Edgar Filing: LINCOLN NATIONAL CORP

Lincoln Financial 2004 11K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 11-K

Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2004

THE LINCOLN NATIONAL LIFE INSURANCE COMPANY

AGENTS’ SAVINGS AND PROFIT-SHARING PLAN

(Full title of the Plan)

[Current Registration Number 33-04711]

Lincoln National Corporation

1500 Market Street, Suite 3900

Centre Square West Tower

Philadelphia, PA 19102

(Name of Issuer and principal executive office)

The Lincoln National Life Insurance Company

Agents’ Savings and Profit-Sharing Plan

Financial Statements

As of and for the years ended December 31, 2004, 2003, and 2002

with Report of Independent Registered Public Accounting Firm

The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan

Financial Statements and Supplemental Schedule


Years ended December 31, 2004, 2003, and 2002



Contents


Report of Independent Registered Public Accounting Firm	1


Audited Financial Statements:

Statements of Net Assets Available for Plan Benefits	2
Statements of Changes in Net Assets Available for Plan Benefits	3
Notes to Financial Statements	4


Supplemental Schedule

Schedule H, Line 4i—Schedule of Assets (Held At End of Year)	19

Report of Independent Registered Public Accounting Firm

Lincoln National Corporation Plan Administrator

Lincoln National Corporation

We have audited the accompanying statements of net assets available for benefits of The Lincoln National Life Insurance Company Agents’ Savings and Profit-Sharing Plan as of December 31, 2004 and 2003, and the related statements of changes in net assets available for benefits for each of the three years in the period ended December 31, 2004. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Plan’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan's internal control over financial reporting. Accordingly we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2004 and 2003, and the changes in its net assets available for benefits for each of the three years in the period ended December 31, 2004, in conformity with U.S. generally accepted accounting principles.

Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2004, is presented for purposes of additional analysis and is not a required part of the financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.

/s/ Ernst & Young LLP

Philadelphia, Pennsylvania

March 25, 2005

The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan

Statements of Net Assets Available for Plan Benefits


	December 31
	2004		2003
Assets
Investments:
Common stock---Lincoln National Corporation
(cost: 2004---$43,578,228; 2003---$43,488,868)	$	58,721,853	$	54,523,924
Wells Fargo Bank Short-Term Investment Fund		1,195,934		1,629,309
Pooled separate accounts---The Lincoln National
Life Insurance Company Separate Accounts
(cost: 2004---$72,213,058; 2003---$62,467,180)		99,529,718		81,529,299
Investment contracts---The Lincoln National
Life Insurance Company		17,598,686		15,955,401
Participant loans		4,151,804		4,218,026
Total Investments		181,197,995		157,855,959

Accrued interest receivable		60,484		1,328
Due from broker		-		50,997
Contributions receivable from participant deferrals		-		232,518
Contributions receivable from Employer companies		2,878,195		3,946,241
Total assets		184,136,674		162,087,043

Liabilities
Due to broker		26,629		-
Total liabilities		26,629		-
Net assets available for plan benefits	$	184,110,045	$	162,087,043

See accompanying notes.

The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan

Statements of Changes in Net Assets Available for Plan Benefits


	Year ended December 31
	2004			2003			2002
Investment income:
Cash dividends---Lincoln National Corporation	$	1,819,776		$	1,924,171		$	1,954,337
Interest:
The Lincoln National Life Insurance Company		748,249			638,100			677,376
Other		250,743			275,985			371,221
		998,992			914,085			1,048,597
		2,818,768			2,838,256			3,002,934
Net realized gain (loss) on sale
and distributions of investments:
Common stock---Lincoln National Corporation		4,070,037			1,563,498			4,050,730
Pooled separate accounts---
The Lincoln National Life Insurance
Company Separate Accounts		1,652,409			(1,040,533	)		(2,592,752	)
		5,722,446			522,965			1,457,978
Net unrealized appreciation
(depreciation) of investments		12,363,106			29,055,510			(41,836,079	)

Contributions:
Participants		7,452,877			6,280,189			6,068,580
Employer companies		5,199,336			6,056,534			2,258,564
		12,652,213			12,336,723			8,327,144

Transfers from (to) affiliated plans		3,588,680			285,051			(42,253	)
Distributions to participants		(14,994,001	)		(15,112,736	)		(13,242,739	)
Administrative expenses		(128,210	)		(103,179	)		(106,837	)

Net increase (decrease) in net
assets available for plan benefits		22,023,002			29,822,590			(42,439,852	)

Net assets available for plan benefits
at beginning of the year		162,087,043			132,264,453			174,704,305
Net assets available for plan benefits
at end of the year	$	184,110,045		$	162,087,043		$	132,264,453


See accompanying notes.

The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan


Notes to Financial Statements


1. Significant Accounting Policies

Investments Valuation and Income Recognition

The investment in Lincoln National Corporation ("LNC") common stock is valued at the last reported sales price per the national securities exchange on the last business day of the year.

The Wells Fargo Bank Short-Term Investment Fund is valued at cost, which approximates fair value.

The fair value of participation units in pooled separate accounts is based on quoted redemption value on the last business day of the year.

The investment contracts are valued at contract value as estimated by The Lincoln National Life Insurance Company ("Lincoln Life" or “Employer”). Contract value represents net contributions plus interest at the contract rate. The contracts are fully benefit responsive.

Participant loans are valued at their outstanding balances, which approximate fair value.

The cost of investments sold or distributed is determined using the specific identification method.

Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date.

Use of Estimates

Preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.


2. Description of the Plan

The Lincoln National Life Insurance Company Agents' Savings and Profit-Sharing Plan ("Plan") is a contributory, defined contribution plan which covers eligible agents of Lincoln Life and other participating agents who are employed by Lincoln Life. Any person who is a full-time agent of Lincoln Life is eligible to enroll in the Plan. A participant may make pre-tax contributions at a rate of at least 1%, but not more than 25% of eligible earnings, up to a maximum annual amount as determined under applicable law. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).

Participants direct the Plan to invest their contributions and Employer matching contributions in any combination of the investment options as described in Note 4. Prior to April 1, 2002, discretionary Employer contributions were required to be invested in the LNC Common Stock Fund. Effective April 1, 2002, participants could immediately direct the investment of the discretionary Employer contributions to other funds.

The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan

Notes to Financial Statements (continued)


2. Description of the Plan (continued)

Employer matching contributions to the Plan are provided in the form of a guaranteed match of $0.50 for each dollar a participant contributes, not to exceed 6% of eligible earnings, and a discretionary match of up to $1.00 for each dollar contributed, not to exceed 6% of eligible earnings. The amount of discretionary contribution varies according to whether LNC has met certain performance-based criteria as determined by the Compensation Committee of LNC's Board of Directors.

Participants’ contributions are fully vested. Employer contributions vest based upon years of service as defined in the Plan agreement as follows:

	Years of Service		Percent Vested
	1		0%
	2		50%
	3 or more		100%


The Employer has the right to discontinue contributions at any time and terminate the Plan. In the event of termination of the Plan, all amounts allocated to participants' accounts shall become vested.

The Plan allows loans to participants in amounts up to 50% of the vested account value to a maximum of $50,000 but not more than the total value of the participant's accounts, excluding Employer contributions that have not been in the Plan for two full years, less the highest outstanding loan balance in the previous twelve month period. Interest charged on new loans to participants is established monthly based upon the prime rate plus 1%. Loans may be repaid over any period selected by the participant up to a maximum repayment period of 5 years except that the maximum repayment period may be 20 years for the purchase of a principal residence.

Upon termination of service due to disability or retirement, a participant or beneficiary, in case of the participant’s death, may elect to receive either a lump-sum amount equal to the value of the participant's vested interest in his or her account, or annual installments over a five-year period. For termination of service due to other reasons, a participant may receive the value of the vested interest in his or her account as a lump-sum distribution. Vested account balances less than $5,000 are immediately distributable under the terms of the Plan, without the Participant’s consent, unless a timely election of rollover to an IRA or another qualified plan has been made.

Each participant's account is credited with the participant's contributions, contributions from the Employer and applicable investment earnings, and is charged with an allocation of administrative expenses and applicable investment losses. Forfeited non-vested amounts are used to reduce future Employer contributions.

The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan

Notes to Financial Statements (continued)

3. Investments

The following is a summary of assets held for investment:

December 31, 2004

December 31, 2003

Number of

Shares, Units

Fair

Shares, Units

Fair

or Par Value

Value

or Par Value

Value

Quoted Market Values

Common stock---LNC

1,257,966

58,721,853

1,350,605

54,523,924

Pooled separate account investment

contracts underwritten by Lincoln Life:

Core Equity Fund

956,272.451

13,498,359

957,140.858

12,133,579

Medium Capitalization Equity Fund

833,783.418

10,462,314

864,898.815

9,452,047

Short Term Fund

1,700,613.780

6,253,838

1,539,780.100

5,616,810

Government/ Corporate Bond Fund

291,777.749

2,545,761

281,100.440

2,311,461

Large Capitalization Equity Fund

1,201,311.739

10,014,376

1,242,408.641

10,116,809

Balanced Fund

261,627.576

2,002,419

221,520.392

1,555,405

High Yield Bond Fund

721,142.318

2,725,052

677,534.414

2,268,995

Small Capitalization Equity Fund

1,403,790.064

11,094,295

1,410,390.044

9,851,575

Value Equity Fund

2,501,312.327

6,108,705

2,115,372.390

4,636,896

International Equity Fund

1,067,960.074

9,292,320

932,529.673

6,704,888

Conservative Balanced Fund

232,576.568

491,876

221,093.519

434,050

Aggressive Balanced Fund

379,036.436

899,606

275,088.192

587,726

Delaware Growth and Income Fund

918,745.140

1,555,893

649,762.829

993,292

Scudder VIT Equity 500 Index Fund

4,168,208.538

4,189,465

3,871,959.676

3,529,291

Fidelity VIP Contrafund

4,383,002.727

5,478,314

2,917,953.594

3,166,855

Neuberger-Berman AMT Regency Fund

1,894,203.416

2,702,461

1,224,187.180

1,429,483

Social Awareness Fund

1,220,854.693

1,297,647

1,152,697.791

1,090,452

American Funds New Perspective

2,928,516.285

2,800,247

1,520,723.497

1,315,274

Neuberger-Berman Mid-Cap Growth Fund

1,880,412.759

2,011,666

1,506,601.361

1,387,881

Scudder VIT Small Cap Index Fund

1,878,239.710

2,924,044

1,559,466.488

2,064,734

Janus Aspen Growth Fund

31,596.547

298,351

38,684.997

351,608

Fidelity VIP Overseas Fund

72,217.004

882,709

49,003.881

530,188

Total pooled separate accounts

99,529,718

81,529,299

Contract Value

Investment contracts

underwritten by Lincoln Life

17,598,686

15,955,401

Estimated Value

Wells Fargo Bank short-term

investment fund

1,195,934

1,629,309

Participants loans

4,151,804

4,218,026

Total investments

181,197,995

157,855,959

* Investments that represent 5% or more of the fair value of net assets available for benefits as of the indicated date.

The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan

Notes to Financial Statements (continued)

3. Investments (continued)

Net realized gain (loss) on sale and distribution of investments is summarized as follows:

	Year ended December 31
	2004		2003			2002
Common stock
Proceeds from disposition of stock	$	11,566,749	$	6,636,009		$	9,787,848
Cost of stock disposed		7,496,712		5,072,511			5,737,118
Net realized gain on sale and distribution
of common stock	$	4,070,037	$	1,563,498		$	4,050,730

Pooled separate accounts
Proceeds from disposition of units	$	29,304,850	$	33,001,417		$	38,447,890
Cost of units disposed		27,652,441		34,041,950			41,040,642
Net realized loss on sale and distribution
of pooled separate accounts	$	1,652,409	$	(1,040,533	)	$	(2,592,752	)

The net change in unrealized appreciation or depreciation of investments in total and by investment classification as determined by quoted market price is summarized as follows:

	Year ended December 31
	2004		2003		2002
Fair value in excess of cost:
At beginning of the year	$	30,097,179	$	1,041,669	$	42,877,748
At end of the year		42,460,285		30,097,179		1,041,669
Change in net unrealized appreciation of investments	$	12,363,106	$	29,055,510	$	(41,836,079	)

Common stock	$	4,108,565	$	11,125,039	$	(30,005,422	)
Pooled separate accounts		8,254,541		17,930,471		(11,830,657	)
Change in net unrealized appreciation of investments	$	12,363,106	$	29,055,510	$	(41,836,079	)

The investment contracts (Guaranteed Fund) earned an average interest rate of approximately 4.0%, 4.0%, and 4.9% in 2004, 2003, and 2002 respectively. The credited interest rates for new contributions, which approximate the current market rate, were 4.0% and 5.0% at December 31, 2004 and 2003, respectively. The rate on new contributions is guaranteed through the three succeeding calendar year quarters. The credited interest rates for the remaining contract value balance was 4.0% at both December 31, 2004 and 2003 and were determined based upon the performance of Lincoln Life's general account. The credited interest rates can be changed quarterly. The minimum guaranteed rate is 3.5%. The guarantee is based on Lincoln Life's ability to meet its financial obligations from the general assets of Lincoln Life. The fair value of the investment contracts approximates contract value.

The Lincoln National Life Insurance Company

Agents' Savings and Profit-Sharing Plan

Notes to Financial Statements (continued)

4. Investment Options

The detail of the net assets available for plan benefits by investment option is as follows:

Investment Options
December 31, 2004	Total			1		2		3		4		5		6
Assets
Investments:
Common stock	$	58,721,853		$	58,721,853	$	-	$	-	$	-	$	-	$	-
Short-term investment fund		1,195,934			1,195,934		-		-		-		-		-
Pooled separate accounts		99,529,718			-		-		-		13,498,359		10,462,314		6,253,838
Investment contracts		17,598,686			-		-		17,598,686		-		-		-
Participant loans		4,151,804			-		-		-		-		-		-
Total investments		181,197,995			59,917,787		-		17,598,686		13,498,359		10,462,314		6,253,838

Accrued interest receivable		60,484			2,134		-		58,350		-		-		-
Due from (to) broker		(26,629	)		-		-		85		74,516		66,870		-
Contributions receivable from participant deferrals		-			-		-		-		-		-		-
Contributions receivable from Employer companies		2,878,195			2,878,195		-		-		-		-		-
Net assets available for plan benefits	$	184,110,045		$	62,798,116	$	-	$	17,657,121	$	13,572,875	$	10,529,184	$	6,253,838

Investment Options
December 31, 2004	7		8		9		10			11		12			13
Assets
Investments:
Common stock	$	-	$	-	$	-	$	-		$	-	$	-		$	-
Short-term investment fund		-		-		-		-			-		-			-
Pooled separate accounts		2,545,761		10,014,376		2,002,419		2,725,052			11,094,295		6,108,705			9,292,320
Investment contracts		-		-		-		-			-		-			-
Participant loans		-		-		-		-			-		-			-
Total investments		2,545,761		10,014,376		2,002,419		2,725,052			11,094,295		6,108,705			9,292,320

Accrued interest receivable		-		-		-		-			-		-			-
Due from (to) broker		34,989		18,155		4,545		(4,085	)		83,286		(26,624	)		57,800
Contributions receivable from participant deferrals		-		-		-		-			-		-			-
Contributions receivable from Employer companies		-		-		-		-			-		-			-
Net assets available for plan benefits	$	2,580,750	$	10,032,531	$	2,006,964	$	2,720,967		$	11,177,581	$	6,082,081		$	9,350,120

Investment Options
December 31, 2004		14		15		16		17			18			19			20
Assets
Investments:
Common stock	$	-	$	-	$	-	$	-		$	-		$	-		$	-
Short-term investment fund		-		-		-		-			-			-			-
Pooled separate accounts		491,876		899,606		1,555,893		4,189,465			5,478,314			2,702,461			1,297,647
Investment contracts		-		-		-		-			-			-			-
Participant loans		-		-		-		-			-			-			-
Total investments		491,876		899,606		1,555,893		4,189,465			5,478,314			2,702,461			1,297,647

Accrued interest receivable		-		-		-		-			-			-			-
Due from (to) broker		126		-		3,579		(22,688	)		(108,815	)		(128,944	)		91,085
Contributions receivable from participant deferrals		-		-		-		-			-			-			-
Contributions receivable from Employer companies		-		-		-		-			-			-			-
Net assets available for plan benefits	$	492,002	$	899,606	$	1,559,472	$	4,166,777		$	5,369,499		$	2,573,517		$	1,388,732

Investment Options
December 31, 2004		21			22			23			24		25		Loans
Assets
Investments:
Common stock	$	-		$	-		$	-		$	-	$	-	$	-
Short-term investment fund		-			-			-			-		-		-
Pooled separate accounts		2,800,247			2,011,666			2,924,044			298,351		882,709		-
Investment contracts		-			-			-			-		-		-
Participant loans		-			-			-			-		-		4,151,804
Total investments		2,800,247			2,011,666			2,924,044			298,351		882,709		4,151,804

Accrued interest receivable		-			-			-			-		-		-
Due from (to) broker		(63,077	)		(25,532	)		(95,448	)		13,081		467		-
Contributions receivable from participant deferrals		-			-			-			-		-		-
Contributions receivable from Employer companies		-			-			-			-		-		-
Net assets available for plan benefits	$	2,737,170		$	1,986,134		$	2,828,596		$	311,432	$	883,176	$	4,151,804

The Lincoln National Life Insurance Company

Agents' Savings and Profit-Sharing Plan

Notes to Financial Statements (continued)

4. Investment Options

The detail of the net assets available for plan benefits by investment option is as follows:

Investment Options
December 31, 2003	Total		1		2		3			4			5		6
Assets
Investments:
Common stock	$	54,523,924	$	54,523,924	$	-	$	-		$	-		$	-	$	-
Short-term investment fund		1,629,309		1,629,309		-		-			-			-		-
Pooled separate accounts		81,529,299		-		-		-			12,133,579			9,452,047		5,616,810
Investment contracts		15,955,401		-		-		15,955,401			-			-		-
Participant loans		4,218,026		-		-		-			-			-		-
Total investments		157,855,959		56,153,233		-		15,955,401			12,133,579			9,452,047		5,616,810

Accrued interest receivable		1,328		1,328		-		-			-			-		-
Due from (to) broker		50,997		-		-		(7,346	)		(31,698	)		22,419		(15,628	)
Contributions receivable from participant deferrals		232,518		232,518		-		-			-			-		-
Contributions receivable from Employer companies		3,946,241		3,946,241		-		-			-			-		-
Net assets available for plan benefits	$	162,087,043	$	60,333,320	$	-	$	15,948,055		$	12,101,881		$	9,474,466	$	5,601,182

Investment Options
December 31, 2003	7			8			9			10			11		12		13
Assets
Investments:
Common stock	$	-		$	-		$	-		$	-		$	-	$	-	$	-
Short-term investment fund		-			-			-			-			-		-		-
Pooled separate accounts		2,311,461			10,116,809			1,555,405			2,268,995			9,851,575		4,636,896		6,704,888
Investment contracts		-			-			-			-			-		-		-
Participant loans		-			-			-			-			-		-		-
Total investments		2,311,461			10,116,809			1,555,405			2,268,995			9,851,575		4,636,896		6,704,888

Accrued interest receivable		-			-			-			-			-		-		-
Due from (to) broker		(3,469	)		(29,148	)		(5,955	)		(11,070	)		56,547		35,557		1,638
Contributions receivable from participant deferrals		-			-			-			-			-		-		-
Contributions receivable from Employer companies		-			-			-			-			-		-		-
Net assets available for plan benefits	$	2,307,992		$	10,087,661		$	1,549,450		$	2,257,925		$	9,908,122	$	4,672,453	$	6,706,526

Investment Options
December 31, 2003	14			15			16			17			18			19		20
Assets
Investments:
Common stock	$	-		$	-		$	-		$	-		$	-		$	-	$	-
Short-term investment fund		-			-			-			-			-			-		-
Pooled separate accounts		434,050			587,726			993,292			3,529,291			3,166,855			1,429,483		1,090,452
Investment contracts		-			-			-			-			-			-		-
Participant loans		-			-			-			-			-			-		-
Total investments		434,050			587,726			993,292			3,529,291			3,166,855			1,429,483		1,090,452

Accrued interest receivable		-			-			-			-			-			-		-
Due from (to) broker		(242	)		(3,040	)		(3,281	)		(2,717	)		(7,609	)		280		(22,441	)
Contributions receivable from participant deferrals		-			-			-			-			-			-		-
Contributions receivable from Employer companies		-			-			-			-			-			-		-
Net assets available for plan benefits	$	433,808		$	584,686		$	990,011		$	3,526,574		$	3,159,246		$	1,429,763	$	1,068,011

Investment Options
December 31, 2003	21		22		23			24		25			Loans
Assets
Investments:
Common stock	$	-	$	-	$	-		$	-	$	-		$	-
Short-term investment fund		-		-		-			-		-			-
Pooled separate accounts		1,315,274		1,387,881		2,064,734			351,608		530,188			-
Investment contracts		-		-		-			-		-			-
Participant loans		-		-		-			-		-			4,218,026
Total investments		1,315,274		1,387,881		2,064,734			351,608		530,188			4,218,026

Accrued interest receivable		-		-		-			-		-			-
Due from (to) broker		27,695		54,112		(2,623	)		-		(984	)		-
Contributions receivable from participant deferrals		-		-		-			-		-			-
Contributions receivable from Employer companies		-		-		-			-		-			-
Net assets available for plan benefits	$	1,342,969	$	1,441,993	$	2,062,111		$	351,608	$	529,204		$	4,218,026

The Lincoln National Life Insurance Company

Agents' Savings and Profit-Sharing Plan

Notes to Financial Statements (continued)

4. Investment Options (continued)

The detail of the changes in net assets available for plan benefits by investment option is as follows:

Investment Options

December 31, 2004

Total

Investment income:

Cash dividends

1,819,776

Interest

998,992

24,854

723,395

Total investment income

2,818,768

1,844,630

723,395

Net realized gain (loss) on sale and

distribution of investments:

Common stock

4,070,037

Pooled separate accounts

1,652,409

203,967

(3,539

)

51,005

Total net realized gains (losses)

5,722,446

4,070,037

203,967

(3,539

)

51,005

Net unrealized appreciation

(depreciation) of investments

12,363,106

4,108,565

1,184,989

1,379,549

1,288

Contributions:

Participant

7,452,877

748,914

248,869

691,806

602,308

244,033

Employer companies

5,199,336

3,161,387

85,062

223,592

200,559

64,686

Total contributions

12,652,213

3,910,301

333,931

915,398

802,867

308,719

Transfers to affiliated plans

3,588,680

614,533

871,935

296,183

276,040

141,047

Distributions to participants

(14,994,001

)

(5,348,906

)

(1,809,653

)

(780,660

)

(705,912

)

(1,789,266

)

Administrative expenses

(128,210

)

(46,539

)

(12,364

)

(9,549

)

(7,507

)

(4,818

)

Net transfers

(6,687,825

)

1,601,822

(339,334

)

(686,780

)

1,944,681

Net increase (decrease) in net

assets available for plan benefits

22,023,002

2,464,796

1,709,066

1,470,994

1,054,718

652,656

Net assets available for plan

benefits at beginning of the year

162,087,043

60,333,320

15,948,055

12,101,881

9,474,466

5,601,182

Net assets available for plan

benefits at end of the year

184,110,045

62,798,116

17,657,121

13,572,875

10,529,184

6,253,838

Investment Options

December 31, 2004

Investment income:

Cash dividends

Interest

Total investment income

Net realized gain (loss) on sale and

distribution of investments:

Common stock

Pooled separate accounts

118,385

(188,688

)

55,178

136,428

305,375

89,484

272,710

Total net realized gains (losses)

118,385

(188,688

)

55,178

136,428

305,375

89,484

272,710

Net unrealized appreciation

(depreciation) of investments

34,359

431,322

108,514

134,775

1,004,627

502,684

1,267,577

Contributions:

Participant

150,522

805,344

173,788

185,635

741,598

497,130

591,062

Employer companies

40,739

261,466

53,278

55,264

227,043

150,881

182,480

Total contributions

191,261

1,066,810

227,066

240,899

968,641

648,011

773,542

Transfers to affiliated plans

76,543

155,178

1,501

19,033

225,840

158,488

116,473

Distributions to participants

(289,392

)

(777,277

)

(183,498

)

(73,459

)

(717,672

)

(413,380

)

(411,164

)

Administrative expenses

(1,914

)

(7,967

)

(1,428

)

(1,769

)

(8,185

)

(4,158

)

(5,949

)

Net transfers

143,516

(734,508

)

250,181

7,135

(509,167

)

428,499

630,405

Net increase (decrease) in net

assets available for plan benefits

272,758

(55,130

)

457,514

463,042

1,269,459

1,409,628

2,643,594

Net assets available for plan

benefits at beginning of the year

2,307,992

10,087,661

1,549,450

2,257,925

9,908,122

4,672,453

6,706,526

Net assets available for plan

benefits at end of the year

2,580,750

10,032,531

2,006,964

2,720,967

11,177,581

6,082,081

9,350,120

The Lincoln National Life Insurance Company

Agents' Savings and Profit-Sharing Plan

Notes to Financial Statements (continued)

4. Investment Options (continued)

The detail of the changes in net assets available for plan benefits by investment option is as follows:

Investment Options

December 31, 2004

Investment income:

Cash dividends

Interest

Total investment income

Net realized gain (loss) on sale and

distribution of investments:

Common stock

Pooled separate accounts

18,830

15,861

33,241

96,378

84,290

100,306

70,301

Total net realized gains (losses)

18,830

15,861

33,241

96,378

84,290

100,306

70,301

Net unrealized appreciation

(depreciation) of investments

16,777

67,620

113,392

295,717

537,009

315,620

77,919

Contributions:

Participant

36,869

122,416

160,835

229,911

352,392

150,485

63,352

Employer companies

11,905

31,944

45,509

66,604

99,622

42,459

17,056

Total contributions

48,774

154,360

206,344

296,515

452,014

192,944

80,408

Transfers to affiliated plans

33,405

12,599

234,516

39,198

23,085

5,632

Distributions to participants

(14,303

)

(95,828

)

(38,684

)

(123,031

)

(349,783

)

(140,610

)

(35,899

)

Administrative expenses

(367

)

(627

)

(981

)

(2,968

)

(3,091

)

(1,472

)

(934

)

Net transfers

(11,517

)

140,129

243,550

(156,924

)

1,450,616

653,881

123,294

Net increase (decrease) in net

assets available for plan benefits

58,194

314,920

569,461

640,203

2,210,253

1,143,754

320,721

Net assets available for plan

benefits at beginning of the year

433,808

584,686

990,011

3,526,574

3,159,246

1,429,763

1,068,011

Net assets available for plan

benefits at end of the year

492,002

899,606

1,559,472

4,166,777

5,369,499

2,573,517

1,388,732

Investment Options

December 31, 2004

Loans

Investment income:

Cash dividends

Interest

250,743

Total investment income

250,743

Net realized gain (loss) on sale and

distribution of investments:

Common stock

Pooled separate accounts

(72,288

)

29,076

147,930

39,823

48,356

Total net realized gains (losses)

(72,288

)

29,076

147,930

39,823

48,356

Net unrealized appreciation

(depreciation) of investments

305,514

235,544

223,675

(21,832

)

37,902

Contributions:

Participant

136,142

200,906

212,549

27,387

78,624

Employer companies

40,541

55,631

56,071

6,768

18,789

Total contributions

176,683

256,537

268,620

34,155

97,413

Transfers to affiliated plans

98,166

21,996

89,182

53,567

24,540

Distributions to participants

(224,214

)

(172,305

)

(136,161

)

(23,429

)

(22,550

)

(316,965

)

Administrative expenses

(1,312

)

(1,347

)

(2,011

)

(346

)

(607

)

Net transfers

1,111,652

174,640

175,250

(122,114

)

168,918

Net increase (decrease) in net

assets available for plan benefits

1,394,201

544,141

766,485

(40,176

)

353,972

(66,222

)

Net assets available for plan

benefits at beginning of the year

1,342,969

1,441,993

2,062,111

351,608

529,204

4,218,026

Net assets available for plan

benefits at end of the year

2,737,170

1,986,134

2,828,596

311,432

883,176

4,151,804

The Lincoln National Life Insurance Company

Agents' Savings and Profit-Sharing Plan

Notes to Financial Statements (continued)

4. Investment Options (continued)

The detail of the changes in net assets available for plan benefits by investment option is as follows:

Investment Options
December 31, 2003	Total			1			2		3			4			5			6
Investment income:
Cash dividends	$	1,924,171		$	1,924,171		$	-	$	-		$	-		$	-		$	-
Interest		914,085			15,311			-		622,789			-			-			-
Total investment income		2,838,256			1,939,482			-		622,789			-			-			-
Net realized gain (loss) on sale and
distribution of investments:
Common stock		1,563,498			1,563,498			-		-			-			-			-
Pooled separate accounts		(1,040,533	)		-			-		-			(86,860	)		(324,703	)		99,353
Total net realized gains (losses)		522,965			1,563,498			-		-			(86,860	)		(324,703	)		99,353
Net unrealized appreciation
(depreciation) of investments		29,055,510			11,125,039			-		-			2,867,561			2,607,152			(38,827	)
Contributions:
Participant		6,280,189			954,053			-		229,346			618,903			547,801			202,458
Employer companies		6,056,534			4,300,682			-		81,192			210,048			190,321			62,817
Total contributions		12,336,723			5,254,735			-		310,538			828,951			738,122			265,275
Transfers to affiliated plans		285,051			72,815			-		(225,925	)		(27,431	)		72,098			(85,843	)
Distributions to participants		(15,112,736	)		(3,938,718	)		-		(1,674,653	)		(690,935	)		(672,902	)		(1,906,570	)
Administrative expenses		(103,179	)		(37,385	)		-		(11,496	)		(7,744	)		(5,938	)		(6,154	)
Net transfers		-			(4,787,547	)		-		1,548,319			(89,927	)		360,326			(1,361,027	)
Net increase (decrease) in net
assets available for plan benefits		29,822,590			11,191,919			-		569,572			2,793,615			2,774,155			(3,033,793	)
Net assets available for plan
benefits at beginning of the year		132,264,453			49,141,401			-		15,378,483			9,308,266			6,700,311			8,634,975
Net assets available for plan
benefits at end of the year	$	162,087,043		$	60,333,320		$	-	$	15,948,055		$	12,101,881		$	9,474,466		$	5,601,182

Investment Options

December 31, 2003

Investment income:

Cash dividends

Interest

Total investment income

Net realized gain (loss) on sale and

distribution of investments:

Common stock

Pooled separate accounts

186,429

(505,088

)

12,908

212,775

(144,779

)

(102,761

)

22,254

Total net realized gains (losses)

186,429

(505,088

)

12,908

212,775

(144,779

)

(102,761

)

22,254

Net unrealized appreciation

(depreciation) of investments

27,141

2,489,266

251,242

291,368

2,699,755

1,078,364

1,851,824

Contributions:

Participant

181,394

726,921

145,412

133,667

619,840

429,409

396,354

Employer companies

44,803

247,494

49,839

44,696

203,487

140,182

139,205

Total contributions

226,197

974,415

195,251

178,363

823,327

569,591

535,559

Transfers to affiliated plans

16,781

49,433

54,428

86,123

141,515

(1,140

)

55,930

Distributions to participants

(1,060,535

)

(1,053,523

)

(264,923

)

(394,941

)

(904,542

)

(410,144

)

(570,470

)

Administrative expenses

(2,038

)

(7,124

)

(1,140

)

(1,480

)

(6,280

)

(3,027

)

(3,912

)

Net transfers

374,601

(467,065

)

38,391

569,299

(327,707

)

(79,799

)

512,117

Net increase (decrease) in net

assets available for plan benefits

(231,424

)

1,480,314

286,157

941,507

2,281,289

1,051,084

2,403,302

Net assets available for plan

benefits at beginning of the year

2,539,416

8,607,347

1,263,293

1,316,418

7,626,833

3,621,369

4,303,224

Net assets available for plan

benefits at end of the year

2,307,992

10,087,661

1,549,450

2,257,925

9,908,122

4,672,453

6,706,526

The Lincoln National Life Insurance Company

Agents' Savings and Profit-Sharing Plan

Notes to Financial Statements (continued)

4. Investment Options (continued)

The detail of the changes in net assets available for plan benefits by investment option is as follows:

Investment Options

December 31, 2003

Investment income:

Cash dividends

Interest

Total investment income

Net realized gain (loss) on sale and

distribution of investments:

Common stock

Pooled separate accounts

17,868

7,119

(6,874

)

(54,667

)

6,812

(171

)

(6,860

)

Total net realized gains (losses)

17,868

7,119

(6,874

)

(54,667

)

6,812

(171

)

(6,860

)

Net unrealized appreciation

(depreciation) of investments

30,107

94,774

187,710

735,010

618,239

351,190

169,673

Contributions:

Participant

36,302

68,137

75,269

138,688

196,536

102,623

33,513

Employer companies

13,290

16,468

24,366

45,675

65,512

34,251

10,930

Total contributions

49,592

84,605

99,635

184,363

262,048

136,874

44,443

Transfers to affiliated plans

(2,816

)

28,712

(1,152

)

44,307

11,882

5,252

Distributions to participants

(126,688

)

(52,635

)

(29,174

)

(265,152

)

(206,183

)

(116,579

)

(31,733

)

Administrative expenses

(360

)

(376

)

(536

)

(1,818

)

(1,716

)

(853

)

(411

)

Net transfers

84,261

105,961

248,225

1,023,800

659,588

58,024

555,838

Net increase (decrease) in net

assets available for plan benefits

51,964

268,160

497,834

1,665,843

1,338,788

440,367

736,202

Net assets available for plan

benefits at beginning of the year

381,844

316,526

492,177

1,860,731

1,820,458

989,396

331,809

Net assets available for plan

benefits at end of the year

433,808

584,686

990,011

3,526,574

3,159,246

1,429,763

1,068,011

Investment Options
December 31, 2003	21			22			23			24			25			Loans
Investment income:
Cash dividends	$	-		$	-		$	-		$	-		$	-		$	-
Interest		-			-			-			-			-			275,985
Total investment income		-			-			-			-			-			275,985
Net realized gain (loss) on sale and
distribution of investments:
Common stock		-			-			-			-			-			-
Pooled separate accounts		(340,337	)		(91,840	)		35,349			5,706			17,834			-
Total net realized gains (losses)		(340,337	)		(91,840	)		35,349			5,706			17,834			-
Net unrealized appreciation
(depreciation) of investments		648,753			386,369			422,749			62,822			98,229			-
Contributions:
Participant		137,349			157,349			112,935			15,485			20,445			-
Employer companies		40,651			50,064			29,995			4,594			5,972			-
Total contributions		178,000			207,413			142,930			20,079			26,417			-
Transfers to affiliated plans		(4,398	)		(262	)		3,783			-			(9,041	)		-
Distributions to participants		(236,552	)		(140,046	)		(136,746	)		(19,714	)		(1,298	)		(207,380	)
Administrative expenses		(1,295	)		(930	)		(846	)		(145	)		(175	)		-
Net transfers		(432,214	)		11,331			915,975			189,490			289,740			-
Net increase (decrease) in net
assets available for plan benefits		(188,043	)		372,035			1,383,194			258,238			421,706			68,605
Net assets available for plan
benefits at beginning of the year		1,531,012			1,069,958			678,917			93,370			107,498			4,149,421
Net assets available for plan
benefits at end of the year	$	1,342,969		$	1,441,993		$	2,062,111		$	351,608		$	529,204		$	4,218,026

The Lincoln National Life Insurance Company

Agents' Savings and Profit-Sharing Plan

Notes to Financial Statements (continued)

4. Investment Options (continued)

The detail of the changes in net assets available for plan benefits by investment option is as follows:

Investment Options
December 31, 2002	Total			1			2			3			4			5			6
Investment income:
Cash dividends	$	1,954,337		$	1,954,337		$	-		$	-		$	-		$	-		$	-
Interest		1,048,597			32,665			-			644,711			-			-			-
Total investment income		3,002,934			1,987,002			-			644,711			-			-			-
Net realized gain (loss) on sale and
distribution of investments:
Common stock		4,050,730			4,050,730			-			-			-			-			-
Pooled separate accounts		(2,592,752	)		-			100,813			-			(253,270	)		(472,407	)		197,620
Total net realized gains (losses)		1,457,978			4,050,730			100,813			-			(253,270	)		(472,407	)		197,620
Net unrealized appreciation
(depreciation) of investments		(41,836,079	)		(30,005,422	)		(100,813	)		-			(2,472,769	)		(2,515,825	)		(65,128	)
Contributions:
Participant		6,068,580			1,164,032			-			139,184			590,732			572,190			259,361
Employer companies		2,258,564			621,512			-			50,303			202,712			194,473			87,963
Total contributions		8,327,144			1,785,544			-			189,487			793,444			766,663			347,324
Transfers to affiliated plans		(42,253	)		(174,166	)		-			(8,922	)		46,286			4,439			12,428
Distributions to participants		(13,242,739	)		(5,986,944	)		-			(947,254	)		(660,430	)		(502,205	)		(1,737,364	)
Administrative expenses		(106,837	)		(46,821	)		-			(9,052	)		(8,097	)		(6,212	)		(6,356	)
Net transfers		-			(5,043,615	)		-			2,622,171			(1,073,916	)		(536,973	)		757,960
Net increase (decrease) in net
assets available for plan benefits		(42,439,852	)		(33,433,692	)		-			2,491,141			(3,628,752	)		(3,262,520	)		(493,516	)
Net assets available for plan
benefits at beginning of the year		174,704,305			82,575,093			-			12,887,342			12,937,018			9,962,831			9,128,491
Net assets available for plan
benefits at end of the year	$	132,264,453		$	49,141,401		$	-		$	15,378,483		$	9,308,266		$	6,700,311		$	8,634,975

Investment Options
December 31, 2002	7			8			9			10			11			12			13
Investment income:
Cash dividends	$	-		$	-		$	-		$	-		$	-		$	-		$	-
Interest		-			-			-			-			-			-			-
Total investment income		-			-			-			-			-			-			-
Net realized gain (loss) on sale and
distribution of investments:
Common stock		-			-			-			-			-			-			-
Pooled separate accounts		128,462			(647,710	)		(12,538	)		(12,251	)		(400,749	)		(238,697	)		(28,967	)
Total net realized gains (losses)		128,462			(647,710	)		(12,538	)		(12,251	)		(400,749	)		(238,697	)		(28,967	)
Net unrealized appreciation
(depreciation) of investments		61,596			(2,980,705	)		(168,217	)		36,874			(1,343,817	)		(548,135	)		(419,400	)
Contributions:
Participant		83,869			786,073			111,369			108,073			633,221			397,522			379,964
Employer companies		27,224			252,249			39,860			40,432			197,214			132,360			130,153
Total contributions		111,093			1,038,322			151,229			148,505			830,435			529,882			510,117
Transfers to affiliated plans		52,250			(18,100	)		-			(24,805	)		(4,158	)		(4,536	)		1,818
Distributions to participants		(176,883	)		(700,483	)		(94,582	)		(167,138	)		(579,365	)		(173,951	)		(219,333	)
Administrative expenses		(1,551	)		(7,859	)		(1,077	)		(922	)		(6,127	)		(2,866	)		(3,233	)
Net transfers		697,096			(233,414	)		(80,954	)		95,953			(23,549	)		128,204			52,932
Net increase (decrease) in net
assets available for plan benefits		872,063			(3,549,949	)		(206,139	)		76,216			(1,527,330	)		(310,099	)		(106,066	)
Net assets available for plan
benefits at beginning of the year		1,667,353			12,157,296			1,469,432			1,240,202			9,154,163			3,931,468			4,409,290
Net assets available for plan
benefits at end of the year	$	2,539,416		$	8,607,347		$	1,263,293		$	1,316,418		$	7,626,833		$	3,621,369		$	4,303,224

The Lincoln National Life Insurance Company

Agents' Savings and Profit-Sharing Plan

Notes to Financial Statements (continued)

4. Investment Options (continued)

The detail of the changes in net assets available for plan benefits by investment option is as follows:

Investment Options
December 31, 2002	14			15			16			17			18			19			20
Investment income:
Cash dividends	$	-		$	-		$	-		$	-		$	-		$	-		$	-
Interest		-			-			-			-			-			-			-
Total investment income		-			-			-			-			-			-
Net realized gain (loss) on sale and
distribution of investments:
Common stock		-			-			-			-			-			-			-
Pooled separate accounts		(1,205	)		(16,947	)		(46,485	)		(82,669	)		(42,364	)		(57,377	)		(22,034	)
Total net realized gains (losses)		(1,205	)		(16,947	)		(46,485	)		(82,669	)		(42,364	)		(57,377	)		(22,034	)
Net unrealized appreciation
(depreciation) of investments		189			(15,289	)		(74,029	)		(452,930	)		(113,994	)		(75,724	)		(65,549	)
Contributions:
Participant		23,988			40,194			64,486			109,092			125,242			88,624			24,539
Employer companies		8,248			12,974			22,387			35,487			42,174			32,030			8,403
Total contributions		32,236			53,168			86,873			144,579			167,416			120,654			32,942
Transfers to affiliated plans		-			-			-			9,512			3,823			-			-
Distributions to participants		(364	)		(15,507	)		(26,195	)		(18,360	)		(47,672	)		(34,315	)		5,902
Administrative expenses		(174	)		(234	)		(332	)		(1,296	)		(1,088	)		(764	)		(194	)
Net transfers		205,824			(54,252	)		108,748			547,174			617,524			100,712			168,042
Net increase (decrease) in net
assets available for plan benefits		236,506			(49,061	)		48,580			146,010			583,645			53,186			119,109
Net assets available for plan
benefits at beginning of the year		145,338			365,587			443,597			1,714,721			1,236,813			936,210			212,700
Net assets available for plan
benefits at end of the year	$	381,844		$	316,526		$	492,177		$	1,860,731		$	1,820,458		$	989,396		$	331,809

Investment Options
December 31, 2002	21			22			23			24			25			Loans
Investment income:
Cash dividends	$	-		$	-		$	-		$	-		$	-		$	-
Interest		-			-			-			-			-			371,221
Total investment income		-			-			-			-			-			371,221
Net realized gain (loss) on sale and
distribution of investments:
Common stock		-			-			-			-			-			-
Pooled separate accounts		(215,497	)		(421,707	)		(27,372	)		(12,174	)		(7,227	)		-
Total net realized gains (losses)		(215,497	)		(421,707	)		(27,372	)		(12,174	)		(7,227	)		-
Net unrealized appreciation
(depreciation) of investments		(278,665	)		(66,601	)		(157,741	)		(5,914	)		(8,071	)		-
Contributions:
Participant		160,898			135,227			58,510			5,619			6,571			-
Employer companies		52,320			46,589			18,013			1,677			1,807			-
Total contributions		213,218			181,816			76,523			7,296			8,378			-
Transfers to affiliated plans		20,255			20,416			21,207			-			-			-
Distributions to participants		(17,714	)		(38,899	)		(14,053	)		247			1,010			(1,090,887	)
Administrative expenses		(1,208	)		(873	)		(441	)		(26	)		(34	)		-
Net transfers		98,548			306,592			321,810			103,941			113,442			-
Net increase (decrease) in net
assets available for plan benefits		(181,063	)		(19,256	)		219,933			93,370			107,498			(719,666	)
Net assets available for plan
benefits at beginning of the year		1,712,075			1,089,214			458,984			-			-			4,869,087
Net assets available for plan
benefits at end of the year	$	1,531,012		$	1,069,958		$	678,917		$	93,370		$	107,498		$	4,149,421

The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan

Notes to Financial Statements (continued)

4. Investment Options (continued)

Information with respect to investment options is as follows:


Option	Description of Investment Option

1	LNC Common Stock Fund, which invests primarily in the stock of LNC. Some funds may be invested in the Wells Fargo Bank Short-Term Investment Fund until the LNC stock can be purchased.

2	Guaranteed Fund, which invests primarily in high grade corporate securities. The account’s balances are backed by the general assets of the Lincoln National Life Insurance Company.

3	Core Equity Fund (SA#11), which invests primarily in large capitalization stocks of large-sized U.S. companies.

4	Medium Capitalization Equity Fund (SA#17), which invests primarily in medium-sized companies that have strong financial characteristics.

5	Short-Term Fund (SA#14), which invests in high quality money market securities that include commercial paper, bankers acceptances, certificates of deposit, loan participation and short-term U.S. government debt.

6	Government/Corporate Bond Fund (SA#12), which invests primarily in U.S. government bonds, high-quality corporate bonds, and foreign bonds.

7	Large Capitalization Equity Fund (SA#23), which invests primarily in large-sized companies whose stock has the potential for a significant appreciation in value within 18 months from the date of purchase.

8	Balanced Fund (SA#21), which invests in three different asset classes: stocks, bonds and money market instruments, which provides growth through the stock portion and reduced risk through the bond and money market portion.

9	High Yield Bond Fund (SA#20), which invests primarily in below-investment-grade bonds, providing higher rates of return to compensate for higher risk.

10	Small Capitalization Equity Fund (SA#24), which invests primarily in the stock of new, rapid growth companies.

11	Value Equity Fund (SA#28), which invests primarily in large capitalization stocks of undervalued companies that are industry leaders.

The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan

Notes to Financial Statements (continued)

4. Investment Options (continued)

12	International Equity Fund (SA#22), which invests primarily in dividend paying stocks of non-U.S.companies.

13	Conservative Balanced Account (SA#30), which invests in three different asset classes with a bias towards fixed-income securities and some equity exposure.

14	Aggressive Balanced Fund (SA#32), which invests in three different asset classes with a bias towards equities.

15	Delaware Growth and Income Fund (SA#61), which invests in large-capitalization/value securities of companies with high dividend yields.

16	Scudder VIT Equity 500 Index Fund (SA#27), which invests in large cap/blend equities in approximately the same proportions as represented in the S&P 500.

17	Fidelity VIP Contrafund (SA#35), which seeks diversified capital appreciation by investing in shares of companies that may be undervalued.

18	Neuberger-Berman AMT Regency Fund (SA#38), which seeks capital growth by investing in stocks of well managed companies whose prices may be undervalued.

19	Social Awareness Fund (SA#33), which seeks capital growth and social responsibility by investing in stocks of companies that are committed to human needs.

20	American Funds New Perspective Fund (SA#34), which seeks to provide long-term growth of capital through investments in blue chip companies in the United States and abroad, emphasizing multinational or global companies and focusing on opportunities generated by changes in global trade patterns and economic and political relationships.

21	Neuberger-Berman Mid-Cap Growth Fund (SA#37), which seeks growth of capital by investing primarily in stocks of mid-cap companies with potential to offer attractive long-term returns.

22	Scudder VIT Small Cap Index Fund (SA #36), which invests in a statistically selected diversified sample of the 2000 stocks included in the Russell 2000.

23	Janus Aspen Growth Fund (SA#70), which seeks long-term growth of capital in a manner consistent with the preservation of capital by investing primarily in common stock selected for their growth potential.

24	Fidelity VIP Overseas Fund (SA#59), which seeks long-term growth of capital by investing mainly in foreign securities.

The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan

Notes to Financial Statements (continued)


4. Investment Options (continued)

The information as to the number of participants selecting each investment option is not readily available. During 2002, the Plan began offering investment options 24 and 25. Investment options 4 through 25 are invested in pooled separate accounts of Lincoln Life through a group annuity contract issued by Lincoln Life.


5. Income Tax Status

The Plan has received a determination letter from the Internal Revenue Service dated February 9, 1995, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the “Code”) and, therefore, the related trust is exempt from taxation. However, subsequent to the issuance of the favorable determination letter, the Plan was amended. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan Administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan, as amended, is qualified and the related trust is tax exempt. The Plan Sponsor has indicated that it will take the necessary steps, if any, to maintain the Plan’s qualified status.


6. Tax Implications to Participants

There are no income tax consequences to participants arising from their pre-tax contributions, the Employer's contributions, and income earned in the Plan until actual distribution or withdrawal from the Plan.


7. Transactions with Parties-in-Interest

The Plan has investments in common stock of LNC and in pooled separate accounts and investment contracts with Lincoln Life. Lincoln Life charges the Plan for certain administrative expenses including trustee and audit fees. Total administrative expenses charged were $128,210, $103,179, and $106,837 in 2004, 2003 and 2002, respectively.


8. Concentrations of Credit Risks

The Plan has investments in common stock of LNC, pooled separate accounts, and unallocated investment contracts with Lincoln Life of $58,721,853, $99,529,718, and $17,598,686, respectively, at December 31, 2004 (31.9%, 54.1% and 9.6% of net assets, respectively). LNC and Lincoln Life operate predominately in the insurance and investment management industries.

The Plan invests in various investments that are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain investments it is at least reasonably possible that changes in the values of investments will occur in the near term and that such changes could materially affect the amounts reported in the statements of net assets available for benefits.

The Lincoln National Life Insurance Company

Agents' Savings and Profit-Sharing Plan

Plan Number: 006

EIN: 35-0472300

Schedule H, Line 4i--Schedule of Assets (Held At End of Year)

December 31, 2004

(b)

(c)

(d)

(e)

Description of Investment

Including Maturity Date

Identity of Issue, Borrower,

Rate of Interest,

Current

Lessor or Similar Party

Par or Maturity Value

Cost

Value

* Common stock fund:

Lincoln National Corporation common stock

1,257,966

58,721,853

Wells Fargo Bank Short-Term Investment Fund

1,195,934

par value

1,195,934

59,917,787

*Pooled separate accounts--

The Lincoln National Life Insurance

Company Separate Accounts:

Core Equity Fund

956,272.451

participation units

13,498,359

Medium Capitalization Equity Fund

833,783.418

participation units

10,462,314

Short Term Fund

1,700,613.780

participation units

6,253,838

Government/ Corporate Bond Fund

291,777.749

participation units

2,545,761

Large Capitalization Equity Fund

1,201,311.739

participation units

10,014,376

Balanced Fund

261,627.576

participation units

2,002,419

High Yield Bond Fund

721,142.318

participation units

2,725,052

Small Capitalization Equity Fund

1,403,790.064

participation units

11,094,295

Value Equity Fund

2,501,312.327

participation units

6,108,705

International Equity Fund

1,067,960.074

participation units

9,292,320

Conservative Balanced Fund

232,576.568

participation units

491,876

Aggressive Balanced Fund

379,036.436

participation units

899,606

Delaware Growth and Income Fund

918,745.140

participation units

1,555,893

Scudder VIT Equity 500 Index Fund

4,168,208.538

participation units

4,189,465

Fidelity VIP Contrafund

4,383,002.727

participation units

5,478,314

Neuberger-Berman AMT Regency Fund

1,894,203.416

participation units

2,702,461

Social Awareness Fund

1,220,854.693

participation units

1,297,647

American Funds New Perspective

2,928,516.285

participation units

2,800,247

Neuberger-Berman Mid-Cap Growth Fund

1,880,412.759

participation units

2,011,666

Scudder VIT Small Cap Index Fund

1,878,239.710

participation units

2,924,044

Janus Aspen Growth Fund

31,596.547

participation units

298,351

Fidelity VIP Overseas Fund

72,217.004

participation units

882,709

99,529,718

*Investment contracts--

The Lincoln National Life

Insurance Company (Guaranteed Fund)

3.50% interest rate

17,598,686

Participant loans

Various loans at interest rates

varying from 5.0% to 10.5%.

4,151,804

181,197,995

* Indicates party-in-interest to the Plan.

** Indicates a participant-directed fund. The cost disclosure is not required.

SIGNATURE

THE PLAN: Pursuant to the requirements of the Securities Exchange Act of 1934, the Administrator of the Lincoln National Corporation Agents’ Savings and Profit-Sharing Plan has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

	The Lincoln National Life Insurance Company Agents’ Savings and Profit-Sharing Plan
Date: March 30, 2005	By: /S/ Stephen J. Dover
	Stephen J. Dover
	Plan Administrator