UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K/A
AMENDMENT NO. 1
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
| For the fiscal year ended December 31, 2001 | Commission File Number 1-6028 |
LINCOLN NATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
| Indiana (State of Incorporation) |
35-1140070 (I.R.S. Employer Identification No.) |
1500 Market Street, Suite 3900, Philadelphia, Pennsylvania 19102-2112
(Address of principal executive offices)
Registrant’s telephone number (215) 448-1400
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Exchanges on which registered | ||
| Common Stock Common Share Purchase Rights $3.00 Cumulative Convertible Preferred Stock, Series A 8.35% Trust Originated Preferred Securities, Series B* ** 7.40% Trust Originated Preferred Securities, Series C* 5.67% Trust Originated Preferred Securities, Series D* 7.65% Trust Preferred Securities, Series E* |
New York, Chicago and Pacific New York, Chicago and Pacific New York and Chicago New York New York New York, Chicago and Pacific New York |
||
| * | Issued by Lincoln National Capital II, Lincoln National Capital III, Lincoln National Capital IV and Lincoln National Capital V, respectively. Payments of distributions and payments on liquidation or redemption are guaranteed by Lincoln National Corporation. | |
| ** | Redeemed on January 7, 2002. |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ x ] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of the Form 10-K or any amendment to the Form 10-K. [ x ]
As of March 1, 2002, 187,585,451 shares of common stock were outstanding. The aggregate market value of such shares (based upon the closing price of these shares on the New York Stock Exchange) held by non-affiliates was approximately $9,726,306,000.
Select information from the registrant’s 2001 Annual Report to Shareholders has been incorporated by reference into Part II of the Form 10-K. Select materials from the Proxy Statement for the Annual Meeting of Shareholders, scheduled for May 9, 2002, have been incorporated by reference into Part III of the Form 10-K.
2
Explanatory Note
This Amendment No. 1 to Annual Report on Form 10-K is being filed solely to amend the exhibit list set forth in Part IV, Item 14(a)(3) of our Form 10-K filed with the Securities and Exchange Commission on March 18, 2002 and to file the attached exhibit. The other information set forth in Item 14 of the Form 10-K is simply restated herein and has not been amended.
Part IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
Item 14(a)(1) Financial Statements
The following consolidated financial statements of Lincoln National Corporation are included in LNC’s 2001 Annual Report to Shareholders and are incorporated by reference to Item 8 of the Form 10-K:
| Consolidated Balance Sheets — December 31, 2001 and 2000 | |||
| Consolidated Statements of Income — Years ended December 31, 2001, 2000 and 1999 | |||
| Consolidated Statements of Shareholders’ Equity — Years ended December 31, 2001, 2000 and 1999 | |||
| Consolidated Statements of Cash Flows — Years ended December 31, 2001, 2000 and 1999 | |||
| Notes to Consolidated Financial Statements | |||
| Report of Ernst & Young, Independent Auditors |
Item 14(a)(2) Financial Statement Schedules
The following consolidated financial statement schedules of Lincoln National Corporation are included in Item 14(d):
| I — Summary of Investments — Other than Investments in Related Parties II — Condensed Financial Information of Registrant III — Supplementary Insurance Information IV — Reinsurance V — Valuation and Qualifying Accounts |
All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions, are inapplicable, or the required information is included in the consolidated financial statements, and therefore omitted.
3
Item 14(a)(3) Listing of Exhibits
The following exhibits of Lincoln National Corporation are included in Item 14 - (Note: The numbers preceding the exhibits correspond to the specific numbers within Item 601 of Regulation S-K.):
| 2(a) | Stock and Asset Purchase Agreement among LNC, The Lincoln National Life Insurance Company, Lincoln National Reinsurance Company (Barbados) Limited and Swiss Re Life & Health America Inc. dated as of July 27, 2001 is incorporated herein by reference to Exhibit 99.1 to LNC’s Form 8-K filed with the SEC on August 1, 2001. |
| 3(a)* | The Articles of Incorporation of LNC as last amended effective May 12, 1994. |
| 3(b)* | The Bylaws of LNC as last amended February 18, 2002. |
| 4(a) | Indenture of LNC dated as of January 15, 1987 is incorporated by reference to Exhibit 4(a) of LNC’s Form 10-K for the year ended December 31, 1994, filed with the Commission on March 27, 1995. |
| 4(b)* | First Supplemental Indenture dated as of July 1, 1992, to Indenture of LNC dated as of January 15, 1987. |
| 4(c)* | Specimen Notes for 7 1/8% Notes due July 15, 1999 and for 7 5/8% Notes due July 15, 2002. |
| 4(d)* | Rights Agreement of LNC as last amended November 14, 1996. |
| 4(e) | Indenture of LNC dated as of September 15, 1994, between LNC and The Bank of New York, as Trustee is incorporated by reference to Exhibit 4(e) of LNC’s Form 10-K for the year ended December 31, 1998, as filed with the Commission on March 11, 1999. |
| 4(f)* | Form of Note dated as of September 15, 1994. |
| 4(g)* | Form of Zero Coupon Security dated as of September 15, 1994. |
| 4(h) | Specimen of LNC’s 9 1/8% Debentures due October 1, 2024 is incorporated by reference to Schedule I of LNC’s Form 8-K filed with the Commission on September 29, 1994. |
| 4(i) | Specimen of LNC’s 7 1/4% Debenture due May 15, 2005 is incorporated by reference to Schedule III of LNC’s Form 8-K filed with the Commission on May 17, 1995. |
| 4(j)* | Junior Subordinated Indenture dated as of May 1, 1996 between LNC and The First National Bank of Chicago. |
| 4(k)* | Guarantee Agreement for Lincoln National Capital II. |
| 4(l)* | Form of Lincoln National Capital II 8.35% Trust Originated Preferred Securities, Series B (Commission File No. 333-04133) |
4
| 4(m) | Form of Amended and Restated Declaration of Trust for Lincoln National Capital I and Lincoln National Capital II between LNC, as depositor, The First National Bank of Chicago, as property trustee, First Chicago Delaware, Inc., as Delaware trustee, and certain administrative trustees is incorporated by reference to Exhibit 4(o) of LNC’s Registration Statement (Commission File No. 333-4133) filed with the Commission on May 21, 1996. |
| 4(n) | Specimen of 6 1/2% Notes due March 15, 2008 incorporated by reference to Exhibit 4.1 LNC’s Form 8-K, as filed with the commission on March 24, 1998. |
| 4(o) | Specimen of 7% Notes due March 15, 2018 incorporated by reference to Exhibit 4.2 of LNC’s Form 8-K, as filed with the Commission on March 24, 1998. |
| 4(p) | Amended and Restated Trust Agreement for Lincoln National Capital III between LNC, as depositor, The First National Bank of Chicago, as property trustee, First Chicago Delaware, Inc., as Delaware trustee and the administrative trustees is incorporated by reference to Exhibit 4.1 of LNC’s Form 8-K, as filed with the Commission on July 30, 1998. |
| 4(q) | Form of 7.40% Trust Originated Preferred Securities, Series C, of Lincoln National Capital III is incorporated by reference to Exhibit 4.2 of LNC’s Form 8-K, as filed with the Commission on July 30, 1998. |
| 4(r) | Guarantee Agreement for Lincoln National Capital III is incorporated by reference to Exhibit 4.4 of LNC’s Form 8-K, as filed with the Commission on July 30, 1998. |
| 4(s) | Amended and Restated Trust Agreement for Lincoln National Capital IV between LNC, as depositor, The First National Bank of Chicago, a property trustee, First Chicago Delaware, Inc., as Delaware trustee and the administrative trustees is incorporated by reference to Exhibit 4.1 of LNC’s form 8-K, as filed with the Commission on August 27, 1998. |
| 4(t) | Guarantee Agreement for Lincoln National Capital IV is incorporated by reference to Exhibit 4.5 of LNC’s Form 8-K, as filed with the Commission on August 27, 1998. |
| 4(u) | Purchase Contract Agreement between LNC and The First National Bank of Chicago, as Purchase Contract Agent, relating to Lincoln National Capital IV is incorporated by reference to Exhibit 4.9 of LNC’s Form 8-K, as filed with the Commission on August 27, 1998. |
| 4(v) | Pledge Agreement among LNC, The Chase Manhattan Bank, as agent, and The First National Bank of Chicago, as Purchase Agent, relating to Lincoln National Capital IV is incorporated by reference to Exhibit 4.9 of LNC’s Form 8-K, as filed with the Commission on August 27, 1998. |
| 4(w) | Form of Trust Originated Preferred Securities, Series D, of Lincoln National Capital IV is incorporated by reference to Exhibit 4.2 of LNC’s Form 8-K filed with the SEC on August 27, 1998. |
| 4(x) | First Supplemental Indenture, dated as of August 14, 1998, between LNC and Bank One Trust Company. National Association (successor in interest to The First National Bank of Chicago) is incorporated by reference to Exhibit 4.3 to LNC’s Form 8-K filed with the SEC on August 27, 1998. |
5
| 4(y) | Specimen of 6.20% Note due December 15, 2011 is incorporated by reference to Exhibit 4.1 to LNC’s Form 8-K filed with the SEC on December 11, 2001. |
| 4(z) | Amended and Restated Trust Agreement for Lincoln National Capital V between LNC, as depositor, Bank One Trust Company, National Association (successor in interest to The First National Bank of Chicago), as property trustee, Bank One Delaware, Inc. (successor in interest to First Chicago Delaware, Inc.), as Delaware trustee, and the administrative trustees is incorporated by reference to Exhibit 4.1 of LNC’s Form 8-K filed with the SEC on November 21, 2001. |
| 4(aa) | Guarantee Agreement for Lincoln National Capital V is incorporated by reference to Exhibit 4.4 of LNC’s Form 8-K filed with the SEC on November 21, 2001. |
| 4(bb) | Form of 7.65% Trust Preferred Securities, Series E, of Lincoln National Capital V is incorporated by reference to Exhibit 4.2 of LNC’s Form 8-K filed with the SEC on November 21, 2001. |
| 10(a) +* | The Lincoln National Corporation 1986 Stock Option Incentive Plan. |
| 10(b) +* | Salary Continuation Plan for Executives of Lincoln National Corporation and Affiliates as amended through August 1, 2000. |
| 10(c) +* | Lincoln National Corporation Executives’ Severance Benefit Plan as Amended and Restated effective January 10, 2002. |
| 10(d) +* | The Lincoln National Corporation Outside Directors Retirement Plan as last amended effective March 15, 1990. |
| 10(e) +* | Lincoln National Corporation Directors’ Value Sharing Plan as last amended effective May 14, 1998. |
| 10(f) +* | Lincoln National Corporation Executive Deferred Compensation Plan for Employees (Commission File No. 33-51721) as last amended effective February 16, 1998. |
| 10(g) +* | Lincoln National Corporation 1993 Stock Plan for Non-Employee Directors (Commission File No. 33-58113) as last amended effective May 10, 2001. |
| 10(h) +* | Lincoln National Corporation Executives’ Excess Compensation Benefit Plan. |
| 10(i) +* | First Amendment to Lincoln National Corporation Executives’ Excess Compensation Benefit Plan effective December 22, 1999 is incorporated by reference to Exhibit 10(k) of LNC’s Form 10-K for the year ended December 31, 1999 filed on March 11, 2000. |
| 10(j) +* | Lincoln National Corporation 1997 Incentive Compensation Plan, as last amended effective May 13, 1999. |
6
| 10(k) | Lease and Agreement dated August 1, 1984, with respect to LNL’s Home Office properties located at Clinton Street and Harrison Street, Fort Wayne, Indiana is incorporated by reference to Exhibit 10(n) of LNC’s Form 10-K for the year ended December 31, 1995, filed with the Commission on March 27, 1996. |
| 10(l) | Form of Lease and Agreement dated March 1, 1999, with respect to LNC’s Corporate Office located at Centre Square West Tower, 1500 Market Street, Suite 3900, Philadelphia, Pennsylvania is incorporated by reference to Exhibit 10(p) of LNC’s Form 10-K for the year ended December 31, 2000, filed with the Commission on March 11, 2000. |
| 10(m) * | Agreement of Lease dated February 17, 1998, with respect to LNL’s life products headquarters located at 350 Church Street, Hartford, Connecticut. |
| 10(n) | Lease and Agreement dated December 10, 1999 with respect to Delaware Management Holdings, Inc. for Home Office property located at One Commerce Square, Philadelphia, Pennsylvania is incorporated by reference to Exhibit 10(r) of LNC’s Form 10-K for the year ended December 31, 2000, filed with the Commission on March 11, 2000. |
| 10(o) | Sublease and Agreement dated December 10, 1999 by and between Delaware Management Holdings, Inc. and New York Central Lines LLC for property located at Two Commerce Square, Philadelphia, Pennsylvania is incorporated by reference to Exhibit 10(s) of LNC’s Form 10-K for the year ended December 31, 2000, filed with the Commission on March 11, 2000. |
| 10(p) | Consent to Sublease dated December 10, 1999 with respect to Delaware Management Holdings, Inc. for property located at Two Commerce Square and Philadelphia Plaza Phase II, Philadelphia, Pennsylvania is incorporated by reference to Exhibit 10(t) of LNC’s Form 10-K for the year ended December 31, 2000, filed with the Commission on March 11, 2000. |
| 12 | Historical Ratio of Earnings to Fixed Charges. |
| 13 | Portions of LNC’s Annual Report to Shareholders that are expressly incorporated by reference in this Form 10-K. Other sections of the Annual Report furnished for the information of the Commission are not deemed “filed” as part of this Form 10-K. |
| 21 | List of Subsidiaries of LNC. |
| 23 ** | Consent of Ernst & Young LLP, Independent Auditors |
| + | This exhibit is a management contract or compensatory plan or arrangement required to be filed as an exhibit to this form pursuant to Item 14 of this report. | |
| * | Previously filed on March 18, 2002 with LNC’s Form 10-K for the year ended December 31, 2001 and incorporated by reference herein. | |
| ** | Filed herewith. |
7
Item 14(b)
Financial Report for the quarter ended September 30, 2000, as filed with the Securities and Exchange Commission on Form 8-K on October 25, 2000. Financial Report for the quarter ended September 30, 2000, as filed with the Securities and Exchange Commission on Form 8-K on November 6, 2000.
Item 14(c)
The exhibits of Lincoln National Corporation are listed in Item 14(a)(3) above.
Item 14(d)
The financial statement schedules for Lincoln National Corporation follow.
8
LINCOLN NATIONAL CORPORATION
SCHEDULE I – SUMMARY OF INVESTMENTS – OTHER THAN INVESTMENTS IN
RELATED PARTIES
| December 31, 2001 (000s omitted) | ||||||||||||
| Column A | Column B | Column C | Column D | |||||||||
| Amount | ||||||||||||
| At Which | ||||||||||||
| Shown in the | ||||||||||||
| Type of Investment | Cost | Fair Value | Balance Sheet | |||||||||
Fixed maturity securities available-for-sale: |
||||||||||||
Bonds: |
||||||||||||
United States government and government
agencies and authorities |
$ | 357,881 | $ | 410,510 | $ | 410,510 | ||||||
States, municipalities and political
subdivisions |
45,866 | 44,725 | 44,725 | |||||||||
Asset/Mortgage-backed securities |
3,417,596 | 3,524,678 | 3,524,678 | |||||||||
Foreign governments |
1,117,253 | 1,174,720 | 1,174,720 | |||||||||
Public utilities |
2,535,542 | 2,529,354 | 2,529,354 | |||||||||
Convertibles and bonds with warrants attached |
791 | 566 | 566 | |||||||||
All other corporate bonds |
20,398,464 | 20,575,192 | 20,575,192 | |||||||||
Redeemable preferred stocks |
82,588 | 85,928 | 85,928 | |||||||||
Total |
27,955,981 | 28,345,673 | 28,345,673 | |||||||||
Equity securities available-for-sale: |
||||||||||||
Common stocks: |
||||||||||||
Public utilities |
294 | 306 | 306 | |||||||||
Banks, trusts and insurance companies |
18,971 | 22,561 | 22,561 | |||||||||
Industrial, miscellaneous and all other |
271,899 | 296,415 | 296,415 | |||||||||
Nonredeemable preferred stocks |
153,234 | 151,177 | 151,177 | |||||||||
Total Equity Securities |
444,398 | 470,459 | 470,459 | |||||||||
Mortgage loans on real estate |
4,535,550 | 4,535,550 | (1) | |||||||||
Real estate: |
||||||||||||
Investment properties |
262,307 | 262,307 | ||||||||||
Acquired in satisfaction of debt |
5,575 | 5,575 | ||||||||||
Policy loans |
1,939,683 | 1,939,683 | ||||||||||
Derivative instruments |
46,445 | 46,445 | ||||||||||
Other investments |
507,386 | 507,386 | ||||||||||
Total Investments |
$ | 35,650,880 | $ | 36,113,078 | ||||||||
| (1) | Investments deemed to have declines in value that are other than temporary are written down or reserved for to reduce the carrying value to their estimated realizable value. |
9
LINCOLN NATIONAL CORPORATION
SCHEDULE II — CONDENSED FINANCIAL INFORMATION OF REGISTRANT
BALANCE SHEETS
Lincoln National Corporation (Parent Company Only)
| December 31 (000's omitted) | 2001 | 2000 | ||||||
Assets: |
||||||||
Investments in subsidiaries * |
$ | 5,140,208 | $ | 5,198,438 | ||||
Investments |
592 | 81,175 | ||||||
Derivative instruments |
(2,806 | ) | — | |||||
Cash and invested cash ** |
321,245 | 342,945 | ||||||
Property and equipment |
2,678 | 2,696 | ||||||
Accrued investment income |
514 | 649 | ||||||
Receivable from subsidiaries * |
210,500 | 197,500 | ||||||
Loans to subsidiaries * |
1,594,278 | 1,489,413 | ||||||
Federal income taxes recoverable |
26,792 | 61,925 | ||||||
Other assets |
129,806 | 64,155 | ||||||
Total Assets |
7,423,807 | 7,438,896 | ||||||
Liabilities and Shareholders’ Equity |
||||||||
Liabilities: |
||||||||
Cash collateral on loaned securities |
75,750 | 148,421 | ||||||
Dividends payable |
59,565 | 57,914 | ||||||
Short-term debt |
254,968 | 150,000 | ||||||
Long-term debt |
861,730 | 712,207 | ||||||
Loans from subsidiaries * |
875,870 | 1,265,778 | ||||||
Accrued expenses and other liabilities |
250,820 | 153,889 | ||||||
Total Liabilities |
2,378,703 | 2,488,209 | ||||||
Shareholders’ Equity |
||||||||
Series A preferred stock |
762 | 857 | ||||||
Common stock |
1,255,112 | 1,003,651 | ||||||
Retained earnings |
3,834,427 | 3,915,598 | ||||||
Foreign currency translation adjustment |
(8,062 | ) | 21,930 | |||||
Minimum pension liability adjustment |
(35,959 | ) | — | |||||
Net unrealized gain (loss) on securities
available-for-sale and derivative
instruments [excluding unrealized gain of
subsidiaries: 2001-$218,380; 2000-$3,397] |
(1,176 | ) | 8,651 | |||||
Total Shareholders’ Equity |
5,045,104 | 4,950,687 | ||||||
Total Liabilities and Shareholders’ Equity |
$ | 7,423,807 | $ | 7,438,896 | ||||
| * | Eliminated in consolidation. | |
| ** | Includes short-term funds invested on behalf of LNC’s subsidiaries. |
These condensed financial statements should be read in conjunction with the consolidated financial statements and accompanying footnotes of LNC on pages 77 through 127 of LNC’s 2001 Annual Report to Shareholders which are incorporated by reference to Item 8 of the Form 10-K.
10
LINCOLN NATIONAL CORPORATION
SCHEDULE II – CONDENSED FINANCIAL INFORMATION OF REGISTRANT (Continued)
STATEMENTS OF INCOME
Lincoln National Corporation (Parent Company Only)
| Year Ended December 31 (000s omitted) | 2001 | 2000 | 1999 | |||||||||
Revenue: |
||||||||||||
Dividends from subsidiaries* |
$ | 532,482 | $ | 474,318 | $ | 584,226 | ||||||
Interest from subsidiaries* |
89,080 | 90,988 | 80,395 | |||||||||
Equity in earnings of unconsolidated affiliate |
— | — | 3,807 | |||||||||
Net investment income |
20,350 | 38,715 | 28,689 | |||||||||
Realized gain on investments |
18,275 | 20,898 | 13,311 | |||||||||
Other |
2,846 | 11,312 | 5,760 | |||||||||
Total Revenue |
663,033 | 636,231 | 716,188 | |||||||||
Expenses: |
||||||||||||
Operating and administrative |
19,401 | 7,743 | 15,090 | |||||||||
Interest-subsidiaries* |
17,848 | 31,804 | 23,820 | |||||||||
Interest-other |
116,312 | 130,817 | 117,941 | |||||||||
Total Expenses |
153,561 | 170,364 | 156,851 | |||||||||
Income Before Federal Income Tax Benefit,
Equity in Income of Subsidiaries, Less
Dividends |
509,472 | 465,867 | 559,337 | |||||||||
Federal income tax benefit |
13,258 | 19,853 | 16,899 | |||||||||
Income Before Equity in Income of Subsidiaries,
Less Dividends |
522,730 | 485,720 | 576,236 | |||||||||
Equity in income of subsidiaries, less dividends |
67,481 | 135,673 | (115,882 | ) | ||||||||
Net Income |
$ | 590,211 | $ | 621,393 | $ | 460,354 | ||||||
| * | Eliminated in consolidation. |
These condensed financial statements should be read in conjunction with the consolidated financial statements and accompanying footnotes of LNC on pages 77 through 127 of LNC’s 2001 Annual Report to Shareholders which are incorporated by reference to Item 8 of the Form 10-K.
11
LINCOLN NATIONAL CORPORATION
SCHEDULE II – CONDENSED FINANCIAL INFORMATION OF REGISTRANT (Continued)
STATEMENTS OF CASH FLOWS
Lincoln National Corporation (Parent Company Only)
| Year Ended December 31 (000s omitted) | 2000 | 1999 | 1998 | |||||||||
Cash Flows from Operating Activities: |
||||||||||||
Net Income |
$ | 590,211 | $ | 621,393 | $ | 460,354 | ||||||
Adjustments to reconcile net income to net cash
provided by (used in) operating activities: |
||||||||||||
Equity in income of subsidiaries less than
(greater than) distributions* |
(67,481 | ) | (115,173 | ) | 103,060 | |||||||
Equity in undistributed earnings of unconsolidated affiliates |
— | — | (3,807 | ) | ||||||||
Realized gain on investments |
(18,275 | ) | (20,898 | ) | (13,311 | ) | ||||||
Federal income taxes |
65,501 | 17,822 | 19,623 | |||||||||
Other |
22,616 | 7,297 | (23,004 | ) | ||||||||
Net Adjustments |
2,361 | (110,952 | ) | 82,561 | ||||||||
Net Cash Provided by Operating Activities |
592,572 | 510,441 | 542,915 | |||||||||
Cash Flows from Investing Activities: |
||||||||||||
Net sales (purchases) of investments |
(56,058 | ) | 69,442 | (113,449 | ) | |||||||
Cash collateral on loaned securities |
(72,671 | ) | (38,027 | ) | 135,822 | |||||||
Increase in investment in subsidiaries* |
(19,900 | ) | (20,364 | ) | (75,242 | ) | ||||||
Sale of (investment in) unconsolidated affiliate |
— | 3,517 | (7,013 | ) | ||||||||
Proceeds from sale of subsidiaries |
141,743 | 85,000 | — | |||||||||
Net (purchase) sale of property and equipment |
(205 | ) | 225 | 1,620 | ||||||||
Other |
64,737 | 17,095 | (62,092 | ) | ||||||||
Net Cash Provided by (Used in)
Investing Activities |
57,646 | 116,888 | (120,354 | ) | ||||||||
Cash Flows from Financing Activities: |
||||||||||||
Decrease in long-term debt (includes payments
and transfers to short-term debt) |
(99,968 | ) | — | — | ||||||||
Issuance of long-term debt |
249,220 | — | — | |||||||||
Net increase (decrease) in short-term debt |
104,968 | (122,451 | ) | 122,495 | ||||||||
Increase in loans from subsidiaries* |
(389,909 | ) | (53,089 | ) | 27,153 | |||||||
Decrease in loans to subsidiaries* |
(104,865 | ) | (83,880 | ) | (100,505 | ) | ||||||
Increase (decrease) in receivables from subsidiaries |
(13,000 | ) | 25,500 | (69,700 | ) | |||||||
Increase in Common Stock |
225,254 | — | — | |||||||||
Common stock issued for benefit plans |
90,259 | 32,741 | 48,015 | |||||||||
Retirement of Common Stock |
(503,750 | ) | (210,021 | ) | (377,719 | ) | ||||||
Dividends paid to shareholders |
(230,127 | ) | (222,661 | ) | (218,435 | ) | ||||||
Net Cash Used in Financing Activities |
(671,918 | ) | (633,861 | ) | (568,696 | ) | ||||||
Net Decrease in Cash |
(21,700 | ) | (6,532 | ) | (146,135 | ) | ||||||
Cash and Invested Cash at Beginning of the Year |
342,945 | 349,477 | 495,612 | |||||||||
Cash and Invested Cash at End-of-Year |
$ | 321,245 | $ | 342,945 | $ | 349,477 | ||||||
| * | Eliminated in consolidation. |
These condensed financial statements should be read in conjunction with the consolidated financial statements and accompanying footnotes of LNC on pages 77 through 127 of LNC’s 2001 Annual Report to Shareholders which are incorporated by reference to Item 8 of the Form 10-K.
12
LINCOLN NATIONAL CORPORATION
SCHEDULE III – SUPPLEMENTARY INSURANCE INFORMATION
| Column A | Column B | Column C | Column D | Column E | Column F | |||||||||||||||
| Deferred | Insurance | Other Policy | ||||||||||||||||||
| Acquisition | Policy and | Unearned | Claims and | Premium | ||||||||||||||||
| Segment | Costs | Claim Reserves | Premiums | Benefits Payable | Revenue (1) | |||||||||||||||
Year Ended December 31, 2001 |
||||||||||||||||||||
Annuities |
$ | 912,819 | $ | 2,653,963 | $ | — | $ | — | $ | 646,422 | ||||||||||
Life Insurance |
1,265,606 | 13,049,065 | — | — | 969,341 | |||||||||||||||
Investment Management |
— | — | — | — | — | |||||||||||||||
Lincoln UK |
587,345 | 1,426,577 | — | — | 214,801 | |||||||||||||||
Other (incl. consol. adj’s.) |
119,541 | 4,479,664 | — | — | 1,417,479 | |||||||||||||||
Total |
$ | 2,885,311 | $ | 21,609,269 | $ | — | $ | — | $ | 3,248,043 | ||||||||||
Year Ended December 31, 2000 |
||||||||||||||||||||
Annuities |
$ | 812,465 | $ | 2,693,517 | $ | — | $ | — | $ | 734,426 | ||||||||||
Life Insurance |
1,079,333 | 12,892,092 | — | — | 950,692 | |||||||||||||||
Investment Management |
— | — | — | — | — | |||||||||||||||
Lincoln UK |
635,002 | 1,626,453 | — | — | 357,798 | |||||||||||||||
Other (incl. consol. adj’s.) |
543,707 | 4,516,036 | — | — | 1,431,637 | |||||||||||||||
Total |
$ | 3,070,507 | $ | 21,728,098 | $ | — | $ | — | $ | 3,474,553 | ||||||||||
Year Ended December 31, 1999 |
||||||||||||||||||||
Annuities |
$ | 848,062 | $ | 2,662,945 | $ | — | $ | — | $ | 639,322 | ||||||||||
Life Insurance |
864,372 | 12,326,467 | — | — | 912,597 | |||||||||||||||
Investment Management |
— | — | — | — | — | |||||||||||||||
Lincoln UK |
679,709 | 1,642,891 | — | — | 354,525 | |||||||||||||||
Other (incl. consol. adj’s.) |
408,147 | 4,292,465 | — | — | 1,512,676 | |||||||||||||||
Total |
$ | 2,800,290 | $ | 20,924,768 | $ | — | $ | — | $ | 3,419,120 | ||||||||||
| (1) | Includes insurance fees on universal life and other interest-sensitive products. |
13
LINCOLN NATIONAL CORPORATION
SCHEDULE III – SUPPLEMENTARY INSURANCE INFORMATION (Continued)
| Column G | Column H | Column I | Column J | Column K | Column L | |||||||||||||||
| Amortization of | Other | |||||||||||||||||||
| Net Investment | Deferred Policy | Operating | Premiums | |||||||||||||||||
| Segment | Income (2) | Benefits | Acquisition Costs | Expenses (2) | Written | |||||||||||||||
Year Ended December 31, 2001 |
||||||||||||||||||||
Annuities |
$ | 1,369,961 | $ | 1,127,747 | $ | 131,991 | $ | 395,714 | $ | — | ||||||||||
Life Insurance |
910,166 | 1,066,968 | 95,008 | 308,816 | — | |||||||||||||||
Investment Management |
53,573 | — | — | 414,650 | — | |||||||||||||||
Lincoln UK |
64,787 | 83,397 | 31,608 | 116,673 | — | |||||||||||||||
Other (incl. consol. adj’s.) |
281,130 | 1,131,628 | 111,404 | 600,895 | — | |||||||||||||||
Total |
$ | 2,679,617 | $ | 3,409,740 | $ | 370,011 | $ | 1,836,748 | $ | — | ||||||||||
Year ended December 31, 2000 |
||||||||||||||||||||
Annuities |
$ | 1,393,512 | $ | 1,120,791 | $ | 87,962 | $ | 486,945 | $ | — | ||||||||||
Life Insurance |
871,453 | 1,017,816 | 121,583 | 286,944 | — | |||||||||||||||
Investment Management |
57,742 | — | — | 432,068 | — | |||||||||||||||
Lincoln UK |
70,258 | 178,545 | 70,336 | 213,100 | — | |||||||||||||||
Other (incl. consol. adj’s.) |
354,153 | 1,240,008 | 60,224 | 698,894 | — | |||||||||||||||
Total |
$ | 2,747,118 | $ | 3,557,160 | $ | 340,105 | $ | 2,117,951 | $ | — | ||||||||||
Year ended December 31, 1999 |
||||||||||||||||||||
Annuities |
$ | 1,474,173 | $ | 1,184,285 | $ | 87,477 | $ | 475,344 | $ | — | ||||||||||
Life Insurance |
840,133 | 1,005,812 | 97,232 | 325,180 | — | |||||||||||||||
Investment Management |
56,884 | — | — | 412,991 | — | |||||||||||||||
Lincoln UK |
75,257 | 306,221 | 73,316 | 167,136 | — | |||||||||||||||
Other (incl. consol. adj’s.) |
361,065 | 1,308,706 | 44,024 | 746,012 | — | |||||||||||||||
Total |
$ | 2,807,512 | $ | 3,805,024 | $ | 302,049 | $ | 2,126,663 | $ | — | ||||||||||
| (2) | The allocation of expenses between investments and other operations are based on a number of assumptions and estimates. Results would change if different methods were applied. |
14
LINCOLN NATIONAL CORPORATION
SCHEDULE IV – REINSURANCE
| Column A | Column B | Column C | Column D | Column E | Column F | |||||||||||||||
| Percentage | ||||||||||||||||||||
| Ceded | Assumed | of Amount | ||||||||||||||||||
| to Other | from Other | Assumed | ||||||||||||||||||
| Description | Gross Amount | Companies | Companies | Net Amount | to Net | |||||||||||||||
| (000s omitted) | ||||||||||||||||||||
Year Ended December 31, 2001 |
||||||||||||||||||||
Individual life insurance in-force |
$ | 255,700,000 | $ | 586,500,000 | $ | 396,200,000 | $ | 65,400,000 | 605.8 | % | ||||||||||
Premiums: |
||||||||||||||||||||
Life insurance and annuities (1) |
$ | 2,552,962 | $ | 679,630 | $ | 1,034,131 | $ | 2,907,463 | 35.6 | % | ||||||||||
Health insurance |
263,607 | 346,489 | 423,462 | 340,580 | 124.3 | % | ||||||||||||||
Total |
$ | 2,816,569 | $ | 1,026,119 | $ | 1,457,593 | $ | 3,248,043 | ||||||||||||
Year Ended December 31, 2000 |
||||||||||||||||||||
Individual life insurance in force |
$ | 241,000,000 | $ | 191,500,000 | $ | 396,100,000 | $ | 445,600,000 | 88.9 | % | ||||||||||
Premiums: |
||||||||||||||||||||
Life insurance and annuities (1) |
$ | 2,583,403 | $ | 453,537 | $ | 934,913 | $ | 3,064,779 | 30.5 | % | ||||||||||
Health insurance |
151,204 | 106,328 | 364,898 | 409,774 | 89.0 | % | ||||||||||||||
Total |
$ | 2,734,607 | $ | 559,865 | $ | 1,299,811 | $ | 3,474,553 | ||||||||||||
Year Ended December 31, 1999 |
||||||||||||||||||||
Individual life insurance in force |
$ | 221,300,000 | $ | 171,100,000 | $ | 295,300,000 | $ | 345,500,000 | 85.5 | % | ||||||||||
Premiums: |
||||||||||||||||||||
Life insurance and annuities (1) |
$ | 2,363,373 | $ | 458,798 | $ | 816,046 | $ | 2,720,621 | 30.0 | % | ||||||||||
Health insurance |
167,489 | 162,202 | 693,212 | 698,499 | 99.2 | % | ||||||||||||||
Total |
$ | 2,530,862 | $ | 621,000 | $ | 1,509,258 | $ | 3,419,120 | ||||||||||||
| (1) | Includes insurance fees on universal life and other interest-sensitive products. |
15
LINCOLN NATIONAL CORPORATION
SCHEDULE V – VALUATION AND QUALIFYING ACCOUNTS
| Column A | Column B | Column C | Column D | Column E | ||||||||||||||||
| Additions | ||||||||||||||||||||
| Charged to | ||||||||||||||||||||
| Other | Balance | |||||||||||||||||||
| Balance at | Charged to Costs | Accounts- | Deductions- | at End | ||||||||||||||||
| Description | Beginning of Period | Expenses (1) | Describe | Describe (2) | of Period | |||||||||||||||
| (000s omitted) | ||||||||||||||||||||
Year Ended December 31, 2001 |
||||||||||||||||||||
Deducted from Asset Accounts: |
||||||||||||||||||||
Reserve for Mortgage Loans
on Real Estate |
$ | 4,907 | $ | 736 | $ | — | $ | (3,432 | ) | $ | 2,211 | |||||||||
Included in Other Liabilities: |
||||||||||||||||||||
Investment Guarantees |
323 | — | — | — | 323 | |||||||||||||||
Year Ended December 31, 2000 |
||||||||||||||||||||
Deducted from Asset Accounts: |
||||||||||||||||||||
Reserve for Mortgage Loans
on Real Estate |
$ | 4,691 | $ | 1,830 | $ | — | $ | (1,614 | ) | $ | 4,907 | |||||||||
Included in Other Liabilities: |
||||||||||||||||||||
Investment Guarantees |
323 | — | — | — | 323 | |||||||||||||||
Year Ended December 31, 1999 |
||||||||||||||||||||
Deducted from Asset Accounts: |
||||||||||||||||||||
Reserve for Mortgage Loans
on Real Estate |
$ | 4,794 | $ | 807 | $ | — | $ | (910 | ) | $ | 4,691 | |||||||||
Included in Other Liabilities: |
||||||||||||||||||||
Investment Guarantees |
323 | — | — | — | 323 | |||||||||||||||
| (1) | Excludes charges for the direct write-off of assets. | |
| (2) | Deductions reflect sales or foreclosures of the underlying holdings. |
16
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized on March 22, 2002.
| LINCOLN NATIONAL CORPORATION | |
| By: |
/s/ JOHN L. STEINKAMP Name: John L. Steinkamp |
| Title: Vice President and Associate General Counsel | |