Edgar Filing: LINCOLN NATIONAL CORP

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 11-K

FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS

AND SIMILAR PLANS PURSUANT TO SECTION 15 (d) OF

THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)

|X| ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2006

|_| TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File Number 1-6028

A. Full title of the plan and the address of the plan, if different from that of the issuer named below:

THE LINCOLN NATIONAL LIFE INSURANCE COMPANY AGENTS’ SAVINGS AND PROFIT-SHARING PLAN

B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

Lincoln National Corporation

1500 Market Street, Suite 3900

Centre Square West Tower

Philadelphia, PA 19102

REQUIRED INFORMATION

Financial statements and schedules for the Lincoln National Life Insurance Company Agents’ Savings And Profit-Sharing Plan, prepared in accordance with the financial reporting requirements of the Employee Retirement Income Security Act of 1974, are contained in this Annual Report on Form 11-K.

Financial Statements and Supplemental Schedule

The Lincoln National Life Insurance Company

Agents’ Savings and Profit-Sharing Plan

December 31, 2006 and 2005 and for three years ended December 31, 2006, 2005, and 2004

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


December 31, 2006 and 2005 and for three years ended December 31, 2006, 2005, and 2004




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)	22

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, 2006 and 2005, and the related statements of changes in net assets available for benefits for each of the three years in the period ended December 31, 2006. 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 audits 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, 2006 and 2005, and the changes in its net assets available for benefits for each of the three years in the period ended December 31, 2006, 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, 2006, 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 26, 2007

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

Statements of Net Assets Available for Plan Benefits


	December 31
	2006		2005
Assets
Investments:
Common stock – Lincoln National Corporation
(cost: 2006 – $35,751,944; 2005 – $37,144,896)	$	59,554,426	$	53,923,715
Wells Fargo Bank Short-Term Investment Account		1,748,430		800,619
Pooled separate accounts – The Lincoln National
Life Insurance Company Separate Accounts
(cost: 2006 – $87,337,123; 2005 – $76,485,949)		126,882,016		108,129,318
Investment contracts – The Lincoln National
Life Insurance Company		16,312,170		14,904,972
Participant loans		4,010,852		3,965,728
Total Investments		208,507,894		181,724,352

Accrued interest receivable		58,106		53,592
Cash		740,328		–
Due from broker		–		48,464
Contributions receivable from participant deferrals		12,646		–
Contributions receivable from Employer companies		–		964,322
Total assets		209,318,974		182,790,730

Liabilities
Due to broker		21,546		–
Total liabilities		21,546		–
Net assets available for plan benefits	$	209,297,428	$	182,790,730

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
	2006			2005			2004
Investment income:
Cash dividends – Lincoln National Corporation	$	1,431,425		$	1,637,253		$	1,819,776
Interest:
The Lincoln National Life		681,676			690,088			748,249
Insurance Company Separate Accounts
Other		225,353			236,082			250,743
		907,029			926,170			998,992
		2,338,454			2,563,423			2,818,768
Net realized gain on sale
and distributions of investments:
Lincoln National Corporation
common stock		5,504,007			5,362,745			4,070,037
The Lincoln National Life Insurance
Company Separate Accounts		5,920,004			3,712,858			1,652,409
		11,424,011			9,075,603			5,722,446

Net change in unrealized		14,925,196			5,961,900			12,363,106
appreciation of investments
Contributions:
Participants		7,889,483			7,297,381			7,452,877
Employer companies		1,960,209			3,068,581			5,199,336
		9,849,692			10,365,962			12,652,213

Transfers (to) from affiliated plans		(204,186	)		593,910			3,588,680
Deposit from Jefferson-Pilot 401(k) Plan		14,357,318			–			–
Distributions to participants		(26,009,979	)		(29,711,933	)		(14,994,001	)
Administrative expenses		(173,808	)		(168,180	)		(128,210	)

Net increase (decrease) in net
assets available for plan benefits		26,506,698			(1,319,315	)		22,023,002
Net assets available for plan benefits
at beginning of the year		182,790,730			184,110,045			162,087,043
Net assets available for plan benefits
at end of the year	$	209,297,428		$	182,790,730		$	184,110,045

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 closing sales price reported on the New York Stock Exchange Composite Listing on the last business day of the year.

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

The fair value of participation units in pooled separate accounts estimated by The Lincoln National Life Insurance Company ("Lincoln Life") 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 Lincoln Life. As described in Financial Accounting Standards Board Staff Position, FSP AAG INV-1 and SOP 94-4-1, Reporting of Fully Benefit-Responsive Investment Contracts Held by Certain Investment Companies Subject to the AICPA Investment Company Guide and Defined-Contribution Health and Welfare and Pension Plans (the "FSP"), investment contracts held by a defined-contribution plan are required to be reported at fair value. The Plan adopted FSP AAG INV-1 in 2006. The adoption did not have a material effect on the Plan's financial statements as interest rates are adjusted to market quarterly. Accordingly, contract value, which represents net contributions plus interest at the contract rate, approximates fair value. The contracts are fully benefit-responsive.

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

The cost of investments sold, distributed or forfeited is determined using the specific identification method. Investment purchases and sales are accounted for on a trade-date basis.

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 full-time agents of Lincoln Life, Lincoln Financial Advisors Corporation, Jefferson Pilot Life Insurance Company, and Lincoln Life & Annuity Company of New York ("Employers"). Effective April 1, 2006, LNC acquired Jefferson-Pilot Financial Corporation. Jefferson-Pilot sponsored a 401(k) plan for their eligible agents. Effective June 1, 2006 a plan amendment granted eligibility to the Plan to the legacy Jefferson-Pilot agents. In addition, on May 31, 2006, formal approval was obtained for the transfer to this Plan of assets from the accounts of those agents in the legacy Jefferson-Pilot 401(k) plan. This increased the net assets of the Plan by $14.4 million. Effective June 1, 2006, a participant may make pre-tax contributions at a rate of at least 1% but not more than 50% (25% maximum for January 1, 2004 through May 31, 2006) of eligible earnings (9% for highly compensated employees, as defined in the Plan), 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).

The Lincoln National Life Insurance Company

Agents’ Savings and Profit-Sharing Plan

Notes to Financial Statements (continued)

2. Description of the Plan (continued)

In addition to each participant’s pre-tax contributions, Employer matching contributions are provided to the Plan. The employer matching contribution for eligible participants, other than former Jefferson-Pilot agents, is equal to 50% of each participant’s pre-tax contributions, not to exceed 6% of eligible earnings per pay period. The matching contribution for eligible former Jefferson-Pilot agents is equal to 10% of each participant’s pre-tax contribution, not to exceed 6% of eligible compensation. These matching contributions are directed by the participant. In addition, the employer may contribute an additional discretionary match. The discretionary match is an amount determined by the sole discretion of the LNC Board of Directors. To be eligible, the participant must be employed on the last day of the plan year or have died, retired or become disabled during the year. The amount of the discretionary matching contribution varies according to whether Lincoln Financial Advisors Corporation has met certain performance-based criteria, as determined by the compensation committee of LNC's Board of Directors.

Participants' contributions and earnings thereon are fully vested at all times. 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%

Participants direct the Plan to invest their contributions and the basic Employer matching contributions in any combination of the investment options offered under the Plan. Discretionary matching contributions for the 2005 plan year, deposited in 2006, were initially invested in the LNC Common Stock Account. Participants can immediately direct the investment of the discretionary Employer matching contributions to other investment options.

The Employer has the right to discontinue contributions at any time and terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, all non-vested amounts allocated to participant accounts would become fully vested.

The Plan may make 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 12-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 five years except that the maximum repayment period may be 20 years for the purchase of a principal residence.

The Lincoln National Life Insurance Company

Agents’ Savings and Profit-Sharing Plan

Notes to Financial Statements (continued)

2. Description of the Plan (continued)

Upon termination of service due to disability or retirement, a participant may elect to receive either a lump-sum amount equal to the entire value of the participant’s account or an installment option if certain criteria are met; in cases of death, the participant’s beneficiary makes that election. 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 $1,000 are immediately distributable under the terms of the Plan, without the participant’s consent, unless the participant has made a timely election of rollover to an Individual Retirement Account ("IRA") or other qualified arrangement.

Each participant’s account is credited with the participant’s contributions, Employer contributions, and applicable investment earnings thereon, 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, 2006

December 31, 2005

Number of

Net Asset

Number of

Net Asset

Shares, Units

Value

Fair

Shares, Units

Value

Fair

or Par Value

Per Unit

Value

or Par Value

Per Unit

Value

Fair Values

Common stock – LNC**

896,904

66.400

59,554,426

1,016,853

53.030

53,923,715

Pooled separate account investment

contracts underwritten by Lincoln Life:

Core Equity Account

675,925.619

16.597

11,218,540

824,597.484

14.835

12,233,234

Medium Capitalization Equity Account

637,440.864

15.038

9,586,154

734,938.419

13.760

10,112,973

Short-Term Account

2,474,519.389

3.950

9,774,599

2,149,801.047

3.777

8,120,658

Government/ Corporate Bond Account

478,163.909

9.428

4,508,225

354,494.503

8.943

3,170,138

Large Capitalization Equity Account

845,211.812

9.783

8,268,538

1,115,245.939

9.543

10,643,015

Balanced Account

329,975.428

8.897

2,935,692

339,718.660

8.129

2,761,505

High Yield Bond Account

861,514.961

4.386

3,778,949

842,271.585

3.932

3,312,065

Small Capitalization Equity Account

1,004,016.412

8.930

8,966,268

1,178,821.391

8.329

9,818,639

Value Equity Account

2,106,200.926

3.048

6,418,858

2,108,301.523

2.572

5,422,130

International Equity Account

1,078,128.890

12.018

12,957,276

1,098,341.429

9.766

10,726,842

Conservative Balanced Account

327,871.900

2.388

783,056

349,127.833

2.200

768,116

Aggressive Balanced Account

494,596.549

2.815

1,392,190

389,545.026

2.539

989,016

Delaware Growth and Income Account

2,315,835.708

2.205

5,106,881

1,156,905.944

1.785

2,065,540

Scudder VIT Equity 500 Index Account

4,198,242.064

1.208

5,071,896

3,616,416.234

1.049

3,793,259

Fidelity VIP Contrafund

6,248,064.787

1.625

10,151,855

5,256,435.601

1.458

7,665,460

Neuberger-Berman AMT Regency Account

1,777,817.112

1.771

3,148,514

2,056,425.337

1.596

3,281,027

Social Awareness Account

1,514,969.167

1.329

2,014,000

1,563,453.979

1.187

1,856,133

American Funds Insurance Series Global Growth

4,481,783.250

1.270

5,693,657

3,412,657.312

1.062

3,624,242

Neuberger-Berman Mid-Cap Growth Account

3,099,565.265

1.391

4,312,735

2,471,345.139

1.215

3,002,684

Scudder VIT Small Cap Index Account

1,970,608.242

1.901

3,746,520

1,621,173.104

1.621

2,627,273

Janus Aspen Growth Account

–

27,422.947

9.792

268,526

Fidelity VIP Overseas Account

–

128,967.468

14.475

1,866,843

BlackRock Legacy Account

289,661.157

1.607

465,485

–

American Funds International Account

348,696.154

18.876

6,582,128

–

Total pooled separate accounts

126,882,016

108,129,318

Contract Value

Investment contracts

underwritten by Lincoln Life

16,312,170

14,904,972

Estimated Value

Wells Fargo Bank short-term

investment account

1,748,430

800,619

Participants loans

4,010,852

3,965,728

Total investments

208,507,894

181,724,352

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

** Indicates party in interest to the Plan.

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

Notes to Financial Statements (continued)

3. Investments (continued)

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

	Year Ended December 31
	2006		2005		2004
Common stock
Proceeds from disposition of stock	$	12,038,077	$	14,876,314	$	11,566,749
Cost of stock disposed		6,534,070		9,513,569		7,496,712
Net realized gain on sale and distribution
of common stock	$	5,504,007	$	5,362,745	$	4,070,037

Pooled separate accounts
Proceeds from disposition of units	$	43,764,916	$	33,710,587	$	29,304,850
Cost of units disposed		37,844,912		29,997,729		27,652,441
Net realized gain on sale and distribution
of pooled separate accounts	$	5,920,004	$	3,712,858	$	1,652,409

The net change in unrealized appreciation of investments in total and by investment classification as determined by fair value is summarized as follows:

	Year Ended December 31
	2006		2005		2004
Fair value in excess of cost:
At beginning of the year	$	48,422,185	$	42,460,285	$	30,097,179
At end of the year		63,347,381		48,422,185		42,460,285
Change in net unrealized appreciation of investments	$	14,925,196	$	5,961,900	$	12,363,106

Common stock	$	7,023,661	$	1,635,194	$	4,108,565
Pooled separate accounts		7,901,535		4,326,706		8,254,541
Change in net unrealized appreciation of investments	$	14,925,196	$	5,961,900	$	12,363,106

The investment contracts (Guaranteed Account) earned an average interest rate of approximately 4.0% in all three years. The credited interest rates for new contributions, which approximate the current market rate, were 4.0% at both December 31, 2006 and 2005. The rate on new contributions is guaranteed through the three succeeding calendar year quarters. The credited interest rates for the remaining contract value balance, which approximate the current market rate, were 4.0% at both December 31, 2006 and 2005, 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. Restrictions apply to the aggregate movement of funds to other investment options. The fair value of the investment contracts approximates contract value. Participants are allocated interest on the investment contracts based on the average rate earned on all Plan investments in the investment contracts.

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 (described below) is as follows:

Investment Options

December 31, 2006

Total

Assets

Investments:

Common stock

59,554,426

–

Short-term investment fund

1,748,430

–

Pooled separate accounts

126,882,016

–

11,218,540

9,586,154

9,774,599

4,508,225

Investment contracts

16,312,170

–

16,312,170

–

Participant loans

4,010,852

–

Total investments

208,507,894

61,302,856

16,312,170

11,218,540

9,586,154

9,774,599

4,508,225

Accrued interest receivable

58,106

6,410

51,123

–

Cash

740,328

(12,604

)

752,932

–

Due from broker

–

Contributions receivable from participant deferrals

12,646

–

Contributions receivable from Employer companies

–

Net assets

209,318,974

61,309,308

17,116,225

11,218,540

9,586,154

9,774,599

4,508,225

Liabilities

Due to broker

21,546

–

204

932

398

2,661

105

Total liabilities

21,546

–

204

932

398

2,661

105

Net assets available for plan benefits

209,297,428

61,309,308

17,116,021

11,217,608

9,585,756

9,771,938

4,508,120

Number of participants selecting investment options

1,518

402

623

513

557

372

Investment Options

December 31, 2006

Assets

Investments:

Common stock

–

Short-term investment account

–

Pooled separate accounts

8,268,538

2,935,692

3,778,949

8,966,268

6,418,858

12,957,276

783,056

Investment contracts

–

Participant loans

–

Total investments

8,268,538

2,935,692

3,778,949

8,966,268

6,418,858

12,957,276

783,056

Accrued interest receivable

–

Cash

–

Due from broker

Contributions receivable from participant deferrals

–

Contributions receivable from Employer companies

–

Net assets

8,268,538

2,935,692

3,778,949

8,966,268

6,418,858

12,957,276

783,056

Liabilities

Due to broker

665

913

584

713

425

Total liabilities

665

913

584

713

425

Net assets available for plan benefits

8,267,873

2,934,779

3,778,942

8,965,684

6,418,145

12,956,851

783,027

Number of participants selecting investment options

528

183

371

622

411

703

Investment Options

December 31, 2006

Assets

Investments:

Common stock

–

Short-term investment account

–

Pooled separate accounts

1,392,190

5,106,881

5,071,896

10,151,855

3,148,514

2,014,000

5,693,657

Investment contracts

–

Participant loans

–

Total investments

1,392,190

5,106,881

5,071,896

10,151,855

3,148,514

2,014,000

5,693,657

Accrued interest receivable

–

Cash

–

Due from broker

–

Contributions receivable from participant deferrals

–

Contributions receivable from Employer companies

–

Net assets

1,392,190

5,106,881

5,071,896

10,151,855

3,148,514

2,014,000

5,693,657

Liabilities

Due to broker

1,145

841

1,668

394

2,927

Total liabilities

1,145

841

1,668

394

2,927

Net assets available for plan benefits

1,392,102

5,105,736

5,071,055

10,150,187

3,148,120

2,013,967

5,690,730

Number of participants selecting investment options

143

487

295

667

268

136

396

The Lincoln National Life Insurance Company

Agents’ Savings and Profit-Sharing Plan

Notes to Financial Statements (continued)

4. Investment Options (continued)

Investment Options

December 31, 2006

Loans

Assets

Investments:

Common stock

–

Short-term investment account

–

Pooled separate accounts

4,312,735

3,746,520

465,485

6,582,128

–

Investment contracts

–

Participant loans

–

4,010,852

Total investments

4,312,735

3,746,520

465,485

6,582,128

4,010,852

Accrued interest receivable

–

573

Cash

–

Due from broker

–

Contributions receivable from participant deferrals

–

Contributions receivable from Employer companies

–

Net assets available for plan benefits

4,312,735

3,746,520

465,485

6,582,128

4,011,425

Liabilities

Due to broker

944

1,104

922

3,844

–

Total liabilities

944

1,104

922

3,844

–

Net assets available for plan benefits

4,311,791

3,745,416

464,563

6,578,284

4,011,425

Number of participants selecting investment options

505

416

568

228

Note: Investment options 23 and 24 had a zero balance as of 12/31/06 and are not shown.

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 net assets available for plan benefits by investment option is as follows:

Investment Options

December 31, 2005

Total

Assets

Investments:

Common stock

53,923,715

–

Short-term investment account

800,619

–

Pooled separate accounts

108,129,318

–

12,233,234

10,112,973

8,120,658

3,170,138

Investment contracts

14,904,972

–

14,904,972

–

Participant loans

3,965,728

–

Total investments

181,724,352

54,724,334

14,904,972

12,233,234

10,112,973

8,120,658

3,170,138

Accrued interest receivable

53,592

5,147

48,445

–

Due from (to) broker

48,464

–

22,523

–

Contributions receivable from participant deferrals

–

Contributions receivable from Employer companies

964,322

–

Net assets available for plan benefits

182,790,730

55,693,803

14,975,940

12,233,234

10,112,973

8,120,658

3,170,138

Number of participants selecting investment options

1,293

317

551

597

200

242

Investment Options

December 31, 2005

Assets

Investments:

Common stock

–

Short-term investment account

–

Pooled separate accounts

10,643,015

2,761,505

3,312,065

9,818,639

5,422,130

10,726,842

768,116

Investment contracts

–

Participant loans

–

Total investments

10,643,015

2,761,505

3,312,065

9,818,639

5,422,130

10,726,842

768,116

Accrued interest receivable

–

Due from (to) broker

2,192

1,978

(117,764

)

3,652

4,026

45,372

–

Contributions receivable from participant deferrals

–

Contributions receivable from Employer companies

–

Net assets available for plan benefits

10,645,207

2,763,483

3,194,301

9,822,291

5,426,156

10,772,214

768,116

Number of participants selecting investment options

641

200

356

697

455

742

Investment Options

December 31, 2005

Assets

Investments:

Common stock

–

Short-term investment account

–

Pooled separate accounts

989,016

2,065,540

3,793,259

7,665,460

3,281,027

1,856,133

3,624,242

Investment contracts

–

Participant loans

–

Total investments

989,016

2,065,540

3,793,259

7,665,460

3,281,027

1,856,133

3,624,242

Accrued interest receivable

–

Due from (to) broker

–

38,037

1,826

813

7,893

Contributions receivable from participant deferrals

–

Contributions receivable from Employer companies

–

Net assets available for plan benefits

989,016

2,065,540

3,793,259

7,703,497

3,282,853

1,856,946

3,632,135

Number of participants selecting investment options

122

245

200

466

292

134

320

Investment Options

December 31, 2005

Loans

Assets

Investments:

Common stock

–

Short-term investment account

–

Pooled separate accounts

3,002,684

2,627,273

268,526

1,866,843

Investment contracts

–

Participant loans

–

3,965,728

Total investments

3,002,684

2,627,273

268,526

1,866,843

3,965,728

Accrued interest receivable

–

Due from (to) broker

–

802

37,114

–

Contributions receivable from participant deferrals

–

Contributions receivable from Employer companies

–

Net assets available for plan benefits

3,002,684

2,627,273

269,328

1,903,957

3,965,728

Number of participants selecting investment options

323

306

212

215

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, 2006

Total

Investment income:

Cash dividends

1,431,425

–

Interest

907,029

75,944

605,734

–

Total investment income

2,338,454

1,507,369

605,734

–

Net realized gain on sale and

distribution of investments:

Common stock

5,504,007

–

Pooled separate accounts

5,920,004

–

842,833

416,271

293,803

45,228

Total net realized gains

11,424,011

5,504,007

–

842,833

416,271

293,803

45,228

Net change in unrealized

appreciation of investments

14,925,196

7,023,661

–

562,705

431,374

144,500

215,027

Contributions:

Participant

7,889,483

892,220

219,516

534,884

444,349

156,018

190,879

Employer companies

1,960,209

167,578

62,897

147,672

127,649

45,235

39,260

Total contributions

9,849,692

1,059,798

282,413

682,556

571,998

201,253

230,139

Transfers (to) from affiliated plans

(204,186

)

40,455

(80,699

)

(67,104

)

(15,423

)

19,074

(34,410

)

Deposit from Jefferson-Pilot 401(k) Plan

14,357,318

4,303,193

1,069,761

813,773

30,436

1,810,678

492,367

Distributions to participants

(26,009,979

)

(7,847,021

)

(964,315

)

(1,479,911

)

(910,747

)

(2,990,725

)

(329,267

)

Administrative expenses

(173,808

)

(35,074

)

(9,740

)

(7,555

)

(6,643

)

(59,632

)

(2,117

)

Net transfers

–

(5,940,883

)

1,236,927

(2,362,923

)

(1,044,483

)

2,232,329

721,015

Net increase (decrease) in net

assets available for plan benefits

26,506,698

5,615,505

2,140,081

(1,015,626

)

(527,217

)

1,651,280

1,337,982

Net assets available for plan

benefits at beginning of the year

182,790,730

55,693,803

14,975,940

12,233,234

10,112,973

8,120,658

3,170,138

Net assets available for plan

benefits at end of the year

209,297,428

61,309,308

17,116,021

11,217,608

9,585,756

9,771,938

4,508,120

Investment Options

December 31, 2006

Investment income:

Cash dividends

–

Interest

)

–

)

–

Total investment income

)

–

)

–

Net realized gain on sale and

distribution of investments:

Common stock

–

Pooled separate accounts

256,005

81,440

181,716

609,894

193,896

893,187

26,701

Total net realized gains

256,005

81,440

181,716

609,894

193,896

893,187

26,701

Net change in unrealized

appreciation of investments

(71,963

)

172,802

191,493

13,347

782,905

1,563,299

34,529

Contributions:

Participant

538,206

193,039

229,529

536,012

380,805

715,945

33,347

Employer companies

171,749

50,772

56,584

143,170

107,499

182,614

9,907

Total contributions

709,955

243,811

286,113

679,182

488,304

898,559

43,254

Transfers (to) from affiliated plans

(52,313

)

(4,143

)

3,480

7,320

(10,103

)

35,229

1,020

Deposit from Jefferson-Pilot 401(k) Plan

5,932

24,752

15,909

32,510

34,191

51,862

14,266

Distributions to participants

(1,295,769

)

(252,933

)

(432,917

)

(1,022,299

)

(489,132

)

(1,279,486

)

(11,458

)

Administrative expenses

(6,458

)

(1,926

)

(2,201

)

(6,555

)

(3,642

)

(7,628

)

(601

)

Net transfers

(1,922,722

)

(92,507

)

341,048

(1,170,005

)

(4,430

)

29,615

(92,800

)

Net increase (decrease) in net

assets available for plan benefits

(2,377,334

)

171,296

584,641

(856,607

)

991,989

2,184,637

14,911

Net assets available for plan

benefits at beginning of the year

10,645,207

2,763,483

3,194,301

9,822,291

5,426,156

10,772,214

768,116

Net assets available for plan

benefits at end of the year

8,267,873

2,934,779

3,778,942

8,965,684

6,418,145

12,956,851

783,027

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, 2006

Investment income:

Cash dividends

–

Interest

–

Total investment income

–

Net realized gain on sale and

distribution of investments:

Common stock

–

Pooled separate accounts

42,775

129,297

157,697

513,922

287,530

118,389

208,894

Total net realized gains

42,775

129,297

157,697

513,922

287,530

118,389

208,894

Net change in unrealized

appreciation of investments

94,353

643,058

544,507

589,751

53,486

96,001

655,306

Contributions:

Participant

137,628

267,527

270,109

661,729

201,773

110,703

364,104

Employer companies

39,834

60,562

51,132

161,104

57,863

22,939

78,005

Total contributions

177,462

328,089

321,241

822,833

259,636

133,642

442,109

Transfers (to) from affiliated plans

3,894

(5,365

)

1,588

36,396

(36,824

)

(8,716

)

(24,011

)

Deposit from Jefferson-Pilot 401(k) Plan

48,126

1,132,174

637,563

962,462

44,622

4,590

90,693

Distributions to participants

(178,780

)

(541,825

)

(282,709

)

(1,597,150

)

(653,613

)

(310,567

)

(681,560

)

Administrative expenses

(757

)

(1,872

)

(2,718

)

(5,732

)

(2,096

)

(1,220

)

(2,911

)

Net transfers

216,013

1,356,640

(99,373

)

1,124,208

(87,474

)

124,902

1,370,075

Net increase (decrease) in net

assets available for plan benefits

403,086

3,040,196

1,277,796

2,446,690

(134,733

)

157,021

2,058,595

Net assets available for plan

benefits at beginning of the year

989,016

2,065,540

3,793,259

7,703,497

3,282,853

1,856,946

3,632,135

Net assets available for plan

benefits at end of the year

1,392,102

5,105,736

5,071,055

10,150,187

3,148,120

2,013,967

5,690,730

Investment Options

December 31, 2006

Loans

Investment income:

Cash dividends

–

Interest

–

225,353

Total investment income

–

225,353

Net realized gain on sale and

distribution of investments:

Common stock

–

Pooled separate accounts

234,335

209,810

10,799

47,687

4,854

113,041

–

Total net realized gains

234,335

209,810

10,799

47,687

4,854

113,041

–

Net change in unrealized

appreciation of investments

312,430

322,834

(28,056

)

(312,226

)

29,581

860,492

–

Contributions:

Participant

253,827

275,516

3,465

30,702

11,262

236,389

–

Employer companies

59,929

56,075

938

8,124

2,443

48,675

–

Total contributions

313,756

331,591

4,403

38,826

13,705

285,064

–

Transfers (to) from affiliated plans

(4,642

)

(55,583

)

112

937

45,586

–

Deposit from Jefferson-Pilot 401(k) Plan

883,394

515,760

–

20,185

865,891

452,228

Distributions to participants

(628,815

)

(386,056

)

(604

)

(222,058

)

(69,635

)

(518,743

)

(631,884

)

Administrative expenses

(2,324

)

(1,872

)

(71

)

(747

)

(149

)

(1,567

)

–

Net transfers

200,973

181,659

(255,858

)

(1,455,551

)

465,085

4,928,520

–

Net increase (decrease) in net

assets available for plan benefits

1,309,107

1,118,143

(269,328

)

(1,903,957

)

464,563

6,578,284

45,697

Net assets available for plan

benefits at beginning of the year

3,002,684

2,627,273

269,328

1,903,957

–

3,965,728

Net assets available for plan

benefits at end of the year

4,311,791

3,745,416

–

464,563

6,578,284

4,011,425

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, 2005

Total

Investment income:

Cash dividends

1,637,253

–

Interest

926,170

42,239

647,849

–

Total investment income

2,563,423

1,679,492

647,849

–

Net realized gain (loss) on sale and

distribution of investments:

Common stock

5,362,745

–

Pooled separate accounts

3,712,858

–

514,050

197,691

88,332

95,153

Total net realized gains (losses)

9,075,603

5,362,745

–

514,050

197,691

88,332

95,153

Net change in unrealized appreciation

(depreciation) of investments

5,961,900

1,635,194

–

77,193

700,898

133,138

(24,307

)

Contributions:

Participant

7,297,381

859,454

270,526

612,107

479,192

199,702

152,453

Employer companies

3,068,581

1,150,018

85,980

186,798

155,517

53,989

41,201

Total contributions

10,365,962

2,009,472

356,506

798,905

634,709

253,691

193,654

Transfers (to) from affiliated plans

593,910

217,401

(743,178

)

132,721

163,042

182,088

59,014

Distributions to participants

(29,711,933

)

(7,879,541

)

(4,457,185

)

(2,198,565

)

(1,267,810

)

(2,321,490

)

(298,239

)

Administrative expenses

(168,180

)

(36,944

)

(10,716

)

(8,525

)

(6,746

)

(57,406

)

(1,926

)

Net transfers

–

(10,092,131

)

1,525,542

(655,420

)

(837,995

)

3,588,467

566,039

Net increase (decrease) in net

assets available for plan benefits

(1,319,315

)

(7,104,312

)

(2,681,182

)

(1,339,641

)

(416,211

)

1,866,820

589,388

Net assets available for plan

benefits at beginning of the year

184,110,045

62,798,115

17,657,122

13,572,875

10,529,184

6,253,838

2,580,750

Net assets available for plan

benefits at end of the year

182,790,730

55,693,803

14,975,940

12,233,234

10,112,973

8,120,658

3,170,138

Investment Options

December 31, 2005

Investment income:

Cash dividends

–

Interest

–

Total investment income

–

Net realized gain (loss) on sale and

distribution of investments:

Common stock

–

Pooled separate accounts

(44,606

)

43,149

152,770

453,756

262,800

644,155

26,505

Total net realized gains (losses)

(44,606

)

43,149

152,770

453,756

262,800

644,155

26,505

Net change in unrealized appreciation

(depreciation) of investments

1,351,784

100,270

(39,709

)

(44,275

)

34,382

540,865

(2,420

)

Contributions:

Participant

625,193

199,116

193,078

589,557

425,804

630,715

46,819

Employer companies

206,728

57,264

52,986

176,482

130,489

186,837

14,330

Total contributions

831,921

256,380

246,064

766,039

556,293

817,552

61,149

Transfers (to) from affiliated plans

206,411

(1,872

)

15,440

99,710

(18,544

)

94,767

–

Distributions to participants

(1,204,026

)

(286,433

)

(496,943

)

(1,158,782

)

(1,034,061

)

(1,465,613

)

(171,537

)

Administrative expenses

(6,582

)

(1,529

)

(1,952

)

(6,865

)

(4,036

)

(6,781

)

(363

)

Net transfers

(522,226

)

646,554

597,664

(1,464,873

)

(452,759

)

797,149

362,780

Net increase (decrease) in net

assets available for plan benefits

612,676

756,519

473,334

(1,355,290

)

(655,925

)

1,422,094

276,114

Net assets available for plan

benefits at beginning of the year

10,032,531

2,006,964

2,720,967

11,177,581

6,082,081

9,350,120

492,002

Net assets available for plan

benefits at end of the year

10,645,207

2,763,483

3,194,301

9,822,291

5,426,156

10,772,214

768,116

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, 2005

Investment income:

Cash dividends

–

Interest

–

Total investment income

–

Net realized gain (loss) on sale and

distribution of investments:

Common stock

–

Pooled separate accounts

32,158

101,874

181,527

373,408

165,181

58,926

22,319

Total net realized gains (losses)

32,158

101,874

181,527

373,408

165,181

58,926

22,319

Net change in unrealized appreciation

(depreciation) of investments

28,796

4,754

(34,315

)

599,476

167,744

107,488

332,675

Contributions:

Participant

117,921

217,327

207,077

444,807

192,202

70,734

245,289

Employer companies

33,191

61,604

55,301

129,854

55,788

18,686

70,640

Total contributions

151,112

278,931

262,378

574,661

247,990

89,420

315,929

Transfers (to) from affiliated plans

541

(135,884

)

181,772

54,920

22,478

7,463

19,999

Distributions to participants

(179,329

)

(393,704

)

(517,067

)

(1,589,320

)

(441,613

)

(245,708

)

(420,056

)

Administrative expenses

(637

)

(1,278

)

(2,622

)

(3,996

)

(1,962

)

(982

)

(2,019

)

Net transfers

56,769

651,375

(445,191

)

2,324,849

549,518

451,607

626,118

Net increase (decrease) in net

assets available for plan benefits

89,410

506,068

(373,518

)

2,333,998

709,336

468,214

894,965

Net assets available for plan

benefits at beginning of the year

899,606

1,559,472

4,166,777

5,369,499

2,573,517

1,388,732

2,737,170

Net assets available for plan

benefits at end of the year

989,016

2,065,540

3,793,259

7,703,497

3,282,853

1,856,946

3,632,135

Investment Options

December 31, 2005

Loans

Investment income:

Cash dividends

–

Interest

–

236,082

Total investment income

–

236,082

Net realized gain (loss) on sale and

distribution of investments:

Common stock

–

Pooled separate accounts

87,659

176,798

12,781

66,472

–

Total net realized gains (losses)

87,659

176,798

12,781

66,472

–

Net change in unrealized appreciation

(depreciation) of investments

229,555

(114,432

)

(7,020

)

184,166

–

Contributions:

Participant

209,420

202,110

19,306

87,472

–

Employer companies

63,421

53,310

4,350

23,817

–

Total contributions

272,841

255,420

23,656

111,289

–

Transfers (to) from affiliated plans

19,782

12,779

402

2,658

–

Distributions to participants

(308,526

)

(468,134

)

(110,036

)

(376,057

)

(422,158

)

Administrative expenses

(1,584

)

(1,789

)

(157

)

(783

)

–

Net transfers

716,823

(61,965

)

38,270

1,033,036

–

Net increase (decrease) in net

assets available for plan benefits

1,016,550

(201,323

)

(42,104

)

1,020,781

(186,076

)

Net assets available for plan

benefits at beginning of the year

1,986,134

2,828,596

311,432

883,176

4,151,804

Net assets available for plan

benefits at end of the year

3,002,684

2,627,273

269,328

1,903,957

3,965,728

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

118,385

Total net realized gains (losses)

5,722,446

4,070,037

–

203,967

(3,539

)

51,005

118,385

Net change in unrealized appreciation

(depreciation) of investments

12,363,106

4,108,565

–

1,184,989

1,379,549

1,288

34,359

Contributions:

Participant

7,452,877

748,914

248,869

691,806

602,308

244,033

150,522

Employer companies

5,199,336

3,161,387

85,062

223,592

200,559

64,686

40,739

Total contributions

12,652,213

3,910,301

333,931

915,398

802,867

308,719

191,261

Transfers (to) from affiliated plans

3,588,680

614,533

871,935

296,183

276,040

141,047

76,543

Distributions to participants

(14,994,001

)

(5,348,906

)

(1,809,653

)

(780,660

)

(705,912

)

(1,789,266

)

(289,392

)

Administrative expenses

(128,210

)

(46,539

)

(12,364

)

(9,549

)

(7,507

)

(4,818

)

(1,914

)

Net transfers

–

(6,687,825

)

1,601,822

(339,334

)

(686,780

)

1,944,681

143,516

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

272,758

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

2,307,992

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

2,580,750

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

(188,688

)

55,178

136,428

305,375

89,484

272,710

18,830

Total net realized gains (losses)

(188,688

)

55,178

136,428

305,375

89,484

272,710

18,830

Net change in unrealized appreciation

(depreciation) of investments

431,322

108,514

134,775

1,004,627

502,684

1,267,577

16,777

Contributions:

Participant

805,344

173,788

185,635

741,598

497,130

591,062

36,869

Employer companies

261,466

53,278

55,264

227,043

150,881

182,480

11,905

Total contributions

1,066,810

227,066

240,899

968,641

648,011

773,542

48,774

Transfers (to) from affiliated plans

155,178

1,501

19,033

225,840

158,488

116,473

–

Distributions to participants

(777,277

)

(183,498

)

(73,459

)

(717,672

)

(413,380

)

(411,164

)

(14,303

)

Administrative expenses

(7,967

)

(1,428

)

(1,769

)

(8,185

)

(4,158

)

(5,949

)

(367

)

Net transfers

(734,508

)

250,181

7,135

(509,167

)

428,499

630,405

(11,517

)

Net increase (decrease) in net

assets available for plan benefits

(55,130

)

457,514

463,042

1,269,459

1,409,628

2,643,594

58,194

Net assets available for plan

benefits at beginning of the year

10,087,661

1,549,450

2,257,925

9,908,122

4,672,453

6,706,526

433,808

Net assets available for plan

benefits at end of the year

10,032,531

2,006,964

2,720,967

11,177,581

6,082,081

9,350,120

492,002

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

15,861

33,241

96,378

84,290

100,306

70,301

(72,288

)

Total net realized gains (losses)

15,861

33,241

96,378

84,290

100,306

70,301

(72,288

)

Net change in unrealized appreciation

(depreciation) of investments

67,620

113,392

295,717

537,009

315,620

77,919

305,514

Contributions:

Participant

122,416

160,835

229,911

352,392

150,485

63,352

136,142

Employer companies

31,944

45,509

66,604

99,622

42,459

17,056

40,541

Total contributions

154,360

206,344

296,515

452,014

192,944

80,408

176,683

Transfers (to) from affiliated plans

33,405

12,599

234,516

39,198

23,085

5,632

98,166

Distributions to participants

(95,828

)

(38,684

)

(123,031

)

(349,783

)

(140,610

)

(35,899

)

(224,214

)

Administrative expenses

(627

)

(981

)

(2,968

)

(3,091

)

(1,472

)

(934

)

(1,312

)

Net transfers

140,129

243,550

(156,924

)

1,450,616

653,881

123,294

1,111,652

Net increase (decrease) in net

assets available for plan benefits

314,920

569,461

640,203

2,210,253

1,143,754

320,721

1,394,201

Net assets available for plan

benefits at beginning of the year

584,686

990,011

3,526,574

3,159,246

1,429,763

1,068,011

1,342,969

Net assets available for plan

benefits at end of the year

899,606

1,559,472

4,166,777

5,369,499

2,573,517

1,388,732

2,737,170

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

29,076

147,930

39,823

48,356

–

Total net realized gains (losses)

29,076

147,930

39,823

48,356

–

Net change in unrealized appreciation

(depreciation) of investments

235,544

223,675

(21,832

)

37,902

–

Contributions:

Participant

200,906

212,549

27,387

78,624

–

Employer companies

55,631

56,071

6,768

18,789

–

Total contributions

256,537

268,620

34,155

97,413

–

Transfers (to) from affiliated plans

21,996

89,182

53,567

24,540

–

Distributions to participants

(172,305

)

(136,161

)

(23,429

)

(22,550

)

(316,965

)

Administrative expenses

(1,347

)

(2,011

)

(346

)

(607

)

–

Net transfers

174,640

175,250

(122,114

)

168,918

–

Net increase (decrease) in net

assets available for plan benefits

544,141

766,485

(40,176

)

353,972

(66,222

)

Net assets available for plan

benefits at beginning of the year

1,441,993

2,062,111

351,608

529,204

4,218,026

Net assets available for plan

benefits at end of the year

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)

Information with respect to investment options is as follows:

Option	Description of Investment Option

1	LNC Common Stock Account, which invests exclusively in the stock of LNC. However, some funds may be invested in the Wells Fargo Bank Short-Term Investment Account until the LNC stock can be purchased.

2	Guaranteed Account, which invests in investment contracts underwritten by Lincoln Life. The account’s balances are backed by the general assets of Lincoln Life.

3	Core Equity Account (SA#11), which seeks to buy large capitalization stocks of well-established companies with the objective of long-term capital appreciation.

4	Medium Capitalization Equity Account (SA#17), which invests in stocks of medium-sized companies with the objective of maximum long-term total return.

5	Short-Term Account (SA#14), which invests in high-quality money market securities with the objective of maximizing interest earnings while maintaining principal.

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

7	Large Capitalization Equity Account (SA#23), which invests primarily in stocks of large companies that have the potential to grow 50% within 18 months from the date of purchase.

8	Balanced Account (SA#21), which invests in stocks, bonds and money market instruments with the objective to maximize long-term total return with a moderate level of risk.

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

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

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

12	International Equity Account (SA#22), which invests primarily in stocks of non-United States companies.

13	Conservative Balanced Account (SA#30), which invests in stocks, bonds and money market instruments to maximize long-term total earnings with a conservative level of risk.

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

Notes to Financial Statements (continued)


4. Investment Options (continued)


14	Aggressive Balanced Account (SA#32), which invests in stocks, bonds and money market instruments to maximize long-term total return with an aggressive level of risk.

15	Delaware Value Account (SA#61), which invests in large capitalization companies that have long-term capital appreciation potential.

16	Scudder VIT Equity 500 Index Account (SA#27), which seeks to replicate the total return of the S&P 500.

17	Fidelity VIP Contrafund (SA#35), which seeks capital appreciation by investing primarily in securities of companies whose value is not fully recognized by the market.

18	Neuberger-Berman AMT Regency Account (SA#38), which seeks capital growth by investing mainly in common stocks of mid-capitalization companies.

19	Social Awareness Account (SA#33), which seeks capital growth and social responsibility by investing in the Lincoln National Social Awareness Portfolio.

20	American Funds New Perspective Account (formerly Global Growth) (SA#34), which invests primarily in common stocks, convertibles, preferred stocks, bonds and cash to provide long-term growth through investments all over the world.

21	Neuberger-Berman AMT Mid-Cap Growth Account (SA#37), which seeks capital appreciation using a growth-oriented investment approach.

22	Scudder VIT Small Cap Index Account, which seeks to reflect Russell 2000 performance by investing in the Small Cap Index Portfolio.

23	Janus Aspen Growth Account (SA#70), which seeks long-term growth of capital in a manner consistent with the preservation of capital.

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

25	Blackrock Legacy Account (SA #81), which seeks to provide long-term growth of capital.

26	American Funds Insurance Series International Fund Account (SA #54), which seeks capital appreciation by investing primarily in common stocks of companies outside the United States.

The Lincoln National Life Insurance Company

Agents' Savings and Profit-Sharing Plan

Notes to Financial Statements (continued)

4. Investment Options (continued)

Investment options 3 through 26 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 April 30, 2004, 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. Subsequent to this determination by the Internal Revenue Service, 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.

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 $173,808, $168,180 and $128,210 in 2006, 2005 and 2004, respectively.

8. Concentrations of Credit Risks and Marker Risks

The Plan has investments in common stock of LNC, pooled separate accounts, and unallocated investment contracts with Lincoln Life of $59,554,426, $126,882,016, and $16,312,170, respectively, at December 31, 2006 (28.5%, 60.6% and 7.8% of net assets, respectively). LNC and Lincoln Life operate predominately in the insurance and investment management industries.

The Plan invests in various investment securities. Investment securities are exposed to various risks including, but not limited to, interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, 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 participants’ account balances and the amounts reported in the statements of net assets available for plan benefits.

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

Notes to Financial Statements (continued)


9. Reconciliation to Form 5500

The following is a reconciliation of net assets available for plan benefits per the 2006 statement of net assets available for plan benefits to the Form 5500:

	Year Ended
	December 31
	2006

Net assets available for plan benefits per the financial statements	$	209,297,428
Amounts allocated to withdrawn participants		(850,631	)
Net assets available for plan benefits per the Form 5500	$	208,446,797


The following is a reconciliation of distributions to participants per the 2006 statement of changes in net assets available for plan benefits to the Form 5500:

	Year Ended
	December 31
	2006

Distributions to participants per the financial statements	$	26,009,979
Amounts allocated on Form 5500 to withdrawn
participants at December 31, 2006		850,631
Distributions to participants per the Form 5500	$	26,860,610

Amounts allocated to withdrawn participants are recorded on the Form 5500 for benefit payments that have been processed and approved for payment prior to year-end but not yet paid. There were no pending payments in 2005.

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, 2006

(b)		(c)		(d)	(e)
		Description of Investment
		Including Maturity Date
Identity of Issuer, Borrower,		Rate of Interest,			Current
Lessor or Similar Party		Par or Maturity Value		Cost	Value

*Common stock account:
Lincoln National Corporation common stock		896,904	shares	**	$ 59,554,426
Wells Fargo Bank Short-Term Investment Account		1,748,430	par value	**	1,748,430
					61,302,856
*Pooled separate accounts –
The Lincoln National Life Insurance
Company Separate Accounts:
	Core Equity Account	675,925.619	participation units	**	11,218,540
	Medium Capitalization Equity Account	637,440.864	participation units	**	9,586,154
	Short-Term Account	2,474,519.389	participation units	**	9,774,599
	Government/ Corporate Bond Account	478,163.909	participation units	**	4,508,225
	Large Capitalization Equity Account	845,211.812	participation units	**	8,268,538
	Balanced Account	329,975.428	participation units	**	2,935,692
	High Yield Bond Account	861,514.961	participation units	**	3,778,949
	Small Capitalization Equity Account	1,004,016.412	participation units	**	8,966,268
	Value Equity Account	2,106,200.926	participation units	**	6,418,858
	International Equity Account	1,078,128.890	participation units	**	12,957,276
	Conservative Balanced Account	327,871.900	participation units	**	783,056
	Aggressive Balanced Account	494,596.549	participation units	**	1,392,190
	Delaware Growth and Income Account	2,315,835.708	participation units	**	5,106,881
	Scudder VIT Equity 500 Index Account	4,198,242.064	participation units	**	5,071,896
	Fidelity VIP Contrafund	6,248,064.787	participation units	**	10,151,855
	Neuberger-Berman AMT Regency Account	1,777,817.112	participation units	**	3,148,514
	Social Awareness Account	1,514,969.167	participation units	**	2,014,000
	American Funds Insurance Series Global Growth	4,481,783.250	participation units	**	5,693,657
	Neuberger-Berman Mid-Cap Growth Account	3,099,565.265	participation units	**	4,312,735
	Scudder VIT Small Cap Index Account	1,970,608.242	participation units	**	3,746,520
	BlackRock Legacy Account	289,661.157	participation units	**	465,485
	American Funds International Account	348,696.154	participation units	**	6,582,128
					126,882,016
*Investment contracts –
The Lincoln National Life
Insurance Company (Guaranteed Account)			4.00% interest rate	**	16,312,170

Participant loans		Various loans at interest rates
		varying from 5.00% to 10.50%.		-	4,010,852
					$208,507,894

* Indicates party in interest to the Plan.
** Indicates a participant-directed account. 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 Life Insurance Company Agents' Savings and Profit-Sharing Plan has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.



	Lincoln National Life Insurance Company Agents' Savings and Profit-Sharing Plan
	By: /s/ Barbara Bird
Date: March 30, 2007	Barbara Bird on Behalf of the Lincoln National Corporation Benefits Committee