Lincoln National Corporation (NYSE:LNC) Q4 2018 Earnings Conference Call Transcript

Feb 07, 2019 • 10:00 am ET


Lincoln National Corporation (NYSE:LNC) Q4 2018 Earnings Conference Call Transcript


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Good morning and thank you for joining Lincoln Financial Group's Fourth Quarter 2018 Earnings Conference Call. At this time, all lines are in a listen-only mode. Later, we will announce the opportunity for questions and instructions will be given at that time. (Operator Instructions)

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

Christopher Giovanni

Thank you, Crystal. 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 and 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 and 10-K filed with the SEC.

We appreciate your participation today and invite you to visit Lincoln'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 adjusted income from operations and adjusted return on equity to their most capable GAAP measures. Before beginning, I would also like to remind you that we will be hosting our Investor Day on June 12th in New York City and we hope that many of you will join us in person. Presenting on today's call are Dennis Glass, President and Chief Executive Officer; and Randy Freitag, Chief Financial Officer and Head of Individual Life. After their prepared remarks, we will move to the question-and-answer portion of the call.

I will now turn things over to Dennis.

Dennis R. Glass

Thank you, Chris, and good morning, everyone. Continued execution on strategic priorities produced strong fourth quarter and full-year results with adjusted operating EPS up 9% compared to the prior year quarter and 13% excluding notable items for the full year. Adjusted ROE expanded another 40 basis points in 2018 to 13.5%. As you know, we have a multi-year track record of equally strong financial results and are confident we can sustain this performance over time given the strength of our franchise and effective execution of key management initiatives including maximizing our diverse product portfolio and distribution advantages to sustain profitable topline growth, driving expense savings from both our digital programs and synergies from the Liberty acquisition. With the Liberty transaction, we also successfully increased the scale of our Group business and the percentage of earnings from traditional insurance risks, maintained superior risk management, and leveraging the strength of our balance sheet and solid capital generation.

Let me touch on each of these. First, on profitable topline growth. Our powerful retail franchise benefited from management actions targeted towards expanding the product portfolio in attractive fast growing segments of the market and increasing