JHUSA U - MVL, MVL Plus

485BPOS 1 d670381d485bpos.htm JHUSA U - MVL, MVL PLUS JHUSA U - MVL, MVL Plus

As filed with the U.S. Securities and Exchange Commission on April 25, 2014
Registration No. 333-164171

U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-6

SEC File No 811-3068

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
POST EFFECTIVE AMENDMENT NO. 5 [X]

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 38 [X]

John Hancock Variable Life Account U

(Exact Name of Registrant)

John Hancock Life Insurance Company (U.S.A.)

(Name of Depositor)

197 Clarendon Street
Boston, MA 02116

(Complete address of depositor’s principal executive offices)

Depositor’s Telephone Number: 617-572-6000

JAMES C. HOODLET
John Hancock Life Insurance Company (U.S.A.)
U.S. INSURANCE LAW
JOHN HANCOCK PLACE
BOSTON, MA 02117

(Name and complete address of agent for service)

It is proposed that this filing will become effective (check appropriate box)

[ ] immediately upon filing pursuant to paragraph (b) of Rule 485
[X ] on April 30, 2014 pursuant to paragraph (b) of Rule 485
[ ] 60 days after filing pursuant to paragraph (a) (1) of Rule 485
[ ] on (date) pursuant to paragraph (a) (1) of Rule 485

If appropriate check the following box

[ ] this post-effective amendment designates a new effective date for a previously filed amendment

Pursuant to the provisions of Rule 24f-2, Registrant has registered an indefinite amount of the securities under the Securities Act of 1933.

Prospectus dated April 30, 2014

for interests in

John Hancock Variable Life Account U

Interests are made available under

MEDALLION VARIABLE LIFE

a flexible premium variable universal life insurance policy

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)
(“John Hancock USA”)

The policy provides a fixed account option with fixed rates of return declared by John Hancock USA
and the following investment accounts:

500 Index B
Active Bond
Blue Chip Growth
Capital Appreciation
Emerging Markets Value
Equity-Income
Fundamental All Cap Core
Global Bond
High Yield
International Equity Index B
International Value
Lifestyle Balanced MVP
Lifestyle Growth MVP
Lifestyle Moderate MVP
Mid Cap Index
Mid Cap Stock
Mid Value
Money Market B
Real Estate Securities
Short Term Government Income
Small Cap Growth
Total Bond Market B

* * * * * * * * * * * *

Please note that the Securities and Exchange Commission (“SEC”) has not approved or disapproved these securities, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

GUIDE TO THIS PROSPECTUS

This prospectus is arranged in the following way:

The first section is called “Summary of Benefits and Risks.” It contains a summary of the benefits available under the policy and of the principal risks of purchasing the policy. You should read this section before reading any other section of this prospectus.
Behind the Summary of Benefits and Risks section is a section called “Fee Tables” that describes the fees and expenses you will pay when buying, owning and surrendering the policy.
Behind the Fee Tables section is a section called “Detailed Information.” This section gives more details about the policy. It may repeat certain information contained in the Summary of Benefits and Risks section in order to put the more detailed information in proper context.
Finally, on the back cover of this prospectus is information concerning the Statement of Additional Information (the “SAI”) and how the SAI, audited financial statements forJohn Hancock USA and the Separate Account, personalized illustrations and other information can be obtained.

Prior to making any investment decisions, you should carefully review this product prospectus and all applicable supplements. In addition, you should review the prospectuses for the underlying funds that we make available as investment options under the policies. The funds’ prospectuses describe the investment objectives, policies and restrictions of, and the risks relating to, investment in the funds. In the case of any of the portfolios that are operated as “feeder funds”, the prospectus for the corresponding “master fund” is also provided. If you need to obtain additional copies of any of these documents, please contact your John Hancock USA representative or contact our Service Office at the address and telephone number on the back page of this product prospectus.

TABLE OF CONTENTS

	Page No.



SUMMARY OF BENEFITS AND RISKS	4
The nature of the policy	4
Summary of policy benefits	4
Death benefit	4
Surrender of the policy	4
Partial withdrawals	4
Policy loans	5
Optional benefit riders	5
Investment options	5
Summary of policy risks	5
Lapse risk	5
Investment risk	5
Access to funds risk	5
Transfer risk	6
Market timing and disruptive trading risks	6
Tax risks	6
FEE TABLES	8
DETAILED INFORMATION	11
Table of Investment Options and Investment Subadvisers	11
Description of John Hancock USA	13
Description of Separate Account U	14
The fixed investment option	14
Premiums	15
Planned premiums	15
Maximum premium payments	15
Ways to pay premiums	15
Processing premium payments	15
Lapse and reinstatement	16
Guaranteed death benefit feature	16
The death benefit	16
Limitations on payment of death benefit	17
The minimum insurance amount	17
Increase in coverage	17
Decrease in coverage	17
Change of death benefit option	17
Effective date of certain policy transactions	17
Tax consequences of coverage changes	18
Your beneficiary	18
Ways in which we pay out policy proceeds	18
Changing a payment option	18
Tax impact of payment option chosen	18
The account value	18
Commencement of investment performance	19
Allocation of future premium payments	19
Transfers of existing account value	19
Limitation on number of investment options	20
Dollar cost averaging	20
Surrender and partial withdrawals	21
Full surrender	21
Partial withdrawals	21
Policy loans	21
Repayment of policy loans	21
Effects of policy loans	22
Description of charges at the policy level	22
Deductions from premium payments	22
Deductions from account value	22
Additional information about how certain policy charges work	23
Sales expenses and related charges	23
Effect of premium payment pattern	24
Method of deduction	24
Reduced charges for eligible classes	24
Other charges we could impose in the future	24
Description of charges at the fund level	25
Other policy benefits, rights and limitations	25
Optional benefit riders you can add	25
Variations in policy terms	25
Procedures for issuance of a policy	25
Minimum initial premium	26
Commencement of insurance coverage	26
Backdating	26
Temporary coverage prior to policy delivery	26
Monthly deduction dates	26
Changes that we can make as to your policy	26
The owner of the policy	27
Policy cancellation right	27
Reports that you will receive	27
Assigning your policy	28
When we pay policy proceeds	28
General	28
Delay to challenge coverage	28
Delay for check clearance	28
Delay of separate account proceeds	28
Delay of general account surrender proceeds	28
How you communicate with us	28
General rules	28
Telephone and facsimile transactions	29
Distribution of policies	29
Compensation	30
Tax considerations	31
General	31
Death benefit proceeds and other policy distributions	31
Policy loans	32
Diversification rules and ownership of the Separate Account	32
7-pay premium limit and modified endowment contract status	33
Corporate and H.R. 10 retirement plans	34
Withholding	34
Life insurance purchases by residents of Puerto Rico	34
Life insurance purchases by non-resident aliens	34
Life insurance owned by citizens or residents living abroad	34
Financial statements reference	34
Registration statement filed with the SEC	35
Independent registered public accounting firm	35

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SUMMARY OF BENEFITS AND RISKS

The nature of the policy

The policy’s primary purpose is to provide lifetime protection against economic loss due to the death of the insured person. The policy is unsuitable as a short-term savings vehicle because of the substantial policy-level charges and the contingent deferred sales charge. We are obligated to pay all amounts promised under the policy. The value of the amount you have invested under the policy may increase or decrease daily based on the investment results of the variable investment options that you choose. The amount we pay to the policy’s beneficiary upon the death of the insured person (we call this the “death benefit”) may be similarly affected. That’s why the policy is referred to as a “variable” life insurance policy. We call the investments you make in the policy “premiums” or “premium payments.” The amount we require as your first premium depends upon the specifics of your policy and the insured person. Except as noted in the Detailed Information section of this prospectus, you can make any other premium payments you wish at any time. That’s why the policy is called a “flexible premium” policy.

If the life insurance protection described in this prospectus is provided under a master group policy, the term “policy” as used in this prospectus refers to the certificate we issue and not to the master group policy.

Summary of policy benefits

Death benefit

In your application for the policy, you will tell us how much life insurance coverage you want on the life of the insured person. This is called the “face amount” of insurance. In the policy, this may also be referred to as the “Sum Insured.”

When the insured person dies, we will pay the death benefit minus any outstanding loans. There are three ways of calculating the death benefit. You choose which one you want in the application. The three death benefit options are:

Option 1 - The death benefit will equal the greater of (1) the face amount or (2) the minimum insurance amount under the “guideline premium and cash value corridor test” (as described under “The minimum insurance amount” provision in the Detailed Information section of this prospectus).

Option 2 - The death benefit will equal the greater of (1) the face amount plus your policy’s account value on the date of death, or (2) the minimum insurance amount under the “guideline premium and cash value corridor test.”

Option 3 - The death benefit will equal the greater of (1) the face amount or (2) the minimum insurance amount under the “cash value accumulation test” (as described below).

Surrender of the policy

You may surrender the policy in full at any time. If you do, we will pay you the account value of the policy less any outstanding policy debt and less any contingent deferred sales charge and administrative surrender charge that then applies. This is called your “surrender value.” You must return your policy when you request a surrender.

If you have not taken a loan on your policy, the “account value” of your policy will, on any given date, be equal to:

the amount you invested,

plus or minus the investment experience of the investment options you’ve chosen,

minus all charges we deduct, and

minus all withdrawals you have made.

If you take a loan on your policy, your account value will be computed somewhat differently. This is discussed under “Policy loans.”

Partial withdrawals

You may make a partial withdrawal of your surrender value at any time after the first policy year. Each withdrawal must be at least $1,000. There is a charge for each partial withdrawal. The charge is equal to the lesser of 2% of the withdrawal amount or $20. Your account value is automatically reduced by the amount of the withdrawal and the charge. We reserve the right to refuse a withdrawal if it would reduce the surrender value or the Total Face Amount below certain minimum amounts.

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Policy loans

You may borrow from your policy at any time after the first policy year by completing the appropriate form. The minimum amount of each loan is $300. The maximum amount you can borrow is determined by a formula as described in your policy. Interest is charged on each loan. You can pay the interest or allow it to become part of the outstanding loan balance. You can repay all or part of a loan at any time. If there is an outstanding loan when the insured person dies, it will be deducted from the death benefit. Policy loans permanently affect the calculation of your account value, and may also result in adverse tax consequences.

Optional benefit riders

When you apply for the policy, you can request any of the optional benefit riders that we make available. There are a number of such riders. Charges for most riders will be deducted monthly from the policy’s account value.

Investment options

The policy offers a number of investment options, as listed on page 1 of this prospectus. These investment options are subaccounts of John Hancock Variable Life Account U (the “Account” or “Separate Account”), a separate account operated by us under Michigan law. They cover a broad spectrum of investment styles and strategies. Although the funds of the series funds that underlie those investment options operate like publicly traded mutual funds, there are important differences between your investment options and publicly-traded mutual funds. You can transfer money from one investment option to another without tax liability. Moreover, any dividends and capital gains distributed by each underlying fund are automatically reinvested and reflected in the fund’s value and create no taxable event for you. If and when policy earnings are distributed (generally as a result of a surrender or partial withdrawal), they will be treated as ordinary income instead of as capital gains. Also, you must keep in mind that you are purchasing an insurance policy and you will be assessed charges at the policy level as well as at the fund level. Such policy level charges are significant and will reduce the investment performance of your investment options.

Summary of policy risks

Lapse risk

If the account value of your policy is insufficient to pay the charges when due, your policy (or part of it) can terminate (i.e. “lapse”). This can happen because you haven’t paid enough premiums or because the investment performance of the investment options you’ve chosen has been poor or because of a combination of both factors. You’ll be given a “grace period” within which to make additional premium payments to keep the policy in effect. If lapse occurs, you’ll be given the opportunity to reinstate the policy by making the required premium payments and satisfying certain other conditions.

Since withdrawals reduce your account value, withdrawals increase the risk of lapse. Loans also increase the risk of lapse.

Investment risk

As mentioned above, the investment performance of any variable investment option may be good or bad. Your account value will rise or fall based on the investment performance of the variable investment options you’ve chosen. Some variable investment options are riskier than others. These risks (and potential rewards) are discussed in detail in the prospectuses of the series funds.

Access to funds risk

There is a risk that you will not be able (or willing) to access your account value by surrendering the policy because of the contingent deferred sales charge (“CDSC”) that may be payable upon surrender. The CDSC is a percentage of the premiums you’ve paid and disappears only after 12 policy years have passed. See the “Fee Tables” section of this prospectus for details on the CDSC. There is a fee for each partial withdrawal. The charge is equal to the lesser of 2% of the withdrawal amount or $20. Any communication that arrives on a date that is not a business day will be processed on the business day next following that date. The term “business day” is defined under “The account value.”

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Transfer risk

Market timing and disruptive trading risks

The policy is not designed for professional market timers or highly active traders, including persons or entities that engage in programmed, large or frequent transfers among the investment accounts or between the investment accounts and any available fixed account. The policy is also not designed to accommodate trading that results in transfers that are large in relation to the total assets of the underlying portfolio.

Variable investment accounts in variable life insurance products can be a prime target for abusive transfer activity because these products value their investment accounts on a daily basis and allow transfers among investment accounts without immediate tax consequences. As a result, some investors may seek to frequently transfer into and out of investment accounts or to make large transfers in reaction to market news or to exploit a perceived pricing inefficiency. Whatever the reason, long-term investors in an investment account can be harmed by large or frequent transfer activity. For example, such activity may expose the investment account’s underlying portfolio to increased portfolio transaction costs and/or disrupt the portfolio manager’s ability to effectively manage the portfolio’s investments in accordance with the portfolio’s investment objectives and policies. This could include causing the portfolio to maintain higher levels of cash than would otherwise be the case, or liquidating investments prematurely. Accordingly, frequent or large transfers may result in dilution with respect to interests held for long-term investment and adversely affect policy owners, beneficiaries and the underlying portfolios.

To discourage market timing and disruptive trading activity, we impose restrictions on transfers (see “Transfers of existing policy value”) and reserve the right to change, suspend or terminate telephone, facsimile and internet transaction privileges (see “How you communicate with us”). In addition, we reserve the right to take other actions at any time to restrict trading, including, but not limited to:

(i) restricting the number of transfers made during a defined period,

(ii) restricting the dollar amount of transfers,

(iii) restricting transfers into and out of certain investment accounts,

(iv) restricting the method used to submit transfers, and

(v) deferring a transfer at any time we are unable to purchase or redeem shares of the underlying portfolio.

We may also impose additional administrative conditions upon, or prohibit a transfer request made by a third party giving instructions on behalf of multiple policies, whether owned by the same owner or different owners. If you engage a third party for asset allocation services, then you may be subject to these transfer restrictions because of the actions of that party in providing those services. We will notify the third party you have engaged if we exercise this right.

While we seek to identify and prevent disruptive trading activity, it may not always be possible to do so. Therefore, no assurance can be given that the restrictions we impose will be successful in preventing all disruptive trading and avoiding harm to long-term investors.

Tax risks

In order for you to receive the tax benefits extended to life insurance under the Internal Revenue Code (the “Code”), your policy must comply with certain requirements of the Code. We will monitor your policy for compliance with these requirements, but a policy might fail to qualify as life insurance in spite of our monitoring. If this were to occur, you would be subject to income tax on the income credited to your policy for the period of disqualification and all subsequent periods. The tax laws also contain a so-called “7-pay limit” that limits the amount of premium that can be paid in relation to the policy’s death benefit. If the limit is violated, the policy will be treated as a “modified endowment contract,” which can have adverse tax consequences. There are also certain Treasury Department rules referred to as the “investor control rules” that determine whether you would be treated as the “owner” of the assets underlying your policy. If that were determined to be the case, you

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would be taxed on any income or gains those assets generate. In other words, you would lose the value of the so-called “inside build-up” that is a major benefit of life insurance.

There is also a tax risk associated with policy loans. Although no part of a loan is treated as income to you when the loan is made, surrender or lapse of the policy would result in the loan being treated as a distribution at the time of lapse or surrender. This could result in a considerable tax bill. Under certain circumstances involving large amounts of outstanding loans and an insured person of advanced age, you might find yourself having to choose between high premium requirements to keep your policy from lapsing and a significant tax burden if you allow the lapse to occur.

Tax consequences of ownership or receipt of policy proceeds under Federal, state and local estate, inheritance, gift and other tax laws can vary greatly depending upon the circumstances of each owner or beneficiary. There can also be unfavorable tax consequences on such things as the change of policy ownership or assignment of ownership interests. For these and all the other reasons mentioned above, we recommend you consult with a qualified tax adviser before buying the policy and before exercising certain rights under the policy.

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FEE TABLES

This section contains the tables that describe all of the fees and expenses that you will pay when buying, owning and surrendering the policy. In the first three tables, certain entries show the minimum charge, the maximum charge and the charge for a representative insured person. Other entries show only the maximum charge we can assess and are labeled as such. The remaining entries are always calculated in the same way, so we cannot assess a charge that is greater than the charge shown in the table. Except where necessary to show a rate greater than zero, all rates shown in the tables have been rounded to two decimal places as required by prospectus disclosure rules. Consequently, the actual rates charged may be slightly higher or lower than those shown.

The first table below describes the fees and expenses that you will pay at the time that you pay a premium, surrender the policy, withdraw account value, or transfer account value between investment options .

Transaction Fees
Charge	When Charge is Deducted	Amount Deducted
Premium sales charge	Upon payment of premium	4% of Target Premium⁽¹⁾
Premium tax charge	Upon payment of premium	2.35% of each premium paid
DAC tax charge	Upon payment of premium	1.25% of each premium paid
Maximum administrative surrender charge	Upon lapse or surrender within first 9 policy years	$5 per $1,000 of the policy’s current face amount in policy years 1-7⁽²⁾
Maximum contingent deferred sales charge (CDSC)	Upon surrender of policy within the period stated Upon reduction of Basic Sum Insured as a result of a partial withdrawal	26.0% of total Target Premium received for surrenders in policy years 1-7⁽³⁾ Pro rata portion of applicable CDSC
Maximum partial withdrawal charge	Upon making a partial withdrawal	Lesser of 2% of withdrawal amount or $20

(1) The “Target Premium” for each policy year is determined at the time the policy is issued and appears in the “Policy Specifications” section of the policy. In general, the greater the proportion of Additional Sum Insured at issue, the lower the Target Premium.

(2) The administrative surrender charge decreases in later policy years as follows: for policy year 8, it is $4 per $1,000 of face amount; and for policy year 9, it is $3 per $1,000 of face amount.

(3) In calculating the CDSC, only Target Premiums received during the first 3 policy years are considered. The CDSC percentage decreases in later policy years as follows: for policy year 8, it is 21.7%; for policy year 9, it is 17.3%; for policy year 10, it is 13.0%; for policy year 11, it is 8.7%; for policy year 12, it is 4.3%; and for policy years 13 and later, it is 0%.

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The next two tables describe the fees and expenses that you will pay periodically during the time you own the policy . These tables do not include fees and expenses paid at the fund level. Except for the M&E charge and the Living Care Benefit Rider all of the charges shown in the tables are deducted from your account value. The second table is devoted only to optional rider benefits.

Periodic Charges Other Than Fund Operating Expenses
Charge	When Charge is Deducted	Amount Deducted
Charge	When Charge is Deducted	Guaranteed Rate	Current Rate
Insurance charge:⁽¹⁾
Minimum charge	Monthly	$0.06 per $1,000 of AAR	$0.05 per $1,000 of AAR
Maximum charge	Monthly	$165.34 per $1,000 of AAR	$159.11 per $1,000 of AAR
Charge for representative insured person	Monthly	$0.14 per $1,000 of AAR	$0.14 per $1,000 of AAR
Issue charge	Monthly in first policy year only	$20	$20
Maximum maintenance charge	Monthly	$8	$8
M&E charge⁽²⁾	Daily from separate account assets	.003% of assets	.002% of assets
Maximum policy loan interest rate⁽³⁾	Accrues daily Payable annually	5.0%	5.0%

(1) The insurance charge is determined by multiplying the amount of insurance for which we are at risk (the amount at risk or “AAR”) by the applicable cost of insurance rate. The rates vary widely depending upon the Total Sum Insured, the length of time the policy has been in effect, the insurance risk characteristics of the insured person and (generally) the gender of the insured person. The “minimum” rate shown in the table at the guaranteed rate is the rate in the first policy year for a $1,000,000 policy issued to cover a 10 year old female preferred underwriting risk. The “minimum” rate shown in the table at the current rate is the rate in the first policy year for a $1,000,000 policy issued to cover a 20 year old female preferred non-tobacco underwriting risk. The “maximum” rate shown in the table at both the guaranteed and current rates is the rate in the first policy year for a $100,000 policy issued to cover a 99 year old male substandard tobacco underwriting risk. This includes the so-called “extra mortality charge.” The “representative insured person” referred to in the table is a 35 year old male standard non-tobacco underwriting risk with a $100,000 policy. The charges shown in the table may not be particularly relevant to your current situation. For more information about cost of insurance rates, talk to your John Hancock USA representative.

(2) This charge only applies to separate account assets (i.e., those assets invested in the variable investment options). The charge does not apply to the fixed investment option. The effective annual rate equivalents of the actual unrounded daily rates charged are .90% on a guaranteed basis and .60% on a current basis.

(3) 5.00% is the maximum effective annual interest rate we can charge and applies only during policy years 1-20. The effective annual interest rate is 4.50% for policy year 21 and thereafter. The amount of any loan is transferred from the investment options to a special loan account which earns interest at a rate at least equal to (i) the policy loan interest rate less 1% for policy years 1-20 and (ii( the policy loan interest rate less .5% for all other policy years. Therefore, the true cost of a loan is the difference between the loan interest we charge and the interest we credit to the special loan account.

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Rider Charges
Charge	When Charge is Deducted	Amount Deducted
Disability Waiver of Charges Rider:⁽¹⁾
Minimum charge	Monthly	5.62% of all other monthly charges
Maximum charge	Monthly	20.38% of all other monthly charges
Charge for representative insured person	Monthly	6.69% of all other monthly charges
Living Care Benefit Rider	Only if benefit is exercised	Charge is imbedded in discounting of death benefit paid in advance⁽²⁾
Children’s Insurance Benefit Rider	Monthly	$0.50 per $1,000 of Rider Sum Insured
Accidental Death Benefit Rider:⁽³⁾
Minimum charge	Monthly	$0.75 per $1,000 of accidental death benefit
Maximum charge	Monthly	$1.71 per $1,000 of accidental death benefit
Charge for representative insured person	Monthly	$0.78 per $1,000 of accidental death benefit
Insured or Spouse YRT Rider:⁽⁴⁾
Minimum Charge	Monthly	$0.08 per $1,000 of YRT death benefit
Maximum Charge	Monthly	$83.33 per $1,000 of YRT death benefit
Charge for representative person	Monthly	$0.20 per $1,000 of YRT death benefit

(1) The charge for this rider is determined by multiplying the Target Premium by the applicable rate. The rates vary by the issue age and the disability insurance risk characteristics of the insured person. The “minimum” rate shown in the table is for a 21 year old standard or preferred underwriting risk. The “maximum” rate shown in the table is for a 55 year old substandard underwriting risk. The “representative insured person” referred to in the table is a 35 year old standard or preferred underwriting risk.

(2) Applicable state regulations currently limit the discount percentage to the greater of (i) the yield on 90 day U.S. Treasury bills at the time the discount is determined, and (ii) the policy’s maximum loan interest rate at the time the discount is determined.

(3) The charge for this rider is determined by multiplying the amount of accidental death benefit selected by the applicable rate. The rates vary by the attained age and the ADB risk characteristics of the insured person. The “minimum” rate shown in the table is for an insured person less than 1 year of age with the lowest ADB risk rating (1.0). The “maximum” rate shown in that table is for a 65 year old with the highest ADB risk rating (1.5). The “representative insured person” referred to in the table is a 35 year old with an ADB rating of 1.0.

(4) “YRT” stands for “Yearly Renewable Term”. The charge for this rider is determined by multiplying the amount of insurance under the rider by the applicable cost of insurance rate for the rider. The rates vary widely depending upon the amount of YRT coverage and the insurance risk characteristics and gender of the person insured under the rider. The “minimum” rate shown in the table is the rate for a rider with $1,000,000 of coverage issued to cover a 0 year old female preferred underwriting risk. The “maximum” rate shown in the table is the rate for a rider with $100,000 of coverage issued to cover a 99 year old male standard tobacco underwring risk. The “representative insured person” referred to in the table is a 35 year old male standard non-tobacco underwriting risk with $100,000 of rider coverage. If the Disability Payment of Premium Rider is also elected, the charge for this rider will be increased by 54%. If the person covered under this rider is rated substandard, there will be an extra charge for this rider of up to $445.61 per $1,000 of YRT death benefit.

The next table describes the minimum and maximum portfolio level fees and expenses charged by any of the portfolios underlying a variable investment option offered through this prospectus, expressed as a percentage of average net assets (rounded to two decimal places). These expenses are deducted from portfolio assets.

Total Annual Portfolio Operating Expenses	Minimum	Maximum
Range of expenses, including management fees, distribution and/or service (12b-1) fees, and other expenses	0.48%	1.10%

¹ Certain of the portfolios’ advisers or subadvisers have contractually agreed to reimburse or waive certain portfolio level expenses. The minimum expense shown does not reflect this reimbursement. If such reimbursement or waiver was reflected, the minimum expense would be 0.25%.

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DETAILED INFORMATION

This section of the prospectus provides additional detailed information that is not contained in the Summary of Benefits and Risks section.

Table of Investment Options and Investment Subadvisers

When you select a Separate Account investment option, we invest your money in shares of a corresponding portfolio of the John Hancock Variable Insurance Trust (the “Trust” or “JHVIT”) and hold the shares in a subaccount of the Separate Account. Fees and expenses of the portfolios are not fixed or specified under the terms of the policies and may vary from year to year. These fees and expenses differ for each portfolio and reduce the investment return of each portfolio. Therefore, they also indirectly reduce the return you will earn on any Separate Account investment options you select. For more information, please refer to the prospectus for the underlying portfolio.

The John Hancock Variable Insurance Trust is a so-called “series” type mutual fund and is registered under the Investment Company Act of 1940 (“1940 Act”) as an open-end management investment company. John Hancock Investment Management Services, LLC (“JHIMS”) provides investment advisory services to the Trust and receives investment management fees for doing so. JHIMS pays a portion of its investment management fees to other firms that manage the Trust’s portfolios. We are affiliated with JHIMS and may indirectly benefit from any investment management fees JHIMS retains.

The portfolios pay us or certain of our affiliates compensation for some of the distribution, administrative, shareholder support, marketing and other services we or our affiliates provide to the portfolios. The amount of this compensation is based on a percentage of the assets of the portfolios attributable to the variable insurance products that we and our affiliates issue. These percentages may differ from portfolio to portfolio and among classes of shares within a portfolio. In some cases, the compensation is derived from the Rule 12b-1 fees that are deducted from a portfolio’s assets for the services we or our affiliates provide to that portfolio. These compensation payments do not, however, result in any charge to you in addition to what is shown in the prospectus for the underlying portfolio.

The following table provides a general description of the portfolios that underlie the variable investment options we make available under the policy. You bear the investment risk of any portfolio you choose as an investment option for your policy. You can find a full description of each portfolio, including the investment objectives, policies, and risks, in the prospectus for that portfolio. You should read the portfolio’s prospectus carefully before investing in the corresponding variable investment option.

The investment options in the Separate Account are not publicly traded mutual funds. The investment options are only available to you as investment options in the policies, or in some cases through other variable annuity contracts or variable life insurance policies issued by us or by other life insurance companies. In some cases, the investment options also may be available through participation in certain qualified pension or retirement plans. The portfolios’ investment advisers and managers (i.e. subadvisers) may manage publicly traded mutual funds with similar names and investment objectives. However, the portfolios are not directly related to any publicly traded mutual fund. You should not compare the performance of any investment option described in this prospectus with the performance of a publicly traded mutual fund. The performance of any publicly traded mutual fund could differ substantially from that of any of the investment options of our Separate Account.

The portfolios available under the policies are as described in the following table:

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Portfolio	Portfolio Manager	Investment Objective
Capital Appreciation	Jennison Associates LLC	To seek to provide long-term growth of capital.
Emerging Markets Value	Dimensional Fund Advisors LP	To seek to provide long-term capital appreciation.
Equity-Income	T. Rowe Price Associates, Inc.	To seek to provide substantial dividend income and also long-term growth of capital.
Fundamental All Cap Core	John Hancock Asset Management, a division of Manulife Asset Management (US) LLC	To seek to provide long-term growth of capital.
Global Bond	Pacific Investment Management Company LLC	To seek to provide maximum total return, consistent with preservation of capital and prudent investment management.
High Yield	Western Asset Management Company	To seek to provide an above-average total return over a market cycle of 3 to 5 years, consistent with reasonable risk.
International Equity Index B	SSgA Funds Management, Inc.	To seek to track the performance of a broad-based equity index of foreign companies primarily in developed countries and, to a lesser extent, in emerging markets.
International Value	Templeton Investment Counsel, LLC	To seek to provide long-term growth of capital.
Lifestyle Balanced MVP	John Hancock Asset Management, a division of Manulife Asset Management (US) LLC; and John Hancock Asset Management, a division of Manulife Asset Management (North America) Limited	To seek to provide growth of capital and current income while seeking to both manage the volatility of return and limit the magnitude of portfolio losses.
Lifestyle Growth MVP	John Hancock Asset Management, a division of Manulife Asset Management (US) LLC; and John Hancock Asset Management, a division of Manulife Asset Management (North America) Limited	To seek to provide long-term growth of capital while seeking to both manage the volatility of return and limit the magnitude of portfolio losses.
Lifestyle Moderate MVP	John Hancock Asset Management, a division of Manulife Asset Management (US) LLC; and John Hancock Asset Management, a division of Manulife Asset Management (North America) Limited	To seek to provide current income and growth of capital while seeking to both manage the volatility of return and limit the magnitude of portfolio losses.
Mid Cap Index	John Hancock Asset Management, a division of Manulife Asset Management (North America) Limited	To seek to approximate the aggregate total return of a medium-capitalization U.S. domestic equity market index.
Mid Cap Stock	Wellington Management Company, LLP	To seek to provide long-term growth of capital.
Mid Value	T. Rowe Price Associates, Inc.	To seek to provide long-term capital appreciation.
Money Market B	John Hancock Asset Management, a division of Manulife Asset Management (North America) Limited	To seek to obtain maximum current income consistent with preservation of principal and liquidity. Certain market conditions may cause the return of the portfolio to become low or possibly negative.
Real Estate Securities	Deutsche Investment Management Americas Inc.	To seek to provide a combination of long-term capital appreciation and current income.
Short Term Government Income	John Hancock Asset Management, a division of Manulife Asset Management (US) LLC	To seek to provide a high level of current income consistent with preservation of capital. Maintaining a stable share price is a secondary goal.
Small Cap Growth	Wellington Management Company, LLP	To seek long-term capital appreciation.
Total Bond Market B	Declaration Management & Research LLC	To seek to track the performance of the Barclays U.S. Aggregate Bond Index.*

*The U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM pass throughs), ABS, and CMBS.

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If the shares of a portfolio are no longer available for investment or in our judgment investment in a portfolio becomes inappropriate, we may eliminate the shares of a portfolio and substitute shares of another portfolio of the Trust or another open-end registered investment company. Substitution may be made with respect to both existing investments and the investment of future purchase payments. However, we will make no such substitution without first notifying you and obtaining approval of the appropriate insurance regulatory authorities and the SEC (to the extent required by the 1940 Act).

Valuation

We will purchase and redeem series fund shares for the Separate Account at their net asset value without any sales or redemption charges. Shares of a series fund represent an interest in one of the funds of the series fund which corresponds to a subaccount of the Separate Account. Any dividend or capital gains distributions received by the Separate Account will be reinvested in shares of that same fund at their net asset value as of the dates paid.

On each business day, shares of each series fund are purchased or redeemed by us for each subaccount based on, among other things, the amount of net premiums allocated to the subaccount, distributions reinvested, and transfers to, from and among subaccounts, all to be effected as of that date. Such purchases and redemptions are effected at each series fund’s net asset value per share determined for that same date. A “business day” is any date on which the New York Stock Exchange is open for trading. We compute policy values for each business day as of the close of that day (usually 4:00 p.m. Eastern time).

Voting interest

We will vote shares of the portfolios held in the Separate Account at the shareholder meetings according to voting instructions timely received from persons having the voting interest under the policies. We will determine the number of portfolio shares for which voting instructions may be given not more than 90 days prior to the meeting. Proxy material will be distributed to each person having the voting interest under the policy together with appropriate forms for giving voting instructions. We will vote all portfolio shares that we hold in the Separate Account for policy owners in proportion to the instructions timely received by us from policy owners from all our Separate Accounts that are registered with the SEC under the 1940 Act. We will vote all portfolio shares that we otherwise are entitled to vote (including our own shares) on any matter in proportion to the instructions timely received by us and any affiliated insurance companies with respect to the matter from policy owners in Separate Accounts of these insurance companies that are registered with the SEC under the 1940 Act. The effect of this proportional voting is that a small number of policy owners can determine the outcome of a vote.

We determine the number of a series fund’s shares held in a subaccount attributable to each owner by dividing the amount of a policy’s account value held in the subaccount by the net asset value of one share in the series fund. Fractional votes will be counted. We determine the number of shares as to which the owner may give instructions as of the record date for the series fund’s meeting. Owners of policies may give instructions regarding the election of the Board of Trustees or Board of Directors of the series fund, ratification of the selection of independent auditors, approval of series fund investment advisory agreements and other matters requiring a shareholder vote. We will furnish owners with information and forms to enable owners to give voting instructions. However, we may, in certain limited circumstances permitted by the SEC’s rules, disregard voting instructions. If we do disregard voting instructions, you will receive a summary of that action and the reasons for it in the next semi-annual report to owners.

The voting privileges described above reflect our understanding of applicable Federal securities law requirements. To the extent that applicable law, regulations or interpretations change to eliminate or restrict the need for such voting privileges, we reserve the right to proceed in accordance with any such revised requirements. We also reserve the right, subject to compliance with applicable law, including approval of owners if so required, (1) to transfer assets determined by John Hancock USA to be associated with the class of policies to which your policy belongs from the Account to another separate account or subaccount, (2) to deregister the Account under the 1940 Act, (3) to substitute for the fund shares held by a subaccount any other investment permitted by law, and (4) to take any action necessary to comply with or obtain any exemptions from the 1940 Act. Any such change will be made only if, in our judgment, the change would best serve the interests of owners of policies in your policy class or would be appropriate in carrying out the purposes of such policies. We would notify owners of any of the foregoing changes and to the extent legally required, obtain approval of affected owners and any regulatory body prior thereto. Such notice and approval, however, may not be legally required in all cases.

Description of John Hancock USA

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assets of JHLICO and JHVLICO, including those assets related to John Hancock Variable Life Account U, the separate account that currently funds your policy. Effective at the time of the merger, we became the depositor of John Hancock Variable Life Account U (the “Separate Account”).

Except for the succession of John Hancock USA as the depositor for the Separate Account and its assumption of the obligations arising under the policies, the merger did not affect the Separate Account or any provisions of, any rights and obligations under, or any of your allocations among investment options under, the policies. We will continue to administer and service inforce policies of JHLICO and JHVLICO in all jurisdictions where issued and will assume the direct responsibility for the payment of all claims and benefits and other obligations under these policies.

We are a stock life insurance company and are currently licensed in the District of Columbia and all states of the United States, except New York. We were incorporated in Maine on August 20, 1955 by a special act of the Maine legislature and redomesticated under the laws of Michigan on December 30, 1992. Our ultimate parent is Manulife Financial Corporation (“MFC”), a publicly traded company based in Toronto, Canada. MFC is the holding company of John Hancock USA and its subsidiaries. However, neither John Hancock USA nor any of its affiliated companies guarantees the investment performance of the Separate Account.

We are ranked and rated by independent financial rating services, which may include Moody’s, Standard & Poor’s, Fitch and A.M. Best. The purpose of these ratings is to reflect the financial strength or claims-paying ability of the company, but they do not specifically relate to its products, the performance (return) of these products, the value of any investment in these products upon withdrawal or to individual securities held in any portfolio. These ratings do not apply to the safety and performance of the Separate Account.

Description of Separate Account U

The variable investment options shown on page 1 are in fact subaccounts of the Separate Account and initially established by JHVLICO under Massachusetts law. On December 31, 2009, as a result of the merger of JHLICO and JHVLICO into John Hancock USA, we became the owner of all the assets of the Separate Account and currently operate the Separate Account under Michigan law (see “Description of John Hancock USA”).

The Separate Account meets the definition of “separate account” under the Federal securities laws and is registered as a unit investment trust under the 1940 Act. Such registration does not involve supervision by the SEC of the management of the Separate Account or of us.

The Separate Account’s assets are our property. Each policy provides that amounts we hold in the Separate Account pursuant to the policies cannot be reached by any other persons who may have claims against us and can’t be used to pay any indebtedness of John Hancock USA other than those arising out of policies that use the Separate Account. Income, gains and losses credited to, or charged against, the Separate Account reflect the Separate Account’s own investment experience and not the investment experience of John Hancock USA’s other assets. John Hancock USA is obligated to pay all amounts promised to policy holders under the policy.

New subaccounts may be added and made available to policy owners from time to time. Existing subaccounts may be modified or deleted at any time.

The fixed investment option

Our obligations under the policy’s fixed investment option are backed by our general account assets. Our general account consists of assets owned by us other than those in the Account and in other separate accounts that we may establish. Subject to applicable law, we have sole discretion over the investment of assets of the general account and policy owners do not share in the investment experience of, or have any preferential claim on, those assets. Instead, we guarantee that the account value allocated to the fixed investment option will accrue interest daily at an effective annual rate of at least 4% without regard to the actual investment experience of the general account.

Because of exemptive and exclusionary provisions, interests in our fixed investment option have not been registered under the Securities Act of 1933 (the “1933 Act”) and our general account has not been registered as an investment company under the 1940 Act. Accordingly, neither the general account nor any interests therein are subject to the provisions of these acts, and we have been advised that the staff of the SEC has not reviewed the disclosure in this prospectus relating to the fixed investment option. Disclosure regarding the fixed investment option are, however, subject to certain generally applicable provisions of the Federal securities laws relating to accuracy and completeness of statements made in prospectuses.

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Premiums

Planned premiums

The Policy Specifications page of your policy will show the “Planned Premium” for the policy. You choose this amount in the policy application. You will also choose how often to pay premiums — annually, semi-annually, quarterly or monthly. The dates on which the Planned Premiums are “due” are referred to as “modal processing dates.” The premium reminder notice we send you is based on the amount and period you choose. However, payment of Planned Premiums is not necessarily required. You need only invest enough to keep the policy in force (see “Lapse and reinstatement”).

Maximum premium payments

Federal tax law limits the amount of premium payments you can make relative to the amount of your policy’s insurance coverage. We will not knowingly accept any amount by which a premium payment exceeds the maximum. If you exceed certain other limits, the law may impose a penalty on amounts you take out of your policy (see “Tax considerations”). Also, we may refuse to accept any amount of an additional premium if:

that amount of premium would increase our insurance risk exposure, and

the insured person doesn’t provide us with adequate evidence that they continue to meet our requirements for issuing insurance.

In no event, however, will we refuse to accept any premium necessary to prevent the policy from terminating or to keep the guaranteed death benefit feature in effect.

Ways to pay premiums

If you pay premiums by check or money order, they must be drawn on a U.S. bank in U.S. dollars and made payable to “John Hancock Life.” We will not accept credit card checks. We will not accept starter or third party checks if they fail to satisfy our administrative requirements. Premiums after the first must be sent to our Service Office at the appropriate address shown on the back cover of this prospectus.

We will also accept premiums:

by wire or by exchange from another insurance company,

via an electronic funds transfer program (any owner interested in making monthly premium payments must use this method), or

if we agree to it, through a salary deduction plan with your employer.

You can obtain information on these other methods of premium payment by contacting your John Hancock USA representative or by contacting our Service Office.

Processing premium payments

We will process any premium payment as of the day we receive it, unless one of the following exceptions applies:

(1) We will process a payment received prior to a policy’s date of issue as if received on the business day immediately preceding the date of issue.

(2) If the Minimum Initial Premium is not received prior to the date of issue, we will process each premium payment received thereafter as if received on the business day immediately preceding the date of issue until all of the Minimum Initial Premium is received.

(3) We will process the portion of any premium payment for which we require evidence of the insured person’s continued insurability only after we have received such evidence and found it satisfactory to us.

(4) If we receive any premium payment that we think will cause a policy to become a modified endowment contract or will cause a policy to lose its status as life insurance under the tax laws, we will not accept the excess portion of that premium payment and will immediately notify the owner. We will refund the excess premium when the premium payment check has had time to clear the banking system (but in no case more than two weeks after receipt), except in the following circumstances:

The tax problem resolves itself prior to the date the refund is to be made; or

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The tax problem relates to modified endowment contract status and we receive a signed acknowledgment from the owner prior to the refund date instructing us to process the premium notwithstanding the tax issues involved.

In the above cases, we will treat the excess premium as having been received on the date the tax problem resolves itself or the date we receive the signed acknowledgment. We will then process it accordingly.

(5) If a premium payment is received or is otherwise scheduled to be processed (as specified above) on a date that is not a business day, the premium payment will be processed on the business day next following that date.

Lapse and reinstatement

If the policy’s surrender value is not sufficient to pay the charges and the guaranteed death benefit feature is not in effect, we will notify you of how much you will need to pay to keep the policy in force. You will have a 61 day “grace period” to make that payment. If you don’t pay at least the required amount by the end of the grace period, your policy will terminate (i.e., lapse). All coverage under the policy will then cease. Even if the policy terminates in this way, you can still reactivate (i.e., “reinstate”) it within 1 year from the beginning of the grace period. You will have to provide evidence that the insured person still meets our requirements for issuing coverage. You will also have to pay a minimum amount of premium and be subject to the other terms and conditions applicable to reinstatements, as specified in the policy. If the insured person dies during the grace period, we will deduct any unpaid monthly charges from the death benefit. During the grace period, you cannot make transfers among investment options or make a partial withdrawal or policy loan.

Generally, the suicide exclusion and incontestability provision will apply from the effective date of the reinstatement. Your policy will indicate if this is not the case. A surrendered policy cannot be reinstated.

Guaranteed death benefit feature

This feature is available only if the insured person meets certain underwriting requirements. The feature guarantees that your face amount will not lapse during the first 5 policy years, regardless of adverse investment performance, if on each modal processing date during that 5 year period the amount of cumulative premiums you have paid (less all withdrawals from the policy) equals or exceeds the sum of all Guaranteed Death Benefit Premiums due to date. The Guaranteed Death Benefit Premium (or “GDB Premium”) is defined in the policy and is “due” on each modal processing date. (The term “modal processing date” is defined under “Planned Premiums”).

The GDB Premium varies from policy to policy based upon a number of factors, including the insured person’s issue age, insurance risk characteristics and (generally) gender. No GDB Premium will ever be greater than the so-called “guideline premium” for the policy as defined in Section 7702 of the Code. Also, the GDB Premiums may change in the event of any change in the face amount of the policy or any change in the death benefit option (see “The Death Benefit” below).

If the Guaranteed Death Benefit test is not satisfied on any modal processing date, we will notify you immediately and tell you how much you will need to pay to keep the feature in effect. You will have until the second monthly deduction date after default to make that payment. If you don’t pay at least the required amount by the end of that period, the feature will permanently lapse. You cannot restore the feature once it has lapsed.

If there are monthly charges that remain unpaid because of this feature, we will deduct such charges when there is sufficient surrender value to pay them.

The death benefit

When the insured person dies, we will pay the death benefit minus any outstanding loans. There are 3 ways of calculating the death benefit. You must choose which one you want in the application. The three death benefit options are:

Option 1 - The death benefit will equal the greater of (1) the face amount or (2) the minimum insurance amount under the “guideline premium and cash value corridor test” (as described below).

Option 2 - The death benefit will equal the greater of (1) the face amount plus your policy’s account value on the date of death, or (2) the minimum insurance amount under the “guideline premium and cash value corridor test”.

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Option 3 - The death benefit will equal the greater of (1) the face amount or (2) the minimum insurance amount under the “cash value accumulation test” (as described below).

For the same premium payments, the death benefit under Option 2 will tend to be higher than the death benefit under Options 1 or 3. On the other hand, the monthly insurance charge will be higher under Option 2 to compensate us for the additional insurance risk. Because of that, the account value will tend to be higher under Options 1 or 3 than under Option 2 for the same premium payments.

Limitations on payment of death benefit

If the insured person commits suicide within certain time periods (generally within two years from the Issue Date of the policy), the amount payable will be equal to the premiums paid, less the amount of any policy debt on the date of death, and less any withdrawals, unless otherwise provided by your policy.

Also, if an application misstated the age or sex of either of the insured persons, we will adjust, if necessary, the Base Face Amount, any Supplemental Face Amount, and every other benefit to that which would have been purchased at the correct age or sex by the most recent cost of insurance charges or as otherwise provided by your policy.

The minimum insurance amount

In order for a policy to qualify as life insurance under Federal tax law, there has to be a minimum amount of insurance in relation to account value. There are two tests that can be applied under Federal tax law. Death benefit Options 1 and 2 use the “guideline premium and cash value corridor test” while Option 3 uses the “cash value accumulation test.” For Options 1 and 2, we compute the minimum insurance amount each business day by multiplying the account value on that date by the so-called “corridor factor” applicable on that date. The corridor factors are derived by applying the “guideline premium and cash value corridor test.” The corridor factor starts out at 2.50 for ages at or below 40 and decreases as attained age increases, reaching a low of 1.0 at age 95. A table showing the factor for each age will appear in the policy. For Option 3, we compute the minimum insurance amount each business day by multiplying the account value on that date by the so-called “death benefit factor” applicable on that date. The death benefit factors are derived by applying the “cash value accumulation test.” The death benefit factor decreases as attained age increases. A table showing the factor for each age will appear in the policy.

Increase in coverage

Increases in the face amount of insurance coverage are generally not permitted under our current administrative rules. We expect to be able to allow such increases in the future, but that is not guaranteed.

Decrease in coverage

After the first policy year, you may request a reduction in the face amount of insurance coverage, but only if:

the remaining face amount will be at least $100,000, and

the remaining face amount will at least equal the minimum required by the tax laws to maintain the policy’s life insurance status.

As to when an approved decrease would take effect, see “Effective date of certain policy transactions” below. If there is a reduction in the face amount, a pro-rata portion of the applicable CDSC will be deducted from the account value (see “Contingent deferred sales charge (‘CDSC’)”).

Change of death benefit option

You may request to change your coverage from death benefit Option 1 to Option 2 or vice-versa. If you request a change from Option 1 to Option 2, we will require evidence that the insured person still meets our requirements for issuing coverage. This is because such a change increases our insurance risk exposure. If you have chosen death benefit Option 3, you can never change to either Option 1 or Option 2.

Effective date of certain policy transactions

The following transactions take effect on the policy anniversary on or next following the date we approve your request:

Face amount increases, when and if permitted by our administrative rules

Change of death benefit option

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Face amount decreases take effect on the monthly deduction date on or next following the date we approve the request for decrease.

Tax consequences of coverage changes

Please read “Tax considerations” to learn about possible tax consequences of changing your insurance coverage under the policy.

Your beneficiary

You name your beneficiary when you apply for the policy. The beneficiary is entitled to the proceeds we pay following the insured person’s death. You may change the beneficiary during the insured person’s lifetime. Such a change requires the consent of any irrevocable named beneficiary. A new beneficiary designation is effective as of the date you sign it, but will not affect any payments we make before we receive it. If no beneficiary is living when the insured person dies, we will pay the insurance proceeds to the owner or the owner’s estate.

Ways in which we pay out policy proceeds

You may choose to receive proceeds from the policy as a single sum. This includes proceeds that become payable because of death or full surrender. As permitted by state law and our current administrative procedures, death claim proceeds may be placed into an interest-bearing John Hancock retained asset account in the beneficiary’s name. The interest earned in a John Hancock retained asset account is normally subject to income tax. You should consult with your tax advisor if you have any questions regarding taxation of the interest earned. We will provide the beneficiary with a checkbook, so checks may be written for all or a part of the proceeds. The retained asset account is part of our general account and is subject to the claims of our creditors. It is not a bank account and it is not insured by the FDIC. We may receive a benefit from managing proceeds held in a retained asset account. Please contact our Service Office for more information. Alternatively, you can elect to have proceeds of $1,000 or more applied to any of a number of other payment options, including the following:

Option 1 - Proceeds left with us to accumulate with interest

Option 2A - Equal monthly payments of a specified amount until all proceeds are paid out

Option 2B - Equal monthly payments for a specified period of time

Option 3 - Equal monthly payments for life, but with payments guaranteed for a specific number of years

Option 4 - Equal monthly payments for life with no refund

Option 5 - Equal monthly payments for life with a refund if all of the proceeds haven’t been paid out

You cannot choose an option if the monthly payments under the option would be less than $50. We will issue a supplementary agreement when the proceeds are applied to any alternative payment option. That agreement will spell out the terms of the option in full. We will credit interest on each of the above options. For Options 1 and 2A, the interest will be at least an effective annual rate of 3.50%. If no alternative payment option has been chosen, proceeds may be paid as a single sum.

Changing a payment option

You can change the payment option at any time before the proceeds are payable. If you haven’t made a choice, the payee of the proceeds has a prescribed period in which he or she can make that choice.

Tax impact of payment option chosen

There may be tax consequences to you or your beneficiary depending upon which payment option is chosen. You should consult with a qualified tax adviser before making that choice.

The account value

From each premium payment you make, we deduct the charges described under “Deductions from premium payments.” We invest the rest in the investment options you’ve elected. Special investment rules apply to premiums processed prior to the Allocation Date (see “Processing premium payments”).

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Over time, the amount you’ve invested in any variable investment option will increase or decrease the same as if you had invested the same amount directly in the corresponding fund of a series fund and had reinvested all fund dividends and distributions in additional fund shares; except that we will deduct certain additional charges which will reduce your account value. We describe these charges under “Description of charges at the policy level.” We calculate the unit values for each investment account once every business day as of the close of trading on the New York Stock Exchange, usually 4:00 p.m. Eastern time. Sales and redemptions within any investment account will be transacted using the unit value next calculated after we receive your request either in writing or other form that we specify. If we receive your request before the close of our business day, we’ll use the unit value calculated as of the end of that business day. If we receive your request at or after the close of our business day, we’ll use the unit value calculated as of the end of the next business day. If a scheduled transaction falls on a day that is not a business day, we’ll process it as of the end of the next business day.

The amount you’ve invested in the fixed investment option will earn interest at a rate we declare from time to time. We guarantee that this rate will be at least 4%. If you want to know what the current declared rate is, just call or write to us. Amounts you invest in a fixed investment option will not be subject to the mortality and expense risk charge. Otherwise, the policy level charges applicable to the fixed investment option are the same as those applicable to the variable investment options.

Commencement of investment performance

All premium payments will be allocated among the investment options on the date as of which they are processed (as discussed under “Processing Premium Payments”).

Allocation of future premium payments

At any time, you may change the investment options in which future premium payments will be invested. You make the original allocation in the application for the policy. The percentages you select must be in whole numbers and must total 100%.

Transfers of existing account value

The policies are not designed for professional market timing organizations or other persons or entities that use programmed, large or frequent transfers among investment options, as described in the “Market timing and disruptive trading risks” section of this prospectus. As a consequence, we have reserved the right to impose limits on the number and frequency of transfers into and out of variable investment options. We also reserve the right to impose a charge for any transfer beyond an annual limit (which will not be less than 12). Under our current rules, we impose no charge on transfers but we do impose the following restrictions on transfers into and out of variable investment options. Transfers out of a fixed investment option are subject to additional limitations noted below.

Our current practice is to restrict transfers into or out of variable investment options to two per calendar month (except with respect to those policies described in the following paragraphs). For purposes of this restriction, and in applying the limitation on the number of free transfers made during the period from the opening of a business day (usually 9:00 a.m. Eastern time) to the close of that business day (usually 4:00 p.m. Eastern time) are considered one transfer. You may, however, transfer to the Money Market B investment option even if the two transfer per month limit has been reached, but only if 100% of the account value in all variable investment options is transferred to the Money Market B investment option. If such a transfer to the Money Market B investment option is made then, for the 30 calendar day period after such transfers, no transfers from the Money Market B investment option to any other investment options (variable or fixed) may be made. If your policy offers a dollar cost averaging or automatic asset allocation rebalancing program, any transfers pursuant to such program are not considered transfers subject to these restrictions on frequent trading. The restrictions described in this paragraph will be applied uniformly to all policy owners subject to the restrictions.

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one variable investment option into a second variable investment option, the values can only be transferred out of the second investment option if they are transferred into the Money Market B investment option; and (ii) any account values that would otherwise not be transferable by application of the 10 day limit described above and that are transferred into the Money Market B investment option may not be transferred out of the Money Market B investment option into any other investment options (variable or fixed) for 30 calendar days. The restrictions described in this paragraph will be applied uniformly to all policy owners subject to the restrictions.

If we change any of the above rules relating to transfers, we will notify you of the change. Transfers under the dollar cost averaging program will not be counted toward any limit or restriction on transfers into and out of variable investment options.

Subject to our approval, we may offer policies purchased by a corporation or other entity that has purchased policies to match its liabilities under an employee benefit plan, as described above, the ability to electronically rebalance the investment options in its policies. Under these circumstances, in lieu of imposing any specific limit upon the number or timing of transfers, we will monitor aggregate trades among the sub-accounts for frequency, pattern and size for potentially harmful investment practices. If we detect trading activity that we believe may be harmful to the overall operation of any investment account or underlying portfolio, we may impose conditions on policies employing electronic rebalancing to submit trades, including setting limits upon the number and timing of transfers, and revoking privileges to make trades by any means other than written communication submitted via U.S. mail.

While we seek to identify and prevent disruptive frequent trading activity, it may not always be possible to do so. Therefore no assurance can be given that the restrictions we impose will be successful in preventing all disruptive frequent trading and avoiding harm to long-term investors. The restrictions described in these paragraphs will be applied uniformly to all policy owners subject to the restrictions.

Rule 22c-2 under the 1940 Act requires us to provide tax identification numbers and other policy owner transaction information to the Trust or to other investment companies in which the Separate Account invests, at their request. An investment company will use this information to identify any pattern or frequency of investment account transfers that may violate their frequent trading policy. An investment company may require us to impose trading restrictions in addition to those described above if violations of their frequent trading policy are discovered.

Transfers out of a fixed investment option are currently subject to the following restrictions:

You can only make such a transfer once a year and only during the 31 day period following your policy anniversary.

We must receive the request for such a transfer during the period beginning 60 days prior to the policy anniversary and ending 30 days after it.

The most you can transfer at any one time is the greater of $500 or 20% of the assets in your fixed investment option.

We reserve the right to impose a minimum amount limit on transfers out of the fixed investment option.

If there is a default as described in the “Lapse and reinstatement” provision and a “grace period” is triggered, you will be prohibited from making any transfers among investment options while the grace period remains in effect.

Limitation on number of investment options

Whether through the allocation of premium or through the transfer of existing account value, you can never be invested in more than ten investment options at any one time.

Dollar cost averaging

This is a program of automatic monthly transfers out of the Money Market B investment option into one or more of the other variable investment options. You choose the investment options and the dollar amount and timing of the transfers. Any transfer made under this program will not count toward the annual transfer limit described under “Transfers of existing account value.” The program is designed to reduce the risks that result from market fluctuations. It does this by spreading out the allocation of your money to investment options over a longer period of time. This allows you to reduce the risk of investing most of your money at a time when market prices are high. Obviously, the success of this strategy depends on market trends and is not guaranteed. No fee is charged for this program.

Scheduled transfers under this option may be made from the Money Market B investment option to not more than nine other variable investment options. However, the amount transferred to any one investment option must be at least $100.

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Once we receive the election in form satisfactory to us at our Service Office, transfers will begin on the second monthly deduction date following its receipt. Once elected, the scheduled monthly transfer option will remain in effect for so long as you have at least $2,500 of your account value in the Money Market B investment option, or until we receive written notice from you of cancellation of the option or notice of the death of the insured person.

Surrender and partial withdrawals

Full surrender

You may surrender your policy in full at any time. If you do, we will pay you the account value, less any policy debt and less any CDSC and administrative surrender charge that then applies. This is called your “surrender value.” You must return your policy when you request a full surrender.

Partial withdrawals

You may make a partial withdrawal of your surrender value at any time after the first policy year. Each partial withdrawal must be at least $1,000. There is a fee for each partial withdrawal. The charge is equal to the lesser of 2% of the withdrawal amount or $20. We will automatically reduce the account value of your policy by the amount of the withdrawal and the related charge. Each investment option will be reduced in the same proportion as the account value is then allocated among them. We will not permit a partial withdrawal if it would cause your surrender value to fall below 3 months’ worth of monthly charges (see “Deductions from account value”). We also reserve the right to refuse any partial withdrawal that would cause the policy’s face amount to fall below $100,000. Under the Option 1 or Option 3 death benefit, the reduction of your account value occasioned by a partial withdrawal could cause the minimum insurance amount to become less than your face amount of insurance (see “The Death Benefit”). If that happens, we will automatically reduce your face amount of insurance. The calculation of that reduction is explained in the policy. If such a face amount reduction would cause your policy to fail the Code’s definition of life insurance, we will not permit the partial withdrawal. If the withdrawal results in a reduction in the face amount, a pro-rata portion of the applicable CDSC will be deducted from the account value (see “Contingent deferred sales charge”).

Policy loans

You may borrow from your policy at any time after it has been in effect for 1 year by completing a form satisfactory to us or, if the telephone transaction authorization form has been completed, by telephone. The maximum amount you can borrow is equal to 100% of your surrender value that is in the fixed investment option plus one of the following:

In policy years 2 and 3—75% of your surrender value that is in the variable investment options

In all later policy years—90% of your surrender value that is in the variable investment options

The minimum amount of each loan is $300. The interest charged on any loan is an effective annual rate of 5.0% in the first 20 policy years and 4.50% thereafter. Accrued interest will be added to the loan daily and will bear interest at the same rate as the original loan amount. The amount of the loan is deducted from the investment options in the same proportion as the account value is then allocated among them and is placed in a special loan account. This special loan account will earn interest at an effective annual rate of 4.0%. The tax consequences of a loan interest credited differential of 0% are unclear. You should consult a tax adviser before effecting a loan to evaluate possible tax consequences. If we determine that a loan will be treated as a taxable distribution because of the differential between the loan interest rate and the rate being credited on the special loan account, we reserve the right to decrease the rate credited on the special loan account to a rate that would, in our reasonable judgement, result in the transaction being treated as a loan under Federal tax law. The right to increase the rate charged on the loan is restricted in some states. Please see your John Hancock USA representative for details. We process policy loans as of the day we receive the loan request.

Repayment of policy loans

You can repay all or part of a loan at any time. Each repayment will be allocated among the investment options as follows:

The same proportionate part of the loan as was borrowed from the fixed investment option will be repaid to the fixed investment option.

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The remainder of the repayment will be allocated among the investment options in the same way a new premium payment would be allocated.

If you want a payment to be used as a loan repayment, you must include instructions to that effect. Otherwise, all payments will be assumed to be premium payments. We process loan repayments as of the day we receive the repayment.

Effects of policy loans

The account value, the surrender value, and any death benefit above the Total Sum Insured are permanently affected by any loan, whether or not it is repaid in whole or in part. This is because the amount of the loan is deducted from the investment options and placed in a special loan account. The investment options and the special loan account will generally have different rates of investment return.

The amount of the outstanding loan (which includes accrued and unpaid interest) is subtracted from the amount otherwise payable when the policy proceeds become payable.

Whenever the outstanding loan equals or exceeds the surrender value, the policy will terminate 31 days after we have mailed notice of termination to you (and to any assignee of record at such assignee’s last known address) specifying the minimum amount that must be paid to avoid termination, unless a repayment of at least the amount specified is made within that period. Also, taking out a loan on the policy increases the risk that the policy may lapse because of the difference between the interest rate charged on the loan and the interest rate credited to the special loan account. Policy loans may also result in adverse tax consequences under certain circumstances (see “Tax considerations”) .

Description of charges at the policy level

Deductions from premium payments

Premium tax charge - A charge to cover state premium taxes we currently expect to pay, on average. This charge is currently 2.35% of each premium.

DAC tax charge - A charge to cover the increased Federal income tax burden that we currently expect will result from receipt of premiums. This charge is currently 1.25% of each premium.

Premium sales charge - A charge to help defray our sales costs. The charge is 4% of a certain portion of the premium you pay. The portion of each year‘s premium that is subject to the charge is called the “Target Premium.” It’s determined at the time the policy is issued and will appear in the “Policy Specifications” section of the policy. We currently waive one half of this charge for policies with a face amount of $250,000 or higher, but continuation of that waiver is not guaranteed. Also, we currently intend to stop making this charge on premiums received after the 10th policy year, but this is not guaranteed either.

Deductions from account value

Issue charge - A monthly charge to help defray our administrative costs. This is a flat dollar charge of $20 and is deducted only during the first policy year.

Maintenance charge - A monthly charge to help defray our administrative costs. This is a flat dollar charge of up to $8.

Insurance charge - A monthly charge for the cost of insurance. To determine the charge, we multiply the amount of insurance for which we are at risk by a cost of insurance rate. The rate is derived from an actuarial table. The table in your policy will show the maximum cost of insurance rates. The cost of insurance rates that we currently apply are generally less than the maximum rates. We will review the cost of insurance rates at least every 5 years and may change them from time to time. However, those rates will never be more than the maximum rates shown in the policy. The table of rates we use will depend on the insurance risk characteristics and (usually) gender of the insured person, the face amount of insurance and the length of time the policy has been in effect. Regardless of the table used, cost of insurance rates generally increase each year that you own your policy, as the insured person‘s attained age increases. (The insured person’s “attained age” on any date is his or her age on the birthday nearest that date). We currently apply a lower insurance charge for policies with a face amount of $250,000 or higher, but continuation of that practice is not guaranteed. Also, it is our current intention to reduce the insurance charge in the 10th policy year and thereafter, but such a reduction is not guaranteed either.

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M & E charge - A daily charge for mortality and expense risks we assume. This charge is deducted from the variable investment options. It does not apply to the fixed investment option. The current charge is at an effective annual rate of .60% of the value of the assets in each variable investment option. We guarantee that this charge will never exceed an effective annual rate of .90%.

Optional benefits charge - Monthly charges for any optional insurance benefits added to the policy by means of a rider. The riders we currently offer are described under “Optional benefit riders you can add.”

Administrative surrender charge - A charge we deduct if the policy lapses or is surrendered in the first 9 policy years. We deduct this charge to compensate us for administrative expenses that we would otherwise not recover in the event of early lapse or surrender. The amount of the charge depends upon the policy year in which lapse or surrender occurs and the policy’s face amount at that time. The maximum charge is $5 per $1,000 of face amount in policy years 1 through 7, $4 per $1,000 in policy year 8 and $3 per $1,000 in policy year 9.

Contingent deferred sales charge (“CDSC”) - A charge we deduct if the policy lapses or is surrendered within the first 12 policy years. We deduct this charge to compensate us for sales expenses that we would otherwise not recover in the event of early lapse or surrender. The charge is a percentage of premiums received that do not exceed the Target Premium . (“Target Premium” is described above under “Deductions from premium payments”). In policy years 1 through 3, the charge is a percentage of premiums received prior to the end of the policy year in question. Thereafter, it’s a percentage of only those premiums received in policy years 1 through 3. The charge reaches its maximum at the end of the third policy year, stays level through the seventh policy year, and is reduced by an equal amount at the beginning of each policy year thereafter until it reaches zero. This is shown in the following table (where the percentages are rounded to one decimal place):

Policy Year(s)	Percentage
Policy years 1-7	26.0%
Policy year 8	21.7%
Policy year 9	17.3%
Policy year 10	13.0%
Policy year 11	8.7%
Policy year 12	4.3%
Policy year 13 and later	0.0%

The above table applies only if the insured person is less than attained age 55 at issue. For older issue ages, the maximum is reached earlier and the percentage may decrease to zero in fewer than 12 policy years. Regardless of issue age, there is a further limitation on the CDSC that can be charged if surrender or lapse occurs in the second policy year. The CDSC cannot exceed 32% of one year’s Target Premium. A pro-rata portion of the CDSC may also be charged in the case of withdrawals that reduce the face amount (see “Partial withdrawals”) and requested reductions in the face amount (see “Decrease in coverage”). The pro-rata charge is calculated by dividing the reduction in face amount by the face amount immediately prior to the reduction and then multiplying the applicable CDSC by that ratio.

Partial withdrawal charge - A charge for each partial withdrawal of account value to compensate us for the administrative expenses of processing the withdrawal. The charge is equal to the lesser of 2% of the withdrawal amount or $20.

Loan interest rate

The maximum loan interest charged on any loan is shown in the Fee Tables and described under “Policy loans” in this prospectus.

Additional information about how certain policy charges work

Sales expenses and related charges

The sales charges (i.e., the premium sales charge and the CDSC) help to compensate us for the cost of selling our policies (see “Description of Charges at the Policy Level”). The amount of the charges in any policy year does not specifically correspond to sales expenses for that year. We expect to recover our total sales expenses over the life of the policy. To the extent that the sales charges do not cover total sales expenses, the sales expenses may be recovered from other sources, including gains from the charge for mortality and expense risks and other gains with respect to the policies, or from our

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general assets. Similarly, administrative expenses not fully recovered by the issue charge and the maintenance charge may also be recovered from such other sources.

Effect of premium payment pattern

You may structure the timing and amount of premium payments to minimize the sales charges, although doing so involves certain risks. Paying less than one Target Premium in any policy year, or paying more than one Target Premium in any policy year could reduce your total sales charges over time. For example, if the Target Premium was $1,000 and you paid a premium of $1,000 for ten years, you would pay total premium sales charges of $400 and be subject to a maximum CDSC of $780. If you paid $2,000 every other policy year for ten policy years, you would pay total premium sales charges of only $200 and be subject to a maximum CDSC of only $520. However, delaying the payment of Target Premiums to later policy years could increase the risk that the account value will be insufficient to pay policy charges as they come due. As a result, the policy may lapse and eventually terminate. Conversely, accelerating the payment of Target Premiums to earlier policy years could cause aggregate premiums paid to exceed the policy’s 7-pay premium limit and, as a result, cause the policy to become a modified endowment contract, with adverse tax consequences to you upon receipt of policy distributions (see “Tax considerations”).

Method of deduction

Unless we agree otherwise, we will deduct the monthly charges described in the Fee Tables section and any CDSC from your policy’s investment options in proportion to the amount of account value you have in each. For each month that we cannot deduct any charge because of insufficient account value, the uncollected charges will accumulate and be deducted when and if sufficient account value becomes available.

The insurance under the policy continues in full force during any grace period but, if the insured person dies during the policy grace period, the amount of unpaid monthly charges is deducted from the death benefit otherwise payable.

Reduced charges for eligible classes

The charges otherwise applicable may be reduced with respect to policies issued to a class of associated individuals or to a trustee, employer or similar entity where we anticipate that the sales to the members of the class will result in lower than normal sales or administrative expenses, lower taxes or lower risks to us. We will make these reductions in accordance with our rules in effect at the time of the application for a policy. The factors we consider in determining the eligibility of a particular group for reduced charges, and the level of the reduction, are as follows: the nature of the association and its organizational framework; the method by which sales will be made to the members of the class; the facility with which premiums will be collected from the associated individuals and the association’s capabilities with respect to administrative tasks; the anticipated lapse and surrender rates of the policies; the size of the class of associated individuals and the number of years it has been in existence; the aggregate amount of premiums paid; and any other such circumstances which result in a reduction in sales or administrative expenses, lower taxes or lower risks. Any reduction in charges will be reasonable and will apply uniformly to all prospective policy purchasers in the class and will not unfairly discriminate against any owner.

Other charges we could impose in the future

Except for the DAC tax charge, we currently make no charge for our Federal income taxes. However, if we incur, or expect to incur, income taxes attributable to any subaccount of the Account or this class of policies in future years, we reserve the right to make a charge for such taxes. Any such charge would reduce what you earn on any affected investment options. However, we expect that no such charge will be necessary.

We also reserve the right to increase the premium tax charge and the DAC tax charge in order to correspond, respectively, with changes in the state premium tax levels or in the Federal income tax treatment of the deferred acquisition costs for this type of policy.

Under current laws, we may incur state and local taxes (in addition to premium taxes) in several states. At present, these taxes are not significant. If there is a material change in applicable state or local tax laws, we may make charges for such taxes.

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Description of charges at the fund level

The funds must pay investment management fees and other operating expenses. These fees and expenses (shown in the prospectus for the underlying portfolio) are different for each fund and reduce the investment return of each fund. Therefore, they also indirectly reduce the return you will earn on any variable investment options you select. Expenses of the funds are not fixed or specified under the terms of the policy, and those expenses may vary from year to year.

Other policy benefits, rights and limitations

Optional benefit riders you can add

When you apply for a policy, you can request any of the optional benefit riders that we then make available. Availability of any rider, the benefits it provides and the charges for it may vary by state. Our rules and procedures will govern eligibility for any rider and, in some cases, the configuration of the actual rider benefits. Each rider contains specific details that you should review before you decide to choose the rider. Charges for most riders will be deducted from the policy’s account value. We may change these charges (or the rates that determine them), but not above any applicable maximum amount stated in the Policy Specifications page of your policy. We may add to, delete from or modify the following list of optional benefit riders:

Disability Waiver of Charges Rider - This rider waives charges under the policy during the total disability (as defined in the rider) of the insured person. The benefit continues until the earlier of (i) the policy anniversary nearest the insured person’s 65th birthday or (ii) the cessation of total disability.

Living Care Benefit Rider - Provides for an advance payment to you of a portion of the death benefit if the insured person becomes terminally ill, as defined in the rider, with death expected within 24 months. Advances under the rider are discounted for interest at the rates specified in the rider, and we may use a portion of any advance to repay loans under your policy. The maximum advance is $1,000,000.

Children’s Insurance Benefit Rider - This rider covers children of the insured person at the time of application and children born or adopted after the rider is purchased. For coverage to begin on any child, he or she must be more than 14 days old and less than 15 years old. Coverage will continue until the earliest of (i) termination of the rider upon request, (ii) lapse of the policy, (iii) the insured person‘s 65th birthday, (iv) election to convert to permanent coverage on the child’s 18th birthday, or (v) the child‘s 22nd birthday. Since we don’t know which children are covered at any point in time, it is up to you to terminate the rider if it no longer suits your needs.

Accidental Death Benefit Rider - This rider provides for an additional insurance benefit if the insured person‘s death is due to accidental causes between the policy anniversaries nearest the insured person’s 5th and 70th birthdays.

Insured or Spouse YRT Rider - This rider provides a level or decreasing amount of term insurance on the life of the insured person or the insured person’s spouse. The benefit is payable if the person insured under the rider dies during the term period. In applying for this rider, you must choose the term period and whether the coverage amount is level or decreasing.

Variations in policy terms

Insurance laws and regulations apply to us in every state in which our policies are sold. As a result, terms and conditions of your insurance coverage may vary depending on where you purchase a policy. We disclose all material variations in this prospectus.

We may vary the charges and other terms of our policies where special circumstances result in sales or administrative expenses, mortality risks or other risks that are different from those normally associated with the policies. These include the type of variations discussed under “Reduced charges for eligible classes.” No variation in any charge will exceed any maximum stated in this prospectus with respect to that charge.

Any variation discussed above will be made only in accordance with uniform rules that we adopt and that we apply fairly to our customers.

Procedures for issuance of a policy

Generally, the policy is available with a minimum face amount at issue of $100,000. At the time of issue, the insured person must have an attained age of at least 20 and no more than 75. All insured persons must meet certain health and other insurance risk criteria called “underwriting standards.”

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Policies issued in Montana or in connection with certain employee plans will not directly reflect the sex of the insured person in either the premium rates or the charges or values under the policy.

Minimum initial premium

The Minimum Initial Premium must be received by us at our Service Office in order for the policy to be in full force and effect. There is no grace period for the payment of the Minimum Initial Premium. The minimum amount of premium required at the time of policy issue is equal to three monthly Guaranteed Death Benefit Premiums (see “Guaranteed death benefit feature” in the Basic Information section of this prospectus). However, if an owner has chosen to pay premiums on a monthly basis, the minimum amount required is only equal to one monthly Guaranteed Death Benefit Premium.

Commencement of insurance coverage

After you apply for a policy, it can sometimes take up to several weeks for us to gather and evaluate all the information we need to decide whether to issue a policy to you and, if so, what the insured person’s risk classification should be. After we approve an application for a policy and assign an appropriate insurance rate class, we will prepare the policy for delivery. We will not pay a death benefit under a policy unless the policy is in effect when the insured person dies (except for the circumstances described under “Temporary coverage prior to policy delivery” below).

The policy will take effect only if all of the following conditions are satisfied:

The policy is delivered to and received by the applicant.

The Minimum Initial Premium is received by us.

Each insured person is living and still meets our criteria for issuing insurance.

If all of the above conditions are satisfied, the policy will take effect on the date shown in the policy as the “date of issue.” That is the date on which we begin to deduct monthly charges. Policy months, policy years and policy anniversaries are all measured from the date of issue.

Backdating

In order to preserve a younger age at issue for the insured person, we can designate a date of issue that is up to 60 days earlier than the date that would otherwise apply. This is referred to as “backdating” and is allowed under state insurance laws. Backdating can also be used in certain corporate-owned life insurance cases involving multiple policies to retain a common monthly deduction date.

The conditions for coverage described above under “Commencement of insurance coverage” must still be satisfied, but in a backdating situation the policy always takes effect retroactively. Backdating results in a lower insurance charge (if it is used to preserve the insured person’s younger age at issue), but monthly charges begin earlier than would otherwise be the case. Those monthly charges will be deducted as soon as we receive premiums sufficient to pay them.

Temporary coverage prior to policy delivery

If a specified amount of premium is paid with the application for a policy and other conditions are met, we will provide temporary term life insurance coverage on the insured person for a period prior to the time coverage under the policy takes effect. Such temporary term coverage will be subject to the terms and conditions described in the application for the policy, including limits on amount and duration of coverage.

Monthly deduction dates

Each charge that we deduct monthly is assessed against your account value or the subaccounts at the close of business on the date of issue and at the close of the first business day in each subsequent policy month.

Changes that we can make as to your policy

We reserve the right to make any changes in the policy necessary to ensure the policy is within the definition of life insurance under the Federal tax laws and is in compliance with any changes in Federal or state tax laws.

In our policies, we reserve the right to make certain changes if they would serve the best interests of policy owners or would be appropriate in carrying out the purposes of the policies. Such changes include those listed below.

Changes necessary to comply with or obtain or continue exemptions under the Federal securities laws

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Combining or removing investment options

Changes in the form of organization of any separate account

Any such changes will be made only to the extent permitted by applicable laws and only in the manner permitted by such laws. When required by law, we will obtain your approval of the changes and the approval of any appropriate regulatory authority.

The owner of the policy

Who owns the policy? That’s up to the person who applies for the policy. The owner of the policy is the person who can exercise most of the rights under the policy, such as the right to choose the investment options or the right to surrender the policy. In many cases, the person buying the policy is also the person who will be the owner. However, the application for a policy can name another person or entity (such as a trust) as owner. Wherever the term “you” appears in this prospectus, we’ve assumed that the reader is the person who has the right or privilege being discussed. There may be tax consequences if the owner and the insured person are different, so you should discuss this issue with your tax adviser.

While the insured person is alive, you will have a number of options under the policy. These options include those listed below.

Determine when and how much you invest in the various investment options

Borrow or withdraw amounts you have in the investment options

Change the beneficiary who will receive the death benefit

Change the amount of insurance

Turn in (i.e., “surrender”) the policy for the full amount of its surrender value

Choose the form in which we will pay out the death benefit or other proceeds

It is possible to name so-called “joint owners” of the policy. If more than one person owns a policy, all owners must join in most requests to exercise rights under the policy.

Policy cancellation right

You have the right to cancel your policy within the latest of the following periods:

10 days after you receive it (this period may be longer in some states);

10 days after mailing by John Hancock USA of the Notice of Withdrawal Right; or

45 days after the date Part A of the application has been completed.

This is often referred to as the “free look” period. During this period, your premiums will be allocated as described under “Processing premium payments” in this prospectus. To cancel your policy, simply deliver or mail the policy to us at one of the addresses shown on the back cover, or to the John Hancock USA representative who delivered the policy to you.

In most states, you will receive a refund of any premiums you’ve paid. In some states, the refund will be your account value on the date of cancellation plus all charges deducted by John Hancock USA prior to that date. The date of cancellation will be the date of such mailing or delivery.

Reports that you will receive

At least annually, we will send you a statement setting forth the following information as of the end of the most recent reporting period: the amount of the death benefit and account value, the portion of the account value in each investment option, the surrender value, premiums received and charges deducted from premiums since the last report, and any outstanding policy loan (and interest charged for the preceding policy year). Moreover, you also will receive confirmations of premium payments, transfers among investment options, policy loans, partial withdrawals and certain other policy transactions.

Semi-annually we will send you a report containing the financial statements of the series funds, including a list of securities held in each fund.

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Assigning your policy

You may assign your rights in the policy to someone else as collateral for a loan or for some other reason. Assignments do not require the consent of any revocable beneficiary. A copy of the assignment must be forwarded to us. We are not responsible for any payment we make or any action we take before we receive notice of the assignment in good order. Nor are we responsible for the validity of the assignment. An absolute assignment is a change of ownership. All collateral assignees of record must consent to any full surrender, partial withdrawal or loan from the policy.

When we pay policy proceeds

General

We will ordinarily pay any death benefit, withdrawal, surrender value or loan within 7 days after we receive the last required form or request (and, with respect to the death benefit, any other documentation that may be required). As permitted by state law and our current administrative procedures, death claim proceeds may be placed into an interest-bearing John Hancock retained asset account in the beneficiary’s name. The interest earned in a John Hancock retained asset account is normally subject to income tax. You should consult with your tax advisor if you have any questions regarding taxation of the interest earned. We will provide the beneficiary with a checkbook, so checks may be written for all or a part of the proceeds. The retained asset account is part of our general account and is subject to the claims of our creditors. It is not a bank account and it is not insured by the FDIC. We may receive a benefit from managing proceeds held in a retained asset account. Please contact our Service Office for more information.

Delay to challenge coverage

We may challenge the validity of your insurance policy based on any material misstatements made to us in the application for the policy. We cannot make such a challenge, however, beyond certain time limits that are specified in the policy.

Delay for check clearance

We reserve the right to defer payment of that portion of your account value that is attributable to a premium payment made by check for a reasonable period of time (not to exceed 15 days) to allow the check to clear the banking system. We will not delay payment longer than necessary for us to verify a check has cleared the banking system.

Delay of separate account proceeds

We reserve the right to defer payment of any death benefit, loan or other distribution that is derived from a variable investment option if (1) the New York Stock Exchange is closed (other than customary weekend and holiday closings) or trading on the New York Stock Exchange is restricted; (2) an emergency exists, as determined by the SEC, as a result of which disposal of securities is not reasonably practicable or it is not reasonably practicable to fairly determine the account value; or (3) the SEC by order permits the delay for the protection of owners. Transfers and allocations of account value among the investment options may also be postponed under these circumstances. If we need to defer calculation of separate account values for any of the foregoing reasons, all delayed transactions will be processed at the next values that we do compute.

Delay of general account surrender proceeds

State laws allow us to defer payment of any portion of the surrender value derived from the fixed investment option for up to 6 months. These laws were enacted many years ago to help insurance companies in the event of a liquidity crisis.

How you communicate with us

General rules

You should mail or express all checks and money orders for premium payments and loan repayments to our Service Office at the appropriate address shown on the back cover.

Under our current rules, certain requests must be made in writing and be signed and dated by you. These requests include those listed below.

loans

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surrenders or partial withdrawals

change of death benefit option

increase or decrease in face amount

change of beneficiary

election of payment option for policy proceeds

tax withholding elections

election of telephone transaction privilege

The following requests may be made either in writing (signed and dated by you) or by telephone or fax if a special form is completed (see “Telephone and facsimile transactions” below).

transfers of account value among investment options

change of allocation among investment options for new premium payments

You should mail or express all written requests to our Service Office at the appropriate address shown on the back cover. You should also send notice of the insured person’s death and related documentation to our Service Office. We don’t consider that we’ve “received” any communication until such time as it has arrived at the proper place and in the proper and complete form.

We have special forms that should be used for a number of the requests mentioned above. You can obtain these forms from our Service Office or your John Hancock USA representative. Each communication to us must include your name, your policy number and the name of the insured person. We cannot process any request that doesn’t include this required information. Any communication that arrives after the close of our business day, or on a day that is not a business day, will be considered “received” by us on the next following business day. Our business day currently closes at 4:00 p.m. Eastern time, but special circumstances (such as suspension of trading on a major exchange) may dictate an earlier closing time.

Telephone and facsimile transactions

If you complete a special authorization form, you can request transfers among investment options and changes of allocation among investment options simply by telephoning us at 1-800-732-5543 or by faxing us at 1-617-572-1571. Any fax request should include your name, daytime telephone number, policy number and, in the case of transfers and changes of allocation, the names of the investment options involved. We will honor telephone instructions from anyone who provides the correct identifying information, so there is a risk of loss to you if this service is used by an unauthorized person. However, you will receive written confirmation of all telephone transactions. There is also a risk that you will be unable to place your request due to equipment malfunction or heavy phone line usage. If this occurs, you should submit your request in writing.

If you authorize telephone transactions, you will be liable for any loss, expense or cost arising out of any unauthorized or fraudulent telephone instructions which we reasonably believe to be genuine, unless such loss, expense or cost is the result of our mistake or negligence. We employ procedures which provide safeguards against the execution of unauthorized transactions, and which are reasonably designed to confirm that instructions received by telephone are genuine. These procedures include requiring personal identification, tape recording calls, and providing written confirmation to the owner. If we do not employ reasonable procedures to confirm that instructions communicated by telephone are genuine, we may be liable for any loss due to unauthorized or fraudulent instructions.

As stated earlier in this prospectus, the policies are not designed for professional market timing organizations or other persons or entities that use programmed or frequent transfers among investment options. For reasons such as that, we have imposed restrictions on transfers. However, we also reserve the right to change our telephone and facsimile transaction policies or procedures at any time. Moreover, we also reserve the right to suspend or terminate the privilege altogether with respect to any owners who we feel are abusing the privilege to the detriment of other owners.

Distribution of policies

John Hancock Distributors LLC (“JH Distributors”), a Delaware limited liability company affiliated with us, is the principal distributor and underwriter of the securities offered through this prospectus and of other annuity and life insurance products we and our affiliates offer. JH Distributors also acts as the principal underwriter of the Trust, whose securities are used to fund certain investment accounts under the policies and under other annuity and life insurance products we offer.

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JH Distributors’ principal address is 601 Congress Street, Boston, MA 02210 and it also maintains offices with us at 197 Clarendon Street, Boston, Massachusetts 02116. JH Distributors is a broker-dealer registered under the Securities Exchange Act of 1934 (the “1934 Act”) and a member of the Financial Industry Regulatory Authority (“FINRA”).

We offer the policies for sale through individuals who are licensed as insurance agents and who are registered representatives of broker-dealers that have entered into selling agreements with JH Distributors. Our affiliate, Signator Investors, Inc., is one such broker-dealer. In addition, we, either directly or through JH Distributors, have entered into agreements with other financial intermediaries that provide marketing, sales support and certain administrative services to help promote the policies (“financial intermediaries”). In a limited number of cases, we have entered into loans, leases or other financial agreements with these broker-dealers or financial intermediaries or their affiliates.

Compensation

The broker-dealers and other financial intermediaries that distribute or support the marketing of our policies may be compensated by means of various compensation and revenue sharing arrangements. A general description of these arrangements is set out below under “Standard compensation” and “Additional compensation and revenue sharing.” These arrangements may differ between firms, and not all broker-dealers or financial intermediaries will receive the same compensation and revenue sharing benefits for distributing our policies. Also, a broker-dealer may receive more or less compensation or other benefits for the promotion and sale of our policy than it would expect to receive from another issuer.

Under their own arrangements, broker-dealers determine how much of any amounts received from us is to be paid to their registered representatives. Our affiliated broker-dealer, Signator Investors, Inc., may pay its registered representatives additional compensation and benefits, such as bonus payments, expense payments, health and retirement benefits or the waiver of overhead costs or expenses in connection with the sale of the policies that they would not receive in connection with the sale of policies issued by unaffiliated companies.

Policy owners do not pay any compensation or revenue sharing benefits directly. These payments are made from JH Distributors’ and our own revenues, profits or retained earnings, which may be derived from a number of sources, such as fees received from an underlying fund’s distribution plan (“12b-1 fees”), the fees and charges imposed under the policy and other sources.

You should contact your registered representative for more information on compensation arrangements in connection with your purchase of a policy. We provide additional information on special compensation or reimbursement arrangements involving broker-dealers and other financial intermediaries in the Statement of Additional Information, which is available upon request.

Standard compensation. JH Distributors pays compensation to broker-dealers for the promotion and sale of the policies, and for providing ongoing service in relation to policies that have already been purchased. We may also pay a limited number of broker-dealers commissions or overrides to “wholesale” the policies; that is, to provide marketing support and training services to the broker-dealer firms that do the actual selling.

The compensation JH Distributors pays to broker-dealers may vary depending on the selling agreement. The compensation paid is not expected to exceed 135% of the target premium plus 8% of any excess premium paid in the first policy year, 11% of the target premium plus 5% of any excess paid in the second through fourth policy year, and 8% of the target and excess premium paid in policy years 5 through 10. This compensation schedule is exclusive of additional compensation and revenue sharing and inclusive of overrides and expense allowances paid to broker-dealers for sale of the policies (not including riders).

Additional compensation and revenue sharing. To the extent permitted by SEC and FINRA rules and other applicable laws and regulations, we may enter into special compensation or reimbursement arrangements (“revenue sharing”), either directly or through JH Distributors, with selected broker-dealers and other financial intermediaries. In consideration of these arrangements, a firm may feature our policy in its sales system, give us preferential access to sales staff, or allow JH Distributors or its affiliates to participate in conferences, seminars or other programs attended by the firm’s sales force. We hope to benefit from these revenue sharing and other arrangements through increased sales of our policies.

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or training programs, seminars for the public or client seminars, advertising and sales campaigns regarding the policies, payments to assist a firm in connection with its systems, operations and marketing expenses and/or other events or activities sponsored by the firms. We may contribute to, as well as sponsor, various educational programs, sales promotions, and/or other contests in which participating firms and their sales persons may receive gifts and prizes such as merchandise, cash or other rewards as may be permitted under FINRA rules and other applicable laws and regulations.

Tax considerations

This description of Federal income tax consequences is only a brief summary and is neither exhaustive nor authoritative. It was written to support the promotion of our products. It does not constitute legal or tax advice, and it is not intended to be used and cannot be used to avoid any penalties that may be imposed on you. Tax consequences will vary based on your own particular circumstances, and for further information you should consult a qualified tax adviser. Federal, state and local tax laws, regulations and interpretations can change from time to time. As a result, the tax consequences to you and the beneficiary may be altered, in some cases retroactively. The policy may be used in various arrangements, including non-qualified deferred compensation or salary continuation plans, split dollar insurance plans, executive bonus plans, retiree medical benefit plans and others. The tax consequences of such plans may vary depending on the particular facts and circumstances of each individual arrangement. Therefore, if the value of using the policy in any such arrangement depends in part on the tax consequences, a qualified tax adviser should be consulted for advice.

General

We are taxed as a life insurance company. Under current tax law rules, we include the investment income (exclusive of capital gains) of the Separate Account in our taxable income and take deductions for investment income credited to our policy holder reserves. We are also required to capitalize and amortize certain costs instead of deducting those costs when they are incurred. We do not currently charge the Separate Account for any resulting income tax costs, other than a charge we may impose against the Separate Account to compensate us for the cost of a delay in the deductibility of deferred acquisition costs (the “DAC tax” adjustment) pursuant to section 848 of the Internal Revenue Code. We also claim certain tax credits or deductions relating to foreign taxes paid and dividends received by the series funds. These benefits can be material. We do not pass these benefits through to the Separate Account, principally because: (i) the deductions and credits are allowed to us and not the policy owners under applicable tax law; and (ii) the deductions and credits do not represent investment return on the Separate Account assets that is passed through to policy owners.

The policies permit us to deduct a charge for any taxes we incur that are attributable to the operation or existence of the policies or the Separate Account. Currently, we do not anticipate making any specific charge for such taxes other than any DAC tax charge and premium taxes where applicable. If the level of the current taxes increases, however, or is expected to increase in the future, we reserve the right to make a charge in the future.

Death benefit proceeds and other policy distributions

Generally, death benefits paid under policies such as yours are not subject to income tax unless policy ownership has been transferred in exchange for payment. Earnings on your account value are ordinarily not subject to income tax as long as we don’t pay them out to you. If we do pay out any amount of your account value upon surrender or partial withdrawal, all or part of that distribution would generally be treated as a return of the premiums you’ve paid and not subjected to income tax. Any portion not treated as a return of your premiums would be includible in your income.

Please note that certain distributions associated with a reduction in death benefit or other policy benefits within the first fifteen years after issuance of the policy are ordinarily taxable in whole or in part. Amounts you borrow are generally not taxable to you.

However, some of the tax rules change if your policy becomes a modified endowment contract. This can happen if you’ve paid premiums in excess of limits prescribed by the tax laws. In that case, additional taxes and penalties may be payable for policy distributions of any kind, including loans. (See “7-pay premium limit and modified endowment contract status” below.)

We expect the policy to receive the same Federal income and estate tax treatment as fixed benefit life insurance policies. Section 7702 of the Internal Revenue Code defines a life insurance contract for Federal tax purposes. For a policy to be treated as a life insurance contract, it must satisfy either the cash value accumulation test or the guideline premium test. These tests limit the amount of premium that you may pay into the policy. We will monitor compliance with these standards. If we

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determine that a policy does not satisfy section 7702, we may take whatever steps are appropriate and reasonable to bring it into compliance with section 7702.

Increases in account value as a result of interest or investment experience will not be subject to Federal income tax unless and until values are received through actual or deemed distributions. In general, unless the policy is a modified endowment contract, the owner will be taxed only on the amount of distributions that exceed the premiums paid under the policy. An exception to this general rule occurs in the case of a decrease in the policy’s death benefit or any other change that reduces benefits under the policy in the first fifteen years after the policy is issued and that results in a cash distribution to the policy owner. Changes that reduce benefits include partial withdrawals, death benefit option changes, and distributions required to keep the policy in compliance with section 7702. For purposes of this rule any distribution within the two years immediately before a reduction in benefits will also be treated as if it were a result of the reduction. A cash distribution that reduces policy benefits will be taxed in whole or in part (to the extent of any gain in the policy) under rules prescribed in section 7702. The taxable amount is subject to limits prescribed in section 7702(f)(7). Any taxable distribution will be ordinary income to the owner (rather than capital gain).

It is possible that, despite our monitoring, a policy might fail to qualify as a life insurance contract under section 7702 of the Internal Revenue Code. This could happen, for example, if we inadvertently failed to return to you any premium payments that were in excess of permitted amounts, or if any of the funds failed to meet certain investment diversification or other requirements of the Internal Revenue Code. If this were to occur, you would be subject to income tax on the income credited to the policy from the date of issue to the date of the disqualification and for subsequent periods.

Tax consequences of ownership or receipt of policy proceeds under Federal, state and local estate, inheritance, gift and other tax laws will depend on the circumstances of each owner or beneficiary. If the person insured by the policy is also its owner, either directly or indirectly through an entity such as a revocable trust, the death benefit will be includible in his or her estate for purposes of the Federal estate tax. If the owner is not the person insured, the value of the policy will be includible in the owner’s estate upon his or her death. Even if ownership has been transferred, the death proceeds or the policy value may be includible in the former owner’s estate if the transfer occurred less than three years before the former owner’s death or if the former owner retained certain kinds of control over the policy. You should consult your tax adviser regarding these possible tax consequences.

Because there may be unfavorable tax consequences (including recognition of taxable income and the loss of income tax-free treatment for any death benefit payable to the beneficiary), you should consult a qualified tax adviser prior to changing the policy’s ownership or making any assignment of ownership interests.

Policy loans

We expect that, except as noted below (see “7-pay premium limit and modified endowment contract status”), loans received under the policy will be treated as indebtedness of an owner and that no part of any loan will constitute income to the owner. However, if the policy terminates for any reason other than the payment of the death benefit, an amount equal to any outstanding loan that was not previously considered income will be treated as if it had been distributed to the owner upon such termination. This could result in a considerable tax bill. Under certain circumstances involving large amounts of outstanding loans, you might find yourself having to choose between high premiums required to keep your policy from lapsing and a significant tax burden if you allow the lapse to occur.

Diversification rules and ownership of the Separate Account

Your policy will not qualify for the tax benefits of a life insurance contract unless the Separate Account follows certain rules requiring diversification of investments underlying the policy. In addition, the rules require that the policy owner not have “investor control” over the underlying assets.

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the Separate Account assets would be includible in the policy owner’s gross income. The Internal Revenue Service (“IRS”) has stated in published rulings that a variable policy owner will be considered the owner of Separate Account assets if the policy owner possesses incidents of ownership in those assets, such as the ability to exercise investment control over the assets. A Treasury Decision issued in 1986 stated that guidance would be issued in the form of regulations or rulings on the “extent to which Policyholders may direct their investments to particular sub-accounts of a Separate Account without being treated as owners of the underlying assets.” As of the date of this prospectus, no comprehensive guidance on this point has been issued. In Rev. Rul. 2003-91, however, the IRS ruled that a contract holder would not be treated as the owner of assets underlying a variable life insurance or annuity contract despite the owner’s ability to allocate funds among as many as twenty subaccounts.

The ownership rights under your policy are similar to, but different in certain respects from, those described in IRS rulings in which it was determined that policyholders were not owners of Separate Account assets. Since you have greater flexibility in allocating premiums and policy values than was the case in those rulings, it is possible that you would be treated as the owner of your policy’s proportionate share of the assets of the Separate Account.

We do not know what future Treasury Department regulations or other guidance may require. We cannot guarantee that the funds will be able to operate as currently described in the series funds’ prospectuses, or that a series fund will not have to change any fund’s investment objectives or policies. We have reserved the right to modify your policy if we believe doing so will prevent you from being considered the owner of your policy’s proportionate share of the assets of the Separate Account, but we are under no obligation to do so.

7-pay premium limit and modified endowment contract status

At the time of policy issuance, we will determine whether the Planned Premium schedule will exceed the 7-pay limit discussed below. If so, our standard procedures prohibit issuance of the policy unless you sign a form acknowledging that fact.

The 7-pay limit at any time during the first seven contract years is the total of net level premiums that would have been payable at or before that time under a comparable fixed policy that would be fully “paid-up” after the payment of seven equal annual premiums. “Paid-up” means that no further premiums would be required to continue the coverage in force until maturity, based on certain prescribed assumptions. If the total premiums paid at any time during the first seven policy years exceed the 7-pay limit, the policy will be treated as a modified endowment contract, which can have adverse tax consequences.

Policies classified as modified endowment contracts are subject to the following tax rules:

First, all withdrawals from such a policy are treated as ordinary income subject to tax up to the amount equal to the excess (if any) of the policy value immediately before the withdrawal over the investment in the policy at such time. If you own any other modified endowment contracts issued to you in the same calendar year by the same insurance company or its affiliates, their values will be combined with the value of the policy from which you take the withdrawal for purposes of determining how much of the withdrawal is taxable as ordinary income.

Second, loans taken from or secured by such a policy and assignments or pledges of any part of its value are treated as partial withdrawals from the policy and taxed accordingly. Past-due loan interest that is added to the loan amount is treated as an additional loan.

Third, a 10% additional penalty tax is imposed on the portion of any distribution (including distributions on surrender) from, or loan taken from or secured by, such a policy that is included in income except where the distribution or loan:

is made on or after the date on which the policy owner attains age 59½;

is attributable to the policy owner becoming disabled; or

is part of a series of substantially equal periodic payments for the life (or life expectancy) of the policy owner or the joint lives (or joint life expectancies) of the policy owner and the policy owner’s beneficiary.

These exceptions to the 10% additional tax do not apply in situations where the policy is not owned by an individual.

Furthermore, any time there is a “material change” in a policy, the policy will begin a new 7-pay testing period as if it were a newly-issued policy. The material change rules for determining whether a policy is a modified endowment contract are complex. In general, however, the determination of whether a policy will be a modified endowment contract after a material change depends upon the relationship among the death benefit of the policy at the time of such change, the policy value at the

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time of the change, and the additional premiums paid into the policy during the seven years starting with the date on which the material change occurs.

Moreover, under a policy insuring a single life, if there is a reduction in benefits (such as a reduction in the death benefit or the reduction or cancellation of certain rider benefits) during a 7-pay testing period, the 7-pay limit will generally be recalculated based on the reduced benefits and the policy will be re-tested, from the beginning of the 7-pay testing period using the lower limit. If the premiums paid to date at any point during the 7-pay testing period are greater than the recalculated 7-pay limit, the policy will become a modified endowment contract. If your policy is a survivorship policy, a reduction in benefits under the policy at any time will require re-testing. For such a policy the 7-pay limit will generally be recalculated based on the reduced benefits and the policy will be re-tested, using the lower limit, from the date it was issued. You should consult your tax adviser if you have questions regarding the possible impact of the 7-pay limit on your policy.

If your policy is issued as a result of an exchange subject to section 1035 of the Internal Revenue Code, it may be considered to be a modified endowment contract if the death benefit under the new policy is smaller than the death benefit under the exchanged policy, or if you reduce coverage in your new policy after it is issued. Therefore, if you desire to reduce the face amount as part of a 1035 exchange, a qualified tax adviser should be consulted for advice. A new policy issued in exchange for a modified endowment contract will also be a modified endowment contract regardless of any change in the death benefit.

Corporate and H.R. 10 retirement plans

The policy may be acquired in connection with the funding of retirement plans satisfying the qualification requirements of section 401 of the Internal Revenue Code. If so, the Internal Revenue Code provisions relating to such plans and life insurance benefits thereunder should be carefully scrutinized. We are not responsible for compliance with the terms of any such plan or with the requirements of applicable provisions of the Internal Revenue Code.

Withholding

To the extent that policy distributions to you are taxable, they are generally subject to withholding for your Federal income tax liability. However if you reside in the United States, you can generally choose not to have tax withheld from distributions. Electing to have no withholding will not reduce your tax liability and may expose you to penalties under the rules governing payment of estimated taxes.

Life insurance purchases by residents of Puerto Rico

In Rev. Rul. 2004-75, 2004-31 I.R.B. 109, the Internal Revenue Service ruled that income received by residents of Puerto Rico under a life insurance policy issued by a United States company is U.S.-source income that is subject to United States Federal income tax.

Life insurance purchases by non-resident aliens

If you are not a U.S. citizen or resident, you will generally be subject to U.S. Federal withholding tax on taxable distributions from life insurance policies at a 30% rate, unless a lower treaty rate applies. In addition, you may be subject to state and/or municipal taxes and taxes imposed by your country of citizenship or residence. You should consult with a qualified tax adviser before purchasing a policy.

Life insurance owned by citizens or residents living abroad

If you are a U.S. citizen or permanent resident living outside the United States, you are still subject to income taxation by the United States. Since many countries tax on the basis of domicile, you may also be subject to tax in the country or territory in which you are living. The tax-deferred accumulation of gain that a life insurance policy provides under United States tax law may not be available under the tax laws of the country in which you are living. If you are living outside the United States or planning to do so, you should consult with a qualified tax adviser before purchasing or retaining ownership of a policy.

Financial statements reference

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under the policies. Our general account is comprised of securities and other investments, the value of which may decline during periods of adverse market conditions.

Registration statement filed with the SEC

This prospectus omits certain information contained in the Registration Statement which has been filed with the SEC. More details may be obtained from the SEC upon payment of the prescribed fee.

Independent registered public accounting firm

The consolidated financial statements of John Hancock Life Insurance Company (U.S.A.) at December 31, 2013 and 2012, and for each of the three years in the period ended December 31, 2013, and the financial statements of John Hancock Variable Life Account U at December 31, 2013, and for each of the two years in the period ended December 31, 2013, appearing in the Statement of Additional Information of the Registration Statement have been audited by Ernst &Young LLP, independent registered public accounting firm, as set forth in their reports thereon appearing elsewhere herein, and are included in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.

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In addition to this prospectus, John Hancock USA has filed with the SEC a Statement of Additional Information (the “SAI”) which contains additional information about John Hancock USA and the Separate Account, including information on our history, services provided to the Separate Account, legal and regulatory matters and the audited financial statements for John Hancock USA and the Separate Account. The SAI and personalized illustrations of death benefits, account values and surrender values are available, without charge, upon request. You may obtain the personalized illustrations from your John Hancock USA representative. The SAI may be obtained by contacting the John Hancock USA Service Office. You should also contact the John Hancock USA Service Office to request any other information about your policy or to make any inquiries about its operation.

JOHN HANCOCK USA SERVICE OFFICE
Principal Office & Express Delivery	Mail Delivery
Life Operations 197 Clarendon Street, C-6 Boston, MA 02117	1 John Hancock Way, Suite 1350 Boston, MA 02217-1099
Phone:	Fax:
1-800-732-5543	1-617-572-1571

Information about the Separate Account (including the SAI) can be reviewed and copied at the SEC’s Public Reference Branch, 100 F Street, NE, Room 1580, Washington, DC, 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 202-551-5850. Reports and other information about the Account are available on the SEC’s Internet website at http://www.sec.gov. Copies of such information may be obtained, upon payment of a duplicating fee, by writing the Public Reference Section of the SEC at 100 F Street, NE, Washington, DC 20549-0102.

1940 Act File No. 811-3068 — 1933 Act File No. 333-164171


Statement of Additional Information dated April 30, 2014 for interests in John Hancock Variable Life Account U (Name of Registrant) JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) (“John Hancock USA”) (Name of Depositor) This is a Statement of Additional Information (“SAI”). It is not the prospectus. The prospectus, dated the same date as this SAI, may be obtained from a John Hancock USA representative or by contacting the John Hancock USA Service Office by mail or telephone at the address or telephone number listed on the back page of the prospectus. TABLE OF CONTENTS
Contents of this SAI	Page No.
Description of the Depositor	2
Description of the Registrant	2
Services	2
Independent registered public accounting firm	2
Legal and Regulatory Matters	3
Principal Underwriter/Distributor	3
Additional Information About Charges	3
Reduction in Charges	4
Financial Statements of Registrant and Depositor	F-1

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Description of the Depositor

Under the Federal securities laws, the entity responsible for organization of the registered separate account underlying the variable life insurance policy is known as the “Depositor.” John Hancock USA (“Depositor”) is a stock life insurance company organized under the laws of Maine on August 20, 1955 by a special act of the Maine legislature and redomesticated under the laws of Michigan. The Depositor is a licensed life insurance company in the District of Columbia and all states of the United States except New York. Until 2004, the Depositor was known as The Manufacturers Life Insurance Company (U.S.A.).

The Depositor’s ultimate parent is Manulife Financial Corporation (“MFC”), a publicly traded company based in Toronto, Canada. MFC is the holding company of The Manufacturers Life Insurance Company and its subsidiaries, collectively known as Manulife Financial.

Effective December 31, 2009, we entered into a merger agreement with John Hancock Life Insurance Company (“JHLICO”) and John Hancock Variable Life Insurance Company (“JHVLICO”) and assumed legal ownership of all of the assets of JHLICO and JHVLICO, including those assets related to John Hancock Variable Life Account S, the separate account that currently funds your policy. Effective at the time of the merger, we became the depositor of John Hancock Variable Life Account S (the “Separate Account” “Registrant”).

Except for the succession of John Hancock USA as the Depositor for the Separate Account and its assumption of the obligations arising under the policies, the merger did not affect the Separate Account or any provisions of, any rights and obligations under, or any of your allocations among investment options under, the policies. We will continue to administer and service inforce policies of JHLICO and JHVLICO in all jurisdictions where issued and will assume the direct responsibility for the payment of all claims and benefits and other obligations under these policies.

Description of the Registrant

Under the Federal securities laws, the registered separate account underlying the variable life insurance policy is known as the “Registrant.” John Hancock Variable Life Account U (the “Registrant” or “Separate Account”), is a separate account initially established by JHVLICO under Massachusetts law. The variable investment options shown on page 1 of the prospectus are subaccounts of the Separate Account. The Separate Account meets the definition of “separate account” under the Federal securities laws and is registered as a unit investment trust under the Investment Company Act of 1940 (“1940 Act”). Such registration does not involve supervision by the Securities and Exchange Commission (“SEC”) of the management of the Separate Account or of the Depositor.

New subaccounts may be added and made available to policy owners from time to time. Existing subaccounts may be modified or deleted at any time.

Services

Administration of policies issued by the Depositor and of registered separate accounts organized by the Depositor may be provided by other affiliates. Neither the Depositor nor the separate accounts are assessed any charges for such services.

Custodianship and depository services for the Registrant are provided by State Street Investment Services (“State Street”). State Street’s address is State Street Financial Center, One Lincoln Street, Boston, Massachusetts, 02111.

Independent registered public accounting firm

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Legal and Regulatory Matters

There are no legal proceedings to which the Depositor, the Separate Account or the principal underwriter is a party or to which the assets of the Separate Account are subject that are likely to have a material adverse effect on the Separate Account or the ability of the principal underwriter to perform its contract with the Separate Account or of the Depositor to meet its obligations under the policies.

Principal Underwriter/Distributor

John Hancock Distributors LLC (“JH Distributors”), a Delaware limited liability company affiliated with the Depositor, is the principal distributor and underwriter of the securities offered through the prospectus. JH Distributors acts as the principal distributor of a number of other life insurance and annuity products we and our affiliates offer or maintain. JH Distributors also acts as the principal underwriter of John Hancock Variable Insurance Trust (the “Trust”), whose securities are used to fund certain variable investment options under the policies and under other life insurance and annuity products we offer or maintain.

JH Distributors’ principal address is 601 Congress Street, Boston, MA 02210, and it also maintains offices with us at 197 Clarendon Street, Boston, MA 02116. JH Distributors is a broker-dealer registered under the Securities Act of 1934 (the “1934 Act”) and is a member of the Financial Industry Regulatory Authority (“FINRA”).

The aggregate dollar amount of underwriting commissions paid to JH Distributors by the Depositor and its affiliates in connection with the sale of variable life products in 2013, 2012, and 2011 was $119,574,297, $156,801,522 and $158,741,294, respectively. JH Distributors did not retain any of these amounts during such periods.

The registered representative through whom your policy is sold will be compensated pursuant to the registered representative’s own arrangement with his or her broker-dealer. Compensation to broker-dealers for the promotion and sale of the policies is not paid directly by policy owners but will be recouped through the fees and charges imposed under the policy.

Additional compensation and revenue sharing arrangements may be offered to certain broker-dealer firms and other financial intermediaries. The terms of such arrangements may differ among firms we select based on various factors. In general, the arrangements involve three types of payments or any combination thereof:

Fixed dollar payments: The amount of these payments varies widely. JH Distributors may, for example, make one or more payments in connection with a firm’s conferences, seminars or training programs, seminars for the public, advertising and sales campaigns regarding the policies, to assist a firm in connection with its systems, operations and marketing expenses, or for other activities of a selling firm or wholesaler. JH Distributors may make these payments upon the initiation of a relationship with a firm, and at any time thereafter.

Payments based upon sales: These payments are based upon a percentage of the total amount of money received, or anticipated to be received, for sales through a firm of some or all of the insurance products that we and/or our affiliates offer. JH Distributors makes these payments on a periodic basis.

Payments based upon “assets under management”: These payments are based upon a percentage of the policy value of some or all of our (and/or our affiliates’) insurance products that were sold through the firm. JH Distributors makes these payments on a periodic basis.

Our affiliated broker-dealer, Signator Investors, Inc., may pay its respective registered representatives additional cash incentives, such as bonus payments, expense payments, health and retirement benefits or the waiver of overhead costs or expenses in connection with the sale of the policies that they would not receive in connection with the sale of policies issued by unaffiliated companies.

Additional Information About Charges

A policy will not be issued until the underwriting process has been completed to our satisfaction. The underwriting process generally includes the obtaining of information concerning your age, medical history, occupation and other personal information. This information is then used to determine the cost of insurance charge.

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Reduction in Charges

The policy may be available for purchase by corporations and other groups or sponsoring organizations. Group or sponsored arrangements may include reduction or elimination of withdrawal charges and deductions for employees, officers, directors, agents and immediate family members of the foregoing. We reserve the right to reduce any of the policy’s charges on certain cases where it is expected that the amount or nature of such cases will result in savings of sales, underwriting, administrative, commissions or other costs. Eligibility for these reductions and the amount of reductions will be determined by a number of factors, including the number of lives to be insured, the total premiums expected to be paid, total assets under management for the policyowner, the nature of the relationship among the insured individuals, the purpose for which the policies are being purchased, expected persistency of the individual policies, and any other circumstances which we believe to be relevant to the expected reduction of its expenses. Some of these reductions may be guaranteed and others may be subject to withdrawal or modifications, on a uniform case basis. Reductions in charges will not be unfairly discriminatory to any policyowners. We may modify from time to time, on a uniform basis, both the amounts of reductions and the criteria for qualification.

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333-164172

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333-164174

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

John Hancock Life Insurance Company (U.S.A.)

For the Years Ended December 31, 2013, 2012 and 2011

With Report of Independent Auditors

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

INDEX TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS


Report of Independent Auditors			F-1

Audited Consolidated Financial Statements

Consolidated Balance Sheets- As of December 31, 2013 and 2012			F-2

Consolidated Statements of Operations- For the Years Ended December 31, 2013, 2012 and 2011			F-4

Consolidated Statements of Comprehensive Income (Loss)- For the Years Ended December 31, 2013, 2012 and 2011			F-5

Consolidated Statements of Changes in Shareholder’s Equity- For the Years Ended December 31, 2013, 2012 and 2011			F-6

Consolidated Statements of Cash Flows- For the Years Ended December 31, 2013, 2012 and 2011			F-8

Notes to Consolidated Financial Statements			F-10

Report of Independent Auditors

The Board of Directors

John Hancock Life Insurance Company (U.S.A.)

We have audited the accompanying consolidated financial statements of John Hancock Life Insurance Company (U.S.A.), which comprise the consolidated balance sheets as of December 31, 2013 and 2012, and the related consolidated statements of operations, comprehensive income (loss), changes in shareholder’s equity and cash flows for each of the three years in the period ended December 31, 2013, and the related notes to the consolidated financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in conformity with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free of material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of John Hancock Life Insurance Company (U.S.A.) at December 31, 2013 and 2012, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2013, in conformity with U.S. generally accepted accounting principles.

/s/ Ernst & Young LLP

Boston, Massachusetts

March 27, 2014

F-1

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

CONSOLIDATED BALANCE SHEETS


	December 31,
	2013		2012

	(in millions)
Assets
Investments
Fixed maturities:
Available-for-sale—at fair value (amortized cost: 2013—$55,988; 2012—$58,066)	$	57,998	$	64,996
Held-for-trading—at fair value (cost: 2013—$1,217; 2012—$1,351)		1,216		1,441
Equity securities:
Available-for-sale—at fair value (cost: 2013—$131; 2012—$294)		191		386
Held-for-trading—at fair value (cost: 2013—$271; 2012—$243)		284		252
Mortgage loans on real estate		13,412		13,192
Investment real estate, agriculture, and timber		6,146		5,316
Policy loans		5,405		5,264
Short-term investments		2,892		2,145
Other invested assets		5,488		4,855

Total Investments		93,032		97,847
Cash and cash equivalents		2,541		3,446
Accrued investment income		988		1,039
Goodwill		957		953
Value of business acquired		1,183		1,196
Deferred policy acquisition costs and deferred sales inducements		7,777		5,913
Amounts due from and held for affiliates		4,333		3,805
Other intangible assets		1,234		1,250
Reinsurance recoverable		13,265		12,812
Derivative assets		7,720		11,853
Current income tax receivable		517		135
Amounts on deposit with reinsurers		6,249		6,763
Other assets		2,475		2,736
Separate account assets		154,258		140,626

Total Assets	$	296,529	$	290,374

The accompanying notes are an integral part of these consolidated financial statements.

F-2

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

CONSOLIDATED BALANCE SHEETS – (CONTINUED)


	December 31,
	2013		2012

	(in millions)
Liabilities and Shareholder’s Equity
Liabilities
Future policy benefits	$	83,294	$	83,330
Policyholders’ funds		14,894		15,723
Unearned revenue		1,652		1,466
Unpaid claims and claim expense reserves		867		1,269
Policyholder dividends payable		490		497
Amounts due to affiliates		2,984		2,490
Short-term debt		49		14
Long-term debt		472		520
Consumer notes		666		716
Current income tax payable		29		-
Deferred income tax liability		2,958		4,218
Coinsurance funds withheld		5,896		6,275
Payables for collateral on derivatives		790		2,126
Derivative liabilities		8,124		8,439
Other liabilities		2,751		4,005
Separate account liabilities		154,258		140,626

Total Liabilities		280,174		271,714

Shareholder’s Equity
Preferred stock ($1.00 par value; 50,000,000 shares authorized; 100,000 shares issued and outstanding at December 31, 2013 and 2012)		-		-
Common stock ($1.00 par value; 50,000,000 shares authorized; 4,728,939 shares issued and outstanding at December 31, 2013 and 2012)		5		5
Additional paid-in capital		12,792		12,790
Retained earnings		1,444		247
Accumulated other comprehensive income		1,935		5,405

Total Company Shareholder’s Equity		16,176		18,447
Noncontrolling interests		179		213

Total Shareholder’s Equity		16,355		18,660

Total Liabilities and Shareholder’s Equity	$	296,529	$	290,374

The accompanying notes are an integral part of these consolidated financial statements.

F-3

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

CONSOLIDATED STATEMENTS OF OPERATIONS


	Years ended December 31,
	2013			2012			2011

	(in millions)
Revenues
Premiums	$	2,297		$	2,799		$	2,996
Fee income		4,836			4,724			5,717
Net investment income		5,042			4,559			4,989
Net realized investment and other gains (losses):
Total other-than-temporary impairment losses		(87	)		(125	)		(93	)
Portion of loss recognized in other comprehensive income		6			26			21

Net impairment losses recognized in earnings		(81	)		(99	)		(72	)
Other net realized investment and other gains (losses)		(4,197	)		(2,069	)		3,207

Total net realized investment and other gains (losses)		(4,278	)		(2,168	)		3,135
Other revenue		263			143			124

Total revenues		8,160			10,057			16,961

Benefits and expenses
Benefits to policyholders		5,254			6,401			7,639
Policyholder dividends		620			663			811
Amortization of deferred policy acquisition costs, deferred sales inducements, and value of business acquired		(298	)		1,385			2,841
Goodwill impairment		-			-			500
Other operating costs and expenses		258			2,374			6,313

Total benefits and expenses		5,834			10,823			18,104


Income (loss) before income taxes		2,326			(766	)		(1,143	)

Income tax expense (benefit)		821			(633	)		(332	)


Net income (loss)		1,505			(133	)		(811	)

Less: net income (loss) attributable to noncontrolling interests		8			26			44


Net income (loss) attributable to the Company	$	1,497		$	(159	)	$	(855	)

The accompanying notes are an integral part of these consolidated financial statements.

F-4

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)


	Years ended December 31,
	2013			2012			2011

	(in millions)
Net income (loss)	$	1,505		$	(133	)	$	(811	)

Other comprehensive income (loss), net of tax
Change in unrealized investment gains (losses):
Unrealized investment gains (losses) arising during the period		(2,068	)		1,544			1,937
Reclassification adjustment for (gains) losses realized in net income		(123	)		(686	)		(692	)
Change in foreign currency translation adjustment		(11	)		(50	)		13
Change in unrealized gains (losses) on derivative instruments designated as cash flow hedges:
Unrealized gains (losses) on the effective portion of the change in fair value of cash flow hedges		(944	)		648			1,777
Reclassification of net cash flow hedge (gains) losses to net income		(324	)		(209	)		(59	)

Total other comprehensive income (loss), net of tax		(3,470	)		1,247			2,976

Total comprehensive income (loss)	$	(1,965	)	$	1,114		$	2,165

Income taxes included in other comprehensive income (loss)
Change in unrealized investment gains (losses):
Income tax expense (benefit) from unrealized investment gains arising during the period		(1,113	)		831			1,044
Income tax (expense) benefit related to reclassification adjustment for gains realized in net income (loss)		(66	)		(369	)		(373	)
Change in unrealized gains (losses) on derivative instruments designated as cash flow hedges:
Income tax expense (benefit) from unrealized gains on the effective portion of the change in fair value cash flow hedges		(509	)		349			957
Income tax (expense) benefit related to reclassification of net cash flow hedge gains to net income (loss)		(175	)		(113	)		(32	)

Total income tax expense (benefit) in other comprehensive income (loss)	$	(1,863	)	$	698		$	1,596

The accompanying notes are an integral part of these consolidated financial statements.

F-5

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY


	Preferred and Common Stock		Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)		Total Shareholder’s Equity attributable to the Company			Noncontrolling Interests			Total Shareholders’s Equity			Outstanding Shares

	(in millions, except for shares outstanding)																		(in thousands)
Balance at January 1, 2011	$	5	$	12,776	$	1,261		$	1,182	$	15,224		$	245		$	15,469			4,829
Net income (loss)		-		-		(855	)				(855	)		44			(811	)
Other comprehensive income (loss), net of tax		-		-		-			2,976		2,976			-			2,976
Share -based payments		-		13		-			-		13			-			13
Contributions from noncontrolling interests		-		-		-			-		-			64			64
Distributions to non-controlling interests		-		-		-			-		-			(94	)		(94	)

Balance at December 31, 2011	$	5	$	12,789	$	406		$	4,158	$	17,358		$	259		$	17,617			4,829

The accompanying notes are an integral part of these consolidated financial statements.

F-6

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY – (CONTINUED)


	Preferred and Common Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Shareholder’s Equity attributable to the Company			Noncontrolling Interests			Total Shareholders’s Equity			Outstanding Shares
	(in millions, except for outstanding shares)																				(in thousands)

Balance at January 1, 2012	$	5	$	12,789		$	406		$	4,158		$	17,358		$	259		$	17,617			4,829
Net income (loss)							(159	)					(159	)		26			(133	)
Other comprehensive income (loss), net of tax										1,247			1,247						1,247
Share-based payments				3									3						3
Acquisition on noncontrolling interests				(2	)								(2	)					(2	)
Contributions from noncontrolling interests													-			42			42
Distributions to non-controlling interests													-			(114	)		(114	)

Balance at December 31, 2012	$	5	$	12,790		$	247		$	5,405		$	18,447		$	213		$	18,660			4,829

Net income (loss)							1,497						1,497			8			1,505
Other comprehensive income (loss), net of tax										(3,470	)		(3,470	)					(3,470	)
Share-based payments				2									2						2
Contributions from noncontrolling interests																36			36
Distributions to non-controlling interests																(78	)		(78	)
Dividend paid to Parent							(300	)					(300	)					(300	)

Balance at December 31, 2013	$	5	$	12,792		$	1,444		$	1,935		$	16,176		$	179		$	16,355			4,829

The accompanying notes are an integral part of these consolidated financial statements.

F-7

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

CONSOLIDATED STATEMENTS OF CASH FLOWS


	Years ended December 31,
	2013			2012			2011

	(in millions)
Cash flows from operating activities:
Net income (loss)	$	1,505		$	(133	)	$	(811	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Amortization of premiums and accretion of discounts associated with investments, net		(6	)		(5	)		27
Net realized investments and other (gains) losses		4,278			2,168			(3,135	)
Change in expected internal rate of return on leveraged leases		(75	)		247			-
Amortization of deferred policy acquisition costs, deferred sales inducements, and value of business acquired		(298	)		1,385			2,841
Capitalization of deferred policy acquisition costs and deferred sales inducements		(655	)		(719	)		(766	)
Goodwill impairment		-			-			500
Depreciation and amortization		169			152			140
Net cash flows from trading securities		107			32			265
(Increase) decrease in accrued investment income		51			27			(91	)
(Increase) decrease in other assets and other liabilities, net		(3,378	)		(752	)		522
Increase (decrease) in policyholder liabilities and accruals, net		(3,193	)		(1,279	)		3,980
Interest credited to policyholder liabilities		1,046			1,180			1,156
Increase (decrease) in deferred income taxes		606			(378	)		(100	)

Net cash provided by (used in) operating activities		157			1,925			4,528

Cash flows from investing activities:
Sales of:
Fixed maturities		22,956			21,625			27,779
Equity securities		466			232			114
Mortgage loans on real estate		998			1,347			1,367
Investment real estate, agriculture, and timber		75			42			43
Other invested assets		234			533			131
Maturities, prepayments, and scheduled redemptions of:
Fixed maturities		1,661			1,369			2,316
Mortgage loans on real estate		353			338			367
Other invested assets		318			238			267
Purchases of:
Fixed maturities		(22,930	)		(22,647	)		(31,201	)
Equity securities		(182	)		(139	)		(96	)
Investment real estate, agriculture, and timber		(1,015	)		(1,134	)		(814	)
Other invested assets		(1,024	)		(1,082	)		(943	)
Mortgage loans on real estate issued		(1,654	)		(1,821	)		(2,443	)
Net (purchases) redemptions of short-term investments		(747	)		(544	)		(150	)
Net (additions) disposals of property, plant and equipment		(49	)		-			-
Purchase of business, net of cash acquired		(7	)		-			-
Other, net		(283	)		(27	)		111

Net cash provided by (used in) investing activities		(830	)		(1,670	)		(3,152	)

The accompanying notes are an integral part of these consolidated financial statements.

F-8

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

CONSOLIDATED STATEMENTS OF CASH FLOWS – (CONTINUED)


	Years ended December 31,
	2013			2012			2011

	(in millions)
Cash flows from financing activities:
Dividends paid to Parent		(300	)		-			-
Increase (decrease) in amounts due to affiliates		131			(37	)		63
Increase (decrease) in repurchase agreements		(437	)		-			-
Universal life and investment-type contract deposits		3,265			3,090			3,573
Universal life and investment-type contract maturities and withdrawals		(2,876	)		(3,083	)		(4,168	)
Net transfers from (to) separate accounts related to universal life and investment-type contracts		348			512			156
Repayments of consumer notes, net		(50	)		(103	)		(147	)
Issuance of short-term debt		2			2			6
Repayments of short-term debt		-			-			(2	)
Issuance of long-term debt		-			1			1
Repayments of long-term debt		(12	)		(106	)		(213	)
Contributions from noncontrolling interests		36			42			64
Distributions to noncontrolling interests		(78	)		(114	)		(94	)
Unearned revenue on financial reinsurance		(260	)		(254	)		(82	)
Net reinsurance recoverable		(1	)		1			(1	)

Net cash provided by (used in) financing activities		(232	)		(49	)		(844	)

Net increase (decrease) in cash and cash equivalents		(905	)		206			532
Cash and cash equivalents at beginning of year		3,446			3,240			2,708

Cash and cash equivalents at end of year	$	2,541		$	3,446		$	3,240


Non-cash financing activities during the year:
Transfer of assets for fixed deferred annuity reinsurance transactions	$	-		$	(6,768	)	$	-

The accompanying notes are an integral part of these consolidated financial statements.

F-9

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Summary of Significant Accounting Policies

Business. John Hancock Life Insurance Company (U.S.A.) (“JHUSA”) is a wholly-owned subsidiary of The Manufacturers Investment Corporation (“MIC”). MIC is a wholly-owned subsidiary of John Hancock Financial Corporation (“JHFC”), which is an indirect, wholly-owned subsidiary of The Manufacturers Life Insurance Company (“MLI”). MLI, in turn, is a wholly-owned subsidiary of Manulife Financial Corporation (“MFC”), a Canadian-based, publicly traded financial services holding company.

JHUSA conducts its business activities through its insurance, investment and other subsidiaries (collectively, “the Company”) and provides a wide range of financial protection and wealth management products and services to both individual and institutional customers located primarily in the United States. Through its insurance operations, the Company offers a variety of individual life insurance and individual and group long-term care insurance that are distributed through multiple distribution channels, including insurance agents, brokers, banks, financial planners, and direct marketing. The Company also offers mutual fund products and services which include a variety of retirement products to retirement plans. The Company distributes products through multiple distribution channels, including insurance agents and affiliated brokers, securities brokerage firms, financial planners, pension plan sponsors, pension plan consultants, and banks. In 2013, the Company discontinued sales of its structured settlements and single premium immediate annuity products. In 2012, the Company suspended new sales of its individual fixed and variable annuity products. In 2011, the Company suspended new sales of its group long-term care insurance product. The Company is licensed to sell insurance in 50 states, and the District of Columbia and U.S. territories.

The Company manages individual and group fixed and variable annuity, and individual life insurance contracts (collectively, the contracts) for both individual and institutional customers. Amounts invested in the fixed portion of the contracts are allocated to the general account of the Company. Amounts invested in the variable portion of the contracts are allocated to the separate accounts of the Company. Each of these separate accounts invests in shares of one of the various portfolios of the John Hancock Variable Insurance Trust (“JHVIT”), a no-load, open-end investment management company organized as a Massachusetts business trust, or in open-end investment management companies offered and managed by unaffiliated third parties.

Effective January 1, 2014, the John Hancock Funds Board of Trustees approved John Hancock Advisers, LLC (“JHA”) as the investment adviser to John Hancock Funds II (“JHF II”) and John Hancock Funds III (“JHF III”) replacing John Hancock Investment Management Services, LLC (“JHIMS”). JHF II funds are offered to retail investors, other affiliated John Hancock Funds and separate accounts of JHUSA and JHNY as investment options for 401(k) plans sold by Retirement Plan Services. JHF III funds are offered to retail investors and other affiliated John Hancock Funds. This change transferred approximately $86 billion of assets from JHIMS to JHA. JHIMS will continue as the investment adviser for the John Hancock Variable Insurance Trust funds.

Basis of Presentation. These financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”), which require management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from these estimates.

The accompanying consolidated financial statements include the accounts of the Company, including its majority-owned and controlled subsidiaries and variable interest entities (“VIEs”) in which the Company is the primary beneficiary or has control over the VIE. For further discussion regarding VIEs, see the Relationships with Variable Interest Entities Note. All significant intercompany transactions and balances have been eliminated.

Reclassifications. The Company reclassified its fixed deferred annuity liabilities balance of $8,935 million at December 31, 2012 to policyholder funds on the Consolidated Balance Sheets to conform to the current year presentation. Certain other amounts have also been reclassified to conform to the current year presentation.

Investments. The Company determines the classification of its financial assets at initial recognition. Fixed maturity and equity securities are recognized initially at fair value plus, in the case of investments not held for trading, directly attributable transaction costs. The Company classifies its fixed maturity and equity securities, other than leveraged leases, as either available-for-sale or held-for-trading and records these securities at fair value. The change in fair value related to available-for-sale securities is reflected in accumulated other comprehensive income (“AOCI”), net of policyholder related amounts

F-10

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 1 — Summary of Significant Accounting Policies - (continued)

and deferred income taxes. The change in fair value related to held-for-trading securities is reflected in net realized investment and other gains (losses).

Interest income on fixed maturity securities, other than mortgage-backed securities, is generally recognized on the accrual basis. The amortized cost of fixed maturity securities is adjusted for other-than-temporary impairments, amortization of premiums, and accretion of discounts to maturity. Amortization of premiums and accretion of discounts is on an effective yield basis and is included in net investment income. The Company recognizes an impairment loss only when management does not expect to recover the amortized cost of the fixed maturity security.

The Company classifies its leveraged leases as fixed maturity securities and calculates their carrying value by accruing income at their expected internal rate of return.

For mortgage-backed securities, the Company recognizes income using a constant effective yield based on anticipated prepayments and the estimated economic life of the securities. When actual prepayments differ significantly from anticipated prepayments, the effective yield is recalculated to reflect actual payments to date plus anticipated future payments, and any resulting adjustment is included in net investment income.

Equity securities primarily include common stock. Dividends are recorded as income on the ex-dividend date. The Company recognizes an impairment loss only when management does not expect to recover the cost of the equity security. In determining whether an equity security is impaired, the Company considers its intent and ability to hold a particular equity security for a period of time sufficient to allow for the recovery of its value. Equity securities that do not have readily determinable fair values are included in other invested assets.

Mortgage loans on real estate are carried at unpaid principal balances and are adjusted for amortization of premiums or accretion of discounts, less an allowance for probable losses. Premiums or discounts are amortized over the life of the mortgage loan contract in a manner that results in a constant effective yield. Interest income and amortization amounts and other costs that are recognized as an adjustment of yield are included as components of net investment income. When contractual payments of mortgage investments are more than 90 days in arrears or when loans are considered impaired, interest is no longer accrued. Mortgage loans on real estate are evaluated periodically as part of the Company’s loan review procedures and are considered impaired when it is probable that the Company will be unable to collect all amounts of principal and interest due according to the contractual terms of the mortgage loan agreement. The valuation allowance established as a result of impairment is based on the present value of the expected future cash flows, discounted at the loan’s original effective interest rate, or is based on the collateral value of the loan if the loan is collateral dependent. The Company estimates this level to be adequate to absorb estimated probable credit losses that exist at the balance sheet date. Any change to the valuation allowance for mortgage loans on real estate is reported as a component of net realized investment and other gains (losses). Interest received on impaired mortgage loans on real estate is applied to reduce the outstanding investment balance. Interest received on other mortgage loans that are in non-accrual status is recorded as interest income on a cash basis. If foreclosure becomes probable, the measurement method used is based on the collateral’s fair value. Foreclosed real estate is recorded at the collateral’s fair value at the date of foreclosure, which establishes a new cost basis.

Investment real estate, agriculture, and timber, which the Company has the intent to hold for the production of income, is carried at depreciated cost, using the straight-line method of depreciation, less adjustments for impairments in value. In those cases where it is determined that the carrying amount of investment real estate, agriculture, and timber is not recoverable, an impairment loss is recognized based on the difference between the depreciated cost and fair value of the asset. The Company reports impairment losses as part of net realized investment and other gains (losses).

Policy loans are carried at unpaid principal balances.

Short-term investments, which include investments with remaining maturities of one year or less, but greater than three months, at the time of purchase, are reported at fair value.

Other invested assets primarily represent investments in which the Company does not have a controlling financial interest, but has significant influence, and are recorded using the equity method of accounting. The Company records its share of earnings using the most recent financial information available, which is generally on a three month lag. Depending on the timing of receipt of the audited financial statements of these other invested assets, the investee level financial data may be up to one year in arrears.

F-11

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 1 — Summary of Significant Accounting Policies - (continued)

Net realized investment and other gains (losses), other than those related to separate accounts for which the Company does not bear the investment risk, are determined on a specific identification method and are reported net of amounts credited to participating contract holder accounts.

Derivative Financial Instruments. The Company uses derivative financial instruments (“derivatives”) to manage exposures to interest rate, foreign currency, credit, equity price movements, and other market risks arising from on-balance sheet financial instruments, certain insurance contract liabilities, and selected anticipated transactions. Derivatives are recorded at fair value. Derivatives with unrealized gains are reported as derivative assets and derivatives with unrealized losses are reported as derivative liabilities. Derivatives embedded in other instruments (“host instruments”), such as investment securities, reinsurance contracts, and certain benefit guarantees, are separately recorded as derivatives when their economic characteristics and risks are not closely related to those of the host instrument, the terms of the embedded derivative are the same as those of a stand-alone derivative, and the host instrument is not held-for-trading or carried at fair value.

A determination is made for each relationship as to whether hedge accounting can be applied. Where hedge accounting is not applied, changes in fair value of derivatives are recorded in net realized investment and other gains (losses).

Where the Company has elected to use hedge accounting, a hedge relationship is designated and documented at inception. Hedge effectiveness is evaluated at inception and throughout the term of the hedge, and hedge accounting is only applied when the Company expects that each hedging instrument will be highly effective in achieving offsetting changes in fair value or changes in cash flows attributable to the risk being hedged. Hedge effectiveness is assessed quarterly using a variety of consistently applied techniques, including regression analysis and cumulative dollar offset. When it is determined that the hedging relationship is no longer effective or the hedged item has been sold or terminated, the Company discontinues hedge accounting prospectively. In such cases, if the derivative hedging instruments are not sold or terminated, any subsequent changes in fair value of the derivative are recognized in net realized investment and other gains (losses).

For derivatives that are designated as hedging instruments, changes in fair value are recognized according to the nature of the risks being hedged, as discussed below.

Fair Value Hedges. In a fair value hedging relationship, changes in the fair value of the hedging derivatives are recorded in net realized investment and other gains (losses), along with changes in fair value attributable to the hedged risk. The carrying value of the hedged item is adjusted for changes in fair value attributable to the hedged risk. To the extent the changes in the fair value of derivatives do not offset the changes in the fair value of the hedged item attributable to the hedged risk in net realized investment and other gains (losses), any ineffectiveness will remain in net realized investment and other gains (losses). When hedge accounting is discontinued, the carrying value of the hedged item is no longer adjusted and the cumulative fair value adjustments are amortized to net investment income over the remaining term of the hedged item unless the hedged item is sold, at which time the balance is recognized immediately in net investment income.

Cash Flow Hedges. In a cash flow hedge relationship, the effective portion of the changes in the fair value of the hedging instrument is recorded in AOCI, while the ineffective portion is recognized in net realized investment and other gains (losses). Unrealized gains and losses recorded in AOCI are recognized in income during the same periods as the variability in the cash flows hedged or the hedged forecasted transactions are recognized.

Unrealized gains and losses on cash flow hedges recorded in AOCI are reclassified immediately to income when the hedged item is sold or the forecasted transaction is no longer expected to occur. When a hedge is discontinued, but the hedged forecasted transaction remains highly probable to occur, the amounts in AOCI are reclassified to net realized investment and other gains (losses) in the periods during which variability in the cash flows hedged or the hedged forecasted transaction is recognized in income.

Cash and Cash Equivalents. Cash and cash equivalents include cash and all highly liquid debt investments with a remaining maturity of three months or less when purchased.

Goodwill, Value of Business Acquired, and Other Intangible Assets. Goodwill represents primarily the excess of the cost over the fair value of identifiable net assets acquired by MFC, on April 28, 2004. The allocation of purchase consideration resulted in the recognition of goodwill, value of business acquired (“VOBA”), and other intangible assets.

F-12

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 1 — Summary of Significant Accounting Policies - (continued)

VOBA is the present value of estimated future profits of insurance policies in-force related to businesses acquired by MFC. The Company amortizes VOBA using the same methodology and assumptions used to amortize deferred policy acquisition costs (“DAC”) and tests for recoverability at least annually.

Other intangible assets include brand name, investment management contracts (fair value of the investment management relationships between the Company and the mutual funds managed by the Company), distribution networks, and other investment management contracts (institutional investment management contracts managed by the Company’s investment management subsidiaries). Brand name and investment management contracts are not subject to amortization. Distribution networks and other investment management contracts are amortized over their respective estimated lives in other operating costs and expenses.

The Company tests goodwill and intangible assets not subject to amortization for impairment at least annually, or more frequently if circumstances indicate impairment may have occurred. Amortizing intangible assets are reviewed for impairment only upon the occurrence of certain triggering events. An impairment is recorded whenever a reporting unit’s goodwill or intangible asset’s fair value is deemed to be less than its carrying value. A reporting unit is defined as an operating segment or one level below an operating segment. For discussions regarding goodwill impairments recorded during the years ended December 31, 2013, 2012 and 2011, see the Goodwill, Value of Business Acquired, and Other Intangible Assets Note.

Deferred Policy Acquisition Costs, Deferred Sales Inducements, and Unearned Revenue. DAC are costs that are directly related to the successful acquisition or renewal of insurance contracts. Such costs include: (1) incremental direct costs of contract acquisition, such as commissions; (2) the portion of an employee’s total compensation and benefits directly related to underwriting, policy issuance and processing, medical inspection, and contract selling of new and renewal insurance contracts with respect to actual policies acquired or renewed; (3) other costs directly related to acquisition or renewal activities that would not have been incurred had a policy not been acquired or renewed; and (4) in limited circumstances, the costs of direct response advertising whose primary purpose is to elicit sales to customers who could be shown to have responded specifically to the advertising and that results in contract acquisition. All other acquisition-related costs, including those related to general advertising and solicitation, market research, agent training, product development, unsuccessful sales and underwriting efforts, as well as all indirect costs, are expensed as incurred. Similarly, any amounts assessed as initiation fees or front-end loads are recorded as unearned revenue. The Company tests the recoverability of DAC at least annually.

DAC related to participating traditional life insurance is amortized over the life of the policies at a constant rate based on the present value of the estimated gross margin amounts expected to be realized over the lives of the policies. Estimated gross margin amounts include anticipated premiums and investment results less claims and administrative expenses, changes in the net level premium reserve, and expected annual policyholder dividends. For annuity, universal life insurance, and investment-type products, DAC and unearned revenue are amortized generally in proportion to the change in present value of estimated gross profits arising principally from surrender charges, investment results, including realized investment and other gains (losses), and mortality and expense margins. In situations where using gross profits is not the best basis for amortizing DAC, the Company amortizes DAC and unearned revenue based on the amount of insurance in force. DAC amortization includes retrospective adjustments when estimates are revised. For annuity, universal life insurance, and investment-type products, the DAC asset is adjusted for the impact of unrealized gains (losses) on available for sale investments as if these gains (losses) had been realized, with corresponding credits or charges included in AOCI.

DAC and unearned revenue related to non-participating traditional life insurance and DAC related to long-term care insurance are amortized over the premium-paying period of the related policies using assumptions consistent with those used in computing future policy benefits.

The Company offers sales inducements, including enhanced crediting rates or bonus payments, to contract holders on certain of its individual life insurance and individual and group annuity products. The Company’s deferred sales inducements (“DSI”) are amortized over the life of the underlying contracts using the same methodology and assumptions used to amortize DAC.

Reinsurance. Assets and liabilities related to reinsurance ceded contracts are reported on a gross basis. The accompanying Consolidated Statements of Operations reflect premiums, benefits, and settlement expenses net of reinsurance ceded. Reinsurance premiums, commissions, expense reimbursements, benefits, and reserves related to reinsured business are

F-13

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 1 — Summary of Significant Accounting Policies - (continued)

accounted for on a basis consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts.

The Company utilizes reinsurance agreements to provide for greater diversification of business, allowing management to control exposure to potential losses arising from large risks, and provide additional capacity for growth. Reinsurance ceded contracts do not relieve the Company from its obligations to policyholders. The Company remains liable to its contract holders to the extent that counterparties to reinsurance ceded contracts do not meet their contractual obligations. Failure of the reinsurers to honor their obligations could result in losses to the Company; consequently, estimates are established for amounts deemed or estimated to be uncollectible. To minimize its exposure to significant losses from reinsurance insolvencies, the Company evaluates the financial condition of its reinsurers and monitors concentration of credit risk arising from similar characteristics among the reinsurers.

When a reinsurance agreement does not subject the reinsurer to the reasonable possibility of significant loss, the Company accounts for the agreement as financial reinsurance and uses deposit-type accounting treatment with only the reinsurance risk fee being reported in other operating costs and expenses.

Separate Account Assets and Liabilities. Separate account assets and liabilities reported on the Company’s Consolidated Balance Sheets represent funds that are administered and invested by the Company to meet specific investment objectives of contract holders. Net investment income and net realized investment and other gains (losses) generally accrue directly to such contract holders who bear the investment risk, subject, in some cases, to principal guarantees and minimum guaranteed rates of income. The assets of each separate account are legally segregated and are not subject to claims that arise out of any other business of the Company. Separate account assets are reported at fair value, and separate account liabilities are set equal to the fair value of the separate account assets. Deposits, surrenders, net investment income, net realized investment and other gains (losses), and the related liability changes of separate accounts are offset within the same line item in the Consolidated Statements of Operations. Fees charged to contract holders, principally mortality, policy administration, investment management, and surrender charges, are included in the revenues of the Company. For the years ended December 31, 2013, 2012 and 2011 there were no gains or losses on transfers of assets from the general account to the separate account.

Future Policy Benefits and Policyholders’ Funds. Future policy benefits for participating traditional life insurance policies are based on the net level premium method. The net level premium reserve is calculated using the guaranteed mortality and dividend fund interest rates. The liability for annual dividends represents the accrual of annual dividends earned. Settlement dividends are accrued in proportion to gross margins over the life of the policies. Participating business represented 32% and 33% of the Company’s traditional life net insurance in-force at December 31, 2013 and 2012, respectively, and 77%, 78%, and 76% of the Company’s traditional life net insurance premiums for the years ended December 31, 2013, 2012 and 2011, respectively.

Future policy benefits for long-term care insurance policies are based on the net level premium method. Assumptions established at policy issue as to mortality, morbidity, persistency, and interest and expenses, which include a margin for adverse deviation, are based on estimates developed by management.

For non-participating traditional life insurance policies, future policy benefits are estimated using a net level premium method based upon actuarial assumptions as to mortality, persistency, interest, and expenses established at the policy issue or acquisition date. Assumptions established at policy issue as to mortality and persistency are based on the Company’s experience, which, together with interest and expense assumptions, include a margin for adverse deviation.

For universal life insurance products, the basic policy reserve is account value. An additional liability is established for product features which result in a pattern of profits followed by losses. The benefits covered by this liability include benefits paid under no-lapse guarantee features as well as certain other death benefits. The additional liability is calculated by multiplying the benefit ratio by the assessments recorded from contract inception accumulated with interest and subtracting the excess benefits paid from contract inception accumulated with interest. If experience or assumption changes result in a new benefit ratio, the reserves are adjusted to reflect the changes in a manner similar to the retrospective adjustment of DAC, VOBA, and unearned revenue. The assumptions used in estimating the additional liability are consistent with those used for amortizing DAC. The no-lapse guarantee benefits used in calculating the liability are based on the average benefits payable over a range of scenarios.

F-14

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 1 — Summary of Significant Accounting Policies - (continued)

Policyholders’ funds are generally equal to the total of the policyholder account values before surrender charges, additional reserves established to adjust for lower market interest rates as of the acquisition date, and additional reserves established on certain guarantees offered in certain investment-type products. Fixed annuity liabilities during the accumulation period are based on the accumulated contract holders’ fund balances and after annuitization are equal to the present value of expected future payments. Policyholder account values include deposits plus credited interest or change in investment value less expense and mortality fees, as applicable, and withdrawals. Policy benefits are charged to expense and include benefit claims incurred in the period in excess of related policy account balances and interest credited to policyholders’ account balances.

Funding agreements are purchased from the Company by special purpose entities (“SPEs”), which in turn issue medium-term notes to global investors that are non-recourse to the Company. The SPEs are not consolidated in the Company’s consolidated financial statements. The Company is not currently issuing new funding agreements.

Liabilities for unpaid claims and claim expense reserves include estimates of payments to be made on reported individual and group life, long-term care, and group accident and health insurance claims and estimates of incurred but not reported claims based on historical claim development patterns.

Estimates of future policy benefit reserves, claim reserves, and expenses are reviewed on a regular basis and adjusted as necessary. Any changes in estimates are reflected in current earnings.

Policyholder Dividends. Policyholder dividends for the closed blocks are approved annually by JHUSA’s Board of Directors. The aggregate amount of policyholder dividends is calculated based upon actual interest, mortality, morbidity, persistency, and expense experience for the year as appropriate, as well as management’s judgment as to the proper level of statutory surplus to be retained by JHUSA. For policies included in the JHUSA closed block, expense experience is included in determining policyholder dividends. Expense experience is not included for policies included in the John Hancock Life Insurance Company (“JHLICO”) closed block. JHLICO was a predecessor company that was merged into JHUSA on December 31, 2009. For additional information on the closed blocks, see the Closed Blocks Note.

Revenue Recognition. Premiums from participating and non-participating traditional life insurance, annuity policies with life contingencies, and reinsurance contracts are recognized as revenue when due. When premiums are due over a significantly shorter period than the period over which benefits are provided, any excess profit is deferred and recognized into income in a constant relationship to insurance in-force or, for annuities, the amount of expected future benefit payments.

Premiums from long-term care insurance contracts are recognized as revenue when due.

Deposits related to universal life and investment-type products are credited to policyholders’ account balances. Revenues from these contracts, as well as annuity contracts, consist of amounts assessed against policyholders’ account balances for mortality, policy administration, and surrender charges and are recorded in fee income in the period in which the services are provided.

Fee income also includes advisory fees, broker-dealer commissions and fees, and administration service fees. Such fees and commissions are recognized in the period in which the services are performed. Commissions related to security transactions and related expenses are recognized as income on the trade date. Contingent deferred selling charge commissions are recognized as income when received. Selling commissions paid to the selling broker-dealer for sales of mutual funds that do not have a front-end sales charge are deferred and amortized on a straight-line basis over periods ranging from one to six years. This is the approximate period of time expected to be benefited and during which fees earned pursuant to Rule 12b-1 distribution plans are received from the funds and contingent deferred sales charges are received from shareholders of the funds.

Income Taxes. The provision for federal income taxes includes amounts currently payable or recoverable and deferred income taxes, computed under the liability method, resulting from temporary differences between the tax and financial statement bases of assets and liabilities. A valuation allowance is established for deferred tax assets when it is more likely than not that an amount will not be realized. Foreign subsidiaries and U.S. subsidiaries operating outside of the United States are taxed under applicable foreign statutory rates. In accordance with the income tax sharing agreements in effect for the applicable tax years, the income tax expense (benefit) is computed as if each entity filed separate federal income tax returns with tax benefits provided for operating losses and tax credits when utilized and settled by the consolidated group.

F-15

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 1 — Summary of Significant Accounting Policies - (continued)

Intercompany settlements of income taxes are made through an increase or reduction in amounts due to or from affiliates. Such settlements occur on a periodic basis in accordance with the tax sharing agreements.

Foreign Currency. Assets and liabilities of foreign operations are translated into U.S. dollars using current exchange rates as of the balance sheet date. Revenues and expenses are translated using the average exchange rates during the year. The resulting net translation adjustments for each year are included in AOCI. Gains or losses on foreign currency transactions are reflected in earnings.

Adoption of Recent Accounting Pronouncements

Offsetting Assets and Liabilities

In December 2011 and January 2013, the Financial Accounting Standards Board (“FASB”) issued updated guidance regarding the disclosure of recognized derivative instruments (including bifurcated embedded derivatives), repurchase agreements and securities borrowing/lending transactions that are offset in the statement of financial position or are subject to an enforceable master netting arrangement or similar arrangement (irrespective of whether they are offset in the balance sheet). This new guidance requires an entity to disclose information, on both a gross and net basis, about instruments and transactions within the scope of the guidance. The Company adopted the revised accounting standard effective January 1, 2013 via retrospective adoption, as required. The expanded disclosures required by this guidance are included in the Investments Note. The adoption of the guidance did not impact the Company’s financial position or results of operations.

Fed Funds as Benchmark Interest Rate

In July 2013, the FASB issued new guidance regarding derivatives. The new guidance permits a company to designate the Fed Funds Effective Swap Rate (also referred to as the “Overnight Index Swap Rate” or “OIS”) as the hedged risk (or benchmark interest rate) in both cash flow and fair value hedges. The new guidance also removed the requirement that similar hedges designate the same benchmark rate. The new guidance is effective prospectively for qualifying new or redesignated hedging relationships commencing on or after July 17, 2013. The adoption of the guidance did not impact the Company’s financial position or results of operations.

Comprehensive Income

In February 2013, the FASB issued updated guidance regarding the presentation of comprehensive income. Under the guidance, the Company is required to separately present information about significant items reclassified out of accumulated other comprehensive income by component as well as changes in accumulated other comprehensive income balances by component in either the financial statements or the notes to the financial statements. The guidance does not change the items that are reported in other comprehensive income, does not change when an item of other comprehensive income must be reclassified to net income, and does not amend any existing requirements for reporting net income or other comprehensive income. The Company’s adoption was prospective and the disclosures required by this guidance are included in the Shareholder’s Equity Note.

Income Taxes

In July 2013, the FASB issued updated guidance regarding the presentation of an unrecognized tax benefit when a net operating loss carryforward, similar tax losses, or a tax credit carryforward exist. This guidance requires liabilities for uncertain tax positions to be presented in the financial statements as a reduction to deferred assets to the extent that the deferred tax assets are available to reduce resulting taxes payable within the same jurisdiction. The guidance is generally effective for 2014. The Company retrospectively early adopted this new guidance for its 2013 reporting. The adoption of this guidance did not impact the Company’s financial position or results of operations.

Indefinite-Lived Intangible Asset Impairment Testing

In July 2012, the FASB issued updated guidance regarding testing indefinite-lived intangible assets for impairment. This guidance is intended to simplify how a company tests indefinite-lived intangible assets for impairment by giving companies the option to perform a qualitative assessment before calculating the fair value of the indefinite-lived intangible asset. Under the guidance, a company is not required to calculate the fair value of an indefinite-lived intangible asset unless the entity

F-16

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 1 — Summary of Significant Accounting Policies - (continued)

determines that it is more likely than not that its fair value is less than its carrying amount. The provisions of this guidance became effective for annual and interim impairment tests performed after September 15, 2012. The adoption of this guidance did not impact the Company’s financial position or results of operations.

Future Adoption of Recent Accounting Pronouncements

Investment Companies

In June 2013, the FASB issued updated guidance clarifying the characteristics of an investment company and requiring new disclosures. The new guidance changes the way in which a company assesses whether it should be considered an investment company. Once deemed an investment company, the new guidelines require additional disclosures as well as changes to the reporting of interests in other investment companies. The provisions of the new guidance are effective for annual and interim reporting periods in fiscal years beginning after December 15, 2013. Upon adoption, the new guidance is not expected to materially impact the Company’s financial position or results of operations.

Note 2 — Investments

Fixed Maturity and Equity Securities

The Company’s investments in available-for-sale fixed maturity and equity securities are summarized below:


	December 31, 2013
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Other-Than- Temporary Impairments in AOCI

	(in millions)
Fixed maturity and equity securities
Corporate debt securities	$	37,233	$	2,730	$	(778	)	$	39,185	$	(22	)
Commercial mortgage-backed securities		791		19		(29	)		781		(6	)
Residential mortgage-backed securities		184		1		(18	)		167		(5	)
Collateralized debt obligations		61		-		(8	)		53		-
Other asset-backed securities		974		60		(9	)		1,025		-
U.S. Treasury securities and obligations of U.S. government corporations and agencies		9,168		119		(406	)		8,881		-
Obligations of states and political subdivisions		4,388		295		(53	)		4,630		-
Debt securities issued by foreign governments		1,466		128		(41	)		1,553		-

Fixed maturity securities		54,265		3,352		(1,342	)		56,275		(33	)
Other fixed maturity securities (1)		1,723		-		-			1,723		-

Total fixed maturity securities available-for-sale		55,988		3,352		(1,342	)		57,998		(33	)

Equity securities available-for-sale		131		60		-			191		-

Total fixed maturity and equity securities available-for-sale	$	56,119	$	3,412	$	(1,342	)	$	58,189	$	(33	)

F-17

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2 — Investments - (continued)


	December 31, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Other-Than- Temporary Impairments in AOCI

		(in millions)
Fixed maturity and equity securities
Corporate debt securities	$	36,804	$	5,160	$	(271	)	$	41,693	$	(38	)
Commercial mortgage-backed securities		1,427		48		(81	)		1,394		(17	)
Residential mortgage-backed securities		301		1		(60	)		242		(20	)
Collateralized debt obligations		152		-		(46	)		106		(33	)
Other asset-backed securities		794		102		(2	)		894		(1	)
U.S. Treasury securities and obligations of U.S. government corporations and agencies		11,165		1,009		(79	)		12,095		-
Obligations of states and political subdivisions		4,482		913		(1	)		5,394		-
Debt securities issued by foreign governments		1,230		243		(6	)		1,467		-

Fixed maturity securities		56,355		7,476		(546	)		63,285		(109	)
Other fixed maturity securities (1)		1,711		-		-			1,711		-

Total fixed maturity securities available-for-sale		58,066		7,476		(546	)		64,996		(109	)

Equity securities available-for-sale		294		97		(5	)		386		-

Total fixed maturity and equity securities available-for-sale	$	58,360	$	7,573	$	(551	)	$	65,382	$	(109	)

(1)	The Company classifies its leveraged leases as fixed maturity securities and calculates their carrying value by accruing income at their expected internal rate of return.

The amortized cost and fair value of available-for-sale fixed maturity securities at December 31, 2013, by contractual maturity, are shown below:


	Amortized Cost		Fair Value

	(in millions)
Fixed maturity securities
Due in one year or less	$	1,301	$	1,351
Due after one year through five years		9,903		10,380
Due after five years through ten years		8,644		8,959
Due after ten years		32,407		33,559

		52,255		54,249
Asset-backed and mortgage-backed securities		2,010		2,026

Total	$	54,265	$	56,275

Expected maturities may differ from contractual maturities because eligible borrowers may exercise their right to call or prepay obligations with or without call or prepayment penalties. Asset-backed and mortgage-backed securities are shown separately in the table above, as they are not due at a single maturity date.

F-18

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2 — Investments - (continued)

Fixed Maturity and Equity Securities Impairment Review

The Company has a process in place to identify securities that could potentially have an impairment that is other-than-temporary. This process involves monitoring market events that could impact issuers’ credit ratings, business climate, management changes, litigation and government actions, and other similar factors. This process also involves monitoring late payments, downgrades by rating agencies, key financial ratios, financial statements, revenue forecasts, and cash flow projections as indicators of credit issues.

At the end of each quarter, the MFC Loan Review Committee reviews all fixed maturity securities where there is evidence of impairment or a significant unrealized loss at the balance sheet date. Generally, securities with market value less than 60 percent of amortized cost for six months or more indicate an impairment is present. Accordingly, securities in this category are normally deemed impaired unless there is clear evidence they should not be impaired. The analysis focuses on each company’s or project’s ability to service its debts in a timely fashion and the length of time the security has been trading below amortized cost. The results of this analysis are reviewed by the Transaction and Portfolio Review Committee at MFC. This committee includes MFC’s Chief Financial Officer, Chief Investment Officer, Chief Risk Officer, Chief Credit Officer, and other senior management. This quarterly process includes a fresh assessment of the credit quality of each investment in the entire fixed maturity security portfolio.

The Company considers relevant facts and circumstances in evaluating whether the impairment of a fixed maturity security is other-than-temporary. Relevant facts and circumstances considered include (1) the length of time the fair value has been below cost; (2) the financial position of the issuer, including the current and future impact of any specific events; and (3) the Company’s ability and intent to hold the fixed maturity security to maturity or until it recovers in value. If the Company intends to sell, or if it is more likely than not that it will be required to sell an impaired fixed maturity security prior to recovery of its cost basis, the security is considered other-than-temporarily impaired, and the Company records a charge to earnings for the full amount of impairment (the difference between the current carrying amount and fair value of the security). For fixed maturity securities in an unrealized loss position where the Company does not intend to sell or is not more likely than not to be required to sell, the Company determines its ability to recover the amortized cost of the security by comparing the net present value of the projected future cash flows to the amortized cost of the security. If the net present value of the cash flow is less than the security’s amortized cost, then the difference is recorded as a credit loss. The difference between the estimates of the credit loss and the overall unrealized loss on the security is the non-credit-related component. The credit loss portion is charged to net realized investment and other gains (losses) on the Consolidated Statements of Operations, while the non-credit loss is charged to AOCI on the Consolidated Balance Sheets.

The net present value used to determine the credit loss is calculated by discounting the Company’s best estimate of projected future cash flows at the effective interest rate implicit in the fixed maturity security prior to impairment. The Company may use the estimated fair value of collateral as a proxy for the net present value if it believes that the security is dependent on the liquidation of collateral for recovery of its investment. The projection of future cash flows is subject to the same analysis the Company applies to its overall impairment evaluation process, as noted above, which incorporates security specific information such as late payments, downgrades by rating agencies, key financial ratios, investee financial statements, and fundamentals of the industry and geographic area in which the issuer operates, as well as overall macroeconomic conditions.

The projections are estimated using assumptions regarding probability of default and estimates regarding timing and amount of recoveries associated with a default. For mortgage-backed and asset-backed securities, cash flow estimates, including prepayment assumptions, are based on data from third-party data sources or internal estimates and are driven by assumptions regarding the underlying collateral, including default rates, recoveries, and changes in value.

Similarly, management evaluates all facts and circumstances and exercises professional judgment in determining whether an other-than-temporary impairment of equity securities exists. The MFC Transaction and Portfolio Review Committee reviews and approves the proposed impairments based on an analysis of the evidence, including the current market price, the length of time the security has been in an unrealized loss position, forecasted earnings per share, consensus price targets, projected P/E ratios, overall financial health of each issuer, liquidity or solvency issues, announced changes in ownership structure, changes to issuer debt ratings, changes to dividend payments, changes in products, markets or competition, and other industry specific or macroeconomic factors.

There are a number of significant risks and uncertainties inherent in the process of monitoring impairments and determining if an impairment is other-than-temporary. These risks and uncertainties include (1) the risk that the Company’s assessment of

F-19

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2 — Investments - (continued)

an issuer’s ability to meet all of its contractual obligations will change based on changes in the credit characteristics of that issuer; (2) the risk that the economic outlook will be worse than expected or have more of an impact on the issuer than anticipated; (3) the risk that fraudulent information could be provided to the Company’s investment professionals who determine the fair value estimates and other-than-temporary impairments; and (4) the risk that new information obtained by the Company or changes in other facts and circumstances lead it to change its intent to hold the security to maturity or until it recovers in value. Any of these situations could result in a charge to earnings in a future period.

The cost amounts for both fixed maturity securities and equity securities are net of other-than-temporary impairment charges.

The following table rolls forward the amount of credit losses recognized in earnings on available-for-sale fixed maturity securities for which a portion of the other-than-temporary impairment was also recognized in AOCI:

Credit losses on available-for-sale fixed maturity securities:


	December 31,
	2013			2012			2011

	(in millions)
Balance, beginning of year	$	371		$	380		$	399

Additions:
Credit losses for which an other-than-temporary impairment was not previously recognized		57			75			38
Credit losses for which an other-than-temporary impairment was previously recognized		10			12			13

Deletions:
Amounts related to sold, matured, or paid down available-for-sale fixed maturity securities		(149	)		(96	)		(70	)


Balance, end of year	$	289		$	371		$	380

F-20

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2 — Investments - (continued)

The following table shows the carrying value and gross unrealized losses aggregated by investment category and length of time that individual available-for-sale fixed maturity and equity securities have been in a continuous unrealized loss position:

Unrealized Losses on Available-For-Sale Fixed Maturity and Equity Securities — By Investment Age


	December 31, 2013
	Less than 12 months					12 months or more					Total

	Carrying Value		Unrealized Losses			Carrying Value		Unrealized Losses			Carrying Value		Unrealized Losses

						(in millions)
Corporate debt securities	$	8,479	$	(467	)	$	2,316	$	(311	)	$	10,795	$	(778	)
Commercial mortgage-backed securities		153		(1	)		197		(28	)		350		(29	)
Residential mortgage-backed securities		4		-			144		(18	)		148		(18	)
Collateralized debt obligations		-		-			49		(8	)		49		(8	)
Other asset-backed securities		196		(9	)		10		-			206		(9	)
US Treasury securities and obligations of US government corps and agencies		5,470		(243	)		709		(163	)		6,179		(406	)
Obligations of states and political subdivisions		844		(32	)		93		(21	)		937		(53	)
Debt securities issued by foreign governments		229		(17	)		112		(24	)		341		(41	)
Total fixed maturity securities available-for-sale		15,375		(769	)		3,630		(573	)		19,005		(1,342	)
Equity securities available-for-sale		4		-			-		-			4		-
Total	$	15,379	$	(769	)	$	3,630	$	(573	)	$	19,009	$	(1,342	)

F-21

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2 — Investments - (continued)



	December 31, 2012
	Less than 12 months					12 months or more					Total

	Carrying Value		Unrealized Losses			Carrying Value		Unrealized Losses			Carrying Value		Unrealized Losses

						(in millions)
Corporate debt securities	$	2,008	$	(85	)	$	1,404	$	(186	)	$	3,412	$	(271	)
Commercial mortgage-backed securities		129		(1	)		223		(80	)		352		(81	)
Residential mortgage-backed securities		1		-			214		(60	)		215		(60	)
Collateralized debt obligations		-		-			99		(46	)		99		(46	)
Other asset-backed securities		5		-			30		(2	)		35		(2	)
US Treasury securities and obligations of US government corps and agencies		3,847		(79	)		-		-			3,847		(79	)
Obligations of states and political subdivisions		116		(1	)		-		-			116		(1	)
Debt securities issued by foreign governments		7		-			86		(6	)		93		(6	)
Total fixed maturity securities available-for-sale		6,113		(166	)		2,056		(380	)		8,169		(546	)
Equity securities available-for-sale		14		(3	)		4		(2	)		18		(5	)
Total	$	6,127	$	(169	)	$	2,060	$	(382	)	$	8,187	$	(551	)

Unrealized losses can be created by rising interest rates or by rising credit concerns and hence widening credit spreads. Credit concerns are apt to play a larger role in the unrealized loss on below investment grade securities. Unrealized losses on investment grade securities principally relate to changes in interest rates or changes in credit spreads since the securities were acquired. Credit rating agencies’ statistics indicate that investment grade securities have been found to be less likely to develop credit concerns. The gross unrealized losses on below investment grade available-for-sale fixed maturity securities decreased to $97 million at December 31, 2013 from $280 million at December 31, 2012.

At December 31, 2013 and 2012, there were 999 and 624 available-for-sale fixed maturity securities with an aggregate gross unrealized loss of $1,342 million and $546 million, respectively, of which the single largest unrealized loss was $90 million and $33 million, respectively. The Company anticipates that these fixed maturity securities will perform in accordance with their contractual terms and currently has the ability and intent to hold these securities until they recover or mature.

At December 31, 2013 and 2012, there were 52 and 75 equity securities with an aggregate gross unrealized loss of $0 million and $5 million, respectively, of which the single largest unrealized loss was $0 million and $2 million, respectively. The Company anticipates that these equity securities will recover in value in the near term.

Available-for-sale securities with amortized cost of $150 million were non-income producing for the year ended December 31, 2013. Non-income producing assets represent investments that have not produced income for the 12 months preceding December 31, 2013.

Securities Lending

The Company participated in a securities lending program for the purpose of enhancing income on securities held. There were no securities on loan and no collateral held as of December 31, 2013 and 2012. The Company maintains collateral at a level of at least 102% of the loaned securities’ market value and monitors the market value of the loaned securities on a daily basis.

F-22

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2 — Investments - (continued)

Assets on Deposit and Pledged as Collateral

The Company maintains assets which are pledged as collateral in connection with various agreements and transactions. Additionally, the Company holds assets on deposit with government authorities as required by state law. The following table summarizes the fair value of the pledged or deposited assets:


	December 31,
	2013		2012

	(in millions)
Bonds pledged in support of over-the-counter derivative instruments	$	919	$	114
Bonds pledged in support of exchange-traded futures and cleared derivatives		541		552
Bonds on deposit with government authorities		34		36
Mortgage loans pledged in support of real estate		47		52
Bonds held in trust		96		105
Pledged collateral under reinsurance agreements		2,462		2,849

Total	$	4,099	$	3,708

Offsetting Financial Assets and Financial Liabilities

The Company does not offset financial instruments in the Consolidated Balance Sheets, as the rights of offset are conditional.

In the case of derivatives, collateral is collected from and pledged to counterparties to manage credit exposure in accordance with Credit Support Annex agreements. Under master netting agreements, the Company has a right of offset in the event of default, insolvency, bankruptcy or other early termination.

In the case of reverse repurchase and repurchase transactions, additional collateral may be collected from or pledged to counterparties to manage credit exposure according to bilateral reverse repurchase agreements or repurchase agreements. In the event of default by a counterparty, the Company is entitled to liquidate the assets the Company holds as collateral to offset against obligations to the same counterparty.

The following table presents the effects of conditional master netting and similar arrangements. Similar arrangements may include global master repurchase agreements, global master securities lending agreements, and any related rights to financial collateral.

F-23

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2 — Investments - (continued)


				Related Amounts Not Set Off in the Consolidated Balance Sheets
Year ended December 31, 2013	Gross Amounts of Financial Instruments presented in the Consolidated Balance Sheets(1)			Amounts Subject to an Enforceable Master Netting Arrangement or Similar Agreements			Financial and Cash Collateral Pledged (Received)(2)			Net Amount Including Financing Trusts(3)			Net Amount Excluding Financing Trusts
	(in millions)
Financial assets
Derivative assets	$	7,880		$	(4,966	)	$	(2,895	)	$	19		$	-
Securities lending		-			-			-			-			-
Reverse repurchase agreements		-			-			-			-			-

Total financial assets		7,880			(4,966	)		(2,895	)		19			-

Financial liabilities
Derivative liabilities		(5,862	)		4,966			844			(52	)		(33	)
Repurchase agreements		-			-			-			-			-

Total financial liabilities	$	(5,862	)	$	4,966		$	844		$	(52	)	$	(33	)


Year ended December 31, 2012	Gross Amounts of Financial Instruments presented in the Consolidated Balance Sheets(1)			Amounts Subject to an Enforceable Master Netting Arrangement or Similar Agreements			Financial and Cash Collateral Pledged (Received)(2)			Net Amount Including Financing Trusts(3)			Net Amount Excluding Financing Trusts
	(in millions)
Financial assets
Derivative assets	$	12,175		$	(5,147	)	$	(6,943	)	$	85		$	1
Securities lending
Reverse repurchase agreements

Total financial assets		12,175			(5,147	)		(6,943	)		85			1

Financial liabilities
Derivative liabilities		(5,288	)		5,147			101			(40	)		(5	)
Repurchase agreements

Total financial liabilities	$	(5,288	)	$	5,147		$	101		$	(40	)	$	(5	)

F-24

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2 — Investments - (continued)

1.	The Company does not offset financial instruments. Financial assets and liabilities in the table above include accrued interest of $142 million and $46 million, respectively as of December 31, 2013 (December 31, 2012 - $317 million and $212 million, respectively).

Financial and cash collateral excludes over-collateralization. As at December 31, 2013 the Company was over-collateralized on OTC derivative assets and OTC derivative liabilities in the amounts of $339 million and $94 million, respectively (December 31, 2012 - $630 million and $14 million, respectively). Collateral pledged (received) does not include collateral in transit on OTC instruments or include initial margin on exchange traded contracts.

3.	The net amount includes derivative contracts entered into between the Company and its financing trusts which it does not consolidate. The Company does not exchange collateral on derivative contracts entered into with these trusts.

Affiliate Transactions

In 2013, JHUSA sold certain fixed maturity securities to an affiliate, Manulife International Limited. These bonds had a book value of approximately $402 million and a fair value of approximately $454 million at the date of the transaction. The Company recognized approximately $52 million in pre-tax realized gains.

In 2013, JHUSA sold certain fixed maturity securities to an affiliate, John Hancock Reassurance Company Limited. These bonds had a book value of approximately $184 million and a fair value of approximately $181 million at the date of the transaction. The Company recognized approximately $3 million in pre-tax realized losses.

In 2013, JHUSA sold certain and acquired certain fixed maturity securities from an affiliate, MLI (Bermuda Branch). The bonds had a net book value of approximately $338 million and a fair value of approximately $372 million at the date of the transaction. The Company recognized approximately $27 million in pre-tax realized gains.

Mortgage Loans on Real Estate

At December 31, 2013 and 2012, the mortgage portfolio was diversified by specific collateral property type and geographic region as displayed below:

December 31, 2013:


Collateral Property Type	Carrying Amount			Geographic Concentration	Carrying Amount

	(in millions)				(in millions)
Apartments	$	2,400		East North Central	$	1,607
Industrial		1,162		East South Central		171
Office buildings		4,006		Middle Atlantic		2,361
Retail		3,623		Mountain		603
Mixed use		21		New England		887
Agricultural		464		Pacific		3,881
Agribusiness		700		South Atlantic		2,763
Other		1,048		West North Central		460
				West South Central		591
				Canada / other		100

Provision for losses		(12	)	Provision for losses		(12	)


Total	$	13,412		Total	$	13,412

F-25

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2 — Investments - (continued)

December 31, 2012:


Collateral Property Type	Carrying Amount			Geographic Concentration	Carrying Amount

	(in millions)				(in millions)
Apartments	$	2,162		East North Central	$	1,477
Industrial		1,380		East South Central		166
Office buildings		3,711		Middle Atlantic		2,258
Retail		3,613		Mountain		719
Mixed use		6		New England		939
Agricultural		507		Pacific		3,589
Agribusiness		853		South Atlantic		2,782
Other		1,004		West North Central		482
				West South Central		649
				Canada / other		175

Provision for losses		(44	)	Provision for losses		(44	)


Total	$	13,192		Total	$	13,192

At the end of each quarter, the MFC Loan Review Committee reviews all mortgage loans rated BB or lower, as determined by review of the underlying collateral, and decides whether an allowance for credit loss is needed. The Company considers collateral value, the borrower’s ability to pay, normal historical credit loss levels, and future expectations in evaluating whether an allowance for credit losses is required for impaired loans.

Changes in the allowance for probable losses on mortgage loans on real estate are summarized below:


	Balance at Beginning of Period		Additions		Recoveries			Charge- offs and Disposals			Balance at End of Period

	(in millions)

Year ended December 31, 2013	$	44	$	12	$	(2	)	$	(42	)	$	12

Year ended December 31, 2012		45		24		(1	)		(24	)		44

Year ended December 31, 2011		34		38		(1	)		(26	)		45

A mortgage loan charge-off is recorded when the impaired loan is disposed or when an impaired loan is determined to be a full loss with no possibility of recovery. Charge-offs are deducted from the allowance for probable losses.

As of December 31, 2013, the carrying value for certain mortgage loans is as follows:


	December 31,		December 31,

	2013		2012

	(in millions)
Non-income producing	$	36	$	75
Delinquent less than 90 days		-		15
Delinquent greater than 90 days		-		22

The Company provides for credit risk on mortgage loans by establishing allowances against the carrying value of the impaired loans. The total recorded investment in mortgage loans that is considered to be impaired along with the related allowance for credit losses was as follows:

F-26

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2 — Investments - (continued)


	December 31,
	2013			2012

	(in millions)
Impaired mortgage loans on real estate with provision for losses	$	48		$	119
Allowance for credit losses		(12	)		(44	)

Net impaired mortgage loans on real estate	$	36		$	75

The average recorded investment in impaired loans and the interest income recognized on impaired loans were as follows:


	December 31,
	2013		2012		2011

	(in millions)

Average recorded investment in impaired loans	$	36	$	105	$	109
Interest income recognized on impaired loans		-		-		-

For mortgage loans, the Company evaluates credit quality through regular monitoring of credit related exposures, considering both qualitative and quantitative factors in assigning an internal risk rating (IRR). These ratings are updated at least annually.

The carrying value of mortgage loans by IRR was as follows:


	December 31,
	2013		2012

	(in millions)
AAA	$	421	$	319
AA		1,689		1,460
A		4,108		2,928
BBB		6,647		7,648
BB		414		529
B and lower and unrated		133		308

Total	$	13,412	$	13,192

Investment Real Estate, Agriculture, and Timber

Investment real estate, agriculture, and timber of $217 million was non-income producing for the year ended December 31, 2013. Depreciation expense on investment real estate, agriculture, and timber was $97 million, $84 million, and $69 million in 2013, 2012 and 2011, respectively. Accumulated depreciation was $691 million and $602 million at December 31, 2013 and 2012, respectively.

Other Invested Assets

The following tables summarize the Company’s investments accounted for using the equity method of accounting:


	December 31,
	2013		2012

	(in millions)
Carrying value	$	5,074	$	4,458
Combined assets		75,818		62,974
Combined liabilities		15,029		14,830
Debt included in combined liabilities		11,260		9,698

F-27

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2 — Investments - (continued)


	December 31,
	2013		2012		2011

	(in millions)
Net investment income on the investments	$	340	$	218	$	222
Combined revenues		9,370		8,639		8,516
Combined expenses		4,506		4,696		4,750
Combined income (loss) from operations		4,864		3,943		3,766

Net Investment Income and Net Realized Investment and Other Gains (Losses)

The following information summarizes the components of net investment income and net realized investment and other gains (losses):


	December 31,
	2013			2012			2011

	(in millions)
Net investment income
Fixed maturity securities	$	3,164		$	2,943		$	3,425
Equity securities		6			7			9
Mortgage loans on real estate		756			771			798
Investment real estate, agriculture, and timber		261			216			205
Policy loans		293			300			305
Short-term investments		6			8			9
Derivatives		532			405			196
Equity method investments and other		286			182			303

Gross investment income		5,304			4,832			5,250

Investment expenses		(262	)		(273	)		(261	)

Net investment income	$	5,042		$	4,559		$	4,989


	December 31,

	2013			2012			2011

	(in millions)
Net realized investment and other gains (losses)
Fixed maturity securities	$	(45	)	$	1,025		$	1,131
Equity securities		138			40			(11	)
Mortgage loans on real estate		32			58			(82	)
Derivatives		(4,626	)		(3,441	)		2,137
Other invested assets		144			189			62
Amounts credited to participating contract holders		79			(39	)		(102	)

Net realized investment and other gains (losses)	$	(4,278	)	$	(2,168	)	$	3,135

F-28

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2 — Investments - (continued)


	December 31,
	2013			2012			2011

	(in millions)
Certain investment related activity:
Net investment income passed through to participating contract holders as interest credited to policyholders’ account balances	$	80		$	91		$	100
Change in unrealized gains (losses) included in net realized investment and other gains (losses):
Fixed maturity securities held-for-trading		(91	)		33			46
Equity securities held-for-trading		4			9			(10	)
Derivatives		(2,661	)		(1,941	)		2,687
Gross gains on sales of available-for-sale securities		589			1,284			1,619
Gross losses on sales of available-for-sale securities		(774	)		199			291
Other-than-temporary impairments on available-for-sale securities		76			95			70

Note 3 — Relationships with Variable Interest Entities

In its capacities as an investor and as an investment manager, the Company has relationships with various types of entities, some of which are considered variable interest entities (“VIEs”).

The Company consolidates a VIE when it is determined that it is the primary beneficiary of the VIE, or controls the VIE. The Company’s analysis to determine whether it must consolidate the VIE includes review of the Company’s contractual rights and responsibilities, fees received, and interests held. For the purpose of disclosing consolidated variable interest entities, the Company aggregates similar entities.

If it is not considered to be the primary beneficiary of the VIE, nor does it have control over the VIE, the Company assesses the materiality of its relationship with the VIE to determine if it holds a significant variable interest, which requires disclosure. This assessment considers the materiality of the VIE relationship to the Company as, among other factors, a percentage of total investments, percentage of total net investment income, and percentage of total funds under management. For purposes of assessing materiality and disclosing significant variable interests, the Company aggregates similar entities.

Consolidated Variable Interest Entities

The following table presents the total assets and total liabilities relating to VIEs for which the Company has concluded that it is the primary beneficiary or in control and which are consolidated in the Company’s financial statements. The liabilities recognized as a result of consolidating the VIEs do not represent claims against the general assets of the Company. Conversely, the assets recognized as a result of consolidating the VIEs can only be used to settle the liabilities recognized as a result of consolidating the VIEs.

December 31,

2013

2012

Total Assets

Total Liabilities

Total Assets

Total Liabilities

(in millions)

Collateralized debt obligations

(“CDOs”)

111

138

F-29

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 3 — Relationships with Variable Interest Entities - (continued)

Significant Variable Interests in Unconsolidated Variable Interest Entities

The following table presents the total assets of, investment in, and maximum exposure to loss relating to VIEs for which the Company has concluded that it holds significant variable interests, but it is not the primary beneficiary, nor does it have control over the VIE, and which have not been consolidated. The Company does not record any liabilities related to these unconsolidated VIEs.


	2013						2012

	Total Assets		Investment (1)		Maximum Exposure to Loss (2)		Total Assets		Investment (1)		Maximum Exposure to Loss (2)

		(in millions)
Collateralized debt obligations (3)	$	281	$	-	$	-	$	341	$	-	$	-
Real estate limited partnerships (4)		982		262		262		1,158		314		323
Timber funds (5)		2,758		172		212		3,601		478		496

Total	$	4,021	$	434	$	474	$	5,100	$	792	$	819

(1)	The Company’s investments in unconsolidated VIEs are included in other invested assets on the Consolidated Balance Sheets.

(2)

The maximum exposure to loss related to CDOs is limited to the investment reported on the Company’s Consolidated Balance Sheets. The maximum exposure to loss related to real estate limited partnerships and timber funds is limited to the Company’s investment plus unfunded capital commitments. The maximum loss is expected to occur only upon bankruptcy of the issuer or investee or as a result of a natural disaster in the case of the timber funds.

(3)

The Company acts as an investment manager to certain CDOs for which it collects a management fee. In addition, the Company may invest in debt or equity securities issued by these CDOs or by CDOs managed by others. CDOs raise capital by issuing debt and equity securities and use the proceeds to purchase investments.

(4)

Real estate limited partnerships include partnerships established for the purpose of investing in real estate that qualifies for low income housing and/or historic tax credits. Limited partnerships are owned by a general partner, who manages the business, and by limited partners, who invest capital, but have limited liability and are not involved in the partnerships’ management. The Company is typically the sole limited partner or investor member of each and is not the general partner or managing member.

(5)

The Company acts as investment manager for the VIEs owning the timberland properties (the “Timber funds”), in which the general account and institutional separate accounts invests. Timber funds are investment vehicles used primarily by large institutional investors, such as public and corporate pension plans, whose primary source of return is derived from the growth and harvest of timber and long-term appreciation of the property. The primary risks related to timberland investments include market value uncertainty (due to fluctuations in market prices for timberland outputs), liquidity risk (as compared to stocks and other financial instruments), and environmental risk (natural hazards or legislation related to threatened or endangered species). These risks are mitigated through effective investment management and geographic diversification of timberland investments and sound environmental risk governance practices. The Company collects an advisory fee from each timber fund and is also eligible for performance and forestry management fees.

F-30

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 4 — Goodwill, Value of Business Acquired, and Other Intangible Assets

The changes in the carrying value of goodwill by segment were as follows:


	Insurance		Wealth Management		Corporate and Other		Total

	(in millions)
Balance at January 1, 2013	$	-	$	808	$	145	$	953
Acquisition		4		-		-		4
Impairment		-		-		-		-

Balance at December 31, 2013	$	4	$	808	$	145	$	957


	Insurance		Wealth Management		Corporate and Other		Total

	(in millions)
Balance at January 1, 2012	$	-	$	808	$	145	$	953
Impairment		-		-		-		-

Balance at December 31, 2012	$	-	$	808	$	145	$	953

In 2013 and 2012, the Company had no goodwill impairments. In 2011, the Company impaired $500 million of goodwill associated with the Wealth Management segment. The impairment was reflective of the decrease in the expected future earnings for these businesses. The fair values were determined primarily using an earnings-based approach, which incorporated the segments’ in-force and new business embedded value using internal forecasts of revenue and expense.

Value of Business Acquired

The balance of and changes in VOBA were as follows:


	December 31,
	2013			2012			2011

	(in millions)
Balance, beginning of year	$	1,196		$	1,321		$	1,959
Amortization		(108	)		(224	)		(389	)
Change due to unrealized investment gains (losses)		95			136			(249	)
Reinsurance recapture (1)		-			(37	)		-

Balance, end of year	$	1,183		$	1,196		$	1,321

(1)

The amount relates to a universal life block of business that was recaptured by a third party resulting in the write off of the associated value of business acquired. The net impact of this recapture transaction was an $8 million gain and was recorded in fee income in the Consolidated Statement of Operations.

F-31

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 4 — Goodwill, Value of Business Acquired, and Other Intangible Assets - (continued)

The following table provides estimated future amortization for the periods indicated:


	VOBA Amortization
	(in millions)
2014	$	101
2015		100
2016		95
2017		90
2018		84

F-32

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 4 — Goodwill, Value of Business Acquired, and Other Intangible Assets - (continued)

Other Intangible Assets

Other intangible assets were as follows:


	Gross Carrying Amount		Accumulated Net Amortization			Net Carrying Amount

	(in millions)
December 31, 2013
Not subject to amortization:
Brand name	$	600	$	-		$	600
Investment management contracts		295		-			295
Other		4		-			4
Subject to amortization:
Distribution networks		401		(88	)		313
Other investment management contracts		56		(34	)		22

Total	$	1,356	$	(122	)	$	1,234


	Gross Carrying Amount		Accumulated Net Amortization			Net Carrying Amount

	(in millions)
December 31, 2012
Not subject to amortization:
Brand name	$	600	$	-		$	600
Investment management contracts		295		-			295
Other		5		-			5
Subject to amortization:
Distribution networks		397		(73	)		324
Other investment management contracts		56		(30	)		26

Total	$	1,353	$	(103	)	$	1,250


	Gross Carrying Amount		Accumulated Net Amortization			Net Carrying Amount

	(in millions)
December 31, 2011
Not subject to amortization:
Brand name	$	600	$	-		$	600
Investment management contracts		295		-			295
Other		5		-			5
Subject to amortization:
Distribution networks		397		(60	)		337
Other investment management contracts		64		(31	)		33

Total	$	1,361	$	(91	)	$	1,270

Amortization expense for other intangible assets was $17 million, $16 million, and $15 million for the years ended December 31, 2013, 2012 and 2011, respectively. Amortization expense for other intangible assets is expected to be approximately $18 million in 2014, $17 million in 2015, $16 million in 2016, $16 million in 2017, and $16 million in 2018.

During 2013 and 2011, the Company had no other intangible assets impairments. During 2012, the Company impaired $4 million of other investment management contracts subject to amortization associated with the Corporate and Other segment. The impairment was recorded in other operating costs and expenses in the Consolidated Statement of Operations. The gross carrying value of the impaired other investment management contracts was $8 million and the associated accumulated amortization was $4 million. The impairments were reflective of a decrease in expected future earnings. The fair values were determined primarily using an earnings based approach using internal forecasts of revenue and expense.

F-33

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 5 — Deferred Policy Acquisition Costs and Deferred Sales Inducements

The balance of and changes in deferred policy acquisition costs were as follows:


	December 31,
	2013		2012			2011

	(in millions)
Balance, beginning of year	$	5,767	$	6,111		$	8,657
Capitalization		631		715			755
Amortization		298		(1,084	)		(2,330	)
Change due to unrealized investment gains		814		25			(971	)

Balance, end of year	$	7,510	$	5,767		$	6,111

The balance of and changes in deferred sales inducements were as follows:


	December 31,
	2013			2012			2011

	(in millions)
Balance, beginning of year	$	146		$	187		$	321
Capitalization		24			4			11
Amortization		108			(77	)		(122	)
Change due to unrealized investment gains		(11	)		32			(23	)

Balance, end of year	$	267		$	146		$	187

Note 6 — Related Party Transactions

Service Agreements

The Company has formal service agreements with MFC and MLI, which can be terminated by either party upon two months’ notice. Under the various agreements, the Company will pay operating expenses incurred by MFC and MLI on behalf of the Company. Services provided under the agreements include legal, actuarial, investment, data processing, accounting, and certain other administrative services. Management fees relating to the agreements were $444 million, $482 million, and $457 million for the years ended December 31, 2013, 2012 and 2011, respectively. As of December 31, 2013 and 2012, the Company had amounts payable to MFC and MLI of $11 million and $17 million, respectively.

Management believes the allocation methods used are reasonable and appropriate in the circumstances; however, the Company’s Consolidated Balance Sheets and Consolidated Statements of Operations may not necessarily be indicative of the financial condition that would have existed if the Company operated as an unaffiliated entity.

F-34

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 6 — Related Party Transactions - (continued)

Other

The Company, in the ordinary course of business, invests funds deposited by customers and manages the resulting invested assets for growth and income for customers. From time to time, successful investment strategies of the Company may attract deposits from affiliates of the Company. At December 31, 2013 and 2012, the Company managed approximately $13,108 million and $8,947 million of affiliated assets under management, respectively.

The Company has entered into two currency swap agreements with JHFC which are recorded at fair value. JHFC utilizes the currency swaps to hedge currency exposure on foreign currency financial instruments. The Company has also entered into two currency agreements with external counterparties which offset the currency swap agreements with JHFC. As of December 31, 2013 and 2012, the currency swap agreements with JHFC and the external counterparties had offsetting fair values of $19 million and $84 million, respectively.

The Company also has certain debt and reinsurance agreements with affiliates. These are more fully described in the Reinsurance note and Debt and the Line of Credit note.

JHUSA operates a liquidity pool in which affiliates can invest excess cash. Terms of operation and participation in the liquidity pool are set out in the Second Restated and Amended Liquidity Pool and Loan Facility Agreement effective January 1, 2010. The maximum aggregate amounts that JHUSA can accept into the Liquidity Pool are $5 billion in U.S. dollar deposits and $200 million in Canadian dollar deposits. Under the terms of the agreement, certain participants may receive advances from the Liquidity Pool up to certain predetermined limits. Interest payable on U.S. dollar funds will be reset daily to the one-month U.S. dollar London Interbank Bid Rate (“LIBID”) and interest payable in Canadian dollar funds is based off the one-month Canadian Dollar Offering Rate (“CDOR”) plus a spread.

The following table details the affiliates and their participation in JHUSA’s Liquidity Pool:


	December 31,
	2013		2012

	(in millions)
The Manufacturers Investment Corporation	$	313	$	100
John Hancock Financial Corporation		36		89
Manulife Reinsurance Limited		7		35
Manulife Reinsurance (Bermuda) Ltd.		81		89
Manulife Hungary Holdings KFT.		-		5
John Hancock Life Insurance Company Vermont		16		18
John Hancock Reassurance Company, Ltd.		21		15
John Hancock Insurance Agency, Inc.		17		10

Total	$	491	$	361

The balances above are reported on the Consolidated Balance Sheets as amounts due to affiliates.

MFC fully and unconditionally guarantees payments from the guarantee periods of the accumulation phase for certain of the Company’s market value adjusted annuity contracts.

MFC fully and unconditionally guarantees JHLICO’s SignatureNotes. In December 2009, the entity that formerly issued these notes, JHLICO, ceased to exist and its property and obligations became the property and obligations of the Company.

MFC’s guarantees of the market value adjusted deferred annuity contracts and SignatureNotes are unsecured obligations of MFC and are subordinated in right of payment to the prior payment in full of all other obligations of MFC, except for other guarantees or obligations of MFC, which by their terms are designated as ranking equally in right of payment with or subordinate to MFC’s guarantees of the market value adjusted deferred annuity contracts and SignatureNotes. As a result of the guarantees by MFC, the Company is exempt from filing quarterly and annual reports with the U.S. Securities and

F-35

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 6 — Related Party Transactions - (continued)

Exchange Commission (“SEC”) pursuant to SEC Rule 12h-5, and in lieu thereof, MFC reports condensed consolidating financial information regarding the Company in its quarterly and annual reports.

Effective March 31, 1996, MLI provides a claims paying guarantee to certain U.S. policyholders. The claims guarantee agreement was terminated effective August 13, 2008, but still remains in effect with respect to policies issued by the Company prior to that date.

Note 7 — Reinsurance

Certain premiums and benefits are assumed from or ceded to affiliate and other insurance companies under various reinsurance agreements. The Company entered into these reinsurance agreements to transfer underlying risk on certain of its products, and to improve cash flow and statutory capital. The ceded reinsurance agreements provide the Company with increased capacity to write larger risks and maintain its exposure to loss within its capital resources.

Total reinsurance amounts included in the Company’s accompanying financial statements were as follows:


	Years ended December 31,
	2013			2012			2011

	(in millions)
Premiums earned
Direct	$	3,203		$	3,591		$	3,782
Assumed		752			1,127			1,188
Ceded		(1,658	)		(1,919	)		(1,974	)

Net	$	2,297		$	2,799		$	2,996

Benefits to policyholders ceded	$	2,536		$	3,101		$	2,770

Affiliated Reinsurance

The table and commentary below summarizes the impact of the reinsurance agreements with an affiliate, John Hancock Reassurance Company Limited (“JHRECO”), a wholly-owned subsidiary of MFC:


	Years ended December 31,
	2013			2012		2011

	(in millions)
Premiums ceded	$	603		$	614	$	703
Benefits ceded		786			722		792
Amounts due from and held for affiliates		-			1
Reinsurance recoverable		6,517			6,269
Amounts due to affiliates		140			149
Coinsurance funds withheld		5,888			5,995
Other Payables		(48	)		34

On December 9, 1997, the Company entered into reinsurance agreements with JHRECO to reinsure certain portions of its long-term care insurance and group annuity contracts in order to facilitate its capital management process. These reinsurance contracts are written both on a coinsurance funds withheld and a modified coinsurance funds withheld basis where the related financial assets remain invested at the Company. As of July 1, 2010, amendments were made to the contracts to update the calculation of investment income and the expense allowance to reflect current experience. Effective December 31, 2008, the Company entered into an amended and restated reinsurance agreement to reinsure 20% of the risk related to payout annuity policies issued January 1, 2008 through September 30, 2008 and 65% of the risk related to payout annuity policies issued prior to January 1, 2008. The reinsurance agreement is written on a modified coinsurance basis where the assets supporting the reinsured policies remain invested with the Company. In 2013, there was a partial recapture of the payout annuity policy agreement by the Company. This recapture did not have a material impact on the Company’s results of operations. The total

F-36

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 7 — Reinsurance - (continued)

settlement amount was $59 million and $78 million for the years ended December 31, 2013 and 2012, respectively, and the settlement calculation consisted primarily of ceded investment income, ceded benefit payments and ceded reserves.

The table and commentary below summarizes the impact of the reinsurance agreements with an affiliate, Manulife Reinsurance (Bermuda) Limited (“MRBL”):


	Years ended December 31,
	2013		2012		2011

	(in millions)
Premiums ceded	$	-	$	-	$	-
Benefits ceded		15		40		23
Amounts due from and held for affiliates		349		22
Reinsurance recoverable		1,233		1,083
Amounts due to affiliates		55		112
Coinsurance funds withheld		-		267
Unearned revenue		786		1,046
Invested assets held in trust		2,561		2,484

Effective October 1, 2008, the Company entered into a reinsurance agreement with an affiliate, MRBL, to reinsure 75% of certain group annuity contracts in-force. The reinsurance agreement covers all contracts, excluding the guaranteed benefit rider, issued and in-force as of September 30, 2008. As the underlying contracts being reinsured are considered investment contracts, the agreement does not meet the criteria for reinsurance accounting and was classified as a financial instrument. Effective October 1, 2009, the original agreement was amended to increase the quota share percentage from 75% to 87%. Under the terms of the amended agreement, additional consideration of $250 million was paid by MRBL and is being amortized into income through other operating costs and expenses on a basis consistent with the manner in which the deferred policy acquisition costs on the underlying reinsured contracts are recognized.

Effective October 1, 2008, the Company entered into an amended and restated reinsurance agreement with MRBL to reinsure 90% of a significant block of variable annuity contracts in-force. All substantial risks, including all guaranteed benefits, related to certain specified policies not already reinsured to third parties, are reinsured under the agreement. The base contracts are reinsured on a modified coinsurance basis, while the guaranteed benefit reinsurance coverage is apportioned in accordance with the reinsurance agreement provisions between modified coinsurance and coinsurance funds withheld. The assets supporting the reinsured policies remain invested with the Company. Since the inception of the treaty in 2008, several amendments have been enacted to refine certain aspects of the treaty. The net MRBL reinsurance recoverable includes the impact of ongoing reinsurance cash flows and is accounted for over the life of the underlying reinsured policies using assumptions consistent with those used to account for the underlying policies with changes to ceded reserves and cost of reinsurance recognized as a component of benefits to policyholders on the Consolidated Statements of Operations. The Company paid MRBL $1,174 million and $259 million for the years ended December 31, 2013 and 2012, respectively, and the settlement consisted primarily of ceded investment income related to non-qualifying hedging strategies and changes in the modified coinsurance and coinsurance reserves.

Effective December 31, 2004, the Company entered into a reinsurance agreement with MRBL to reinsure 75% of the non-reinsured risk of the JHLICO closed block. The Company amended this treaty during 2008 to increase the portion of non-reinsured risk reinsured under this treaty to 90% and amended it during 2009 to provide additional surplus relief. The reinsurance agreement is written on a modified coinsurance basis where the related financial assets remain invested with the Company. As the reinsurance agreement does not subject the reinsurer to the reasonable possibility of significant loss, it was classified as financial reinsurance and given deposit-type accounting treatment with only the reinsurance risk fee being reported in other operating costs and expenses in the Consolidated Statements of Operations.

Effective December 31, 2003, the Company entered into a reinsurance agreement with MRBL to reinsure 90% of the non-reinsured risk of the JHUSA closed block. As approximately 90% of the mortality risk is covered under previously existing contracts with third-party reinsurers and the resulting limited mortality risk is inherent in the new contract with MRBL, it was classified as financial reinsurance and given deposit-type accounting treatment. The Company retained title to the invested

F-37

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 7 — Reinsurance - (continued)

assets supporting this block of business. These invested assets are held in trust on behalf of MRBL and are included in amounts due from and held for affiliates on the Consolidated Balance Sheets.

At December 31, 2013, any material recoveries were secured by letters of credit or assets placed in trust by the assuming company.

Included in other operating costs and expenses for the years ended December 31, 2013, 2012 and 2011, respectively is ($2,629) million, ($442) million and $3,221 million of separate account fee income, net investment income and realized investment and other gains (losses), which was ceded to the affiliated reinsurers noted above.

On July 31, 2013, MFC signed an agreement to sell its life insurance business in Taiwan to CTBC Life Insurance Company (CTBC Life). Under the agreement, CTBC Life will assume all of the life insurance business related obligations. In connection with this transaction, on December 31, 2013, the Company paid $111 million in fees to an affiliate, Manufacturers Life Reinsurance Limited for the recapture of certain traditional life business reserves and net liabilities of $284 million, which resulted in a pre-tax gain of $173 million.

Non-Affiliated Reinsurance

The Company entered into a coinsurance agreement with Reinsurance Group of America (“RGA”) to reinsure 90% of its JHUSA fixed deferred annuity business effective April 1, 2012. The transaction was structured such that the Company transferred the actuarial liabilities and related invested assets which included $387 million in cash and approximately $4,916 million in fixed maturity securities and mortgage loans. The Company incurred a pre-tax loss of $56 million in connection with the transaction. Under the terms of the agreement, the Company will maintain responsibility for servicing of the policies and managing some of the assets. In addition, the agreement does not meet the criteria for reinsurance accounting and was given deposit-type accounting treatment that resulted in the recognition of an asset for amounts on deposit with reinsurers on the Consolidated Balance Sheets.

The Company also entered into a coinsurance agreement with Commonwealth Annuity to reinsure 90% of its JHNY fixed deferred annuity business effective July 1, 2012. The transaction was structured such that the Company transferred the actuarial liabilities and related invested assets which included $231 million in cash and $1,481 million in fixed maturity securities. The Company incurred a pre-tax gain of $46 million in connection with the transaction. Under the terms of the agreement, the Company will maintain responsibility for servicing of the policies. In addition, the agreement does not meet the criteria for reinsurance accounting and was given deposit-type accounting treatment that resulted in the recognition of an asset for amounts on deposit with reinsurers on the Consolidated Balance Sheets.

On July 1, 2011, JHUSA entered into a sale of its Life Retrocession business by way of a coinsurance treaty with Pacific Life Insurance Company that resulted in the recognition of approximately $426 million pre-tax gain which was deferred and included in reinsurance recoverable. During 2013, JHUSA novated approximately 95% of the underlying reinsurance agreements to Pacific Life Insurance Company. Based on this novation, the Company recorded approximately $321 million in the Consolidated Statement of Operations to recognize the deferred gain. In 2014, the Company completed the novation of the remaining 5% of the agreements and will record approximately $18 million to the Consolidated Statement of Operations.

Note 8 — Derivatives and Hedging Instruments

Derivatives are financial contracts, the value of which is derived from underlying interest rates, foreign exchange rates, credit, equity price movements, indices or other market risks arising from on-balance sheet financial instruments and selected anticipated transactions. The Company uses derivatives including swaps, forward and futures agreements, floors, and options to manage current and anticipated exposures to changes in interest rates, foreign exchange rates, credit and equity market prices.

Over-the-counter (“OTC”) swaps are contractual agreements between the Company and a counterparty to exchange a series of cash flows based upon rates applied to a notional amount. For interest rate swaps, counterparties generally exchange fixed or floating interest rate payments based on a notional value in a single currency. Cross currency swaps involve the exchange of principal amounts between parties as well as the exchange of interest payments in one currency for the receipt of interest payments in another currency. Total return swaps are contracts that involve the exchange of payments based on changes in

F-38

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 8 — Derivatives and Hedging Instruments - (continued)

the values of a reference asset, including any returns such as interest earned on these assets, in return for amounts based on reference rates specified in the contract.

Cleared interest rate swaps are contractual agreements between the Company and a counterparty whereby the transaction must be cleared through a central clearing house, and subject to mandatory margin and reporting requirements.

Forward and futures agreements are contractual obligations to buy or sell a financial instrument or foreign currency on a predetermined future date at a specified price. Forward contracts are OTC contracts negotiated between counterparties, whereas futures agreements are contracts with standard amounts and settlement dates that are traded on regulated exchanges.

Interest rate floors are contracts with counterparties which require payment of a premium for the right to receive payments when the market interest rate on specified future dates falls below the agreed upon strike price. Interest rate treasury lock contracts are customized agreements securing current interest rates on Treasury securities for payment on a future date.

Options are contractual agreements whereby the holder has the right, but not the obligation, to buy (call option) or sell (put option) a security, exchange rate, interest rate, or other financial instrument at a predetermined price/rate within a specified time.

Types of Derivatives and Derivative Strategies

Interest Rate Contracts. The Company uses interest rate futures contracts, OTC interest rate swap agreements, cleared interest rate swap agreements, pre-payable interest rate swap agreements, and interest rate treasury locks as part of its overall strategies of managing the duration of assets and liabilities or the average life of certain asset portfolios to specified targets. Interest rate swap agreements are contracts with counterparties to exchange interest rate payments of a differing character (i.e., fixed-rate payments exchanged for variable-rate payments) based on an underlying principal balance (notional principal). The net differential to be paid or received on interest rate swap agreements is accrued and recognized as a component of net investment income.

The Company uses interest rate swap agreements in effective hedge accounting relationships. These derivatives hedge the variable cash flows associated with future fixed income asset acquisitions, which will support the Company’s long-term care and life insurance businesses. These agreements will reduce the impact of future interest rate changes on the cost of acquiring adequate assets to support the investment income assumptions used in pricing these products. During future periods when the acquired assets are held by the Company, the accumulated other comprehensive income will be amortized into investment income as a yield adjustment on the assets.

The Company also uses interest rate swap agreements in effective hedge accounting relationships designed to hedge the variable cash flows associated with payments that it will receive on certain floating rate fixed income securities. The accumulated other comprehensive income will be amortized into investment income as a yield adjustment when the payments are made.

In addition, the Company uses interest rate swap agreements in effective hedge accounting relationships to hedge the risk of changes in fair value of fixed rate assets and liabilities arising from changes in benchmark interest rates. The Company reclassifies the effective portion of the change in fair value of the hedged item due to interest rate risk to earnings and amortizes the basis adjustment over the life of the hedged item.

The Company also enters into basis swaps to better match the cash flows from assets and related liabilities. Basis swaps are included in interest rate swaps for disclosure purposes. The Company utilizes basis swaps in non-qualifying hedge accounting relationships.

Inflation swaps are used to reduce inflation risk generated from inflation-indexed liabilities. Inflation swaps are classified within interest rate swaps for disclosure purposes. The Company utilizes inflation swaps in qualifying and non-qualifying hedge accounting relationships.

The Company uses exchange-traded interest rate futures primarily to hedge mismatches between the duration of assets in a portfolio and the duration of liabilities supported by those assets, to hedge against changes in value of securities the Company owns or anticipates acquiring, and to hedge against changes in interest rates on anticipated liability issuances by replicating

F-39

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 8 — Derivatives and Hedging Instruments - (continued)

U.S. Treasury or swap curve performance. The Company utilizes exchange-traded interest rate futures in non-qualifying hedge accounting relationships.

The Company also purchases interest rate floors primarily to protect against interest rate exposure arising from mismatches between assets and liabilities (duration mismatches). The Company utilizes interest rate floors in non-qualifying hedge accounting relationships.

Foreign Currency Contracts. Foreign currency derivatives, including foreign currency swaps, foreign currency forwards, and foreign currency futures are used by the Company to reduce the risk from fluctuations in foreign currency exchange rates associated with its assets and liabilities denominated in foreign currencies.

Cross currency rate swap agreements are used to manage the Company’s exposure to foreign exchange rate fluctuations, interest rate fluctuations, or both, on foreign currency financial instruments. Cross currency rate swap agreements are contracts to exchange the currencies of two different countries at the same rate of exchange at specified future dates. The net differential to be paid or received on cross currency rate swap agreements is accrued and recognized as a component of net investment income.

Under foreign currency forwards, the Company agrees with other parties to deliver a specified amount of an identified currency at a specified future date. Typically, the price is agreed upon at the time of the contract and payment for such a contract is made at the specified future date. The maturities of these forwards correspond with the future periods in which the foreign currency transactions are expected to occur. The Company utilizes currency forwards in qualifying and non-qualifying hedge accounting relationships.

Foreign currency futures are contractual obligations to buy or sell a foreign currency on a predetermined future date at a specified price. These contracts are standardized contracts traded on an exchange. The Company utilizes foreign exchange futures in other non-qualifying hedge accounting relationships.

Equity Market Contracts. Total return swaps are contracts that involve the exchange of payments based on changes in the value of a reference asset, including any returns such as interest earned on these assets, in exchange for amounts based on reference rates specified in the contract. The Company utilizes total return swaps in qualifying and non-qualifying hedge accounting relationships.

Equity index options are contractual agreements whereby the holder has the right, but not the obligation, to buy (call option) or sell (put option) an underlying equity market index on or before a specified future date at a specified price. The Company utilizes equity index options that are exchange-traded in non-qualifying hedge accounting relationships.

Equity index futures contracts are contractual obligations to buy or sell a specified amount of an underlying equity index at an agreed contract price on a specified date. Equity index futures are contracts with standard amounts and settlement dates that are traded on regulated exchanges. The Company utilizes equity index futures in non-qualifying hedge accounting relationships.

Credit Contracts. The Company manages credit risk through the issuance of credit default swaps (“CDS”). A CDS is a derivative instrument representing an agreement between two parties to exchange the credit risk of a single specified entity or an index based on the credit risk of a group of entities (all commonly referred to as the “reference entity” or a portfolio of “reference entities”), in return for a periodic premium. CDS contracts typically have a five-year term.

The table below provides a summary of the gross notional amount and fair value of derivatives contracts for all derivatives in qualifying and non-qualifying hedge accounting relationships:

F-40

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 8 — Derivatives and Hedging Instruments - (continued)


		December 31, 2013						December 31, 2012
		Notional Amount		Fair Value Assets		Fair Value Liabilities		Notional Amount		Fair Value Assets		Fair Value Liabilities

		(in millions)
Qualifying Hedge Accounting Relationships
Fair value hedges	Interest rate swaps	$	8,026	$	461	$	526	$	9,336	$	739	$	1,048
	Foreign currency swaps		183		-		93		232		-		157

Cash flow hedges	Interest rate swaps		15,053		931		741		13,232		2,669		73
	Foreign currency swaps		502		3		70		1,763		147		255
	Foreign currency forwards		124		-		1		182		9		-
	Equity total return swaps		28		15		-		29		3		2

Total Derivatives in Hedge Accounting Relationships		$	23,916	$	1,410	$	1,431	$	24,774	$	3,567	$	1,535


Non-Qualifying Hedge Accounting Relationships
	Interest rate swaps	$	116,391	$	5,898	$	3,846	$	94,343	$	8,094	$	3,378
	Interest rate treasury locks		5,425		-		385		-		-		-
	Interest rate options		2,683		21		-		1,323		43		-
	Interest rate futures		2,939		-		-		3,987		-		-
	Foreign currency swaps		2,516		114		133		1,463		121		150
	Foreign currency forwards		11		-		-		40		1		-
	Foreign currency futures		968		-		-		1,860		-		-
	Equity total return swaps		31		21		-		63		2		4
	Equity options		3,228		248		-		45		5		1
	Equity index futures		4,771		-		-		9,107		-		-
	Credit default swaps		315		8		-		265		6		-
	Embedded derivatives – fixed maturity securities		-		-		-		-		-		-
	Embedded derivatives – reinsurance contracts		-		-		2,329		-		14		3,371
	Embedded derivatives – participating pension contracts (1)		-		-		115		-		-		129
	Embedded derivatives – benefit guarantees (1)		-		1,230		257		-		2,701		1,217

Total Derivatives in Non-Qualifying Hedge Accounting Relationships			139,278		7,540		7,065		112,496		10,987		8,250


Total Derivatives (2)		$	163,194	$	8,950	$	8,496	$	137,270	$	14,554	$	9,785

(1)	Embedded derivatives related to participating pension contracts are reported as part of future policy benefits and embedded derivatives related to benefit guarantees are reported as part of reinsurance recoverable or future policy benefits on the Consolidated Balance Sheets.

(2)

The fair values of all derivatives in an asset position are reported within derivative assets on the Consolidated Balance Sheets, and derivatives in a liability position are reported within derivative liabilities on the Consolidated Balance Sheets, excluding embedded derivatives related to participating pension contracts and benefit guarantees.

F-41

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 8 — Derivatives and Hedging Instruments - (continued)

The following table provides a summary of the derivative assets and liabilities including embedded derivatives as of December 31, 2013 and 2012, respectively.


	December 31, 2013						December 31, 2012
	Fair Value Assets			Fair Value Liabilities			Fair Value Assets			Fair Value Liabilities

	(in millions)
Derivatives on balance sheets	$	7,720		$	8,124		$	11,853		$	8,439
Non-reinsurance embedded derivatives		1,230			372			2,701			1,346

Total derivatives		8,950			8,496			14,554			9,785
Netting adjustments (a)		(1,098	)		(3,870	)		(3,535	)		(3,367	)
Assets and cash collateral used to offset asset/liabilities		(4,469	)		(995	)		(3,382	)		(1,408	)
Affiliate reinsurance related to embedded derivatives (b)		(363	)		(2,242	)		(1,317	)		(3,223	)

Total derivatives after netting adjustments, collateral and net of reinsurance related embedded derivatives	$	3,020		$	1,389		$	6,320		$	1,787

(a)	Represents the netting of derivative exposures covered by a master netting agreement. For these purposes, a master netting agreement is an arrangement between the Company and counterparty where more than one derivative contract exists between the two entities.

(b)

Represents activity related to reinsurance contracts between the Company and affiliated reinsurers. These entities are under common control with the Company by the Company’s ultimate parent, MFC, and they do not create an inter-connection to any third party financial institution unaffiliated with the Company.

Hedging Relationships

The Company generally does not enter into derivative contracts for speculative purposes. In certain circumstances, these hedges also meet the requirements for hedge accounting. Hedging relationships eligible for hedge accounting are designated as either fair value hedges or cash flow hedges, as described below.

Fair Value Hedges. The Company uses interest rate swaps to manage its exposure to changes in fair value of fixed-rate financial instruments caused by changes in interest rates. The Company also uses cross currency swaps and currency forwards to manage its exposure to foreign exchange rate fluctuations and interest rate fluctuations.

For the years ended December 31, 2013, 2012 and 2011, the Company did not recognize any gains or losses related to the portion of the hedging instruments that were excluded from the assessment of hedge effectiveness. At December 31, 2013, the Company had no hedges of firm commitments.

F-42

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 8 — Derivatives and Hedging Instruments - (continued)

The following tables show the investment gains (losses) recognized:

Year ended December 31, 2013


Derivatives in Qualifying Fair Value Hedging Relationships	Hedged Items in Qualifying Fair Value Hedging Relationships	Gains (Losses) Recognized on Derivatives			Gains (Losses) Recognized for Hedged Items			Ineffectiveness Recognized
		(in millions)
Interest rate swaps	Fixed-rate assets	$	537		$	(555	)	$	(18	)
	Fixed-rate liabilities		(340	)		318			(22	)
Foreign currency swaps	Fixed-rate assets		34			(31	)		3
	Fixed-rate liabilities		-			-			-

Total		$	231		$	(268	)	$	(37	)

Year ended December 31, 2012


Derivatives in Qualifying Fair Value Hedging Relationships	Hedged Items in Qualifying Fair Value Hedging Relationships	Gains (Losses) Recognized on Derivatives			Gains (Losses) Recognized for Hedged Items			Ineffectiveness Recognized
		(in millions)
Interest rate swaps	Fixed-rate assets	$	118		$	(93	)	$	25
	Fixed-rate liabilities		(4	)		1			(3	)
Foreign currency swaps	Fixed-rate assets		(1	)		(22	)		(23	)
	Fixed-rate liabilities		-			-			-

Total		$	113		$	(114	)	$	(1	)

Year ended December 31, 2011


Derivatives in Qualifying Fair Value Hedging Relationships	Hedged Items in Qualifying Fair Value Hedging Relationships	Gains (Losses) Recognized on Derivatives			Gains (Losses) Recognized for Hedged Items			Ineffectiveness Recognized
		(in millions)
Interest rate swaps	Fixed-rate assets	$	(546	)	$	679		$	133
	Fixed-rate liabilities		339			(370	)		(31	)
Foreign currency swaps	Fixed-rate assets		(21	)		10			(11	)
	Fixed-rate liabilities		-			-			-

Total		$	(228	)	$	319		$	91

Cash Flow Hedges. The Company uses interest rate swaps and interest rate treasury locks to hedge the variability in cash flows from variable rate financial instruments and forecasted transactions. The Company also uses cross currency swaps and

F-43

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 8 — Derivatives and Hedging Instruments - (continued)

forward agreements to hedge currency exposure on foreign currency financial instruments and foreign currency denominated expenses, respectively. Total return swaps are used to hedge the variability in cash flows associated with certain stock-based compensation awards. Inflation swaps are used to reduce inflation risk generated from inflation-indexed liabilities.

For the year ended December 31, 2011, certain cash flow hedges were discontinued because it was no longer probable that the original forecasted transaction would occur by the end of the originally specified time period documented at inception of the hedging relationship. In 2012 and 2011, the Company completed a comprehensive review of its projections of future cash flows related to hedging activity for its life insurance business and its long-term care business, respectively. As a result of the continued volatility in interest rates and current trends within the long-term care and life insurance businesses, the Company de-designated $1.6 billion (notional principal) of forward-starting interest rate swaps for the life insurance business in 2012, and $3.9 billion (notional principal) of forward-starting interest rate swaps for the long-term care business in 2011.

The accumulated other comprehensive income related to de-designated swaps continues to be deferred. During 2012 and 2011, the deferred OCI related to the de-designated swaps amounted to $312 million, net of tax and $432 million, net of tax, respectively. If the forecasted transactions do occur, these amounts will be reclassified to earnings in the periods during which variability in the cash flows hedged or the hedged forecasted transactions are recognized in earnings. If the forecasted transactions become probable not to occur, the amounts will be reclassified to earnings in that period.

During 2012, the Company completed a review of the investment strategy for JHNY universal life (“UL”) business. As part of this review, it was determined that it was appropriate for the UL business to begin investing in non-fixed income assets. Under the revised investment strategy, UL cash flows will be invested in a combination of fixed income and non-fixed income assets, potentially resulting in lower cash flows available for reinvestments in fixed income assets than originally anticipated for the UL cash flow hedging program. The Company voluntarily de-designated $150 million (notional principal) of forward-starting interest rate swaps in 2012; the accumulated other comprehensive income related to these de-designated swaps continues to be deferred. During 2012, the deferred OCI related to the de-designated swaps amounted to $30 million, net of tax. If the forecasted transactions do occur as expected, these amounts will be allocated to the acquired fixed income assets in the periods during which the hedged forecasted transactions occur and amortized to earnings over the life of the underlying fixed income assets acquired. If the forecasted transactions become probable not to occur, the amounts will be reclassified to earnings in that period.

For the year ended December 31, 2013, all of the Company’s hedged forecast transactions qualified as cash flow hedges and no cash flow hedges were discontinued because it was probable that the original forecasted transactions would occur by the end of the originally specified time period documented at inception of the hedging relationship.

F-44

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 8 — Derivatives and Hedging Instruments - (continued)

The following tables present the effects of derivatives in qualifying cash flow hedging relationships on the Consolidated Statements of Operations, the Consolidated Statements of Comprehensive Income (Loss) and the Consolidated Statements of Changes in Shareholder’s Equity.

Year ended December 31, 2013


Derivatives in Qualifying Cash Flow Hedging Relationships	Hedged Items in Qualifying Cash Flow Hedging Relationships	Gains (Losses) Deferred in AOCI on Derivatives (Net of Tax)			Gains Reclassified from AOCI into Net Realized Investment and Other Gains (Losses) (Net of Tax)			Ineffectiveness Recognized in Net Realized Investment and Other Gains (Losses)
		(in millions)
Interest rate swaps	Forecasted fixed-rate assets	$	(898	)	$	325		$	-
	Floating rate assets		(11	)		-			-
	Inflation indexed liabilities		(58	)		-			-
	Forecasted fixed-rate liabilities		-			-			-
Foreign currency swaps	Fixed-rate assets		20			(1	)		-
	Floating rate assets		1			-			-
	Floating rate liabilities		-			-			-
Foreign currency forwards	Forecasted expenses		(7	)		-			-
	Foreign currency assets		-			-			-
Equity total return swaps	Share-based payments		9			-			-

	Total	$	(944	)	$	324		$	-


Year ended December 31, 2012
Derivatives in Qualifying Cash Flow Hedging Relationships	Hedged Items in Qualifying Cash Flow Hedging Relationships	Gains (Losses) Deferred in AOCI on Derivatives (Net of Tax)			Gains Reclassified from AOCI into Net Realized Investment and Other Gains (Losses) (Net of Tax)			Ineffectiveness Recognized in Net Realized Investment and Other Gains (Losses)
		(in millions)
Interest rate swaps	Forecasted fixed-rate assets	$	526		$	212		$	9
	Floating rate assets		(5	)		-			-
	Inflation indexed liabilities		134			-			-
	Forecasted fixed-rate liabilities		-			-			-
Foreign currency swaps	Fixed-rate assets		(16	)		(4	)		-
	Floating rate assets		(1	)		-			-
	Floating rate liabilities		-			-			-
Foreign currency forwards	Forecasted expenses		3			1			-
	Foreign currency assets		-			-			-
Equity total return swaps	Share-based payments		7			-			-

	Total	$	648		$	209		$	9

F-45

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 8 — Derivatives and Hedging Instruments - (continued)

Year ended December 31, 2011


Derivatives in Qualifying Cash Flow Hedging Relationships	Hedged Items in Qualifying Cash Flow Hedging Relationships	Gains (Losses) Deferred in AOCI on Derivatives (Net of Tax)			Gains Reclassified from AOCI into Net Realized Investment and Other Gains (Losses) (Net of Tax)		Ineffectiveness Recognized in Net Realized Investment and Other Gains (Losses)
		(in millions)
Interest rate swaps	Forecasted fixed-rate assets	$	1,916		$	59	$	14
	Floating rate assets		5			-		-
	Inflation indexed liabilities		(136	)		-		-
	Forecasted fixed-rate liabilities		-			-		-
Foreign currency swaps	Fixed-rate assets		16			-		-
	Floating rate assets		(1	)		-		-
	Floating rate liabilities		-			-		-
Foreign currency forwards	Forecasted expenses		(16	)		-		-
	Foreign currency assets		-			-		-
Equity total return swaps	Share-based payments		(7	)		-		-

	Total	$	1,777		$	59	$	14

The Company anticipates that pre-tax net gains of approximately $90 million will be reclassified from AOCI to earnings within the next 12 months. The maximum time frame for which variable cash flows are hedged is 33 years.

For a rollforward of the net accumulated gains (losses) on cash flow hedges see the Shareholder’s Equity Note.

Derivatives Not Designated in Qualifying Hedge Accounting Relationships. The Company enters into interest rate swap agreements, cancelable interest rate swap agreements, and interest rate futures contracts to manage interest rate risk, total return swap agreements to manage equity risk, and CDS to manage credit risk. The Company also uses interest rate treasury locks and interest rate floor agreements to manage exposure to interest rates without designating the derivatives as hedging instruments. Interest rate floor agreements hedge the interest rate risk associated with minimum interest rate guarantees in certain life insurance and annuity businesses.

The Company offers certain variable annuity products with a guaranteed minimum withdrawal benefit (“GMWB”) and guaranteed minimum death benefit (“GMDB”). These guarantees are effectively an embedded option on the basket of mutual funds offered to contract holders. Beginning in November 2007, for certain contracts, the Company implemented a hedging program to reduce its exposure to the GMWB and GMDB guarantees. This dynamic hedging program uses interest rate swap agreements, equity index futures (including but not limited to the Dow Jones Industrial, Standard & Poor’s 500, Russell 2000, and Dow Jones Euro Stoxx 50 indices), equity index options, and U.S. Treasury futures to match the sensitivities of the GMWB and GMDB liabilities to the market risk factors.

The Company also has a macro equity risk hedging program using equity and currency futures, as well as equity index options. This program is designed to reduce the Company’s overall exposure to public equity markets arising from several sources including, but not limited to, variable annuity guarantees not dynamically hedged, separate account fees not associated with guarantees, and Company equity holdings.

The Company uses foreign currency swaps and foreign currency forwards to reduce the risk from fluctuations in foreign currency exchange rates associated with its assets and liabilities denominated in foreign currencies.

F-46

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 8 — Derivatives and Hedging Instruments - (continued)

For the years ended December 31, 2013, 2012 and 2011, gains and losses related to derivatives in a non-qualifying hedge accounting relationship were recognized by the Company and the components were recorded in net realized investment and other gains (losses) as follows:


Years ended December 31,	2013			2012			2011
	(in millions)
Non-Qualifying Hedge Accounting Relationships
Interest rate swaps	$	(3,036	)	$	(336	)	$	3,230
Interest rate treasury locks		(385	)		-			-
Interest rate options		(46	)		(8	)		1
Interest rate futures		82			(53	)		(237	)
Foreign currency swaps		5			(32	)		17
Foreign currency forwards		4			(5	)		(10	)
Foreign currency futures		74			-			16
Equity total return swaps		(16	)		7			(1	)
Equity options		(36	)		-			-
Equity index futures		(1,982	)		(1,555	)		(318	)
Credit default swaps		-			1			-
Embedded derivatives		212			(1,730	)		153

Total Investment Gains (Losses) from Derivatives in Non-Qualifying Hedge Accounting Relationships	$	(5,124	)	$	(3,711	)	$	2,851

Credit Default Swaps. The Company replicates exposure to specific issuers by selling credit protection via CDS in order to complement its cash bond investing. The Company does not employ leverage in its CDS program and therefore, does not write CDS protection in excess of its government bond holdings.

The following table provides details of the CDS protection sold by type of contract and external agency rating for the underlying reference security, as of December 31, 2013 and 2012, respectively.


	December 31, 2013						December 31, 2012

	Notional amount²		Fair Value		Weighted average maturity (in years)³		Notional amount²		Fair Value		Weighted average maturity (in years)³

	(in millions)
Single name CDS¹
Corporate Debt
AAA	$	35	$	1		3	$	25	$	1		4
AA		95		3		3		85		2		4
A		185		4		3		145		3		4
BBB		-		-				10		-		5

Total CDS protection sold	$	315	$	8			$	265	$	6

¹	The rating agency designations are based on S&P where available followed by Moody’s, Dominion Bond Rating Services (DBRS), and Fitch. If no rating is available from a rating agency, then an internally developed rating is used.

²	Notional amount represents the maximum future payments the Company would have to pay its counterparties assuming a default of the underlying credit and zero recovery on the underlying issuer obligation.

F-47

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 8 — Derivatives and Hedging Instruments - (continued)

³	The weighted average maturity of the CDS is weighted based on notional amounts.

The Company held no purchased credit protection at December 31, 2013 and 2012. The average credit rating of the counterparties guaranteeing the underlying credit is A+ and the weighted average maturity is 3 years.

Embedded Derivatives. The Company has certain embedded derivatives that are required to be separated from their host contracts and accounted for as derivatives. These host contracts include fixed maturity securities, reinsurance contracts, participating pension contracts, and certain benefit guarantees.

For more details on the Company’s embedded derivatives, see the Fair Value Measurements Note.

Credit Risk. The Company’s exposure to loss on derivatives is limited to the amount of any net gains that may have accrued with a particular counterparty. Gross derivative counterparty exposure is measured as the total fair value (including accrued interest) of all outstanding contracts in a gain position excluding any offsetting contracts in negative positions and the impact of collateral on hand. The Company may be exposed to credit-related losses in the event of nonperformance by counterparties to the derivative financial instruments. The current credit exposure of the Company’s derivative contracts is limited to the fair value in excess of the collateral held at the reporting date.

The Company manages its credit risk by entering into transactions with creditworthy counterparties, obtaining collateral where appropriate, and entering into master netting agreements that provide for a netting of payments and receipts with a single counterparty. The Company enters into credit support annexes with its OTC derivative dealers in order to manage its credit exposure to those counterparties. As part of the terms and conditions of those agreements, the pledging and accepting of collateral in connection with the Company’s derivative usage is required. As of December 31, 2013 and 2012, the Company accepted collateral consisting of cash of $702 million and $2,142 million and various securities with a fair value of $2,425 million and $5,430 million, respectively, which is held in separate custodial accounts. In addition, the Company has pledged collateral to support both the OTC derivative instruments, exchange traded futures and cleared interest rate swap transactions. For further details regarding pledged collateral see the Investments Note.

In June 2013, under US regulations, certain interest rate swap agreements and credit default swap agreements were required to be cleared through central clearing houses. These transactions are contractual agreements that require initial and variation margin collateral postings and are settled on a daily basis through a clearing house. As such, they reduce the credit risk exposure in the event of default by a counterparty.

Note 9 — Certain Separate Accounts

The deposits related to the variable life insurance contracts are invested in separate accounts, and the Company guarantees a specified death benefit on certain policies if specified premiums on these policies are paid by the policyholder, regardless of separate account performance.

The following table reflects variable life insurance contracts with guarantees held by the Company:


	December 31,
	2013		2012

	(in millions, except for age)
Life insurance contracts with guaranteed benefits
In the event of death
Account value	$	9,781	$	8,346
Net amount at risk related to deposits		174		182
Average attained age of contract holders		53		52

Many of the variable annuity contracts issued by the Company offer various guaranteed minimum death, income, and/or withdrawal benefits. GMDB features guarantee the contract holder either (a) a return of no less than total deposits made to the contract less any partial withdrawals; (b) total deposits made to the contract less any partial withdrawals plus a minimum return; (c) the highest contract value on a specified anniversary date minus any withdrawals following the contract anniversary, or (d) a combination of (b) and (c) above.

F-48

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 9 — Certain Separate Accounts - (continued)

Contracts with Guaranteed Minimum Income Benefit (“GMIB”) riders provide a guaranteed lifetime annuity, which may be elected by the contract holder after a stipulated waiting period (7 to 15 years), and which may be larger than what the contract account balance would purchase at then-current annuity purchase rates.

Multiple variations of an optional GMWB rider have also been offered by the Company. The GMWB rider provides contract holders a guaranteed annual withdrawal amount over a specified time period or in some cases for as long as they live. In general, guaranteed annual withdrawal amounts are based on deposits and may be reduced if withdrawals exceed allowed amounts. Guaranteed amounts may also be increased as a result of “step-up” provisions, which increase the benefit base to higher account values at specified intervals. Guaranteed amounts may also be increased if withdrawals are deferred over a specified period. In addition, certain versions of the GMWB rider extend lifetime guarantees to spouses.

Unaffiliated and affiliated reinsurance has been utilized to mitigate risk related to some of the guarantee benefit riders. Hedging has also been utilized to mitigate risk related to some of the GMWB riders.

For GMDB, the net amount at risk is defined as the current guaranteed minimum death benefit in excess of the current account balance. For GMIB, the net amount at risk is defined as the excess of the current annuitization income base over the current account value. For GMWB, the net amount at risk is defined as the current guaranteed withdrawal amount minus the current account value. For all the guarantees, the net amount at risk is floored at zero at the single contract level.

F-49

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 9 — Certain Separate Accounts - (continued)

The Company had the following variable annuity contracts with guarantees. Amounts at risk are shown net of reinsurance. Note that the Company’s variable annuity contracts with guarantees may offer more than one type of guarantee in each contract; therefore, the amounts listed are not mutually exclusive.


	December 31,
	2013			2012

	(in millions, except for ages and percentages)
Guaranteed Minimum Death Benefit
Return of net deposits
In the event of death
Account value	$	25,475		$	24,553
Net amount at risk — net of reinsurance		33			64
Average attained age of contract holders		66			66

Return of net deposits plus a minimum return
In the event of death
Account value	$	557		$	542
Net amount at risk — net of reinsurance		265			305
Average attained age of contract holders		71			70
Guaranteed minimum return rate		5	%		5	%

Highest specified anniversary account value minus withdrawals post anniversary
In the event of death
Account value	$	25,711		$	25,350
Net amount at risk — net of reinsurance		160			265
Average attained age of contract holders		67			66

Guaranteed Minimum Income Benefit
Account value	$	4,678		$	4,816
Net amount at risk — net of reinsurance		30			40
Average attained age of contract holders		65			65

Guaranteed Minimum Withdrawal Benefit
Account value	$	40,205		$	38,613
Net amount at risk		407			774
Average attained age of contract holders		66			65

F-50

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 9 — Certain Separate Accounts - (continued)

Account balances of variable contracts with guarantees were invested in various separate accounts with the following characteristics:


	December 31,
	2013		2012

	(in millions)
Type of Fund
Equity	$	31,223	$	28,537
Balanced		22,921		21,539
Bond		6,755		7,557
Money Market		906		1,407

Total	$	61,805	$	59,040

The following table summarizes the liabilities for guarantees on variable life and annuity contracts reflected in future policy benefits in the general account:


	Guaranteed Minimum Death Benefit (GMDB)			Guaranteed Minimum Income Benefit (GMIB)			Guaranteed Minimum Withdrawal Benefit (GMWB)			Total

	(in millions)
Balance at January 1, 2013	$	229		$	179		$	1,310		$	1,718
Incurred guarantee benefits		(32	)		(65	)		-			(97	)
Other reserve changes		1			(38	)		(1,002	)		(1,039	)

Balance at December 31, 2013		198			76			308			582
Reinsurance recoverable		(47	)		(1,074	)		(259	)		(1,380	)

Net balance at December 31, 2013	$	151		$	(998	)	$	49		$	(798	)


Balance at January 1, 2012	$	247		$	211		$	1,165		$	1,623
Incurred guarantee benefits		(51	)		(91	)		-			(142	)
Other reserve changes		33			59			145			237

Balance at December 31, 2012		229			179			1,310			1,718
Reinsurance recoverable		(68	)		(1,801	)		(1,071	)		(2,940	)

Net balance at December 31, 2012	$	161		$	(1,622	)	$	239		$	(1,222	)

The GMDB gross and ceded reserves, the GMIB gross reserves, and the life contingent portion of the GMWB reserves were determined in accordance with ASC 944, “Financial Services – Insurance”, and the GMIB reinsurance recoverable and non-life contingent GMWB gross reserves were determined in accordance with ASC 815 “Derivatives and Hedging.”

The Company regularly evaluates estimates used and adjusts the additional liability balance, with a related charge or credit to benefits to policyholders, if actual experience or other evidence suggests that earlier assumptions should be revised.

F-51

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 9 — Certain Separate Accounts - (continued)

The following assumptions and methodology were used to determine the amounts above at December 31, 2013 and 2012:

•

Data used included 1,000 stochastically generated investment performance scenarios. For the GMIB reinsurance recoverable and non-life contingent GMWB gross reserve calculations, risk neutral scenarios were used.

•

Mean return and volatility assumptions were determined by asset class. Market consistent observed volatilities were used where available for ASC 815 calculations.

•

Annuity mortality is based on a combination of the Ruark Variable Annuity table and the Company’s actual experience between 2006 and 2010. The Ruark table is based on an industry study of variable annuity deaths in 2005 and 2006.

•

Annuity base lapse rates vary by contract type, duration, type of living benefit or death benefit rider, and whether guaranteed withdrawals are being taken. The lapse rates range from 0.5% to 40%.

•

The discount rates used in the GMDB gross and ceded reserves, the GMIB gross reserves, and the life contingent portion of the GMWB reserve calculations range from 6.4% to 7%. The discount rates used in the GMIB reinsurance recoverable and non-life contingent GMWB gross reserve calculations were based on the term structure of swap curves with a credit spread based on the credit standing of MFC (for GMWB) and the reinsurers (for GMIB).

Note 10 — Closed Blocks

The Company operates two separate closed blocks for the benefit of certain classes of individual or joint traditional participating whole life insurance policies. The JHUSA closed block was established upon the demutualization of MLI for those designated participating policies that were in-force on September 23, 1999. The JHLICO closed block was established upon the demutualization of JHLICO for those designated participating policies that were in-force on February 1, 2000.

Assets were allocated to the closed blocks in an amount that, together with anticipated revenues from policies included in the closed blocks, was reasonably expected to be sufficient to support such business, including provision for payment of benefits, direct asset acquisition and disposition costs, taxes, and for continuation of dividend scales, assuming experience underlying such dividend scales continues. Assets allocated to the closed blocks inure solely to the benefit of policyholders included in the closed blocks and will not revert to the benefit of the shareholders of the Company. No reallocation, transfer, borrowing, or lending of assets can be made between the closed blocks and other portions of the Company’s general account, any of its separate accounts, or any affiliate of the Company without prior approval from the State of Michigan Department of Insurance and Financial Services.

If, over time, the aggregate performance of the assets and policies of a closed block is better than was assumed in funding that closed block, dividends to policyholders for that closed block will be increased. If, over time, the aggregate performance of the assets and policies of a closed block is less favorable than was assumed in funding that closed block, dividends to policyholders for that closed block will be reduced.

The assets and liabilities allocated to the closed blocks are recorded in the Company’s Consolidated Balance Sheets and Consolidated Statements of Operations on the same basis as other similar assets and liabilities. The carrying amount of the closed blocks’ liabilities in excess of the carrying amount of the closed blocks’ assets at the date the closed blocks were established (adjusted to eliminate the impact of related amounts in accumulated other comprehensive income) represents the maximum future earnings from the assets and liabilities designated to the closed blocks that can be recognized in income over the period the policies in the closed blocks remain in force. The Company has developed an actuarial calculation of the timing of such maximum future shareholder earnings, and this is the basis of the policyholder dividend obligation.

If actual cumulative earnings of a closed block are greater than expected cumulative earnings of that block, only expected earnings will be recognized in that closed block’s income. Actual cumulative earnings in excess of expected cumulative earnings of a closed block represent undistributed accumulated earnings attributable to policyholders, which are recorded as a policyholder dividend obligation because the excess will be paid to the policyholders of that closed block as an additional policyholder dividend unless otherwise offset by future closed block performance that is less favorable than originally expected. If actual cumulative performance of a closed block is less favorable than expected, expected earnings for that

F-52

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 10 — Closed Blocks - (continued)

closed block will be recognized in net income, unless the policyholder dividend obligation has been reduced to zero, in which case actual earnings will be recognized in income. The policyholder dividend obligation for the JHLICO and JHUSA closed blocks was zero at December 31, 2013 and 2012.

For all closed block policies, the principal cash flow items that affect the amount of closed block assets and liabilities are premiums, net investment income, purchases and sales of investments, policyholder benefits, policyholder dividends, premium taxes, guaranty fund assessments, and income taxes. For the JHLICO closed block policies, the principal income and expense items excluded from the closed block are management and maintenance expenses, commissions, and net investment income and realized investment gains and losses of investment assets outside the closed block that support the closed block business, all of which enter into the determination of total gross margins of closed block policies for the purpose of the amortization of deferred policy acquisition costs. There are no exclusions applicable to the JHUSA closed block. The amounts shown in the following tables for assets, liabilities, revenues, and expenses of the closed blocks are those that enter into the determination of amounts that are to be paid to policyholders.

The following tables set forth certain summarized financial information relating to the closed blocks as of the dates indicated:

F-53

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 10 — Closed Blocks - (continued)

JHUSA Closed Block


	December 31,
	2013			2012

	(in millions)
Liabilities
Future policy benefits	$	8,129		$	8,258
Policyholders’ funds		71			74
Policyholder dividends payable		155			162
Other closed block liabilities		698			659

Total closed block liabilities		9,053			9,153


Assets
Investments
Fixed maturities:
Available-for-sale—at fair value (amortized cost: 2013—$2,988; 2012—$2,733)		3,217			3,163
Mortgage loans on real estate		483			519
Investment real estate		722			710
Policy loans		1,585			1,589
Other invested assets		4			5

Total investments		6,011			5,986

Cash borrowings, cash, and cash equivalents		(489	)		(513	)
Accrued investment income		100			101
Amount due from and held for affiliates		2,076			2,047
Other closed block assets		486			588

Total assets designated to the closed block		8,184			8,209

Excess of closed block liabilities over assets designated to the closed block		869			944
Portion of above representing accumulated other comprehensive income:
Unrealized appreciation, net of deferred income tax expense of $268 and $322, respectively		497			597
Adjustment for deferred policy acquisition costs, net deferred income tax benefit of $81 and $111, respectively		(150	)		(206	)
Foreign currency translation adjustment		(51	)		(79	)

Total amounts included in accumulated other comprehensive income		296			312

Maximum future earnings to be recognized from closed block assets and liabilities	$	1,165		$	1,256

F-54

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 10 — Closed Blocks - (continued)

JHUSA Closed Block


	Years ended December 31,
	2013		2012			2011

	(in millions)
Revenues
Premiums	$	499	$	538		$	558
Net investment income		291		339			331
Net realized investment income and other gains (losses)		265		111			67

Total revenues		1,055		988			956

Benefits and Expenses
Benefits to policyholders		575		656			668
Policyholder dividends		313		331			354
Amortization of deferred policy acquisition costs		-		94			14
Other closed block operating costs and expenses		27		29			29

Total benefits and expenses		915		1,110			1,065

Revenues, net of benefits and expenses		140		(122	)		(109	)
Income tax expense (benefit)		49		(43	)		(41	)

Revenues (losses), net of benefits and expenses and income taxes	$	91	$	(79	)	$	(68	)

Maximum future earnings from closed block assets and liabilities:


	December 31,
	2013			2012

	(in millions)
Beginning of period	$	1,256		$	1,177
Revenues, net of benefits and expenses and income taxes		(91	)		79

End of period	$	1,165		$	1,256

F-55

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 10 — Closed Blocks - (continued)

JHLICO Closed Block


	December 31,
	2013		2012

	(in millions)
Liabilities
Future policy benefits	$	10,229	$	10,488
Policyholders’ funds		1,401		1,446
Policyholder dividends payable		325		324
Other closed block liabilities		246		418

Total closed block liabilities		12,201		12,676

Assets
Investments
Fixed maturities:
Available-for-sale—at fair value (amortized cost: 2013—$6,174; 2012—$6,198)		6,353		6,839
Equity securities:
Available-for-sale—at fair value (cost: 2013—$4; 2012—$6)		8		9
Mortgage loans on real estate		1,982		2,176
Policy loans		1,504		1,449
Other invested assets		80		88

Total investments		9,927		10,561

Cash borrowings, cash, and cash equivalents		88		154
Accrued investment income		120		128
Other closed block assets		78		88

Total assets designated to the closed block		10,213		10,931

Excess of closed block liabilities over assets designated to the closed block		1,988		1,745
Portion of above representing accumulated other comprehensive income:
Unrealized appreciation, net of deferred income tax expense of $65 and $229, respectively		121		425

Maximum future earnings to be recognized from closed block assets and liabilities	$	2,109	$	2,170

F-56

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 10 — Closed Blocks - (continued)

JHLICO Closed Block


	Years ended December 31,
	2013		2012		2011

	(in millions)
Revenues
Premiums	$	442	$	514	$	577
Net investment income		512		555		576
Net realized investment income and other gains (losses)		25		65		73

Total revenues		979		1,134		1,226

Benefits and Expenses
Benefits to policyholders		600		665		729
Policyholder dividends		263		289		412
Other closed block operating costs and expenses		22		12		52

Total benefits and expenses		885		966		1,193

Revenues, net of benefits and expenses		94		168		33
Income tax expense (benefit)		33		59		12

Revenues, net of benefits and expenses and income taxes	$	61	$	109	$	21

Maximum future earnings from closed block assets and liabilities:


	December 31,
	2013			2012

	(in millions)
Beginning of period	$	2,170		$	2,279
Revenues, net of benefits and expenses and income taxes		(61	)		(109	)

End of period	$	2,109		$	2,170

Note 11 — Debt and Line of Credit

External short-term and long-term debt consisted of the following:


	December 31,
	2013			2012

	(in millions)
Long-term debt:
Surplus notes, 7.38% maturing in 2024	$	472		$	472
Fixed rate notes payable, interest ranging from 3.5% to 13.84% due in varying amounts to 2017		49			62
Less short-term debt		(49	)		(14	)

Total long-term debt	$	472		$	520

F-57

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 11 — Debt and Line of Credit - (continued)

Long-Term Debt

Aggregate maturities of long-term debt are as follows: 2014—$49 million; 2015—$0 million; 2016—$0 million; 2017—$0 million; 2018—$0 million; and thereafter—$472 million .

Interest expense on debt, included in other operating costs and expenses, was $38 million, $41 million, and $46 million in 2013, 2012 and 2011, respectively. Interest paid on debt was $37 million, $38 million, and $43 million in 2013, 2012 and 2011, respectively.

The fixed rate notes payable includes $35 million of collateralized debt and therefore ranks highest in priority. The remaining fixed rate notes payable are unsecured. Any payment of interest or principal on the surplus notes requires the prior approval of the Michigan Director of the Department of Insurance and Financial Services (the “Director”).

Consumer Notes

The Company issued consumer notes through its SignatureNotes program. The SignatureNotes investment product was sold through a broker-dealer network to retail customers in the form of publicly traded fixed and/or floating rate securities. SignatureNotes have a variety of maturities, interest rates, and call provisions. Interest ranging from 0.8% to 6.0% is due in varying amounts to 2032.

Aggregate maturities of consumer notes, net of unamortized dealer fees, are as follows: 2014—$239 million; 2015—$150 million; 2016— $67 million; 2017—$8 million; 2018—$44 million; and thereafter—$162 million.

Interest expense on consumer notes, included in other operating costs and expenses, was $29 million, $34 million, and $42 million in 2013, 2012 and 2011, respectively. Interest paid amounted to $30 million, $36 million, and $42 million in 2013, 2012 and 2011, respectively.

Line of Credit

At December 31, 2013, the Company, MFC, and other MFC subsidiaries had a committed line of credit through a group of banks totaling $500 million pursuant to a multi-year facility, which will expire in 2015. The banks will commit, when requested, to loan funds at prevailing interest rates as determined in accordance with the line of credit agreement. Under the terms of the agreement, MFC is required to maintain a certain minimum level of net worth, and MFC and the Company are required to comply with certain other covenants, which were met at December 31, 2013. At December 31, 2013, MFC and its subsidiaries, including the Company, had no outstanding borrowings under the agreement.

At December 31, 2013, the Company had a committed line of credit agreement established by MLI totaling $1 billion, which will expire in 2018. MLI will commit, when requested, to loan funds at prevailing interest rates as determined in accordance with the line of credit agreement. Under the terms of the agreement, the Company is required to maintain a certain minimum level of net worth and comply with certain other covenants as long as any amount is owed to the lender under the agreement. At December 31, 2013, the Company had no outstanding borrowings under the agreement.

At December 31, 2013, JHUSA and MIC share in a committed line of credit established by MFC totaling $1 billion, which will expire in 2018. MFC will commit, when requested, to loan funds at prevailing interest rates as determined in accordance with the line of credit agreement. Under the terms of the agreement, the Company is required to maintain a certain minimum level of net worth and comply with certain other covenants, as long as any amount is owed to the lender under the agreement. At December 31, 2013, the Company had no outstanding borrowings under the agreement.

Affiliated Debt and Loan Transactions

Affiliated debt and loan transactions are included in amounts due to affiliates or due from affiliates, respectively on the Consolidated Balance Sheets.

F-58

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 11 — Debt and Line of Credit - (continued)

Pursuant to subordinated surplus notes dated September 30, 2008, the Company borrowed $405 million from an affiliate, John Hancock Insurance Agency, Inc. (“JHIA”). The notes mature on March 31, 2033. The interest rate is fixed at 7%, and interest is payable semi-annually. Interest expense was $29 million, $29 million, and $29 million for the years ended December 31, 2013, 2012 and 2011, respectively.

On December 22, 2006, the Company issued a subordinated note that was converted on September 30, 2008 to a subordinated surplus note. The outstanding amount to JHFC of $136 million is due December 15, 2016. Interest on the subordinated surplus note from October 1, 2008 until December 15, 2011 accrued at a variable rate equal to LIBOR plus 0.3% per annum calculated and reset quarterly on March 31, June 30, September 30, and December 31 and payable semi-annually on March 31 and September 30 of each year. Thereafter, interest accrues at a variable rate equal to LIBOR plus 1.3% per annum reset quarterly as aforementioned and payable semi-annually on June 15 and December 15 of each year until payment in full. Interest expense was $2 million, $2 million, and $0 million for the years ended December 31, 2013, 2012 and 2011, respectively.

The issuance of the above surplus notes by the Company was approved by the Director, and any payments of interest or principal on the surplus notes require the prior approval of the Director. The surplus notes are included with amounts due to affiliates on the Consolidated Balance Sheets.

Pursuant to a demand note receivable dated September 30, 2008, the Company has $295 million outstanding with MIC. The note, which was to have matured on March 31, 2013, was extended to March 31, 2018. Prior to March 31, 2013, the interest rate was calculated at a fluctuating rate equal to 3-month LIBOR plus 83 basis points per annum. Following the extension, the interest rate is calculated at a fluctuating rate equal to 3-month LIBOR plus 180 basis points per annum. Interest income was $6 million, $4 million, and $3 million for the years ended December 31, 2013, 2012 and 2011, respectively.

Pursuant to a promissory note dated June 28, 2012, the Company borrowed $153 million from Manulife Finance Switzerland AG (“MFSA”). Interest on the loan is calculated at a fluctuating rate equal to 3-month LIBOR plus 90 basis points per annum and is payable quarterly. In addition, the Company renewed two previously outstanding promissory notes to MFSA with an outstanding balance of $7 million and combined these notes with the new note issued on June 28, 2012, thus bringing the total principal balance due to $160 million. On June 28, 2013, the maturity date was extended for a period of one year to June 28, 2014 with the terms noted above. Interest expense was $2 million and $1 million for the years ended December 31, 2013 and 2012, respectively.

Pursuant to a demand note dated December 20, 2012, the Company borrowed $130 million from MIC. The note matures on December 20, 2015. Interest on the loan is calculated at a fluctuating rate equal to the one-month LIBOR rate and is payable monthly. Interest expense was $0 million and $0 million for the years ended December 31, 2013 and 2012, respectively.

Note 12 — Income Taxes

The Company is included in the consolidated federal income tax return of JHFC. John Hancock Life and Health Insurance Company (“JHLH”), an affiliate, files a separate federal income tax return for a five-year period that began in 2010.

Income (loss) before income taxes includes the following:


	Years ended December 31,
	2013		2012			2011

	(in millions)
Domestic	$	2,326	$	(766	)	$	(1,143	)

Income (loss) before income taxes	$	2,326	$	(766	)	$	(1,143	)

F-59

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 12 — Income Taxes - (continued)

The components of income taxes were as follows:


	Years ended December 31,
	2013		2012			2011

	(in millions)
Current taxes:
Federal	$	213	$	(255	)	$	(233	)
State		2		-			1

Total		215		(255	)		(232	)


Deferred taxes:
Federal		606		(378	)		(100	)
State		-		-			-

Total		606		(378	)		(100	)

Total income tax expense (benefit)	$	821	$	(633	)	$	(332	)

A reconciliation of income taxes at the federal income tax rate to income tax expense (benefit) charged to operations follows:


	Years ended December 31,
	2013			2012			2011

	(in millions)
Tax at 35%	$	814		$	(268	)	$	(400	)
Add (deduct):
Prior year taxes		18			(61	)		27
Tax credits		(64	)		(76	)		(74	)
Tax-exempt investment income		(6	)		(29	)		(31	)
Lease income		147			27			1
Dividend received deduction		(109	)		(113	)		(102	)
Change in tax reserves		(49	)		(128	)		67
Goodwill impairment		-			-			175
Valuation allowance		50			-			-
Foreign tax expense gross-up		9			10			3
Other		11			5			2

Total income tax expense (benefit)	$	821		$	(633	)	$	(332	)

F-60

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 12 — Income Taxes - (continued)

Deferred income tax assets and liabilities result from tax affecting the differences between the financial statement values and income tax values of assets and liabilities at each Consolidated Balance Sheet date. Deferred tax assets and liabilities consisted of the following:


	December 31,
	2013			2012

	(in millions)
Deferred tax assets:
Policy reserves	$	1,147		$	2,401
Net operating loss carryforwards		928			661
Net capital loss carryforwards		-			-
Tax credits		878			831
Unearned revenue		601			523
Deferred compensation		66			53
Accrued interest		150			414
Policyholder dividends payable		84			91
Other		77			91

Sub-total deferred tax assets		3,931			5,065
Valuation allowance		(50	)		-

Total deferred tax assets		3,881			5,065

Deferred tax liabilities
Unrealized investment gains on securities		1,091			2,954
Deferred policy acquisition costs		1,927			1,606
Intangible assets		904			946
Premiums receivable		33			36
Deferred sales inducements		103			57
Deferred gains		451			527
Securities and other investments		2,100			2,969
Other		230			188

Total deferred tax liabilites		6,839			9,283

Net deferred tax liabilities	$	2,958		$	4,218

At December 31, 2013, the Company had $2,652 million of net operating loss carryforwards which will expire between 2023 and 2028. At December 31, 2013, the Company had $878 million of tax credits, which consist of $661 million of general business credits, $206 million of foreign tax credits, and $11 million of alternative minimum tax credits. The general business credits begin to expire in tax year 2021 through tax year 2033. The foreign tax credits begin to expire in tax year 2013 through tax year 2023. The alternative minimum tax credits do not have an expiration date.

The Company has recorded a valuation allowance against specific general business tax credit carryforwards of $50 million for the year ended December 31, 2013. These tax credits were generated by the legacy JHFC group and are subject to the separate return limitation rules. These credits will not expire until 2019, however due to restrictions on the utilization, management believes that it is more likely than not that the Company will not realize the benefit. In assessing the need for a valuation allowance, management considered the future reversal of taxable temporary differences, future taxable income exclusive of reversing temporary differences, taxable income in the carry back period, as well as tax planning strategies. Tax planning strategies were considered to the extent they were both prudent and feasible and if implemented, would result in the realization of deferred tax assets.

In 2013, the Company received income tax refunds of $200 million from subsidiaries under the terms of its inter-company tax-sharing agreement and made income tax payments of $760 million to the Internal Revenue Service (“IRS”). In 2012, the Company received income tax refunds of $190 million from subsidiaries under the terms of its inter-company tax-sharing

F-61

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 12 — Income Taxes - (continued)

agreement and made income tax payments of $43 million to the IRS. In 2011, the Company received income tax refunds of $181 million from subsidiaries under the inter-company tax sharing agreement and received income tax refunds of $20 million from the IRS.

The Company files income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions. The Company is under continuous examination by the IRS. Effective for 2010, the Company’s common parent JHFC merged into MHDLLC resulting in a new combined group. The returns for the new combined group have not yet been examined by the IRS. With respect to the legacy MHDLLC consolidated return group, the IRS audit for tax years prior to 2008 have been closed. For tax years 2008 and 2009, a refund claim is pending with the IRS Joint Committee. With respect to the legacy JHFC group, the IRS has completed its examinations of tax years 1997 through 2006. IRS has issued statutory notices of deficiency relating to issues in years 1997 through 2001 and the Company has resolved all issues with the IRS except leveraged leases, for which the Company filed a petition in the U.S. Tax Court. For tax years 2002 through 2004, all issues have been resolved except those pertaining to the Tax Court case. For tax years 2005 and 2006, the legacy JHFC group is currently in appeals. Tax years 2007 through 2009 are currently under examination by the IRS. Tax years 1997 through 2004 remain open until the Tax Court case is resolved.

On August, 5, 2013, the U.S. Tax Court issued an opinion in the litigation between the Company and the IRS involving the tax treatment of certain leveraged lease investments. The Court’s opinion effectively ruled against the Company with respect to deductions claimed for tax years 1997-2001. Final judgment in the case is pending and expected in 2014. The Company is reviewing its appeals options and has made an advance payment of tax and interest that will come due upon final judgment to avoid further accrual of interest. There is no material impact to the Company’s financial position or results of operations as a result of the decision.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:


	December 31,
	2013			2012

	(in millions)
Balance, beginning of year	$	3,226		$	2,477
Additions based on tax positions related to the current year		140			350
Payments		(565	)		-
Additions for tax positions of prior years		23			616
Reductions for tax positions of prior years		(2,173	)		(217	)

Balance, end of year	$	651		$	3,226

Included in the balances as of December 31, 2013 and 2012, respectively, are $164 million and $237 million of unrecognized benefits that, if recognized, would affect the Company’s effective tax rate. Included in the balances as of December 31, 2013 and 2012, respectively, are $487 million and $2,989 million of tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. Because of the impact of deferred tax accounting, other than interest or penalties, the disallowance of the shorter deductibility period would not affect the annual effective rate, but would accelerate the payment of taxes to an earlier period.

The Company’s liability for unrecognized tax benefits may decrease in the next twelve months pending the outcome of remaining issues associated with the 1997 through 2009 IRS audit. A reasonable estimate of the decrease cannot be determined at this time; however, the Company believes that the ultimate resolution will not result in a material change to its consolidated financial statements. Excluding the effect of interest and penalties, this has no impact on the annual effective rate, but would accelerate the payment of taxes to an earlier period.

The Company recognizes interest accrued and penalties in income tax expense. The Company recognized approximately $12 million and $34 million of interest benefit for the years ended December 31, 2013 and 2012, respectively, and $161 million of interest expense for the year ended December 31, 2011. The Company had approximately $422 million and $1,157 million accrued for interest as of December 31, 2013 and 2012, respectively. The Company did not recognize material penalties for the years ended December 31, 2013, 2012 and 2011.

F-62

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 13 — Commitments, Guarantees, Contingencies, and Legal Proceedings

Commitments. The Company has extended commitments to purchase U.S. private debt and to issue mortgage loans on real estate totaling $2,328 million and $126 million, respectively, at December 31, 2013. If funded, loans related to real estate mortgages would be fully collateralized by the mortgaged properties. The Company monitors the creditworthiness of borrowers under long-term bond commitments and requires collateral as deemed necessary. Approximately 46% of these commitments expire in 2014 and the majority of the remainder expires by 2018.

The Company leases office space under non-cancelable operating lease agreements with various expiration dates. Rental expenses, net of sub-lease income, were $17 million, $18 million and $20 million for the years ended December 31, 2013, 2012 and 2011, respectively.

During 2001, the Company entered into an office ground lease agreement, which expires on September 20, 2096. During 2012, the Company entered into a parking lease agreement, which expires on December 31, 2050. The terms of the lease agreements provide for adjustments in future periods. The future minimum lease payments, by year and in the aggregate, under these leases and other non-cancelable operating leases along with the associated sub-lease income are as follows:


	Non-cancelable Operating Leases		Sub-lease Income

	(in millions)
2014		36		14
2015		20		3
2016		12		-
2017		9		-
2018		6		-
Thereafter		361		-

Total		444		17

Other than the Company’s investment in real estate, the Company does not have any material sub-lease income related to its office space. Leasing of investment real estate is not a significant part of the Company’s business activities in terms of revenue, net income, or assets.

The Company’s investment in leveraged leases relates to equipment used primarily in the transportation industries; however, this type of leasing transaction is not a significant part of the Company’s business activities in terms of revenue, net income, or assets.

Guarantees. In the course of business, the Company enters into guarantees which vary in nature and purpose and which are accounted for and disclosed under U.S. GAAP specific to the insurance industry. The Company had no guarantees outstanding outside the scope of insurance accounting at December 31, 2013.

Contingencies. The Company is an investor in a number of leasing transactions. On August 5, 2013, the U.S. Tax Court issued an opinion in the litigation between John Hancock and the IRS involving the tax treatment of certain leveraged lease investments. The Court’s opinion effectively ruled against the Company with respect to deductions claimed for tax years 1997-2001. Final judgment in the case is pending and expected in 2014. The Company is reviewing its appeals options and has made an advance payment of tax and interest that will come due upon final judgment to avoid further accrual of interest. There is no material impact to the Company’s financial position or results of operations as a result of the decision.

The Company acts as an intermediary/broker in OTC derivative instruments. In these cases, the Company enters into derivative transactions on behalf of affiliated companies and then enters into offsetting derivative transactions with the affiliate. In the event of default of either party, the Company is still obligated to fulfill its obligations with the other party.

F-63

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 13 — Commitments, Guarantees, Contingencies, and Legal Proceedings - (continued)

Legal Proceedings. The Company is regularly involved in litigation, both as a defendant and as a plaintiff. The litigation naming the Company as a defendant ordinarily involves its activities as a provider of insurance protection and wealth management products, an employer, and a taxpayer. In addition, the Michigan Department of Insurance and Financial Services, state attorneys general, the SEC, the Financial Regulatory Authority, and other government and regulatory bodies regularly make inquiries and, from time to time, require the production of information or conduct examinations concerning the Company’s compliance with, among other things, insurance laws, securities laws, and laws governing the activities of broker-dealers. An estimation of the range of potential outcomes in any given matter is often unavailable until such matters have developed and sufficient information emerges to support an assessment of the range of possible loss, such as quantification of a damage demand from plaintiffs, discovery from other parties and investigation of factual allegations, rulings by the court on motions or appeals, analysis by experts, and the progress of settlement negotiations. On a quarterly and annual basis, the Company reviews relevant information with respect to litigation contingencies and updates its accruals and estimates of reasonably possible losses or ranges of loss based on such reviews.

Note 14 — Shareholder’s Equity

Capital Stock

The Company has two classes of capital stock, preferred stock and common stock. All of the outstanding preferred and common stock of the Company is owned by MIC, its parent.

Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss) were as follows:

F-64

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 14 — Shareholder’s Equity - (continued)


	Net Unrealized Investment Gains (Losses)			Net Accumulated Gain (loss) on Cash Flow Hedges			Foreign Currency Translation Adjustment			Additional Pension and Postretirement Unrecognized Net Periodic Benefit Cost		Accumulated Other Comprehensive Income (Loss)

	(in millions)
Balance at January 1, 2011	$	988		$	234		$	(44	)	$	4	$	1,182
Gross unrealized investment gains (net of deferred income tax expense of $1,817)		3,371											3,371
Reclassification adjustment for gains realized in net income (net of deferred income tax expense of $373)		(692	)										(692	)
Adjustment for policyholder liabilities (net of deferred income tax benefit of $355)		(659	)										(659	)
Adjustment for deferred policy acquisition costs, deferred sales inducements, value of business acquired, and unearned revenue liability (net of deferred income tax benefit of $418)		(775	)										(775	)

Net unrealized investment gains		1,245											1,245
Foreign currency translation adjustment (net of deferred income tax expense of $0)								13					13
Pension and postretirement benefits:
Change in prior service cost (net of deferred income tax benefit of $0)											-		-
Change in net actuarial loss (net of deferred income tax benefit of $0)											-		-
Net unrealized losses on split-dollar life insurance benefit (net of deferred income tax benefit of $0)											-		-
Net gains on the effective portion of the change in fair value of cash flow hedges (net of deferred income tax expense of $957)					1,777								1,777
Reclassification of net cash flow hedge gains to net income (net of deferred income tax expense of $32)					(59	)							(59	)

Balance at December 31, 2011	$	2,233		$	1,952		$	(31	)	$	4	$	4,158

F-65

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 14 — Shareholder’s Equity - (continued)


	Net Unrealized Investment Gains (Losses)			Net Accumulated Gain (loss) on Cash Flow Hedges			Foreign Currency Translation Adjustment			Additional Pension and Postretirement Unrecognized Net Periodic Benefit Cost		Accumulated Other Comprehensive Income (Loss)

	(in millions)
Balance at January 1, 2012	$	2,233		$	1,952		$	(31	)	$	4	$	4,158
Gross unrealized investment gains (net of deferred income tax expense of $902)		1,677											1,677
Reclassification adjustment for gains realized in net income (net of deferred income tax expense of $369)		(686	)										(686	)
Adjustment for policyholder liabilities (net of deferred income tax benefit of $135)		(251	)										(251	)
Adjustment for deferred policy acquisition costs, deferred sales inducements, value of business acquired, and unearned revenue liability (net of deferred income tax expense of $64)		118											118

Net unrealized investment gains		858											858
Foreign currency translation adjustment (net of deferred income tax benefit of $0)								(50	)				(50	)
Pension and postretirement benefits:
Change in prior service cost (net of deferred income tax benefit of $0)											-		-
Change in net actuarial loss (net of deferred income tax benefit of $0)											-		-
Net unrealized losses on split-dollar life insurance benefit (net of deferred income tax benefit of $0)											-		-
Net gains on the effective portion of the change in fair value of cash flow hedges (net of deferred income tax expense of $349)					648								648
Reclassification of net cash flow hedge gains to net income (net of deferred income tax expense of $113)					(209	)							(209	)

Balance at December 31, 2012	$	3,091		$	2,391		$	(81	)	$	4	$	5,405

F-66

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 14 — Shareholder’s Equity - (continued)


	Net Unrealized Investment Gains (Losses)			Net Accumulated Gain (loss) on Cash Flow Hedges			Foreign Currency Translation Adjustment			Additional Pension and Postretirement Unrecognized Net Periodic Benefit Cost		Accumulated Other Comprehensive Income (Loss)

	(in millions)
Balance at January 1, 2013	$	3,091		$	2,391		$	(81	)	$	4	$	5,405
Gross unrealized investment losses (net of deferred income tax benefit of $1,698)		(3,152	)										(3,152	)
Reclassification adjustment for gains realized in net income (net of deferred income tax expense of $66)		(123	)										(123	)
Adjustment for policyholder liabilities (net of deferred income tax expense of $260)		481											481
Adjustment for deferred policy acquisition costs, deferred sales inducements, value of business acquired, and unearned revenue liability (net of deferred income tax expense of $325)		603											603

Net unrealized investment losses		(2,191	)										(2,191	)
Foreign currency translation adjustment (net of deferred income tax benefit of $0)								(11	)				(11	)
Pension and postretirement benefits:
Change in prior service cost (net of deferred income tax benefit of $0)											-		-
Change in net actuarial loss (net of deferred income tax benefit of $0)											-		-
Net unrealized losses on split-dollar life insurance benefit (net of deferred income tax benefit of $0)											-		-
Net losses on the effective portion of the change in fair value of cash flow hedges (net of deferred income tax benefit of $509)					(944	)							(944	)
Reclassification of net cash flow hedge gains to net income (net of deferred income tax expense of $175)					(324	)							(324	)

Balance at December 31, 2013	$	900		$	1,123		$	(92	)	$	4	$	1,935

F-67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 14 — Shareholder’s Equity - (continued)

Information regarding amounts reclassified out of each component of AOCI was as follows:


	Amounts Reclassified from AOCI (1)


	Year Ended December 31, 2013			Affected Line Item in Consolidated Statement of Operations



Unrealized investment gains (losses): (2) (3)
Net unrealized gains (losses)	$	195		Other net realized investment and other gains (losses)
OTTI		(6	)	Portion of loss recognized in other comprehensive income

Net realized gains (losses) before income tax		189
Income tax (expense) benefit		(66	)

Net realized gains (losses), net of income tax	$	123

Unrealized gains (losses) on derivatives—cash flow hedges:
Interest rate swaps	$	500		Other net realized investment and other gains (losses)
Foreign currency swaps		(2	)	Other net realized investment and other gains (losses)
Foreign currency forwards		-		Other net realized investment and other gains (losses)
Equity market contracts		-		Other net realized investment and other gains (losses)

Net gains (losses) on cash flow hedges, before income tax		498
Income tax (expense) benefit		(174	)

Net gains (losses) on cash flow hedges, net of income tax	$	324

Foreign currency translation adjustment:
Foreign currency translation adjustment, before income tax	$	-		Other net realized investment and other gains (losses)
Income tax (expense) benefit		-

Foreign currency translation adjustment, net of income tax	$	-

Total reclassifications for the year, net of income tax	$	447

(1)	Positive amounts indicate gains/benefits reclassified out of AOCI. Negative amounts indicate losses/costs reclassified out of AOCI.

(2)	Amounts reflect investment gains (losses) that were previously unrealized and reclassified to the Consolidated Statements of Operations during the period as realized.

(3)	See table below for additional information on unrealized investment gains (losses), including the impact on deferred policy acquisition costs, deferred sales inducements, value of business acquired, unearned revenue liability, and policyholder liabilities.

F-68

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 14 — Shareholder’s Equity - (continued)

Net unrealized investment gains (losses) included on the Company’s Consolidated Balance Sheets as a component of shareholder’s equity are summarized below:


	Years ended December 31,

	2013			2012			2011

	(in millions)
Balance, end of year comprises:
Unrealized investment gains (losses) on:
Fixed maturity securities	$	2,283		$	7,378		$	5,932
Equity securities		513			471			365
Other investments		19			5			33

Total (1)		2,815			7,854			6,330
Amounts of unrealized investment gains (losses) attributable to:
Deferred policy acquisition costs, deferred sales inducements, value of business acquired, and unearned revenue liability		(714	)		(1,642	)		(1,824	)
Policyholder liabilities		(716	)		(1,456	)		(1,070	)
Deferred income taxes		(485	)		(1,665	)		(1,203	)

Total		(1,915	)		(4,763	)		(4,097	)

Net unrealized investment gains (losses)	$	900		$	3,091		$	2,233

(1)	Includes unrealized investment gains (losses) on invested assets held in trust on behalf of MRBL, which are included in amounts due from and held for affiliates on the Consolidated Balance Sheets. See Reinsurance Note for information on the associated MRBL reinsurance agreement.

Statutory Results

The Company and its wholly-owned subsidiaries, JHNY and JHLH, are required to prepare financial statements in accordance with accounting practices prescribed or permitted by the insurance departments of their states of domicile, which are Michigan, New York, and Massachusetts, respectively.

The principal differences between statutory financial statements and financial statements prepared in accordance with USGAAP are that statutory financial statements do not reflect DAC, bonds may be carried at amortized cost, assets and liabilities are presented net of reinsurance, policy and contract obligations are generally valued using more conservative assumptions and certain assets are non-admitted.

Life and health insurance companies are subject to certain risk-based capital (“RBC”) requirements as specified by the NAIC. Under those requirements, the amount of capital and surplus maintained by a life and health insurance company is to be determined based on the various risk factors related to it. At December 31, 2013, JHUSA, JHNY and JHLH met the minimum RBC requirements.


Company	State of Domicile	Statutory Net Income (Loss)				Statutory Capital and Surplus

	(in millions)
		2013		2012		2013		2012

JHUSA	Michigan	$	3,015	$	221	$	5,809	$	5,794
JHNY	New York		466		69		1,284		1,005
JHLH	Massachusetts		82		12		683		665

F-69

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 14 — Shareholder’s Equity - (continued)

Under Michigan State insurance laws, no insurer may pay any shareholder dividends from any source other than statutory earned surplus without the prior approval of the Director. Dividends to the shareholder that may be paid without prior approval of the Director are limited by the laws of the State of Michigan. Such dividends are permissible if, together with other dividends or distributions made within the preceding 12 months, they do not exceed the greater of 10% of the JHUSA surplus as of December 31 of the preceding year, or the net gain from operations for the 12 month period ending December 31 of the immediately preceding year. JHUSA paid a shareholder dividend of $300 million to MIC in 2013. JHUSA paid no shareholder dividends to MIC for the years ended December 31, 2012 and 2011.

Under New York State insurance laws, no insurer may pay any shareholder dividends from any source other than statutory earned surplus without the prior approval of the Superintendent of Financial Services (the “Superintendent”). New York State law also limits the aggregate amount of dividends a life insurer may pay in any calendar year, without the prior permission of the Superintendent, to the lesser of (i) 10% of its statutory policyholders’ surplus as of the immediately preceding calendar year or (ii) the company’s statutory net gain from operations for the immediately preceding calendar year, not including realized capital gains. JHNY paid no shareholder dividends to JHUSA for the years ended December 31, 2013, 2012 and 2011.

Under Massachusetts insurance law, no insurer may pay any shareholder dividends from any source other than statutory unassigned surplus without the prior approval of the Insurance Commissioner. Massachusetts law also limits the amount of total shareholder dividends that a life insurer may pay within a rolling 12-month period, without the prior permission of the Commissioner, to the greater of (i) 10% of its statutory policyholders’ surplus as of December 31 of the preceding year or (ii) the company’s statutory net gain from operations for the preceding year ending December 31. JHLH paid no shareholder dividends to JHUSA for the years ended December 31, 2013, 2012 and 2011.

Note 15 — Pension and Other Postretirement Benefit Plans

Retirement Plans. The Company participates in the John Hancock Pension Plan, a qualified defined benefit plan that covers substantially all of its employees. The Company also participates in the John Hancock Non-Qualified Pension Plan, a nonqualified defined benefit plan for employees whose qualified cash balance benefit is restricted by the Internal Revenue Code. Both plans are sponsored by MIC. The non-qualified defined benefit plan was frozen except for grandfathered participants as of January 1, 2008, and the benefits accrued under this plan continue to be subject to the plan’s provisions.

The Company is jointly and severally liable for the funding requirements of the plans and will recognize its allocation, from MIC, of the required contributions to the plans as pension expense in its Consolidated Statements of Operations. The allocation is derived by utilizing participant data, provided by the plan actuary, to calculate payments into the trust for the qualified plan and payments to participants for the non-qualified plan. The expense for these plans was $42 million, $59 million and $41 million in 2013, 2012 and 2011, respectively.

The Company participates in the John Hancock Supplemental Retirement Plan, a non-qualified defined contribution plan maintained by MFC, which was established as of January 1, 2008 with participant directed investment options. The expense for this plan was $16 million, $7 million and $6 million in 2013, 2012 and 2011, respectively. The prior non-qualified defined contribution plan was frozen except for grandfathered participants as of January 1, 2008, and the benefits accrued under the prior plan continue to be subject to the prior plan provisions.

The Company also maintains separate rabbi trusts for the purpose of holding assets to be used to satisfy its obligations with respect to certain other non-qualified retirement plans of $406 million and $439 million at December 31, 2013 and 2012, respectively. In the event of insolvency of the Company, the rabbi trust assets can be used to satisfy claims of general creditors.

401 (k) Plans. The Company participates in qualified defined contribution plans for its employees who meet certain eligibility requirements. These plans include the Investment-Incentive Plan for John Hancock Employees and the John Hancock Savings and Investment Plan. Both plans are sponsored by JHUSA. Expense is primarily comprised of the amounts the Company contributes to the plans, which fully matches eligible participants’ basic pre-tax or Roth contributions, subject to a 4% per participant maximum. The expense for the defined contribution plans was $19 million, $19 million and $19 million in 2013, 2012 and 2011, respectively.

F-70

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 15 — Pension and Other Postretirement Benefit Plans - (continued)

Deferred Compensation Plan. The Company maintains the Deferred Compensation Plan for Certain Employees of John Hancock, and the Deferred Compensation Plan of the John Hancock Financial Network, both of which are deferred compensation plans sponsored by MFC. These plans are for a select group of management or highly compensated employees and certain qualified agents. The plans are fully funded and accounts are maintained by a third-party administrator. Under these plans, participants have the flexibility and opportunity to invest their plan balances in mutual funds. The liability for these plans at December 31, 2013 and 2012 was $89 million and $76 million, respectively.

Prior to January 1, 2006, the Company offered the Legacy Deferred Compensation Plan for Certain Employees of John Hancock Life Insurance Company (USA), the legacy plan, which is closed to new participation and is unfunded. These are notional accounts and all liabilities have remained with the Company and are paid out of general account assets when a distribution is taken. The liability for this plan at December 31, 2013 and 2012 was $18 million and $17 million, respectively.

Postretirement Benefit Plan. The Company participates in the John Hancock Employee Welfare Plan which is sponsored by MIC. Certain employees hired prior to January 1, 2005 who meet age and service criteria may be eligible for these postretirement benefits in accordance with the plan’s provisions. The majority of retirees contribute a portion of the total cost of postretirement medical benefits. Life insurance benefits are based on final compensation subject to the plan maximum. The Welfare Plan was amended effective January 1, 2007 whereby participants who had not reached a certain age and years of service with the Company were no longer eligible for such Company contributory benefits. Also, the number of years of service required to be eligible for the benefit was increased to 15 years for all participants.

Consistent with the pension plan, the Company is jointly and severally liable for the funding requirements of the plan and will recognize its allocation, from MIC, of the benefits earned by plan participants as postretirement benefits expense in its Consolidated Statements of Operations. The allocation is derived by utilizing participant data, provided by the plan actuary, to calculate claim payments to participants in these plans. The expense for this plan was $32 million, $30 million, and $46 million in 2013, 2012 and 2011, respectively.

Note 16 — Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; that is, an exit value. The exit value assumes the asset or liability is exchanged in an orderly transaction; it is not a forced liquidation or distressed sale.

The Company categorizes its fair value measurements according to a three-level hierarchy. The hierarchy prioritizes the inputs used by the Company’s valuation techniques. A level is assigned to each fair value measurement based on the lowest level input significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are defined as follows:

•

Level 1 – Fair value measurements that reflect unadjusted, quoted prices in active markets for identical assets and liabilities that the Company has the ability to access at the measurement date. Active markets are defined as having the following characteristics for the measured asset/liability; (i) many transactions, (ii) current prices, (iii) price quotes not varying substantially among market makers, (iv) narrow bid/ask spreads, and (v) most information is publicly available. Valuations are based on quoted prices reflecting market transactions involving assets or liabilities identical to those being measured. Level 1 assets primarily include exchange traded equity securities and certain separate account assets.

•

Level 2 – Fair value measurements using inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in inactive markets, inputs that are observable that are not prices (such as interest rates, credit risks, etc.), and inputs that are derived from or corroborated by observable market data. Most fixed maturity securities are classified within Level 2. Also included in the Level 2 category are financial instruments that are priced using models with observable market inputs, including most derivative financial instruments and certain separate account assets and liabilities.

•

Level 3 – Fair value measurements using significant nonmarket observable inputs. These include valuations for assets and liabilities that are derived using data, some or all of which is not market observable data, including assumptions about risk. Level 3 securities include less liquid securities, such as structured asset-backed securities, commercial mortgage-backed

F-71

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 16 — Fair Value Measurements - (continued)

securities, and other securities that have little or no price transparency. Embedded and complex derivative financial instruments and separate account investments in timber and agriculture are also included in Level 3.

Determination of Fair Value

The valuation methodologies used to determine the fair values of assets and liabilities reflect market participant assumptions and are based on the application of the fair value hierarchy that prioritizes observable market inputs over unobservable inputs. When available, the Company uses quoted market prices to determine fair value and classifies such items within Level 1 or 2. If quoted market prices are not available, fair value is based upon valuation techniques, which discount expected cash flows utilizing independent market observable interest rates based on the credit quality and duration of the instrument. Items valued using models are classified according to the lowest level input that is significant to the valuation. Thus, an item may be classified in Level 3 even though significant market observable inputs are used.

The Company utilizes a Valuation Quality Assurance (“VQA”) team of security analysts. The MFC Chief Investment Officer has ultimate responsibility over the VQA team. The team ensures quality and completeness of all daily and monthly prices. Prices are received from external pricing vendors and brokers and are put through a quality assurance process which includes review of price movements relative to the market, comparison of prices between vendors, and internal matrix pricing. All inputs to our pricing matrix are external observable inputs extracted and entered by the VQA team. Broker quotes are used only when no external public vendor prices are available.

The following is a description of the valuation techniques used to measure fair value and the general classification of these instruments pursuant to the fair value hierarchy:

•

Assets and Liabilities Measured and Disclosed at Fair Value on a Recurring Basis and Reported in the Consolidated Balance Sheets – This category includes assets and liabilities measured at fair value on a recurring and nonrecurring basis. Financial instruments measured on a recurring basis include fixed maturity securities, equity securities, short-term investments, real estate joint ventures and other limited partnership interests, derivatives, and separate account assets and liabilities. Assets measured at fair value on a nonrecurring basis include limited partnership interests, goodwill and other intangible assets, which are reported at fair value only in the period in which an impairment is recognized.

•

Assets and Liabilities Disclosed at Fair Value on a Recurring Basis – This category includes mortgage loans on real estate, policy loans, cash and cash equivalents, consumer notes, debt and affiliated debt, and policyholders’ funds.

Assets and Liabilities Measured and Disclosed at Fair Value on a Recurring Basis

Fixed Maturity Securities

For fixed maturity securities, including corporate debt, U.S. Treasury, commercial and residential mortgage-backed securities, asset-backed securities, collateralized debt obligations, issuances by foreign governments, and obligations of state and political subdivisions, fair values are based on quoted market prices when available. When market prices are not available, fair value is generally estimated using discounted cash flow analyses, incorporating current market inputs for similar financial instruments with comparable terms and credit quality (matrix pricing). The significant inputs into these models include, but are not limited to, yield curves, credit risks and spreads, measures of volatility, and prepayment speeds. These fixed maturity securities are classified within Level 2. Fixed maturity securities with significant pricing inputs which are unobservable are classified within Level 3.

Equity Securities

Equity securities are comprised of common stock and are classified within Level 1, as fair values are based on quoted market prices in active markets. Common stocks not traded in active markets are classified within Level 3.

Short-Term Investments

Short-term investments are comprised of securities due to mature within one year of the date of purchase. Those that are traded in active markets are classified within Level 1, as fair values are based on quoted market prices. Securities such as commercial paper and discount notes are classified within Level 2 because these securities are typically not actively traded due to their short maturities and, as such, their cost generally approximates fair value.

F-72

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 16 — Fair Value Measurements - (continued)

Real Estate Joint Ventures and Other Limited Partnership Interests

The amounts disclosed in the following tables consist of those investments accounted for using the cost method. The estimated fair values for such cost method investments are generally based on the Company’s share of the NAV as provided in the financial statements of the investees. In certain circumstances, management may adjust the NAV by a premium or discount when it has sufficient evidence to support applying such adjustments.

Derivatives

The fair value of derivatives is determined through the use of quoted market prices for exchange-traded derivatives or through the use of pricing models for OTC derivatives. The pricing models used are based on market standard valuation methodologies, and the inputs to these models are consistent with what a market participant would use when pricing the instruments. Derivative valuations can be affected by changes in interest rates, currency exchange rates, financial indices, credit spreads, default risk (including the counterparties to the contract), and volatility. The Company’s derivatives are generally classified within Level 2 given the significant inputs to the pricing models for most OTC derivatives are observable or can be corroborated by observable market data. Inputs that are observable generally include interest rates, foreign currency exchange rates, and interest rate curves; however, certain OTC derivatives may rely on inputs that are significant to the fair value, but are unobservable in the market or cannot be derived principally from or corroborated by observable market data and would be classified within Level 3. Inputs that are unobservable generally include broker quotes, volatilities, and inputs that are outside of the observable portion of the interest rate curve or other relevant market measures. These unobservable inputs may involve significant management judgment or estimation.

Even though unobservable, these inputs are based on assumptions deemed appropriate given the circumstances and consistent with what market participants would use when pricing such instruments. The credit risk of both the counterparty and the Company are considered in determining the fair value for all OTC derivatives after taking into account the effects of netting agreements and collateral arrangements.

Embedded Derivatives

The Company holds assets and liabilities classified as embedded derivatives on the Consolidated Balance Sheets. These assets include guaranteed minimum income benefits that are ceded under modified coinsurance reinsurance arrangements (“Reinsurance GMIB Assets”). Liabilities include policyholder benefits offered under variable annuity contracts such as GMWB with a term certain and embedded reinsurance derivatives.

Embedded derivatives are recorded on the Consolidated Balance Sheets at fair value, separately from their host contract, and the change in their fair value is reflected in net income. Many observable factors including, but not limited to, market conditions, credit ratings, and risk margins related to non-capital market inputs may result in significant fluctuations in the fair value of embedded derivatives that could materially affect net income. Embedded derivatives which are valued using observable market inputs are classified within Level 2 of the fair value hierarchy. Some embedded derivatives, mainly benefit guarantees for variable annuity products, utilize significant pricing inputs which are unobservable. These unobservable inputs are received from third party valuation experts and include equity volatility, mortality rates, lapse rates and utilization rates. Embedded derivatives with significant unobservable inputs are classified within Level 3.

The fair value of embedded derivatives related to GMIB and GMWB is estimated as the present value of future benefits less the present value of future fees. The fair value calculation includes assumptions for risk margins including nonperformance risk.

Risk margins are established to capture the risks of the instrument which represent the additional compensation a market participant would require to assume the risks related to the uncertainties of such actuarial assumptions as annuitization, persistency, partial withdrawal, and surrenders. The establishment of these actuarial assumptions, risk margins, nonperformance risk, and other inputs requires the use of significant judgment.

Nonperformance risk refers to the risk that the obligation will not be fulfilled and affects the value of the liability. The fair value measurement assumes that the nonperformance risk is the same before and after the transfer; therefore, fair value reflects the reporting entity’s own credit risk.

Nonperformance risk for liabilities held by the Company is based on MFC’s own credit risk, which is determined by taking into consideration publicly available information relating to MFC’s debt, as well as its claims paying ability. Nonperformance risk is also reflected in the reinsurance GMIB assets held by the Company. The credit risk of the

F-73

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 16 — Fair Value Measurements - (continued)

reinsurance companies is most representative of the nonperformance risk for the reinsurance GMIB assets and is derived from publicly available information relating to the reinsurance companies’ publicly issued debt. As such, the reinsurance contract embedded derivatives are classified within Level 2.

The fair value of embedded derivatives related to reinsurance agreements is determined based on a total return swap methodology. These total return swaps are reflected as assets or liabilities on the Consolidated Balance Sheets representing the difference between the adjusted statutory book value and fair value of the related modified coinsurance assets with ongoing changes in fair value recorded in net realized investment and other gains (losses). The fair value of the underlying assets is based on the valuation approach for similar assets described herein.

Separate Account Assets and Liabilities

Separate account assets are carried at fair value and reported as a summarized total on the Consolidated Balance Sheets. Assets owned by the Company’s separate accounts primarily include investments in funds, fixed maturity securities, equity securities, real estate, short-term investments, and cash and cash equivalents. For separate accounts structured as a non-unitized fund, the fair value of the separate account assets is based on the fair value of the underlying assets owned by the separate account. For separate accounts structured as a unitized fund, the fair value of separate account assets is based on the fair value of the underlying funds owned by the separate account. Investment performance related to separate account assets is fully offset by corresponding amounts credited to contract holders whose interest in the separate account assets is recorded by the Company as separate account liabilities. Separate account liabilities are set equal to the fair value of separate account assets.

The fair value of fund investments is based upon quoted market prices or reported NAV. Fund investments that are traded in an active market and have a NAV that the Company can access at the measurement date are classified within Level 1. The fair values of fixed maturity securities, equity securities, short-term investments, and cash equivalents held by separate accounts are determined on a basis consistent with the methodologies described herein for similar financial instruments held within the Company’s general account and may be classified within Level 1, 2, or 3, accordingly.

Separate account assets classified as Level 3 consist primarily of fixed maturity and equity investments in private companies, which own timber and agriculture and carry it at fair value. The values of the timber and agriculture investments are estimated using generally accepted valuation techniques. A comprehensive appraisal is performed shortly after initial purchase and at two or three-year intervals thereafter. Appraisal updates are conducted according to client contracts, generally at one-year or six-month intervals. In the quarters in which an investment is not independently appraised or its valuation updated, the market value is reviewed by management. The valuation of an investment is adjusted only if there has been a significant change in economic circumstances related to the investment since acquisition or the most recent independent valuation and upon the independent appraiser’s review and concurrence with management. Further, these valuations are prepared giving consideration to the income, cost, and sales comparison approaches of estimating asset value. The significant unobservable inputs used in the fair value measurement of the Company’s timberland investments are harvest volumes, timber prices, operating costs and discount rates. Significant changes to any one of these inputs in isolation could result in a significant change to fair value measurement. Holding other factors constant, an increase to either harvest volumes or timber prices would tend to increase the fair value of a timberland investment, while an increase in operating costs or discount rate would have the opposite effect. These investments are classified as Level 3 by the companies owning them, and therefore the equity investments in these companies are considered to be Level 3 by the Company.

Assets and Liabilities Disclosed at Fair Value on a Recurring Basis

Mortgage Loans on Real Estate

The fair value of unimpaired mortgage loans is estimated using discounted cash flows and takes into account the contractual maturities and discount rates, which were based on current market rates for similar maturity ranges and adjusted for risk due to the property type.

Policy Loans

These loans are carried at unpaid principal balances, which approximate their fair values.

Cash and Cash Equivalents

The carrying values for cash and cash equivalents approximate fair value due to the short-term maturities of these instruments.

F-74

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 16 — Fair Value Measurements - (continued)

Policyholders’ Funds

Policyholders’ funds include guaranteed investment contracts, funding agreements, fixed-rate deferred annuities, term certain and supplementary contracts without life contingencies, and certain balances that can be withdrawn by the policyholder at any time without prior notice or penalty. The fair values associated with guaranteed investment contracts, funding agreements, term certain and supplementary contracts without life contingencies are determined by projecting cash flows and discounting the cash flows at current corporate rates, defined as U.S. Treasury rates plus MFC’s corporate spread. The fair value attributable to credit risk represents the present value of the spread. The fair value of fixed-rate deferred annuities is estimated by projecting multiple stochastically generated interest rate scenarios under a risk neutral environment reflecting inputs (interest rate, volatility, etc.) observable at the valuation date. For those balances that can be withdrawn by the policyholder at any time without prior notice or penalty, the fair value is the amount estimated to be payable to the policyholder as of the reporting date, which is generally the carrying value.

Debt and Affiliated Debt

The fair value of the Company’s short-term and long-term debt and affiliated debt transactions is estimated using discounted cash flows based on the Company’s incremental borrowing rates for similar type of borrowing arrangements. Short-term debt and long-term debt includes fixed rate notes. Affiliated debt includes variable and fixed rate notes receivable from and payable to related parties.

Consumer Notes

The fair value of consumer notes is determined by projecting cash flows and discounting the cash flows at current corporate rates, defined as U.S. Treasury rates plus MFC’s corporate spread. The fair value attributable to credit risk represents the present value of the spread.

F-75

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 16 — Fair Value Measurements - (continued)

The table below presents the fair value by fair value hierarchy level for assets and liabilities that are reported at fair value in the Consolidated Balance Sheets:


	December 31, 2013
	Carrying Value		Total Fair Value		Level 1		Level 2		Level 3

	(in millions)
Assets:
Fixed maturity securities available-for-sale (1):
Corporate debt securities (5)	$	39,185	$	39,185	$	-	$	36,272	$	2,913
Commercial mortgage-backed securities		781		781		-		496		285
Residential mortgage-backed securities		167		167		-		4		163
Collateralized debt obligations		53		53		-		5		48
Other asset-backed securities		1,025		1,025		-		1,002		23
U.S. Treasury and agency securities		8,881		8,881		-		8,876		5
Obligations of states and political subdivisions (6)		4,630		4,630		-		4,491		139
Debt securities issued by foreign governments		1,553		1,553		-		1,553		-

Total fixed maturity securities available-for-sale		56,275		56,275		-		52,699		3,576

Fixed maturity securities held-for-trading:
Corporate debt securities (5)		965		965		-		930		35
Commercial mortgage-backed securities		59		59		-		49		10
Residential mortgage-backed securities		1		1		-		-		1
Collateralized debt obligations		-		-		-		-		-
Other asset-backed securities		28		28		-		28		-
U.S. Treasury and agency securities		69		69		-		69		-
Obligations of states and political subdivisions (6)		80		80		-		71		9
Debt securities issued by foreign governments		14		14		-		14		-

Total fixed maturity securities held-for-trading		1,216		1,216		-		1,161		55

Equity securities available-for-sale		191		191		191		-		-
Equity securities held-for-trading		284		284		284		-		-
Short-term investments		2,892		2,892		-		2,892		-
Other invested assets (2)		375		375		-		-		375
Derivative assets (3):
Interest rate swaps		7,290		7,290		-		7,283		7
Interest rate treasury locks		-		-		-		-		-
Interest rate options		21		21		-		-		21
Interest rate futures		-		-		-		-		-
Foreign currency swaps		117		117		-		117		-
Foreign currency forwards		-		-		-		-		-
Foreign currency futures		-		-		-		-		-
Equity total return swaps		36		36		-		-		36
Equity options		248		248		-		26		222
Equity index futures		-		-		-		-		-
Credit default swaps		8		8		-		8		-
Embedded derivatives (4):
Reinsurance contracts		-		-		-		-		-
Benefit guarantees (7)		1,230		1,230		-		-		1,230
Assets held in trust (8)		2,565		2,565		928		1,595		42
Separate account assets		154,258		154,258		146,845		5,194		2,219

Total assets at fair value	$	227,006	$	227,006	$	148,248	$	70,975	$	7,783


Liabilities:
Derivatives liabilities (3):
Interest rate swaps	$	5,113	$	5,113	$	-	$	5,113	$	-
Interest rate treasury locks		385		385		-		-		385
Interest rate options		-		-		-		-		-
Interest rate futures		-		-		-		-		-
Foreign currency swaps		296		296		-		277		19
Foreign currency forwards		1		1		-		1		-
Foreign currency futures		-		-		-		-		-
Equity total return swaps		-		-		-		-		-
Equity options		-		-		-		-		-
Equity index futures		-		-		-		-		-
Credit default swaps		-		-		-		-		-
Embedded derivatives (4):
Reinsurance contracts		2,329		2,329		-		2,329		-
Participating pension contracts		115		115		-		115		-
Benefit guarantees (7)		257		257		-		-		257

F-76

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 16 — Fair Value Measurements - (continued)

Separate account liabilities

154,258

146,845

5,194

2,219

Total liabilities at fair value

162,754

146,845

13,029

2,880

F-77

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 16 — Fair Value Measurements - (continued)


	December 31, 2012
	Carrying Value		Total Fair Value		Level 1		Level 2		Level 3

	(in millions)
Assets:
Fixed maturity securities available-for-sale (1):
Corporate debt securities (5)	$	41,693	$	41,693	$	-	$	38,004	$	3,689
Commercial mortgage-backed securities		1,394		1,394		-		1,166		228
Residential mortgage-backed securities		242		242		-		4		238
Collateralized debt obligations		106		106		-		6		100
Other asset-backed securities		894		894		-		847		47
U.S. Treasury and agency securities		12,095		12,095		-		12,095		-
Obligations of states and political subdivisions (6)		5,394		5,394		-		4,831		563
Debt securities issued by foreign governments		1,467		1,467		-		1,467		-

Total fixed maturity securities available-for-sale		63,285		63,285		-		58,420		4,865

Fixed maturity securities held-for-trading:
Corporate debt securities (5)		997		997		-		955		42
Commercial mortgage-backed securities		145		145		-		134		11
Residential mortgage-backed securities		1		1		-		-		1
Collateralized debt obligations		2		2		-		1		1
Other asset-backed securities		24		24		-		23		1
U.S. Treasury and agency securities		190		190		-		190		-
Obligations of states and political subdivisions (6)		81		81		-		70		11
Debt securities issued by foreign governments		1		1		-		1		-

Total fixed maturity securities held-for-trading		1,441		1,441		-		1,374		67

Equity securities available-for-sale		386		386		386		-		-
Equity securities held-for-trading		252		252		252		-		-
Short-term investments		2,145		2,145		-		2,145		-
Other invested assets (2)		367		367		-		-		367
Derivative assets (3):
Interest rate swaps		11,502		11,502		-		11,484		18
Interest rate treasury locks		-		-		-		-		-
Interest rate options		43		43		-		-		43
Interest rate futures		-		-		-		-		-
Foreign currency swaps		268		268		-		268		-
Foreign currency forwards		10		10		-		10		-
Foreign currency futures		-		-		-		-		-
Equity total return swaps		5		5		-		-		5
Equity options		5		5		-		5		-
Equity index futures		-		-		-		-		-
Credit default swaps		6		6		-		6		-
Embedded derivatives (4):
Reinsurance contracts		14		14		-		14		-
Benefit guarantees (7)		2,701		2,701		-		-		2,701
Assets held in trust (8)		2,487		2,487		886		1,546		55
Separate account assets		140,626		140,626		132,994		5,409		2,223

Total assets at fair value	$	225,543	$	225,543	$	134,518	$	80,681	$	10,344


Liabilities:
Derivatives liabilities (3):
Interest rate swaps	$	4,499	$	4,499	$	-	$	4,498	$	1
Interest rate treasury locks		-		-		-		-		-
Interest rate options		-		-		-		-		-
Interest rate futures		-		-		-		-		-
Foreign currency swaps		562		562		-		517		45
Foreign currency forwards		-		-		-		-		-
Foreign currency futures		-		-		-		-		-
Equity total return swaps		6		6		-		-		6
Equity options		1		1		-		1		-
Equity index futures		-		-		-		-		-
Credit default swaps		-		-		-		-		-
Embedded derivatives (4):
Reinsurance contracts		3,371		3,371		-		3,371		-
Participating pension contracts		129		129		-		129		-
Benefit guarantees (7)		1,217		1,217		-		-		1,217
Separate account liabilities		140,626		140,626		132,994		5,409		2,223

Total liabilities at fair value	$	150,411	$	150,411	$	132,994	$	13,925	$	3,492

F-78

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 16 — Fair Value Measurements - (continued)

(1)	Fixed maturity securities available-for-sale exclude leveraged leases of $1,723 million and $1,711 million at December 31, 2013 and 2012, respectively. The Company calculates the carrying value of its leveraged leases by accruing income at its expected internal rate of return.

(2)	Other invested assets exclude equity method and cost-accounted investments of $5,113 million and $4,488 million at December 31, 2013 and 2012, respectively.

(3)	Derivative assets and liabilities are presented gross to reflect the presentation in the Consolidated Balance Sheets, but are presented net for purposes of the Level 3 rollforward.

(4)

Embedded derivatives related to fixed maturity securities and reinsurance contracts are reported as part of the derivative asset or liability on the Consolidated Balance Sheets. Embedded derivatives related to benefit guarantees are reported as part of the reinsurance recoverable or future policy benefits on the Consolidated Balance Sheets. Embedded derivatives related to participating pension contracts are reported as part of future policy benefits on the Consolidated Balance Sheets.

(5)

Fair value of the Level 3 corporate debt securities is determined based on discounted cash flow models using discount rates based on credit spreads, yields, or price levels of publicly traded debt of the issuer or other comparable securities, considering illiquidity and structure. The significant unobservable input is the yield at or beyond the 30 year point and ranged from 0 to 61 basis points and 0 to 61 basis points during 2013 and 2012, respectively.

(6)

Fair value of the Level 3 obligations of states and political subdivisions is determined based on discounted cash flow models using discount rates based on credit spreads, yields, or price levels of publicly traded debt of the issuer or other comparable securities, considering illiquidity and structure. The significant unobservable input is the yield at or beyond the 30 year point and ranged from 0 to 361 basis points and 97 to 364 basis points during 2013 and 2012, respectively.

(7)

Fair value of the Level 3 benefit guarantees is determined based on discounted cash flow models. The significant unobservable inputs are equity implied volatility, base lapse rates, dynamic lapse rates, mortality rates, and 0% utilization rates. These inputs ranged from 0% to 37%, 1% to 40%, 0% to 50%, 0% to 40%, and 80% to 100% in 2013, respectively. These inputs ranged from 0% to 35%, 1% to 35%, 0% to 70%, 0% to 38%, and 80% to 100% in 2012, respectively.

(8)

Represents the fair value of assets held in trust on behalf of MRBL, which are included in amounts due from and held for affiliates on the Consolidated Balance Sheets. See the Reinsurance Note for information on the associated MRBL reinsurance agreement. The fair value of the trust assets is determined on a basis consistent with the methodologies described herein for similar financial instruments.

F-79

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 16 — Fair Value Measurements - (continued)

The table below presents the fair value by fair value hierarchy level for certain assets and liabilities that are not reported at fair value in the Consolidated Balance Sheet, but are disclosed at fair value.


	December 31, 2013
	Carrying Value		Total Fair Value		Level 1		Level 2		Level 3

	(in millions)
Assets
Mortgage loans on real estate	$	13,412	$	14,535	$	-	$	-	$	14,535
Policy loans		5,405		5,405		-		5,405		-
Cash and cash equivalents		2,541		2,541		2,541		-		-
Affiliated debt		295		295		-		295		-

Total Assets	$	21,653	$	22,776	$	2,541	$	5,700	$	14,535

Liabilities
Consumer notes	$	666	$	685	$	-	$	-	$	685
Debt		521		590		-		590		-
Policyholders’ funds		14,747		14,970		-		1,414		13,556
Affiliated debt		831		831		-		831		-

Total Liabilities	$	16,765	$	17,076	$	-	$	2,835	$	14,241


	December 31, 2012
	Carrying Value		Total Fair Value		Level 1		Level 2		Level 3

	(in millions)
Assets
Mortgage loans on real estate	$	13,192	$	15,065	$	-	$	-	$	15,065
Policy loans		5,264		5,264		-		5,264		-
Cash and cash equivalents		3,446		3,446		3,446		-		-
Affiliated debt		295		295		-		295		-

Total Assets	$	22,197	$	24,070	$	3,446	$	5,559	$	15,065

Liabilities
Consumer notes	$	716	$	757	$	-	$	-	$	757
Debt		534		593		-		593		-
Policyholders’ funds		15,588		15,916		-		1,325		14,591
Affiliated debt		831		831		-		831		-

Total Liabilities	$	17,669	$	18,097	$	-	$	2,749	$	15,348

Transfers of Level 1 and Level 2 Assets and Liabilities

The Company’s policy is to record transfers of assets and liabilities between Level 1 and Level 2 at their fair values as of the end of each reporting period, consistent with the date of the determination of fair value. Assets are transferred out of Level 1 when they are no longer transacted with sufficient frequency and volume in an active market. During the years ended December 31, 2013 and 2012, the Company did not have any transfers from Level 1 to Level 2. Conversely, assets are transferred from Level 2 to Level 1 when transaction volume and frequency are indicative of an active market. The Company did not transfer assets from Level 2 to Level 1 during the years ended December 31, 2013 and 2012.

F-80

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 16 — Fair Value Measurements - (continued)

Level 3 Financial Instruments

The changes in Level 3 financial instruments measured at fair value on a recurring basis for the years ended December 31, 2013, 2012 and 2011 are summarized as follows:


	Balance at January 1, 2013		Net realized/unrealized gains (losses) included in:						Purchases		Issuances		Sales			Settlements			Transfers					Balance at December 31, 2013			Change in unrealized gains (losses) included in earnings on instruments still held
	Balance at January 1, 2013		Earnings (1)			AOCI (2)			Purchases		Issuances		Sales			Settlements			Into Level 3 (3)		Out of Level 3 (3)			Balance at December 31, 2013

	(in millions)
Fixed maturity securities available-for-sale:
Corporate debt securities	$	3,689	$	(66	)	$	(249	)	$	984	$	-	$	(41	)	$	(699	)	$	418	$	(1,123	)	$	2,913		$	-
Commercial mortgage-backed securities		228		(20	)		36			85		-		(8	)		(37	)		3		(2	)		285			-
Residential mortgage-backed securities		238		22			27			-		-		(54	)		(70	)		-		-			163			-
Collateralized debt obligations		100		28			4			-		-		(34	)		(50	)		-		-			48			-
Other asset-backed securities		47		8			(6	)		2		-		-			(24	)		-		(4	)		23			-
US Treasury securities and obligations of US govt corporation and agencies (AFS)		-		-			5			-		-		-			-			-		-			5			-
Obligations of states and political subdivisions		563		-			(38	)		153		-		-			(159	)		-		(380	)		139			-

Total fixed maturity securities available-for-sale		4,865		(28	)		(221	)		1,224		-		(137	)		(1,039	)		421		(1,509	)		3,576			-

Fixed maturity securities held-for-trading:
Corporate debt securities		42		(9	)		-			7		-		(5	)		10			-		(10	)		35			(3	)
Commercial mortgage-backed securities		11		2			-			-		-		(3	)		-			-		-			10			2
Residential mortgage-backed securities		1		-			-			-		-		-			-			-		-			1			-
Collateralized debt obligations		1		1			-			-		-		(1	)		(1	)		-		-			-			-
Other asset-backed securities		1		-			-			-		-		-			(1	)		-		-			-			-
Obligations of states and political subdivisions		11		(2	)		-			-		-		-			-			-		-			9			(2	)

Total fixed maturity securities held-for-trading		67		(8	)		-			7		-		(9	)		8			-		(10	)		55			(3	)

Other invested assets		367		20			6			109		-		(36	)		(106	)		51		(36	)		375			(4	)
Net derivatives		14		(452	)		27			287		-		(6	)		-			-		12			(118	)		(175	)
Net embedded derivatives (4)		1,484		(511	)		-			-		-		-			-			-		-			973			(511	)
Assets held in trust		55		3			(9	)		11		-		(7	)		-			-		(11	)		42			-
Separate account assets/ liabilities (5)		2,223		161			-			31		-		(195	)		-			-		(1	)		2,219			1

Total	$	9,075	$	(815	)	$	(197	)	$	1,669	$	-	$	(390	)	$	(1,137	)	$	472	$	(1,555	)	$	7,122		$	(692	)

F-81

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 16 — Fair Value Measurements - (continued)


			Net realized/unrealized gains (losses) included in:																	Transfers							Change in unrealized gains (losses) included in earnings on instruments still held
	Balance at January 1, 2012		Earnings (1)			AOCI (2)			Purchases		Issuances			Sales			Settlements			Into Level 3 (3)		Out of Level 3 (3)			Balance at December 31, 2012

	(in millions)
Fixed maturity securities available-for-sale:
Corporate debt securities	$	4,148	$	78		$	127		$	1,759	$	-		$	(1,478	)	$	(217	)	$	50	$	(778	)	$	3,689	$	-
Commercial mortgage-backed securities		298		(21	)		48			41		-			(23	)		(109	)		1		(7	)		228		-
Residential mortgage-backed securities		361		(47	)		132			85		-			(206	)		(87	)		-		-			238		-
Collateralized debt obligations		114		(29	)		36			8		-			(13	)		(16	)		-		-			100		-
Other asset-backed securities		44		5			8			8		-			(7	)		(11	)		-		-			47		-
Obligations of states and political subdivisions		536		12			3			106		-			(74	)		-			20		(40	)		563		-

Total fixed maturity securities available-for-sale		5,501		(2	)		354			2,007		-			(1,801	)		(440	)		71		(825	)		4,865		-

Fixed maturity securities held-for-trading
Corporate debt securities		52		5			-			9		-			(3	)		(1	)		2		(22	)		42		5
Commercial mortgage-backed securities		11		1			-			-		-			-			-			-		(1	)		11		3
Residential mortgage-backed securities		2		-			-			-		-			-			(1	)		-		-			1		-
Collateralized debt obligations		3		-			-			-		-			-			(2	)		-		-			1		-
Other asset-backed securities		-		1			-			-		-			-			-			-		-			1		-
Obligations of states and political subdivisions		10		1			-			-		-			-			-			-		-			11		1

Total fixed maturity securities held-for-trading		78		8			-			9		-			(3	)		(4	)		2		(23	)		67		9

Other invested assets		425		54			(31	)		111		(16	)		(176	)		-			-		-			367		6
Net derivatives		8		(13	)		5			45		-			7			-			-		(38	)		14		34
Net embedded derivatives (4)		1,745		(256	)		-			-		-			-			-			-		(5	)		1,484		(256	)
Assets held in trust		72		-			-			-		-			-			(2	)		-		(15	)		55		-
Separate account assets/liabilities (5)		2,152		101			-			111		-			(141	)		-			-		-			2,223		-

Total	$	9,981	$	(108	)	$	328		$	2,283	$	(16	)	$	(2,114	)	$	(446	)	$	73	$	(906	)	$	9,075	$	(207	)

F-82

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 16 — Fair Value Measurements - (continued)


	Balance at January 1, 2011		Net realized/unrealized gains (losses) included in:						Purchases		Issuances		Sales			Settlements			Transfers					Balance at December 31, 2011		Change in unrealized gains (losses) included in earnings on instruments still held
	Balance at January 1, 2011		Earnings (1)			AOCI (2)			Purchases		Issuances		Sales			Settlements			Into Level 3 (3)		Out of Level 3 (3)			Balance at December 31, 2011

	(in millions)
Fixed maturity securities available-for-sale:
Corporate debt securities	$	3,301	$	13		$	200		$	872	$	-	$	-		$	(424	)	$	336	$	(150	)	$	4,148	$	-
Commercial mortgage-backed securities		485		(17	)		(11	)		-		-		-			(159	)		-		-			298		-
Residential mortgage-backed securities		450		1			17			-		-		-			(107	)		-		-			361		-
Collateralized debt obligations		103		(6	)		29			-		-		-			(12	)		-		-			114		-
Other asset-backed securities		79		(7	)		1			-		-		-			(25	)		16		(20	)		44		-
Obligations of states and political subdivisions		408		-			55			87		-		-			-			-		(14	)		536		-

Total fixed maturity securities available-for-sale		4,826		(16	)		291			959		-		-			(727	)		352		(184	)		5,501		-

Fixed maturity securities held-for-trading
Corporate debt securities		36		14			-			23		-		-			(3	)		-		(18	)		52		14
Commercial mortgage-backed securities		15		(1	)		-			-		-		-			(3	)		-		-			11		(1	)
Residential mortgage-backed securities		3		-			-			-		-		-			(1	)		-		-			2		-
Collateralized debt obligations		3		-			-			-		-		-			-			-		-			3		-
Other asset-backed securities		1		-			-			-		-		-			-			-		(1	)		-		-
Obligations of states and political subdivisions		-		1			-			9		-		-			-			-		-			10		1

Total fixed maturity securities held-for-trading		58		14			-			32		-		-			(7	)		-		(19	)		78		14

Other invested assets		230		20			(3	)		75		-		(6	)		(50	)		159		-			425		22
Net derivatives		19		1			19			13		-		-			-			-		(44	)		8		2
Net embedded derivatives (4)		967		778			-			-		-		-			-			-		-			1,745		778
Assets held in trust		61		-			12			-		-		-			(1	)		-		-			72		12
Separate account assets/ liabilities (5)		2,075		(14	)		53			67		-		-			(29	)		-		-			2,152		60

Total	$	8,236	$	783		$	372		$	1,146	$	-	$	(6	)	$	(814	)	$	511	$	(247	)	$	9,981	$	888

F-83

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 16 — Fair Value Measurements - (continued)

1)	This amount is included in net realized investment and other gains (losses) on the Consolidated Statements of Operations.

2)	This amount is included in net unrealized investment gains (losses) within AOCI on the Consolidated Balance Sheets.

3)	For financial assets that are transferred into and/or out of Level 3, the Company uses the fair value of the assets at the beginning of the reporting period.

4)	The earnings amount is included in benefits to policyholders on the Consolidated Statements of Operations.

5)	Investment performance related to separate account assets is fully offset by corresponding amounts credited to contract holders whose liability is reflected within separate account liabilities.

The Company may hedge positions with offsetting positions that are classified in a different level. For example, the gains and losses for assets and liabilities in the Level 3 category presented in the tables above may not reflect the effect of offsetting gains and losses on hedging instruments that have been classified by the Company in the Level 1 and Level 2 categories.

The transfers into Level 3 primarily result from securities that were impaired during the year or securities where a lack of observable market data (versus the previous year) resulted in reclassifying assets into Level 3. The transfers out of Level 3 primarily result from observable market data becoming available for that asset, thus eliminating the need to extrapolate market data beyond observable points.

Assets Measured at Fair Value on a Nonrecurring Basis

Certain assets are reported at fair value on a nonrecurring basis, including investments such as, limited partnership interests, goodwill and other intangible assets, which are reported at fair value only in the period in which an impairment is recognized. The fair value is calculated using models that are widely accepted in the financial services industry. For the years ended December 31, 2013 and 2012, the Company did not record a goodwill impairment. During the year ended December 31, 2011, the Company recorded a goodwill impairment of $500 million and the fair value measurement was classified as Level 3. For additional information regarding the impairments, see the Goodwill, Value of Business Acquired, and Other Intangible Assets Note.

Note 17 — Segment Information

The Company operates in the following three business segments: (1) Insurance and (2) Wealth Management, which primarily serve retail and institutional customers and (3) Corporate and Other, which includes the institutional advisory business, the reinsurance operations, and certain corporate operations.

The Company’s reportable segments are strategic business units offering different products and services. The reportable segments are managed separately, as they focus on different products, markets, and distribution channels.

Insurance Segment. Offers a variety of individual life insurance products and individual and group long-term care insurance. Products are distributed through multiple distribution channels, including insurance agents, brokers, banks, financial planners, and direct marketing. In 2012, the Company’s remaining international insurance operations were transferred to the Corporate and Other Segment.

Wealth Management Segment. Offers annuities and mutual fund products and services. These businesses also offer a variety of retirement products to group benefit plans. Annuity contracts provide non-guaranteed, partially guaranteed, and fully guaranteed investment options through general and separate account products. These businesses distribute products through multiple distribution channels, including insurance agents and brokers affiliated with the Company, securities brokerage firms, financial planners, pension plan sponsors, pension plan consultants, and banks. As discussed in the Summary of Significant Accounting Policies Note, the Company suspended sales of all its individual and group fixed and variable annuities.

F-84

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 17 — Segment Information - (continued)

Corporate and Other Segment. Primarily consists of certain corporate operations, the institutional advisory business, reinsurance operations, and businesses that are either disposed or in run-off. Corporate operations primarily include certain financing activities, income on capital not specifically allocated to the operating segments, and certain non-recurring expenses not allocated to the segments. The income statement impact of goodwill impairment charges are reported in this segment. In 2012, the Company’s remaining international insurance operations were transferred from the Insurance Segment.

The accounting policies of the segments are the same as those described in the Summary of Significant Accounting Policies Note. Allocations of net investment income are based on the amount of assets allocated to each segment. Other costs and operating expenses are allocated to each segment based on a review of the nature of such costs, cost allocations utilizing time studies, and other relevant allocation methodologies.

The following tables summarize selected financial information by segment for the periods indicated. Included in the Insurance Segment for all periods presented are the assets, liabilities, revenues, and expenses of the closed blocks. For additional information on the closed blocks, see the Closed Blocks Note.


	Insurance			Wealth Management			Corporate and Other			Total

	(in millions)
2013
Revenues from external customers	$	5,034		$	2,185		$	177		$	7,396
Net investment income		3,104			1,477			461			5,042
Net realized investment and other gains (losses)		(1,043	)		(2,847	)		(388	)		(4,278	)
Inter-segment		-			-			-			-

Revenues	$	7,095		$	815		$	250		$	8,160


Net income (loss)	$	200		$	967		$	338		$	1,505

Supplemental Information:
Equity in net income (loss) of investees accounted for under the equity method	$	258		$	91		$	(9	)	$	340
Carrying value of investments under the equity method		3,976			855			243			5,074
Amortization of deferred policy acquisition costs, deferred sales inducements, and value of business acquired		(205	)		(94	)		1			(298	)
Goodwill impairment		-			-			-			-
Interest expense		-			-			38			38
Income tax expense (benefit)		79			273			469			821
Segment assets		101,993			170,106			24,430			296,529

F-85

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 17 — Segment Information - (continued)


	Insurance			Wealth Management			Corporate and Other			Total

	(in millions)
2012
Revenues from external customers	$	5,118		$	2,253		$	295		$	7,666
Net investment income		2,956			1,641			(38	)		4,559
Net realized investment and other gains (losses)		(269	)		(1,606	)		(293	)		(2,168	)
Inter-segment		-			-			-			-

Revenues	$	7,805		$	2,288		$	(36	)	$	10,057


Net income (loss)	$	(220	)	$	94		$	(7	)	$	(133	)

Supplemental Information:
Equity in net income (loss) of investees accounted for under the equity method	$	208		$	28		$	(18	)	$	218
Carrying value of investments under the equity method		3,259			912			287			4,458
Amortization of deferred policy acquisition costs, deferred sales inducements, and value of business acquired		1,001			384			-			1,385
Goodwill impairment		-			-			-			-
Interest expense		-			-			41			41
Income tax expense (benefit)		(174	)		(381	)		(78	)		(633	)
Segment assets		101,334			163,135			25,905			290,374

	Insurance			Wealth Management			Corporate and Other			Total

	(in millions)
2011
Revenues from external customers	$	6,288		$	2,166		$	383		$	8,837
Net investment income		2,831			1,824			334			4,989
Net realized investment and other gains (losses)		1,108			2,004			23			3,135
Inter-segment revenues		-			-			-			-

Revenues	$	10,227		$	5,994		$	740		$	16,961


Net income (loss)	$	30		$	(200	)	$	(641	)	$	(811	)

Supplemental Information:
Equity in net income (loss) of investees accounted for under the equity method	$	178		$	46		$	(2	)	$	222
Amortization of deferred policy acquisition costs, deferred sales inducements, and value of business acquired		1,673			1,167			1			2,841
Goodwill impairment		-			-			500			500
Interest expense		-			-			47			47
Income tax expense (benefit)		(19	)		(246	)		(67	)		(332	)

The Company operates primarily in the United States and has no reportable major customers.

Note 18 — Subsequent Events

The Company evaluated the recognition and disclosure of subsequent events for its December 31, 2013 consolidated financial statements through the date on which the consolidated financial statements were issued.

F-86

John Hancock Variable Life Account U of John Hancock Life Insurance Company (U.S.A.)

Audited Financial Statements

Year ended December 31, 2013 with Report of Independent Registered Public Accounting Firm

John Hancock Variable Life Account U of John Hancock Life Insurance Company (U.S.A.)

Audited Financial Statements

Year ended December 31, 2013

Contents


Report of Independent Registered Public Accounting Firm			5
Statements of Assets and Contract Owners’ Equity			7
Statements of Operations and Changes in Contract Owners’ Equity			10
Notes to Financial Statements			42
Organization			42
Significant Accounting Policies			43
Mortality and Expense Risks Charges			44
Policy Loans			44
Federal Income Taxes			45
Contract Charges			45
Purchases and Sales of Investments			45
Transaction with Affiliates			47
Diversification Requirements			48
Subsequent Events			48
Financial Highlights			49

Report of Independent Registered Public Accounting Firm

Board of Directors of the John Hancock Life Insurance Company (U.S.A.) and Contract Owners of John Hancock Life Insurance Company (U.S.A.) Separate Account U


“Active” sub-accounts

500 Index Trust B		Investment Quality Bond Trust
Active Bond Trust		Lifestyle Aggressive Trust
All Cap Core Trust		Lifestyle Balanced Trust
Alpha Opportunities Trust		Lifestyle Conservative Trust
American Asset Allocation Trust Series 1		Lifestyle Growth Trust
American Global Growth Trust Series 1		Lifestyle Moderate Trust
American Growth Trust Series 1		Mid Cap Index Trust
American Growth-Income Trust Series 1		Mid Cap Stock Trust
American International Trust Series 1		Mid Value Trust
American New World Trust Series 1		Money Market Trust B
Blue Chip Growth Trust		Natural Resources Trust
Bond Trust		Real Estate Securities Trust
Capital Appreciation Trust		Real Return Bond Trust
Capital Appreciation Value Trust		Science & Technology Trust
Core Bond Trust		Short Term Government Income Trust
Core Strategy Trust		Small Cap Growth Trust
Emerging Markets Value Trust		Small Cap Index Trust
Equity-Income Trust		Small Cap Opportunities Trust
Financial Services Trust		Small Cap Value Trust
Franklin Templeton Founding Allocation Trust		Small Company Value Trust
Fundamental All Cap Core Trust		Strategic Income Opportunities Trust
Fundamental Large Cap Value Trust		Total Bond Market Trust B
Fundamental Value Trust		Total Return Trust
Global Bond Trust		Total Stock Market Index Trust
Global Trust		Ultra Short Term Bond Trust
Health Sciences Trust		U.S. Equity Trust
High Yield Trust		Utilities Trust
International Core Trust		Value Trust
International Equity Index Trust B		All Asset Portfolio
International Growth Stock Trust		Brandes International Equity
International Small Company Trust		Frontier Capital Appreciation
International Value Trust		Large Cap Growth

Report of Independent Registered Public Accounting Firm


“Closed” sub-accounts

All Cap Value Trust		Disciplined Diversification Trust
American Global Small Capitalization Trust Series 1		Fundamental Holdings Trust Series 1
American High-Income Bond Trust Series 1		Global Diversification Trust Series 1
Core Allocation Plus Trust		Smaller Company Growth Trust

We have audited the accompanying statements of assets and contract owners’ equity of John Hancock Variable Life Account U (the “Account”), comprised of the active sub-accounts as of December 31, 2013, and the related statements of operations and changes in contract owners’ equity of the active and closed sub-accounts for each of the two years in the period then ended (or years since inception), and the financial highlights for each of the five years in the period then ended (or years since inception). These financial statements and financial highlights are the responsibility of the Account’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Account’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Account’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2013, by correspondence with the custodian or fund manager of the underlying portfolios. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the active sub-accounts constituting John Hancock Variable Life Account U at December 31, 2013, and the results of its operations and changes in contract owners’ equity of the active and closed sub-accounts for each of the two years in the period then ended (or years since inception), and the financial highlights for each of the five years in the period then ended (or years since inception), in conformity with U.S. generally accepted accounting principles.

/s/ ERNST & YOUNG LLP

Chartered Accountants

Licensed Public Accountants

Toronto, Canada

March 28, 2014

John Hancock Variable Life Account U

Statements of Assets and Contract Owners’ Equity

December 31, 2013


Assets
Investments at fair value:
Sub-accounts invested in John Hancock Variable Insurance Trust portfolios:
500 Index Trust B - 3,331,601 shares (cost $51,638,789)	$	77,726,253
Active Bond Trust - 26,124,839 shares (cost $247,073,722)		250,798,450
All Cap Core Trust - 3,909 shares (cost $65,626)		98,345
All Cap Value Trust		—
Alpha Opportunities Trust - 9,957 shares (cost $162,377)		161,497
American Asset Allocation Trust Series 1 - 90,008 shares (cost $1,082,030)		1,369,924
American Global Growth Trust Series 1 - 3,528 shares (cost $50,482)		55,315
American Global Small Capitalization Trust Series 1		—
American Growth Trust Series 1 - 96,208 shares (cost $1,373,403)		2,158,904
American Growth-Income Trust Series 1 - 62,468 shares (cost $989,978)		1,371,800
American High-Income Bond Trust Series 1		—
American International Trust Series 1 - 68,065 shares (cost $1,044,421)		1,308,898
American New World Trust Series 1 - 34,026 shares (cost $437,889)		506,640
Blue Chip Growth Trust - 3,692,161 shares (cost $64,420,820)		126,271,915
Bond Trust - 2,648 shares (cost $36,689)		35,191
Capital Appreciation Trust - 1,542,497 shares (cost $14,347,754)		24,356,033
Capital Appreciation Value Trust - 28,466 shares (cost $374,442)		370,053
Core Allocation Plus Trust		—
Core Bond Trust - 10,970 shares (cost $152,204)		140,420
Core Strategy Trust - 51,478 shares (cost $737,067)		745,917
Disciplined Diversification Trust		—
Emerging Markets Value Trust - 181,440 shares (cost $2,079,194)		1,796,251
Equity-Income Trust - 2,330,927 shares (cost $34,815,890)		46,059,108
Financial Services Trust - 101,990 shares (cost $1,117,199)		1,614,509
Franklin Templeton Founding Allocation Trust - 3,492 shares (cost $30,741)		45,536
Fundamental All Cap Core Trust - 33,384,205 shares (cost $459,159,111)		690,385,359
Fundamental Holdings Trust Series 1		—
Fundamental Large Cap Value Trust - 28,120 shares (cost $404,376)		448,226
Fundamental Value Trust - 30,088 shares (cost $390,064)		606,580
Global Bond Trust - 639,110 shares (cost $8,008,313)		7,880,232
Global Diversification Trust Series 1		—
Global Trust - 12,645 shares (cost $212,656)		258,849
Health Sciences Trust - 167,256 shares (cost $2,859,607)		4,910,636
High Yield Trust - 1,149,043 shares (cost $7,277,917)		6,940,220
International Core Trust - 42,608 shares (cost $396,637)		497,240
International Equity Index Trust B - 2,235,611 shares (cost $36,715,296)		38,296,009
International Growth Stock Trust - 22,334 shares (cost $312,991)		376,549
International Small Company Trust - 30,620 shares (cost $297,120)		385,809
International Value Trust - 868,288 shares (cost $9,918,894)		12,746,465
Investment Quality Bond Trust - 67,528 shares (cost $771,512)		767,794
Lifestyle Aggressive Trust - 522,702 shares (cost $4,282,737)		5,702,674
Lifestyle Balanced Trust - 23,402,445 shares (cost $227,722,656)		321,081,544
Lifestyle Conservative Trust - 56,120 shares (cost $735,036)		707,678
Lifestyle Growth Trust - 2,671,248 shares (cost $30,407,339)		38,038,570
Lifestyle Moderate Trust - 365,266 shares (cost $4,389,987)		5,000,487

John Hancock Variable Life Account U

Statements of Assets and Contract Owners’ Equity

December 31, 2013


Assets (continued)
Investments at fair value:
Sub-accounts invested in John Hancock Variable Insurance Trust portfolios:
Mid Cap Index Trust - 78,363 shares (cost $1,328,283)	$	1,709,889
Mid Cap Stock Trust - 1,222,085 shares (cost $17,368,864)		25,895,976
Mid Value Trust - 919,952 shares (cost $9,477,753)		12,824,131
Money Market Trust B - 53,447,561 shares (cost $53,447,561)		53,447,561
Natural Resources Trust - 99,624 shares (cost $1,067,373)		1,012,183
Real Estate Securities Trust - 2,217,281 shares (cost $22,721,757)		30,509,784
Real Return Bond Trust - 46,276 shares (cost $577,049)		538,652
Science & Technology Trust - 57,950 shares (cost $954,449)		1,440,045
Short Term Government Income Trust - 424,546 shares (cost $5,492,421)		5,306,821
Small Cap Growth Trust - 2,169,024 shares (cost $20,483,909)		27,958,715
Small Cap Index Trust - 126,669 shares (cost $1,573,250)		2,006,442
Small Cap Opportunities Trust - 9,206 shares (cost $237,170)		282,619
Small Cap Value Trust - 453,896 shares (cost $7,921,292)		11,819,442
Small Company Value Trust - 21,582 shares (cost $355,096)		544,290
Smaller Company Growth Trust		—
Strategic Income Opportunities Trust - 88,915 shares (cost $1,208,184)		1,168,341
Total Bond Market Trust B - 1,800,431 shares (cost $18,257,954)		18,166,347
Total Return Trust - 206,717 shares (cost $2,945,366)		2,801,019
Total Stock Market Index Trust - 559,707 shares (cost $6,289,988)		9,559,793
Ultra Short Term Bond Trust - 17,783 shares (cost $217,232)		213,043
U.S. Equity Trust - 13,742 shares (cost $195,597)		243,505
Utilities Trust - 63,336 shares (cost $780,232)		976,639
Value Trust - 27,540 shares (cost $476,079)		713,826

Sub-accounts invested in Outside Trust portfolios:
All Asset Portfolio - 48,234 shares (cost $537,384)	$	532,505
Brandes International Equity - 76,622 shares (cost $1,119,156)		1,007,583
Frontier Capital Appreciation - 38,587 shares (cost $909,058)		1,146,435
Large Cap Growth - 18,625 shares (cost $322,510)		460,775

	$	1,884,308,241

Policy Loans:
Active Bond Trust	$	52,337,349
Blue Chip Growth Trust		17,400,485
Fundamental All Cap Core Trust		142,897,974
International Equity Index Trust B		3,624,153
Lifestyle Balanced Trust		55,850,933
Money Market Trust B		14,678,337
Real Estate Securities Trust		4,301,928

	$	291,091,159

Total assets	$	2,175,399,400

Contract Owners’ Equity
Variable universal life insurance contracts	$	2,175,399,400

See accompanying notes.

This page intentionally left blank.

John Hancock Variable Life Account U

Statements of Operations and Changes in Contract Owners’ Equity


	Sub-Account
	500 Index Trust B						Active Bond Trust
	Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12
Income:
Dividend income distribution	$	1,284,338		$	610,997		$	14,835,555		$	11,082,024
Interest on policy loans		—			—			3,300,771			3,563,441

Total investment income		1,284,338			610,997			18,136,326			14,645,465
Expenses:
Mortality and expense risk		107,951			82,059			1,043,487			1,090,215

Net investment income (loss)		1,176,387			528,938			17,092,839			13,555,250

Realized gains (losses) on investments:
Capital gain distributions		145,426			—			—			1,797,247
Net realized gains (losses)		1,718,546			1,580,563			1,138,754			1,408,362

Realized gains (losses)		1,863,972			1,580,563			1,138,754			3,205,609
Unrealized appreciation (depreciation) during the period		16,025,087			7,055,311			(15,455,243	)		10,306,775

Net increase (decrease) in assets from operations		19,065,446			9,164,812			2,776,350			27,067,634

Changes from principal transactions:
Transfer of net premiums		3,496,391			4,147,718			9,313,095			9,672,159
Transfer on terminations		(6,705,696	)		(11,028,978	)		(29,447,266	)		(31,579,291	)
Transfer on general account policy loans		(426,057	)		(678,966	)		7,025,034			6,722,822
Net interfund transfers		1,539,473			(920,618	)		(3,314,300	)		877,420
Net change in separate account policy loans		—			—			(7,162,478	)		(6,994,717	)

Net increase (decrease) in assets from principal transactions		(2,095,889	)		(8,480,844	)		(23,585,915	)		(21,301,607	)

Total increase (decrease) in assets		16,969,557			683,968			(20,809,565	)		5,766,027

Assets, beginning of period		60,756,696			60,072,728			323,945,364			318,179,337

Assets, end of period	$	77,726,253		$	60,756,696		$	303,135,799		$	323,945,364

(aa)	Terminated as an investment option and funds transferred to Fundamental Large Cap Value Trust on December 9, 2013.

See accompanying notes.


Sub-Account
All Asset Portfolio						All Cap Core Trust						All Cap Value Trust
Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13 (aa)			Year Ended Dec. 31/12

$	25,345		$	33,573		$	1,188		$	815		$	2,939		$	1,173
	—			—			—			—			—			—

	25,345			33,573			1,188			815			2,939			1,173

	—			—			—			—			—			—

	25,345			33,573			1,188			815			2,939			1,173


	—			—			—			—			116,865			5,199
	(6,272	)		1,890			1,616			910			(74,628	)		3,688

	(6,272	)		1,890			1,616			910			42,237			8,887
	(23,920	)		60,781			22,709			8,486			(519	)		1,380

	(4,847	)		96,244			25,513			10,211			44,657			11,440


	31,560			40,169			6,670			7,006			15,501			12,007
	(82,480	)		(62,963	)		(5,841	)		(3,407	)		(24,939	)		(23,770	)
	(69	)		52,423			(122	)		10			1,160			(119	)
	(246,301	)		84,161			245			(54	)		(167,286	)		9,073
	—			—			—			—			—			—

	(297,290	)		113,790			952			3,555			(175,564	)		(2,809	)

	(302,137	)		210,034			26,465			13,766			(130,907	)		8,631

	834,642			624,608			71,880			58,114			130,907			122,276

$	532,505		$	834,642		$	98,345		$	71,880			—		$	130,907

John Hancock Variable Life Account U

Statements of Operations and Changes in Contract Owners’ Equity

(continued)


	Sub-Account
	Alpha Opportunities Trust						American Asset Allocation Trust Series 1
	Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12
Income:
Dividend income distribution	$	1,209		$	206		$	13,775		$	11,262
Interest on policy loans		—			—			—			—

Total investment income		1,209			206			13,775			11,262
Expenses:
Mortality and expense risk		—			—			—			—

Net investment income (loss)		1,209			206			13,775			11,262

Realized gains (losses) on investments:
Capital gain distributions		14,956			1,894			—			—
Net realized gains (losses)		6,832			(660	)		17,711			10,072

Realized gains (losses)		21,788			1,234			17,711			10,072
Unrealized appreciation (depreciation) during the period		78			3,932			177,086			59,435

Net increase (decrease) in assets from operations		23,075			5,372			208,572			80,769

Changes from principal transactions:
Transfer of net premiums		5,981			3,966			33,333			2,452
Transfer on terminations		(16,783	)		(5,056	)		(32,987	)		(37,078	)
Transfer on general account policy loans		(225	)		(166	)		—			—
Net interfund transfers		111,662			8,815			424,960			237,293
Net change in separate account policy loans		—			—			—			—

Net increase (decrease) in assets from principal transactions		100,635			7,559			425,306			202,667

Total increase (decrease) in assets		123,710			12,931			633,878			283,436

Assets, beginning of period		37,787			24,856			736,046			452,610

Assets, end of period	$	161,497		$	37,787		$	1,369,924		$	736,046

(t)	Terminated as an investment option and funds transferred to American Growth-Income Trust Series 1 on November 5, 2012.

(w)	Terminated as an investment option and funds transferred to American Global Growth Trust Series 1 on April 29, 2013.

See accompanying notes.


Sub-Account
American Blue Chip Income and Growth Trust Series 1				American Global Growth Trust Series 1						American Global Small Capitalization Trust Series 1
	Year Ended Dec. 31/12 (t)			Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13 (w)			Year Ended Dec. 31/12

		—		$	448		$	73		$	3		$	67
		—			—			—			—			—

		—			448			73			3			67

		—			—			—			—			—

		—			448			73			3			67


		48,494			—			—			—			—
		(11,990	)		275			(45	)		715			(24	)

		36,504			275			(45	)		715			(24	)
		(444	)		4,382			2,893			(94	)		238

		36,060			5,105			2,921			624			281


		13,024			213			213			130			750
		(21,878	)		(1,957	)		(563	)		(105	)		(224	)
		(25	)		—			—			(54	)		(40	)
		(323,728	)		36,045			(1	)		(8,481	)		6,432
		—			—			—			—			—

		(332,607	)		34,301			(351	)		(8,510	)		6,918

		(296,547	)		39,406			2,570			(7,886	)		7,199

		296,547			15,909			13,339			7,886			687

		—		$	55,315		$	15,909			—		$	7,886

John Hancock Variable Life Account U

Statements of Operations and Changes in Contract Owners’ Equity

(continued)


	Sub-Account
	American Growth Trust Series 1						American Growth-Income Trust Series 1
	Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12
Income:
Dividend income distribution	$	10,598		$	7,923		$	12,325		$	11,869
Interest on policy loans		—			—			—			—

Total investment income		10,598			7,923			12,325			11,869
Expenses:
Mortality and expense risk		—			—			—			—

Net investment income (loss)		10,598			7,923			12,325			11,869

Realized gains (losses) on investments:
Capital gain distributions		—			—			—			—
Net realized gains (losses)		169,118			136,456			20,759			21,521

Realized gains (losses)		169,118			136,456			20,759			21,521
Unrealized appreciation (depreciation) during the period		366,200			184,420			292,687			69,447

Net increase (decrease) in assets from operations		545,916			328,799			325,771			102,837

Changes from principal transactions:
Transfer of net premiums		133,787			166,654			70,839			49,656
Transfer on terminations		(241,424	)		(221,971	)		(106,877	)		(105,838	)
Transfer on general account policy loans		(4,530	)		(1,035	)		(2,354	)		(2,457	)
Net interfund transfers		(256,112	)		(295,041	)		127,403			367,773
Net change in separate account policy loans		—			—			—			—

Net increase (decrease) in assets from principal transactions		(368,279	)		(351,393	)		89,011			309,134

Total increase (decrease) in assets		177,637			(22,594	)		414,782			411,971

Assets, beginning of period		1,981,267			2,003,861			957,018			545,047

Assets, end of period	$	2,158,904		$	1,981,267		$	1,371,800		$	957,018

(x)	Terminated as an investment option and funds transferred to High Yield Trust on April 29, 2013.

See accompanying notes.


Sub-Account
American High-Income Bond Trust Series 1						American International Trust Series 1						American New World Trust Series 1
Year Ended Dec. 31/13 (x)			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12

$	150		$	12,232		$	11,656		$	10,953		$	4,554		$	2,409
	—			—			—			—			—			—

	150			12,232			11,656			10,953			4,554			2,409

	—			—			—			—			—			—

	150			12,232			11,656			10,953			4,554			2,409


	4,681			—			—			—			—			—
	(6,366	)		(877	)		23,569			(14,054	)		8,161			(2,032	)

	(1,685	)		(877	)		23,569			(14,054	)		8,161			(2,032	)
	7,183			(3,551	)		197,199			167,519			37,928			63,711

	5,648			7,804			232,424			164,418			50,643			64,088


	868			2,216			70,019			66,997			22,975			20,670
	(1,572	)		(30,998	)		(116,994	)		(109,264	)		(32,903	)		(25,919	)
	—			—			(6,972	)		(7,976	)		(1,509	)		(1,977	)
	(197,608	)		168,508			75,396			(29,484	)		33,165			(3,341	)
	—			—			—			—			—			—

	(198,312	)		139,726			21,449			(79,727	)		21,728			(10,567	)

	(192,664	)		147,530			253,873			84,691			72,371			53,521

	192,664			45,134			1,055,025			970,334			434,269			380,748

	—		$	192,664		$	1,308,898		$	1,055,025		$	506,640		$	434,269

John Hancock Variable Life Account U

Statements of Operations and Changes in Contract Owners’ Equity

(continued)


	Sub-Account
	Balanced Trust				Blue Chip Growth Trust
		Year Ended Dec. 31/12 (n)			Year Ended Dec. 31/13			Year Ended Dec. 31/12
Income:
Dividend income distribution		$	1,222		$	339,146		$	129,699
Interest on policy loans			—			1,046,972			1,031,752

Total investment income			1,222			1,386,118			1,161,451
Expenses:
Mortality and expense risk			—			617,770			563,918

Net investment income (loss)			1,222			768,348			597,533

Realized gains (losses) on investments:
Capital gain distributions			27,904			—			—
Net realized gains (losses)			(20,895	)		4,748,559			3,386,177

Realized gains (losses)			7,009			4,748,559			3,386,177
Unrealized appreciation (depreciation) during the period			(1,330	)		32,998,739			12,437,083

Net increase (decrease) in assets from operations			6,901			38,515,646			16,420,793

Changes from principal transactions:
Transfer of net premiums			61			4,798,468			5,110,258
Transfer on terminations			(2,022	)		(11,401,155	)		(13,153,713	)
Transfer on general account policy loans			—			207,484			667,167
Net interfund transfers			(85,864	)		(1,718,066	)		524,253
Net change in separate account policy loans			—			(527,953	)		(1,365,222	)

Net increase (decrease) in assets from principal transactions			(87,825	)		(8,641,222	)		(8,217,257	)

Total increase (decrease) in assets			(80,924	)		29,874,424			8,203,536

Assets, beginning of period			80,924			113,797,976			105,594,440

Assets, end of period			—		$	143,672,400		$	113,797,976

(n)	Terminated as an investment option and funds transferred to Lifestyle Growth Trust on April 30, 2012.

See accompanying notes.


Sub-Account
Bond Trust						Brandes International Equity						Capital Appreciation Trust
Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12

$	1,492		$	1,439		$	22,545		$	16,826		$	53,874		$	38,131
	—			—			—			—			—			—

	1,492			1,439			22,545			16,826			53,874			38,131

	—			—			5,365			4,584			85,332			70,784

	1,492			1,439			17,180			12,242			(31,458	)		(32,653	)


	374			346			—			—			—			—
	(648	)		39			(15,646	)		(49,028	)		738,285			598,207

	(274	)		385			(15,646	)		(49,028	)		738,285			598,207
	(1,878	)		1,188			133,943			175,388			5,987,667			2,081,226

	(660	)		3,012			135,477			138,602			6,694,494			2,646,780


	8,074			7,175			15,244			18,360			1,404,346			1,514,253
	(19,011	)		(4,091	)		(20,030	)		(20,541	)		(2,351,903	)		(3,044,511	)
	(19	)		135			11,760			3,155			(222,800	)		(114,644	)
	(6,129	)		1			(808	)		32,545			879,317			(137,035	)
	—			—			—			—			—			—

	(17,085	)		3,220			6,166			33,519			(291,040	)		(1,781,937	)

	(17,745	)		6,232			141,643			172,121			6,403,454			864,843

	52,936			46,704			865,940			693,819			17,952,579			17,087,736

$	35,191		$	52,936		$	1,007,583		$	865,940		$	24,356,033		$	17,952,579

John Hancock Variable Life Account U

Statements of Operations and Changes in Contract Owners’ Equity

(continued)


	Sub-Account
	Capital Appreciation Value Trust						Core Allocation Plus Trust
	Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13 (ac)			Year Ended Dec. 31/12
Income:
Dividend income distribution	$	4,495		$	769		$	1,158		$	473
Interest on policy loans		—			—			—			—

Total investment income		4,495			769			1,158			473
Expenses:
Mortality and expense risk		—			—			—			—

Net investment income (loss)		4,495			769			1,158			473

Realized gains (losses) on investments:
Capital gain distributions		29,258			4,840			11,995			2,013
Net realized gains (losses)		11,342			240			(3,574	)		139

Realized gains (losses)		40,600			5,080			8,421			2,152
Unrealized appreciation (depreciation) during the period		(5,342	)		340			(2,842	)		1,525

Net increase (decrease) in assets from operations		39,753			6,189			6,737			4,150

Changes from principal transactions:
Transfer of net premiums		6,438			4,906			431			460
Transfer on terminations		(25,295	)		(3,339	)		(1,534	)		(1,540	)
Transfer on general account policy loans		(4	)		4			—			—
Net interfund transfers		281,697			25,608			(39,818	)		1
Net change in separate account policy loans		—			—			—			—

Net increase (decrease) in assets from principal transactions		262,836			27,179			(40,921	)		(1,079	)

Total increase (decrease) in assets		302,589			33,368			(34,184	)		3,071

Assets, beginning of period		67,464			34,096			34,184			31,113

Assets, end of period	$	370,053		$	67,464			—		$	34,184

(ac)	Terminated as an investment option and funds transferred to Core Strategy Trust on December 9, 2013.

See accompanying notes.


Sub-Account
Core Bond Trust						Core Strategy Trust						Disciplined Diversification Trust
Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13 (ac)			Year Ended Dec. 31/12

$	3,096		$	2,640		$	4,654		$	61		$	14,699		$	8,409
	—			—			—			—			—			—

	3,096			2,640			4,654			61			14,699			8,409

	—			—			—			—			—			—

	3,096			2,640			4,654			61			14,699			8,409


	5,288			2,484			265			—			169,239			4,542
	349			495			(152	)		2			(94,828	)		4,136

	5,637			2,979			113			2			74,411			8,678
	(11,458	)		(1,901	)		8,783			185			(35,352	)		23,251

	(2,725	)		3,718			13,550			248			53,758			40,338


	9,254			4,587			6,593			455			49,334			53,742
	(4,975	)		(4,733	)		(5,369	)		(404	)		(46,888	)		(44,741	)
	(58	)		(47	)		—			—			(184	)		(2,075	)
	41,897			50,000			728,906			(1	)		(415,105	)		19
	—			—			—			—			—			—

	46,118			49,807			730,130			50			(412,843	)		6,945

	43,393			53,525			743,680			298			(359,085	)		47,283

	97,027			43,502			2,237			1,939			359,085			311,802

$	140,420		$	97,027		$	745,917		$	2,237			—		$	359,085

John Hancock Variable Life Account U

Statements of Operations and Changes in Contract Owners’ Equity

(continued)


	Sub-Account
	Emerging Markets Value Trust						Equity-Income Trust
	Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12
Income:
Dividend income distribution	$	24,624		$	17,044		$	839,585		$	821,197
Interest on policy loans		—			—			—			—

Total investment income		24,624			17,044			839,585			821,197
Expenses:
Mortality and expense risk		4,983			3,031			119,767			106,424

Net investment income (loss)		19,641			14,013			719,818			714,773

Realized gains (losses) on investments:
Capital gain distributions		62,175			102,351			—			—
Net realized gains (losses)		(182,866	)		(63,559	)		414,514			(325,669	)

Realized gains (losses)		(120,691	)		38,792			414,514			(325,669	)
Unrealized appreciation (depreciation) during the period		28,786			188,365			9,999,644			5,712,959

Net increase (decrease) in assets from operations		(72,264	)		241,170			11,133,976			6,102,063

Changes from principal transactions:
Transfer of net premiums		114,783			144,329			2,389,926			2,593,684
Transfer on terminations		(118,857	)		(153,907	)		(4,979,017	)		(5,021,069	)
Transfer on general account policy loans		(19,898	)		(5,802	)		(474,326	)		(437,580	)
Net interfund transfers		268,837			78,551			(1,504,908	)		(329,040	)
Net change in separate account policy loans		—			—			—			—

Net increase (decrease) in assets from principal transactions		244,865			63,171			(4,568,325	)		(3,194,005	)

Total increase (decrease) in assets		172,601			304,341			6,565,651			2,908,058

Assets, beginning of period		1,623,650			1,319,309			39,493,457			36,585,399

Assets, end of period	$	1,796,251		$	1,623,650		$	46,059,108		$	39,493,457

See accompanying notes.


Sub-Account
Financial Services Trust						Franklin Templeton Founding Allocation Trust						Frontier Capital Appreciation
Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12

$	10,171		$	10,152		$	1,044		$	1,275			—		$	2,658
	—			—			—			—			—			—

	10,171			10,152			1,044			1,275			—			2,658

	—			—			—			—			5,729			4,470

	10,171			10,152			1,044			1,275			(5,729	)		(1,812	)


	15,681			—			—			—			97,818			53,580
	60,126			(2,115	)		1,514			322			6,126			(322	)

	75,807			(2,115	)		1,514			322			103,944			53,258
	302,406			175,182			6,938			4,462			222,894			66,301

	388,384			183,219			9,496			6,059			321,109			117,747


	103,075			117,822			210			553			15,734			16,247
	(193,857	)		(119,570	)		(3,631	)		(1,651	)		(53,704	)		(39,049	)
	(29,728	)		(18,217	)		—			—			10,585			1,313
	114,935			67,032			(3,144	)		28			(2,013	)		53,695
	—			—			—			—			—			—

	(5,575	)		47,067			(6,565	)		(1,070	)		(29,398	)		32,206

	382,809			230,286			2,931			4,989			291,711			149,953

	1,231,700			1,001,414			42,605			37,616			854,724			704,771

$	1,614,509		$	1,231,700		$	45,536		$	42,605		$	1,146,435		$	854,724

John Hancock Variable Life Account U

Statements of Operations and Changes in Contract Owners’ Equity

(continued)


	Sub-Account
	Fundamental All Cap Core Trust						Fundamental Holdings Trust Series 1
	Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13 (ac)			Year Ended Dec. 31/12
Income:
Dividend income distribution	$	6,055,220		$	4,181,922		$	452		$	286
Interest on policy loans		8,749,675			9,193,484			—			—

Total investment income		14,804,895			13,375,406			452			286
Expenses:
Mortality and expense risk		2,499,237			2,301,704			—			—

Net investment income (loss)		12,305,658			11,073,702			452			286

Realized gains (losses) on investments:
Capital gain distributions		—			—			8,663			—
Net realized gains (losses)		9,013,013			(1,580,654	)		(5,200	)		91

Realized gains (losses)		9,013,013			(1,580,654	)		3,463			91
Unrealized appreciation (depreciation) during the period		173,401,760			106,261,734			(1,304	)		1,005

Net increase (decrease) in assets from operations		194,720,431			115,754,782			2,611			1,382

Changes from principal transactions:
Transfer of net premiums		23,484,357			24,541,702			9,114			9,110
Transfer on terminations		(74,982,658	)		(72,116,703	)		(1,175	)		(1,015	)
Transfer on general account policy loans		11,200,580			13,984,084			—			—
Net interfund transfers		(2,351,832	)		(2,420,884	)		(27,415	)		—
Net change in separate account policy loans		(12,024,132	)		(14,922,281	)		—			—

Net increase (decrease) in assets from principal transactions		(54,673,685	)		(50,934,082	)		(19,476	)		8,095

Total increase (decrease) in assets		140,046,746			64,820,700			(16,865	)		9,477

Assets, beginning of period		693,236,587			628,415,887			16,865			7,388

Assets, end of period	$	833,283,333		$	693,236,587			—		$	16,865

(ac)	Terminated as an investment option and funds transferred to Core Strategy Trust on December 9, 2013.

See accompanying notes.


Sub-Account
Fundamental Large Cap Value Trust						Fundamental Value Trust						Global Bond Trust
Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12

$	2,468		$	1,087		$	8,273		$	5,113		$	41,328		$	605,098
	—			—			—			—			—			—

	2,468			1,087			8,273			5,113			41,328			605,098

	—			—			—			—			22,175			25,173

	2,468			1,087			8,273			5,113			19,153			579,925


	—			—			—			—			—			—
	11,163			1,302			76,976			20,874			140,393			(29,564	)

	11,163			1,302			76,976			20,874			140,393			(29,564	)
	32,938			10,423			87,278			38,370			(651,794	)		885

	46,569			12,812			172,527			64,357			(492,248	)		551,246


	15,772			3,925			60,404			70,380			466,202			490,031
	(12,177	)		(4,026	)		(143,302	)		(67,279	)		(1,069,076	)		(1,037,999	)
	(372	)		—			(15,322	)		(1,507	)		584,422			(61,603	)
	307,071			44,512			(5,218	)		(7,716	)		(138,264	)		283,408
	—			—			—			—			—			—

	310,294			44,411			(103,438	)		(6,122	)		(156,716	)		(326,163	)

	356,863			57,223			69,089			58,235			(648,964	)		225,083

	91,363			34,140			537,491			479,256			8,529,196			8,304,113

$	448,226		$	91,363		$	606,580		$	537,491		$	7,880,232		$	8,529,196

John Hancock Variable Life Account U

Statements of Operations and Changes in Contract Owners’ Equity

(continued)


	Sub-Account
	Global Diversification Trust Series 1						Global Trust
	Year Ended Dec. 31/13 (ac)			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12
Income:
Dividend income distribution	$	4,307		$	3,552		$	3,754		$	3,964
Interest on policy loans		—			—			—			—

Total investment income		4,307			3,552			3,754			3,964
Expenses:
Mortality and expense risk		—			—			—			—

Net investment income (loss)		4,307			3,552			3,754			3,964

Realized gains (losses) on investments:
Capital gain distributions		60,260			—			—			—
Net realized gains (losses)		(16,542	)		673			29,182			(7,848	)

Realized gains (losses)		43,718			673			29,182			(7,848	)
Unrealized appreciation (depreciation) during the period		(17,181	)		23,582			23,095			40,876

Net increase (decrease) in assets from operations		30,844			27,807			56,031			36,992

Changes from principal transactions:
Transfer of net premiums		18,641			19,915			16,481			21,161
Transfer on terminations		(11,438	)		(10,236	)		(31,666	)		(47,516	)
Transfer on general account policy loans		238			—			151			—
Net interfund transfers		(254,680	)		15,930			23,457			(309	)
Net change in separate account policy loans		—			—			—			—

Net increase (decrease) in assets from principal transactions		(247,239	)		25,609			8,423			(26,664	)

Total increase (decrease) in assets		(216,395	)		53,416			64,454			10,328

Assets, beginning of period		216,395			162,979			194,395			184,067

Assets, end of period		—		$	216,395		$	258,849		$	194,395

(ac)	Terminated as an investment option and funds transferred to Core Strategy Trust on December 9, 2013.

See accompanying notes.


Sub-Account
Health Sciences Trust						High Yield Trust						International Core Trust
Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12

	—			—		$	461,676		$	461,635		$	12,635		$	34,583
	—			—			—			—			—			—

	—			—			461,676			461,635			12,635			34,583

	—			—			13,212			10,233			—			—

	—			—			448,464			451,402			12,635			34,583


	368,922			234,726			—			—			—			—
	441,581			147,305			(247,749	)		(196,593	)		9,509			(237,566	)

	810,503			382,031			(247,749	)		(196,593	)		9,509			(237,566	)
	968,407			559,743			323,476			754,171			82,183			371,952

	1,778,910			941,774			524,191			1,008,980			104,327			168,969


	231,891			250,934			308,331			331,393			47,214			58,195
	(628,149	)		(539,956	)		(644,099	)		(771,042	)		(125,810	)		(849,498	)
	(67,975	)		(101,808	)		(21,685	)		(30,031	)		(3,073	)		(1,190	)
	(73,582	)		92,983			652,953			(21,257	)		(3,066	)		3,099
	—			—			—			—			—			—

	(537,815	)		(297,847	)		295,500			(490,937	)		(84,735	)		(789,394	)

	1,241,095			643,927			819,691			518,043			19,592			(620,425	)

	3,669,541			3,025,614			6,120,529			5,602,486			477,648			1,098,073

$	4,910,636		$	3,669,541		$	6,940,220		$	6,120,529		$	497,240		$	477,648

John Hancock Variable Life Account U

Statements of Operations and Changes in Contract Owners’ Equity

(continued)


	Sub-Account
	International Equity Index Trust A				International Equity Index Trust B
		Year Ended Dec. 31/12 (s)			Year Ended Dec. 31/13			Year Ended Dec. 31/12
Income:
Dividend income distribution		$	15,805		$	902,451		$	415,236
Interest on policy loans			—			217,263			246,817

Total investment income			15,805			1,119,714			662,053
Expenses:
Mortality and expense risk			—			168,931			159,640

Net investment income (loss)			15,805			950,783			502,413

Realized gains (losses) on investments:
Capital gain distributions			28,165			—			—
Net realized gains (losses)			(186,715	)		(816,319	)		(1,309,402	)

Realized gains (losses)			(158,550	)		(816,319	)		(1,309,402	)
Unrealized appreciation (depreciation) during the period			202,488			4,892,090			6,477,116

Net increase (decrease) in assets from operations			59,743			5,026,554			5,670,127

Changes from principal transactions:
Transfer of net premiums			42,530			1,816,519			1,953,783
Transfer on terminations			(41,594	)		(4,034,047	)		(4,737,054	)
Transfer on general account policy loans			(496	)		410,903			17,864
Net interfund transfers			(613,273	)		(352,711	)		60,345
Net change in separate account policy loans			—			(572,646	)		(173,426	)

Net increase (decrease) in assets from principal transactions			(612,833	)		(2,731,982	)		(2,878,488	)

Total increase (decrease) in assets			(553,090	)		2,294,572			2,791,639

Assets, beginning of period			553,090			39,625,590			36,833,951

Assets, end of period			—		$	41,920,162		$	39,625,590

(s)	Terminated as an investment option and funds transferred to International Equity Index Trust B on November 5, 2012.

(p)	Reflects the period from commencement of operations on November 5, 2012 through December 31, 2012.

(u)	Terminated as an investment option and funds transferred to International Growth Stock Trust on November 5, 2012.

See accompanying notes.


Sub-Account
International Growth Stock Trust						International Opportunities Trust				International Small Company Trust
Year Ended Dec. 31/13			Year Ended Dec. 31/12 (p)				Year Ended Dec. 31/12 (u)			Year Ended Dec. 31/13			Year Ended Dec. 31/12

$	4,197		$	2,317			$	6,593		$	6,247		$	4,557
	—			—				—			—			—

	4,197			2,317				6,593			6,247			4,557

	—			—				—			—			—

	4,197			2,317				6,593			6,247			4,557


	—			—				—			—			—
	6,970			173				(13,848	)		19,866			2,324

	6,970			173				(13,848	)		19,866			2,324
	52,146			11,412				35,265			56,585			50,950

	63,313			13,902				28,010			82,698			57,831


	45,017			11,209				41,422			24,600			27,658
	(53,913	)		(8,360	)			(65,086	)		(31,806	)		(32,986	)
	(533	)		20				(2,702	)		(3,811	)		(113	)
	(23,655	)		329,549				(340,755	)		(39,898	)		(2,795	)
	—			—				—			—			—

	(33,084	)		332,418				(367,121	)		(50,915	)		(8,236	)

	30,229			346,320				(339,111	)		31,783			49,595

	346,320			—				339,111			354,026			304,431

$	376,549		$	346,320				—		$	385,809		$	354,026

John Hancock Variable Life Account U

Statements of Operations and Changes in Contract Owners’ Equity

(continued)


	Sub-Account
	International Value Trust						Investment Quality Bond Trust
	Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12
Income:
Dividend income distribution	$	210,912		$	281,891		$	30,475		$	17,138
Interest on policy loans		—			—			—			—

Total investment income		210,912			281,891			30,475			17,138
Expenses:
Mortality and expense risk		30,644			27,967			—			—

Net investment income (loss)		180,268			253,924			30,475			17,138

Realized gains (losses) on investments:
Capital gain distributions		—			—			14,791			—
Net realized gains (losses)		211,268			(36,964	)		3,672			5,348

Realized gains (losses)		211,268			(36,964	)		18,463			5,348
Unrealized appreciation (depreciation) during the period		2,308,504			1,600,280			(64,540	)		36,257

Net increase (decrease) in assets from operations		2,700,040			1,817,240			(15,602	)		58,743

Changes from principal transactions:
Transfer of net premiums		772,033			868,781			19,300			20,614
Transfer on terminations		(1,353,216	)		(1,439,286	)		(27,148	)		(32,686	)
Transfer on general account policy loans		(121,278	)		(67,837	)		(6,890	)		(22,247	)
Net interfund transfers		(247,034	)		(181,650	)		(19,609	)		9,709
Net change in separate account policy loans		—			—			—			—

Net increase (decrease) in assets from principal transactions		(949,495	)		(819,992	)		(34,347	)		(24,610	)

Total increase (decrease) in assets		1,750,545			997,248			(49,949	)		34,133

Assets, beginning of period		10,995,920			9,998,672			817,743			783,610

Assets, end of period	$	12,746,465		$	10,995,920		$	767,794		$	817,743

(o)	Terminated as an investment option and funds transferred to U.S. Equity Trust on April 30, 2012.

See accompanying notes.


Sub-Account
Large Cap Growth						Large Cap Trust				Lifestyle Aggressive Trust
Year Ended Dec. 31/13			Year Ended Dec. 31/12				Year Ended Dec. 31/12 (o)			Year Ended Dec. 31/13			Year Ended Dec. 31/12

$	2,223		$	161			$	1,002		$	131,339		$	67,201
	—			—				—			—			—

	2,223			161				1,002			131,339			67,201

	2,306			2,013				—			—			—

	(83	)		(1,852	)			1,002			131,339			67,201


	22,052			—				—			—			—
	4,693			4,063				39,600			(18,396	)		(130,179	)

	26,745			4,063				39,600			(18,396	)		(130,179	)
	93,206			61,254				(17,358	)		1,145,367			764,061

	119,868			63,465				23,244			1,258,310			701,083


	6,799			8,635				6,558			452,978			458,111
	(22,708	)		(11,877	)			(9,805	)		(805,244	)		(538,496	)
	10,734			2,441				(877	)		(84,559	)		4,578
	256			(61,606	)			(185,886	)		103,038			(54,786	)
	—			—				—			—			—

	(4,919	)		(62,407	)			(190,010	)		(333,787	)		(130,593	)

	114,949			1,058				(166,766	)		924,523			570,490

	345,826			344,768				166,766			4,778,151			4,207,661

$	460,775		$	345,826				—		$	5,702,674		$	4,778,151

John Hancock Variable Life Account U

Statements of Operations and Changes in Contract Owners’ Equity

(continued)


	Sub-Account
	Lifestyle Balanced Trust						Lifestyle Conservative Trust
	Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12
Income:
Dividend income distribution	$	8,896,591		$	6,891,584		$	25,031		$	82,923
Interest on policy loans		3,463,126			3,480,096			—			—

Total investment income		12,359,717			10,371,680			25,031			82,923
Expenses:
Mortality and expense risk		1,837,466			1,791,471			—			—

Net investment income (loss)		10,522,251			8,580,209			25,031			82,923

Realized gains (losses) on investments:
Capital gain distributions		—			—			26,422			17,225
Net realized gains (losses)		8,096,092			6,739,604			(5,640	)		9,889

Realized gains (losses)		8,096,092			6,739,604			20,782			27,114
Unrealized appreciation (depreciation) during the period		20,836,197			20,293,520			(14,106	)		(16,394	)

Net increase (decrease) in assets from operations		39,454,540			35,613,333			31,707			93,643

Changes from principal transactions:
Transfer of net premiums		13,629,861			14,312,177			184,431			103,778
Transfer on terminations		(37,891,105	)		(40,819,559	)		(294,983	)		(111,554	)
Transfer on general account policy loans		4,513,448			5,724,977			(130,247	)		(36,513	)
Net interfund transfers		166,575			150,334			(2,002,389	)		2,143,372
Net change in separate account policy loans		(4,957,023	)		(6,384,970	)		—			—

Net increase (decrease) in assets from principal transactions		(24,538,244	)		(27,017,041	)		(2,243,188	)		2,099,083

Total increase (decrease) in assets		14,916,296			8,596,292			(2,211,481	)		2,192,726

Assets, beginning of period		362,016,181			353,419,889			2,919,159			726,433

Assets, end of period	$	376,932,477		$	362,016,181		$	707,678		$	2,919,159

See accompanying notes.


Sub-Account
Lifestyle Growth Trust						Lifestyle Moderate Trust						Mid Cap Index Trust
Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12

$	904,768		$	577,550		$	146,118		$	119,649		$	17,337		$	18,054
	—			—			—			—			—			—

	904,768			577,550			146,118			119,649			17,337			18,054

	47,278			46,028			9,890			8,776			2,396			1,575

	857,490			531,522			136,228			110,873			14,941			16,479


	—			—			—			—			82,288			121,214
	(2,850	)		(857,073	)		93,501			30,580			46,946			(1,517	)

	(2,850	)		(857,073	)		93,501			30,580			129,234			119,697
	5,222,450			4,346,714			234,729			292,513			270,829			61,719

	6,077,090			4,021,163			464,458			433,966			415,004			197,895


	2,874,721			3,063,169			258,852			303,679			103,084			79,057
	(4,257,785	)		(3,572,769	)		(614,973	)		(540,960	)		(161,747	)		(182,302	)
	(141,979	)		(331,854	)		(19,357	)		(14,611	)		(15,687	)		(13,806	)
	2,181,154			(1,596,470	)		133,267			965,570			150,732			(61,851	)
	—			—			—			—			—			—

	656,111			(2,437,924	)		(242,211	)		713,678			76,382			(178,902	)

	6,733,201			1,583,239			222,247			1,147,644			491,386			18,993

	31,305,369			29,722,130			4,778,240			3,630,596			1,218,503			1,199,510

$	38,038,570		$	31,305,369		$	5,000,487		$	4,778,240		$	1,709,889		$	1,218,503

John Hancock Variable Life Account U

Statements of Operations and Changes in Contract Owners’ Equity

(continued)


	Sub-Account
	Mid Cap Stock Trust						Mid Value Trust
	Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12
Income:
Dividend income distribution	$	15,536			—		$	127,834		$	85,715
Interest on policy loans		—			—			—			—

Total investment income		15,536			—			127,834			85,715
Expenses:
Mortality and expense risk		82,592			71,566			27,298			19,256

Net investment income (loss)		(67,056	)		(71,566	)		100,536			66,459

Realized gains (losses) on investments:
Capital gain distributions		424,137			—			798,679			737,329
Net realized gains (losses)		389,217			(181,417	)		469,668			(74,610	)

Realized gains (losses)		813,354			(181,417	)		1,268,347			662,719
Unrealized appreciation (depreciation) during the period		6,475,871			4,206,721			1,738,847			971,162

Net increase (decrease) in assets from operations		7,222,169			3,953,738			3,107,730			1,700,340

Changes from principal transactions:
Transfer of net premiums		1,113,075			1,231,625			507,340			578,930
Transfer on terminations		(2,661,915	)		(2,388,085	)		(1,695,712	)		(1,348,571	)
Transfer on general account policy loans		(181,689	)		(321,617	)		(81,232	)		(179,835	)
Net interfund transfers		(222,845	)		(354,771	)		867,821			154,076
Net change in separate account policy loans		—			—			—			—

Net increase (decrease) in assets from principal transactions		(1,953,374	)		(1,832,848	)		(401,783	)		(795,400	)

Total increase (decrease) in assets		5,268,795			2,120,890			2,705,947			904,940

Assets, beginning of period		20,627,181			18,506,291			10,118,184			9,213,244

Assets, end of period	$	25,895,976		$	20,627,181		$	12,824,131		$	10,118,184

See accompanying notes.


Sub-Account
Money Market Trust B						Natural Resources Trust						Real Estate Securities Trust
Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12

$	4,899		$	24,553		$	6,622		$	14,345		$	634,146		$	568,178
	979,685			1,079,199			—			—			265,877			272,171

	984,584			1,103,752			6,622			14,345			900,023			840,349

	333,655			373,346			—			—			162,035			156,084

	650,929			730,406			6,622			14,345			737,988			684,265


	2,723			4,325			—			—			—			—
	—			—			(24,534	)		123,717			(13,428	)		(259,038	)

	2,723			4,325			(24,534	)		123,717			(13,428	)		(259,038	)
	—			—			51,804			(137,374	)		(581,671	)		4,750,129

	653,652			734,731			33,892			688			142,889			5,175,356


	3,714,021			4,883,165			128,127			171,949			1,352,808			1,462,728
	(13,853,438	)		(19,231,337	)		(174,019	)		(435,056	)		(3,304,018	)		(3,757,146	)
	1,660,636			3,393,872			(10,675	)		(31,530	)		315,192			(57,805	)
	4,773,510			1,726,449			(358,733	)		(23,923	)		(408,430	)		116,973
	(1,854,834	)		(3,514,549	)		—			—			(543,895	)		(84,067	)

	(5,560,105	)		(12,742,400	)		(415,300	)		(318,560	)		(2,588,343	)		(2,319,317	)

	(4,906,453	)		(12,007,669	)		(381,408	)		(317,872	)		(2,445,454	)		2,856,039

	73,032,351			85,040,020			1,393,591			1,711,463			37,257,166			34,401,127

$	68,125,898		$	73,032,351		$	1,012,183		$	1,393,591		$	34,811,712		$	37,257,166

John Hancock Variable Life Account U

Statements of Operations and Changes in Contract Owners’ Equity

(continued)


	Sub-Account
	Real Return Bond Trust						Science & Technology Trust
	Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12
Income:
Dividend income distribution	$	14,785		$	11,567			—			—
Interest on policy loans		—			—			—			—

Total investment income		14,785			11,567			—			—
Expenses:
Mortality and expense risk		—			—			—			—

Net investment income (loss)		14,785			11,567			—			—

Realized gains (losses) on investments:
Capital gain distributions		—			—			—			—
Net realized gains (losses)		(2,538	)		12,922			35,756			17,085

Realized gains (losses)		(2,538	)		12,922			35,756			17,085
Unrealized appreciation (depreciation) during the period		(75,162	)		31,864			359,573			72,555

Net increase (decrease) in assets from operations		(62,915	)		56,353			395,329			89,640

Changes from principal transactions:
Transfer of net premiums		52,424			50,969			124,388			30,131
Transfer on terminations		(114,811	)		(126,586	)		(45,106	)		(64,613	)
Transfer on general account policy loans		(1,918	)		(3,771	)		(13,957	)		12,626
Net interfund transfers		27,659			(30,738	)		20,593			30,682
Net change in separate account policy loans		—			—			—			—

Net increase (decrease) in assets from principal transactions		(36,646	)		(110,126	)		85,918			8,826

Total increase (decrease) in assets		(99,561	)		(53,773	)		481,247			98,466

Assets, beginning of period		638,213			691,986			958,798			860,332

Assets, end of period	$	538,652		$	638,213		$	1,440,045		$	958,798

See accompanying notes.


Sub-Account
Short Term Government Income Trust						Small Cap Growth Trust						Small Cap Index Trust
Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12

$	111,307		$	99,075			—			—		$	27,193		$	30,637
	—			—			—			—			—			—

	111,307			99,075			—			—			27,193			30,637

	9,071			9,883			95,223			81,329			—			—

	102,236			89,192			(95,223	)		(81,329	)		27,193			30,637


	—			—			1,112,776			2,785,070			126,357			253,796
	(7,763	)		9,652			159,878			(51,596	)		(1,315	)		(30,198	)

	(7,763	)		9,652			1,272,654			2,733,474			125,042			223,598
	(145,941	)		(37,179	)		7,696,515			488,866			414,724			(31,395	)

	(51,468	)		61,665			8,873,946			3,141,011			566,959			222,840


	351,283			449,874			1,327,144			1,506,958			93,070			97,959
	(523,610	)		(921,553	)		(3,034,771	)		(2,928,073	)		(189,536	)		(216,119	)
	(41,076	)		(40,415	)		(226,772	)		(179,090	)		(14,314	)		7,444
	(203,525	)		(239,348	)		(52,628	)		(244,974	)		31,443			(333	)
	—			—			—			—			—			—

	(416,928	)		(751,442	)		(1,987,027	)		(1,845,179	)		(79,337	)		(111,049	)

	(468,396	)		(689,777	)		6,886,919			1,295,832			487,622			111,791

	5,775,217			6,464,994			21,071,796			19,775,964			1,518,820			1,407,029

$	5,306,821		$	5,775,217		$	27,958,715		$	21,071,796		$	2,006,442		$	1,518,820

John Hancock Variable Life Account U

Statements of Operations and Changes in Contract Owners’ Equity

(continued)


	Sub-Account
	Small Cap Opportunities Trust						Small Cap Value Trust
	Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12
Income:
Dividend income distribution	$	892			—		$	63,150		$	85,560
Interest on policy loans		—			—			—			—

Total investment income		892			—			63,150			85,560
Expenses:
Mortality and expense risk		—			—			—			—

Net investment income (loss)		892			—			63,150			85,560

Realized gains (losses) on investments:
Capital gain distributions		—			—			574,052			438,296
Net realized gains (losses)		8,294			(1,416	)		219,386			78,938

Realized gains (losses)		8,294			(1,416	)		793,438			517,234
Unrealized appreciation (depreciation) during the period		35,667			58,992			2,220,333			795,846

Net increase (decrease) in assets from operations		44,853			57,576			3,076,921			1,398,640

Changes from principal transactions:
Transfer of net premiums		11,747			14,469			608,747			643,508
Transfer on terminations		(15,199	)		(309,975	)		(1,270,101	)		(1,353,157	)
Transfer on general account policy loans		(1,042	)		(924	)		(123,699	)		(180,986	)
Net interfund transfers		151,979			(18,436	)		(149,499	)		(123,961	)
Net change in separate account policy loans		—			—			—			—

Net increase (decrease) in assets from principal transactions		147,485			(314,866	)		(934,552	)		(1,014,596	)

Total increase (decrease) in assets		192,338			(257,290	)		2,142,369			384,044

Assets, beginning of period		90,281			347,571			9,677,073			9,293,029

Assets, end of period	$	282,619		$	90,281		$	11,819,442		$	9,677,073

(ag)	Terminated as an investment option and funds transferred to Small Cap Opportunities Trust on December 9, 2013.

See accompanying notes.


Sub-Account
Small Company Value Trust						Smaller Company Growth Trust						Strategic Income Opportunities Trust
Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13 (ag)			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12

$	8,130		$	937			—			—		$	65,263		$	59,873
	—			—			—			—			—			—

	8,130			937			—			—			65,263			59,873

	—			—			—			—			—			—

	8,130			937			—			—			65,263			59,873


	—			—			7,401			4,672			—			—
	33,335			12,079			13,757			(330	)		(14,845	)		(19,223	)

	33,335			12,079			21,158			4,342			(14,845	)		(19,223	)
	88,413			40,088			114			3,586			(11,216	)		57,320

	129,878			53,104			21,272			7,928			39,202			97,970


	55,329			65,325			3,750			3,620			70,396			66,071
	(66,499	)		(39,812	)		(4,988	)		(3,131	)		(141,887	)		(96,508	)
	(2,657	)		(347	)		(3,018	)		(22	)		(26,698	)		(2,970	)
	24,145			15,830			(74,588	)		1,646			379,372			33,569
	—			—			—			—			—			—

	10,318			40,996			(78,844	)		2,113			281,183			162

	140,196			94,100			(57,572	)		10,041			320,385			98,132

	404,094			309,994			57,572			47,531			847,956			749,824

$	544,290		$	404,094			—		$	57,572		$	1,168,341		$	847,956

John Hancock Variable Life Account U

Statements of Operations and Changes in Contract Owners’ Equity

(continued)


	Sub-Account
	Total Bond Market Trust B						Total Return Trust
	Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12
Income:
Dividend income distribution	$	638,818		$	328,003		$	91,509		$	61,063
Interest on policy loans		—			—			—			—

Total investment income		638,818			328,003			91,509			61,063
Expenses:
Mortality and expense risk		17,828			19,298			—			—

Net investment income (loss)		620,990			308,705			91,509			61,063

Realized gains (losses) on investments:
Capital gain distributions		—			—			65,763			—
Net realized gains (losses)		135,519			365,232			12,810			22,271

Realized gains (losses)		135,519			365,232			78,573			22,271
Unrealized appreciation (depreciation) during the period		(1,248,099	)		152,134			(226,513	)		147,323

Net increase (decrease) in assets from operations		(491,590	)		826,071			(56,431	)		230,657

Changes from principal transactions:
Transfer of net premiums		734,468			1,175,891			177,766			185,679
Transfer on terminations		(2,160,259	)		(3,817,984	)		(340,918	)		(345,681	)
Transfer on general account policy loans		(90,047	)		(121,117	)		(6,977	)		(6,697	)
Net interfund transfers		43,297			(803,314	)		(18,030	)		255,797
Net change in separate account policy loans		—			—			—			—

Net increase (decrease) in assets from principal transactions		(1,472,541	)		(3,566,524	)		(188,159	)		89,098

Total increase (decrease) in assets		(1,964,131	)		(2,740,453	)		(244,590	)		319,755

Assets, beginning of period		20,130,478			22,870,931			3,045,609			2,725,854

Assets, end of period	$	18,166,347		$	20,130,478		$	2,801,019		$	3,045,609

(r)	Reflects the period from commencement of operations on April 30, 2012 through December 31, 2012.

See accompanying notes.


Sub-Account
Total Stock Market Index Trust						Ultra Short Term Bond Trust						U.S. Equity Trust
Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12 (r)

$	127,083		$	118,293		$	2,673		$	1,788		$	4,189		$	3,066
	—			—			—			—			—			—

	127,083			118,293			2,673			1,788			4,189			3,066

	—			—			—			—			—			—

	127,083			118,293			2,673			1,788			4,189			3,066


	121,387			19,681			—			—			—			—
	187,926			67,416			(218	)		(898	)		9,347			110

	309,313			87,097			(218	)		(898	)		9,347			110
	2,048,553			907,473			(2,480	)		(7	)		45,062			2,846

	2,484,949			1,112,863			(25	)		883			58,598			6,022


	611,187			660,261			22,941			481			17,520			13,459
	(1,041,979	)		(1,114,519	)		(11,002	)		(2,479	)		(38,901	)		(11,416	)
	(132,688	)		(144,476	)		—			—			(731	)		(47	)
	(38,433	)		(207,838	)		21,157			74,932			(2,774	)		201,775
	—			—			—			—			—			—

	(601,913	)		(806,572	)		33,096			72,934			(24,886	)		203,771

	1,883,036			306,291			33,071			73,817			33,712			209,793

	7,676,757			7,370,466			179,972			106,155			209,793			—

$	9,559,793		$	7,676,757		$	213,043		$	179,972		$	243,505		$	209,793

John Hancock Variable Life Account U

Statements of Operations and Changes in Contract Owners’ Equity

(continued)


	Sub-Account
	Utilities Trust						Value Trust
	Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12
Income:
Dividend income distribution	$	19,882		$	33,132		$	5,486		$	4,911
Interest on policy loans		—			—			—			—

Total investment income		19,882			33,132			5,486			4,911
Expenses:
Mortality and expense risk		—			—			—			—

Net investment income (loss)		19,882			33,132			5,486			4,911

Realized gains (losses) on investments:
Capital gain distributions		—			—			—			—
Net realized gains (losses)		69,572			42,310			67,907			6,857

Realized gains (losses)		69,572			42,310			67,907			6,857
Unrealized appreciation (depreciation) during the period		86,988			38,090			129,458			79,039

Net increase (decrease) in assets from operations		176,442			113,532			202,851			90,807

Changes from principal transactions:
Transfer of net premiums		57,796			69,183			46,724			51,947
Transfer on terminations		(163,503	)		(151,843	)		(40,013	)		(63,616	)
Transfer on general account policy loans		(5,135	)		(34,705	)		(3,967	)		(10,777	)
Net interfund transfers		(10,350	)		50,060			(62,414	)		(20,147	)
Net change in separate account policy loans		—			—			—			—

Net increase (decrease) in assets from principal transactions		(121,192	)		(67,305	)		(59,670	)		(42,593	)

Total increase (decrease) in assets		55,250			46,227			143,181			48,214

Assets, beginning of period		921,389			875,162			570,645			522,431

Assets, end of period	$	976,639		$	921,389		$	713,826		$	570,645

See accompanying notes.


Total
Year Ended Dec. 31/13			Year Ended Dec. 31/12

$	37,361,865		$	28,167,168
	18,023,369			18,866,960

	55,385,234			47,034,128

	7,351,621			7,030,827

	48,033,613			40,003,301


	4,490,694			6,695,393
	27,541,751			9,215,715

	32,032,445			15,911,108
	279,666,846			193,705,174

	359,732,904			249,619,583


	78,151,925			84,304,638
	(214,133,460	)		(231,188,983	)
	23,162,358			27,319,483
	(298,264	)		(389,420	)
	(27,642,961	)		(33,439,232	)

	(140,760,402	)		(153,393,514	)

	218,972,502			96,226,069

	1,956,426,898			1,860,200,829

$	2,175,399,400		$	1,956,426,898

John Hancock Variable Life Account U

Notes to Financial Statements

December 31, 2013

1.	Organization

John Hancock Variable Life Account U (the “Account”) is a separate investment account of John Hancock Life Insurance Company (U.S.A.) (the “Company” or “JHUSA”). The Account operates as a Unit Investment Trust registered under the Investment Company Act of 1940, as amended (the “Act”) and has 60 active investment sub-accounts that invest in shares of a particular John Hancock Variable Insurance Trust (the “Trust”), which was formerly known as the John Hancock Trust, portfolio and 4 sub-accounts that invest in shares of other outside investment trusts as of December 31, 2013. The Trust is registered under the Act as an open-end management investment company, commonly known as a mutual fund, which does not transact with the general public. Instead, the Trust deals primarily with insurance companies by providing the investment medium for variable contracts. The Account is a funding vehicle for the allocation of net premiums under variable life contracts (the “Contracts”) issued by the Company.

The Company is a stock life insurance company incorporated under the laws of Michigan in 1979. The Company is an indirect wholly owned subsidiary of Manulife Financial Corporation (“MFC”), a Canadian based publicly traded life insurance company.

The Company is required to maintain assets in the Account with a total fair value at least equal to the reserves and other liabilities relating to the variable benefits under all Contracts participating in the Account. These assets may not be charged with liabilities which arise from any other business the Company conducts. However, all obligations under the Contracts are general corporate obligations of the Company.

Additional assets are held in the Company’s general account to cover the contingency that the guaranteed minimum death benefit might exceed the death benefit which would have been payable in the absence of such guarantee.

As the result of a portfolio change, the following sub-account of the Account was renamed as follows:


Previous Name	New Name	Effective Date
Business Opportunity Value	Large Cap Value	April 29, 2013

The following sub-accounts of the Account were terminated as investment options and the funds were transferred to existing sub-accounts as follows:


Terminated	Transferred To	Effective Date
All Cap Value Trust	Fundamental Large Cap Value Trust	December 9, 2013
American Global Small Capitalization Trust Series 1	American Global Growth Trust Series 1	April 29, 2013
American High-Income Bond Trust Series 1	High Yield Trust	April 29, 2013
Core Allocation Plus Trust	Core Strategy Trust	December 9, 2013
Disciplined Diversification Trust	Core Strategy Trust	December 9, 2013
Fundamental Holdings Trust Series 1	Core Strategy Trust	December 9, 2013
Global Diversification Trust Series 1	Core Strategy Trust	December 9, 2013
Smaller Company Growth Trust	Small Cap Opportunities Trust	December 9, 2013

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

2.	Significant Accounting Policies

Investments of each sub-account consist of shares in the respective portfolios of the Trust. These shares are carried at fair value which is calculated using the fair value of the investment securities underlying each Trust portfolio. Transactions are recorded on the trade date. Income from dividends is recorded on the ex-dividend date. Realized gains and losses on the sale of investments are computed on the basis of the specifically identified cost of the investment sold.

In addition to the Account, a contract holder may also allocate funds to the fixed account contained within the Company’s general account. Because of exemptive and exclusionary provisions, interests in the fixed account have not been registered under the Securities Act of 1933 and the Company’s general account has not been registered as an investment company under the Act. Net interfund transfers include interfund transfers between separate and general accounts.

FASB ASC Topic 820 - Fair Value Measurement and Disclosure (“ASC 820”) provides a single definition of fair value for accounting purposes, establishes a consistent framework for measuring fair value and expands disclosure requirements about fair value measurements. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; that is, an exit value. An exit value is not a forced liquidation or distressed sale.

Following ASC 820 guidance, the Account has categorized its fair value measurements according to a three-level hierarchy. The hierarchy prioritizes the inputs used by the Account’s valuation techniques. A level is assigned to each fair value measurement based on the lowest level input significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are defined as follows:

•

Level 1 – Fair value measurements that reflect unadjusted, quoted prices in active markets for identical assets and liabilities that the Account has the ability to access at the measurement date.

•

Level 2 – Fair value measurements using inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly.

•

Level 3 – Fair value measurements using significant non-market observable inputs.

Assets owned by the Account are primarily open-ended mutual fund investments issued by the Trust. These are classified within Level 1, as fair values of the underlying funds are based upon reported net asset values (“NAV”), which represent the values at which each sub-account can redeem its investments. Investments also include Policy Loans which are carried at unpaid principal and interest balances. As interest rates on unpaid principle balances are reset monthly based on published rates, policy loans are classified as Level 2, in accordance with ASC 820, as interest rates are considered to be observable inputs.

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

The following table presents the Account’s assets that are measured at fair value on a recurring basis by fair value hierarchy level under ASC 820, as of December 31, 2013.


	Mutual Funds
Level 1	$	1,884,308,241
Level 2	$	291,091,159
Level 3		—

	$	2,175,399,400

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported herein. Actual results could differ from those estimates.

3.	Mortality and Expense Risks Charges

JHUSA assumes mortality and expense risks of the variable life insurance policies for which asset charges are deducted at various rates ranging from 0% to 0.6% of net assets, depending on the type of policy (excluding policy loans and policies for which no mortality and expense risks is charged). Additionally, a monthly charge at varying levels for the cost of extra insurance is deducted from the net assets of the Account.

4.	Policy Loans

Policy loans may be held as an investment in the sub-account or in the Company’s general account depending on the terms of the Contracts.

Policy loans reported in the Statements of Assets and Contract Owners’ Equity represent policy loan investments of the sub-account and consist of outstanding loans plus accrued interest, where interest is accrued and compounded daily (net of a charge for policy loan administration determined at an annual rate of 0.75% of the aggregate amount of policyholder indebtedness in policy years 1-20 and 0.25% thereafter). Policy loans are fully collateralized by the cash surrender value of the Contracts borrowed against.

The change in separate account policy loans and transfer on general account policy loans reported in the Statement of Operations and Changes in Contract Owners’ Equity represent disbursement or repayment of loans held as an investment in the sub-account or in the Company’s general account, respectively. Sub-account loan investments are funded directly from the sub-account whereas general account loans are funded through interfund transfers with the Company.

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

5.	Federal Income Taxes

The Account does not file separate tax returns. The taxable income of the Account is consolidated with that of the Company within the consolidated federal tax return. Any tax contingencies arising from the taxable income generated by the Account are the responsibility of the Company and the Company holds any and all tax contingencies on its financial statements. The Account is not a party to the consolidated tax sharing agreement thus no amount of income taxes or tax contingencies are passed through to the Account. The legal form of the Account is not taxable in any state or foreign jurisdictions.

The Income Taxes topic of the FASB Accounting Standard Codification establishes a minimum threshold for financial statement recognition of the benefit of positions taken, or expected to be taken, in filing tax returns (including whether the Account is taxable in certain jurisdictions). The topic requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether tax positions are “more-likely-than not” of being sustained by the applicable tax authority. Tax positions deemed to meet the more-likely-than-not threshold would be recorded as tax expense or benefit.

The Account complies with the provisions of FASB ASC Topic 740, Income Taxes. As of December 31, 2013, the Account did not have a liability for any uncertain tax positions. The Account recognizes interest and penalties, if any, related to tax liabilities as income tax expense in the Statements of Operations.

6.	Contract Charges

The Company deducts certain charges from gross premiums before placing the remaining net premiums in the sub-account. In the event of a surrender by the contract holder, surrender charges may be levied by the Company against the contract value at the time of termination to cover sales and administrative expenses associated with underwriting and issuing the Contract. Additionally, each month a deduction consisting of an administrative charge, a charge for cost of insurance, and charges for supplementary benefits is deducted from the contract value. Contract charges are paid through the redemption of sub-account units and are reflected as terminations.

7.	Purchases and Sales of Investments

The cost of purchases and proceeds from sales of investments for the year ended December 31, 2013 were as follows:


	Purchases		Sales
Sub-accounts:
500 Index Trust B	$	6,175,730	$	6,949,805
Active Bond Trust		18,727,334		21,358,703
All Cap Core Trust		9,537		7,398
All Cap Value Trust		233,852		289,612
Alpha Opportunities Trust		182,460		65,660

John Hancock Variable Life Account U

Notes to Financial Statements (continued)


	Purchases		Sales
Sub-accounts:
American Asset Allocation Trust Series 1	$	527,012	$	87,930
American Global Growth Trust Series 1		36,668		1,919
American Global Small Capitalization Trust Series 1		1,968		10,474
American Growth Trust Series 1		142,942		500,622
American Growth-Income Trust Series 1		209,902		108,565
American High-Income Bond Trust Series 1		8,653		202,135
American International Trust Series 1		311,625		278,521
American New World Trust Series 1		154,110		127,827
Blue Chip Growth Trust		2,565,186		10,957,079
Bond Trust		10,350		25,569
Capital Appreciation Trust		2,076,723		2,399,220
Capital Appreciation Value Trust		564,682		268,092
Core Allocation Plus Trust		13,588		41,356
Core Bond Trust		60,975		6,473
Core Strategy Trust		766,160		31,110
Disciplined Diversification Trust		221,245		450,149
Emerging Markets Value Trust		770,308		443,626
Equity-Income Trust		1,977,678		5,826,185
Financial Services Trust		308,673		288,397
Franklin Templeton Founding Allocation Trust		3,086		8,607
Fundamental All Cap Core Trust		10,201,292		49,294,862
Fundamental Holdings Trust Series 1		18,182		28,542
Fundamental Large Cap Value Trust		348,145		35,383
Fundamental Value Trust		66,249		161,414
Global Bond Trust		1,287,695		1,425,259
Global Diversification Trust Series 1		117,809		300,480
Global Trust		121,245		109,067
Health Sciences Trust		787,235		956,128
High Yield Trust		1,632,231		888,268
International Core Trust		99,002		171,102
International Equity Index Trust B		2,187,384		3,613,201
International Growth Stock Trust		39,648		68,536
International Small Company Trust		73,204		117,872
International Value Trust		867,514		1,636,740
Investment Quality Bond Trust		69,177		58,258
Lifestyle Aggressive Trust		536,723		739,171
Lifestyle Balanced Trust		13,290,506		25,812,601
Lifestyle Conservative Trust		727,254		2,918,989
Lifestyle Growth Trust		5,576,641		4,063,039
Lifestyle Moderate Trust		579,238		685,221
Mid Cap Index Trust		361,446		187,836
Mid Cap Stock Trust		1,061,747		2,658,041
Mid Value Trust		2,295,845		1,798,412
Money Market Trust B		9,925,583		13,956,886
Natural Resources Trust		171,339		580,018

John Hancock Variable Life Account U

Notes to Financial Statements (continued)


	Purchases		Sales
Sub-accounts:
Real Estate Securities Trust	$	2,382,534	$	3,954,871
Real Return Bond Trust		378,634		400,495
Science & Technology Trust		245,115		159,197
Short Term Government Income Trust		886,533		1,201,225
Small Cap Growth Trust		2,114,954		3,084,429
Small Cap Index Trust		303,829		229,616
Small Cap Opportunities Trust		174,424		26,046
Small Cap Value Trust		970,423		1,267,773
Small Company Value Trust		91,024		72,575
Smaller Company Growth Trust		69,636		141,079
Strategic Income Opportunities Trust		965,620		619,175
Total Bond Market Trust B		1,305,437		2,156,987
Total Return Trust		695,574		726,461
Total Stock Market Index Trust		550,421		903,865
Ultra Short Term Bond Trust		69,643		33,874
U.S. Equity Trust		30,078		50,775
Utilities Trust		267,803		369,114
Value Trust		114,880		169,064
All Asset Portfolio		563,632		835,578
Brandes International Equity		48,565		25,219
Frontier Capital Appreciation		122,744		60,053
Large Cap Growth		42,535		25,485

	$	100,896,819	$	179,513,316

8.	Transaction with Affiliates

John Hancock Distributors LLC, a registered broker-dealer and wholly owned subsidiary of JHUSA, acts as the principal underwriter of the Contracts pursuant to a distribution agreement with the Company. Contracts are sold by registered representatives of either John Hancock Distributors LLC or other broker-dealers having distribution agreements with John Hancock Distributors LLC who are also authorized as variable life insurance agents under applicable state insurance laws. Registered representatives are compensated on a commission basis.

JHUSA has a formal service agreement with its ultimate parent company, MFC, which can be terminated by either party upon two months’ notice. Under this agreement, JHUSA pays for legal, actuarial, investment and certain other administrative services.

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

Certain officers of the Account are officers and directors of JHUSA or the Trust.

The majority of the investments held by the Account are invested in the Trust (Note 1).

Mortality and expense risks charges, as described in Note 3, are paid to JHUSA.

9.	Diversification Requirements

The Internal Revenue Service has issued regulations under Section 817(h) of the Internal Revenue Code (the “Code”). Under the provisions of Section 817(h) of the Code, a variable life contract will not be treated as a life contract for federal tax purposes for any period for which the investments of the Account on which the contract is based are not adequately diversified. The Code provides that the “adequately diversified” requirement may be met if the underlying investments satisfy either a statutory safe harbour test or diversification requirements set forth in regulations issued by the Secretary of Treasury. JHUSA believes that the Account satisfies the current requirements of the regulations, and the Account will continue to meet such requirements.

10.

Subsequent Events

In accordance with the provision set forth in FASB ASC Topic 855 - Subsequent Events (“ASC 855”), management has evaluated the possibility of subsequent events existing in the Account’s financial statements through March 28, 2014 and has determined that no events have occurred that require additional disclosure.

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	500 Index Trust B
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		2,182			2,491			2,819			2,915			2,408
Units issued		160			132			120			191			885
Units redeemed		(216	)		(441	)		(448	)		(287	)		(378	)

Units, end of period (000’s)		2,126			2,182			2,491			2,819			2,915

Unit value, end of period $		33.87 to 37.65			25.81 to 28.52			22.42 to 24.63			22.14 to 24.18			19.39 to 21.05
Assets, end of period $ (000’s)		77,726			60,757			60,073			66,876			60,216
Investment income ratio*		1.84	%		0.99	%		1.72	%		1.79	%		2.70	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		31.24% to 32.03	%		15.11% to 15.80	%		1.26% to 1.86	%		14.17% to 14.85	%		25.59% to 26.36	%

	Sub-Account
	Active Bond Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		427			442			500			536			544
Units issued		22			17			13			33			74
Units redeemed		(88	)		(32	)		(71	)		(69	)		(82	)

Units, end of period (000’s)		361			427			442			500			536

Unit value, end of period $		51.20 to 66.44			51.41 to 66.31			47.12 to 60.42			44.74 to 57.02			39.51 to 50.05
Assets, end of period $ (000’s)		303,136			323,945			318,179			323,708			312,167
Investment income ratio*		5.75	%		4.19	%		5.39	%		7.51	%		7.41	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		(0.40%) to 0.19	%		9.10% to 9.76	%		5.33% to 5.97	%		13.23% to 13.91	%		24.11% to 24.86	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	All Asset Portfolio
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		52			44			39			28			4
Units issued		35			15			13			32			28
Units redeemed		(54	)		(7	)		(8	)		(21	)		(4	)

Units, end of period (000’s)		33			52			44			39			28

Unit value, end of period $		15.81			15.82			13.80			13.58			12.05
Assets, end of period $ (000’s)		533			835			625			542			339
Investment income ratio*		3.78	%		4.72	%		6.74	%		7.35	%		9.83	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		(0.10	%)		14.65	%		1.66	%		12.71	%		21.32	%

	Sub-Account
	All Cap Core Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		5			5			3			3			7
Units issued		1			1			2			—			1
Units redeemed		—			(1	)		—			—			(5	)

Units, end of period (000’s)		6			5			5			3			3

Unit value, end of period $		18.44			13.72			11.76			11.71			10.36
Assets, end of period $ (000’s)		98			72			58			33			27
Investment income ratio*		1.34	%		1.21	%		1.37	%		1.17	%		1.65	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		34.44	%		16.62	%		0.40	%		13.09	%		28.61	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	All Cap Value Trust
	Year Ended Dec. 31/13 (aa)			Year Ended Dec. 31/12			Year Ended Dec. 31/11			Year Ended Dec. 31/10			Year Ended Dec. 31/09
Units, beginning of period		9			9			9			8			17
Units issued		6			3			5			3			24
Units redeemed		(15	)		(3	)		(5	)		(2	)		(33	)

Units, end of period (000’s)		—			9			9			9			8

Unit value, end of period $		20.42			15.60			14.06			14.67			12.38
Assets, end of period $ (000’s)		—			131			122			123			94
Investment income ratio*		1.78	%		0.88	%		0.34	%		0.43	%		0.43	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		30.93	%		10.92	%		(4.17	%)		18.50	%		26.59	%

(aa) Terminated as an investment option and funds transferred to Fundamental Large Cap Value Trust on December 9, 2013.

	Sub-Account
	Alpha Opportunities Trust
	Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/11			Year Ended Dec. 31/10			Year Ended Dec. 31/09 (al)
Units, beginning of period		3			2			2			—			—
Units issued		8			1			1			2			—
Units redeemed		(3	)		—			(1	)		—			—

Units, end of period (000’s)		8			3			2			2			—

Unit value, end of period $		22.54			16.63			13.70			14.89			12.73
Assets, end of period $ (000’s)		161			38			25			26			1
Investment income ratio*		1.51	%		0.71	%		0.24	%		1.19	%		0.27	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		35.58	%		21.38	%		(8.02	%)		16.98	%		27.31	%

(al)	Reflects the period from commencement of operations on May 4, 2009 through December 31, 2009.

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	American Asset Allocation Trust Series 1
	Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/11			Year Ended Dec. 31/10			Year Ended Dec. 31/09
Units, beginning of period		63			45			40			22			—
Units issued		39			21			9			23			24
Units redeemed		(7	)		(3	)		(4	)		(5	)		(2	)

Units, end of period (000’s)		95			63			45			40			22

Unit value, end of period $		14.49			11.75			10.15			10.06			8.98
Assets, end of period $ (000’s)		1,370			736			453			401			199
Investment income ratio*		1.39	%		1.85	%		1.65	%		1.59	%		3.03	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		23.30	%		15.77	%		0.91	%		12.07	%		23.61	%


	Sub-Account
	American Global Growth Trust Series 1
	Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/11 (d)
Units, beginning of period		2			2			—
Units issued		3			—			2
Units redeemed		—			—			—

Units, end of period (000’s)		5			2			2

Unit value, end of period $		14.40			11.19			9.17
Assets, end of period $ (000’s)		55			16			13
Investment income ratio*		2.37	%		0.49	%		1.34	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		28.63	%		22.12	%		(9.24	%)

(d)	Fund available in prior year but no activity.

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	American Global Small Capitalization Trust Series 1
	Year Ended Dec. 31/13 (w)			Year Ended Dec. 31/12			Year Ended Dec. 31/11 (d)
Units, beginning of period		1			—			—
Units issued		—			1			—
Units redeemed		(1	)		—			—

Units, end of period (000’s)		—			1			—

Unit value, end of period $		10.64			9.64			8.19
Assets, end of period $ (000’s)		—			8			1
Investment income ratio*		0.18	%		3.00	%		1.24	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		10.37	%		17.71	%		(19.43	%)

(w)	Terminated as an investment option and funds transferred to American Global Growth Trust Series 1 on April 29, 2013.

(d)	Fund available in prior year but no activity.


	Sub-Account
	American Growth Trust Series 1
	Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/11			Year Ended Dec. 31/10			Year Ended Dec. 31/09
Units, beginning of period		132			157			177			199			206
Units issued		8			11			16			45			41
Units redeemed		(29	)		(36	)		(36	)		(67	)		(48	)

Units, end of period (000’s)		111			132			157			177			199

Unit value, end of period $		19.58			15.11			12.86			13.48			11.40
Assets, end of period $ (000’s)		2,159			1,981			2,004			2,371			2,266
Investment income ratio*		0.51	%		0.39	%		0.22	%		0.34	%		0.26	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		29.61	%		17.49	%		(4.63	%)		18.24	%		38.87	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	American Growth-Income Trust Series 1
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		70			47			44			47			45
Units issued		12			30			7			6			17
Units redeemed		(7	)		(7	)		(4	)		(9	)		(15	)

Units, end of period (000’s)		75			70			47			44			47

Unit value, end of period $		18.11			13.62			11.62			11.87			10.69
Assets, end of period $ (000’s)		1,372			957			545			515			504
Investment income ratio*		1.08	%		1.82	%		1.21	%		1.07	%		1.30	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		33.02	%		17.16	%		(2.10	%)		11.06	%		30.79	%


	Sub-Account
	American High-Income Bond Trust Series 1
	Year Ended Dec. 31/13 (x)			Year Ended Dec. 31/12			Year Ended Dec. 31/11 (d)
Units, beginning of period		17			5			—
Units issued		—			15			5
Units redeemed		(17	)		(3	)		—

Units, end of period (000’s)		—			17			5

Unit value, end of period $		11.83			11.49			10.16
Assets, end of period $ (000’s)		—			193			45
Investment income ratio*		0.24	%		18.36	%		8.83	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		2.90	%		13.11	%		1.46	%

(x)	Terminated as an investment option and funds transferred to High Yield Trust on April 29, 2013.

(d)	Fund available in prior year but no activity.

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	American International Trust Series 1
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		69			74			96			94			123
Units issued		18			5			6			37			21
Units redeemed		(17	)		(10	)		(28	)		(35	)		(50	)

Units, end of period (000’s)		70			69			74			96			94

Unit value, end of period $		18.85			15.55			13.24			15.45			14.46
Assets, end of period $ (000’s)		1,309			1,055			970			1,474			1,358
Investment income ratio*		0.99	%		1.08	%		1.20	%		1.66	%		1.07	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		21.20	%		17.50	%		(14.34	%)		6.88	%		42.58	%

	Sub-Account
	American New World Trust Series 1
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09 (al)
Units, beginning of period		27			28			19			9			—
Units issued		9			3			11			14			9
Units redeemed		(8	)		(4	)		(2	)		(4	)		—

Units, end of period (000’s)		28			27			28			19			9

Unit value, end of period $		17.49			15.77			13.44			15.69			13.36
Assets, end of period $ (000’s)		507			434			381			301			118
Investment income ratio*		0.98	%		0.59	%		1.63	%		1.64	%		2.48	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		10.89	%		17.37	%		(14.33	%)		17.43	%		33.58	%

(al)	Reflects the period from commencement of operations on May 4, 2009 through December 31, 2009.

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Blue Chip Growth Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		533			571			637			697			749
Units issued		17			23			25			38			55
Units redeemed		(72	)		(61	)		(91	)		(98	)		(107	)

Units, end of period (000’s)		478			533			571			637			697

Unit value, end of period $		100.73 to 112.07			71.65 to 79.24			60.88 to 66.93			60.37 to 65.97			52.25 to 56.75
Assets, end of period $ (000’s)		143,672			113,798			105,594			112,834			107,252
Investment income ratio*		0.31	%		0.13	%		0.01	%		0.09	%		0.19	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		40.59% to 41.43	%		17.69% to 18.39	%		0.84% to 1.45	%		15.56% to 16.25	%		42.12% to 42.97	%


	Sub-Account
	Bond Trust
	Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11 (h)
Units, beginning of period		6			5			—
Units issued		1			1			5
Units redeemed		(2	)		—			—

Units, end of period (000’s)		5			6			5

Unit value, end of period $		10.58			10.72			10.08
Assets, end of period $ (000’s)		35			53			47
Investment income ratio*		2.96	%		2.89	%		15.01	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		(1.32	%)		6.31	%		0.82	%

(h)	Reflects the period from commencement of operations on October 31, 2011 through December 31, 2011.

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Brandes International Equity
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		31			30			29			31			35
Units issued		1			3			3			2			1
Units redeemed		(1	)		(2	)		(2	)		(4	)		(5	)

Units, end of period (000’s)		31			31			30			29			31

Unit value, end of period $		32.34 to 35.37			27.97 to 30.40			23.32 to 25.19			27.14 to 29.14			26.10 to 27.86
Assets, end of period $ (000’s)		1,008			866			694			788			807
Investment income ratio*		2.45	%		2.12	%		3.04	%		3.23	%		2.31	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		15.63% to 16.33	%		19.96% to 20.68	%		(14.08%) to (13.56	%)		3.98% to 4.61	%		24.53% to 25.28	%

	Sub-Account
	Capital Appreciation Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		1,127			1,239			1,449			1,594			1,703
Units issued		116			56			115			123			171
Units redeemed		(126	)		(168	)		(325	)		(268	)		(280	)

Units, end of period (000’s)		1,117			1,127			1,239			1,449			1,594

Unit value, end of period $		21.64 to 22.17			15.83 to 16.13			13.72 to 13.90			13.79 to 13.88			12.40 to 12.41
Assets, end of period $ (000’s)		24,356			17,953			17,088			20,038			19,783
Investment income ratio*		0.26	%		0.20	%		0.11	%		0.18	%		0.32	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		36.69% to 37.50	%		15.34% to 16.03	%		(0.48%) to 0.11	%		11.21% to 11.88	%		41.51% to 42.35	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Capital Appreciation Value Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		6			4			4			1			—
Units issued		37			2			—			13			1
Units redeemed		(19	)		—			—			(10	)		—

Units, end of period (000’s)		24			6			4			4			1

Unit value, end of period $		15.60			12.76			11.12			10.79			9.47
Assets, end of period $ (000’s)		370			67			34			31			6
Investment income ratio*		2.42	%		1.68	%		1.49	%		1.83	%		2.26	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		22.29	%		14.77	%		3.09	%		13.91	%		30.26	%

	Sub-Account
	Core Allocation Plus Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13 (ac)			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09 (d)
Units, beginning of period		3			3			3			3			—
Units issued		—			—			—			—			3
Units redeemed		(3	)		—			—			—			—

Units, end of period (000’s)		—			3			3			3			3

Unit value, end of period $		12.75			10.63			9.36			9.58			8.66
Assets, end of period $ (000’s)		—			34			31			33			29
Investment income ratio*		3.33	%		1.43	%		1.39	%		1.23	%		3.02	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		20.00	%		13.53	%		(2.26	%)		10.57	%		25.42	%

(ac)	Terminated as an investment option and funds transferred to Core Strategy Trust on December 9, 2013.

(d)	Fund available in prior year but no activity.

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Core Bond Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		5			1			6			5			2
Units issued		3			4			—			6			10
Units redeemed		—			—			(5	)		(5	)		(7	)

Units, end of period (000’s)		8			5			1			6			5

Unit value, end of period $		15.34			15.67			14.71			13.58			12.67
Assets, end of period $ (000’s)		140			97			44			99			73
Investment income ratio*		2.40	%		3.95	%		2.27	%		2.80	%		2.10	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		(2.12	%)		6.54	%		8.32	%		7.17	%		9.93	%

	Sub-Account
	Core Strategy Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10 (q)			Dec. 31/09 (aj)
Units, beginning of period		—			—			—			—			1
Units issued		56			—			—			—			—
Units redeemed		(2	)		—			—			—			(1	)

Units, end of period (000’s)		54			—			—			—			—

Unit value, end of period $		13.88			11.64			10.34			10.32			9.17
Assets, end of period $ (000’s)		746			2			2			—			—
Investment income ratio*		8.88	%		2.87	%		5.43	%		1.95	%		0.01	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		19.29	%		12.58	%		0.19	%		12.57	%		21.93	%

(q)	Fund available in current year but no activity.

(aj)	Renamed on May 4, 2009. Previously known as Index Allocation Trust.

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Disciplined Diversification Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13 (ac)			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		33			32			31			28			1
Units issued		3			4			4			6			27
Units redeemed		(36	)		(3	)		(3	)		(3	)		—

Units, end of period (000’s)		—			33			32			31			28

Unit value, end of period $		13.23			11.51			10.21			10.42			9.19
Assets, end of period $ (000’s)		—			359			312			313			251
Investment income ratio*		4.06	%		2.49	%		2.24	%		1.72	%		2.91	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		14.89	%		12.79	%		(2.04	%)		13.45	%		27.27	%

(ac) Terminated as an investment option and funds transferred to Core Strategy Trust on December 9, 2013.

	Sub-Account
	Emerging Markets Value Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		132			127			143			220			61
Units issued		58			27			37			122			191
Units redeemed		(38	)		(22	)		(53	)		(199	)		(32	)

Units, end of period (000’s)		152			132			127			143			220

Unit value, end of period $		11.50 to 11.97			11.95 to 12.36			10.14 to 10.43			13.98 to 14.29			11.42 to 11.61
Assets, end of period $ (000’s)		1,796			1,624			1,319			2,031			2,528
Investment income ratio*		1.37	%		1.14	%		1.52	%		1.21	%		0.17	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		(3.76%) to (3.18	%)		17.79% to 18.49	%		(27.46%) to (27.02	%)		22.38% to 23.11	%		100.14% to 101.36	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Equity-Income Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		1,263			1,370			1,493			1,637			1,765
Units issued		32			35			90			68			112
Units redeemed		(160	)		(142	)		(213	)		(212	)		(240	)

Units, end of period (000’s)		1,135			1,263			1,370			1,493			1,637

Unit value, end of period $		38.35 to 42.63			29.66 to 32.78			25.40 to 27.90			25.75 to 28.12			22.48 to 24.40
Assets, end of period $ (000’s)		46,059			39,493			36,585			40,255			38,409
Investment income ratio*		1.95	%		2.12	%		1.81	%		1.95	%		2.22	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		29.27% to 30.05	%		16.77% to 17.47	%		(1.35%) to (0.76	%)		14.54% to 15.23	%		25.00% to 25.75	%

	Sub-Account
	Financial Services Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		62			59			75			86			74
Units issued		12			10			4			11			34
Units redeemed		(12	)		(7	)		(20	)		(22	)		(22	)

Units, end of period (000’s)		62			62			59			75			86

Unit value, end of period $		26.20			20.02			16.96			18.72			16.68
Assets, end of period $ (000’s)		1,615			1,232			1,001			1,397			1,432
Investment income ratio*		0.70	%		0.87	%		1.56	%		0.34	%		0.81	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		30.86	%		18.03	%		(9.39	%)		12.22	%		41.53	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Franklin Templeton Founding Allocation Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09 (d)
Units, beginning of period		5			5			5			4			—
Units issued		—			—			—			2			4
Units redeemed		(1	)		—			—			(1	)		—

Units, end of period (000’s)		4			5			5			5			4

Unit value, end of period $		14.12			11.34			9.75			9.89			8.93
Assets, end of period $ (000’s)		46			43			38			38			31
Investment income ratio*		2.41	%		3.18	%		3.05	%		3.59	%		6.56	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		24.51	%		16.33	%		(1.45	%)		10.71	%		31.52	%

(d) Fund available in prior year but no activity.

	Sub-Account
	Frontier Capital Appreciation
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		19			18			19			22			25
Units issued		—			2			1			2			2
Units redeemed		(1	)		(1	)		(2	)		(5	)		(5	)

Units, end of period (000’s)		18			19			18			19			22

Unit value, end of period $		65.55 to 74.65			47.37 to 53.63			40.58 to 45.67			44.00 to 49.22			34.86 to 38.75
Assets, end of period $ (000’s)		1,146			855			705			812			768
Investment income ratio*		0.00	%		0.33	%		0.00	%		0.22	%		0.04	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		38.37% to 39.21	%		16.74% to 17.43	%		(7.78%) to (7.22	%)		26.25% to 27.00	%		47.72% to 48.61	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Fundamental All Cap Core Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11 (k)			Dec. 31/10			Dec. 31/09
Units, beginning of period		2,181			2,412			2,621			2,831			2,959
Units issued		63			69			95			124			215
Units redeemed		(245	)		(300	)		(304	)		(334	)		(343	)

Units, end of period (000’s)		1,999			2,181			2,412			2,621			2,831

Unit value, end of period $		19.73 to 88.16			14.52 to 65.28			11.74 to 53.10			11.98 to 54.53			10.02 to 45.89
Assets, end of period $ (000’s)		833,283			693,237			628,416			683,152			639,781
Investment income ratio*		0.99	%		0.81	%		1.09	%		1.21	%		1.45	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		35.05% to 35.87	%		22.92% to 23.67	%		(2.61%) to (2.02	%)		18.83% to 19.55	%		27.59% to 28.35	%

(k)	Renamed on June 27, 2011. Previously known as Optimized All Cap Trust.



	Sub-Account
	Fundamental Holdings Trust Series 1
	Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13 (ac)			Dec. 31/12			Dec. 31/11 (i)			Dec. 31/10 (d)
Units, beginning of period		2			1			1			—
Units issued		1			1			—			1
Units redeemed		(3	)		—			—			—

Units, end of period (000’s)		—			2			1			1

Unit value, end of period $		16.67			14.66			13.02			13.15
Assets, end of period $ (000’s)		—			17			7			8
Investment income ratio*		2.31	%		2.34	%		1.48	%		2.11	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		13.66	%		12.65	%		(1.05	%)		10.36	%

(ac)	Terminated as an investment option and funds transferred to Core Strategy Trust on December 9, 2013.

(i)	Renamed on October 31, 2011. Previously known as American Fundamental Holdings Trust Series 1.

(d)	Fund available in prior year but no activity.

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Fundamental Large Cap Value Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11 (l)			Dec. 31/10			Dec. 31/09
Units, beginning of period		6			2			3			3			3
Units issued		20			5			2			1			—
Units redeemed		(2	)		(1	)		(3	)		(1	)		—

Units, end of period (000’s)		24			6			2			3			3

Unit value, end of period $		18.04			13.62			10.94			10.74			9.46
Assets, end of period $ (000’s)		448			91			34			39			29
Investment income ratio*		1.55	%		1.80	%		0.93	%		2.23	%		2.21	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		32.46	%		24.48	%		1.90	%		13.51	%		0.2453

(l) Renamed on June 27, 2011. Previously known as Optimized Value Trust.

	Sub-Account
	Fundamental Value Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		41			42			49			44			37
Units issued		4			4			4			11			15
Units redeemed		(10	)		(5	)		(11	)		(6	)		(8	)

Units, end of period (000’s)		35			41			42			49			44

Unit value, end of period $		17.45			13.06			11.52			11.96			10.57
Assets, end of period $ (000’s)		607			537			479			579			457
Investment income ratio*		1.36	%		0.99	%		0.80	%		1.25	%		1.05	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		33.62	%		13.40	%		(3.74	%)		13.20	%		31.83	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Global Bond Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		282			293			328			370			399
Units issued		42			24			30			69			53
Units redeemed		(49	)		(35	)		(65	)		(111	)		(82	)

Units, end of period (000’s)		275			282			293			328			370

Unit value, end of period $		27.06 to 30.08			28.82 to 31.84			27.06 to 29.72			24.95 to 27.24			22.74 to 24.68
Assets, end of period $ (000’s)		7,880			8,529			8,304			8,571			8,791
Investment income ratio*		0.51	%		7.22	%		6.31	%		3.60	%		12.49	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		(6.10%) to (5.54	%)		6.51% to 7.15	%		8.44% to 9.08	%		9.74% to 10.40	%		14.72% to 15.41	%



	Sub-Account
	Global Diversification Trust Series 1
	Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13 (ac)			Dec. 31/12			Dec. 31/11 (j)			Dec. 31/10 (d)
Units, beginning of period		15			13			12			—
Units issued		3			3			4			12
Units redeemed		(18	)		(1	)		(3	)		—

Units, end of period (000’s)		—			15			13			12

Unit value, end of period $		17.42			15.36			13.26			14.18
Assets, end of period $ (000’s)		—			216			163			161
Investment income ratio*		1.91	%		1.86	%		2.27	%		3.79	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		13.46	%		15.84	%		(6.49	%)		12.57	%

(ac)	Terminated as an investment option and funds transferred to Core Strategy Trust on December 9, 2013.

(j)	Renamed on October 31, 2011. Previously known as American Global Diversification Trust Series 1.

(d)	Fund available in prior year but no activity.

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Global Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		15			17			22			19			18
Units issued		7			2			4			4			3
Units redeemed		(7	)		(4	)		(9	)		(1	)		(2	)

Units, end of period (000’s)		15			15			17			22			19

Unit value, end of period $		17.70			13.51			11.09			11.79			10.94
Assets, end of period $ (000’s)		259			194			184			256			201
Investment income ratio*		1.80	%		2.23	%		1.77	%		1.82	%		1.81	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		31.04	%		21.82	%		(5.96	%)		7.82	%		31.47	%

	Sub-Account
	Health Sciences Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		136			148			149			168			181
Units issued		12			13			20			12			37
Units redeemed		(28	)		(25	)		(21	)		(31	)		(50	)

Units, end of period (000’s)		120			136			148			149			168

Unit value, end of period $		40.81			26.98			20.45			18.48			15.96
Assets, end of period $ (000’s)		4,911			3,670			3,026			2,744			2,681
Investment income ratio*		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		51.24	%		31.93	%		10.67	%		15.81	%		31.84	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	High Yield Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		322			350			425			486			422
Units issued		61			14			39			128			388
Units redeemed		(44	)		(42	)		(114	)		(189	)		(324	)

Units, end of period (000’s)		339			322			350			425			486

Unit value, end of period $		19.24 to 21.14			17.81 to 19.45			15.05 to 16.33			14.97 to 16.15			13.24 to 14.20
Assets, end of period $ (000’s)		6,940			6,121			5,602			6,743			6,732
Investment income ratio*		6.99	%		7.89	%		8.51	%		39.91	%		11.43	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		8.03% to 8.68	%		18.33% to 19.07	%		0.53% to 1.14	%		13.07% to 13.75	%		53.59% to 54.51	%

	Sub-Account
	International Core Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		36			93			91			83			90
Units issued		6			6			7			14			4
Units redeemed		(11	)		(63	)		(5	)		(6	)		(11	)

Units, end of period (000’s)		31			36			93			91			83

Unit value, end of period $		17.23			13.77			11.96			13.22			12.05
Assets, end of period $ (000’s)		497			478			1,098			1,193			989
Investment income ratio*		2.75	%		3.04	%		2.52	%		2.08	%		2.51	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		25.13	%		15.16	%		(9.55	%)		9.67	%		18.62	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	International Equity Index Trust B
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		485			522			579			657			702
Units issued		21			36			21			38			65
Units redeemed		(53	)		(73	)		(78	)		(116	)		(110	)

Units, end of period (000’s)		453			485			522			579			657

Unit value, end of period $		41.44 to 47.59			36.40 to 41.55			31.10 to 35.28			36.37 to 41.02			32.83 to 36.81
Assets, end of period $ (000’s)		41,920			39,626			36,834			47,278			48,133
Investment income ratio*		2.47	%		1.23	%		3.33	%		2.52	%		3.86	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		13.85% to 14.54	%		17.06% to 17.76	%		(14.50%) to (13.99	%)		10.77% to 11.43	%		37.97% to 38.80	%


	Sub-Account
	International Growth Stock Trust
	Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12 (p)
Units, beginning of period		33			—
Units issued		3			34
Units redeemed		(6	)		(1	)

Units, end of period (000’s)		30			33

Unit value, end of period $		12.41			10.41
Assets, end of period $ (000’s)		377			346
Investment income ratio*		1.19	%		4.28	%
Expense ratio lowest to highest**		0.00	%		0.00	%
Total return lowest to highest***		19.18	%		4.12	%

(p)	Reflects the period from commencement of operations on November 5, 2012 through December 31, 2012.

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	International Small Company Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09 (am)
Units, beginning of period		28			29			32			47			—
Units issued		5			3			7			8			50
Units redeemed		(9	)		(4	)		(10	)		(23	)		(3	)

Units, end of period (000’s)		24			28			29			32			47

Unit value, end of period $		15.23			12.06			10.12			12.07			9.84
Assets, end of period $ (000’s)		386			354			304			398			471
Investment income ratio*		1.75	%		1.39	%		1.67	%		2.65	%		0.79	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		26.30	%		19.23	%		(16.18	%)		22.62	%		(1.59	%)

(am) Reflects the period from commencement of operations on November 16, 2009 through December 31, 2009.

	Sub-Account
	International Value Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		733			792			927			91			82
Units issued		41			40			52			973			24
Units redeemed		(98	)		(99	)		(187	)		(137	)		(15	)

Units, end of period (000’s)		676			733			792			927			91

Unit value, end of period $		17.64 to 20.69			13.98 to 16.49			11.71 to 13.90			13.43 to 16.03			12.43
Assets, end of period $ (000’s)		12,746			10,996			9,999			13,483			1,129
Investment income ratio*		1.82	%		2.73	%		2.35	%		2.40	%		2.38	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00	%
Total return lowest to highest***		25.46% to 26.21	%		18.65% to 19.36	%		(13.31%) to (12.80	%)		8.00% to 8.34	%		35.94	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Investment Quality Bond Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		53			55			52			53			53
Units issued		2			2			5			3			8
Units redeemed		(4	)		(4	)		(2	)		(4	)		(8	)

Units, end of period (000’s)		51			53			55			52			53

Unit value, end of period $		15.14			15.43			14.33			13.26			12.33
Assets, end of period $ (000’s)		768			818			784			684			654
Investment income ratio*		3.83	%		2.15	%		4.40	%		5.29	%		5.05	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		(1.88	%)		7.66	%		8.06	%		7.54	%		12.43	%

	Sub-Account
	Large Cap Growth
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09 (ak)
Units, beginning of period		12			14			14			13			15
Units issued		1			1			1			2			1
Units redeemed		(1	)		(3	)		(1	)		(1	)		(3	)

Units, end of period (000’s)		12			12			14			14			13

Unit value, end of period $		38.02 to 45.61			28.10 to 33.50			23.69 to 28.08			24.02 to 28.31			19.64 to 23.00
Assets, end of period $ (000’s)		461			346			345			348			272
Investment income ratio*		0.57	%		0.05	%		0.00	%		0.37	%		0.64	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		35.34% to 36.15	%		18.60% to 19.31	%		(1.40%) to (0.80	%)		22.33% to 23.06	%		36.58% to 37.41	%

(ak)	Renamed on November 16, 2009. Previously known as Turner Core Growth Trust.

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Lifestyle Aggressive Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		329			338			376			380			393
Units issued		25			22			30			37			64
Units redeemed		(44	)		(31	)		(68	)		(41	)		(77	)

Units, end of period (000’s)		310			329			338			376			380

Unit value, end of period $		18.39			14.51			12.43			13.29			11.41
Assets, end of period $ (000’s)		5,703			4,778			4,208			5,002			4,333
Investment income ratio*		2.47	%		1.46	%		1.73	%		2.05	%		1.12	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		26.77	%		16.67	%		(6.46	%)		16.50	%		35.70	%

	Sub-Account
	Lifestyle Balanced Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		4,309			4,660			5,112			5,311			6,312
Units issued		214			286			298			519			378
Units redeemed		(508	)		(637	)		(750	)		(718	)		(1,379	)

Units, end of period (000’s)		4,015			4,309			4,660			5,112			5,311

Unit value, end of period $		16.00 to 16.85			14.26 to 14.93			12.82 to 13.34			12.81 to 13.25			11.53 to 11.85
Assets, end of period $ (000’s)		376,932			362,016			353,420			381,353			380,626
Investment income ratio*		2.85	%		2.28	%		3.29	%		2.76	%		4.35	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		12.23% to 12.89	%		11.24% to 11.90	%		0.08% to 0.67	%		11.11% to 11.78	%		30.12% to 30.89	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Lifestyle Conservative Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		195			53			94			46			35
Units issued		44			151			15			75			39
Units redeemed		(193	)		(9	)		(56	)		(27	)		(28	)

Units, end of period (000’s)		46			195			53			94			46

Unit value, end of period $		15.62			15.02			13.84			13.27			12.15
Assets, end of period $ (000’s)		708			2,919			726			1,236			555
Investment income ratio*		1.09	%		5.86	%		3.61	%		3.10	%		5.97	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		3.99	%		8.55	%		4.27	%		9.25	%		21.63	%

	Sub-Account
	Lifestyle Growth Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		2,144			2,315			2,380			2,408			2,680
Units issued		290			253			354			283			296
Units redeemed		(251	)		(424	)		(419	)		(311	)		(568	)

Units, end of period (000’s)		2,183			2,144			2,315			2,380			2,408

Unit value, end of period $		16.73 to 17.62			14.09 to 14.76			12.45 to 12.96			12.72 to 13.16			11.32 to 11.64
Assets, end of period $ (000’s)		38,039			31,305			29,722			31,048			27,807
Investment income ratio*		2.63	%		1.84	%		2.69	%		2.53	%		3.46	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		18.67% to 19.38	%		13.23% to 13.91	%		(2.14%) to (1.55	%)		12.37% to 13.04	%		32.52% to 33.33	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Lifestyle Moderate Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		326			272			382			293			255
Units issued		29			89			37			166			98
Units redeemed		(45	)		(35	)		(147	)		(77	)		(60	)

Units, end of period (000’s)		310			326			272			382			293

Unit value, end of period $		15.62 to 16.45			14.25 to 14.92			12.95 to 13.48			12.73 to 13.17			11.57 to 11.90
Assets, end of period $ (000’s)		5,000			4,778			3,631			4,965			3,423
Investment income ratio*		3.05	%		2.71	%		3.35	%		2.84	%		5.27	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		9.61% to 10.26	%		10.06% to 10.70	%		1.76% to 2.38	%		10.03% to 10.69	%		26.44% to 27.18	%

	Sub-Account
	Mid Cap Index Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		76			88			134			72			57
Units issued		18			8			59			156			24
Units redeemed		(10	)		(20	)		(105	)		(94	)		(9	)

Units, end of period (000’s)		84			76			88			134			72

Unit value, end of period $		13.32 to 25.23			10.07 to 18.95			8.62 to 16.13			8.86 to 16.48			7.07 to 13.07
Assets, end of period $ (000’s)		1,710			1,219			1,200			1,657			853
Investment income ratio*		1.16	%		1.46	%		0.63	%		1.35	%		1.11	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		32.29% to 33.09	%		16.84% to 17.54	%		(2.73%) to (2.14	%)		25.30% to 26.06	%		4.14% to 36.74	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Mid Cap Stock Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		442			483			549			601			661
Units issued		12			13			26			58			49
Units redeemed		(47	)		(54	)		(92	)		(110	)		(109	)

Units, end of period (000’s)		407			442			483			549			601

Unit value, end of period $		60.61 to 68.19			44.56 to 49.83			36.64 to 40.73			40.58 to 44.84			33.17 to 36.43
Assets, end of period $ (000’s)		25,896			20,627			18,506			23,201			20,696
Investment income ratio*		0.07	%		0.00	%		0.00	%		0.00	%		0.00	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		36.02% to 36.84	%		21.61% to 22.34	%		(9.71%) to (9.16	%)		22.33% to 23.07	%		30.68% to 31.47	%

	Sub-Account
	Mid Value Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		381			413			480			555			564
Units issued		48			20			17			70			128
Units redeemed		(59	)		(52	)		(84	)		(145	)		(137	)

Units, end of period (000’s)		370			381			413			480			555

Unit value, end of period $		32.82 to 36.05			25.12 to 27.42			21.14 to 22.94			22.34 to 24.10			19.34 to 20.74
Assets, end of period $ (000’s)		12,824			10,118			9,213			11,248			11,215
Investment income ratio*		1.10	%		0.89	%		0.74	%		2.05	%		0.68	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		30.69% to 31.47	%		18.83% to 19.54	%		(5.37%) to (4.80	%)		15.48% to 16.16	%		45.38% to 46.27	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Money Market Trust B
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		1,010			1,300			1,618			1,769			1,939
Units issued		353			411			615			848			1,192
Units redeemed		(505	)		(701	)		(933	)		(999	)		(1,362	)

Units, end of period (000’s)		858			1,010			1,300			1,618			1,769

Unit value, end of period $		17.37 to 22.10			17.37 to 22.24			17.36 to 22.36			17.35 to 22.48			17.34 to 22.61
Assets, end of period $ (000’s)		68,126			73,032			85,040			93,563			100,167
Investment income ratio*		0.01	%		0.04	%		0.00	%		0.05	%		0.48	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		(0.61%) to 0.01	%		(0.56%) to 0.03	%		(0.54%) to 0.08	%		(0.55%) to 0.03	%		(0.12%) to 0.47	%

	Sub-Account
	Natural Resources Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		83			103			122			117			151
Units issued		10			24			16			39			48
Units redeemed		(34	)		(44	)		(35	)		(34	)		(82	)

Units, end of period (000’s)		59			83			103			122			117

Unit value, end of period $		17.49			16.97			16.87			21.16			18.36
Assets, end of period $ (000’s)		1,012			1,394			1,711			2,551			2,137
Investment income ratio*		0.55	%		0.82	%		0.53	%		0.72	%		1.16	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		3.07	%		0.58	%		(20.27	%)		15.25	%		59.23	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Real Estate Securities Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		162			175			186			208			237
Units issued		6			8			17			17			24
Units redeemed		(21	)		(21	)		(28	)		(39	)		(53	)

Units, end of period (000’s)		147			162			175			186			208

Unit value, end of period $		92.59 to 105.43			93.19 to 105.48			79.90 to 89.90			73.36 to 82.05			57.12 to 63.50
Assets, end of period $ (000’s)		34,812			37,257			34,401			33,923			29,013
Investment income ratio*		1.91	%		1.77	%		1.52	%		1.94	%		3.51	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		(0.65%) to (0.05	%)		16.64% to 17.33	%		8.92% to 9.58	%		28.43% to 29.20	%		29.48% to 30.26	%

	Sub-Account
	Real Return Bond Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		41			48			46			29			19
Units issued		25			6			18			35			19
Units redeemed		(27	)		(13	)		(16	)		(18	)		(9	)

Units, end of period (000’s)		39			41			48			46			29

Unit value, end of period $		14.24			15.69			14.41			12.85			11.81
Assets, end of period $ (000’s)		539			638			692			590			340
Investment income ratio*		2.44	%		1.75	%		4.07	%		12.93	%		8.94	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		(9.25	%)		8.86	%		12.14	%		8.82	%		19.54	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Science & Technology Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		58			57			66			55			96
Units issued		11			6			8			83			18
Units redeemed		(9	)		(5	)		(17	)		(72	)		(59	)

Units, end of period (000’s)		60			58			57			66			55

Unit value, end of period $		23.78			16.57			14.99			16.24			13.02
Assets, end of period $ (000’s)		1,440			959			860			1,069			717
Investment income ratio*		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		43.55	%		10.54	%		(7.72	%)		24.69	%		64.57	%



	Sub-Account
	Short Term Government Income Trust
	Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10 (ba)
Units, beginning of period		483			542			769			—
Units issued		71			35			64			873
Units redeemed		(109	)		(94	)		(291	)		(104	)

Units, end of period (000’s)		445			483			542			769

Unit value, end of period $		10.52 to 17.95			10.60 to 18.19			10.48 to 18.09			10.19 to 17.70
Assets, end of period $ (000’s)		5,307			5,775			6,465			8,916
Investment income ratio*		2.01	%		1.63	%		2.22	%		1.51	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		(1.34%) to (0.74	%)		0.58% to 1.18	%		2.21% to 2.83	%		1.49% to 1.91	%

(ba)	Reflects the period from commencement of operations on May 3, 2010 through December 31, 2010.

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Small Cap Growth Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		1,065			1,159			1,322			1,448			1,607
Units issued		44			40			71			131			137
Units redeemed		(124	)		(134	)		(234	)		(257	)		(296	)

Units, end of period (000’s)		985			1,065			1,159			1,322			1,448

Unit value, end of period $		27.40 to 30.46			19.11 to 21.12			16.50 to 18.13			17.81 to 19.45			14.67 to 15.92
Assets, end of period $ (000’s)		27,959			21,072			19,776			24,290			21,877
Investment income ratio*		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		43.36% to 44.21	%		15.83% to 16.53	%		(7.35%) to (6.79	%)		21.41% to 22.14	%		33.66% to 34.46	%

	Sub-Account
	Small Cap Index Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		86			92			102			104			96
Units issued		7			7			7			15			18
Units redeemed		(11	)		(13	)		(17	)		(17	)		(10	)

Units, end of period (000’s)		82			86			92			102			104

Unit value, end of period $		24.79			17.87			15.40			16.10			12.74
Assets, end of period $ (000’s)		2,006			1,519			1,407			1,640			1,321
Investment income ratio*		1.56	%		2.06	%		1.16	%		0.56	%		0.95	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		38.75	%		16.06	%		(4.37	%)		26.43	%		26.70	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Small Cap Opportunities Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		6			30			32			30			28
Units issued		10			1			5			7			7
Units redeemed		(2	)		(25	)		(7	)		(5	)		(5	)

Units, end of period (000’s)		14			6			30			32			30

Unit value, end of period $		18.97			13.52			11.57			11.94			9.21
Assets, end of period $ (000’s)		283			90			348			377			274
Investment income ratio*		0.69	%		0.00	%		0.10	%		0.00	%		0.00	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		40.28	%		16.88	%		(3.13	%)		29.71	%		34.03	%

	Sub-Account
	Small Cap Value Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		201			223			255			288			304
Units issued		6			6			9			18			21
Units redeemed		(23	)		(28	)		(41	)		(51	)		(37	)

Units, end of period (000’s)		184			201			223			255			288

Unit value, end of period $		64.51			48.39			41.79			41.32			32.75
Assets, end of period $ (000’s)		11,819			9,677			9,293			10,537			9,444
Investment income ratio*		0.59	%		0.89	%		0.85	%		0.41	%		0.70	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		33.33	%		15.78	%		1.15	%		26.15	%		28.79	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Small Company Value Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		23			20			22			26			29
Units issued		4			5			3			4			8
Units redeemed		(4	)		(2	)		(5	)		(8	)		(11	)

Units, end of period (000’s)		23			23			20			22			26

Unit value, end of period $		22.78			17.30			14.86			15.00			12.36
Assets, end of period $ (000’s)		544			404			310			334			329
Investment income ratio*		1.72	%		0.26	%		0.59	%		1.45	%		0.40	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		31.68	%		16.41	%		(0.94	%)		21.39	%		27.82	%

	Sub-Account
	Smaller Company Growth Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13 (ag)			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09 (am)
Units, beginning of period		4			3			7			4			—
Units issued		3			1			2			6			4
Units redeemed		(7	)		—			(6	)		(3	)		—

Units, end of period (000’s)		—			4			3			7			4

Unit value, end of period $		19.23			14.23			12.24			13.16			10.52
Assets, end of period $ (000’s)		—			58			48			94			39
Investment income ratio*		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		35.12	%		16.27	%		(7.04	%)		25.12	%		5.22	%

(ag)	Terminated as an investment option and funds transferred to Small Cap Opportunities Trust on December 9, 2013.

(am)	Reflects the period from commencement of operations on November 16, 2009 through December 31, 2009.

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Strategic Income Opportunities Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10 (az)			Dec. 31/09
Units, beginning of period		49			49			75			45			21
Units issued		51			12			20			42			38
Units redeemed		(35	)		(12	)		(46	)		(12	)		(14	)

Units, end of period (000’s)		65			49			49			75			45

Unit value, end of period $		18.22			17.55			15.54			15.22			13.13
Assets, end of period $ (000’s)		1,168			848			750			1,135			587
Investment income ratio*		7.04	%		7.42	%		10.01	%		12.95	%		6.65	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		3.81	%		12.94	%		2.08	%		15.91	%		26.78	%

(az) Renamed on May 3, 2010. Previously known as Strategic Income Trust.

	Sub-Account
	Total Bond Market Trust B
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		897			1,060			1,201			1,280			1,217
Units issued		31			49			53			104			232
Units redeemed		(99	)		(212	)		(194	)		(183	)		(169	)

Units, end of period (000’s)		829			897			1,060			1,201			1,280

Unit value, end of period $		20.28 to 22.27			20.91 to 22.83			20.21 to 21.94			18.90 to 20.39			17.85 to 19.14
Assets, end of period $ (000’s)		18,166			20,130			22,871			24,112			24,183
Investment income ratio*		3.37	%		1.57	%		4.17	%		4.40	%		5.16	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		(3.01%) to (2.44	%)		3.47% to 4.08	%		6.96% to 7.60	%		5.85% to 6.49	%		5.64% to 6.29	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Total Return Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		173			168			173			178			144
Units issued		31			29			24			56			66
Units redeemed		(42	)		(24	)		(29	)		(61	)		(32	)

Units, end of period (000’s)		162			173			168			173			178

Unit value, end of period $		17.22			17.57			16.18			15.57			14.46
Assets, end of period $ (000’s)		2,801			3,046			2,726			2,698			2,586
Investment income ratio*		3.24	%		2.13	%		4.36	%		2.45	%		4.38	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		(1.98	%)		8.57	%		3.97	%		7.66	%		13.71	%

	Sub-Account
	Total Stock Market Index Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		142			158			172			201			213
Units issued		5			5			7			9			20
Units redeemed		(15	)		(21	)		(21	)		(38	)		(32	)

Units, end of period (000’s)		132			142			158			172			201

Unit value, end of period $		71.52			53.59			46.38			46.23			39.42
Assets, end of period $ (000’s)		9,560			7,677			7,370			7,999			7,953
Investment income ratio*		1.46	%		1.53	%		1.28	%		1.37	%		1.64	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		33.45	%		15.56	%		0.33	%		17.26	%		28.93	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Ultra Short Term Bond Trust
	Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11 (d)
Units, beginning of period		19			11			—
Units issued		7			18			14
Units redeemed		(3	)		(10	)		(3	)

Units, end of period (000’s)		23			19			11

Unit value, end of period $		10.07			10.07			10.00
Assets, end of period $ (000’s)		213			180			106
Investment income ratio*		1.33	%		1.17	%		1.56	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		(0.02	%)		0.66	%		0.09	%

(d)	Fund available in prior year but no activity.


	Sub-Account
	U.S. Equity Trust
	Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12 (r)
Units, beginning of period		20			—
Units issued		2			21
Units redeemed		(4	)		(1	)

Units, end of period (000’s)		18			20

Unit value, end of period $		13.20			10.28
Assets, end of period $ (000’s)		244			210
Investment income ratio*		1.75	%		2.20	%
Expense ratio lowest to highest**		0.00	%		0.00	%
Total return lowest to highest***		28.36	%		2.81	%

(r)	Reflects the period from commencement of operations on April 30, 2012 through December 31, 2012.

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Utilities Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		42			45			38			47			67
Units issued		10			6			17			9			15
Units redeemed		(15	)		(9	)		(10	)		(18	)		(35	)

Units, end of period (000’s)		37			42			45			38			47

Unit value, end of period $		26.50			21.97			19.33			18.10			15.88
Assets, end of period $ (000’s)		977			921			875			689			756
Investment income ratio*		2.10	%		3.75	%		4.42	%		2.28	%		4.61	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		20.65	%		13.63	%		6.80	%		14.00	%		33.58	%

	Sub-Account
	Value Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		32			34			46			45			73
Units issued		5			4			7			11			12
Units redeemed		(7	)		(6	)		(19	)		(10	)		(40	)

Units, end of period (000’s)		30			32			34			46			45

Unit value, end of period $		24.72			18.25			15.53			15.37			12.57
Assets, end of period $ (000’s)		714			571			522			706			572
Investment income ratio*		0.80	%		0.85	%		0.99	%		1.07	%		1.27	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		35.44	%		17.50	%		1.03	%		22.30	%		41.19	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

^(*)

These ratios, which are not annualized, represent the dividends, excluding distributions of capital gains, received by the sub-account from the underlying Trust portfolio, net of management fees and expenses assessed by the Trust portfolio adviser, divided by the average net assets of the sub-account. These ratios exclude those expenses, such as mortality and expense risks charges that result in direct reductions in unit values. The recognition of investment income by the sub-account is affected by the timing of the declarations of dividends by the underlying Trust portfolio in which the sub-accounts invest. It is the practice of the Trust, for income tax reasons, to declare dividends in April for investment income received in the previous calendar year for all sub-accounts of the Trust except for the Money Market Trust which declares and reinvests dividends on a daily basis. Any dividend distribution received from a sub-account of the Trust is reinvested immediately, at the net asset value, in shares of that sub-account and retained as assets of the corresponding sub-account so that the unit value of the sub-account is not affected by the declaration and reinvestment of dividends.

^(**)

These ratios represent the annualized contract expenses of the separate account, consisting primarily of mortality and expense risks charges, for the period indicated. The ratios include only those expenses that result in a direct reduction in unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying Trust portfolio are excluded. When no range is given, the lowest and highest values are the same.

^(***)

These ratios, which are not annualized, represent the total return for the period indicated, including changes in the value of the underlying Trust portfolio, and reflect deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units; inclusion of these expenses in the calculation would result in a reduction in the total return presented. When no range is given, the lowest and highest values are the same.

Prospectus dated April 30, 2014

for interests in

John Hancock Variable Life Account U

Interests are made available under

MEDALLION VARIABLE UNIVERSAL LIFE PLUS

a flexible premium variable universal life insurance policy

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)
(“John Hancock USA”)

The policy provides a fixed account option with fixed rates of return declared by John Hancock USA
and the following investment accounts:

500 Index B
Active Bond
All Cap Core
Alpha Opportunities
American Asset Allocation
American Global Growth
American Growth
American Growth-Income
American International
American New World
Blue Chip Growth
Bond
Capital Appreciation
Capital Appreciation Value
Core Bond
Core Strategy
Emerging Markets Value
Equity-Income
Financial Services
Franklin Templeton Founding Allocation
Fundamental All Cap Core
Fundamental Large Cap Value
Fundamental Value
Global
Global Bond
Health Sciences
High Yield
International Core
International Equity Index B
International Growth Stock
International Small Company
International Value
Investment Quality Bond
Lifestyle Aggressive MVP
Lifestyle Balanced MVP
Lifestyle Conservative MVP
Lifestyle Growth MVP
Lifestyle Moderate MVP
Mid Cap Index
Mid Cap Stock
Mid Value
Money Market B
Natural Resources
PIMCO VIT All Asset
Real Estate Securities
Real Return Bond
Science & Technology
Short Term Government Income
Small Cap Growth
Small Cap Index
Small Cap Opportunities
Small Cap Value
Small Company Value
Strategic Income Opportunities
Total Bond Market B
Total Return
Total Stock Market Index
Ultra Short Term Bond
U.S. Equity
Utilities
Value

* * * * * * * * * * * *

GUIDE TO THIS PROSPECTUS

This prospectus is arranged in the following way:

The first section is called “Summary of Benefits and Risks.” It contains a summary of the benefits available under the policy and of the principal risks of purchasing the policy. You should read this section before reading any other section of this prospectus.
Behind the Summary of Benefits and Risks section is a section called “Fee Tables” that describes the fees and expenses you will pay when buying, owning and surrendering the policy.
Behind the Fee Tables section is a section called “Detailed Information.” This section gives more details about the policy. It may repeat certain information contained in the Summary of Benefits and Risks section in order to put the more detailed information in proper context.
Finally, on the back cover of this prospectus is information concerning the Statement of Additional Information (the “SAI”) and how the SAI, audited financial statements for John Hancock USA and the Separate Account, personalized illustrations and other information can be obtained.

Prior to making any investment decisions, you should carefully review this product prospectus and all applicable supplements. In addition, you should review the prospectuses for the underlying funds that we make available as investment options under the policies. The funds’ prospectuses describe the investment objectives, policies and restrictions of, and the risks relating to, investment in the funds. In the case of any of the portfolios that are operated as “feeder funds,” the prospectus for the corresponding “master fund” is also provided. If you need to obtain additional copies of any of these documents, please contact your John Hancock USA representative or contact our Service Office at the address and telephone number on the back page of this product prospectus.

TABLE OF CONTENTS

	Page No.



SUMMARY OF BENEFITS AND RISKS	4
The nature of the policy	4
Summary of policy benefits	4
Death benefit	4
Surrender of the policy	4
Partial withdrawals	4
Policy loans	5
Optional benefit riders	5
Investment options	5
Summary of policy risks	5
Lapse risk	5
Investment risk	5
Access to funds risk	5
Transfer risk	6
Market timing and disruptive trading risks	6
Tax risks	6
FEE TABLES	8
DETAILED INFORMATION	12
Table of Investment Options and Investment Subadvisers	12
Description of John Hancock USA	16
Description of Separate Account U	17
The fixed investment option	17
Premiums	18
Planned premiums	18
Maximum premium payments	18
Ways to pay premiums	18
Processing premium payments	18
Lapse and reinstatement	19
Guaranteed death benefit feature	19
The death benefit	20
Limitations on payment of death benefit	20
Basic Sum Insured vs. Additional Sum Insured	20
The minimum insurance amount	21
When the insured person reaches 100	21
Requesting an increase in coverage	21
Requesting a decrease in coverage	21
Change of death benefit option	22
Effective date of certain policy transactions	22
Tax consequences of coverage changes	22
Your beneficiary	22
Ways in which we pay out policy proceeds	22
Changing a payment option	23
Tax impact of payment option chosen	23
The account value	23
Commencement of investment performance	23
Allocation of future premium payments	24
Transfers of existing account value	24
Dollar cost averaging	25
Asset rebalancing	25
Surrender and partial withdrawals	26
Full surrender	26
Partial withdrawals	26
Policy loans	26
Repayment of policy loans	27
Effects of policy loans	27
Description of charges at the policy level	27
Deductions from premium payments	27
Deductions from account value	27
Additional information about how certain policy charges work	29
Sales expenses and related charges	29
Effect of premium payment pattern	29
Method of deduction	29
Reduced charges for eligible classes	29
Other charges we could impose in the future	30
Description of charges at the fund level	30
Other policy benefits, rights and limitations	30
Optional benefit riders you can add	30
Variations in policy terms	32
Procedures for issuance of a policy	32
Minimum initial premium	32
Commencement of insurance coverage	32
Backdating	32
Temporary coverage prior to policy delivery	33
Monthly deduction dates	33
Changes that we can make as to your policy	33
The owner of the policy	33
Policy cancellation right	33
Reports that you will receive	34
Assigning your policy	34
When we pay policy proceeds	34
General	34
Delay to challenge coverage	34
Delay for check clearance	34
Delay of separate account proceeds	34
Delay of general account surrender proceeds	35
How you communicate with us	35
General rules	35
Telephone and facsimile transactions	35
Distribution of policies	36
Compensation	36
Tax considerations	37
General	37
Death benefit proceeds and other policy distributions	38
Policy loans	39
Diversification rules and ownership of the Separate Account	39
7-pay premium limit and modified endowment contract status	40
Corporate and H.R. 10 retirement plans	41
Withholding	41
Life insurance purchases by residents of Puerto Rico	41
Life insurance purchases by non-resident aliens	41
Life insurance owned by citizens or residents living abroad	41
Financial statements reference	41
Registration statement filed with the SEC	41
Independent registered public accounting firm	41

Table Of Contents

SUMMARY OF BENEFITS AND RISKS

The nature of the policy

Summary of policy benefits

Death benefit

When the insured person dies, we will pay the death benefit minus any outstanding loans. There are two ways of calculating the death benefit (Option A and Option B). You choose which one you want in the application. The two death benefit options are:

Option A - The death benefit will equal the greater of (1) the Total Sum Insured, or (2) the minimum insurance amount (as described under “The minimum insurance amount” provision in the Detailed Information section of this prospectus).

Option B - The death benefit will equal the greater of (1) the Total Sum Insured plus your policy’s account value on the date of death , or (2) the minimum insurance amount under the “guideline premium and cash value corridor test”.

Surrender of the policy

You may surrender the policy in full at any time. If you do, we will pay you the account value of the policy less any outstanding policy debt and less any contingent deferred sales charge that then applies. This is called your “surrender value.” You must return your policy when you request a surrender.

If you have not taken a loan on your policy, the “account value” of your policy will, on any given date, be equal to:

the amount you invested,

plus or minus the investment experience of the investment options you’ve chosen,

minus all charges we deduct, and

minus all withdrawals you have made.

If you take a loan on your policy, your account value will be computed somewhat differently. This is discussed under “Policy loans.”

Partial withdrawals

Table Of Contents

Policy loans

You may borrow from your policy at any time by completing the appropriate form. The minimum amount of each loan is $300. The maximum amount you can borrow is determined by a formula as described in your policy. Interest is charged on each loan. You can pay the interest or allow it to become part of the outstanding loan balance. You can repay all or part of a loan at any time. If there is an outstanding loan when the insured person dies, it will be deducted from the death benefit. Policy loans permanently affect the calculation of your account value, and may also result in adverse tax consequences.

Optional benefit riders

When you apply for the policy, you can request any of the optional benefit riders that we make available. There are a number of such riders, including the Living Care Benefit Rider, the Optional Enhanced Cash Value Rider and the Long-Term Care Acceleration Rider. Charges for most riders will be deducted monthly from the policy’s account value.

Investment options

Summary of policy risks

Lapse risk

Since withdrawals reduce your account value, withdrawals increase the risk of lapse. Loans also increase the risk of lapse.

Investment risk

Access to funds risk

There is a risk that you will not be able (or willing) to access your account value by surrendering the policy because of the contingent deferred sales charge (“CDSC”) that may be payable upon surrender. The CDSC is a percentage of the premiums you’ve paid and disappears only after 10 policy years have passed. See the “Fee Tables” section of this prospectus for details on the CDSC. There is a fee for each partial withdrawal. The charge is equal to the lesser of 2% of the withdrawal amount or $20. Any communication that arrives on a date that is not a business day will be processed on the business day next following that date. The term “business day” is defined under “The account value.”

Table Of Contents

Transfer risk

There is a risk that you will not be able to transfer your account value from one investment option to another because of limitations on the dollar amount or frequency of transfers you can make. The limitations on transfers out of the fixed account are more restrictive than those that apply to transfers out of investment accounts. If you purchase the Long-Term Care Rider, while benefits are being paid under that rider you will be subject to special transfer restrictions (see “Optional supplementary benefit riders you can add”).

Market timing and disruptive trading risks

(i) restricting the number of transfers made during a defined period,

(ii) restricting the dollar amount of transfers,

(iii) restricting transfers into and out of certain investment accounts,

(iv) restricting the method used to submit transfers, and

(v) deferring a transfer at any time we are unable to purchase or redeem shares of the underlying portfolio.

Tax risks

Life insurance death benefits are ordinarily not subject to income tax. Other Federal and state taxes may apply as further discussed below. In general, you will be taxed on the amount of lifetime distributions that exceed the premiums paid under the policy. Any taxable distribution will be treated as ordinary income (rather than as capital gains) for tax purposes. If you have elected the Long-Term Care Acceleration Rider, you may be deemed to have received a distribution for tax purposes each time a deduction is made from your policy value to pay the rider charge. The tax laws are not clear on this point.

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tax laws also contain a so-called “7-pay limit” that limits the amount of premium that can be paid in relation to the policy’s death benefit. If the limit is violated, the policy will be treated as a “modified endowment contract,” which can have adverse tax consequences. There are also certain Treasury Department rules referred to as the “investor control rules” that determine whether you would be treated as the “owner” of the assets underlying your policy. If that were determined to be the case, you would be taxed on any income or gains those assets generate. In other words, you would lose the value of the so-called “inside build-up” that is a major benefit of life insurance.

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FEE TABLES

Transaction Fees
Charge	When Charge is Deducted	Amount Deducted
Premium sales charge	Upon payment of premium	4% of Target Premium⁽¹⁾
Premium tax charge	Upon payment of premium	2.35% of each premium paid
DAC tax charge	Upon payment of premium	1.25% of each premium paid
Maximum contingent deferred sales charge (CDSC)	Upon surrender of policy within the period stated Upon reduction of Basic Sum Insured as a result of a partial withdrawal or a written request	100% of first year Target Premium for surrenders in policy years 1-5⁽²⁾ Pro rata portion of applicable CDSC
Maximum ASI reduction charge	Upon decrease in Additional Sum Insured (ASI) during the first 20 policy years	$17.40 per $1,000 of decrease in ASI⁽³⁾
Maximum partial withdrawal charge	Upon making a partial withdrawal	Lesser of $20 or 2% of withdrawal amount
Maximum transfer charge	Upon each transfer into or out of a variable investment option beyond an annual limit of not less than 12	$25 (currently $0)⁽⁴⁾

(1) The “Target Premium” for each policy year is determined at the time the policy is issued and appears in the “Policy Specifications” section of the policy. In general, the greater the proportion of Additional Sum Insured at issue, the lower the Target Premium.

(2) The CDSC percentage decreases in later policy years as follows: for policy year 6, it is 80%; for policy year 7, it is 70%; for policy year 8, it is 60%; for policy year 9, it is 40%; for policy year 10, it is 20%; and for policy years 11 and later, it is 0%.

(3) A table in the policy will state the maximum rate for this charge per $1,000 of ASI, based on the insured person’s issue age, insurance risk characteristics and (usually) gender. The rates range from less than $1 per $1,000 of ASI for issue ages of 40 or less up to the maximum shown in the table for an issue age 81 male tobacco risk.

(4) This charge is not currently imposed, but we reserve the right to do so in the policy.

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The next two tables describe the fees and expenses that you will pay periodically during the time you own the policy . These tables do not include fees and expenses paid at the fund level. Except for the policy loan interest rate, the Living Care Benefit Rider and the Optional Enhanced Cash Value Rider, all of the charges shown in the tables are deducted from your account value. The second table is devoted only to optional rider benefits.

Periodic Charges Other Than Fund Operating Expenses
Charge	When Charge is Deducted	Amount Deducted
Charge	When Charge is Deducted	Guaranteed Rate	Current Rate
Insurance charge:⁽¹⁾
Minimum charge	Monthly	$0.05 per $1,000 of AAR	$0.01 per $1,000 of AAR
Maximum charge	Monthly	$83.33 per $1,000 of AAR	$83.33 per $1,000 of AAR
Charge for representative insured person	Monthly	$0.14 per $1,000 of AAR	$0.14 per $1,000 of AAR
Issue charge	Monthly in first policy year only	$20	$20
Maintenance charge	Monthly	$8	$6
Asset-based risk charge⁽²⁾	Monthly	.075% of account value	.050% of account value in policy years 1-10 .035% of account value in policy year 11, decreasing by .001% each year in policy years 12-28 .017% of account value in policy year 29 and thereafter
Maximum policy loan interest rate⁽³⁾	Accrues daily Payable annually	4.75%	4.75%

(1) The insurance charge is determined by multiplying the amount of insurance for which we are at risk (the amount at risk or “AAR”) by the applicable cost of insurance rate. The rates vary widely depending upon the Total Sum Insured, the length of time the policy has been in effect, the insurance risk characteristics of the insured person and (generally) the gender of the insured person. The “minimum” rate shown in the table at the guaranteed rate is the rate in the first policy year for a $1,000,000 policy issued to cover a 10 year old female preferred underwriting risk. The “minimum” rate shown in the table at the current rate is the rate in the eighth policy year for a $1,000,000 Basic Sum Insured $4,000,000 Additional Sum Insured policy issued to cover a 4 year old female preferred underwriting risk. The “maximum” rate shown in the table at both the guaranteed and current rates is the rate in the first policy year for a $100,000 all Basic Sum Insured policy issued to cover a 99 year old male substandard tobacco underwriting risk. This includes the so-called “extra mortality charge.” The “representative insured person” referred to in the table is a 35 year old male standard non-tobacco underwriting risk with a $100,000 policy. The charges shown in the table may not be particularly relevant to your current situation. For more information about cost of insurance rates, talk to your John Hancock USA representative.

(2) This charge only applies to that portion of account value held in the variable investment options. The charge does not apply to the fixed investment option.

(3) 4.75% is the maximum effective annual interest rate we can charge and applies only during policy years 1-10. The effective annual interest rate is 4.50% for policy years 11-20 and, under our current rules, is 4.00% thereafter. The amount of any loan is transferred from the investment options to a special loan account which earns interest at an effective annual rate of 4.00%. Therefore, the true cost of a loan is the difference between the loan interest we charge and the interest we credit to the special loan account.

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(1) The charge for this rider is determined by multiplying the total amount of all other monthly policy level charges by the applicable rate. The rates vary by the attained age and the disability insurance risk characteristics of the insured person. The “minimum” rate shown in the table is for a 64 year old preferred underwriting risk. The “maximum” rate shown in that table is for a 55 year old substandard underwriting risk. The “representative insured person” referred to in the table is a 35 year old standard underwriting risk.

(2) Applicable state regulations currently limit the discount percentage to the greater of (i) the yield on 90 day U.S. Treasury bills at the time the discount is determined, and (ii) the policy’s maximum loan interest rate at the time the discount is determined.

(3) The charge for this rider is determined by multiplying the amount of insurance for which we are at risk by the applicable rate. The rates vary by the issue age, the insurance risk characteristics and gender of the insured person. The “minimum” rate shown in the table is for a 20 year old male tobacco underwriting risk. The “maximum” rate shown in that table is for an 85 year old female preferred non-tobacco underwriting risk. The “representative insured person” referred to in the table is a 35 year old male standard non-tobacco underwriting risk.

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(4)

The charge for this rider is determined by multiplying the amount of accidental death benefit selected by the applicable rate. The rates vary by the attained age and the ADB risk characteristics of the insured person. The “minimum” rate shown in the table is for an insured person less than 1 year of age with the lowest ADB risk rating (1.0). The “maximum” rate shown in that table is for a 65 year old with the highest ADB rating (1.5). The “representative insured person” referred to in the table is a 35 year old with an ADB rating of 1.0.

(5)

The charge for this rider is determined by multiplying the total amount of all other monthly charges by the applicable rate. The rates vary by the LTC insurance risk characteristics of the insured person and the rider benefit level selected. The “minimum” rate shown in the table is for a standard underwriting risk with a 1% Monthly Acceleration Percentage. The “maximum” rate shown in that table is for a substandard underwriting risk with a 4% Monthly Acceleration Percentage. The “representative insured person” referred to in the table is a standard underwriting risk with a 4% Monthly Acceleration Percentage.

Total Annual Portfolio Operating Expenses	Minimum	Maximum
Range of expenses, including management fees, distribution and/or service (12b-1) fees, and other expenses¹	0.48%	1.64%

¹ Certain of the portfolios’ advisers or subadvisers have contractually agreed to reimburse or waive certain portfolio level expenses. The minimum and maximum expenses shown do not reflect these contractual expense reimbursements or waivers. If such reimbursements or waivers were reflected, the minimum and maximum expenses would be 0.25% and 1.52%, respectively.

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DETAILED INFORMATION

This section of the prospectus provides additional detailed information that is not contained in the Summary of Benefits and Risks section.

Table of Investment Options and Investment Subadvisers

When you select a Separate Account investment option, we invest your money in shares of a corresponding portfolio of the John Hancock Variable Insurance Trust (the “Trust” or “JHVIT”) (or the PIMCO Variable Insurance Trust (the “PIMCO Trust”) with respect to the PIMCO VIT All Asset portfolio) and hold the shares in a subaccount of the Separate Account. Fees and expenses of the portfolios are not fixed or specified under the terms of the policies and may vary from year to year. These fees and expenses differ for each portfolio and reduce the investment return of each portfolio. Therefore, they also indirectly reduce the return you will earn on any Separate Account investment options you select. For more information, please refer to the prospectus for the underlying portfolio.

The JHVIT and the PIMCO Trust are so-called “series” type mutual funds and each is registered under the Investment Company Act of 1940 (“1940 Act”) as an open-end management investment company. John Hancock Investment Management Services, LLC. (“JHIMS”) provides investment advisory services to the Trust and receives investment management fees for doing so. JHIMS pays a portion of its investment management fees to other firms that manage the Trust’s portfolios. We are affiliated with JHIMS and may indirectly benefit from any investment management fees JHIMS retains. The PIMCO VIT All Asset portfolio of the PIMCO Trust receives investment advisory services from Pacific Investment Management Company LLC (“PIMCO”) and pays investment management fees to PIMCO.

Each of the American Asset Allocation, American Global Growth, American Growth, American Growth-Income, American International and American New World portfolios invests in Series 1 shares of the corresponding investment portfolio of the Trust. The American Asset Allocation, American Global Growth, American Growth, American Growth-Income, American International and American New World portfolios (“American Portfolios”) operate as “feeder funds,” which means that the portfolios do not buy investment securities directly. Instead, they invest in a “master fund” which in turn purchases investment securities. Each of the American feeder fund portfolios has the same investment objective and limitations as its master fund. The prospectus for the American Fund master fund is included with the prospectuses for the underlying funds. We pay American Funds Distributors, Inc., the principal underwriter for the American Funds Insurance Series, a percentage of some or all of the amounts allocated to the American Portfolios of the Trust for the marketing support services it provides.

The following table provides a general description of the portfolios that underlie the variable investment options we make available under the policy. You bear the investment risk of any portfolio you choose as an investment option for your policy. You can find a full description of each portfolio, including the investment objectives, policies, restrictions, and risks, in the prospectus for that portfolio. You should read the portfolio’s prospectus carefully before investing in the corresponding variable investment option.

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The portfolios available under the policies, the portfolio managers (engaged by JHIMS or PIMCO) and the investment objective for the portfolio are as described in the following table:

Portfolio Portfolio Manager Investment Objective

500 Index B John Hancock Asset Management, a division of Manulife Asset Management (North America) Limited To approximate the aggregate total return of a broad-based U.S. domestic equity market index.

Active Bond Declaration Management & Research LLC; and John Hancock Asset Management, a division of Manulife Asset Management (US) LLC To seek to provide income and capital appreciation.

All Cap Core QS Investors, LLC To seek to provide long-term growth of capital.

Alpha Opportunities Wellington Management Company, LLP To seek to provide long-term total return.

American Asset Allocation Capital Research and Management Company (Adviser to the American Funds Insurance Series) To seek to provide high total return (including income and capital gains) consistent with preservation of capital over the long-term.

American Global Growth Capital Research and Management Company (Adviser to the American Funds Insurance Series) To seek to provide long-term growth of capital.

American Growth Capital Research and Management Company (Adviser to the American Funds Insurance Series) To seek to provide growth of capital.

American Growth–Income Capital Research and Management Company (Adviser to the American Funds Insurance Series) To seek to provide growth of capital and income.

American International Capital Research and Management Company (Adviser to the American Funds Insurance Series) To seek to provide long-term growth of capital.

American New World Capital Research and Management Company (Adviser to the American Funds Insurance Series) To seek to provide long-term capital appreciation.

Blue Chip Growth T. Rowe Price Associates, Inc. To seek to provide long-term growth of capital. Current income is a secondary objective.

Bond John Hancock Asset Management, a division of Manulife Asset Management (US) LLC To seek to provide income and capital appreciation.

Capital Appreciation Jennison Associates LLC To seek to provide long-term growth of capital.

Capital Appreciation Value T. Rowe Price Associates, Inc. To seek to provide long-term capital appreciation.

Core Bond Wells Capital Management, Incorporated To seek to provide total return consisting of income and capital appreciation.

Core Strategy John Hancock Asset Management, a division of Manulife Asset Management (US) LLC; and John Hancock Asset Management, a division of Manulife Asset Management (North America) Limited To seek to provide long-term growth of capital. Current income is also a consideration.

Emerging Markets Value Dimensional Fund Advisors LP To seek to provide long-term capital appreciation.

Equity-Income T. Rowe Price Associates, Inc. To seek to provide substantial dividend income and also long-term growth of capital.

Financial Services Davis Selected Advisers, L.P. To seek to provide growth of capital.

Franklin Templeton Founding Allocation John Hancock Asset Management, a division of Manulife Asset Management (US) LLC To seek to provide long-term growth of capital.

Fundamental All Cap Core John Hancock Asset Management, a division of Manulife Asset Management (US) LLC To seek to provide long-term growth of capital.

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Portfolio	Portfolio Manager	Investment Objective
Fundamental Large Cap Value	John Hancock Asset Management, a division of Manulife Asset Management (US) LLC	To seek to provide long-term capital appreciation.
Fundamental Value	Davis Selected Advisers, L.P.	To seek to provide capital growth.
Global	Templeton Global Advisors Limited	To seek to provide long-term capital appreciation.
Global Bond	Pacific Investment Management Company LLC	To seek to provide maximum total return, consistent with preservation of capital and prudent investment management.
Health Sciences	T. Rowe Price Associates, Inc.	To seek to provide long-term capital appreciation.
High Yield	Western Asset Management Company	To seek to provide an above-average total return over a market cycle of 3 to 5 years, consistent with reasonable risk.
International Core	Grantham, Mayo, Van Otterloo & Co. LLC	To seek to provide high total return.
International Equity Index B	SSgA Funds Management, Inc.	To seek to track the performance of a broad-based equity index of foreign companies primarily in developed countries and, to a lesser extent, in emerging markets.
International Growth Stock	Invesco Advisers, Inc.	To seek to provide long-term growth of capital.
International Small Company	Dimensional Fund Advisors LP	To seek to provide long-term capital appreciation.
International Value	Templeton Investment Counsel, LLC	To seek to provide long-term growth of capital.
Investment Quality Bond	Wellington Management Company, LLP	To seek to provide a high level of current income consistent with the maintenance of principal and liquidity.
Lifestyle Aggressive MVP	John Hancock Asset Management, a division of Manulife Asset Management (US) LLC; and John Hancock Asset Management, a division of Manulife Asset Management (North America) Limited	To seek to provide long-term growth of capital while seeking to both manage the volatility of return and limit the magnitude of portfolio losses.
Lifestyle Balanced MVP	John Hancock Asset Management, a division of Manulife Asset Management (US) LLC; and John Hancock Asset Management, a division of Manulife Asset Management (North America) Limited	To seek to provide growth of capital and current income while seeking to both manage the volatility of return and limit the magnitude of portfolio losses.
Lifestyle Conservative MVP	John Hancock Asset Management, a division of Manulife Asset Management (US) LLC; and John Hancock Asset Management, a division of Manulife Asset Management (North America) Limited	To seek to provide current income and growth of capital while seeking to both manage the volatility of return and limit the magnitude of portfolio losses.
Lifestyle Growth MVP	John Hancock Asset Management, a division of Manulife Asset Management (US) LLC; and John Hancock Asset Management, a division of Manulife Asset Management (North America) Limited	To seek to provide long-term growth of capital while seeking to both manage the volatility of return and limit the magnitude of portfolio losses.
Lifestyle Moderate MVP	John Hancock Asset Management, a division of Manulife Asset Management (US) LLC; and John Hancock Asset Management, a division of Manulife Asset Management (North America) Limited	To seek to provide current income and growth of capital while seeking to both manage the volatility of return and limit the magnitude of portfolio losses.
Mid Cap Index	John Hancock Asset Management, a division of Manulife Asset Management (North America) Limited	To seek to approximate the aggregate total return of a medium-capitalization U.S. domestic equity market index.
Mid Cap Stock	Wellington Management Company, LLP	To seek to provide long-term growth of capital.

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Portfolio	Portfolio Manager	Investment Objective
Mid Value	T. Rowe Price Associates, Inc.	To seek to provide long-term capital appreciation.
Money Market B	John Hancock Asset Management, a division of Manulife Asset Management (North America) Limited	To seek to obtain maximum current income consistent with preservation of principal and liquidity. Certain market conditions may cause the return of the portfolio to become low or possibly negative.
Natural Resources	Wellington Management Company, LLP	To seek to provide long-term total return.
PIMCO VIT All Asset (a series of PIMCO Variable Insurance Trust) (only Class M is available)	Pacific Investment Management Company LLC	To seek to provide maximum real return, consistent with preservation of real capital and prudent investment management.
Real Estate Securities	Deutsche Investment Management Americas Inc.	To seek to provide a combination of long-term capital appreciation and current income.
Real Return Bond	Pacific Investment Management Company LLC	To seek to provide maximum real return, consistent with preservation of real capital and prudent investment management.
Science & Technology	T. Rowe Price Associates, Inc.; and Allianz Global Investors U.S. LLC	To seek to provide long-term growth of capital. Current income is incidental to the portfolio’s objective.
Short Term Government Income	John Hancock Asset Management, a division of Manulife Asset Management (US) LLC	To seek to provide a high level of current income consistent with preservation of capital. Maintaining a stable share price is a secondary goal.
Small Cap Growth	Wellington Management Company, LLP	To seek to provide long-term capital appreciation.
Small Cap Index	John Hancock Asset Management, a division of Manulife Asset Management (North America) Limited	To seek to approximate the aggregate total return of a small-capitalization U.S. domestic equity market index.
Small Cap Opportunities	Dimensional Fund Advisors LP; and Invesco Advisers, Inc.	To seek to provide long-term capital appreciation.
Small Cap Value	Wellington Management Company, LLP	To seek to provide long-term capital appreciation.
Small Company Value	T. Rowe Price Associates, Inc.	To seek to provide long-term growth of capital.
Strategic Income Opportunities	John Hancock Asset Management, a division of Manulife Asset Management (US) LLC	To seek to provide a high level of current income.
Total Bond Market B	Declaration Management & Research LLC	To seek to track the performance of the Barclays U.S. Aggregate Bond Index.*
Total Return	Pacific Investment Management Company LLC	To seek to provide maximum total return, consistent with preservation of capital and prudent investment management.
Total Stock Market Index	John Hancock Asset Management, a division of Manulife Asset Management (North America) Limited	To seek to approximate the aggregate total return of a broad U.S. domestic equity market index.
Ultra Short Term Bond	John Hancock Asset Management, a division of Manulife Asset Management (US) LLC	To seek to provide a high level of current income consistent with the maintenance of liquidity and the preservation of capital.
U.S. Equity	Grantham, Mayo, Van Otterloo & Co. LLC	To seek to provide long-term capital appreciation.
Utilities	Massachusetts Financial Services Company	To seek to provide capital growth and current income (income above that available from the portfolio invested entirely in equity securities).
Value	Invesco Advisers, Inc.	To seek to provide an above-average total return over a market cycle of 3 to 5 years, consistent with reasonable risk.

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Valuation

Voting interest

We determine the number of a series fund’s shares held in a subaccount attributable to each owner by dividing the amount of a policy’s account value held in the subaccount by the net asset value of one share in the series fund. Fractional votes will be counted. We determine the number of shares as to which the owner may give instructions as of the record date for a series fund’s meeting. Owners of policies may give instructions regarding the election of the Board of Trustees or Board of Directors of a series fund, ratification of the selection of independent auditors, approval of series fund investment advisory agreements and other matters requiring a shareholder vote. We will furnish owners with information and forms to enable owners to give voting instructions. However, we may, in certain limited circumstances permitted by the SEC’s rules, disregard voting instructions. If we do disregard voting instructions, you will receive a summary of that action and the reasons for it in the next semi-annual report to owners.

Description of John Hancock USA

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Description of Separate Account U

New subaccounts may be added and made available to policy owners from time to time. Existing subaccounts may be modified or deleted at any time.

The fixed investment option

Our obligations under the fixed investment option are backed by our general account assets. Our general account consists of assets owned by us other than those in the Account and in other separate accounts that we may establish. Subject to applicable law, we have sole discretion over the investment of assets of the general account and policy owners do not share in the investment experience of, or have any preferential claim on, those assets. Instead, we guarantee that the account value allocated to any fixed investment option will accrue interest daily at an effective annual rate that we determine without regard to the actual investment experience of the general account. We currently offer only one fixed investment option — the standard fixed investment option. The effective annual rate we declare for the standard fixed investment option will never be less than 4%. We reserve the right to offer one or more additional fixed investment options with characteristics that differ from those of the current fixed investment option, but we are under no obligation to do so.

Because of exemptive and exclusionary provisions, interests in any fixed investment option have not been and will not be registered under the Securities Act of 1933 (the “1933 Act”) and our general account has not been registered as an investment company under the 1940 Act. Accordingly, neither the general account nor any interests therein are subject to the

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provisions of these acts, and we have been advised that the staff of the SEC has not reviewed the disclosure in this prospectus relating to any fixed investment option. Disclosure regarding fixed investment options are, however, subject to certain generally applicable provisions of the Federal securities laws relating to accuracy and completeness of statements made in prospectuses.

Premiums

Planned premiums

Maximum premium payments

that amount of premium would increase our insurance risk exposure, and

the insured person doesn’t provide us with adequate evidence that they continue to meet our requirements for issuing insurance.

In no event, however, will we refuse to accept any premium necessary to prevent the policy from terminating or to keep the guaranteed death benefit feature in effect.

Ways to pay premiums

We will also accept premiums:

by wire or by exchange from another insurance company,

via an electronic funds transfer program (any owner interested in making monthly premium payments must use this method), or

if we agree to it, through a salary deduction plan with your employer.

You can obtain information on these other methods of premium payment by contacting your John Hancock USA representative or by contacting our Service Office.

Processing premium payments

We will process any premium payment as of the day we receive it, unless one of the following exceptions applies:

(1) We will process a payment received prior to a policy’s date of issue as if received on the business day immediately preceding the date of issue.

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The tax problem resolves itself prior to the date the refund is to be made; or

The tax problem relates to modified endowment contract status and we receive a signed acknowledgment from the owner prior to the refund date instructing us to process the premium notwithstanding the tax issues involved.

Lapse and reinstatement

Either your entire policy or the Additional Sum Insured portion of your Total Sum Insured can lapse for failure to pay charges due under the policy. If the guaranteed death benefit feature is in effect, the Additional Sum Insured and any additional benefit riders (unless otherwise stated therein) will lapse if the policy’s surrender value is not sufficient to pay the charges on a grace period testing date. If the guaranteed death benefit feature is not in effect, the entire policy will lapse if the policy’s surrender value is not sufficient to pay the charges on a grace period testing date. In either case, we will notify you of how much you will need to pay to keep the Additional Sum Insured or the policy in force. You will have a 61 day “grace period” to make these payments. If you pay these amounts during the grace period, you may also continue the guaranteed death benefit feature by paying the GDB Premium described in your policy.

If you don’t pay at least the required amount by the end of the grace period, the Additional Sum Insured and any additional benefit riders (unless otherwise stated therein) or your policy, as the case may be, will lapse. If your policy lapses, all coverage under the policy will cease. Even if the policy or the Additional Sum Insured terminates in this way, you can still reactivate (i.e., “reinstate”) it within 3 years from the beginning of the grace period. You will have to provide evidence that the insured person still meets our requirements for issuing coverage. You will also have to pay a minimum amount of premium and be subject to the other terms and conditions applicable to reinstatements, as specified in the policy. Reinstatement of a lapsed policy or Additional Sum Insured will take effect on the monthly deduction date on or next following the date we approve the reinstatement request.

If the guaranteed death benefit is not in effect and the insured person dies during the grace period, we will deduct any unpaid monthly charges from the death benefit. During a grace period, you cannot make a partial withdrawal or policy loan.

Guaranteed death benefit feature

This feature guarantees that your Basic Sum Insured will not terminate (i.e., “lapse”), regardless of adverse investment performance, if on each “grace period testing date” the amount of cumulative premiums you have paid (less all withdrawals from the policy and all outstanding loans) equals or exceeds the sum of all Guaranteed Death Benefit Premium (“GDB Premium”) due to date. If the Guaranteed Death Benefit test is not satisfied on any grace period testing date, the guaranteed death benefit feature will not be “in effect” on that date. We currently test on a quarterly basis, but reserve the right to test on each monthly deduction date. (The term “monthly deduction date” is defined under “Procedures for issuance of a policy”.)

Your policy will show two types of GDB Premium (or such other types as permitted by your policy’s state of issue):

Age 65/10 Year GDB Premium - is used on each testing date until the policy anniversary nearest the insured person’s 65th birthday (or, if longer, until the 10th policy anniversary ). The GDB premium that is “due” during this period is equal to the Age 65/10 Year GDB Premium times the number of elapsed policy months on a testing date.

Age 100 GDB Premium - is used on each testing date that occurs on and after the policy anniversary nearest the insured person’s 65th birthday (or on and after the 10th policy anniversary ) until the policy anniversary nearest the
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insured person’s 100th birthday. The GDB premium that is “due” during this period is equal to the number of elapsed policy months on the testing date, measured from the Date of Issue, times the Age 100 GDB Premium.

The Age 100 GDB Premium is higher than the Age 65/10 Year GDB Premium, but neither will ever be greater than the so-called “guideline premium” for the policy as defined in Section 7702 of the Code. The GDB Premium varies from policy to policy based upon a number of factors, including the insured person’s issue age, insurance risk characteristics and (generally) gender.

The guaranteed death benefit feature applies only to the Basic Sum Insured in effect when we issue the policy. It does not apply to any amount of Additional Sum Insured and it will not be in effect if you increase the Basic Sum Insured (see “The Death Benefit” below). The amount of the Basic Sum Insured that is guaranteed will be reduced to the extent that we pay it to you under a living care or life-time care additional benefit rider while the insured is living (see “Optional benefit riders you can add”). If there are monthly charges that remain unpaid because of this guaranteed death benefit feature, we will deduct such charges when there is sufficient surrender value to pay them.

If an insufficient amount of GDB premium has been paid on a grace period testing date, and your policy would lapse for failure to pay charges then due, we will provide you with a notification as described in the section, “Lapse and Reinstatement” above.

The death benefit

In your application for the policy, you will tell us how much life insurance coverage you want on the life of the insured person. This is called the “Total Sum Insured.” Total Sum Insured is composed of the Basic Sum Insured and any Additional Sum Insured you elect. The maximum amount of Additional Sum Insured you can have when we issue the policy is generally limited to 400% of the Basic Sum Insured. There are a number of factors you should consider in determining whether to elect coverage in the form of Basic Sum Insured or in the form of Additional Sum Insured. These factors are discussed under “Basic Sum Insured vs. Additional Sum Insured” below.

When the insured person dies, we will pay the death benefit minus any outstanding loans, accrued interest and unpaid fees and charges. There are two ways of calculating the death benefit. You must choose which one you want in the application. The two death benefit options are:

Option A - The death benefit will equal the greater of (1) the Total Sum Insured, or (2) the minimum insurance amount (as described below).

Option B - The death benefit will equal the greater of (1) the Total Sum Insured plus your policy’s account value on the date of death, or (2) the minimum insurance amount under the “guideline premium and cash value corridor test”.

For the same premium payments, the death benefit under Option B will tend to be higher than the death benefit under Option A. On the other hand, the monthly insurance charge will be higher under Option B to compensate us for the additional insurance risk. Because of that, the account value will tend to be higher under Option A than under Option B for the same premium payments.

Limitations on payment of death benefit

Basic Sum Insured vs. Additional Sum Insured

As noted earlier in this prospectus, you should consider a number of factors in determining whether to elect coverage in the form of Basic Sum Insured or in the form of Additional Sum Insured.

For the same amount of premiums paid, the amount of the sales charge deducted from premiums and the amount of compensation paid to the selling insurance agent will generally be less if coverage is included as Additional Sum Insured, rather than as Basic Sum Insured. On the other hand, the amount of any Additional Sum Insured is not included in the

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guaranteed death benefit feature. Therefore, if the policy’s surrender value is insufficient to pay the monthly charges as they fall due (including the charges for the Additional Sum Insured), the Additional Sum Insured coverage will lapse, even if the Basic Sum Insured stays in effect pursuant to the guaranteed death benefit feature.

Generally, you will incur lower issue charges and have more flexible coverage with respect to the Additional Sum Insured than with respect to the Basic Sum Insured. If this is your priority, you may wish to maximize the proportion of the Additional Sum Insured. However, if your priority is to take advantage of the guaranteed death benefit feature the proportion of the policy’s Total Sum Insured that is guaranteed can be increased by taking out more coverage as Basic Sum Insured at the time of policy issuance.

Any decision you make to modify the amount of Additional Sum Insured coverage after issue can have significant tax consequences (see “Tax considerations”).

The minimum insurance amount

In order for a policy to qualify as life insurance under Federal tax law, there has to be a minimum amount of insurance in relation to account value. There are two tests that can be applied under Federal tax law — the “guideline premium and cash value corridor test” and the “cash value accumulation test.” When you elect the Option A death benefit, you must also elect which test you wish to have applied. If you elect the Option B death benefit, the guideline premium and cash value corridor test will automatically be applied. Under the guideline premium and cash value corridor test, we compute the minimum insurance amount each business day by multiplying the account value on that date by the death benefit factor (called “corridor factor” in the policy) applicable on that date. In this case, the factors are derived by applying the guideline premium and cash value corridor test. The factor starts out at 2.50 for ages at or below 40 and decreases as attained age increases, reaching a low of 1.0 at age 95. A table showing the factor for each policy year will appear in the policy. Under the cash value accumulation test, we compute the minimum insurance amount each business day by multiplying the account value on that date by the death benefit factor applicable on that date. In this case, the factors are derived by applying the cash value accumulation test. The factor decreases as attained age increases. A table showing the factor for each age will appear in the policy.

As noted above, you have to elect which test will be applied if you elect the Option A death benefit. The cash value accumulation test may be preferable if you want an increasing death benefit in later policy years and/or want to fund the policy at the “7 pay” limit for the full 7 years (see “Tax considerations”). The guideline premium and cash value corridor test may be preferable if you want the account value under the policy to increase without increasing the death benefit as quickly as might otherwise be required.

When the insured person reaches 100

On the policy anniversary nearest the insured person’s 100th birthday, the death benefit will become equal to the account value on the date of death. Death benefit Options A and B (as described above) will cease to apply. Also, we will stop deducting any monthly charges (other than the asset-based risk charge) and will stop accepting any premium payments.

In the provision entitled “Optional benefit riders you can add”, we describe an optional Age 100 Waiver of Charges Rider that provides for continuation of the Total Sum Insured after the insured person reaches 100.

Requesting an increase in coverage

The Basic Sum Insured generally cannot be increased after policy issue. You may request an increase in the Additional Sum Insured. As to when such an increase would take effect, see “Effective date of certain policy transactions” below. Generally, each such increase must be at least $50,000. However, you will have to provide us with evidence that the insured person still meets our requirements for issuing insurance coverage. Unless we consent otherwise, you may not increase the Additional Sum Insured if the increase would cause the entire Additional Sum Insured to equal or exceed 800% of the Basic Sum Insured.

Requesting a decrease in coverage

After the first policy year, you may request a reduction in the Total Sum Insured, but only if:

the remaining Basic Sum Insured will be at least $100,000, and

the remaining Additional Sum Insured will not exceed 800% of the Basic Sum Insured, and

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the remaining Total Sum Insured will at least equal the minimum required by the tax laws to maintain the policy’s life insurance status.

As to when any reduction in Total Sum Insured would take effect, see “Effective date of certain policy transactions” below. Any reduction in Total Sum Insured will be implemented by first reducing any Additional Sum Insured. If there is any reduction in Basic Sum Insured, a pro-rata portion of the applicable CDSC will be deducted from the account value (see “Contingent deferred sales charge”).

Change of death benefit option

If the “guideline premium and cash value corridor test” applies to your policy, you may change your coverage from death benefit Option A to Option B or vice-versa on any policy anniversary, but only if there is no change in the Federal tax law test used to determine the minimum insurance amount. If you change from Option A to Option B, we will require evidence that the insured person still meets our requirements for issuing coverage. This is because such a change increases our insurance risk exposure.

If the “cash value accumulation test” applies to your policy, you can never change to either Option A under the “guideline premium and cash value corridor test” or to Option B.

Please read “The minimum insurance amount” for more information about the “guideline premium and cash value corridor test” and the “cash value accumulation test.”

Effective date of certain policy transactions

The following transactions take effect on the policy anniversary on or next following the date we approve your request:

Additional Sum Insured increases.

Change of death benefit Option from A to B.

A change of death benefit Option from B to A is effective on the policy anniversary on or next following the date we receive the request.

Total Sum Insured decreases take effect on the monthly deduction date on or next following the date we approve your request.

Tax consequences of coverage changes

Please read “Tax considerations” to learn about possible tax consequences of changing your insurance coverage under the policy.

Your beneficiary

Ways in which we pay out policy proceeds

Option 1 - Proceeds left with us to accumulate with interest

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Option 2A - Equal monthly payments of a specified amount until all proceeds are paid out

Option 2B - Equal monthly payments for a specified period of time

Option 3 - Equal monthly payments for life, but with payments guaranteed for a specific number of years

Option 4 - Equal monthly payments for life with no refund

Option 5 - Equal monthly payments for life with a refund if all of the proceeds haven’t been paid out

Changing a payment option

Tax impact of payment option chosen

There may be tax consequences to you or your beneficiary depending upon which payment option is chosen. You should consult with a qualified tax adviser before making that choice.

The account value

The amount you’ve invested in the fixed investment option will earn interest at a rate we declare from time to time. We guarantee that this rate will be at least 4%. If you want to know what the current declared rate is, just call or write to us. Amounts you invest in a fixed investment option will not be subject to the asset-based risk charge. Otherwise, the policy level charges applicable to the fixed investment option are the same as those applicable to the variable investment options. We reserve the right to offer one or more additional fixed investment options with characteristics that differ from those of the current fixed investment options, but we are under no obligation to do so.

Commencement of investment performance

Any premium payment processed prior to the twentieth day after the policy’s date of issue will automatically be allocated to the Money Market B investment option. On the later of the date such payment is received or the twentieth day following the date of issue, the portion of the Money Market B investment option attributable to such payment will be reallocated automatically among the investment options you have chosen.

All other premium payments will be allocated among the investment options you have chosen as soon as they are processed.

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Allocation of future premium payments

Transfers of existing account value

You may also transfer your existing account value from one investment option to another. To do so, you must tell us how much to transfer, either as a whole number percentage or as a specific dollar amount. A confirmation of each transfer will be sent to you. Without our approval, the maximum amount you may transfer to or from any investment option in any policy year is $1,000,000.

The policies are not designed for professional market timing organizations or other persons or entities that use programmed, large or frequent transfers among investment options, as described in the “Market timing and disruptive trading risks” section of this prospectus. As a consequence, we have reserved the right to impose limits on the number and frequency of transfers into and out of variable investment options. We also reserve the right to impose a fee of up to $25 for any transfer beyond an annual limit (which will not be less than twelve). Under our current rules, we impose no charge on transfers but we do impose the following restrictions on transfers into and out of variable investment options. Transfers out of a fixed investment option are subject to additional limitations noted below.

Our current practice is to restrict transfers into or out of variable investment options to two per calendar month (except with respect to those policies described in the following paragraphs). For purposes of this restriction, and in applying the limitation on the number of free transfers, any transfers made during the period from the opening of a business day (usually 9:00 a.m. Eastern time) to the close of that business day (usually 4:00 p.m. Eastern time) are considered one transfer. You may, however, transfer to the Money Market B investment option even if the two transfer per month limit has been reached, but only if 100% of the account value in all variable investment options is transferred to the Money Market B investment option. If such a transfer to the Money Market B investment option is made then, for the 30 calendar day period after such transfers, no transfers from the Money Market B investment option to any other investment options (variable or fixed) may be made. If your policy offers a dollar cost averaging or automatic asset allocation rebalancing program, any transfers pursuant to such program are not considered transfers subject to these restrictions on frequent trading. The restrictions described in this paragraph will be applied uniformly to all policy owners subject to the restrictions.

Policies such as yours may be purchased by a corporation or other entity as a means to informally finance the liabilities created by an employee benefit plan, and to this end the entity may aggregately manage the policies purchased to match its liabilities under the plan. Policies sold under these circumstances are subject to special transfer restrictions. In lieu of the two transfers per month restriction, we will allow the policy owner under these circumstances to rebalance the investment options in its policies within the following limits: (i) during the 10 calendar day period after any account values are transferred from one variable investment option into a second variable investment option, the values can only be transferred out of the second investment option if they are transferred into the Money Market B investment option; and (ii) any account values that would otherwise not be transferable by application of the 10 day limit described above and that are transferred into the Money Market B investment option may not be transferred out of the Money Market B investment option into any other investment options (variable or fixed) for 30 calendar days. The restrictions described in this paragraph will be applied uniformly to all policy owners subject to the restrictions.

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Transfers out of the fixed investment option are currently subject to the following restrictions.

You can only make such a transfer once in each policy year.

Any transfer request received within 6 months of the last transfer out of the fixed investment option will not be processed until such 6 month period has expired.

The most you can transfer at any one time is the greater of (i) $500, (ii) 20% of the assets in your fixed investment option or (iii) the amount transferred out of your fixed investment option during the previous policy year.

We reserve the right to impose limits on the minimum amount of each transfer out of the fixed investment option and the maximum amount of any transfer into the fixed investment option after the second policy year. We also reserve the right to impose different restrictions on any additional fixed investment option that we may offer in the future.

Dollar cost averaging

Asset rebalancing

This is a program that automatically re-sets the percentage of your account value allocated to the variable investment options. Over time, the variations in the investment results for each variable investment option you’ve elected will shift the percentage allocations among them. The rebalancing program will periodically transfer your account value among the variable investment options to reestablish the preset percentages you have chosen. Any transfer made under this program will not count toward the annual transfer limit described under “Transfers of existing account value.” Rebalancing would usually result in transferring amounts from a variable investment option with relatively higher investment performance since the last rebalancing to one with relatively lower investment performance. However, rebalancing can also result in transferring amounts from a variable investment option with relatively lower current investment performance to one with relatively higher current investment performance.

This option can be elected in the application or by sending the appropriate form to our Service Office. You must specify the frequency for rebalancing (quarterly, semi-annually or annually), the preset percentage for each variable investment option and a future beginning date. The first rebalancing will occur on the monthly deduction date that occurs on or next follows the beginning date you select.

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Once elected, rebalancing will continue until we receive notice of cancellation of the option or notice of the death of the insured person. If you cancel rebalancing, you will have to wait 30 days before you can start it again. No fee is charged for this program.

The fixed investment option does not participate in and is not affected by rebalancing. We reserve the right to modify, terminate or suspend the rebalancing program at any time. If you have any questions with respect to asset rebalancing, call 1-800-777-1377.

Surrender and partial withdrawals

Full surrender

You may surrender your policy in full at any time. If you do, we will pay you the account value, less any policy debt and less any CDSC that then applies. This is called your “surrender value.” You must return your policy when you request a full surrender. We process surrenders as of the day we receive the surrender request.

Partial withdrawals

You may make a partial withdrawal of your surrender value at any time after the first policy year. Each partial withdrawal must be at least $1,000. There is a charge for each partial withdrawal. The charge is equal to the lesser of 2% of the withdrawal amount or $20. We will automatically reduce the account value of your policy by the amount of the withdrawal and the related charge. Unless we agree otherwise, each investment option will be reduced in the same proportion as the account value is then allocated among them. We will not permit a partial withdrawal if it would cause your surrender value to fall below 3 months’ worth of monthly charges (see “Deductions from account value”). We also reserve the right to refuse any partial withdrawal that would cause the policy’s Total Sum Insured to fall below $100,000 or the policy’s Basic Sum Insured to fall below $100,000. Under the Option A death benefit, the reduction of your account value occasioned by a partial withdrawal could cause the minimum insurance amount to become less than your Total Sum Insured (see “The death benefit”). If that happens, we will automatically reduce your Total Sum Insured. The calculation of that reduction is explained in the policy, and will be implemented by first reducing any Additional Sum Insured in effect. If the reduction in Total Sum Insured would cause your policy to fail the Internal Revenue Code’s definition of life insurance, we will not permit the partial withdrawal. If the withdrawal results in a reduction in Basic Sum Insured, a pro-rata portion of the applicable CDSC will be deducted from the account value (see “Deductions from account value”).

Policy loans

You may borrow from your policy at any time by completing a form satisfactory to us. The maximum amount you can borrow is determined as follows:

We first determine the surrender value of your policy.

We then subtract an amount equal to 12 times the monthly charges then being deducted from account value.

We then multiply the resulting amount by .75% in policy years 1 through 10, .50% in policy years 11 through 20, and 0% thereafter (although we reserve the right to increase the percentage after policy year 20 to as much as .25%).

We then subtract the third item above from the result of the second item above.

The minimum amount of each loan is $300. The interest charged on any loan is an effective annual rate of 4.75% in the first 10 policy years, 4.50% in policy years 11 through 20, and 4.00% thereafter. However, we reserve the right to increase the percentage after policy year 20 to as much as 4.25%. Accrued interest will be added to the loan daily and will bear interest at the same rate as the original loan amount. The amount of the loan is deducted from the investment options in the same proportion as the account value is then allocated among them and is placed in a special loan account. This special loan account will earn interest at an effective annual rate of 4.00%. The tax consequences of a loan interest credited differential of 0% are unclear. You should consult a tax adviser before effecting a loan to evaluate possible tax consequences. If we determine that a loan will be treated as a taxable distribution because of the differential between the loan interest rate and the rate being credited on the special loan account, we reserve the right to decrease the rate credited on the special loan account to a rate that would, in our reasonable judgement, result in the transaction being treated as a loan under Federal tax law. The right to increase the rate charged on the loan is restricted in some states. Please see your John Hancock USA representative for details. We process policy loans as of the day we receive the loan request.

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Repayment of policy loans

You can repay all or part of a loan at any time. Unless we agree otherwise, each repayment will be allocated among the investment options as follows:

The same proportionate part of the loan as was borrowed from any fixed investment option will be repaid to that fixed investment option.

The remainder of the repayment will be allocated among the investment options in the same way a new premium payment would be allocated.

Effects of policy loans

The account value, the net cash surrender value, and any death benefit above the Total Sum Insured are permanently affected by any loan, whether or not it is repaid in whole or in part. This is because the amount of the loan is deducted from the investment options and placed in a special loan account. The investment options and the special loan account will generally have different rates of investment return.

The amount of the outstanding loan (which includes accrued and unpaid interest) is subtracted from the amount otherwise payable when the policy proceeds become payable.

Whenever the outstanding loan equals or exceeds the surrender value, the policy will terminate 31 days after we have mailed notice of termination to you (and to any assignee of record at such assignee’s last known address) specifying the minimum amount that must be paid to avoid termination, unless a repayment of at least the amount specified is made within that period. Also, taking out a loan on the policy increases the risk that the policy may lapse because of the difference between the interest rate charged on the loan and the interest rate credited to the special loan account. Policy loans may result in adverse tax consequences under certain circumstances (see “Tax considerations”) .

Description of charges at the policy level

Deductions from premium payments

Premium tax charge - A charge to cover state premium taxes we currently expect to pay, on average. This charge is currently 2.35% of each premium.

DAC tax charge - A charge to cover the increased Federal income tax burden that we currently expect will result from receipt of premiums. This charge is currently 1.25% of each premium.

Premium sales charge - A charge to help defray our sales costs. The charge is 4% of a certain portion of the premium you pay. The portion of each year‘s premium that is subject to the charge is called the “Target Premium.” It’s determined at the time the policy is issued and will appear in the “Policy Specifications” section of the policy. We currently waive one half of this charge for policies with a Total Sum Insured (excluding any Premium Cost Recovery Benefit) of $250,000 or higher, but continuation of that waiver is not guaranteed. Also, we currently intend to stop making this charge on premiums received after the 10th policy year, but this is not guaranteed either. Because policies of this type were first offered for sale on May 1, 2000, no termination of this charge has yet occurred.

Enhanced Cash Value Rider charge - A charge to cover the cost of this rider, if elected, equal to 4% of premium paid in the first policy year that does not exceed the Target Premium. We may vary the charge where special circumstances result in sales or administrative expenses, mortality risks or other risks that are different from those normally associated with the rider. These include the type of variations discussed under “Reduced charges for eligible classes.” No variation in the charge will exceed the maximum stated above.

Deductions from account value

Issue charge - A monthly charge to help defray our administrative costs. This is a flat dollar charge of $20 and is deducted only during the first policy year.

Maintenance charge - A monthly charge to help defray our administrative costs. This is a flat dollar charge of up to $8 (currently $6).

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Insurance charge - A monthly charge for the cost of insurance. To determine the charge, we multiply the amount of insurance for which we are at risk by a cost of insurance rate. The rate is derived from an actuarial table and the ratio of Basic Sum Insured to Additional Sum Insured on the date we issue your policy. The table in your policy will show the maximum cost of insurance rates. The cost of insurance rates that we currently apply are generally less than the maximum rates. We will review the cost of insurance rates at least every 5 years and may change them from time to time. However, those rates will never be more than the maximum rates shown in the policy. The table of rates we use will depend on the insurance risk characteristics and (usually) gender of the insured person, the Total Sum Insured and the length of time the policy has been in effect. Regardless of the table used, cost of insurance rates generally increase each year that you own your policy, as the insured person‘s attained age increases. (The insured person’s “attained age” on any date is his or her age on the birthday nearest that date). We currently apply three “bands” of insurance rates, based on a policy’s Total Sum Insured on the date of issue (excluding any scheduled increase in Additional Sum Insured on the date of issue), but continuation of that practice is not guaranteed. The lowest band of rates is for policies of $1 million or more, next lower for policies between $250,000 to $999,999, and the highest band is for policies between $100,000 to $249,999. The insurance charge for death benefit Option B will tend to be higher than the insurance charge for death benefit Option A (see “The Death Benefit”).

Asset-based risk charge - A monthly charge for mortality and expense risks we assume. The charge is a percentage of that portion of your account value allocated to variable investment options. The current percentages are .05% for policy years 1-10, .04% for policy year 11, decreasing by .001% each year thereafter through policy year 28, and .02% for policy year 29 and each policy year thereafter. These percentages equate to effective annual rates of .60% for policy years 1-10, .40% for policy year 11, grading down to .20% for policy years 29 and thereafter. The reductions after policy year 10 have not occurred yet under any policy, since no policy has been outstanding for 10 years. We guarantee that this charge will never exceed .075% of that portion of your account value allocated to variable investment options. This percentage equates to an effective annual rate of .90%. This charge does not apply to the fixed investment option.

Optional benefits charge - Monthly charges for optional insurance benefits (other than the optional enhanced cash value rider) added to the policy by means of a rider. The riders we currently offer are described under “Optional benefit riders you can add”.

ASI reduction charge - A charge we deduct if you decrease the Additional Sum Insured during the first 20 policy years. A table in your policy will state the maximum rate for the charge per $1,000 of Additional Sum Insured surrendered, based on the insured person’s issue age, insurance risk characteristics and (usually) gender. The rates are shown in the policy and generally range from less than $1 per $1,000 for issue age 40 or less, and increase for issue ages thereafter, to over $10 per $1,000 for issue ages after 70. We do not deduct this charge if the Additional Sum Insured is reduced because of a withdrawal of surrender value or surrender of the policy.

Contingent deferred sales charge (“CDSC”) - A charge we deduct if the policy lapses or is surrendered within the first 10 policy years. We deduct this charge to compensate us for sales expenses that we would otherwise not recover in the event of early lapse or surrender. The charge is a percentage of the premiums we received in the first policy year that do not exceed the first year Target Premium, as shown in the following table:

Policy Year(s)	Percentage of First YearTarget Premium
1-5	100%
6	80%
7	70%
8	60%
9	40%
10	20%
11 and later	0%

The above table applies only if the insured person is less than attained age 45 at issue. For older issue ages, the maximum is reached earlier and the percentage may decrease to zero in fewer than 10 policy years. Regardless of issue age, there is a further limitation on the CDSC that can be charged if surrender or lapse occurs in the second policy year. A pro-rata portion of the CDSC may also be charged in the case of withdrawals that reduce Basic Sum Insured (see “Partial withdrawals” on page ) and requested reductions in Basic Sum Insured (see “Requesting a decrease in coverage” on page ). The pro-rata charge is calculated by dividing the reduction in Basic Sum Insured by the Basic Sum Insured immediately prior to the reduction and then multiplying the applicable CDSC by that ratio.

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Partial withdrawal charge - A charge for each partial withdrawal of account value to compensate us for the administrative expenses of processing the withdrawal. The charge is equal to the lesser of $20 or 2% of the withdrawal amount.

Loan interest rate

The maximum loan interest charged on any loan is shown in the Fee Tables and described under “Policy loans” in this prospectus.

Transfer fee

We currently do not impose a fee upon transfers of policy value among the investment options, but reserve the right to do so in the policy (see “Transfers of existing policy value”).

Additional information about how certain policy charges work

Sales expenses and related charges

Effect of premium payment pattern

You may structure the timing and amount of premium payments to minimize the sales charges, although doing so involves certain risks. Paying less than one Target Premium in any policy year, or paying more than one Target Premium in any policy year could reduce your total sales charges over time. For example, if the Target Premium was $1,000 and you paid a premium of $1,000 for ten years, you would pay total premium sales charges of $400 and be subject to a maximum CDSC of $1,000. If you paid $2,000 every other policy year for ten policy years, you would pay total premium sales charges of only $200 and be subject to a maximum CDSC of $1,000. However, delaying the payment of Target Premiums to later policy years could increase the risk that the guaranteed death benefit feature will lapse and the account value will be insufficient to pay policy charges as they come due. As a result, the policy or any Additional Sum Insured may lapse and eventually terminate. Conversely, accelerating the payment of Target Premiums to earlier policy years could cause aggregate premiums paid to exceed the policy’s 7-pay premium limit and, as a result, cause the policy to become a modified endowment contract, with adverse tax consequences to you upon receipt of policy distributions (see “Tax considerations”).

Method of deduction

Reduced charges for eligible classes

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of years it has been in existence; the aggregate amount of premiums paid; and any other such circumstances which result in a reduction in sales or administrative expenses, lower taxes or lower risks. Any reduction in charges will be reasonable and will apply uniformly to all prospective policy purchasers in the class and will not unfairly discriminate against any owner.

Other charges we could impose in the future

Description of charges at the fund level

Other policy benefits, rights and limitations

Optional benefit riders you can add

When you apply for a policy, you can request any of the optional benefit riders that we then make available. Availability of any rider, the benefits it provides and the charges for it may vary by state. Our rules and procedures will govern eligibility for any rider and, in some cases, the configuration of the actual rider benefits. Each rider contains specific details that you should review before you decide to choose the rider. Charges for most riders will be deducted from the policy’s account value. We may change these charges (or the rates that determine them), but not above any applicable maximum amount stated in the Policy Specifications page of your policy. Charges for the Long-Term Care Acceleration Rider, as described below, may be considered a “distribution” for federal income tax purposes (see “Tax considerations”). We may add to, delete from, or modify the following list of additional benefit riders:

Disability Waiver of Charges Rider - Provides for the waiver of monthly deductions if the insured person becomes totally and permanently disabled, as defined in the rider, prior to age 60. If the insured person becomes totally and permanently disabled after age 60, monthly deductions are only waived until age 65. Benefits under this rider do not reduce the Guaranteed Death Benefit Premium payment requirements described under “Guaranteed death benefit feature” that are necessary for the guaranteed death benefit feature to remain in effect.

Living Care Benefit Rider - Provides for an advance payment to you of a portion of the death benefit if the insured person becomes terminally ill, as defined in the rider, with death expected within 24 months. Advances under the rider are discounted for interest at the rates specified in the rider, and we may use a portion of any advance to repay loans under your policy. The maximum advance is $1,000,000.

Age 100 Waiver of Charges Rider - Provides for the continuation of the Total Sum Insured in force when the insured person attains age 100, without charge, if the policy’s account value at the time is greater than the sum of 1 plus the amount of any surrender charges then existing. The monthly charge for this rider currently begins in the 6th policy year.

Children’s Insurance Benefit Rider - Provides term insurance up through age 21 on each covered child of the insured person. A child must be more than 14 days old and less than 15 years old to begin coverage.

Accidental Death Benefit Rider - Provides for an additional insurance benefit if the insured person‘s death is due to accidental causes between the policy anniversaries nearest the insured person’s 5th and 70th birthdays.

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Enhanced Cash Value Rider - While this rider is in effect, we will pay an Enhanced Cash Value Benefit in addition to the policy surrender value if:

you surrender the policy before the CDSC is equal to zero; and

the surrender is not the result of an exchange under Section 1035 of the Internal Revenue Code,

The Enhanced Cash Value Benefit is equal to the CDSC in effect on the date of your surrender, up to a maximum amount equal to your account value on the date of surrender less any indebtedness. We describe the CDSC, and the period it is in effect, under “Deductions from account value.”

The Enhanced Cash Value Benefit does not increase (a) the death benefit payable under the policy, (b) the maximum amount you may borrow from the policy or (c) the maximum amount you may withdraw from the policy through partial withdrawals.

Long-Term Care Acceleration Rider - intended only for policies where the death benefit is determined under Option A and the “cash value accumulation test” described under “The minimum insurance amount” is elected. This rider provides for periodic advance payments to you of a portion of the death benefit if the insured person becomes “chronically ill” so that such person: (1) is unable to perform at least 2 activities of daily living without substantial human assistance or has a severe cognitive impairment; and (2) is receiving certain qualified services described in the rider.

Benefits under the Long-Term Care Acceleration Rider will not begin until we receive proof that the insured person qualifies and has received 100 days of “qualified long-term care service” as defined in the rider, while the policy was in force. You must continue to submit evidence during the insured person‘s lifetime of the insured person’s eligibility for rider benefits.

We determine a maximum amount of death benefit that we will advance for each month of qualification. This amount, called the “Maximum Monthly Benefit” is based on the percentage of the policy’s death benefit that you select when you apply for the policy, and the death benefit amount in effect when the insured person qualifies for benefits. The actual amount of any advance is based on the expense incurred by the insured person, up to the Maximum Monthly Benefit, for each day of qualified long-term care service in a calendar month. The first 100 days of qualified long-term care service, however, are excluded in any determination of an advance. We will recalculate the Maximum Monthly Benefit if you make a partial withdrawal of account value, and for other events described in the rider. Each advance reduces the remaining death benefit under your policy, and causes a proportionate reduction in your policy’s account value. If you have a policy loan, we will use a portion of each death benefit advance to repay indebtedness.

We restrict your account value’s exposure to market risk when benefits are paid under the Long-Term Care Acceleration rider. We do this in several ways. First, before we begin paying any Monthly Benefit or waiving monthly deductions, we will transfer all account value from the variable investment options to the fixed investment option. (The amount to be transferred will be determined on the business day immediately following the date we approve a request for benefits under the rider.) In addition, you will not be permitted to transfer account value or allocate any additional premium payment to a variable investment option while rider benefits are paid. Your participation in any of the automatic investment plans will also be suspended during this period.

If the insured person no longer qualifies for rider benefits and your policy remains in force, you will be permitted to invest new premium payments or existing account value in the variable investment options. (The restriction on transfers from the fixed account described under “Transfers of existing account value” will continue to apply.) Benefits under this rider do not reduce the Guaranteed Death Benefit Premium payment requirements described under “Guaranteed death benefit feature” that may be necessary for the guaranteed death benefit feature to remain in effect after a termination of rider benefits.

If you purchase this rider:

you and your immediate family will also have access to a national program designed to help the elderly maintain their independent living by providing advice about an array of elder care services available to seniors, and

you will have access to a list of long-term care providers in your area who provide special discounts to persons who belong to the national program.

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Variations in policy terms

Any variation discussed above will be made only in accordance with uniform rules that we adopt and that we apply fairly to our customers.

Procedures for issuance of a policy

Generally, the policy is available with a minimum Basic Sum Insured at issue of $100,000. At the time of issue, the insured person must have an attained age of no more than 80. All insured persons must meet certain health and other insurance risk criteria called underwriting standards.

Policies issued in Montana or in connection with certain employee plans will not directly reflect the sex of the insured person in either the premium rates or the charges or values under the policy.

Minimum initial premium

The Minimum Initial Premium must be received by us at our Service Office in order for the policy to be in full force and effect. There is no grace period for the payment of the Minimum Initial Premium. The Minimum Initial Premium is determined by us based on the characteristics of the insured person, the Basic Sum Insured and the Additional Sum Insured at issue, and the policy options you have selected.

Commencement of insurance coverage

The policy will take effect only if all of the following conditions are satisfied.

The policy is delivered to and received by the applicant.

The Minimum Initial Premium is received by us.

The insured person is living and still meets our criteria for issuing insurance.

Backdating

The conditions for coverage described above under “Commencement of insurance coverage” must still be satisfied, but in a backdating situation the policy always takes effect retroactively. Backdating results in a lower insurance charge (if it is used to preserve an insured person’s younger age at issue), but monthly charges begin earlier than would otherwise be the case. Those monthly charges will be deducted as soon as we receive premiums sufficient to pay them.

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Temporary coverage prior to policy delivery

Monthly deduction dates

Changes that we can make as to your policy

Changes necessary to comply with or obtain or continue exemptions under the Federal securities laws

Combining or removing investment options

Changes in the form of organization of any separate account

The owner of the policy

While the insured person is alive, you will have a number of options under the policy. These options include those listed below.

Determine when and how much you invest in the various investment options

Borrow or withdraw amounts you have in the investment options

Change the beneficiary who will receive the death benefit

Change the amount of insurance

Turn in (i.e., “surrender”) the policy for the full amount of its surrender value

Choose the form in which we will pay out the death benefit or other proceeds

It is possible to name so-called “joint owners” of the policy. If more than one person owns a policy, all owners must join in most requests to exercise rights under the policy.

Policy cancellation right

You have the right to cancel your policy within 10 days after you receive it (the period may be longer in some states). This is often referred to as the “free look” period. During this period, your premiums will be allocated as described under “Processing premium payments” in this prospectus. To cancel your policy, simply deliver or mail the policy to:

John Hancock USA at one of the addresses shown on the back cover of this prospectus, or

the John Hancock USA representative who delivered the policy to you.

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Reports that you will receive

At least annually, we will send you a statement setting forth the following information as of the end of the most recent reporting period: the amount of the death benefit, the Basic Sum Insured and the Additional Sum Insured, the account value, the portion of the account value in each investment option, the surrender value, premiums received and charges deducted from premiums since the last report, and any outstanding policy loan (and interest charged for the preceding policy year). Moreover, you also will receive confirmations of premium payments, transfers among investment options, policy loans, partial withdrawals and certain other policy transactions.

Semi-annually we will send you a report containing the financial statements of each series fund, including a list of securities held in each fund.

Assigning your policy

When we pay policy proceeds

General

Delay to challenge coverage

Delay for check clearance

Delay of separate account proceeds

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among the investment options may also be postponed under these circumstances. If we need to defer calculation of separate account values for any of the foregoing reasons, all delayed transactions will be processed at the next values that we do compute.

Delay of general account surrender proceeds

How you communicate with us

General rules

You should mail or express all checks and money orders for premium payments and loan repayments to our Service Office at the appropriate address shown on the back cover.

Under our current rules, certain requests must be made in writing and be signed and dated by you. These requests include those listed below.

loans

surrenders or partial withdrawals

change of death benefit option

increase or decrease in Total Sum Insured

change of beneficiary

election of payment option for policy proceeds

tax withholding elections

election of telephone transaction privilege

The following requests may be made either in writing (signed and dated by you) or by telephone or fax if a special form is completed (see “Telephone and facsimile transactions” below).

transfers of account value among investment options

change of allocation among investment options for new premium payments

Telephone and facsimile transactions

If you complete a special authorization form, you can request transfers among investment options and changes of allocation among investment options simply by telephoning us at 1-800-777-1377 or by faxing us at 1-617-572-1571. Any fax request should include your name, daytime telephone number, policy number and, in the case of transfers and changes of allocation, the names of the investment options involved. We will honor telephone instructions from anyone who provides the correct identifying information, so there is a risk of loss to you if this service is used by an unauthorized person. However, you will receive written confirmation of all telephone transactions. There is also a risk that you will be unable to place your request due to equipment malfunction or heavy phone line usage. If this occurs, you should submit your request in writing.

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our mistake or negligence. We employ procedures which provide safeguards against the execution of unauthorized transactions, and which are reasonably designed to confirm that instructions received by telephone are genuine. These procedures include requiring personal identification, tape recording calls, and providing written confirmation to the owner. If we do not employ reasonable procedures to confirm that instructions communicated by telephone are genuine, we may be liable for any loss due to unauthorized or fraudulent instructions.

Distribution of policies

Compensation

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The compensation JH Distributors pays to broker-dealers may vary depending on the selling agreement. The compensation paid is not expected to exceed 135% of the target premium paid in the first policy year, 11% of the target premium paid in years 2-4, and 5% of the target premium paid in years 5 and after. Compensation on any premium paid in excess of target premium in any year will not exceed 8%. This compensation schedule is exclusive of additional compensation and revenue sharing and inclusive of overrides and expense allowances paid to broker-dealers for sale of the policies (not including riders).

Selling broker-dealers and other financial intermediaries may receive, directly or indirectly, additional payments in the form of cash, other compensation or reimbursement. These additional compensation or reimbursement arrangements may include, for example, payments in connection with the firm’s “due diligence” examination of the policies, payments for providing conferences or seminars, sales or training programs for invited registered representatives and other employees, payment for travel expenses, including lodging, incurred by registered representatives and other employees for such seminars or training programs, seminars for the public or client seminars, advertising and sales campaigns regarding the policies, payments to assist a firm in connection with its systems, operations and marketing expenses and/or other events or activities sponsored by the firms. We may contribute to, as well as sponsor, various educational programs, sales promotions, and/or other contests in which participating firms and their sales persons may receive gifts and prizes such as merchandise, cash or other rewards as may be permitted under FINRA rules and other applicable laws and regulations.

Tax considerations

General

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Death benefit proceeds and other policy distributions

If the policy complies with section 7702, the death benefit proceeds under the policy ordinarily should be excludable from the beneficiary’s gross income under section 101 of the Internal Revenue Code. (As noted above, a transfer of the policy for valuable consideration may limit the exclusion of death benefits from the beneficiary’s income.) In addition, if you have elected a Long-Term Care Rider, the rider’s benefits generally will be excludable from gross income under the Internal Revenue Code. The tax-free nature of these accelerated benefits is contingent on the rider meeting specific requirements under section 101 and/or section 7702B of the Internal Revenue Code. The riders are intended to meet these standards. If you have elected a Long-Term Care Rider, we caution you that there is a significant risk that ownership by anyone other than the person insured by the policy will cause adverse tax consequences. If the owner of the policy is not the insured person, benefit payments may be included in the owner’s income, and the death benefit may be part of the insured person’s estate for purposes of the Federal estate tax. A policy with a Long-Term Care Rider should not be purchased by or transferred to a person other than the insured person unless you have carefully reviewed the tax implications with your tax adviser.

Distributions for tax purposes include amounts received upon surrender or partial withdrawals. You may also be deemed to have received a distribution for tax purposes if you assign all or part of your policy rights or change your policy’s ownership. If you have elected the Long-Term Care Acceleration Rider, as described in “Optional supplementary benefit riders you can add,” deductions from policy value to pay the rider charges will reduce your investment in the contract but will not be included in income even if you have recovered all of your investment in the contract.

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requirements of the Internal Revenue Code. If this were to occur, you would be subject to income tax on the income credited to the policy from the date of issue to the date of the disqualification and for subsequent periods.

Policy loans

Diversification rules and ownership of the Separate Account

In certain circumstances, the owner of a variable life insurance policy may be considered the owner, for Federal income tax purposes, of the assets of the Separate Account used to support the policy. In those circumstances, income and gains from the Separate Account assets would be includible in the policy owner’s gross income. The Internal Revenue Service (“IRS”) has stated in published rulings that a variable policy owner will be considered the owner of Separate Account assets if the policy owner possesses incidents of ownership in those assets, such as the ability to exercise investment control over the assets. A Treasury Decision issued in 1986 stated that guidance would be issued in the form of regulations or rulings on the “extent to which Policyholders may direct their investments to particular sub-accounts of a Separate Account without being treated as owners of the underlying assets.” As of the date of this prospectus, no comprehensive guidance on this point has been issued. In Rev. Rul. 2003-91, however, the IRS ruled that a contract holder would not be treated as the owner of assets underlying a variable life insurance or annuity contract despite the owner’s ability to allocate funds among as many as twenty subaccounts.

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7-pay premium limit and modified endowment contract status

Policies classified as modified endowment contracts are subject to the following tax rules:

First, all withdrawals from such a policy are treated as ordinary income subject to tax up to the amount equal to the excess (if any) of the policy value immediately before the withdrawal over the investment in the policy at such time. If you own any other modified endowment contracts issued to you in the same calendar year by the same insurance company or its affiliates, their values will be combined with the value of the policy from which you take the withdrawal for purposes of determining how much of the withdrawal is taxable as ordinary income.

Second, loans taken from or secured by such a policy and assignments or pledges of any part of its value are treated as partial withdrawals from the policy and taxed accordingly. Past-due loan interest that is added to the loan amount is treated as an additional loan.

Third, a 10% additional penalty tax is imposed on the portion of any distribution (including distributions on surrender) from, or loan taken from or secured by, such a policy that is included in income except where the distribution or loan:

is made on or after the date on which the policy owner attains age 59½;

is attributable to the policy owner becoming disabled; or

is part of a series of substantially equal periodic payments for the life (or life expectancy) of the policy owner or the joint lives (or joint life expectancies) of the policy owner and the policy owner’s beneficiary.

These exceptions to the 10% additional tax do not apply in situations where the policy is not owned by an individual.

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Corporate and H.R. 10 retirement plans

Withholding

Life insurance purchases by residents of Puerto Rico

Life insurance purchases by non-resident aliens

Life insurance owned by citizens or residents living abroad

Financial statements reference

The financial statements of John Hancock USA and the Separate Account can be found in the Statement of Additional Information. The financial statements of John Hancock USA should be distinguished from the financial statements of the Separate Account and should be considered only as bearing upon the ability of John Hancock USA to meet its obligations under the policies. Our general account is comprised of securities and other investments, the value of which may decline during periods of adverse market conditions.

Registration statement filed with the SEC

This prospectus omits certain information contained in the Registration Statement which has been filed with the SEC. More details may be obtained from the SEC upon payment of the prescribed fee.

Independent registered public accounting firm

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JOHN HANCOCK USA SERVICE OFFICE
Principal Office & Express Delivery	Mail Delivery
Life Operations 197 Clarendon Street, C-6 Boston, MA 02117	1 John Hancock Way, Suite 1350 Boston, MA 02217-1099
Phone:	Fax:
1-800-777-1377	1-617-572-1571

1940 Act File No. 811-3068 — 1933 Act File No. 333-164171


Statement of Additional Information dated April 30, 2014 for interests in John Hancock Variable Life Account U (Name of Registrant) JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) (“John Hancock USA”) (Name of Depositor) This is a Statement of Additional Information (“SAI”). It is not the prospectus. The prospectus, dated the same date as this SAI, may be obtained from a John Hancock USA representative or by contacting the John Hancock USA Service Office by mail or telephone at the address or telephone number listed on the back page of the prospectus. TABLE OF CONTENTS
Contents of this SAI	Page No.
Description of the Depositor	2
Description of the Registrant	2
Services	2
Independent registered public accounting firm	2
Legal and Regulatory Matters	3
Principal Underwriter/Distributor	3
Additional Information About Charges	3
Reduction in Charges	4
Financial Statements of Registrant and Depositor	F-1

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Description of the Depositor

Description of the Registrant

New subaccounts may be added and made available to policy owners from time to time. Existing subaccounts may be modified or deleted at any time.

Services

Independent registered public accounting firm

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Legal and Regulatory Matters

Principal Underwriter/Distributor

Fixed dollar payments: The amount of these payments varies widely. JH Distributors may, for example, make one or more payments in connection with a firm’s conferences, seminars or training programs, seminars for the public, advertising and sales campaigns regarding the policies, to assist a firm in connection with its systems, operations and marketing expenses, or for other activities of a selling firm or wholesaler. JH Distributors may make these payments upon the initiation of a relationship with a firm, and at any time thereafter.

Payments based upon sales: These payments are based upon a percentage of the total amount of money received, or anticipated to be received, for sales through a firm of some or all of the insurance products that we and/or our affiliates offer. JH Distributors makes these payments on a periodic basis.

Payments based upon “assets under management”: These payments are based upon a percentage of the policy value of some or all of our (and/or our affiliates’) insurance products that were sold through the firm. JH Distributors makes these payments on a periodic basis.

Additional Information About Charges

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Reduction in Charges

333-164171

333-164172

333-164173

333-164174

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

John Hancock Life Insurance Company (U.S.A.)

For the Years Ended December 31, 2013, 2012 and 2011

With Report of Independent Auditors

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

INDEX TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS


Report of Independent Auditors			F-1

Audited Consolidated Financial Statements

Consolidated Balance Sheets- As of December 31, 2013 and 2012			F-2

Consolidated Statements of Operations- For the Years Ended December 31, 2013, 2012 and 2011			F-4

Consolidated Statements of Comprehensive Income (Loss)- For the Years Ended December 31, 2013, 2012 and 2011			F-5

Consolidated Statements of Changes in Shareholder’s Equity- For the Years Ended December 31, 2013, 2012 and 2011			F-6

Consolidated Statements of Cash Flows- For the Years Ended December 31, 2013, 2012 and 2011			F-8

Notes to Consolidated Financial Statements			F-10

Report of Independent Auditors

The Board of Directors

John Hancock Life Insurance Company (U.S.A.)

Management’s Responsibility for the Financial Statements

Auditor’s Responsibility

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

/s/ Ernst & Young LLP

Boston, Massachusetts

March 27, 2014

F-1

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

CONSOLIDATED BALANCE SHEETS


	December 31,
	2013		2012

	(in millions)
Assets
Investments
Fixed maturities:
Available-for-sale—at fair value (amortized cost: 2013—$55,988; 2012—$58,066)	$	57,998	$	64,996
Held-for-trading—at fair value (cost: 2013—$1,217; 2012—$1,351)		1,216		1,441
Equity securities:
Available-for-sale—at fair value (cost: 2013—$131; 2012—$294)		191		386
Held-for-trading—at fair value (cost: 2013—$271; 2012—$243)		284		252
Mortgage loans on real estate		13,412		13,192
Investment real estate, agriculture, and timber		6,146		5,316
Policy loans		5,405		5,264
Short-term investments		2,892		2,145
Other invested assets		5,488		4,855

Total Investments		93,032		97,847
Cash and cash equivalents		2,541		3,446
Accrued investment income		988		1,039
Goodwill		957		953
Value of business acquired		1,183		1,196
Deferred policy acquisition costs and deferred sales inducements		7,777		5,913
Amounts due from and held for affiliates		4,333		3,805
Other intangible assets		1,234		1,250
Reinsurance recoverable		13,265		12,812
Derivative assets		7,720		11,853
Current income tax receivable		517		135
Amounts on deposit with reinsurers		6,249		6,763
Other assets		2,475		2,736
Separate account assets		154,258		140,626

Total Assets	$	296,529	$	290,374

The accompanying notes are an integral part of these consolidated financial statements.

F-2

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

CONSOLIDATED BALANCE SHEETS – (CONTINUED)


	December 31,
	2013		2012

	(in millions)
Liabilities and Shareholder’s Equity
Liabilities
Future policy benefits	$	83,294	$	83,330
Policyholders’ funds		14,894		15,723
Unearned revenue		1,652		1,466
Unpaid claims and claim expense reserves		867		1,269
Policyholder dividends payable		490		497
Amounts due to affiliates		2,984		2,490
Short-term debt		49		14
Long-term debt		472		520
Consumer notes		666		716
Current income tax payable		29		-
Deferred income tax liability		2,958		4,218
Coinsurance funds withheld		5,896		6,275
Payables for collateral on derivatives		790		2,126
Derivative liabilities		8,124		8,439
Other liabilities		2,751		4,005
Separate account liabilities		154,258		140,626

Total Liabilities		280,174		271,714

Shareholder’s Equity
Preferred stock ($1.00 par value; 50,000,000 shares authorized; 100,000 shares issued and outstanding at December 31, 2013 and 2012)		-		-
Common stock ($1.00 par value; 50,000,000 shares authorized; 4,728,939 shares issued and outstanding at December 31, 2013 and 2012)		5		5
Additional paid-in capital		12,792		12,790
Retained earnings		1,444		247
Accumulated other comprehensive income		1,935		5,405

Total Company Shareholder’s Equity		16,176		18,447
Noncontrolling interests		179		213

Total Shareholder’s Equity		16,355		18,660

Total Liabilities and Shareholder’s Equity	$	296,529	$	290,374

The accompanying notes are an integral part of these consolidated financial statements.

F-3

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

CONSOLIDATED STATEMENTS OF OPERATIONS


	Years ended December 31,
	2013			2012			2011

	(in millions)
Revenues
Premiums	$	2,297		$	2,799		$	2,996
Fee income		4,836			4,724			5,717
Net investment income		5,042			4,559			4,989
Net realized investment and other gains (losses):
Total other-than-temporary impairment losses		(87	)		(125	)		(93	)
Portion of loss recognized in other comprehensive income		6			26			21

Net impairment losses recognized in earnings		(81	)		(99	)		(72	)
Other net realized investment and other gains (losses)		(4,197	)		(2,069	)		3,207

Total net realized investment and other gains (losses)		(4,278	)		(2,168	)		3,135
Other revenue		263			143			124

Total revenues		8,160			10,057			16,961

Benefits and expenses
Benefits to policyholders		5,254			6,401			7,639
Policyholder dividends		620			663			811
Amortization of deferred policy acquisition costs, deferred sales inducements, and value of business acquired		(298	)		1,385			2,841
Goodwill impairment		-			-			500
Other operating costs and expenses		258			2,374			6,313

Total benefits and expenses		5,834			10,823			18,104


Income (loss) before income taxes		2,326			(766	)		(1,143	)

Income tax expense (benefit)		821			(633	)		(332	)


Net income (loss)		1,505			(133	)		(811	)

Less: net income (loss) attributable to noncontrolling interests		8			26			44


Net income (loss) attributable to the Company	$	1,497		$	(159	)	$	(855	)

The accompanying notes are an integral part of these consolidated financial statements.

F-4

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)


	Years ended December 31,
	2013			2012			2011

	(in millions)
Net income (loss)	$	1,505		$	(133	)	$	(811	)

Other comprehensive income (loss), net of tax
Change in unrealized investment gains (losses):
Unrealized investment gains (losses) arising during the period		(2,068	)		1,544			1,937
Reclassification adjustment for (gains) losses realized in net income		(123	)		(686	)		(692	)
Change in foreign currency translation adjustment		(11	)		(50	)		13
Change in unrealized gains (losses) on derivative instruments designated as cash flow hedges:
Unrealized gains (losses) on the effective portion of the change in fair value of cash flow hedges		(944	)		648			1,777
Reclassification of net cash flow hedge (gains) losses to net income		(324	)		(209	)		(59	)

Total other comprehensive income (loss), net of tax		(3,470	)		1,247			2,976

Total comprehensive income (loss)	$	(1,965	)	$	1,114		$	2,165

Income taxes included in other comprehensive income (loss)
Change in unrealized investment gains (losses):
Income tax expense (benefit) from unrealized investment gains arising during the period		(1,113	)		831			1,044
Income tax (expense) benefit related to reclassification adjustment for gains realized in net income (loss)		(66	)		(369	)		(373	)
Change in unrealized gains (losses) on derivative instruments designated as cash flow hedges:
Income tax expense (benefit) from unrealized gains on the effective portion of the change in fair value cash flow hedges		(509	)		349			957
Income tax (expense) benefit related to reclassification of net cash flow hedge gains to net income (loss)		(175	)		(113	)		(32	)

Total income tax expense (benefit) in other comprehensive income (loss)	$	(1,863	)	$	698		$	1,596

The accompanying notes are an integral part of these consolidated financial statements.

F-5

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY


	Preferred and Common Stock		Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)		Total Shareholder’s Equity attributable to the Company			Noncontrolling Interests			Total Shareholders’s Equity			Outstanding Shares

	(in millions, except for shares outstanding)																		(in thousands)
Balance at January 1, 2011	$	5	$	12,776	$	1,261		$	1,182	$	15,224		$	245		$	15,469			4,829
Net income (loss)		-		-		(855	)				(855	)		44			(811	)
Other comprehensive income (loss), net of tax		-		-		-			2,976		2,976			-			2,976
Share -based payments		-		13		-			-		13			-			13
Contributions from noncontrolling interests		-		-		-			-		-			64			64
Distributions to non-controlling interests		-		-		-			-		-			(94	)		(94	)

Balance at December 31, 2011	$	5	$	12,789	$	406		$	4,158	$	17,358		$	259		$	17,617			4,829

The accompanying notes are an integral part of these consolidated financial statements.

F-6

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY – (CONTINUED)


	Preferred and Common Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Shareholder’s Equity attributable to the Company			Noncontrolling Interests			Total Shareholders’s Equity			Outstanding Shares
	(in millions, except for outstanding shares)																				(in thousands)

Balance at January 1, 2012	$	5	$	12,789		$	406		$	4,158		$	17,358		$	259		$	17,617			4,829
Net income (loss)							(159	)					(159	)		26			(133	)
Other comprehensive income (loss), net of tax										1,247			1,247						1,247
Share-based payments				3									3						3
Acquisition on noncontrolling interests				(2	)								(2	)					(2	)
Contributions from noncontrolling interests													-			42			42
Distributions to non-controlling interests													-			(114	)		(114	)

Balance at December 31, 2012	$	5	$	12,790		$	247		$	5,405		$	18,447		$	213		$	18,660			4,829

Net income (loss)							1,497						1,497			8			1,505
Other comprehensive income (loss), net of tax										(3,470	)		(3,470	)					(3,470	)
Share-based payments				2									2						2
Contributions from noncontrolling interests																36			36
Distributions to non-controlling interests																(78	)		(78	)
Dividend paid to Parent							(300	)					(300	)					(300	)

Balance at December 31, 2013	$	5	$	12,792		$	1,444		$	1,935		$	16,176		$	179		$	16,355			4,829

The accompanying notes are an integral part of these consolidated financial statements.

F-7

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

CONSOLIDATED STATEMENTS OF CASH FLOWS


	Years ended December 31,
	2013			2012			2011

	(in millions)
Cash flows from operating activities:
Net income (loss)	$	1,505		$	(133	)	$	(811	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Amortization of premiums and accretion of discounts associated with investments, net		(6	)		(5	)		27
Net realized investments and other (gains) losses		4,278			2,168			(3,135	)
Change in expected internal rate of return on leveraged leases		(75	)		247			-
Amortization of deferred policy acquisition costs, deferred sales inducements, and value of business acquired		(298	)		1,385			2,841
Capitalization of deferred policy acquisition costs and deferred sales inducements		(655	)		(719	)		(766	)
Goodwill impairment		-			-			500
Depreciation and amortization		169			152			140
Net cash flows from trading securities		107			32			265
(Increase) decrease in accrued investment income		51			27			(91	)
(Increase) decrease in other assets and other liabilities, net		(3,378	)		(752	)		522
Increase (decrease) in policyholder liabilities and accruals, net		(3,193	)		(1,279	)		3,980
Interest credited to policyholder liabilities		1,046			1,180			1,156
Increase (decrease) in deferred income taxes		606			(378	)		(100	)

Net cash provided by (used in) operating activities		157			1,925			4,528

Cash flows from investing activities:
Sales of:
Fixed maturities		22,956			21,625			27,779
Equity securities		466			232			114
Mortgage loans on real estate		998			1,347			1,367
Investment real estate, agriculture, and timber		75			42			43
Other invested assets		234			533			131
Maturities, prepayments, and scheduled redemptions of:
Fixed maturities		1,661			1,369			2,316
Mortgage loans on real estate		353			338			367
Other invested assets		318			238			267
Purchases of:
Fixed maturities		(22,930	)		(22,647	)		(31,201	)
Equity securities		(182	)		(139	)		(96	)
Investment real estate, agriculture, and timber		(1,015	)		(1,134	)		(814	)
Other invested assets		(1,024	)		(1,082	)		(943	)
Mortgage loans on real estate issued		(1,654	)		(1,821	)		(2,443	)
Net (purchases) redemptions of short-term investments		(747	)		(544	)		(150	)
Net (additions) disposals of property, plant and equipment		(49	)		-			-
Purchase of business, net of cash acquired		(7	)		-			-
Other, net		(283	)		(27	)		111

Net cash provided by (used in) investing activities		(830	)		(1,670	)		(3,152	)

The accompanying notes are an integral part of these consolidated financial statements.

F-8

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

CONSOLIDATED STATEMENTS OF CASH FLOWS – (CONTINUED)


	Years ended December 31,
	2013			2012			2011

	(in millions)
Cash flows from financing activities:
Dividends paid to Parent		(300	)		-			-
Increase (decrease) in amounts due to affiliates		131			(37	)		63
Increase (decrease) in repurchase agreements		(437	)		-			-
Universal life and investment-type contract deposits		3,265			3,090			3,573
Universal life and investment-type contract maturities and withdrawals		(2,876	)		(3,083	)		(4,168	)
Net transfers from (to) separate accounts related to universal life and investment-type contracts		348			512			156
Repayments of consumer notes, net		(50	)		(103	)		(147	)
Issuance of short-term debt		2			2			6
Repayments of short-term debt		-			-			(2	)
Issuance of long-term debt		-			1			1
Repayments of long-term debt		(12	)		(106	)		(213	)
Contributions from noncontrolling interests		36			42			64
Distributions to noncontrolling interests		(78	)		(114	)		(94	)
Unearned revenue on financial reinsurance		(260	)		(254	)		(82	)
Net reinsurance recoverable		(1	)		1			(1	)

Net cash provided by (used in) financing activities		(232	)		(49	)		(844	)

Net increase (decrease) in cash and cash equivalents		(905	)		206			532
Cash and cash equivalents at beginning of year		3,446			3,240			2,708

Cash and cash equivalents at end of year	$	2,541		$	3,446		$	3,240


Non-cash financing activities during the year:
Transfer of assets for fixed deferred annuity reinsurance transactions	$	-		$	(6,768	)	$	-

The accompanying notes are an integral part of these consolidated financial statements.

F-9

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Summary of Significant Accounting Policies

F-10

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 1 — Summary of Significant Accounting Policies - (continued)

and deferred income taxes. The change in fair value related to held-for-trading securities is reflected in net realized investment and other gains (losses).

The Company classifies its leveraged leases as fixed maturity securities and calculates their carrying value by accruing income at their expected internal rate of return.

Policy loans are carried at unpaid principal balances.

Short-term investments, which include investments with remaining maturities of one year or less, but greater than three months, at the time of purchase, are reported at fair value.

F-11

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 1 — Summary of Significant Accounting Policies - (continued)

For derivatives that are designated as hedging instruments, changes in fair value are recognized according to the nature of the risks being hedged, as discussed below.

Cash and Cash Equivalents. Cash and cash equivalents include cash and all highly liquid debt investments with a remaining maturity of three months or less when purchased.

F-12

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 1 — Summary of Significant Accounting Policies - (continued)

F-13

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 1 — Summary of Significant Accounting Policies - (continued)

accounted for on a basis consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts.

F-14

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 1 — Summary of Significant Accounting Policies - (continued)

Estimates of future policy benefit reserves, claim reserves, and expenses are reviewed on a regular basis and adjusted as necessary. Any changes in estimates are reflected in current earnings.

Premiums from long-term care insurance contracts are recognized as revenue when due.

F-15

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 1 — Summary of Significant Accounting Policies - (continued)

Adoption of Recent Accounting Pronouncements

Offsetting Assets and Liabilities

Fed Funds as Benchmark Interest Rate

Comprehensive Income

Income Taxes

Indefinite-Lived Intangible Asset Impairment Testing

F-16

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 1 — Summary of Significant Accounting Policies - (continued)

Future Adoption of Recent Accounting Pronouncements

Investment Companies

Note 2 — Investments

Fixed Maturity and Equity Securities

The Company’s investments in available-for-sale fixed maturity and equity securities are summarized below:


	December 31, 2013
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Other-Than- Temporary Impairments in AOCI

	(in millions)
Fixed maturity and equity securities
Corporate debt securities	$	37,233	$	2,730	$	(778	)	$	39,185	$	(22	)
Commercial mortgage-backed securities		791		19		(29	)		781		(6	)
Residential mortgage-backed securities		184		1		(18	)		167		(5	)
Collateralized debt obligations		61		-		(8	)		53		-
Other asset-backed securities		974		60		(9	)		1,025		-
U.S. Treasury securities and obligations of U.S. government corporations and agencies		9,168		119		(406	)		8,881		-
Obligations of states and political subdivisions		4,388		295		(53	)		4,630		-
Debt securities issued by foreign governments		1,466		128		(41	)		1,553		-

Fixed maturity securities		54,265		3,352		(1,342	)		56,275		(33	)
Other fixed maturity securities (1)		1,723		-		-			1,723		-

Total fixed maturity securities available-for-sale		55,988		3,352		(1,342	)		57,998		(33	)

Equity securities available-for-sale		131		60		-			191		-

Total fixed maturity and equity securities available-for-sale	$	56,119	$	3,412	$	(1,342	)	$	58,189	$	(33	)

F-17

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2 — Investments - (continued)


	December 31, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Other-Than- Temporary Impairments in AOCI

		(in millions)
Fixed maturity and equity securities
Corporate debt securities	$	36,804	$	5,160	$	(271	)	$	41,693	$	(38	)
Commercial mortgage-backed securities		1,427		48		(81	)		1,394		(17	)
Residential mortgage-backed securities		301		1		(60	)		242		(20	)
Collateralized debt obligations		152		-		(46	)		106		(33	)
Other asset-backed securities		794		102		(2	)		894		(1	)
U.S. Treasury securities and obligations of U.S. government corporations and agencies		11,165		1,009		(79	)		12,095		-
Obligations of states and political subdivisions		4,482		913		(1	)		5,394		-
Debt securities issued by foreign governments		1,230		243		(6	)		1,467		-

Fixed maturity securities		56,355		7,476		(546	)		63,285		(109	)
Other fixed maturity securities (1)		1,711		-		-			1,711		-

Total fixed maturity securities available-for-sale		58,066		7,476		(546	)		64,996		(109	)

Equity securities available-for-sale		294		97		(5	)		386		-

Total fixed maturity and equity securities available-for-sale	$	58,360	$	7,573	$	(551	)	$	65,382	$	(109	)

(1)	The Company classifies its leveraged leases as fixed maturity securities and calculates their carrying value by accruing income at their expected internal rate of return.

The amortized cost and fair value of available-for-sale fixed maturity securities at December 31, 2013, by contractual maturity, are shown below:


	Amortized Cost		Fair Value

	(in millions)
Fixed maturity securities
Due in one year or less	$	1,301	$	1,351
Due after one year through five years		9,903		10,380
Due after five years through ten years		8,644		8,959
Due after ten years		32,407		33,559

		52,255		54,249
Asset-backed and mortgage-backed securities		2,010		2,026

Total	$	54,265	$	56,275

F-18

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2 — Investments - (continued)

Fixed Maturity and Equity Securities Impairment Review

F-19

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2 — Investments - (continued)

The cost amounts for both fixed maturity securities and equity securities are net of other-than-temporary impairment charges.

Credit losses on available-for-sale fixed maturity securities:


	December 31,
	2013			2012			2011

	(in millions)
Balance, beginning of year	$	371		$	380		$	399

Additions:
Credit losses for which an other-than-temporary impairment was not previously recognized		57			75			38
Credit losses for which an other-than-temporary impairment was previously recognized		10			12			13

Deletions:
Amounts related to sold, matured, or paid down available-for-sale fixed maturity securities		(149	)		(96	)		(70	)


Balance, end of year	$	289		$	371		$	380

F-20

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2 — Investments - (continued)

Unrealized Losses on Available-For-Sale Fixed Maturity and Equity Securities — By Investment Age


	December 31, 2013
	Less than 12 months					12 months or more					Total

	Carrying Value		Unrealized Losses			Carrying Value		Unrealized Losses			Carrying Value		Unrealized Losses

						(in millions)
Corporate debt securities	$	8,479	$	(467	)	$	2,316	$	(311	)	$	10,795	$	(778	)
Commercial mortgage-backed securities		153		(1	)		197		(28	)		350		(29	)
Residential mortgage-backed securities		4		-			144		(18	)		148		(18	)
Collateralized debt obligations		-		-			49		(8	)		49		(8	)
Other asset-backed securities		196		(9	)		10		-			206		(9	)
US Treasury securities and obligations of US government corps and agencies		5,470		(243	)		709		(163	)		6,179		(406	)
Obligations of states and political subdivisions		844		(32	)		93		(21	)		937		(53	)
Debt securities issued by foreign governments		229		(17	)		112		(24	)		341		(41	)
Total fixed maturity securities available-for-sale		15,375		(769	)		3,630		(573	)		19,005		(1,342	)
Equity securities available-for-sale		4		-			-		-			4		-
Total	$	15,379	$	(769	)	$	3,630	$	(573	)	$	19,009	$	(1,342	)

F-21

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2 — Investments - (continued)



	December 31, 2012
	Less than 12 months					12 months or more					Total

	Carrying Value		Unrealized Losses			Carrying Value		Unrealized Losses			Carrying Value		Unrealized Losses

						(in millions)
Corporate debt securities	$	2,008	$	(85	)	$	1,404	$	(186	)	$	3,412	$	(271	)
Commercial mortgage-backed securities		129		(1	)		223		(80	)		352		(81	)
Residential mortgage-backed securities		1		-			214		(60	)		215		(60	)
Collateralized debt obligations		-		-			99		(46	)		99		(46	)
Other asset-backed securities		5		-			30		(2	)		35		(2	)
US Treasury securities and obligations of US government corps and agencies		3,847		(79	)		-		-			3,847		(79	)
Obligations of states and political subdivisions		116		(1	)		-		-			116		(1	)
Debt securities issued by foreign governments		7		-			86		(6	)		93		(6	)
Total fixed maturity securities available-for-sale		6,113		(166	)		2,056		(380	)		8,169		(546	)
Equity securities available-for-sale		14		(3	)		4		(2	)		18		(5	)
Total	$	6,127	$	(169	)	$	2,060	$	(382	)	$	8,187	$	(551	)

Securities Lending

F-22

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2 — Investments - (continued)

Assets on Deposit and Pledged as Collateral


	December 31,
	2013		2012

	(in millions)
Bonds pledged in support of over-the-counter derivative instruments	$	919	$	114
Bonds pledged in support of exchange-traded futures and cleared derivatives		541		552
Bonds on deposit with government authorities		34		36
Mortgage loans pledged in support of real estate		47		52
Bonds held in trust		96		105
Pledged collateral under reinsurance agreements		2,462		2,849

Total	$	4,099	$	3,708

Offsetting Financial Assets and Financial Liabilities

The Company does not offset financial instruments in the Consolidated Balance Sheets, as the rights of offset are conditional.

F-23

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2 — Investments - (continued)


				Related Amounts Not Set Off in the Consolidated Balance Sheets
Year ended December 31, 2013	Gross Amounts of Financial Instruments presented in the Consolidated Balance Sheets(1)			Amounts Subject to an Enforceable Master Netting Arrangement or Similar Agreements			Financial and Cash Collateral Pledged (Received)(2)			Net Amount Including Financing Trusts(3)			Net Amount Excluding Financing Trusts
	(in millions)
Financial assets
Derivative assets	$	7,880		$	(4,966	)	$	(2,895	)	$	19		$	-
Securities lending		-			-			-			-			-
Reverse repurchase agreements		-			-			-			-			-

Total financial assets		7,880			(4,966	)		(2,895	)		19			-

Financial liabilities
Derivative liabilities		(5,862	)		4,966			844			(52	)		(33	)
Repurchase agreements		-			-			-			-			-

Total financial liabilities	$	(5,862	)	$	4,966		$	844		$	(52	)	$	(33	)


Year ended December 31, 2012	Gross Amounts of Financial Instruments presented in the Consolidated Balance Sheets(1)			Amounts Subject to an Enforceable Master Netting Arrangement or Similar Agreements			Financial and Cash Collateral Pledged (Received)(2)			Net Amount Including Financing Trusts(3)			Net Amount Excluding Financing Trusts
	(in millions)
Financial assets
Derivative assets	$	12,175		$	(5,147	)	$	(6,943	)	$	85		$	1
Securities lending
Reverse repurchase agreements

Total financial assets		12,175			(5,147	)		(6,943	)		85			1

Financial liabilities
Derivative liabilities		(5,288	)		5,147			101			(40	)		(5	)
Repurchase agreements

Total financial liabilities	$	(5,288	)	$	5,147		$	101		$	(40	)	$	(5	)

F-24

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2 — Investments - (continued)

1.	The Company does not offset financial instruments. Financial assets and liabilities in the table above include accrued interest of $142 million and $46 million, respectively as of December 31, 2013 (December 31, 2012 - $317 million and $212 million, respectively).

3.	The net amount includes derivative contracts entered into between the Company and its financing trusts which it does not consolidate. The Company does not exchange collateral on derivative contracts entered into with these trusts.

Affiliate Transactions

Mortgage Loans on Real Estate

At December 31, 2013 and 2012, the mortgage portfolio was diversified by specific collateral property type and geographic region as displayed below:

December 31, 2013:


Collateral Property Type	Carrying Amount			Geographic Concentration	Carrying Amount

	(in millions)				(in millions)
Apartments	$	2,400		East North Central	$	1,607
Industrial		1,162		East South Central		171
Office buildings		4,006		Middle Atlantic		2,361
Retail		3,623		Mountain		603
Mixed use		21		New England		887
Agricultural		464		Pacific		3,881
Agribusiness		700		South Atlantic		2,763
Other		1,048		West North Central		460
				West South Central		591
				Canada / other		100

Provision for losses		(12	)	Provision for losses		(12	)


Total	$	13,412		Total	$	13,412

F-25

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2 — Investments - (continued)

December 31, 2012:


Collateral Property Type	Carrying Amount			Geographic Concentration	Carrying Amount

	(in millions)				(in millions)
Apartments	$	2,162		East North Central	$	1,477
Industrial		1,380		East South Central		166
Office buildings		3,711		Middle Atlantic		2,258
Retail		3,613		Mountain		719
Mixed use		6		New England		939
Agricultural		507		Pacific		3,589
Agribusiness		853		South Atlantic		2,782
Other		1,004		West North Central		482
				West South Central		649
				Canada / other		175

Provision for losses		(44	)	Provision for losses		(44	)


Total	$	13,192		Total	$	13,192

Changes in the allowance for probable losses on mortgage loans on real estate are summarized below:


	Balance at Beginning of Period		Additions		Recoveries			Charge- offs and Disposals			Balance at End of Period

	(in millions)

Year ended December 31, 2013	$	44	$	12	$	(2	)	$	(42	)	$	12

Year ended December 31, 2012		45		24		(1	)		(24	)		44

Year ended December 31, 2011		34		38		(1	)		(26	)		45

As of December 31, 2013, the carrying value for certain mortgage loans is as follows:


	December 31,		December 31,

	2013		2012

	(in millions)
Non-income producing	$	36	$	75
Delinquent less than 90 days		-		15
Delinquent greater than 90 days		-		22

F-26

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2 — Investments - (continued)


	December 31,
	2013			2012

	(in millions)
Impaired mortgage loans on real estate with provision for losses	$	48		$	119
Allowance for credit losses		(12	)		(44	)

Net impaired mortgage loans on real estate	$	36		$	75

The average recorded investment in impaired loans and the interest income recognized on impaired loans were as follows:


	December 31,
	2013		2012		2011

	(in millions)

Average recorded investment in impaired loans	$	36	$	105	$	109
Interest income recognized on impaired loans		-		-		-

The carrying value of mortgage loans by IRR was as follows:


	December 31,
	2013		2012

	(in millions)
AAA	$	421	$	319
AA		1,689		1,460
A		4,108		2,928
BBB		6,647		7,648
BB		414		529
B and lower and unrated		133		308

Total	$	13,412	$	13,192

Investment Real Estate, Agriculture, and Timber

Other Invested Assets

The following tables summarize the Company’s investments accounted for using the equity method of accounting:


	December 31,
	2013		2012

	(in millions)
Carrying value	$	5,074	$	4,458
Combined assets		75,818		62,974
Combined liabilities		15,029		14,830
Debt included in combined liabilities		11,260		9,698

F-27

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2 — Investments - (continued)


	December 31,
	2013		2012		2011

	(in millions)
Net investment income on the investments	$	340	$	218	$	222
Combined revenues		9,370		8,639		8,516
Combined expenses		4,506		4,696		4,750
Combined income (loss) from operations		4,864		3,943		3,766

Net Investment Income and Net Realized Investment and Other Gains (Losses)

The following information summarizes the components of net investment income and net realized investment and other gains (losses):


	December 31,
	2013			2012			2011

	(in millions)
Net investment income
Fixed maturity securities	$	3,164		$	2,943		$	3,425
Equity securities		6			7			9
Mortgage loans on real estate		756			771			798
Investment real estate, agriculture, and timber		261			216			205
Policy loans		293			300			305
Short-term investments		6			8			9
Derivatives		532			405			196
Equity method investments and other		286			182			303

Gross investment income		5,304			4,832			5,250

Investment expenses		(262	)		(273	)		(261	)

Net investment income	$	5,042		$	4,559		$	4,989


	December 31,

	2013			2012			2011

	(in millions)
Net realized investment and other gains (losses)
Fixed maturity securities	$	(45	)	$	1,025		$	1,131
Equity securities		138			40			(11	)
Mortgage loans on real estate		32			58			(82	)
Derivatives		(4,626	)		(3,441	)		2,137
Other invested assets		144			189			62
Amounts credited to participating contract holders		79			(39	)		(102	)

Net realized investment and other gains (losses)	$	(4,278	)	$	(2,168	)	$	3,135

F-28

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2 — Investments - (continued)


	December 31,
	2013			2012			2011

	(in millions)
Certain investment related activity:
Net investment income passed through to participating contract holders as interest credited to policyholders’ account balances	$	80		$	91		$	100
Change in unrealized gains (losses) included in net realized investment and other gains (losses):
Fixed maturity securities held-for-trading		(91	)		33			46
Equity securities held-for-trading		4			9			(10	)
Derivatives		(2,661	)		(1,941	)		2,687
Gross gains on sales of available-for-sale securities		589			1,284			1,619
Gross losses on sales of available-for-sale securities		(774	)		199			291
Other-than-temporary impairments on available-for-sale securities		76			95			70

Note 3 — Relationships with Variable Interest Entities

In its capacities as an investor and as an investment manager, the Company has relationships with various types of entities, some of which are considered variable interest entities (“VIEs”).

Consolidated Variable Interest Entities

December 31,

2013

2012

Total Assets

Total Liabilities

Total Assets

Total Liabilities

(in millions)

Collateralized debt obligations

(“CDOs”)

111

138

F-29

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 3 — Relationships with Variable Interest Entities - (continued)

Significant Variable Interests in Unconsolidated Variable Interest Entities


	2013						2012

	Total Assets		Investment (1)		Maximum Exposure to Loss (2)		Total Assets		Investment (1)		Maximum Exposure to Loss (2)

		(in millions)
Collateralized debt obligations (3)	$	281	$	-	$	-	$	341	$	-	$	-
Real estate limited partnerships (4)		982		262		262		1,158		314		323
Timber funds (5)		2,758		172		212		3,601		478		496

Total	$	4,021	$	434	$	474	$	5,100	$	792	$	819

(1)	The Company’s investments in unconsolidated VIEs are included in other invested assets on the Consolidated Balance Sheets.

(2)

(3)

(4)

(5)

F-30

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 4 — Goodwill, Value of Business Acquired, and Other Intangible Assets

The changes in the carrying value of goodwill by segment were as follows:


	Insurance		Wealth Management		Corporate and Other		Total

	(in millions)
Balance at January 1, 2013	$	-	$	808	$	145	$	953
Acquisition		4		-		-		4
Impairment		-		-		-		-

Balance at December 31, 2013	$	4	$	808	$	145	$	957


	Insurance		Wealth Management		Corporate and Other		Total

	(in millions)
Balance at January 1, 2012	$	-	$	808	$	145	$	953
Impairment		-		-		-		-

Balance at December 31, 2012	$	-	$	808	$	145	$	953

Value of Business Acquired

The balance of and changes in VOBA were as follows:


	December 31,
	2013			2012			2011

	(in millions)
Balance, beginning of year	$	1,196		$	1,321		$	1,959
Amortization		(108	)		(224	)		(389	)
Change due to unrealized investment gains (losses)		95			136			(249	)
Reinsurance recapture (1)		-			(37	)		-

Balance, end of year	$	1,183		$	1,196		$	1,321

(1)

F-31

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 4 — Goodwill, Value of Business Acquired, and Other Intangible Assets - (continued)

The following table provides estimated future amortization for the periods indicated:


	VOBA Amortization
	(in millions)
2014	$	101
2015		100
2016		95
2017		90
2018		84

F-32

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 4 — Goodwill, Value of Business Acquired, and Other Intangible Assets - (continued)

Other Intangible Assets

Other intangible assets were as follows:


	Gross Carrying Amount		Accumulated Net Amortization			Net Carrying Amount

	(in millions)
December 31, 2013
Not subject to amortization:
Brand name	$	600	$	-		$	600
Investment management contracts		295		-			295
Other		4		-			4
Subject to amortization:
Distribution networks		401		(88	)		313
Other investment management contracts		56		(34	)		22

Total	$	1,356	$	(122	)	$	1,234


	Gross Carrying Amount		Accumulated Net Amortization			Net Carrying Amount

	(in millions)
December 31, 2012
Not subject to amortization:
Brand name	$	600	$	-		$	600
Investment management contracts		295		-			295
Other		5		-			5
Subject to amortization:
Distribution networks		397		(73	)		324
Other investment management contracts		56		(30	)		26

Total	$	1,353	$	(103	)	$	1,250


	Gross Carrying Amount		Accumulated Net Amortization			Net Carrying Amount

	(in millions)
December 31, 2011
Not subject to amortization:
Brand name	$	600	$	-		$	600
Investment management contracts		295		-			295
Other		5		-			5
Subject to amortization:
Distribution networks		397		(60	)		337
Other investment management contracts		64		(31	)		33

Total	$	1,361	$	(91	)	$	1,270

F-33

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 5 — Deferred Policy Acquisition Costs and Deferred Sales Inducements

The balance of and changes in deferred policy acquisition costs were as follows:


	December 31,
	2013		2012			2011

	(in millions)
Balance, beginning of year	$	5,767	$	6,111		$	8,657
Capitalization		631		715			755
Amortization		298		(1,084	)		(2,330	)
Change due to unrealized investment gains		814		25			(971	)

Balance, end of year	$	7,510	$	5,767		$	6,111

The balance of and changes in deferred sales inducements were as follows:


	December 31,
	2013			2012			2011

	(in millions)
Balance, beginning of year	$	146		$	187		$	321
Capitalization		24			4			11
Amortization		108			(77	)		(122	)
Change due to unrealized investment gains		(11	)		32			(23	)

Balance, end of year	$	267		$	146		$	187

Note 6 — Related Party Transactions

Service Agreements

F-34

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 6 — Related Party Transactions - (continued)

Other

The Company also has certain debt and reinsurance agreements with affiliates. These are more fully described in the Reinsurance note and Debt and the Line of Credit note.

The following table details the affiliates and their participation in JHUSA’s Liquidity Pool:


	December 31,
	2013		2012

	(in millions)
The Manufacturers Investment Corporation	$	313	$	100
John Hancock Financial Corporation		36		89
Manulife Reinsurance Limited		7		35
Manulife Reinsurance (Bermuda) Ltd.		81		89
Manulife Hungary Holdings KFT.		-		5
John Hancock Life Insurance Company Vermont		16		18
John Hancock Reassurance Company, Ltd.		21		15
John Hancock Insurance Agency, Inc.		17		10

Total	$	491	$	361

The balances above are reported on the Consolidated Balance Sheets as amounts due to affiliates.

MFC fully and unconditionally guarantees payments from the guarantee periods of the accumulation phase for certain of the Company’s market value adjusted annuity contracts.

F-35

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 6 — Related Party Transactions - (continued)

Exchange Commission (“SEC”) pursuant to SEC Rule 12h-5, and in lieu thereof, MFC reports condensed consolidating financial information regarding the Company in its quarterly and annual reports.

Note 7 — Reinsurance

Total reinsurance amounts included in the Company’s accompanying financial statements were as follows:


	Years ended December 31,
	2013			2012			2011

	(in millions)
Premiums earned
Direct	$	3,203		$	3,591		$	3,782
Assumed		752			1,127			1,188
Ceded		(1,658	)		(1,919	)		(1,974	)

Net	$	2,297		$	2,799		$	2,996

Benefits to policyholders ceded	$	2,536		$	3,101		$	2,770

Affiliated Reinsurance

The table and commentary below summarizes the impact of the reinsurance agreements with an affiliate, John Hancock Reassurance Company Limited (“JHRECO”), a wholly-owned subsidiary of MFC:


	Years ended December 31,
	2013			2012		2011

	(in millions)
Premiums ceded	$	603		$	614	$	703
Benefits ceded		786			722		792
Amounts due from and held for affiliates		-			1
Reinsurance recoverable		6,517			6,269
Amounts due to affiliates		140			149
Coinsurance funds withheld		5,888			5,995
Other Payables		(48	)		34

F-36

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 7 — Reinsurance - (continued)

The table and commentary below summarizes the impact of the reinsurance agreements with an affiliate, Manulife Reinsurance (Bermuda) Limited (“MRBL”):


	Years ended December 31,
	2013		2012		2011

	(in millions)
Premiums ceded	$	-	$	-	$	-
Benefits ceded		15		40		23
Amounts due from and held for affiliates		349		22
Reinsurance recoverable		1,233		1,083
Amounts due to affiliates		55		112
Coinsurance funds withheld		-		267
Unearned revenue		786		1,046
Invested assets held in trust		2,561		2,484

F-37

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 7 — Reinsurance - (continued)

assets supporting this block of business. These invested assets are held in trust on behalf of MRBL and are included in amounts due from and held for affiliates on the Consolidated Balance Sheets.

At December 31, 2013, any material recoveries were secured by letters of credit or assets placed in trust by the assuming company.

Non-Affiliated Reinsurance

Note 8 — Derivatives and Hedging Instruments

F-38

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 8 — Derivatives and Hedging Instruments - (continued)

the values of a reference asset, including any returns such as interest earned on these assets, in return for amounts based on reference rates specified in the contract.

Types of Derivatives and Derivative Strategies

F-39

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 8 — Derivatives and Hedging Instruments - (continued)

U.S. Treasury or swap curve performance. The Company utilizes exchange-traded interest rate futures in non-qualifying hedge accounting relationships.

The table below provides a summary of the gross notional amount and fair value of derivatives contracts for all derivatives in qualifying and non-qualifying hedge accounting relationships:

F-40

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 8 — Derivatives and Hedging Instruments - (continued)


		December 31, 2013						December 31, 2012
		Notional Amount		Fair Value Assets		Fair Value Liabilities		Notional Amount		Fair Value Assets		Fair Value Liabilities

		(in millions)
Qualifying Hedge Accounting Relationships
Fair value hedges	Interest rate swaps	$	8,026	$	461	$	526	$	9,336	$	739	$	1,048
	Foreign currency swaps		183		-		93		232		-		157

Cash flow hedges	Interest rate swaps		15,053		931		741		13,232		2,669		73
	Foreign currency swaps		502		3		70		1,763		147		255
	Foreign currency forwards		124		-		1		182		9		-
	Equity total return swaps		28		15		-		29		3		2

Total Derivatives in Hedge Accounting Relationships		$	23,916	$	1,410	$	1,431	$	24,774	$	3,567	$	1,535


Non-Qualifying Hedge Accounting Relationships
	Interest rate swaps	$	116,391	$	5,898	$	3,846	$	94,343	$	8,094	$	3,378
	Interest rate treasury locks		5,425		-		385		-		-		-
	Interest rate options		2,683		21		-		1,323		43		-
	Interest rate futures		2,939		-		-		3,987		-		-
	Foreign currency swaps		2,516		114		133		1,463		121		150
	Foreign currency forwards		11		-		-		40		1		-
	Foreign currency futures		968		-		-		1,860		-		-
	Equity total return swaps		31		21		-		63		2		4
	Equity options		3,228		248		-		45		5		1
	Equity index futures		4,771		-		-		9,107		-		-
	Credit default swaps		315		8		-		265		6		-
	Embedded derivatives – fixed maturity securities		-		-		-		-		-		-
	Embedded derivatives – reinsurance contracts		-		-		2,329		-		14		3,371
	Embedded derivatives – participating pension contracts (1)		-		-		115		-		-		129
	Embedded derivatives – benefit guarantees (1)		-		1,230		257		-		2,701		1,217

Total Derivatives in Non-Qualifying Hedge Accounting Relationships			139,278		7,540		7,065		112,496		10,987		8,250


Total Derivatives (2)		$	163,194	$	8,950	$	8,496	$	137,270	$	14,554	$	9,785

(1)	Embedded derivatives related to participating pension contracts are reported as part of future policy benefits and embedded derivatives related to benefit guarantees are reported as part of reinsurance recoverable or future policy benefits on the Consolidated Balance Sheets.

(2)

F-41

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 8 — Derivatives and Hedging Instruments - (continued)

The following table provides a summary of the derivative assets and liabilities including embedded derivatives as of December 31, 2013 and 2012, respectively.


	December 31, 2013						December 31, 2012
	Fair Value Assets			Fair Value Liabilities			Fair Value Assets			Fair Value Liabilities

	(in millions)
Derivatives on balance sheets	$	7,720		$	8,124		$	11,853		$	8,439
Non-reinsurance embedded derivatives		1,230			372			2,701			1,346

Total derivatives		8,950			8,496			14,554			9,785
Netting adjustments (a)		(1,098	)		(3,870	)		(3,535	)		(3,367	)
Assets and cash collateral used to offset asset/liabilities		(4,469	)		(995	)		(3,382	)		(1,408	)
Affiliate reinsurance related to embedded derivatives (b)		(363	)		(2,242	)		(1,317	)		(3,223	)

Total derivatives after netting adjustments, collateral and net of reinsurance related embedded derivatives	$	3,020		$	1,389		$	6,320		$	1,787

(a)	Represents the netting of derivative exposures covered by a master netting agreement. For these purposes, a master netting agreement is an arrangement between the Company and counterparty where more than one derivative contract exists between the two entities.

(b)

Hedging Relationships

F-42

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 8 — Derivatives and Hedging Instruments - (continued)

The following tables show the investment gains (losses) recognized:

Year ended December 31, 2013


Derivatives in Qualifying Fair Value Hedging Relationships	Hedged Items in Qualifying Fair Value Hedging Relationships	Gains (Losses) Recognized on Derivatives			Gains (Losses) Recognized for Hedged Items			Ineffectiveness Recognized
		(in millions)
Interest rate swaps	Fixed-rate assets	$	537		$	(555	)	$	(18	)
	Fixed-rate liabilities		(340	)		318			(22	)
Foreign currency swaps	Fixed-rate assets		34			(31	)		3
	Fixed-rate liabilities		-			-			-

Total		$	231		$	(268	)	$	(37	)

Year ended December 31, 2012


Derivatives in Qualifying Fair Value Hedging Relationships	Hedged Items in Qualifying Fair Value Hedging Relationships	Gains (Losses) Recognized on Derivatives			Gains (Losses) Recognized for Hedged Items			Ineffectiveness Recognized
		(in millions)
Interest rate swaps	Fixed-rate assets	$	118		$	(93	)	$	25
	Fixed-rate liabilities		(4	)		1			(3	)
Foreign currency swaps	Fixed-rate assets		(1	)		(22	)		(23	)
	Fixed-rate liabilities		-			-			-

Total		$	113		$	(114	)	$	(1	)

Year ended December 31, 2011


Derivatives in Qualifying Fair Value Hedging Relationships	Hedged Items in Qualifying Fair Value Hedging Relationships	Gains (Losses) Recognized on Derivatives			Gains (Losses) Recognized for Hedged Items			Ineffectiveness Recognized
		(in millions)
Interest rate swaps	Fixed-rate assets	$	(546	)	$	679		$	133
	Fixed-rate liabilities		339			(370	)		(31	)
Foreign currency swaps	Fixed-rate assets		(21	)		10			(11	)
	Fixed-rate liabilities		-			-			-

Total		$	(228	)	$	319		$	91

F-43

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 8 — Derivatives and Hedging Instruments - (continued)

F-44

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 8 — Derivatives and Hedging Instruments - (continued)

Year ended December 31, 2013


Derivatives in Qualifying Cash Flow Hedging Relationships	Hedged Items in Qualifying Cash Flow Hedging Relationships	Gains (Losses) Deferred in AOCI on Derivatives (Net of Tax)			Gains Reclassified from AOCI into Net Realized Investment and Other Gains (Losses) (Net of Tax)			Ineffectiveness Recognized in Net Realized Investment and Other Gains (Losses)
		(in millions)
Interest rate swaps	Forecasted fixed-rate assets	$	(898	)	$	325		$	-
	Floating rate assets		(11	)		-			-
	Inflation indexed liabilities		(58	)		-			-
	Forecasted fixed-rate liabilities		-			-			-
Foreign currency swaps	Fixed-rate assets		20			(1	)		-
	Floating rate assets		1			-			-
	Floating rate liabilities		-			-			-
Foreign currency forwards	Forecasted expenses		(7	)		-			-
	Foreign currency assets		-			-			-
Equity total return swaps	Share-based payments		9			-			-

	Total	$	(944	)	$	324		$	-


Year ended December 31, 2012
Derivatives in Qualifying Cash Flow Hedging Relationships	Hedged Items in Qualifying Cash Flow Hedging Relationships	Gains (Losses) Deferred in AOCI on Derivatives (Net of Tax)			Gains Reclassified from AOCI into Net Realized Investment and Other Gains (Losses) (Net of Tax)			Ineffectiveness Recognized in Net Realized Investment and Other Gains (Losses)
		(in millions)
Interest rate swaps	Forecasted fixed-rate assets	$	526		$	212		$	9
	Floating rate assets		(5	)		-			-
	Inflation indexed liabilities		134			-			-
	Forecasted fixed-rate liabilities		-			-			-
Foreign currency swaps	Fixed-rate assets		(16	)		(4	)		-
	Floating rate assets		(1	)		-			-
	Floating rate liabilities		-			-			-
Foreign currency forwards	Forecasted expenses		3			1			-
	Foreign currency assets		-			-			-
Equity total return swaps	Share-based payments		7			-			-

	Total	$	648		$	209		$	9

F-45

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 8 — Derivatives and Hedging Instruments - (continued)

Year ended December 31, 2011


Derivatives in Qualifying Cash Flow Hedging Relationships	Hedged Items in Qualifying Cash Flow Hedging Relationships	Gains (Losses) Deferred in AOCI on Derivatives (Net of Tax)			Gains Reclassified from AOCI into Net Realized Investment and Other Gains (Losses) (Net of Tax)		Ineffectiveness Recognized in Net Realized Investment and Other Gains (Losses)
		(in millions)
Interest rate swaps	Forecasted fixed-rate assets	$	1,916		$	59	$	14
	Floating rate assets		5			-		-
	Inflation indexed liabilities		(136	)		-		-
	Forecasted fixed-rate liabilities		-			-		-
Foreign currency swaps	Fixed-rate assets		16			-		-
	Floating rate assets		(1	)		-		-
	Floating rate liabilities		-			-		-
Foreign currency forwards	Forecasted expenses		(16	)		-		-
	Foreign currency assets		-			-		-
Equity total return swaps	Share-based payments		(7	)		-		-

	Total	$	1,777		$	59	$	14

For a rollforward of the net accumulated gains (losses) on cash flow hedges see the Shareholder’s Equity Note.

F-46

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 8 — Derivatives and Hedging Instruments - (continued)


Years ended December 31,	2013			2012			2011
	(in millions)
Non-Qualifying Hedge Accounting Relationships
Interest rate swaps	$	(3,036	)	$	(336	)	$	3,230
Interest rate treasury locks		(385	)		-			-
Interest rate options		(46	)		(8	)		1
Interest rate futures		82			(53	)		(237	)
Foreign currency swaps		5			(32	)		17
Foreign currency forwards		4			(5	)		(10	)
Foreign currency futures		74			-			16
Equity total return swaps		(16	)		7			(1	)
Equity options		(36	)		-			-
Equity index futures		(1,982	)		(1,555	)		(318	)
Credit default swaps		-			1			-
Embedded derivatives		212			(1,730	)		153

Total Investment Gains (Losses) from Derivatives in Non-Qualifying Hedge Accounting Relationships	$	(5,124	)	$	(3,711	)	$	2,851

The following table provides details of the CDS protection sold by type of contract and external agency rating for the underlying reference security, as of December 31, 2013 and 2012, respectively.


	December 31, 2013						December 31, 2012

	Notional amount²		Fair Value		Weighted average maturity (in years)³		Notional amount²		Fair Value		Weighted average maturity (in years)³

	(in millions)
Single name CDS¹
Corporate Debt
AAA	$	35	$	1		3	$	25	$	1		4
AA		95		3		3		85		2		4
A		185		4		3		145		3		4
BBB		-		-				10		-		5

Total CDS protection sold	$	315	$	8			$	265	$	6

¹	The rating agency designations are based on S&P where available followed by Moody’s, Dominion Bond Rating Services (DBRS), and Fitch. If no rating is available from a rating agency, then an internally developed rating is used.

²	Notional amount represents the maximum future payments the Company would have to pay its counterparties assuming a default of the underlying credit and zero recovery on the underlying issuer obligation.

F-47

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 8 — Derivatives and Hedging Instruments - (continued)

³	The weighted average maturity of the CDS is weighted based on notional amounts.

For more details on the Company’s embedded derivatives, see the Fair Value Measurements Note.

Note 9 — Certain Separate Accounts

The following table reflects variable life insurance contracts with guarantees held by the Company:


	December 31,
	2013		2012

	(in millions, except for age)
Life insurance contracts with guaranteed benefits
In the event of death
Account value	$	9,781	$	8,346
Net amount at risk related to deposits		174		182
Average attained age of contract holders		53		52

F-48

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 9 — Certain Separate Accounts - (continued)

F-49

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 9 — Certain Separate Accounts - (continued)


	December 31,
	2013			2012

	(in millions, except for ages and percentages)
Guaranteed Minimum Death Benefit
Return of net deposits
In the event of death
Account value	$	25,475		$	24,553
Net amount at risk — net of reinsurance		33			64
Average attained age of contract holders		66			66

Return of net deposits plus a minimum return
In the event of death
Account value	$	557		$	542
Net amount at risk — net of reinsurance		265			305
Average attained age of contract holders		71			70
Guaranteed minimum return rate		5	%		5	%

Highest specified anniversary account value minus withdrawals post anniversary
In the event of death
Account value	$	25,711		$	25,350
Net amount at risk — net of reinsurance		160			265
Average attained age of contract holders		67			66

Guaranteed Minimum Income Benefit
Account value	$	4,678		$	4,816
Net amount at risk — net of reinsurance		30			40
Average attained age of contract holders		65			65

Guaranteed Minimum Withdrawal Benefit
Account value	$	40,205		$	38,613
Net amount at risk		407			774
Average attained age of contract holders		66			65

F-50

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 9 — Certain Separate Accounts - (continued)

Account balances of variable contracts with guarantees were invested in various separate accounts with the following characteristics:


	December 31,
	2013		2012

	(in millions)
Type of Fund
Equity	$	31,223	$	28,537
Balanced		22,921		21,539
Bond		6,755		7,557
Money Market		906		1,407

Total	$	61,805	$	59,040

The following table summarizes the liabilities for guarantees on variable life and annuity contracts reflected in future policy benefits in the general account:


	Guaranteed Minimum Death Benefit (GMDB)			Guaranteed Minimum Income Benefit (GMIB)			Guaranteed Minimum Withdrawal Benefit (GMWB)			Total

	(in millions)
Balance at January 1, 2013	$	229		$	179		$	1,310		$	1,718
Incurred guarantee benefits		(32	)		(65	)		-			(97	)
Other reserve changes		1			(38	)		(1,002	)		(1,039	)

Balance at December 31, 2013		198			76			308			582
Reinsurance recoverable		(47	)		(1,074	)		(259	)		(1,380	)

Net balance at December 31, 2013	$	151		$	(998	)	$	49		$	(798	)


Balance at January 1, 2012	$	247		$	211		$	1,165		$	1,623
Incurred guarantee benefits		(51	)		(91	)		-			(142	)
Other reserve changes		33			59			145			237

Balance at December 31, 2012		229			179			1,310			1,718
Reinsurance recoverable		(68	)		(1,801	)		(1,071	)		(2,940	)

Net balance at December 31, 2012	$	161		$	(1,622	)	$	239		$	(1,222	)

F-51

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 9 — Certain Separate Accounts - (continued)

The following assumptions and methodology were used to determine the amounts above at December 31, 2013 and 2012:

•

Mean return and volatility assumptions were determined by asset class. Market consistent observed volatilities were used where available for ASC 815 calculations.

•

Annuity base lapse rates vary by contract type, duration, type of living benefit or death benefit rider, and whether guaranteed withdrawals are being taken. The lapse rates range from 0.5% to 40%.

•

Note 10 — Closed Blocks

F-52

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 10 — Closed Blocks - (continued)

The following tables set forth certain summarized financial information relating to the closed blocks as of the dates indicated:

F-53

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 10 — Closed Blocks - (continued)

JHUSA Closed Block


	December 31,
	2013			2012

	(in millions)
Liabilities
Future policy benefits	$	8,129		$	8,258
Policyholders’ funds		71			74
Policyholder dividends payable		155			162
Other closed block liabilities		698			659

Total closed block liabilities		9,053			9,153


Assets
Investments
Fixed maturities:
Available-for-sale—at fair value (amortized cost: 2013—$2,988; 2012—$2,733)		3,217			3,163
Mortgage loans on real estate		483			519
Investment real estate		722			710
Policy loans		1,585			1,589
Other invested assets		4			5

Total investments		6,011			5,986

Cash borrowings, cash, and cash equivalents		(489	)		(513	)
Accrued investment income		100			101
Amount due from and held for affiliates		2,076			2,047
Other closed block assets		486			588

Total assets designated to the closed block		8,184			8,209

Excess of closed block liabilities over assets designated to the closed block		869			944
Portion of above representing accumulated other comprehensive income:
Unrealized appreciation, net of deferred income tax expense of $268 and $322, respectively		497			597
Adjustment for deferred policy acquisition costs, net deferred income tax benefit of $81 and $111, respectively		(150	)		(206	)
Foreign currency translation adjustment		(51	)		(79	)

Total amounts included in accumulated other comprehensive income		296			312

Maximum future earnings to be recognized from closed block assets and liabilities	$	1,165		$	1,256

F-54

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 10 — Closed Blocks - (continued)

JHUSA Closed Block


	Years ended December 31,
	2013		2012			2011

	(in millions)
Revenues
Premiums	$	499	$	538		$	558
Net investment income		291		339			331
Net realized investment income and other gains (losses)		265		111			67

Total revenues		1,055		988			956

Benefits and Expenses
Benefits to policyholders		575		656			668
Policyholder dividends		313		331			354
Amortization of deferred policy acquisition costs		-		94			14
Other closed block operating costs and expenses		27		29			29

Total benefits and expenses		915		1,110			1,065

Revenues, net of benefits and expenses		140		(122	)		(109	)
Income tax expense (benefit)		49		(43	)		(41	)

Revenues (losses), net of benefits and expenses and income taxes	$	91	$	(79	)	$	(68	)

Maximum future earnings from closed block assets and liabilities:


	December 31,
	2013			2012

	(in millions)
Beginning of period	$	1,256		$	1,177
Revenues, net of benefits and expenses and income taxes		(91	)		79

End of period	$	1,165		$	1,256

F-55

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 10 — Closed Blocks - (continued)

JHLICO Closed Block


	December 31,
	2013		2012

	(in millions)
Liabilities
Future policy benefits	$	10,229	$	10,488
Policyholders’ funds		1,401		1,446
Policyholder dividends payable		325		324
Other closed block liabilities		246		418

Total closed block liabilities		12,201		12,676

Assets
Investments
Fixed maturities:
Available-for-sale—at fair value (amortized cost: 2013—$6,174; 2012—$6,198)		6,353		6,839
Equity securities:
Available-for-sale—at fair value (cost: 2013—$4; 2012—$6)		8		9
Mortgage loans on real estate		1,982		2,176
Policy loans		1,504		1,449
Other invested assets		80		88

Total investments		9,927		10,561

Cash borrowings, cash, and cash equivalents		88		154
Accrued investment income		120		128
Other closed block assets		78		88

Total assets designated to the closed block		10,213		10,931

Excess of closed block liabilities over assets designated to the closed block		1,988		1,745
Portion of above representing accumulated other comprehensive income:
Unrealized appreciation, net of deferred income tax expense of $65 and $229, respectively		121		425

Maximum future earnings to be recognized from closed block assets and liabilities	$	2,109	$	2,170

F-56

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 10 — Closed Blocks - (continued)

JHLICO Closed Block


	Years ended December 31,
	2013		2012		2011

	(in millions)
Revenues
Premiums	$	442	$	514	$	577
Net investment income		512		555		576
Net realized investment income and other gains (losses)		25		65		73

Total revenues		979		1,134		1,226

Benefits and Expenses
Benefits to policyholders		600		665		729
Policyholder dividends		263		289		412
Other closed block operating costs and expenses		22		12		52

Total benefits and expenses		885		966		1,193

Revenues, net of benefits and expenses		94		168		33
Income tax expense (benefit)		33		59		12

Revenues, net of benefits and expenses and income taxes	$	61	$	109	$	21

Maximum future earnings from closed block assets and liabilities:


	December 31,
	2013			2012

	(in millions)
Beginning of period	$	2,170		$	2,279
Revenues, net of benefits and expenses and income taxes		(61	)		(109	)

End of period	$	2,109		$	2,170

Note 11 — Debt and Line of Credit

External short-term and long-term debt consisted of the following:


	December 31,
	2013			2012

	(in millions)
Long-term debt:
Surplus notes, 7.38% maturing in 2024	$	472		$	472
Fixed rate notes payable, interest ranging from 3.5% to 13.84% due in varying amounts to 2017		49			62
Less short-term debt		(49	)		(14	)

Total long-term debt	$	472		$	520

F-57

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 11 — Debt and Line of Credit - (continued)

Long-Term Debt

Aggregate maturities of long-term debt are as follows: 2014—$49 million; 2015—$0 million; 2016—$0 million; 2017—$0 million; 2018—$0 million; and thereafter—$472 million .

Consumer Notes

Line of Credit

Affiliated Debt and Loan Transactions

Affiliated debt and loan transactions are included in amounts due to affiliates or due from affiliates, respectively on the Consolidated Balance Sheets.

F-58

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 11 — Debt and Line of Credit - (continued)

Note 12 — Income Taxes

Income (loss) before income taxes includes the following:


	Years ended December 31,
	2013		2012			2011

	(in millions)
Domestic	$	2,326	$	(766	)	$	(1,143	)

Income (loss) before income taxes	$	2,326	$	(766	)	$	(1,143	)

F-59

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 12 — Income Taxes - (continued)

The components of income taxes were as follows:


	Years ended December 31,
	2013		2012			2011

	(in millions)
Current taxes:
Federal	$	213	$	(255	)	$	(233	)
State		2		-			1

Total		215		(255	)		(232	)


Deferred taxes:
Federal		606		(378	)		(100	)
State		-		-			-

Total		606		(378	)		(100	)

Total income tax expense (benefit)	$	821	$	(633	)	$	(332	)

A reconciliation of income taxes at the federal income tax rate to income tax expense (benefit) charged to operations follows:


	Years ended December 31,
	2013			2012			2011

	(in millions)
Tax at 35%	$	814		$	(268	)	$	(400	)
Add (deduct):
Prior year taxes		18			(61	)		27
Tax credits		(64	)		(76	)		(74	)
Tax-exempt investment income		(6	)		(29	)		(31	)
Lease income		147			27			1
Dividend received deduction		(109	)		(113	)		(102	)
Change in tax reserves		(49	)		(128	)		67
Goodwill impairment		-			-			175
Valuation allowance		50			-			-
Foreign tax expense gross-up		9			10			3
Other		11			5			2

Total income tax expense (benefit)	$	821		$	(633	)	$	(332	)

F-60

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 12 — Income Taxes - (continued)


	December 31,
	2013			2012

	(in millions)
Deferred tax assets:
Policy reserves	$	1,147		$	2,401
Net operating loss carryforwards		928			661
Net capital loss carryforwards		-			-
Tax credits		878			831
Unearned revenue		601			523
Deferred compensation		66			53
Accrued interest		150			414
Policyholder dividends payable		84			91
Other		77			91

Sub-total deferred tax assets		3,931			5,065
Valuation allowance		(50	)		-

Total deferred tax assets		3,881			5,065

Deferred tax liabilities
Unrealized investment gains on securities		1,091			2,954
Deferred policy acquisition costs		1,927			1,606
Intangible assets		904			946
Premiums receivable		33			36
Deferred sales inducements		103			57
Deferred gains		451			527
Securities and other investments		2,100			2,969
Other		230			188

Total deferred tax liabilites		6,839			9,283

Net deferred tax liabilities	$	2,958		$	4,218

F-61

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 12 — Income Taxes - (continued)

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:


	December 31,
	2013			2012

	(in millions)
Balance, beginning of year	$	3,226		$	2,477
Additions based on tax positions related to the current year		140			350
Payments		(565	)		-
Additions for tax positions of prior years		23			616
Reductions for tax positions of prior years		(2,173	)		(217	)

Balance, end of year	$	651		$	3,226

F-62

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 13 — Commitments, Guarantees, Contingencies, and Legal Proceedings


	Non-cancelable Operating Leases		Sub-lease Income

	(in millions)
2014		36		14
2015		20		3
2016		12		-
2017		9		-
2018		6		-
Thereafter		361		-

Total		444		17

F-63

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 13 — Commitments, Guarantees, Contingencies, and Legal Proceedings - (continued)

Note 14 — Shareholder’s Equity

Capital Stock

The Company has two classes of capital stock, preferred stock and common stock. All of the outstanding preferred and common stock of the Company is owned by MIC, its parent.

Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss) were as follows:

F-64

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 14 — Shareholder’s Equity - (continued)


	Net Unrealized Investment Gains (Losses)			Net Accumulated Gain (loss) on Cash Flow Hedges			Foreign Currency Translation Adjustment			Additional Pension and Postretirement Unrecognized Net Periodic Benefit Cost		Accumulated Other Comprehensive Income (Loss)

	(in millions)
Balance at January 1, 2011	$	988		$	234		$	(44	)	$	4	$	1,182
Gross unrealized investment gains (net of deferred income tax expense of $1,817)		3,371											3,371
Reclassification adjustment for gains realized in net income (net of deferred income tax expense of $373)		(692	)										(692	)
Adjustment for policyholder liabilities (net of deferred income tax benefit of $355)		(659	)										(659	)
Adjustment for deferred policy acquisition costs, deferred sales inducements, value of business acquired, and unearned revenue liability (net of deferred income tax benefit of $418)		(775	)										(775	)

Net unrealized investment gains		1,245											1,245
Foreign currency translation adjustment (net of deferred income tax expense of $0)								13					13
Pension and postretirement benefits:
Change in prior service cost (net of deferred income tax benefit of $0)											-		-
Change in net actuarial loss (net of deferred income tax benefit of $0)											-		-
Net unrealized losses on split-dollar life insurance benefit (net of deferred income tax benefit of $0)											-		-
Net gains on the effective portion of the change in fair value of cash flow hedges (net of deferred income tax expense of $957)					1,777								1,777
Reclassification of net cash flow hedge gains to net income (net of deferred income tax expense of $32)					(59	)							(59	)

Balance at December 31, 2011	$	2,233		$	1,952		$	(31	)	$	4	$	4,158

F-65

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 14 — Shareholder’s Equity - (continued)


	Net Unrealized Investment Gains (Losses)			Net Accumulated Gain (loss) on Cash Flow Hedges			Foreign Currency Translation Adjustment			Additional Pension and Postretirement Unrecognized Net Periodic Benefit Cost		Accumulated Other Comprehensive Income (Loss)

	(in millions)
Balance at January 1, 2012	$	2,233		$	1,952		$	(31	)	$	4	$	4,158
Gross unrealized investment gains (net of deferred income tax expense of $902)		1,677											1,677
Reclassification adjustment for gains realized in net income (net of deferred income tax expense of $369)		(686	)										(686	)
Adjustment for policyholder liabilities (net of deferred income tax benefit of $135)		(251	)										(251	)
Adjustment for deferred policy acquisition costs, deferred sales inducements, value of business acquired, and unearned revenue liability (net of deferred income tax expense of $64)		118											118

Net unrealized investment gains		858											858
Foreign currency translation adjustment (net of deferred income tax benefit of $0)								(50	)				(50	)
Pension and postretirement benefits:
Change in prior service cost (net of deferred income tax benefit of $0)											-		-
Change in net actuarial loss (net of deferred income tax benefit of $0)											-		-
Net unrealized losses on split-dollar life insurance benefit (net of deferred income tax benefit of $0)											-		-
Net gains on the effective portion of the change in fair value of cash flow hedges (net of deferred income tax expense of $349)					648								648
Reclassification of net cash flow hedge gains to net income (net of deferred income tax expense of $113)					(209	)							(209	)

Balance at December 31, 2012	$	3,091		$	2,391		$	(81	)	$	4	$	5,405

F-66

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 14 — Shareholder’s Equity - (continued)


	Net Unrealized Investment Gains (Losses)			Net Accumulated Gain (loss) on Cash Flow Hedges			Foreign Currency Translation Adjustment			Additional Pension and Postretirement Unrecognized Net Periodic Benefit Cost		Accumulated Other Comprehensive Income (Loss)

	(in millions)
Balance at January 1, 2013	$	3,091		$	2,391		$	(81	)	$	4	$	5,405
Gross unrealized investment losses (net of deferred income tax benefit of $1,698)		(3,152	)										(3,152	)
Reclassification adjustment for gains realized in net income (net of deferred income tax expense of $66)		(123	)										(123	)
Adjustment for policyholder liabilities (net of deferred income tax expense of $260)		481											481
Adjustment for deferred policy acquisition costs, deferred sales inducements, value of business acquired, and unearned revenue liability (net of deferred income tax expense of $325)		603											603

Net unrealized investment losses		(2,191	)										(2,191	)
Foreign currency translation adjustment (net of deferred income tax benefit of $0)								(11	)				(11	)
Pension and postretirement benefits:
Change in prior service cost (net of deferred income tax benefit of $0)											-		-
Change in net actuarial loss (net of deferred income tax benefit of $0)											-		-
Net unrealized losses on split-dollar life insurance benefit (net of deferred income tax benefit of $0)											-		-
Net losses on the effective portion of the change in fair value of cash flow hedges (net of deferred income tax benefit of $509)					(944	)							(944	)
Reclassification of net cash flow hedge gains to net income (net of deferred income tax expense of $175)					(324	)							(324	)

Balance at December 31, 2013	$	900		$	1,123		$	(92	)	$	4	$	1,935

F-67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 14 — Shareholder’s Equity - (continued)

Information regarding amounts reclassified out of each component of AOCI was as follows:


	Amounts Reclassified from AOCI (1)


	Year Ended December 31, 2013			Affected Line Item in Consolidated Statement of Operations



Unrealized investment gains (losses): (2) (3)
Net unrealized gains (losses)	$	195		Other net realized investment and other gains (losses)
OTTI		(6	)	Portion of loss recognized in other comprehensive income

Net realized gains (losses) before income tax		189
Income tax (expense) benefit		(66	)

Net realized gains (losses), net of income tax	$	123

Unrealized gains (losses) on derivatives—cash flow hedges:
Interest rate swaps	$	500		Other net realized investment and other gains (losses)
Foreign currency swaps		(2	)	Other net realized investment and other gains (losses)
Foreign currency forwards		-		Other net realized investment and other gains (losses)
Equity market contracts		-		Other net realized investment and other gains (losses)

Net gains (losses) on cash flow hedges, before income tax		498
Income tax (expense) benefit		(174	)

Net gains (losses) on cash flow hedges, net of income tax	$	324

Foreign currency translation adjustment:
Foreign currency translation adjustment, before income tax	$	-		Other net realized investment and other gains (losses)
Income tax (expense) benefit		-

Foreign currency translation adjustment, net of income tax	$	-

Total reclassifications for the year, net of income tax	$	447

(1)	Positive amounts indicate gains/benefits reclassified out of AOCI. Negative amounts indicate losses/costs reclassified out of AOCI.

(2)	Amounts reflect investment gains (losses) that were previously unrealized and reclassified to the Consolidated Statements of Operations during the period as realized.

(3)	See table below for additional information on unrealized investment gains (losses), including the impact on deferred policy acquisition costs, deferred sales inducements, value of business acquired, unearned revenue liability, and policyholder liabilities.

F-68

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 14 — Shareholder’s Equity - (continued)

Net unrealized investment gains (losses) included on the Company’s Consolidated Balance Sheets as a component of shareholder’s equity are summarized below:


	Years ended December 31,

	2013			2012			2011

	(in millions)
Balance, end of year comprises:
Unrealized investment gains (losses) on:
Fixed maturity securities	$	2,283		$	7,378		$	5,932
Equity securities		513			471			365
Other investments		19			5			33

Total (1)		2,815			7,854			6,330
Amounts of unrealized investment gains (losses) attributable to:
Deferred policy acquisition costs, deferred sales inducements, value of business acquired, and unearned revenue liability		(714	)		(1,642	)		(1,824	)
Policyholder liabilities		(716	)		(1,456	)		(1,070	)
Deferred income taxes		(485	)		(1,665	)		(1,203	)

Total		(1,915	)		(4,763	)		(4,097	)

Net unrealized investment gains (losses)	$	900		$	3,091		$	2,233

(1)	Includes unrealized investment gains (losses) on invested assets held in trust on behalf of MRBL, which are included in amounts due from and held for affiliates on the Consolidated Balance Sheets. See Reinsurance Note for information on the associated MRBL reinsurance agreement.

Statutory Results


Company	State of Domicile	Statutory Net Income (Loss)				Statutory Capital and Surplus

	(in millions)
		2013		2012		2013		2012

JHUSA	Michigan	$	3,015	$	221	$	5,809	$	5,794
JHNY	New York		466		69		1,284		1,005
JHLH	Massachusetts		82		12		683		665

F-69

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 14 — Shareholder’s Equity - (continued)

Note 15 — Pension and Other Postretirement Benefit Plans

F-70

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 15 — Pension and Other Postretirement Benefit Plans - (continued)

Note 16 — Fair Value Measurements

•

F-71

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 16 — Fair Value Measurements - (continued)

Determination of Fair Value

The following is a description of the valuation techniques used to measure fair value and the general classification of these instruments pursuant to the fair value hierarchy:

•

Assets and Liabilities Measured and Disclosed at Fair Value on a Recurring Basis

Fixed Maturity Securities

Equity Securities

Short-Term Investments

F-72

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 16 — Fair Value Measurements - (continued)

Real Estate Joint Ventures and Other Limited Partnership Interests

Derivatives

Embedded Derivatives

F-73

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 16 — Fair Value Measurements - (continued)

Separate Account Assets and Liabilities

Assets and Liabilities Disclosed at Fair Value on a Recurring Basis

Mortgage Loans on Real Estate

Policy Loans

These loans are carried at unpaid principal balances, which approximate their fair values.

Cash and Cash Equivalents

The carrying values for cash and cash equivalents approximate fair value due to the short-term maturities of these instruments.

F-74

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 16 — Fair Value Measurements - (continued)

Policyholders’ Funds

Debt and Affiliated Debt

Consumer Notes

F-75

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 16 — Fair Value Measurements - (continued)

The table below presents the fair value by fair value hierarchy level for assets and liabilities that are reported at fair value in the Consolidated Balance Sheets:


	December 31, 2013
	Carrying Value		Total Fair Value		Level 1		Level 2		Level 3

	(in millions)
Assets:
Fixed maturity securities available-for-sale (1):
Corporate debt securities (5)	$	39,185	$	39,185	$	-	$	36,272	$	2,913
Commercial mortgage-backed securities		781		781		-		496		285
Residential mortgage-backed securities		167		167		-		4		163
Collateralized debt obligations		53		53		-		5		48
Other asset-backed securities		1,025		1,025		-		1,002		23
U.S. Treasury and agency securities		8,881		8,881		-		8,876		5
Obligations of states and political subdivisions (6)		4,630		4,630		-		4,491		139
Debt securities issued by foreign governments		1,553		1,553		-		1,553		-

Total fixed maturity securities available-for-sale		56,275		56,275		-		52,699		3,576

Fixed maturity securities held-for-trading:
Corporate debt securities (5)		965		965		-		930		35
Commercial mortgage-backed securities		59		59		-		49		10
Residential mortgage-backed securities		1		1		-		-		1
Collateralized debt obligations		-		-		-		-		-
Other asset-backed securities		28		28		-		28		-
U.S. Treasury and agency securities		69		69		-		69		-
Obligations of states and political subdivisions (6)		80		80		-		71		9
Debt securities issued by foreign governments		14		14		-		14		-

Total fixed maturity securities held-for-trading		1,216		1,216		-		1,161		55

Equity securities available-for-sale		191		191		191		-		-
Equity securities held-for-trading		284		284		284		-		-
Short-term investments		2,892		2,892		-		2,892		-
Other invested assets (2)		375		375		-		-		375
Derivative assets (3):
Interest rate swaps		7,290		7,290		-		7,283		7
Interest rate treasury locks		-		-		-		-		-
Interest rate options		21		21		-		-		21
Interest rate futures		-		-		-		-		-
Foreign currency swaps		117		117		-		117		-
Foreign currency forwards		-		-		-		-		-
Foreign currency futures		-		-		-		-		-
Equity total return swaps		36		36		-		-		36
Equity options		248		248		-		26		222
Equity index futures		-		-		-		-		-
Credit default swaps		8		8		-		8		-
Embedded derivatives (4):
Reinsurance contracts		-		-		-		-		-
Benefit guarantees (7)		1,230		1,230		-		-		1,230
Assets held in trust (8)		2,565		2,565		928		1,595		42
Separate account assets		154,258		154,258		146,845		5,194		2,219

Total assets at fair value	$	227,006	$	227,006	$	148,248	$	70,975	$	7,783


Liabilities:
Derivatives liabilities (3):
Interest rate swaps	$	5,113	$	5,113	$	-	$	5,113	$	-
Interest rate treasury locks		385		385		-		-		385
Interest rate options		-		-		-		-		-
Interest rate futures		-		-		-		-		-
Foreign currency swaps		296		296		-		277		19
Foreign currency forwards		1		1		-		1		-
Foreign currency futures		-		-		-		-		-
Equity total return swaps		-		-		-		-		-
Equity options		-		-		-		-		-
Equity index futures		-		-		-		-		-
Credit default swaps		-		-		-		-		-
Embedded derivatives (4):
Reinsurance contracts		2,329		2,329		-		2,329		-
Participating pension contracts		115		115		-		115		-
Benefit guarantees (7)		257		257		-		-		257

F-76

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 16 — Fair Value Measurements - (continued)

Separate account liabilities

154,258

146,845

5,194

2,219

Total liabilities at fair value

162,754

146,845

13,029

2,880

F-77

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 16 — Fair Value Measurements - (continued)


	December 31, 2012
	Carrying Value		Total Fair Value		Level 1		Level 2		Level 3

	(in millions)
Assets:
Fixed maturity securities available-for-sale (1):
Corporate debt securities (5)	$	41,693	$	41,693	$	-	$	38,004	$	3,689
Commercial mortgage-backed securities		1,394		1,394		-		1,166		228
Residential mortgage-backed securities		242		242		-		4		238
Collateralized debt obligations		106		106		-		6		100
Other asset-backed securities		894		894		-		847		47
U.S. Treasury and agency securities		12,095		12,095		-		12,095		-
Obligations of states and political subdivisions (6)		5,394		5,394		-		4,831		563
Debt securities issued by foreign governments		1,467		1,467		-		1,467		-

Total fixed maturity securities available-for-sale		63,285		63,285		-		58,420		4,865

Fixed maturity securities held-for-trading:
Corporate debt securities (5)		997		997		-		955		42
Commercial mortgage-backed securities		145		145		-		134		11
Residential mortgage-backed securities		1		1		-		-		1
Collateralized debt obligations		2		2		-		1		1
Other asset-backed securities		24		24		-		23		1
U.S. Treasury and agency securities		190		190		-		190		-
Obligations of states and political subdivisions (6)		81		81		-		70		11
Debt securities issued by foreign governments		1		1		-		1		-

Total fixed maturity securities held-for-trading		1,441		1,441		-		1,374		67

Equity securities available-for-sale		386		386		386		-		-
Equity securities held-for-trading		252		252		252		-		-
Short-term investments		2,145		2,145		-		2,145		-
Other invested assets (2)		367		367		-		-		367
Derivative assets (3):
Interest rate swaps		11,502		11,502		-		11,484		18
Interest rate treasury locks		-		-		-		-		-
Interest rate options		43		43		-		-		43
Interest rate futures		-		-		-		-		-
Foreign currency swaps		268		268		-		268		-
Foreign currency forwards		10		10		-		10		-
Foreign currency futures		-		-		-		-		-
Equity total return swaps		5		5		-		-		5
Equity options		5		5		-		5		-
Equity index futures		-		-		-		-		-
Credit default swaps		6		6		-		6		-
Embedded derivatives (4):
Reinsurance contracts		14		14		-		14		-
Benefit guarantees (7)		2,701		2,701		-		-		2,701
Assets held in trust (8)		2,487		2,487		886		1,546		55
Separate account assets		140,626		140,626		132,994		5,409		2,223

Total assets at fair value	$	225,543	$	225,543	$	134,518	$	80,681	$	10,344


Liabilities:
Derivatives liabilities (3):
Interest rate swaps	$	4,499	$	4,499	$	-	$	4,498	$	1
Interest rate treasury locks		-		-		-		-		-
Interest rate options		-		-		-		-		-
Interest rate futures		-		-		-		-		-
Foreign currency swaps		562		562		-		517		45
Foreign currency forwards		-		-		-		-		-
Foreign currency futures		-		-		-		-		-
Equity total return swaps		6		6		-		-		6
Equity options		1		1		-		1		-
Equity index futures		-		-		-		-		-
Credit default swaps		-		-		-		-		-
Embedded derivatives (4):
Reinsurance contracts		3,371		3,371		-		3,371		-
Participating pension contracts		129		129		-		129		-
Benefit guarantees (7)		1,217		1,217		-		-		1,217
Separate account liabilities		140,626		140,626		132,994		5,409		2,223

Total liabilities at fair value	$	150,411	$	150,411	$	132,994	$	13,925	$	3,492

F-78

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 16 — Fair Value Measurements - (continued)

(1)	Fixed maturity securities available-for-sale exclude leveraged leases of $1,723 million and $1,711 million at December 31, 2013 and 2012, respectively. The Company calculates the carrying value of its leveraged leases by accruing income at its expected internal rate of return.

(2)	Other invested assets exclude equity method and cost-accounted investments of $5,113 million and $4,488 million at December 31, 2013 and 2012, respectively.

(3)	Derivative assets and liabilities are presented gross to reflect the presentation in the Consolidated Balance Sheets, but are presented net for purposes of the Level 3 rollforward.

(4)

(5)

(6)

(7)

(8)

F-79

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 16 — Fair Value Measurements - (continued)


	December 31, 2013
	Carrying Value		Total Fair Value		Level 1		Level 2		Level 3

	(in millions)
Assets
Mortgage loans on real estate	$	13,412	$	14,535	$	-	$	-	$	14,535
Policy loans		5,405		5,405		-		5,405		-
Cash and cash equivalents		2,541		2,541		2,541		-		-
Affiliated debt		295		295		-		295		-

Total Assets	$	21,653	$	22,776	$	2,541	$	5,700	$	14,535

Liabilities
Consumer notes	$	666	$	685	$	-	$	-	$	685
Debt		521		590		-		590		-
Policyholders’ funds		14,747		14,970		-		1,414		13,556
Affiliated debt		831		831		-		831		-

Total Liabilities	$	16,765	$	17,076	$	-	$	2,835	$	14,241


	December 31, 2012
	Carrying Value		Total Fair Value		Level 1		Level 2		Level 3

	(in millions)
Assets
Mortgage loans on real estate	$	13,192	$	15,065	$	-	$	-	$	15,065
Policy loans		5,264		5,264		-		5,264		-
Cash and cash equivalents		3,446		3,446		3,446		-		-
Affiliated debt		295		295		-		295		-

Total Assets	$	22,197	$	24,070	$	3,446	$	5,559	$	15,065

Liabilities
Consumer notes	$	716	$	757	$	-	$	-	$	757
Debt		534		593		-		593		-
Policyholders’ funds		15,588		15,916		-		1,325		14,591
Affiliated debt		831		831		-		831		-

Total Liabilities	$	17,669	$	18,097	$	-	$	2,749	$	15,348

Transfers of Level 1 and Level 2 Assets and Liabilities

F-80

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 16 — Fair Value Measurements - (continued)

Level 3 Financial Instruments

The changes in Level 3 financial instruments measured at fair value on a recurring basis for the years ended December 31, 2013, 2012 and 2011 are summarized as follows:


	Balance at January 1, 2013		Net realized/unrealized gains (losses) included in:						Purchases		Issuances		Sales			Settlements			Transfers					Balance at December 31, 2013			Change in unrealized gains (losses) included in earnings on instruments still held
	Balance at January 1, 2013		Earnings (1)			AOCI (2)			Purchases		Issuances		Sales			Settlements			Into Level 3 (3)		Out of Level 3 (3)			Balance at December 31, 2013

	(in millions)
Fixed maturity securities available-for-sale:
Corporate debt securities	$	3,689	$	(66	)	$	(249	)	$	984	$	-	$	(41	)	$	(699	)	$	418	$	(1,123	)	$	2,913		$	-
Commercial mortgage-backed securities		228		(20	)		36			85		-		(8	)		(37	)		3		(2	)		285			-
Residential mortgage-backed securities		238		22			27			-		-		(54	)		(70	)		-		-			163			-
Collateralized debt obligations		100		28			4			-		-		(34	)		(50	)		-		-			48			-
Other asset-backed securities		47		8			(6	)		2		-		-			(24	)		-		(4	)		23			-
US Treasury securities and obligations of US govt corporation and agencies (AFS)		-		-			5			-		-		-			-			-		-			5			-
Obligations of states and political subdivisions		563		-			(38	)		153		-		-			(159	)		-		(380	)		139			-

Total fixed maturity securities available-for-sale		4,865		(28	)		(221	)		1,224		-		(137	)		(1,039	)		421		(1,509	)		3,576			-

Fixed maturity securities held-for-trading:
Corporate debt securities		42		(9	)		-			7		-		(5	)		10			-		(10	)		35			(3	)
Commercial mortgage-backed securities		11		2			-			-		-		(3	)		-			-		-			10			2
Residential mortgage-backed securities		1		-			-			-		-		-			-			-		-			1			-
Collateralized debt obligations		1		1			-			-		-		(1	)		(1	)		-		-			-			-
Other asset-backed securities		1		-			-			-		-		-			(1	)		-		-			-			-
Obligations of states and political subdivisions		11		(2	)		-			-		-		-			-			-		-			9			(2	)

Total fixed maturity securities held-for-trading		67		(8	)		-			7		-		(9	)		8			-		(10	)		55			(3	)

Other invested assets		367		20			6			109		-		(36	)		(106	)		51		(36	)		375			(4	)
Net derivatives		14		(452	)		27			287		-		(6	)		-			-		12			(118	)		(175	)
Net embedded derivatives (4)		1,484		(511	)		-			-		-		-			-			-		-			973			(511	)
Assets held in trust		55		3			(9	)		11		-		(7	)		-			-		(11	)		42			-
Separate account assets/ liabilities (5)		2,223		161			-			31		-		(195	)		-			-		(1	)		2,219			1

Total	$	9,075	$	(815	)	$	(197	)	$	1,669	$	-	$	(390	)	$	(1,137	)	$	472	$	(1,555	)	$	7,122		$	(692	)

F-81

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 16 — Fair Value Measurements - (continued)


			Net realized/unrealized gains (losses) included in:																	Transfers							Change in unrealized gains (losses) included in earnings on instruments still held
	Balance at January 1, 2012		Earnings (1)			AOCI (2)			Purchases		Issuances			Sales			Settlements			Into Level 3 (3)		Out of Level 3 (3)			Balance at December 31, 2012

	(in millions)
Fixed maturity securities available-for-sale:
Corporate debt securities	$	4,148	$	78		$	127		$	1,759	$	-		$	(1,478	)	$	(217	)	$	50	$	(778	)	$	3,689	$	-
Commercial mortgage-backed securities		298		(21	)		48			41		-			(23	)		(109	)		1		(7	)		228		-
Residential mortgage-backed securities		361		(47	)		132			85		-			(206	)		(87	)		-		-			238		-
Collateralized debt obligations		114		(29	)		36			8		-			(13	)		(16	)		-		-			100		-
Other asset-backed securities		44		5			8			8		-			(7	)		(11	)		-		-			47		-
Obligations of states and political subdivisions		536		12			3			106		-			(74	)		-			20		(40	)		563		-

Total fixed maturity securities available-for-sale		5,501		(2	)		354			2,007		-			(1,801	)		(440	)		71		(825	)		4,865		-

Fixed maturity securities held-for-trading
Corporate debt securities		52		5			-			9		-			(3	)		(1	)		2		(22	)		42		5
Commercial mortgage-backed securities		11		1			-			-		-			-			-			-		(1	)		11		3
Residential mortgage-backed securities		2		-			-			-		-			-			(1	)		-		-			1		-
Collateralized debt obligations		3		-			-			-		-			-			(2	)		-		-			1		-
Other asset-backed securities		-		1			-			-		-			-			-			-		-			1		-
Obligations of states and political subdivisions		10		1			-			-		-			-			-			-		-			11		1

Total fixed maturity securities held-for-trading		78		8			-			9		-			(3	)		(4	)		2		(23	)		67		9

Other invested assets		425		54			(31	)		111		(16	)		(176	)		-			-		-			367		6
Net derivatives		8		(13	)		5			45		-			7			-			-		(38	)		14		34
Net embedded derivatives (4)		1,745		(256	)		-			-		-			-			-			-		(5	)		1,484		(256	)
Assets held in trust		72		-			-			-		-			-			(2	)		-		(15	)		55		-
Separate account assets/liabilities (5)		2,152		101			-			111		-			(141	)		-			-		-			2,223		-

Total	$	9,981	$	(108	)	$	328		$	2,283	$	(16	)	$	(2,114	)	$	(446	)	$	73	$	(906	)	$	9,075	$	(207	)

F-82

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 16 — Fair Value Measurements - (continued)


	Balance at January 1, 2011		Net realized/unrealized gains (losses) included in:						Purchases		Issuances		Sales			Settlements			Transfers					Balance at December 31, 2011		Change in unrealized gains (losses) included in earnings on instruments still held
	Balance at January 1, 2011		Earnings (1)			AOCI (2)			Purchases		Issuances		Sales			Settlements			Into Level 3 (3)		Out of Level 3 (3)			Balance at December 31, 2011

	(in millions)
Fixed maturity securities available-for-sale:
Corporate debt securities	$	3,301	$	13		$	200		$	872	$	-	$	-		$	(424	)	$	336	$	(150	)	$	4,148	$	-
Commercial mortgage-backed securities		485		(17	)		(11	)		-		-		-			(159	)		-		-			298		-
Residential mortgage-backed securities		450		1			17			-		-		-			(107	)		-		-			361		-
Collateralized debt obligations		103		(6	)		29			-		-		-			(12	)		-		-			114		-
Other asset-backed securities		79		(7	)		1			-		-		-			(25	)		16		(20	)		44		-
Obligations of states and political subdivisions		408		-			55			87		-		-			-			-		(14	)		536		-

Total fixed maturity securities available-for-sale		4,826		(16	)		291			959		-		-			(727	)		352		(184	)		5,501		-

Fixed maturity securities held-for-trading
Corporate debt securities		36		14			-			23		-		-			(3	)		-		(18	)		52		14
Commercial mortgage-backed securities		15		(1	)		-			-		-		-			(3	)		-		-			11		(1	)
Residential mortgage-backed securities		3		-			-			-		-		-			(1	)		-		-			2		-
Collateralized debt obligations		3		-			-			-		-		-			-			-		-			3		-
Other asset-backed securities		1		-			-			-		-		-			-			-		(1	)		-		-
Obligations of states and political subdivisions		-		1			-			9		-		-			-			-		-			10		1

Total fixed maturity securities held-for-trading		58		14			-			32		-		-			(7	)		-		(19	)		78		14

Other invested assets		230		20			(3	)		75		-		(6	)		(50	)		159		-			425		22
Net derivatives		19		1			19			13		-		-			-			-		(44	)		8		2
Net embedded derivatives (4)		967		778			-			-		-		-			-			-		-			1,745		778
Assets held in trust		61		-			12			-		-		-			(1	)		-		-			72		12
Separate account assets/ liabilities (5)		2,075		(14	)		53			67		-		-			(29	)		-		-			2,152		60

Total	$	8,236	$	783		$	372		$	1,146	$	-	$	(6	)	$	(814	)	$	511	$	(247	)	$	9,981	$	888

F-83

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 16 — Fair Value Measurements - (continued)

1)	This amount is included in net realized investment and other gains (losses) on the Consolidated Statements of Operations.

2)	This amount is included in net unrealized investment gains (losses) within AOCI on the Consolidated Balance Sheets.

3)	For financial assets that are transferred into and/or out of Level 3, the Company uses the fair value of the assets at the beginning of the reporting period.

4)	The earnings amount is included in benefits to policyholders on the Consolidated Statements of Operations.

5)	Investment performance related to separate account assets is fully offset by corresponding amounts credited to contract holders whose liability is reflected within separate account liabilities.

Assets Measured at Fair Value on a Nonrecurring Basis

Note 17 — Segment Information

F-84

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 17 — Segment Information - (continued)


	Insurance			Wealth Management			Corporate and Other			Total

	(in millions)
2013
Revenues from external customers	$	5,034		$	2,185		$	177		$	7,396
Net investment income		3,104			1,477			461			5,042
Net realized investment and other gains (losses)		(1,043	)		(2,847	)		(388	)		(4,278	)
Inter-segment		-			-			-			-

Revenues	$	7,095		$	815		$	250		$	8,160


Net income (loss)	$	200		$	967		$	338		$	1,505

Supplemental Information:
Equity in net income (loss) of investees accounted for under the equity method	$	258		$	91		$	(9	)	$	340
Carrying value of investments under the equity method		3,976			855			243			5,074
Amortization of deferred policy acquisition costs, deferred sales inducements, and value of business acquired		(205	)		(94	)		1			(298	)
Goodwill impairment		-			-			-			-
Interest expense		-			-			38			38
Income tax expense (benefit)		79			273			469			821
Segment assets		101,993			170,106			24,430			296,529

F-85

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 17 — Segment Information - (continued)


	Insurance			Wealth Management			Corporate and Other			Total

	(in millions)
2012
Revenues from external customers	$	5,118		$	2,253		$	295		$	7,666
Net investment income		2,956			1,641			(38	)		4,559
Net realized investment and other gains (losses)		(269	)		(1,606	)		(293	)		(2,168	)
Inter-segment		-			-			-			-

Revenues	$	7,805		$	2,288		$	(36	)	$	10,057


Net income (loss)	$	(220	)	$	94		$	(7	)	$	(133	)

Supplemental Information:
Equity in net income (loss) of investees accounted for under the equity method	$	208		$	28		$	(18	)	$	218
Carrying value of investments under the equity method		3,259			912			287			4,458
Amortization of deferred policy acquisition costs, deferred sales inducements, and value of business acquired		1,001			384			-			1,385
Goodwill impairment		-			-			-			-
Interest expense		-			-			41			41
Income tax expense (benefit)		(174	)		(381	)		(78	)		(633	)
Segment assets		101,334			163,135			25,905			290,374

	Insurance			Wealth Management			Corporate and Other			Total

	(in millions)
2011
Revenues from external customers	$	6,288		$	2,166		$	383		$	8,837
Net investment income		2,831			1,824			334			4,989
Net realized investment and other gains (losses)		1,108			2,004			23			3,135
Inter-segment revenues		-			-			-			-

Revenues	$	10,227		$	5,994		$	740		$	16,961


Net income (loss)	$	30		$	(200	)	$	(641	)	$	(811	)

Supplemental Information:
Equity in net income (loss) of investees accounted for under the equity method	$	178		$	46		$	(2	)	$	222
Amortization of deferred policy acquisition costs, deferred sales inducements, and value of business acquired		1,673			1,167			1			2,841
Goodwill impairment		-			-			500			500
Interest expense		-			-			47			47
Income tax expense (benefit)		(19	)		(246	)		(67	)		(332	)

The Company operates primarily in the United States and has no reportable major customers.

Note 18 — Subsequent Events

F-86

John Hancock Variable Life Account U of John Hancock Life Insurance Company (U.S.A.)

Audited Financial Statements

Year ended December 31, 2013 with Report of Independent Registered Public Accounting Firm

John Hancock Variable Life Account U of John Hancock Life Insurance Company (U.S.A.)

Audited Financial Statements

Year ended December 31, 2013

Contents


Report of Independent Registered Public Accounting Firm			5
Statements of Assets and Contract Owners’ Equity			7
Statements of Operations and Changes in Contract Owners’ Equity			10
Notes to Financial Statements			42
Organization			42
Significant Accounting Policies			43
Mortality and Expense Risks Charges			44
Policy Loans			44
Federal Income Taxes			45
Contract Charges			45
Purchases and Sales of Investments			45
Transaction with Affiliates			47
Diversification Requirements			48
Subsequent Events			48
Financial Highlights			49

Report of Independent Registered Public Accounting Firm

Board of Directors of the John Hancock Life Insurance Company (U.S.A.) and Contract Owners of John Hancock Life Insurance Company (U.S.A.) Separate Account U


“Active” sub-accounts

500 Index Trust B		Investment Quality Bond Trust
Active Bond Trust		Lifestyle Aggressive Trust
All Cap Core Trust		Lifestyle Balanced Trust
Alpha Opportunities Trust		Lifestyle Conservative Trust
American Asset Allocation Trust Series 1		Lifestyle Growth Trust
American Global Growth Trust Series 1		Lifestyle Moderate Trust
American Growth Trust Series 1		Mid Cap Index Trust
American Growth-Income Trust Series 1		Mid Cap Stock Trust
American International Trust Series 1		Mid Value Trust
American New World Trust Series 1		Money Market Trust B
Blue Chip Growth Trust		Natural Resources Trust
Bond Trust		Real Estate Securities Trust
Capital Appreciation Trust		Real Return Bond Trust
Capital Appreciation Value Trust		Science & Technology Trust
Core Bond Trust		Short Term Government Income Trust
Core Strategy Trust		Small Cap Growth Trust
Emerging Markets Value Trust		Small Cap Index Trust
Equity-Income Trust		Small Cap Opportunities Trust
Financial Services Trust		Small Cap Value Trust
Franklin Templeton Founding Allocation Trust		Small Company Value Trust
Fundamental All Cap Core Trust		Strategic Income Opportunities Trust
Fundamental Large Cap Value Trust		Total Bond Market Trust B
Fundamental Value Trust		Total Return Trust
Global Bond Trust		Total Stock Market Index Trust
Global Trust		Ultra Short Term Bond Trust
Health Sciences Trust		U.S. Equity Trust
High Yield Trust		Utilities Trust
International Core Trust		Value Trust
International Equity Index Trust B		All Asset Portfolio
International Growth Stock Trust		Brandes International Equity
International Small Company Trust		Frontier Capital Appreciation
International Value Trust		Large Cap Growth

Report of Independent Registered Public Accounting Firm


“Closed” sub-accounts

All Cap Value Trust		Disciplined Diversification Trust
American Global Small Capitalization Trust Series 1		Fundamental Holdings Trust Series 1
American High-Income Bond Trust Series 1		Global Diversification Trust Series 1
Core Allocation Plus Trust		Smaller Company Growth Trust

/s/ ERNST & YOUNG LLP

Chartered Accountants

Licensed Public Accountants

Toronto, Canada

March 28, 2014

John Hancock Variable Life Account U

Statements of Assets and Contract Owners’ Equity

December 31, 2013


Assets
Investments at fair value:
Sub-accounts invested in John Hancock Variable Insurance Trust portfolios:
500 Index Trust B - 3,331,601 shares (cost $51,638,789)	$	77,726,253
Active Bond Trust - 26,124,839 shares (cost $247,073,722)		250,798,450
All Cap Core Trust - 3,909 shares (cost $65,626)		98,345
All Cap Value Trust		—
Alpha Opportunities Trust - 9,957 shares (cost $162,377)		161,497
American Asset Allocation Trust Series 1 - 90,008 shares (cost $1,082,030)		1,369,924
American Global Growth Trust Series 1 - 3,528 shares (cost $50,482)		55,315
American Global Small Capitalization Trust Series 1		—
American Growth Trust Series 1 - 96,208 shares (cost $1,373,403)		2,158,904
American Growth-Income Trust Series 1 - 62,468 shares (cost $989,978)		1,371,800
American High-Income Bond Trust Series 1		—
American International Trust Series 1 - 68,065 shares (cost $1,044,421)		1,308,898
American New World Trust Series 1 - 34,026 shares (cost $437,889)		506,640
Blue Chip Growth Trust - 3,692,161 shares (cost $64,420,820)		126,271,915
Bond Trust - 2,648 shares (cost $36,689)		35,191
Capital Appreciation Trust - 1,542,497 shares (cost $14,347,754)		24,356,033
Capital Appreciation Value Trust - 28,466 shares (cost $374,442)		370,053
Core Allocation Plus Trust		—
Core Bond Trust - 10,970 shares (cost $152,204)		140,420
Core Strategy Trust - 51,478 shares (cost $737,067)		745,917
Disciplined Diversification Trust		—
Emerging Markets Value Trust - 181,440 shares (cost $2,079,194)		1,796,251
Equity-Income Trust - 2,330,927 shares (cost $34,815,890)		46,059,108
Financial Services Trust - 101,990 shares (cost $1,117,199)		1,614,509
Franklin Templeton Founding Allocation Trust - 3,492 shares (cost $30,741)		45,536
Fundamental All Cap Core Trust - 33,384,205 shares (cost $459,159,111)		690,385,359
Fundamental Holdings Trust Series 1		—
Fundamental Large Cap Value Trust - 28,120 shares (cost $404,376)		448,226
Fundamental Value Trust - 30,088 shares (cost $390,064)		606,580
Global Bond Trust - 639,110 shares (cost $8,008,313)		7,880,232
Global Diversification Trust Series 1		—
Global Trust - 12,645 shares (cost $212,656)		258,849
Health Sciences Trust - 167,256 shares (cost $2,859,607)		4,910,636
High Yield Trust - 1,149,043 shares (cost $7,277,917)		6,940,220
International Core Trust - 42,608 shares (cost $396,637)		497,240
International Equity Index Trust B - 2,235,611 shares (cost $36,715,296)		38,296,009
International Growth Stock Trust - 22,334 shares (cost $312,991)		376,549
International Small Company Trust - 30,620 shares (cost $297,120)		385,809
International Value Trust - 868,288 shares (cost $9,918,894)		12,746,465
Investment Quality Bond Trust - 67,528 shares (cost $771,512)		767,794
Lifestyle Aggressive Trust - 522,702 shares (cost $4,282,737)		5,702,674
Lifestyle Balanced Trust - 23,402,445 shares (cost $227,722,656)		321,081,544
Lifestyle Conservative Trust - 56,120 shares (cost $735,036)		707,678
Lifestyle Growth Trust - 2,671,248 shares (cost $30,407,339)		38,038,570
Lifestyle Moderate Trust - 365,266 shares (cost $4,389,987)		5,000,487

John Hancock Variable Life Account U

Statements of Assets and Contract Owners’ Equity

December 31, 2013


Assets (continued)
Investments at fair value:
Sub-accounts invested in John Hancock Variable Insurance Trust portfolios:
Mid Cap Index Trust - 78,363 shares (cost $1,328,283)	$	1,709,889
Mid Cap Stock Trust - 1,222,085 shares (cost $17,368,864)		25,895,976
Mid Value Trust - 919,952 shares (cost $9,477,753)		12,824,131
Money Market Trust B - 53,447,561 shares (cost $53,447,561)		53,447,561
Natural Resources Trust - 99,624 shares (cost $1,067,373)		1,012,183
Real Estate Securities Trust - 2,217,281 shares (cost $22,721,757)		30,509,784
Real Return Bond Trust - 46,276 shares (cost $577,049)		538,652
Science & Technology Trust - 57,950 shares (cost $954,449)		1,440,045
Short Term Government Income Trust - 424,546 shares (cost $5,492,421)		5,306,821
Small Cap Growth Trust - 2,169,024 shares (cost $20,483,909)		27,958,715
Small Cap Index Trust - 126,669 shares (cost $1,573,250)		2,006,442
Small Cap Opportunities Trust - 9,206 shares (cost $237,170)		282,619
Small Cap Value Trust - 453,896 shares (cost $7,921,292)		11,819,442
Small Company Value Trust - 21,582 shares (cost $355,096)		544,290
Smaller Company Growth Trust		—
Strategic Income Opportunities Trust - 88,915 shares (cost $1,208,184)		1,168,341
Total Bond Market Trust B - 1,800,431 shares (cost $18,257,954)		18,166,347
Total Return Trust - 206,717 shares (cost $2,945,366)		2,801,019
Total Stock Market Index Trust - 559,707 shares (cost $6,289,988)		9,559,793
Ultra Short Term Bond Trust - 17,783 shares (cost $217,232)		213,043
U.S. Equity Trust - 13,742 shares (cost $195,597)		243,505
Utilities Trust - 63,336 shares (cost $780,232)		976,639
Value Trust - 27,540 shares (cost $476,079)		713,826

Sub-accounts invested in Outside Trust portfolios:
All Asset Portfolio - 48,234 shares (cost $537,384)	$	532,505
Brandes International Equity - 76,622 shares (cost $1,119,156)		1,007,583
Frontier Capital Appreciation - 38,587 shares (cost $909,058)		1,146,435
Large Cap Growth - 18,625 shares (cost $322,510)		460,775

	$	1,884,308,241

Policy Loans:
Active Bond Trust	$	52,337,349
Blue Chip Growth Trust		17,400,485
Fundamental All Cap Core Trust		142,897,974
International Equity Index Trust B		3,624,153
Lifestyle Balanced Trust		55,850,933
Money Market Trust B		14,678,337
Real Estate Securities Trust		4,301,928

	$	291,091,159

Total assets	$	2,175,399,400

Contract Owners’ Equity
Variable universal life insurance contracts	$	2,175,399,400

See accompanying notes.

This page intentionally left blank.

John Hancock Variable Life Account U

Statements of Operations and Changes in Contract Owners’ Equity


	Sub-Account
	500 Index Trust B						Active Bond Trust
	Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12
Income:
Dividend income distribution	$	1,284,338		$	610,997		$	14,835,555		$	11,082,024
Interest on policy loans		—			—			3,300,771			3,563,441

Total investment income		1,284,338			610,997			18,136,326			14,645,465
Expenses:
Mortality and expense risk		107,951			82,059			1,043,487			1,090,215

Net investment income (loss)		1,176,387			528,938			17,092,839			13,555,250

Realized gains (losses) on investments:
Capital gain distributions		145,426			—			—			1,797,247
Net realized gains (losses)		1,718,546			1,580,563			1,138,754			1,408,362

Realized gains (losses)		1,863,972			1,580,563			1,138,754			3,205,609
Unrealized appreciation (depreciation) during the period		16,025,087			7,055,311			(15,455,243	)		10,306,775

Net increase (decrease) in assets from operations		19,065,446			9,164,812			2,776,350			27,067,634

Changes from principal transactions:
Transfer of net premiums		3,496,391			4,147,718			9,313,095			9,672,159
Transfer on terminations		(6,705,696	)		(11,028,978	)		(29,447,266	)		(31,579,291	)
Transfer on general account policy loans		(426,057	)		(678,966	)		7,025,034			6,722,822
Net interfund transfers		1,539,473			(920,618	)		(3,314,300	)		877,420
Net change in separate account policy loans		—			—			(7,162,478	)		(6,994,717	)

Net increase (decrease) in assets from principal transactions		(2,095,889	)		(8,480,844	)		(23,585,915	)		(21,301,607	)

Total increase (decrease) in assets		16,969,557			683,968			(20,809,565	)		5,766,027

Assets, beginning of period		60,756,696			60,072,728			323,945,364			318,179,337

Assets, end of period	$	77,726,253		$	60,756,696		$	303,135,799		$	323,945,364

(aa)	Terminated as an investment option and funds transferred to Fundamental Large Cap Value Trust on December 9, 2013.

See accompanying notes.


Sub-Account
All Asset Portfolio						All Cap Core Trust						All Cap Value Trust
Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13 (aa)			Year Ended Dec. 31/12

$	25,345		$	33,573		$	1,188		$	815		$	2,939		$	1,173
	—			—			—			—			—			—

	25,345			33,573			1,188			815			2,939			1,173

	—			—			—			—			—			—

	25,345			33,573			1,188			815			2,939			1,173


	—			—			—			—			116,865			5,199
	(6,272	)		1,890			1,616			910			(74,628	)		3,688

	(6,272	)		1,890			1,616			910			42,237			8,887
	(23,920	)		60,781			22,709			8,486			(519	)		1,380

	(4,847	)		96,244			25,513			10,211			44,657			11,440


	31,560			40,169			6,670			7,006			15,501			12,007
	(82,480	)		(62,963	)		(5,841	)		(3,407	)		(24,939	)		(23,770	)
	(69	)		52,423			(122	)		10			1,160			(119	)
	(246,301	)		84,161			245			(54	)		(167,286	)		9,073
	—			—			—			—			—			—

	(297,290	)		113,790			952			3,555			(175,564	)		(2,809	)

	(302,137	)		210,034			26,465			13,766			(130,907	)		8,631

	834,642			624,608			71,880			58,114			130,907			122,276

$	532,505		$	834,642		$	98,345		$	71,880			—		$	130,907

John Hancock Variable Life Account U

Statements of Operations and Changes in Contract Owners’ Equity

(continued)


	Sub-Account
	Alpha Opportunities Trust						American Asset Allocation Trust Series 1
	Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12
Income:
Dividend income distribution	$	1,209		$	206		$	13,775		$	11,262
Interest on policy loans		—			—			—			—

Total investment income		1,209			206			13,775			11,262
Expenses:
Mortality and expense risk		—			—			—			—

Net investment income (loss)		1,209			206			13,775			11,262

Realized gains (losses) on investments:
Capital gain distributions		14,956			1,894			—			—
Net realized gains (losses)		6,832			(660	)		17,711			10,072

Realized gains (losses)		21,788			1,234			17,711			10,072
Unrealized appreciation (depreciation) during the period		78			3,932			177,086			59,435

Net increase (decrease) in assets from operations		23,075			5,372			208,572			80,769

Changes from principal transactions:
Transfer of net premiums		5,981			3,966			33,333			2,452
Transfer on terminations		(16,783	)		(5,056	)		(32,987	)		(37,078	)
Transfer on general account policy loans		(225	)		(166	)		—			—
Net interfund transfers		111,662			8,815			424,960			237,293
Net change in separate account policy loans		—			—			—			—

Net increase (decrease) in assets from principal transactions		100,635			7,559			425,306			202,667

Total increase (decrease) in assets		123,710			12,931			633,878			283,436

Assets, beginning of period		37,787			24,856			736,046			452,610

Assets, end of period	$	161,497		$	37,787		$	1,369,924		$	736,046

(t)	Terminated as an investment option and funds transferred to American Growth-Income Trust Series 1 on November 5, 2012.

(w)	Terminated as an investment option and funds transferred to American Global Growth Trust Series 1 on April 29, 2013.

See accompanying notes.


Sub-Account
American Blue Chip Income and Growth Trust Series 1				American Global Growth Trust Series 1						American Global Small Capitalization Trust Series 1
	Year Ended Dec. 31/12 (t)			Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13 (w)			Year Ended Dec. 31/12

		—		$	448		$	73		$	3		$	67
		—			—			—			—			—

		—			448			73			3			67

		—			—			—			—			—

		—			448			73			3			67


		48,494			—			—			—			—
		(11,990	)		275			(45	)		715			(24	)

		36,504			275			(45	)		715			(24	)
		(444	)		4,382			2,893			(94	)		238

		36,060			5,105			2,921			624			281


		13,024			213			213			130			750
		(21,878	)		(1,957	)		(563	)		(105	)		(224	)
		(25	)		—			—			(54	)		(40	)
		(323,728	)		36,045			(1	)		(8,481	)		6,432
		—			—			—			—			—

		(332,607	)		34,301			(351	)		(8,510	)		6,918

		(296,547	)		39,406			2,570			(7,886	)		7,199

		296,547			15,909			13,339			7,886			687

		—		$	55,315		$	15,909			—		$	7,886

John Hancock Variable Life Account U

Statements of Operations and Changes in Contract Owners’ Equity

(continued)


	Sub-Account
	American Growth Trust Series 1						American Growth-Income Trust Series 1
	Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12
Income:
Dividend income distribution	$	10,598		$	7,923		$	12,325		$	11,869
Interest on policy loans		—			—			—			—

Total investment income		10,598			7,923			12,325			11,869
Expenses:
Mortality and expense risk		—			—			—			—

Net investment income (loss)		10,598			7,923			12,325			11,869

Realized gains (losses) on investments:
Capital gain distributions		—			—			—			—
Net realized gains (losses)		169,118			136,456			20,759			21,521

Realized gains (losses)		169,118			136,456			20,759			21,521
Unrealized appreciation (depreciation) during the period		366,200			184,420			292,687			69,447

Net increase (decrease) in assets from operations		545,916			328,799			325,771			102,837

Changes from principal transactions:
Transfer of net premiums		133,787			166,654			70,839			49,656
Transfer on terminations		(241,424	)		(221,971	)		(106,877	)		(105,838	)
Transfer on general account policy loans		(4,530	)		(1,035	)		(2,354	)		(2,457	)
Net interfund transfers		(256,112	)		(295,041	)		127,403			367,773
Net change in separate account policy loans		—			—			—			—

Net increase (decrease) in assets from principal transactions		(368,279	)		(351,393	)		89,011			309,134

Total increase (decrease) in assets		177,637			(22,594	)		414,782			411,971

Assets, beginning of period		1,981,267			2,003,861			957,018			545,047

Assets, end of period	$	2,158,904		$	1,981,267		$	1,371,800		$	957,018

(x)	Terminated as an investment option and funds transferred to High Yield Trust on April 29, 2013.

See accompanying notes.


Sub-Account
American High-Income Bond Trust Series 1						American International Trust Series 1						American New World Trust Series 1
Year Ended Dec. 31/13 (x)			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12

$	150		$	12,232		$	11,656		$	10,953		$	4,554		$	2,409
	—			—			—			—			—			—

	150			12,232			11,656			10,953			4,554			2,409

	—			—			—			—			—			—

	150			12,232			11,656			10,953			4,554			2,409


	4,681			—			—			—			—			—
	(6,366	)		(877	)		23,569			(14,054	)		8,161			(2,032	)

	(1,685	)		(877	)		23,569			(14,054	)		8,161			(2,032	)
	7,183			(3,551	)		197,199			167,519			37,928			63,711

	5,648			7,804			232,424			164,418			50,643			64,088


	868			2,216			70,019			66,997			22,975			20,670
	(1,572	)		(30,998	)		(116,994	)		(109,264	)		(32,903	)		(25,919	)
	—			—			(6,972	)		(7,976	)		(1,509	)		(1,977	)
	(197,608	)		168,508			75,396			(29,484	)		33,165			(3,341	)
	—			—			—			—			—			—

	(198,312	)		139,726			21,449			(79,727	)		21,728			(10,567	)

	(192,664	)		147,530			253,873			84,691			72,371			53,521

	192,664			45,134			1,055,025			970,334			434,269			380,748

	—		$	192,664		$	1,308,898		$	1,055,025		$	506,640		$	434,269

John Hancock Variable Life Account U

Statements of Operations and Changes in Contract Owners’ Equity

(continued)


	Sub-Account
	Balanced Trust				Blue Chip Growth Trust
		Year Ended Dec. 31/12 (n)			Year Ended Dec. 31/13			Year Ended Dec. 31/12
Income:
Dividend income distribution		$	1,222		$	339,146		$	129,699
Interest on policy loans			—			1,046,972			1,031,752

Total investment income			1,222			1,386,118			1,161,451
Expenses:
Mortality and expense risk			—			617,770			563,918

Net investment income (loss)			1,222			768,348			597,533

Realized gains (losses) on investments:
Capital gain distributions			27,904			—			—
Net realized gains (losses)			(20,895	)		4,748,559			3,386,177

Realized gains (losses)			7,009			4,748,559			3,386,177
Unrealized appreciation (depreciation) during the period			(1,330	)		32,998,739			12,437,083

Net increase (decrease) in assets from operations			6,901			38,515,646			16,420,793

Changes from principal transactions:
Transfer of net premiums			61			4,798,468			5,110,258
Transfer on terminations			(2,022	)		(11,401,155	)		(13,153,713	)
Transfer on general account policy loans			—			207,484			667,167
Net interfund transfers			(85,864	)		(1,718,066	)		524,253
Net change in separate account policy loans			—			(527,953	)		(1,365,222	)

Net increase (decrease) in assets from principal transactions			(87,825	)		(8,641,222	)		(8,217,257	)

Total increase (decrease) in assets			(80,924	)		29,874,424			8,203,536

Assets, beginning of period			80,924			113,797,976			105,594,440

Assets, end of period			—		$	143,672,400		$	113,797,976

(n)	Terminated as an investment option and funds transferred to Lifestyle Growth Trust on April 30, 2012.

See accompanying notes.


Sub-Account
Bond Trust						Brandes International Equity						Capital Appreciation Trust
Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12

$	1,492		$	1,439		$	22,545		$	16,826		$	53,874		$	38,131
	—			—			—			—			—			—

	1,492			1,439			22,545			16,826			53,874			38,131

	—			—			5,365			4,584			85,332			70,784

	1,492			1,439			17,180			12,242			(31,458	)		(32,653	)


	374			346			—			—			—			—
	(648	)		39			(15,646	)		(49,028	)		738,285			598,207

	(274	)		385			(15,646	)		(49,028	)		738,285			598,207
	(1,878	)		1,188			133,943			175,388			5,987,667			2,081,226

	(660	)		3,012			135,477			138,602			6,694,494			2,646,780


	8,074			7,175			15,244			18,360			1,404,346			1,514,253
	(19,011	)		(4,091	)		(20,030	)		(20,541	)		(2,351,903	)		(3,044,511	)
	(19	)		135			11,760			3,155			(222,800	)		(114,644	)
	(6,129	)		1			(808	)		32,545			879,317			(137,035	)
	—			—			—			—			—			—

	(17,085	)		3,220			6,166			33,519			(291,040	)		(1,781,937	)

	(17,745	)		6,232			141,643			172,121			6,403,454			864,843

	52,936			46,704			865,940			693,819			17,952,579			17,087,736

$	35,191		$	52,936		$	1,007,583		$	865,940		$	24,356,033		$	17,952,579

John Hancock Variable Life Account U

Statements of Operations and Changes in Contract Owners’ Equity

(continued)


	Sub-Account
	Capital Appreciation Value Trust						Core Allocation Plus Trust
	Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13 (ac)			Year Ended Dec. 31/12
Income:
Dividend income distribution	$	4,495		$	769		$	1,158		$	473
Interest on policy loans		—			—			—			—

Total investment income		4,495			769			1,158			473
Expenses:
Mortality and expense risk		—			—			—			—

Net investment income (loss)		4,495			769			1,158			473

Realized gains (losses) on investments:
Capital gain distributions		29,258			4,840			11,995			2,013
Net realized gains (losses)		11,342			240			(3,574	)		139

Realized gains (losses)		40,600			5,080			8,421			2,152
Unrealized appreciation (depreciation) during the period		(5,342	)		340			(2,842	)		1,525

Net increase (decrease) in assets from operations		39,753			6,189			6,737			4,150

Changes from principal transactions:
Transfer of net premiums		6,438			4,906			431			460
Transfer on terminations		(25,295	)		(3,339	)		(1,534	)		(1,540	)
Transfer on general account policy loans		(4	)		4			—			—
Net interfund transfers		281,697			25,608			(39,818	)		1
Net change in separate account policy loans		—			—			—			—

Net increase (decrease) in assets from principal transactions		262,836			27,179			(40,921	)		(1,079	)

Total increase (decrease) in assets		302,589			33,368			(34,184	)		3,071

Assets, beginning of period		67,464			34,096			34,184			31,113

Assets, end of period	$	370,053		$	67,464			—		$	34,184

(ac)	Terminated as an investment option and funds transferred to Core Strategy Trust on December 9, 2013.

See accompanying notes.


Sub-Account
Core Bond Trust						Core Strategy Trust						Disciplined Diversification Trust
Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13 (ac)			Year Ended Dec. 31/12

$	3,096		$	2,640		$	4,654		$	61		$	14,699		$	8,409
	—			—			—			—			—			—

	3,096			2,640			4,654			61			14,699			8,409

	—			—			—			—			—			—

	3,096			2,640			4,654			61			14,699			8,409


	5,288			2,484			265			—			169,239			4,542
	349			495			(152	)		2			(94,828	)		4,136

	5,637			2,979			113			2			74,411			8,678
	(11,458	)		(1,901	)		8,783			185			(35,352	)		23,251

	(2,725	)		3,718			13,550			248			53,758			40,338


	9,254			4,587			6,593			455			49,334			53,742
	(4,975	)		(4,733	)		(5,369	)		(404	)		(46,888	)		(44,741	)
	(58	)		(47	)		—			—			(184	)		(2,075	)
	41,897			50,000			728,906			(1	)		(415,105	)		19
	—			—			—			—			—			—

	46,118			49,807			730,130			50			(412,843	)		6,945

	43,393			53,525			743,680			298			(359,085	)		47,283

	97,027			43,502			2,237			1,939			359,085			311,802

$	140,420		$	97,027		$	745,917		$	2,237			—		$	359,085

John Hancock Variable Life Account U

Statements of Operations and Changes in Contract Owners’ Equity

(continued)


	Sub-Account
	Emerging Markets Value Trust						Equity-Income Trust
	Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12
Income:
Dividend income distribution	$	24,624		$	17,044		$	839,585		$	821,197
Interest on policy loans		—			—			—			—

Total investment income		24,624			17,044			839,585			821,197
Expenses:
Mortality and expense risk		4,983			3,031			119,767			106,424

Net investment income (loss)		19,641			14,013			719,818			714,773

Realized gains (losses) on investments:
Capital gain distributions		62,175			102,351			—			—
Net realized gains (losses)		(182,866	)		(63,559	)		414,514			(325,669	)

Realized gains (losses)		(120,691	)		38,792			414,514			(325,669	)
Unrealized appreciation (depreciation) during the period		28,786			188,365			9,999,644			5,712,959

Net increase (decrease) in assets from operations		(72,264	)		241,170			11,133,976			6,102,063

Changes from principal transactions:
Transfer of net premiums		114,783			144,329			2,389,926			2,593,684
Transfer on terminations		(118,857	)		(153,907	)		(4,979,017	)		(5,021,069	)
Transfer on general account policy loans		(19,898	)		(5,802	)		(474,326	)		(437,580	)
Net interfund transfers		268,837			78,551			(1,504,908	)		(329,040	)
Net change in separate account policy loans		—			—			—			—

Net increase (decrease) in assets from principal transactions		244,865			63,171			(4,568,325	)		(3,194,005	)

Total increase (decrease) in assets		172,601			304,341			6,565,651			2,908,058

Assets, beginning of period		1,623,650			1,319,309			39,493,457			36,585,399

Assets, end of period	$	1,796,251		$	1,623,650		$	46,059,108		$	39,493,457

See accompanying notes.


Sub-Account
Financial Services Trust						Franklin Templeton Founding Allocation Trust						Frontier Capital Appreciation
Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12

$	10,171		$	10,152		$	1,044		$	1,275			—		$	2,658
	—			—			—			—			—			—

	10,171			10,152			1,044			1,275			—			2,658

	—			—			—			—			5,729			4,470

	10,171			10,152			1,044			1,275			(5,729	)		(1,812	)


	15,681			—			—			—			97,818			53,580
	60,126			(2,115	)		1,514			322			6,126			(322	)

	75,807			(2,115	)		1,514			322			103,944			53,258
	302,406			175,182			6,938			4,462			222,894			66,301

	388,384			183,219			9,496			6,059			321,109			117,747


	103,075			117,822			210			553			15,734			16,247
	(193,857	)		(119,570	)		(3,631	)		(1,651	)		(53,704	)		(39,049	)
	(29,728	)		(18,217	)		—			—			10,585			1,313
	114,935			67,032			(3,144	)		28			(2,013	)		53,695
	—			—			—			—			—			—

	(5,575	)		47,067			(6,565	)		(1,070	)		(29,398	)		32,206

	382,809			230,286			2,931			4,989			291,711			149,953

	1,231,700			1,001,414			42,605			37,616			854,724			704,771

$	1,614,509		$	1,231,700		$	45,536		$	42,605		$	1,146,435		$	854,724

John Hancock Variable Life Account U

Statements of Operations and Changes in Contract Owners’ Equity

(continued)


	Sub-Account
	Fundamental All Cap Core Trust						Fundamental Holdings Trust Series 1
	Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13 (ac)			Year Ended Dec. 31/12
Income:
Dividend income distribution	$	6,055,220		$	4,181,922		$	452		$	286
Interest on policy loans		8,749,675			9,193,484			—			—

Total investment income		14,804,895			13,375,406			452			286
Expenses:
Mortality and expense risk		2,499,237			2,301,704			—			—

Net investment income (loss)		12,305,658			11,073,702			452			286

Realized gains (losses) on investments:
Capital gain distributions		—			—			8,663			—
Net realized gains (losses)		9,013,013			(1,580,654	)		(5,200	)		91

Realized gains (losses)		9,013,013			(1,580,654	)		3,463			91
Unrealized appreciation (depreciation) during the period		173,401,760			106,261,734			(1,304	)		1,005

Net increase (decrease) in assets from operations		194,720,431			115,754,782			2,611			1,382

Changes from principal transactions:
Transfer of net premiums		23,484,357			24,541,702			9,114			9,110
Transfer on terminations		(74,982,658	)		(72,116,703	)		(1,175	)		(1,015	)
Transfer on general account policy loans		11,200,580			13,984,084			—			—
Net interfund transfers		(2,351,832	)		(2,420,884	)		(27,415	)		—
Net change in separate account policy loans		(12,024,132	)		(14,922,281	)		—			—

Net increase (decrease) in assets from principal transactions		(54,673,685	)		(50,934,082	)		(19,476	)		8,095

Total increase (decrease) in assets		140,046,746			64,820,700			(16,865	)		9,477

Assets, beginning of period		693,236,587			628,415,887			16,865			7,388

Assets, end of period	$	833,283,333		$	693,236,587			—		$	16,865

(ac)	Terminated as an investment option and funds transferred to Core Strategy Trust on December 9, 2013.

See accompanying notes.


Sub-Account
Fundamental Large Cap Value Trust						Fundamental Value Trust						Global Bond Trust
Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12

$	2,468		$	1,087		$	8,273		$	5,113		$	41,328		$	605,098
	—			—			—			—			—			—

	2,468			1,087			8,273			5,113			41,328			605,098

	—			—			—			—			22,175			25,173

	2,468			1,087			8,273			5,113			19,153			579,925


	—			—			—			—			—			—
	11,163			1,302			76,976			20,874			140,393			(29,564	)

	11,163			1,302			76,976			20,874			140,393			(29,564	)
	32,938			10,423			87,278			38,370			(651,794	)		885

	46,569			12,812			172,527			64,357			(492,248	)		551,246


	15,772			3,925			60,404			70,380			466,202			490,031
	(12,177	)		(4,026	)		(143,302	)		(67,279	)		(1,069,076	)		(1,037,999	)
	(372	)		—			(15,322	)		(1,507	)		584,422			(61,603	)
	307,071			44,512			(5,218	)		(7,716	)		(138,264	)		283,408
	—			—			—			—			—			—

	310,294			44,411			(103,438	)		(6,122	)		(156,716	)		(326,163	)

	356,863			57,223			69,089			58,235			(648,964	)		225,083

	91,363			34,140			537,491			479,256			8,529,196			8,304,113

$	448,226		$	91,363		$	606,580		$	537,491		$	7,880,232		$	8,529,196

John Hancock Variable Life Account U

Statements of Operations and Changes in Contract Owners’ Equity

(continued)


	Sub-Account
	Global Diversification Trust Series 1						Global Trust
	Year Ended Dec. 31/13 (ac)			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12
Income:
Dividend income distribution	$	4,307		$	3,552		$	3,754		$	3,964
Interest on policy loans		—			—			—			—

Total investment income		4,307			3,552			3,754			3,964
Expenses:
Mortality and expense risk		—			—			—			—

Net investment income (loss)		4,307			3,552			3,754			3,964

Realized gains (losses) on investments:
Capital gain distributions		60,260			—			—			—
Net realized gains (losses)		(16,542	)		673			29,182			(7,848	)

Realized gains (losses)		43,718			673			29,182			(7,848	)
Unrealized appreciation (depreciation) during the period		(17,181	)		23,582			23,095			40,876

Net increase (decrease) in assets from operations		30,844			27,807			56,031			36,992

Changes from principal transactions:
Transfer of net premiums		18,641			19,915			16,481			21,161
Transfer on terminations		(11,438	)		(10,236	)		(31,666	)		(47,516	)
Transfer on general account policy loans		238			—			151			—
Net interfund transfers		(254,680	)		15,930			23,457			(309	)
Net change in separate account policy loans		—			—			—			—

Net increase (decrease) in assets from principal transactions		(247,239	)		25,609			8,423			(26,664	)

Total increase (decrease) in assets		(216,395	)		53,416			64,454			10,328

Assets, beginning of period		216,395			162,979			194,395			184,067

Assets, end of period		—		$	216,395		$	258,849		$	194,395

(ac)	Terminated as an investment option and funds transferred to Core Strategy Trust on December 9, 2013.

See accompanying notes.


Sub-Account
Health Sciences Trust						High Yield Trust						International Core Trust
Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12

	—			—		$	461,676		$	461,635		$	12,635		$	34,583
	—			—			—			—			—			—

	—			—			461,676			461,635			12,635			34,583

	—			—			13,212			10,233			—			—

	—			—			448,464			451,402			12,635			34,583


	368,922			234,726			—			—			—			—
	441,581			147,305			(247,749	)		(196,593	)		9,509			(237,566	)

	810,503			382,031			(247,749	)		(196,593	)		9,509			(237,566	)
	968,407			559,743			323,476			754,171			82,183			371,952

	1,778,910			941,774			524,191			1,008,980			104,327			168,969


	231,891			250,934			308,331			331,393			47,214			58,195
	(628,149	)		(539,956	)		(644,099	)		(771,042	)		(125,810	)		(849,498	)
	(67,975	)		(101,808	)		(21,685	)		(30,031	)		(3,073	)		(1,190	)
	(73,582	)		92,983			652,953			(21,257	)		(3,066	)		3,099
	—			—			—			—			—			—

	(537,815	)		(297,847	)		295,500			(490,937	)		(84,735	)		(789,394	)

	1,241,095			643,927			819,691			518,043			19,592			(620,425	)

	3,669,541			3,025,614			6,120,529			5,602,486			477,648			1,098,073

$	4,910,636		$	3,669,541		$	6,940,220		$	6,120,529		$	497,240		$	477,648

John Hancock Variable Life Account U

Statements of Operations and Changes in Contract Owners’ Equity

(continued)


	Sub-Account
	International Equity Index Trust A				International Equity Index Trust B
		Year Ended Dec. 31/12 (s)			Year Ended Dec. 31/13			Year Ended Dec. 31/12
Income:
Dividend income distribution		$	15,805		$	902,451		$	415,236
Interest on policy loans			—			217,263			246,817

Total investment income			15,805			1,119,714			662,053
Expenses:
Mortality and expense risk			—			168,931			159,640

Net investment income (loss)			15,805			950,783			502,413

Realized gains (losses) on investments:
Capital gain distributions			28,165			—			—
Net realized gains (losses)			(186,715	)		(816,319	)		(1,309,402	)

Realized gains (losses)			(158,550	)		(816,319	)		(1,309,402	)
Unrealized appreciation (depreciation) during the period			202,488			4,892,090			6,477,116

Net increase (decrease) in assets from operations			59,743			5,026,554			5,670,127

Changes from principal transactions:
Transfer of net premiums			42,530			1,816,519			1,953,783
Transfer on terminations			(41,594	)		(4,034,047	)		(4,737,054	)
Transfer on general account policy loans			(496	)		410,903			17,864
Net interfund transfers			(613,273	)		(352,711	)		60,345
Net change in separate account policy loans			—			(572,646	)		(173,426	)

Net increase (decrease) in assets from principal transactions			(612,833	)		(2,731,982	)		(2,878,488	)

Total increase (decrease) in assets			(553,090	)		2,294,572			2,791,639

Assets, beginning of period			553,090			39,625,590			36,833,951

Assets, end of period			—		$	41,920,162		$	39,625,590

(s)	Terminated as an investment option and funds transferred to International Equity Index Trust B on November 5, 2012.

(p)	Reflects the period from commencement of operations on November 5, 2012 through December 31, 2012.

(u)	Terminated as an investment option and funds transferred to International Growth Stock Trust on November 5, 2012.

See accompanying notes.


Sub-Account
International Growth Stock Trust						International Opportunities Trust				International Small Company Trust
Year Ended Dec. 31/13			Year Ended Dec. 31/12 (p)				Year Ended Dec. 31/12 (u)			Year Ended Dec. 31/13			Year Ended Dec. 31/12

$	4,197		$	2,317			$	6,593		$	6,247		$	4,557
	—			—				—			—			—

	4,197			2,317				6,593			6,247			4,557

	—			—				—			—			—

	4,197			2,317				6,593			6,247			4,557


	—			—				—			—			—
	6,970			173				(13,848	)		19,866			2,324

	6,970			173				(13,848	)		19,866			2,324
	52,146			11,412				35,265			56,585			50,950

	63,313			13,902				28,010			82,698			57,831


	45,017			11,209				41,422			24,600			27,658
	(53,913	)		(8,360	)			(65,086	)		(31,806	)		(32,986	)
	(533	)		20				(2,702	)		(3,811	)		(113	)
	(23,655	)		329,549				(340,755	)		(39,898	)		(2,795	)
	—			—				—			—			—

	(33,084	)		332,418				(367,121	)		(50,915	)		(8,236	)

	30,229			346,320				(339,111	)		31,783			49,595

	346,320			—				339,111			354,026			304,431

$	376,549		$	346,320				—		$	385,809		$	354,026

John Hancock Variable Life Account U

Statements of Operations and Changes in Contract Owners’ Equity

(continued)


	Sub-Account
	International Value Trust						Investment Quality Bond Trust
	Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12
Income:
Dividend income distribution	$	210,912		$	281,891		$	30,475		$	17,138
Interest on policy loans		—			—			—			—

Total investment income		210,912			281,891			30,475			17,138
Expenses:
Mortality and expense risk		30,644			27,967			—			—

Net investment income (loss)		180,268			253,924			30,475			17,138

Realized gains (losses) on investments:
Capital gain distributions		—			—			14,791			—
Net realized gains (losses)		211,268			(36,964	)		3,672			5,348

Realized gains (losses)		211,268			(36,964	)		18,463			5,348
Unrealized appreciation (depreciation) during the period		2,308,504			1,600,280			(64,540	)		36,257

Net increase (decrease) in assets from operations		2,700,040			1,817,240			(15,602	)		58,743

Changes from principal transactions:
Transfer of net premiums		772,033			868,781			19,300			20,614
Transfer on terminations		(1,353,216	)		(1,439,286	)		(27,148	)		(32,686	)
Transfer on general account policy loans		(121,278	)		(67,837	)		(6,890	)		(22,247	)
Net interfund transfers		(247,034	)		(181,650	)		(19,609	)		9,709
Net change in separate account policy loans		—			—			—			—

Net increase (decrease) in assets from principal transactions		(949,495	)		(819,992	)		(34,347	)		(24,610	)

Total increase (decrease) in assets		1,750,545			997,248			(49,949	)		34,133

Assets, beginning of period		10,995,920			9,998,672			817,743			783,610

Assets, end of period	$	12,746,465		$	10,995,920		$	767,794		$	817,743

(o)	Terminated as an investment option and funds transferred to U.S. Equity Trust on April 30, 2012.

See accompanying notes.


Sub-Account
Large Cap Growth						Large Cap Trust				Lifestyle Aggressive Trust
Year Ended Dec. 31/13			Year Ended Dec. 31/12				Year Ended Dec. 31/12 (o)			Year Ended Dec. 31/13			Year Ended Dec. 31/12

$	2,223		$	161			$	1,002		$	131,339		$	67,201
	—			—				—			—			—

	2,223			161				1,002			131,339			67,201

	2,306			2,013				—			—			—

	(83	)		(1,852	)			1,002			131,339			67,201


	22,052			—				—			—			—
	4,693			4,063				39,600			(18,396	)		(130,179	)

	26,745			4,063				39,600			(18,396	)		(130,179	)
	93,206			61,254				(17,358	)		1,145,367			764,061

	119,868			63,465				23,244			1,258,310			701,083


	6,799			8,635				6,558			452,978			458,111
	(22,708	)		(11,877	)			(9,805	)		(805,244	)		(538,496	)
	10,734			2,441				(877	)		(84,559	)		4,578
	256			(61,606	)			(185,886	)		103,038			(54,786	)
	—			—				—			—			—

	(4,919	)		(62,407	)			(190,010	)		(333,787	)		(130,593	)

	114,949			1,058				(166,766	)		924,523			570,490

	345,826			344,768				166,766			4,778,151			4,207,661

$	460,775		$	345,826				—		$	5,702,674		$	4,778,151

John Hancock Variable Life Account U

Statements of Operations and Changes in Contract Owners’ Equity

(continued)


	Sub-Account
	Lifestyle Balanced Trust						Lifestyle Conservative Trust
	Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12
Income:
Dividend income distribution	$	8,896,591		$	6,891,584		$	25,031		$	82,923
Interest on policy loans		3,463,126			3,480,096			—			—

Total investment income		12,359,717			10,371,680			25,031			82,923
Expenses:
Mortality and expense risk		1,837,466			1,791,471			—			—

Net investment income (loss)		10,522,251			8,580,209			25,031			82,923

Realized gains (losses) on investments:
Capital gain distributions		—			—			26,422			17,225
Net realized gains (losses)		8,096,092			6,739,604			(5,640	)		9,889

Realized gains (losses)		8,096,092			6,739,604			20,782			27,114
Unrealized appreciation (depreciation) during the period		20,836,197			20,293,520			(14,106	)		(16,394	)

Net increase (decrease) in assets from operations		39,454,540			35,613,333			31,707			93,643

Changes from principal transactions:
Transfer of net premiums		13,629,861			14,312,177			184,431			103,778
Transfer on terminations		(37,891,105	)		(40,819,559	)		(294,983	)		(111,554	)
Transfer on general account policy loans		4,513,448			5,724,977			(130,247	)		(36,513	)
Net interfund transfers		166,575			150,334			(2,002,389	)		2,143,372
Net change in separate account policy loans		(4,957,023	)		(6,384,970	)		—			—

Net increase (decrease) in assets from principal transactions		(24,538,244	)		(27,017,041	)		(2,243,188	)		2,099,083

Total increase (decrease) in assets		14,916,296			8,596,292			(2,211,481	)		2,192,726

Assets, beginning of period		362,016,181			353,419,889			2,919,159			726,433

Assets, end of period	$	376,932,477		$	362,016,181		$	707,678		$	2,919,159

See accompanying notes.


Sub-Account
Lifestyle Growth Trust						Lifestyle Moderate Trust						Mid Cap Index Trust
Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12

$	904,768		$	577,550		$	146,118		$	119,649		$	17,337		$	18,054
	—			—			—			—			—			—

	904,768			577,550			146,118			119,649			17,337			18,054

	47,278			46,028			9,890			8,776			2,396			1,575

	857,490			531,522			136,228			110,873			14,941			16,479


	—			—			—			—			82,288			121,214
	(2,850	)		(857,073	)		93,501			30,580			46,946			(1,517	)

	(2,850	)		(857,073	)		93,501			30,580			129,234			119,697
	5,222,450			4,346,714			234,729			292,513			270,829			61,719

	6,077,090			4,021,163			464,458			433,966			415,004			197,895


	2,874,721			3,063,169			258,852			303,679			103,084			79,057
	(4,257,785	)		(3,572,769	)		(614,973	)		(540,960	)		(161,747	)		(182,302	)
	(141,979	)		(331,854	)		(19,357	)		(14,611	)		(15,687	)		(13,806	)
	2,181,154			(1,596,470	)		133,267			965,570			150,732			(61,851	)
	—			—			—			—			—			—

	656,111			(2,437,924	)		(242,211	)		713,678			76,382			(178,902	)

	6,733,201			1,583,239			222,247			1,147,644			491,386			18,993

	31,305,369			29,722,130			4,778,240			3,630,596			1,218,503			1,199,510

$	38,038,570		$	31,305,369		$	5,000,487		$	4,778,240		$	1,709,889		$	1,218,503

John Hancock Variable Life Account U

Statements of Operations and Changes in Contract Owners’ Equity

(continued)


	Sub-Account
	Mid Cap Stock Trust						Mid Value Trust
	Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12
Income:
Dividend income distribution	$	15,536			—		$	127,834		$	85,715
Interest on policy loans		—			—			—			—

Total investment income		15,536			—			127,834			85,715
Expenses:
Mortality and expense risk		82,592			71,566			27,298			19,256

Net investment income (loss)		(67,056	)		(71,566	)		100,536			66,459

Realized gains (losses) on investments:
Capital gain distributions		424,137			—			798,679			737,329
Net realized gains (losses)		389,217			(181,417	)		469,668			(74,610	)

Realized gains (losses)		813,354			(181,417	)		1,268,347			662,719
Unrealized appreciation (depreciation) during the period		6,475,871			4,206,721			1,738,847			971,162

Net increase (decrease) in assets from operations		7,222,169			3,953,738			3,107,730			1,700,340

Changes from principal transactions:
Transfer of net premiums		1,113,075			1,231,625			507,340			578,930
Transfer on terminations		(2,661,915	)		(2,388,085	)		(1,695,712	)		(1,348,571	)
Transfer on general account policy loans		(181,689	)		(321,617	)		(81,232	)		(179,835	)
Net interfund transfers		(222,845	)		(354,771	)		867,821			154,076
Net change in separate account policy loans		—			—			—			—

Net increase (decrease) in assets from principal transactions		(1,953,374	)		(1,832,848	)		(401,783	)		(795,400	)

Total increase (decrease) in assets		5,268,795			2,120,890			2,705,947			904,940

Assets, beginning of period		20,627,181			18,506,291			10,118,184			9,213,244

Assets, end of period	$	25,895,976		$	20,627,181		$	12,824,131		$	10,118,184

See accompanying notes.


Sub-Account
Money Market Trust B						Natural Resources Trust						Real Estate Securities Trust
Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12

$	4,899		$	24,553		$	6,622		$	14,345		$	634,146		$	568,178
	979,685			1,079,199			—			—			265,877			272,171

	984,584			1,103,752			6,622			14,345			900,023			840,349

	333,655			373,346			—			—			162,035			156,084

	650,929			730,406			6,622			14,345			737,988			684,265


	2,723			4,325			—			—			—			—
	—			—			(24,534	)		123,717			(13,428	)		(259,038	)

	2,723			4,325			(24,534	)		123,717			(13,428	)		(259,038	)
	—			—			51,804			(137,374	)		(581,671	)		4,750,129

	653,652			734,731			33,892			688			142,889			5,175,356


	3,714,021			4,883,165			128,127			171,949			1,352,808			1,462,728
	(13,853,438	)		(19,231,337	)		(174,019	)		(435,056	)		(3,304,018	)		(3,757,146	)
	1,660,636			3,393,872			(10,675	)		(31,530	)		315,192			(57,805	)
	4,773,510			1,726,449			(358,733	)		(23,923	)		(408,430	)		116,973
	(1,854,834	)		(3,514,549	)		—			—			(543,895	)		(84,067	)

	(5,560,105	)		(12,742,400	)		(415,300	)		(318,560	)		(2,588,343	)		(2,319,317	)

	(4,906,453	)		(12,007,669	)		(381,408	)		(317,872	)		(2,445,454	)		2,856,039

	73,032,351			85,040,020			1,393,591			1,711,463			37,257,166			34,401,127

$	68,125,898		$	73,032,351		$	1,012,183		$	1,393,591		$	34,811,712		$	37,257,166

John Hancock Variable Life Account U

Statements of Operations and Changes in Contract Owners’ Equity

(continued)


	Sub-Account
	Real Return Bond Trust						Science & Technology Trust
	Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12
Income:
Dividend income distribution	$	14,785		$	11,567			—			—
Interest on policy loans		—			—			—			—

Total investment income		14,785			11,567			—			—
Expenses:
Mortality and expense risk		—			—			—			—

Net investment income (loss)		14,785			11,567			—			—

Realized gains (losses) on investments:
Capital gain distributions		—			—			—			—
Net realized gains (losses)		(2,538	)		12,922			35,756			17,085

Realized gains (losses)		(2,538	)		12,922			35,756			17,085
Unrealized appreciation (depreciation) during the period		(75,162	)		31,864			359,573			72,555

Net increase (decrease) in assets from operations		(62,915	)		56,353			395,329			89,640

Changes from principal transactions:
Transfer of net premiums		52,424			50,969			124,388			30,131
Transfer on terminations		(114,811	)		(126,586	)		(45,106	)		(64,613	)
Transfer on general account policy loans		(1,918	)		(3,771	)		(13,957	)		12,626
Net interfund transfers		27,659			(30,738	)		20,593			30,682
Net change in separate account policy loans		—			—			—			—

Net increase (decrease) in assets from principal transactions		(36,646	)		(110,126	)		85,918			8,826

Total increase (decrease) in assets		(99,561	)		(53,773	)		481,247			98,466

Assets, beginning of period		638,213			691,986			958,798			860,332

Assets, end of period	$	538,652		$	638,213		$	1,440,045		$	958,798

See accompanying notes.


Sub-Account
Short Term Government Income Trust						Small Cap Growth Trust						Small Cap Index Trust
Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12

$	111,307		$	99,075			—			—		$	27,193		$	30,637
	—			—			—			—			—			—

	111,307			99,075			—			—			27,193			30,637

	9,071			9,883			95,223			81,329			—			—

	102,236			89,192			(95,223	)		(81,329	)		27,193			30,637


	—			—			1,112,776			2,785,070			126,357			253,796
	(7,763	)		9,652			159,878			(51,596	)		(1,315	)		(30,198	)

	(7,763	)		9,652			1,272,654			2,733,474			125,042			223,598
	(145,941	)		(37,179	)		7,696,515			488,866			414,724			(31,395	)

	(51,468	)		61,665			8,873,946			3,141,011			566,959			222,840


	351,283			449,874			1,327,144			1,506,958			93,070			97,959
	(523,610	)		(921,553	)		(3,034,771	)		(2,928,073	)		(189,536	)		(216,119	)
	(41,076	)		(40,415	)		(226,772	)		(179,090	)		(14,314	)		7,444
	(203,525	)		(239,348	)		(52,628	)		(244,974	)		31,443			(333	)
	—			—			—			—			—			—

	(416,928	)		(751,442	)		(1,987,027	)		(1,845,179	)		(79,337	)		(111,049	)

	(468,396	)		(689,777	)		6,886,919			1,295,832			487,622			111,791

	5,775,217			6,464,994			21,071,796			19,775,964			1,518,820			1,407,029

$	5,306,821		$	5,775,217		$	27,958,715		$	21,071,796		$	2,006,442		$	1,518,820

John Hancock Variable Life Account U

Statements of Operations and Changes in Contract Owners’ Equity

(continued)


	Sub-Account
	Small Cap Opportunities Trust						Small Cap Value Trust
	Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12
Income:
Dividend income distribution	$	892			—		$	63,150		$	85,560
Interest on policy loans		—			—			—			—

Total investment income		892			—			63,150			85,560
Expenses:
Mortality and expense risk		—			—			—			—

Net investment income (loss)		892			—			63,150			85,560

Realized gains (losses) on investments:
Capital gain distributions		—			—			574,052			438,296
Net realized gains (losses)		8,294			(1,416	)		219,386			78,938

Realized gains (losses)		8,294			(1,416	)		793,438			517,234
Unrealized appreciation (depreciation) during the period		35,667			58,992			2,220,333			795,846

Net increase (decrease) in assets from operations		44,853			57,576			3,076,921			1,398,640

Changes from principal transactions:
Transfer of net premiums		11,747			14,469			608,747			643,508
Transfer on terminations		(15,199	)		(309,975	)		(1,270,101	)		(1,353,157	)
Transfer on general account policy loans		(1,042	)		(924	)		(123,699	)		(180,986	)
Net interfund transfers		151,979			(18,436	)		(149,499	)		(123,961	)
Net change in separate account policy loans		—			—			—			—

Net increase (decrease) in assets from principal transactions		147,485			(314,866	)		(934,552	)		(1,014,596	)

Total increase (decrease) in assets		192,338			(257,290	)		2,142,369			384,044

Assets, beginning of period		90,281			347,571			9,677,073			9,293,029

Assets, end of period	$	282,619		$	90,281		$	11,819,442		$	9,677,073

(ag)	Terminated as an investment option and funds transferred to Small Cap Opportunities Trust on December 9, 2013.

See accompanying notes.


Sub-Account
Small Company Value Trust						Smaller Company Growth Trust						Strategic Income Opportunities Trust
Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13 (ag)			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12

$	8,130		$	937			—			—		$	65,263		$	59,873
	—			—			—			—			—			—

	8,130			937			—			—			65,263			59,873

	—			—			—			—			—			—

	8,130			937			—			—			65,263			59,873


	—			—			7,401			4,672			—			—
	33,335			12,079			13,757			(330	)		(14,845	)		(19,223	)

	33,335			12,079			21,158			4,342			(14,845	)		(19,223	)
	88,413			40,088			114			3,586			(11,216	)		57,320

	129,878			53,104			21,272			7,928			39,202			97,970


	55,329			65,325			3,750			3,620			70,396			66,071
	(66,499	)		(39,812	)		(4,988	)		(3,131	)		(141,887	)		(96,508	)
	(2,657	)		(347	)		(3,018	)		(22	)		(26,698	)		(2,970	)
	24,145			15,830			(74,588	)		1,646			379,372			33,569
	—			—			—			—			—			—

	10,318			40,996			(78,844	)		2,113			281,183			162

	140,196			94,100			(57,572	)		10,041			320,385			98,132

	404,094			309,994			57,572			47,531			847,956			749,824

$	544,290		$	404,094			—		$	57,572		$	1,168,341		$	847,956

John Hancock Variable Life Account U

Statements of Operations and Changes in Contract Owners’ Equity

(continued)


	Sub-Account
	Total Bond Market Trust B						Total Return Trust
	Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12
Income:
Dividend income distribution	$	638,818		$	328,003		$	91,509		$	61,063
Interest on policy loans		—			—			—			—

Total investment income		638,818			328,003			91,509			61,063
Expenses:
Mortality and expense risk		17,828			19,298			—			—

Net investment income (loss)		620,990			308,705			91,509			61,063

Realized gains (losses) on investments:
Capital gain distributions		—			—			65,763			—
Net realized gains (losses)		135,519			365,232			12,810			22,271

Realized gains (losses)		135,519			365,232			78,573			22,271
Unrealized appreciation (depreciation) during the period		(1,248,099	)		152,134			(226,513	)		147,323

Net increase (decrease) in assets from operations		(491,590	)		826,071			(56,431	)		230,657

Changes from principal transactions:
Transfer of net premiums		734,468			1,175,891			177,766			185,679
Transfer on terminations		(2,160,259	)		(3,817,984	)		(340,918	)		(345,681	)
Transfer on general account policy loans		(90,047	)		(121,117	)		(6,977	)		(6,697	)
Net interfund transfers		43,297			(803,314	)		(18,030	)		255,797
Net change in separate account policy loans		—			—			—			—

Net increase (decrease) in assets from principal transactions		(1,472,541	)		(3,566,524	)		(188,159	)		89,098

Total increase (decrease) in assets		(1,964,131	)		(2,740,453	)		(244,590	)		319,755

Assets, beginning of period		20,130,478			22,870,931			3,045,609			2,725,854

Assets, end of period	$	18,166,347		$	20,130,478		$	2,801,019		$	3,045,609

(r)	Reflects the period from commencement of operations on April 30, 2012 through December 31, 2012.

See accompanying notes.


Sub-Account
Total Stock Market Index Trust						Ultra Short Term Bond Trust						U.S. Equity Trust
Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12 (r)

$	127,083		$	118,293		$	2,673		$	1,788		$	4,189		$	3,066
	—			—			—			—			—			—

	127,083			118,293			2,673			1,788			4,189			3,066

	—			—			—			—			—			—

	127,083			118,293			2,673			1,788			4,189			3,066


	121,387			19,681			—			—			—			—
	187,926			67,416			(218	)		(898	)		9,347			110

	309,313			87,097			(218	)		(898	)		9,347			110
	2,048,553			907,473			(2,480	)		(7	)		45,062			2,846

	2,484,949			1,112,863			(25	)		883			58,598			6,022


	611,187			660,261			22,941			481			17,520			13,459
	(1,041,979	)		(1,114,519	)		(11,002	)		(2,479	)		(38,901	)		(11,416	)
	(132,688	)		(144,476	)		—			—			(731	)		(47	)
	(38,433	)		(207,838	)		21,157			74,932			(2,774	)		201,775
	—			—			—			—			—			—

	(601,913	)		(806,572	)		33,096			72,934			(24,886	)		203,771

	1,883,036			306,291			33,071			73,817			33,712			209,793

	7,676,757			7,370,466			179,972			106,155			209,793			—

$	9,559,793		$	7,676,757		$	213,043		$	179,972		$	243,505		$	209,793

John Hancock Variable Life Account U

Statements of Operations and Changes in Contract Owners’ Equity

(continued)


	Sub-Account
	Utilities Trust						Value Trust
	Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/13			Year Ended Dec. 31/12
Income:
Dividend income distribution	$	19,882		$	33,132		$	5,486		$	4,911
Interest on policy loans		—			—			—			—

Total investment income		19,882			33,132			5,486			4,911
Expenses:
Mortality and expense risk		—			—			—			—

Net investment income (loss)		19,882			33,132			5,486			4,911

Realized gains (losses) on investments:
Capital gain distributions		—			—			—			—
Net realized gains (losses)		69,572			42,310			67,907			6,857

Realized gains (losses)		69,572			42,310			67,907			6,857
Unrealized appreciation (depreciation) during the period		86,988			38,090			129,458			79,039

Net increase (decrease) in assets from operations		176,442			113,532			202,851			90,807

Changes from principal transactions:
Transfer of net premiums		57,796			69,183			46,724			51,947
Transfer on terminations		(163,503	)		(151,843	)		(40,013	)		(63,616	)
Transfer on general account policy loans		(5,135	)		(34,705	)		(3,967	)		(10,777	)
Net interfund transfers		(10,350	)		50,060			(62,414	)		(20,147	)
Net change in separate account policy loans		—			—			—			—

Net increase (decrease) in assets from principal transactions		(121,192	)		(67,305	)		(59,670	)		(42,593	)

Total increase (decrease) in assets		55,250			46,227			143,181			48,214

Assets, beginning of period		921,389			875,162			570,645			522,431

Assets, end of period	$	976,639		$	921,389		$	713,826		$	570,645

See accompanying notes.


Total
Year Ended Dec. 31/13			Year Ended Dec. 31/12

$	37,361,865		$	28,167,168
	18,023,369			18,866,960

	55,385,234			47,034,128

	7,351,621			7,030,827

	48,033,613			40,003,301


	4,490,694			6,695,393
	27,541,751			9,215,715

	32,032,445			15,911,108
	279,666,846			193,705,174

	359,732,904			249,619,583


	78,151,925			84,304,638
	(214,133,460	)		(231,188,983	)
	23,162,358			27,319,483
	(298,264	)		(389,420	)
	(27,642,961	)		(33,439,232	)

	(140,760,402	)		(153,393,514	)

	218,972,502			96,226,069

	1,956,426,898			1,860,200,829

$	2,175,399,400		$	1,956,426,898

John Hancock Variable Life Account U

Notes to Financial Statements

December 31, 2013

1.	Organization

As the result of a portfolio change, the following sub-account of the Account was renamed as follows:


Previous Name	New Name	Effective Date
Business Opportunity Value	Large Cap Value	April 29, 2013

The following sub-accounts of the Account were terminated as investment options and the funds were transferred to existing sub-accounts as follows:


Terminated	Transferred To	Effective Date
All Cap Value Trust	Fundamental Large Cap Value Trust	December 9, 2013
American Global Small Capitalization Trust Series 1	American Global Growth Trust Series 1	April 29, 2013
American High-Income Bond Trust Series 1	High Yield Trust	April 29, 2013
Core Allocation Plus Trust	Core Strategy Trust	December 9, 2013
Disciplined Diversification Trust	Core Strategy Trust	December 9, 2013
Fundamental Holdings Trust Series 1	Core Strategy Trust	December 9, 2013
Global Diversification Trust Series 1	Core Strategy Trust	December 9, 2013
Smaller Company Growth Trust	Small Cap Opportunities Trust	December 9, 2013

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

2.	Significant Accounting Policies

•

Level 1 – Fair value measurements that reflect unadjusted, quoted prices in active markets for identical assets and liabilities that the Account has the ability to access at the measurement date.

•

Level 2 – Fair value measurements using inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly.

•

Level 3 – Fair value measurements using significant non-market observable inputs.

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

The following table presents the Account’s assets that are measured at fair value on a recurring basis by fair value hierarchy level under ASC 820, as of December 31, 2013.


	Mutual Funds
Level 1	$	1,884,308,241
Level 2	$	291,091,159
Level 3		—

	$	2,175,399,400

3.	Mortality and Expense Risks Charges

4.	Policy Loans

Policy loans may be held as an investment in the sub-account or in the Company’s general account depending on the terms of the Contracts.

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

5.	Federal Income Taxes

6.	Contract Charges

7.	Purchases and Sales of Investments

The cost of purchases and proceeds from sales of investments for the year ended December 31, 2013 were as follows:


	Purchases		Sales
Sub-accounts:
500 Index Trust B	$	6,175,730	$	6,949,805
Active Bond Trust		18,727,334		21,358,703
All Cap Core Trust		9,537		7,398
All Cap Value Trust		233,852		289,612
Alpha Opportunities Trust		182,460		65,660

John Hancock Variable Life Account U

Notes to Financial Statements (continued)


	Purchases		Sales
Sub-accounts:
American Asset Allocation Trust Series 1	$	527,012	$	87,930
American Global Growth Trust Series 1		36,668		1,919
American Global Small Capitalization Trust Series 1		1,968		10,474
American Growth Trust Series 1		142,942		500,622
American Growth-Income Trust Series 1		209,902		108,565
American High-Income Bond Trust Series 1		8,653		202,135
American International Trust Series 1		311,625		278,521
American New World Trust Series 1		154,110		127,827
Blue Chip Growth Trust		2,565,186		10,957,079
Bond Trust		10,350		25,569
Capital Appreciation Trust		2,076,723		2,399,220
Capital Appreciation Value Trust		564,682		268,092
Core Allocation Plus Trust		13,588		41,356
Core Bond Trust		60,975		6,473
Core Strategy Trust		766,160		31,110
Disciplined Diversification Trust		221,245		450,149
Emerging Markets Value Trust		770,308		443,626
Equity-Income Trust		1,977,678		5,826,185
Financial Services Trust		308,673		288,397
Franklin Templeton Founding Allocation Trust		3,086		8,607
Fundamental All Cap Core Trust		10,201,292		49,294,862
Fundamental Holdings Trust Series 1		18,182		28,542
Fundamental Large Cap Value Trust		348,145		35,383
Fundamental Value Trust		66,249		161,414
Global Bond Trust		1,287,695		1,425,259
Global Diversification Trust Series 1		117,809		300,480
Global Trust		121,245		109,067
Health Sciences Trust		787,235		956,128
High Yield Trust		1,632,231		888,268
International Core Trust		99,002		171,102
International Equity Index Trust B		2,187,384		3,613,201
International Growth Stock Trust		39,648		68,536
International Small Company Trust		73,204		117,872
International Value Trust		867,514		1,636,740
Investment Quality Bond Trust		69,177		58,258
Lifestyle Aggressive Trust		536,723		739,171
Lifestyle Balanced Trust		13,290,506		25,812,601
Lifestyle Conservative Trust		727,254		2,918,989
Lifestyle Growth Trust		5,576,641		4,063,039
Lifestyle Moderate Trust		579,238		685,221
Mid Cap Index Trust		361,446		187,836
Mid Cap Stock Trust		1,061,747		2,658,041
Mid Value Trust		2,295,845		1,798,412
Money Market Trust B		9,925,583		13,956,886
Natural Resources Trust		171,339		580,018

John Hancock Variable Life Account U

Notes to Financial Statements (continued)


	Purchases		Sales
Sub-accounts:
Real Estate Securities Trust	$	2,382,534	$	3,954,871
Real Return Bond Trust		378,634		400,495
Science & Technology Trust		245,115		159,197
Short Term Government Income Trust		886,533		1,201,225
Small Cap Growth Trust		2,114,954		3,084,429
Small Cap Index Trust		303,829		229,616
Small Cap Opportunities Trust		174,424		26,046
Small Cap Value Trust		970,423		1,267,773
Small Company Value Trust		91,024		72,575
Smaller Company Growth Trust		69,636		141,079
Strategic Income Opportunities Trust		965,620		619,175
Total Bond Market Trust B		1,305,437		2,156,987
Total Return Trust		695,574		726,461
Total Stock Market Index Trust		550,421		903,865
Ultra Short Term Bond Trust		69,643		33,874
U.S. Equity Trust		30,078		50,775
Utilities Trust		267,803		369,114
Value Trust		114,880		169,064
All Asset Portfolio		563,632		835,578
Brandes International Equity		48,565		25,219
Frontier Capital Appreciation		122,744		60,053
Large Cap Growth		42,535		25,485

	$	100,896,819	$	179,513,316

8.	Transaction with Affiliates

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

Certain officers of the Account are officers and directors of JHUSA or the Trust.

The majority of the investments held by the Account are invested in the Trust (Note 1).

Mortality and expense risks charges, as described in Note 3, are paid to JHUSA.

9.	Diversification Requirements

10.

Subsequent Events

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	500 Index Trust B
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		2,182			2,491			2,819			2,915			2,408
Units issued		160			132			120			191			885
Units redeemed		(216	)		(441	)		(448	)		(287	)		(378	)

Units, end of period (000’s)		2,126			2,182			2,491			2,819			2,915

Unit value, end of period $		33.87 to 37.65			25.81 to 28.52			22.42 to 24.63			22.14 to 24.18			19.39 to 21.05
Assets, end of period $ (000’s)		77,726			60,757			60,073			66,876			60,216
Investment income ratio*		1.84	%		0.99	%		1.72	%		1.79	%		2.70	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		31.24% to 32.03	%		15.11% to 15.80	%		1.26% to 1.86	%		14.17% to 14.85	%		25.59% to 26.36	%

	Sub-Account
	Active Bond Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		427			442			500			536			544
Units issued		22			17			13			33			74
Units redeemed		(88	)		(32	)		(71	)		(69	)		(82	)

Units, end of period (000’s)		361			427			442			500			536

Unit value, end of period $		51.20 to 66.44			51.41 to 66.31			47.12 to 60.42			44.74 to 57.02			39.51 to 50.05
Assets, end of period $ (000’s)		303,136			323,945			318,179			323,708			312,167
Investment income ratio*		5.75	%		4.19	%		5.39	%		7.51	%		7.41	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		(0.40%) to 0.19	%		9.10% to 9.76	%		5.33% to 5.97	%		13.23% to 13.91	%		24.11% to 24.86	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	All Asset Portfolio
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		52			44			39			28			4
Units issued		35			15			13			32			28
Units redeemed		(54	)		(7	)		(8	)		(21	)		(4	)

Units, end of period (000’s)		33			52			44			39			28

Unit value, end of period $		15.81			15.82			13.80			13.58			12.05
Assets, end of period $ (000’s)		533			835			625			542			339
Investment income ratio*		3.78	%		4.72	%		6.74	%		7.35	%		9.83	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		(0.10	%)		14.65	%		1.66	%		12.71	%		21.32	%

	Sub-Account
	All Cap Core Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		5			5			3			3			7
Units issued		1			1			2			—			1
Units redeemed		—			(1	)		—			—			(5	)

Units, end of period (000’s)		6			5			5			3			3

Unit value, end of period $		18.44			13.72			11.76			11.71			10.36
Assets, end of period $ (000’s)		98			72			58			33			27
Investment income ratio*		1.34	%		1.21	%		1.37	%		1.17	%		1.65	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		34.44	%		16.62	%		0.40	%		13.09	%		28.61	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	All Cap Value Trust
	Year Ended Dec. 31/13 (aa)			Year Ended Dec. 31/12			Year Ended Dec. 31/11			Year Ended Dec. 31/10			Year Ended Dec. 31/09
Units, beginning of period		9			9			9			8			17
Units issued		6			3			5			3			24
Units redeemed		(15	)		(3	)		(5	)		(2	)		(33	)

Units, end of period (000’s)		—			9			9			9			8

Unit value, end of period $		20.42			15.60			14.06			14.67			12.38
Assets, end of period $ (000’s)		—			131			122			123			94
Investment income ratio*		1.78	%		0.88	%		0.34	%		0.43	%		0.43	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		30.93	%		10.92	%		(4.17	%)		18.50	%		26.59	%

(aa) Terminated as an investment option and funds transferred to Fundamental Large Cap Value Trust on December 9, 2013.

	Sub-Account
	Alpha Opportunities Trust
	Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/11			Year Ended Dec. 31/10			Year Ended Dec. 31/09 (al)
Units, beginning of period		3			2			2			—			—
Units issued		8			1			1			2			—
Units redeemed		(3	)		—			(1	)		—			—

Units, end of period (000’s)		8			3			2			2			—

Unit value, end of period $		22.54			16.63			13.70			14.89			12.73
Assets, end of period $ (000’s)		161			38			25			26			1
Investment income ratio*		1.51	%		0.71	%		0.24	%		1.19	%		0.27	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		35.58	%		21.38	%		(8.02	%)		16.98	%		27.31	%

(al)	Reflects the period from commencement of operations on May 4, 2009 through December 31, 2009.

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	American Asset Allocation Trust Series 1
	Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/11			Year Ended Dec. 31/10			Year Ended Dec. 31/09
Units, beginning of period		63			45			40			22			—
Units issued		39			21			9			23			24
Units redeemed		(7	)		(3	)		(4	)		(5	)		(2	)

Units, end of period (000’s)		95			63			45			40			22

Unit value, end of period $		14.49			11.75			10.15			10.06			8.98
Assets, end of period $ (000’s)		1,370			736			453			401			199
Investment income ratio*		1.39	%		1.85	%		1.65	%		1.59	%		3.03	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		23.30	%		15.77	%		0.91	%		12.07	%		23.61	%


	Sub-Account
	American Global Growth Trust Series 1
	Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/11 (d)
Units, beginning of period		2			2			—
Units issued		3			—			2
Units redeemed		—			—			—

Units, end of period (000’s)		5			2			2

Unit value, end of period $		14.40			11.19			9.17
Assets, end of period $ (000’s)		55			16			13
Investment income ratio*		2.37	%		0.49	%		1.34	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		28.63	%		22.12	%		(9.24	%)

(d)	Fund available in prior year but no activity.

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	American Global Small Capitalization Trust Series 1
	Year Ended Dec. 31/13 (w)			Year Ended Dec. 31/12			Year Ended Dec. 31/11 (d)
Units, beginning of period		1			—			—
Units issued		—			1			—
Units redeemed		(1	)		—			—

Units, end of period (000’s)		—			1			—

Unit value, end of period $		10.64			9.64			8.19
Assets, end of period $ (000’s)		—			8			1
Investment income ratio*		0.18	%		3.00	%		1.24	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		10.37	%		17.71	%		(19.43	%)

(w)	Terminated as an investment option and funds transferred to American Global Growth Trust Series 1 on April 29, 2013.

(d)	Fund available in prior year but no activity.


	Sub-Account
	American Growth Trust Series 1
	Year Ended Dec. 31/13			Year Ended Dec. 31/12			Year Ended Dec. 31/11			Year Ended Dec. 31/10			Year Ended Dec. 31/09
Units, beginning of period		132			157			177			199			206
Units issued		8			11			16			45			41
Units redeemed		(29	)		(36	)		(36	)		(67	)		(48	)

Units, end of period (000’s)		111			132			157			177			199

Unit value, end of period $		19.58			15.11			12.86			13.48			11.40
Assets, end of period $ (000’s)		2,159			1,981			2,004			2,371			2,266
Investment income ratio*		0.51	%		0.39	%		0.22	%		0.34	%		0.26	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		29.61	%		17.49	%		(4.63	%)		18.24	%		38.87	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	American Growth-Income Trust Series 1
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		70			47			44			47			45
Units issued		12			30			7			6			17
Units redeemed		(7	)		(7	)		(4	)		(9	)		(15	)

Units, end of period (000’s)		75			70			47			44			47

Unit value, end of period $		18.11			13.62			11.62			11.87			10.69
Assets, end of period $ (000’s)		1,372			957			545			515			504
Investment income ratio*		1.08	%		1.82	%		1.21	%		1.07	%		1.30	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		33.02	%		17.16	%		(2.10	%)		11.06	%		30.79	%


	Sub-Account
	American High-Income Bond Trust Series 1
	Year Ended Dec. 31/13 (x)			Year Ended Dec. 31/12			Year Ended Dec. 31/11 (d)
Units, beginning of period		17			5			—
Units issued		—			15			5
Units redeemed		(17	)		(3	)		—

Units, end of period (000’s)		—			17			5

Unit value, end of period $		11.83			11.49			10.16
Assets, end of period $ (000’s)		—			193			45
Investment income ratio*		0.24	%		18.36	%		8.83	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		2.90	%		13.11	%		1.46	%

(x)	Terminated as an investment option and funds transferred to High Yield Trust on April 29, 2013.

(d)	Fund available in prior year but no activity.

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	American International Trust Series 1
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		69			74			96			94			123
Units issued		18			5			6			37			21
Units redeemed		(17	)		(10	)		(28	)		(35	)		(50	)

Units, end of period (000’s)		70			69			74			96			94

Unit value, end of period $		18.85			15.55			13.24			15.45			14.46
Assets, end of period $ (000’s)		1,309			1,055			970			1,474			1,358
Investment income ratio*		0.99	%		1.08	%		1.20	%		1.66	%		1.07	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		21.20	%		17.50	%		(14.34	%)		6.88	%		42.58	%

	Sub-Account
	American New World Trust Series 1
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09 (al)
Units, beginning of period		27			28			19			9			—
Units issued		9			3			11			14			9
Units redeemed		(8	)		(4	)		(2	)		(4	)		—

Units, end of period (000’s)		28			27			28			19			9

Unit value, end of period $		17.49			15.77			13.44			15.69			13.36
Assets, end of period $ (000’s)		507			434			381			301			118
Investment income ratio*		0.98	%		0.59	%		1.63	%		1.64	%		2.48	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		10.89	%		17.37	%		(14.33	%)		17.43	%		33.58	%

(al)	Reflects the period from commencement of operations on May 4, 2009 through December 31, 2009.

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Blue Chip Growth Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		533			571			637			697			749
Units issued		17			23			25			38			55
Units redeemed		(72	)		(61	)		(91	)		(98	)		(107	)

Units, end of period (000’s)		478			533			571			637			697

Unit value, end of period $		100.73 to 112.07			71.65 to 79.24			60.88 to 66.93			60.37 to 65.97			52.25 to 56.75
Assets, end of period $ (000’s)		143,672			113,798			105,594			112,834			107,252
Investment income ratio*		0.31	%		0.13	%		0.01	%		0.09	%		0.19	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		40.59% to 41.43	%		17.69% to 18.39	%		0.84% to 1.45	%		15.56% to 16.25	%		42.12% to 42.97	%


	Sub-Account
	Bond Trust
	Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11 (h)
Units, beginning of period		6			5			—
Units issued		1			1			5
Units redeemed		(2	)		—			—

Units, end of period (000’s)		5			6			5

Unit value, end of period $		10.58			10.72			10.08
Assets, end of period $ (000’s)		35			53			47
Investment income ratio*		2.96	%		2.89	%		15.01	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		(1.32	%)		6.31	%		0.82	%

(h)	Reflects the period from commencement of operations on October 31, 2011 through December 31, 2011.

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Brandes International Equity
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		31			30			29			31			35
Units issued		1			3			3			2			1
Units redeemed		(1	)		(2	)		(2	)		(4	)		(5	)

Units, end of period (000’s)		31			31			30			29			31

Unit value, end of period $		32.34 to 35.37			27.97 to 30.40			23.32 to 25.19			27.14 to 29.14			26.10 to 27.86
Assets, end of period $ (000’s)		1,008			866			694			788			807
Investment income ratio*		2.45	%		2.12	%		3.04	%		3.23	%		2.31	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		15.63% to 16.33	%		19.96% to 20.68	%		(14.08%) to (13.56	%)		3.98% to 4.61	%		24.53% to 25.28	%

	Sub-Account
	Capital Appreciation Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		1,127			1,239			1,449			1,594			1,703
Units issued		116			56			115			123			171
Units redeemed		(126	)		(168	)		(325	)		(268	)		(280	)

Units, end of period (000’s)		1,117			1,127			1,239			1,449			1,594

Unit value, end of period $		21.64 to 22.17			15.83 to 16.13			13.72 to 13.90			13.79 to 13.88			12.40 to 12.41
Assets, end of period $ (000’s)		24,356			17,953			17,088			20,038			19,783
Investment income ratio*		0.26	%		0.20	%		0.11	%		0.18	%		0.32	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		36.69% to 37.50	%		15.34% to 16.03	%		(0.48%) to 0.11	%		11.21% to 11.88	%		41.51% to 42.35	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Capital Appreciation Value Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		6			4			4			1			—
Units issued		37			2			—			13			1
Units redeemed		(19	)		—			—			(10	)		—

Units, end of period (000’s)		24			6			4			4			1

Unit value, end of period $		15.60			12.76			11.12			10.79			9.47
Assets, end of period $ (000’s)		370			67			34			31			6
Investment income ratio*		2.42	%		1.68	%		1.49	%		1.83	%		2.26	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		22.29	%		14.77	%		3.09	%		13.91	%		30.26	%

	Sub-Account
	Core Allocation Plus Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13 (ac)			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09 (d)
Units, beginning of period		3			3			3			3			—
Units issued		—			—			—			—			3
Units redeemed		(3	)		—			—			—			—

Units, end of period (000’s)		—			3			3			3			3

Unit value, end of period $		12.75			10.63			9.36			9.58			8.66
Assets, end of period $ (000’s)		—			34			31			33			29
Investment income ratio*		3.33	%		1.43	%		1.39	%		1.23	%		3.02	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		20.00	%		13.53	%		(2.26	%)		10.57	%		25.42	%

(ac)	Terminated as an investment option and funds transferred to Core Strategy Trust on December 9, 2013.

(d)	Fund available in prior year but no activity.

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Core Bond Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		5			1			6			5			2
Units issued		3			4			—			6			10
Units redeemed		—			—			(5	)		(5	)		(7	)

Units, end of period (000’s)		8			5			1			6			5

Unit value, end of period $		15.34			15.67			14.71			13.58			12.67
Assets, end of period $ (000’s)		140			97			44			99			73
Investment income ratio*		2.40	%		3.95	%		2.27	%		2.80	%		2.10	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		(2.12	%)		6.54	%		8.32	%		7.17	%		9.93	%

	Sub-Account
	Core Strategy Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10 (q)			Dec. 31/09 (aj)
Units, beginning of period		—			—			—			—			1
Units issued		56			—			—			—			—
Units redeemed		(2	)		—			—			—			(1	)

Units, end of period (000’s)		54			—			—			—			—

Unit value, end of period $		13.88			11.64			10.34			10.32			9.17
Assets, end of period $ (000’s)		746			2			2			—			—
Investment income ratio*		8.88	%		2.87	%		5.43	%		1.95	%		0.01	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		19.29	%		12.58	%		0.19	%		12.57	%		21.93	%

(q)	Fund available in current year but no activity.

(aj)	Renamed on May 4, 2009. Previously known as Index Allocation Trust.

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Disciplined Diversification Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13 (ac)			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		33			32			31			28			1
Units issued		3			4			4			6			27
Units redeemed		(36	)		(3	)		(3	)		(3	)		—

Units, end of period (000’s)		—			33			32			31			28

Unit value, end of period $		13.23			11.51			10.21			10.42			9.19
Assets, end of period $ (000’s)		—			359			312			313			251
Investment income ratio*		4.06	%		2.49	%		2.24	%		1.72	%		2.91	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		14.89	%		12.79	%		(2.04	%)		13.45	%		27.27	%

(ac) Terminated as an investment option and funds transferred to Core Strategy Trust on December 9, 2013.

	Sub-Account
	Emerging Markets Value Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		132			127			143			220			61
Units issued		58			27			37			122			191
Units redeemed		(38	)		(22	)		(53	)		(199	)		(32	)

Units, end of period (000’s)		152			132			127			143			220

Unit value, end of period $		11.50 to 11.97			11.95 to 12.36			10.14 to 10.43			13.98 to 14.29			11.42 to 11.61
Assets, end of period $ (000’s)		1,796			1,624			1,319			2,031			2,528
Investment income ratio*		1.37	%		1.14	%		1.52	%		1.21	%		0.17	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		(3.76%) to (3.18	%)		17.79% to 18.49	%		(27.46%) to (27.02	%)		22.38% to 23.11	%		100.14% to 101.36	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Equity-Income Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		1,263			1,370			1,493			1,637			1,765
Units issued		32			35			90			68			112
Units redeemed		(160	)		(142	)		(213	)		(212	)		(240	)

Units, end of period (000’s)		1,135			1,263			1,370			1,493			1,637

Unit value, end of period $		38.35 to 42.63			29.66 to 32.78			25.40 to 27.90			25.75 to 28.12			22.48 to 24.40
Assets, end of period $ (000’s)		46,059			39,493			36,585			40,255			38,409
Investment income ratio*		1.95	%		2.12	%		1.81	%		1.95	%		2.22	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		29.27% to 30.05	%		16.77% to 17.47	%		(1.35%) to (0.76	%)		14.54% to 15.23	%		25.00% to 25.75	%

	Sub-Account
	Financial Services Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		62			59			75			86			74
Units issued		12			10			4			11			34
Units redeemed		(12	)		(7	)		(20	)		(22	)		(22	)

Units, end of period (000’s)		62			62			59			75			86

Unit value, end of period $		26.20			20.02			16.96			18.72			16.68
Assets, end of period $ (000’s)		1,615			1,232			1,001			1,397			1,432
Investment income ratio*		0.70	%		0.87	%		1.56	%		0.34	%		0.81	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		30.86	%		18.03	%		(9.39	%)		12.22	%		41.53	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Franklin Templeton Founding Allocation Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09 (d)
Units, beginning of period		5			5			5			4			—
Units issued		—			—			—			2			4
Units redeemed		(1	)		—			—			(1	)		—

Units, end of period (000’s)		4			5			5			5			4

Unit value, end of period $		14.12			11.34			9.75			9.89			8.93
Assets, end of period $ (000’s)		46			43			38			38			31
Investment income ratio*		2.41	%		3.18	%		3.05	%		3.59	%		6.56	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		24.51	%		16.33	%		(1.45	%)		10.71	%		31.52	%

(d) Fund available in prior year but no activity.

	Sub-Account
	Frontier Capital Appreciation
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		19			18			19			22			25
Units issued		—			2			1			2			2
Units redeemed		(1	)		(1	)		(2	)		(5	)		(5	)

Units, end of period (000’s)		18			19			18			19			22

Unit value, end of period $		65.55 to 74.65			47.37 to 53.63			40.58 to 45.67			44.00 to 49.22			34.86 to 38.75
Assets, end of period $ (000’s)		1,146			855			705			812			768
Investment income ratio*		0.00	%		0.33	%		0.00	%		0.22	%		0.04	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		38.37% to 39.21	%		16.74% to 17.43	%		(7.78%) to (7.22	%)		26.25% to 27.00	%		47.72% to 48.61	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Fundamental All Cap Core Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11 (k)			Dec. 31/10			Dec. 31/09
Units, beginning of period		2,181			2,412			2,621			2,831			2,959
Units issued		63			69			95			124			215
Units redeemed		(245	)		(300	)		(304	)		(334	)		(343	)

Units, end of period (000’s)		1,999			2,181			2,412			2,621			2,831

Unit value, end of period $		19.73 to 88.16			14.52 to 65.28			11.74 to 53.10			11.98 to 54.53			10.02 to 45.89
Assets, end of period $ (000’s)		833,283			693,237			628,416			683,152			639,781
Investment income ratio*		0.99	%		0.81	%		1.09	%		1.21	%		1.45	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		35.05% to 35.87	%		22.92% to 23.67	%		(2.61%) to (2.02	%)		18.83% to 19.55	%		27.59% to 28.35	%

(k)	Renamed on June 27, 2011. Previously known as Optimized All Cap Trust.



	Sub-Account
	Fundamental Holdings Trust Series 1
	Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13 (ac)			Dec. 31/12			Dec. 31/11 (i)			Dec. 31/10 (d)
Units, beginning of period		2			1			1			—
Units issued		1			1			—			1
Units redeemed		(3	)		—			—			—

Units, end of period (000’s)		—			2			1			1

Unit value, end of period $		16.67			14.66			13.02			13.15
Assets, end of period $ (000’s)		—			17			7			8
Investment income ratio*		2.31	%		2.34	%		1.48	%		2.11	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		13.66	%		12.65	%		(1.05	%)		10.36	%

(ac)	Terminated as an investment option and funds transferred to Core Strategy Trust on December 9, 2013.

(i)	Renamed on October 31, 2011. Previously known as American Fundamental Holdings Trust Series 1.

(d)	Fund available in prior year but no activity.

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Fundamental Large Cap Value Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11 (l)			Dec. 31/10			Dec. 31/09
Units, beginning of period		6			2			3			3			3
Units issued		20			5			2			1			—
Units redeemed		(2	)		(1	)		(3	)		(1	)		—

Units, end of period (000’s)		24			6			2			3			3

Unit value, end of period $		18.04			13.62			10.94			10.74			9.46
Assets, end of period $ (000’s)		448			91			34			39			29
Investment income ratio*		1.55	%		1.80	%		0.93	%		2.23	%		2.21	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		32.46	%		24.48	%		1.90	%		13.51	%		0.2453

(l) Renamed on June 27, 2011. Previously known as Optimized Value Trust.

	Sub-Account
	Fundamental Value Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		41			42			49			44			37
Units issued		4			4			4			11			15
Units redeemed		(10	)		(5	)		(11	)		(6	)		(8	)

Units, end of period (000’s)		35			41			42			49			44

Unit value, end of period $		17.45			13.06			11.52			11.96			10.57
Assets, end of period $ (000’s)		607			537			479			579			457
Investment income ratio*		1.36	%		0.99	%		0.80	%		1.25	%		1.05	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		33.62	%		13.40	%		(3.74	%)		13.20	%		31.83	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Global Bond Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		282			293			328			370			399
Units issued		42			24			30			69			53
Units redeemed		(49	)		(35	)		(65	)		(111	)		(82	)

Units, end of period (000’s)		275			282			293			328			370

Unit value, end of period $		27.06 to 30.08			28.82 to 31.84			27.06 to 29.72			24.95 to 27.24			22.74 to 24.68
Assets, end of period $ (000’s)		7,880			8,529			8,304			8,571			8,791
Investment income ratio*		0.51	%		7.22	%		6.31	%		3.60	%		12.49	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		(6.10%) to (5.54	%)		6.51% to 7.15	%		8.44% to 9.08	%		9.74% to 10.40	%		14.72% to 15.41	%



	Sub-Account
	Global Diversification Trust Series 1
	Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13 (ac)			Dec. 31/12			Dec. 31/11 (j)			Dec. 31/10 (d)
Units, beginning of period		15			13			12			—
Units issued		3			3			4			12
Units redeemed		(18	)		(1	)		(3	)		—

Units, end of period (000’s)		—			15			13			12

Unit value, end of period $		17.42			15.36			13.26			14.18
Assets, end of period $ (000’s)		—			216			163			161
Investment income ratio*		1.91	%		1.86	%		2.27	%		3.79	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		13.46	%		15.84	%		(6.49	%)		12.57	%

(ac)	Terminated as an investment option and funds transferred to Core Strategy Trust on December 9, 2013.

(j)	Renamed on October 31, 2011. Previously known as American Global Diversification Trust Series 1.

(d)	Fund available in prior year but no activity.

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Global Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		15			17			22			19			18
Units issued		7			2			4			4			3
Units redeemed		(7	)		(4	)		(9	)		(1	)		(2	)

Units, end of period (000’s)		15			15			17			22			19

Unit value, end of period $		17.70			13.51			11.09			11.79			10.94
Assets, end of period $ (000’s)		259			194			184			256			201
Investment income ratio*		1.80	%		2.23	%		1.77	%		1.82	%		1.81	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		31.04	%		21.82	%		(5.96	%)		7.82	%		31.47	%

	Sub-Account
	Health Sciences Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		136			148			149			168			181
Units issued		12			13			20			12			37
Units redeemed		(28	)		(25	)		(21	)		(31	)		(50	)

Units, end of period (000’s)		120			136			148			149			168

Unit value, end of period $		40.81			26.98			20.45			18.48			15.96
Assets, end of period $ (000’s)		4,911			3,670			3,026			2,744			2,681
Investment income ratio*		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		51.24	%		31.93	%		10.67	%		15.81	%		31.84	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	High Yield Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		322			350			425			486			422
Units issued		61			14			39			128			388
Units redeemed		(44	)		(42	)		(114	)		(189	)		(324	)

Units, end of period (000’s)		339			322			350			425			486

Unit value, end of period $		19.24 to 21.14			17.81 to 19.45			15.05 to 16.33			14.97 to 16.15			13.24 to 14.20
Assets, end of period $ (000’s)		6,940			6,121			5,602			6,743			6,732
Investment income ratio*		6.99	%		7.89	%		8.51	%		39.91	%		11.43	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		8.03% to 8.68	%		18.33% to 19.07	%		0.53% to 1.14	%		13.07% to 13.75	%		53.59% to 54.51	%

	Sub-Account
	International Core Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		36			93			91			83			90
Units issued		6			6			7			14			4
Units redeemed		(11	)		(63	)		(5	)		(6	)		(11	)

Units, end of period (000’s)		31			36			93			91			83

Unit value, end of period $		17.23			13.77			11.96			13.22			12.05
Assets, end of period $ (000’s)		497			478			1,098			1,193			989
Investment income ratio*		2.75	%		3.04	%		2.52	%		2.08	%		2.51	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		25.13	%		15.16	%		(9.55	%)		9.67	%		18.62	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	International Equity Index Trust B
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		485			522			579			657			702
Units issued		21			36			21			38			65
Units redeemed		(53	)		(73	)		(78	)		(116	)		(110	)

Units, end of period (000’s)		453			485			522			579			657

Unit value, end of period $		41.44 to 47.59			36.40 to 41.55			31.10 to 35.28			36.37 to 41.02			32.83 to 36.81
Assets, end of period $ (000’s)		41,920			39,626			36,834			47,278			48,133
Investment income ratio*		2.47	%		1.23	%		3.33	%		2.52	%		3.86	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		13.85% to 14.54	%		17.06% to 17.76	%		(14.50%) to (13.99	%)		10.77% to 11.43	%		37.97% to 38.80	%


	Sub-Account
	International Growth Stock Trust
	Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12 (p)
Units, beginning of period		33			—
Units issued		3			34
Units redeemed		(6	)		(1	)

Units, end of period (000’s)		30			33

Unit value, end of period $		12.41			10.41
Assets, end of period $ (000’s)		377			346
Investment income ratio*		1.19	%		4.28	%
Expense ratio lowest to highest**		0.00	%		0.00	%
Total return lowest to highest***		19.18	%		4.12	%

(p)	Reflects the period from commencement of operations on November 5, 2012 through December 31, 2012.

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	International Small Company Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09 (am)
Units, beginning of period		28			29			32			47			—
Units issued		5			3			7			8			50
Units redeemed		(9	)		(4	)		(10	)		(23	)		(3	)

Units, end of period (000’s)		24			28			29			32			47

Unit value, end of period $		15.23			12.06			10.12			12.07			9.84
Assets, end of period $ (000’s)		386			354			304			398			471
Investment income ratio*		1.75	%		1.39	%		1.67	%		2.65	%		0.79	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		26.30	%		19.23	%		(16.18	%)		22.62	%		(1.59	%)

(am) Reflects the period from commencement of operations on November 16, 2009 through December 31, 2009.

	Sub-Account
	International Value Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		733			792			927			91			82
Units issued		41			40			52			973			24
Units redeemed		(98	)		(99	)		(187	)		(137	)		(15	)

Units, end of period (000’s)		676			733			792			927			91

Unit value, end of period $		17.64 to 20.69			13.98 to 16.49			11.71 to 13.90			13.43 to 16.03			12.43
Assets, end of period $ (000’s)		12,746			10,996			9,999			13,483			1,129
Investment income ratio*		1.82	%		2.73	%		2.35	%		2.40	%		2.38	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00	%
Total return lowest to highest***		25.46% to 26.21	%		18.65% to 19.36	%		(13.31%) to (12.80	%)		8.00% to 8.34	%		35.94	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Investment Quality Bond Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		53			55			52			53			53
Units issued		2			2			5			3			8
Units redeemed		(4	)		(4	)		(2	)		(4	)		(8	)

Units, end of period (000’s)		51			53			55			52			53

Unit value, end of period $		15.14			15.43			14.33			13.26			12.33
Assets, end of period $ (000’s)		768			818			784			684			654
Investment income ratio*		3.83	%		2.15	%		4.40	%		5.29	%		5.05	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		(1.88	%)		7.66	%		8.06	%		7.54	%		12.43	%

	Sub-Account
	Large Cap Growth
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09 (ak)
Units, beginning of period		12			14			14			13			15
Units issued		1			1			1			2			1
Units redeemed		(1	)		(3	)		(1	)		(1	)		(3	)

Units, end of period (000’s)		12			12			14			14			13

Unit value, end of period $		38.02 to 45.61			28.10 to 33.50			23.69 to 28.08			24.02 to 28.31			19.64 to 23.00
Assets, end of period $ (000’s)		461			346			345			348			272
Investment income ratio*		0.57	%		0.05	%		0.00	%		0.37	%		0.64	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		35.34% to 36.15	%		18.60% to 19.31	%		(1.40%) to (0.80	%)		22.33% to 23.06	%		36.58% to 37.41	%

(ak)	Renamed on November 16, 2009. Previously known as Turner Core Growth Trust.

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Lifestyle Aggressive Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		329			338			376			380			393
Units issued		25			22			30			37			64
Units redeemed		(44	)		(31	)		(68	)		(41	)		(77	)

Units, end of period (000’s)		310			329			338			376			380

Unit value, end of period $		18.39			14.51			12.43			13.29			11.41
Assets, end of period $ (000’s)		5,703			4,778			4,208			5,002			4,333
Investment income ratio*		2.47	%		1.46	%		1.73	%		2.05	%		1.12	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		26.77	%		16.67	%		(6.46	%)		16.50	%		35.70	%

	Sub-Account
	Lifestyle Balanced Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		4,309			4,660			5,112			5,311			6,312
Units issued		214			286			298			519			378
Units redeemed		(508	)		(637	)		(750	)		(718	)		(1,379	)

Units, end of period (000’s)		4,015			4,309			4,660			5,112			5,311

Unit value, end of period $		16.00 to 16.85			14.26 to 14.93			12.82 to 13.34			12.81 to 13.25			11.53 to 11.85
Assets, end of period $ (000’s)		376,932			362,016			353,420			381,353			380,626
Investment income ratio*		2.85	%		2.28	%		3.29	%		2.76	%		4.35	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		12.23% to 12.89	%		11.24% to 11.90	%		0.08% to 0.67	%		11.11% to 11.78	%		30.12% to 30.89	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Lifestyle Conservative Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		195			53			94			46			35
Units issued		44			151			15			75			39
Units redeemed		(193	)		(9	)		(56	)		(27	)		(28	)

Units, end of period (000’s)		46			195			53			94			46

Unit value, end of period $		15.62			15.02			13.84			13.27			12.15
Assets, end of period $ (000’s)		708			2,919			726			1,236			555
Investment income ratio*		1.09	%		5.86	%		3.61	%		3.10	%		5.97	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		3.99	%		8.55	%		4.27	%		9.25	%		21.63	%

	Sub-Account
	Lifestyle Growth Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		2,144			2,315			2,380			2,408			2,680
Units issued		290			253			354			283			296
Units redeemed		(251	)		(424	)		(419	)		(311	)		(568	)

Units, end of period (000’s)		2,183			2,144			2,315			2,380			2,408

Unit value, end of period $		16.73 to 17.62			14.09 to 14.76			12.45 to 12.96			12.72 to 13.16			11.32 to 11.64
Assets, end of period $ (000’s)		38,039			31,305			29,722			31,048			27,807
Investment income ratio*		2.63	%		1.84	%		2.69	%		2.53	%		3.46	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		18.67% to 19.38	%		13.23% to 13.91	%		(2.14%) to (1.55	%)		12.37% to 13.04	%		32.52% to 33.33	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Lifestyle Moderate Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		326			272			382			293			255
Units issued		29			89			37			166			98
Units redeemed		(45	)		(35	)		(147	)		(77	)		(60	)

Units, end of period (000’s)		310			326			272			382			293

Unit value, end of period $		15.62 to 16.45			14.25 to 14.92			12.95 to 13.48			12.73 to 13.17			11.57 to 11.90
Assets, end of period $ (000’s)		5,000			4,778			3,631			4,965			3,423
Investment income ratio*		3.05	%		2.71	%		3.35	%		2.84	%		5.27	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		9.61% to 10.26	%		10.06% to 10.70	%		1.76% to 2.38	%		10.03% to 10.69	%		26.44% to 27.18	%

	Sub-Account
	Mid Cap Index Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		76			88			134			72			57
Units issued		18			8			59			156			24
Units redeemed		(10	)		(20	)		(105	)		(94	)		(9	)

Units, end of period (000’s)		84			76			88			134			72

Unit value, end of period $		13.32 to 25.23			10.07 to 18.95			8.62 to 16.13			8.86 to 16.48			7.07 to 13.07
Assets, end of period $ (000’s)		1,710			1,219			1,200			1,657			853
Investment income ratio*		1.16	%		1.46	%		0.63	%		1.35	%		1.11	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		32.29% to 33.09	%		16.84% to 17.54	%		(2.73%) to (2.14	%)		25.30% to 26.06	%		4.14% to 36.74	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Mid Cap Stock Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		442			483			549			601			661
Units issued		12			13			26			58			49
Units redeemed		(47	)		(54	)		(92	)		(110	)		(109	)

Units, end of period (000’s)		407			442			483			549			601

Unit value, end of period $		60.61 to 68.19			44.56 to 49.83			36.64 to 40.73			40.58 to 44.84			33.17 to 36.43
Assets, end of period $ (000’s)		25,896			20,627			18,506			23,201			20,696
Investment income ratio*		0.07	%		0.00	%		0.00	%		0.00	%		0.00	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		36.02% to 36.84	%		21.61% to 22.34	%		(9.71%) to (9.16	%)		22.33% to 23.07	%		30.68% to 31.47	%

	Sub-Account
	Mid Value Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		381			413			480			555			564
Units issued		48			20			17			70			128
Units redeemed		(59	)		(52	)		(84	)		(145	)		(137	)

Units, end of period (000’s)		370			381			413			480			555

Unit value, end of period $		32.82 to 36.05			25.12 to 27.42			21.14 to 22.94			22.34 to 24.10			19.34 to 20.74
Assets, end of period $ (000’s)		12,824			10,118			9,213			11,248			11,215
Investment income ratio*		1.10	%		0.89	%		0.74	%		2.05	%		0.68	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		30.69% to 31.47	%		18.83% to 19.54	%		(5.37%) to (4.80	%)		15.48% to 16.16	%		45.38% to 46.27	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Money Market Trust B
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		1,010			1,300			1,618			1,769			1,939
Units issued		353			411			615			848			1,192
Units redeemed		(505	)		(701	)		(933	)		(999	)		(1,362	)

Units, end of period (000’s)		858			1,010			1,300			1,618			1,769

Unit value, end of period $		17.37 to 22.10			17.37 to 22.24			17.36 to 22.36			17.35 to 22.48			17.34 to 22.61
Assets, end of period $ (000’s)		68,126			73,032			85,040			93,563			100,167
Investment income ratio*		0.01	%		0.04	%		0.00	%		0.05	%		0.48	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		(0.61%) to 0.01	%		(0.56%) to 0.03	%		(0.54%) to 0.08	%		(0.55%) to 0.03	%		(0.12%) to 0.47	%

	Sub-Account
	Natural Resources Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		83			103			122			117			151
Units issued		10			24			16			39			48
Units redeemed		(34	)		(44	)		(35	)		(34	)		(82	)

Units, end of period (000’s)		59			83			103			122			117

Unit value, end of period $		17.49			16.97			16.87			21.16			18.36
Assets, end of period $ (000’s)		1,012			1,394			1,711			2,551			2,137
Investment income ratio*		0.55	%		0.82	%		0.53	%		0.72	%		1.16	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		3.07	%		0.58	%		(20.27	%)		15.25	%		59.23	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Real Estate Securities Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		162			175			186			208			237
Units issued		6			8			17			17			24
Units redeemed		(21	)		(21	)		(28	)		(39	)		(53	)

Units, end of period (000’s)		147			162			175			186			208

Unit value, end of period $		92.59 to 105.43			93.19 to 105.48			79.90 to 89.90			73.36 to 82.05			57.12 to 63.50
Assets, end of period $ (000’s)		34,812			37,257			34,401			33,923			29,013
Investment income ratio*		1.91	%		1.77	%		1.52	%		1.94	%		3.51	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		(0.65%) to (0.05	%)		16.64% to 17.33	%		8.92% to 9.58	%		28.43% to 29.20	%		29.48% to 30.26	%

	Sub-Account
	Real Return Bond Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		41			48			46			29			19
Units issued		25			6			18			35			19
Units redeemed		(27	)		(13	)		(16	)		(18	)		(9	)

Units, end of period (000’s)		39			41			48			46			29

Unit value, end of period $		14.24			15.69			14.41			12.85			11.81
Assets, end of period $ (000’s)		539			638			692			590			340
Investment income ratio*		2.44	%		1.75	%		4.07	%		12.93	%		8.94	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		(9.25	%)		8.86	%		12.14	%		8.82	%		19.54	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Science & Technology Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		58			57			66			55			96
Units issued		11			6			8			83			18
Units redeemed		(9	)		(5	)		(17	)		(72	)		(59	)

Units, end of period (000’s)		60			58			57			66			55

Unit value, end of period $		23.78			16.57			14.99			16.24			13.02
Assets, end of period $ (000’s)		1,440			959			860			1,069			717
Investment income ratio*		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		43.55	%		10.54	%		(7.72	%)		24.69	%		64.57	%



	Sub-Account
	Short Term Government Income Trust
	Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10 (ba)
Units, beginning of period		483			542			769			—
Units issued		71			35			64			873
Units redeemed		(109	)		(94	)		(291	)		(104	)

Units, end of period (000’s)		445			483			542			769

Unit value, end of period $		10.52 to 17.95			10.60 to 18.19			10.48 to 18.09			10.19 to 17.70
Assets, end of period $ (000’s)		5,307			5,775			6,465			8,916
Investment income ratio*		2.01	%		1.63	%		2.22	%		1.51	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		(1.34%) to (0.74	%)		0.58% to 1.18	%		2.21% to 2.83	%		1.49% to 1.91	%

(ba)	Reflects the period from commencement of operations on May 3, 2010 through December 31, 2010.

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Small Cap Growth Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		1,065			1,159			1,322			1,448			1,607
Units issued		44			40			71			131			137
Units redeemed		(124	)		(134	)		(234	)		(257	)		(296	)

Units, end of period (000’s)		985			1,065			1,159			1,322			1,448

Unit value, end of period $		27.40 to 30.46			19.11 to 21.12			16.50 to 18.13			17.81 to 19.45			14.67 to 15.92
Assets, end of period $ (000’s)		27,959			21,072			19,776			24,290			21,877
Investment income ratio*		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		43.36% to 44.21	%		15.83% to 16.53	%		(7.35%) to (6.79	%)		21.41% to 22.14	%		33.66% to 34.46	%

	Sub-Account
	Small Cap Index Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		86			92			102			104			96
Units issued		7			7			7			15			18
Units redeemed		(11	)		(13	)		(17	)		(17	)		(10	)

Units, end of period (000’s)		82			86			92			102			104

Unit value, end of period $		24.79			17.87			15.40			16.10			12.74
Assets, end of period $ (000’s)		2,006			1,519			1,407			1,640			1,321
Investment income ratio*		1.56	%		2.06	%		1.16	%		0.56	%		0.95	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		38.75	%		16.06	%		(4.37	%)		26.43	%		26.70	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Small Cap Opportunities Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		6			30			32			30			28
Units issued		10			1			5			7			7
Units redeemed		(2	)		(25	)		(7	)		(5	)		(5	)

Units, end of period (000’s)		14			6			30			32			30

Unit value, end of period $		18.97			13.52			11.57			11.94			9.21
Assets, end of period $ (000’s)		283			90			348			377			274
Investment income ratio*		0.69	%		0.00	%		0.10	%		0.00	%		0.00	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		40.28	%		16.88	%		(3.13	%)		29.71	%		34.03	%

	Sub-Account
	Small Cap Value Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		201			223			255			288			304
Units issued		6			6			9			18			21
Units redeemed		(23	)		(28	)		(41	)		(51	)		(37	)

Units, end of period (000’s)		184			201			223			255			288

Unit value, end of period $		64.51			48.39			41.79			41.32			32.75
Assets, end of period $ (000’s)		11,819			9,677			9,293			10,537			9,444
Investment income ratio*		0.59	%		0.89	%		0.85	%		0.41	%		0.70	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		33.33	%		15.78	%		1.15	%		26.15	%		28.79	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Small Company Value Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		23			20			22			26			29
Units issued		4			5			3			4			8
Units redeemed		(4	)		(2	)		(5	)		(8	)		(11	)

Units, end of period (000’s)		23			23			20			22			26

Unit value, end of period $		22.78			17.30			14.86			15.00			12.36
Assets, end of period $ (000’s)		544			404			310			334			329
Investment income ratio*		1.72	%		0.26	%		0.59	%		1.45	%		0.40	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		31.68	%		16.41	%		(0.94	%)		21.39	%		27.82	%

	Sub-Account
	Smaller Company Growth Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13 (ag)			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09 (am)
Units, beginning of period		4			3			7			4			—
Units issued		3			1			2			6			4
Units redeemed		(7	)		—			(6	)		(3	)		—

Units, end of period (000’s)		—			4			3			7			4

Unit value, end of period $		19.23			14.23			12.24			13.16			10.52
Assets, end of period $ (000’s)		—			58			48			94			39
Investment income ratio*		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		35.12	%		16.27	%		(7.04	%)		25.12	%		5.22	%

(ag)	Terminated as an investment option and funds transferred to Small Cap Opportunities Trust on December 9, 2013.

(am)	Reflects the period from commencement of operations on November 16, 2009 through December 31, 2009.

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Strategic Income Opportunities Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10 (az)			Dec. 31/09
Units, beginning of period		49			49			75			45			21
Units issued		51			12			20			42			38
Units redeemed		(35	)		(12	)		(46	)		(12	)		(14	)

Units, end of period (000’s)		65			49			49			75			45

Unit value, end of period $		18.22			17.55			15.54			15.22			13.13
Assets, end of period $ (000’s)		1,168			848			750			1,135			587
Investment income ratio*		7.04	%		7.42	%		10.01	%		12.95	%		6.65	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		3.81	%		12.94	%		2.08	%		15.91	%		26.78	%

(az) Renamed on May 3, 2010. Previously known as Strategic Income Trust.

	Sub-Account
	Total Bond Market Trust B
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		897			1,060			1,201			1,280			1,217
Units issued		31			49			53			104			232
Units redeemed		(99	)		(212	)		(194	)		(183	)		(169	)

Units, end of period (000’s)		829			897			1,060			1,201			1,280

Unit value, end of period $		20.28 to 22.27			20.91 to 22.83			20.21 to 21.94			18.90 to 20.39			17.85 to 19.14
Assets, end of period $ (000’s)		18,166			20,130			22,871			24,112			24,183
Investment income ratio*		3.37	%		1.57	%		4.17	%		4.40	%		5.16	%
Expense ratio lowest to highest**		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%		0.00% to 0.60	%
Total return lowest to highest***		(3.01%) to (2.44	%)		3.47% to 4.08	%		6.96% to 7.60	%		5.85% to 6.49	%		5.64% to 6.29	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Total Return Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		173			168			173			178			144
Units issued		31			29			24			56			66
Units redeemed		(42	)		(24	)		(29	)		(61	)		(32	)

Units, end of period (000’s)		162			173			168			173			178

Unit value, end of period $		17.22			17.57			16.18			15.57			14.46
Assets, end of period $ (000’s)		2,801			3,046			2,726			2,698			2,586
Investment income ratio*		3.24	%		2.13	%		4.36	%		2.45	%		4.38	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		(1.98	%)		8.57	%		3.97	%		7.66	%		13.71	%

	Sub-Account
	Total Stock Market Index Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		142			158			172			201			213
Units issued		5			5			7			9			20
Units redeemed		(15	)		(21	)		(21	)		(38	)		(32	)

Units, end of period (000’s)		132			142			158			172			201

Unit value, end of period $		71.52			53.59			46.38			46.23			39.42
Assets, end of period $ (000’s)		9,560			7,677			7,370			7,999			7,953
Investment income ratio*		1.46	%		1.53	%		1.28	%		1.37	%		1.64	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		33.45	%		15.56	%		0.33	%		17.26	%		28.93	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Ultra Short Term Bond Trust
	Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11 (d)
Units, beginning of period		19			11			—
Units issued		7			18			14
Units redeemed		(3	)		(10	)		(3	)

Units, end of period (000’s)		23			19			11

Unit value, end of period $		10.07			10.07			10.00
Assets, end of period $ (000’s)		213			180			106
Investment income ratio*		1.33	%		1.17	%		1.56	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		(0.02	%)		0.66	%		0.09	%

(d)	Fund available in prior year but no activity.


	Sub-Account
	U.S. Equity Trust
	Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12 (r)
Units, beginning of period		20			—
Units issued		2			21
Units redeemed		(4	)		(1	)

Units, end of period (000’s)		18			20

Unit value, end of period $		13.20			10.28
Assets, end of period $ (000’s)		244			210
Investment income ratio*		1.75	%		2.20	%
Expense ratio lowest to highest**		0.00	%		0.00	%
Total return lowest to highest***		28.36	%		2.81	%

(r)	Reflects the period from commencement of operations on April 30, 2012 through December 31, 2012.

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

11.

Financial Highlights


	Sub-Account
	Utilities Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		42			45			38			47			67
Units issued		10			6			17			9			15
Units redeemed		(15	)		(9	)		(10	)		(18	)		(35	)

Units, end of period (000’s)		37			42			45			38			47

Unit value, end of period $		26.50			21.97			19.33			18.10			15.88
Assets, end of period $ (000’s)		977			921			875			689			756
Investment income ratio*		2.10	%		3.75	%		4.42	%		2.28	%		4.61	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		20.65	%		13.63	%		6.80	%		14.00	%		33.58	%

	Sub-Account
	Value Trust
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	Dec. 31/13			Dec. 31/12			Dec. 31/11			Dec. 31/10			Dec. 31/09
Units, beginning of period		32			34			46			45			73
Units issued		5			4			7			11			12
Units redeemed		(7	)		(6	)		(19	)		(10	)		(40	)

Units, end of period (000’s)		30			32			34			46			45

Unit value, end of period $		24.72			18.25			15.53			15.37			12.57
Assets, end of period $ (000’s)		714			571			522			706			572
Investment income ratio*		0.80	%		0.85	%		0.99	%		1.07	%		1.27	%
Expense ratio lowest to highest**		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Total return lowest to highest***		35.44	%		17.50	%		1.03	%		22.30	%		41.19	%

John Hancock Variable Life Account U

Notes to Financial Statements (continued)

^(*)

^(**)

^(***)

PART C
OTHER INFORMATION

Item 26. Exhibits

The following exhibits are filed as part of this Registration Statement:

(a)(1) Resolution of the Board of Directors establishing Separate Account U is incorporated by reference to post-effective amendment number 1, file number 333-164174, filed with the Commission in April 2010.

(2) Resolution of Board of Directors of John Hancock Life Insurance Company (U.S.A.) accepting the intact transfer of John Hancock Variable Life Account U from John Hancock Variable Life Insurance Company, incorporated by reference to the Registrant’s Initial Registration Statement filed with the Commission on January 4, 2010.

(b) Not applicable.

(c) (1) Distribution Agreement and Servicing Agreement between John Hancock Distributors and John Hancock Life Insurance Company (U.S.A.) dated February 17, 2009, incorporated by reference to pre-effective amendment number 1, file number 333-157212, filed with the Commission on April 7, 2009.

(2)(a) Specimen General Agent and Broker-Dealer Selling Agreement by and among John Hancock Life Insurance Company (U.S.A.) and John Hancock Distributors LLC effective August, 2009, incorporated by reference to pre-effective amendment number 2, file number 333-157212, filed with the Commission in April, 2011.

(b) List of third party broker-dealer firms included as Attachment A, incorporated by reference to post-effective amendment number 6, file number 333-179570, filed with the Commission in April, 2014.

(d)(1) Form of Policy Endorsement for John Hancock Variable Life Insurance Company dated December 31, 2009, incorporated by reference to Registrant’s Initial Registration Statement filed with the Commission on January 4, 2010 and form of Policy Endorsement dated 2009, is incorporated by reference to post-effective amendment number 1, file number 333-164150, filed with the Commission in April 2010.

(2) Form of specimen flexible variable life insurance policy for Medallion Variable Life, incorporated by reference to the initial registration statement, file number 333-164171, filed with the Commission on January 4, 2010.

(3) Form of specimen flexible variable life insurance policy for Medallion Variable Universal Life Plus, incorporated by reference to the initial registration statement, file number 333-164171, filed with the Commission on January 4, 2010.

(4) Form of specimen Enhanced Cash Value Rider, incorporated by reference to the initial registration statement, file number 333-164171, filed with the Commission on January 4, 2010.

(5) Form of specimen Disability Waiver of Charges Benefit Rider, incorporated by reference to the initial registration statement, file number 333-164171, filed with the Commission on January 4, 2010.

(6) Form of specimen Age 100 Waiver of Charges Rider, incorporated by reference to the initial registration statement, file number 333-164171, filed with the Commission on January 4, 2010.

(7) Form of specimen Settlement Option Provision Acceleration of Death Benefits for Terminal Illness Rider, incorporated by reference to the initial registration statement, file number 333-164171, filed with the Commission on January 4, 2010.

(8) Form of specimen Acceleration of Life Insurance Death Benefit for Qualified Long-Term Care Services Rider, incorporated by reference to the initial registration statement, file number 333-164171, filed with the Commission on January 4, 2010.

(9) Form of specimen Children’s Insurance Benefit Rider, incorporated by reference to the initial registration statement, file number 333-164171, filed with the Commission on January 4, 2010.

(10) Form of specimen Yearly Renewable Decreasing Term Benefit Rider, incorporated by reference to the initial registration statement, file number 333-164171, filed with the Commission on January 4, 2010.

(11) Form of specimen Accidental Death Benefit Rider, incorporated by reference to the initial registration statement, file number 333-164171, filed with the Commission on January 4, 2010.

(e) Specimen policy application, incorporated by reference to the initial registration statement, filed with the Commission on January 4, 2010.

(f) (1) Restated Articles of Redomestication of the John Hancock Life Insurance Company (U.S.A.) (formerly, The Manufacturers Life Insurance Company (U.S.A.)) dated December 30, 1992, incorporated by reference to post-effective amendment number 9, file number 333-85284, filed with the Commission in April, 2007.

(a) Amendment to the Articles of Redomestication of John Hancock Life Insurance Company (U.S.A.) (formerly, The Manufacturers Life Insurance Company (U.S.A.)) dated July 16, 2004, incorporated by reference to pre-effective amendment number 1, file number 333-126668, filed with the Commission on October 12, 2005.

(b) Amendment to the Articles of Redomestication effective January 1, 2005, incorporated by reference to post-effective amendment number 9, file number 333-85284, filed with the Commission in April, 2007.

(c) Amended and Restated Articles of Redomestication and Articles of Incorporation of John Hancock Life Insurance Company (U.S.A.) dated July 26, 2010, and further amended as of November 20, 2012, incorporated by reference to post-effective amendment number 2, file number 333-179570, filed with the Commission in April 2013.

(2) By-laws of John Hancock Life Insurance Company (U.S.A.) (formerly, The Manufacturers Life Insurance Company (U.S.A.)) dated December 2, 1992, incorporated by reference to pre-effective amendment number 1, file number 333-126668, filed with the Commission on October 12, 2005.

(a) Amendment to the By-laws of John Hancock Life Insurance Company (U.S.A.) (formerly, The Manufacturers Life Insurance Company (U.S.A.)) dated June 7, 2000, incorporated by reference to pre-effective amendment number 1, file number 333-126668, filed with the Commission on October 12, 2005.

(b) Amendment to the By-laws of John Hancock Life Insurance Company (U.S.A.) (formerly, The Manufacturers Life Insurance Company (U.S.A.)) dated March 12, 1999, incorporated by reference to pre-effective amendment number 1, file number 333-126668, filed with the Commission on October 12, 2005.

(c) Amendment to the By-laws of John Hancock Life Insurance Company (U.S.A.) (formerly, The Manufacturers Life Insurance Company (U.S.A.)) dated July 16, 2004, incorporated by reference to post-effective amendment number 9, file number 333-85284, filed with the Commission in April, 2007.

(d) Amended and Restated By-laws of John Hancock Life Insurance Company (U.S.A.) dated June 15, 2010, incorporated by reference to post-effective amendment number 2, file number 333-179570, filed with the Commission in April 2013.

(g)(1)The Depositor maintains reinsurance arrangements in the normal course of business, none of which are material.

(2) Service Agreement and Indemnity Combination Coinsurance and Modified Coinsurance Agreement of Variable Insurance Policies between John Hancock Life Insurance Company (U.S.A.) and John Hancock Life Insurance Company of NewYork, incorporated by reference to the Initial Registration Statement, file number 333-164150, filed with the Commission on January 4, 2010.

(h)(1) Participation Agreement among the Manufacturers Insurance Company (U.S.A.), the Manufacturers Insurance Company of New York, PIMCO Variable Insurance Trust and PIMCO Advisors Distributors LLC dated April 30, 2004, incorporated by reference to pre-effective amendment number 1, file number 333-126668, filed with the Commission on October 12, 2005.

(2) Participation Agreement among John Hancock Life Insurance Company (U.S.A.), John Hancock Life Insurance Company of New York, and John Hancock Trust dated April 20, 2005, incorporated by reference to pre-effective amendment number 1, file number 333-126668, filed with the Commission on October 12, 2005.

(3) Participation Agreement among John Hancock Life Insurance Company (U.S.A.), John Hancock Life Insurance Company of New York, and M Financial Investment Advisers, Inc. dated November 13, 2009, incorporated by reference to file number 333-164150, filed with the Commission on January 4, 2010.

4) Shareholder Information Agreement between John Hancock Life Insurance Company (U.S.A.), John Hancock Life Insurance Company of New York, John Hancock Life Insurance Company, John Hancock Variable Life Insurance, and John Hancock Trust portfolios (except American Funds Insurance Series) dated April 16, 2007, incorporated by reference to post-effective amendment number 9, file number 333-85284, filed with the Commission in April, 2007.

(5) Shareholder Information Agreement between John Hancock Life Insurance Company (U.S.A.), John Hancock Life Insurance Company of New York, John Hancock Life Insurance Company, John Hancock Variable Life Insurance, and John Hancock Trust on behalf of series of the Trust that are feeder funds of the American Funds Insurance Series dated April 16, 2007, incorporated by reference to post-effective amendment number 9, file number 333-85284, filed with the Commission in April, 2007.

(i) (1) Service agreement between Manulife Financial Corporation and the Manufacturers Life Insurance Company (U.S.A.), dated January 1, 2001, incorporated by reference to post-effective amendment number 6, file number 333-179570, filed with the Commission in April, 2014.

(j) Not applicable.

(k) Opinion and consent of counsel regarding the legality of the securities being registered, incorporated by reference to the initial registration statement, filed with the Commission on January 4, 2010.

(l) Not Applicable.

(m) Not Applicable.

(n) Consents of Independent Registered Public Accounting Firm, filed herewith.

(n)(1) Opinion of Counsel as to the eligibility of this post-effective amendment to be filed pursuant to Rule 485(b), filed herewith.

(o) Not Applicable.

(p) Not Applicable.

(q) Memorandum Regarding Issuance, Face Amount Increase, Redemption and Transfer Procedures for the policies, incorporated by reference to pre-effective amendment number 1, file number 333-100597, filed with the Commission on December 16, 2002.

Powers of Attorney

(i) Powers of Attorney for Craig Bromley, Thomas Borshoff, Paul M. Connolly, Michael Doughty, Ruth Ann Fleming, James D. Gallagher, Scott S. Hartz, Rex Schlaybaugh, Jr., and John Vrysen, incorporated by reference to post-effective amendment number 1, file number 333-179570, filed with the Commission April 24, 2013.

Item 27. Directors and Officers of the Depositor

OFFICERS AND DIRECTORS OF JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

Name and Principal Business Address	Position with Depositor
Craig Bromley 601 Congress Street Boston, MA 02210	Director, Chairman and President
Thomas Borshoff 536 Stone Road Pittsford, NY 14534	Director
Paul M. Connolly 75 Indian Spring Road Milton, MA 02186	Director
Michael Doughty 197 Clarendon Street Boston, MA 02116	Director
Ruth Ann Fleming 205 Highland Avenue Short Hills, NJ 07078	Director
James D. Gallagher 601 Congress Street Boston, MA 02210	Director, Executive Vice President, General Counsel and Chief Administrative Officer
Scott S. Hartz 197 Clarendon Street Boston, MA 02116	Director, Executive Vice President and Chief Investment Officer
Rex Schlaybaugh, Jr. 400 Renaissance Center Detroit, MI 48243	Director
John G. Vrysen 601 Congress Street Boston, MA 02210	Director and Senior Vice President

Executive Vice Presidents
Michael Doughty**
Steven Finch*	and Chief Financial Officer
James D. Gallagher*	and General Counsel & Chief Administrative Officer
Scott S. Hartz**	and Chief Investment Officer – US Investments

Senior Vice Presidents
Andrew G. Arnott*
Kevin J. Cloherty*

Name and Principal Business Address	Position with Depositor
Barry Evans ††††
Peter Gordon*
Brian Heapps**
Gregory Mack*
Janis K. McDonough*****
H. Steven Moore****	and Treasurer
James O’Brien †††
Sebastian Pariath*	and Head of Operations and Chief Information Officer
Timothy W. Ramza*
Alan R. Seghezzi**
Anthony Teta**
Brooks Tingle**

Vice Presidents
Emanuel Alves*	Counsel and Corporate Secretary
John C.S. Anderson**
Roy V. Anderson*
Abigail M. Armstrong**
Kevin Askew*****
James Bacharach*
William Ball**
Ann Birle*****
Stephen J. Blewitt**
Alan Block*
Robert Boyda**
Grant Buchanan***
David Campbell***
Bob Carroll**
Rick A. Carlson*
Brian Collins*
Paul M. Crowley**
John J. Danello*
Brent Dennis**
Robert Donahue*****
Paul Gallagher*
Ann Gencarella**
Richard Harris***	and Appointed Actuary
John Hatch*
Kevin Hill**
Eugene Xavier Hodge, Jr.*
James C. Hoodlet**
Roy Kapoor****
Mitchell Karman*	and Chief Compliance Officer & Counsel
Frank Knox*	and Chief Compliance Officer – Retail Funds/Separate Accounts
Hung Ko***	Vice President, Treasury
David Kroach***
Robert Leach*
Scott Lively*
Cheryl Mallett****
Nathaniel I. Margolis**
John B. Maynard*
Karen McCafferty*
Scott A. McFetridge**
William McPadden**
Maureen Milet**	and Chief Compliance Officer – Investments
Scott Morin*
Jeffrey H. Nataupsky*
Scott Navin**

Name and Principal Business Address	Position with Depositor
Betty Ng***
Nina Nicolosi*
Jeffrey Packard**
Frank O‘Neill*
Daragh O’Sullivan**
Jacques Ouimet**
Gary M. Pelletier**
David Plumb*
Tracey Polsgrove*
Krishna Ramdial****	Vice President, Treasury
S. Mark Ray**
Jill Rebman***
George Revoir*
Mark Rizza*
Andrew Ross****
Lisa Anne Ryan †††
Thomas Samoluk*
Martin Sheerin*
Gordon Shone*
Rob Stanley*
Yiji S. Starr*
Christopher Sutherland**
Tony Todisco*****
Simonetta Vendittelli*	and Controller
Peter de Vries***
Linda A. Watters*
Jeffery Whitehead*
Brent Wilkinson †††
Henry Wong**
Leo Zerilli*

Assistant Vice Presidents
Cathy Addison
Joanne Adkins
Stacey Agretelis
Patricia L. Allison
Eynshteyn Averbukh
Michael Barnes
Jack Barry
Naomi S. Bazak
P. J. Beltramini
William D. Bertrand
Jon Bourgault
Daniel C. Budde
Jennifer Toone Campanella
Suzanne Cartledge
Tabitha Chinniah
Anjali Chitre
Catherine Collins
Thomas Corrigan
Thomas D. Crohan
Diane Cronin
Jaime Hertel Dasque
Lorn C. Davis
Todd D. Emmel
Allan M. Fen
Paul A. Fishbin
Michael A. Foreman
Arthur Francis

Name and Principal Business Address	Position with Depositor
Donna Frankel
Philip W. Freiberger
Scott B. Garfield
John M. Garrison
Keith Gendron
William A. Gottlieb
Gerald C. Hanrahan, Jr.
Teresa S. Hayes
Charles Whitney Hill
Tina Joseph
Recep C. Kendircioglu
Bruce Kinna
Patty Kisielis
Sally Kwan
Brigitte Labreche
Thomas Loftus
Timothy J. Malik
Robert Maulden
Kathleen E. McDonough
Reid W. McLay
Pamela Memishian
John P. Monahan
Geoffrey Norris
John O’Connor
E. David Pemsteim
Charlie Philbrook	and Chief Risk Officer
David Pickett
Michael A. Pirrello
Malcolm Pittman
Jason M. Pratt
Sonya Prear
David P. Previte
Peta-Gaye Prinn
Malcolm Quinn
Hilary Quosai
Kathryn Riley
Josephine M. Rolka
Timothy A. Roseen
Louise Santosuosso
Eileen Schindler	and Chief Accountant
Mark Shannon
Susan Simi
Debbie Stickland
Michael Traynor
Joan Marie Uzdavinis
John Wallace
Sean A. Williams
Jennifer Wilson
Sameh Youssef
Paolo Zadra
Aleksander Zivanovic

*Principal Business Office is 601 Congress Street, Boston, MA 02210

**Principal Business Office is 197 Clarendon Street, Boston, MA 02116

***Principal Business Office is 200 Bloor Street, Toronto, Canada M4W1E5

****Principal Business Office is 250 Bloor Street, Toronto, Canada M4W1E5

*****Principal Business Office is 380 Stuart Street, Boston, MA 02116

†Principal Business is 6400 Sheridan Drive, Williamsville, NY 14221

††Principal Business is 2001 Butterfield Road, Downers Grove, Illinois 60515

†††Principal Business is 200 Berkeley Street, Boston, MA 02116

††††Principal Business is 101 Huntington Avenue, Boston, MA 02116

Item 28. Persons Controlled by or Under Common Control with the Depositor or the Registrant

The Registrant is a separate account of the Depositor operating as a unit investment trust. The Registrant supports benefits payable under the Depositor’s variable life insurance policies by investing assets allocated to various investment options in shares of John Hancock Variable Insurance Trust (formerly, John Hancock Trust) and other mutual funds registered under the Investment Company Act of 1940 as open-end management investment companies of the “series” type.

As of the effective date of the registration statement, the Company and its affiliates are controlled by Manulife Financial Corporation.

LOGO

Item 29. Indemnification

The Form of Selling Agreement or Service Agreement between John Hancock Distributors LLC (“JH Distributors”) and various broker-dealers may provide that the selling broker-dealer indemnify and hold harmless JH Distributors and the Company, including their affiliates, officers, directors, employees and agents against losses, claims, liabilities or expenses (including reasonable attorney’s fees), arising out of or based upon a breach of the Selling or Service Agreement, or any applicable law or regulation or any applicable rule of any self-regulatory organization or similar provision consistent with industry practice.

Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

Item 30. Principal Underwriter

(a) Set forth below is information concerning other investment companies for which JH Distributors, the principal underwriter of the contracts, acts as investment adviser or principal underwriter.

Name of Investment Company	Capacity in Which Acting
John Hancock Variable Life Account S	Principal Underwriter
John Hancock Variable Life Account U	Principal Underwriter
John Hancock Variable Life Account V	Principal Underwriter
John Hancock Variable Life Account UV	Principal Underwriter
John Hancock Life Insurance Company (U.S.A.) Separate Account R	Principal Underwriter
John Hancock Life Insurance Company (U.S.A.) Separate Account T	Principal Underwriter
John Hancock Life Insurance Company (U.S.A.) Separate Account W	Principal Underwriter
John Hancock Life Insurance Company (U.S.A.) Separate Account X	Principal Underwriter
John Hancock Life Insurance Company (U.S.A.) Separate Account Q	Principal Underwriter
John Hancock Life Insurance Company (U.S.A.) Separate Account A	Principal Underwriter
John Hancock Life Insurance Company (U.S.A.) Separate Account N	Principal Underwriter
John Hancock Life Insurance Company (U.S.A.) Separate Account H	Principal Underwriter
John Hancock Life Insurance Company (U.S.A.) Separate Account I	Principal Underwriter

Name of Investment Company	Capacity in Which Acting
John Hancock Life Insurance Company (U.S.A.) Separate Account J	Principal Underwriter
John Hancock Life Insurance Company (U.S.A.) Separate Account K	Principal Underwriter
John Hancock Life Insurance Company (U.S.A.) Separate Account M	Principal Underwriter
John Hancock Life Insurance Company of New York Separate Account B	Principal Underwriter
John Hancock Life Insurance Company of New York Separate Account A	Principal Underwriter

(b) John Hancock Life Insurance Company (U.S.A.) is the sole member of JH Distributors and the following comprise the Board of Managers and Officers of JH Distributors.

Name	Title
Michael Doughty**	Chairman, Director
Steven Finch*	Director
James C. Hoodlet**	Director
George Revoir*	Director, President and Chief Executive Officer
Alan Seghezzi**	Director
Christopher Walker***	Director, Vice President, Investments
Emanuel Alves*	Secretary
H. Steven Moore****	Senior Vice President, Treasurer
Brian Collins*	Vice President, US Taxation
Kris Ramdial****	Vice President, Treasury
Jeffrey H. Long*	Assistant Vice President, Chief Financial Officer and Financial Operations Principal
Michael Mahoney*	Assistant Vice President, Chief Compliance Officer
David Pickett*	Assistant Vice President, General Counsel

*Principal Business Office is 601 Congress Street, Boston, MA 02210

**Principal Business Office is 197 Clarendon Street, Boston, MA 02116

***Principal Business Office is 200 Bloor Street, Toronto, Canada M4W1E5

****Principal Business Office is 250 Bloor Street, Toronto, Canada M4W1E5

The information contained in the section titled “Principal Underwriter and Distributor” in the Statement of Additional Information, contained in this Registration Statement, is hereby incorporated by reference in response to Item 31.(c)(2-5).

Item 31. Location of Accounts and Records

The following entities prepare, maintain, and preserve the records required by Section 31(a) of the Act for the Registrant through written agreements between the parties to the effect that such services will be provided to the Registrant for such periods prescribed by the Rules and Regulations of the Commission under the Act and such records will be surrendered promptly on request: John Hancock Distributors LLC, John Hancock Place, Boston, Massachusetts 02117, serves as Registrant’s distributor and principal underwriter, and, in such capacities, keeps records regarding shareholders account records, canceled stock certificates. John Hancock Life Insurance Company (U.S.A.) (at the same address), in its capacity as Registrant’s depositor keeps all other records required by Section 31 (a) of the Act.

Item 32. Management Services

All management services contracts are discussed in Part A or Part B.

Item 33. Fee Representation

Representation of Insurer Pursuant to Section 26 of the Investment Company Act of 1940

John Hancock Life Insurance Company (U.S.A.) hereby represents that the fees and charges deducted under the contracts issued pursuant to this registration statement, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by the Company.

Signatures

Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant has caused this amendment to the Registration Statement to be signed on its behalf in the City of Boston, Commonwealth of Massachusetts, as of the 25^th day of April, 2014.

John Hancock Variable Life Account U

(Registrant)

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

By: /s/ Craig Bromley

Craig Bromley

Principal Executive Officer

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

(Depositor)

By: /s/ Craig Bromley

Craig Bromley

Principal Executive Officer

Signatures

Pursuant to the requirements of the Securities Act of 1933, this post-effective amendment to the Registration Statement has been signed by the following persons in the capacities indicated as of the 25^th day of April, 2014.

Signatures	Title
/s/ Simonetta Vendittelli Simonetta Vendittelli	Vice President and Controller

/s/ Steven Finch Steven Finch	Executive Vice President and Chief Financial Officer

* Craig Bromley	Director

* Thomas Borshoff	Director

* Paul M. Connolly	Director

* Ruth Ann Fleming	Director

* Michael Doughty	Director

* James D. Gallagher	Director

* Scott S. Hartz	Director

* Rex E. Schlaybaugh, Jr.	Director

* John G. Vrysen	Director


/s/James C. Hoodlet James C. Hoodlet

*Pursuant to Power of Attorney

April, 2014

This disclosure is distributed to policy owners of variable life insurance policies of John Hancock Life Insurance Company (U.S.A.) (“John Hancock USA”) and offering interests in John Hancock Variable Life Account U (the “Account” or “Separate Account”). Certain of the investment options described in this disclosure may not be available to you under your policy. You may contact the John Hancock USA Service Office for more information at 1-800-827-4546 or write to us at 197 Clarendon Street, C-6, Boston, MA 02117. For Majestic and COLI products, you may contact us at 1-800-521-1234 or write to us at the above address.

The investment options listed below are offered under variable life insurance policies bearing the title Annual Premium Variable Life.

Active Bond
Blue Chip Growth
Fundamental All Cap Core
International Equity Index B
Lifestyle Balanced MVP
Money Market B
Real Estate Securities

The investment options listed below are offered under variable life insurance policies bearing the title eVariable Life.

500 Index B
Active Bond
Blue Chip Growth
Capital Appreciation
Equity-Income
Financial Services
Global Bond
Health Sciences
High Yield
International Equity Index B
International Value
Mid Cap Index
Mid Cap Stock
Mid Value
Money Market B
Real Estate Securities
Short Term Government Income
Small Cap Growth
Small Cap Index
Total Return
Total Stock Market Index

The investment options listed below are offered under variable life insurance policies bearing the title Medallion Variable Life.

The investment options listed below are offered under variable life insurance policies bearing the following titles: Medallion Variable Universal Life Plus, Medallion Variable Universal Life Edge, and Medallion Variable Universal Life Edge II:

Market timing and disruptive trading risks

To discourage market timing and disruptive trading activity, we impose restrictions on transfers and reserve the right to change, suspend or terminate telephone, facsimile and internet transaction privileges. In addition, we reserve the right to take other actions at any time to restrict trading, including, but not limited to:

(i) restricting the number of transfers made during a defined period,

(ii) restricting the dollar amount of transfers,

(iii) restricting transfers into and out of certain investment accounts,

(iv) restricting the method used to submit transfers, and

(v) deferring a transfer at any time we are unable to purchase or redeem shares of the underlying portfolio.

Total annual portfolio operating expenses

The following table describes the minimum and maximum portfolio level fees and expenses charged by any of the portfolios underlying a variable investment option offered through the Annual Premium Variable Life policy, expressed as a percentage of average net assets (rounded to two decimal places). These expenses are deducted from portfolio assets. For more information, please refer to the prospectus for the underlying portfolio.

Total Annual Portfolio Operating Expenses	Minimum	Maximum
Range of expenses, including management fees, distribution and/or service (12b-1) fees, and other expenses	0.54%	0.82%

The following table describes the minimum and maximum portfolio level fees and expenses charged by any of the portfolios underlying a variable investment option offered through the Medallion Variable Life policy, expressed as a percentage of average net assets (rounded to two decimal places). These expenses are deducted from portfolio assets. For more information, please refer to the prospectus for the underlying portfolio.

Total Annual Portfolio Operating Expenses	Minimum	Maximum
Range of expenses, including management fees, distribution and/or service (12b-1) fees, and other expenses	0.48%	1.10%

The following table describes the minimum and maximum portfolio level fees and expenses charged by any of the portfolios underlying a variable investment option offered through the e-Variable Life policy, expressed as a percentage of average net assets (rounded to two decimal places). These expenses are deducted from portfolio assets. For more information, please refer to the prospectus for the underlying portfolio.

Total Annual Portfolio Operating Expenses	Minimum	Maximum
Range of expenses, including management fees, distribution and/or service (12b-1) fees, and other expenses	0.48%	1.10%

The following table describes the minimum and maximum portfolio level fees and expenses charged by any of the portfolios underlying a variable investment option offered through the Medallion Variable Universal Life Edge, Medallion Variable Universal Life Edge II, and Medallion Variable Universal Life Plus policies, expressed as a percentage of average net assets (rounded to two decimal places). These expenses are deducted from portfolio assets. For more information, please refer to the prospectus for the underlying portfolio.

Total Annual Portfolio Operating Expenses	Minimum	Maximum
Range of expenses, including management fees, distribution and/or service (12b-1) fees, and other expenses¹	0.48%	1.64%

Table of Investment Options and Investment Subadvisers

Please note that certain of the investment options described in this table may not be available to you under your policy.

When you select a Separate Account investment option, we invest your money in shares of a corresponding portfolio of the John Hancock Variable Insurance Trust (the “Trust” or “JHVIT”) (or the PIMCO Variable Insurance Trust (the “PIMCO Trust”) or M Fund, Inc. (the “M Fund”)), and hold the shares in a subaccount of the Separate Account. Fees and expenses of the portfolios are not fixed or specified under the terms of the policies and may vary from year to year. These fees and expenses differ for each portfolio and reduce the investment return of each portfolio. Therefore, they also indirectly reduce the return you will earn on any Separate Account investment options you select. For more information, please refer to the prospectus for the underlying portfolio.

The JHVIT, the PIMCO Trust, and the M Fund are so-called “series” type mutual funds and each is registered under the Investment Company Act of 1940 (“1940 Act”) as an open-end management investment company. John Hancock Investment

Management Services, LLC (“JHIMS”) provides investment advisory services to the Trust and receives investment management fees for doing so. JHIMS pays a portion of its investment management fees to other firms that manage the Trust’s portfolios. We are affiliated with JHIMS and may indirectly benefit from any investment management fees JHIMS retains. The PIMCO VIT All Asset portfolio of the PIMCO Trust receives investment advisory services from Pacific Investment Management Company LLC (“PIMCO”) and pays investment management fees to PIMCO.

Each of the American Asset Allocation, American Global Growth, American Growth, American Growth-Income, American International and American New World portfolios invests in shares of the corresponding investment portfolio of the Trust. The American Asset Allocation, American Global Growth, American Growth, American Growth-Income, American International and American New World portfolios (“American Portfolios”) operate as “feeder funds,” which means that the portfolios do not buy investment securities directly. Instead, they invest in a “master fund” which in turn purchases investment securities. Each of the American feeder fund portfolios has the same investment objective and limitations as its master fund. The prospectus for the American Fund master fund is included with the prospectuses for the underlying funds. We pay American Funds Distributors, Inc., the principal underwriter for the American Funds Insurance Series, a percentage of some or all of the amounts allocated to the American Portfolios of the Trust for the marketing support services it provides.

The M Capital Appreciation, M International Equity, M Large Cap Growth and M Large Cap Value portfolios are series of the M Fund, an open-end management investment company registered under the 1940 Act. The assets of these subaccounts are invested in the corresponding portfolios of the M Fund. M Financial Investment Advisers, Inc. (“M Financial”) is the investment adviser for all portfolios of the M Fund. The entities shown in the table below as “Portfolio Managers” of the M Fund portfolios are sub-investment advisers selected by M Financial and are the entities that manage the portfolio’s assets.

The following table provides a general description of the portfolios that underlie the variable investment options we make available under the policy. You bear the investment risk of any portfolio you choose as an investment option for your policy. You can find a full description of each portfolio, including the investment objectives, policies, restrictions, and risks, in the prospectus for that portfolio. You should read the portfolio’s prospectus carefully before investing in the corresponding variable investment option.

The portfolios available under the policies, the portfolio managers (engaged by JHIMS, M Financial or PIMCO) and the investment objective for the portfolio are as described in the following table:

Portfolio	Portfolio Manager	Investment Objective
All Cap Core	QS Investors, LLC	To seek to provide long-term growth of capital.
Alpha Opportunities	Wellington Management Company, LLP	To seek to provide long-term total return.
American Asset Allocation	Capital Research and Management Company (Adviser to the American Funds Insurance Series)	To seek to provide high total return (including income and capital gains) consistent with preservation of capital over the long-term.
American Global Growth	Capital Research and Management Company (Adviser to the American Funds Insurance Series)	To seek to provide long-term growth of capital.
American Growth	Capital Research and Management Company (Adviser to the American Funds Insurance Series)	To seek to provide growth of capital.
American Growth–Income	Capital Research and Management Company (Adviser to the American Funds Insurance Series)	To seek to provide growth of capital and income.
American International	Capital Research and Management Company (Adviser to the American Funds Insurance Series)	To seek to provide long-term growth of capital.
American New World	Capital Research and Management Company (Adviser to the American Funds Insurance Series)	To seek to provide long-term capital appreciation.
Blue Chip Growth	T. Rowe Price Associates, Inc.	To seek to provide long-term growth of capital. Current income is a secondary objective.
Bond	John Hancock Asset Management, a division of Manulife Asset Management (US) LLC	To seek to provide income and capital appreciation.
Capital Appreciation	Jennison Associates LLC	To seek to provide long-term growth of capital.
Capital Appreciation Value	T. Rowe Price Associates, Inc.	To seek to provide long-term capital appreciation.
Core Bond	Wells Capital Management, Incorporated	To seek to provide total return consisting of income and capital appreciation.
Core Strategy	John Hancock Asset Management, a division of Manulife Asset Management (US) LLC; and John Hancock Asset Management, a division of Manulife Asset Management (North America) Limited	To seek to provide long-term growth of capital. Current income is also a consideration.
Emerging Markets Value	Dimensional Fund Advisors LP	To seek to provide long-term capital appreciation.
Equity-Income	T. Rowe Price Associates, Inc.	To seek to provide substantial dividend income and also long-term growth of capital.
Financial Services	Davis Selected Advisers, L.P.	To seek to provide growth of capital.
Franklin Templeton Founding Allocation	John Hancock Asset Management, a division of Manulife Asset Management (US) LLC	To seek to provide long-term growth of capital.
Fundamental All Cap Core	John Hancock Asset Management, a division of Manulife Asset Management (US) LLC	To seek to provide long-term growth of capital.
Fundamental Large Cap Value	John Hancock Asset Management, a division of Manulife Asset Management (US) LLC	To seek to provide long-term capital appreciation.
Fundamental Value	Davis Selected Advisers, L.P.	To seek to provide capital growth.
Global	Templeton Global Advisors Limited	To seek to provide long-term capital appreciation.
Global Bond	Pacific Investment Management Company LLC	To seek to provide maximum total return, consistent with preservation of capital and prudent investment management.
Health Sciences	T. Rowe Price Associates, Inc.	To seek to provide long-term capital appreciation.
High Yield	Western Asset Management Company	To seek to provide an above-average total return over a market cycle of 3 to 5 years, consistent with reasonable risk.

Portfolio	Portfolio Manager	Investment Objective
International Core	Grantham, Mayo, Van Otterloo & Co. LLC	To seek to provide high total return.
International Equity Index B	SSgA Funds Management, Inc.	To seek to track the performance of a broad-based equity index of foreign companies primarily in developed countries and, to a lesser extent, in emerging markets.
International Growth Stock	Invesco Advisers, Inc.	To seek to provide long-term growth of capital.
International Small Company	Dimensional Fund Advisors LP	To seek to provide long-term capital appreciation.
International Value	Templeton Investment Counsel, LLC	To seek to provide long-term growth of capital.
Investment Quality Bond	Wellington Management Company, LLP	To seek to provide a high level of current income consistent with the maintenance of principal and liquidity.
Lifestyle Aggressive MVP	John Hancock Asset Management, a division of Manulife Asset Management (US) LLC; and John Hancock Asset Management, a division of Manulife Asset Management (North America) Limited	To seek to provide long-term growth of capital while seeking to both manage the volatility of return and limit the magnitude of portfolio losses.
Lifestyle Balanced MVP	John Hancock Asset Management, a division of Manulife Asset Management (US) LLC; and John Hancock Asset Management, a division of Manulife Asset Management (North America) Limited	To seek to provide growth of capital and current income while seeking to both manage the volatility of return and limit the magnitude of portfolio losses.
Lifestyle Conservative MVP	John Hancock Asset Management, a division of Manulife Asset Management (US) LLC; and John Hancock Asset Management, a division of Manulife Asset Management (North America) Limited	To seek to provide current income and growth of capital while seeking to both manage the volatility of return and limit the magnitude of portfolio losses.
Lifestyle Growth MVP	John Hancock Asset Management, a division of Manulife Asset Management (US) LLC; and John Hancock Asset Management, a division of Manulife Asset Management (North America) Limited	To seek to provide long-term growth of capital while seeking to both manage the volatility of return and limit the magnitude of portfolio losses.
Lifestyle Moderate MVP	John Hancock Asset Management, a division of Manulife Asset Management (US) LLC; and John Hancock Asset Management, a division of Manulife Asset Management (North America) Limited	To seek to provide current income and growth of capital while seeking to both manage the volatility of return and limit the magnitude of portfolio losses.
Mid Cap Index	John Hancock Asset Management, a division of Manulife Asset Management (North America) Limited	To seek to approximate the aggregate total return of a medium-capitalization U.S. domestic equity market index.
Mid Cap Stock	Wellington Management Company, LLP	To seek to provide long-term growth of capital.
Mid Value	T. Rowe Price Associates, Inc.	To seek to provide long-term capital appreciation.
Money Market B	John Hancock Asset Management, a division of Manulife Asset Management (North America) Limited	To seek to obtain maximum current income consistent with preservation of principal and liquidity. Certain market conditions may cause the return of the portfolio to become low or possibly negative.
Natural Resources	Wellington Management Company, LLP	To seek to provide long-term total return.
PIMCO VIT All Asset (a series of PIMCO Variable Insurance Trust) (only Class M is available)	Pacific Investment Management Company LLC	To seek to provide maximum real return, consistent with preservation of real capital and prudent investment management.

Portfolio	Portfolio Manager	Investment Objective
Real Estate Securities	Deutsche Investment Management Americas Inc.	To seek to provide a combination of long-term capital appreciation and current income.
Real Return Bond	Pacific Investment Management Company LLC	To seek to provide maximum real return, consistent with preservation of real capital and prudent investment management.
Science & Technology	T. Rowe Price Associates, Inc.; and Allianz Global Investors U.S. LLC	To seek to provide long-term growth of capital. Current income is incidental to the portfolio’s objective.
Short Term Government Income	John Hancock Asset Management, a division of Manulife Asset Management (US) LLC	To seek to provide a high level of current income consistent with preservation of capital. Maintaining a stable share price is a secondary goal.
Small Cap Growth	Wellington Management Company, LLP	To seek to provide long-term capital appreciation.
Small Cap Index	John Hancock Asset Management, a division of Manulife Asset Management (North America) Limited	To seek to approximate the aggregate total return of a small-capitalization U.S. domestic equity market index.
Small Cap Opportunities	Dimensional Fund Advisors LP; and Invesco Advisers, Inc.	To seek to provide long-term capital appreciation.
Small Cap Value	Wellington Management Company, LLP	To seek to provide long-term capital appreciation.
Small Company Value	T. Rowe Price Associates, Inc.	To seek to provide long-term growth of capital.
Strategic Income Opportunities	John Hancock Asset Management, a division of Manulife Asset Management (US) LLC	To seek to provide a high level of current income.
Total Bond Market B	Declaration Management & Research LLC	To seek to track the performance of the Barclays U.S. Aggregate Bond Index.*
Total Return	Pacific Investment Management Company LLC	To seek to provide maximum total return, consistent with preservation of capital and prudent investment management.
Total Stock Market Index	John Hancock Asset Management, a division of Manulife Asset Management (North America) Limited	To seek to approximate the aggregate total return of a broad U.S. domestic equity market index.
Ultra Short Term Bond	John Hancock Asset Management, a division of Manulife Asset Management (US) LLC	To seek to provide a high level of current income consistent with the maintenance of liquidity and the preservation of capital.
U.S. Equity	Grantham, Mayo, Van Otterloo & Co. LLC	To seek to provide long-term capital appreciation.
Utilities	Massachusetts Financial Services Company	To seek to provide capital growth and current income (income above that available from the portfolio invested entirely in equity securities).
Value	Invesco Advisers, Inc.	To seek to provide an above-average total return over a market cycle of 3 to 5 years, consistent with reasonable risk.
M Capital Appreciation (a series of M Fund, Inc.)	Frontier Capital Management Company, LLC	To seek to provide maximum capital appreciation.
M International Equity (a series of M Fund, Inc.)	Northern Cross, LLC	To seek to provide long-term capital appreciation.
M Large Cap Growth (a series of M Fund, Inc.)	DSM Capital Partners LLC	To seek to provide long-term capital appreciation.
M Large Cap Value (a series of M Fund, Inc.)	AJO, LP	To seek to provide long-term capital appreciation.

Tax considerations

particular circumstances, and for further information you should consult a qualified tax adviser. Federal, state and local tax laws, regulations and interpretations can change from time to time. As a result, the tax consequences to you and the beneficiary may be altered, in some cases retroactively. The policy may be used in various arrangements, including non-qualified deferred compensation or salary continuation plans, split dollar insurance plans, executive bonus plans, retiree medical benefit plans and others. The tax consequences of such plans may vary depending on the particular facts and circumstances of each individual arrangement. Therefore, if the value of using the policy in any such arrangement depends in part on the tax consequences, a qualified tax adviser should be consulted for advice.

General

Death benefit proceeds and other policy distributions

other than the person insured by the policy will cause adverse tax consequences. If the owner of the policy is not the insured person, benefit payments may be included in the owner’s income, and the death benefit may be part of the insured person’s estate for purposes of the Federal estate tax. A policy with a Long-Term Care Rider should not be purchased by or transferred to a person other than the insured person unless you have carefully reviewed the tax implications with your tax adviser.

Distributions for tax purposes include amounts received upon surrender or partial withdrawals. You may also be deemed to have received a distribution for tax purposes if you assign all or part of your policy rights or change your policy’s ownership. If your policy offers a Long-Term Care Rider, and if you have elected it, deductions from policy value to pay the rider charges will reduce your investment in the contract, but will not be included in income even if you have recovered all of your investment in the contract.

Policy loans

Diversification rules and ownership of the Separate Account

7-pay premium limit and modified endowment contract status

Policies classified as modified endowment contracts are subject to the following tax rules:

First, all withdrawals from such a policy are treated as ordinary income subject to tax up to the amount equal to the excess (if any) of the policy value immediately before the withdrawal over the investment in the policy at such time. If you own any other modified endowment contracts issued to you in the same calendar year by the same insurance company or its affiliates, their values will be combined with the value of the policy from which you take the withdrawal for purposes of determining how much of the withdrawal is taxable as ordinary income.

Second, loans taken from or secured by such a policy and assignments or pledges of any part of its value are treated as partial withdrawals from the policy and taxed accordingly. Past-due loan interest that is added to the loan amount is treated as an additional loan.

Third, a 10% additional penalty tax is imposed on the portion of any distribution (including distributions on surrender) from, or loan taken from or secured by, such a policy that is included in income except where the distribution or loan:

is made on or after the date on which the policy owner attains age 59½;

is attributable to the policy owner becoming disabled; or

is part of a series of substantially equal periodic payments for the life (or life expectancy) of the policy owner or the joint lives (or joint life expectancies) of the policy owner and the policy owner’s beneficiary.

These exceptions to the 10% additional tax do not apply in situations where the policy is not owned by an individual.

change depends upon the relationship among the death benefit of the policy at the time of such change, the policy value at the time of the change, and the additional premiums paid into the policy during the seven years starting with the date on which the material change occurs.

Corporate and H.R. 10 retirement plans

Withholding

Life insurance purchases by residents of Puerto Rico

Life insurance purchases by non-resident aliens

Life insurance owned by citizens or residents living abroad

In addition to the disclosure contained herein, John Hancock USA has filed with the SEC a prospectus and a Statement of Additional Information (the “SAI”) which contains additional information about John Hancock USA and the Separate Account, including information on our history, services provided to the Separate Account, legal and regulatory matters and the audited financial statements of John Hancock USA and the Separate Account. The SAI and personalized illustrations of death benefits, account values and surrender values are available, without charge, upon request. You may obtain the personalized illustrations from your John Hancock USA representative. The SAI may be obtained by contacting the John Hancock USA Servicing Office. You should also contact the John Hancock USA Servicing Office to request any other information about your policy or to make any inquiries about its operation.

SUPPLEMENT DATED APRIL 30, 2014

PROSPECTUSES DATED APRIL 30, 2014 OR LATER

The prospectuses involved bear the title “Protection Variable Universal Life,” “Accumulation Variable Universal Life,” “Corporate VUL,” “Medallion Variable Universal Life Plus,” “Medallion Variable Universal Life Edge,” “Medallion Variable Universal Life Edge II,” “Medallion Executive Variable Life,” “Medallion Executive Variable Life II,” “Medallion Executive Variable Life III,” “Performance Executive Variable Life,” “Variable Estate Protection,” “Variable Estate Protection Plus,” “Variable Estate Protection Edge,” “Performance Survivorship Variable Universal Life”, “Protection Variable Universal Life”, and “Survivorship Variable Universal Life.” We refer to these prospectuses as the “Product Prospectuses.”

This supplement will be used only with policies sold through the product prospectuses and through registered representatives affiliated with the M Financial Group.

This Supplement is accompanied with a current prospectus for the M Fund, Inc. that contains detailed information about the funds. Be sure to read that prospectus before selecting any of the four additional variable investment options/investment accounts.

AMENDMENT TO PRODUCT PROSPECTUSES

The table on the cover page of each product prospectus is amended to include the following four additional variable investment options/investment accounts:

M Capital Appreciation

M International Equity

M Large Cap Growth

M Large Cap Value

VL M SUPP (4/2014)

SUPPLEMENT DATED APRIL 30, 2014

PROSPECTUSES DATED APRIL 30, 2014 OR LATER

This Supplement is to be distributed with certain prospectuses dated April 30, 2014 or later for variable life insurance policies of John Hancock Life Insurance Company (U.S.A.). The prospectuses involved bear the title “Flex V1,” “Flex V2,” or “Medallion Variable Life.” We refer to these prospectuses as the “Product Prospectuses.”

This supplement will be used only with policies sold through the product prospectuses and through registered representatives affiliated with the M Financial Group.

This Supplement is accompanied with a current prospectus for the M Fund, Inc. that contains detailed information about the funds. Be sure to read that prospectus before selecting any of the three additional variable investment options/investment accounts.

AMENDMENT TO PRODUCT PROSPECTUSES

The table on the cover page of each product prospectus is amended to include the following four additional variable investment options/investment accounts:

M Capital Appreciation

M International Equity

M Large Cap Growth

VL 3 FUND M SUPP (4/2014)

SUPPLEMENT DATED APRIL 30, 2014

PROSPECTUSES DATED APRIL 30, 2014

This Supplement is intended to be distributed with prospectuses dated April 30, 2014 for the following variable life insurance policies of John Hancock Life Insurance Company (U.S.A.) that are delivered or issued for delivery in the states specified:

MEDALLION VARIABLE UNIVERSAL LIFE PLUS

(MASSACHUSETTS AND TEXAS ONLY)

MEDALLION VARIABLE UNIVERSAL LIFE EDGE

(MARYLAND, MASSACHUSETTS AND TEXAS ONLY)

VARIABLE ESTATE PROTECTION PLUS

(MASSACHUSETTS AND TEXAS ONLY)

VARIABLE ESTATE PROTECTION EDGE

(MASSACHUSETTS AND TEXAS ONLY)

Notwithstanding any language in the prospectus to the contrary, the following shall apply: (1) The Guaranteed Minimum Death Benefit feature will apply only during the first five Policy years. (2) There is no option to extend the Guaranteed Minimum Death Benefit feature beyond the first five Policy years and, as a consequence, there can be no Guaranteed Minimum Death Benefit Charge assessed under the Policy.

MD-MA-TX (4/2014)

(1)	The “Target Premium” for each policy year is determined at the time the policy is issued and appears in the “Policy Specifications” section of the policy. In general, the greater the proportion of Additional Sum Insured at issue, the lower the Target Premium.
(2)	The administrative surrender charge decreases in later policy years as follows: for policy year 8, it is $4 per $1,000 of face amount; and for policy year 9, it is $3 per $1,000 of face amount.
(3)	In calculating the CDSC, only Target Premiums received during the first 3 policy years are considered. The CDSC percentage decreases in later policy years as follows: for policy year 8, it is 21.7%; for policy year 9, it is 17.3%; for policy year 10, it is 13.0%; for policy year 11, it is 8.7%; for policy year 12, it is 4.3%; and for policy years 13 and later, it is 0%.

(1)	The insurance charge is determined by multiplying the amount of insurance for which we are at risk (the amount at risk or “AAR”) by the applicable cost of insurance rate. The rates vary widely depending upon the Total Sum Insured, the length of time the policy has been in effect, the insurance risk characteristics of the insured person and (generally) the gender of the insured person. The “minimum” rate shown in the table at the guaranteed rate is the rate in the first policy year for a $1,000,000 policy issued to cover a 10 year old female preferred underwriting risk. The “minimum” rate shown in the table at the current rate is the rate in the first policy year for a $1,000,000 policy issued to cover a 20 year old female preferred non-tobacco underwriting risk. The “maximum” rate shown in the table at both the guaranteed and current rates is the rate in the first policy year for a $100,000 policy issued to cover a 99 year old male substandard tobacco underwriting risk. This includes the so-called “extra mortality charge.” The “representative insured person” referred to in the table is a 35 year old male standard non-tobacco underwriting risk with a $100,000 policy. The charges shown in the table may not be particularly relevant to your current situation. For more information about cost of insurance rates, talk to your John Hancock USA representative.
(2)	This charge only applies to separate account assets (i.e., those assets invested in the variable investment options). The charge does not apply to the fixed investment option. The effective annual rate equivalents of the actual unrounded daily rates charged are .90% on a guaranteed basis and .60% on a current basis.
(3)	5.00% is the maximum effective annual interest rate we can charge and applies only during policy years 1-20. The effective annual interest rate is 4.50% for policy year 21 and thereafter. The amount of any loan is transferred from the investment options to a special loan account which earns interest at a rate at least equal to (i) the policy loan interest rate less 1% for policy years 1-20 and (ii( the policy loan interest rate less .5% for all other policy years. Therefore, the true cost of a loan is the difference between the loan interest we charge and the interest we credit to the special loan account.

(1)	The charge for this rider is determined by multiplying the Target Premium by the applicable rate. The rates vary by the issue age and the disability insurance risk characteristics of the insured person. The “minimum” rate shown in the table is for a 21 year old standard or preferred underwriting risk. The “maximum” rate shown in the table is for a 55 year old substandard underwriting risk. The “representative insured person” referred to in the table is a 35 year old standard or preferred underwriting risk.
(2)	Applicable state regulations currently limit the discount percentage to the greater of (i) the yield on 90 day U.S. Treasury bills at the time the discount is determined, and (ii) the policy’s maximum loan interest rate at the time the discount is determined.
(3)	The charge for this rider is determined by multiplying the amount of accidental death benefit selected by the applicable rate. The rates vary by the attained age and the ADB risk characteristics of the insured person. The “minimum” rate shown in the table is for an insured person less than 1 year of age with the lowest ADB risk rating (1.0). The “maximum” rate shown in that table is for a 65 year old with the highest ADB risk rating (1.5). The “representative insured person” referred to in the table is a 35 year old with an ADB rating of 1.0.
(4)	“YRT” stands for “Yearly Renewable Term”. The charge for this rider is determined by multiplying the amount of insurance under the rider by the applicable cost of insurance rate for the rider. The rates vary widely depending upon the amount of YRT coverage and the insurance risk characteristics and gender of the person insured under the rider. The “minimum” rate shown in the table is the rate for a rider with $1,000,000 of coverage issued to cover a 0 year old female preferred underwriting risk. The “maximum” rate shown in the table is the rate for a rider with $100,000 of coverage issued to cover a 99 year old male standard tobacco underwring risk. The “representative insured person” referred to in the table is a 35 year old male standard non-tobacco underwriting risk with $100,000 of rider coverage. If the Disability Payment of Premium Rider is also elected, the charge for this rider will be increased by 54%. If the person covered under this rider is rated substandard, there will be an extra charge for this rider of up to $445.61 per $1,000 of YRT death benefit.

(1)	The “Target Premium” for each policy year is determined at the time the policy is issued and appears in the “Policy Specifications” section of the policy. In general, the greater the proportion of Additional Sum Insured at issue, the lower the Target Premium.
(2)	The CDSC percentage decreases in later policy years as follows: for policy year 6, it is 80%; for policy year 7, it is 70%; for policy year 8, it is 60%; for policy year 9, it is 40%; for policy year 10, it is 20%; and for policy years 11 and later, it is 0%.
(3)	A table in the policy will state the maximum rate for this charge per $1,000 of ASI, based on the insured person’s issue age, insurance risk characteristics and (usually) gender. The rates range from less than $1 per $1,000 of ASI for issue ages of 40 or less up to the maximum shown in the table for an issue age 81 male tobacco risk.
(4)	This charge is not currently imposed, but we reserve the right to do so in the policy.

(1)	The insurance charge is determined by multiplying the amount of insurance for which we are at risk (the amount at risk or “AAR”) by the applicable cost of insurance rate. The rates vary widely depending upon the Total Sum Insured, the length of time the policy has been in effect, the insurance risk characteristics of the insured person and (generally) the gender of the insured person. The “minimum” rate shown in the table at the guaranteed rate is the rate in the first policy year for a $1,000,000 policy issued to cover a 10 year old female preferred underwriting risk. The “minimum” rate shown in the table at the current rate is the rate in the eighth policy year for a $1,000,000 Basic Sum Insured $4,000,000 Additional Sum Insured policy issued to cover a 4 year old female preferred underwriting risk. The “maximum” rate shown in the table at both the guaranteed and current rates is the rate in the first policy year for a $100,000 all Basic Sum Insured policy issued to cover a 99 year old male substandard tobacco underwriting risk. This includes the so-called “extra mortality charge.” The “representative insured person” referred to in the table is a 35 year old male standard non-tobacco underwriting risk with a $100,000 policy. The charges shown in the table may not be particularly relevant to your current situation. For more information about cost of insurance rates, talk to your John Hancock USA representative.
(2)	This charge only applies to that portion of account value held in the variable investment options. The charge does not apply to the fixed investment option.
(3)	4.75% is the maximum effective annual interest rate we can charge and applies only during policy years 1-10. The effective annual interest rate is 4.50% for policy years 11-20 and, under our current rules, is 4.00% thereafter. The amount of any loan is transferred from the investment options to a special loan account which earns interest at an effective annual rate of 4.00%. Therefore, the true cost of a loan is the difference between the loan interest we charge and the interest we credit to the special loan account.