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This document is dated August 8, 2006. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

Forward-Looking Statements — Cautionary Language

Lincoln Financial Group Reports Second Quarter 2006 Earnings

Robust Results Reflect Combined Earnings from the Jefferson-Pilot Merger

Topics: | Individual Markets  | Employer Markets  | Investment Management  | Lincoln UK  | Lincoln Financial Media  | Other Operations  | Capital and Share Repurchase  | 2006 Outlook  | Reconciliation Table  | Digest of Earnings  |

PHILADELPHIA, August 8, 2006 — Lincoln National Corporation (NYSE:LNC) today reported net income of $349.0 million, or $1.23 per diluted share for the second quarter of 2006. By comparison, net income for the second quarter of 2005 was $197.9 million, or $1.13 per diluted share.

Income from operations for the second quarter of 2006 was $351.4 million, or $1.24 per diluted share, compared with $203.6 million, or $1.16 per diluted share, in the second quarter of 2005. Income from operations was positively impacted by the merger with Jefferson-Pilot that closed on April 3, 2006, which contributed approximately $145 million to earnings in the quarter.

Return on equity (ROE), based on income from operations, for the quarter was 12.4%. The attached table defines and reconciles income from operations and ROE, non-GAAP measures, to net income and ROE calculated in accordance with GAAP.

Consolidated domestic retail deposits, which include individual annuities, mutual funds, life insurance and other personal wealth accumulation products together with retirement products sold into the employer-sponsored marketplace, reached $7.5 billion, up 6% over the second quarter of 2005. Lincoln reported consolidated retail net flows for the quarter of $1.9 billion. Investment management institutional deposits were $2.8 billion for the quarter with $687 million in net flows. At June 30, 2006, consolidated assets under management were $212 billion, an increase of 15% after adjusting for the combination with Jefferson-Pilot, which added approximately $29 billion to assets under management.

"In our first quarter of combined operations, our results underscore Lincoln's enhanced earnings engine and improved presence in the marketplace as well as the integration expertise of our management team," said Jon A. Boscia, chairman and chief executive officer of Lincoln Financial Group.

Individual Markets

Individual Annuities

Second quarter income from operations for the Individual Annuities segment was $89.0 million versus $52.5 million for the same period a year ago. Approximately 50% of the growth in income from operations was driven by the Jefferson-Pilot merger. The current quarter's results benefited from approximately $3 million, after tax, primarily related to better than expected investment income and favorable DAC unlocking, which was partially offset by slightly negative hedge program results.

In the quarter, gross deposits reached $2.8 billion and net flows were $844 million, both fueled by individual variable annuity deposits of $2.4 billion, an increase of 31% over the second quarter of 2005. Lincoln's i4LIFE® Advantage, a retirement income solution, continued to excel in the market, as elections increased 69% over 2005 levels.

"Despite the highly competitive marketplace and many new features introduced this year, we continued to see momentum in our variable annuity results, driven by broad-based distribution and quality products," said Boscia.

Individual Life Insurance

Individual Life Insurance income from operations was $147.1 million, compared to $62.6 million in the second quarter of 2005. The year-over-year variance was primarily driven by the merger with Jefferson-Pilot, accounting for approximately 80% of the increase in earnings. The 2006 quarter was favorably impacted by approximately $10 million, after tax, largely related to better than expected investment returns and positive DAC unlocking.

Combined individual life insurance sales, reported as paid annualized premium, decreased 4% in the quarter as compared to the prior year period. Sequentially, the current quarter's combined life insurance sales gained 10%.

"A challenging market, together with success in curtailing IOLI sales, has pressured life insurance production," said Boscia. "Work has begun to integrate product portfolios and I'm encouraged by the momentum in the wirehouse channel where production has doubled since last year," Boscia added.

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Employer Markets

Retirement Products & Other
Retirement Products
Second quarter income from operations for Retirement Products was $54.3 million versus $45.3 million for the same period a year ago. The growth in earnings reflected $1.8 billion of account value expansion, driving an 11% increase in fee income and included approximately $2 million, after tax, of better than expected investment income.

Excluding approximately $130 million of assets transferred from the Jefferson Pilot 401k plan in the current quarter, gross deposits were $1 billion, consistent with the same period results in 2005. By product, deposits varied in the period with growth in Lincoln DirectorSM, a small-case group variable annuity product, offset by declines in Lincoln Alliance® Program, a large-case employer-sponsored retirement plan solution. Alliance deposits can vary on a quarter-to-quarter basis with the second quarter of 2005 being one of our strongest since introducing the product.

"As the market's reliance on employee funded plans increases, Lincoln is focused on solidifying its employer-sponsored strategy and is well-positioned to execute on a complimentary product portfolio and integrated distribution platform. Our product and distribution balance allowed us to match the $1 billion in deposits from the same period in 2005 despite Alliance's shortfall," said Boscia.

Executive Benefits & Other
Executive Benefits and Other income from operations was $16.2 million, compared to $4.3 million in the second quarter of 2005. Approximately 50% of the growth in earnings was related to the addition of the principally BOLI-based executive benefits business from the Jefferson-Pilot merger, with the remaining increase attributable to growth in the inforce COLI/BOLI business and improved mortality margin in the institutional pension business.

Benefit Partners

For the second quarter, Benefit Partners' income from operations was $37.0 million, up 74% over the prior year period, as reported by Jefferson-Pilot. The current quarter benefited by approximately $11 million, after tax, due to a better than expected non-medical loss ratio of 64.7%, driven by favorable long-term disability claims incidence and terminations.

In the quarter, annualized premiums for new business were $45.3 million, reflecting pricing discipline in a highly competitive market and a significant decline in the larger-case disability premiums.

"Consistent with industry results, we have seen significant weakness in the price-competitive large-case market while experiencing more modest declines in our core small case business, which we define as less than 200 lives," said Boscia.

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Investment Management

Investment Management reported income from operations of $12.0 million for the quarter, compared to an operating loss of $1.4 million for the same period a year ago. Year-over-year growth was primarily attributable to a 29% increase in third-party assets under management. Earnings were impacted by a number of small items, including adverse markets and the installation of a new fee structure in Delaware's management of the Lincoln general account assets. Together these items impacted the quarter's results by $3 million, after tax. The second quarter of 2005 included approximately $4 million of expenses associated with investment talent acquisitions.

In the quarter, total deposits reached $6.0 billion and net flows were slightly over $1.0 billion. Strong inflows in 2005 and 2006 have resulted in capacity constraints in the International ADR managed account product and two of the Large Cap Growth products, contributing to the reduced deposits in the quarter as compared to the record results in the year-ago period. "The second quarter of 2006 marked 8 consecutive quarters of net flows in excess of $1 billion, highlighting one of the more consistently strong growth records in the business," said Boscia.

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Lincoln UK

For the second quarter, the UK segment's income from operations was $9.9 million, which compares with $10.3 million in the second quarter of 2005.

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Lincoln Financial Media

Lincoln Financial Media income from operations was $11.9 million in the second quarter of 2006, down approximately $3 million as compared to the second quarter of 2005 as reported by Jefferson-Pilot. The quarter's results were primarily impacted by expenses associated with stock options and the amortization of merger-related intangible assets.

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Other Operations

The Other Operations line has undergone significant changes to include the corporate held assets of the former Jefferson-Pilot, income on unallocated capital, and branding expenses. Other Operations recorded an operating loss for the second quarter of $26.1 million, versus income from operations of $30.1 million in the second quarter of 2005. The current quarter included an $11 million, after tax, impact of merger-related expenses, partially offset by approximately $3 million, after tax, of better than expected investment income. The second quarter of 2005 included approximately $50 million, after-tax, of better than expected investment income and a reduction in a deferred tax asset valuation allowance. Interest expense for the period was $42 million, after-tax, an increase of $28 million over the same period in 2005, reflecting merger-related financing and the consolidation of existing Jefferson-Pilot debt.

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Capital and Share Repurchase

As of June 30, 2006, the book value of Lincoln National Corporation common stock, excluding accumulated other comprehensive loss, was $40.60, compared with $31.56 a year ago. Book value, including accumulated other comprehensive loss, was $40.48, compared with $36.87 a year ago. As previously announced, Lincoln repurchased approximately 8.1 million shares in the second quarter of 2006 as part of the accelerated share repurchase program (ASR) the company entered on April 3, 2006. On July 18, 2006, Lincoln completed the ASR and retired another 779,000 shares, bringing the total number of shares repurchased to 8.84 million shares.

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2006 Outlook

Merger Integration
Integration remains on track with realized pre-tax savings in the quarter of $18 million, yielding an annualized run-rate savings of approximately $75 million and on course for achieving the $90 million run-rate savings target in the first year after closing the merger. Lincoln maintains its three-year, annualized run-rate merger savings estimate of $180 million.

Individual Annuities
For the Individual Annuities segment, Lincoln anticipates income from operations, as reported in the second quarter of 2006, to benefit from solid variable flows, excluding the period's net favorable items and adjusting for the equity markets. In the second half of 2006, the company expects continued pressure on fixed flows.

Individual Life Insurance
Lincoln expects the Individual Life segment's income from operations to build modestly from results reported in the second quarter after factoring in the positive DAC unlocking and favorable investment results in the quarter. With competitive pressures and the company's current product-line integration efforts underway, Lincoln expects individual life sales for the second half of 2006 to modestly outperform the first two quarters of 2006.

Employer Markets
Acknowledging the newness of Employer Markets as a standalone segment, Lincoln expects improved variable deposits and flows throughout the second half of 2006 with more modest growth in earnings, as incremental asset growth may be offset by competitive pressures on crediting rate activity and its impact on spreads. The segment's earnings are also impacted by changes in the equity markets. Lincoln anticipates Benefit Partners to return to normal non-medical loss ratios in the range of 71-75% with modestly better sales results as the year continues.

Earnings Estimates
Lincoln expects income from operations for Investment Management to be in the mid-$50 million range, recognizing results are sensitive to the equity markets and acknowledging a slightly more than $1 million negative impact per quarter related to the new general account management fee structure.

For the UK segment, Lincoln continues to estimate 2006 earnings in the mid to upper $30 million range, assuming stable exchange rates.

For Lincoln Financial Media, the company expects 2006 income from operations to be in the upper $30 million range for the last nine months of the year.

Capital Management
During the remaining six months of 2006, Lincoln intends to repurchase $350-500 million of shares of our common stock. As part of this repurchase activity the company expects to execute another accelerated stock buyback program of approximately $350 million as soon as practicable.

This outlook contains estimates that are forward-looking, and Lincoln's actual experience in 2006 will almost certainly differ because of the many assumptions utilized in the outlook as well as a large number of other factors that will probably change, which may lead us to revise our estimates over time, such as changes that may result from our annual comprehensive review of the assumptions underlying DAC, VOBA, and DFEL that will occur during the third quarter. Please see the Forward-Looking Statements — Cautionary Language that follow for additional factors that may cause actual results to differ materially from our current expectations.

Lincoln National Corporation will discuss the company's second quarter results with investors in a conference call beginning at 11:00 a.m. (ET) on Wednesday, August 9, 2006. The company will also post its second quarter 2006 statistical supplement on its Web site, www.LFG.com.

Lincoln Financial Group is the marketing name for Lincoln National Corporation (NYSE:LNC) and its affiliates. With headquarters in Philadelphia, Lincoln Financial Group had consolidated assets of $167 billion as of June 30, 2006, and had annual consolidated revenues of $5.5 billion in 2005. The company offers: annuities; life, group life and disability insurance; 401(k) and 403(b) plans; savings plans; mutual funds; managed accounts; institutional investments; and comprehensive financial planning and advisory services. Company affiliates include: Lincoln Financial Distributors, which provides wholesaling and marketing support; Lincoln Financial Advisors and Jefferson Pilot Securities Corp., Lincoln Financial Retail Distribution, a national network of financial planners, agents, and registered representatives; Delaware Investments, the marketing name for Delaware Management Holdings, Inc. and its subsidiaries; Lincoln Financial Media, which owns and operates three television stations, 18 radio stations, and the Lincoln Financial Sports production and syndication business; and Lincoln UK. For more information please visit www.LFG.com.


Investor Contacts:
Jim Sjoreen
215 448-1420
E-mail: InvestorRelations@LFG.com

Media Contact:
Laurel O'Brien
215 255-1520
E-mail: MediaRelations@LFG.com


Financial data will be posted at www.LFG.com/investor


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Lincoln Financial Group is the marketing name for Lincoln National Corporation and insurance
company affiliates, including The Lincoln National Life Insurance Company, Fort Wayne, IN,
and in New York, Lincoln Life & Annuity Company of New York, Syracuse, NY. Variable products
distributed by broker/dealer-affiliate Lincoln Financial Distributors, Inc., Radnor, PA. Securities
and investment advisory services offered through other affiliates. Explore Lincoln.