Lincoln Financial Group (NYSE: LNC) today reported financial results for the fourth quarter and full year ended December 31, 2023.
"The 2023 fourth quarter marked a significant step forward in rebuilding capital, and we expect our year-end risk-based capital ratio to be above our target of 400%," said Ellen Cooper, Chairman, President and CEO of Lincoln Financial Group. "We delivered improved operating performance led by our Group Protection business, record sales in Annuities, and more stable Life earnings. In Retirement Plan Services, we achieved our ninth consecutive year of positive flows. We are making meaningful progress in resetting our businesses for profitable organic growth as we reposition our product sales to a more capital-efficient and higher risk-adjusted return mix supported by our leading distribution.
"Additionally, we closed a major reinsurance transaction with Fortitude Re and announced the agreement to sell our wealth management business to Osaic, Inc. As we look ahead, we will build on our solid foundation and strong momentum to further strengthen our balance sheet, improve free cash flow, and grow profitably as we position our company to deliver increasing shareholder value."
Business Highlights
Our 2023 fourth-quarter and full-year results were driven by substantial progress in each of our businesses and reflect our focused execution as we advance on our multi-year journey to transform our business.
Earnings Summary
|
For the Three Months Ended
|
For the Twelve Months Ended
|
||
(in millions, except per share data) |
12/31/2022(2) |
12/31/2023 |
12/31/2022(2) |
12/31/2023 |
Net Income (Loss) |
$812 |
$(1,235) |
$1,358 |
$(752) |
Net Income (Loss) Available to Common Stockholders |
807 |
(1,246) |
1,345 |
(835) |
Net Income (Loss) per Diluted Share Available to Common Stockholders(1) |
4.73 |
(7.35) |
7.78 |
(4.92) |
Adjusted Income (Loss) from Operations |
134 |
258 |
(1,167) |
973 |
Adjusted Income (Loss) from Operations Available to Common Stockholders |
129 |
246 |
(1,180) |
890 |
Adjusted Income (Loss) from Operations per Diluted Share Available to Common Stockholders(1) |
$0.76 |
$1.45 |
$(6.90) |
$5.22 |
(1) |
In periods where a net loss or adjusted loss from operations is presented, basic shares are used in the diluted EPS and adjusted diluted EPS calculations, as the use of diluted shares would result in a lower loss per share. |
|
(2) |
Prior-year numbers have been adjusted to reflect LDTI accounting. |
Condensed Reconciliation of Net Income to Adjusted Income from Operations(1)
|
For the Three Months Ended |
For the Twelve Months Ended |
||
(in millions) |
12/31/2022(2) |
12/31/2023 |
12/31/2022(2) |
12/31/2023 |
Net income (loss) available to common stockholders ? diluted |
$807 |
$(1,246) |
$1,345 |
$(835) |
Less: |
|
|
|
|
Preferred stock dividends declared |
-- |
(11) |
-- |
(82) |
Adjustment for deferred units of LNC stock in deferred compensation plans |
(5) |
-- |
(13) |
(1) |
Net income (loss) |
812 |
(1,235) |
1,358 |
(752) |
Less: |
|
|
|
|
Non-economic market risk benefit impacts, related to net annuity product, after-tax |
674 |
(797) |
3,266 |
52 |
Net life insurance product features, after-tax |
6 |
(178) |
21 |
(310) |
Changes in fair value of reinsurance-related embedded derivatives, trading securities and certain mortgage loans, after-tax |
(5) |
(613) |
(41) |
(633) |
Investment gains (losses), after-tax |
11 |
136 |
16 |
(744) |
Other |
(8) |
(41) |
(737) |
(90) |
Adjusted income (loss) from operations |
$134 |
$258 |
$(1,167) |
$973 |
Adjusted income (loss) from operations available to common stockholders |
$129 |
$246 |
$(1,180) |
$890 |
(1) | Refer to the full reconciliation of Net Income to Adjusted Income from Operations at the back of this press release. |
|
(2) | Prior-year numbers have been adjusted to reflect LDTI accounting. |
Variable Investment Income
Alternative Investment Income, after-tax(1) |
For the Three Months Ended |
For the Twelve Months Ended |
|||||
(in millions) |
12/31/2022 |
3/31/2023 |
6/30/2023 |
9/30/2023 |
12/31/2023 |
12/31/2022 |
12/31/2023 |
Annuities |
$1 |
$2 |
$5 |
$3 |
$3 |
$6 |
$13 |
Life Insurance |
7 |
37 |
53 |
34 |
39 |
38 |
163 |
Group Protection |
1 |
2 |
2 |
2 |
2 |
4 |
7 |
Retirement Plan Services |
1 |
1 |
3 |
2 |
2 |
3 |
8 |
Other Operations |
? |
? |
? |
? |
? |
1 |
1 |
Consolidated |
$10 |
$42 |
$63 |
$41 |
$46 |
$52 |
$192 |
(1) |
|
Excludes alternative investment income on investments supporting our modified coinsurance and coinsurance with funds withheld agreements as we have limited economic interest in those investments. |
Prepayment Income, after-tax |
For the Three Months Ended |
For the Twelve Months Ended |
|||||
(in millions) |
12/31/2022 |
3/31/2023 |
6/30/2023 |
9/30/2023 |
12/31/2023 |
12/31/2022 |
12/31/2023 |
Annuities |
$1 |
$1 |
$? |
$1 |
$1 |
$24 |
$2 |
Life Insurance |
5 |
2 |
1 |
? |
2 |
30 |
4 |
Group Protection |
? |
? |
? |
? |
? |
5 |
1 |
Retirement Plan Services |
1 |
? |
1 |
? |
? |
18 |
1 |
Other Operations |
? |
? |
? |
? |
? |
5 |
? |
Consolidated |
$7 |
$3 |
$2 |
$1 |
$3 |
$82 |
$8 |
Items Impacting Segment Results
|
For the Three Months Ended December 31, 2023 |
||||
(in millions) |
Annuities |
Life Insurance |
Group Protection |
Retirement Plan Services |
Other Operations |
After-tax segment impacts: |
|
|
|
|
|
Alternative investment income compared to long-term target(1) |
$(1) |
$(17) |
$(1) |
? |
$(1) |
Prepayment income(2) |
1 |
2 |
? |
? |
? |
Annual assumption review |
? |
? |
? |
? |
? |
Legal accruals |
? |
? |
? |
? |
? |
Total impact |
$? |
$(15) |
$(1) |
? |
$(1) |
(1) |
Alternative investment income comparison to long-term target assumes a 10% annual return on the alternative investment portfolio. |
|
(2) |
Prepayment income is based on actual income reported in the quarter. |
Capital and Liquidity
|
For the Three Months Ended |
||||
(in millions, except per share data) |
12/31/2022 |
3/31/2023 |
6/30/2023 |
9/30/2023 |
12/31/2023 |
Holding company available liquidity(1) |
$460 |
$454 |
$457 |
$455 |
$458 |
RBC Ratio(2) |
377% |
~380% |
~380% |
375 - 385% |
400 - 410% |
Book value per share (BVPS), Including AOCI |
$24.32 |
$33.89 |
$28.49 |
$13.04 |
$34.81 |
Book value per share (BVPS), Excluding AOCI |
$61.86 |
$56.04 |
$58.58 |
$63.03 |
$55.30 |
Adjusted book value per share |
$65.72 |
$66.05 |
$64.37 |
$63.53 |
$61.21 |
(1) |
Holding company available liquidity presented for the quarters ended 12/31/2022, 3/31/2023 and 6/30/2023 is net of the $500 million prefunding used to repay $500 million of debt that matured in the third quarter of 2023. |
|
(2) |
The RBC ratio is calculated as of December 31 annually, but is reported in the March statutory reporting, and as such, the quarterly ratios presented for 2023 are considered estimates until the statutory statements are filed. |
Annuities
|
For the Three Months Ended |
For the Twelve Months Ended |
|||||||
(in millions) |
12/31/2022 |
3/31/2023 |
6/30/2023 |
9/30/2023 |
12/31/2023(1) |
Change |
12/31/2022 |
12/31/2023(1) |
Change |
Total operating revenues |
$1,125 |
$1,141 |
$1,190 |
$1,197 |
$(525) |
NM |
$4,482 |
$3,002 |
-33.0% |
Total operating expenses |
806 |
841 |
880 |
915 |
(846) |
NM |
3,136 |
1,789 |
-43.0% |
Income (loss) from operations before taxes |
319 |
300 |
310 |
282 |
321 |
0.6% |
1,346 |
1,213 |
-9.9% |
Federal income tax expense (benefit) |
44 |
26 |
39 |
34 |
42 |
-4.5% |
185 |
140 |
-24.3% |
Income (loss) from operations |
$275 |
$274 |
$271 |
$248 |
$279 |
1.5% |
$1,161 |
$1,073 |
-7.6% |
Income (loss) from operations, excluding impact of annual assumption review |
$275 |
$274 |
$271 |
$260 |
$279 |
18.2% |
$1,160 |
$1,085 |
-6.5% |
Total sales |
$3,210 |
$3,164 |
$2,582 |
$2,728 |
$4,365 |
36.0% |
$11,879 |
$12,840 |
8.1% |
Net flows |
$152 |
$(331) |
$(1,108) |
$(874) |
$278 |
82.9% |
$(337) |
$(2,034) |
NM |
Average account balances, net of reinsurance |
$142,099 |
$146,331 |
$148,260 |
$151,312 |
$147,419 |
3.7% |
$149,591 |
$148,206 |
-0.9% |
Return on average account balances |
77 |
75 |
73 |
66 |
76 |
|
78 |
72 |
|
(1) |
Day one impacts related to the reinsurance transaction with Fortitude Re caused line-item volatility in the fourth quarter and full-year 2023. |
|
For the Three Months Ended |
For the Twelve Months Ended |
|||||||
(in millions) |
12/31/2022 |
3/31/2023 |
6/30/2023 |
9/30/2023 |
12/31/2023 |
Change |
12/31/2022 |
12/31/2023 |
Change |
Total operating revenues |
$1,688 |
$1,757 |
$1,760 |
$1,723 |
$1,667 |
-1.2% |
$6,747 |
$6,907 |
2.4% |
Total operating expenses |
1,706 |
1,780 |
1,725 |
1,952 |
1,681 |
-1.5% |
9,428 |
7,138 |
-24.3% |
Income (loss) from operations before taxes |
(18) |
(23) |
35 |
(229) |
(14) |
22.2% |
(2,681) |
(231) |
91.4% |
Federal income tax expense (benefit) |
(9) |
(10) |
2 |
(56) |
(8) |
11.1% |
(587) |
(72) |
87.7% |
Income (loss) from operations |
$(9) |
$(13) |
$33 |
$(173) |
$(6) |
33.3% |
$(2,094) |
$(159) |
92.4% |
Income (loss) from operations, excluding impact of annual assumption review |
$(9) |
$(13) |
$33 |
$(17) |
$(6) |
33.3% |
$13 |
$(3) |
NM |
|
|
|
|
|
|
|
|
|
|
Average account balances, net of reinsurance |
$47,963 |
$49,100 |
$50,049 |
$50,130 |
$45,608 |
-4.9% |
$49,036 |
$48,722 |
-0.6% |
Total sales |
$186 |
$130 |
$123 |
$144 |
$144 |
-22.6% |
$705 |
$542 |
-23.1% |
Group Protection
|
For the Three Months Ended |
For the Twelve Months Ended |
|||||||
(in millions) |
12/31/2022 |
3/31/2023 |
6/30/2023 |
9/30/2023 |
12/31/2023 |
Change |
12/31/2022 |
12/31/2023 |
Change |
Total operating revenues |
$1,346 |
$1,388 |
$1,400 |
$1,388 |
$1,387 |
3.0% |
$5,304 |
$5,563 |
4.9% |
Total operating expenses |
1,313 |
1,299 |
1,262 |
1,302 |
1,322 |
0.7% |
5,252 |
5,184 |
-1.3% |
Income (loss) from operations before taxes |
33 |
89 |
138 |
86 |
65 |
97.0% |
52 |
379 |
NM |
Federal income tax expense (benefit) |
7 |
18 |
29 |
18 |
13 |
85.7% |
11 |
80 |
NM |
Income (loss) from operations |
$26 |
$71 |
$109 |
$68 |
$52 |
100.0% |
$41 |
$299 |
NM |
Income (loss) from operations, excluding impact of annual assumption review |
$26 |
$71 |
$109 |
$44 |
$52 |
18% |
$53 |
$275 |
NM |
|
|
|
|
|
|
|
|
|
|
Insurance premiums |
$1,213 |
$1,251 |
$1,263 |
$1,251 |
$1,250 |
3.1% |
$4,768 |
$5,014 |
5.2% |
Total sales |
$356 |
$128 |
$96 |
$71 |
$398 |
11.8% |
$676 |
$693 |
2.5% |
Total loss ratio |
81.1% |
75.0% |
71.3% |
75.2% |
76.6% |
|
82.5% |
74.5% |
|
Operating margin |
2.1% |
5.6% |
8.6% |
5.4% |
4.1% |
|
0.9% |
6.0% |
|
Operating margin, excluding impact of annual reserve assumption review |
2.1% |
5.6% |
8.6% |
3.5% |
4.1% |
|
1.1% |
5.5% |
|
Retirement Plan Services
|
For the Three Months Ended |
For the Twelve Months Ended |
|||||||
(in millions) |
12/31/2022 |
3/31/2023 |
6/30/2023 |
9/30/2023 |
12/31/2023 |
Change |
12/31/2022 |
12/31/2023 |
Change |
Total operating revenues |
$325 |
$328 |
$334 |
$327 |
$322 |
-0.9% |
$1,274 |
$1,310 |
2.8% |
Total operating expenses |
264 |
277 |
279 |
277 |
278 |
5.3% |
1,027 |
1,109 |
8.0% |
Income (loss) from operations before taxes |
61 |
51 |
55 |
50 |
44 |
-27.9% |
247 |
201 |
-18.6% |
Federal income tax expense (benefit) |
9 |
8 |
8 |
7 |
6 |
-33.3% |
36 |
30 |
-16.7% |
Income (loss) from operations |
$52 |
$43 |
$47 |
$43 |
$38 |
-26.9% |
$211 |
$171 |
-19.0% |
|
|
|
|
|
|
|
|
|
|
Deposits |
$2,973 |
$3,209 |
$2,897 |
$2,700 |
$2,972 |
0.0% |
$12,902 |
$11,778 |
-8.7% |
Net flows |
$51 |
$535 |
$201 |
$(272) |
$(332) |
NM |
$2,696 |
$132 |
-95.1% |
Average account balances |
$87,987 |
$91,457 |
$94,099 |
$96,473 |
$96,045 |
9.2% |
$90,960 |
$94,520 |
3.9% |
Return on average account balances |
24 |
19 |
20 |
18 |
16 |
|
23 |
18 |
|
Other Operations
|
For the Three Months Ended |
For the Twelve Months Ended |
|||||||
(in millions) |
12/31/2022 |
3/31/2023 |
6/30/2023 |
9/30/2023 |
12/31/2023(1) |
Change |
12/31/2022 |
12/31/2023(1) |
Change |
Total operating revenues |
$47 |
$43 |
$46 |
$38 |
$(884) |
NM |
$156 |
$(755) |
NM |
Total operating expenses |
315 |
150 |
181 |
180 |
(744) |
NM |
758 |
(229) |
NM |
Income (loss) from operations before taxes |
(268) |
(107) |
(135) |
(142) |
(140) |
47.8% |
(602) |
(526) |
12.6% |
Federal income tax expense (benefit) |
(58) |
(20) |
(29) |
(29) |
(35) |
39.7% |
(116) |
(115) |
0.9% |
Income (loss) from operations(2) |
$(210) |
$(87) |
$(106) |
$(113) |
$(105) |
50.0% |
$(486) |
$(411) |
15.4% |
(1) |
Day one impacts related to the reinsurance transaction with Fortitude Re caused line-item volatility in the fourth quarter and full-year 2023. |
|
(2) |
Income (loss) from operations does not include preferred dividends. |
Unrealized Gains and Losses
The Company reported a net unrealized loss of $8.7 billion (pre-tax) on its available-for-sale securities as of December 31, 2023. This compared to a net unrealized loss of $11.9 billion (pre-tax) as of December 31, 2022, with the year-over-year decrease primarily due to the Fortitude Re reinsurance transaction and tighter spread.
The tables attached to this release define and reconcile the non-GAAP measures adjusted income (loss) from operations, adjusted income (loss) from operations available to common stockholders, book value per share, excluding AOCI, and adjusted book value per share to net income (loss), net income (loss) available to common stockholders, and book value per share, including AOCI, calculated in accordance with GAAP.
This press release contains statements that are forward-looking, and actual results may differ materially. Please see the Forward-looking Statements ? Cautionary Language at the end of this release for factors that may cause actual results to differ materially from the company's current expectations.
For other financial information, please refer to the company's fourth quarter 2023 statistical supplement, which is available in the investor relations section of its website http://www.lincolnfinancial.com/investor.
Conference Call Information
Lincoln Financial Group will discuss the company's fourth-quarter and full-year 2023 results with the investment and analyst community in a conference call beginning at 8:30 a.m. Eastern Time on Thursday, February 8, 2024.
The conference call will be broadcast live through the company's website at www.lincolnfinancial.com/webcast. Please log on to the webcast at least 15 minutes prior to the start of the conference call to download and install any necessary streaming media software. A replay of the call will be available by 10:30 a.m. Eastern Time on February 8, 2024, at www.lincolnfinancial.com/webcast.
About Lincoln Financial Group
Lincoln Financial Group helps people to plan, protect and retire with confidence. As of December 31, 2023, approximately 17 million customers trust our guidance and solutions across four core businesses ? annuities, life insurance, group protection, and retirement plan services. As of December 31, 2023, the company had $295 billion in end-of-period account balances, net of reinsurance. Headquartered in Radnor, Pa., Lincoln Financial Group is the marketing name for Lincoln National Corporation (NYSE: LNC) and its affiliates. Learn more at LincolnFinancial.com.
Explanatory Notes on Use of Non-GAAP Measures
Management believes that adjusted income (loss) from operations (or adjusted operating income), adjusted income (loss) from operations available to common stockholders, and adjusted income (loss) from operations per diluted share available to common stockholders better explain the results of the company's ongoing businesses in a manner that allows for a better understanding of the underlying trends in the company's current business as the excluded items are unpredictable and not necessarily indicative of current operating fundamentals or future performance of the business segments, and, in most instances, decisions regarding these items do not necessarily relate to the operations of the individual segments. Management also believes that using book value, excluding accumulated other comprehensive income ("AOCI"), and adjusted book value per share enables investors to analyze the amount of our net worth that is primarily attributable to our business operations. Book value per share, excluding AOCI is useful to investors because it eliminates the effect of items that are unpredictable and can fluctuate significantly from period to period, primarily based on changes in interest rates. Adjusted book value per share is useful to investors because it eliminates the effect of items that are unpredictable and can fluctuate significantly from period to period, primarily based on changes in equity markets and interest rates.
For the historical periods, reconciliations of non-GAAP measures used in this press release to the most directly comparable GAAP measure may be included in this Appendix to the press release and/or are included in the Statistical Supplements for the corresponding periods contained in the Earnings section of the Investor Relations page on our website: http://www.lincolnfinancial.com/investor.
Definitions of Non-GAAP Measures Used in this Press Release
Adjusted income (loss) from operations, adjusted income (loss) from operations available to common stockholders, book value per share, excluding AOCI, and adjusted book value per share are financial measures we use to evaluate and assess our results. Adjusted income (loss) from operations, adjusted income (loss) from operations available to common stockholders, book value per share, excluding AOCI, and adjusted book value per share, as used in the press release, are non-GAAP financial measures and do not replace GAAP net income (loss), net income (loss) available to common stockholders, and book value per share, including AOCI, the most directly comparable GAAP measures.
Adjusted Income (Loss) from Operations
Adjusted income (loss) from operations is GAAP net income (loss) excluding the after-tax effects of the following items, as applicable:
Adjusted Income (Loss) from Operations Available to Common Stockholders
Adjusted income (loss) from operations available to common stockholders is defined as after-tax adjusted income (loss) from operations less preferred stock dividends and the adjustment for deferred units of LNC stock in our deferred compensation plans.
Book Value Per Share, Excluding AOCI
Book value per share, excluding AOCI, is calculated based upon a non-GAAP financial measure.
Adjusted Book Value Per Share
Adjusted book value per share is calculated based upon a non-GAAP financial measure.
Other Definitions
Holding Company Available Liquidity
Holding company available liquidity consists of cash and invested cash, excluding cash held as collateral, and certain short-term investments that can be readily converted into cash, net of commercial paper outstanding.
Notable Items
Notable items are items which, in management's view, do not reflect the company's normal, ongoing operations.
Special Note
Sales
Sales as reported consist of the following:
Lincoln National Corporation |
|||||||||||||||
Reconciliation of Net Income to Adjusted Income from Operations |
|||||||||||||||
|
For the |
|
For the |
||||||||||||
(in millions, except per share data) |
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
December 31, |
|
December 31, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
||||||||
Net Income (Loss) Available to Common |
|
|
|
|
|
|
|
||||||||
Stockholders ? Diluted |
$ |
(1,246 |
) |
|
$ |
807 |
|
|
$ |
(835 |
) |
|
$ |
1,345 |
|
Less: |
|
|
|
|
|
|
|
||||||||
Preferred stock dividends declared |
|
(11 |
) |
|
|
? |
|
|
|
(82 |
) |
|
|
? |
|
Adjustment for deferred units of LNC stock our |
|
|
|
|
|
|
|
||||||||
deferred compensation plans(1) |
|
? |
|
|
|
(5 |
) |
|
|
(1 |
) |
|
|
(13 |
) |
Net Income (Loss) |
|
(1,235 |
) |
|
|
812 |
|
|
|
(752 |
) |
|
|
1,358 |
|
Less: |
|
|
|
|
|
|
|
||||||||
Net annuity product features, after-tax |
|
(797 |
) |
|
|
674 |
|
|
|
52 |
|
|
|
3,266 |
|
Net life insurance product features, after-tax |
|
(178 |
) |
|
|
6 |
|
|
|
(310 |
) |
|
|
21 |
|
Credit loss-related adjustments, after-tax |
|
(21 |
) |
|
|
(8 |
) |
|
|
(63 |
) |
|
|
(103 |
) |
Investment gains (losses), after-tax (2) |
|
136 |
|
|
|
11 |
|
|
|
(744 |
) |
|
|
16 |
|
Changes in the fair value of reinsurance-related |
|
|
|
|
|
|
|
||||||||
embedded derivatives, trading securities and |
|
|
|
|
|
|
|
||||||||
certain mortgage loans, after-tax(3) |
|
(613 |
) |
|
|
(5 |
) |
|
|
(633 |
) |
|
|
(41 |
) |
Impairment of intangibles |
|
? |
|
|
|
? |
|
|
|
? |
|
|
|
(634 |
) |
Transaction and integration costs related to mergers, |
|
|
|
|
|
|
|
||||||||
acquisitions and divestitures, after-tax (4) |
|
(20 |
) |
|
|
? |
|
|
|
(27 |
) |
|
|
? |
|
Total adjustments |
|
(1,493 |
) |
|
|
678 |
|
|
|
(1,725 |
) |
|
|
2,525 |
|
Adjusted Income (Loss) from Operations |
|
258 |
|
|
|
134 |
|
|
|
973 |
|
|
|
(1,167 |
) |
Add: |
|
|
|
|
|
|
|
||||||||
Preferred stock dividends |
|
(11 |
) |
|
|
? |
|
|
|
(82 |
) |
|
|
? |
|
Adjustment for deferred units of LNC stock in our deferred compensation plans |
|
(1 |
) |
|
|
(5 |
) |
|
|
(1 |
) |
|
|
(13 |
) |
Adjusted income (loss) from operations available to common stockholders |
$ |
246 |
|
|
$ |
129 |
|
|
$ |
890 |
|
|
$ |
(1,180 |
) |
|
|
|
|
|
|
|
|
||||||||
Diluted (5) |
|
|
|
|
|
|
|
||||||||
Net income (loss) |
$ |
(7.35 |
) |
|
$ |
4.73 |
|
|
$ |
(4.92 |
) |
|
$ |
7.78 |
|
Adjusted income (loss) from operations |
|
1.45 |
|
|
|
0.76 |
|
|
|
5.22 |
|
|
|
(6.90 |
) |
|
|
|
|
|
|
|
|
||||||||
Stockholders' Equity, Average |
|
|
|
|
|
|
|
||||||||
Stockholders' equity |
$ |
5,046 |
|
|
$ |
3,943 |
|
|
$ |
5,437 |
|
|
$ |
9,719 |
|
Less: |
|
|
|
|
|
|
|
||||||||
Preferred stock |
|
986 |
|
|
|
493 |
|
|
|
986 |
|
|
|
123 |
|
AOCI |
|
(5,979 |
) |
|
|
(6,646 |
) |
|
|
(5,563 |
) |
|
|
(1,022 |
) |
Stockholders' equity, excluding AOCI and preferred stock |
|
10,038 |
|
|
|
10,096 |
|
|
|
10,014 |
|
|
|
10,618 |
|
MRB-related impacts |
|
1,314 |
|
|
|
(1,262 |
) |
|
|
257 |
|
|
|
(2,085 |
) |
GLB and GDB hedge instruments gains (losses) (6) |
|
(1,857 |
) |
|
|
N/A |
|
|
|
(1,155 |
) |
|
|
N/A |
|
Adjusted average stockholders' equity |
$ |
10,582 |
|
|
$ |
11,358 |
|
|
$ |
10,912 |
|
|
$ |
12,703 |
|
(1) |
We exclude deferred units of LNC stock that are antidilutive from our diluted earnings per share calculation. |
|
(2) |
Includes an $597 million after-tax loss on the sale of fixed maturity AFS securities as part of the Fortitude Re reinsurance transaction for year ended December 31, 2023. |
|
(3) |
Includes primarily changes in the fair value of embedded derivatives related to the Fortitude Re reinsurance transaction effective in the fourth quarter of 2023. |
|
(4) |
Includes costs pertaining to the Fortitude Re reinsurance transaction and the planned sale of our wealth management business. |
|
(5) |
In periods where a net loss or adjusted loss from operations is presented, basic shares are used in the diluted EPS and adjusted diluted EPS calculations, as the use of diluted shares would result in a lower loss per share. |
|
(6) |
For periods beginning on or after January 1, 2023, gains (losses) on our GLB and GDB hedge instruments are excluded from adjusted stockholders' equity to align to the updated hedge program. |
Lincoln National Corporation | |||||||
Reconciliation of Book Value per Share |
|||||||
|
As of December 31, |
||||||
|
|
2023 |
|
|
|
2022 |
|
Book Value Per Common Share |
|
|
|
||||
Book value per share |
$ |
34.81 |
|
|
$ |
24.32 |
|
Less: |
|
|
|
||||
AOCI |
|
(20.49 |
) |
|
|
(37.54 |
) |
Book value per share, excluding AOCI |
|
55.30 |
|
|
|
61.86 |
|
Less: |
|
|
|
||||
MRB-related gains (losses) |
|
6.38 |
|
|
|
(3.86 |
) |
GLB and GDB hedge instruments gains (losses)(1) |
|
(12.29 |
) |
|
|
N/A |
|
Adjusted book value per share |
$ |
61.21 |
|
|
$ |
65.72 |
|
(1) |
For periods beginning on or after January 1, 2023, gains (losses) on our GLB and GDB hedge instruments are excluded from adjusted stockholders' equity to align to the updated hedge program. |
Lincoln National Corporation |
|||||||
Digest of Earnings |
|||||||
|
For the |
||||||
(in millions, except per share data) |
Three Months Ended |
||||||
|
December 31, |
||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
||||
Revenues |
$ |
700 |
|
|
$ |
3,841 |
|
|
|
|
|
||||
Net Income (Loss) |
$ |
(1,235 |
) |
|
$ |
812 |
|
Preferred stock dividends declared |
|
(11 |
) |
|
|
? |
|
Adjustment for deferred units of LNC stock in our |
|
|
|
||||
deferred compensation plans (1) |
|
? |
|
|
|
(5 |
) |
Net Income (Loss) Available to Common |
|
|
|
||||
Stockholders ? Diluted |
$ |
(1,246 |
) |
|
$ |
807 |
|
|
|
|
|
||||
Earnings (Loss) Per Common Share ? Basic |
$ |
(7.35 |
) |
|
$ |
4.80 |
|
Earnings (Loss) Per Common Share ? Diluted (2) |
|
(7.35 |
) |
|
|
4.73 |
|
|
|
|
|
||||
Average Shares ? Basic |
|
169,661,997 |
|
|
|
169,217,427 |
|
Average Shares ? Diluted |
|
170,422,512 |
|
|
|
170,632,350 |
|
|
|
|
|
||||
|
For the |
||||||
|
Twelve Months Ended |
||||||
|
December 31, |
||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
||||
Revenues |
$ |
11,645 |
|
|
$ |
18,810 |
|
|
|
|
|
||||
Net Income (Loss) |
$ |
(752 |
) |
|
$ |
1,358 |
|
Preferred stock dividends declared |
|
(82 |
) |
|
|
? |
|
Adjustment for deferred units of LNC stock in our |
|
|
|
||||
deferred compensation plans (1) |
|
(1 |
) |
|
|
(13 |
) |
Net Income (Loss) Available to Common |
|
|
|
||||
Stockholders ? Diluted |
$ |
(835 |
) |
|
$ |
1,345 |
|
|
|
|
|
||||
Earnings (Loss) Per Common Share ? Basic |
$ |
(4.92 |
) |
|
$ |
7.93 |
|
Earnings (Loss) Per Common Share ? Diluted (2) |
|
(4.92 |
) |
|
|
7.78 |
|
|
|
|
|
||||
Average Shares ? Basic |
|
169,562,903 |
|
|
|
171,034,695 |
|
Average Shares ? Diluted |
|
170,738,655 |
|
|
|
172,700,155 |
|
(1) |
We exclude deferred units of LNC stock that are antidilutive from our diluted earnings per share calculation. |
|
(2) |
In periods where a net loss or adjusted loss from operations is presented, basic shares are used in the diluted EPS and adjusted diluted EPS calculations, as the use of diluted shares would result in a lower loss per share. |
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 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 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 correct or update any forward-looking statements to reflect events or circumstances that occur after the date of this press release.
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.
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