NU Online News Service, Feb. 4, 11:27 a.m. – Lincoln National Corp., Fort Wayne, Ind., is reporting $169 million in net income for the fourth quarter of 2001 on $1.5 billion in revenue, compared with $149 million in net income on $1.8 billion in revenue for the fourth quarter of 2000.

Lincoln sells annuities, life insurance and investment management services, and it also has a large subsidiary in the United Kingdom, Lincoln UK. It once owned a major life reinsurance company, but it sold the unit to Swiss Reinsurance Company, Zurich, in late 2001.

Operating income from continuing operations fell to $689 million, from $719 million. Operating results exclude profits and losses from the reinsurance unit. They also exclude restructuring charges, charges related to accounting changes, and gains and losses on investments.

All major Lincoln units turned a net profit in the latest quarter, but some reported decreases in revenue and earnings as a result of the soft economy.

  • The annuity unit generated $54 million in net income on $468 million in revenue, down from $86 million in net income on $522 million in revenue. Variable annuity assets fell to $35 billion at the end of 2001, from $39 billion a year earlier, but only $25 million in cash flowed out of the contracts. Meanwhile, fixed annuity assets held steady at $17 billion, and $656 million in cash flowed in to the contracts.
  • The life unit generated $52 million in net income on $465 million in revenue, down from $71 million in net income on $480 million in revenue. The life unit recorded an unusual million gain connected with the Sept. 11, 2001, attacks. Lincoln set aside $51 million in reserves before taxes in the third quarter of 2001 to cover Sept. 11 death claims, but it reduced the Sept. 11 reserves by $13 million and put that amount back in the income column.
  • The investment management unit generated $4 million in net income on $107 million in revenue, down from $9 million in net income on $120 million in revenue.
  • Lincoln UK generated $23 million in net income on $63 million in revenue, compared with $16 million on $104 million in revenue.