Edgar Filing: LINCOLN NATIONAL CORP

Current Report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report: June 30, 2002

LINCOLN NATIONAL CORPORATION

(Exact name of registrant as specified in its charter)


Indiana (State of Incorporation)		1-6028 (Commission File Number)		35-1140070 (I.R.S. Employer Identification No.)

1500 Market Street, Suite 3900, Centre Square West Tower, Philadelphia, PA 19102
(Address of principal executive offices)

Registrant’s telephone number 219-448-1400

Item 5

Statistical Report for the quarter ended June 30, 2002.

LINCOLN STATISTICAL REPORT

Second Quarter

2002

Lincoln Financial Group

This document is dated October 2, 2002. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

The Lincoln Statistical Report included herein is a revised report as of June 30, 2002. The key revisions from the Lincoln Statistical Report as of June 30, 2002 filed on Form 8-K on August 5, 2002 are the following:


—	Inclusion of a Roll Forward of Deferred Acquisition Costs for the Lincoln Retirement and Life Insurance segments for 2001 and the year-to-date June 30, 2002 and related quarters in those periods (Pages 13, 14, 17 and 18).


—	Inclusion of a splitout of the Lincoln Retirement Annuity Account Values for 2002 by Fixed Annuities—excluding fixed portion of variable contracts, Variable Annuities—including fixed portion of variable contracts and Fixed Portion of Variable Contracts (Pages 15 and 16).


—	Inclusion of Lincoln Retirement’s Average Daily Variable Annuity Account Values for 1999, 2000, 2001 and 2002 and the related quarters in those years (Pages 15 and 16).


06/30/02		PAGE 1

Financial Highlights
Unaudited [Amounts in Millions, except Per Share]


				For the Quarter Ended June 30											For the Six Months Ended June 30

				2002			2001								2002			2001
				Amount			Amount			Change			% Change		Amount			Amount			Change			% Change

*Income from Operations*
	Lincoln Retirement*				47.8			90.8			(43.0	)	(47.4	%)		128.2			173.1			(44.9	)	(25.9	%)
	Life Insurance				73.5			67.1			6.4		9.5	%		144.6			135.7			8.9		6.6	%
	Investment Management				6.6			3.7			2.9		78.4	%		14.6			6.1			8.5		139.3	%
	Lincoln UK				6.7			16.2			(9.5	)	(58.6	%)		21.1			30.6			(9.5	)	(31.0	%)
	Corporate & Other**				(7.3	)		(9.7	)		2.4					(19.3	)		1.2			(20.5	)

			*Total Income from Operations*		127.2			168.1			(40.9	)	(24.3	%)		289.2			346.7			(57.5	)	(16.6	%)

	Realized gains (losses) on investments				(52.7	)		(11.4	)		(41.3	)				(120.3	)		(24.8	)		(95.5	)
	Gains (losses) on derivatives				0.3			0.2			0.1					0.4			0.1			0.3
	Reserve increase on business sold through reinsurance				(14.4	)		0.0			(14.4	)				(14.4	)		0.0			(14.4	)
	Restructuring charges				(1.0	)		(3.9	)		2.9					(1.0	)		(4.5	)		3.5

*Income before Accounting Changes*					59.4			153.0			(93.6	)				153.9			317.5			(163.6	)
	Cumulative effect of accounting changes***				0.0			(11.3	)		11.3					0.0			(15.6	)		15.6

		*Net Income*			59.4			141.7			(82.3	)	(58.1	%)		153.9			301.9			(148.1	)	(49.0	%)

Earnings per share (diluted) Income from Operations				$	0.67		$	0.88			($0.21	)	(23.9	%)	$	1.52		$	1.80			($0.28	)	(15.6	%)
Realized gain (losses) on investments					($0.27	)		($0.06	)		($0.21	)				($0.62	)		($0.13	)		($0.49	)
Gains (losses) on derivatives				$	0.00		$	0.00		$	0.00				$	0.00		$	0.00		$	0.00
Reserve increase on business sold through reinsurance					($0.08	)	$	0.00			($0.08	)				($0.08	)	$	0.00			($0.08	)
Restructuring charges					($0.01	)		($0.02	)	$	0.01					($0.01	)		($0.02	)	$	0.01

*Income before Accounting Changes*				$	0.31		$	0.80			($0.49	)			$	0.81		$	1.65			($0.84	)
	Cumulative effect of accounting changes***			$	0.00			($0.06	)	$	0.06				$	0.00			($0.08	)	$	0.08

		*Net Income*		$	0.31		$	0.74			($0.43	)	(58.1	%)	$	0.81		$	1.57			($0.76	)	(48.4	%)

*Inc. from Oper. — before Goodwill Amort.*
	Lincoln Retirement*				47.8			91.1			(43.3	)	(47.5	%)		128.2			173.7			(45.5	)	(26.2	%)
	Life Insurance				73.5			73.0			0.5		0.6	%		144.6			147.6			(2.9	)	(2.0	%)
	Investment Management				6.6			7.7			(1.1	)	(14.4	%)		14.6			14.2			0.4		2.6	%
	Lincoln UK				6.7			16.4			(9.7	)	(59.3	%)		21.1			30.9			(9.8	)	(31.8	%)
	Corporate & Other**				(7.3	)		(9.2	)		1.9					(19.3	)		2.0			(21.3	)

			*Total*		127.2			179.0			(51.7	)	(28.9	%)		289.2			368.5			(79.2	)	(21.5	%)

Earnings per share (diluted) Inc. from Oper. — before Goodwill Amort.				$	0.67		$	0.93			($0.26	)	(28.0	%)	$	1.52		$	1.91			($0.39	)	(20.4	%)
*Net Income — before Goodwill Amort.*
	Lincoln Retirement*				10.2			80.2			(70.0	)	(87.3	%)		57.8			157.1			(99.3	)	(63.2	%)
	Life Insurance				57.4			59.5			(2.1	)	(3.5	%)		101.6			128.3			(26.7	)	(20.8	%)
	Investment Management				6.2			6.9			(0.8	)	(11.0	%)		13.2			13.0			0.2		1.6	%
	Lincoln UK				9.8			17.8			(8.0	)	(44.7	%)		20.7			32.7			(12.1	)	(36.8	%)
	Corporate & Other**				(24.2	)		(11.8	)		(12.4	)				(39.4	)		(7.4	)		(32.0	)

			*Total*		59.4			152.6			(93.2	)	(61.1	%)		153.9			323.7			(169.8	)	(52.5	%)

Earnings per share (diluted) Net Income — before Goodwill Amort.				$	0.31		$	0.79			($0.48	)	(60.8	%)	$	0.81		$	1.68			($0.87	)	(51.8	%)
*Operating Revenue*
	Lincoln Retirement*				498.8			522.1			(23.3	)	(4.5	%)		1002.3			1034.9			(32.6	)	(3.1	%)
	Life Insurance				464.6			465.5			(0.9	)	(0.2	%)		929.9			933.4			(3.4	)	(0.4	%)
	Investment Management				103.1			111.4			(8.3	)	(7.5	%)		208.1			224.4			(16.2	)	(7.2	%)
	Lincoln UK				63.4			66.9			(3.4	)	(5.1	%)		122.2			151.2			(29.0	)	(19.2	%)
	Corporate & Other**				96.1			450.7			(354.6	)	(78.7	%)		193.2			992.1			(798.9	)	(80.5	%)

			*Total Operating Revenue*		1226.0			1616.5			(390.5	)	(24.2	%)		2455.8			3336.0			(880.2	)	(26.4	%)

*Total Revenue*
	Lincoln Retirement*				442.6			512.1			(69.6	)	(13.6	%)		895.6			1022.5			(126.9	)	(12.4	%)
	Life Insurance				439.8			455.7			(15.8	)	(3.5	%)		863.8			915.3			(51.6	)	(5.6	%)
	Investment Management				102.4			110.3			(7.9	)	(7.2	%)		205.9			222.6			(16.6	)	(7.5	%)
	Lincoln UK				68.0			68.9			(0.9	)	(1.3	%)		121.6			153.8			(32.2	)	(20.9	%)
	Corporate & Other**				92.2			452.0			(359.8	)	(79.6	%)		184.5			983.6			(799.1	)	(81.2	%)

			*Total Revenue*		1145.0			1599.0			(454.0	)	(28.4	%)		2271.4			3297.8			(1,026.4	)	(31.1	%)

*Operational Data by Segment: (Billions except where noted)*

Lincoln Retirement*
	Gross Deposits				1.640			1.371			0.269		19.6	%		3.354			2.818			0.536		19.0	%
	Net Cash Flows				0.223			(0.196	)		0.419		213.8	%		0.311			(0.787	)		1.098		139.6	%
	Account Values (Gross)				49.886			53.658			(3.772	)	(7.0	%)		49.886			53.658			(3.772	)	(7.0	%)
	Account Values (Net of Reinsurance)				48.116			52.512			(4.396	)	(8.4	%)		48.116			52.512			(4.397	)	(8.4	%)
*Life Insurance Segment*
	First Year Premium- Retail (in millions)				155.801			134.596			21.205		15.8	%		295.178			258.836			36.343		14.0	%
	First Year Premium- COLI (in millions)				46.631			20.976			25.655		122.3	%		53.504			28.032			25.473		90.9	%
	First Year Premium- Total (in millions)				202.432			155.572			46.860		30.1	%		348.682			286.867			61.815		21.5	%
	In-force				244.750			223.272			21.478		9.6	%		244.750			223.272			21.479		9.6	%
	Account Values				11.759			11.066			0.693		6.3	%		11.759			11.066			0.693		6.3	%
*Investment Management Segment*
	Retail Deposits				1.356			0.884			0.472		53.4	%		2.558			2.050			0.508		24.8	%
	Retail Net Cash Flows				0.167			(0.148	)		0.315		212.8	%		0.257			(0.167	)		0.424		253.9	%
	Institutional In-flows				1.232			1.056			0.176		16.7	%		2.708			2.247			0.461		20.5	%
	Institutional Net Cash Flows				0.455			0.445			0.010		2.2	%		1.185			0.027			1.158		4288.9	%
	Total Net Cash Flows				0.622			0.297			0.325		109.4	%		1.442			(0.140	)		1.582		1130.2	%
	Assets Under Management — Retail and Inst’l				48.738			50.737			(1.998	)	(3.9	%)		48.738			50.737			(1.999	)	(3.9	%)
	Assets Under Management — Insurance Assets				38.476			36.018			2.458		6.8	%		38.476			36.018			2.458		6.8	%
	Assets Under Management — Total Segment				87.214			86.755			0.460		0.5	%		87.214			86.755			0.459		0.5	%
*Consolidated*
	Consolidated Domestic Retail Deposits				3.203			2.534			0.669		26.4	%		6.250			5.305			0.945		17.8	%
	Consolidated Domestic Retail Account Balances				77.644			83.250			(5.606	)	(6.7	%)		77.644			83.250			(5.606	)	(6.7	%)
	Total Retail Net Cash Flows				0.688			(0.073	)		0.761		1038.5	%		1.066			(0.427	)		1.494		349.6	%
	Total Net Cash Flows				1.143			0.372			0.771		207.4	%		2.252			(0.400	)		2.652		662.5	%

	Total Assets Under Management				123.036			128.507			(5.471	)	(4.3	%)		123.036			128.507			(5.471	)	(4.3	%)

* Effective March 7, 2002, the Annuities segment became known as Lincoln Retirement.

** Upon the closing of Swiss Re’s acquisition of LNC’s reinsurance business on December 7, 2001, all historical financial data for the former Reinsurance segment was moved into “Other Operations.” In addition, ongoing amortization of the deferred gain on indemnity reinsurance is shown in “Other Operations.”

*** The cumulative effect of accounting changes relates to the adjustment recorded upon adoption of FAS #133 in the 1st qtr. 2001.


06/30/02		PAGE 2

Financial Highlights
Unaudited [Amounts in Millions, except Per Share]


			For the Quarter Ended June 30												For the Six Months Ended June 30

			2002			2001									2002			2001
			Amount			Amount			Change			% Change			Amount			Amount			Change			% Change

*Consolidated Operational Data: (Millions)*
*Balance Sheet Assets — End of Period*				95069.2			96431.2			(1362.0	)		(1.4	%)		95069.2			96431.2			(1362.0	)		(1.4	%)
*Shareholders’ Equity*
	Beg of Period (Securities at Market)			5131.1			5096.4			34.7						5263.5			4954.1			309.4
	End of Period (Securities at Market)			5307.9			5055.9			252.0						5307.9			5055.9			252.0
	End of Period (Securities at Cost)			4959.6			4952.8			6.8						4959.6			4952.8			6.8
	Average Equity (Securities at Cost)			5080.7			4920.2			160.5						5082.0			4936.9			145.1
*Return on Equity*
	Inc from Operations/Average Equity			10.0	%		13.7	%		(3.6	%)					11.4	%		14.0	%		(2.7	%)
	Net Income/Average Equity			4.7	%		11.5	%		(6.8	%)					6.1	%		12.2	%		(6.2	%)
*Return on Capital*
	Inc from Operations/Average Capital			8.4	%		11.3	%		(2.9	%)					9.4	%		11.6	%		(2.2	%)
*Common Stock Outstanding*
	Average for the Period — Diluted			189.7			192.0			(2.3	)		(1.2	%)		190.7			192.8			(2.1	)		(1.1	%)
	End of Period — Assuming Conv of Pref			184.5			188.2			(3.7	)		(2.0	%)		184.5			188.2			(3.7	)		(2.0	%)
	End of Period — Diluted			186.9			192.9			(6.0	)		(3.1	%)		186.9			192.9			(6.0	)		(3.1	%)
Book Value (Securities at Market)			$	28.77		$	26.87			1.90			7.1	%	$	28.77		$	26.87			1.90			7.1	%
Book Value (Securities at Cost)			$	26.88		$	26.32			0.56			2.1	%	$	26.88		$	26.32			0.56			2.1	%
*Cash Returned to Shareholders*
	Share Repurchase — dollar amount			175.7			35.1			140.6						226.7			186.8			39.9
	Dividends Declared to Shareholders			59.6			56.2			3.4						119.6			114.2			5.4

		*Total Cash Returned to Shareholders*		235.3			91.3			144.0						346.3			301.0			45.3

	Share Repurchase — number of shares			3.885			0.750			3.135						4.885			4.300			0.585
	Dividend Declared on Common Stock — per share		$	0.320		$	0.305		$	0.015			4.9	%	$	0.640		$	0.610		$	0.030			4.9	%

			For the Quarter Ended June 30												For the Six Months Ended June 30

		*Comprehensive Income*	2002			2001									2002			2001
		(millions)	Amount			Amount									Amount			Amount

Net Income				59.4			141.7									153.9			301.9
Foreign Currency Translation				42.8			(19.5	)								30.0			(37.3	)
Net Unrealized Gains (Losses) on Securities				293.9			(114.2	)								130.0			64.2
Gains (Losses) on Derivatives				0.1			3.7									1.2			9.4
Cumulative Effect of Accounting Change				0.0			0.0									0.0			17.6
Minimum Pension Liability Adjustment				(2.6	)		0.0									(1.9	)		0.0

	Comprehensive Income			393.6			11.7									313.2			355.8


06/30/02		PAGE 3

Financial Highlights
Unaudited [Amounts in Millions]


			For the Quarter Ended June 30												For the Six Months Ended June 30

			2002			2001									2002			2001
			Amount			Amount			Change			% Change			Amount			Amount			Change			% Change

Consolidated Condensed Statements of Income
Revenue:
	Insurance Premiums and Fees			443.2			833.5			(390.3	)		(46.8	%)		881.4			1,746.9			(865.5	)		(49.5	%)
	Investment Advisory Fees			47.8			49.6			(1.9	)		(3.7	%)		95.8			99.0			(3.3	)		(3.3	%)
	Net Investment Income			651.0			673.1			(22.0	)		(3.3	%)		1,299.1			1,346.8			(47.7	)		(3.5	%)
	Realized Gains (Losses) on Investments			(81.5	)		(17.9	)		(63.6	)					(185.0	)		(38.4	)		(146.6	)
	Gains (Losses) on Derivatives			0.4			0.2			0.2						0.6			0.1			0.5
	Other			84.0			60.4			23.7			39.2	%		179.5			143.2			36.3			25.3	%

		Total Revenue		1,145.0			1,599.0			(454.0	)		(28.4	%)		2,271.4			3,297.8			(1,026.4	)		(31.1	%)
Benefits and Expenses:
	Benefits			626.1			855.0			(228.9	)		(26.8	%)		1,229.5			1,761.7			(532.2	)		(30.2	%)
	Underwriting, Acquisition, Insurance and Other Expenses			457.7			540.3			(82.5	)		(15.3	%)		874.7			1,111.3			(236.6	)		(21.3	%)

		Total Benefits and Expenses		1,083.9			1,395.3			(311.4	)		(22.3	%)		2,104.3			2,873.0			(768.7	)		(26.8	%)

		Net Income before Federal Taxes		61.1			203.7			(142.6	)					167.2			424.8			(257.6	)
Federal Income Taxes				1.7			50.7			(49.0	)					13.3			107.3			(94.0	)

*Income before Accounting Changes*				59.4			153.0			(93.6	)					153.9			317.5			(163.6	)
Cumulative Effect of Accounting Changes				—			(11.3	)		11.3						—			(15.6	)		15.6

		Net Income		59.4			141.7			(82.3	)		(58.1	%)		153.9			301.9			(148.1	)		(49.0	%)

Income before Tax and Cumulative Effect of Accounting Changes By Segment
	Lincoln Retirement			(0.6	)		102.6			(103.2	)					46.1			197.9			(151.8	)
	Life Insurance			80.5			90.9			(10.4	)					144.3			190.0			(45.7	)
	Investment Management			7.4			4.6			2.8						15.6			8.1			7.5
	Lincoln UK			9.6			21.2			(11.6	)					20.1			40.8			(20.7	)
	Corporate and Other			(35.9	)		(15.6	)		(20.3	)					(59.0	)		(12.0	)		(47.0	)

		Income before Tax and Cumulative Effect of Accounting Changes		61.1			203.7			(142.6	)					167.2			424.8			(257.6	)
Pre-Tax Realized Gains (Losses) by Segment*
	Lincoln Retirement			(56.3	)		(10.0	)		(46.3	)					(106.7	)		(12.3	)		(94.4	)
	Life Insurance			(24.7	)		(9.8	)		(14.9	)					(66.2	)		(18.0	)		(48.2	)
	Investment Management			(0.7	)		(1.1	)		0.4						(2.2	)		(1.8	)		(0.4	)
	Lincoln UK			4.5			2.0			2.5						(0.6	)		2.6			(3.2	)
	Corporate and Other			(3.9	)		1.4			(5.3	)					(8.8	)		(8.7	)		(0.1	)

	Pre-Tax Realized Gains (Losses) on Investments and Derivatives			(81.1	)		(17.5	)		(63.6	)					(184.4	)		(38.2	)		(146.2	)
After-Tax Realized Gains (Losses) by Segment*
	Lincoln Retirement			(36.6	)		(6.5	)		(30.1	)					(69.4	)		(8.0	)		(61.4	)
	Life Insurance			(16.0	)		(6.3	)		(9.7	)					(43.1	)		(11.7	)		(31.4	)
	Investment Management			(0.4	)		(0.7	)		0.3						(1.4	)		(1.2	)		(0.2	)
	Lincoln UK			3.2			1.4			1.8						(0.4	)		1.8			(2.2	)
	Corporate and Other			(2.7	)		0.9			(3.5	)					(5.6	)		(5.6	)		—

	After-Tax Realized Gains (Losses) on Investments and Derivatives			(52.4	)		(11.2	)		(41.2	)					(119.9	)		(24.7	)		(95.2	)

Includes both realized gains (losses) on investments and gains (losses) on derivatives.


06/30/02		PAGE 4

Financial Highlights
Unaudited [Amounts in Millions, except Retail Account Balances and Assets Managed]


				As of

				June		December
				2002		2001
				Amount		Amount		Change			% Change

Consolidated Condensed Balance Sheets Assets:
Investments:
	Securities Available for Sale:
			Fixed Maturities		29,724.6		28,345.7		1,378.9			4.9	%
			Equities		419.5		470.5		(51.0	)		(10.8	%)
	Mortgage Loans on Real Estate				4,395.4		4,535.5		(140.2	)		(3.1	%)
	Real Estate				258.7		267.9		(9.2	)		(3.4	%)
	Policy Loans				1,906.1		1,939.7		(33.6	)		(1.7	%)
	Other Long-Term Investments				456.0		553.8		(97.9	)		(17.7	%)

			Total Investments		37,160.1		36,113.1		1,047.0			2.9	%
Other Assets:
	Assets Held in Separate Accounts				40,579.6		44,833.4		(4,253.8	)		(9.5	%)
	Other Assets				17,329.5		17,054.8		274.7			1.6	%

			Total Assets		95,069.2		98,001.3		(2,932.1	)		(3.0	%)

Liabilities and Shareholders’ Equity
Liabilities:
	Insurance and Investment Contract Liabilities				41,862.1		40,857.2		1,005.0			2.5	%
	Liabilities Related to Separate Accounts				40,579.6		44,833.4		(4,253.8	)		(9.5	%)
	Other Liabilities				7,319.6		7,047.2		272.4			3.9	%

			Total Liabilities		89,761.4		92,737.8		(2,976.4	)		(3.2	%)
Shareholders’ Equity:
	Net Unrealized Gains(Losses) on Securities and Derivatives				348.4		217.2		131.1			60.4	%
	Other Shareholders’ Equity				4,959.5		5,046.3		(86.8	)		(1.7	%)

			Total Shareholders’ Equity		5,307.9		5,263.5		44.4			0.8	%

		Total Liabilities and Shareholders’ Equity			95,069.2		98,001.3		(2,932.1	)		(3.0	%)


		As of June 30

		2002			2001
*($ billions)*		Amount			Amount			Change			% Change

Domestic Retail Account Balances:
Lincoln Retirement — Fixed Annuities			16.909			15.551			1.358			8.7	%
Lincoln Retirement — Variable Annuities			31.206			36.961			(5.755	)		(15.6	%)
Lincoln Retirement — Life Insurance			—			0.157			(0.157	)		(100.0	%)
Life Insurance Segment — Life Insurance			11.759			11.066			0.693			6.3	%
Investment Management — Annuities			10.896			12.532			(1.636	)		(13.1	%)
Investment Management — Mutual Funds			11.033			12.215			(1.182	)		(9.7	%)
Investment Management — Wrap Fee & Other			1.847			1.774			0.073			4.1	%
Consolidating Adjustments			(6.007	)		(7.007	)		1.000			14.3	%

	Total Domestic Account Balance		77.644			83.250			(5.606	)		(6.7	%)

Assets Managed by Advisor:
Investment Management Segment			87.214			86.755			0.459			0.5	%
Lincoln UK			6.753			7.027			(0.274	)		(3.9	%)
Policy Loans (within business units)			1.906			1.947			(0.041	)		(2.1	%)
Non-LNC Affiliates			27.162			32.778			(5.615	)		(17.1	%)

	Total Assets Managed		123.036			128.507			(5.471	)		(4.3	%)


06/30/02		PAGE 5

Eleven-Year Summary
Unaudited [Millions of Dollars except Per Share Data]


For the Year Ended December 31				2001			2000			1999			1998			1997			1996

*Revenue*
		Lincoln Retirement			1968.3			2133.7			2115.8			2068.1			2023.0			1805.0
		Life Insurance			1840.6			1819.0			1760.4			1378.5			544.8			549.2
		Investment Management			433.7			490.3			495.5			491.9			459.1			410.5
		Lincoln UK			293.3			438.2			446.6			439.7			427.3			393.2
		Corporate & Other			1844.7			1970.4			1985.4			1708.9			1444.3			1575.6

			*Total Revenue*		6380.6			6851.5			6803.7			6087.1			4898.5			4733.6

Income from Operations*
		Lincoln Retirement			320.3			362.0			299.4			262.4			223.0			174.6
		Life Insurance			279.0			259.9			212.0			149.2			39.9			41.2
		Investment Management			14.6			44.1			61.0			43.9			18.1			18.6
		Lincoln UK			60.2			61.0			(13.9	)		70.9			(108.3	)		66.0
		Corporate & Other			14.8			(8.0	)		(83.1	)		4.0			(223.3	)		(1.7	)

			*Total Income from Cont Oper*		689.0			719.1			475.5			530.4			(50.6	)		298.8
		Discontinued Operations															110.1			135.3

			*Income from Operations*		689.0			719.1			475.5			530.4			59.4			434.1

*Net Income*
		Lincoln Retirement			269.2			358.6			291.5			273.8			263.3			204.3
		Life Insurance			233.1			249.3			211.5			127.5			39.1			51.8
		Investment Management			11.8			37.0			51.6			44.4			25.1			25.0
		Lincoln UK			68.9			(13.2	)		(18.2	)		71.7			(106.8	)		66.0
		Corporate & Other			7.2			(10.2	)		(76.1	)		(7.6	)		(198.4	)		9.3

			*Total Net Inc from Cont Oper*		590.2			621.4			460.4			509.8			22.2			356.4
		Discontinued Operations															911.8			157.2

			*Total Net Income*		590.2			621.4			460.4			509.8			934.0			513.6

*OTHER DATA*
	*Assets*				98001.3			99844.1			103095.7			93836.3			77174.7			71713.4
*Shareholders’ Equity:*
	Securities and Derivatives at Market				5263.5			4954.1			4263.9			5387.9			4982.9			4470.0
	Securities and Derivatives at Cost				5046.3			4942.0			4729.6			4835.6			4546.9			4057.1
	Average Equity (Sec & Deriv at Cost)				5022.6			4831.9			4818.7			4685.6			4214.1			3866.0
*Common Shares Outstanding: (millions)*
	End of Period — Diluted				191.1			195.2			197.0			203.4			204.7			209.5
	Average for the Period — Diluted				193.3			194.9			200.4			203.3			208.0			210.7
*Per Share Data (Diluted)*
	Income (Loss) from Continuing Operations			$	3.56		$	3.69		$	2.37		$	2.61			($0.24	)	$	1.42
	Income from Operations *			$	3.56		$	3.69		$	2.37		$	2.61		$	0.29		$	2.06
	Net Income from Continuing Operations			$	3.05		$	3.19		$	2.30		$	2.51		$	0.11		$	1.69
	Net Income			$	3.05		$	3.19		$	2.30		$	2.51		$	4.49		$	2.44
	*Shareholders’ Equity*:
	Shareholders’ Equity (Sec & Deriv at Market)			$	28.10		$	25.92		$	21.76		$	26.59		$	24.63		$	21.50
	Shareholders’ Equity (Sec & Deriv at Cost)			$	26.94		$	25.85		$	24.14		$	23.86		$	22.48		$	19.51
	Dividends Declared (Common Stock)			$	1.235		$	1.175		$	1.115		$	1.055		$	0.995		$	0.935
*Return on Equity (see page 30)*
		Net Income/Average Equity			11.8	%		12.9	%		9.6	%		10.9	%		22.2	%		13.3	%
		Inc from Operations/Average Equity			13.7	%		14.9	%		9.9	%		11.3	%		1.4	%		11.2	%
	*Market Value of Common Stock*
		High for the Year		$	52.750		$	56.375		$	57.500		$	49.438		$	39.063		$	28.500
		Low for the Year		$	38.000		$	22.625		$	36.000		$	33.500		$	24.500		$	20.375
		*Close for the Year*		$	48.570		$	47.313		$	40.000		$	40.907		$	39.063		$	26.250

[Additional columns below]

[Continued from above table, first column(s) repeated]


																			Ten-year
																			compound
For the Year Ended December 31				1995			1994			1993			1992			1991			annual growth

*Revenue*
		Lincoln Retirement			1877.1			1506.2			1603.8			1336.2			1216.7			4.9	%
		Life Insurance			514.9			466.2			477.5			444.4			417.3			16.0	%
		Investment Management			290.5
		Lincoln UK			351.5			216.0			174.9			180.6			169.6			5.6	%
		Corporate & Other			1552.5			1744.1			2680.9			2780.9			3721.0

			*Total Revenue*		4586.5			3932.5			4937.1			4742.1			5524.6			1.5	%

Income from Operations*
		Lincoln Retirement			175.2			142.4			127.1			89.4			58.3			18.6	%
		Life Insurance			35.4			34.2			37.8			46.8			31.5			24.4	%
		Investment Management			20.6
		Lincoln UK			45.9			17.2			11.9			9.2			14.3			15.5	%
		Corporate & Other			(136.2	)		24.8			20.8			6.5			4.2

			*Total Income from Cont Oper*		140.8			218.6			197.6			151.9			108.3			20.3	%
		Discontinued Operations			165.6			171.1			145.9			88.7			69.4

			*Income from Operations*		306.5			389.7			343.5			240.6			177.7			14.5	%

*Net Income*
		Lincoln Retirement			248.8			142.4			127.1			89.4			58.3			16.5	%
		Life Insurance			40.6			34.2			37.8			46.8			31.5			22.2	%
		Investment Management			27.4
		Lincoln UK			45.7			18.5			12.6			9.2			14.3
		Corporate & Other			(61.1	)		(29.6	)		(101.1	)		125.1			28.4

			*Total Net Inc from Cont Oper*		301.4			165.5			76.4			270.5			132.5			16.1	%
		Discontinued Operations			180.8			184.4			242.5			88.7			69.4

			*Total Net Income*		482.2			349.9			318.9			359.2			201.9			11.3	%

*OTHER DATA*
	*Assets*				63257.7			48864.8			47825.1			39042.2			33660.3			11.3	%
*Shareholders’ Equity:*
	Securities and Derivatives at Market				4378.1			3042.1			4072.3			2826.8			2655.8			7.1	%
	Securities and Derivatives at Cost				3679.9			3353.1			3157.6			2664.1			2445.8			7.5	%
	Average Equity (Sec & Deriv at Cost)				3550.5			3288.6			3009.0			2575.0			2335.3			8.0	%
*Common Shares Outstanding: (millions)*
	End of Period — Diluted				210.3			208.3			208.3			187.7			185.4
	Average for the Period — Diluted				209.5			208.7			206.1			186.8			189.2
*Per Share Data (Diluted)*
	Income (Loss) from Continuing Operations			$	0.67		$	1.05		$	0.96		$	0.81		$	0.57			20.1	%
	Income from Operations *			$	1.46		$	1.87		$	1.67		$	1.29		$	0.94			14.3	%
	Net Income from Continuing Operations			$	1.44		$	0.79		$	0.37		$	1.45		$	0.70			15.9	%
	Net Income			$	2.30		$	1.68		$	1.55		$	1.92		$	1.07			11.1	%
	*Shareholders’ Equity*:
	Shareholders’ Equity (Sec & Deriv at Market)			$	20.95		$	14.67		$	19.69		$	15.13		$	14.35			7.0	%
	Shareholders’ Equity (Sec & Deriv at Cost)			$	17.61		$	16.17		$	15.27		$	14.26		$	13.21			7.4	%
	Dividends Declared (Common Stock)			$	0.875		$	0.830		$	0.775		$	0.738		$	0.693			5.9	%
*Return on Equity (see page 30)*
		Net Income/Average Equity			13.6	%		10.6	%		10.6	%		13.9	%		8.6	%
		Inc from Operations/Average Equity			8.6	%		11.8	%		11.4	%		9.3	%		7.6	%
	*Market Value of Common Stock*
		High for the Year		$	26.875		$	22.188		$	24.125		$	19.032		$	13.813
		Low for the Year		$	17.313		$	17.313		$	17.344		$	12.625		$	9.500
		*Close for the Year*		$	26.875		$	17.500		$	21.750		$	18.500		$	13.688			13.5	%

* “Income from Operations” is defined as “Net income less realized gain (loss) on investments, derivative instruments and associated items, gain (loss) on sale of subsidiaries, restructuring charges, and cumulative effect of accounting changes, all net of taxes.” Income from operations also excludes the recognition of losses and related changes to the deferred gain amortization under indemnity reinsurance resulting from future developments in the business sold through indemnity reinsurance.


06/30/02		PAGE 6

Quarterly Summary
Unaudited [Millions of Dollars except Per Share Data]


			Sep			Dec			Mar			Jun			Sep			Dec
*For the Quarter Ended*			1999			1999			2000			2000			2000			2000

*Revenue*
	Lincoln Retirement			520.5			538.0			548.7			530.5			532.1			522.3
	Life Insurance			437.1			473.1			441.7			444.2			453.2			479.9
	Investment Management			118.8			126.6			125.8			120.7			123.8			120.0
	Lincoln UK			110.5			103.8			112.8			108.2			112.8			104.3
	Corporate & Other			455.2			566.4			440.2			489.0			494.1			547.0

		*Total Revenue*		1642.1			1807.9			1669.2			1692.7			1716.1			1773.5

Income from Operations*
	Lincoln Retirement			75.4			73.7			88.5			84.1			102.9			86.4
	Life Insurance			52.6			57.0			60.4			62.4			66.5			70.6
	Investment Management			14.7			16.5			12.4			13.1			9.9			8.7
	Lincoln UK			16.2			(67.1	)		15.7			19.3			10.6			15.5
	Corporate & Other			(27.5	)		(43.5	)		(6.5	)		(5.9	)		0.9			3.5

		*Income from Operations*		131.4			36.6			170.6			173.0			190.7			184.7

*Net Income*
	Lincoln Retirement			68.4			69.9			91.2			84.4			93.8			89.2
	Life Insurance			54.0			59.7			58.1			58.4			67.4			65.4
	Investment Management			14.4			19.8			12.3			8.4			9.7			6.6
	Lincoln UK			16.4			(72.6	)		15.5			19.1			(29.9	)		(17.9	)
	Corporate & Other			(20.9	)		(42.2	)		(6.8	)		(6.8	)		(2.3	)		5.7

		*Total Net Income*		132.3			34.6			170.2			163.6			138.6			148.9

*OTHER DATA*

*Assets*				96500.7			103095.7			106340.0			103847.6			103243.1			99844.1

*Shareholders’ Equity*
	Beg of Period (Sec & Deriv at Market)			4817.4			4662.2			4263.9			4340.4			4223.7			4538.6
	End of Period (Sec & Deriv at Market)			4662.2			4263.9			4340.4			4223.7			4538.6			4954.1
	End of Period (Sec & Deriv at Cost)			4766.0			4729.6			4751.6			4780.3			4876.3			4942.0
	Average Equity (Sec & Deriv at Cost)			4793.9			4774.2			4791.5			4753.0			4867.2			4915.7

*Common Shares Outstanding*
	Average for the Period — Diluted			199.0			197.1			195.8			194.0			195.6			195.6
	End of Period — Diluted			196.9			197.0			195.1			193.7			196.2			195.2

*Per Share Data (Diluted)*
	Income from Operations *		$	0.66		$	0.19		$	0.87		$	0.89		$	0.98		$	0.94
	Net Income		$	0.66		$	0.18		$	0.87		$	0.84		$	0.71		$	0.76

*Shareholders’ Equity*
	Shareholders’ Equity (Sec & Deriv at Market)		$	23.76		$	21.76		$	22.45		$	22.10		$	23.67		$	25.92
	Shareholders’ Equity (Sec & Deriv at Cost)		$	24.28		$	24.14		$	24.58		$	25.01		$	25.43		$	25.85
	Dividends Declared (Com Stk)		$	0.275		$	0.290		$	0.290		$	0.290		$	0.290		$	0.305

*Return on Equity (see page 30)*
	Net Income/Average Equity			11.0	%		2.9	%		14.2	%		13.8	%		11.4	%		12.1	%
	Inc from Operations/Average Equity			11.0	%		3.1	%		14.2	%		14.6	%		15.7	%		15.0	%

*Market Value of Common Stock*
	Highest Price		$	57.500		$	48.313		$	41.375		$	40.063		$	56.375		$	50.938
	Lowest Price		$	36.000		$	36.500		$	22.625		$	29.000		$	35.625		$	40.875
	*Closing Price*		$	37.563		$	40.000		$	33.500		$	36.125		$	48.125		$	47.313

[Additional columns below]

[Continued from above table, first column(s) repeated]


			Mar			Jun			Sep			Dec			Mar			Jun
*For the Quarter Ended*			2001			2001			2001			2001			2002			2002

*Revenue*
	Lincoln Retirement			510.4			512.1			478.2			467.5			453.0			442.6
	Life Insurance			459.6			455.7			460.6			464.7			423.9			439.8
	Investment Management			112.3			110.3			104.7			106.5			103.5			102.4
	Lincoln UK			84.9			68.9			76.3			63.2			53.6			68.0
	Corporate & Other			531.6			452.0			489.5			371.7			92.3			92.2

		*Total Revenue*		1698.8			1599.0			1609.3			1473.6			1126.4			1145.0

Income from Operations*
	Lincoln Retirement			82.3			90.8			72.4			74.8			80.4			47.8
	Life Insurance			68.6			67.1			70.1			73.2			71.1			73.5
	Investment Management			2.4			3.7			3.5			5.1			8.0			6.6
	Lincoln UK			14.4			16.2			10.1			19.5			14.4			6.7
	Corporate & Other			10.9			(9.7	)		(12.9	)		26.5			(12.0	)		(7.3	)

		*Income from Operations*		178.6			168.1			143.2			199.1			162.0			127.2

*Net Income*
	Lincoln Retirement			76.6			79.9			58.6			54.2			47.6			10.2
	Life Insurance			62.9			53.5			64.7			51.9			44.2			57.4
	Investment Management			2.0			2.9			2.9			4.0			7.0			6.2
	Lincoln UK			14.8			17.6			14.0			22.5			10.8			9.8
	Corporate & Other			4.0			(12.2	)		(21.2	)		36.7			(15.2	)		(24.2	)

		*Total Net Income*		160.2			141.7			119.1			169.2			94.5			59.4

*OTHER DATA*

*Assets*				94122.4			96431.2			90206.0			98001.3			97846.4			95069.2

*Shareholders’ Equity*
	Beg of Period (Sec & Deriv at Market)			4954.1			5096.4			5055.9			5368.6			5263.5			5131.1
	End of Period (Sec & Deriv at Market)			5096.4			5055.9			5368.6			5263.5			5131.1			5307.9
	End of Period (Sec & Deriv at Cost)			4882.7			4952.8			5100.4			5046.3			5076.6			4959.5
	Average Equity (Sec & Deriv at Cost)			4953.7			4920.2			5085.0			5131.4			5083.3			5080.7

*Common Shares Outstanding*
	Average for the Period — Diluted			193.7			192.0			194.8			192.8			191.7			189.7
	End of Period — Diluted			191.3			192.9			193.3			191.1			191.7			186.9

*Per Share Data (Diluted)*
	Income from Operations *		$	0.92		$	0.88		$	0.74		$	1.03		$	0.84		$	0.67
	Net Income		$	0.83		$	0.74		$	0.61		$	0.88		$	0.49		$	0.31

*Shareholders’ Equity*
	Shareholders’ Equity (Sec & Deriv at Market)		$	27.09		$	26.87		$	28.29		$	28.10		$	27.30		$	28.77
	Shareholders’ Equity (Sec & Deriv at Cost)		$	25.96		$	26.32		$	26.87		$	26.94		$	27.02		$	26.88
	Dividends Declared (Com Stk)		$	0.305		$	0.305		$	0.305		$	0.320		$	0.320		$	0.320

*Return on Equity (see page 30)*
	Net Income/Average Equity			12.9	%		11.5	%		9.4	%		13.2	%		7.4	%		4.7	%
	Inc from Operations/Average Equity			14.4	%		13.7	%		11.3	%		15.5	%		12.7	%		10.0	%

*Market Value of Common Stock*
	Highest Price		$	48.250		$	52.300		$	52.750		$	49.450		$	53.650		$	52.540
	Lowest Price		$	38.000		$	41.280		$	41.000		$	40.000		$	47.200		$	40.750
	*Closing Price*		$	42.470		$	51.750		$	46.630		$	48.570		$	50.730		$	42.000


06/30/02		PAGE 7

Reconciliation of Business Segments to Consolidated Income Statement
Unaudited [Millions of Dollars]


																	Investment
*For the Quarter Ended June 30*					Lincoln Retirement						Life Insurance						Management						Lincoln UK

					Jun			Jun			Jun			Jun			Jun			Jun			Jun			Jun
					2002			2001			2002			2001			2002			2001			2002			2001

*Operating Revenue*
	Life and annuity premiums					13.1			32.5			47.5			50.7									11.4			8.8
	Surrender charges					7.2			8.5			13.5			13.5
	Mortality assessments											123.9			124.8									8.3			8.9
	Expense assessments					127.1			138.0			47.2			45.3									27.8			31.4
	Health premiums											0.1			0.0									0.7			0.7
	Investment advisory fees																	68.4			72.7
	Other revenue and fees					(1.3	)		3.9			6.7			3.8			22.0			25.7			0.0			0.1
	Net investment income					352.7			339.3			225.7			227.4			12.7			13.0			15.3			16.9
	Earnings in Unconsolidated Affiliates

				*Operating Revenue*		498.8			522.1			464.6			465.5			103.1			111.4			63.4			66.9

*Operating Benefits and Expenses*
	Ins. benefits paid or provided:
			Life and annuity policy benefits			72.5			72.6			103.6			103.5									15.5			15.9
			Div accum & div to policyholders									18.2			19.0
			Interest credited to policy bal			221.8			209.7			148.9			141.2
			Health policy benefits									0.0			0.0									3.5			2.0
	Underwriting, acquisition, insurance and other expenses					147.2			126.0			88.5			92.0			95.0			101.6			39.3			29.7
	Goodwill amortization								0.3						5.9						4.1						0.2
	Interest											0.0

		*Operating Benefits and Expenses*				441.5			408.6			359.3			361.7			95.0			105.7			58.4			47.7

				Income from Operations Before Tax		57.3			113.6			105.3			103.8			8.1			5.7			5.1			19.1
	Federal income taxes					9.5			22.8			31.8			36.7			1.5			2.0			(1.6	)		2.9

				*Income from Operations*		47.8			90.8			73.5			67.1			6.6			3.7			6.7			16.2

	Restructuring charges					(1.0	)		(0.6	)					(2.0	)
	Realized gains (losses) on investments					(36.6	)		(6.7	)		(16.4	)		(6.4	)		(0.4	)		(0.7	)		3.2			1.4
	Gains (losses) on derivatives					0.1			0.1			0.3			0.1
	Reserve increase on business sold through reinsurance Gain on sale of subsidiaries

*Income before Accounting Changes*						10.2			83.6			57.4			58.8			6.2			3.0			9.8			17.6
	Cumulative effect of accounting changes								(3.7	)					(5.3	)					(0.1	)

				*Net Income*		10.2			79.9			57.4			53.5			6.2			2.9			9.8			17.6

*Inc. from Oper.-before Goodwill Amort*						47.8			91.1			73.5			73.0			6.6			7.7			6.7			16.4

*Net Income-before Goodwill Amort*						10.2			80.2			57.4			59.5			6.2			6.9			9.8			17.8


					Corporate and						Consolidating
					Other Operations						Adjustments						Consolidated

					Jun			Jun			Jun			Jun			Jun			Jun
					2002			2001			2002			2001			2002			2001

*Operating Revenue*
	Life and annuity premiums					(3.4	)		261.9									68.7			353.9
	Surrender charges								0.4			0.6			0.5			21.3			22.8
	Mortality assessments					(1.7	)		0.0									130.5			133.7
	Expense assessments					1.7			(0.0	)		10.7			12.8			214.4			227.5
	Health premiums					7.6			94.9									8.3			95.7
	Investment advisory fees											(20.7	)		(23.1	)		47.8			49.6
	Other revenue and fees					94.3			71.8			(37.1	)		(44.9	)		84.7			60.3
	Net investment income					46.3			78.8			(1.6	)		(2.4	)		651.0			673.1
	Earnings in Unconsolidated Affiliates					(0.6	)		0.0									(0.6	)		0.0

			*Operating Revenue*			144.2			507.8			(48.1	)		(57.1	)		1226.0			1616.5

*Operating Benefits and Expenses*
	Ins. benefits paid or provided:
		Life and annuity policy benefits				(0.1	)		181.6									191.5			373.6
		Div accum & div to policyholders				0.0			1.2									18.2			20.2
		Interest credited to policy bal				3.7			8.7			8.0			10.0			382.5			369.7
		Health policy benefits				30.4			89.5									33.9			91.5
	Underwriting, acquisition, insurance and other expenses					93.7			206.9			(54.4	)		(64.7	)		409.3			491.4
	Goodwill amortization								0.4						(0.0	)					10.9
	Interest					26.2			34.5			(1.6	)		(2.4	)		24.6			32.0

		*Operating Benefits and Expenses*				154.0			522.8			(48.1	)		(57.1	)		1060.1			1389.3

				Income from Operations Before Tax		(9.8	)		(15.0	)					0.0			166.0			227.2
	Federal income taxes					(2.5	)		(5.3	)								38.7			59.1

				*Income from Operations*		(7.3	)		(9.7	)					0.0			127.2			168.1

	Restructuring charges								(1.2	)								(1.0	)		(3.9	)
	Realized gains (losses) on investments					(2.4	)		0.2			(0.0	)		0.8			(52.7	)		(11.5	)
	Gains (losses) on derivatives					(0.1	)		(0.1	)								0.3			0.2
	Reserve increase on business sold through reinsurance					(14.4	)											(14.4	)

*Income before Accounting Changes*						(24.2	)		(10.8	)		(0.0	)		0.8			59.4			153.0
	Cumulative effect of accounting changes								(2.2	)											(11.3	)

			*Net Income*			(24.2	)		(13.0	)		(0.0	)		0.8			59.4			141.7

*Inc. from Oper.-before Goodwill Amort*						(7.3	)		(9.2	)								127.2			179.0

*Net Income-before Goodwill Amort*						(24.2	)		(12.6	)		(0.0	)		0.8			59.4			152.6


06/30/02		PAGE 7A

Reconciliation of Business Segments to Consolidated Income Statement
Unaudited [Millions of Dollars]


																	Investment
*For the Six Months Ended June 30*					Lincoln Retirement						Life Insurance						Management						Lincoln UK

					Jun			Jun			Jun			Jun			Jun			Jun			Jun			Jun
					2002			2001			2002			2001			2002			2001			2002			2001

*Operating Revenue*
	Life and annuity premiums					25.3			51.6			98.6			101.5									22.8			21.0
	Surrender charges					15.1			17.5			25.2			30.6
	Mortality assessments											247.8			249.1									14.8			18.3
	Expense assessments					254.8			279.5			94.1			92.7									53.1			75.1
	Health premiums											0.1			0.1									1.4			1.4
	Investment advisory fees																	137.6			145.3
	Other revenue and fees					4.5			5.6			12.4			8.9			45.0			52.0			0.3			0.7
	Net investment income					702.6			680.7			451.7			450.4			25.5			27.1			29.9			34.8
	Earnings in Unconsolidated Affiliates

			*Operating Revenue*			1002.3			1034.9			929.9			933.4			208.1			224.4			122.2			151.2

*Operating Benefits and Expenses*
	Ins. benefits paid or provided:
		Life and annuity policy benefits				127.9			142.4			207.7			203.4									30.5			35.7
		Div accum & div to policyholders										36.0			36.6
		Interest credited to policy bal				447.9			419.1			295.2			279.5
		Health policy benefits										0.0			0.0									6.8			6.2
	Underwriting, acquisition, insurance and other expenses					272.1			260.6			180.6			190.8			190.4			206.4			64.2			70.8
	Goodwill amortization								0.6						11.8						8.1						0.3
	Interest											0.0

		*Operating Benefits and Expenses*				847.9			822.7			719.5			722.1			190.4			214.5			101.6			113.0

				Income from Operations Before Tax		154.4			212.2			210.4			211.2			17.8			9.9			20.6			38.2

	Federal income taxes					26.2			39.1			65.8			75.5			3.2			3.8			(0.5	)		7.6

				*Income from Operations*		128.2			173.1			144.6			135.7			14.6			6.1			21.1			30.6

	Restructuring charges					(1.0	)		(1.3	)					(2.0	)
	Realized gains (losses) on investments					(69.5	)		(8.1	)		(43.4	)		(11.8	)		(1.4	)		(1.2	)		(0.4	)		1.8
	Gains (losses) on derivatives					0.1			0.0			0.3			0.1
	Reserve increase on business sold through reinsurance Gain on sale of subsidiaries

*Income before Accounting Changes*						57.8			163.8			101.6			122.0			13.2			4.9			20.7			32.4
	Cumulative effect of accounting changes								(7.3	)					(5.5	)					(0.1	)

			*Net Income*			57.8			156.5			101.6			116.5			13.2			4.8			20.7			32.4

*Inc. from Oper.-before Goodwill Amort.*						128.2			173.7			144.6			147.6			14.6			14.2			21.1			30.9

*Net Income-before Goodwill Amort.*						57.8			157.1			101.6			128.3			13.2			13.0			20.7			32.7


					Corporate and						Consolidating
					Other Operations						Adjustments						Consolidated

					Jun			Jun			Jun			Jun			Jun			Jun
					2002			2001			2002			2001			2002			2001

*Operating Revenue*
	Life and annuity premiums					(3.4	)		581.9									143.4			756.0
	Surrender charges								1.2			1.1			1.2			41.4			50.6
	Mortality assessments					(1.7	)		0.0									260.9			267.4
	Expense assessments					1.7			(0.0	)		21.3			25.0			425.0			472.4
	Health premiums					9.3			199.1									10.8			200.5
	Investment advisory fees											(41.9	)		(46.2	)		95.8			99.0
	Other revenue and fees					192.3			158.0			(74.4	)		(82.8	)		180.1			142.3
	Net investment income					92.5			160.3			(3.1	)		(6.6	)		1299.1			1346.8
	Earnings in Unconsolidated Affiliates					(0.6	)		0.9									(0.6	)		0.9

			*Operating Revenue*			290.2			1101.5			(96.9	)		(109.4	)		2455.8			3336.0

*Operating Benefits and Expenses*
	Ins. benefits paid or provided:
		Life and annuity policy benefits				1.5			411.1									367.6			792.5
		Div accum & div to policyholders				0.0			2.5									36.0			39.1
		Interest credited to policy bal				29.5			17.9			16.1			20.2			788.6			736.7
		Health policy benefits				30.4			187.1									37.3			193.3
	Underwriting, acquisition, insurance and other expenses					204.1			410.7			(109.9	)		(123.0	)		801.5			1016.2
	Goodwill amortization								0.9						(0.0	)					21.7
	Interest					52.5			73.1			(3.1	)		(6.6	)		49.5			66.5

		*Operating Benefits and Expenses*				318.0			1103.2			(96.9	)		(109.4	)		2080.5			2866.1

				Income from Operations Before Tax		(27.9	)		(6.0	)					4.3			375.4			469.9

	Federal income taxes					(8.6	)		(4.1	)					1.3			86.1			123.2

				*Income from Operations*		(19.3	)		(1.8	)					3.0			289.2			346.7

	Restructuring charges								(1.2	)								(1.0	)		(4.5	)
	Realized gains (losses) on investments					(5.7	)		(6.3	)		(0.0	)		0.8			(120.3	)		(24.8	)
	Gains (losses) on derivatives					(0.0	)		(0.0	)								0.4			0.1
	Reserve increase on business sold through reinsurance					(14.4	)											(14.4	)
	Gain on sale of subsidiaries

*Income before Accounting Changes*						(39.4	)		(9.4	)		(0.0	)		3.8			153.9			317.5
	Cumulative effect of accounting changes								(2.7	)											(15.6	)

			*Net Income*			(39.4	)		(12.1	)		(0.0	)		3.8			153.9			301.9

*Inc. from Oper.-before Goodwill Amort.*						(19.3	)		(1.0	)					3.0			289.2			368.5

*Net Income-before Goodwill Amort.*						(39.4	)		(11.2	)		(0.0	)		3.8			153.9			323.7


06/30/02		PAGE 8

Statement of Consolidated Income
Unaudited [Millions of Dollars]


																				YTD			YTD
																				Jun			Jun
*For the Year Ended December 31*					1997			1998			1999			2000			2001			2001			2002

*Operating Revenue*
	Life and annuity premiums					756.2			985.6			1183.0			1403.3			1363.4			756.0			143.4
	Surrender charges					45.4			91.5			110.2			114.7			101.5			50.6			41.4
	Mortality assessments					186.4			380.1			496.4			496.5			533.3			267.4			260.9
	Expense assessments					600.3			803.0			930.9			1050.2			909.2			472.4			425.0
	Health premiums					572.6			635.1			698.5			409.8			340.6			200.5			10.8
	Investment advisory fees					204.9			227.1			223.8			213.1			197.2			99.0			95.8
	Other revenue and fees					157.3			261.0			344.5			445.4			351.8			142.3			180.1
	Net investment income					2250.8			2681.4			2807.5			2747.1			2679.6			1346.8			1299.1
	Earnings in Unconsolidated Affiliates					2.1			3.3			5.8			(0.4	)		5.7			0.9			(0.6	)

			*Operating Revenue*			4775.9			6068.0			6800.7			6879.8			6482.2			3336.0			2455.8

*Operating Benefits and Expenses*
	Ins. benefits paid or provided:
		Life and annuity policy benefits				1090.2			1237.7			1546.6			1546.4			1517.9			792.5			367.6
		Div accum & div to policyholders				29.7			78.0			88.4			87.6			83.7			39.1			36.0
		Interest credited to policy bal				1238.7			1446.2			1510.4			1474.2			1506.0			736.7			788.6
		Health policy benefits				833.1			566.9			659.7			449.0			302.1			193.3			37.3
	Underwriting, acquisition, insurance and other expenses					1557.3			1844.2			2218.5			2168.4			2004.5			1016.2			801.5
	Goodwill amortization					15.6			44.5			49.2			45.1			43.4			21.7
	Interest					92.5			117.1			133.7			139.5			121.0			66.5			49.5

		*Operating Benefits and Expenses*				4857.2			5334.6			6206.4			5910.3			5578.6			2866.1			2080.5

				Income from Operations Before Tax		(81.3	)		733.4			594.4			969.6			903.6			469.9			375.4

	Federal income taxes					(30.6	)		203.0			118.9			250.5			214.7			123.2			86.1

				*Income from Continuing Operations*		(50.6	)		530.4			475.5			719.1			689.0			346.7			289.2

	Discontinued Operations					911.8
	Restructuring charges								(34.3	)		(18.9	)		(80.2	)		(24.7	)		(4.5	)		(1.0	)
	Realized gains (losses) on investments					72.9			13.7			3.8			(17.5	)		(68.7	)		(24.8	)		(120.3	)
	Gains (losses) on derivatives																	(4.9	)		0.1			0.4
	Reserve increase on business sold through reinsurance																							(14.4	)
	Gain on sale of subsidiaries																	15.0

*Income before Accounting Changes*						934.0			509.8			460.4			621.4			605.8			317.5			153.9
	Cumulative Effect of Accounting Changes																	(15.6	)		(15.6	)

			*Net Income*			934.0			509.8			460.4			621.4			590.2			301.9			153.9


					Sep			Dec			Mar			Jun			Sep			Dec
*For the Quarter Ended*					1999			1999			2000			2000			2000			2000

*Operating Revenue*
	Life and annuity premiums					263.8			361.1			331.2			337.1			339.0			396.1
	Surrender charges					28.4			29.2			28.7			29.8			25.9			30.3
	Mortality assessments					118.2			118.7			118.5			122.5			125.9			129.6
	Expense assessments					245.9			238.3			261.1			258.6			273.4			257.1
	Health premiums					149.6			233.6			58.4			144.0			117.9			89.4
	Investment advisory fees					54.6			54.1			54.0			52.2			53.3			53.6
	Other revenue and fees					77.9			71.2			106.1			88.7			106.0			144.6
	Net investment income					697.1			700.1			711.1			673.8			690.0			672.1
	Earnings in Unconsolidated Affiliates					1.2			1.8			1.0			(3.6	)		1.6			0.6

			*Operating Revenue*			1636.7			1808.2			1670.2			1703.0			1733.1			1773.5

*Operating Benefits and Expenses*
	Ins. benefits paid or provided:
		Life and annuity policy benefits				294.0			572.5			356.1			370.1			390.2			430.0
		Div accum & div to policyholders				21.2			23.3			21.7			20.2			18.2			27.4
		Interest credited to policy bal				369.7			388.5			373.9			366.8			362.0			371.5
		Health policy benefits				189.8			157.8			114.3			119.9			123.0			91.8
	Underwriting, acquisition, insurance and other expenses					533.4			630.5			525.7			537.5			532.4			572.9
	Goodwill amortization					12.9			14.6			10.2			12.0			12.0			10.9
	Interest					33.3			34.7			36.3			35.4			34.4			33.4

		*Operating Benefits and Expenses*				1454.1			1821.8			1438.2			1461.9			1472.2			1537.9

				Income from Operations before Tax/Min Int		182.6			(13.6	)		232.0			241.1			260.8			235.6

	Federal income taxes					51.2			(50.2	)		61.6			67.9			70.1			50.9

				*Inc from Operations before Min Int*		131.4			36.6			170.4			173.2			190.7			184.7

	Minority Interest											(0.2	)		0.2			(0.0	)		0.0

				*Income from Operations*		131.4			36.6			170.6			173.0			190.7			184.7

	Restructuring charges					(3.2	)		(3.6	)					(2.7	)		(40.5	)		(37.0	)
	Realized gains (losses) on investments					4.1			1.6			(0.4	)		(6.7	)		(11.6	)		1.2
	Gains (losses) on derivatives
	Reserve increase on business sold through reinsurance
	Gain on sale of subsidiaries

*Income before Accounting Changes*						132.3			34.6			170.2			163.6			138.6			148.9
	Cumulative Effect of Accounting Changes

			*Net Income*			132.3			34.6			170.2			163.6			138.6			148.9

[Additional columns below]

[Continued from above table, first column(s) repeated]


					Mar			Jun			Sep			Dec			Mar			Jun
*For the Quarter Ended*					2001			2001			2001			2001			2002			2002

*Operating Revenue*
	Life and annuity premiums					402.1			353.9			336.8			270.7			74.7			68.7
	Surrender charges					27.8			22.8			23.2			27.7			20.2			21.3
	Mortality assessments					133.7			133.7			133.3			132.6			130.4			130.5
	Expense assessments					244.9			227.5			224.4			212.4			210.5			214.4
	Health premiums					104.8			95.7			103.9			36.1			2.4			8.3
	Investment advisory fees					49.4			49.6			47.2			50.9			48.0			47.8
	Other revenue and fees					82.0			60.3			91.5			118.0			95.5			84.7
	Net investment income					673.7			673.1			686.2			646.6			648.1			651.0
	Earnings in Unconsolidated Affiliates					0.9			0.0			0.4			4.3						(0.6	)

			*Operating Revenue*			1719.5			1616.5			1646.9			1499.3			1229.8			1226.0

*Operating Benefits and Expenses*
	Ins. benefits paid or provided:
		Life and annuity policy benefits				418.9			373.6			422.6			302.8			176.1			191.5
		Div accum & div to policyholders				18.9			20.2			18.0			26.6			17.8			18.2
		Interest credited to policy bal				367.1			369.7			378.7			390.6			406.2			382.5
		Health policy benefits				101.8			91.5			83.8			25.0			3.3			33.9
	Underwriting, acquisition, insurance and other expenses					524.8			491.4			516.0			472.3			392.2			409.3
	Goodwill amortization					10.9			10.9			10.9			10.7
	Interest					34.4			32.0			29.6			25.0			24.8			24.6

		*Operating Benefits and Expenses*				1476.7			1389.3			1459.6			1252.9			1020.4			1060.1

				Income from Operations before Tax/Min Int		242.7			227.2			187.3			246.5			209.4			166.0

	Federal income taxes					64.1			59.1			44.1			47.4			47.4			38.7

				*Inc from Operations before Min Int*		178.6			168.1			143.2			199.1			162.0			127.2

	Minority Interest					(0.0	)		(0.0	)		(0.0	)		(0.0	)

				*Income from Operations*		178.6			168.1			143.2			199.1			162.0			127.2

	Restructuring charges					(0.7	)		(3.9	)		0.0			(20.2	)					(1.0	)
	Realized gains (losses) on investments					(13.4	)		(11.5	)		(23.8	)		(20.0	)		(67.6	)		(52.7	)
	Gains (losses) on derivatives					(0.1	)		0.2			(0.4	)		(4.6	)		0.1			0.3
	Reserve increase on business sold through reinsurance																				(14.4	)
	Gain on sale of subsidiaries														15.0

*Income before Accounting Changes*						164.5			153.0			119.1			169.2			94.5			59.4
	Cumulative Effect of Accounting Changes					(4.3	)		(11.3	)					(0.0	)

			*Net Income*			160.2			141.7			119.1			169.2			94.5			59.4


06/30/02		PAGE 9

Reconciliation of Business Segments to Consolidated Balance Sheets
Unaudited [Millions of Dollars]

Investment

Lincoln Retirement

Life Insurance

Management

Lincoln UK

Jun

Dec

Jun

Dec

Jun

Dec

Jun

Dec

2002

2001

2002

2001

2002

2001

2002

2001

ASSETS

Investments

Corporate bonds

11681.1

10956.5

7273.7

7088.2

439.9

424.2

574.3

512.3

U.S. government bonds

13.3

13.2

74.2

78.2

0.1

0.2

Foreign government bonds

192.8

145.8

121.5

114.6

1.4

1.9

278.2

326.2

Asset/Mortgage backed securities

2318.4

1945.8

769.8

779.1

38.0

42.5

State and municipal bonds

24.6

24.3

25.0

17.4

Preferred stocks-redeemable

55.7

62.7

12.5

13.0

8.8

8.8

Common stocks

20.5

6.4

7.6

141.9

211.3

Preferred stocks-equity

32.8

38.5

0.7

5.6

2.6

2.6

Mortgage loans

2297.2

2378.1

1653.2

1701.6

88.5

92.4

0.3

0.3

Real estate

0.2

0.2

Policy loans

474.6

491.4

1423.3

1439.7

8.1

8.6

Other long-term investments

15.2

11.7

19.3

20.9

Total Investments

17126.3

16068.0

11379.6

11265.9

579.3

572.6

1003.0

1058.8

Allocated investments

3877.4

3481.0

1338.8

1154.7

111.2

102.4

Notes receivable from LNC

581.1

333.3

136.4

27.6

30.2

82.9

Invest in unconsol affiliates Cash and invested cash

(107.3

)

(24.7

)

(23.1

)

(36.4

)

68.9

55.4

230.0

181.2

Property and equipment

8.0

8.5

44.7

36.5

21.1

39.3

Premium and fees receivable

0.4

0.0

22.4

8.2

35.6

38.5

Accrued investment income

249.6

245.0

184.2

187.6

9.6

8.9

20.5

20.9

Assets held in separate accounts

30741.3

34324.6

1341.8

1491.0

5520.0

5607.2

Federal income tax recoverable Amount recoverable from reinsurers

1149.0

1211.6

879.6

859.5

Deferred acquisition costs

967.8

912.8

1404.9

1265.6

591.0

587.3

Other intangible assets

146.8

154.5

930.7

964.0

45.8

50.1

243.9

244.0

Goodwill

43.9

43.9

855.1

855.1

300.7

300.7

12.7

12.1

Other

167.4

138.1

393.7

358.4

202.9

212.5

35.7

37.9

Total Assets

54943.7

56888.2

18852.2

18409.7

1429.1

1460.5

7678.0

7788.8


			Corporate and						Consolidating
			Other Operations						Adjustments						Consolidated

			Jun			Dec			Jun			Dec			Jun		Dec
			2002			2001			2002			2001			2002		2001

*ASSETS*

*Investments*
	Corporate bonds			4024.7			4123.9									23993.6		23105.1
	U.S. government bonds			353.9			318.9									441.6		410.5
	Foreign government bonds			526.1			586.2									1120.1		1174.7
	Asset/Mortgage backed securities			904.8			757.3									4031.0		3524.7
	State and municipal bonds			9.1			3.0									58.8		44.7
	Preferred stocks-redeemable			2.5			1.4									79.6		85.9
	Common stocks			98.9			100.5									267.7		319.3
	Preferred stocks-equity			115.8			104.5									151.8		151.2
	Mortgage loans			356.1			363.0									4395.4		4535.5
	Real estate			258.5			267.7									258.7		267.9
	Policy loans															1906.1		1939.7
	Other long-term investments			421.6			521.3									456.0		553.8

		*Total Investments*		7072.0			7147.8									37160.1		36113.1

Allocated investments				(1122.3	)		50.0			(4205.1	)		(4788.2	)
Notes receivable from LNC				(747.2	)		(443.7	)		(0.5	)		(0.1	)		0.0		0.0
Invest in unconsol affiliates				7.5			8.1									7.5		8.1
Cash and invested cash				2096.9			3130.5						(210.5	)		2265.4		3095.5
Property and equipment				179.6			173.2									253.5		257.5
Premium and fees receivable				417.1			365.6			(14.2	)		(12.2	)		461.4		400.1
Accrued investment income				92.4			101.0									556.3		563.5
Assets held in separate accounts										2976.5			3410.5			40579.6		44833.4
Federal income tax recoverable										438.4			15.1			438.4		15.1
Amount recoverable from reinsurers				4660.0			4150.6			(178.7	)		(191.4	)		6509.9		6030.4
Deferred acquisition costs				2.3			33.9			90.6			85.6			3056.6		2885.3
Other intangible assets																1367.3		1412.6
Goodwill				(0.0	)		(0.0	)								1212.4		1211.8
Other				860.2			865.5			(459.3	)		(437.4	)		1200.6		1174.9

		*Total Assets*		13518.5			15582.5			(1352.3	)		(2128.6	)		95069.2		98001.3


06/30/02		PAGE 10

Reconciliation of Business Segments to Consolidated Balance Sheets
Unaudited [Millions of Dollars]

Investment

Lincoln Retirement

Life Insurance

Management

Lincoln UK

Jun

Dec

Jun

Dec

Jun

Dec

Jun

Dec

2002

2001

2002

2001

2002

2001

2002

2001

LIABILITIES and SHAREHOLDERS' EQUITY
Liabilities

Insurance and Inv Contract Liabilities:

Life and annuity reserves

2664.9

2622.7

13339.2

12955.8

1327.5

1338.1

Health reserves

0.4

0.3

47.2

46.0

Unpaid claims — life and health

40.2

31.3

100.3

92.9

40.2

42.4

Unearned premiums

0.0

0.0

Premium deposit funds

18503.4

17838.9

10.0

13.9

30.1

29.2

Participating policyholders’ funds

91.9

100.2

Other policyholders’ funds

577.3

555.2

Liab related to separate accounts

30741.3

34324.6

1341.8

1491.0

5520.0

5607.2

Total Insurance and Inv Contract Liabilities

51949.8

54817.5

15460.9

15209.5

6965.0

7063.0

Federal income taxes

80.0

(5.7

)

(7.3

)

(13.5

)

41.7

43.3

(1.8

)

(12.2

)

Short-term debt

10.0

Long-term debt Minority Interest in pref. securities of sub Notes payable to LNC

9.3

Other liabilities

363.1

168.4

460.5

436.3

819.8

866.2

203.3

192.0

Deferred gain on indemnity reinsurance
Total Liabilities

52392.9

54980.3

15914.2

15642.2

861.6

918.8

7166.5

7242.8

Net unrealized gains (losses) on securities

137.6

79.9

48.5

13.6

2.4

1.5

25.1

15.3

Gains (losses) on derivatives

7.5

0.3

15.5

4.5

Other shareholders’ equity

2405.7

1824.9

2874.1

2738.5

565.1

540.3

524.3

566.7

S/Hs’ equity-minimum pension liability adjustment

(37.8

)

(36.0

)

Cumulative effect of accounting change

2.8

10.9

Shareholders’ Equity

2550.8

1907.9

2938.0

2767.5

567.6

541.7

511.5

546.0

Total Liabilities and S/Hs’ Equity

54943.7

56888.2

18852.2

18409.7

1429.1

1460.5

7678.0

7788.8


				Corporate and						Consolidating
				Other Operations						Adjustments						Consolidated

				Jun			Dec			Jun			Dec			Jun			Dec
				2002			2001			2002			2001			2002			2001

LIABILITIES and SHAREHOLDERS' EQUITY Liabilities
Insurance and Inv Contract Liabilities:
	Life and annuity reserves				1397.5			1122.8			(117.8	)		(122.4	)		18611.2			17917.0
	Health reserves				2128.4			2491.5									2176.1			2537.9
	Unpaid claims — life and health				905.4			920.9									1086.1			1087.5
	Unearned premiums				154.3			66.9									154.3			66.9
	Premium deposit funds				29.3			105.5			585.0			597.5			19157.8			18585.0
	Participating policyholders’ funds																91.9			100.2
	Other policyholders’ funds				7.4			7.4									584.7			562.7
	Liab related to separate accounts										2976.5			3410.5			40579.6			44833.4

			Total Insurance and Inv Contract Liabilities		4622.3			4715.0			3443.7			3885.6			82441.8			85690.6
Federal income taxes					(550.7	)		(26.7	)		438.1			14.8
Short-term debt					211.0			550.7						(210.5	)		211.0			350.2
Long-term debt					1112.3			861.8									1112.3			861.8
Minority Interest in pref. securities of sub					380.0			474.7									380.0			474.7
Notes payable to LNC					361.8			335.0			(361.8	)		(344.3	)		0.0			0.0
Other liabilities					3321.8			3239.4			(667.5	)		(686.3	)		4501.1			4216.1
Deferred gain on indemnity reinsurance					1115.2			1144.5									1115.2			1144.5

			*Total Liabilities*		10573.8			11294.3			2852.4			2659.3			89761.4			92737.8

Net unrealized gains (losses) on securities					103.9			77.2			8.2			8.2			325.7			195.7
Gains (losses) on derivatives					(0.3	)		(0.8	)								22.7			3.9
Other shareholders’ equity					2841.1			4207.9			(4213.0	)		(4796.0	)		4997.4			5082.2
S/Hs’ equity-minimum pension liability adjustment																	(37.8	)		(36.0	)
Cumulative effect of accounting change								3.9												17.6

			*Shareholders’ Equity*		2944.7			4288.2			(4204.8	)		(4787.9	)		5307.9			5263.5

		*Total Liabilities and S/Hs’ Equity*			13518.5			15582.5			(1352.3	)		(2128.6	)		95069.2			98001.3


6/30/2002		PAGE 11

Five Year Comparative Balance Sheet
Unaudited [Millions of Dollars except Common Share Data]


				1997		1998		1999			2000		2001

ASSETS Investments
		Corporate bonds			16633.3		22505.2		21119.5			21249.7		23105.1
		U.S. government bonds			662.4		1134.6		538.3			542.9		410.5
		Foreign government bonds			1804.4		1321.2		1447.5			1321.1		1174.7
		Mortgage backed securities			4529.3		5080.5		4404.0			4160.4		3524.7
		State and municipal bonds			241.4		16.7		14.7			14.6		44.7
		Preferred stocks-redeemable			195.5		174.6		164.7			161.2		85.9
		Common stocks			572.3		463.1		514.5			436.6		319.3
		Preferred stocks-equity			88.2		79.8		89.5			113.1		151.2
		Mortgage loans			3288.1		4393.1		4735.4			4663.0		4535.5
		Real estate			576.0		488.7		256.2			282.0		267.9
		Policy loans			763.1		1840.0		1892.4			1960.9		1939.7
		Other long-term investments			464.8		432.0		401.8			463.3		553.8

			*Total Investments*		29818.8		37929.5		35578.4			35368.6		36113.1

Invest in unconsol affiliates					21.0		18.8		25.8			6.4		8.1
Cash and invested cash					3794.7		2433.4		1895.9			1927.4		3095.5
Property and equipment					189.8		174.8		203.8			228.2		257.5
Premiums and fees receivable					197.5		246.2		259.6			296.7		400.1
Accrued investment income					423.0		528.5		533.2			546.4		563.5
Assets held in separate accounts					37138.8		43408.9		53654.2			50579.9		44833.4
Federal income taxes recoverable							204.1		345.0			207.5		15.1
Amounts recoverable from reinsurers					2350.8		3127.1		3954.3			3747.7		6030.4
Deferred acquisition costs					1623.8		1964.4		2800.3			3070.5		2885.3
Other intangible assets					613.9		1848.4		1746.5			1557.0		1412.6
Goodwill					457.7		1484.3		1423.0			1286.0		1211.8
Other					544.8		468.0		675.7			1021.6		1174.9

			*Total Assets*		77174.7		93836.3		103095.7			99844.1		98001.3

*LIABILITIES and SHAREHOLDERS’ EQUITY*
*Liabilities*
Insurance and Inv Contract Liabilities:
		Life and annuity reserves			8228.7		16434.2		17071.4			17841.2		17917.0
		Health reserves			2300.4		2600.1		2507.8			2523.8		2537.9
		Unpaid claims-life and health			682.0		1043.4		1269.8			1316.6		1087.5
		Unearned premiums			55.3		62.3		75.8			46.5		66.9
		Premium deposit funds			19803.0		20171.9		19624.1			17715.5		18585.0
		Participating policyholders’ funds			79.8		142.7		132.0			139.4		100.2
		Other policyholders’ funds			180.6		438.4		472.6			522.2		562.7
		Liab related to separate accounts			37138.8		43408.9		53654.2			50579.9		44833.4

			Total Ins and Inv Contr Liabilities		68468.5		84301.9		94807.7			90685.1		85690.6
Federal income taxes					487.8
Short-term debt					297.2		314.6		460.2			312.9		350.2
Long-term debt					511.0		712.2		712.0			712.2		861.8
Minority Interest — pref sec of a sub					315.0		745.0		745.0			745.0		474.7
Other liabilities					2112.2		2374.6		2107.0			2434.7		4216.1
Deferred gain on indemnity reinsurance														1144.5

			*Total Liabilities*		72191.8		88448.3		98831.9			94890.0		92737.8

S/Hs’ equity-unrealized gains (losses)-cont op					436.0		552.4		(465.7	)		12.0		199.6
S/Hs’ equity-foreign currency					46.2		50.0		30.0			21.9		(8.1	)
S/Hs’ equity-minimum pension liability adjustment														(36.0	)
S/Hs’ equity-other					4500.7		4785.5		4699.6			4920.2		5090.4
Cumulative effect of accounting change														17.6

			*Total Shareholders’ Equity*		4982.9		5387.9		4263.9			4954.1		5263.5

			*Total Liabilities and Shareholders’ Equity*		77174.7		93836.3		103095.7			99844.1		98001.3

*Shareholders’ Equity Per Share*
	[Book Value, Securities at Cost]			$	22.48	$	23.86	$	24.14		$	25.85	$	26.94
Common shares outstanding					202.3		202.6		196.0			191.2		187.3


06/30/02		PAGE 12

Quarterly Balance Sheet
Unaudited [Millions of Dollars except Common Share Data]


				Sep			Dec			Mar			Jun			Sep			Dec
				1999			1999			2000			2000			2000			2000

*ASSETS*
*Investments*
		Corporate bonds			21560.5			21119.5			21188.0			20719.1			21064.7			21249.7
		U.S. government bonds			991.0			538.3			572.4			566.2			575.5			542.9
		Foreign government bonds			1369.6			1447.5			1416.4			1377.4			1277.7			1321.1
		Mortgage backed securities			4601.2			4404.0			4393.4			4242.4			4172.5			4160.4
		State and municipal bonds			14.8			14.7			14.7			14.1			14.3			14.6
		Preferred stocks — redeemable			171.3			164.7			159.7			159.2			159.5			161.2
		Common stocks			423.9			514.5			496.4			467.8			479.9			436.6
		Preferred stocks-equity			82.7			89.5			91.3			92.2			90.3			113.1
		Mortgage loans			4772.7			4735.4			4833.9			4783.8			4767.3			4663.0
		Real estate			280.3			256.2			283.4			282.1			297.6			282.0
		Policy loans			1863.2			1892.4			1896.3			1914.7			1935.6			1960.9
		Other long-term investments			401.2			401.8			428.8			438.2			470.5			463.3

			*Total Investments*		36532.4			35578.4			35774.6			35057.2			35305.4			35368.6

Invest in unconsol affiliates					23.4			25.8						(0.9	)		5.8			6.4
Cash and invested cash					2342.9			1895.9			1510.1			1619.3			1435.9			1927.4
Property and equipment					191.9			203.8			207.7			205.5			213.8			228.2
Premiums and fees receivable					296.0			259.6			190.2			247.8			240.8			296.7
Accrued investment income					602.9			533.2			575.0			544.0			569.2			546.4
Assets held in separate accounts					46228.8			53654.2			56907.6			54924.2			54410.9			50579.9
Federal income taxes recoverable					457.3			345.0			300.4			246.1			267.3			207.5
Amount recoverable from reinsurers					3315.6			3954.3			3851.0			3775.3			3774.7			3747.7
Deferred acquisition costs					2614.5			2800.3			2870.4			2968.0			3048.0			3070.5
Other intangible assets					1760.6			1746.5			1705.5			1646.7			1598.4			1557.0
Goodwill					1435.0			1423.0			1349.6			1335.4			1296.6			1286.0
Other					699.3			675.7			1097.8			1279.1			1076.4			1021.6

			*Total Assets*		96500.7			103095.7			106340.0			103847.6			103243.1			99844.1

*LIABILITIES and SHAREHOLDERS’ EQUITY*
*Liabilities*
Insurance and Inv Contract Liabilities:
		Life and annuity reserves			16760.5			17071.4			17172.1			17247.3			17500.0			17841.2
		Health reserves			2511.3			2507.8			2547.4			2494.2			2520.2			2523.8
		Unpaid claims — life and health			1162.6			1269.8			1177.3			1204.1			1202.8			1316.6
		Unearned premiums			62.5			75.8			57.1			52.8			51.8			46.5
		Premium deposit funds			19988.9			19624.1			18899.3			18407.2			18072.1			17715.5
		Participating policyholders’ funds			120.2			132.0			130.7			130.4			135.4			139.4
		Other policyholders’ funds			445.9			472.6			478.9			490.6			500.7			522.2
		Liab related to separate accounts			46228.8			53654.2			56907.6			54924.2			54410.9			50579.9

			Total Ins and Inv Contr Liabilities		87280.8			94807.7			97370.5			94950.8			94394.0			90685.1
Federal income taxes
Short-term debt					367.7			460.2			474.2			355.7			330.3			312.9
Long-term debt					712.0			712.0			712.0			712.1			712.2			712.2
Minority Interest — pref sec of a sub					745.0			745.0			745.0			745.0			745.0			745.0
Notes payable to LNC
Other liabilities					2733.0			2107.0			2697.9			2860.3			2522.9			2434.7
Deferred gain on indemnity reinsurance

			*Total Liabilities*		91838.5			98831.9			101999.6			99623.9			98704.5			94890.0

S/Hs’ equity-unrealized gns (losses) — inv					(103.8	)		(465.7	)		(411.2	)		(556.6	)		(337.7	)		12.0
S/Hs’ equity- gains (losses) — derivatives
S/Hs’ equity-foreign currency					40.2			30.0			22.8			21.8			19.9			21.9
S/Hs’ equity-minimum pension liability adj
S/Hs’ equity-other					4725.8			4699.6			4728.9			4758.5			4856.4			4920.1
Cumulative effect of accounting change

			*Total Shareholders’ Equity*		4662.2			4263.9			4340.4			4223.7			4538.6			4954.1

			*Total Liabilities and Shareholders’ Equity*		96500.7			103095.7			106340.0			103847.6			103243.1			99844.1

*Shareholders’ Equity Per Share*
	[Book Value, Securities at Cost]			$	24.28		$	24.14		$	24.58		$	25.01		$	25.43		$	25.85
Common shares outstanding					196.3			196.0			193.3			191.1			191.8			191.2

[Additional columns below]

[Continued from above table, first column(s) repeated]


				Mar		Jun			Sep		Dec			Mar			Jun
				2001		2001			2001		2001			2002			2002

*ASSETS*
*Investments*
		Corporate bonds			21855.2		22116.6			23424.3		23105.1			23470.4			23993.6
		U.S. government bonds			536.6		510.0			467.7		410.5			429.1			441.6
		Foreign government bonds			1240.8		1236.3			1160.3		1174.7			1180.1			1120.1
		Mortgage backed securities			4009.8		3844.6			3765.6		3524.7			3613.9			4031.0
		State and municipal bonds			14.7		14.1			14.4		44.7			62.6			58.8
		Preferred stocks — redeemable			154.1		152.2			99.3		85.9			84.6			79.6
		Common stocks			388.6		373.3			311.2		319.3			284.4			267.7
		Preferred stocks-equity			170.9		160.8			166.5		151.2			154.2			151.8
		Mortgage loans			4641.2		4652.8			4663.1		4535.5			4448.2			4395.4
		Real estate			308.1		306.9			288.8		267.9			258.2			258.7
		Policy loans			1947.0		1947.4			1943.4		1939.7			1918.0			1906.1
		Other long-term investments			477.4		480.9			483.4		553.8			459.6			456.0

			*Total Investments*		35744.5		35796.0			36788.0		36113.1			36363.1			37160.1

Invest in unconsol affiliates					7.3		6.1			6.5		8.1			8.1			7.5
Cash and invested cash					2015.2		1501.9			1996.3		3095.5			1699.5			2265.4
Property and equipment					242.1		251.4			261.0		257.5			266.4			253.5
Premiums and fees receivable					282.8		303.7			264.5		400.1			376.3			461.4
Accrued investment income					581.9		573.2			615.1		563.5			577.1			556.3
Assets held in separate accounts					44506.2		47140.2			39479.8		44833.4			44916.7			40579.6
Federal income taxes recoverable					106.6		177.5			35.3		15.1			551.3			438.4
Amount recoverable from reinsurers					3706.4		3662.0			3818.3		6030.4			6096.3			6509.9
Deferred acquisition costs					2963.4		3129.1			3087.2		2885.3			3114.9			3056.6
Other intangible assets					1505.3		1479.0			1451.5		1412.6			1384.0			1367.3
Goodwill					1274.5		1263.6			1253.2		1211.8			1211.5			1212.4
Other					1186.3		1147.7			1149.4		1174.9			1280.9			1200.6

			*Total Assets*		94122.4		96431.2			90206.0		98001.3			97846.4			95069.2

*LIABILITIES and SHAREHOLDERS’ EQUITY*
*Liabilities*
Insurance and Inv Contract Liabilities:
		Life and annuity reserves			17733.0		17865.3			17990.8		17917.0			18014.6			18611.2
		Health reserves			2534.8		2533.9			2573.2		2537.9			2492.4			2176.1
		Unpaid claims — life and health			1255.3		1136.5			1206.6		1087.5			1153.6			1086.1
		Unearned premiums			45.9		19.0			8.1		66.9			66.5			154.3
		Premium deposit funds			17667.1		17715.9			18509.7		18585.0			18669.6			19157.8
		Participating policyholders’ funds			145.0		135.2			118.3		100.2			98.6			91.9
		Other policyholders’ funds			532.1		541.4			554.3		562.7			571.9			584.7
		Liab related to separate accounts			44506.2		47140.2			39479.8		44833.4			44916.7			40579.6

			Total Ins and Inv Contr Liabilities		84419.3		87087.2			80440.8		85690.6			85983.9			82441.8
Federal income taxes
Short-term debt					415.3		351.3			539.0		350.2			510.2			211.0
Long-term debt					712.3		712.4			712.4		861.8			861.8			1112.3
Minority Interest — pref sec of a sub					745.0		745.0			305.0		474.7			376.2			380.0
Notes payable to LNC															(0.0	)		0.0
Other liabilities					2734.2		2479.4			2840.2		4216.1			3864.6			4501.1
Deferred gain on indemnity reinsurance												1144.5			1118.6			1115.2

			*Total Liabilities*		89026.0		91375.3			84837.4		92737.8			92715.3			89761.4

S/Hs’ equity-unrealized gns (losses) — inv					190.4		76.2			247.9		195.7			31.8			325.7
S/Hs’ equity- gains (losses) — derivatives					5.7		9.4			2.9		3.9			22.6			22.7
S/Hs’ equity-foreign currency					4.1		(15.3	)		6.9		(8.1	)		(20.9	)		21.9
S/Hs’ equity-minimum pension liability adj												(36.0	)		(35.2	)		(37.8	)
S/Hs’ equity-other					4878.5		4968.2			5093.4		5090.4			5132.7			4975.4
Cumulative effect of accounting change					17.6		17.6			17.6		17.6

			*Total Shareholders’ Equity*		5096.4		5055.9			5368.6		5263.5			5131.1			5307.9

			*Total Liabilities and Shareholders’ Equity*		94122.4		96431.2			90206.0		98001.3			97846.4			95069.2

*Shareholders’ Equity Per Share*
	[Book Value, Securities at Cost]			$	25.96	$	26.32		$	26.87	$	26.94		$	27.02		$	26.88
Common shares outstanding					188.1		188.2			189.8		187.3			187.9			184.5


06/30/02		PAGE 13

Lincoln Retirement
Income Statements & Operational Data
Unaudited [Millions of Dollars]


																				YTD			YTD
																				Jun			Jun
For the Year Ended December 31					1997			1998			1999			2000			2001			2001			2002

*Operating Revenue*
	Premiums					84.2			53.9			65.2			64.3			77.5			51.6			25.3
	Surrender charges					29.8			33.5			37.9			41.8			31.2			17.5			15.1
	Expense assessments					367.2			459.9			536.2			628.4			537.7			279.5			254.8
	Other revenue and fees					1.2			1.7			14.5			11.0			16.7			5.6			4.5
	Net investment income					1477.1			1501.6			1474.2			1393.5			1370.0			680.7			702.6

				*Operating Revenue*		1959.5			2050.6			2128.0			2138.9			2033.1			1034.9			1002.3

*Operating Benefits and Expenses*
	Benefits paid or provided:
		Benefits				292.6			271.6			259.1			254.7			263.9			142.4			127.9
		Interest credited to policy bal.				974.4			955.2			925.2			866.1			863.8			419.1			447.9
	Underwriting, acquisition, insurance and other expenses					415.0			498.8			560.8			575.5			524.5			260.6			272.1
	Goodwill amortization					0.0			2.2			2.0			(0.6	)		1.2			0.6			0.0

			*Operating Benefits and Expenses*			1682.0			1727.8			1747.1			1695.7			1653.5			822.7			847.9

				Income from Operations Before Tax		277.5			322.8			380.9			443.2			379.6			212.2			154.4
	Federal income taxes					54.5			60.4			81.4			81.2			59.3			39.1			26.2

				*Income from Operations*		223.0			262.4			299.4			362.0			320.3			173.1			128.2

	Realized gains (losses) on investments					40.3			11.4			(7.9	)		(3.4	)		(42.3	)		(8.1	)		(69.5	)
	Gains (losses) on derivatives																	(0.2	)		0.0			0.1
	Restructuring charges																	(1.3	)		(1.3	)		(1.0	)

				*Income before Accounting Changes*		263.3			273.8			291.5			358.6			276.5			163.8			57.8
	Cumulative effect of accounting changes																	(7.3	)		(7.3	)		0.0

				*Net Income*		263.3			273.8			291.5			358.6			269.2			156.5			57.8

*Inc from Oper — before Goodwill Amort.*						223.0			264.6			301.5			361.4			321.5			173.7			128.2
*Net Income — before Goodwill Amort.*						263.3			276.0			293.6			358.0			270.5			157.1			57.8
*Effective tax rate*						19.6	%		18.7	%		21.4	%		18.3	%		15.6	%		18.4	%		17.0	%
Operating Revenue						1959.5			2050.6			2128.0			2138.9			2033.1			1034.9			1002.3
Realized gains (losses) on investments						63.5			17.5			(12.1	)		(5.2	)		(64.5	)		(12.4	)		(106.7	)
Gains (losses) on derivatives																		(0.3	)		0.0			(0.0	)

		*Total Revenue*				2023.0			2068.1			2115.8			2133.7			1968.3			1022.5			895.6

Average capital						1373.0			1592.6			1562.0			1601.8			1828.2			1792.5			2216.4
Return on average capital						16.2	%		16.5	%		19.2	%		22.6	%		17.5	%		19.3	%		11.6	%
Roll Forward of Deferred Acquisition Costs
Balance at beginning-of-period																		812.5			812.5			912.8
Deferral																		240.9			110.4			122.5
Amortization																		(125.5	)		(69.0	)		(80.8	)

	Operating																	115.4			41.4			41.6
	Adjustment related to realized (gains) losses on securities available-for-sale																	68.2			17.7			46.6
	Adjustment related to unrealized (gains) losses on securities available-for-sale																	(90.0	)		(46.7	)		(18.4	)
Other*																		6.7			6.4			(14.8	)

Balance at end-of-period																		912.8			831.3			967.8

Includes the transfer of the Legacy Life block of businesses to the Life Insurance segment in the first quarter of 2002.


06/30/02		PAGE 14

Lincoln Retirement
Income Statements & Operational Data
Unaudited [Millions of Dollars]


					Sep			Dec			Mar			Jun			Sep			Dec
					1999			1999			2000			2000			2000			2000

*Operating Revenue*
		Premiums				13.1			21.0			13.3			16.8			18.0			16.2
		Surrender charges				10.1			9.8			11.1			11.2			10.4			9.1
		Expense assessments				142.6			140.5			155.1			155.7			163.4			154.2
		Other revenue and fees				0.9			6.4			2.2			0.6			4.6			3.5
		Net investment income				364.5			366.0			362.9			345.8			349.8			335.0

				*Operating Revenue*		531.2			543.7			544.6			530.1			546.2			518.1

*Operating Benefits and Expenses*
		Benefits paid or provided:
			Benefits			55.0			77.2			61.6			65.7			68.4			59.0
			Interest credited to policy balances			230.1			234.1			228.2			219.4			205.4			213.2
		Underwriting, acquisition, insurance and other expenses				146.5			134.7			144.5			139.8			147.9			143.2
		Goodwill amortization				0.6			0.5			(1.5	)		0.3			0.3			0.3

		*Operating Benefits and Expenses*				432.2			446.5			432.8			425.2			421.9			415.7

				Income from Operations Before Tax		99.0			97.2			111.8			104.8			124.2			102.3
		Federal income taxes				23.6			23.5			23.3			20.7			21.3			15.9

				*Income from Operations*		75.4			73.7			88.5			84.1			102.9			86.4

		Realized gains (losses) on investments				(7.0	)		(3.7	)		2.7			0.3			(9.1	)		2.8
		Gains (losses) on derivatives
		Restructuring charges
	*Income before Accounting Changes*					68.4			69.9			91.2			84.4			93.8			89.2
		Cumulative effect of accounting changes

				*Net Income*		68.4			69.9			91.2			84.4			93.8			89.2

*Inc from Oper — before Goodwill Amort.*						76.0			74.2			87.0			84.4			103.2			86.7
*Net Income — before Goodwill Amort.*						69.1			70.4			89.7			84.7			94.1			89.5
*Effective tax rate*						23.8	%		24.2	%		20.8	%		19.7	%		17.1	%		15.6	%
Operating Revenue						531.2			543.7			544.6			530.1			546.2			518.1
Realized gains (losses) on investments						(10.7	)		(5.8	)		4.2			0.4			(14.1	)		4.2
Gains (losses) on derivatives

			*Total Revenue*			520.5			538.0			548.7			530.5			532.1			522.3

Average capital						1471.2			1559.0			1438.4			1647.7			1635.2			1686.0
Return on average capital						20.5	%		18.9	%		24.6	%		20.4	%		25.2	%		20.5	%
Roll Forward of Deferred Acquisition Costs
Balance at beginning-of-quarter
Deferral
Amortization

		Operating
		Adjustment related to realized (gains) losses on securities available-for-sale
		Adjustment related to unrealized (gains) losses on securities available-for-sale
Other*

Balance at end-of-quarter

[Additional columns below]

[Continued from above table, first column(s) repeated]


					Mar			Jun			Sep			Dec			Mar			Jun
					2001			2001			2001			2001			2002			2002

*Operating Revenue*
		Premiums				19.1			32.5			13.2			12.7			12.2			13.1
		Surrender charges				9.1			8.5			6.5			7.2			7.9			7.2
		Expense assessments				141.6			138.0			132.0			126.2			127.7			127.1
		Other revenue and fees				1.7			3.9			1.2			10.0			5.8			(1.3	)
		Net investment income				341.3			339.3			346.6			342.6			349.9			352.7

				*Operating Revenue*		512.8			522.1			499.5			498.7			503.5			498.8

*Operating Benefits and Expenses*
		Benefits paid or provided:
			Benefits			69.8			72.6			66.3			55.3			55.4			72.5
			Interest credited to policy balances			209.4			209.7			217.2			227.5			226.1			221.8
		Underwriting, acquisition, insurance and other expenses				134.6			126.0			132.8			131.1			124.9			147.2
		Goodwill amortization				0.3			0.3			0.3			0.3

		*Operating Benefits and Expenses*				414.1			408.6			416.6			414.2			406.4			441.5

				Income from Operations Before Tax		98.7			113.6			82.9			84.5			97.1			57.3
		Federal income taxes				16.3			22.8			10.4			9.7			16.7			9.5

				*Income from Operations*		82.3			90.8			72.4			74.8			80.4			47.8

		Realized gains (losses) on investments				(1.4	)		(6.7	)		(13.5	)		(20.7	)		(32.8	)		(36.6	)
		Gains (losses) on derivatives				(0.1	)		0.1			(0.3	)		0.1			0.0			0.1
		Restructuring charges				(0.7	)		(0.6	)		0.0			0.0			0.0			(1.0	)

	*Income before Accounting Changes*					80.2			83.6			58.6			54.2			47.6			10.2
		Cumulative effect of accounting changes				(3.6	)		(3.7	)		0.0			0.0			0.0			0.0

				*Net Income*		76.6			79.9			58.6			54.2			47.6			10.2

*Inc from Oper — before Goodwill Amort.*						82.6			91.1			72.7			75.1			80.4			47.8
*Net Income — before Goodwill Amort.*						76.9			80.2			58.9			54.5			47.6			10.2
*Effective tax rate*						16.6	%		20.1	%		12.6	%		11.5	%		17.2	%		16.5	%
Operating Revenue						512.8			522.1			499.5			498.7			503.5			498.8
Realized gains (losses) on investments						(2.2	)		(10.3	)		(20.8	)		(31.3	)		(50.5	)		(56.2	)
Gains (losses) on derivatives						(0.2	)		0.2			(0.5	)		0.2			0.0			(0.1	)

			*Total Revenue*			510.4			512.1			478.2			467.5			453.0			442.6

Average capital						1797.9			1787.1			1902.9			1824.9			2041.6			2391.2
Return on average capital						18.3	%		20.3	%		15.2	%		16.4	%		15.8	%		8.0	%
Roll Forward of Deferred Acquisition Costs
Deferral						50.2			60.2			58.7			71.9			61.7			60.8
Amortization						(40.7	)		(28.3	)		(35.6	)		(20.8	)		(32.7	)		(48.2	)

		Operating				9.5			31.9			23.0			51.0			29.1			12.6
		Adjustment related to realized (gains) losses on securities available-for-sale				12.8			4.9			16.4			34.1			25.7			20.9
		Adjustment related to unrealized (gains) losses on securities available-for-sale				(78.6	)		31.9			(89.7	)		46.5			78.2			(96.6	)
Other*						6.5			(0.0	)		0.3			(0.0	)		(14.8	)

Balance at end-of-quarter						762.6			831.3			781.2			912.8			1,031.0			967.8

Includes the transfer of the Legacy Life block of business to the Life Insurance segment in the first quarter of 2002.


06/30/02		PAGE 15

Lincoln Retirement
Annuity Account Value Roll Forward
Unaudited [Billions of Dollars]


																				YTD			YTD
																				Jun			Jun
					1997			1998			1999			2000			2001			2001			2002

*Fixed Annuities — Bal Beg-of-Year*						17.634			17.214			18.111			18.210			16.615			16.615			18.004
		Gross Deposits				1.632			1.452			2.563			2.074			3.342			1.228			1.759
		Withdrawals (incl charges) & deaths				(2.220	)		(2.468	)		(2.521	)		(3.283	)		(2.448	)		(1.361	)		(1.281	)

				Net cash flows		(0.588	)		(1.016	)		0.042			(1.209	)		0.894			(0.134	)		0.478
		Transfer from (to) var annuities				(1.336	)		(0.356	)		(0.783	)		(1.329	)		(0.428	)		(0.236	)		(0.264	)
		Interest credited				0.978			0.994			0.840			0.944			0.923			0.451			0.461
		Acq of new business/companies				0.527			1.274

				*Fixed Annuities — Gross*		17.214			18.111			18.210			16.615			18.004			16.697			18.679
*Reinsurance Ceded*						(1.757	)		(1.606	)		(1.419	)		(1.221	)		(1.514	)		(1.146	)		(1.770	)

				*Fixed Annuities — Bal End -of-Year*		15.458			16.505			16.791			15.394			16.491			15.551			16.909

				Fixed Annuities Incremental Deposits *		1.412			1.265			2.310			1.918			3.213			1.147			1.720
*Variable Annuities — Bal Beg-of-Year*						20.383			27.346			33.358			41.493			39.427			39.427			34.638
		Gross Deposits				2.695			2.791			2.553			3.165			3.067			1.590			1.595
		Withdrawals (incl charges) & deaths				(2.038	)		(3.019	)		(3.760	)		(4.830	)		(3.856	)		(2.243	)		(1.762	)

				Net cash flows		0.657			(0.228	)		(1.207	)		(1.665	)		(0.789	)		(0.653	)		(0.167	)
		Transfer from (to) fixed annuities				1.335			0.389			0.787			1.320			0.428			0.238			0.266
		Invest inc & change in mkt value				4.971			5.414			8.555			(1.721	)		(4.428	)		(2.051	)		(3.531	)
		Acq (sale) of new business/companies							0.437

				*Var Annuities — Bal End-of-Year*		27.346			33.358			41.493			39.427			34.638			36.961			31.206

				Variable Annuities Incremental Deposits *		2.585			2.641			2.409			2.667			2.624			1.295			1.469
	*Total Annuities — Bal Beg-of-Year*					38.017			44.561			51.469			59.704			56.043			56.043			52.643
		Gross Deposits				4.327			4.244			5.116			5.239			6.409			2.818			3.354
		Withdrawals (incl charges) & deaths				(4.258	)		(5.487	)		(6.281	)		(8.113	)		(6.304	)		(3.604	)		(3.043	)

				Net cash flows		0.069			(1.244	)		(1.165	)		(2.874	)		0.105			(0.787	)		0.311
		Transfers				(0.001	)		0.033			0.004			(0.009	)		0.000			0.002			0.002
		Interest credited & change in mkt value				5.949			6.408			9.395			(0.777	)		(3.505	)		(1.600	)		(3.070	)
		Acq of new business/companies				0.527			1.711

				*Total Gross Annuities — Bal End-of-Year*		44.561			51.469			59.704			56.043			52.643			53.658			49.886
*Reinsurance Ceded*						(1.757	)		(1.606	)		(1.419	)		(1.221	)		(1.514	)		(1.146	)		(1.770	)

*Total Annuities (Net of Ceded) — Bal End-of-Year*						42.804			49.863			58.284			54.821			51.129			52.512			48.116

				Total Annuities Incremental Deposits *		3.997			3.906			4.719			4.585			5.837			2.442			3.189
				*Var Ann Under Agree — Included above*					0.649			0.719			0.941			1.077			0.975			1.175
*Fixed Annuities — excluding fixed portion of variable contracts*
			Deposits									0.709			0.459			1.712			0.489			0.935
			Withdrawals									(1.367	)		(2.271	)		(1.604	)		(0.912	)		(0.730	)
			Net Flows									(0.658	)		(1.812	)		0.108			(0.423	)		0.205
			Gross Fixed Account Values																					10.048
			Reinsurance Ceded																					(1.770	)

																								8.278
*Variable Annuities — including fixed portion of variable contracts*
			Deposits									4.407			4.780			4.697			2.329			2.419
			Withdrawals									(4.915	)		(5.842	)		(4.700	)		(2.692	)		(2.313	)
			Net Flows									(0.508	)		(1.062	)		(0.003	)		(0.363	)		0.106
			Variable Account Values																					39.838
*Fixed Portion of Variable Contracts*
			Deposits									1.853			1.615			1.630			0.739			0.824
			Withdrawals									(1.154	)		(1.012	)		(0.844	)		(0.449	)		(0.551	)
			Net Flows									0.699			0.603			0.786			0.290			0.273
			Fixed Portion of Variable Account Values																					8.631


*Average Daily Variable Account Values*												35.932			41.776			35.573			37.341			33.921

* Incremental Deposits represent gross deposits reduced by transfers from other Lincoln Retirement products.


06/30/02		PAGE 16

Lincoln Retirement
Annuity Account Value Roll Forward
Unaudited [Billions of Dollars]


				Sep			Dec			Mar			Jun			Sep			Dec
				1999			1999			2000			2000			2000			2000

Fixed Annuities — Bal. Beg-of-Quarter					18.303			18.406			18.210			17.615			17.200			16.930
	Gross Deposits				0.678			0.741			0.589			0.490			0.513			0.482
	Withdrawals (incl charges) & deaths				(0.567	)		(0.782	)		(0.875	)		(0.796	)		(0.802	)		(0.810	)

			Net cash flows		0.111			(0.040	)		(0.287	)		(0.307	)		(0.288	)		(0.328	)
	Transfer from (to) var annuities				(0.238	)		(0.300	)		(0.550	)		(0.346	)		(0.217	)		(0.216	)
	Interest credited				0.231			0.144			0.241			0.238			0.235			0.230
	Acq of new business/companies

			*Fixed Annuities — Gross*		18.406			18.210			17.615			17.200			16.930			16.615
*Reinsurance Ceded*					(1.473	)		(1.419	)		(1.371	)		(1.316	)		(1.270	)		(1.221	)

			*Fixed Annuities — Bal. End-of-Quarter*		16.934			16.791			16.244			15.884			15.660			15.394

			Fixed Annuities Incremental Deposits *		0.644			0.582			0.560			0.447			0.464			0.447
Variable Annuities — Bal. Beg-of-Quarter					37.233			35.613			41.493			44.640			43.097			42.743
	Gross Deposits				0.634			0.634			0.797			0.793			0.729			0.846
	Withdrawals (incl charges) & deaths				(0.938	)		(1.084	)		(1.210	)		(1.168	)		(1.253	)		(1.199	)

			Net cash flows		(0.304	)		(0.450	)		(0.413	)		(0.375	)		(0.524	)		(0.353	)
	Transfer from (to) fixed annuities				0.237			0.303			0.549			0.343			0.216			0.212
	Invest inc. & change in mkt value				(1.553	)		6.027			3.011			(1.511	)		(0.046	)		(3.175	)
	Acq (sale) of new business/companies

			*Var Annuities — Bal. End-of-Quarter*		35.613			41.493			44.640			43.097			42.743			39.427

			*Variable Annuities Incremental Deposits*		0.589			0.592			0.732			0.699			0.586			0.650
Total Annuities — Bal. Beg-of-Quarter					55.536			54.020			59.704			62.255			60.297			59.673
	Gross Deposits				1.312			1.375			1.386			1.283			1.242			1.328
	Withdrawals (incl charges) & deaths				(1.505	)		(1.865	)		(2.085	)		(1.964	)		(2.055	)		(2.009	)

		Net cash flows			(0.193	)		(0.490	)		(0.700	)		(0.682	)		(0.812	)		(0.681	)
	Transfers				(0.001	)		0.003			(0.001	)		(0.003	)		(0.001	)		(0.004	)
	Interest credited & change in mkt value				(1.322	)		6.171			3.252			(1.273	)		0.189			(2.945	)
	Acq of new business/companies

			*Total Gross Annuities — Bal. End-of-Quarter*		54.020			59.704			62.255			60.297			59.673			56.043
*Reinsurance Ceded*					(1.473	)		(1.419	)		(1.371	)		(1.316	)		(1.270	)		(1.221	)

*Total Annuities (Net of Ceded) — Bal. End-of-Qtr*					52.547			58.284			60.884			58.981			58.403			54.821

			Total Annuities Incremental Deposits *		1.233			1.174			1.292			1.145			1.050			1.097
			*Var Ann Under Agree — Included above*		0.639			0.719			0.866			0.868			0.962			0.941

[Additional columns below]

[Continued from above table, first column(s) repeated]


				Mar			Jun			Sep			Dec			Mar			Jun
				2001			2001			2001			2001			2002			2002

Fixed Annuities — Bal. Beg-of-Quarter					16.615			16.599			16.697			17.317			18.004			18.178
	Gross Deposits				0.560			0.668			0.896			1.218			0.906			0.853
	Withdrawals (incl charges) & deaths				(0.787	)		(0.574	)		(0.525	)		(0.562	)		(0.730	)		(0.551	)

			Net cash flows		(0.227	)		0.094			0.372			0.656			0.176			0.302
	Transfer from (to) var annuities				(0.014	)		(0.222	)		0.021			(0.213	)		(0.232	)		(0.032	)
	Interest credited				0.225			0.226			0.228			0.244			0.230			0.231
	Acq of new business/companies

			*Fixed Annuities — Gross*		16.599			16.697			17.317			18.004			18.178			18.679
*Reinsurance Ceded*					(1.169	)		(1.146	)		(1.266	)		(1.514	)		(1.645	)		(1.770	)

			*Fixed Annuities — Bal. End-of-Quarter*		15.430			15.551			16.051			16.491			16.533			16.909

			Fixed Annuities Incremental Deposits *		0.536			0.611			0.873			1.193			0.881			0.839
Variable Annuities — Bal. Beg-of-Quarter					39.427			34.733			36.961			30.506			34.638			35.150
	Gross Deposits				0.887			0.703			0.684			0.793			0.808			0.787
	Withdrawals (incl charges) & deaths				(1.250	)		(0.993	)		(0.795	)		(0.818	)		(0.896	)		(0.866	)

			Net cash flows		(0.363	)		(0.290	)		(0.111	)		(0.025	)		(0.088	)		(0.079	)
	Transfer from (to) fixed annuities				0.011			0.227			(0.023	)		0.213			0.234			0.032
	Invest inc. & change in mkt value				(4.342	)		2.291			(6.321	)		3.944			0.366			(3.897	)
	Acq (sale) of new business/companies

			*Var Annuities — Bal. End-of-Quarter*		34.733			36.961			30.506			34.638			35.150			31.206

			*Variable Annuities Incremental Deposits*		0.683			0.612			0.604			0.725			0.725			0.744
Total Annuities — Bal. Beg-of-Quarter					56.043			51.332			53.658			47.824			52.643			53.329
	Gross Deposits				1.447			1.371			1.580			2.011			1.714			1.640
	Withdrawals (incl charges) & deaths				(2.037	)		(1.567	)		(1.320	)		(1.380	)		(1.626	)		(1.417	)

		Net cash flows			(0.590	)		(0.196	)		0.261			0.631			0.088			0.223
	Transfers				(0.003	)		0.005			(0.002	)					0.002			0.000
	Interest credited & change in mkt value				(4.117	)		2.517			(6.093	)		4.188			0.596			(3.666	)
	Acq of new business/companies

			*Total Gross Annuities — Bal. End-of-Quarter*		51.332			53.658			47.824			52.643			53.329			49.886
*Reinsurance Ceded*					(1.169	)		(1.146	)		(1.266	)		(1.514	)		(1.645	)		(1.770	)

*Total Annuities (Net of Ceded) — Bal. End-of-Qtr*					50.163			52.512			46.558			51.129			51.684			48.116

			Total Annuities Incremental Deposits *		1.219			1.223			1.477			1.918			1.606			1.583
			*Var Ann Under Agree — Included above*		0.904			0.975			0.907			1.077			1.207			1.175

Incremental Deposits represent gross deposits reduced by transfers from other Lincoln Retirement products.


*Fixed Annuities — excluding fixed portion of variable contracts*
	Deposits	0.147		0.275		0.134		0.126		0.114		0.085
	Withdrawals	(0.329	)	(0.428	)	(0.612	)	(0.557	)	(0.532	)	(0.570	)
	Net Flows	(0.182	)	(0.152	)	(0.479	)	(0.431	)	(0.417	)	(0.485	)
	Gross Fixed Account Values
	Reinsurance Ceded

	Net Fixed Account Values
*Variable Annuities — including fixed portion of variable contracts*
	Deposits	1.165		1.100		1.252		1.157		1.128		1.243
	Withdrawals	(1.176	)	(1.438	)	(1.473	)	(1.408	)	(1.523	)	(1.439	)
	Net Flows	(0.011	)	(0.338	)	(0.221	)	(0.251	)	(0.395	)	(0.196	)
	Variable Account Values
*Fixed Portion of Variable Contracts*
	Deposits	0.531		0.466		0.455		0.364		0.399		0.397
	Withdrawals	(0.238	)	(0.354	)	(0.263	)	(0.240	)	(0.270	)	(0.240	)
	Net Flows	0.293		0.112		0.192		0.124		0.129		0.157
	Fixed Portion of Variable Account Values
*Average Daily Variable Account Values*		36.580		37.845		42.185		42.182		43.055		39.682

[Additional columns below]

[Continued from above table, first column(s) repeated]


*Fixed Annuities — excluding fixed portion of variable contracts*
	Deposits	0.160		0.329		0.489		0.734		0.505		0.430
	Withdrawals	(0.556	)	(0.356	)	(0.340	)	(0.352	)	(0.463	)	(0.267	)
	Net Flows	(0.396	)	(0.027	)	0.149		0.382		0.042		0.163
	Gross Fixed Account Values									9.761		10.048
	Reinsurance Ceded									(1.645	)	(1.770	)

	Net Fixed Account Values									8.116		8.278
*Variable Annuities — including fixed portion of variable contracts*
	Deposits	1.287		1.042		1.091		1.277		1.209		1.210
	Withdrawals	(1.481	)	(1.211	)	(0.979	)	(1.028	)	(1.163	)	(1.150	)
	Net Flows	(0.194	)	(0.169	)	0.112		0.249		0.046		0.060
	Variable Account Values									43.568		39.838
*Fixed Portion of Variable Contracts*
	Deposits	0.400		0.339		0.407		0.484		0.401		0.423
	Withdrawals	(0.231	)	(0.218	)	(0.184	)	(0.210	)	(0.267	)	(0.284	)
	Net Flows	0.169		0.121		0.223		0.274		0.134		0.139
	Fixed Portion of Variable Account Values									8.417		8.631
*Average Daily Variable Account Values*		38.180		36.499		34.399		33.216		34.341		33.502


06/30/02		PAGE 17

Life Insurance Segment
Income Statements & Operational Data
Unaudited [Millions of Dollars]


																				YTD			YTD
																				Jun			Jun
					1997			1998			1999			2000			2001			2001			2002

*Operating Revenue*
	Premiums					64.8			185.9			235.8			227.3			212.4			101.6			98.7
	Surrender charges					9.8			52.1			66.3			66.4			66.1			30.6			25.2
	Mortality assessments					161.2			350.1			444.6			465.2			499.4			249.1			247.8
	Expense assessments					28.6			146.2			165.8			191.8			191.4			92.7			94.1
	Other revenue and fees					9.0			2.6			9.8			14.2			17.9			8.9			12.4
	Net investment income					268.2			642.6			840.1			871.5			910.2			450.4			451.7

				*Operating Revenue*		541.5			1379.5			1762.6			1836.4			1897.5			933.4			929.9

*Operating Benefits and Expenses*
	Benefits paid or provided:
		Benefits				143.6			371.2			430.5			411.5			418.5			203.4			207.7
		Div accum & div to policyholders				20.4			70.7			81.5			80.8			78.5			36.6			36.0
		Interest credited to policy bal.				153.0			393.1			493.8			525.4			569.9			279.5			295.2
	Underwriting, acquisition, insurance and other expenses					172.1			293.1			399.1			384.8			374.7			190.8			180.6
	Goodwill amortization					0.1			19.7			23.4			23.7			23.7			11.8			0.0

			*Operating Benefits and Expenses*			489.3			1147.8			1428.2			1426.3			1465.4			722.1			719.5

				Income from Operations Before Tax		52.3			231.6			334.3			410.1			432.1			211.2			210.4
	Federal income taxes					12.4			82.4			122.3			150.1			153.0			75.5			65.8

				*Income from Operations*		39.9			149.2			212.0			259.9			279.0			135.7			144.6

	Realized gains (losses) on investments					(0.8	)		(1.7	)		(0.5	)		(10.7	)		(38.5	)		(11.8	)		(43.4	)
	Gains (losses) on derivatives																	1.6			0.1			0.3
	Restructuring charges					0.0			(20.0	)		0.0			0.0			(3.5	)		(2.0	)		0.0

*Income before Accounting Changes*						39.1			127.5			211.5			249.3			238.6			122.0			101.6
	Cumulative effect of accounting changes																	(5.5	)		(5.5	)		0.0

				*Net Income*		39.1			127.5			211.5			249.3			233.1			116.5			101.6

*Inc from Oper — before Goodwill Amort.*						40.0			168.9			235.4			283.6			302.7			147.6			144.6
*Net Income — before Goodwill Amort.*						39.2			147.1			234.9			273.0			256.7			128.3			101.6
*Effective tax rate*						23.7	%		35.6	%		36.6	%		36.6	%		35.4	%		35.7	%		31.3	%
Operating Revenue						541.5			1,379.5			1,762.6			1836.4			1897.5			933.4			929.9
Realized gains (losses) on investments						3.2			(1.0	)		(2.2	)		(17.4	)		(57.6	)		(18.2	)		(66.8	)
Gains (losses) on derivatives																		0.7			0.1			0.6

		*Total Revenue*				544.8			1378.5			1760.4			1819.0			1840.6			915.3			863.8

Average capital						384.9			1948.0			2712.3			2640.2			2731.5			2722.7			2833.8
Return on average capital						10.4	%		7.7	%		7.8	%		9.8	%		10.2	%		10.0	%		10.2	%

*First Year Premiums by Product (Millions)*
		Universal Life				114.0			233.0			342.9			289.3			292.7			127.7			185.3
		Variable Universal Life				52.9			101.3			142.2			218.7			228.6			108.3			81.4
		Whole Life				5.4			20.0			23.9			22.4			26.3			9.2			11.6
		Term				33.0			48.0			45.9			41.9			30.8			13.7			16.8

				Total Retail		205.3			402.3			555.0			572.3			578.4			258.8			295.2
		Corporate Owned Life Insurance (COLI)				0.0			4.0			14.7			87.0			47.3			28.0			53.5

				Total		205.3			406.3			569.7			659.3			625.6			286.9			348.7

*First Year Premiums by Distribution (Millions)*
Lincoln Financial Advisors						71.0			35.0			188.3			200.6			196.1			86.2			89.8
Lincoln Financial Distributors						134.3			356.3			367.9			444.7			413.0			193.1			252.5
Other*						0.0			15.0			13.5			14.0			16.6			7.6			6.4

		*Total by Distribution*				205.3			406.3			569.7			659.3			625.6			286.9			348.7

*Life Insurance In-Force (Billions)*
	Universal Life & Other					32.827			105.837			109.288			115.872			121.168			118.007			123.674
	Term Insurance					30.337			67.076			85.701			100.130			113.226			105.265			121.076

			*Total Life Segment In-Force*			63.164			172.914			194.988			216.002			234.394			223.272			244.750

Roll Forward of Deferred Acquisition Costs
Balance at beginning-of-period																		1,079.3			1,079.3			1,265.6
Deferral																		324.8			133.3			156.5
Amortization																		(95.0	)		(35.1	)		(45.7	)

	Operating																	229.8			98.2			110.8
	Adjustment related to realized (gains) losses on securities available-for-sale																	43.0			21.1			27.0
	Adjustment related to unrealized (gains) losses on securities available-for-sale																	(89.0	)		(47.8	)		(17.9	)
Other**																		2.5			0.4			19.3

Balance at end-of-period																		1,265.6			1,151.1			1,404.9

*		Other consists of distribution arrangements with third-party intermediaries.
**		Includes the transfer of the Legacy Life block of business from the Lincoln Retirement segment in the first quarter of 2002.


06/30/02		PAGE 18

Life Insurance Segment
Income Statements & Operational Data
Unaudited [Millions of Dollars]


For the Quarter Ended					Sep			Dec			Mar			Jun			Sep			Dec
					1999			1999			2000			2000			2000			2000

*Operating Revenue*
	Premiums					52.4			71.1			53.0			56.3			50.9			67.1
	Surrender charges					17.1			18.0			16.2			16.5			13.8			19.9
	Mortality assessments					110.5			113.9			112.2			114.5			116.3			122.1
	Expense assessments					42.8			48.0			45.3			44.1			46.9			55.5
	Other revenue and fees					2.4			3.9			3.2			3.6			3.8			3.7
	Net investment income					209.6			214.8			215.6			215.5			220.6			219.7

				*Operating Revenue*		434.9			469.6			445.5			450.5			452.4			488.0

*Operating Benefits and Expenses*
	Benefits paid or provided:
		Benefits				105.4			112.8			98.4			96.3			95.8			121.0
		Div accum & div to policyholders				19.2			21.0			20.4			18.7			16.4			25.3
		Interest credited to policy bal.				122.8			122.3			126.3			128.7			134.0			136.5
	Underwriting, acquisition, insurance and other expenses					99.1			117.8			99.4			100.9			94.9			89.6
	Goodwill amortization					6.4			6.0			5.9			5.9			5.9			5.9

			*Operating Benefits and Expenses*			353.0			379.9			350.3			350.6			347.0			378.4

				Income from Operations Before Tax		82.0			89.8			95.2			99.9			105.4			109.6
	Federal income taxes					29.4			32.8			34.8			37.4			38.9			39.0

				*Income from Operations*		52.6			57.0			60.4			62.4			66.5			70.6

	Realized gains (losses) on investments					1.4			2.8			(2.4	)		(4.0	)		1.0			(5.2	)
	Gains (losses) on derivatives
	Restructuring charges


*Income before Accounting Changes*						54.0			59.7			58.1			58.4			67.4			65.4
	Cumulative effect of accounting changes

				*Net Income*		54.0			59.7			58.1			58.4			67.4			65.4

*Inc from Oper — before Goodwill Amort.*						59.0			63.0			66.3			68.4			72.4			76.5
*Net Income — before Goodwill Amort.*						60.4			65.8			64.0			64.4			73.4			71.3

*Effective tax rate*						35.9	%		36.5	%		36.5	%		37.5	%		36.9	%		35.6	%

Operating Revenue						434.9			469.6			445.5			450.5			452.4			488.0
Realized gains (losses) on investments						2.1			3.4			(3.8	)		(6.3	)		0.8			(8.1	)
Gains (losses) on derivatives

		*Total Revenue*				437.1			473.1			441.7			444.2			453.2			479.9

Average capital						2707.4			2686.0			2655.3			2615.0			2650.5			2640.0
Return on average capital						7.8	%		8.5	%		9.1	%		9.6	%		10.0	%		10.7	%

*First Year Premiums by Product (Millions)*
		Universal Life				75.6			113.2			72.3			63.7			72.4			80.9
		Variable Universal Life				30.0			55.6			44.0			44.5			55.1			75.1
		Whole Life				6.4			8.0			3.9			4.5			6.0			8.0
		Term				10.5			11.0			13.1			12.1			9.1			7.6

				Total Retail		122.5			187.8			133.3			124.8			142.6			171.6
		Corporate Owned Life Insurance (COLI)				2.3			4.0			12.7			19.5			5.8			49.0

				Total		124.8			191.9			146.0			144.3			148.4			220.7

*First Year Premiums by Distribution (Millions)*
Lincoln Financial Advisors						39.4			72.8			46.1			37.0			51.3			66.2
Lincoln Financial Distributors						82.0			115.0			96.8			104.4			92.9			150.6
Other*						3.4			4.1			3.0			2.9			4.2			3.9

		*Total by Distribution*				124.8			191.9			146.0			144.3			148.4			220.7

*Insurance In-Force (Billions)*
	Universal Life & Other					106.945			109.288			108.817			110.448			112.884			115.872
	Term Insurance					81.963			85.701			92.857			97.039			98.424			100.130

			*Total Segment In-Force*			188.908			194.988			201.674			207.487			211.308			216.002

Roll Forward of Deferred Acquisition Costs
Balance at beginning-of-quarter
Deferral
Amortization

	Operating
	Adjustment related to realized (gains) losses on securities available-for-sale
	Adjustment related to unrealized (gains) losses on securities available-for-sale
Other

Balance at end-of-quarter

[Additional columns below]

[Continued from above table, first column(s) repeated]


For the Quarter Ended					Mar			Jun			Sep			Dec			Mar			Jun
					2001			2001			2001			2001			2002			2002

*Operating Revenue*
	Premiums					50.9			50.7			46.4			64.4			51.1			47.6
	Surrender charges					17.2			13.5			15.6			19.9			11.7			13.5
	Mortality assessments					124.3			124.8			124.7			125.5			123.9			123.9
	Expense assessments					47.4			45.3			46.0			52.8			46.9			47.2
	Other revenue and fees					5.1			3.8			3.0			6.0			5.7			6.7
	Net investment income					223.0			227.4			233.2			226.6			226.0			225.7

				*Operating Revenue*		467.9			465.5			468.9			495.2			465.3			464.6

*Operating Benefits and Expenses*
	Benefits paid or provided:
		Benefits				99.9			103.5			102.3			112.9			104.1			103.6
		Div accum & div to policyholders				17.5			19.0			16.5			25.4			17.8			18.2
		Interest credited to policy bal.				138.3			141.2			143.5			146.9			146.3			148.9
	Underwriting, acquisition, insurance and other expenses					98.8			92.0			92.5			91.4			92.1			88.5
	Goodwill amortization					5.9			5.9			5.9			5.9			0.0

			*Operating Benefits and Expenses*			360.5			361.7			360.8			382.5			360.2			359.3

				Income from Operations Before Tax		107.4			103.8			108.1			112.7			105.1			105.3
	Federal income taxes					38.8			36.7			38.1			39.5			34.0			31.8

				*Income from Operations*		68.6			67.1			70.1			73.2			71.1			73.5

	Realized gains (losses) on investments					(5.4	)		(6.4	)		(5.3	)		(21.3	)		(26.9	)		(16.4	)
	Gains (losses) on derivatives					(0.0	)		0.1			(0.0	)		1.5			0.0			0.3
	Restructuring charges								(2.0	)					(1.5	)

*Income before Accounting Changes*						63.2			58.8			64.7			51.9			44.2			57.4
	Cumulative effect of accounting changes					(0.2	)		(5.3	)		0.0			(0.0	)		0.0			0.0

				*Net Income*		62.9			53.5			64.7			51.9			44.2			57.4

*Inc from Oper — before Goodwill Amort.*						74.5			73.0			76.0			79.1			71.1			73.5
*Net Income — before Goodwill Amort.*						68.9			59.5			70.6			57.8			44.2			57.4

*Effective tax rate*						36.1	%		35.3	%		35.2	%		35.0	%		32.3	%		30.2	%

Operating Revenue						467.9			465.5			468.9			495.2			465.3			464.6
Realized gains (losses) on investments						(8.2	)		(10.0	)		(8.2	)		(31.1	)		(41.4	)		(25.4	)
Gains (losses) on derivatives						(0.0	)		0.2			(0.1	)		0.6			0.0			0.6

		*Total Revenue*				459.6			455.7			460.6			464.7			423.9			439.8

Average capital						2729.8			2715.7			2736.3			2744.4			2801.9			2865.8

Return on average capital						10.1	%		9.9	%		10.2	%		10.7	%		10.2	%		10.3	%

*First Year Premiums by Product (Millions)*
		Universal Life				57.7			70.0			67.4			97.5			86.4			98.9
		Variable Universal Life				56.0			52.2			50.1			70.2			39.0			42.4
		Whole Life				4.1			5.1			6.7			10.4			5.2			6.4
		Term				6.5			7.2			8.1			9.1			8.7			8.1

				Total Retail		124.2			134.6			132.4			187.2			139.4			155.8
		Corporate Owned Life Insurance (COLI)				7.1			21.0			5.1			14.2			6.9			46.6

				Total		131.3			155.6			137.4			201.3			146.3			202.4

*First Year Premiums by Distribution (Millions)*
Lincoln Financial Advisors						38.1			48.2			41.8			68.0			41.5			48.3
Lincoln Financial Distributors						89.1			104.0			90.4			129.5			100.9			151.6
Other*						4.2			3.4			5.2			3.8			3.8			2.6

		*Total by Distribution*				131.3			155.6			137.4			201.3			146.3			202.4

*Insurance In-Force (Billions)*
	Universal Life & Other					116.747			118.007			119.029			121.168			122.316			123.674
	Term Insurance					102.467			105.265			108.723			113.226			117.752			121.076

			*Total Segment In-Force*			219.214			223.272			227.751			234.394			240.068			244.750

Roll Forward of Deferred Acquisition Costs
Balance at beginning-of-quarter*						1,079.3			1,064.1			1,151.1			1,156.0			1,265.6			1,385.3
Deferral						64.5			68.8			85.3			106.3			74.3			82.2
Amortization						(19.3	)		(15.8	)		(29.7	)		(30.2	)		(22.1	)		(23.6	)

	Operating					45.2			53.0			55.5			76.1			52.3			58.6
	Adjustment related to realized (gains) losses on securities available-for-sale					7.8			13.3			7.2			14.7			15.8			11.2
	Adjustment related to unrealized (gains) losses on securities available-for-sale					(68.5	)		20.7			(59.6	)		18.5			34.0			(51.9	)
Other**						0.2			0.1			1.8			0.3			17.6			1.7

Balance at end-of-quarter						1,064.1			1,151.1			1,156.0			1,265.6			1,385.3			1,404.9

*		Other consists of distribution arrangements with third-party intermediaries.
**		Includes the transfer of the Legacy Life block of business from the Lincoln Retirement segment in the first quarter of 2002.


06/30/02		PAGE 19

Life Insurance Segment
Life Insurance Account Value Roll Forward
Unaudited [Billions of Dollars]


																			YTD			YTD
																			Jun			Jun
				1997			1998			1999			2000			2001			2001			2002

Universal Life — Bal Beg-of-Year					2.530			2.558			6.259			6.650			6.976			6.976			7.508
	Deposits				0.278			0.675			1.017			0.955			1.043			0.497			0.612
	Withdrawals & deaths				(0.399	)		(0.701	)		(0.452	)		(0.426	)		(0.319	)		(0.161	)		(0.193	)

			Net cash flows		(0.121	)		(0.026	)		0.564			0.528			0.724			0.335			0.419
	Policyholder assessments										(0.544	)		(0.584	)		(0.598	)		(0.294	)		(0.316	)
	Interest credited				0.149			0.350			0.370			0.382			0.405			0.198			0.210
	Acq of new business/transfers between segments				0.000			3.378			0.000			0.000			0.000			0.000			0.018

		*Universal Life — Bal End of Year (1)*			2.558			6.259			6.650			6.976			7.508			7.216			7.838

Variable Universal Life — Bal Beg-of-Year					0.339			0.480			1.200			1.605			1.808			1.808			1.746
	Deposits				0.106			0.193			0.326			0.607			0.584			0.273			0.277
	Withdrawals & deaths				(0.040	)		(0.100	)		(0.099	)		(0.132	)		(0.251	)		(0.108	)		(0.112	)

			Net cash flows		0.065			0.093			0.228			0.475			0.332			0.165			0.164
	Policyholder assessments							0.000			(0.084	)		(0.141	)		(0.170	)		(0.082	)		(0.093	)
	Invest inc & chg in mkt value				0.076			0.105			0.370			(0.130	)		(0.225	)		(0.125	)		(0.173	)
	Acq of new business/transfers between segments				0.000			0.522			(0.110	)		0.000			0.000			0.000			0.132

			*Variable Universal Life — Bal End-of-Year*		0.480			1.200			1.605			1.808			1.746			1.766			1.776

Interest Sensitive Whole Life — Bal Beg-of-Year											1.784			1.963			2.062			2.062			2.123
	Deposits							0.340			0.355			0.322			0.307			0.125			0.129
	Withdrawals & deaths							(0.294	)		(0.162	)		(0.168	)		(0.200	)		(0.084	)		(0.091	)

			Net cash flows					0.046			0.193			0.154			0.107			0.041			0.038
	Policyholder assessments										(0.168	)		(0.168	)		(0.164	)		(0.076	)		(0.081	)
	Interest credited							0.096			0.109			0.113			0.118			0.058			0.065
	Acq of new business/transfers between segments							1.642			0.045

		*Int Sensitive Whole Life — Bal End-of-Year*						1.784			1.963			2.062			2.123			2.084			2.145











*Total Segment — Life Insurance Account Values*
Bal Beg-of-Year					2.869			3.038			9.243			10.217			10.847			10.847			11.377
	Deposits				0.384			1.207			1.698			1.884			1.934			0.895			1.018
	Withdrawals & deaths				(0.439	)		(1.095	)		(0.713	)		(0.727	)		(0.771	)		(0.354	)		(0.396	)

			Net cash flows		(0.056	)		0.113			0.985			1.158			1.163			0.541			0.621
	Policyholder assessments										(0.795	)		(0.893	)		(0.931	)		(0.453	)		(0.490	)
	Invest inc & change in market value				0.225			0.551			0.849			0.364			0.299			0.132			0.101
	Acq of new business/transfers between segments							5.542			(0.065	)											0.150

		*Total Segment — Bal End-of-Year*			3.038			9.243			10.217			10.847			11.377			11.066			11.759

(1)

Includes fixed investment option of VUL products.


06/30/02		PAGE 20

Life Insurance Segment
Life Insurance Account Value Roll Forward
Unaudited [Billions of Dollars]


For the Quarter Ended				Sep			Dec			Mar			Jun			Sep			Dec
				1999			1999			2000			2000			2000			2000

Universal Life — Bal Beg-of-Quarter					6.434			6.519			6.650			6.729			6.782			6.878
	Deposits				0.239			0.306			0.252			0.212			0.227			0.265
	Withdrawals & deaths				(0.109	)		(0.124	)		(0.121	)		(0.111	)		(0.080	)		(0.114	)

			Net cash flows		0.129			0.182			0.131			0.101			0.146			0.151
	Policyholder assessments				(0.136	)		(0.145	)		(0.145	)		(0.143	)		(0.146	)		(0.150	)
	Interest credited				0.091			0.093			0.093			0.095			0.096			0.097
	Acq of new business/transfers between segments													0.000						0.000

		*Universal Life — Bal End-of-Quarter (1)*			6.519			6.650			6.729			6.782			6.878			6.976

Variable Universal Life — Bal Beg of Quarter					1.298			1.285			1.605			1.771			1.764			1.812
	Deposits				0.074			0.107			0.112			0.128			0.123			0.245
	Withdrawals & deaths				(0.049	)		(0.025	)		(0.019	)		(0.028	)		(0.037	)		(0.048	)

			Net cash flows		0.025			0.082			0.093			0.100			0.085			0.197
	Policyholder assessments				(0.020	)		(0.024	)		(0.032	)		(0.033	)		(0.036	)		(0.041	)
	Invest inc & chg in mkt value				(0.018	)		0.262			0.105			(0.074	)		(0.001	)		(0.160	)
	Acq of new business/transfers between segments													0.000

			*Variable Universal Life — Bal End-of-Quarter*		1.285			1.605			1.771			1.764			1.812			1.808

Interest Sensitive Whole Life — Bal Beg-of-Quarter					1.895			1.922			1.963			1.970			1.993			2.026
	Deposits				0.086			0.113			0.060			0.071			0.079			0.113
	Withdrawals & deaths				(0.044	)		(0.050	)		(0.042	)		(0.037	)		(0.033	)		(0.056	)

			Net cash flows		0.043			0.062			0.018			0.034			0.045			0.057
	Policyholder assessments				(0.042	)		(0.048	)		(0.039	)		(0.040	)		(0.040	)		(0.050	)
	Interest credited				0.027			0.026			0.028			0.028			0.027			0.029
	Acq of new business/transfers between segments

		*Int Sensitive Whole Life — Bal End-of-Quarter*			1.922			1.963			1.970			1.993			2.026			2.062

*Total Segment — Life Insurance Account Values*
Bal Beg-of-Quarter					9.628			9.726			10.217			10.470			10.538			10.716
	Deposits				0.399			0.526			0.424			0.411			0.428			0.622
	Withdrawals & deaths				(0.202	)		(0.199	)		(0.182	)		(0.176	)		(0.151	)		(0.218	)

			Net cash flows		0.197			0.327			0.242			0.235			0.277			0.404
	Policyholder assessments				(0.198	)		(0.216	)		(0.215	)		(0.216	)		(0.221	)		(0.241	)
	Invest inc & change in market value				0.100			0.381			0.227			0.048			0.123			(0.033	)
	Acq of new business/transfers between segments				0.000			0.000			0.000			0.000			0.000			0.000

		*Total Segment — Bal End-of-Quarter*			9.726			10.217			10.470			10.538			10.716			10.847

[Additional columns below]

[Continued from above table, first column(s) repeated]


For the Quarter Ended				Mar			Jun			Sep			Dec			Mar			Jun
				2001			2001			2001			2001			2002			2002

Universal Life — Bal Beg-of-Quarter					6.976			7.063			7.216			7.315			7.508			7.622
	Deposits				0.227			0.270			0.233			0.314			0.248			0.364
	Withdrawals & deaths				(0.091	)		(0.071	)		(0.085	)		(0.073	)		(0.098	)		(0.096	)

			Net cash flows		0.136			0.199			0.147			0.241			0.150			0.268
	Policyholder assessments				(0.147	)		(0.147	)		(0.150	)		(0.153	)		(0.158	)		(0.158	)
	Interest credited				0.098			0.100			0.102			0.105			0.104			0.106
	Acq of new business/transfers between segments				0.000												0.018

		*Universal Life — Bal End-of-Quarter (1)*			7.063			7.216			7.315			7.508			7.622			7.838

Variable Universal Life — Bal Beg of Quarter					1.808			1.633			1.766			1.527			1.746			1.919
	Deposits				0.136			0.138			0.124			0.186			0.129			0.147
	Withdrawals & deaths				(0.049	)		(0.060	)		(0.055	)		(0.088	)		(0.055	)		(0.057	)

			Net cash flows		0.087			0.078			0.069			0.098			0.074			0.090
	Policyholder assessments				(0.041	)		(0.041	)		(0.042	)		(0.045	)		(0.047	)		(0.046	)
	Invest inc & chg in mkt value				(0.221	)		0.096			(0.266	)		0.166			0.013			(0.186	)
	Acq of new business/transfers between segments				0.000			0.000									0.132

			*Variable Universal Life — Bal End-of-Quarter*		1.633			1.766			1.527			1.746			1.919			1.776

Interest Sensitive Whole Life — Bal Beg-of-Quarter					2.062			2.068			2.084			2.096			2.123			2.126
	Deposits				0.056			0.069			0.077			0.105			0.063			0.066
	Withdrawals & deaths				(0.041	)		(0.043	)		(0.054	)		(0.061	)		(0.051	)		(0.039	)

			Net cash flows		0.014			0.027			0.022			0.044			0.012			0.026
	Policyholder assessments				(0.037	)		(0.040	)		(0.041	)		(0.047	)		(0.042	)		(0.039	)
	Interest credited				0.028			0.030			0.030			0.030			0.033			0.032
	Acq of new business/transfers between segments

		*Int Sensitive Whole Life — Bal End-of-Quarter*			2.068			2.084			2.096			2.123			2.126			2.145

*Total Segment — Life Insurance Account Values*
Bal Beg-of-Quarter					10.847			10.764			11.066			10.939			11.377			11.667
	Deposits				0.418			0.477			0.434			0.605			0.440			0.577
	Withdrawals & deaths				(0.181	)		(0.173	)		(0.195	)		(0.222	)		(0.204	)		(0.192	)

			Net cash flows		0.237			0.304			0.239			0.383			0.236			0.385
	Policyholder assessments				(0.225	)		(0.228	)		(0.232	)		(0.246	)		(0.246	)		(0.244	)
	Invest inc & change in market value				(0.094	)		0.226			(0.134	)		0.301			0.151			(0.049	)
	Acq of new business/transfers between segments				0.000			0.000			0.000			0.000			0.150			0.000

		*Total Segment — Bal End-of-Quarter*			10.764			11.066			10.939			11.377			11.667			11.759

(1)

Includes fixed investment option of VUL products.


06/30/02		PAGE 21

Investment Management
Income Statements
Unaudited [Millions of Dollars]


For the Year Ended December 31					1997

*Operating Revenue*
	Investment advisory fees — External					229.9
	Investment advisory fees — Insurance Assets					68.5
	Other revenue and fees					76.3
	Net investment income					72.8

			*Operating Revenue*			447.5

*Operating Benefits and Expenses*
	Underwriting, acquisition, insurance and other expenses					396.1
	Goodwill amortization					15.5
	Interest on notes payable					0.1

		*Operating Benefits and Expenses*				411.8

				Income from Operations Before Tax		35.8
	Federal income taxes					17.7

			*Income from Operations*			18.1

	Realized gains (losses) on investments					7.0
	Gains (losses) on derivatives
	Restructuring charges					0.0

*Income before Accounting Changes*						25.1
	Cumulative effect of accounting changes

			*Net Income*			25.1

*Income from Operations- before Goodwill Amortization*						33.6

*Income from Operations — before Goodwill & Intang. Amort.*						45.2
*Net Income —before Goodwill Amortization*						40.6
*Net Income —before Goodwill & Intang. Amort.*						52.2

Operating Revenue						447.5
Realized gains (losses) on investments						11.6
Gains (losses) on derivatives

			*Total Revenue*			459.1

	Average Capital (Securities at Cost)					653.3
	Return on Capital					2.8	%

[Additional columns below]

[Continued from above table, first column(s) repeated]


																	YTD			YTD
																	Jun			Jun
For the Year Ended December 31					1998			1999			2000			2001			2001			2002

*Operating Revenue*
	Investment advisory fees — External					249.0			248.6			231.6			197.2			101.6			95.8
	Investment advisory fees — Insurance Assets					82.5			83.6			88.9			87.5			43.6			41.9
	Other revenue and fees					92.5			106.6			115.9			99.2			52.0			45.0
	Net investment income					67.0			56.9			57.7			53.6			27.1			25.5

			*Operating Revenue*			491.0			495.6			494.2			437.4			224.4			208.1

*Operating Benefits and Expenses*
	Underwriting, acquisition, insurance and other expenses					401.5			384.3			408.7			397.8			206.4			190.4
	Goodwill amortization					16.3			16.2			16.2			16.2			8.1			0.0
	Interest on notes payable					0.4			0.0			0.0			0.0			0.0			0.0

		*Operating Benefits and Expenses*				418.2			400.5			425.0			414.1			214.5			190.4

				Income from Operations Before Tax		72.8			95.1			69.2			23.4			9.9			17.8
	Federal income taxes					28.9			34.1			25.1			8.7			3.8			3.2

			*Income from Operations*			43.9			61.0			44.1			14.6			6.1			14.6

	Realized gains (losses) on investments					0.5			(0.1	)		(2.5	)		(2.4	)		(1.2	)		(1.4	)
	Gains (losses) on derivatives														0.0			0.0			0.0
	Restructuring charges					0.0			(9.2	)		(4.6	)		(0.4	)		0.0			0.0

*Income before Accounting Changes*						44.4			51.6			37.0			11.9			4.9			13.2
	Cumulative effect of accounting changes														(0.1	)		(0.1	)

			*Net Income*			44.4			51.6			37.0			11.8			4.8			13.2

*Income from Operations — before Goodwill Amortization*						60.3			77.2			60.3			30.9			14.2			14.6
*Income from Operations — before Goodwill & Intang. Amort.*						72.6			88.7			70.9			37.9			18.3			17.3
*Net Income — before Goodwill Amortization*						60.8			67.9			53.2			28.0			13.0			13.2
*Net Income — before Goodwill & Intang. Amort.*						73.1			79.4			63.8			35.0			17.0			15.9

Operating Revenue						491.0			495.6			494.2			437.4			224.4			208.1
Realized gains (losses) on investments						0.9			(0.1	)		(3.9	)		(3.7	)		(1.8	)		(2.2	)
Gains (losses) on derivatives

		*Total Revenue*				491.9			495.5			490.3			433.7			222.6			205.9

	Average Capital (Securities at Cost)					642.3			593.9			575.2			543.7			545.6			557.4
	Return on Capital					6.8	%		10.3	%		7.7	%		2.7	%		2.2	%		5.2	%


For the Quarter Ended					Sep			Dec			Mar			Jun			Sep			Dec
					1999			1999			2000			2000			2000			2000

*Operating Revenue*
		Investment advisory fees — External				60.7			60.3			60.0			57.9			56.9			56.7
		Investment advisory fees — Insurance Assets				19.9			22.1			21.0			22.3			22.5			23.1
		Other revenue and fees				24.9			29.8			31.9			31.0			26.4			26.6
		Net investment income				13.9			13.9			13.0			12.6			18.3			13.8

	*Operating Revenue*					119.3			126.1			126.0			123.8			124.1			120.2

*Operating Benefits and Expenses*
		Underwriting, acquisition, insurance and other expenses				92.8			96.3			102.5			99.3			103.9			103.0
		Goodwill amortization				4.1			4.1			4.1			4.1			4.1			4.1
		Interest on notes payable				0.0			0.0			0.0			0.0			0.0			(0.0	)

			*Operating Benefits & Expenses*			96.8			100.4			106.6			103.3			107.9			107.1

				Income from Operations Before Tax		22.5			25.7			19.4			20.5			16.2			13.1
		Federal income taxes				7.7			9.1			7.0			7.4			6.3			4.4

				*Income from Operations*		14.7			16.5			12.4			13.1			9.9			8.7

		Realized gains (losses) on investments				(0.3	)		0.4			(0.1	)		(2.0	)		(0.2	)		(0.2	)
		Gains (losses) on derivatives
		Restructuring charges				0.0			2.9			0.0			(2.7	)		0.0			(1.9	)

*Income before Accounting Changes*						14.4			19.8			12.3			8.4			9.7			6.6
		Cumulative effect of accounting changes

				*Net Income*		14.4			19.8			12.3			8.4			9.7			6.6

*Inc from Oper — before Goodwill Amortization*						18.8			20.6			16.5			17.1			14.0			12.7
*Inc from Oper — before Goodwill & Intang. Amort.*						21.7			23.3			19.4			19.7			16.6			15.2
*Net Income — before Goodwill Amortization*						18.5			23.9			16.4			12.4			13.7			10.6
*Net Income — before Goodwill & Intang. Amort.*						21.3			26.6			19.2			15.0			16.3			13.1

Operating Revenue						119.3			126.1			126.0			123.8			124.1			120.2
Realized gains (losses) on investments						(0.5	)		0.6			(0.2	)		(3.1	)		(0.4	)		(0.3	)
Gains (losses) on derivatives

			*Total Revenue*			118.8			126.6			125.8			120.7			123.8			120.0

		Average Capital (Securities at Cost)				587.2			584.2			581.5			593.0			567.7			558.5
		Return on Capital				10.0	%		11.3	%		8.6	%		8.8	%		7.0	%		6.2	%

[Additional columns below]

[Continued from above table, first column(s) repeated]


For the Quarter Ended					Mar			Jun			Sep			Dec			Mar			Jun
					2001			2001			2001			2001			2002			2002

*Operating Revenue*
		Investment advisory fees — External				50.5			51.1			46.2			49.3			48.0			47.8
		Investment advisory fees — Insurance Assets				22.1			21.6			21.8			22.0			21.2			20.7
		Other revenue and fees				26.3			25.7			23.9			23.4			23.0			22.0
		Net investment income				14.1			13.0			13.6			12.8			12.8			12.7

	*Operating Revenue*					113.0			111.4			105.5			107.6			105.1			103.1

*Operating Benefits and Expenses*
		Underwriting, acquisition, insurance and other expenses				104.7			101.6			95.1			96.4			95.4			95.0
		Goodwill amortization				4.1			4.1			4.1			4.1			0.0
		Interest on notes payable				0.0			0.0			0.0			0.0			0.0			0.0

			*Operating Benefits & Expenses*			108.8			105.7			99.2			100.4			95.4			95.0

				Income from Operations Before Tax		4.2			5.7			6.3			7.1			9.7			8.1
		Federal income taxes				1.8			2.0			2.9			2.1			1.7			1.5

				*Income from Operations*		2.4			3.7			3.5			5.1			8.0			6.6

		Realized gains (losses) on investments				(0.5	)		(0.7	)		(0.5	)		(0.7	)		(1.0	)		(0.4	)
		Gains (losses) on derivatives							0.0			0.0			0.0			0.0			0.0
		Restructuring charges				0.0			0.0			0.0			(0.4	)		0.0			0.0

*Income before Accounting Changes*						2.0			3.0			2.9			4.0			7.0			6.2
		Cumulative effect of accounting changes							(0.1	)		0.0			0.0			0.0			0.0

				*Net Income*		2.0			2.9			2.9			4.0			7.0			6.2

*Inc from Oper — before Goodwill Amortization*						6.5			7.7			7.5			9.1			8.0			6.6
*Inc from Oper — before Goodwill & Intang. Amort.*						9.1			9.2			9.0			10.6			9.4			7.9
*Net Income — before Goodwill Amortization*						6.0			6.9			7.0			8.1			7.0			6.2
*Net Income — before Goodwill & Intang. Amort.*						8.6			8.4			8.5			9.5			8.4			7.5

Operating Revenue						113.0			111.4			105.5			107.6			105.1			103.1
Realized gains (losses) on investments						(0.7	)		(1.1	)		(0.8	)		(1.1	)		(1.5	)		(0.7	)
Gains (losses) on derivatives																					0.0

			*Total Revenue*			112.3			110.3			104.7			106.5			103.5			102.4

		Average Capital (Securities at Cost)				548.3			542.8			543.1			540.6			546.1			568.6
		Return on Capital				1.8	%		2.7	%		2.5	%		3.8	%		5.8	%		4.6	%


06/30/02		PAGE 22

Investment Management
Assets Under Management Roll Forward
Unaudited [Billions of Dollars]


																			YTD			YTD
																			Jun			Jun
				1997			1998			1999			2000			2001			2001			2002

Retail Fixed — Bal Beg-of-Year					5.853			8.125			8.217			7.423			6.608			6.608			7.120
	Fund Sales				0.961			1.165			0.991			0.770			0.876			0.452			0.564
	Redemptions				(1.271	)		(1.235	)		(1.424	)		(1.401	)		(1.050	)		(0.547	)		(0.597	)
	Net Money Market				(0.069	)		(0.140	)		(0.110	)		(0.207	)		(0.047	)		(0.020	)		(0.005	)
	Transfers				(0.220	)		0.132			0.177			(0.168	)		0.403			0.044			(0.020	)

			Net Cash Flows(1)		(0.599	)		(0.078	)		(0.366	)		(1.006	)		0.183			(0.071	)		(0.057	)
	Market				0.324			0.170			(0.428	)		0.097			0.329			0.231			0.105
	Acquisitions/addition of Assets under Administration(1)				2.547									0.094

		Balance End-of-Year			8.125			8.217			7.423			6.608			7.120			6.768			7.168

Retail Equity — Bal Beg-of-Year					13.152			17.754			22.080			23.384			21.523			21.523			17.987
	Fund Sales				2.953			3.581			3.271			4.116			2.816			1.598			1.994
	Redemptions				(1.926	)		(2.460	)		(4.971	)		(4.431	)		(2.839	)		(1.578	)		(1.671	)
	Net Money Market				0.000			(0.002	)		(0.001	)		0.001			0.000
	Transfers				0.209			0.730			(0.143	)		(0.178	)		(0.538	)		(0.116	)		(0.008	)

			Net Cash Flows(1)		1.236			1.849			(1.844	)		(0.493	)		(0.561	)		(0.096	)		0.314
	Market				3.323			2.476			3.148			(1.710	)		(2.974	)		(1.673	)		(1.690	)
	Acquisitions/addition of Assets under Administration(1)				0.043									0.342

		Balance at End-of-Year			17.754			22.080			23.384			21.523			17.987			19.753			16.611

Total Retail — Bal Beg-of-Year					19.005			25.879			30.297			30.807			28.130			28.130			25.107
	Retail Sales — Annuities				2.163			2.238			1.561			1.782			1.702			0.944			1.191
	Retail Sales — Mutual Funds				1.218			1.913			2.153			2.578			1.522			0.838			1.014
	Retail eSales — Managed Acct. & Other				0.533			0.596			0.550			0.525			0.468			0.268			0.354

			Total Retail Sales		3.914			4.747			4.264			4.886			3.692			2.050			2.558
	Redemptions				(3.197	)		(3.695	)		(6.395	)		(5.833	)		(3.889	)		(2.125	)		(2.268	)
	Net Money Market				(0.068	)		(0.141	)		(0.111	)		(0.206	)		(0.047	)		(0.020	)		(0.005	)
	Transfers				(0.011	)		0.862			0.034			(0.346	)		(0.135	)		(0.072	)		(0.028	)

			Net Cash Flows(1)		0.637			1.773			(2.208	)		(1.499	)		(0.379	)		(0.167	)		0.257
	Market				3.647			2.647			2.720			(1.613	)		(2.645	)		(1.442	)		(1.586	)
	Acquisitions/addition of Assets under Administration(1)				2.590									0.435

		Balance at End-of-Year			25.879			30.297			30.807			28.130			25.107			26.522			23.778

Institutional Fixed — Bal Beg-of-Year					3.580			5.708			6.955			6.936			6.111			6.111			5.490
	Inflows				2.509			2.169			2.000			0.771			0.643			0.543			1.467
	Withdrawals/Terminations				(0.787	)		(1.242	)		(1.699	)		(1.973	)		(1.228	)		(0.544	)		(0.400	)
	Transfers				0.013			(0.074	)		(0.001	)		(0.005	)		0.017			0.013			(0.001	)

			Net Cash Flows		1.735			0.853			0.300			(1.207	)		(0.568	)		0.012			1.067
	Market				0.343			0.394			(0.319	)		0.382			(0.053	)		(0.314	)		0.287
	Acquisitions				0.051

		Balance at End-of-Year			5.708			6.955			6.936			6.111			5.490			5.809			6.844

Institutional Equity — Bal Beg-of-Year					22.886			24.871			24.235			23.631			19.112			19.112			17.814
	Inflows				2.465			3.840			5.248			2.730			3.182			1.704			1.241
	Withdrawals/Terminations				(6.447	)		(7.441	)		(7.801	)		(7.209	)		(2.878	)		(1.700	)		(1.147	)
	Transfers				(0.068	)		0.047			0.011			(0.008	)		0.036			0.011			0.024

			Net Cash Flows		(4.049	)		(3.555	)		(2.542	)		(4.487	)		0.340			0.015			0.119
	Market				6.035			2.919			1.938			(0.032	)		(1.638	)		(0.721	)		0.183

	Acquisitions Balance at End-of-Year				24.871			24.235			23.631			19.112			17.814			18.406			18.116

Total Institutional — Bal Beg-of-Year					26.465			30.579			31.191			30.568			25.223			25.223			23.304
	Inflows				4.975			6.009			7.248			3.501			3.825			2.247			2.708
	Withdrawals/Terminations				(7.234	)		(8.683	)		(9.500	)		(9.182	)		(4.106	)		(2.244	)		(1.547	)
	Transfers				(0.055	)		(0.027	)		0.010			(0.014	)		0.053			0.024			0.024

			Net Cash Flows		(2.314	)		(2.702	)		(2.242	)		(5.694	)		(0.228	)		0.027			1.185
	Market				6.377			3.313			1.619			0.350			(1.691	)		(1.035	)		0.470
	Acquisitions				0.051

		Balance at End-of-Year			30.579			31.191			30.568			25.223			23.304			24.215			24.959

Total Retail/Institutional — At End-of-Year					56.458			61.488			61.375			53.354			48.411			50.737			48.738

Insurance Assets — At End-of-Year					35.684			39.432			35.934			35.686			38.119			36.018			38.476

Total Assets Under Management At End-of-Year					92.142			100.920			97.309			89.040			86.530			86.755			87.214


(1)	Retail assets under management have been restated to include assets under administration beginning in January of 2000.
	Net Cash Flows from Assets Under Administration are:													0.018			0.081			0.040			0.151


06/30/02		PAGE 23

Investment Management
Assets Under Management Roll Forward
Unaudited [Billions of Dollars]


					Sep			Dec			Mar			Jun			Sep			Dec
					1999			1999			2000			2000			2000			2000

Retail Fixed — Bal-Beg-of-Qtr						7.945			7.680			7.424			7.057			6.764			6.631
	Fund Sales					0.231			0.181			0.168			0.166			0.223			0.212
	Redemptions					(0.342	)		(0.403	)		(0.456	)		(0.339	)		(0.328	)		(0.277	)
	Net Money Market					(0.029	)		(0.030	)		(0.067	)		(0.058	)		(0.031	)		(0.051	)
	Transfers					0.034			0.154			(0.102	)		(0.046	)		(0.031	)		0.010

				Net Cash Flows(1)		(0.106	)		(0.098	)		(0.457	)		(0.277	)		(0.167	)		(0.106	)
	Market					(0.159	)		(0.158	)		(0.003	)		(0.017	)		0.035			0.081
	Acquisitions/addition of Assets under Admin.(1)					0.000			0.000			0.094			0.000			0.000			0.000

			Balance at End-of-Qtr			7.680			7.424			7.057			6.764			6.631			6.606

Retail Equity — Bal-Beg-of-Qtr						22.340			20.873			23.383			24.478			23.496			24.047
	Fund Sales					0.730			0.894			1.234			0.884			0.927			1.071
	Redemptions					(0.865	)		(1.120	)		(1.565	)		(0.989	)		(1.040	)		(0.837	)
	Net Money Market					0.000			0.000			0.000			0.000			0.001			0.000
	Transfers					(0.060	)		(0.086	)		(0.091	)		0.018			(0.036	)		(0.069	)

				Net Cash Flows(1)		(0.195	)		(0.312	)		(0.423	)		(0.087	)		(0.148	)		0.165
	Market					(1.272	)		2.822			1.176			(0.895	)		0.699			(2.689	)
	Acquisitions/addition of Assets under Admin.(1)					0.000			0.000			0.342			0.000			0.000			0.000

			Balance at End-of-Qtr			20.873			23.383			24.478			23.496			24.047			21.524

Total Retail — Bal-Beg-of-Qtr						30.285			28.553			30.807			31.535			30.260			30.679
	Retail Sales — Annuities					0.332			0.409			0.379			0.358			0.456			0.589
	Retail Sales — Mutual Funds					0.514			0.587			0.876			0.586			0.554			0.562
	Retail Sales — Managed Acct. & Other					0.116			0.079			0.148			0.106			0.140			0.131

		Total Retail Sales				0.962			1.075			1.403			1.050			1.150			1.283
	Redemptions					(1.207	)		(1.523	)		(2.021	)		(1.329	)		(1.368	)		(1.114	)
	Net Money Market					(0.029	)		(0.030	)		(0.067	)		(0.058	)		(0.030	)		(0.051	)
	Transfers					(0.026	)		0.068			(0.193	)		(0.027	)		(0.067	)		(0.059	)

				Net Cash Flows(1)		(0.300	)		(0.410	)		(0.879	)		(0.364	)		(0.315	)		0.059
	Market					(1.431	)		2.664			1.173			(0.911	)		0.734			(2.608	)
	Acquisitions/addition of Assets under Admin.(1)					0.000			0.000			0.435			0.000			0.000			0.000

			Balance at End-of-Qtr			28.553			30.807			31.535			30.260			30.679			28.130

Institutional Fixed — Bal-Beg-of-Qtr						7.264			7.218			6.937			6.873			6.485			6.276
	Inflows					0.446			0.420			0.180			0.148			0.308			0.135
	Withdrawals/Terminations					(0.294	)		(0.781	)		(0.353	)		(0.520	)		(0.532	)		(0.568	)
	Transfers					(0.002	)		0.001			(0.005	)		(0.001	)		0.000			0.001

				Net Cash Flows		0.150			(0.360	)		(0.178	)		(0.373	)		(0.224	)		(0.433	)
	Market					(0.196	)		0.079			0.114			(0.015	)		0.015			0.269

			Balance at End-of-Qtr			7.218			6.937			6.873			6.485			6.276			6.112

Institutional Equity — Bal-Beg-of-Qtr						23.962			23.098			23.631			20.304			20.241			19.044
	Inflows					1.839			0.934			0.904			0.669			0.407			0.750
	Withdrawals/Terminations					(1.165	)		(2.043	)		(3.333	)		(1.354	)		(1.154	)		(1.368	)
	Transfers					(0.008	)		(0.010	)		(0.004	)		0.002			(0.013	)		0.007

				Net Cash Flows		0.666			(1.119	)		(2.433	)		(0.683	)		(0.760	)		(0.611	)
	Market					(1.530	)		1.652			(0.894	)		0.620			(0.438	)		0.680

			Balance at End-of-Qtr			23.098			23.631			20.304			20.241			19.044			19.113

Total Institutional — Bal-Beg-of-Qtr						31.226			30.316			30.568			27.177			26.726			25.320
	Inflows					2.285			1.354			1.084			0.817			0.715			0.885
	Withdrawals/Terminations					(1.459	)		(2.824	)		(3.686	)		(1.874	)		(1.686	)		(1.936	)
	Transfers					(0.010	)		(0.009	)		(0.009	)		0.001			(0.012	)		0.008

				Net Cash Flows		0.816			(1.479	)		(2.611	)		(1.056	)		(0.983	)		(1.043	)
	Market					(1.726	)		1.731			(0.780	)		0.605			(0.423	)		0.949

			Balance at End-of-Qtr			30.316			30.568			27.177			26.726			25.320			25.225

Total Retail/Inst — At End-of-Qtr						58.869			61.375			58.712			56.986			55.998			53.355
Insurance Assets-End-of-Qtr						36.820			35.934			35.541			34.891			34.981			35.686
Total Assets Under Management

		At End-of-Qtr				95.689			97.309			94.253			91.877			90.979			89.041

			Net Cash Flows from Assets Under Administration are:									0.006			0.000			0.011			0.001

[Additional columns below]

[Continued from above table, first column(s) repeated]


					Mar			Jun			Sep			Dec			Mar			Jun
					2001			2001			2001			2001			2002			2002

Retail Fixed — Bal-Beg-of-Qtr						6.606			6.750			6.767			7.205			7.120			7.087
	Fund Sales					0.248			0.204			0.206			0.218			0.292			0.272
	Redemptions					(0.261	)		(0.286	)		(0.262	)		(0.242	)		(0.291	)		(0.306	)
	Net Money Market					0.010			(0.030	)		0.005			(0.031	)		(0.003	)		(0.002	)
	Transfers					0.047			(0.003	)		0.388			(0.027	)		(0.040	)		0.021

				Net Cash Flows(1)		0.044			(0.115	)		0.337			(0.083	)		(0.042	)		(0.015	)
	Market					0.100			0.131			0.101			(0.002	)		0.009			0.096
	Acquisitions/addition of Assets under Admin.(1)					0.000			0.000			0.000			0.000			0.000			0.000

			Balance at End-of-Qtr			6.750			6.767			7.205			7.120			7.087			7.168

Retail Equity — Bal-Beg-of-Qtr						21.524			18.254			19.754			15.871			17.988			18.255
	Fund Sales					0.916			0.681			0.638			0.580			0.910			1.084
	Redemptions					(0.911	)		(0.667	)		(0.654	)		(0.607	)		(0.791	)		(0.881	)
	Net Money Market					0.000			0.000			0.000			0.000			0.000			0.000
	Transfers					(0.070	)		(0.046	)		(0.441	)		0.019			0.014			(0.022	)

				Net Cash Flows(1)		(0.064	)		(0.032	)		(0.456	)		(0.008	)		0.133			0.182
	Market					(3.205	)		1.532			(3.427	)		2.125			0.134			(1.826	)
	Acquisitions/addition of Assets under Admin.(1)					0.000			0.000			0.000			0.000			0.000			0.000

			Balance at End-of-Qtr			18.254			19.754			15.871			17.988			18.255			16.611

Total Retail — Bal-Beg-of-Qtr						28.130			25.005			26.521			23.076			25.108			25.342
	Retail Sales — Annuities					0.542			0.403			0.434			0.324			0.590			0.601
	Retail Sales — Mutual Funds					0.484			0.354			0.335			0.348			0.452			0.562
	Retail Sales — Managed Acct. & Other					0.140			0.127			0.074			0.126			0.160			0.194

		Total Retail Sales				1.166			0.884			0.843			0.798			1.202			1.356
	Redemptions					(1.172	)		(0.952	)		(0.915	)		(0.850	)		(1.082	)		(1.186	)
	Net Money Market					0.010			(0.030	)		0.005			(0.031	)		(0.003	)		(0.002	)
	Transfers					(0.023	)		(0.049	)		(0.053	)		(0.008	)		(0.027	)		(0.001	)

				Net Cash Flows(1)		(0.019	)		(0.148	)		(0.120	)		(0.091	)		0.091			0.167
	Market					(3.105	)		1.663			(3.326	)		2.123			0.143			(1.730	)
	Acquisitions/addition of Assets under Admin.(1)					0.000			0.000			0.000			0.000			0.000			0.000

			Balance at End-of-Qtr			25.005			26.521			23.076			25.108			25.342			23.778

Institutional Fixed — Bal-Beg-of-Qtr						6.112			5.891			5.810			5.640			5.490			6.018
	Inflows					0.310			0.233			0.020			0.080			0.804			0.663
	Withdrawals/Terminations					(0.432	)		(0.112	)		(0.493	)		(0.191	)		(0.239	)		(0.161	)
	Transfers					0.003			0.010			0.001			0.002			(0.001	)		0.000

				Net Cash Flows		(0.119	)		0.131			(0.472	)		(0.109	)		0.564			0.503
	Market					(0.102	)		(0.212	)		0.302			(0.041	)		(0.036	)		0.323

			Balance at End-of-Qtr			5.891			5.810			5.640			5.490			6.018			6.844

Institutional Equity — Bal-Beg-of-Qtr						19.113			17.312			18.406			16.241			17.814			18.641
	Inflows					0.881			0.823			0.863			0.615			0.672			0.569
	Withdrawals/Terminations					(1.199	)		(0.501	)		(0.555	)		(0.624	)		(0.512	)		(0.635	)
	Transfers					0.019			(0.008	)		0.009			0.016			0.006			0.018

				Net Cash Flows		(0.299	)		0.314			0.317			0.007			0.166			(0.047	)
	Market					(1.502	)		0.780			(2.482	)		1.566			0.661			(0.477	)

			Balance at End-of-Qtr			17.312			18.406			16.241			17.814			18.641			18.116

Total Institutional — Bal-Beg-of-Qtr						25.225			23.203			24.216			21.881			23.304			24.659
	Inflows					1.191			1.056			0.883			0.695			1.476			1.232
	Withdrawals/Terminations					(1.631	)		(0.613	)		(1.048	)		(0.815	)		(0.751	)		(0.796	)
	Transfers					0.022			0.002			0.010			0.018			0.005			0.019

				Net Cash Flows		(0.418	)		0.445			(0.155	)		(0.102	)		0.730			0.455
	Market					(1.604	)		0.568			(2.180	)		1.525			0.625			(0.154	)

			Balance at End-of-Qtr			23.203			24.216			21.881			23.304			24.659			24.960

Total Retail/Inst — At End-of-Qtr						48.208			50.737			44.957			48.413			50.001			48.738
Insurance Assets-End-of-Qtr						36.324			36.018			37.337			38.119			37.171			38.476
Total Assets Under Management

		At End-of-Qtr				84.532			86.755			82.294			86.532			87.172			87.214


(1) Retail assets under management have been restated to include assets under administration beginning in January of 2000.
	Net Cash Flows from Assets Under Administration are:					0.027			0.013			0.007			0.034			0.090			0.061


06/30/02		PAGE 24

Lincoln UK
Income Statements & Operational Data
Unaudited [Millions of Dollars]


																				YTD			YTD
																				Jun			Jun
For the Year Ended December 31					1997			1998			1999			2000			2001			2001			2002

*Operating Revenue*
		Premiums				145.4			156.6			145.1			148.4			46.1			22.3			24.1
		Mortality assessments				25.2			29.3			27.1			31.4			33.9			18.3			14.8
		Expense assessments				166.1			153.6			182.3			178.1			134.8			75.1			53.1
		Other revenue and fees				3.3			11.2			13.8			6.9			1.3			0.7			0.3
		Net investment income				85.1			87.9			75.3			70.3			64.8			34.8			29.9

				*Operating Revenue*		425.2			438.6			443.6			435.0			280.9			151.2			122.2

*Operating Benefits and Expenses*
		Benefits paid or provided:
			Benefits			339.6			151.0			306.2			178.5			83.4			41.9			37.3
		Underwriting, acquisition, insurance and other expenses				184.5			175.6			223.5			180.0			147.6			70.8			64.2
		Goodwill amortization				0.0			6.3			7.0			4.0			0.6			0.3			0.0

				*Operating Benefits and Expenses*		524.1			332.9			536.7			362.6			231.7			113.0			101.6

				Income from Operations Before Tax		(99.0	)		105.8			(93.1	)		72.4			49.2			38.2			20.6
		Federal income taxes				9.3			34.8			(79.2	)		11.3			(11.1	)		7.6			(0.5	)

				*Income from Operations*		(108.3	)		70.9			(13.9	)		61.0			60.2			30.6			21.1

		Realized gains (losses) on investments				1.5			0.8			2.1			2.3			8.7			1.8			(0.4	)
		Restructuring charges				0.0			0.0			(6.5	)		(76.5	)		0.0			0.0			0.0

*Income before Accounting Changes*						(106.8	)		71.7			(18.2	)		(13.2	)		68.9			32.4			20.7
		Cumulative effect of accounting changes																0.0			0.0			0.0

				*Net Income*		(106.8	)		71.7			(18.2	)		(13.2	)		68.9			32.4			20.7

*Inc from Oper — Before Goodwill Amort.*						(108.3	)		77.2			(6.9	)		65.1			60.9			30.9			21.1
*Net Income — Before Goodwill Amort.*						(106.8	)		78.0			(11.3	)		(9.2	)		69.6			32.7			20.7
*Effective tax rate*						(9.4	%)		32.9	%		85.1	%		15.7	%		(22.5	%)		20.0	%		(2.2	%)
Operating revenue						425.2			438.6			443.6			435.0			280.9			151.2			122.2
Realized gains (losses) on investments						2.1			1.1			3.0			3.2			12.4			2.6			(0.6	)

			*Total Revenue*			427.3			439.7			446.6			438.2			293.3			153.8			121.6

Average capital						618.1			517.7			551.2			488.2			559.7			550.9			497.6
Return on average capital						(17.5	%)		13.7	%		(2.5	%)		12.5	%		10.8	%		11.1	%		8.5	%
	Unit Linked Assets — Beg-of-Year					5.074			5.643			6.265			7.220			6.441			6.441			5.607
		Deposits				0.569			0.473			0.537			0.554			0.481			0.242			0.229
		Withdrawals (incl. chgs) & Deaths				(0.503	)		(0.547	)		(0.566	)		(0.644	)		(0.529	)		(0.277	)		(0.264	)

				Net Cash Flows		0.066			(0.074	)		(0.029	)		(0.090	)		(0.048	)		(0.035	)		(0.035	)
		Inv Inc & Chg in Mkt Val				0.682			0.662			1.154			(0.154	)		(0.617	)		(0.306	)		(0.338	)
		Acq of new business/companies				0.000			0.000			0.000			0.000			0.000			0.000			0.000
		Foreign currency adjustment				(0.179	)		0.035			(0.170	)		(0.536	)		(0.169	)		(0.332	)		0.286

	Unit Linked Assets — End-of-Year					5.643			6.265			7.220			6.441			5.607			5.768			5.520

Individual Life In-force (Billions)						25.026			25.002			25.698			24.290			20.878			21.519			20.401
Exchange Rate — Dollars to Pounds
				For-the-Year		1.644			1.658			1.617			1.518			1.441			1.438			1.443
				End-of-Year		1.651			1.660			1.615			1.493			1.456			1.415			1.532


06/30/02		PAGE 25

Lincoln UK
Income Statements & Operational Data
Unaudited [Millions of Dollars]


For the Quarter Ended					Sep			Dec			Mar			Jun			Sep			Dec
					1999			1999			2000			2000			2000			2000

*Operating Revenue*
		Premiums				33.5			38.7			39.0			36.3			32.5			40.5
		Mortality assessments				7.7			5.0			6.3			8.0			9.6			7.5
		Expense assessments				49.3			37.2			46.5			44.3			52.6			34.6
		Other revenue and fees				3.6			3.8			2.4			1.3			2.0			1.3
		Net investment income				16.2			17.7			18.9			18.5			16.1			16.7

				*Operating Revenue*		110.3			102.4			113.2			108.4			112.8			100.6

*Operating Benefits and Expenses*
		Benefits paid or provided:
			Benefits			27.2			211.8			35.0			37.4			51.9			54.2
		Underwriting, acquisition, insurance and other expenses				61.6			51.4			56.4			43.5			45.2			34.9
		Goodwill amortization				1.2			3.3			1.3			1.3			1.2			0.2

				*Operating Benefits and Expenses*		90.1			266.6			92.8			82.2			98.3			89.3

				Income from Operations Before Tax		20.2			(164.2	)		20.4			26.2			14.5			11.3
		Federal income taxes				4.0			(97.1	)		4.7			6.9			3.9			(4.2	)

				*Income from Operations*		16.2			(67.1	)		15.7			19.3			10.6			15.5

		Realized gains (losses) on investments				0.2			1.0			(0.2	)		(0.1	)		(0.0	)		2.6
		Restructuring charges				0.0			(6.5	)		0.0			0.0			(40.5	)		(36.1	)

*Income before Accounting Changes*						16.4			(72.6	)		15.5			19.1			(29.9	)		(17.9	)
		Cumulative effect of accounting changes

				*Net Income*		16.4			(72.6	)		15.5			19.1			(29.9	)		(17.9	)

*Inc from Oper — Before Goodwill Amort.*						17.4			(63.8	)		17.1			20.5			11.8			15.7
*Net Income — Before Goodwill Amort.*						17.6			(69.3	)		16.8			20.4			(28.7	)		(17.8	)
*Effective tax rate*						20.0	%		59.1	%		22.9	%		26.4	%		27.2	%		-37.1	%
Operating revenue						110.3			102.4			113.2			108.4			112.8			100.6
Realized gains (losses) on investments						0.3			1.4			(0.4	)		(0.2	)		(0.0	)		3.8

			*Total Revenue*			110.5			103.8			112.8			108.2			112.8			104.3

Average capital						573.5			585.0			516.4			500.8			486.5			448.9
Return on average capital						11.3	%		(45.9	%)		12.2	%		15.4	%		8.7	%		13.8	%
	Unit Linked Assets Balance-Beg-of-Quarter (Billions)					6.503			6.568			7.220			7.031			6.726			6.499
		Deposits				0.130			0.156			0.159			0.134			0.145			0.116
		Withdrawals (incl. chgs) & Deaths				(0.136	)		(0.158	)		(0.170	)		(0.162	)		(0.159	)		(0.153	)

				Net Cash Flows		(0.005	)		(0.002	)		(0.011	)		(0.028	)		(0.014	)		(0.037	)
		Inv Inc & Chg in Mkt Val				(0.214	)		0.784			(0.077	)		0.047			(0.025	)		(0.100	)
		Acq of new business/companies Foreign currency adjustment				0.284			(0.130	)		(0.101	)		(0.324	)		(0.189	)		0.078

	Unit Linked Assets — End-of-Quarter					6.568			7.220			7.031			6.726			6.499			6.441

Individual Life In-force (Billions)						26.235			25.698			26.514			25.225			24.535			24.290
Exchange Rate — Dollars to Pounds
				For-the-Quarter		1.614			1.625			1.599			1.536			1.482			1.454
				End-of-Quarter		1.647			1.615			1.591			1.517			1.475			1.493

[Additional columns below]

[Continued from above table, first column(s) repeated]


For the Quarter Ended					Mar			Jun			Sep			Dec			Mar			Jun
					2001			2001			2001			2001			2002			2002

*Operating Revenue*
		Premiums				12.8			9.6			11.8			11.9			12.1			12.1
		Mortality assessments				9.4			8.9			8.5			7.1			6.5			8.3
		Expense assessments				43.7			31.4			35.5			24.1			25.3			27.8
		Other revenue and fees				0.6			0.1			0.0			0.6			0.3			0.0
		Net investment income				17.9			16.9			14.8			15.2			14.7			15.3

				*Operating Revenue*		84.4			66.9			70.7			58.9			58.8			63.4

*Operating Benefits and Expenses*
		Benefits paid or provided:
			Benefits			24.0			17.9			20.7			20.8			18.3			19.0
		Underwriting, acquisition, insurance and other expenses				41.1			29.7			40.3			36.5			24.9			39.3
		Goodwill amortization				0.2			0.2			0.2			0.2

				*Operating Benefits and Expenses*		65.3			47.7			61.1			57.5			43.2			58.4

				Income from Operations Before Tax		19.1			19.1			9.6			1.4			15.6			5.1
		Federal income taxes				4.7			2.9			(0.5	)		(18.1	)		1.1			(1.6	)

				*Income from Operations*		14.4			16.2			10.1			19.5			14.4			6.7

		Realized gains (losses) on investments				0.4			1.4			3.9			3.0			(3.6	)		3.2
		Restructuring charges				0.0			0.0			0.0			0.0			0.0			0.0

*Income before Accounting Changes*						14.8			17.6			14.0			22.5			10.8			9.8
		Cumulative effect of accounting changes																			0.0

				*Net Income*		14.8			17.6			14.0			22.5			10.8			9.8

*Inc from Oper — Before Goodwill Amort.*						14.5			16.4			10.3			19.7			14.4			6.7
*Net Income — Before Goodwill Amort.*						14.9			17.8			14.2			22.7			10.8			9.8
*Effective tax rate*						24.6	%		15.3	%		(5.7	%)		(1337.4	%)		7.3	%		(31.3	%)
Operating revenue						84.4			66.9			70.7			58.9			58.8			63.4
Realized gains (losses) on investments						0.6			2.0			5.5			4.3			(5.1	)		4.5

			*Total Revenue*			84.9			68.9			76.3			63.2			53.6			68.0

Average capital						548.7			553.2			575.4			561.3			510.0			485.3
Return on average capital						10.5	%		11.7	%		7.0	%		13.9	%		11.3	%		5.5	%
	Unit Linked Assets Balance-Beg-of-Quarter (Billions)					6.441			5.677			5.768			5.218			5.607			5.618
		Deposits				0.132			0.111			0.128			0.111			0.114			0.115
		Withdrawals (incl. chgs) & Deaths				(0.147	)		(0.131	)		(0.136	)		(0.115	)		(0.127	)		(0.137	)

				Net Cash Flows		(0.015	)		(0.020	)		(0.009	)		(0.004	)		(0.013	)		(0.022	)
		Inv Inc & Chg in Mkt Val				(0.421	)		0.115			(0.768	)		0.457			0.141			(0.479	)
		Acq of new business/companies Foreign currency adjustment				(0.328	)		(0.004	)		0.226			(0.063	)		(0.117	)		0.403

	Unit Linked Assets — End-of-Quarter					5.677			5.768			5.218			5.607			5.618			5.520

Individual Life In-force (Billions)						21.894			21.519			21.299			20.878			20.010			20.401
Exchange Rate — Dollars to Pounds
				For-the-Quarter		1.455			1.421			1.442			1.448			1.423			1.464
				End-of-Quarter		1.416			1.415			1.474			1.456			1.426			1.532


06/30/02		PAGE 26

Other Operations
Unaudited [Millions of Dollars]


																YTD				YTD
																Jun			Jun
For the Year Ended December 31					1997			1998		1999		2000		2001			2001			2002

*Revenue*
	Lincoln Financial Advisors					125.3		286.4		317.0		377.5		360.7			165.0			154.0
	Lincoln Financial Distributors					20.5		33.5		107.5		119.9		113.4			46.4			58.7

				Total Distribution		145.8		319.9		424.4		497.4		474.0			211.4			212.7
	Reinsurance					1362.3		1581.2		1824.1		1770.6		1699.4			966.5			0.0
	Amortization of deferred gain on indemnity reinsurance*													20.4			0.0			46.2
	Other [Including Consolidating Adjustments]					(105.9	)	(192.7	)	(277.5	)	(292.6	)	(360.4	)		(185.7	)		(65.7	)

			*Operating Revenue*			1402.2		1708.3		1971.0		1975.4		1833.4			992.1			193.2

	Realized gains (losses) on investments					42.1		0.5		14.4		(5.0	)	8.2			(8.5	)		(8.7	)
	Gains (losses) on derivatives													(9.7	)		(0.0	)		(0.0	)
	Gain on sale of reinsurance subsidiaries													12.8			0.0			0.0

		*Total Revenue*				1444.3		1708.9		1985.4		1970.4		1844.7			983.6			184.5

*Income (Loss)*
	Lincoln Financial Advisors					(5.3	)	(23.7	)	(20.8	)	(11.7	)	(15.9	)		(19.1	)		(16.9	)
	Lincoln Financial Distributors					(11.2	)	(8.2	)	(14.0	)	(18.5	)	(30.7	)		(18.4	)		(13.5	)

				Total Distribution		(16.5	)	(31.9	)	(34.8	)	(30.2	)	(46.6	)		(37.5	)		(30.4	)
	Reinsurance					(150.1	)	104.9		40.1		122.5		128.8			80.9
	Amortization of deferred gain on indemnity reinsurance*													12.9						30.0
	LNC Financing					(31.6	)	(51.5	)	(83.5	)	(84.9	)	(77.9	)		(43.7	)		(17.8	)
	Other Corporate					(25.1	)	(17.5	)	(5.0	)	(15.4	)	(2.4	)		1.5			(1.1	)

			*Inc (Loss) from Operations*			(223.3	)	4.0		(83.1	)	(8.0	)	14.8			1.2			(19.3	)

	Realized gains (losses) on investments					24.9		2.7		10.2		(3.2	)	5.9			(5.6	)		(5.7	)
	Gains (losses) on derivatives													(6.3	)		(0.0	)		(0.0	)
	Gain on sale of reinsurance subsidiaries													15.0			0.0			0.0
	Reserve increase on business sold through reinsurance																			(14.4	)
	Restructuring charges					0.0		(14.3	)	(3.2	)	1.0		(19.5	)		(1.2	)		0.0

*Income before Accounting Changes*						(198.4	)	(7.6	)	(76.1	)	(10.2	)	9.9			(5.6	)		(39.4	)
	Cumulative effect of accounting changes													(2.7	)		(2.7	)		0.0
				*Total Net Income (Loss)*		(198.4	)	(7.6	)	(76.1	)	(10.2	)	7.2			(8.3	)		(39.4	)


					Sep			Dec			Mar			Jun			Sep			Dec
For the Quarter Ended					1999			1999			2000			2000			2000			2000

*Revenue*
	Lincoln Financial Advisors					75.7			104.0			86.4			90.0			91.3			109.8
	Lincoln Financial Distributors					26.4			34.2			29.3			28.1			27.5			35.0

				Total Distribution		102.1			138.2			115.8			118.1			118.8			144.8
	Reinsurance					403.7			575.1			392.7			458.9			457.9			461.0
	Amortization of deferred gain on indemnity reinsurance*
	Other [Including Consolidating Adjustments]					(64.8	)		(147.0	)		(67.6	)		(86.7	)		(79.2	)		(59.2	)

			*Operating Revenue*			441.0			566.4			440.9			490.3			497.5			546.6

	Realized gains (losses) on investments					14.2			0.0			(0.8	)		(1.3	)		(3.4	)		0.4
	Gains (losses) on derivatives
	Gain on sale of reinsurance subsidiaries

		*Total Revenue*				455.2			566.4			440.2			489.0			494.1			547.0

*Income (Loss)*
	Lincoln Financial Advisors					(5.3	)		2.7			(7.4	)		(2.9	)		(3.1	)		1.6
	Lincoln Financial Distributors					(2.1	)		(3.7	)		(3.3	)		(5.2	)		(5.0	)		(5.1	)

				Total Distribution		(7.4	)		(1.0	)		(10.7	)		(8.1	)		(8.0	)		(3.4	)
	Reinsurance					2.2			(19.5	)		31.9			25.8			28.2			36.6
	Amortization of deferred gain on indemnity reinsurance*
	LNC Financing					(19.9	)		(21.6	)		(21.9	)		(22.2	)		(20.9	)		(19.8	)
	Other Corporate					(2.4	)		(1.4	)		(5.7	)		(1.5	)		1.6			(9.8	)

				*Inc (Loss) from Oper*		(27.5	)		(43.5	)		(6.5	)		(5.9	)		0.9			3.5

	Realized gains (losses) on investments					9.8			1.3			(0.4	)		(0.8	)		(3.2	)		1.2
	Gains (losses) on derivatives
	Gain on sale of reinsurance subsidiaries
	Reserve increase on business sold through reinsurance
	Restructuring charges					(3.2	)		0.0			0.0			0.0			0.0			1.0

*Income before Accounting Changes*						(20.9	)		(42.2	)		(6.8	)		(6.8	)		(2.3	)		5.7
	Cumulative effect of accounting changes
				*Total Net Income (Loss)*		(20.9	)		(42.2	)		(6.8	)		(6.8	)		(2.3	)		5.7

[Additional columns below]

[Continued from above table, first column(s) repeated]


					Mar			Jun			Sep			Dec			Mar			Jun
For the Quarter Ended					2001			2001			2001			2001			2002			2002

*Revenue*
	Lincoln Financial Advisors					81.2			83.8			78.9			116.7			75.9			78.1
	Lincoln Financial Distributors					25.7			20.7			32.0			35.0			29.4			29.3

				Total Distribution		106.9			104.5			111.0			151.7			105.3			107.4
	Reinsurance					515.1			451.4			467.4			265.6
	Amortization of deferred gain on indemnity reinsurance*														20.4			24.1			22.1
	Other [Including Consolidating Adjustments]					(80.5	)		(105.2	)		(76.0	)		(98.7	)		(32.2	)		(33.4	)

			*Operating Revenue*			541.5			450.7			502.3			339.0			97.1			96.1

	Realized gains (losses) on investments					(10.0	)		1.4			(12.8	)		29.5			(4.9	)		(3.8	)
	Gains (losses) on derivatives					0.1			(0.1	)		(0.0	)		(9.7	)		0.1			(0.1	)
	Gain on sale of reinsurance subsidiaries														12.8			0.0

		*Total Revenue*				531.6			452.0			489.5			371.7			92.3			92.2

*Income (Loss)*
	Lincoln Financial Advisors					(6.8	)		(12.3	)		(4.2	)		7.4			(9.1	)		(7.7	)
	Lincoln Financial Distributors					(6.9	)		(11.5	)		(7.8	)		(4.5	)		(6.2	)		(7.3	)

				Total Distribution		(13.8	)		(23.8	)		(12.0	)		3.0			(15.4	)		(15.0	)
	Reinsurance					46.8			34.1			17.2			30.7			0.0
	Amortization of deferred gain on indemnity reinsurance*														12.9			15.7			14.4
	LNC Financing					(21.7	)		(22.0	)		(19.5	)		(14.7	)		(8.2	)		(9.6	)
	Other Corporate					(0.5	)		2.0			1.5			(5.3	)		(4.1	)		2.9

				*Inc (Loss) from Oper*		10.9			(9.7	)		(12.9	)		26.5			(12.0	)		(7.3	)

	Realized gains (losses) on investments					(6.5	)		1.0			(8.3	)		19.7			(3.3	)		(2.4	)
	Gains (losses) on derivatives					0.1			(0.1	)		(0.0	)		(6.3	)		0.1			(0.1	)
	Gain on sale of reinsurance subsidiaries					0.0			0.0			0.0			15.0			0.0
	Reserve increase on business sold through reinsurance																				(14.4	)
	Restructuring charges					0.0			(1.2	)		0.0			(18.3	)		0.0

*Income before Accounting Changes*						4.4			(10.0	)		(21.2	)		36.7			(15.2	)		(24.2	)
	Cumulative effect of accounting changes					(0.4	)		(2.2	)		0.0			(0.0	)		0.0
				*Total Net Income (Loss)*		4.0			(12.2	)		(21.2	)		36.7			(15.2	)		(24.2	)

The amortization of deferred gain on sale of reinsurance business represents the amortization of deferred gain recognized on the business sold through indemnity reinsurance to Swiss Re.


06/30/02		PAGE 27

Consolidated Domestic Retail Deposits/Account Balances
Unaudited [Billions of Dollars]


																	YTD			YTD
																	Jun			Jun
		1997			1998			1999			2000			2001			2001			2002

Deposits — For the Year
Lincoln Retirement — Fixed Annuities			1.632			1.452			2.563			2.074			3.342			1.228			1.759
Lincoln Retirement — Variable Annuities			2.695			2.791			2.553			3.165			3.067			1.590			1.595
Lincoln Retirement — Life Insurance			0.000			0.000			0.017			0.014			0.012			0.007
Life Insurance Segment — Life Insurance			0.384			1.207			1.698			1.884			1.934			0.895			1.018
Inv Mgmt — Annuities			2.163			2.238			1.561			1.782			1.702			0.944			1.191
Inv Mgmt — Mutual Funds(1)			1.218			1.913			2.153			2.578			1.522			0.838			1.014
Inv Mgmt — Wrap Fee & Other			0.533			0.596			0.550			0.525			0.468			0.268			0.354
Consolidating Adjustments			(0.966	)		(1.041	)		(0.499	)		(0.406	)		(1.039	)		(0.465	)		(0.680	)

	Gross Deposits		7.658			9.157			10.597			11.617			11.008			5.305			6.250
Account Balances — End of Year
Lincoln Retirement — Fixed Annuities			15.458			16.505			16.791			15.394			16.491
Lincoln Retirement — Variable Annuities			27.346			33.358			41.493			39.427			34.638
Lincoln Retirement — Life Insurance						0.155			0.160			0.149
Life Insurance Segment — Life Insurance			3.038			9.243			10.217			10.847			11.377
Inv Mgmt — Annuities			10.991			14.257			15.557			13.527			11.835
Inv Mgmt — Mutual Funds(1)			12.484			13.528			13.632			13.261			11.552
Inv Mgmt — Wrap Fee & Other			2.403			2.512			1.618			1.342			1.719
Consolidating Adjustments			(6.806	)		(8.891	)		(9.175	)		(7.753	)		(6.717	)

	Account Balances		64.914			80.512			90.288			86.205			81.044


			Sep			Dec			Mar			Jun			Sep			Dec
			1999			1999			2000			2000			2000			2000

Deposits — For the Quarter
Lincoln Retirement — Fixed Annuities				0.678			0.741			0.589			0.490			0.513			0.482
Lincoln Retirement — Variable Annuities				0.634			0.634			0.797			0.793			0.729			0.846
Lincoln Retirement — Life Insurance				0.004			0.005			0.003			0.003			0.004			0.004
Life Insurance Segment — Life Insurance				0.399			0.526			0.424			0.411			0.428			0.622
Inv Mgmt — Annuities				0.332			0.409			0.379			0.358			0.456			0.589
Inv Mgmt — Mutual Funds(1)				0.514			0.587			0.876			0.586			0.554			0.562
Inv Mgmt — Managed Acct. & Other				0.116			0.079			0.148			0.106			0.140			0.131
Consolidating Adjustments				(0.096	)		(0.118	)		(0.099	)		(0.062	)		(0.100	)		(0.145	)

	Gross Deposits			2.581			2.864			3.116			2.685			2.724			3.091

Account Balances — End of Quarter
Lincoln Retirement — Fixed Annuities				16.934			16.791			16.244			15.884			15.660			15.394
Lincoln Retirement — Variable Annuities				35.613			41.493			44.640			43.097			42.743			39.427
Lincoln Retirement — Life Insurance				0.128			0.155			0.169			0.165			0.166			0.160
Life Insurance Segment — Life Insurance				9.726			10.217			10.470			10.538			10.716			10.847
Inv Mgmt — Annuities				14.036			15.557			15.557			14.888			14.853			13.527
Inv Mgmt — Mutual Funds(1)				12.938			13.632			14.671			14.069			14.571			13.261
Inv Mgmt — Managed Acct. & Other				1.579			1.618			1.309			1.304			1.256			1.342
Consolidating Adjustments				(8.387	)		(9.175	)		(8.768	)		(8.419	)		(8.644	)		(7.753	)

		Account Balances		82.567			90.288			94.292			91.526			91.322			86.205

[Additional columns below]

[Continued from above table, first column(s) repeated]


			Mar			Jun			Sep			Dec			Mar			Jun
			2001			2001			2001			2001			2002			2002

Deposits — For the Quarter
Lincoln Retirement — Fixed Annuities				0.560			0.668			0.896			1.218			0.906			0.853
Lincoln Retirement — Variable Annuities				0.887			0.703			0.684			0.793			0.808			0.787
Lincoln Retirement — Life Insurance				0.003			0.004			0.003			0.002
Life Insurance Segment — Life Insurance				0.418			0.477			0.434			0.605			0.440			0.577
Inv Mgmt — Annuities				0.542			0.403			0.434			0.324			0.590			0.601
Inv Mgmt — Mutual Funds(1)				0.484			0.354			0.335			0.348			0.452			0.562
Inv Mgmt — Managed Acct. & Other				0.140			0.127			0.074			0.126			0.160			0.194
Consolidating Adjustments				(0.262	)		(0.202	)		(0.295	)		(0.279	)		(0.309	)		(0.371	)

	Gross Deposits			2.771			2.534			2.566			3.137			3.047			3.203

Account Balances — End of Quarter
Lincoln Retirement — Fixed Annuities				15.430			15.551			16.051			16.491			16.533			16.909
Lincoln Retirement — Variable Annuities				34.733			36.961			30.506			34.638			35.150			31.206
Lincoln Retirement — Life Insurance				0.147			0.157			0.134			0.149
Life Insurance Segment — Life Insurance				10.764			11.066			10.939			11.377			11.667			11.759
Inv Mgmt — Annuities				11.822			12.532			10.714			11.835			11.920			10.896
Inv Mgmt — Mutual Funds(1)				11.530			12.215			10.726			11.552			11.597			11.033
Inv Mgmt — Managed Acct. & Other				1.653			1.774			1.635			1.719			1.821			1.847
Consolidating Adjustments				(6.834	)		(7.007	)		(6.023	)		(6.717	)		(6.684	)		(6.007	)

		Account Balances		79.245			83.250			74.682			81.044			82.005			77.644

Total Domestic Net Flows
Unaudited [Billions of Dollars]


														YTD			YTD
														Jun			Jun
For the Year		1998			1999			2000			2001			2001			2002

Lincoln Retirement			(1.244	)		(1.165	)		(2.874	)		0.105			(0.787	)		0.311
Life Insurance Segment			0.113			0.985			1.158			1.163			0.541			0.621
Investment Management Segment- Retail(1)			1.772			(2.209	)		(1.499	)		(0.379	)		(0.167	)		0.257
Consolidating Adjustments			(0.158	)		1.276			1.406			(0.150	)		(0.016	)		(0.123	)

	Total Retail Net Flows		0.483			(1.114	)		(1.810	)		0.739			(0.427	)		1.066
Investment Management Segment- Institutional			(2.702	)		(2.240	)		(5.694	)		(0.228	)		0.027			1.185

	Total Net Flows		(2.219	)		(3.354	)		(7.504	)		0.511			(0.400	)		2.252


		Sep			Dec			Mar			Jun			Sep			Dec
For the Quarter		1999			1999			2000			2000			2000			2000

Lincoln Retirement			(0.193	)		(0.490	)		(0.700	)		(0.682	)		(0.812	)		(0.681	)
Life Insurance Segment			0.197			0.327			0.242			0.235			0.277			0.404
Investment Management Segment- Retail(1)			(0.300	)		(0.410	)		(0.879	)		(0.364	)		(0.315	)		0.059
Consolidating Adjustments			0.313			0.463			0.717			0.342			0.194			0.152

	Total Retail Net Flows		0.016			(0.111	)		(0.620	)		(0.470	)		(0.656	)		(0.065	)
Investment Management Segment- Instit			0.816			(1.479	)		(2.611	)		(1.056	)		(0.983	)		(1.043	)

	Total Net Flows		0.832			(1.590	)		(3.231	)		(1.526	)		(1.639	)		(1.109	)

[Additional columns below]

[Continued from above table, first column(s) repeated]


		Mar			Jun			Sep			Dec			Mar			Jun
For the Quarter		2001			2001			2001			2001			2002			2002

Lincoln Retirement			(0.590	)		(0.196	)		0.261			0.631			0.088			0.223
Life Insurance Segment			0.237			0.304			0.239			0.383			0.236			0.385
Investment Management Segment- Retail(1)			(0.019	)		(0.148	)		(0.120	)		(0.091	)		0.091			0.167
Consolidating Adjustments			0.019			(0.034	)		(0.081	)		(0.053	)		(0.037	)		(0.086	)

	Total Retail Net Flows		(0.354	)		(0.073	)		0.299			0.870			0.378			0.688
Investment Management Segment- Instit			(0.418	)		0.445			(0.155	)		(0.102	)		0.730			0.455

	Total Net Flows		(0.772	)		0.372			0.144			0.768			1.108			1.143

NOTE: Excludes amounts reported as Assets Under Management — Insurance Assets
(1) Retail assets under management have been restated to include assets under administration beginning in January of 2000. See details on pages 22 and 23.


06/30/02		PAGE 28

Consolidated Investment Data
Unaudited [Millions of Dollars except as noted]


December 31					1997		1998		1999		2000		2001

Assets Managed by Source LNC’s Investments and Cash:
	Fixed maturity securities					24.066		30.233		27.689		27.450		28.346
	Equity securities					0.660		0.543		0.604		0.550		0.470
	Other investments					5.092		7.154		7.286		7.369		7.297

				Total LNC Investments(1)		29.819		37.929		35.578		35.369		36.113
Separate accounts						37.139		43.409		53.654		50.580		44.833
Cash and Invested Cash						3.795		2.433		1.896		1.927		3.095
Discontinued Operations Total LNC						70.752		83.772		91.128		87.876		84.042

Non-affiliate assets managed						48.331		50.061		49.314		43.397		42.199
		Total Assets Managed				119.083		133.833		140.443		131.273		126.241

Assets Managed by Advisor Investment Management segment(1)						56.457		61.488		61.374		53.354		48.411
(See page 22 for additional detail) DLIA-Corp						35.684		39.432		35.934		35.686		38.119
(Assets managed internally-see page 22) Lincoln (UK)						6.775		7.573		8.589		7.873		6.847
Policy Loans (within business units)						0.763		1.840		1.892		1.961		1.940
Non-LNC Affiliates						19.404		23.500		32.654		32.399		30.924
			Total Assets Managed			119.083		133.833		140.443		131.273		126.241


					Sep		Dec		Mar		Jun		Sep		Dec
End of Quarter					1999		1999		2000		2000		2000		2000

Assets Managed by Source
LNC’s Investments and Cash:
	Fixed maturity securities					28.708		27.689		27.745		27.078		27.264		27.450
	Equity securities					0.507		0.604		0.588		0.560		0.570		0.550
	Other investments					7.317		7.286		7.442		7.419		7.471		7.369

				Total LNC Investments(1)		36.532		35.578		35.775		35.057		35.305		35.369
Separate accounts						46.229		53.654		56.908		54.924		54.411		50.580
Cash and invested cash						2.343		1.896		1.510		1.619		1.436		1.927

		Total LNC				85.104		91.128		94.192		91.601		91.152		87.876

Non-affiliate assets managed						48.068		49.314		47.150		45.945		45.119		43.397
		Total Assets Managed				133.172		140.443		141.342		137.546		136.271		131.273

Assets Managed by Advisor
Investment Management segment(1)						58.869		61.375		58.712		56.986		55.998		53.355
(See page 23 for additional detail) DLIA-Corp						36.820		35.934		35.541		34.891		34.981		35.686
(Assets managed internally-see page 23) Lincoln (UK)						7.849		8.589		8.423		8.058		7.838		7.873
Policy Loans (within business units)						1.863		1.892		1.896		1.915		1.936		1.961
Non-LNC Affiliates						27.771		32.653		36.770		35.696		35.518		32.397
			Total Assets Managed			133.172		140.443		141.342		137.546		136.271		131.273

[Additional columns below]

[Continued from above table, first column(s) repeated]


					Mar		Jun		Sep		Dec		Mar		Jun
End of Quarter					2001		2001		2001		2001		2002		2002

Assets Managed by Source
LNC’s Investments and Cash:
	Fixed maturity securities					27.811		27.874		28.932		28.346		28.841		29.725
	Equity securities					0.560		0.534		0.478		0.470		0.439		0.419
	Other investments					7.374		7.388		7.379		7.297		7.084		7.016

				Total LNC Investments(1)		35.744		35.796		36.788		36.113		36.363		37.160
Separate accounts						44.506		47.140		39.480		44.833		44.917		40.580
Cash and invested cash						2.015		1.502		1.996		3.095		1.700		2.265

		Total LNC				82.266		84.438		78.264		84.042		82.979		80.005

Non-affiliate assets managed						41.904		44.069		39.198		42.199		43.708		43.031
		Total Assets Managed				124.170		128.507		117.462		126.241		126.687		123.036

Assets Managed by Advisor
Investment Management segment(1)						48.208		50.737		44.957		48.413		50.001		48.738
(See page 23 for additional detail) DLIA-Corp						36.324		36.018		37.337		38.119		37.171		38.476
(Assets managed internally-see page 23) Lincoln (UK)						7.012		7.027		6.474		6.847		6.772		6.753
Policy Loans (within business units)						1.947		1.947		1.943		1.940		1.918		1.906
Non-LNC Affiliates						30.679		32.778		26.750		30.923		30.825		27.162
			Total Assets Managed			124.170		128.507		117.462		126.241		126.687		123.036

(1) Retail assets under management have been restated to include assets under administration beginning in January of 2000. See details on pages 22 and 23.


06/30/02		PAGE 29

Consolidated Investment Data
Unaudited [Millions of Dollars except as noted]


																				YTD			YTD
																				Jun			Jun
For the Year Ended December 31					1997			1998			1999			2000			2001			2001			2002

*Net Investment Income*
		Fixed Maturity Securities				1832.1			2065.8			2232.9			2148.7			2121.0			1053.9			1046.3
		Equity Securities				19.1			22.8			20.1			19.5			17.6			8.8			7.6
		Mortgage loans on real estate				279.2			383.6			369.2			373.8			374.5			188.0			179.7
		Real estate				99.4			86.8			64.1			51.8			49.5			25.9			24.2
		Policy loans				44.5			99.5			116.5			125.0			125.3			62.8			61.3
		Invested cash				102.4			156.8			110.3			87.2			68.4			42.3			21.5
		Other investments				20.6			88.4			51.8			66.8			69.5			37.9			17.7

			Investment revenue			2397.3			2903.7			2964.8			2872.8			2825.8			1419.5			1358.1
		Investment expense				146.6			222.3			157.3			125.7			146.2			72.8			59.1
			*Net Investment Income*			2250.8			2681.4			2807.5			2747.1			2679.6			1346.8			1299.1

		Gross-up of Tax Exempt Income				12.7			11.6			8.1			7.8			7.2			3.5			3.5
				Adjusted Net Invest Income		2263.5			2693.0			2815.6			2754.9			2686.8			1350.3			1302.6

Mean Invested Assets (Cost Basis)						30337.3			36573.8			39027.5			37471.3			37616.9			37166.3			38202.7
Ratio of Adjusted Net Invest Inc Over Mean Invested Assets						7.46	%		7.36	%		7.21	%		7.35	%		7.14	%		7.27	%		6.82	%
*Investment Gains*
Realized Gains (Losses) on Investments						72.9			13.7			3.8			(17.5	)		(68.7	)		(24.8	)		(120.3	)
Gains(Losses) on Derivatives						0.0			0.0			0.0			0.0			(4.9	)		0.1			0.4
Incr (Decr) in Unreal Gains on Sec Avail-for-Sale (after DAC/Tax)						159.6			116.4			(1018.1	)		477.7			183.7			64.1			129.9
Incr (Decr) on Derivatives*																		3.9			27.0			1.3
Incr (Decr) in Foreign Exchange						(20.3	)		3.8			(19.9	)		(8.1	)		(30.0	)		(37.3	)		30.0
Incr (Decr) in minimum pension liability																		(36.0	)		0.0			(1.9	)
Securities Available-for-Sale
	[Billions of Dollars at End of Year]
	Fixed Maturity Sec (Market)					24.066			30.233			27.689			27.450			28.346			27.874			29.725
	Fixed Maturity Sec (Adjusted Cost)					22.624			28.640			28.357			27.373			27.956			27.681			29.133
	Equity Securities (Market)					0.660			0.543			0.604			0.550			0.470			0.534			0.419
	Equity Securities (Adjusted Cost)					0.518			0.437			0.482			0.458			0.444			0.477			0.374
*% of Fixed Maturity Securities (Based on Market)*
		Treasuries and AAA				27.6	%		25.6	%		22.8	%		22.1	%		17.2	%		19.3	%		18.2	%
		AA or better				35.1	%		32.6	%		29.8	%		29.2	%		23.6	%		26.0	%		25.0	%
		BB or less				7.3	%		7.0	%		8.0	%		6.7	%		8.3	%		7.8	%		6.4	%


					Sep			Dec			Mar			Jun			Sep			Dec
For the Quarter Ended					1999			1999			2000			2000			2000			2000

*Net Investment Income*
		Fixed Maturity Securities				551.2			548.0			541.3			544.4			525.3			537.7
		Equity Securities				3.9			6.9			3.7			5.7			3.6			6.5
		Mortgage loans on real estate				94.7			94.5			92.0			95.1			94.4			92.3
		Real estate				13.7			12.5			11.2			12.5			11.8			16.3
		Policy loans				29.4			29.9			30.7			30.9			30.5			32.9
		Invested cash				32.4			22.0			27.2			15.1			26.5			18.4
		Other investments				9.9			20.9			35.1			2.0			26.9			2.9

			Investment revenue			735.2			734.9			741.1			705.7			719.1			706.9
		Investment expense				38.1			34.8			30.0			31.8			29.0			34.8

			*Net Investment Income*			697.1			700.1			711.1			673.8			690.0			672.1

		Gross-up of Tax Exempt Income				1.7			2.6			1.5			2.3			1.4			2.6
				Adjusted Net Invest Income		698.7			702.7			712.6			676.1			691.5			674.7

Mean Invested Assets (Cost Basis)						39111.8			38438.6			38237.4			37306.1			37250.8			37090.8
Ratio of Adjusted Net Invest Inc Over Mean Invested Assets						7.15	%		7.31	%		7.45	%		7.25	%		7.43	%		7.28	%
*Investment Gains*
Realized Gains (Losses) on Investments						4.1			1.6			(0.4	)		(6.7	)		(11.6	)		1.2
Gains (Losses) on Derivatives						0.0			0.0			0.0			0.0			0.0			0.0
Incr (Decr) in Unreal Gains on Sec Avail-for-Sale (after DAC/Tax)						(102.7	)		(361.9	)		54.5			(145.4	)		218.8			349.8
Incr (Decr) on Derivatives*
Incr (Decr) in Foreign Exchange						19.6			(10.2	)		(7.3	)		(0.9	)		(2.0	)		2.0
Incr (Decr) in minimum pension liability
Securities Available-for-Sale
	[Billions of Dollars at End of Year]
	Fixed Maturity Sec (Market)					28.708			27.689			27.745			27.078			27.264			27.450
	Fixed Maturity Sec (Adjusted Cost)					28.974			28.357			28.295			27.788			27.727			27.373
	Equity Securities (Market)					0.507			0.604			0.588			0.560			0.570			0.550
	Equity Securities (Adjusted Cost)					0.414			0.482			0.475			0.446			0.450			0.458
*% of Fixed Maturity Securities (Based on Market)*
		Treasuries and AAA				24.2	%		22.8	%		22.7	%		22.3	%		22.3	%		22.1	%
		AA or better				31.1	%		29.8	%		29.5	%		29.3	%		29.4	%		29.2	%
		BB or less				7.5	%		8.0	%		7.4	%		7.4	%		6.8	%		6.7	%

[Additional columns below]

[Continued from above table, first column(s) repeated]


					Mar			Jun			Sep			Dec			Mar			Jun
For the Quarter Ended					2001			2001			2001			2001			2002			2002

*Net Investment Income*
		Fixed Maturity Securities				526.9			527.0			536.9			530.1			522.5			523.8
		Equity Securities				1.0			7.8			3.7			5.1			3.4			4.3
		Mortgage loans on real estate				95.7			92.4			94.2			92.4			89.5			90.2
		Real estate				12.8			13.1			12.7			10.9			12.3			11.9
		Policy loans				31.4			31.4			31.0			31.6			30.2			31.1
		Invested cash				22.5			19.8			14.8			11.3			12.4			9.1
		Other investments				19.6			18.2			28.2			3.5			7.8			9.8

			Investment revenue			709.9			709.7			721.4			684.8			678.0			680.2
		Investment expense				36.1			36.6			35.2			38.2			29.9			29.2

			*Net Investment Income*			673.7			673.1			686.2			646.6			648.1			651.0

		Gross-up of Tax Exempt Income				0.5			3.0			1.5			2.1			1.5			2.0
				Adjusted Net Invest Income		674.2			676.1			687.7			648.7			649.7			653.0

Mean Invested Assets (Cost Basis)						37238.0			37094.5			37685.8			38449.3			38169.9			38235.5
Ratio of Adjusted Net Invest Inc Over Mean Invested Assets						7.24	%		7.29	%		7.30	%		6.75	%		6.81	%		6.83	%
*Investment Gains*
Realized Gains (Losses) on Investments						(13.4	)		(11.5	)		(23.8	)		(20.0	)		(67.6	)		(52.7	)
Gains (Losses) on Derivatives						(0.1	)		0.2			(0.4	)		(4.6	)		0.1			0.3
Incr (Decr) in Unreal Gains on Sec Avail-for-Sale (after DAC/Tax)						178.4			(114.2	)		171.8			(52.2	)		(163.9	)		293.8
Incr (Decr) on Derivatives*						23.3			3.7			(6.7	)		1.2			1.2			0.0
Incr (Decr) in Foreign Exchange						(17.8	)		(19.5	)		22.2			(14.9	)		(12.8	)		42.8
Incr (Decr) in minimum pension liability															(36.0	)		0.7			(2.6	)
Securities Available-for-Sale
	[Billions of Dollars at End of Year]
	Fixed Maturity Sec (Market)					27.811			27.874			28.932			28.346			28.841			29.725
	Fixed Maturity Sec (Adjusted Cost)					27.367			27.681			28.253			27.956			28.831			29.133
	Equity Securities (Market)					0.560			0.534			0.478			0.470			0.439			0.419
	Equity Securities (Adjusted Cost)					0.507			0.477			0.453			0.444			0.398			0.374
*% of Fixed Maturity Securities (Based on Market)*
		Treasuries and AAA				20.3	%		19.3	%		17.9	%		17.2	%		17.8	%		18.2	%
		AA or better				27.1	%		26.0	%		24.3	%		23.6	%		24.7	%		25.0	%
		BB or less				7.2	%		7.8	%		7.2	%		8.3	%		7.5	%		6.4	%

2001 includes the cumulative effect of accounting change related to the adjustment recorded upon adoption of FAS #133.


06/30/02		PAGE 30

Common Stock / Debt Information
Unaudited [Dollars per Share, except Percentages]


For the Year Ended December 31			1991				1992			1993			1994			1995

*Common Stock [1]*
Highest Price				13.813				19.032			24.125			22.188			26.875
Lowest Price				9.500				12.625			17.344			17.313			17.313
*Closing Price*				13.688				18.500			21.750			17.500			26.875
Dividend Payout Ratio [2]				63.5	%			38.9	%		52.6	%		51.0	%		39.7	%
Yield [3]				5.3	%			4.1	%		3.8	%		4.9	%		3.4	%
Preferred Stock Dividend (Millions)				13.033				17.246			17.212			17.119			8.644
*Debt: (End of Period)*
		Senior Debt Ratings
		A.M. Best
		Fitch				AA				AA-			AA-			AA-
		Moody’s						A2			A2			A1			A2
		Standard and Poors						A+			A+			A+			A
Claims Paying Ratings:
	Lincoln Life — A.M. Best							A+			A+			A+			A+
	Lincoln Life — Fitch						AAA			AAA			AAA			AA+
	Lincoln Life — Moody’s							A1			A1		Aa3			Aa3
	Lincoln Life — Standard & Poors						AA-			AA-			AA-			AA-
	First Penn — A.M. Best*							A			A+			A+			A+
	First Penn — Fitch
	First Penn — Moody’s
	First Penn — Standard & Poors*						AA-			AA-			AA-			AA-
	LLA of New York — A.M. Best*
	LLA of New York — Fitch*
	LLA of New York — Moody’s
	LLA of New York — Standard & Poors*
Ratios
		Debt to Total Capitalization [4]						25.7	%		21.1	%		19.9	%		22.8	%
		Debt to Equity [4]						34.7	%		26.7	%		24.9	%		29.5	%

[Additional columns below]

[Continued from above table, first column(s) repeated]

For the Year Ended December 31

1996

1997

1998

1999

2000

2001

Common Stock [1]

Highest Price

28.500

39.063

49.438

57.500

56.375

52.750

Lowest Price

20.375

24.500

33.500

36.000

22.625

38.000

Closing Price

26.250

39.063

40.907

40.000

47.313

48.570

Dividend Payout Ratio [2]

38.2

22.8

43.9

50.5

38.3

41.9

Yield [3]

3.7

2.7

2.9

2.6

Preferred Stock Dividend (Millions)

0.112

0.106

0.100

0.089

0.078

0.071

Debt: (End of Period)

Senior Debt Ratings

A.M. Best

Fitch

AA-

A+

Moody’s

Standard and Poors

A-

Claims Paying Ratings:

Lincoln Life — A.M. Best

A+

Lincoln Life — Fitch

AA+

Lincoln Life — Moody’s

Aa3

Lincoln Life — Standard & Poors

AA-

First Penn — A.M. Best*

A+

First Penn — Fitch

AA+

AA +

AA+

First Penn — Moody’s

First Penn — Standard & Poors*

AA-

LLA of New York — A.M. Best*

A+

LLA of New York — Fitch*

AA+

LLA of New York — Moody’s

LLA of New York — Standard & Poors*

AA-

Ratios

Debt to Total Capitalization [4]

18.8

17.0

21.2

23.2

20.8

21.4

Debt to Equity [4]

23.1

20.5

26.9

30.3

26.3

27.2

Sep

Dec

Mar

Jun

Sep

Dec

For the Quarter Ended

1999

2000

Common Stock:

Highest Price

57.500

48.313

41.375

40.063

56.375

50.938

Lowest Price

36.000

36.500

22.625

29.000

35.625

40.875

Closing Price

37.563

40.000

33.500

36.125

48.125

47.313

Yield [3]

2.9

3.5

3.2

2.4

2.6

Preferred Stock Dividend

0.027

0.014

0.022

0.021

0.013

(Millions)

Debt: (End of Period)

Senior Debt Ratings

A.M. Best

Fitch

A+

Moody’s

Standard and Poors

A-

Claims Paying Ratings:

Lincoln Life — A.M. Best

Lincoln Life — Fitch

AA+

Lincoln Life — Moody’s

Aa3

Lincoln Life — Standard & Poors

AA-

First Penn — A.M. Best*

First Penn — Fitch

AA+

First Penn — Moody’s

First Penn — Standard & Poors*

AA-

LLA of New York — A.M. Best*

LLA of New York — Fitch*

AA+

LLA of New York — Moody’s

LLA of New York — Standard & Poors*

AA-

Ratios

Debt to Total Capitalization [4]

22.0

23.2

23.3

21.8

21.2

20.8

Debt to Equity [4]

28.3

30.3

30.4

28.0

27.0

26.3

[Additional columns below]

[Continued from above table, first column(s) repeated]

Mar

Jun

Sep

Dec

Mar

Jun

For the Quarter Ended

2001

2002

Common Stock:

Highest Price

48.250

52.300

52.750

49.450

53.650

52.540

Lowest Price

38.000

41.280

41.000

40.000

47.200

40.750

Closing Price

42.470

51.750

46.630

48.570

50.730

42.000

Yield [3]

2.9

2.4

2.6

2.5

3.0

Preferred Stock Dividend

0.019

0.018

0.017

0.016

(Millions) Debt: (End of Period)

Senior Debt Ratings A.M. Best

Fitch

A+

Moody’s

Standard and Poors

A-

Claims Paying Ratings:

Lincoln Life — A.M. Best

A+

Lincoln Life — Fitch

Lincoln Life — Moody’s

Aa3

Lincoln Life — Standard & Poors

AA-

First Penn — A.M. Best*

A+

First Penn — Fitch

First Penn — Moody’s

First Penn — Standard & Poors*

AA-

LLA of New York — A.M. Best*

A+

LLA of New York — Fitch*

LLA of New York — Moody’s

LLA of New York — Standard & Poors*

AA-

Ratios

Debt to Total Capitalization [4]

22.2

21.2

21.1

21.4

22.7

22.6

Debt to Equity [4]

28.5

27.0

26.7

27.2

29.4

29.2

• Rating based on affiliation with Lincoln Life

[1] Stock prices shown above include 2-for-1 splits in June 1993, and June 1999

[2] Indicated dividend divided by net income

[3] Indicated dividend divided by the closing price

[4] Equity used in calculation assumes securities at cost. Minority interest-preferred securities of subsidiary companies (hybrid securities) are considered 50% debt and 50% equity.


	Return on Equity/Return on Capital: In order to accommodate the various perspectives, LNC presents two separate Return on Equity numbers on pages 2, 5 and 6 of this Statistical Report. “Net Income Divided by Average Shareholders’ Equity” tends to fluctuate from period to period due to the realization of gains and losses on investments or sale of subsidiaries. “Income from Operations Divided by Average Shareholders’ Equity” is less volatile but leaves out an important element of earnings for a company that has a long-term goal of enhancing shareholder value by realizing investment gains.

	Return on capital measures the effectiveness of LNC’s use of its total capital, which is made up of equity, debt and hybrid securities. Return on capital is calculated by dividing income from operations (after adding back after-tax interest expense) by average capital. The difference between return on capital and return on equity presents the effect of leveraging on LNC’s consolidated results.