# LINCOLN FINANCIAL DISTRIBUTORS, INC. X-17A-5 (2025-02-28) — Broker-dealer annual report - Company: LINCOLN FINANCIAL DISTRIBUTORS, INC. - Form: X-17A-5 - Filed: 2025-02-28 - Period: 2024-12-31 - Accession: 0000019033-25-000002 - CIK: 19033 - File #: 8-13431 - Type: Broker-dealer - Material weakness: No - Auditor: Exempt from Audit Requirement - Auditor location: NA, PA - Contact: Megan Vogt Omoruyi - Phone: (336) 691-4670 - Email: omoruyi@lfg.com - Website: lfg.com - Signed by: Megan Vogt Omoruyi (AVP, Financial and Operational Principal) Original filing: https://www.sec.gov/Archives/edgar/data/19033/000001903325000002/2024lfdannualpublic.pdf --- {0}------------------------------------------------ #### S TATEMENT OF FINANCIAL CONDITION AND RELATED NOTES Lincoln Financial Distributors, Inc. Year Ended December 31, 2024 {1}------------------------------------------------ #### UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ## ANNUAL REPORTS FORM X-17A-5 PART III OMB APPROVAL OMB Number: 3235-0123 Expires: Nov: 30, 2026 Estimated average burden hours per response: 12 sec file number 8-13431 FACING PAGE Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 filing for the period beginning 01/01/24 12/31/24 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ MM/DD/YY MM/DD/YY A. REGISTRANT IDENTIFICATION NAME OF FIRM: Lincoln Financial Distributors, Inc. TYPE OF REGISTRANT (check all applicable boxes): ■ Broker-dealer □ Check here if respondent is also an OTC derivatives dealer ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | 130 N. Radnor-Chester Rd. | | |--|---------------------------|--| | | | | | PA
(State)
PERSON TO CONTACT WITH REGARD TO THIS FILING | | 19087
(Zip Code) | | |---------------------------------------------------------------|--------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--| | | | | | | | | | | | | | | | | Megan Vogt Omoruyi 336-691-4670 | | Megan. Omoruyi@lfg.com | | | (Area Code - Telephone Number) | | | | | | | | | | | | | | | | | | | | (City) | (State) | (Zip Code) | | | | | | | | FOR OFFICIAL USE ONLY | | | | | | (Date of Registration with PCAOB)(if applicable) | (Email Address)
B. ACCOUNTANT IDENTIFICATION
INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
(Name - if individual, state last, first, and middle name)
(PCAOB Registration Number, if applicable) | | \* Claims for exemption from the requirement that the annual reports of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17 CFR 240.17a-5(e)(1)(ii), if applicable. Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. {2}------------------------------------------------ #### OATH OR AFFIRMATION | Megan Vogt Omoruyi | | | swear (or affirm) that, to the best of my knowledge and belief, the | | |-------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------|------------|--------------------------------------------------------------------------------------------|-------| | tinancial report pertaining to the firm of Lincoln Financial Distributors, Inc.
12/31 | | | , 2024 , is true and correct. I further swear (or affirm) that neither the company nor any | as of | | partner, officer, director, or equivalent person, as the case may be, has any proprietary interest in any account classified solely | | | | | | as that of a customer. | LORI C KNIBB
Notary Public, North Carolina | | | | | | Guilford County
My Commission Expires | Signature: | | | | | | litle: | | | incles and Operationel Principa Notary Public #### This filing\*\* contains (check all applicable boxes): - (a) Statement of financial condition. - (b) Notes to consolidated statement of financial condition. - □ (c) Statement of income (loss) or, if there is other comprehensive income in the period(s) presented, a statement of comprehensive income (as defined in § 210.1-02 of Regulation S-X). - □ (d) Statement of cash flows. - □ {e) Statement of changes in stockholders' or partners' or sole proprietor's equity. - □ (f) Statement of changes in liabilities subordinated to claims of creditors. - □ (g) Notes to consolidated financial statements. - [ (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable. - | - □ (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. - □ (k) Computation for determination of security-based swap reserve requirements pursuant to Exhibit B to 17 CFR 240.15c3-3 or Exhibit A to 17 CFR 240.18a-4, as applicable. - [ (I) Computation for Determination of PAB Requirements under Exhibit A to § 240.15c3-3. - | (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. - □ (n) Information relating to possession or control requirements for security-based swap customers under 17 CFR 240.15c3-3(p)(2) or 17 CFR 240.18a-4, as applicable. - □ (o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capital on tangible net worth under 17 CFR 240.15c3-1, 17 CFR 240.18a-2, as applicable, and the reserve requirements under 17 CFR 240.15c3-3 or 17 CFR 240.18a-4, as applicable, if material differences exist, or a statement that no material differences exist. - | (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition. - | - □ (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - = (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - □ (t) Independent public accountant's report based on an examination of the statement of financial condition. - | (u) Independent public accountant's report based on an examination of the financial statements under 17 CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable. - □ (v) Independent public accountant's report based on an examination of certain statements in the compliance report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - | (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - | as applicable. - □ (y) Report describing any material inadequacies found to have existed since the date of the previous audit, or a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k). - O (z) Other: \*\* To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5(e)(3) or 17 CFR 240.18c-7(d)(2), as applicable. {3}------------------------------------------------ # **Lincoln Financial Distributors, Inc. Statement of Financial Condition and Related Notes Year Ended December 31, 2024** # **Table of Contents** | Duly Authorized Officer Affirmation 1 | | |--------------------------------------------------------------------------------------|--| | Statement of Financial Condition 2 | | | Notes to Statement of Financial Condition 3 | | | Exemption Report Pursuant to Rule 17a-5 under the Securities Exchange Act of 1934 7 | | {4}------------------------------------------------ ## Duly Authorized Officer Affirmation Pursuant to Rule 17a-5 under the Securities Exchange Act of 1934 December 31, 2024 Lincoln Financial Distributors, Inc. (the "Company") is a registered broker-dealer subject to Rule 17a-5 promulgated by the Securities and Exchange Commission (17 C.F.R. § 240.17a-5, "Reports to be made by certain brokers and dealers"). Pursuant to 17 C.F.R. § 240.17a-5(e)(1)(i), I affirm that, to the best of my knowledge and belief, the Company is exempt from the requirement to engage an independent public accountant to provide the reports required under 17 C.F.R. § 240.17a-5(d)(1)(0)(C) because, during the year ended December 31, 2024: - 1. The securities business of the Company was limited to acting as broker (agent) for a single issuer in soliciting subscriptions for securities of that issuer; and - 2. The Company promptly transmitted to the issuer any funds and promptly delivered to the subscriber any securities received in connection with the transaction, and the Company did not otherwise hold funds or securities for or owe money or securities to customers. Dated: February 28, 2025 Jagan Vagt Smoring Name: Megan Vogt Omoruyi () Title: AVP, Financial and Operational Principal Notary Public LORI C KNIBB Notary Public, North Carolina Guilford County My Commission Expires {5}------------------------------------------------ # **Lincoln Financial Distributors, Inc. Statement of Financial Condition** (in thousands, except for share data) | | As of
December 31, | | | |----------------------------------------------------------|-----------------------|---------|--| | | | | | | | | 2024 | | | ASSETS | | | | | Cash and invested cash | \$ | 5,107 | | | Commissions and fees receivable | | 30,503 | | | Due from affiliates | | 150 | | | Other assets | | 21 | | | Total assets | \$ | 35,780 | | | LIABILITIES AND STOCKHOLDER'S EQUITY | | | | | Liabilities | | | | | Due to affiliates | \$ | 30,129 | | | Other liabilities | | 1,170 | | | Total liabilities | | 31,299 | | | Stockholder's Equity | | | | | Common stock – \$25 par value; 10,000 shares authorized; | | | | | 8,000 shares issued and outstanding | | 200 | | | Additional paid-in capital | | 12,632 | | | Accumulated deficit | | (8,351) | | | Total stockholder's equity | | 4,481 | | | Total liabilities and stockholder's equity | \$ | 35,780 | | {6}------------------------------------------------ # **Lincoln Financial Distributors, Inc. Notes to the Statement of Financial Condition** (in thousands) ## **1. Nature of Operations, Basis of Presentation, Summary of Significant Accounting Policies and New Accounting Standards** #### **Nature of Operations** Lincoln Financial Distributors, Inc. ("LFD" or the "Company," which also may be referred to as "we," "our" or "us") is a registered broker-dealer that is engaged in the business of wholesaling and marketing financial services products, such as mutual funds, variable life insurance and variable annuities through financial intermediaries, including brokers, planners, agents, financial advisers, thirdparty administrators, financial institutions and other intermediaries. LFD is the principal underwriter for the wholesale distribution of all variable life and annuity products of our affiliated insurance companies, The Lincoln National Life Insurance Company ("LNL") and Lincoln Life & Annuity Company of New York ("LLANY"). LFD does not solicit or sell products directly to the general public. LFD is licensed to engage in broker-dealer activity throughout the United States. LFD is a wholly owned subsidiary of LNL, which is a wholly owned subsidiary of Lincoln National Corporation ("LNC"). #### **Basis of Presentation** The accompanying financial statements are prepared in accordance with United States of America generally accepted accounting principles ("GAAP"). Certain GAAP policies, which significantly affect the determination of financial condition, results of operations and cash flows, are summarized below. The Company and other affiliated entities that provide services to the Company are under common ownership and management control. The existence of this control could result in the Company's operating results or financial condition being significantly different from those that would have been obtained if the Company were autonomous. ## **Summary of Significant Accounting Policies and New Accounting Standards** #### *Accounting Estimates and Assumptions* The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions affecting the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities as of the date of the statement of financial condition. Those estimates are inherently subject to change and actual results could differ from those estimates. #### *Cash and Invested Cash* Cash and invested cash is carried at cost, which approximates fair value, and includes all highly liquid investments purchased with an original maturity of three months or less. {7}------------------------------------------------ #### *Income Taxes* LNC files a U.S. consolidated income tax return that includes all eligible subsidiaries, including LFD and LNL. Pursuant to an intercompany tax-sharing agreement with LNL, LFD provides for income taxes on a separate return filing basis. The tax-sharing agreement also provides that LFD will receive benefit for net operating losses, capital losses and tax credits, which may not be usable on a separate return basis to the extent such items may be utilized in the consolidated federal income tax return of LNC. Deferred income taxes are recognized, based on enacted rates, when assets and liabilities have different values for financial statement and tax reporting purposes. A valuation allowance is recorded to the extent required. Judgment and the use of estimates are required in determining whether a valuation allowance is necessary and, if so, the amount of such valuation allowance. See Note 2 for additional information. #### *Adoption of New Accounting Standards* Accounting Standards Updates ("ASUs") not listed below were assessed and determined to be either not applicable or insignificant in presentation or amount. | | | Effective | Effect on Financial Statements | |---------------|------------------------------------|------------|------------------------------------| | Standard | Description | Date | or Other Significant Matters | | ASU 2023-07, | This ASU aims to enhance | January 1, | We adopted this ASU effective | | Segment | reportable segment disclosure | 2024 | January 1, 2024, incorporating the | | Reporting | requirements. It requires that a | (Annual | required disclosure in the | | (Topic 280): | public entity disclose significant | Filings) | "Segment Information" section | | Improvements | segment expenses that are | | below. | | to Reportable | regularly provided to the chief | | | | Segment | operating decision maker | | | | Disclosures | ("CODM"), disclose and describe | | | | | other segment items and report | | | | | additional measures of a segment's | | | | | profit or loss if used by the | | | | | CODM. | | | The following table provides a description of current period adoptions of new ASUs. {8}------------------------------------------------ #### *Segment Information* The Company operates in one reportable segment given the similarities of all the products and services provided. The reportable segment reflects the manner by which our chief operating and decision maker ("CODM") views and manages the business. Our CODM is the Chief Executive Officer. Stockholder's equity is used by the CODM to evaluate financial performance as it is the starting point for the net capital calculation. See Note 5 for information on the Company's net capital requirements. ## **2. Income Taxes** As of December 31, 2024, LFD had a current federal income tax liability of \$16. LFD had no deferred federal income tax liability for the year ended December 31, 2024. LFD had no uncertain tax positions as of December 31, 2024. The LNC consolidated group is subject to examination by U.S. federal, state and local and non-U.S. income tax authorities. With few exceptions for limited scope review, we are no longer subject to U.S. federal examinations for years before 2020. In the first quarter of 2021, the Internal Revenue Service commenced an examination of our 2014, 2015, 2016 and 2017 refund claims. We are currently under examination by several state and local taxing jurisdictions; however, we do not expect those examinations to materially impact us. We recognize interest and penalties accrued, if any, related to unrecognized tax benefits as a component of tax expense. For the year ended December 31, 2024, we recognized no interest and penalty expense related to uncertain tax positions. There was no accrued interest and penalty expense related to the unrecognized tax benefits as of December 31, 2024. In August 2022, the Inflation Reduction Act of 2022 was passed by the U.S. Congress and signed into law by President Biden. The Inflation Reduction Act of 2022 established a new 15% corporate alternative minimum tax for corporations whose average adjusted net income for any consecutive three-year period beginning after December 31, 2022, exceeds \$1.0 billion. The provision was effective for tax years beginning after December 31, 2022. We determined that we were not within the scope of the corporate alternative minimum tax for 2024. ## **3. Agreements and Transactions with Affiliates** In order to be compliant with the Financial Industry Regulatory Authority ("FINRA") rules regarding proper expense recognition and expense-sharing agreements, LFD has entered into various cost-sharing agreements with affiliates. Amounts due from affiliates primarily represent amounts due to LFD for the settlement of general and administrative expenses and taxes and fees as stipulated in the Master Services Agreement. Amounts due to affiliates primarily represent amounts due to LNL related to wholesale distribution expenses incurred on LFD's behalf as well as intercompany cost and tax-sharing agreements. {9}------------------------------------------------ #### **4. Contingencies** #### *Regulatory and Litigation Matters* Regulatory bodies, such as the Securities and Exchange Commission ("SEC") and FINRA, regularly make inquiries and conduct examinations or investigations concerning our compliance with, among other things, securities laws and laws governing the activities of broker-dealers. While LFD is from time to time involved in various pending or threatened legal proceedings arising from the conduct of business either in the ordinary course or otherwise, such legal expenses are a part of our affiliate costsharing agreements. Based on information currently known by management, management does not believe any such charges are likely to have a material adverse effect on LFD's financial condition. #### **5. Net Capital Requirements** LFD operates under the alternative standard provisions of the SEC Uniform Net Capital Rule (Rule 15c3-1), which requires the minimum net capital to be the greater of \$250 or 2% of aggregate debit items computed in accordance with the SEC Customer Protection Rule (Rule 15c3-3) reserve requirements. Our operations do not include the physical handling of securities or the maintenance of open customer accounts; therefore, there are no reserve provisions pursuant to Rule 15c3-3. Accordingly, our minimum net capital requirement is \$250. | | As of
December 31,
2024 | | |---------------------------------|-------------------------------|-------| | Minimum net capital requirement | \$ | 250 | | Net capital | | 4,233 | | Excess net capital | \$ | 3,983 | #### **6. Subsequent Events** Management evaluated subsequent events for the Company through February 28, 2025, the date the statement of financial condition was available to be issued. Management is not aware of any subsequent events that would require recognition or disclosure in the statement of financial condition or related notes. {10}------------------------------------------------ ## **Lincoln Financial Distributors, Inc. Exemption Report Pursuant to Rule 17a-5 under the Securities Exchange Act of 1934 December 31, 2024** Lincoln Financial Distributors, Inc. (the "Company") is a registered broker-dealer subject to Rule 17a-5 promulgated by the Securities and Exchange Commission (17 C.F.R. § 240.17a-5, "Reports to be made by certain brokers and dealers"). In accordance with the requirements of subsections (d)(1)(i)(B)(2) and (d)(4) of Rule 17a-5, I affirm on behalf of the Company that, to the best of the Company's knowledge and belief: - 1. The Company claimed an exemption from the provisions of 17 C.F.R. § 240.15c3-3 ("Rule 15c3-3") pursuant to subsection (k)(1) of Rule 15c3-3; and - 2. The Company met the exemption provisions in subsection (k)(1) of Rule 15c3-3 throughout the year ended December 31, 2024, without exception. Dated: February 28, 2025 \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Name: Megan Vogt Omoruyi Title: AVP, Financial and Operational Principal Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.