Lincoln National Corporation (NYSE:LNC) Q4 2015 Earnings Conference Call - Final Transcript

Feb 04, 2016 • 10:00 am ET


Lincoln National Corporation (NYSE:LNC) Q4 2015 Earnings Conference Call - Final Transcript


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Good morning and thank you for joining Lincoln Financial Group's Fourth Quarter 2015 Earnings Conference Call. [Operator Instructions]

At this time, I would like to turn the conference over to the Senior Vice President of Investor Relations, Chris Giovanni. Please go ahead, sir.

Chris Giovanni

Thank you, Michele. Good morning and welcome to Lincoln Financial's fourth quarter earnings call.

Before we begin, I have an important reminder. Any comments made during the call regarding future expectations, trends in market conditions, including comments about sales and deposits, expenses, income from operations, share repurchases and liquidity and capital resources, are forward-looking statements under the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from current expectations. These risks and uncertainties are described in the cautionary statement disclosures in our earnings release issued yesterday and our reports on Forms 8-K, 10-Q and 10-K filed with the SEC.

We appreciate your participation today and invite you to visit Lincoln Financial's website,, where you can find our press release and statistical supplement, which include a full reconciliation of the non-GAAP measures used in the call, including income from operations and return on equity, to their most comparable GAAP measures.

One final item, I want to remind you that Lincoln will hold an Investor Day in New York City on June 9. We hope that many of you will be able to join us there.

Presenting on today's call are Dennis Glass, President and Chief Executive Officer, and Randy Freitag, Chief Financial Officer. After their prepared remarks, we will move to the question-and-answer portion of the call.

With that, I'd like to turn things over to Dennis.

Dennis R. Glass

Thank you, Chris, and good morning everyone. Fourth quarter results once again demonstrated the resilience of Lincoln's franchise as we had a solid finish in what proved to be a very volatile year for capital markets. Our EPS, excluding notable items, increased 5% in the fourth quarter. Under the same measure, for the full year, our EPS also increased 5%, which resulted in a ROE of just over 12%.

As we begin 2016, we recognize that there are a number of questions around the impact of weak capital markets on our businesses, and Randy will discuss this later. However, it is important to note, we have positive momentum in key business drivers and our strategic initiatives are enabling us to execute on our growth, profitability and capital management initiatives.

Some examples of these include consolidated net flows of $1.4 billion in the quarter, nearly double the prior-year quarter, and up 9% for the full year. Individual life insurance sales increased 11% in the fourth quarter while total life insurance sales were up 8% in 2015. Our book value per share, excluding AOIC, is now over $52, a record, and up 6% from the prior year.

Balance sheet strength combined with solid capital generation enabled us to deploy another $250 million towards buybacks and dividends in the fourth quarter,