Lincoln Financial 2004 11K
 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549

FORM 11-K 

Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2004

THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
AGENTS’ SAVINGS AND PROFIT-SHARING PLAN 
(Full title of the Plan)

[Current Registration Number 33-04711]


Lincoln National Corporation

1500 Market Street, Suite 3900
Centre Square West Tower
Philadelphia, PA 19102
 
(Name of Issuer and principal executive office)
 
 


 
 
 
The Lincoln National Life Insurance Company
Agents’ Savings and Profit-Sharing Plan
 
Financial Statements
 
As of and for the years ended December 31, 2004, 2003, and 2002
with Report of Independent Registered Public Accounting Firm
 
 
 
 
 
 
 

 

The Lincoln National Life Insurance Company
 
Agents' Savings and Profit-Sharing Plan
 
   
Financial Statements and Supplemental Schedule
 
   
   
Years ended December 31, 2004, 2003, and 2002
 
   
   
   
Contents
 
   
   
Report of Independent Registered Public Accounting Firm
1
   
   
Audited Financial Statements:
 
   
Statements of Net Assets Available for Plan Benefits
2
Statements of Changes in Net Assets Available for Plan Benefits
3
Notes to Financial Statements
4
   
   
Supplemental Schedule
 
   
Schedule H, Line 4i—Schedule of Assets (Held At End of Year)
19
 
 

 

Report of Independent Registered Public Accounting Firm
 
 
Lincoln National Corporation Plan Administrator
Lincoln National Corporation
 
We have audited the accompanying statements of net assets available for benefits of The Lincoln National Life Insurance Company Agents’ Savings and Profit-Sharing Plan as of December 31, 2004 and 2003, and the related statements of changes in net assets available for benefits for each of the three years in the period ended December 31, 2004. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits.
 
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Plan’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan's internal control over financial reporting. Accordingly we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
 
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2004 and 2003, and the changes in its net assets available for benefits for each of the three years in the period ended December 31, 2004, in conformity with U.S. generally accepted accounting principles.
 
Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2004, is presented for purposes of additional analysis and is not a required part of the financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
 
 
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
March 25, 2005
 
 
1

 

The Lincoln National Life Insurance Company
 
Agents' Savings and Profit-Sharing Plan
 
           
Statements of Net Assets Available for Plan Benefits
 
           
           
   
December 31
 
   
2004
 
2003
 
Assets
             
Investments:
             
Common stock---Lincoln National Corporation
             
(cost: 2004---$43,578,228; 2003---$43,488,868)
 
$
58,721,853
 
$
54,523,924
 
Wells Fargo Bank Short-Term Investment Fund
   
1,195,934
   
1,629,309
 
Pooled separate accounts---The Lincoln National
             
Life Insurance Company Separate Accounts
             
(cost: 2004---$72,213,058; 2003---$62,467,180)
   
99,529,718
   
81,529,299
 
Investment contracts---The Lincoln National
             
Life Insurance Company
   
17,598,686
   
15,955,401
 
Participant loans
   
4,151,804
   
4,218,026
 
Total Investments
   
181,197,995
   
157,855,959
 
               
Accrued interest receivable
   
60,484
   
1,328
 
Due from broker
   
-
   
50,997
 
Contributions receivable from participant deferrals
   
-
   
232,518
 
Contributions receivable from Employer companies
   
2,878,195
   
3,946,241
 
Total assets
   
184,136,674
   
162,087,043
 
               
Liabilities
             
Due to broker
   
26,629
   
-
 
Total liabilities
   
26,629
   
-
 
Net assets available for plan benefits
 
$
184,110,045
 
$
162,087,043
 
               
See accompanying notes.
             
 
 
2

 

The Lincoln National Life Insurance Company
 
Agents' Savings and Profit-Sharing Plan
 
   
Statements of Changes in Net Assets Available for Plan Benefits
 
               
               
   
Year ended December 31
   
2004
 
2003
 
2002
 
Investment income:
                   
Cash dividends---Lincoln National Corporation
 
$
1,819,776
 
$
1,924,171
 
$
1,954,337
 
Interest:
                   
The Lincoln National Life Insurance Company
   
748,249
   
638,100
   
677,376
 
Other
   
250,743
   
275,985
   
371,221
 
     
998,992
   
914,085
   
1,048,597
 
     
2,818,768
   
2,838,256
   
3,002,934
 
Net realized gain (loss) on sale
                   
and distributions of investments:
                   
Common stock---Lincoln National Corporation
   
4,070,037
   
1,563,498
   
4,050,730
 
Pooled separate accounts---
                   
The Lincoln National Life Insurance
                   
Company Separate Accounts
   
1,652,409
   
(1,040,533
)
 
(2,592,752
)
     
5,722,446
   
522,965
   
1,457,978
 
Net unrealized appreciation
                   
(depreciation) of investments
   
12,363,106
   
29,055,510
   
(41,836,079
)
                     
Contributions:
                   
Participants
   
7,452,877
   
6,280,189
   
6,068,580
 
Employer companies
   
5,199,336
   
6,056,534
   
2,258,564
 
     
12,652,213
   
12,336,723
   
8,327,144
 
                     
Transfers from (to) affiliated plans
   
3,588,680
   
285,051
   
(42,253
)
Distributions to participants
   
(14,994,001
)
 
(15,112,736
)
 
(13,242,739
)
Administrative expenses
   
(128,210
)
 
(103,179
)
 
(106,837
)
                     
Net increase (decrease) in net
                   
assets available for plan benefits
   
22,023,002
   
29,822,590
   
(42,439,852
)
                     
Net assets available for plan benefits
                   
at beginning of the year
   
162,087,043
   
132,264,453
   
174,704,305
 
Net assets available for plan benefits
                   
at end of the year
 
$
184,110,045
 
$
162,087,043
 
$
132,264,453
 
                     
     
   
       
See accompanying notes.
                   
 
 
3

 

The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
 
Notes to Financial Statements
       
       
1.  Significant Accounting Policies
       
Investments Valuation and Income Recognition
       
The investment in Lincoln National Corporation ("LNC") common stock is valued at the last reported sales price per the national securities exchange on the last business day of the year.
       
The Wells Fargo Bank Short-Term Investment Fund is valued at cost, which approximates fair value.
       
The fair value of participation units in pooled separate accounts is based on quoted redemption value on the last business day of the year.
       
The investment contracts are valued at contract value as estimated by The Lincoln National Life Insurance Company ("Lincoln Life" or “Employer”). Contract value represents net contributions plus interest at the contract rate. The contracts are fully benefit responsive.
       
Participant loans are valued at their outstanding balances, which approximate fair value.
       
The cost of investments sold or distributed is determined using the specific identification method.
       
Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date.
       
Use of Estimates
       
Preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
       
       
2.  Description of the Plan
       
The Lincoln National Life Insurance Company Agents' Savings and Profit-Sharing Plan ("Plan") is a contributory, defined contribution plan which covers eligible agents of Lincoln Life and other participating agents who are employed by Lincoln Life. Any person who is a full-time agent of Lincoln Life is eligible to enroll in the Plan. A participant may make pre-tax contributions at a rate of at least 1%, but not more than 25% of eligible earnings, up to a maximum annual amount as determined under applicable law.  The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
       
Participants direct the Plan to invest their contributions and Employer matching contributions in any combination of the investment options as described in Note 4. Prior to April 1, 2002, discretionary Employer contributions were required to be invested in the LNC Common Stock Fund. Effective April 1, 2002, participants could immediately direct the investment of the discretionary Employer contributions to other funds.
 
 
4

 

The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
       
Notes to Financial Statements (continued)
       
       
2. Description of the Plan (continued)
       
Employer matching contributions to the Plan are provided in the form of a guaranteed match of $0.50 for each dollar a participant contributes, not to exceed 6% of eligible earnings, and a discretionary match of up to $1.00 for each dollar contributed, not to exceed 6% of eligible earnings. The amount of discretionary contribution varies according to whether LNC has met certain performance-based criteria as determined by the Compensation Committee of LNC's Board of Directors.
       
Participants’ contributions are fully vested. Employer contributions vest based upon years of service as defined in the Plan agreement as follows:
       

 
Years of Service
 
Percent Vested
 
 
1
 
0%
 
 
2
 
50%
 
 
3 or more
 
100%
 

       
The Employer has the right to discontinue contributions at any time and terminate the Plan.  In the event of termination of the Plan, all amounts allocated to participants' accounts shall become vested.
       
The Plan allows loans to participants in amounts up to 50% of the vested account value to a maximum of $50,000 but not more than the total value of the participant's accounts, excluding Employer contributions that have not been in the Plan for two full years, less the highest outstanding loan balance in the previous twelve month period. Interest charged on new loans to participants is established monthly based upon the prime rate plus 1%. Loans may be repaid over any period selected by the participant up to a maximum repayment period of 5 years except that the maximum repayment period may be 20 years for the purchase of a principal residence.
       
Upon termination of service due to disability or retirement, a participant or beneficiary, in case of the participant’s death, may elect to receive either a lump-sum amount equal to the value of the participant's vested interest in his or her account, or annual installments over a five-year period. For termination of service due to other reasons, a participant may receive the value of the vested interest in his or her account as a lump-sum distribution. Vested account balances less than $5,000 are immediately distributable under the terms of the Plan, without the Participant’s consent, unless a timely election of rollover to an IRA or another qualified plan has been made.
 
Each participant's account is credited with the participant's contributions, contributions from the Employer and applicable investment earnings, and is charged with an allocation of administrative expenses and applicable investment losses.  Forfeited non-vested amounts are used to reduce future Employer contributions.
 
 
5

 

The Lincoln National Life Insurance Company
 
Agents' Savings and Profit-Sharing Plan
 
                 
Notes to Financial Statements (continued)
                 
3.  Investments
               
                 
The following is a summary of assets held for investment:

   
December 31, 2004
     
December 31, 2003
     
   
Number of
         
Number of
         
   
Shares, Units
 
Fair
     
Shares, Units
 
Fair
     
   
or Par Value
 
Value
     
or Par Value
 
Value
     
Quoted Market Values
                                     
Common stock---LNC
   
1,257,966
 
$
58,721,853
   
*
   
1,350,605
 
$
54,523,924
   
*
 
Pooled separate account investment
                                     
contracts underwritten by Lincoln Life:
                                     
Core Equity Fund
   
956,272.451
   
13,498,359
   
*
   
957,140.858
   
12,133,579
   
*
 
Medium Capitalization Equity Fund
   
833,783.418
   
10,462,314
   
*
   
864,898.815
   
9,452,047
   
*
 
Short Term Fund
   
1,700,613.780
   
6,253,838
   
   
1,539,780.100
   
5,616,810
   
 
Government/ Corporate Bond Fund
   
291,777.749
   
2,545,761
   
   
281,100.440
   
2,311,461
   
 
Large Capitalization Equity Fund
   
1,201,311.739
   
10,014,376
   
*
   
1,242,408.641
   
10,116,809
   
*
 
Balanced Fund
   
261,627.576
   
2,002,419
   
   
221,520.392
   
1,555,405
   
 
High Yield Bond Fund
   
721,142.318
   
2,725,052
   
   
677,534.414
   
2,268,995
   
 
Small Capitalization Equity Fund
   
1,403,790.064
   
11,094,295
   
*
   
1,410,390.044
   
9,851,575
   
*
 
Value Equity Fund
   
2,501,312.327
   
6,108,705
   
   
2,115,372.390
   
4,636,896
   
 
International Equity Fund
   
1,067,960.074
   
9,292,320
   
*
   
932,529.673
   
6,704,888
   
 
Conservative Balanced Fund
   
232,576.568
   
491,876
   
   
221,093.519
   
434,050
   
 
Aggressive Balanced Fund
   
379,036.436
   
899,606
   
   
275,088.192
   
587,726
   
 
Delaware Growth and Income Fund
   
918,745.140
   
1,555,893
   
   
649,762.829
   
993,292
   
 
Scudder VIT Equity 500 Index Fund
   
4,168,208.538
   
4,189,465
   
   
3,871,959.676
   
3,529,291
   
 
Fidelity VIP Contrafund
   
4,383,002.727
   
5,478,314
   
   
2,917,953.594
   
3,166,855
   
 
Neuberger-Berman AMT Regency Fund
   
1,894,203.416
   
2,702,461
   
   
1,224,187.180
   
1,429,483
   
 
Social Awareness Fund
   
1,220,854.693
   
1,297,647
   
   
1,152,697.791
   
1,090,452
   
 
American Funds New Perspective
   
2,928,516.285
   
2,800,247
   
   
1,520,723.497
   
1,315,274
   
 
Neuberger-Berman Mid-Cap Growth Fund
   
1,880,412.759
   
2,011,666
   
   
1,506,601.361
   
1,387,881
   
 
Scudder VIT Small Cap Index Fund
   
1,878,239.710
   
2,924,044
   
   
1,559,466.488
   
2,064,734
   
 
Janus Aspen Growth Fund
   
31,596.547
   
298,351
         
38,684.997
   
351,608
       
Fidelity VIP Overseas Fund
   
72,217.004
   
882,709
         
49,003.881
   
530,188
       
Total pooled separate accounts
         
99,529,718
               
81,529,299
       
                                       
Contract Value
                                     
Investment contracts
                                     
underwritten by Lincoln Life
   
17,598,686
   
17,598,686
   
*
   
15,955,401
   
15,955,401
   
*
 
                                       
Estimated Value
                                     
Wells Fargo Bank short-term
                                     
investment fund
   
1,195,934
   
1,195,934
   
   
1,629,309
   
1,629,309
   
 
Participants loans
   
4,151,804
   
4,151,804
   
   
4,218,026
   
4,218,026
   
 
Total investments
       
$
181,197,995
             
$
157,855,959
       
           
               
       

* Investments that represent 5% or more of the fair value of net assets available for benefits as of the indicated date.
 
 
6

 

The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
           
Notes to Financial Statements (continued)
           
3. Investments (continued)
         
           
Net realized gain (loss) on sale and distribution of investments is summarized as follows:
   

   
Year ended December 31
 
   
2004
 
2003
 
2002
 
Common stock
                   
Proceeds from disposition of stock
 
$
11,566,749
 
$
6,636,009
 
$
9,787,848
 
Cost of stock disposed
   
7,496,712
   
5,072,511
   
5,737,118
 
Net realized gain on sale and distribution
                   
of common stock
 
$
4,070,037
 
$
1,563,498
 
$
4,050,730
 
     
   
       
Pooled separate accounts
                   
Proceeds from disposition of units
 
$
29,304,850
 
$
33,001,417
 
$
38,447,890
 
Cost of units disposed
   
27,652,441
   
34,041,950
   
41,040,642
 
Net realized loss on sale and distribution
                   
of pooled separate accounts
 
$
1,652,409
 
$
(1,040,533
)
$
(2,592,752
)
     
   
   
 

The net change in unrealized appreciation or depreciation of investments in total and by investment classification as determined by quoted market price is summarized as follows:

   
Year ended December 31
 
   
2004
 
2003
 
2002
 
Fair value in excess of cost:
                   
At beginning of the year
 
$
30,097,179
 
$
1,041,669
 
$
42,877,748
 
At end of the year
   
42,460,285
   
30,097,179
   
1,041,669
 
Change in net unrealized appreciation of investments
 
$
12,363,106
 
$
29,055,510
 
$
(41,836,079
)
     
   
       
Common stock
 
$
4,108,565
 
$
11,125,039
 
$
(30,005,422
)
Pooled separate accounts
   
8,254,541
   
17,930,471
   
(11,830,657
)
Change in net unrealized appreciation of investments
 
$
12,363,106
 
$
29,055,510
 
$
(41,836,079
)
                     
     
   
   
 

The investment contracts (Guaranteed Fund) earned an average interest rate of approximately 4.0%, 4.0%, and 4.9% in 2004, 2003, and 2002 respectively. The credited interest rates for new contributions, which approximate the current market rate, were 4.0% and 5.0% at December 31, 2004 and 2003, respectively. The rate on new contributions is guaranteed through the three succeeding calendar year quarters. The credited interest rates for the remaining contract value balance was 4.0% at both December 31, 2004 and 2003 and were determined based upon the performance of  Lincoln Life's general account. The credited interest rates can be changed quarterly. The minimum guaranteed rate is 3.5%. The guarantee is based on Lincoln Life's ability to meet its financial obligations from the general assets of Lincoln Life. The fair value of the investment contracts approximates contract value.
 
7

 

The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
                           
Notes to Financial Statements (continued)
                           
4. Investment Options
                         
                           
The detail of the net assets available for plan benefits by investment option is as follows:
                 

Investment Options
 
December 31, 2004
 
Total
 
1
 
2
 
3
 
4
 
5
 
6
 
Assets
                                           
Investments:
                                           
Common stock
 
$
58,721,853
 
$
58,721,853
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
Short-term investment fund
   
1,195,934
   
1,195,934
   
-
   
-
   
-
   
-
   
-
 
Pooled separate accounts
   
99,529,718
   
-
   
-
   
-
   
13,498,359
   
10,462,314
   
6,253,838
 
Investment contracts
   
17,598,686
   
-
   
-
   
17,598,686
   
-
   
-
   
-
 
Participant loans
   
4,151,804
   
-
   
-
   
-
   
-
   
-
   
-
 
Total investments
   
181,197,995
   
59,917,787
   
-
   
17,598,686
   
13,498,359
   
10,462,314
   
6,253,838
 
     
   
   
   
   
   
   
 
Accrued interest receivable
   
60,484
   
2,134
   
-
   
58,350
   
-
   
-
   
-
 
Due from (to) broker
   
(26,629
)
 
-
   
-
   
85
   
74,516
   
66,870
   
-
 
Contributions receivable from participant deferrals
   
-
   
-
   
-
   
-
   
-
   
-
   
-
 
Contributions receivable from Employer companies
   
2,878,195
   
2,878,195
   
-
   
-
   
-
   
-
   
-
 
Net assets available for plan benefits
 
$
184,110,045
 
$
62,798,116
 
$
-
 
$
17,657,121
 
$
13,572,875
 
$
10,529,184
 
$
6,253,838
 
     
   
   
   
   
   
   
 

Investment Options
 
December 31, 2004
 
7
 
8
 
9
 
10
 
11
 
12
 
13
 
Assets
                                           
Investments:
                                           
Common stock
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
Short-term investment fund
   
-
   
-
   
-
   
-
   
-
   
-
   
-
 
Pooled separate accounts
   
2,545,761
   
10,014,376
   
2,002,419
   
2,725,052
   
11,094,295
   
6,108,705
   
9,292,320
 
Investment contracts
   
-
   
-
   
-
   
-
   
-
   
-
   
-
 
Participant loans
   
-
   
-
   
-
   
-
   
-
   
-
   
-
 
Total investments
   
2,545,761
   
10,014,376
   
2,002,419
   
2,725,052
   
11,094,295
   
6,108,705
   
9,292,320
 
     
   
   
   
   
   
   
 
Accrued interest receivable
   
-
   
-
   
-
   
-
   
-
   
-
   
-
 
Due from (to) broker
   
34,989
   
18,155
   
4,545
   
(4,085
)
 
83,286
   
(26,624
)
 
57,800
 
Contributions receivable from participant deferrals
    -      -      -      -      -      -      -  
Contributions receivable from Employer companies
   
-
   
-
   
-
   
-
   
-
   
-
   
-
 
Net assets available for plan benefits
 
$
2,580,750
 
$
10,032,531
 
$
2,006,964
 
$
2,720,967
 
$
11,177,581
 
$
6,082,081
 
$
9,350,120
 
                                             
 
Investment Options
December 31, 2004
   
14
 
 
15
 
 
16
 
 
17
 
 
18
 
 
19
 
 
20
 
Assets
                                           
Investments:
                                           
Common stock
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
Short-term investment fund
   
-
   
-
   
-
   
-
   
-
   
-
   
-
 
Pooled separate accounts
   
491,876
   
899,606
   
1,555,893
   
4,189,465
   
5,478,314
   
2,702,461
   
1,297,647
 
Investment contracts
   
-
   
-
   
-
   
-
   
-
   
-
   
-
 
Participant loans
   
-
   
-
   
-
   
-
   
-
   
-
   
-
 
Total investments
   
491,876
   
899,606
   
1,555,893
   
4,189,465
   
5,478,314
   
2,702,461
   
1,297,647
 
     
   
   
   
   
   
   
 
Accrued interest receivable
   
-
   
-
   
-
   
-
   
-
   
-
   
-
 
Due from (to) broker
   
126
   
-
   
3,579
   
(22,688
)
 
(108,815
)
 
(128,944
)
 
91,085
 
Contributions receivable from participant deferrals
     -      -      -      -      -      -      -  
Contributions receivable from Employer companies
   
-
   
-
   
-
   
-
   
-
   
-
   
-
 
Net assets available for plan benefits
 
$
492,002
 
$
899,606
 
$
1,559,472
 
$
4,166,777
 
$
5,369,499
 
$
2,573,517
 
$
1,388,732
 
     
   
   
   
   
   
   
 
 
Investment Options
December 31, 2004
   
21
 
 
22
 
 
23
 
 
24
 
 
25
 
 
Loans
       
Assets
                                           
Investments:
                                           
Common stock
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
       
Short-term investment fund
   
-
   
-
   
-
   
-
   
-
   
-
       
Pooled separate accounts
   
2,800,247
   
2,011,666
   
2,924,044
   
298,351
   
882,709
     -        
Investment contracts
   
-
   
-
   
-
   
-
   
-
   
-
       
Participant loans
   
-
   
-
   
-
   
-
   
-
   
4,151,804
       
Total investments
   
2,800,247
   
2,011,666
   
2,924,044
   
298,351
   
882,709
   
4,151,804
       
     
   
   
   
   
   
       
Accrued interest receivable
   
-
   
-
   
-
   
-
   
-
   
-
       
Due from (to) broker
   
(63,077
)
 
(25,532
)
 
(95,448
)
 
13,081
   
467
   
-
       
Contributions receivable from participant deferrals
     -      -      -      -      -      -        
Contributions receivable from Employer companies
   
-
   
-
   
-
   
-
   
-
   
-
       
Net assets available for plan benefits
 
$
2,737,170
 
$
1,986,134
 
$
2,828,596
 
$
311,432
 
$
883,176
 
$
4,151,804
       
 
 
8


 
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
                           
Notes to Financial Statements (continued)
                           
                           
4. Investment Options
                         
                           
The detail of the net assets available for plan benefits by investment option is as follows:
                 
                           
                           

Investment Options
 
December 31, 2003
 
Total
 
1
 
2
 
3
 
4
 
5
 
6
 
Assets
                                           
Investments:
                                           
Common stock
 
$
54,523,924
 
$
54,523,924
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
Short-term investment fund
   
1,629,309
   
1,629,309
   
-
   
-
   
-
   
-
   
-
 
Pooled separate accounts
   
81,529,299
   
-
   
-
   
-
   
12,133,579
   
9,452,047
   
5,616,810
 
Investment contracts
   
15,955,401
   
-
   
-
   
15,955,401
   
-
   
-
   
-
 
Participant loans
   
4,218,026
   
-
   
-
   
-
   
-
   
-
   
-
 
Total investments
   
157,855,959
   
56,153,233
   
-
   
15,955,401
   
12,133,579
   
9,452,047
   
5,616,810
 
                                             
Accrued interest receivable
   
1,328
   
1,328
   
-
   
-
   
-
   
-
   
-
 
Due from (to) broker
   
50,997
   
-
   
-
   
(7,346
)
 
(31,698
)
 
22,419
   
(15,628
)
Contributions receivable from participant deferrals
   
232,518
   
232,518
   
-
   
-
   
-
   
-
   
-
 
Contributions receivable from Employer companies
   
3,946,241
   
3,946,241
   
-
   
-
   
-
   
-
   
-
 
Net assets available for plan benefits
 
$
162,087,043
 
$
60,333,320
 
$
-
 
$
15,948,055
 
$
12,101,881
 
$
9,474,466
 
$
5,601,182
 

Investment Options
 
December 31, 2003
 
7
 
8
 
9
 
10
 
11
 
12
 
13
 
Assets
                                           
Investments:
                                           
Common stock
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
Short-term investment fund
   
-
   
-
   
-
   
-
   
-
   
-
   
-
 
Pooled separate accounts
   
2,311,461
   
10,116,809
   
1,555,405
   
2,268,995
   
9,851,575
   
4,636,896
   
6,704,888
 
Investment contracts
   
-
   
-
   
-
   
-
   
-
   
-
   
-
 
Participant loans
   
-
   
-
   
-
   
-
   
-
   
-
   
-
 
Total investments
   
2,311,461
   
10,116,809
   
1,555,405
   
2,268,995
   
9,851,575
   
4,636,896
   
6,704,888
 
                                             
Accrued interest receivable
   
-
   
-
   
-
   
-
   
-
   
-
   
-
 
Due from (to) broker
   
(3,469
)
 
(29,148
)
 
(5,955
)
 
(11,070
)
 
56,547
   
35,557
   
1,638
 
Contributions receivable from participant deferrals
     -      -      -      -      -      -      -  
Contributions receivable from Employer companies
   
-
   
-
   
-
   
-
   
-
   
-
   
-
 
Net assets available for plan benefits
 
$
2,307,992
 
$
10,087,661
 
$
1,549,450
 
$
2,257,925
 
$
9,908,122
 
$
4,672,453
 
$
6,706,526
 

Investment Options
 
December 31, 2003
 
14
 
15
 
16
 
17
 
18
 
19
 
20
 
Assets
                                           
Investments:
                                           
Common stock
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
Short-term investment fund
   
-
   
-
   
-
   
-
   
-
   
-
   
-
 
Pooled separate accounts
   
434,050
   
587,726
   
993,292
   
3,529,291
   
3,166,855
   
1,429,483
   
1,090,452
 
Investment contracts
   
-
   
-
   
-
   
-
   
-
   
-
   
-
 
Participant loans
   
-
   
-
   
-
   
-
   
-
   
-
   
-
 
Total investments
   
434,050
   
587,726
   
993,292
   
3,529,291
   
3,166,855
   
1,429,483
   
1,090,452
 
                                             
Accrued interest receivable
   
-
   
-
   
-
   
-
   
-
   
-
   
-
 
Due from (to) broker
   
(242
)
 
(3,040
)
 
(3,281
)
 
(2,717
)
 
(7,609
)
 
280
   
(22,441
)
Contributions receivable from participant deferrals
     -      -      -      -      -      -      -  
Contributions receivable from Employer companies
   
-
   
-
   
-
   
-
   
-
   
-
   
-
 
Net assets available for plan benefits
 
$
433,808
 
$
584,686
 
$
990,011
 
$
3,526,574
 
$
3,159,246
 
$
1,429,763
 
$
1,068,011
 

 
Investment Options
 
December 31, 2003
 
21
 
22
 
23
 
24
 
25
 
Loans
     
Assets
                                           
Investments:
                                           
Common stock
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
   
 
 
Short-term investment fund
   
-
   
-
   
-
   
-
   
-
   
-
       
Pooled separate accounts
   
1,315,274
   
1,387,881
   
2,064,734
   
351,608
   
530,188
     -        
Investment contracts
   
-
   
-
   
-
   
-
   
-
   
-
       
Participant loans
   
-
   
-
   
-
   
-
   
-
   
4,218,026
       
Total investments
   
1,315,274
   
1,387,881
   
2,064,734
   
351,608
   
530,188
   
4,218,026
       
                                             
Accrued interest receivable
   
-
   
-
   
-
   
-
   
-
   
-
       
Due from (to) broker
   
27,695
   
54,112
   
(2,623
)
 
-
   
(984
)
 
-
       
Contributions receivable from participant deferrals
     -      -      -      -      -      -        
Contributions receivable from Employer companies
   
-
   
-
   
-
   
-
   
-
   
-
       
Net assets available for plan benefits
 
$
1,342,969
 
$
1,441,993
 
$
2,062,111
 
$
351,608
 
$
529,204
 
$
4,218,026
       
 
9

 
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
                           
Notes to Financial Statements (continued)
                           
                           
4. Investment Options (continued)
                         
                           
The detail of the changes in net assets available for plan benefits by investment option is as follows:
           
                           

Investment Options
 
December 31, 2004
 
Total
 
1
 
2
 
3
 
4
 
5
 
6
 
Investment income:
                                           
Cash dividends
 
$
1,819,776
 
$
1,819,776
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
Interest
   
998,992
   
24,854
   
-
   
723,395
   
-
   
-
   
-
 
Total investment income
   
2,818,768
   
1,844,630
   
-
   
723,395
   
-
   
-
   
-
 
Net realized gain (loss) on sale and
                                           
distribution of investments:
                                           
Common stock
   
4,070,037
   
4,070,037
                               
Pooled separate accounts
   
1,652,409
   
-
   
-
   
-
   
203,967
   
(3,539
)
 
51,005
 
Total net realized gains (losses)
   
5,722,446
   
4,070,037
   
-
   
-
   
203,967
   
(3,539
)
 
51,005
 
Net unrealized appreciation
                                           
(depreciation) of investments
   
12,363,106
   
4,108,565
   
-
   
-
   
1,184,989
   
1,379,549
   
1,288
 
Contributions:
   
 
                                     
Participant
   
7,452,877
   
748,914
   
-
   
248,869
   
691,806
   
602,308
   
244,033
 
Employer companies
   
5,199,336
   
3,161,387
   
-
   
85,062
   
223,592
   
200,559
   
64,686
 
Total contributions
   
12,652,213
   
3,910,301
   
-
   
333,931
   
915,398
   
802,867
   
308,719
 
Transfers to affiliated plans
   
3,588,680
   
614,533
   
-
   
871,935
   
296,183
   
276,040
   
141,047
 
Distributions to participants
   
(14,994,001
)
 
(5,348,906
)
 
-
   
(1,809,653
)
 
(780,660
)
 
(705,912
)
 
(1,789,266
)
Administrative expenses
   
(128,210
)
 
(46,539
)
 
-
   
(12,364
)
 
(9,549
)
 
(7,507
)
 
(4,818
)
Net transfers
   
-
   
(6,687,825
)
 
-
   
1,601,822
   
(339,334
)
 
(686,780
)
 
1,944,681
 
Net increase (decrease) in net
                                           
assets available for plan benefits
   
22,023,002
   
2,464,796
   
-
   
1,709,066
   
1,470,994
   
1,054,718
   
652,656
 
Net assets available for plan
                                           
benefits at beginning of the year
   
162,087,043
   
60,333,320
   
-
   
15,948,055
   
12,101,881
   
9,474,466
   
5,601,182
 
Net assets available for plan
                                           
benefits at end of the year
 
$
184,110,045
 
$
62,798,116
 
$
-
 
$
17,657,121
 
$
13,572,875
 
$
10,529,184
 
$
6,253,838
 

Investment Options
 
December 31, 2004
 
7
 
8
 
9
 
10
 
11
 
12
 
13
 
Investment income:
                                           
Cash dividends
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
$
-
 
Interest
   
-
   
-
   
-
   
-
   
-
   
-
   
-
 
Total investment income
   
-
   
-
   
-
   
-
   
-
   
-
   
-
 
Net realized gain (loss) on sale and
                                           
distribution of investments:
                                           
Common stock
   
-
   
-
   
-
   
-
   
-
   
-
   
-
 
Pooled separate accounts
   
118,385
   
(188,688
)
 
55,178
   
136,428
   
305,375
   
89,484
   
272,710
 
Total net realized gains (losses)
   
118,385
   
(188,688
)
 
55,178
   
136,428
   
305,375
   
89,484
   
272,710
 
Net unrealized appreciation
                                           
(depreciation) of investments
   
34,359
   
431,322
   
108,514
   
134,775
   
1,004,627
   
502,684
   
1,267,577
 
Contributions:
                                           
Participant
   
150,522
   
805,344
   
173,788
   
185,635
   
741,598
   
497,130
   
591,062
 
Employer companies
   
40,739
   
261,466
   
53,278
   
55,264
   
227,043
   
150,881
   
182,480
 
Total contributions
   
191,261
   
1,066,810
   
227,066
   
240,899
   
968,641
   
648,011
   
773,542
 
Transfers to affiliated plans
   
76,543
   
155,178
   
1,501
   
19,033
   
225,840
   
158,488
   
116,473
 
Distributions to participants
   
(289,392
)
 
(777,277
)
 
(183,498
)
 
(73,459
)
 
(717,672
)
 
(413,380
)
 
(411,164
)
Administrative expenses
   
(1,914
)
 
(7,967
)
 
(1,428
)
 
(1,769
)
 
(8,185
)
 
(4,158
)
 
(5,949
)
Net transfers
   
143,516
   
(734,508
)
 
250,181
   
7,135
   
(509,167
)
 
428,499