EX-99.1 2 d719878dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

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TSX/NYSE/PSE: MFC SEHK: 945    C$ unless otherwise stated

TORONTO, ON – February 14, 2024 – Manulife Financial Corporation (“Manulife” or the “Company”) reported its full year and fourth quarter results for the period ended December 31, 2023, during which we delivered double-digit growth in core EPS, and today declared a common share dividend increase of 9.6%.

Key highlights for full year 2023 and the fourth quarter (“4Q23”) include:

 

   

Net income attributed to shareholders of $5.1 billion in 2023, up $1.6 billion from 2022 transitional net income attributed to shareholders (“Transitional Net Income”)1, and $1.7 billion in 4Q23, up $0.4 billion from Transitional Net Income in the fourth quarter of 2022 (“4Q22”)

 

   

Net income attributed to shareholders of $5.1 billion in 2023, up $7.0 billion from 2022, and $1.7 billion in 4Q23, up $0.7 billion from 4Q22

 

   

Core earnings1 of $6.7 billion in 2023, up 13% on a constant exchange rate basis2 from 2022. Core earnings of $1.8 billion in 4Q23, up 15% from 4Q22

 

   

Core EPS3 of $3.47 in 2023, up 17%2 from $2.90 in 2022. Core EPS of $0.92 in 4Q23, up 20% from $0.77 in 4Q22

 

   

EPS of $2.61 in 2023, up 47%2 compared with transitional EPS3 of $1.69 in 2022 and up $3.76 compared with EPS of -$1.15 in 2022. EPS of $0.86 in 4Q23, up 43% compared with transitional EPS of $0.60 in 4Q22 and up 97%2 compared with EPS of $0.43 in 4Q22

 

   

Core ROE3 of 15.9% in 2023 and 16.4% in 4Q23, and ROE of 11.9% in 2023 and 15.3% in 4Q23

 

   

LICAT ratio4 of 137%

 

   

Remittances5 of $5.5 billion in 2023 compared with $6.9 billion in 2022

 

   

Entered into an agreement with Global Atlantic to reinsure four in-force blocks of legacy and low ROE business, including $6 billion of long-term care (“LTC”) insurance contract net liabilities6, representing the largest ever LTC reinsurance transaction. The transaction is expected to close by the end of February 20247

 

   

Purchased for cancellation 3.4% of common shares outstanding, or more than 62 million common shares, for $1.6 billion in 2023

 

   

Declared a 9.6% increase in the dividend per common share today

 

 

“2023 was a milestone year for Manulife as we continued to execute on our transformation journey. We delivered strong business results of 17% and 13% growth year-over-year in core EPS and core earnings, respectively, as well as core ROE of 15.9% in 2023. We generated core earnings growth across all insurance segments, double-digit increases in all new business metrics8, and $4.5 billion of net inflows5 in Global WAM9. We also announced a milestone reinsurance transaction, including the largest ever LTC risk transfer.”

 

“Our strategy is grounded in making decisions easier and lives better for our customers and driving greater value for our shareholders. The dedication and passion of our team to deliver has helped us excel in uncertain market conditions and achieve positive momentum as we begin 2024.”

 

Roy Gori, Manulife President & Chief Executive Officer

 

“This year marked a smooth transition to IFRS 17 where Manulife delivered growth in earnings, book value per common share, and LICAT ratio, while returning $1.6 billion to shareholders through our share buyback program. We generated $5.5 billion in remittances in 2023, and we announced a 9.6% increase in the common share dividend today. We enter 2024 well positioned to deliver business growth and cash generation to our shareholders.”

 

Colin Simpson, Manulife Chief Financial Officer

 

 

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Results at a Glance

 

    Quarterly Results      Full Year Results  
 
 ($ millions, unless otherwise stated)   4Q23      4Q22      Change2,5      2023      2022      Change  

Net Income attributed to shareholders /

  $ 1,659      $ 915 /        81% /      $ 5,103      $ (1,933) /        nm /  

Transitional

     $ 1,228        35%         $ 3,498        40%  

Core Earnings

  $ 1,773      $ 1,543        15%      $ 6,684      $ 5,801        13%  

EPS / Transitional ($)

  $ 0.86      $ 0.43 /        97% /      $ 2.61      $ (1.15) /        nm /  
     $ 0.60        43%         $ 1.69        47%  

Core EPS ($)

  $ 0.92      $ 0.77        20%      $ 3.47      $ 2.90        17%  

ROE / Transitional3

    15.3%       

8.0% /

11.0%

 

 

    

7.3 pps /

4.3 pps

 

 

     11.9%       

(5.5)% /

8.2%

 

 

    

17.4 pps /

3.7 pps

 

 

Core ROE

    16.4%        14.1%        2.3 pps        15.9%        14.0%        1.9 pps  

Book value per common share ($)

  $ 22.36      $ 21.56        4%      $ 22.36      $ 21.56        4%  

Adjusted BV per common share ($)3

  $ 32.19      $ 29.42        9%      $ 32.19      $ 29.42        9%  

APE sales5

  $ 1,550      $ 1,288        20%      $ 6,440      $ 5,653        12%  

NBV5

  $ 630      $ 524        20%      $ 2,324      $ 2,063        10%  

New business CSM

  $ 626      $ 442        41%      $ 2,167      $ 1,895        12%  

Global WAM net flows ($ billions)

  $ (1.3)      $ (8.4)        85%      $ 4.5      $ 3.2        28%  

 

Results by Segment

 

                
    Quarterly Results      Full Year Results  
 
 ($ millions, unless otherwise stated)   4Q23      4Q22      Change      2023      2022      Change  

 Asia (US$)

                  

Net Income attributed to shareholders /

    $ 452        $ 231 /        84% /        $ 995        $   516 /        43% /  

Transitional

       363        22%           481        73%  

Core Earnings

      414        365        14%          1,518        1,392        11%  

APE sales

    731        658        11%        3,313        2,920        15%  

NBV

    306        292        5%        1,206        1,181        3%  

New Business CSM

    303        238        27%        1,148        1,006        16%  

 Canada

                                                    

Net Income attributed to shareholders /

Transitional

    $ 365        $

 

(73) /

120

 

 

    

nm /

204%

 

 

     $ 1,191        $

 

(503) /

1,198

 

 

    

nm /

(1)%

 

 

Core Earnings

    352        296        19%        1,487        1,387        7%  

APE sales

    363        252        44%        1,409        1,261        12%  

NBV

    139        87        60%        490        362        35%  

New Business CSM

    70        47        49%        224        199        13%  

 U.S. (US$)

                                                    

Net Income attributed to shareholders /

Transitional

    $ 146        $

 

  (33) /

(79)

 

 

    

nm /

nm

 

 

     $ 473        $

 

  (1,809) /

1,139

 

 

    

nm /

(58)%

 

 

Core Earnings

    349        301        16%        1,304        1,202        8%  

APE sales

    141        105        34%        416        461        (10)%  

NBV

    54        31        74%        153        126        21%  

New Business CSM

    105        52        102%        292        299        (2)%  

 Global WAM

                                                    

Net Income attributed to shareholders

    $ 365        $ 401        (9)%        $ 1,297        $ 1,121        15%  

Core Earnings

    353        274        29%        1,321        1,299        (1)%  

Gross flows ($ billions)5

    35.1        32.5        8%        143.4        136.9        2%  

Average AUMA ($ billions)5

    817        780        5%        813        790        0%  

Core EBITDA margin3

    25.7%        23.6%        210 bps        24.9%        27.2%        (230) bps  

 

 

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Strategic Highlights

We are executing on our strategy to reshape our portfolio and focus on high potential growth

We entered into an agreement with Global Atlantic to reinsure four in-force blocks of legacy and low ROE business, including $6 billion of LTC insurance contract net liabilities. This agreement represents the largest ever LTC reinsurance transaction and is a major milestone in our transformation journey to reshape our portfolio by reducing risk, improving ROE, strengthening capital, growing high return businesses and delivering value to shareholders.7

In Asia, we continued to enhance our mainland Chinese visitor (“MCV") capabilities to complement our prominent domestic franchise in Hong Kong with support from the launch of an expanded hospital network covering more than 3,000 hospitals in mainland China and the opening of our second prestige service centre in Hong Kong. Our continued investments in MCV capabilities have contributed to robust MCV APE sales in 2023, more than double that of our 2019 pre-pandemic levels.

In addition, we launched a unified onboarding platform in our global high net worth business in Bermuda10, Hong Kong and Singapore. The new platform makes new business application, underwriting and compliance processes simpler and faster, enabling more streamlined interactions and an overall enhanced experience for both our brokers and customers.

In Global WAM, we entered into an agreement to acquire multi-sector alternative credit manager CQS11, headquartered in London. The acquisition will give Manulife Investment Management and CQS clients enhanced access to our combined global investment solutions.

In Canada, we partnered with League, a leading healthcare technology provider, to offer our group benefits members more personalized and integrated digital healthcare experiences, enabling them to connect their benefits directly with healthcare options.

We are helping our customers live longer, healthier, and better lives

In the U.S., we enhanced our John Hancock Vitality Program by extending eligibility to access GRAIL’s Galleri® multi-cancer early detection test to additional members, expanding eligibility for preventative care and early detection behaviours through annual skin cancer screenings, and introducing a personalized way to incentivize members to be more physically active through a new Active Rewards feature.

In addition, we differentiated ourselves from other U.S. life insurance carriers by hosting the first longevity symposium in the industry that brought together 250 life insurance brokers, leadership from reinsurance companies, media, and local government officials to give them a first-hand look at the innovations and science shaping the future of longevity.

In Canada, we expanded our Personalized Medicine program to all group benefits extended healthcare plans, making this service available to more customers, while enabling them to learn about medications that best meet their needs and work with healthcare providers on customized treatment plans that can lead to better outcomes.

We continue to progress on our ambition to be the most digital, customer-centric company in our industry

In Global WAM, we continued to enhance and broaden our wealth planning and advice business in Canada Retail through strategic agreements with Fidelity Clearing Canada and Envestnet that will provide access to leading advisory technology and portfolio management platforms, which when combined will deliver an enhanced digital client experience and improved advisor productivity.

In Asia, we completed Phase 1 of the policy administration system modernization in mainland China, launching new business and underwriting modules on the new cloud-native solution, with the seamless data migration of more than three million customers. This enables scale and efficiency, and lays the foundation for improved customer, distributor and partner experience.

Furthermore, we optimized the customer registration experience across our customer websites in the U.S., resulting in a 26% increase in online registrations in 2023, contributing to a 19% improvement in unique website traffic. In Canada, we grew our annual Manulife mobile app downloads by 18%, supported by upgrades designed to enhance our customers’ digital experience and a successful communication campaign highlighting the ease and speed of online claims submissions.

 

 

 

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Strong earnings12 growth supported by rising interest rates and improved insurance experience

Core earnings of $6.7 billion in 2023, up 13% from 2022, and $1.8 billion in 4Q23, up 15% from 4Q22

The increase from 2022 was driven by improved insurance experience, the net impact of rising interest rates, and business growth. These were partially offset by a higher expected credit loss (“ECL”) provision, higher performance-related costs and investments in technology. Insurance experience in our Property and Casualty (“P&C”) Reinsurance business improved significantly in 2023 due to updates to prior year hurricane provisions compared with charges in 2022.

In the fourth quarter, core earnings increased by double-digits year-over-year across all four operating segments.

 

    In Asia, higher net insurance results reflected the net impact of updates to actuarial methods and assumptions, which along with the impact of higher interest rates and business growth, contributed to a 14% increase in 4Q23 core earnings.
    4Q23 core earnings in Global WAM were up 29% as a result of higher average AUMA and fee spreads, benefitting from favourable market impacts.
    In Canada, growth in short-term insurance, primarily Group Insurance, as well as a decline in the ECL provision led to a 19% growth in 4Q23 core earnings.
    4Q23 core earnings in the U.S. increased 16%, in part due to the net impact of higher yields and improved insurance experience.
    In Corporate and Other, core earnings decreased by $39 million as improved insurance experience in our P&C Reinsurance business was more than offset by higher performance-related costs and higher cost of debt financing.

Net Income attributed to shareholders rose to $5.1 billion in 2023, $1.6 billion higher than 2022 Transitional Net Income, and $1.7 billion in 4Q23, $0.4 billion higher than 4Q22 Transitional Net Income

The $1.6 billion increase compared with 2022 Transitional Net Income reflected growth in core earnings and a smaller net charge from market experience. The net charge from market experience in 2023 was primarily related to lower-than-expected returns on alternative long-duration assets (“ALDA”) and the net impact of interest rate movements. The $7.0 billion increase compared with 2022 net income attributed to shareholders was driven by the factors noted above and $5.4 billion of transitional impacts due to the application of IFRS 9 hedge accounting and ECL principles.

The $0.4 billion increase compared with 4Q22 Transitional Net Income was primarily driven by a smaller net charge from market experience, growth in core earnings and the impact of updates to actuarial methods and assumptions in 4Q23. In addition, 4Q22 included the impact of an increase in the Canadian corporate tax rate on our deferred tax assets. The net charge from market experience in 4Q23 was primarily related to lower-than-expected returns on ALDA, partially offset by higher-than-expected returns on public equity. The $0.7 billion increase compared with 4Q22 net income attributed to shareholders was driven by the factors noted above and $0.3 billion of transitional impacts due to the application of IFRS 9 hedge accounting and ECL principles.

Double-digit growth in new business results and $4.5 billion of net inflows in Global WAM

Our 2023 new business results were boosted by strong performance in Asia and Canada. Overall, our APE sales, NBV and new business CSM increased 12%, 10% and 12%, respectively, from 2022

 

    In Asia, higher demand across various markets in the region after the lifting of all COVID-19 containment measures in early 2023 contributed to a 15%, 3% and 16% growth in APE sales, NBV and new business CSM, respectively. Hong Kong APE sales, NBV and new business CSM increased 58%, 20% and 49%, respectively, primarily driven by a return of demand from MCV customers.
    In Canada, APE sales increased 12%, driven by a large affinity markets sale, higher sales in all group benefits markets, partially offset by lower segregated fund sales. Higher sales volumes and higher margins in Group Insurance and Annuities led to a 35% increase year-over-year in NBV. New business CSM also increased 13%.
    In the U.S., APE sales and new business CSM were down 10% and 2%, respectively, due to the adverse impact of higher short-term interest rates on accumulation insurance products for most of 2023, particularly for our affluent customers. However, NBV increased 21%, driven by pricing actions, product mix and higher interest rates, which more than offset the impact of lower sales volumes.

 

  

 

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Our 4Q23 new business results demonstrated momentum with year-over-year growth across all insurance segments, with increases of 20%, 20% and 41% in APE sales, NBV and new business CSM, respectively

 

    Asia generated year-over-year growth of 11%, 5% and 27% in APE sales, NBV and new business CSM, respectively, primarily driven by strong growth in Hong Kong due to a return of demand from MCV customers as noted above.
    In Canada, APE sales increased 44% from 4Q22, primarily due to higher large-case and mid-size sales in Group Insurance and higher fixed annuity sales, partially offset by lower travel sales. Combined with higher margins, this resulted in a 60% and 49% increase in NBV and new business CSM, respectively.
    In the U.S., APE sales increased 34% compared with 4Q22, reflecting a rebound in demand from affluent customers. Combined with product mix and pricing actions, this led to a 74% and 102% increase in NBV and new business CSM, respectively.

Global WAM net inflows of $4.5 billion in 2023, $1.3 billion higher compared with net inflows of $3.2 billion in 2022

 

    Growth in member contributions in Retirement were more than offset by large case pension plan redemptions by a U.S. sponsor in the second half of the year, resulting in increased net outflows of $4.0 billion in 2023, compared with $0.1 billion in the prior year.
    Retail net outflows of $0.5 billion in 2023 improved from $1.6 billion in the prior year, driven by lower mutual fund redemption rates and the launch of our Global Semiconductors strategy in Japan. This was partially offset by lower demand as investors continued to favour short-term cash and money market instruments amid market volatility and higher interest rates.
    Institutional Asset Management generated increased net inflows of $9.0 billion in 2023, compared with $4.9 billion in the prior year, driven by higher net inflows in alternative asset mandates, the impact of acquiring full ownership of Manulife Fund Management in China and new institutional product launches.

Global WAM net outflows of $1.3 billion in 4Q23, a $7.1 billion improvement compared with net outflows of $8.4 billion in 4Q22

 

    Retirement net outflows of $2.5 billion improved from $4.6 billion in the prior year quarter, driven by lower pension plan redemptions in the U.S. and growth in new pension plan sales and member contributions.
    Retail net outflows of $1.0 billion in 4Q23 improved from $4.7 billion in 4Q22, driven by lower mutual fund redemption rates.
    Institutional Asset Management generated higher net inflows of $2.1 billion, compared with $0.9 billion in 4Q22, driven by higher sales of real estate, private equity and credit mandates.

CSM balance increased 21%2 with contribution from organic CSM movement of 5%5 and the impact from changes in actuarial methods and assumptions

CSM net of NCI13 was $20,440 million as at December 31, 2023

CSM net of NCI increased $3,157 million compared with December 31, 2022, representing growth of 21%. Organic CSM movement was an increase of $890 million or 5% in 2023, driven by the impact of new business and interest accretion, partially offset by amortization recognized in core earnings and a net reduction from insurance experience. Inorganic CSM movement was an increase of $2,434 million in 2023, primarily driven by the impact from changes in actuarial methods and assumptions, partially offset by changes in foreign currency exchange rates. In addition, NCI CSM increased $167 million compared with December 31, 2022. Post-tax CSM net of NCI1 was $17,748 million as at December 31, 2023.

4Q23 Update of Actuarial Methods and Assumptions

We updated our actuarial methods and assumptions which decreased the overall level of the risk adjustment for non-financial risk in the fourth quarter. This change moves the risk adjustment to approximately the middle of our existing 90-95% confidence level range. The risk adjustment would have exceeded the 95% confidence level in 4Q23 without making the change. This change led to a decrease in pre-tax fulfilment cash flows of $2,850 million, an increase in pre-tax net income attributed to shareholders of $144 million (an increase of $119 million post-tax), an increase in pre-tax net income attributed to participating policyholders of $115 million ($91 million post-tax), an increase in CSM of $2,638 million, and a decrease in pre-tax other comprehensive income of $47 million ($37 million post-tax).

 

 

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1 

Transitional Net Income, core earnings and post-tax contractual service margin net of NCI (“post-tax CSM net of NCI”) are non-GAAP financial measures. For more information on non-GAAP and other financial measures, see “Non-GAAP and other financial measures” below and in our 2023 Management’s Discussion and Analysis (“2023 MD&A”).

 

2 

Percentage growth / declines in core earnings, diluted core earnings per common share (“core EPS”), transitional diluted earnings per common share (“transitional EPS”), diluted earnings (loss) per share (“EPS”), net income attributed to shareholders, Transitional Net Income, new business contractual service margin net of NCI (“new business CSM”) and contractual service margin net of NCI (“CSM net of NCI”) are stated on a constant exchange rate basis and are non-GAAP ratios.

3 

Core EPS, transitional EPS, core ROE, transitional return on equity (“transitional ROE”), adjusted book value per common share (“adjusted BV per common share”) and core EBITDA margin are non-GAAP ratios.

4 

Life Insurance Capital Adequacy Test (“LICAT”) ratio of The Manufacturers Life Insurance Company (“MLI”) as at December 31, 2023. LICAT ratio is disclosed under the Office of the Superintendent of Financial Institutions Canada’s (“OSFI’s”) Life Insurance Capital Adequacy Test Public Disclosure Requirements guideline.

5 

For more information on remittances, net flows, APE sales, NBV, gross flows and average asset under management and administration (“average AUMA”), see “Non-GAAP and other financial measures” below. In this news release, percentage growth / declines in net flows, APE sales, NBV, gross flows, average AUMA and organic CSM are stated on a constant exchange rate basis.

6 

Insurance and investment contract net liabilities amounts are as at September 30, 2023. IFRS 17 current estimate of present value of future cashflows + risk adjustment + contractual service margin.

7 

See “Caution regarding forward-looking statements” below.

8 

Annualized premium equivalent (“APE”) sales, new business value (“NBV”) and new business CSM.

9 

Global Wealth and Asset Management (“Global WAM”).

10 

Bermuda represents our International High Net Worth business.

11 

The transaction is expected to close in the first half of 2024 subject to customary closing conditions and regulatory approvals.

12 

See “Profitability” in section 1 “Manulife Financial Corporation” and section 8 “Fourth Quarter Financial Highlights” in our 2023 MD&A for more information on notable items attributable to core earnings and net income attributed to shareholders.

13 

Non-controlling interests (“NCI”).

 

 

 

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Earnings Results Conference Call

Manulife will host a conference call and live webcast on its fourth quarter and full year 2023 results on February 15, 2024, at 8:00 a.m. (ET). To access the conference call, dial 1-800-806-5484 or 1-416-340-2217 (Passcode: 7713937#). Please call in 15 minutes before the scheduled start time. You will be required to provide your name and organization to the operator. You may access the webcast at manulife.com/en/investors/results-and-reports.

The archived webcast will be available following the call at the same URL as above. A replay of the call will also be available until March 16, 2024, by dialing 1-800-408-3053 or 1-905-694-9451 (Passcode: 1481706#).

The Fourth Quarter 2023 Statistical Information Package is also available on the Manulife website at: www.manulife.com/en/investors/results-and-reports.

This earnings news release should be read in conjunction with the Company’s 2023 MD&A and Consolidated Financial Statements for the year and the quarter ended December 31, 2023, prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board, which is available on our website at www.manulife.com/en/investors/results-and-reports. The Company’s 2023 MD&A and additional information relating to the Company is available on the SEDAR+ website at http://www.sedarplus.ca and on the U.S. Securities and Exchange Commission’s (“SEC”) website at http://www.sec.gov.

Any information contained in, or otherwise accessible through, websites mentioned in this news release does not form a part of this document unless it is expressly incorporated by reference.

 

Media Inquiries

Cheryl Holmes

(416) 557-0945

Cheryl_Holmes@manulife.com

  

 Investor Relations

 Hung Ko

 (416) 806-9921

Hung_Ko@manulife.com

 

 

 

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Earnings

The following table presents net income attributed to shareholders for 4Q23, 3Q23 and full year 2023 results as well as Transitional Net Income for 4Q22 and full year 2022 results, consisting of core earnings and details of the items excluded from core earnings:

 

     Quarterly Results      Full Year Results  
($ millions)       4Q23         3Q23         4Q22         2023         2022  

Core earnings

              

Asia

   $ 564      $ 522      $ 496      $ 2,048      $ 1,812  

Canada

     352        408        296        1,487        1,387  

U.S.

     474        442        408        1,759        1,566  

Global Wealth and Asset Management

     353        361        274        1,321        1,299  

Corporate and Other

     30        10        69        69        (263)  

Total core earnings

   $  1,773      $    1,743      $  1,543      $    6,684      $ 5,801  

Items excluded from core earnings:

              

Market experience gains (losses)

     (133)        (1,022)        (655)        (1,790)        (2,585)  

Change in actuarial methods and assumptions that flow directly through income

     119        (14)        -        105        26  

Restructuring charge

     (36)        -        -        (36)        -  

Reinsurance transactions, tax-related items and other

     (64)        306        340        140        256  

Net income attributed to shareholders / Transitional

   $ 1,659      $ 1,013      $ 1,228      $ 5,103      $    3,498  

Non-GAAP and other financial measures

The Company prepares its Consolidated Financial Statements in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. We use a number of non-GAAP and other financial measures to evaluate overall performance and to assess each of our businesses. This section includes information required by National Instrument 52-112Non-GAAP and Other Financial Measures Disclosure in respect of “specified financial measures” (as defined therein).

Non-GAAP financial measures include core earnings (loss); core earnings available to common shareholders; core earnings before income taxes, depreciation and amortization (“core EBITDA”); transitional net income (loss) attributed to shareholders (“Transitional Net Income”); common shareholders’ transitional net income; adjusted book value; post-tax contractual service margin; post-tax contractual service margin net of NCI (“post-tax CSM net of NCI”); and core revenue. In addition, non-GAAP financial measures include the following stated on a constant exchange rate (“CER”) basis: any of the foregoing non-GAAP financial measures; net income attributed to shareholders; and common shareholders’ net income.

Non-GAAP ratios include core return on common shareholders’ equity (“core ROE”); diluted core earnings per common share (“core EPS”); transitional diluted earnings per common share (“transitional EPS”); transitional return on equity (“transitional ROE”); adjusted book value per common share; core EBITDA margin; and percentage growth/decline on a constant exchange rate basis in any of the above non-GAAP financial measures and non-GAAP ratios; net income attributed to shareholders; diluted earnings per common share (“EPS”), CSM net of NCI, and new business CSM.

Other specified financial measures include remittances; NBV; APE sales; gross flows; net flows; average assets under management and administration (“average AUMA”); and percentage growth/decline in these foregoing specified financial measures. In addition, explanations of the components of the CSM movement, other than the new business CSM were provided in the 2023 MD&A.

Non-GAAP financial measures and non-GAAP ratios are not standardized financial measures under GAAP and, therefore, might not be comparable to similar financial measures disclosed by other issuers. Therefore, they should not be considered in isolation or as a substitute for any other financial information prepared in accordance with GAAP. For more information on non-GAAP financial measures, including those referred to above, see the section “Non-GAAP and other financial measures” in our 2023 MD&A, which is incorporated by reference.

IFRS 17 Transition

Manulife adopted IFRS 17 “Insurance Contracts” and IFRS 9 “Financial Instruments” effective for years beginning on January 1, 2023, to be applied retrospectively. Our quarterly and full year 2022 results have been restated in accordance with IFRS 17 and IFRS 9.

The 2022 comparative results in this news release may not be fully representative of our market risk profile, as the transition of our general fund portfolio for asset-liability matching purposes under IFRS 17 and IFRS 9 was not completed until early 2023. Consequently, year-over-year variations between our 2023 results compared to the 2022 results should be viewed in this context.

 

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In addition, our 2022 results are also not directly comparable to 2023 results because IFRS 9 hedge accounting and ECL principles are applied prospectively effective January 1, 2023. Accordingly, we have also presented comparative quarterly and full year 2022 results as if IFRS had allowed such principles to be implemented for 2022. Such results are denoted as being “transitional” throughout this news release and include the Transitional Net Income for 2022. For a complete list of transitional financial measures, please see section 1 “Implementation of IFRS 17 and IFRS 9” of the 2023 MD&A.

Reconciliation of core earnings and transitional net income attributed to shareholders to net income attributed to shareholders

 

     2023      
  

 

 

 ($ millions, post-tax and based on actual foreign exchange

 rates in effect in the applicable reporting period, unless

 otherwise stated)

   Asia      Canada      U.S.      Global
WAM
     Corporate
and Other
     Total      

 

 Income (loss) before income taxes

   $     2,244      $     1,609      $       751      $      1,497      $       351      $     6,452    

 Income tax (expenses) recoveries

                   

 Core earnings

     (279)        (378)        (402)        (204)        99        (1,164)    

 Items excluded from core earnings

     (161)        5        290        6        179        319    

 

 Income tax (expenses) recoveries

     (440)        (373)        (112)        (198)        278        (845)    

 

 Net income (post-tax)

     1,804        1,236        639        1,299        629        5,607    

 Less: Net income (post-tax) attributed to

                   

 Non-controlling interests (“NCI”)

     141        -        -        2        1        144    

 Participating policyholders

     315        45        -        -        -        360    

 

 Net income (loss) attributed to shareholders (post-tax)

     1,348        1,191        639        1,297        628        5,103    

 Less: Items excluded from core earnings (post-tax)

                   

 Market experience gains (losses)

     (553)        (341)        (1,196)        10        290        (1,790)    

 Changes in actuarial methods and assumptions that flow directly through income

     (68)        41        132        -        -        105    

 Restructuring charge

     -        -        -        (36)        -        (36)    

 Reinsurance transactions, tax related items and other

     (79)        4        (56)        2        269        140    

 

 Core earnings (post-tax)

   $ 2,048      $ 1,487      $ 1,759      $ 1,321      $ 69      $ 6,684    

 Income tax on core earnings (see above)

     279        378        402        204        (99)        1,164    

 

 Core earnings (pre-tax)

   $ 2,327      $ 1,865      $ 2,161      $ 1,525      $ (30)      $ 7,848    

 

Core earnings, CER basis and U.S. dollars

 

     2023      
  

 

 

 (Canadian $ millions, post-tax and based on actual

 foreign exchange rates in effect in the applicable

 reporting period, unless otherwise stated)

   Asia      Canada      U.S.      Global
WAM
     Corporate
and Other
     Total      

 

 Core earnings (post-tax)

   $     2,048      $     1,487      $     1,759      $     1,321      $        69      $     6,684    

 CER adjustment(1)

     (10)        -        15        7        2        14    

 

 Core earnings, CER basis (post-tax)

   $ 2,038      $ 1,487      $ 1,774      $ 1,328      $ 71      $  6,698    

 Income tax on core earnings, CER basis(2)

     277        378        405        204        (99)        1,165    

 

 Core earnings, CER basis (pre-tax)

   $ 2,315      $ 1,865      $ 2,179      $ 1,532      $ (28)      $ 7,863    

 

 Core earnings (U.S. dollars) – Asia and U.S. segments

                   

Core earnings (post-tax)(3), US $

   $ 1,518         $ 1,304             

 CER adjustment US $(1)

     (21)           -             

 

            

 Core earnings, CER basis (post-tax), US $

   $ 1,497         $ 1,304             

 

            

 

(1)

The impact of updating foreign exchange rates to that which was used in 4Q23.

(2)

Income tax on core earnings adjusted to reflect the foreign exchange rates for the Statement of Income in effect for 4Q23.

(3)

Core earnings (post-tax) in Canadian $ is translated to US $ using the US $ Statement of Income exchange rate for the four respective quarters that make up 2023 core earnings.

 

 

 

 

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Reconciliation of core earnings and transitional net income attributed to shareholders to net income attributed to shareholders

 

     2022       
  

 

 

 ($ millions, post-tax and based on actual foreign exchange

 rates in effect in the applicable reporting period, unless

 otherwise stated)

   Asia      Canada      U.S.      Global
WAM
     Corporate
and Other
     Total       

 

 Income (loss) before income taxes

   $       910      $      (969)      $    (3,011)      $     1,291      $    (1,359)      $    (3,138)     

 Income tax (expenses) recoveries

                    

 Core earnings

     (264)        (335)        (341)        (222)        116        (1,046)     

 Items excluded from core earnings

     (54)        845        1,036        52        326        2,205     

 

 Income tax (expenses) recoveries

     (318)        510        695        (170)        442        1,159     

 

 Net income (post-tax)

     592        (459)        (2,316)        1,121        (917)        (1,979)     

 Less: Net income (post-tax) attributed to

                    

 Non-controlling interests

     120        -        -        -        1        121     

 Participating policyholders

     (211)        44        -        -        -        (167)     

 

 Net income (loss) attributed to shareholders (post-tax)

     683        (503)        (2,316)        1,121        (918)        (1,933)     

 IFRS 9 transitional impacts (post-tax)

     (36)        1,701        3,764        -        2        5,431     

 

 Transitional net income (loss) attributed to shareholders (post-tax)

     647        1,198        1,448        1,121        (916)        3,498     

 Less: Items excluded from core earnings (post-tax)

                    

 Market experience gains (losses)

     (1,141)        (196)        (93)        (260)        (895)        (2,585)     

Changes in actuarial methods and assumptions that flow directly through income

     (9)        47        (12)        -        -        26     

 Restructuring charge

     -        -        -        -        -        -     

Reinsurance transactions, tax related items and other

     (15)        (40)        (13)        82        242        256     

 

 Core earnings (post-tax)

   $ 1,812      $ 1,387      $ 1,566      $ 1,299      $ (263)      $ 5,801     

 Income tax on core earnings (see above)

     263        335        341        222        (116)        1,045     

 

 Core earnings (pre-tax)

   $ 2,075      $ 1,722      $ 1,907      $ 1,521      $ (379)      $ 6,846     

 

Core earnings, CER basis and U.S. dollars

 

     2022       
  

 

 

 (Canadian $ millions, post-tax and based on actual

 foreign exchange rates in effect in the applicable

 reporting period, unless otherwise stated)

   Asia      Canada      U.S.      Global
WAM
     Corporate
and Other
     Total       

 

 Core earnings (post-tax)

   $     1,812      $      1,387      $      1,566      $     1,299      $      (263)      $      5,801     

 CER adjustment(1)

     30        -        69        40        (5)        134     

 

 Core earnings, CER basis (post-tax)

   $ 1,842      $ 1,387      $ 1,635      $ 1,339      $ (268)      $ 5,935     

 Income tax on core earnings, CER basis(2)

     267        335        356        226        (116)        1,068     

 

 Core earnings, CER basis (pre-tax)

   $ 2,109      $ 1,722      $ 1,991      $ 1,565      $ (384)      $ 7,003     

 

 Core earnings (U.S. dollars) – Asia and U.S. segments

                    

Core earnings (post-tax)(3), US $

   $ 1,392         $ 1,202              

 CER adjustment US $(1)

     (39)           -              

 

             

 Core earnings, CER basis (post-tax), US $

   $ 1,353         $ 1,202              

 

             

 

(1)

The impact of updating foreign exchange rates to that which was used in 4Q23.

(2)

Income tax on core earnings adjusted to reflect the foreign exchange rates for the Statement of Income in effect for 4Q23.

(3)

Core earnings (post-tax) in Canadian $ is translated to US $ using the US $ Statement of Income exchange rate for the four respective quarters that make up 2022 core earnings.

 

 

 

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Reconciliation of core earnings to net income attributed to shareholders

 

     4Q23       
  

 

 

 ($ millions, post-tax and based on actual foreign exchange

 rates in effect in the applicable reporting period, unless

 otherwise stated)

   Asia      Canada      U.S.      Global
WAM
     Corporate
and Other
     Total       

 

 Income (loss) before income taxes

   $        847      $       498      $       244      $       424      $       110      $     2,123     

 Income tax (expenses) recoveries

                    

 Core earnings

     (76)        (87)        (113)        (55)        37        (294)     

 Items excluded from core earnings

     (33)        (29)        67        (3)        (30)        (28)     

 

 Income tax (expenses) recoveries

     (109)        (116)        (46)        (58)        7        (322)     

 

 Net income (post-tax)

     738        382        198        366        117        1,801     

 Less: Net income (post-tax) attributed to

                    

 Non-controlling interests (“NCI”)

     37        -        -        1        1        39     

 Participating policyholders

     86        17        -        -        -        103     

 

 Net income (loss) attributed to shareholders (post-tax)

     615        365        198        365        116        1,659     

 Less: Items excluded from core earnings (post-tax)

                    

 Market experience gains (losses)

     -        9        (279)        51        86        (133)     

Changes in actuarial methods and assumptions that flow directly through income

     89        4        26        -        -        119     

 Restructuring charge

     -        -        -        (36)        -        (36)     

 Reinsurance transactions, tax related items and other

     (38)        -        (23)        (3)        -        (64)     

 

 Core earnings (post-tax)

   $ 564      $ 352      $ 474      $ 353      $ 30      $ 1,773     

 Income tax on core earnings (see above)

     76        87        113        55        (37)        294     

 

 Core earnings (pre-tax)

   $ 640      $ 439      $ 587      $ 408      $ (7)      $ 2,067     

 

Core earnings, CER basis and U.S. dollars

 

     4Q23       
  

 

 

 (Canadian $ millions, post-tax and based on actual foreign

 exchange rates in effect in the applicable reporting period,

 unless otherwise stated)

   Asia      Canada      U.S.      Global
WAM
     Corporate
and Other
     Total       

 

 Core earnings (post-tax)

   $       564      $       352      $       474      $       353      $        30      $     1,773     

 CER adjustment(1)

     -        -        -        -        -        -     

 

 Core earnings, CER basis (post-tax)

   $ 564      $ 352      $ 474      $ 353      $ 30      $ 1,773     

 Income tax on core earnings, CER basis(2)

     76        87        113        55        (37)        294     

 

 Core earnings, CER basis (pre-tax)

   $ 640      $ 439      $ 587      $ 408      $ (7)      $ 2,067     

 

 Core earnings (U.S. dollars) – Asia and U.S. segments

                    

Core earnings (post-tax)(3), US $

   $ 414         $ 349              

 CER adjustment US $(1)

     -           -              

 

             

 Core earnings, CER basis (post-tax), US $

   $ 414         $ 349              

 

             

 

(1)

The impact of updating foreign exchange rates to that which was used in 4Q23.

(2)

Income tax on core earnings adjusted to reflect the foreign exchange rates for the Statement of Income in effect for 4Q23.

(3)

Core earnings (post-tax) in Canadian $ is translated to US $ using the US $ Statement of Income exchange rate for 4Q23.

 

 

 

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Reconciliation of core earnings to net income attributed to shareholders

 

     3Q23       
  

 

 

 ($ millions, post-tax and based on actual foreign exchange

 rates in effect in the applicable reporting period, unless

 otherwise stated)

   Asia      Canada      U.S.      Global
WAM
     Corporate
and Other
     Total       

 

 Income (loss) before income taxes

   $       439      $      376      $        68      $       366      $        (75)      $     1,174     

 Income tax (expenses) recoveries

                    

 Core earnings

     (62)        (109)        (93)        (59)        30        (293)     

 Items excluded from core earnings

     (73)        15        97        11        294        344     

 

 Income tax (expenses) recoveries

     (135)        (94)        4        (48)        324        51     

 

 Net income (post-tax)

     304        282        72        318        249        1,225     

 Less: Net income (post-tax) attributed to

                    

 Non-controlling interests (“NCI”)

     25        -        -        -        -        25     

 Participating policyholders

     195        (8)        -        -        -        187     

 

 Net income (loss) attributed to shareholders (post-tax)

     84        290        72        318        249        1,013     

 Less: Items excluded from core earnings (post-tax)

                    

 Market experience gains (losses)

     (286)        (159)        (476)        (43)        (58)        (1,022)     

Changes in actuarial methods and assumptions that flow directly through income

     (157)        37        106        -        -        (14)     

 Restructuring charge

     -        -        -        -        -        -     

 Reinsurance transactions, tax related items and other

     5        4        -        -        297        306     

 

 Core earnings (post-tax)

   $ 522      $ 408      $ 442      $ 361      $ 10      $ 1,743     

 Income tax on core earnings (see above)

     62        109        93        59        (30)        293     

 

 Core earnings (pre-tax)

   $ 584      $ 517      $ 535      $ 420      $ (20)      $ 2,036     

 

Core earnings, CER basis and U.S. dollars

 

     3Q23       
  

 

 

 (Canadian $ millions, post-tax and based on actual foreign

 exchange rates in effect in the applicable reporting period,

 unless otherwise stated)

   Asia      Canada      U.S.      Global
WAM
     Corporate
and Other
     Total       

 

 Core earnings (post-tax)

   $       522      $       408      $       442      $       361      $        10      $     1,743     

 CER adjustment(1)

     5        -        6        4        -        15     

 

 Core earnings, CER basis (post-tax)

   $ 527      $ 408      $ 448      $ 365      $ 10      $ 1,758     

 Income tax on core earnings, CER basis(2)

     62        109        95        59        (30)        295     

 

 Core earnings, CER basis (pre-tax)

   $ 589      $ 517      $ 543      $ 424      $ (20)      $ 2,053     

 

 Core earnings (U.S. dollars) – Asia and U.S. segments

                    

Core earnings (post-tax)(3), US $

   $ 390         $ 329              

 CER adjustment US $(1)

     (3)           -              

 

             

 Core earnings, CER basis (post-tax), US $

   $ 387         $ 329              

 

             

 

(1)

The impact of updating foreign exchange rates to that which was used in 4Q23.

(2)

Income tax on core earnings adjusted to reflect the foreign exchange rates for the Statement of Income in effect for 4Q23.

(3)

Core earnings (post-tax) in Canadian $ is translated to US $ using the US $ Statement of Income exchange rate for 3Q23.

 

 

 

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Reconciliation of core earnings and transitional net income attributed to shareholders to net income attributed to shareholders

 

     4Q22       
  

 

 

 ($ millions, post-tax and based on actual foreign exchange

 rates in effect in the applicable reporting period, unless

 otherwise stated)

   Asia      Canada      U.S.      Global
WAM
     Corporate
and Other
     Total       

 

 Income (loss) before income taxes

   $       403      $       (37)      $       (68)      $       461      $       (62)      $       697     

 Income tax (expenses) recoveries

                    

 Core earnings

     (82)        (81)        (96)        (47)        71        (235)     

 Items excluded from core earnings

     (21)        67        120        (13)        308        461     

 

 Income tax (expenses) recoveries

     (103)        (14)        24        (60)        379        226     

 

 Net income (post-tax)

     300        (51)        (44)        401        317        923     

 Less: Net income (post-tax) attributed to

                    

 Non-controlling interests

     32        -        -        -        1        33     

 Participating policyholders

     (47)        22        -        -        -        (25)     

 

 Net income (loss) attributed to shareholders (post-tax)

     315        (73)        (44)        401        316        915     

 IFRS 9 transitional impacts (post-tax)

     178        193        (62)        -        4        313     

 

 Transitional net income (loss) attributed to shareholders (post-tax)

     493        120        (106)        401        320        1,228     

 Less: Items excluded from core earnings (post-tax)

                    

 Market experience gains (losses)

     12        (136)        (514)        45        (62)        (655)     

Changes in actuarial methods and assumptions that flow directly through income

     -        -        -        -        -        -     

 Restructuring charge

     -        -        -        -        -        -     

 Reinsurance transactions, tax related items and other

     (15)        (40)        -        82        313        340     

 

 Core earnings (post-tax)

   $ 496      $ 296      $ 408      $ 274      $ 69      $ 1,543     

 Income tax on core earnings (see above)

     82        81        96        47        (71)        235     

 

 Core earnings (pre-tax)

   $ 578      $ 377      $ 504      $ 321      $ (2)      $ 1,778     

 

Core earnings, CER basis and U.S. dollars

 

     4Q22       
  

 

 

 (Canadian $ millions, post-tax and based on actual foreign

 exchange rates in effect in the applicable reporting period,

 unless otherwise stated)

   Asia      Canada      U.S.      Global
WAM
     Corporate
and Other
     Total       

 

 Core earnings (post-tax)

   $       496      $       296      $        408      $       274      $         69      $     1,543     

 CER adjustment(1)

     (1)        -        1        -        -        -     

 

 Core earnings, CER basis (post-tax)

   $ 495      $ 296      $ 409      $ 274      $ 69      $ 1,543     

 Income tax on core earnings, CER basis(2)

     81        82        95        48        (71)        235     

 

 Core earnings, CER basis (pre-tax)

   $ 576      $ 378      $ 504      $ 322      $ (2)      $ 1,778     

 

 Core earnings (U.S. dollars) – Asia and U.S. segments

                    

Core earnings (post-tax)(3), US $

   $ 365         $ 301              

 CER adjustment US $(1)

     (1)           -              

 

             

 Core earnings, CER basis (post-tax), US $

   $ 364         $ 301              

 

             

 

(1)

The impact of updating foreign exchange rates to that which was used in 4Q23.

(2)

Income tax on core earnings adjusted to reflect the foreign exchange rates for the Statement of Income in effect for 4Q23.

(3)

Core earnings (post-tax) in Canadian $ is translated to US $ using the US $ Statement of Income exchange rate for 4Q22.

 

 

 

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Core earnings available to common shareholders

($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated)

 

                                                                                                                                    
     Quarterly Results      Full Year Results  
 
      4Q23      3Q23      2Q23      1Q23      4Q22      2023      2022  
 

 Core earnings

   $ 1,773      $ 1,743      $ 1,637      $ 1,531      $ 1,543      $ 6,684      $ 5,801  
 

 Less: Preferred share dividends

     (99)        (54)        (98)        (52)        (97)        (303)        (260)  
 

 Core earnings available to common shareholders

     1,674        1,689        1,539        1,479        1,446        6,381        5,541  
 

 CER adjustment(1)

     -        15        5        (6)        -        14        134  
 

 Core earnings available to common shareholders, CER basis

   $ 1,674      $ 1,704      $ 1,544      $ 1,473      $ 1,446      $ 6,395      $ 5,675  

 

(1)

The impact of updating foreign exchange rates to that which was used in 4Q23.

Core ROE

($ millions, unless otherwise stated)

 

                                                                                                                                    
     Quarterly Results      Full Year Results  
 
      4Q23      3Q23      2Q23      1Q23      4Q22      2023      2022  
 

 Core earnings available to common shareholders (post-tax)

   $ 1,674      $ 1,689      $ 1,539      $ 1,479      $ 1,446      $ 6,381      $ 5,541  
 

 Annualized core earnings available to common shareholders

   $ 6,641      $ 6,701      $ 6,173      $ 5,998      $ 5,737      $ 6,381      $ 5,541  
 

 Average common shareholders’ equity (see below)

   $ 40,563      $ 39,897      $ 39,881      $ 40,465      $ 40,667      $ 40,201      $ 39,726  
 

 Core ROE (annualized %)

     16.4%        16.8%        15.5%        14.8%        14.1%        15.9%        14.0%  
 

 Average common shareholders’ equity

                      
 

 Total shareholders’ and other equity

   $ 47,039      $ 47,407      $ 45,707      $ 47,375      $ 46,876      $ 47,039      $ 46,876   
 

 Less: Preferred shares and other equity

     6,660        6,660        6,660        6,660        6,660        6,660        6,660  
 

 Common shareholders’ equity

   $ 40,379      $ 40,747      $ 39,047      $ 40,715      $ 40,216      $ 40,379      $ 40,216  
 

 Average common shareholders’ equity

   $ 40,563      $ 39,897      $ 39,881      $ 40,465      $ 40,667      $ 40,201      $ 39,726  

Transitional ROE

($ millions, unless otherwise stated)

 

                                                                                              
     Quarterly Results      Full Year
Results
 
 
      4Q22      3Q22      2Q22      1Q22      2022  
 

 Total transitional net income (loss) attributed to shareholders

   $ 1,228      $ 777      $ 168      $ 1,325      $ 3,498  
 

 Preferred share dividends and other equity distributions

     (97)        (51)        (60)        (52)        (260)   
 

 Common shareholders transitional net income (loss)

   $ 1,131      $ 726      $ 108      $ 1,273      $ 3,238  
 

 Annualized common shareholders transitional net income (loss)

   $ 4,487      $ 2,876      $ 437      $ 5,163      $ 3,238  
 

 Average common shareholders’ equity

   $ 40,667      $ 40,260      $ 39,095      $ 38,881      $ 39,726  
 

 Transitional ROE (annualized) (%)

     11.0%        7.1%        1.1%        13.3%        8.2%  

 

 

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CSM and post-tax CSM information

($ millions and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated)

 

                                                                                              
 As at    Dec 31,
2023
     Sept 30,
2023
     June 30,
2023
     Mar 31,
2023
     Dec 31,
2022
 

 CSM

   $ 21,301      $ 18,149      $ 18,103      $ 18,200      $ 17,977  

 Less: CSM for NCI

     (861)        (780)        (680)        (733)        (694)   

 CSM, net of NCI

   $ 20,440      $ 17,369      $ 17,423      $ 17,467      $ 17,283  

 CER adjustment(1)

     380        116        324        (171)        (138)  

 CSM, net of NCI, CER basis

   $ 20,820      $ 17,485      $ 17,747      $ 17,296      $ 17,145  

 Post-tax CSM

              

 CSM

   $ 21,301      $ 18,149      $ 18,103      $ 18,200      $ 17,977  

 Marginal tax rate on CSM

     (2,798)        (2,474)        (2,645)        (2,724)        (2,726)  

 Post-tax CSM

   $ 18,503      $ 15,675      $ 15,458      $ 15,476      $ 15,251  

 CSM, net of NCI

   $ 20,440      $ 17,369      $ 17,423      $ 17,467      $ 17,283  

 Marginal tax rate on CSM net of NCI

     (2,692)        (2,377)        (2,546)        (2,617)        (2,624)  

 Post-tax CSM net of NCI

   $ 17,748      $ 14,992      $ 14,877      $ 14,850      $ 14,659  

 

(1)

The impact of reflecting CSM and CSM net of NCI using the foreign exchange rates for the Statement of Financial Position in effect for 4Q23.

Adjusted book value

                                                                     

 As at

 ($ millions)

   Dec 31,
2023
     Sept 30,
2023
     June 30,
2023
     Mar 31,
2023
     Dec 31,
2022
 

 Common shareholders’ equity

   $ 40,379      $ 40,747      $ 39,047      $ 40,715      $ 40,216   

 Post-tax CSM, net of NCI

     17,748        14,992        14,877        14,850        14,659  

 Adjusted book value

   $ 58,127      $ 55,739      $ 53,924      $ 55,565      $ 54,875  

 

 

 

 

 

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New Business CSM detail, CER Basis

($ millions pre-tax, and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated)

 

                                                                                                                      
     Quarterly Results      Full Year
Results
 
 
      4Q23      3Q23      2Q23      1Q23      4Q22      2023      2022  

 New business CSM, net of NCI

                      

 Hong Kong

   $ 199      $ 167      $ 191      $ 119      $ 110      $ 676      $ 437  

 Japan

     42        29        19        36        28        126        140  

 Asia Other

     173        206        222        146        186        747        732  

 International High Net Worth

                      231        197  

 Mainland China

                      138        12  

 Singapore

                      244        189  

 Vietnam

                      87        305  

 Other Emerging Markets

                                                  47        29  

 Asia

     414        402        432        301        324        1,549        1,309  

 Canada

     70        51        57        46        47        224        199  

 U.S.

     142        54        103        95        71        394        387  

 Total new business CSM net of NCI

     626        507        592        442        442        2,167        1,895  

 Asia NCI

     39        46        38        19        -        142        20  

 Total impact of new insurance business in CSM

   $ 665      $ 553      $ 630      $ 461      $ 442      $ 2,309      $ 1,915  

 New business CSM, net of NCI, CER adjustment(1),(2)

                      

 Hong Kong

   $ -      $ 3      $ 3      $ 1      $ -      $ 7      $ 20  

 Japan

     -        (1)        (1)        (3)        (1)        (5)        (10)  

 Asia Other

     -        5        (1)        (3)        2        1        22  

 International High Net Worth

                      3        7  

 Mainland China

                      -        -  

 Singapore

                      2        13  

 Vietnam

                      (2)        3  

 Other Emerging Markets

                                                  (2)        (1)  

 Asia

     -        7        1        (5)        1        3        32  

 Canada

     -        -        -        -        -        -        -  

 U.S.

     -        1        1        1        -        3        20  

 Total new business CSM net of NCI

     -        8        2        (4)        1        6        52  

 Asia NCI

     -        -        -        (1)        (1)        (1)        (1)  

 Total impact of new insurance business in CSM

   $ -      $ 8      $ 2      $ (5)      $ -      $ 5      $ 51  

 New business CSM net of NCI, CER basis

                      

 Hong Kong

   $ 199      $ 170      $ 194      $ 120      $ 110      $ 683      $ 457  

 Japan

     42        28        18        33        27        121        130  

 Asia Other

     173        211        221        143        188        748        754  

 International High Net Worth

                      234        204  

 Mainland China

                      138        12  

 Singapore

                      246        202  

 Vietnam

                      85        308  

 Other Emerging Markets

                                                  45        28  

 Asia

     414        409        433        296        325        1,552        1,341  

 Canada

     70        51        57        46        47        224        199  

 U.S.

     142        55        104        96        71        397        407  

 Total new business CSM net of NCI, CER basis

     626        515        594        438        443        2,173        1,947  

 Asia NCI, CER basis

     39        46        38        18        (1)        141        19  

 Total impact of new insurance business in CSM, CER basis

   $ 665      $ 561      $ 632      $ 456      $ 442      $ 2,314      $ 1,966  

 

(1)

The impact of updating foreign exchange rates to that which was used in 4Q23.

(2)

New business CSM for Asia Other is reported by country annually, on a full year basis. Other Emerging Markets within Asia Other include Indonesia, the Philippines, Malaysia, Thailand, Cambodia and Myanmar.

 

 

 

 

 

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Reconciliation of Global WAM core earnings to core EBITDA

($ millions, pre-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated)

 

                                                                                                                      
     Quarterly Results     Full Year Results  
 
      4Q23      3Q23      2Q23      1Q23      4Q22     2023      2022  

 Global WAM core earnings (post-tax)

   $ 353      $ 361      $ 320      $ 287      $ 274     $ 1,321      $ 1,299  

 Add back taxes, acquisition costs, other expenses and deferred sales commissions

                     

Core income tax (expenses) recoveries (see above)

     55        59        45        45        47       204        222  
 

Amortization of deferred acquisition costs and other depreciation

     45        41        40        40        43       166        154  
 

Amortization of deferred sales commissions

     21        19        19        21        25       80        98  
 

 Core EBITDA

   $ 474      $ 480      $ 424      $ 393      $ 389      $ 1,771      $ 1,773   
 

 CER adjustment(1)

     -        4        3        1        1       8        51  
 

 Core EBITDA, CER basis

   $ 474      $ 484      $ 427      $ 394      $ 390     $ 1,779      $ 1,824  

 

(1)

The impact of updating foreign exchange rates to that which was used in 4Q23.

Core EBITDA margin and core revenue

 

                                                                                                        
     Quarterly Results     Full Year Results  
 
 ($ millions, unless otherwise stated)    4Q23      3Q23      2Q23      1Q23      4Q22     2023      2022  
 

 Core EBITDA margin

                     
 

 Core EBITDA

   $ 474      $ 480      $ 424      $ 393      $ 389     $ 1,771      $ 1,773  
 

 Core revenue

   $ 1,842      $ 1,783      $ 1,722      $ 1,756      $ 1,646      $ 7,103      $ 6,516   
 

 Core EBITDA margin

     25.7%        26.9%        24.6%        22.4%        23.6%       24.9%        27.2%  
 

 Global WAM core revenue

                     
 

 Other revenue per financial statements

   $ 1,719      $ 1,645      $ 1,691      $ 1,691      $ 1,671     $ 6,746      $ 6,186  
 

 Less: Other revenue in segments other than Global WAM

     31        (64)        44        26        26       37        (205)  
 

 Other revenue in Global WAM (fee income)

   $ 1,688      $ 1,709      $ 1,647      $ 1,665      $ 1,645     $ 6,709      $ 6,391  
 

 Investment income per financial statements

   $ 4,497      $ 4,028      $ 4,135      $ 3,520      $ 4,271     $ 16,180      $ 15,204  
 

 Realized and unrealized gains (losses) on assets supporting insurance and investment contract liabilities per financial statements

     2,674        (2,430)        950        1,944        (2,453)       3,138        (13,646)  
 

 Total investment income

     7,171        1,598        5,085        5,464        1,818       19,318        1,558  
 

 Less: Investment income in segments other than Global WAM

     6,941        1,578        5,010        5,357        1,672       18,886        1,659  
 

 Investment income in Global WAM

   $ 230      $ 20      $ 75      $ 107      $ 146     $ 432      $ (101)  
 

 Total other revenue and investment income in Global WAM

   $ 1,918      $ 1,729      $ 1,722      $ 1,772      $ 1,791     $ 7,141      $ 6,290  
 

 Less: Total revenue reported in items excluded from core earnings

                     
 

Market experience gains (losses)

     63        (54)        7        12        55       28        (316)  
 

Revenue related to integration and acquisitions

     13        -        (7)        4        90       10        90  
 

 Global WAM core revenue

   $ 1,842      $ 1,783      $ 1,722      $ 1,756      $ 1,646     $ 7,103      $ 6,516  

 

 

 

 

 

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Net income financial measures on a CER basis

($ Canadian millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated)

 

     Quarterly Results   Full Year Results  
 
      4Q23      3Q23      2Q23      1Q23      4Q22          2023      2022 
 

  Net income (loss) attributed to shareholders:

                       
 

  Asia

   $ 615      $ 84      $ 130      $ 519      $ 315         $ 1,348      $ 683   
 

  Canada

     365        290        227        309        (73)           1,191        (503)  
 

  U.S.

     198        72        183        186        (44)           639        (2,316)  
 

  Global WAM

     365        318        317        297        401           1,297        1,121  
 

  Corporate and Other

     116        249        168        95        316           628        (918)  
 

  Total net income (loss) attributed to shareholders

     1,659        1,013        1,025        1,406        915           5,103        (1,933)  
 

  Preferred share dividends and other equity distributions

     (99)        (54)        (98)        (52)        (97)           (303)        (260)  
 

  Common shareholders’ net income (loss)

   $  1,560      $  959      $  927      $  1,354      $  818         $  4,800      $  (2,193)  
 

  CER adjustment(1)

                       
 

  Asia

   $ -      $ 2      $ 13      $ 1      $ 19         $ 16      $ 274  
 

  Canada

     -        1        1        (2)        (2)           -        78  
 

  U.S.

     -        -        11        1        (2)           12        (160)  
 

  Global WAM

     -        4        4        -        (1)           8        16  
 

  Corporate and Other

     -        (7)        (9)        (1)        (11)           (17)        (86)  
 

  Total net income (loss) attributed to shareholders

     -        -        20        (1)        3           19        122  
 

  Preferred share dividends and other equity distributions

     -        -        -        -        -           -        -  
 

  Common shareholders’ net income (loss)

   $ -      $ -      $ 20      $ (1)      $ 3         $ 19      $ 122  
 

  Net income (loss) attributed to shareholders, CER basis

                       
 

  Asia

   $ 615      $ 86      $ 143      $ 520      $ 334         $ 1,364      $ 957  
 

  Canada

     365        291        228        307        (75)           1,191        (425)  
 

  U.S.

     198        72        194        187        (46)           651        (2,476)  
 

  Global WAM

     365        322        321        297        400           1,305        1,137  
 

  Corporate and Other

     116        242        159        94        305           611        (1,004)  
 

  Total net income (loss) attributed to shareholders, CER basis

     1,659        1,013        1,045        1,405        918           5,122        (1,811)  
 

  Preferred share dividends and other equity distributions, CER basis

     (99)        (54)        (98)        (52)        (97)           (303)        (260)  
 

  Common shareholders’ net income (loss), CER basis

   $ 1,560      $ 959      $ 947      $ 1,353      $ 821         $ 4,819      $ (2,071)  
 

  Asia net income attributed to shareholders, U.S. dollars

                       
 

  Asia net income (loss) attributed to shareholders, US $(2)

   $ 452      $ 63      $ 96      $ 384      $ 231         $ 995      $ 516  
 

  CER adjustment, US $(1)

     -        -        9        (2)        14           7        186  
 

  Asia net income (loss) attributed to shareholders, U.S. $, CER basis(1)

   $ 452      $ 63      $ 105      $ 382      $ 245         $ 1,002      $ 702  

 

(1)

The impact of updating foreign exchange rates to that which was used in 4Q23.

(2)

Asia net income attributed to shareholders (post-tax) in Canadian dollars is translated to U.S. dollars using the U.S. dollar Statement of Income rate for the reporting period.

 

 

 

 

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Transitional net income financial measures on a CER basis

($ Canadian millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated)

 

     Quarterly Results   

Full Year

Results

 
      4Q22      3Q22      2Q22      1Q22           2022 
 

  Transitional net income (loss) attributed to shareholders:

                  
 

  Asia

   $ 493      $ 176      $ (227)      $ 205          $ 647   
 

  Canada

     120        481        271        326            1,198  
 

  U.S.

     (106)        314        355        885            1,448  
 

  Global WAM

     401        287        150        283            1,121  
 

  Corporate and Other

     320        (481)        (381)        (374)            (916)  
 

  Total transitional net income (loss) attributed to shareholders

     1,228        777        168        1,325            3,498  
 

  Preferred share dividends and other equity distributions

     (97)        (51)        (60)        (52)            (260)  
 

  Common shareholders’ transitional net income (loss)

   $    1,131      $   726      $   108      $   1,273          $   3,238  
 

  CER adjustment(1)

                  
 

  Asia

   $ 14      $ 32      $ 34      $ 62          $ 142  
 

  Canada

     (3)        13        7        12            29  
 

  U.S.

     (2)        16        (4)        58            68  
 

  Global WAM

     (1)        8        2        8            17  
 

  Corporate and Other

     (10)        (23)        (22)        (31)            (86)  
 

  Total CER adjustment - transitional net income attributed to shareholders

     (2)        46        17        109            170  
 

  Preferred share dividends and other equity distributions

     -        -        -        -            -  
 

  Common shareholders’ transitional net income (loss)

   $ (2)      $ 46      $ 17      $ 109          $ 170  
 

  Transitional net income (loss) attributed to shareholders, CER basis

                  
 

  Asia

   $ 507      $ 208      $ (193)      $ 267          $ 789  
 

  Canada

     117        494        278        338            1,227  
 

  U.S.

     (108)        330        351        943            1,516  
 

  Global WAM

     400        295        152        291            1,138  
 

  Corporate and Other

     310        (504)        (403)        (405)            (1,002)  
 

  Total transitional net income (loss) attributed to shareholders, CER basis

     1,226        823        185        1,434            3,668  
 

  Preferred share dividends and other equity distributions, CER basis

     (97)        (51)        (60)        (52)            (260)  
 

  Common shareholders’ net income (loss), CER basis

   $ 1,129      $ 772      $ 125      $ 1,382          $ 3,408  
 

  Asia transitional net income attributed to shareholders, U.S. dollars

                  
 

  Asia transitional net income (loss) attributed to shareholders, US $(2)

   $ 363      $ 134      $ (177)      $ 161          $ 481  
 

  CER adjustment, US $(1)

     9        19        35        35            98  
 

  Asia transitional net income (loss) attributed to shareholders, U.S. $, CER basis(1)

   $ 372      $ 153      $ (142)      $ 196          $ 579  

 

(1)

The impact of updating foreign exchange rates to that which was used in 4Q23.

(2)

Asia transitional net income attributed to shareholders (post-tax) in Canadian dollars is translated to U.S. dollars using the U.S. dollar Statement of Income rate for the reporting period.

 

 

 

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CAUTION REGARDING FORWARD-LOOKING STATEMENTS:

From time to time, Manulife makes written and/or oral forward-looking statements, including in this document. In addition, our representatives may make forward-looking statements orally to analysts, investors, the media and others. All such statements are made pursuant to the “safe harbour” provisions of Canadian provincial securities laws and the U.S. Private Securities Litigation Reform Act of 1995.

The forward-looking statements in this document include, but are not limited to, statements with respect to the closing of the reinsurance transaction in respect of certain legacy blocks, the closing of the acquisition of CQS, and also 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”, “likely”, “suspect”, “outlook”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “plan”, “forecast”, “objective”, “seek”, “aim”, “continue”, “goal”, “restore”, “embark” and “endeavour” (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 and they should not be interpreted as confirming market or analysts’ expectations in any way.

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: general business and economic conditions (including but not limited to the performance, volatility and correlation of equity markets, interest rates, credit and swap spreads, inflation rates, currency rates, investment losses and defaults, market liquidity and creditworthiness of guarantors, reinsurers and counterparties); the ongoing prevalence of COVID-19, including any variants, as well as actions that have been, or may be taken by governmental authorities in response to COVID-19, including the impacts of any variants; changes in laws and regulations; changes in accounting standards applicable in any of the territories in which we operate; changes in regulatory capital requirements; our ability to obtain premium rate increases on in-force policies; our ability to execute strategic plans and changes to strategic plans; downgrades in our financial strength or credit ratings; our ability to maintain our reputation; impairments of goodwill or intangible assets or the establishment of provisions against future tax assets; the accuracy of estimates relating to morbidity, mortality and policyholder behaviour; the accuracy of other estimates used in applying accounting policies, actuarial methods and embedded value methods; our ability to implement effective hedging strategies and unforeseen consequences arising from such strategies; our ability to source appropriate assets to back our long-dated liabilities; level of competition and consolidation; our ability to market and distribute products through current and future distribution channels; unforeseen liabilities or asset impairments arising from acquisitions and dispositions of businesses; the realization of losses arising from the sale of investments classified fair value through other comprehensive income; our liquidity, including the availability of financing to satisfy existing financial liabilities on expected maturity dates when required; obligations to pledge additional collateral; the availability of letters of credit to provide capital management flexibility; accuracy of information received from counterparties and the ability of counterparties to meet their obligations; the availability, affordability and adequacy of reinsurance; legal and regulatory proceedings, including tax audits, tax litigation or similar proceedings; our ability to adapt products and services to the changing market; our ability to attract and retain key executives, employees and agents; the appropriate use and interpretation of complex models or deficiencies in models used; political, legal, operational and other risks associated with our non-North American operations; geopolitical uncertainty, including international conflicts; acquisitions and our ability to complete acquisitions including the availability of equity and debt financing for this purpose; the disruption of or changes to key elements of the Company’s or public infrastructure systems; environmental concerns, including climate change; our ability to protect our intellectual property and exposure to claims of infringement; our inability to withdraw cash from subsidiaries; and the timing to close the reinsurance transactions and CQS transaction described in this document.

Additional information about material risk factors that could cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements may be found in our 2023 Management’s Discussion and Analysis under “Risk Management and Risk Factors” and “Critical Actuarial and Accounting Policies” and in the “Risk Management” note to the Consolidated Financial Statements for the year ended December 31, 2023, as well as elsewhere in our filings with Canadian and U.S. securities regulators.

The forward-looking statements in this document are, unless otherwise indicated, stated as of the date hereof and are presented for the purpose of assisting investors and others in understanding our financial position and results of operations, our future operations, as well as our objectives and strategic priorities, and may not be appropriate for other purposes. We do not undertake to update any forward-looking statements, except as required by law.

 

 

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