Manulife Financial Corporation reports record annual and quarterly results



    TSX/NYSE/PSE: MFC; SEHK: 0945

    TORONTO, Feb. 14 /CNW/ - Manulife Financial Corporation today reported
record shareholders' net income of $4,302 million for 2007, an increase of
eight per cent over the full year 2006. Fully diluted earnings per share were
$2.78, an increase of 11 per cent compared to the $2.51 reported a year ago.
Return on common shareholders' equity(1) was a record 18.4 per cent for 2007,
up from 16.8 per cent in 2006.
    "I am very pleased that virtually all of our businesses achieved record
sales levels for the quarter and for the full year," said Mr. Dominic
D'Alessandro President and Chief Executive Officer. "This positive sales
momentum together with our exceptional asset quality and strong capital
position will allow us to deal with the unsettled markets that are likely to
continue to prevail for some months yet."
    Fourth quarter 2007 shareholders' earnings were a record $1,144 million,
an increase of 4 per cent from one year ago. Fully diluted earnings per share
were $0.75, an increase of seven per cent over the fourth quarter of last
year. Earnings year over year were negatively impacted by $163 million due to
the strengthening of the Canadian dollar. On a constant currency basis, growth
in shareholders' earnings and earnings per share would have been 19 per cent
and 23 per cent, respectively. Fourth quarter return on common shareholders'
equity(1) was a Company record of 20.5 per cent, a rise of 250 basis points
over last year.
    "Despite weak equity markets and unfavourable interest rate movements, we
benefited from having a diversified investment portfolio, leaving overall
investment experience favourable for the quarter" noted Peter Rubenovitch,
Senior Executive Vice President and Chief Financial Officer. "Strong sales and
good expense management also contributed to the quarter's growth in earnings
and ROE."
    Fourth quarter sales were very strong across the Company, with insurance
sales of $642 million, up 15 per cent over last year, and wealth management
sales of $11.5 billion, up 24 per cent. Record sales levels were achieved in
many of our businesses this quarter; some of the notable sales results were:

    
    -   John Hancock Variable Annuity sales of US$2.8 billion, up 27 per cent
    -   John Hancock Life sales of US$316 million, up 54 per cent
    -   Canada Individual Life sales of $65 million, up 18 per cent
    -   Canada Individual Wealth Management sales of $2.5 billion,
        up 39 per cent
    -   Hong Kong Wealth Management sales of US$511 million, up 106 per cent
    -   Other Asia Territories Wealth Management sales of US$554 million, up
        104 per cent
    

    New Business Embedded Value reached record levels for both the fourth
quarter and full year, driven by strong sales and asset growth across the
Company. Fourth quarter New Business Embedded Value was $659 million, up
38 per cent compared to a year ago, and full year results were $2,189 million,
up 18 per cent over 2006.
    Premiums and deposits amounted to $69.4 billion for 2007, a record level
for the Company. Fourth quarter premiums and deposits rose to $17.4 billion,
an increase of 10 per cent over last year due to continued strong sales and
growth in recurring premiums and deposits. On a constant currency basis,
growth in premiums and deposits for the quarter and full year would have been
23 per cent and 12 per cent, respectively.
    Total funds under management as at December 31, 2007 were $396.3 billion,
a decrease of four per cent versus last year due to currency movements.
Excluding the negative impact of currency movements over the year, growth in
funds under management would have been eight per cent.

    
    (1) Return on common shareholders' equity is calculated excluding
        Accumulated Other Comprehensive Income on available-for-sale
        securities and cash flow hedges.

    OPERATING HIGHLIGHTS

    United States

    -   John Hancock Variable Annuities sales were US$2.8 billion in the
        fourth quarter, an increase of 27 per cent over last year, which
        capped a record year of sales totaling US$10.8 billion, an increase
        of 18 per cent. Strong sales resulted in record net flows of US$4.8
        billion for the year. In addition to the announcement in November of
        the distribution partnership established with Edward Jones, other
        initiatives were announced in the quarter, including the following
        key items:

        -  A new optional guaranteed withdrawal benefit rider called
           "Principal Returns" was introduced, having two distinct features:
           it provides an 8% withdrawal rate for clients seeking "income
           now," and offers an accumulation benefit feature for those seeking
           principal protection while investing in the markets. The new rider
           complements the popular lifetime withdrawal benefits which were
           designed with the "income later" client in mind.

        -  Two new fund-of-funds options were added to the Venture Variable
           Annuities investment platform. Both funds primarily invest in
           underlying American Funds portfolios, one of the most well-known
           and widely respected names in the investment business.

    -   John Hancock Life achieved record sales for both the quarter and full
        year, with sales up across all major distribution channels and
        product categories. Full year sales were very strong, up 15% over
        2006, when the business was ranked No.1 in the industry. Continued
        product innovation contributed to the business achieving the No.1
        ranking in overall life insurance sales in the U.S. in the most
        recently reported third quarter(2).

    -   John Hancock Long Term Care had record sales for the full year 2007
        of US$197 million, up 24 per cent from 2006, with strong sales in
        both Retail and Group segments.

    (2) Based on LIMRA, for overall life insurance sales for stand-alone
        third quarter 2007.

    Canada

    -   Record sales in Individual Wealth Management (IWM) for both the
        quarter and full year reflected the success of IncomePlus, the
        guaranteed mimimum withdrawal benefit product introduced to the
        Canadian market by Manulife late in 2006. In the fourth quarter,
        IWM launched the second generation of IncomePlus, now providing a
        lifetime guarantee, which drove the over 40 per cent increase in
        quarterly sales of segregated fund products as compared to a year
        ago. Cash flow into IncomePlus, including new sales and transfers
        from other products, approached $3 billion in 2007.

    -   Manulife Bank surpassed $10 billion in assets this quarter, up 26 per
        cent from a year ago. Fourth quarter loan volumes of $928 million
        exceeded prior year by 45 per cent, driven by sales of Manulife One.

    -   Group Savings & Retirement Solutions' premiums and deposits surpassed
        $3 billion for the year, driven by record sales, including several
        large cases as well as one of the largest defined contribution
        pension plans in Canada.

    -   Fourth quarter and full year sales in Individual Life rose 18 per
        cent and 15 per cent respectively from a year ago. These record
        results reflected the favourable impact of a more competitive product
        portfolio and sustained improvements in service.

    Asia and Japan

    -   Strong variable annuity sales and continued good persistency in Japan
        resulted in record net flows of US$2.6 billion for the year. The new
        generation product continues to be adopted by existing distribution
        channels, with five additional financial institutions beginning to
        offer the product in the fourth quarter.

    -   In Hong Kong, total wealth management sales for the quarter were more
        than double the results of the same period last year. Individual
        Wealth Management and Pension businesses combined to set new fourth
        quarter and full year sales records, largely driven by strong sales
        of investment-linked insurance products as well as reflecting an
        overwhelming response to new product launches.

    -   Other Asia Territories achieved record wealth management sales for
        both the quarter and full year. New product introductions and
        expanded distribution reach contributed to the sales growth across
        almost all territories.

    -   Manulife Financial continued to expand its operations in China and in
        the fourth quarter received five additional licenses; bringing the
        total number of licenses up to 28, among the most of any foreign life
        insurance company in China.

    -   During the fourth quarter, Craig Bromley was appointed President and
        Chief Executive Officer of Manulife Japan. His predecessor, Geoff
        Crickmay, retired after 37 years of service to Manulife Financial.

    Corporate

    -   The Manufacturers Life Insurance Company (MLI), a subsidiary of
        Manulife Financial, completed the previously announced redemption of
        all its outstanding 6.10% Non-Cumulative Class A Preferred Shares,
        Series 6. The redemption is part of Manulife Financial's ongoing
        management of its capital.

    -   In a separate news release, the Company also announced today that the
        Board of Directors approved a quarterly shareholders' dividend of
        $0.24 per share on the common shares of the Company, payable on and
        after March 19, 2008 to shareholders of record at the close of
        business on February 27, 2008.

    Awards

    -   Manulife Financial received a number of awards in the quarter,
        including the following:

        -  In Asia, Manulife was awarded the "Life Insurance Company of the
           Year" title and in Hong Kong, Manulife International Limited (MIL)
           ranked fourth in the Greater China region in the "Top Companies
           for Leaders" survey by FORTUNE magazine. Both awards reward
           corporate and development leadership as well as commitment to
           professionalism, excellent customer service, and innovation.

        -  John Hancock Retirement Plan Services (JHRPS) won thirteen awards
           for communications excellence from the League of American
           Communications Professionals (LACP). Nine of JHRPS' awards were
           honours for "Top 100 Communications Materials of 2007", the best
           showing by a financial services company.

        -  John Hancock Annuities won three "Best in Show" and "Awards of
           Excellence" for the venture variable annuity sales kit; the "It's
           About Time" marketing campaign; and for the advisor, public and
           JH Signature(TM) web sites from the Insurance & Financial
           Communication Association (IFCA).

        -  Manulife Financial's Canadian Individual Wealth Management
           Operations, which serves Manulife Investments and Manulife
           Securities International businesses, has been recognized for
           excellence in leadership, people, customer service and processes
           with a Level Three Certification under the National Quality
           Institute Progressive Excellence Program (NQI PEP(R)).

        -  Manulife has won several awards for IncomePlus including "Best New
           Initiative Award" and the "Canadian Investment Marketing Award" at
           this year's Canadian Investment Awards for pioneering and
           enhancing Canada's first guaranteed minimum withdrawal benefit
           (GMWB) product. In addition, two of the five "Best in Show" awards
           that Manulife's Canadian Division received from the Insurance &
           Financial Communication Association ("IFCA") were related to
           IncomePlus.

    MANAGEMENT'S DISCUSSION AND ANALYSIS

    Financial Highlights
    (unaudited)

                                          Quarterly Results      Year Ended
                                        4Q07    3Q07    4Q06    2007    2006
                                     ----------------------------------------
    Shareholders' Net Income
     (C$ millions)                     1,144   1,070   1,100   4,302   3,985
    Diluted Earnings per Common Share
     (C$)                               0.75    0.70    0.70    2.78    2.51
    Return on Common Shareholders'
     Equity (%, annualized)             20.5    18.9    18.0    18.4    16.8
    Premiums & Deposits (C$ millions) 17,414  16,797  15,819  69,438  64,939
    Funds under Management
     (C$ billions)                     396.3   399.3   414.4
    Capital (C$ billions)               27.5    27.3    29.6
    

    Effective January 1, 2007, the Company adopted four new Canadian
accounting standards for Financial Instruments - Recognition and Measurement,
Hedges, Comprehensive Income and Accounting for Leveraged Leases. These
changes in accounting policies have not had a material impact on shareholders'
net income.

    Net Income
    -----------
    The Company's shareholders' net income for the fourth quarter of 2007 was
$1,144 million, four per cent higher than $1,100 million reported a year
earlier. The increase in earnings was a result of higher fee income related to
the growth in funds under management in the wealth management businesses and
strong investment performance, partially offset by the unfavourable impact of
equity markets on segregated fund guarantee reserves and the decline in
interest rates. The strengthened Canadian dollar reduced earnings by
$163 million. Full year shareholders' net income was $4,302 million, up eight
per cent from $3,985 million reported last year. Excluding the impact of
foreign exchange, earnings rose by 19 per cent in the quarter and 14 per cent
for the full year versus the year ago result.

    Diluted Earnings per Share and Return on Common Shareholders' Equity
    ---------------------------------------------------------------------
    Fourth quarter reported diluted earnings per common share of $0.75 grew
by seven per cent versus 2006 and by 23 per cent excluding the impact of
foreign exchange. Management measures return on common shareholders' equity
excluding the components of Accumulated Other Comprehensive Income on
available-for-sale securities and cash flow hedges. Return on common
shareholders' equity was 20.5 per cent for the fourth quarter, an increase of
250 basis points over the 18.0 per cent recorded in the fourth quarter, 2006
(see discussion of non-GAAP measures at end of release).

    Premiums and Deposits
    ----------------------
    Premiums and deposits for the quarter were $17.4 billion, up ten per cent
from $15.8 billion reported in the fourth quarter of 2006. This increase
reflects growth across all of our divisions, including record sales for John
Hancock Life, Canadian Individual Life and Canadian Wealth Management. On a
constant currency basis, premiums and deposits grew by 23 per cent.

    Funds under Management
    -----------------------
    Funds under management were $396.3 billion as at December 31, 2007,
$18.1 billion lower than $414.4 billion reported a year ago. The decrease was
attributable to the $53.2 billion negative impact of the strengthened Canadian
dollar and $2.2 billion of scheduled maturities of John Hancock Fixed Products
institutional products, partially offset by strong net policyholder cash flows
and favourable equity market performance over the past twelve months.

    Capital
    --------
    Total capital was $27.5 billion as at December 31, 2007, $2.1 billion
lower than $29.6 billion as at December 31, 2006. Capital increased by
$1,583 million due to the change in accounting standards for financial
instruments and net income in the past twelve months of $4,302 million. This
was offset by shareholders' dividends of $1,371 million; the repurchase of 56
million common shares for $2,245 million; and charges of $3.6 billion to
Accumulated Other Comprehensive Income primarily due to the $3.2 billion
negative impact of the strengthened Canadian dollar over the past twelve
months. Since the strengthened Canadian dollar also lowered required capital,
overall changes in the exchange rate had an immaterial impact on the Company's
capital adequacy position.

    
    PERFORMANCE BY DIVISION

    U.S. Insurance

    Canadian dollars                      Quarterly Results      Year Ended
                                        4Q07    3Q07    4Q06    2007    2006
                                       ------  ------  ------  ------  ------
    Shareholders' Net Income
     (millions)                          296     138     168     755     622
    Premiums & Deposits (millions)     1,696   1,605   1,831   6,538   6,713
    Funds under Management (billions)   56.4    56.2    61.3

    U.S. dollars                          Quarterly Results      Year Ended
                                        4Q07    3Q07    4Q06    2007    2006
                                       ------  ------  ------  ------  ------
    Shareholders' Net Income
     (millions)                          302     132     148     718     549
    Premiums & Deposits (millions)     1,729   1,536   1,608   6,119   5,919
    Funds under Management (billions)   57.1    56.4    52.6
    

    U.S. Insurance shareholders' net income for the fourth quarter of 2007
was $296 million, $128 million higher than $168 million reported a year
earlier. Earnings were negatively impacted by the strengthened Canadian
dollar. On a U.S. dollar basis, earnings increased by 104 per cent. Strong
investment results as well as widening credit spreads were partially offset by
less favourable mortality gains in John Hancock Life compared to strong
results in the prior year and losses on new business in John Hancock Long Term
Care. Earnings were also negatively impacted by the decline in interest rates
during the quarter. Full year shareholders' net income was $755 million, up
21 per cent from $622 million reported last year.
    Premiums and deposits for the quarter were $1.7 billion, down seven per
cent from $1.8 billion reported in the fourth quarter of 2006. On a U.S.
dollar basis, premiums and deposits have increased by eight percent reflecting
higher sales and the growth in in-force business.
    Funds under management declined by eight per cent, or $4.9 billion, to
$56.4 billion at December 31, 2007 as a result of a strengthened Canadian
dollar. On a U.S. dollar basis, funds under management grew by nine percent
primarily due to business growth.

    
    U.S. Wealth Management

    Canadian dollars                      Quarterly Results      Year Ended
                                        4Q07    3Q07    4Q06    2007    2006
                                       ------  ------  ------  ------  ------
    Shareholders' Net Income
     (millions)                          263     268     300   1,100   1,136
    Premiums & Deposits (millions)     8,335   8,494   8,213  35,314  35,267
    Funds under Management (billions)  176.0   181.2   196.7

    U.S. dollars                          Quarterly Results      Year Ended
                                        4Q07    3Q07    4Q06    2007    2006
                                       ------  ------  ------  ------  ------
    Shareholders' Net Income
     (millions)                          269     257     263   1,024   1,002
    Premiums & Deposits (millions)     8,495   8,125   7,214  32,906  31,090
    Funds under Management (billions)  178.1   181.9   168.8
    

    U.S. Wealth Management shareholders' net income for the fourth quarter of
2007 was $263 million, $37 million lower than $300 million reported a year
earlier. Earnings were negatively impacted by the strengthening Canadian
dollar. On a U.S. dollar basis, earnings increased by 2 per cent. The increase
in earnings was a result of higher fee income from higher average assets in
John Hancock Variable Annuities and John Hancock Retirement Plan Services and
the favourable impact of updating acquisition cost amortization schedules in
Variable Annuities. This increase was offset by the unfavourable impact of
equity markets on Variable Annuities' segregated fund guarantee reserves and
the non-recurrence of the unusually strong investment results reported in 2006
in John Hancock Fixed Products. Full year shareholders' net income was $1,100
million, down three per cent from $1,136 million reported last year.
    Premiums and deposits for the quarter were $8.3 billion, up one per cent
from $8.2 billion reported in the fourth quarter of 2006. On a U.S. dollar
basis, premiums and deposits were up 18 per cent, led by growth in Variable
Annuities deposits on the strength of sales of the Income Plus For Life rider
product launched earlier in the year. Retirement Plan Services deposits
increased due to higher recurring deposits from the growing block of in-force
participants and John Hancock Mutual Fund deposits improved from strong
investment performance in certain funds. Fixed Products premiums also
increased reflecting higher sales of payout annuities.
    Funds under management declined 11 per cent, or $20.7 billion, to
$176.0 billion at December 31, 2007 as a result of a strengthened Canadian
dollar. On a U.S. dollar basis, funds under management grew $9.3 billion or
six per cent. This growth is attributable to continued strong net policyholder
cash flows and the cumulative effect of favourable equity market performance
over the last twelve months in the Variable Annuities and Retirement Plan
Services businesses. These increases were partially offset by lower funds
under management in Mutual Funds largely due to redemptions from one
underperforming fund and in Fixed Products, due to scheduled maturities
exceeding new sales over the last twelve months.

    
    Canadian Division

    Canadian dollars                      Quarterly Results      Year Ended
                                        4Q07    3Q07    4Q06    2007    2006
                                       ------  ------  ------  ------  ------
    Shareholders' Net Income
     (millions)                          256     333     247   1,103     981
    Premiums & Deposits (millions)     4,312   3,347   3,460  16,121  13,537
    Funds under Management (billions)   86.1    83.6    77.4
    

    Canadian Division shareholders' net income for the fourth quarter of 2007
was $256 million, $9 million higher than $247 million reported a year earlier.
Earnings reflected solid operational results, offset by the impact of less
favourable equity market and interest rate environments as compared to a year
ago. Claims experience in our insurance businesses was favourable,
significantly improved from a year ago. Strong growth in Manulife Bank and
segregated fund assets under management over the past year contributed to
higher earnings. However, new business strain from strong fourth quarter sales
across the division dampened earnings in the period. Investment performance,
while positive, was reduced from a year ago as gains from strong real estate
asset performance were more than offset by less favourable equity market
returns and lower interest rates. Full year shareholders' net income was
$1,103 million, up 12 per cent from $981 million reported last year.
    Premiums and deposits for the quarter were $4.3 billion, up 25 per cent
from $3.5 billion reported in the fourth quarter of 2006 driven by growth in
segregated fund deposits. Segregated fund deposits rose by over 50 per cent
from a year ago reflecting strong sales in our wealth management businesses.
Sales of IncomePlus, Individual Wealth Management's guaranteed withdrawal
benefit product, were more than twice those of a year ago and our pension
business, Group Savings and Retirement Solutions, had the second best sales
quarter in its history. General fund premiums rose across all businesses and
growth in Group Benefits drove the increase in ASO premium equivalents.
    Funds under management rose by 11 per cent, or $8.7 billion, to
$86.1 billion at December 31, 2007 primarily due to growth in segregated fund
assets and Manulife Bank. Strong net sales drove the increase in segregated
funds, reflecting the impact of record sales in 2007 for both Individual
Wealth Management and Group Savings and Retirement Solutions, combined with
improved retention experience. Manulife Bank assets exceeded $10 billion, an
increase of 26 per cent from a year ago due to the continued success of its
loan and mortgage products.

    
    Asia and Japan Division

    Canadian dollars                      Quarterly Results      Year Ended
                                        4Q07    3Q07    4Q06    2007    2006
                                       ------  ------  ------  ------  ------
    Shareholders' Net Income
     (millions)                          175     227     191     858     734
    Premiums & Deposits (millions)     2,831   3,102   1,957  10,406   8,361
    Funds under Management (billions)   43.3    41.6    37.5

    U.S. dollars                          Quarterly Results      Year Ended
                                        4Q07    3Q07    4Q06    2007    2006
                                       ------  ------  ------  ------  ------
    Shareholders' Net Income
     (millions)                          179     216     167     798     647
    Premiums & Deposits (millions)     2,888   2,965   1,718   9,797   7,363
    Funds under Management (billions)   43.8    41.8    32.2
    

    Asia and Japan Division's shareholders' net income for the fourth quarter
of 2007 was $175 million, $16 million lower than $191 million reported a year
earlier. The decrease in earnings was attributable to the unfavourable impact
of the strengthened Canadian dollar. On a U.S. dollar basis earnings increased
seven per cent, driven by increased fee income from the growth in funds under
management across the pension and wealth management businesses in Hong Kong.
In Japan, higher earnings driven by growth in the in-force variable annuity
business were more than offset by unfavourable investments returns resulting
from turbulent equity markets. Full year shareholders' net income was
$858 million compared to $734 million reported last year.
    Premiums and deposits for the quarter were $2.8 billion, up 45 per cent
from $2.0 billion in the fourth quarter of 2006. The primary driver of the
increase was strong sales of the new variable annuity product launched in
Japan during June 2007. Growth in Hong Kong wealth management and pension
sales, mutual fund sales in Indonesia and Thailand, and sales of our new
variable annuity product launched in Taiwan during September 2007 also
contributed to the increase. This was partially offset by the unfavourable
impact of the strengthened Canadian dollar.
    Funds under management grew by 15 per cent, or $5.8 billion, to
$43.3 billion as at December 31, 2007. Growth was fuelled by strong net
policyholder cash flows from variable annuity sales in Japan; increased
business volumes in pension and wealth management products in Hong Kong and
the positive impact of rising equity markets. These increases were partially
offset by the unfavourable impact of the strengthened Canadian dollar.

    
    Reinsurance Division

    Canadian dollars                      Quarterly Results      Year Ended
                                        4Q07    3Q07    4Q06    2007    2006
                                       ------  ------  ------  ------  ------
    Shareholders' Net Income
     (millions)                           65      59      68     263     294
    Premiums (millions)                  240     249     307   1,026   1,010

    U.S. dollars                          Quarterly Results      Year Ended
                                        4Q07    3Q07    4Q06    2007    2006
                                       ------  ------  ------  ------  ------
    Shareholders' Net Income
     (millions)                           66      58      60     246     259
    Premiums (millions)                  245     238     269     956     890
    

    Reinsurance Division's shareholders' net income for the fourth quarter of
2007 was $65 million, $3 million lower than $68 million reported a year
earlier. The decrease in earnings was attributable to the unfavourable impact
of the strengthened Canadian dollar. On a U. S. dollar basis, earnings in the
quarter increased by $6 million over the fourth quarter of 2006 due to strong
investment results and improved Life claims experience partly offset by weaker
equity market performance. Full year shareholders' net income was
$263 million, down 11 per cent from $294 million reported last year. On a U.
S. dollar basis, net income of $246 million for the year was down five per
cent from 2006.
    Premiums for the quarter were $240 million, down 22 per cent from
$307 million reported in the fourth quarter of 2006. The decrease was
primarily due to the impact of the strengthened Canadian dollar and lower
premiums due to timing of reporting. On a U.S. dollar basis, premiums
decreased by nine per cent compared to last year.

    
    Corporate and Other

    Canadian dollars                      Quarterly Results      Year Ended
                                        4Q07    3Q07    4Q06    2007    2006
                                       ------  ------  ------  ------  ------
    Shareholders' Net Income
     (millions)                           89      45     126     223     218
    Funds under Management (billions)   31.9    34.1    38.5
    

    Corporate and Other is comprised of the Investment Division's external
asset management business, earnings on excess capital, the transfer of credit
risk from operating divisions, changes in actuarial methods and assumptions
and other non-operating events. Also included in Corporate and Other is the
John Hancock Accident and Health operations, which consists primarily of
contracts in dispute. Funds under management include externally managed assets
and assets backing the Company's capital.
    Corporate and Other shareholders' net income for the fourth quarter of
2007 was $89 million, $37 million lower than $126 million reported a year
earlier. This decrease is primarily due to less favourable credit experience
compared to the exceptional experience of the prior year and the impact of
non-recurring tax adjustments from a year ago. These decreases were partially
offset by favourable claims experience in our John Hancock Accident and Health
operations, gains realized on our public equity holdings and higher income
from changes in actuarial methods and assumptions and the one-time positive
earnings impact from China as a result of moving to a par transfer policy
consistent with that of the other territories. Full year shareholders' net
income was $223 million, up 2 per cent from $218 million reported a year ago.
    Funds under management declined by 17 per cent, or $6.6 billion, to
$31.9 billion as at December 31, 2007. This was largely due to the negative
impact of the strengthened Canadian dollar as well as the impact of buying
back 56 million common shares for $2.2 billion during the year.

    Performance and Non-GAAP Measures
    ---------------------------------
    We use a number of non-GAAP financial measures to measure overall
performance and to assess each of our businesses. Non-GAAP measures include
return on common shareholders' equity, premiums and deposits and funds under
management. Non-GAAP financial measures are not defined terms under GAAP and,
therefore, are unlikely to be comparable to similar terms used by other
issuers.
    Return on equity is a profitability measure that presents the net income
available to common shareholders as a percentage of the capital deployed to
earn the income. The implementation of the new accounting standards for
financial instruments resulted in certain unrealized gains and losses, which
do not have an impact on reported income for the period, being reflected in a
new component of shareholders' equity. Accordingly, the Company calculates
return on equity using average common shareholders' equity excluding
accumulated other comprehensive income on available-for-sale securities and
cash flow hedges.

    About Manulife Financial
    ------------------------
    Manulife Financial is a leading Canadian-based financial services group
serving millions of customers in 19 countries and territories worldwide.
Operating as Manulife Financial in Canada and Asia, and primarily through John
Hancock in the United States, the Company offers clients a diverse range of
financial protection products and wealth management services through its
extensive network of employees, agents and distribution partners. Funds under
management by Manulife Financial and its subsidiaries were Cdn$396 billion
(US 392 billion) as at December 31, 2007.
    Manulife Financial Corporation trades as 'MFC' on the TSX, NYSE and PSE,
and under '0945' on the SEHK. Manulife Financial can be found on the Internet
at www.manulife.com.

    Attachments: Financial Highlights, Consolidated Statements of Operations,
    Consolidated Balance Sheets, Divisional Information.

    Notes:

    Manulife Financial Corporation will host a Fourth Quarter Earnings
Results Conference Call at 2:00 p.m. ET on February 14, 2008. For local and
international locations, please call (416) 340-2216 and toll free in North
America please call (866) 898-9626. Please call in ten minutes before the call
starts. You will be required to provide your name and organization to the
operator. A playback of this call will be available by 6:00 p.m. ET on
February 14, 2008 until February 21, 2008 by calling (416) 695-5800 (passcode
No.3248036).
    The conference call will also be webcast through Manulife Financial's
website at 2:00 p.m. ET on February 14, 2008. You may access the webcast at:
www.manulife.com/quarterlyreports. An archived version of the webcast will be
available later on the website at the same URL as above.
    The Fourth Quarter 2007 Financial Statements and Statistical Information
Package are also available on the Manulife website at:
www.manulife.com/quarterlyreports. Each of these documents may be downloaded
before the webcast begins.

    Caution Regarding Forward-Looking Statements
    --------------------------------------------
    This document contains forward-looking statements within the meaning of
the "safe harbour" provisions of Canadian provincial securities laws and the
U.S. Private Securities Litigation Reform Act of 1995. These forward-looking
statements relate to, among other things, our objectives, goals, strategies,
intentions, plans, beliefs, expectations and estimates, and can generally be
identified by the use of words such as "may", "will", "could", "should",
"would", "suspect", "outlook", "expect", "intend", "estimate", "anticipate",
"believe", "plan", "forecast", "objective" and "continue" (or the negative
thereof) and words and expressions of similar import, and include statements
concerning possible or assumed future results. Although we believe that the
expectations reflected in such forward-looking statements are reasonable, such
statements involve risks and uncertainties, and undue reliance should not be
placed on such statements. Certain material factors or assumptions are applied
in making forward-looking statements, and actual results may differ materially
from those expressed or implied in such statements. Important factors that
could cause actual results to differ materially from expectations include but
are not limited to: level of competition and consolidation, changes in laws
and regulations, general business and economic conditions, currency rates and
Company liquidity, accuracy of information received from counterparties and
the ability of counterparties to meet their obligations, accuracy of
accounting policies and actuarial methods used by the Company, ability to
maintain the Company's reputation, legal and regulatory proceedings, the
disruption of or changes to key elements of the Company's or to public
infrastructure systems, the ability to attract and retain key executives,
environmental concerns, the ability to complete acquisitions and execute
strategic plans, and the ability to adapt products and services to the
changing market. Additional information about material factors that could
cause actual result to differ materially from expectations and about material
factors or assumptions applied in making forward-looking statements may be
found in the body of this document as well as under "Risk Factors" in our most
recent Annual Information Form, under "Risk Management" and "Critical
Accounting and Actuarial Policies" in the Management's Discussion and Analysis
in our most recent Annual Report, and elsewhere in our filings with Canadian
and U.S. securities regulators. We do not undertake to update any
forward-looking statements.

    
    Financial Highlights
    (Canadian $ in millions unless otherwise stated and per share
     information, unaudited)

                                         As at and for the three months ended
                                                     December 31
                                                2007        2006    % Change
    -------------------------------------------------------------------------

    Net income                             $   1,074   $   1,108          (3)
      (Loss) income attributed to
       participating policyholders               (70)          8           -
    -------------------------------------------------------------------------
    Net income attributed to shareholders  $   1,144   $   1,100           4
      Preferred share dividends                   (8)         (8)          -
    -------------------------------------------------------------------------
    Net income available to common
     shareholders                          $   1,136   $   1,092           4
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Premiums and deposits:
      Life and health insurance premiums   $   3,799   $   3,996          (5)
      Annuity and pension premiums             1,500       1,084          38
      Segregated fund deposits                 9,043       7,879          15
      Mutual fund deposits                     2,291       2,063          11
      ASO premium equivalents                    630         547          15
      Other fund deposits                        151         250         (40)
    -------------------------------------------------------------------------
    Total premiums and deposits            $  17,414   $  15,819          10
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Funds under management:
      General fund                         $ 161,300   $ 171,320          (6)
      Segregated funds                       174,981     172,259           2
      Mutual funds                            32,948      40,601         (19)
      Other funds                             27,119      30,204         (10)
    -------------------------------------------------------------------------
    Total funds under management           $ 396,348   $ 414,384          (4)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Capitalization:
      Liabilities for preferred shares and
       capital instruments                 $   3,010   $   3,695         (19)
      Non-controlling interest in
       subsidiaries                              146         202         (28)

    Equity
      Participating policyholders' equity         82         142         (42)
      Shareholders' equity
        Preferred shares                         638         638           -
        Common shares                         14,000      14,248          (2)
        Contributed surplus                      140         125          12
        Retained earnings                     14,388      13,512           6
        Accumulated other comprehensive loss
         on AFS and translation of net
         foreign operations                   (4,877)     (3,009)         62
    -------------------------------------------------------------------------
    Total capital                          $  27,527   $  29,553          (7)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Selected key performance measures:
      Basic earnings per common share      $    0.76   $    0.71
      Diluted earnings per common share    $    0.75   $    0.70
      Return on common shareholders'
       equity (annualized)(1)                   20.5%       18.0%
      Book value per common share          $   15.73   $   16.08
      Common shares outstanding
       (in millions)
        End of period                          1,501       1,547
        Weighted average - basic               1,502       1,545
        Weighted average - diluted             1,515       1,561

    (1) Return on common shareholders' equity is net income available to
        common shareholders divided by average common shareholders' equity
        excluding accumulated other comprehensive income on AFS securities
        and cash flow hedges.



    Summary Consolidated Financial Statements

    Consolidated Statements of Operations
    (Canadian $ in millions except per share data, unaudited)

                                                   For the three months ended
                                                             December 31
                                                            2007        2006
    -------------------------------------------------------------------------
    Revenue
    Premium income                                     $   5,299   $   5,080
    Investment income
      Investment income                                    2,420       2,709
      Realized/unrealized gains on invested assets
       supporting policy liabilities and consumer notes    1,155         154
    Other revenue                                          1,393       1,247
    -------------------------------------------------------------------------
    Total revenue                                      $  10,267   $   9,190
    -------------------------------------------------------------------------
    Policy benefits and expenses
    To policyholders and beneficiaries
      Death, disability and other claims               $   1,454   $   1,475
      Maturity and surrender benefits                      1,992       2,597
      Annuity payments                                       788         897
      Policyholder dividends and experience
       rating refunds                                        393         402
      Net transfers to segregated funds                      417         113
      Change in actuarial liabilities(1)                   1,250        (126)
    General expenses                                         866         912
    Investment expenses                                      248         239
    Commissions                                            1,143         929
    Interest expense                                         258         253
    Premium taxes                                             65          70
    Non-controlling interest in subsidiaries                  35         (11)
    -------------------------------------------------------------------------
    Total policy benefits and expenses                 $   8,909   $   7,750
    -------------------------------------------------------------------------
    Income before income taxes                         $   1,358   $   1,440
    Income taxes                                            (284)       (332)
    -------------------------------------------------------------------------
    Net income                                         $   1,074   $   1,108
      (Loss) income attributed to participating
       policyholders                                         (70)          8
    -------------------------------------------------------------------------
    Net income attributed to shareholders              $   1,144   $   1,100
      Preferred share dividends                               (8)         (8)
    -------------------------------------------------------------------------
    Net income available to common shareholders        $   1,136   $   1,092
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic earnings per common share                    $    0.76   $    0.71
    Diluted earnings per common share                  $    0.75   $    0.70

    (1) Includes impact of net redemptions in John Hancock Fixed
        institutional products of $0.6 billion in Q4 2007 and $1.2 billion
        in Q4 2006.



    Consolidated Balance Sheets
    (Canadian $ in millions, unaudited)

                                                         As at December 31
    Assets                                                2007        2006
    -------------------------------------------------------------------------
    Invested assets
    Cash and short-term securities                     $  12,354   $  10,901
    Securities
      Bonds                                               72,831      78,085
      Stocks                                              11,134      11,272
    Loans
      Mortgages                                           26,061      28,131
      Private placements                                  21,591      25,074
      Policy loans                                         5,823       6,413
      Bank loans                                           2,182       2,009
    Real estate                                            5,727       5,905
    Other investments                                      3,597       3,530
    -------------------------------------------------------------------------
    Total invested assets                              $ 161,300   $ 171,320
    -------------------------------------------------------------------------
    Other assets
    Accrued investment income                          $   1,414   $   1,557
    Outstanding premiums                                     672         669
    Goodwill                                               6,721       7,461
    Intangible assets                                      1,573       1,708
    Derivatives                                            2,129         400
    Miscellaneous                                          2,649       3,201
    -------------------------------------------------------------------------
    Total other assets                                 $  15,158   $  14,996
    -------------------------------------------------------------------------
    Total assets                                       $ 176,458   $ 186,316
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Segregated funds net assets                        $ 175,544   $ 172,937
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities and equity
    -------------------------------------------------------------------------
    Policy liabilities                                 $ 124,422   $ 130,819
    Deferred realized net gains                              107       4,442
    Bank deposits                                         10,008       7,845
    Consumer notes                                         2,085       2,860
    Long-term debt                                         1,820       1,930
    Future income tax liability, net                       2,839       2,258
    Derivatives                                            1,866         910
    Other liabilities                                      5,820       5,699
    -------------------------------------------------------------------------
                                                       $ 148,967   $ 156,763

    Liabilities for preferred shares and capital
     instruments                                           3,010       3,695
    Non-controlling interest in subsidiaries                 146         202

    Equity
      Participating policyholders' equity                     82         142
      Shareholders' equity
        Preferred shares                                     638         638
        Common shares                                     14,000      14,248
        Contributed surplus                                  140         125
        Retained earnings                                 14,388      13,512
        Accumulated other comprehensive loss              (4,913)     (3,009)
    -------------------------------------------------------------------------
    Total equity                                       $  24,335   $  25,656
    -------------------------------------------------------------------------
    Total liabilities and equity                       $ 176,458   $ 186,316
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Segregated funds net liabilities                   $ 175,544   $ 172,937
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Notes to Summary Consolidated Financial Statements
    (Canadian $ in millions, unaudited)

    Note 1: Divisional Information

                                     For the quarter ended December 31, 2007
                                  -------------------------------------------
                                                U.S.
                                     U.S.      Wealth               Asia and
    Premiums and deposits         Insurance  Management  Canadian     Japan
    -------------------------------------------------------------------------
    General fund premiums         $   1,377  $   1,330  $   1,624  $     728
    Segregated fund deposits            319      5,128      1,929      1,667
    Mutual fund deposits                  -      1,726        129        436
    ASO premium equivalents               -          -        630          -
    Other fund deposits                   -        151          -          -
    -------------------------------------------------------------------------
    Total                         $   1,696  $   8,335  $   4,312  $   2,831
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net income                    $     296  $     263  $     266  $     140
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Funds under management                  As at December 31, 2007
    -------------------------------------------------------------------------
    General fund                  $  45,037  $  35,791  $  51,466  $  16,761
    Segregated funds                 11,387    108,878     31,391     20,727
    Mutual funds                          -     27,585      3,286      2,077
    Other funds                           -      3,713          -      3,702
    -------------------------------------------------------------------------
    Total                         $  56,424  $ 175,967  $  86,143  $  43,267
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                       For the quarter ended
                                         December 31, 2007
                                  --------------------------------
                                              Corporate
                                                 and
    Premiums and deposits         Reinsurance   Other     Total
    --------------------------------------------------------------
    General fund premiums         $     240  $       -  $   5,299
    Segregated fund deposits              -          -      9,043
    Mutual fund deposits                  -          -      2,291
    ASO premium equivalents               -          -        630
    Other fund deposits                   -          -        151
    --------------------------------------------------------------
    Total                         $     240  $       -  $  17,414
    --------------------------------------------------------------
    --------------------------------------------------------------

    Net income                    $      65  $      44  $   1,074
    --------------------------------------------------------------
    --------------------------------------------------------------

    Funds under management             As at December 31, 2007
    --------------------------------------------------------------
    General fund                  $   2,606  $   9,639  $ 161,300
    Segregated funds                      -      2,598    174,981
    Mutual funds                          -          -     32,948
    Other funds                           -     19,704     27,119
    --------------------------------------------------------------
    Total                         $   2,606  $  31,941  $ 396,348
    --------------------------------------------------------------
    --------------------------------------------------------------



                                     For the quarter ended December 31, 2006
                                  -------------------------------------------
                                                U.S.
                                     U.S.      Wealth               Asia and
    Premiums and deposits         Insurance  Management  Canadian     Japan
    -------------------------------------------------------------------------
    General fund premiums         $   1,520  $     944  $   1,523  $     786
    Segregated fund deposits            311      5,324      1,254        939
    Mutual fund deposits                  -      1,695        136        232
    ASO premium equivalents               -          -        547          -
    Other fund deposits                   -        250          -          -
    -------------------------------------------------------------------------
    Total                         $   1,831  $   8,213  $   3,460  $   1,957
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net income                    $     168  $     300  $     216  $     230
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Funds under management                  As at December 31, 2006
    -------------------------------------------------------------------------
    General fund                  $  48,675  $  44,947  $  46,509  $  16,560
    Segregated funds                 12,583    112,269     27,448     17,232
    Mutual funds                          -     35,499      3,441      1,661
    Other funds                           -      3,957          -      2,083
    -------------------------------------------------------------------------
    Total                         $  61,258  $ 196,672  $  77,398  $  37,536
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                       For the quarter ended
                                         December 31, 2006
                                  --------------------------------
                                              Corporate
                                                 and
    Premiums and deposits         Reinsurance   Other     Total
    --------------------------------------------------------------
    General fund premiums         $     307  $       -  $   5,080
    Segregated fund deposits              -         51      7,879
    Mutual fund deposits                  -          -      2,063
    ASO premium equivalents               -          -        547
    Other fund deposits                   -          -        250
    --------------------------------------------------------------
    Total                         $     307  $      51  $  15,819
    --------------------------------------------------------------
    --------------------------------------------------------------

    Net income                    $      68  $     126  $   1,108
    --------------------------------------------------------------
    --------------------------------------------------------------

    Funds under management             As at December 31, 2006
    --------------------------------------------------------------
    General fund                  $   3,009  $  11,620  $ 171,320
    Segregated funds                      -      2,727    172,259
    Mutual funds                          -          -     40,601
    Other funds                           -     24,164     30,204
    --------------------------------------------------------------
    Total                         $   3,009  $  38,511  $ 414,384
    --------------------------------------------------------------
    --------------------------------------------------------------


    Note 2: Comparatives

    Certain comparative amounts have been reclassified to conform with the
    current period's presentation.
    





For further information:

For further information: Media inquiries: Laurie Lupton, (416) 852-7792,
Laurie_Lupton@manulife.com; Investor Relations: Amir Gorgi, 1-800-795-9767,
investor_relations@manulife.com


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