Schedule II

Genworth Financial, Inc.

(Parent Company Only)

Balance Sheets

(Amounts in millions)


	December 31,
	2016			2015
Assets
Investments in subsidiaries	$	12,730		$	12,814
Deferred tax asset		28			25
Other assets		9			—

Total assets	$	12,767		$	12,839

Liabilities and stockholders’ equity
Liabilities:
Other liabilities	$	39		$	13
Intercompany notes payable		84			2

Total liabilities		123			15

Commitments and contingencies
Stockholders’ equity:
Common stock		1			1
Additional paid-in capital		11,962			11,949

Accumulated other comprehensive income (loss):
Net unrealized investment gains (losses):
Net unrealized gains (losses) on securities not other-than-temporarily impaired		1,253			1,236
Net unrealized gains (losses) on other-than-temporarily impaired securities		9			18

Net unrealized investment gains (losses)		1,262			1,254

Derivatives qualifying as hedges		2,085			2,045
Foreign currency translation and other adjustments		(253	)		(289	)

Total accumulated other comprehensive income (loss)		3,094			3,010
Retained earnings		287			564
Treasury stock, at cost		(2,700	)		(2,700	)

Total Genworth Financial, Inc.’s stockholders’ equity		12,644			12,824

Total liabilities and stockholders’ equity	$	12,767		$	12,839

See Notes to Schedule II

See Accompanying Report of Independent Registered Public Accounting Firm

Schedule II

Genworth Financial, Inc.

(Parent Company Only)

Statements of Income

(Amounts in millions)


	Years ended December 31,
	2016			2015			2014
Revenues:
Net investment income	$	(3	)	$	(3	)	$	(2	)

Total revenues		(3	)		(3	)		(2	)

Expenses:
Acquisition and operating expenses, net of deferrals		153			32			21
Interest expense		1			—			—

Total expenses		154			32			21

Loss before income taxes and equity in loss of subsidiaries		(157	)		(35	)		(23	)
Benefit from income taxes		(47	)		(8	)		(8	)
Equity in loss of subsidiaries		(166	)		(579	)		(1,229	)
Loss from discontinued operations, net of taxes		(1	)		(9	)		—

Net loss available to Genworth Financial, Inc.’s common stockholders	$	(277	)	$	(615	)	$	(1,244	)

See Notes to Schedule II

See Accompanying Report of Independent Registered Public Accounting Firm

Schedule II

Genworth Financial, Inc.

(Parent Company Only)

Statements of Comprehensive Income

(Amounts in millions)


	Years ended December 31,
	2016			2015			2014
Net loss available to Genworth Financial, Inc.’s common stockholders	$	(277	)	$	(615	)	$	(1,244	)
Other comprehensive income (loss), net of taxes:
Net unrealized gains (losses) on securities not other-than-temporarily impaired		17			(1,181	)		1,539
Net unrealized gains (losses) on other-than-temporarily impaired securities		(9	)		(4	)		10
Derivatives qualifying as hedges		40			(25	)		751
Foreign currency translation and other adjustments		36			(250	)		(339	)

Total other comprehensive income (loss)		84			(1,460	)		1,961

Total comprehensive income (loss) available to Genworth Financial, Inc.’s common stockholders	$	(193	)	$	(2,075	)	$	717

See Notes to Schedule II

See Accompanying Report of Independent Registered Public Accounting Firm

Schedule II

Genworth Financial, Inc.

(Parent Company Only)

Statements of Cash Flows

(Amounts in millions)


	Years ended December 31,
	2016			2015			2014
Cash flows from operating activities:
Net loss available to Genworth Financial, Inc.’s common stockholders	$	(277	)	$	(615	)	$	(1,244	)
Less loss from discontinued operations, net of taxes		1			9			—
Adjustments to reconcile net loss available to Genworth Financial, Inc.’s common stockholders to net cash from operating activities:
Equity in loss from subsidiaries		166			579			1,229
Deferred income taxes		(6	)		(4	)		4
Stock-based compensation expense		23			21			21
Change in certain assets and liabilities:
Accrued investment income and other assets		(9	)		3			(4	)
Current tax liabilities		—			(3	)		(2	)
Other liabilities and other policy-related balances		20			2			11

Net cash from operating activities		(82	)		(8	)		15

Cash flows from investing activities:
Intercompany notes receivable		—			9			(1	)
Capital contribution paid to subsidiaries		—			—			(12	)

Net cash from investing activities		—			9			(13	)

Cash flows from financing activities:
Other, net		—			(3	)		(2	)
Intercompany notes payable		82			2			—

Net cash from financing activities		82			(1	)		(2	)

Effect of exchange rate changes on cash and cash equivalents		—			—			—

Cash and cash equivalents at beginning of year		—			—			—

Cash and cash equivalents at end of year	$	—		$	—		$	—

See Notes to Schedule II

See Accompanying Report of Independent Registered Public Accounting Firm

Schedule II

Genworth Financial, Inc.

(Parent Company Only)

Notes to Schedule II

Years Ended December 31, 2016, 2015 and 2014

(1) Organization and Purpose

Genworth Holdings, Inc. (“Genworth Holdings”) (formerly known as Genworth Financial, Inc.) was incorporated in Delaware in 2003 in preparation for an initial public offering of Genworth’s common stock, which was completed on May 28, 2004. On April 1, 2013, Genworth Holdings completed a holding company reorganization pursuant to which Genworth Holdings became a direct, 100% owned subsidiary of a new public holding company that it had formed. The new public holding company was incorporated in Delaware on December 5, 2012, in connection with the reorganization, and was renamed Genworth Financial, Inc. (“Genworth Financial”) upon the completion of the reorganization.

Genworth Financial is a holding company whose subsidiaries offer mortgage and long-term care insurance products and service life insurance, as well as annuities and other investment products.

On October 21, 2016, Genworth Financial entered into an agreement and plan of merger (the “Merger Agreement”) with Asia Pacific Global Capital Co., Ltd. (“the Parent”), a limited liability company incorporated in the People’s Republic of China, and Asia Pacific Global Capital USA Corporation (“Merger Sub”), a Delaware corporation and an indirect, wholly-owned subsidiary of the Parent. Subject to the terms and conditions of the Merger Agreement, including the satisfaction or waiver of certain conditions, Merger Sub would merge with and into Genworth Financial with Genworth Financial surviving the merger as an indirect, wholly-owned subsidiary of the Parent. The Parent is a newly formed subsidiary of China Oceanwide Holdings Group Co., Ltd. (together with its affiliates, “China Oceanwide”). China Oceanwide has agreed to acquire all of our outstanding common stock for a total transaction value of approximately $2.7 billion, or $5.43 per share in cash. The transaction is subject to approval by our stockholders as well as other closing conditions, including the receipt of required regulatory approvals in the U.S., China, and other international markets. Both parties are engaging with regulators regarding the applications and the pending transaction. Genworth and China Oceanwide continue to expect the transaction to close by mid-2017.

(2) Commitments

Genworth Financial provides a full and unconditional guarantee to the trustee of Genworth Holdings’ outstanding senior notes and the holders of the senior notes, on an unsecured unsubordinated basis, of the full and punctual payment of the principal of, premium, if any and interest on, and all other amounts payable under, each outstanding series of senior notes, and the full and punctual payment of all other amounts payable by Genworth Holdings under the senior notes indenture in respect of such senior notes. Genworth Financial also provides a full and unconditional guarantee to the trustee of Genworth Holdings’ outstanding subordinated notes and the holders of the subordinated notes, on an unsecured subordinated basis, of the full and punctual payment of the principal of, premium, if any and interest on, and all other amounts payable under, the outstanding subordinated notes, and the full and punctual payment of all other amounts payable by Genworth Holdings under the subordinated notes indenture in respect of the subordinated notes. Genworth Financial also provides a full and unconditional guarantee of Genworth Holdings’ obligations associated with Rivermont Life Insurance Company I and the Tax Matters Agreement.

(3) Income Taxes

As of December 31, 2016 and 2015, Genworth Financial had a deferred tax asset of $28 million and $25 million, respectively, primarily comprised of share-based compensation. These amounts are undiscounted pursuant to the applicable rules governing deferred taxes. Genworth Financial’s current income tax receivable was zero as of December 31, 2016 and 2015. Net cash received for taxes was $41 million, $1 million and $23 million for the years ended December 31, 2016, 2015 and 2014, respectively.