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Lincoln Financial Group Reports Third Quarter Earnings

Maintaining Momentum and Strengthening Market Share

Philadelphia, PA, November 1, 2005 - Lincoln National Corporation (NYSE:LNC) today reported net income of $228.9 million, or $1.30 per diluted share, for the third quarter of 2005. By comparison, net income for the third quarter of 2004 was $199.7 million, or $1.12 per diluted share.

Income from operations for the third quarter of 2005 was $228.2 million, or $1.30 per diluted share, compared with $178.2 million, or $1.00 per diluted share, in the third quarter of 2004. Return on equity (ROE), based on income from operations, for the quarter, was 16.4%. 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 annuities, mutual funds, life insurance and other personal wealth accumulation products, reached $6.2 billion, up 40% over the third quarter of 2004. Lincoln reported consolidated retail net flows for the quarter of $2.8 billion, up 111% from the prior year quarter. Institutional deposits were $2.8 billion, up 8% over the third quarter of 2004.

Lincolns top tier retirement products, superior investment performance, and world-class distribution have produced trailing twelve-month retail and institutional deposits approaching $38 billion, contributing to a lift in total account balances of 30% over the prior year period, said Jon A. Boscia, chairman and chief executive officer of Lincoln Financial Group.

Lincoln completed its annual comprehensive review of prospective assumptions underlying the amortization of Deferred Acquisition Costs (DAC), Present Value of In-Force (PVIF), Deferred Front-End Loads (DFEL) and Guaranteed Minimum Death Benefit (GMDB) and Guaranteed Minimum Withdrawal Benefit (GMWB) reserves. The prospective review in the Life and Retirement segments contributed $36 million, after tax, or $0.20 per diluted share, to the periods operating earnings, resulting primarily from favorable lapse experience within our annuity product line.

Lincoln Retirement

Income from operations for the Retirement segment was $136.2 million in the third quarter of 2005 versus $110.2 million in the year ago period. The Retirement segments results for the third quarter of 2005 and 2004 were favorably impacted by prospective DAC unlocking adjustments of $33 million and $21 million, after tax, respectively.

In the quarter, gross deposits were $2.5 billion and net flows for the segment were $633 million. Despite the proliferation of variable annuity products and features in the marketplace, Lincolns variable annuity deposits reached record levels for the ninth consecutive quarter, fueling year-over-year earnings growth, said Boscia.

Life Insurance

Life insurance income from operations for the segment was $75.1 million, compared to $55.4 million in the third quarter of 2004. The Life segments current quarter results included favorable prospective DAC unlocking adjustments of $3 million, after tax. The prior year period was negatively impacted by approximately $15 million, after tax, of prospective DAC unlocking adjustments.

First year premiums from retail life insurance in the third quarter increased by 9% as compared to the prior year quarter, driven by improved universal life sales. Lincolns focus on product development, tailored wholesaling model and expanded distribution in strategic partnerships drove growth in the face of fierce competitive and industry pressures, said Boscia.

Investment Management

The Investment Management segment reported income from operations of $10.2 million in the third quarter, which compares to $12.5 million in the third quarter of 2004. The year ago quarter included $4.8 million of income from operations from Delaware International Advisors Ltd. (DIAL), which was sold in September, 2004.

Total deposits reached $6.3 billion, fueling net flows of $1.8 billion in the retail division and $1.6 billion in the institutional division. More than 75% of all funds are performing in the top half of their respective peer groups for the year-to-date, one-, three-, and five-year time periods. In a years time, Delaware has essentially recovered the loss of assets and most of the earnings associated with the sale of DIAL, reaching a record $72.5 billion in third party assets under management, said Boscia.

Lincoln UK

For the third quarter, the UK segments income from operations was $9.6 million for the quarter, versus $10.1 million in the same year ago period.

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