

Remain focused on manufacturing retail

and worksite products

Actively direct capital to the highest

and best uses

Best for our employees Best interest of our customers

OUR FOUNDATIONAL DRIVERS

OUR PURPOSEProvide financial peace of mind to everyday consumers across the United States

ENTERPRISE STRATEGY

Utilize digital to drive a differentiated customer experience

Integrated business, financial

and talent planning

Where we play How we win Our capabilities Our tools


2008 1Q20

Holding company cash $(602)M $760M

Statutory capital $5.1B ~$9.7B

RBC ratio 393% ~446%

Below investment-grade assets2 6.1% 4.3%

Goodwill3 38% 13%

2013 2019

Greater management focus7

businesses4

businesses

% of sales with long-term guarantees 36% 18%

Mix of capital market sources of earnings4 54% spread46% fee

36% spread64% fee

% of earnings from mortality/morbidity4 24% 28%

Entered this crisis in a better position than Financial Crisis

Cap

ital

an

d b

alan

ce s

hee

t1St

rate

gic1

1 Time periods for comparison selected because 2008 was pre-financial crisis and 2013 shows progress on strategic initiatives over the medium term. 2 Does not include CMLs. 3 Represents goodwill as a % of end-of-period equity, excluding AOCI.4 Excludes notable items, which represent pre-tax impact to business segment adjusted income from operations. See appendix for reconciliation.

Unfavorable Neutral Favorable


3Y performance (2017-2019)

Adjusted operating revenue1

9% CAGR

Adjusted operating EPS

ex. notable items1

11% CAGR

Adjusted operating ROE ex. AOCI and

notable items1

Expandedto 12.6%

$0

$30

$60

$90

2018 2019

Solid financial results in 2019 and over the longer term

$4

$6

$8

$10

2018 2019

Adjusted operating EPS1 Book value per shareex. AOCI1

Notable itemsAdjusted operating EPS

1 See Appendix for a reconciliation of non-GAAP measures to their most comparable GAAP measures and notable items.


Powerful distribution force shifting to virtual environment

Successfully adopting new technology and sales practices since COVID-19 crisis began

Leading distribution capabilities

1,300+ wholesalers and worksite

Diversified, innovative and multiple solutions across

our portfolio

✓ Annuities

✓ Life Insurance

✓ Group Protection

✓ Retirement Plan Services

Comprehensive set of retail products

Exclusively independent distribution

Broad and deep shelf spaceMultiple channels

Effectively leveraging virtual meeting

platforms

Adoption of digitaltools to enable

business continuity

Market demand forprotection and

guarantee solutions


Earnings benefiting from expense management initiatives

◼ G&A as a % of adjusted operating revenue1

12.0%

11.7%

2013 2019

Programs driving expense improvements2

1 Represents general and administrative expenses, net of amounts capitalized, as a percent of adjusted operating revenue. See Appendix for a reconciliation of non-GAAP measures to their most comparable GAAP measures and notable items.

2 Target achievement of savings from strategic digitization by end of 2021, Group Protection by end of 2020 and additional expense saves in 2020.

+30 bps improvement

Continued improvement in expense ratio

Strategic digitization initiative to drive

$90-150Mannual run-rate savings

Expense savings synergies of

$125Mfrom Group acquisition

Additional expense savings of

$100Mexpected to respond to economic headwinds


$(2)B

$0B

$2B

4Q

10

1Q

11

2Q

11

3Q

11

4Q

11

1Q

12

2Q

12

3Q

12

4Q

12

1Q

13

2Q

13

3Q

13

4Q

13

1Q

14

2Q

14

3Q

14

4Q

14

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

1Q

19

2Q

19

3Q

19

4Q

19

1Q

20

Change in hedge target Hedge program performance (net breakage)

Industry-leading risk management programs

NAIC 1 (AAA/ AA/A)58% NAIC 2

(BBB)38%

Focused on maintaining high-quality investment portfolio1

NAIC 3-6(BIG) 4%

Line of business

Assetduration(in years)

ALM match within target

duration range

Life Insurance 13.5 ✓

Group Protection 6.0 ✓

Retirement Plan Services 6.0 ✓

Annuities 6.5 ✓

Lincoln total3 10.0 ✓

1 Data as of 1Q20, and below investment grade is abbreviated as BIG.2 As a % of rated assets including rated CML assets where CM1=NAIC 1, CM2=NAIC 2, CM3=NAIC 33 Represents total weighted average.

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q20

Minimal historic hedge breakage

96% investment grade2


$298M

$640M

$0.0B

$0.5B

$1.0B

$1.5B

$2.0B

$2.5B

$3.0B

2019

Cap

ital

dep

loym

ent

$0.00

$0.40

$0.80

$1.20

$1.60

2010 2020E

Strong history of capital generation and deployment

45% of shares

or $6.4B

Consistently increased common stock dividend since the crisis

Shares repurchased since peak share count1

1 Based on total shares repurchased from 3Q10, which was peak share count, through 1Q20 as a percentage of 3Q10 end-of-period basic shares outstanding.

Share repurchases

Dividends

$0.9B capital

returned to shareholders

$1.7B investment in growth


1Q20 results and near-term areas of focus


$4,000

$4,250

$4,500

$4,750

1Q19 1Q20

Solid financial results to begin 2020

$1.50

$2.00

$2.50

$3.00

1Q19 1Q20

1 See Appendix for a reconciliation of non-GAAP measures to their most comparable GAAP measures and notable items.

Adjusted operating EPS1 Adjusted operating ROE,excluding AOCI1

Adjusted operating revenues1

11%

12%

13%

14%

1Q19 1Q20


Strong operating results in 1Q20

Annuities RPS Life Insurance Group Protection

Sales +5% driven by continued traction with

IVA product

Total deposits +11% driven by growth in first-year sales and recurring deposits

Operating revenue+7%

Insurance premiums+7%

Positive net flows for both VA & FA

Expense ratio improved 110bps

Favorable mortality results

Employee-paid sales represented 60% of sales in the quarter

Operating income +4%

Operating income +3%

Operating income+9%

Expense ratio improved 120bps

All improvements are 1Q20 vs. 1Q19.


Focusing on expected and potential COVID-19 financial impacts

Claims experience• Expect increase in virus-related mortality claims beginning in

2Q• Morbidity experience to be more impacted by economic fallout

Consumer changes

• Extending premium payment grace periods and waiving 401(k) hardship withdrawal fees

• To date, have not seen meaningful activity and do not expect large impacts on earnings

Distribution disruption• Efficiently moved to virtual sales environment, with increased

adoption of digital tools• Seeing slower decision making from consumers and companies

Investment portfolio • Expect incremental credit downgrades and asset impairments


Accelerating reprice, shift & add new strategy

Before1 2019

Reprice products (GUL) 64% of Life sales 4% of Life sales

Shift to non-guaranteed products 50% 82%

Grow mortality and morbidity2 24% of earnings 28% of earnings

Add products No Indexed Variable Annuity $2.7B in IVA sales

1 Before: Reprice products for 2008, shift to non-guaranteed for 2008, grow mortality and morbidity for 2013, and add products for 2017. 2 Excludes notable items, which represent pre-tax impact to business segment adjusted income from operations. See appendix for reconciliation.

Track record of successfully executing on strategic goals, including reducing capital market sensitivity

Reprice products to help ensure

appropriate returns and put capital to the highest and best use

Shift to products that support our capital management goals, with ~80% of sales without guarantees

Add new well-priced products that

achieve appropriate returns on capital


Protecting balance sheet in current environment

Heading into 2020…

RBC ratio of 439%

Cash at the holding company >$450M target

Buybacks targeted at historical levels

Our 3 goals in a stress scenario 1) Maintain financial strength ratings & business franchise

2) Preserve shareholder dividend 3) Not need to raise equity capital

…where we stand at end of 1Q2020

~80% non-guaranteed sales

Next debt maturity in 2021

Increased RBC ratio to ~446%

Holding company cash of $760M

Suspended buybacks, at least through 2Q20

Reducing sales to free up additional capital

Pre-funded debt; next maturity not until 20231

De-risked investment portfolio Investment portfolio remains low risk; 4.3% BIG

1 With the closing of our recent $800M senior note offering on 5/15/20, both the 2021 debt maturity and the 2022 debt maturity are pre-funded.


Annuities


$925M $954M

$0.0B

$0.5B

$1.0B

$1.5B

2014 2019

Annuities

High-quality in-force block

Consistently strong earnings growth

$250M $261M

$150

$200

$250

$300

1Q19 1Q20

21% ROE 1Q202

76bpsROA 1Q203

$(63)MImpact from annual unlocking over past

decade

1 Notable items: 2014 excludes $12M and 2019 excludes $(93)M. 2 Return on equity, excluding goodwill and AOCI is abbreviated as ROE. 3 Return on assets is abbreviated as ROA.

$1,047M$913M

Income from operations Notable itemsIncome from operations, excluding notable items1


Continuing to execute strategy to ensure strong profitability

Grew sales and increased sales diversification

Track record of executing on strategy

Never launched guaranteed rider without hedge program

Reinsurance for VA rider guarantees

Predictive lapse & utilization model

Tilted away from long-dated guarantees

Annuity Insights empower product actions

Flow reinsurance accelerated Fixed Annuity growth

Developed and launched Indexed VA

Infrastructure to execute agile product actions

Expansion of distribution partnerships such as Allstate & IMO

2003

Today

53%23%

24%

34%

31%

35%

VA w/ GLB VA w/o GLB FA

2016 sales of $8.2B

2019 sales of $14.5B

+21%CAGR


High-quality variable book is a strategic advantage

$0B $4B $8B $12B $16B $20B

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

Prior

Living benefit AV non-RMF Living benefit AV RMF Non-living benefit AV¹ GLB NAR2 GMDB NAR3

1.9% 5.9%

8.0% 4.3%

4.2% 3.0%

2.9% 2.5%

2.0% 2.3%

4.0% 1.8%

6.9% 1.5%

8.8% 2.3%

6.0% 4.1%

2.7% 2.9%

1.4% 1.6%

1.6% 4.9%

1.6% 6.9%

0.8% 7.6%

0.7% 7.0%

Total

3.6% 3.6%

0.8%3.6%

8.7%

22.0%

2019 1Q20

GLB NAR / GLB AV

0.4%3.6%

12.3%

21.2%

2019 1Q20

GMDB NAR / GMDB AV

Lincoln Peer Average⁴

Variable annuity account value by issue year as of 3/31/2020

1 Includes the reinsured portion of living benefit account values. 2 Guaranteed Living Benefits Net Amount at Risk.3 Guaranteed Minimum Death Benefits Net Amount at Risk.4 2019 results as 12/31/19 and 1Q20 results as of 3/31/20; peers include: AEG, AIG, AMP, BHF, EQH, Jackson, MET, MFC, Pacific Life, PRU, and VOYA.

Broaden and diversify portfolio

Shift to non-guaranteed and protecting margins

Consistent market presence added highly profitable business

Avoided living benefit arms race


Retirement Plan Services


$160M $172M

$0M

$75M

$150M

$225M

2014 2019

Retirement Plan ServicesSolid earnings results driven by expense management and strong flows

$1.5B93%

$99M6%

$(400)M

$0M

$400M

$800M

$1,200M

$1,600M

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

1Q

19

2Q

19

3Q

19

4Q

19

1Q

20

Consistently positive net flows

$39M $40M

$0M

$15M

$30M

$45M

1Q19 1Q20Income from operations


Growing and retaining assets in our target markets

89%First-year sales Recurring deposits Termination rates

5.3%

3.7%

3.1%

2.2%

2014-2015 2016-2017 2018-2019 1Q20

$4.8B

$6.1B

$1.7B $1.9B

2014 2019 1Q19 1Q20

$2.7B

$3.4B

$0.8B $0.9B

2014 2019 1Q19 1Q20


$230

$214$ 208

$ 193

2017 2018 2019 1Q20

16% improvement

Expense management to help offset financial headwinds

Digital efficiencies and expense management

In-forceoptimization

• Re-engineering processes to streamline operations

• Leveraging technology to increase scalability of the business

• Driving flows to lower GMIR blocks1

• Repricing business to lower crediting rates, increase fees or reduce risk

Proven history of diligent expense management has driven down cost per participant

1 Guaranteed minimum interest rate is abbreviated at GMIR.


Life Insurance


Life Insurance

Growth in key earnings drivers

Track record of overcoming headwinds to deliver earnings growth

Average account values

+5%1Q19 vs. 1Q20

Total in-force face amount

+10%1Q19 vs. 1Q20

$157M$171M

$100M

$125M

$150M

$175M

$200M

1Q19 1Q20

1 Notable items: 2014 excludes $58M and 2019 excludes $(320)M.

$612M

$259M

$(250)M

$0M

$250M

$500M

$750M

2014 2019


$579M$554M


2013 2014 2015 2016 2017 2018 2019

Highlighting our ongoing attention to key industry trends

Takeaways on our experience managing our in-force1

100%

Act

ual

/an

nu

al e

xpe

ctat

ion

s

Mortality ✓ Emerging company and industry experience reflected in our assumptions

Morbidity ✓ MoneyGuard® reserves sufficient under stress scenarios as multi-benefit design reduces policyholder behavior risk

Reinsurance✓ Have resolved the majority of our reinsurance treaties with manageable

financial impacts

Interest rates✓ Have lowered long-term rates and are finding attractive opportunities in

long-duration, less-liquid assets

1 Based on observed Lincoln and industry trends through 2019.

Actual results Within +/- 1% of annual expectations

Mortality consistently in line with our annual expectations


Proven ability to shift sales to respond to changes in marketplace

56%

11%

10%

7%

4%12%

GUL IUL/UL VUL Term MoneyGuard Executive Benefits

4%

15%

25%

13%

28%

15%

2006 sales of $707M 2019 sales of $1.1B

Near-term strategic focus items

Growing and diversifying sales over the long term

Expect lower sales in 2020 due to product actions to respond to low interest rates and

regulatory changes

Strategic shift to focus on less interest rate sensitive products

Accelerating digital adoption


Group Protection


$23M

$238M

$(100)M

$0M

$100M

$200M

$300M

2014 2019

Group Protection

Well positioned to navigate through periods of volatility

Ability to reprice every one to three years

Scale anddiversification

Business planassumed claims

experience normalized

Expenseefficiency within

our control

Targeted mix of profitable

employee-paid sales

Disability claims management expertise

$55M

$40M

$25M

$35M

$45M

$55M

$65M

1Q19 1Q20

1 Notable items: 2019 excludes $10M.


Leveraging acquisition to grow earnings

$228M


Sustaining strong underlying drivers

Premiums, persistency, and leave management services driving sustained growth

$1.0B $1.1B

$0.5B

$1.0B

$1.5B

$2.0B

1Q19 1Q20

Premiums

85%

89%

83%

86%

89%

92%

1Q19 1Q20

Persistency

3.1M4.2M

0M

2M

4M

6M

1Q19 1Q20

Number of employees covered with our leave management services


Leadership position driven by diversification and scale

< 1K 32%

1-5K26%

5K+42%

Broad reach to all employer sizes Deep partnerships with 7K+ employee benefits brokers

Broker segment% of total

sales1 Who they are

Top 3 national partners

22%Mercer, AON, and Willis Towers Watson

serving larger employers

Top regional producers

51%350+ top producing partners,

with ~20% broker penetration2

Remaining producers

27% Remaining broker partners

2019 premiums by employer size

1 Based on 2017-2019 sales.

2 Average percentage of each broker’s total business placed with Lincoln, based on policy count.


Investments


Investment portfolio: Diversified and high-quality

Mortgage loans14%

Consumernoncyclical

12%

Financials12%

Utilities11%Structured

8%

Other1

7%

Capital goods6%

Energy5%

Consumer cyclical4%

Municipal4%

Basic Industry4%

Communications4%

Technology3%

Transportation3%

Alts2%

Industrial other, 1%

Data as of 3/31/2020.1 Other asset classes primarily include: quasi-sovereign, cash/collateral, and UST/agency.2 As a % of rated assets including rated CML assets where CM1=NAIC 1, CM2=NAIC 2, CM3=NAIC 3.

Diversified across asset classes, sectors and issuers

NAIC 1 (AAA-A)58%

NAIC 2 (BBB)38%

NAIC 3-6 (Below

investment grade)

4%

High-quality portfolio

$119B invested assets 96% investment grade2


New money allocation and de-risking actions reduced BBB- and BIG exposure

BBB- as % of rated assets

BIG as % of rated assets

9.3%

7.9%1

1Q15 1Q20

0.2% 0.1%

5.3%

1.7%

2.9%

2.2%

1.6%

1.0%

0%

2%

4%

6%

8%

10%

3/31/2015 Today

Integrated Midstream Independent & Oil Field RefiningIndependent and oil field services

10%

5%

1Q15 1Q20

Lowered energy exposure

Reduced and shifted the mix to subsectors generally less impacted in oil prices

3.5

1.7

$0B

$2B

$4B

$6B

1

1Q15-4Q18 1Q19-1Q20

De-risking based on name by name scenario analysis

1Q15 – 1Q20

Book value of sales since 1Q15

$5.2B

~70% of sales were rated BBB-

and below

Since 1Q15: Repositioned the portfolio to prepare for next credit cycle

Data as of 3/31/2015 and 3/31/2020.1 BBB- exposure was 7.4% of rated assets as of 12/31/2019. 2 BIG exposure was 3.8% of rated assets as of 12/31/2019.

5.3%

4.3%2

1Q15 1Q20


Energy: $6.0B Consumer cyclical: $5.3B

• Sector exposure is well diversified across 140+ issuers with an average position size of $37M

• 91% investment grade

• Reduced energy allocation by ~50% since 1Q15

• 63% of Energy holdings are in Midstream or Integrated

• 91% investment grade

Retailer34%

Auto21%

Consumer cyclical services

18%

Leisure11%

Restaurants9%

Lodging4%

Gaming2%

Home construction

1%

Midstream43%

Independent26%

Integrated20%

Oil fieldservices

8%

Refining, 3%

Data as of 3/31/2020.

Corporates: Key sectors in focus


Collateralized loan obligations (CLO): $3.9B Commercial mortgage loans (CML): $15.4B

• High-quality portfolio – 85% CM1 rated; minimal CM3 rated: 0.2%– 48% average LTV and 2.4x DSC

• Portfolio consists of 17% retail and less than 1% hotel

• High-quality portfolio– 100% of CLO holdings are NAIC 1– A-Rated CLO holdings are 3% of total CLO portfolio or $135M

Data as of 3/31/2020.

Other asset classes in focus

AAA70%

AA27%

A3%

Apartment33%

Office25%

Industrial19%

Retail17%

Mixed use/ other

5%

Hotel, <1%


Appendix


ReconciliationNet income to adjusted income from operations

1 The numerator used in the calculation of our diluted EPS is adjusted to remove the mark-to-market adjustment for deferred units of LNC stock in our deferred compensation plans if the effect of equity classification would result in a more dilutive EPS.

2 We use our prevailing federal income tax rates of 21% and 35%, where applicable, while taking into account any permanent differences for events recognized differently in our financial statements and federal income tax returns when reconciling our non-GAAP measures to the most comparable GAAP measure.

(in millions, except per share data)

2019 2020 2013 2016 2018 2019

Total Revenues 3,965$ 4,425$ 11,969$ 13,330$ 16,424$ 17,258$

Less:

Excluded realized gain (loss) (400) (75) (273) (518) (46) (794)

Amortization of DFEL associated with benefit ratio unlocking 3 (9) - 1 (5) 6

Amortization of deferred gains arising from reserve

changes on business sold through reinsurance - - 3 3 - -

Total Adjusted Operating Revenues 4,362$ 4,509$ 12,239$ 13,844$ 16,475$ 18,046$

Net Income (Loss) Available to Common

Stockholders - Diluted 252$ 29$ 1,244$ 1,192$ 1,623$ 886$

Adjustment for deferred units of LNC stock in our

deferred compensation plans (1) - (23) - - (18) -

Net Income (Loss) 252 52 1,244 1,192 1,641 886

Less (2):

Excluded realized gain (loss) (316) (60) (178) (337) (37) (627)

Benefit ratio unlocking 142 (349) 36 28 (136) 277

Net impact from the Tax Cuts and Jobs Act - - - - 19 17

Income (loss) from reserve changes (net of related

amortization) on business sold through reinsurance - - 2 2 - -

Acquisition and integration costs related to mergers and

acquisitions, after-tax (15) (4) - - (67) (103)

Gain (loss) on early extinguishment of debt - - - (41) (18) (33)

Adjusted Income (Loss) from Operations 441$ 465$ 1,384$ 1,540$ 1,880$ 1,355$

Earnings (Loss) Per Common Share (Diluted)

Net income (loss) 1.22$ 0.15$ 4.52$ 5.03$ 7.40$ 4.38$

Adjusted income (loss) from operations 2.14$ 2.24$ 5.03$ 6.50$ 8.48$ 6.71$

For the Year EndedFor the Quarter Ended

March 31, December 31,


ReconciliationReturn on equity (ROE)

(in mill ions, except per share data)

For the Year

Ended

December 31,

2019 2020 2019

Average Equity

Average equity, including AOCI 15,384$ 18,132$ 17,973$

Average AOCI 1,430 4,338 4,019

Average equity, excluding AOCI 13,954$ 13,794$ 13,954$

ROE, Including AOCI

Net income (loss) 6.6% 1.1% 4.9%

ROE, Excluding AOCI

Adjusted income (loss) from operations 12.6% 13.5% 9.7%

ROE, Excluding AOCI and Notable Items

Adjusted income (loss) from operations, excluding notable items 12.6%

For the Quarter

March 31,

Ended


ReconciliationBook value per share

(in millions, except per share data)

2018 2019

Book value per share, including AOCI 69.71$ 100.11$

Per share impact of AOCI 1.98 28.84

Book value per share, excluding AOCI 67.73 71.27

As of December 31,


ReconciliationNotable items

(dollars in millions, except per share data)

2013 2016 2018 2019

Adjusted operating EPS, as reported 5.03$ 6.50$ 8.48$ 6.71$

Less:

Notable items:

Tax adjustments 0.01 0.06 - -

Unlocking/reserve adjustments 0.14 - (0.01) (1.99)

Total notable items 0.16 0.06 (0.01) (1.99)

Adjusted operating EPS, excluding notable items 4.87$ 6.44$ 8.49$ 8.70$

For the Years Ended

December 31,


ReconciliationSources of earnings excluding notable items

(dollars in millions, except per share data)

Sources of Earnings, Pre-Tax

Notable Items Impact to

Sources of Earnings

Sources of Earnings, Pre-Tax,

Excluding Notable Items

Investment spread $ 772 $ (21) $ 751

Mortality/morbidity $ 507 $ (36) $ 471

Fees on AUM $ 649 $ - $ 649

VA riders $ 110 $ - $ 110


Percentage by Component


Sources of Earnings,



Excluding Notable Items,


Investment spread 37.9% 0.0% 37.9%

Mortality/morbidity 24.9% -1.1% 23.8%

Fees on AUM 31.8% 1.0% 32.8%

VA riders 5.4% 0.2% 5.6%

Sources of Earnings, Pre-Tax


Sources of Earnings


Excluding Notable Items

Investment spread $ 363 $ 230 $ 593

Mortality/morbidity $ 446 $ 233 $ 679

Fees on AUM $ 1,046 $ (2) $ 1,044

VA riders $ 40 $ 50 $ 90




Sources of Earnings,



Excluding Notable Items,


Investment spread 19.2% 5.4% 24.6%

Mortality/morbidity 23.5% 4.7% 28.2%

Fees on AUM 55.2% -11.8% 43.4%

VA riders 2.1% 1.6% 3.7%

2013

2019

For the Year Ended December 31,

For the Year Ended December 31,

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