SEC Comment Letter for LINCOLN NATIONAL CORP (LNC, LNC-PD) (CIK 0000059558) (LNC) — Apr 24, 2015
LINCOLN NATIONAL CORP (LNC, LNC-PD) (CIK 0000059558)
Date: April 24, 2015 · CIK: 0000059558 · Accession: 0000000000-15-023005
AI Filing Summary & Sentiment
Reasoning
Letter
April 24, 2015 Via E -mail Mr. Randal J. Freitag Executive Vice President and Chief Financial Officer Lincoln National Corporation 150 N. Radnor Chester Road Suite A305 Radnor, Pennsylvania 19087
Re: Lincoln National Corporation Form 10-K for the Fiscal Year Ended December 31 , 2014 Filed February 2 6, 2015 File No. 1-06028
Dear Mr. Freitag :
We have limited our review to only your financial statements and related disclosures and have the following comments . In our comment s, we ask you to provide us with information so we may better understand your disclosure.
Please respond to this letter within 10 business days by providing the requested information or by advising us when you will provide the requested resp onse. If you do not believe a comment applies to your facts and circumstances, please tell us why in your response. Please furnish us a letter on EDGAR under the form type label CORRESP that keys your response s to our comment s.
After reviewing the information you provide, we may hav e additional comments and/or request that you amend your filing.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Introduction; Executive Summary Significant Operational Matters Interest Rate Risk, page 37
1. In response to a question during your earnings conference call for the fourth quarter of 2014 you indicated that the impact of lowering your long -term rate assumption 50 basis point was roughly $125 million. Please address the following: Clarify for us what would be impacted by $125 million. It is unclear to us whether this impact is an expected: o reduction in fair value of investments; o increase in loss recognition in terms of DAC recoverability or increase insurance reserves;
Mr. Randal J. Freitag Lincoln National Corporation April 24, 2015 Page 2
o impact on your earnings for some period of time; or o some other measure. Tell us whether you have disclosed this information in your filing as the anticipated impact of a known trend or uncertainty or explain to us why this information is not required to be disclosed.
Notes to Consolida ted Financial Statements 10. Goodwill and Specifically Identifiable Intangible Assets , page 150
2. Regarding your Life Insurance and Group Protection reporting units that failed the step 1 analysis as of October 1, 2013 and 2014 and your determination of no impairment under the step 2 analysis, p lease address the following: Explain to us why no goodwill impairment resulted under step 2 in 2013 or 2014 . In your response, elaborate on what “new business” represents as referenced in the last sentence in the se cond paragraph on page 48 under “Goodwill and Other Intangible Assets ,” and specifically how it enters into your d etermin ation of the fair value of your reporting units and the implied fair value of goodwill for your reporting units . It appears that your reporting units are the same as your reporting segments. Please explain to us why you do not have reporting units at the component level below your reporting segments. See ASC 350 -20-35-34.
We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing include s all information the Securities Exchange Act of 1934 and all applicable Exchange Act rules require. Since the company and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made.
In responding t o our comment s, please provide a written statement from the company acknowledging that:
the company is responsible for the adequacy and accuracy of the disclosure in the filing; staff comment s or changes to disclosu re in response to staff comment s do not foreclose the Commission from taking any action with respect to the filing; and the compa ny may not assert staff comment s as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
You may contact Mark Brunhofer, Senior Staff Accountant , at (202) 551 -3638 or Sharon Blume, Accounting Branch Chief, at (202) 5 51-3474 if you have questions regarding the comment s. In this regard, do not hesitate to contact me at (202) 551 -3679 .
Sincerely,
/s/ Jim B. Rosenberg
Show Raw Text
April 24, 2015
Via E -mail
Mr. Randal J. Freitag
Executive Vice President and Chief Financial Officer
Lincoln National Corporation
150 N. Radnor Chester Road
Suite A305
Radnor, Pennsylvania 19087
Re: Lincoln National Corporation
Form 10-K for the Fiscal Year Ended December 31 , 2014
Filed February 2 6, 2015
File No. 1-06028
Dear Mr. Freitag :
We have limited our review to only your financial statements and related disclosures and
have the following comments . In our comment s, we ask you to provide us with information so
we may better understand your disclosure.
Please respond to this letter within 10 business days by providing the requested
information or by advising us when you will provide the requested resp onse. If you do not
believe a comment applies to your facts and circumstances, please tell us why in your response.
Please furnish us a letter on EDGAR under the form type label CORRESP that keys your
response s to our comment s.
After reviewing the information you provide, we may hav e additional comments and/or
request that you amend your filing.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Introduction; Executive Summary
Significant Operational Matters
Interest Rate Risk, page 37
1. In response to a question during your earnings conference call for the fourth quarter of
2014 you indicated that the impact of lowering your long -term rate assumption 50 basis
point was roughly $125 million. Please address the following:
Clarify for us what would be impacted by $125 million. It is unclear to us whether
this impact is an expected:
o reduction in fair value of investments;
o increase in loss recognition in terms of DAC recoverability or increase insurance
reserves;
Mr. Randal J. Freitag
Lincoln National Corporation
April 24, 2015
Page 2
o impact on your earnings for some period of time; or
o some other measure.
Tell us whether you have disclosed this information in your filing as the anticipated
impact of a known trend or uncertainty or explain to us why this information is not
required to be disclosed.
Notes to Consolida ted Financial Statements
10. Goodwill and Specifically Identifiable Intangible Assets , page 150
2. Regarding your Life Insurance and Group Protection reporting units that failed the step 1
analysis as of October 1, 2013 and 2014 and your determination of no impairment under
the step 2 analysis, p lease address the following:
Explain to us why no goodwill impairment resulted under step 2 in 2013 or 2014 . In
your response, elaborate on what “new business” represents as referenced in the last
sentence in the se cond paragraph on page 48 under “Goodwill and Other Intangible
Assets ,” and specifically how it enters into your d etermin ation of the fair value of
your reporting units and the implied fair value of goodwill for your reporting units .
It appears that your reporting units are the same as your reporting segments. Please
explain to us why you do not have reporting units at the component level below your
reporting segments. See ASC 350 -20-35-34.
We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filing to be certain that the filing include s all information the Securities Exchange Act of
1934 and all applicable Exchange Act rules require. Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.
In responding t o our comment s, please provide a written statement from the company
acknowledging that:
the company is responsible for the adequacy and accuracy of the disclosure in the filing;
staff comment s or changes to disclosu re in response to staff comment s do not foreclose
the Commission from taking any action with respect to the filing; and
the compa ny may not assert staff comment s as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United States.
You may contact Mark Brunhofer, Senior Staff Accountant , at (202) 551 -3638 or Sharon
Blume, Accounting Branch Chief, at (202) 5 51-3474 if you have questions regarding the
comment s. In this regard, do not hesitate to contact me at (202) 551 -3679 .
Sincerely,
/s/ Jim B. Rosenberg
Jim B. Rosenberg
Senior Assistant Chief Accountant