AUDITED STATUTORY - BASIS FINANCIAL STATEMENTS

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

For the Years Ended December 31, 2020, 2019 and 2018

With Report of Independent Auditors

AUDITED STATUTORY-BASIS FINANCIAL STATEMENTS

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

Years Ended December 31, 2020, 2019 and 2018

Contents

Report of Independent Auditors	1
Statutory-Basis Financial Statements
Balance Sheets—Statutory-Basis	3
Statements of Operations—Statutory-Basis	5
Statements of Changes in Capital and Surplus—Statutory-Basis	6
Statements of Cash Flow—Statutory-Basis	7
Notes to Statutory-Basis Financial Statements	8

Report of Independent Auditors

The Board of Directors and Stockholder

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

We have audited the accompanying statutory-basis financial statements of John Hancock Life Insurance Company (U.S.A.) (the Company), which comprise the balance sheets as of December 31, 2020 and 2019, and the related statements of operations, changes in capital and surplus and cash flow for each of the three years in the period ended December 31, 2020, and the related notes to the 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 accounting practices prescribed or permitted by the Michigan Department of Insurance and Financial Services. Management also is responsible for 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 of America. 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 opinions.

Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles

As described in Note 2 to the statutory-basis financial statements, the Company prepared these financial statements using accounting practices prescribed or permitted by the Michigan Department of Insurance and Financial Services, which is a basis of accounting other than U.S. generally accepted accounting principles. The effects on the financial statements of the variances between these statutory accounting practices and U.S. generally accepted accounting principles, although not reasonably determinable, are presumed to be material.

Adverse Opinion on U.S. Generally Accepted Accounting Principles

In our opinion, because of the significance of the matter described in the Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles paragraph, the statutory-basis financial statements referred to above do not present fairly, in conformity with U.S. generally accepted accounting principles, the financial position of the Company at December 31, 2020 and 2019, or the results of its operations or its cash flows for each of the three years in the period ended December 31, 2020.

1

Opinion on Statutory-Basis of Accounting

In our opinion, the statutory-basis financial statements referred to above present fairly, in all material respects, the financial position of the Company at December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, on the basis of accounting described in Note 2.

/s/ Ernst & Young LLP

Boston, Massachusetts

March 31, 2021

2

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

BALANCE SHEETS—STATUTORY BASIS

	December 31,
	2020		2019
(in millions)
Admitted assets
Cash and invested assets:
Bonds	$	49,194	$	47,193
Stocks:
Preferred stocks		36		15
Common stocks		1,082		1,050
Investments in affiliates		2,879		2,824
Mortgage loans on real estate		11,573		11,647
Real estate:
Company occupied		151		161
Investment properties		4,058		4,045
Cash, cash equivalents and short-term investments		6,620		3,816
Policy loans		2,765		2,888
Derivatives		20,197		13,049
Receivable for collateral on derivatives		210		154
Receivable for securities		1		2
Other invested assets		9,388		9,487
Total cash and invested assets		108,154		96,331
Investment income due and accrued		775		701
Premiums due		49		77
Amounts recoverable from reinsurers		360		216
Funds held by or deposited with reinsured companies		2,890		3,042
Other reinsurance receivable		284		225
Amounts due from affiliates		171		246
Other assets		1,981		1,720
Assets held in separate accounts		151,488		140,747
Total admitted assets	$	266,152	$	243,305

The accompanying notes are an integral part of these statutory-basis financial statements.

3

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

BALANCE SHEETS—STATUTORY BASIS

	December 31,
	2020		2019
(in millions)
Liabilities and capital and surplus
Liabilities:
Policy and contract obligations:
Policy reserves	$	68,229	$	65,942
Policyholders’ and beneficiaries’ funds		2,494		2,260
Consumer notes		138		138
Dividends payable to policyholders		348		376
Policy benefits in process of payment		577		456
Other amount payable on reinsurance		502		545
Other policy obligations		40		46
Total policy and contract obligations		72,328		69,763
Payable to parent and affiliates		2,725		1,934
Transfers to (from) separate account, net		(325)		(323)
Asset valuation reserve		2,888		2,798
Reinsurance in unauthorized companies		55		190
Funds withheld from unauthorized reinsurers		167		161
Interest maintenance reserve		1,795		1,557
Net deferred tax liability		79		101
Derivatives		13,303		7,297
Payables for collateral on derivatives		2,096		828
Payables for securities		192		520
Funds held under coinsurance		8,904		8,074
Other general account obligations		1,449		1,182
Obligations related to separate accounts		151,488		140,747
Total liabilities		257,144		234,829
Capital and surplus:
Preferred stock (par value $1; 50,000,000 shares authorized; 100,000 shares issued and outstanding at December 31, 2020 and 2019)		-		-
Common stock (par value $1; 50,000,000 shares authorized; 4,728,940 shares issued and outstanding at December 31, 2020 and 2019)		5		5
Paid-in surplus		3,219		3,219
Surplus notes		585		585
Unassigned surplus		5,199		4,667
Total capital and surplus		9,008		8,476
Total liabilities and capital and surplus	$	266,152	$	243,305

The accompanying notes are an integral part of these statutory-basis financial statements.

4

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

STATEMENTS OF OPERATIONS—STATUTORY-BASIS

	Years Ended December 31,
	2020			2019			2018
(in millions)
Premiums and other revenues:
Life, long-term care and annuity premiums, net	$	11,667		$	14,948		$	5,816
Consideration for supplementary contracts with life contingencies		141			145			132
Net investment income		4,095			4,406			4,665
Amortization of interest maintenance reserve		149			151			179
Commissions and expense allowance on reinsurance ceded		593			638			468
Reserve adjustment on reinsurance ceded		(4,593	)		(7,575	)		(7,820)
Separate account administrative and contract fees		1,683			1,711			1,786
Other revenue		71			145			193
Total premiums and other revenues		13,806			14,569			5,419
Benefits paid or provided:
Death, surrender and other contract benefits, net		12,880			12,851			12,322
Annuity benefits		787			1,122			1,735
Disability and long-term care benefits		943			853			801
Interest and adjustments on policy or deposit-type funds		48			32			(52)
Payments on supplementary contracts with life contingencies		210			207			203
Increase (decrease) in life and long-term care reserves		2,297			1,863			(5,078)
Total benefits paid or provided		17,165			16,928			9,931
Insurance expenses and other deductions:
Commissions and expense allowance on reinsurance assumed		975			1,052			1,078
General expenses		972			1,041			1,186
Insurance taxes, licenses and fees		149			159			167
Net transfers to (from) separate accounts		(6,427	)		(7,050	)		(7,616)
Investment income ceded		2,664			1,577			1,052
Other (income) deductions		(264	)		20			(459)
Total insurance expenses and other deductions		(1,931	)		(3,201	)		(4,592)
Income (loss) from operations before dividends to policyholders, federal income taxes and net realized capital gains (losses)		(1,428	)		842			80
Dividends to policyholders		92			110			111
Income (loss) from operations before federal income taxes and net realized capital gains (losses)		(1,520	)		732			(31)
Federal income tax expense (benefit)		(64	)		(286	)		(725)
Income (loss) from operations before net realized capital gains (losses)		(1,456	)		1,018			694
Net realized capital gains (losses)		2,066			198			340
Net income (loss)	$	610		$	1,216		$	1,034

The accompanying notes are an integral part of these statutory-basis financial statements.

5

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

STATEMENTS OF CHANGES IN CAPITAL AND SURPLUS—STATUTORY-BASIS

	Preferred and Common Stock		Paid-in Surplus		Surplus Notes		Unassigned Surplus (Deficit)			Total Capital and Surplus
(in millions)
Balances at January 1, 2018	$	5	$	3,219	$	585	$	4,300		$	8,109
Net income (loss)								1,034			1,034
Change in net unrealized capital gains (losses)								(220	)		(220)
Change in net deferred income tax								(17	)		(17)
Decrease (increase) in non-admitted assets								43			43
Change in liability for reinsurance in unauthorized reinsurance								3			3
Decrease (increase) in asset valuation reserves								125			125
Dividend paid to parent								(600	)		(600)
Change in surplus as a result of reinsurance								380			380
Other adjustments, net						-		13			13
Balances at December 31, 2018		5		3,219		585		5,061			8,870
Net income (loss)								1,216			1,216
Change in net unrealized capital gains (losses)								397			397
Change in net deferred income tax								(78	)		(78)
Decrease (increase) in non-admitted assets								(46	)		(46)
Change in liability for reinsurance in unauthorized reinsurance								(189	)		(189)
Decrease (increase) in asset valuation reserves								(817	)		(817)
Dividend paid to parent								(845	)		(845)
Change in surplus as a result of reinsurance								(29	)		(29)
Other adjustments, net						-		(3	)		(3)
Balances at December 31, 2019		5		3,219		585		4,667			8,476
Net income (loss)								610			610
Change in net unrealized capital gains (losses)								683			683
Change in net deferred income tax								149			149
Decrease (increase) in non-admitted assets								(95	)		(95)
Change in liability for reinsurance in unauthorized reinsurance								135			135
Change in reserve due to change in valuation basis								20			20
Decrease (increase) in asset valuation reserves								(90	)		(90)
Dividend paid to parent								(975	)		(975)
Change in surplus as a result of reinsurance								85			85
Other adjustments, net						-		10			10
Balances at December 31, 2020	$	5	$	3,219	$	585	$	5,199		$	9,008

The accompanying notes are an integral part of these statutory-basis financial statements.

6

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

STATEMENTS OF CASH FLOW—STATUTORY-BASIS

	Years Ended December 31,
	2020			2019			2018
(in millions)
Operations
Premiums and other considerations collected, net of reinsurance	$	14,021		$	15,079		$	13,901
Net investment income received		4,139			4,394			4,828
Separate account fees		1,683			1,711			1,786
Commissions and expenses allowance on reinsurance ceded		593			638			468
Miscellaneous income		304			207			668
Benefits and losses paid		(19,600	)		(23,052	)		(22,601)
Net transfers from (to) separate accounts		6,462			7,038			7,670
Commissions and expenses (paid) recovered		(4,808	)		(3,467	)		(3,763)
Dividends paid to policyholders		(120	)		(127	)		(126)
Federal and foreign income and capital gain taxes (paid) recovered		(479	)		677			(617)
Net cash provided by (used in) operating activities		2,195			3,098			2,214
Investment activities
Proceeds from sales, maturities, or repayments of investments:
Bonds		18,253			15,032			22,532
Stocks		203			142			566
Mortgage loans on real estate		919			1,698			880
Real estate		315			106			2,507
Other invested assets		1,054			1,558			2,066
Derivatives		1,969			-			-
Net gains (losses) on cash, cash equivalents and short term investments		18			1			(4)
Total investment proceeds		22,731			18,537			28,547
Cost of investments acquired:
Bonds		21,825			17,230			25,992
Stocks		118			105			114
Mortgage loans on real estate		830			1,261			1,975
Real estate		216			359			213
Other invested assets		1,307			1,354			2,530
Derivatives		-			139			12
Total cost of investments acquired		24,296			20,448			30,836
Net increase (decrease) in receivable/payable for securities and collateral on derivatives		885			(395	)		(547)
Net (increase) decrease in policy loans		123			(100	)		(62)
Net cash provided by (used in) investment activities		(557	)		(2,406	)		(2,898)
Financing and miscellaneous activities
Borrowed funds		497			(10	)		(42)
Net deposits (withdrawals) on deposit-type contracts		233			(135	)		(288)
Dividend paid to Parent		(975	)		(845	)		(600)
Other cash provided (applied)		1,411			1,126			471
Net cash provided by (used in) financing and miscellaneous activities		1,166			136			(459)
Net increase (decrease) in cash, cash equivalents and short-term investments		2,804			828			(1,143)
Cash, cash equivalents and short-term investments at beginning of year		3,816			2,988			4,131
Cash, cash equivalents and short-term investments at end of year	$	6,620		$	3,816		$	2,988
Non-cash activities during the year:
Premium and other operating activity related to reinsurance transactions, net	$	2,166		$	(109	)	$	7,873
Transfer of invested assets related to reinsurance transactions and other affiliate transactions, net		(2,166	)		109			(7,873)

The accompanying notes are an integral part of these statutory-basis financial statements.

7

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

1. Organization and Nature of Operations

John Hancock Life Insurance Company (U.S.A.) (“JHUSA” or the “Company”) 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.

The Company is licensed to conduct insurance business in 49 states, the District of Columbia, Guam, Puerto Rico and the U.S. Virgin Islands, 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 products 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 these products through multiple distribution channels, including insurance agents and affiliated brokers, securities brokerage firms, financial planners, pension plan sponsors, pension plan consultants, and banks. The Company discontinued new sales of its individual long-term care product but maintains in-force retail and group long-term care business. Effective March 31, 2018, the Company discontinued new sales of its corporate and bank-owned life insurance products.

The Company is also registered as a foreign reinsurer in several jurisdictions outside of the United States as part of its International Group Program that offers pooling services and reinsurance coverage for group employee contracts issued by its network partners to local companies, which are subsidiaries, branches or affiliates of multinational corporations.

Pursuant to a distribution agreement with the Company, John Hancock Distributors LLC (“JHD”), a registered broker-dealer and a wholly-owned subsidiary of the Company, acts as the principal underwriter of variable life contracts and other products issued by the Company.

The Company has two wholly-owned life insurance subsidiaries, John Hancock Life Insurance Company of New York (“JHNY”) and John Hancock Life & Health Insurance Company (“JHLH”), as well as a wholly-owned captive insurance subsidiary, Manulife (Michigan) Reassurance Company (“MMRC”).

The Company’s results and operations have been and may continue to be adversely impacted by the COVID-19 pandemic and the recent economic downturn. The adverse effects include but are not limited to significant volatility in equity markets and decline in interest rates, increase in credit risk, strain on commodity markets, foreign currency exchange rate volatility, increases in insurance claims, persistency and redemptions, and disruption of business operations. The breadth and depth of these events and how long they will continue have introduced additional uncertainty around estimates used in determining the carrying value of certain assets and liabilities included in these financial statements.

2. Significant Accounting Policies

Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known and may impact the amounts reported and disclosed herein.

Basis of Presentation

These financial statements have been prepared in conformity with accounting practices prescribed or permitted by the Michigan Department of Insurance and Financial Services (the “Insurance Department”). The National Association of Insurance Commissioners’ (“NAIC”) Accounting Practices and Procedures Manual (“NAIC SAP”) has been adopted as a component of practices prescribed or permitted by the State of Michigan. The Michigan Director of the Department of Insurance and Financial Services (the “Director”) has the authority to prescribe or permit other specific practices that deviate from prescribed practices. NAIC SAP practices differ from accounting principles generally accepted in the United States (“GAAP”) as described below.

8

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

Investments: Investments in bonds not backed by other loans are principally stated at amortized cost using the constant yield (interest) method. Bonds can also be stated at the lesser of amortized cost or fair value based on their NAIC designated rating. Non-redeemable preferred stocks, which have characteristics of equity securities, are reported at cost or lower of cost or market value as determined by the Securities Valuation Office of the NAIC (“SVO”) rating, and the related net unrealized capital gains (losses) are reported in unassigned surplus along with any adjustment for federal income taxes. Redeemable preferred stocks, which have characteristics of debt securities and are rated as medium quality or better, are reported at cost or amortized cost. All other redeemable preferred stocks are reported at the lower of cost, amortized cost, or fair value.

For bonds other than loan-backed and structured securities, the Company has a process in place to identify securities that could potentially have an impairment that is other-than-temporary. The Company recognizes other-than-temporary impairment losses on bonds with unrealized losses when the entity does not have the intent and ability to hold the security for a period of time sufficient to allow for any anticipated recovery in value. Declines in value due to credit difficulties are also considered to be other-than-temporarily impaired when the Company does not have the intent and ability to hold the security for a period of time sufficient to allow for any anticipated recovery in value. The entire difference between amortized cost and fair value on such bonds with credit difficulties is recognized as an impairment loss in income.

Loan-backed and structured securities (i.e., collateralized mortgage obligations) are adjusted for the effects of changes in prepayment assumptions on the related accretion of discounts or amortization of premiums of such securities using either the retrospective or prospective methods. The retrospective adjustment method is used to value all such securities, except principal-only and interest-only securities and such securities with NAIC designations of 3-6, which are valued using the prospective method. If it is determined that a decline in fair value is other-than-temporary, the cost basis of the security is written down to the present value of estimated future cash flows using the original effective interest rate inherent in the security.

Common stocks are primarily reported at fair value based on quoted market prices and the related net unrealized capital gains (losses) are reported in unassigned surplus, net of any adjustment for federal income taxes. There are no restrictions on common and preferred stocks.

Insurance subsidiaries are reported at their underlying audited statutory equity. Non-insurance subsidiaries, which have significant ongoing operations other than for the benefit of the Company and its affiliates, are reported based on the underlying audited GAAP equity. Non-insurance subsidiaries, which have no significant ongoing operations other than for the benefit of the Company and its affiliates, are reported based on the underlying audited GAAP equity, including the admitted portion of goodwill. Dividends from subsidiaries are included in net investment income. The remaining net change in the subsidiaries’ equity is included in the change in net unrealized capital gains (losses).

Realized capital gains (losses) on sales of securities are recognized using the first in, first out (“FIFO”) method. The cost basis of bonds, common and preferred stocks, and other invested assets is adjusted for impairments in value deemed to be other-than-temporary and such adjustments are reported as a component of net realized capital gains (losses).

Mortgage loans on real estate are reported at unpaid principal balances, less an allowance for impairments. Valuation allowances, if necessary, are established for mortgage loans on real estate based on the difference between the net value of the collateral, determined as the fair value of the collateral less estimated costs to obtain and sell, and the recorded investment in the mortgage loan. The initial valuation allowance and subsequent changes in the allowance for mortgage loans are charged or credited directly to unassigned surplus. A mortgage loan is considered to be impaired when, based on current information and events, it is probable that the Company will be unable to collect all principal and interest amounts due according to the contractual terms of the mortgage agreement. When management determines foreclosure is probable and the impairment is other-than-temporary, the mortgage loan is written down and a realized loss is recognized.

Real estate occupied by the Company and real estate held for the production of income are reported at depreciated cost, net of related obligations. Real estate that the Company has the intent to sell is reported at the lower of depreciated cost or fair value, net of related obligations. Depreciation is calculated on a straight-line basis over the estimated useful lives of the properties. Investment income and operating expenses include rent for the Company’s occupancy of Company owned properties.

Cash equivalents are short-term highly liquid investments with original maturities of three months or less and are principally stated at amortized cost. Short-term investments include investments with maturities of one year or less and greater than three months at the date of acquisition and are principally stated at amortized cost.

9

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

Policy loans are reported at unpaid principal balances.

Derivative instruments that meet the criteria to qualify for hedge accounting are accounted for in a manner consistent with the item hedged (i.e., amortized cost or fair value with the related net unrealized capital gains (losses) reported in unassigned surplus along with any adjustment for federal income taxes). Derivative instruments that are entered into for other hedging purposes, also known as economic hedges, do not meet the criteria to qualify for hedge accounting. These derivative instruments are accounted for at fair value, and the related changes in fair value are recognized as net unrealized capital gains (losses) reported in unassigned surplus, net of any adjustments for federal income taxes. Embedded derivatives are not accounted for separately from the host contract.

Other invested assets consist of ownership interests in partnerships and limited liability companies (“LLCs”) which are carried based on the underlying audited GAAP equity, with the exception of affordable housing tax credit properties, which are carried at amortized cost. The related net unrealized capital gains (losses) are reported in unassigned surplus, net of any adjustments for federal income taxes. The Company records its share of income 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.

Interest Maintenance and Asset Valuation Reserves: Under a formula prescribed by the NAIC, the Company defers the portion of realized capital gains (losses) on sales of fixed income investments, principally bonds and mortgage loans, and interest-related hedging activities that are attributable to changes in the general level of interest rates and amortizes those deferrals over the remaining period to maturity based on groupings of individual securities sold in five-year bands. That net deferral is reported as the interest maintenance reserve (“IMR”) in the accompanying Balance Sheets. Realized capital gains (losses) are reported in income, net of federal income tax and transferred to the IMR. The asset valuation reserve (“AVR”) provides a valuation allowance for invested assets. The AVR is determined by an NAIC prescribed formula with changes reflected directly in unassigned surplus.

Subsidiaries: The accounts and operations of the Company’s subsidiaries are not consolidated with the accounts and operations of the Company.

Goodwill: Goodwill is admitted subject to an aggregate limitation of 10% of the capital and surplus in the most recently filed quarterly statement, excluding electronic data processing (“EDP”) equipment, operating system software, net deferred tax assets, and net positive goodwill. Goodwill is amortized over the period the Company benefits economically, not to exceed 10 years. Goodwill held by non-insurance subsidiaries is assessed in accordance with GAAP, subject to certain limitations for holding companies and foreign insurance subsidiaries. Goodwill is reported in other invested assets in the Balance Sheets.

Separate Accounts: Separate account assets and liabilities reported in the accompanying Balance Sheets represent funds that are separately administered, principally for annuity contracts and variable life insurance policies, and for which the contract holder, rather than the Company, bears the investment risk. Separate account obligations are intended to be satisfied from separate account assets and not from assets of the general account. Separate accounts are generally reported at fair value. The operations of the separate accounts are not included in the Statements of Operations; however, income earned on amounts initially invested by the Company in the formation of new separate accounts is included in other revenue. Fees charged to contract holders, principally mortality, policy administration, and surrender charges are included in separate account administrative and contract fees. The assets in the separate accounts are not pledged to others as collateral or otherwise restricted. For the years ended December 31, 2020, 2019 and 2018, there were no gains (losses) on transfers of assets from the general account to the separate account.

Nonadmitted Assets: Certain assets designated as nonadmitted, principally other invested assets, furniture and equipment, prepaid expenses, and other assets not specifically identified as an admitted asset within the NAIC SAP are excluded from the accompanying Balance Sheets and are charged directly to unassigned surplus.

Policy Acquisition Costs: The costs of acquiring and renewing business are expensed when incurred.

Policy Reserves: Reserves for life, long-term care, annuity, and deposit-type contracts are developed by actuarial methods and are determined based on interest rates, mortality tables and valuation methods prescribed by the NAIC that will provide, in the aggregate, reserves that are greater than or equal to the maximum of guaranteed policy cash values or the amounts required by the Insurance Department.

10

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

• The Company waives deduction of deferred fractional premiums on the death of lives insured and annuity contract holders and returns any premium beyond the date of death. Surrender values on policies do not exceed the corresponding benefit reserves. At December 31, 2020 and 2019, the Company held reserves of $ 1,055 million and $ 1,032 million, respectively, on insurance in-force for which gross premiums were less than net premiums according to the standard of valuation set by the State of Michigan.

• Reserves for individual life insurance policies are maintained using the 1941, 1958, 1980, 2001 and 2017 Commissioner’s Standard Ordinary Mortality Tables and using principally the Commissioner’s Reserve Valuation Method. Reserves and assumptions for policies following Valuation Manual 20 (“VM-20”) or Valuation Manual 21 (“VM-21”) will be outlined in the Company’s principle-based reserving (“PBR”) Actuarial Report, following Valuation Manual 31 (“VM-31”).

• Annuity and supplementary contracts with life contingency reserves are based principally on modifications of the 1937 Standard Annuity Table, the Group Annuity Mortality Tables for 1951, 1971, 1983, and 1994, the 1971 and 1983 Individual Annuity Mortality Tables, the A-2000 Individual Annuity Mortality Table, and the 2012 Individual Annuity Reserving Mortality Table.

• Liabilities related to policyholder funds left on deposit with the Company are generally equal to fund balances.

• Long-term care reserves are generally calculated using the one-year preliminary term method based on various mortality, morbidity, and lapse tables.

• For life insurance, the calendar year exact method is used to calculate the reserve at December 31, 2020 and 2019. Reserves at December 31, 2020 and 2019 are calculated based on the rated age. For certain policies with substandard table ratings, substandard multiple extras are applied via the Lotter method.

• For long-term care, the interpolated reserve method is used to adjust the calculated terminal reserve, and in addition an unearned premium reserve is held.

• Tabular interest, tabular less actual reserve released, and tabular costs have been determined by formula. Tabular interest on funds not involving life contingencies is calculated as one percent of the product of such valuation rate of interest times the mean of the amount of funds subject to such valuation rate of interest held at the beginning and end of the valuation year.

• From time to time, the Company finds it appropriate to modify certain required policy reserves because of changes in actuarial assumptions. Reserve modifications resulting from such determinations are recorded directly to unassigned surplus.

• Reserves for variable deferred annuity contracts are calculated in accordance with Valuation Manual 21 (“VM-21”) which has replaced Actuarial Guideline 43 (“AG-43”).

Reinsurance: Reinsurance ceded contracts do not relieve the Company from its obligations to policyholders. The Company remains liable to its policyholders for the portion reinsured to the extent that any reinsurer does not meet its obligations for reinsurance ceded to it under the reinsurance agreements. 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 of the insurer.

Premiums, commissions, expense reimbursements, benefits, and reserves related to reinsured business are accounted for on bases consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts. Premiums ceded to other companies have been reported as a reduction of premium income. Amounts applicable to reinsurance ceded for future policy benefits, unearned premium reserves, and claim liabilities have been reported as reductions of these items.

11

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

The Company records a liability for unsecured policy reserves ceded to reinsurers not authorized in the State of Michigan to assume such business. Changes to those amounts are credited or charged directly to unassigned surplus. Policy and contract liabilities ceded to reinsurers have been reported as reductions of the related reserves. Commissions and expense allowances allowed by reinsurers on business ceded are reported as income when received. Investment income ceded includes separate account fee income, net investment income and realized investment and other gains (losses), which was ceded to the affiliated reinsurers. NAIC SAP prescribes that no gain be recognized upon inception of a reinsurance treaty. The initial gain is recorded directly to unassigned surplus and released into income over the life of the treaty.

Federal Income Taxes: Total federal income taxes are based upon the Company’s best estimate of its current and deferred tax assets or liabilities. Current tax expense is reported in the Statements of Operations as federal income tax expense if resulting from operations and within net realized capital gains (losses) if resulting from capital transactions. Changes in the balances of deferred taxes, which provide for book versus tax temporary differences, are subject to limitations and are reported within various lines within surplus. The provision for federal and foreign income taxes incurred in the Statements of Operations is different from that which would be obtained by applying the statutory federal income tax rate to income before income tax (including realized capital gains). For additional information, see the Federal Income Taxes Note for reconciliation of effective tax rate.

Participating Insurance and Policyholder Dividends: Participating business represented approximately 14% and 15% of the Company’s aggregate reserve for life contracts at December 31, 2020 and 2019, respectively. The amount of policyholders’ dividends to be paid is approved annually by the Company’s Board of Directors. Policyholder dividends are recognized when declared rather than over the term of the related policies. The determination of the amount of policyholders’ dividends is complex and varies by policy type. In general, the aggregate amount of policyholders’ dividends is calculated based upon actual interest, mortality, morbidity, persistency, and expense experience for the year, as well as management’s judgment as to the appropriate level of statutory surplus to be retained by the Company.

Surplus Notes: Surplus notes are reported in capital and surplus, and the interest expense is not accrued unless approved for payment by the Insurance Department.

Statements of Cash Flow: Cash, cash equivalents and short-term investments in the Statements of Cash Flow represent movements of cash and highly liquid debt investments with initial maturities of one year or less.

Premiums and Benefits: Premiums for whole, term, and universal life, long-term care, annuity policies, and group annuity contracts with any mortality and morbidity risk are recognized as revenue when due. Revenues for universal life and annuity policies with mortality or morbidity risk, except for term certain supplementary contracts, consist of the entire premium received. Premiums received for variable universal life, as well as annuity policies and group annuity contracts without mortality or morbidity risk are recorded using deposit accounting and are credited directly to an appropriate policy reserve account, without recognizing premium revenue. Benefits incurred represent the total of death benefits paid, annuity benefits paid and the change in policy reserves.

Policy and Contract Claims: Policy and contract claims are determined on an individual-case basis for reported losses. Estimates of incurred but not reported losses are developed on the basis of past experience.

Guaranty Fund Assessments: Guaranty fund assessments are accrued when the Company receives knowledge of an insurance insolvency.

Variances Between NAIC SAP and GAAP: The more significant variances from GAAP are: (a) bonds would generally be reported at fair value; (b) changes in the fair value of derivative financial instruments would generally be reported as revenue unless deemed an effective hedge; (c) embedded derivatives would be bifurcated from the underlying contract or security and accounted for separately at fair value; (d) income recognition on partnerships and LLCs, which are accounted for under the equity method, would not be limited to the amount of cash distribution; (e) majority-owned noninsurance subsidiaries, variable interest entities where the Company is the primary beneficiary, and certain other controlled entities would be consolidated; (f) changes in the balances of deferred income taxes would generally be included in net income; (g) market value adjusted (“MVA”) annuity products would be reported in the general account of the Company; (h) all assets, subject to valuation allowances, would be recognized; (i) reserves would generally be based upon the net level premium method or the estimated gross margin method with estimates of future mortality, morbidity, persistency and interest; (j) reinsurance ceded, unearned ceded premium and unpaid ceded claims would be reported as an asset; (k) AVR and the IMR would not be recorded; (l)

12

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

changes to the mortgage loan valuation allowance would be reported in income; (m) surplus notes would be reported as liabilities; (n) premiums received in excess of policy charges for universal life and annuity policies would not be recognized as premium revenue and benefits would represent the excess of benefits paid over the policy account value and interest credited to the account values; (o) certain acquisition costs, such as commissions and other variable costs, directly related to acquiring new business are charged to current operations as incurred, would generally be capitalized and amortized based on profit emergence over the expected life of the policies or over the premium payment period; and (p) changes in unrealized capital gains (losses) and foreign currency translations would be presented as other comprehensive income.

The effects of the foregoing variances from GAAP on the accompanying statutory-basis financial statements have not been determined, but are presumed to be material.

3. Permitted Statutory Accounting Practices

The financial statements of the Company are presented in conformity with accounting practices prescribed or permitted by the Insurance Department.

For determining the Company’s solvency under the State of Michigan’s insurance laws and regulations, the Insurance Department recognizes only statutory accounting practices prescribed or permitted by the State of Michigan for determining and reporting the financial condition and results of operations of the Company. NAIC SAP has been adopted as a component of practices prescribed or permitted by the State of Michigan. The Director has the authority to prescribe or permit other specific practices that deviate from prescribed practices.

As of December 31, 2020 and 2019, the Director had not prescribed or permitted the Company to use any accounting practices that would result in the Company’s income or financial position to deviate from NAIC SAP.

13

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

4. Accounting Changes

Accounting changes adopted to conform to the provisions of NAIC SAP are reported as changes in accounting principles. The cumulative effect of changes in accounting principles is reported as an adjustment to unassigned surplus in the period of the change in accounting principle. The cumulative effect is the difference between the amount of unassigned surplus at the beginning of the year and the amount of unassigned surplus that would have been reported at that date if the new accounting principle had been applied retrospectively.

Adoption of New Accounting Standards

Effective January 1, 2020, NAIC Valuation Manual 21 (“VM-21”) – Requirements for Principle-Based Reserves for Variable Annuities was adopted as the new statutory reserving standard replacing Actuarial Guideline 43 (“AG43”) – Commissioners Annuity Reserve Valuation Method (“CARVM”) for Variable Annuities. The requirement is applicable to all variable annuity business in force. The guidance did not have a material impact on the Company’s financial position, results of operations, and financial statement disclosures.

Effective December 31, 2019, the NAIC made non-substantive revisions to Statement of Statutory Accounting Principles (“SSAP”) No. 100R, Fair Value Measurements to adopt with modification the disclosure amendments reflected in Accounting Standards Update (“ASU”) 2018-13 Changes to the Disclosure Requirements for Fair Value Measurement. The revisions included elimination of certain fair value disclosures. The Company adopted the amendment in 2019. The guidance did not have a material impact on the Company’s financial position, results of operations, and financial statement disclosures.

Effective January 1, 2018, the NAIC made substantive revisions to SSAP No. 100, Fair Value Measurements. The revised guidance allows the use of net asset value as a practical expedient for fair value when 1) specifically allowed in a SSAP or 2) when specific conditions exist. The Company adopted the amendment in 2018. The guidance did not have a material impact on the Company’s financial position, results of operations, and financial statement disclosures.

Effective January 1, 2018, the NAIC made substantive revisions to SSAP No. 86, Accounting for Derivative Instruments and Hedging, Income Generation, and Replication (Synthetic Asset) Transactions to adopt ASU 2017-04 Settlement of Valuation Margin. The revised guidance requires the recognition of changes in variation margin as unrealized gains/losses until the derivative contract has matured, terminated and/or expired. The guidance applies to both over-the-counter (“OTC”) derivatives and (“ETF”) exchange-traded futures, regardless of whether the counterparty or exchange considers the variation margin payment to be collateral or a legal settlement. The Company adopted the amendment in 2018. The guidance did not have a material impact on the Company’s financial position, results of operations, and financial statement disclosures.

In November 2018, the NAIC adopted SSAP No. 108 – Derivatives Hedging Variable Annuity Guarantees as a substantive guidance which permits and specifies the requirements for applying a special accounting treatment for derivative contracts hedging variable annuity guarantee benefits that are subject to fluctuations as a result of interest rate sensitivity. The provisions of SSAP No. 108 are separate and distinct from the statutory guidance in SSAP No. 86 - Derivatives. Application of the adopted guidance is limited to the derivative transactions specified in SSAP No. 108 and permitted only if all of the requirements for the special accounting treatment are met. The guidance is effective beginning January 1, 2020. The Company has not elected hedge accounting under SSAP 108.

In November 2018, the NAIC made non-substantive revisions to SSAP No. 51R – Life Contracts to adopt ASU 2018-28 Updates to Liquidity Disclosures. The revisions included enhancements to the existing disclosures on annuity actuarial reserves and deposit type liabilities by withdrawal characteristics and added life liquidity disclosures. The Company adopted the amendment in 2019. The guidance did not have a material impact on the Company’s financial position, results of operations, and financial statement disclosures.

14

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

In November 2018, the NAIC made non-substantive revisions to SSAP No. 86 - Derivatives to incorporate hedge documentation and assessment efficiencies from ASU 2017-12 Targeted Improvements to Accounting for Hedging Activities as issued by Financial Accounting Standards Board (“FASB”). The revisions will allow companies to perform subsequent assessments of hedge effectiveness qualitatively if certain conditions are met, allow companies more time to perform the initial quantitative hedge effectiveness assessment and clarify that companies may apply the “criterial terms match” method for a group of forecasted transactions if they meet the requirements. The revisions were effective beginning January 1, 2019 and the Company adopted the amendment in 2019. The guidance did not have a material impact on the Company’s financial position, results of operations, and financial statement disclosures.

In March 2017, the NAIC made substantive revisions to SSAP No. 69 – Statement of Cash Flow to adopt ASU 2016-15 Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments as issued by the FASB, without modifications. The revisions clarified the classification of eight specific cash flow issues with the objective of reducing diversity in practice. The amendment is to be applied retrospectively, effective for fiscal years beginning after December 15, 2018 and interim periods within those years. The Company adopted the amendment in 2019. The guidance did not have a material impact on the Company’s financial position, results of operations, and financial statement disclosures.

In June 2017, the NAIC adopted revisions to SSAP No. 37, Mortgage Loans. The revision requires an age analysis of mortgage loans disclosure, aggregated by type, with identification of mortgage loans in which the entity is a participant or co-lender in a mortgage loan agreement, capturing: 1) recorded investment of current mortgage loans, 2) recorded investment of mortgage loans classified as 30-59 days, 60-89 days, 90-179 days, and 180 days and greater past due; 3) recorded investment of mortgage loans 90 days and 180 days past due still accruing interest; 4) interest accrued for mortgage loans 90 days and 180 days past due; and 5) recorded investment and number of mortgage loans where interest has been reduced, by percent reduced. The Company adopted the amendment in 2018. The guidance did not have a material impact on the Company’s financial position, results of operations, and financial statement disclosures.

In August 2017, the NAIC adopted non-substantive revisions to SSAP No. 69 – Statement of Cash Flow to adopt ASU 2016-18 Statement of Cash Flows: Restricted Cash as issued by the FASB. The revision clarifies that restricted cash and cash equivalents shall not be reported as operating, investing or financing activities, but shall be reported with cash and cash equivalents when reconciling beginning and ending amounts on the cash flow statement. A consequential change was incorporated in SSAP No. 1 – Accounting Policies, Risks & Uncertainties and Other Disclosures to ensure information on restricted cash, cash equivalents and short-term investments is reported in the restricted asset disclosure. The revision was effective December 31, 2019, to be adopted retrospectively to allow for comparative cash flow statements. The Company adopted the amendment in 2019. The guidance did not have a material impact on the Company’s financial position, results of operations, and financial statement disclosures.

In August 2016, the NAIC adopted substantive revisions to SSAP No. 51 – Life Contracts in order to allow principle-based reserving (“PBR”) for life insurance contracts as specified in the NAIC Valuation Manual – 20 (“VM-20”). Current statutory accounting guidance refers to existing model laws for reserving guidance which are primarily based on formulaic methodology. Also, in June 2016, the NAIC adopted updates to Appendix A-820: Minimum Life and Annuity Reserve Standards as part of the PBR project, which incorporate relevant aspects of the 2009 revisions to the Standard Valuation Law (Model #820) into Appendix A-820. The effective date was January 1, 2017 but companies were allowed to defer adoption for three years until January 1, 2020. The Company had adopted VM-20 for certain products launched in 2018 and 2019. As of January 1, 2020, VM-20 was implemented for all new life insurance contracts. Adoption of VM-20 is on a prospective basis, therefore, there is no impact to surplus upon adoption.

Future Adoption of New Accounting Standards

In April 2020, the NAIC adopted INT 20-1 Reference Rate Reform as an interpretation of statutory accounting guidance to incorporate the US GAAP guidance from ASU 2020-04, Reference Rate Reform (Topic 848) “Facilitation of the Effects of Reference Rate Reform on Financial Reporting”. The effective date of this guidance begins on March 12, 2020 and sunsets on Dec 31, 2022. The guidance provides limited period elective application of accounting relief (expedients) to address the direct effects from the reference rate reform on affected contracts and hedging relationships. The Company is currently assessing which expedients to adopt and the impact of this guidance on its financial statements.

15

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

On September 22, 2017, The Bilateral Agreement Between the United States of America and the European Union (EU) on Prudential Measures Regarding Insurance and Reinsurance, known as the Covered Agreement, was signed by the United States Department of the Treasury and the US Trade Representative. The Covered Agreement includes provisions that serve to reduce reinsurance collateral requirements for certified reinsurers that are licensed and domiciled in Qualified Jurisdictions. On June 25, 2019, the NAIC Executive Committee adopted revisions to the Credit for Reinsurance Model Law (#785) and Credit for Reinsurance Model Regulation (#786), which implement the reinsurance collateral provisions of the Covered Agreements with the European Union (EU) and the United Kingdom (UK). These revisions create a new type of jurisdiction, which is called a Reciprocal Jurisdiction and eliminate reinsurance collateral requirements and local presence requirements for EU and UK reinsurers that maintain a minimum amount of own-funds equivalent to $250 million and a solvency capital requirement (SCR) of 100% under Solvency II. The revisions also provide Reciprocal Jurisdiction status for accredited U.S. jurisdictions and Qualified Jurisdictions if they meet certain requirements in the credit for reinsurance models. U.S. states must adopt these revisions prior to September 1, 2022 or face potential federal preemption by the Federal Insurance Office. To avoid preemption, the laws must be enacted prior to September 1, 2022, and must adhere exactly to the models as they have been adopted by the NAIC. On December 7, 2019, the Statutory Accounting Principles (E) Working Group adopted revisions to Appendix A-785 to incorporate the updates from the adopted Credit for Reinsurance Model Law (#785) and the Credit for Reinsurance Model Regulation (#786) that include the relevant provisions from the Covered Agreement. The Company is assessing the impact on the Company’s financial position, results of operations, and financial statement disclosures.

Reconciliation Between Audited Financial Statements and NAIC Annual Statements

There were no differences in net income (loss) or capital and surplus between the audited financial statements and the NAIC statements as filed as of and for the years ended December 31, 2020, 2019 and 2018.

5. Investments

Bonds

The carrying value and fair value of the Company’s investments in bonds are summarized as follows:

	Carrying   Value		Gross Unrealized Gains		Gross Unrealized Losses		Fair     Value
(in millions)
December 31, 2020:
U.S. government and agencies	$	4,323	$	381	$	(77)	$	4,627
States and political subdivisions		2,915		756		(1)		3,670
Foreign governments		2,456		82		(5)		2,533
Corporate bonds		33,455		6,791		(44)		40,202
Mortgage-backed and asset-backed securities		6,045		992		(4)		7,033
Total bonds	$	49,194	$	9,002	$	(131)	$	58,065
December 31, 2019:
U.S. government and agencies	$	3,468	$	225	$	(37)	$	3,656
States and political subdivisions		2,661		509		(3)		3,167
Foreign governments		2,372		70		(10)		2,432
Corporate bonds		32,496		4,123		(58)		36,561
Mortgage-backed and asset-backed securities		6,196		601		(2)		6,795
Total bonds	$	47,193	$	5,528	$	(110)	$	52,611

16

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

A summary of the carrying value and fair value of the Company’s investments in bonds at December 31, 2020, by contractual maturity, is as follows:

	Carrying Value		Fair     Value
(in millions)
Due in one year or less	$	893	$	910
Due after one year through five years		6,205		6,601
Due after five years through ten years		8,319		9,336
Due after ten years		27,732		34,185
Mortgage-backed and asset-backed securities		6,045		7,033
Total	$	49,194	$	58,065

The expected maturities in the foregoing table may differ from the contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

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 carrying value or fair value, as applicable, of the pledged or deposited assets:

	December 31,
	2020		2019
(in millions)
At fair value:
Bonds and cash pledged in support of over-the-counter derivative instruments	$	305	$	211
Bonds and cash pledged in support of exchange-traded futures		601		344
Bonds and cash pledged in support of cleared interest rate swaps		1,058		880
Total fair value	$	1,964	$	1,435
At carrying value:
Bonds on deposit with government authorities	$	14	$	14
Mortgage loans pledged in support of real estate		-		-
Bonds held in trust		92		93
Pledged collateral under reinsurance agreements		2,899		2,755
Total carrying value	$	3,005	$	2,862

At December 31, 2020 and 2019, the Company held below investment grade corporate bonds of $2,968 million and $2,412 million, with an aggregate fair value of $3,116 million and $2,508 million, respectively. The Company performs periodic evaluations of the relative credit standing of the issuers of these bonds.

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 securities where there is evidence of impairment or a significant unrealized loss at the Balance Sheet date. Impairment is considered to have occurred, based on management’s judgment, when it is deemed probable that the Company will not be able to collect all amounts due according to the debt security’s contractual terms. 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.

17

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

The Company considers relevant facts and circumstances in evaluating whether the impairment of a 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 security to maturity or until it recovers in value. To the extent the Company determines that a security, other than loan-backed and structured securities, is deemed to be other-than-temporarily impaired, the difference between book value and fair value would be charged to income. For loan-backed and structured securities in an unrealized loss position, where the Company does not intend to sell or is not likely to be required to sell the security, the Company calculates an other-than-temporary impairment loss by subtracting the net present value of the projected future cash flows of the security from the amortized cost of the security. The net present value is calculated by discounting the Company’s best estimate of projected future cash flows at the effective interest rate implicit in the debt security prior to impairment. 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, financial statements, and fundamentals of the industry and geographic area in which the issuer operates, as well as overall macroeconomic conditions. The 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.

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

The following tables disclose the impact of Other-Than-Temporary Impairments (OTTI) on Carrying Values (CV), including the Net Present Value (NPV) of Projected Cash Flows (CF) less than Book Value (BV) by CUSIP for loan-backed and structured securities:

Year Ended December 31, 2020

CUSIP#	CV Before OTTI		NPV of Projected CFs		Credit OTTI Recognized in Loss		CV After OTTI		Fair     Value
51817TAB8	$	29	$	24	$	5	$	24	$	21
		-		-		-		-		-
		-		-		-		-		-
Total	$	29	$	24	$	5	$	24	$	21

Year Ended December 31, 2019

CUSIP#	CV Before OTTI		NPV of Projected CFs		Credit OTTI Recognized in Loss		CV After OTTI		Fair     Value
	$	-	$	-	$	-	$	-	$	-
		-		-		-		-		-
		-		-		-		-		-
Total	$	-	$	-	$	-	$	-	$	-

18

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

When a decline in fair value is other-than-temporary, an impairment loss is recognized as a realized loss equal to the entire difference between the bond’s carrying value or amortized cost and its fair value.

The following table shows gross unrealized losses and fair values of bonds, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:

	Less than 12 months				12 months or more				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross   Unrealized   Losses
(in millions)
December 31, 2020:
U.S. government and agencies	$	2,208	$	(77)	$	-	$	-	$	2,208	$	(77)
States and political subdivisions		57		(1)		-		-		57		(1)
Foreign governments		-		-		54		(5)		54		(5)
Corporate bonds		1,018		(33)		175		(11)		1,193		(44)
Mortgage-backed and asset-backed securities		238		(4)		9		-		247		(4)
Total	$	3,521	$	(115)	$	238	$	(16)	$	3,759	$	(131)
	Less than 12 months				12 months or more				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross   Unrealized   Losses
(in millions)
December 31, 2019:
U.S. government and agencies	$	1,619	$	(36)	$	63	$	(1)	$	1,682	$	(37)
States and political subdivisions		110		(3)		-		-		110		(3)
Foreign governments		-		-		49		(10)		49		(10)
Corporate bonds		1,074		(12)		512		(46)		1,586		(58)
Mortgage-backed and asset-backed securities		57		(1)		139		(1)		196		(2)
Total	$	2,860	$	(52)	$	763	$	(58)	$	3,623	$	(110)

At December 31, 2020 and 2019, there were 146 and 172 bonds that had a gross unrealized loss, of which the single largest unrealized loss was $56 million and $29 million, respectively. The Company anticipates that these bonds will perform in accordance with their contractual terms and the Company currently has the ability and intent to hold these bonds until they recover or mature. Unrealized losses can be created by rising interest rates or by rising credit concerns and therefore 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.

For the years ended December 31, 2020, 2019 and 2018, realized capital losses include $112 million, $27 million, and $72 million related to bonds that have experienced an other-than-temporary decline in value and were comprised of 52, 13, and 21 securities, respectively.

19

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

The total recorded investment in restructured corporate bonds at December 31, 2020, 2019 and 2018 was $0 million, $0 million, and $0 million, respectively. There were 0, 1, and 1 restructured corporate bonds for which an impairment was recognized during 2020, 2019 and 2018, respectively. The Company accrues interest income on impaired securities to the extent deemed collectible and the loan continues to perform under its original or restructured contractual terms. Interest income on non-performing loans generally is recognized on a cash basis.

The sales of investments in bonds, including non-cash sales from reinsurance transactions, resulted in the following:

	Years Ended December 31,
	2020		2019		2018
(in millions)
Proceeds	$	16,955	$	12,389	$	28,102
Realized gross gains		625		356		729
Realized gross losses		(67)		(50)		(407)

The Company had no nonadmitted accrued investment income from bonds (unaffiliated) at December 31, 2020 and 2019.

Affiliate Transactions

In 2020, the Company sold certain bonds to an affiliate, John Hancock Reassurance Company Limited (“JHRECO”). These bonds had a book value of $178 million and fair value of $206 million. The Company recognized $28 million in pre-tax realized gains before transfer to the IMR.

In 2020, the Company sold certain bonds to an affiliate, John Hancock Funding Company LLC, (“JHFLLC”). These bonds had a book value of $99 million and fair value of $98 million. The Company recognized $1 million in pre-tax realized losses before transfer to the IMR.

In 2020, the Company acquired at fair value, certain bonds from an affiliate, JHRECO, for $304 million.

In 2020, the Company acquired at fair value, certain bonds from an affiliate, JHLH, for $76 million.

In 2020, the Company acquired at fair value, certain bonds from an affiliate, JHNY, for $65 million.

In 2019, the company seeded certain bonds to an affiliate, JHFLLC. These bonds had a book value of $63 million and fair value of $62 million. The Company recognized $1 million in pre-tax realized losses before transfer to the IMR.

In 2019, the Company sold certain bonds to an affiliate, JHRECO. These bonds had a book value of $893 million and fair value of $943 million. The Company recognized $50 million in pre-tax realized gains before transfer to the IMR.

In 2019, the Company sold certain bonds to an affiliate, JHLH. These bonds had a book value of $82 million and fair value of $93 million. The Company recognized $11 million in pre-tax realized gains before transfer to the IMR.

In 2019, the Company sold certain bonds to an affiliate, JHNY. These bonds had a book value of $121 million and fair value of $130 million. The Company recognized $9 million in pre-tax realized gains before transfer to the IMR.

In 2019, the Company acquired at fair value, certain bonds from an affiliate, JHNY, for $123 million.

In 2019, the Company acquired at fair value, certain bonds from an affiliate, JHLH, for $98 million.

In 2019, the Company acquired at fair value, certain bonds from an affiliate, JHRECO, for $1,088 million.

In 2019, the Company acquired at fair value, certain bonds from an affiliate, Manulife Reinsurance Bermuda Ltd (“MRBL”), for $109 million in lieu of a reinsurance cash settlement.

20

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

In 2019, the Company acquired at fair value, certain bonds from an affiliate, MRBL, for $27 million.

In 2019, the Company acquired at fair value, certain bonds from an affiliate, JHFLLC, for $3 million.

In 2018, the Company sold certain bonds to an affiliate, MRBL. These bonds had a book value of $449 million and fair value of $501 million. The Company recognized $52 million in pre-tax realized gains before transfer to the IMR.

In 2018, the Company sold certain bonds to an affiliate, JHNY. These bonds had a book value of $293 million and fair value of $313 million. The Company recognized $20 million in pre-tax realized gains before transfer to the IMR.

In 2018, the Company sold certain bonds and stocks to an affiliate, JHFLLC. These bonds and stocks had a book value of $53 million and fair value of $53 million. The Company did not recognize any pre-tax realized gains before transfer to the IMR.

In 2018, the Company acquired at fair value, certain bonds from an affiliate, JHNY, for $647 million.

In 2018, the Company acquired at fair value, certain bonds from an affiliate, JHLH, for $48 million.

21

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

Preferred and Common Stocks

Cost and fair value of the Company’s investments in preferred and common stocks are summarized as follow:

	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
(in millions)
December 31, 2020:
Preferred stocks:
Nonaffiliated	$	29	$	7	$	-		$	36
Affiliates		-		-		-			-
Common stocks:
Nonaffiliated		698		399		(15	)		1,082
Affiliates*		1,589		1,290		-			2,879
Total stocks	$	2,316	$	1,696	$	(15	)	$	3,997
	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
(in millions)
December 31, 2019:
Preferred stocks:
Nonaffiliated	$	15	$	4	$	-		$	19
Affiliates		-		-		-			-
Common stocks:
Nonaffiliated		784		283		(17	)		1,050
Affiliates*		1,589		1,235		-			2,824
Total stocks	$	2,388	$	1,522	$	(17	)	$	3,893

*Affiliates - fair value represents the carrying value

At December 31, 2020 and 2019, there were 73 and 120 nonaffiliated equity securities that had a gross unrealized loss excluding securities that have been written down to zero. The single largest unrealized loss was $3 million and $4 million at December 31, 2020 and 2019, respectively. The Company anticipates that these equity securities will recover in value in the near term.

The Company has a process in place to identify equity securities that could potentially have an impairment that is other-than-temporary. The Company considers relevant facts and circumstances in evaluating whether the impairment of a security is other-than-temporary. Relevant facts and circumstances include (1) the length of time the fair value has been below cost; (2) the financial position of the issuer; and (3) the Company’s ability and intent to hold the security until it recovers. To the extent the Company determines that a security is deemed to be other-than-temporarily impaired, the difference between book value and fair value would be charged to income.

For the years ended December 31, 2020, 2019 and 2018, realized capital losses include $18 million, $7 million, and $11 million related to preferred and common stocks that have experienced an other-than-temporary decline in value and were comprised of 144, 132, and 95 securities, respectively. These are primarily made up of impairments on public and private common stocks.

22

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

Affiliate Transactions

In 2018, the Company sold certain common stocks to an affiliate, MRBL. These stocks had a book value of $264 million and fair value of $306 million. The Company recognized $42 million in pre-tax realized gains.

Mortgage Loans on Real Estate

At December 31, 2020 and 2019, the mortgage loan portfolio was diversified by geographic region and specific collateral property type as displayed below. The Company controls credit risk through credit approvals, limits, and monitoring procedures.

  December 31, 2020:

Property Type	Carrying Value
(in millions)
Apartments	$	2,904
Industrial		838
Office buildings		2,855
Retail		3,165
Agricultural		-
Agribusiness		140
Mixed use		7
Other		1,668
Allowance		(4)
Total mortgage loans on real estate	$	11,573

  December 31, 2019:

Property Type	Carrying Value
(in millions)
Apartments	$	2,863
Industrial		752
Office buildings		3,073
Retail		3,263
Agricultural		-
Agribusiness		223
Mixed use		7
Other		1,470
Allowance		(4)
Total mortgage loans on real estate	$	11,647

Geographic Concentration	Carrying Value
(in millions)
East North Central	$	1,358
East South Central		234
Middle Atlantic		1,861
Mountain		630
New England		610
Pacific		3,696
South Atlantic		2,119
West North Central		319
West South Central		743
Canada / Other		7
Allowance		(4)
Total mortgage loans on real estate	$	11,573

Geographic Concentration	Carrying Value
(in millions)
East North Central	$	1,453
East South Central		276
Middle Atlantic		1,700
Mountain		538
New England		633
Pacific		3,710
South Atlantic		2,275
West North Central		325
West South Central		737
Canada / Other		4
Allowance		(4)
Total mortgage loans on real estate	$	11,647

The aggregate mortgages outstanding to any one borrower do not exceed $461 million.

During 2020, the respective maximum and minimum lending rates for commercial mortgage loans issued were 4.52% and 2.21%. The Company issued no agricultural loans during 2020 or 2019. The Company issued no purchase money mortgages in 2020 and 2019. At the issuance of a loan, the percentage of any one loan to value of security, exclusive of insured, guaranteed, or purchase money mortgages does not exceed 75%. Impaired mortgage loans without an allowance for credit losses were $0

23

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

million, $0 million, and $0 million at December 31, 2020, 2019 and 2018, respectively. The average recorded investment in impaired loans was $10 million, $39 million, and $56 million at December 31, 2020, 2019 and 2018, respectively. The Company recognized $1 million, $3 million, and $4 million of interest income during the period the loans were impaired for the years ended December 31, 2020, 2019 and 2018, respectively.

The following table shows the age analysis of mortgage loans aggregated by type:

	Farm		Residential		Commercial		Mezzanine		Total
(in millions)
December 31, 2020:
Recorded Investment
Current	$	239	$	-	$	11,171	$	167	$	11,577
30 - 59 Days Past Due		-		-		-		-		-
60 - 89 Days Past Due		-		-		-		-		-
90 - 179 Days Past Due		-		-		-		-		-
180 + Days Past Due		-		-		-		-		-
December 31, 2019:
Recorded Investment
Current	$	349	$	-	$	11,165	$	137	$	11,651
30 - 59 Days Past Due		-		-		-		-		-
60 - 89 Days Past Due		-		-		-		-		-
90 - 179 Days Past Due		-		-		-		-		-
180 + Days Past Due		-		-		-		-		-

The Company had no recorded investment of mortgage loans 90 to 179 days or 180 days or greater past due still accruing interest or where interest has been reduced in 2020 and 2019. The Company was not a participant or co-lender in a mortgage loan agreement in 2020 and 2019.

Generally, the terms of the restructured mortgage loans call for the Company to receive some form or combination of an equity participation in the underlying collateral, excess cash flows or an effective yield at the maturity of the loans sufficient to meet the original terms of the loans. There are no contractual commitments made to extend credit to debtors owning receivables whose terms have been modified in troubled debt restructurings. The Company accrues interest income on impaired loans to the extent deemed collectible and the loan continues to perform under its original or restructured contractual terms. Interest income on non-performing loans generally is recognized on a cash basis.

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,
	2020		2019
(in millions)
AAA	$	305	$	335
AA		2,975		2,845
A		5,137		5,169
BBB		2,536		3,145
BB		609		147
B and lower and unrated		11		6
Total	$	11,573	$	11,647

24

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

Affiliate Transactions

In 2019, the Company sold certain mortgages to an affiliate, John Hancock GA Mortgage Trust (“JHGMT”). These mortgages had a book value of $785 million and fair value of $800 million at the date of the transaction. The Company recognized $15 million in pre-tax realized gains before transfer to the IMR.

In 2019, the Company acquired at fair value, certain mortgages from an affiliate, Hancock Mortgage REIT Inc., (“HMREIT”), for $119 million.

In 2018, the Company sold certain mortgages to an affiliate, JHLH. These mortgages had a book value of $8 million and fair value of $8 million at the date of the transaction. The Company recognized $0 million in pre-tax realized losses before transfer to the IMR.

In 2018, the Company acquired, at fair value, certain mortgages from an affiliate, JHNY, for $105 million.

In 2018, the Company acquired, at fair value, certain mortgages from an affiliate, JHLH, for $29 million.

Real Estate

The composition of the Company’s investment in real estate is summarized as follows:

	December 31,
	2020			2019
(in millions)
Properties occupied by the company	$	195		$	239
Properties held for the production of income		5,088			4,996
Properties held for sale		-			-
Less accumulated depreciation		(1,074	)		(1,029)
Total	$	4,209		$	4,206

The Company recorded $0 million, $0 million, and $0 million of impairments on real estate investments during the years ended December 31, 2020, 2019 and 2018, respectively.

On December 3, 2020, the Company sold real estate previously classified as properties occupied by the Company. The real estate property had a book value of $13 million and fair value of $177 million which resulted in pre-tax realized gains to operations of $164 million.

Affiliate Transactions

On June 30, 2020, the Company committed to invest an additional $100 million into Hancock U.S Real Estate Fund, L.P. (“HUSREF”). As of December 31, 2020, the Company funded $60 million of the commitment.

In 2018, the Company entered into a joint venture arrangement with the University of California Board of Regents (“UC”). As part of this arrangement, the Company sold six U.S. commercial real estate properties and one other invested asset with the characteristics of real estate to Broadway Green LLC, Broadway Wacker LLC and Broadway Congress LLC, all joint venture entities formed by UC. The Company provides management services to these joint ventures and owns 10% of their equity. The real estate properties had a book value of $728 million and fair value of $985 million which resulted in pre-tax realized gains to operations of $231 million (after 10% deferral of realized gain).

25

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

Other Invested Assets

The Company had no investments in partnerships or LLCs that exceed 10% of its admitted assets at December 31, 2020 and 2019.

Other invested assets primarily consist of investments in partnerships and LLCs. The Company recorded $21 million, $97 million, and $39 million of impairments on partnerships and LLCs during the years ended December 31, 2020, 2019 and 2018, respectively. These impairments are based on significant judgement by the Company in determining whether the objective evidence of other-than-temporary impairment exists. The Company considers relevant facts and circumstances in evaluating whether the impairment of an other invested asset is other-than-temporary. Relevant facts and circumstances include (1) the length of time the fair value has been below cost; (2) the financial position of the investee; (3) the Company’s ability and intent to hold the other invested asset until it recovers. To the extent the Company determines that an other invested asset is deemed to be other-than-temporarily impaired, the difference between book and fair value would be charged to income.

Affiliate Transactions

In 2020, the Company acquired at fair value, certain other invested assets from an affiliate, JHFLLC, for $55 million.

In 2019, Manulife Private Capital and Manulife Investment Management Private Markets launched a closed-end pooled fund that offers third-party investors the opportunity to invest alongside JHUSA’s and MLI’s general account and/or their affiliates (collectively the “General Account”) in private equity funds and private equity co-investments in the US and in Canada. The fund was seeded with a pool of private equity fund investments and direct private equity co-investments from the Company. The assets sold by the Company, to seed the fund, had a book value of $451 million and fair value of $459 million which resulted in a gain to operations of $8 million.

In 2019, the Company acquired at fair value, certain other invested assets from an affiliate, JHFLLC, for $35 million.

In 2018, the Company entered into an agreement to launch John Hancock Infrastructure Fund, LP (the “Fund”), a closed-end pooled fund that will offer investors the opportunity to invest alongside the Company in a targeted infrastructure strategy focused primarily on U.S investments. The fund was seeded with the partial sale of 9 assets owned by the Company. The assets sold had a book value of $1,045 million and fair value of $1,094 million which resulted in a gain to operations of $49 million.

In 2018, the Company acquired at fair value, certain other invested assets from an affiliate, JHNY, for $4 million.

In 2018, the Company acquired at fair value, certain other invested assets from an affiliate, JHLH, for $9 million.

In 2018, the Company acquired at fair value, certain other invested assets from an affiliate, John Hancock Partnership Holdings I (“JHPH I”), for $39 million.

In 2018, the Company acquired at fair value, certain other invested assets from an affiliate, John Hancock Partnership Holdings II (“JHPH II”), for $39 million.

In 2018, the Company acquired at fair value, certain other invested assets from an affiliate, JHFLLC, for $6 million.

Other

The subprime lending sector, also referred to as B-paper, near-prime, or second chance lending, is the sector of the mortgage lending industry which lends to borrowers who do not qualify for prime market interest rates because of poor or insufficient credit history.

For purposes of this disclosure, subprime exposure is defined as the potential for financial loss through direct investment, indirect investment, or underwriting risk associated with risk from the subprime lending sector. For purposes of this note, subprime exposure is not limited solely to the risk associated with holding direct mortgage loans, but also includes any indirect risk through investments in asset-backed or structured securities, hedge funds, common stock, subsidiaries and affiliates, and insurance product issuance.

26

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

Although it can be difficult to determine the indirect risk exposures, it should be noted that not only does it include expected losses, it also includes the potential for losses that could occur due to significantly depressed fair value of the related assets in an illiquid market.

The Company had no direct exposure through investments in subprime mortgage loans as of December 31, 2020 or 2019.

Management considers several factors when classifying a structured finance or residential mortgage-backed security holding as “subprime” or placing a security in the highest risk category. These factors include the transaction’s weighted average FICO or credit score, loan-to-value ratio (“LTV”), geographic composition, lien position, loan purpose, and loan documentation.

The Company has entered into certain repurchase agreements with an aggregate carrying value of $0 million and $0 million as of December 31, 2020 and 2019, respectively. For such agreements, the Company agrees to a specified term, price, and interest rate through the date of the repurchase.

The Company established a facility with an affiliate, MRBL whereby cash collateral can be received under a repurchase agreement program. There was no repurchase agreement activity in 2020 and 2019.

For securities lending transactions, the Company’s policy is to require a minimum of 102% of the fair value of securities loaned to be maintained as collateral. Positions are marked to market and adjusted on a daily basis to ensure the 102% margin requirement is maintained. There were no securities on loan as of December 31, 2020 or 2019.

27

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

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

Major categories of the Company’s net investment income are summarized as follows:

	2020			2019			2018
(in millions)
Income:
Bonds	$	2,135		$	2,117		$	2,279
Preferred stocks		-			-			-
Common stocks		17			125			126
Mortgage loans on real estate		566			569			594
Real estate		461			432			638
Policy loans		177			188			175
Cash, cash equivalents and short-term investments		20			45			38
Other invested assets		783			920			1,069
Derivatives		493			519			427
Other income		7			-			(21	)
Total investment income		4,659			4,915			5,325
Expenses
Investment expenses		(372	)		(331	)		(424	)
Investment taxes, licenses and fees, excluding federal income taxes		(55	)		(51	)		(76	)
Investment interest expense		(44	)		(42	)		(48	)
Depreciation on real estate and other invested assets		(93	)		(85	)		(112	)
Total investment expenses		(564	)		(509	)		(660	)
Net investment income	$	4,095		$	4,406		$	4,665

Realized capital gains (losses) and amounts transferred to the IMR are as follows:

	2020		2019		2018
(in millions)
Realized capital gains (losses)	$	3,010	$	735	$	730
Less amount transferred to the IMR (net of related tax benefit (expense) of $(174) in 2020, $(89) in 2019, and $2 in 2018)		653		336		(6	)
Realized capital gains (losses) before tax		2,357		399		736
Less federal income taxes on realized capital gains (losses) before effect of transfer to the IMR		291		201		396
Net realized capital gains (losses)	$	2,066	$	198	$	340

6. Derivatives

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.

28

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

Over-the-counter (“OTC”) bilateral 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 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 OTC 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.

Swaptions are contractual agreements whereby the holder has the right, but not obligation, to enter into a given swap agreement on a specified future date.

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, swaptions, 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 cash flow and fair value hedge accounting relationships. These derivatives hedge the variable cash flows associated with certain floating-rate bonds, as well as, future fixed income asset acquisitions, which will support the Company’s long-term care and life insurance businesses. These derivatives 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. For its fair value hedging relationships, the Company uses interest rate swap agreements and interest rate treasury locks to hedge the risk of changes in fair value of existing fixed rate assets and liabilities arising from changes in benchmark interest rates.

Inflation swaps are used to reduce inflation risk generated from inflation-indexed liabilities. Inflation swaps are classified within interest rate swaps for disclosure purposes and are both OTC bilateral and Cleared OTC. The Company utilizes inflation swaps in effective hedge accounting relationships and other hedging 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 U.S. Treasury or swap curve performance. The Company utilizes exchange-traded interest rate futures in other hedging relationships.

The Company also uses interest rate floors and swaptions primarily to protect against interest rate exposure arising from mismatches between assets and liabilities (duration mismatches). The Company utilizes interest rate floors in other hedging relationships.

29

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

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 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 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 effective hedge accounting relationships and other hedging 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 hedging 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 effective hedge accounting relationships and other hedging 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 in other hedging 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 other hedging 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.

Replication Synthetic Assets. Replication synthetic asset transactions (“RSATs”) are derivative transactions made in combination with a cash instrument in order to reproduce the investment characteristic of an otherwise permissible investment. The Company uses interest rate swaps and credit default swaps in these transactions when direct investments are either too expensive to acquire or otherwise unavailable in the market. Such derivatives can only be RSATs and not hedging vehicles.

30

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

The table below provides a summary of the gross notional amount and fair value of derivatives contracts for all derivatives in effective hedge accounting relationships, other hedging relationships, and RSATs:

		December 31, 2020
(in millions)		Notional Amount		Carrying Value Assets		Carrying Value Liabilities		Fair Value Assets		Fair Value   Liabilities
Effective Hedge Accounting Relationships
Fair value hedges	Interest rate swaps	$	1,359	$	-	$	-	$	287	$	195
	Foreign currency swaps		-		-		-		-		-
Cash flow hedges	Interest rate swaps		5,217		-		-		766		367
	Foreign currency swaps		321		27		-		38		1
	Foreign currency forwards		-		-		-		-		-
	Interest rate treasury locks		3,310		-		-		457		49
	Equity total return swaps		41		-		-		3		-
Total Derivatives in Effective Hedge Accounting Relationships		$	10,248	$	27	$	-	$	1,551	$	612
Other Hedging Relationships
	Interest rate swaps	$	128,049	$	16,628	$	12,731	$	16,628	$	12,731
	Interest rate treasury locks		12,270		2,120		168		2,120		168
	Interest rate options		7,512		479		-		479		-
	Interest rate futures		10,281		-		-		-		-
	Foreign currency swaps		1,413		441		376		441		376
	Foreign currency forwards		655		31		10		31		10
	Foreign currency futures		835		-		-		-		-
	Equity total return swaps		374		15		17		15		17
	Equity index options		6,168		456		1		456		1
	Equity index futures		4,723		-		-		-		-
	Credit default swaps		-		-		-		-		-
Total Derivatives in Other Hedging Relationships		$	172,280	$	20,170	$	13,303	$	20,170	$	13,303
Replication Synthetic Asset Transactions
	Interest rate swaps	$	4,276	$	-	$	-	$	762	$	-
	Credit default swaps		-		-		-		-		-
Total Derivatives in Replication Synthetic Asset Transactions		$	4,276	$	-	$	-	$	762	$	-
Total Derivatives		$	186,804	$	20,197	$	13,303	$	22,483	$	13,915

31

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

		December 31, 2019
(in millions)		Notional Amount		Carrying Value Assets		Carrying Value Liabilities		Fair Value Assets		Fair Value Liabilities
Effective Hedge Accounting Relationships
Fair value hedges	Interest rate swaps	$	1,570	$	-	$	-	$	260	$	142
	Foreign currency swaps		14		-		3		-		4
Cash flow hedges	Interest rate swaps		6,050		-		-		666		386
	Foreign currency swaps		322		34		-		46		-
	Foreign currency forwards		-		-		-		-		-
	Interest rate treasury locks		2,114		-		-		170		23
	Equity total return swaps		41		-		-		8		-
Total Derivatives in Effective Hedge Accounting Relationships		$	10,111	$	34	$	3	$	1,150	$	555
Other Hedging Relationships
	Interest rate swaps	$	130,584	$	10,762	$	6,884	$	10,762	$	6,884
	Interest rate treasury locks		12,529		1,200		84		1,200		84
	Interest rate options		8,247		304		-		304		-
	Interest rate futures		7,784		-		-		-		-
	Foreign currency swaps		1,423		387		313		387		313
	Foreign currency forwards		540		4		1		4		1
	Foreign currency futures		843		-		-		-		-
	Equity total return swaps		310		12		9		12		9
	Equity index options		5,295		346		3		346		3
	Equity index futures		4,586		-		-		-		-
	Credit default swaps		-		-		-		-		-
Total Derivatives in Other Hedging Relationships		$	172,141	$	13,015	$	7,294	$	13,015	$	7,294
Replication Synthetic Asset Transactions
	Interest rate swaps	$	4,276	$	-	$	-	$	268	$	122
	Credit default swaps		-		-		-		-		-
Total Derivatives in Replication Synthetic Asset Transactions		$	4,276	$	-	$	-	$	268	$	122
Total Derivatives		$	186,528	$	13,049	$	7,297	$	14,433	$	7,971

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 and are reported in a manner consistent with the hedged asset or liability. For the years ended December 31, 2020, 2019 and 2018, respectively, the Company recorded unrealized gains (losses) of $376 million, $278 million, and $231 million, respectively, related to derivatives that no longer qualify for hedge accounting.

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 to manage its exposure to foreign exchange rate fluctuations and interest rate fluctuations.

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 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.

32

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

For the year ended December 31, 2020, 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.

The maximum time frame for which variable cash flows are hedged is 26 years.

Derivatives Not Designated as Hedging Instruments (Economic Hedges) or RSAT 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. The Company manages a hedging program to reduce its exposure to certain contracts with 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 (“S&P”), Russell 2000, and Dow Jones Euro Stoxx 50 indices), currency futures, total return swaps, equity index options, swaptions 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 futures and interest rate swaps, 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.

33

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

For the years ended December 31, 2020, 2019 and 2018 net gains and losses related to derivatives in other hedging relationships were recognized by the Company, and the components were recorded in net unrealized and net realized gains (losses) as follows:

	Years ended December 31,
	2020		2019		2018
(in millions)
Other Hedging Relationships
Net unrealized capital gain (loss):
Interest rate swaps	$	19	$	(171)	$	(193)
Interest rate treasury locks		836		916		(417)
Interest rate options		204		89		(35)
Interest rate futures		92		(379)		212
Foreign currency swaps		7		18		-
Foreign currency forwards		16		(2)		6
Foreign currency futures		(3)		5		(11)
Equity total return swaps		(4)		(15)		9
Equity index options		122		177		(133)
Equity index futures		(48)		(169)		121
Credit default swaps		-		-		-
Total net unrealized capital gain (loss)	$	1,241	$	469	$	(441)
Net realized capital gain (loss):
Interest rate swaps	$	19	$	11	$	(225)
Interest rate treasury locks		1,240		428		43
Interest rate options		(3)		(17)		(5)
Interest rate futures		723		873		(411)
Foreign currency swaps		4		6		4
Foreign currency forwards		(17)		21		(16)
Foreign currency futures		(40)		18		61
Equity total return swaps		6		(17)		(2)
Equity index options		76		(1)		49
Equity index futures		(238)		(944)		157
Credit default swaps		-		1		-
Total net realized capital gain (loss)	$	1,770	$	379	$	(345)
Total gain (loss) from derivatives in other hedging relationships	$	3,011	$	848	$	(786)

The table above does not include unrealized gains (losses) of ($2) million, $17 million, ($28) million and realized gains (losses) of $0 million, $6 million and $12 million for the years ended December 31, 2020, 2019 and 2018, respectively. These gains (losses) represent a portion of equity total return swaps used to hedge restricted share units, but that are no longer in an effective accounting hedge relationship. The gains (losses) are recorded in the General Insurance Expenses line in the Statement of Operations.

The Company also deferred net realized gains (losses) of $144 million, $36 million, and ($229) million (including $31 million,$23 million, and ($226) million of gains (losses) for derivatives in other hedging relationships, respectively) related to interest rates for the years ended December 31, 2020, 2019 and 2018, respectively. Deferred net realized gains and losses are reported in IMR and amortized over the remaining period to expiration date.

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.

34

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

The Company had no CDS protection sold at December 31, 2020 and 2019.

The Company held no purchased credit protection at December 31, 2020 and 2019. The average credit rating of the counterparties guaranteeing the underlying credits is A and the weighted average maturity is 0 years.

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, 2020 and 2019, the Company accepted collateral consisting of cash of $2,096 million and $828 million, and various securities with a fair value of $7,166 million and $6,105 million, respectively, which is held in separate custodial accounts and not reflected within these financial statements. 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.

Under U.S. regulations, certain interest rate swap agreements and credit default swap agreements are 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.

Financing Premiums

The following table presents the Company’s aggregate, non-discounted total premium cost for derivative contracts with financing premiums and the premium cost due in each of the following four years, and thereafter.

Fiscal Year	Derivative Premium     Payments Due
(in millions)
2021	$	143
2022		-
2023		-
2024		-
Thereafter		-
Total Future Settled Premiums	$	143

35

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

	Undiscounted Future Premium Commitments		Derivative Fair Value With Premium Commitments		Derivative Fair Value     Excluding Impact of Future Settled Premiums
(in millions)
Prior Year	$	98	$	64	$	162
Current Year	$	143	$	92	$	235

Transactions with Affiliates

The Company has entered into a currency swap agreement with JHFC which is recorded at fair value. JHFC utilizes the currency swap to hedge currency exposure on foreign currency financial instruments. The Company has also entered into currency swap agreements with external counterparties which offset the currency swap agreement with JHFC. As of December 31, 2020 and 2019, the currency swap agreements with JHFC and the external counterparties had offsetting fair values of $367 million and $310 million, respectively.

The Company has entered into equity total return swap agreements with MLI which is recorded at fair value. JHUSA utilizes the equity total return swaps to hedge equity exposure on restricted share units (“RSU”). As of December 31, 2020 and 2019, the equity total return swap agreements with MLI had a fair value of $10 million and $17 million.

The Company has entered into a foreign currency forward agreement with John Hancock Funding Company, LLC (“JHF LLC”), which is recorded at fair value. JHF LLC utilizes the foreign currency forward to hedge currency exposure on a non-functional currency asset. The Company has also entered into a foreign currency forward with an external counterparty, which offsets the foreign currency forward agreement with JHF LLC. As of December 31, 2020 and 2019, the foreign currency forwards with JHF LLC and the external counterparty had offsetting fair values of $2 million and $0 million.

7. 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:

• Financial Instruments Measured at Fair Value and Reported in the Balance Sheet after Initial Recognition – This category includes assets and liabilities measured at fair value. Financial instruments in this category include bonds and preferred stocks carried at the lower of cost or fair value due to their SVO quality rating, common stocks, derivatives, and separate account assets and liabilities.

• Other Financial Instruments Not Reported at Fair Value After Initial Recognition – This category includes assets and liabilities as follows:

Bonds – For bonds, 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.

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. The fair value of impaired mortgage loans is based on the net of the collateral less estimated cost to obtain and sell. Fair value of commercial mortgages is derived through an internal valuation methodology using both observable and unobservable inputs. Unobservable inputs include credit assumptions and liquidity spread adjustments. Fair value of fixed-rate residential mortgages is determined using the discounted cash flow method. Inputs

36

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

used for valuation are primarily comprised of prevailing interest rates and prepayment rates, if applicable. Fair value of variable-rate residential mortgages is assumed to be their carrying value.

Cash, Cash Equivalents and Short-Term Investments – The carrying values for cash, cash equivalents, and short-term investments approximate their fair value due to the short-term maturities of these instruments.

Policy Loans – These loans are carried at unpaid principal balances, which approximate their fair values.

Policy Reserves – Policy reserves consist of guaranteed investment contracts. The fair values associated with these financial instruments 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.

Policyholders’ and Beneficiaries’ Funds – Includes term certain contracts and supplementary contracts without life contingencies. The fair values associated with the term certain contracts 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. Fair value disclosure is not required 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 and provides no additional disclosure value.

Consumer Notes – The fair value of consumer notes is determined by projecting cash flows and using a spread assumption associated with the specific risks in the Signature Note contracts. The spread is calculated by taking the difference between the contractual crediting rate and the yield curve as of the issue date of each Signature Note. The calculated spread is added to the yield curve as of each future valuation date to determine the fair value of the Signature Notes.

Financial Instruments Measured at Fair Value and Reported in the Balance Sheet after Initial Recognition

Valuation Hierarchy

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 reflecting market transactions. 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 bonds are classified within Level 2. Also, included in the Level 2 category are certain separate account assets and liabilities and derivative 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 impaired bonds and less liquid securities, such as structured asset-backed securities, commercial mortgage-backed securities, and other securities that have little or no price transparency.

Determination of Fair Value

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 (not a forced liquidation or distress sale) between market participants at the measurement date, that is, an exit value.

When available, quoted market prices are used to determine fair value. If quoted market prices are not available, fair value is typically based upon alternative valuation techniques such as discounted cash flows, matrix pricing, consensus pricing services and other techniques. Broker quotes are generally used when external public vendor prices are not available.

37

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

The Company has a process in place that includes a review of price movements relative to the market, a comparison of prices between vendors, and a comparison to internal matrix pricing which uses predominately external observable data. Judgement is applied in adjusting external observable data for items including liquidity and credit factors.

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:

Bonds

Refer to the previous page for the determination of fair value of bonds. Generally, impaired bonds with a NAIC designation rating of 6 whose cost is greater than its fair value are reported at fair value and are classified within Level 3.

Preferred Stocks

Preferred stocks with active markets are classified within Level 1, as fair values are based on quoted market prices. Preferred stocks not traded in active markets are classified within Level 3.

Common Stocks

Common stocks with active markets are classified within Level 1, as fair values are based on quoted market prices. Common stocks not traded in active markets are classified within Level 3.

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, that 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.

Separate Account Assets and Liabilities

For separate accounts structured as a non-unitized fund, the fair value of 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 the separate account assets is based on the fair value of the underlying funds owned by the separate account. Assets owned by the Company’s separate accounts primarily include: investments in mutual funds, bonds, common stock, short-term investments, real estate, and cash and cash equivalents. 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 net asset value (“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. Level 2 assets consist primarily of bonds which are valued using matrix pricing with independent pricing data.

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 them 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

38

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

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.

39

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

The following table presents the Company’s assets and liabilities that are measured and reported at fair value in the Balance Sheets after initial recognition by fair value hierarchy level:

	December 31, 2020
	Carrying Value		Total Fair Value		Level 1		Level 2		Level 3		Net Asset Value (NAV)
(in millions)
Assets:
Bond with NAIC 6 rating:
Industrial and misc	$	16	$	16	$	-	$	-	$	16	$	-
Loan-backed and structured securities		-		-		-		-		-		-
Total bonds with NAIC 6 rating		16		16		-		-		16		-
Preferred stocks:
Industrial and misc		16		16		-		-		16		-
Total preferred stocks		16		16		-		-		16		-
Common stocks:
Industrial and misc		1,082		1,082		994		-		88		-
Total common stocks		1,082		1,082		994		-		88		-
Derivatives:
Interest rate swaps		16,628		16,628		-		16,628		-		-
Interest rate treasury locks		2,120		2,120		-		117		2,003		-
Interest rate options		479		479		-		133		346		-
Interest rate futures		-		-		-		-		-		-
Foreign currency swaps		441		441		-		441		-		-
Foreign currency forwards		31		31		-		31		-		-
Foreign currency futures		-		-		-		-		-		-
Equity total return swaps		15		15		-		-		15		-
Equity index options		456		456		-		456		-		-
Equity index futures		-		-		-		-		-		-
Credit default swaps		-		-		-		-		-		-
Total derivatives		20,170		20,170		-		17,806		2,364		-
Assets held in separate accounts		151,488		151,488		146,818		2,884		1,786		-
Total assets	$	172,772	$	172,772	$	147,812	$	20,690	$	4,270	$	-
Liabilities:
Derivatives:
Interest rate swaps	$	12,731	$	12,731	$	-	$	12,731	$	-	$	-
Interest rate treasury locks		168		168		-		31		137		-
Interest rate options		-		-		-		-		-		-
Interest rate futures		-		-		-		-		-		-
Foreign currency swaps		376		376		-		376		-		-
Foreign currency forwards		10		10		-		10		-		-
Foreign currency futures		-		-		-		-		-		-
Equity total return swaps		17		17		-		-		17		-
Equity index options		1		1		-		1		-		-
Equity index futures		-		-		-		-		-		-
Credit default swaps		-		-		-		-		-		-
Total derivatives		13,303		13,303		-		13,149		154		-
Liabilities held in separate accounts		151,488		151,488		146,818		2,884		1,786		-
Total liabilities	$	164,791	$	164,791	$	146,818	$	16,033	$	1,940	$	-

40

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

	December 31, 2019
	Carrying Value		Total Fair Value		Level 1		Level 2		Level 3		Net Asset Value (NAV)
(in millions)
Assets:
Bond with NAIC 6 rating:
Industrial and misc	$	5	$	5	$	-	$	-	$	5	$	-
Loan-backed and structured securities		-		-		-		-		-		-
Total bonds with NAIC 6 rating		5		5		-		-		5		-
Preferred stocks:
Industrial and misc		3		3		-		-		3		-
Total preferred stocks		3		3		-		-		3		-
Common stocks:
Industrial and misc		1,050		1,050		961		-		89		-
Total common stocks		1,050		1,050		961		-		89		-
Derivatives:
Interest rate swaps		10,762		10,762		-		10,737		25		-
Interest rate treasury locks		1,200		1,200		-		229		971		-
Interest rate options		304		304		-		76		228		-
Interest rate futures		-		-		-		-		-		-
Foreign currency swaps		387		387		-		387		-		-
Foreign currency forwards		4		4		-		4		-		-
Foreign currency futures		-		-		-		-		-		-
Equity total return swaps		12		12		-		-		12		-
Equity index options		346		346		-		346		-		-
Equity index futures		-		-		-		-		-		-
Credit default swaps		-		-		-		-		-		-
Total derivatives		13,015		13,015		-		11,779		1,236		-
Assets held in separate accounts		140,747		140,747		136,201		2,730		1,816		-
Total assets	$	154,820	$	154,820	$	137,162	$	14,509	$	3,149	$	-
Liabilities:
Derivatives:
Interest rate swaps	$	6,884	$	6,884	$	-	$	6,787	$	97	$	-
Interest rate treasury locks		84		84		-		-		84		-
Interest rate options		-		-		-		-		-		-
Interest rate futures		-		-		-		-		-		-
Foreign currency swaps		313		313		-		313		-		-
Foreign currency forwards		1		1		-		1		-		-
Foreign currency futures		-		-		-		-		-		-
Equity total return swaps		9		9		-		-		9		-
Equity index options		3		3		-		3		-		-
Equity index futures		-		-		-		-		-		-
Credit default swaps		-		-		-		-		-		-
Total derivatives		7,294		7,294		-		7,104		190		-
Liabilities held in separate accounts		140,747		140,747		136,201		2,730		1,816		-
Total liabilities	$	148,041	$	148,041	$	136,201	$	9,834	$	2,006	$	-

41

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

Fair Value of Financial Instruments Not Reported at Fair Value in the Balance Sheet

The table below presents the carrying amounts and fair value by fair value hierarchy level for certain assets and liabilities that are not reported at fair value in the Balance Sheets:

	December 31, 2020
	Carrying Value		Total Fair Value		Level 1		Level 2		Level 3
(in millions)
Assets:
Bonds (1)	$	49,178	$	55,558	$	283	$	52,342	$	2,933
Preferred stocks		20		20		-		-		20
Mortgage loans on real estate		11,573		13,400		-		-		13,400
Cash, cash equivalents and short term investments		6,620		6,620		3,957		2,663		-
Policy loans		2,765		2,765		-		2,765		-
Derivatives in effective hedge accounting and RSAT relationships		27		2,313		-		1,915		398
Total assets	$	70,183	$	80,676	$	4,240	$	59,685	$	16,751
Liabilities:
Consumer notes	$	138	$	176	$	-	$	-	$	176
Borrowed money		500		500		-		500		-
Policy reserves		1,205		1,210		-		-		1,210
Policyholders’ and beneficiaries’ funds		790		954		-		954		-
Derivatives in effective hedge accounting and RSAT relationships		-		612		-		563		49
Total liabilities	$	2,633	$	3,452	$	-	$	2,017	$	1,435
	December 31, 2019
	Carrying Value		Total Fair Value		Level 1		Level 2		Level 3
(in millions)
Assets:
Bonds (1)	$	47,188	$	50,177	$	-	$	47,652	$	2,525
Preferred stocks		12		16		-		-		16
Mortgage loans on real estate		11,647		12,735		-		-		12,735
Cash, cash equivalents and short term investments		3,816		3,816		2,864		952		-
Policy loans		2,888		2,888		-		2,888		-
Derivatives in effective hedge accounting and RSAT relationships		34		1,418		-		1,270		148
Total assets	$	65,585	$	71,050	$	2,864	$	52,762	$	15,424
Liabilities:
Consumer notes	$	138	$	162	$	-	$	-	$	162
Borrowed money		-		-		-		-		-
Policy reserves		1,268		1,267		-		-		1,267
Policyholders’ and beneficiaries’ funds		795		960		-		960		-
Derivatives in effective hedge accounting and RSAT relationships		3		677		-		310		367
Total liabilities	$	2,204	$	3,066	$	-	$	1,270	$	1,796

(1) Bonds are carried at amortized cost unless they have NAIC designation rating of 6. Fair value of bonds exclude leveraged leases of $2,491 million and $2,429 million at December 31, 2020 and 2019, respectively. The Company calculates the carrying value by accruing income at its expected internal rate of return.

42

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

Level 3 Financial Instruments

The changes in Level 3 financial instruments measured and reported at fair value for the years ended December 31, 2020, 2019 and 2018, are summarized as follows:

			Net realized/unrealized gains (losses) included in:																Transfers
	Balance at January 1, 2020		Net income (1)		Surplus		Amounts credited to separate account liabilities (2)		Purchases		Issuances		Sales			Settlements			Into Level 3 (3)		Out of Level 3 (3)		Balance at   December    31, 2020
(in millions)
Bonds with NAIC 6 rating:
Impaired corporate bonds	$	5	$	-	$	-	$	-	$	12	$	-	$	(1	)	$	-		$	-	$	-	$	16
Impaired mortgage-backed and asset-backed securities		-		-		-		-		-		-		-			-			-		-		-
Total bonds with NAIC 6 rating		5		-		-		-		12		-		(1	)		-			-		-		16
Preferred stocks:
Industrial and misc		3		-		-		-		13		-		-			-			-		-		16
Total preferred stocks		3		-		-		-		13		-		-			-			-		-		16
Common stocks:
Industrial and misc		89		2		2		-		2		-		(7	)		-			-		-		88
Total common stocks		89		2		2		-		2		-		(7	)		-			-		-		88
Net derivatives		1,046		889		1,140		-		-		-		-			(889	)		-		24		2,210
Separate account assets/liabilities		1,816		64		-		-		25		-		(119	)		-			-		-		1,786
Total	$	2,959	$	955	$	1,142	$	-	$	52	$	-	$	(127	)	$	(889	)	$	-	$	24	$	4,116

43

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

			Net realized/unrealized gains (losses) included in:																	Transfers
	Balance at January 1, 2019		Net income (1)		Surplus			Amounts credited to separate account liabilities (2)		Purchases		Issuances		Sales			Settlements			Into Level 3 (3)		Out of Level 3 (3)			Balance at   December   31, 2019
(in millions)
Bonds with NAIC 6 rating:
Impaired corporate bonds	$	6	$	-	$	-		$	-	$	-	$	-	$	(1	)	$	-		$	-	$	-		$	5
Impaired mortgage-backed and asset-backed securities		-		-		-			-		-		-		-			-			-		-			-
Total bonds with NAIC 6 rating		6		-		-			-		-		-		(1	)		-			-		-			5
Preferred stocks:
Industrial and misc		3		-		-			-		-		-		-			-			-		-			3
Total preferred stocks		3		-		-			-		-		-		-			-			-		-			3
Common stocks:
Industrial and misc		111		14		(18	)		-		1		-		(19	)		-			-		-			89
Total common stocks		111		14		(18	)		-		1		-		(19	)		-			-		-			89
Net derivatives		290		425		752			-		10		-		-			(425	)		-		(6	)		1,046
Separate account assets/liabilities		1,804		26		-			-		35		-		(55	)		-			6		-			1,816
Total	$	2,214	$	465	$	734		$	-	$	46	$	-	$	(75	)	$	(425	)	$	6	$	(6	)	$	2,959

44

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

			Net realized/unrealized gains (losses) included in:																Transfers
	Balance at January 1, 2018		Net income (1)		Surplus			Amounts credited to separate account liabilities (2)		Purchases		Issuances		Sales		Settlements			Into Level 3 (3)		Out of Level 3 (3)			Balance at   December   31, 2018
(in millions)
Bonds with NAIC 6 rating:
Impaired corporate bonds	$	10	$	-	$	-		$	-	$	-	$	-	$	(1)	$	-		$	-	$	(3	)	$	6
Impaired mortgage-backed and asset-backed securities		6		1		-			-		-		-		(7)		-			-		-			-
Total bonds with NAIC 6 rating		16		1		-			-		-		-		(8)		-			-		(3	)		6
Preferred stocks:
Industrial and misc		-		-		-			-		3		-		-		-			-		-			3
Total preferred stocks		-		-		-			-		3		-		-		-			-		-			3
Common stocks:
Industrial and misc		134		44		3			-		4		-		(76)		-			2		-			111
Total common stocks		134		44		3			-		4		-		(76)		-			2		-			111
Net derivatives		728		-		(389	)		-		8		-		-		(46	)		-		(11	)		290
Separate account assets/liabilities		1,844		133		-			-		42		-		(209)		-			3		(9	)		1,804
Total	$	2,722	$	178	$	(386	)	$	-	$	57	$	-	$	(293)	$	(46	)	$	5	$	(23	)	$	2,214

(1) This amount is included in net realized capital gains (losses) on the Statements of Operations.

(2) Changes in the fair value of separate account assets are credited directly to separate account liabilities in accordance with NAIC SAP and are not reflected in income.

(3) For financial instruments that are transferred into and/or out of Level 3, the Company uses the fair value of the instruments at the beginning of the reporting period.

45

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

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 instruments into Level 3. The transfers out of Level 3 primarily result from observable market data becoming available for that instrument, thus eliminating the need to extrapolate market data beyond observable points. Additionally, securities carried at fair value at the beginning of the period but carried at amortized cost at the end of the period due to rating change or change in fair value relative to amortized cost, are included in transfers out of Level 3. Conversely, any securities carried at amortized cost at the beginning of the period and carried at fair value at the end of the year due to SVO rating change or change in fair value relative to amortized cost, are included into transfers into Level 3.

8. 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 shift 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 statutory-basis financial statements were as follows:

	Years ended December 31,
	2020			2019			2018
(in millions)
Premiums earned
Direct	$	18,998		$	20,649		$	20,067
Assumed		522			519			603
Ceded		(7,853	)		(6,220	)		(14,854)
Net	$	11,667		$	14,948		$	5,816
Benefits to policyholders ceded	$	(14,395	)	$	(15,433	)	$	(15,881)

Reserve amounts ceded to reinsurers not authorized in the State of Michigan are mostly covered by funds withheld assets, letters of credit or trust agreements. Amounts payable or recoverable for reinsurance on policy and contract liabilities are not subject to periodic or maximum limits. At December 31, 2020, any material recoveries were collateralized or settled by the assuming company.

Neither the Company nor any of its related parties control, directly or indirectly, any external reinsurers with whom the Company conducts business. No policies issued by the Company have been reinsured with a foreign company, which is controlled, either directly or indirectly, by a party not primarily engaged in the business of insurance. The Company does not have any reinsurance agreements in effect under which the reinsurer may unilaterally cancel the agreement. At December 31, 2020, there were no reinsurance agreements in effect such that the amount of losses paid or accrued through the statement date may result in a payment to the reinsurer of amounts which, in aggregate and allowing for offset of mutual credits from other reinsurance agreements with the same reinsurer, exceed the total direct premium collected under the reinsured policies.

As of December 31, 2020, if all reinsurance agreements were cancelled the estimated aggregate reduction in unassigned surplus is $4,725 million.

The following tables and commentary disclose the reinsurance treaty transactions considered material to the Company.

46

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

Non-Affiliated Reinsurance

The table and commentary below consist of the impact of the New York Life (“NYL”) Agreements:

	Years ended December 31,
	2020			2019			2018
(in millions)
Premiums ceded	$	(208	)	$	(233	)	$	(219)
Premiums assumed		83			93			88
Benefits ceded		(629	)		(601	)		(594)
Benefits assumed		252			240			238
Other reinsurance receivable (payable)		(1	)		-			-
Funds held by or deposited with reinsured companies		2,885			3,038			3,183

The John Hancock Life Insurance Company (“JHLICO”) closed block was established upon the demutualization of JHLICO for those designated participating policies that were in-force on February 1, 2000.

Effective July 1, 2015, the Company entered into coinsurance reinsurance agreements with NYL to cede 100% quota share (“QS”) of the Company’s JHLICO Closed Block policies (“NYL 100% Coinsurance”). In addition, NYL agreed to retrocede 40% QS of the same policy risks back to the Company under a coinsurance funds withheld (“FWH”) agreement (“NYL 40% FWH Retrocession”). Collectively, these agreements are known as the NYL Agreements. The NYL 100% Coinsurance keeps the assets supporting the JHLICO Closed Block together in NYL, and the NYL 40% FWH Retrocession adjusts the net reinsurance to NYL to 60% of the JHLICO Closed Block policies at risk.

The table and commentary below consist of the impact of the Reinsurance Group of America (“RGA”) Agreements:

	Year ended December 31,
	2020			2019			2018
(in millions)
Premiums ceded, net	$	-		$	(1	)	$	(2,792)
Benefits ceded, net		(536	)		(623	)		(541)
Other reinsurance receivable		69			81			96
Other amounts payable on reinsurance		-			-			-

Effective July 1, 2018, the Company entered into a coinsurance agreement with RGA to cede 100% quota share (“QS”) of a significant block of individual pay-out annuities. The transaction was structured such that the Company transferred the policy liabilities of $2,520 million and related invested assets of $2,829 million. The Company incurred a pre-tax loss of $72 million net of realized capital gains, including a ceding commission paid of $33 million, and a decrease of $43 million to statutory surplus. Under the terms of the agreement, the Company will maintain responsibility for servicing the policies.

Effective April 1, 2012, the Company entered into a coinsurance agreement with RGA to cede its fixed deferred annuities at 90% quota share (“QS”). Subsequently, the treaty increased to 100% QS effective February 29, 2016. The transaction was structured such that the Company transferred the actuarial liabilities and related invested assets. Under the terms of the agreement, the Company will maintain responsibility for servicing the policies.

47

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

The table and commentary below consist of the impact of the Jackson National Life Insurance Company (“Jackson”) Agreement:

	Year ended December 31,
	2020			2019			2018
(in millions)
Premiums ceded, net	$	-		$	-		$	(5,317)
Benefits ceded, net		(455	)		(474	)		(134)
Funds held by or deposited with reinsured companies		-			-			-
Other reinsurance receivable		50			45			20
Other amounts payable on reinsurance		-			-			-

Effective October 1, 2018, the Company entered into 100% quota share coinsurance agreement with Jackson, a wholly-owned subsidiary of Prudential plc, to reinsure a block of legacy group pay-out annuities. The transaction was structured such that the Company transferred the policy liabilities of $4,292 million and related invested assets of $5,400 million. The Company incurred a pre-tax loss of $914 million net of realized capital gains, including a ceding commission paid of $222 million, and a decrease of $699 million to statutory surplus. Under the terms of the agreement, the Company will maintain responsibility for servicing the policies.

The table and commentary below consist of the impact of the Global Atlantic Financial Group Limited (“Global Atlantic”) Agreements:

	Year ended
	December 31,
	2020
(in millions)
Premiums ceded, net	$	(2,438)
Benefits ceded, net		(8)
Funds held by or deposited with reinsured companies		-
Other reinsurance receivable		2
Other amounts payable on reinsurance		-

Effective July 1, 2020, the Company entered into two agreements to reinsure a block of legacy bank-owned life insurance (“BOLI”) contracts with subsidiaries of the Global Atlantic Financial Group Ltd, a subsidiary of KKR & Co. Inc. The first agreement is a monthly renewable term agreement with Global Atlantic Assurance Limited, domesticated in Bermuda, and the other agreement is a 100% coinsurance arrangement with Commonwealth Annuity & Life Insurance Company, licensed in Michigan. Under the terms of both agreements, the Company will maintain responsibility for servicing the policies. Under the coinsurance arrangement, the transaction was structured such that the Company transferred the policy liabilities of $2,101 million and related invested assets of $2,410 million. The Company incurred a pre-tax gain of $174 million net of realized capital gains, including a ceding commission received of $179 million, and an increase in statutory surplus of $138 million, net of tax, which was deferred and will be amortized over a period of approximately twenty years.

48

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

At the beginning of 2020, the Company had a number of reinsurance agreements with Scottish Re (U.S.), Inc. (“SRUS”). On March 6, 2019, SRUS was declared impaired and placed into rehabilitation by the Delaware Chancery Court. The Company reached a settlement agreement with the Receiver of SRUS, which was approved by the Delaware Chancery Court on February 28, 2020. Under the terms of the settlement, the yearly renewable term reinsurance agreements between the Company and SRUS were terminated effective as of January 1, 2020; certain term coinsurance agreements were novated to Hannover Life Reassurance Company of America (“Hannover Life”) effective January 1, 2019; and the arbitration between the Company and SRUS was dismissed with prejudice. The Company recorded an increase in pre-tax income of $30 million comprised of a cash payment and an increase in surplus of approximately $117 million related to the reversal of certain provisions previously established for the term coinsurance business novated to Hannover Life. The Company is expected to receive approximately $7 million from Hannover Life as settlement for the 2020 net claims recoverable balance. As of December 31, 2020, the Company has established full provisions to offset the reserve credit and net reinsurance receivables for policies not novated to Hannover Life.

Affiliated Reinsurance

The table and commentary below consist of the impact of the reinsurance agreements with an affiliate, JHNY:

	Years ended December 31,
	2020			2019			2018
(in millions)
Premiums ceded, net	$	(138	)	$	(159	)	$	(167)
Benefits ceded, net		(439	)		(396	)		(408)
Funds held by or deposited with reinsured companies		-			-			-
Other reinsurance receivable		59			42			39
Other amounts payable on reinsurance		6			3			5
Treaty settlement received (paid)		171			207			208

On January 1, 2010, the assets supporting the policyholders who reside in the state of New York (“NY business”) were transferred to JHNY from the Company. The transfer included participating traditional life insurance, variable universal life insurance, universal life insurance, fixed deferred and immediate annuities, participating pension contracts where assets were held in separate accounts, and variable annuities. The NY business was transferred using assumption reinsurance, modified coinsurance and coinsurance with cut-through provisions.

49

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

The table and commentary below consist of the impact of the reinsurance agreements with an affiliate, JHRECO:

	Years ended December 31,
	2020			2019			2018
(in millions)
Premiums ceded	$	(482	)	$	(510	)	$	(501)
Premiums ceded, impact of treaty recaptured		-			-			-
Benefits ceded		(638	)		(615	)		(573)
Other reinsurance receivable		8			-			13
Other amounts payable on reinsurance		-			-			-
Funds held under coinsurance		8,628			7,771			7,131
Treaty settlement received (paid)		27			5			20

The Company reinsures a portion of the risk related to certain life policies with JHRECO.

The Company reinsures a large portion of the Long Term Care (“LTC”) risk under a single accounting and capital regime, which helps to manage JHUSA’s overall risk profile and reduce strain on statutory surplus. JHUSA’s indirect parent company, MFC, is regulated on a global basis by the Canadian insurance regulator, The Office of the Superintendent of Financial Institution (“OSFI”), and reports its results on a consolidated International Financial Reporting Standards (“IFRS”) basis. As such, the agreement has no impact on the parent company financial results.

JHRECO does not retrocede any risks to a third party or affiliates. The risks assumed by JHRECO are solely the responsibility of JHRECO, but they are also retained within the parent company group. Reserve credits taken were $9,589 million and $9,306 million at December 31, 2020 and 2019, respectively. Total amount of funds withheld (including capital) on behalf of the captive reinsurer that back the long term care liabilities was $8,628 million and $7,766 million at December 31, 2020 and 2019, respectively.

The table and commentary below consist of the impact of the reinsurance agreements with an affiliate, MRBL:

	Years ended December 31,
	2020			2019			2018
(in millions)
Premiums ceded	$	(2,797	)	$	(3,243	)	$	(3,763)
Benefits ceded		(8,739	)		(10,026	)		(10,700)
Other reinsurance receivable		59			7			185
Other amounts payable on reinsurance		287			367			660
Funds withheld from unauthorized reinsurers		167			16			7
Funds held under coinsurance		-			81			143
Treaty settlement received (paid)		867			(448	)		178

The Company reinsures 87% of certain group annuity contracts in-force with MRBL. The reinsurance agreement covers all contracts, excluding the guaranteed benefit rider.

The Company reinsures 90% of a significant block of variable annuity contracts in-force with MRBL. All substantial risks, including all guaranteed benefits (GMDB, Guaranteed Minimum Income Benefit (“GMIB”), and GMWB), related to certain specified policies not already reinsured to third parties, are reinsured under the agreement. The base contracts are reinsured on

50

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

a modified coinsurance basis, while the guaranteed benefit reinsurance coverage is apportioned in accordance with the reinsurance agreement provisions between modified coinsurance and coinsurance FWH. 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 Statements of Operations.

The Company’s indirect parent company, MFC, is regulated on a global basis by the Canadian insurance regulator, OSFI, and reports on a consolidated IFRS basis. The Company utilizes a dynamic hedging program to manage risks on an economic basis. The IFRS accounting for these derivatives aligns with MFC’s market-based reserving regime. The US statutory accounting and reserving framework does not provide appropriate alignment of economic risk management strategies (hedging) and associated reserve methodologies. The treaty with MRBL provides a mechanism to allow management of the majority of the variable annuity risk under a single consolidated reserve and capital regime, rather than managing the block simultaneously under two very diverse frameworks.

As a coinsurance / modified coinsurance treaty, MRBL holds $780 million and $2,063 million as a coinsurance reserve and JHUSA holds $2,199 million and $249 million as a modified coinsurance reserve at December 31, 2020 and 2019, respectively. The IFRS reserves that MRBL holds for variable annuities are similar in concept to VM-21. The calculations are a real-world stochastic calculation at CTE(70), based on the guaranteed benefits and fees in isolation rather than the whole contract, including the cash flows generated from the dynamic hedging program and including margins for adverse deviation. The real-world stochastic scenarios are subject to Canadian Institute of Actuaries equity and bond fund return calibration criteria. Reserve credits taken were $167 million and $16 million at December 31, 2020 and 2019, respectively, and there is no supporting collateral.

MRBL does not retrocede any risks to a third party. The risks assumed by MRBL are solely the responsibility of MRBL, but they are also retained within MFC. This transaction has no impact on MFC’s financial statements as it reports its risks on a consolidated basis.

On September 30, 2018, the Company entered into a combination coinsurance and modified coinsurance agreement with MRBL to cede 95% of certain single life and survivorship variable universal life products. The transactions included the transfer from JHUSA of $662 million of policy liabilities. The transactions resulted in a pre-tax gain of $500 million, including a ceding commission received of $500 million, and an increase in surplus of $395 million net of tax, which was deferred and will be amortized over a period of approximately 20 years.

The Company entered into a Stop Loss Reinsurance Agreement with MRBL, effective April 1, 2017, simultaneous with entering into a coinsurance with partial funds withheld agreement with MMRC, as described below.

The table and commentary below consist of the impact of the reinsurance agreement with an affiliate, Manulife Reinsurance Limited (“MRL”):

	Years ended December 31,
	2020			2019			2018
(in millions)
Premiums ceded	$	30		$	(102	)	$	(133)
Benefits ceded		(579	)		(623	)		(595)
Other reinsurance receivable		-			-			-
Other amounts payable on reinsurance		-			7			7
Funds withheld from unauthorized reinsurers		-			145			329
Treaty settlement received (paid)		(23	)		(30	)		(30)

51

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

The Company entered into a coinsurance/modified coinsurance agreement with an affiliate, MRL, to reinsure 90% of all risks not already reinsured to third parties on various universal life contracts effective December 15, 2000. Subsequent amendments added further universal life and some term contracts. The Company amended the agreement during 2014 to simplify treaty administration and to modify the structure of the treaty to a modified coinsurance FWH structure. Effective December 31, 2020, the Company novated universal life policies from MRL to MRBL. The above table includes the 2020 activity with MRL, prior to the novation.

The table and commentary below consist of the impact of the reinsurance agreements with an affiliate, JHLH:

	Years ended December 31,
	2020			2019			2018
(in millions)
Premiums ceded	$	(28	)	$	(27	)	$	(28)
Premiums assumed		-			-			-
Benefits ceded		(26	)		(24	)		(22)
Benefits assumed		23			19			19
Other reinsurance receivable		-			1			-
Other amounts payable on reinsurance		6			4			5
Funds held under coinsurance		-			-			-
Treaty settlement received (paid)		(20	)		(22	)		(23)

On December 31, 2016, the Company entered into a coinsurance agreement with an affiliate, JHLH, to reinsure 100% of a block of single premium universal life policies.

The table and commentary below consist of the impact of the reinsurance agreement with an affiliate, MMRC:

	Years ended December 31,
	2020			2019			2018
(in millions)
Premiums ceded	$	(161	)	$	(150	)	$	(135)
Premiums assumed		-			-			-
Benefits ceded		(44	)		(22	)		(17)
Benefits assumed		-			-			-
Other reinsurance receivable		-			7			-
Other amounts payable on reinsurance		9			-			22
Funds held under coinsurance		276			222			102
Treaty settlement received (paid)		(63	)		(6	)		(68)

Effective April 1, 2017, the Company entered into a coinsurance with partial FWH agreement with an affiliate, MMRC, to reinsure 100% of the Company’s in-force single-life term life insurance policies and related riders, for certain policy years.

The reinsurance agreement with MMRC was entered into to address the surplus strain caused by the excess of XXX NAIC reserves over the VM-20 reserve levels. This transaction was within the scope of Actuarial Guideline 48, the NAIC Term Life and Universal Life with Secondary Guarantees (XXX/AXXX) Credit for Reinsurance Model Regulation (“AG 48”). In accordance with the terms of AG 48, the obligations of MMRC under the reinsurance agreement are supported by a FWH account and a credit-linked note. The FWH account is funded with assets meeting the definition of “Primary Security” under

52

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

AG 48 and in an amount equal to or in excess of the VM-20 reserve. The credit-linked note is in the amount of the excess of the statutory reserves over the then current “Required Level of Primary Security”.

The Company did not commute any material ceded reinsurance in 2020.

9. Federal Income Taxes

The components of the net deferred tax asset/(liability) are as follows:

	December 31, 2020
	(1)			(2)			(3)
							(Col 1 + 2)
	Ordinary			Capital			Total
(in millions)
(a) Gross deferred tax assets	$	1,560		$	87		$	1,647
(b) Statutory valuation allowance adjustments		121			-			121
(c) Adjusted gross deferred tax assets (a - b)		1,439			87			1,526
(d) Deferred tax assets nonadmitted		-			-			-
(e) Subtotal net admitted deferred tax asset (c - d)		1,439			87			1,526
(f) Deferred tax liabilities		1,488			117			1,605
(g) Net admitted deferred tax asset / (net deferred tax liability) (e - f)	$	(49	)	$	(30	)	$	(79)
	December 31, 2019
	(4)			(5)			(6)
							(Col 4 + 5)
	Ordinary			Capital			Total
(in millions)
(a) Gross deferred tax assets	$	1,534		$	69		$	1,603
(b) Statutory valuation allowance adjustments		121			-			121
(c) Adjusted gross deferred tax assets (a - b)		1,413			69			1,482
(d) Deferred tax assets nonadmitted		-			-			-
(e) Subtotal net admitted deferred tax asset (c - d)		1,413			69			1,482
(f) Deferred tax liabilities		1,489			94			1,583
(g) Net admitted deferred tax asset / (net deferred tax liability) (e - f)	$	(76	)	$	(25	)	$	(101)
	Change
	(7)			(8)			(9)
	(Col 1 - 4)			(Col 2 - 5)			(Col 7 + 8)
	Ordinary			Capital			Total
(in millions)
(a) Gross deferred tax assets	$	26		$	18		$	44
(b) Statutory valuation allowance adjustments		-			-			-
(c) Adjusted gross deferred tax assets (a - b)		26			18			44
(d) Deferred tax assets nonadmitted		-			-			-
(e) Subtotal net admitted deferred tax asset (c - d)		26			18			44
(f) Deferred tax liabilities		(1	)		23			22
(g) Net admitted deferred tax asset / (net deferred tax liability) (e - f)	$	27		$	(5	)	$	22

53

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

The Company has recorded a valuation allowance against specific general business tax credit carryforwards of $121 million and $121 million for the years ended December 31, 2020 and 2019, respectively. These tax credits were generated by the legacy JHFC group and are subject to the separate return limitation rules. These credits will not begin to expire until 2027, 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.

The amount of adjusted gross deferred tax assets admitted under each component and the resulting increase in deferred tax assets by character are as follows:

	December 31, 2020
	(1)		(2)		(3)
					(Col 1 + 2)
	Ordinary		Capital		Total
(in millions)
2. Admission calculation components SSAP No. 101
(a) Federal income taxes paid in prior years recoverable through loss carrybacks.	$	-	$	76	$	76
(b) Adjusted gross deferred tax assets expected to be realized (excluding the amount of deferred tax assets from 2(a) above) after application of the threshold limitation. (The lesser of 2(b)1 and 2(b)2 below)		196		-		196
1. Adjusted gross deferred tax assets expected to be realized following the Balance Sheet date.		196		-		196
2. Adjusted gross deferred tax assets allowed per limitation threshold.		1,349		-		1,349
(c) Adjusted gross deferred tax assets (excluding the amount of deferred tax assets from 2(a) and 2(b) above) offset by gross deferred tax liabilities.		1,243		11		1,254
(d) Deferred tax assets admitted as the result of application of SSAP No. 101. Total (2(a) + 2(b) + 2(c))	$	1,439	$	87	$	1,526

54

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

	December 31, 2019
	(4)			(5)		(6)
						(Col 4 + 5)
	Ordinary			Capital		Total
(in millions)
2. Admission calculation components SSAP No. 101
(a) Federal income taxes paid in prior years recoverable through loss carrybacks.	$	-		$	58	$	58
(b) Adjusted gross deferred tax assets expected to be realized (excluding the amount of deferred tax assets from 2(a) above) after application of the threshold limitation. (The lesser of 2(b)1 and 2(b)2 below)		354			-		354
1. Adjusted gross deferred tax assets expected to be realized following the Balance Sheet date.		354			-		354
2. Adjusted gross deferred tax assets allowed per limitation threshold.		1,269			-		1,269
(c) Adjusted gross deferred tax assets (excluding the amount of deferred tax assets from 2(a) and 2(b) above) offset by gross deferred tax liabilities.		1,059			11		1,070
(d) Deferred tax assets admitted as the result of application of SSAP No. 101. Total (2(a) + 2(b) + 2(c))	$	1,413		$	69	$	1,482
	Change
	(7)			(8)		(9)
	(Col 1 - 4)			(Col 2 - 5)		(Col 7 + 8)
	Ordinary			Capital		Total
(in millions)
2. Admission calculation components SSAP No. 101
(a) Federal income taxes paid in prior years recoverable through loss carrybacks.	$	-		$	18	$	18
(b) Adjusted gross deferred tax assets expected to be realized (excluding the amount of deferred tax assets from 2(a) above) after application of the threshold limitation. (The lesser of 2(b)1 and 2(b)2 below)		(158	)		-		(158)
1. Adjusted gross deferred tax assets expected to be realized following the Balance Sheet date.		(158	)		-		(158)
2. Adjusted gross deferred tax assets allowed per limitation threshold.		80			-		80
(c) Adjusted gross deferred tax assets (excluding the amount of deferred tax assets from 2(a) and 2(b) above) offset by gross deferred tax liabilities.		184			-		184
(d) Deferred tax assets admitted as the result of application of SSAP No. 101. Total (2(a) + 2(b) + 2(c))	$	26		$	18	$	44

55

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

	2020	2019
(in millions)
(a) Ratio percentage used to determine recovery period and threshold limitation amount	849%	845%
(b) Amount of adjusted capital and surplus used to determine recovery period and threshold limitation in 2(b)2 above	$    8,997	$    8,461

Impact of tax planning strategies is as follows:

	December 31, 2020
	(1)			(2)
	Ordinary			Capital
(in millions)
(a) Determination of Adjusted Gross Deferred Tax Assets and Net Admitted Deferred Tax Assets by tax character as a percentage.
1. Adjusted Gross DTAs Amount From Note 9A1(c)	$	1,439		$	87
2. Percentage of Adjusted Gross DTAs By Tax Character Attributable To The Impact of Tax Planning Strategies		0	%		0%
3. Net Admitted Adjusted Gross DTAs Amount from Note 9A1(e)	$	1,439		$	87
4. Percentage of Net Admitted Adjusted Gross DTAs by Tax Character Attributable To The Impact of Tax Planning Strategies		0	%		0%
	December 31, 2019
	(3)			(4)
	Ordinary			Capital
(in millions)
(a) Determination of Adjusted Gross Deferred Tax Assets and Net Admitted Deferred Tax Assets by tax character as a percentage.
1. Adjusted Gross DTAs Amount From Note 9A1(c)	$	1,413		$	69
2. Percentage of Adjusted Gross DTAs By Tax Character Attributable To The Impact of Tax Planning Strategies		0	%		0%
3. Net Admitted Adjusted Gross DTAs Amount from Note 9A1(e)	$	1,413		$	69
4. Percentage of Net Admitted Adjusted Gross DTAs by Tax Character Attributable To The Impact of Tax Planning Strategies		0	%		0%

56

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

	Change
	(5)		(6)
	(Col 1 - 3)		(Col 2 - 4)
	Ordinary		Capital
(in millions)
(a) Determination of Adjusted Gross Deferred Tax Assets and Net Admitted Deferred Tax Assets by tax character as a percentage.
1. Adjusted Gross DTAs Amount From Note 9A1(c)	$	26	$	18
2. Percentage of Adjusted Gross DTAs By Tax Character Attributable To The Impact of Tax Planning Strategies		0%		0%
3. Net Admitted Adjusted Gross DTAs Amount from Note 9A1(e)	$	26	$	18
4. Percentage of Net Admitted Adjusted Gross DTAs by Tax Character Attributable To The Impact of Tax Planning Strategies		0%		0%

The Company’s tax planning strategies do not include the use of reinsurance.

There are no unrecognized deferred tax liabilities for amounts described in ASC 740-10-25-3.

Current income taxes incurred consist of the following major components:

	Years Ended December 31,
	(1)		(2)		(3)
					(Col 1 - 2)
	2020		2019		Change
(in millions)
1. Current income tax
(a) Federal	$	(64)	$	(286)		$      222
(b) Foreign		-		-		-
(c) Subtotal		(64)		(286)		222
(d) Federal income tax on net capital gains		291		201		90
(e) Utilization of capital loss carryforwards		-		-		-
(f) Other		-		-		-
(g) Federal and foreign income taxes incurred	$	227	$	(85)		$      312

57

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are as follows:

	December 31,
	(1)		(2)		(3)
					(Col 1 - 2)
	2020		2019		Change
(in millions)
2. Deferred tax assets:
(a) Ordinary:
(1) Discounting of unpaid losses	$	-	$	-	$	-
(2) Unearned premium reserve		-		-		-
(3) Policyholder reserves		682		665		17
(4) Investments		103		80		23
(5) Deferred acquisition costs		473		462		11
(6) Policyholder dividends accrual		46		49		(3)
(7) Fixed assets		-		-		-
(8) Compensation and benefits accrual		32		32		-
(9) Pension accrual		21		18		3
(10) Receivables - nonadmitted		62		59		3
(11) Net operating loss carryforward		-		-		-
(12) Tax credit carry-forward		121		121		-
(13) Other (including items <5% of total ordinary tax assets)		20		48		(28)
(99) Subtotal	$	1,560	$	1,534	$	26
(b) Statutory valuation allowance adjustment		121		121		-
(c) Nonadmitted		-		-		-
(d) Admitted ordinary deferred tax assets (2(a)(99) - 2(b) - 2(c))	$	1,439	$	1,413	$	26
(e) Capital:
(1) Investments	$	87	$	69	$	18
(2) Net capital loss carryforward		-		-		-
(3) Real estate		-		-		-
(4) Other (including items <5% of total capital tax assets)		-		-		-
(99) Subtotal	$	87	$	69	$	18
(f) Statutory valuation allowance adjustment		-		-		-
(g) Nonadmitted		-		-		-
(h) Admitted capital deferred tax assets (2(e)(99) - 2(f) - 2(g))	$	87	$	69	$	18
(i) Admitted deferred tax assets (2(d)+2(h))	$	1,526	$	1,482	$	44

58

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

3. Deferred tax liabilities:
(a) Ordinary:
(1) Investments	$	1,176		$	1,100		$	76
(2) Fixed assets		27			18			9
(3) Deferred and uncollected premium		6			12			(6)
(4) Policyholder reserves		208			256			(48)
(5) Other (including items <5% of total ordinary tax liabilities)		71			103			(32)
(99) Subtotal	$	1,488		$	1,489		$	(1)
(b) Capital:
(1) Investments	$	117		$	94		$	23
(2) Real estate		-			-			-
(3) Other (including items <5% of total capital tax liabilities)		-			-			-
(99) Subtotal	$	117		$	94		$	23
(c) Deferred tax liabilities (3(a)(99) + 3(b)(99))	$	1,605		$	1,583		$	22
4. Net deferred tax assets/liabilities (2(i) - 3(c))	$	(79	)	$	(101	)	$	22

The change in net deferred income taxes is comprised of the following:

	December 31,
	2020			2019		Change
(in millions)
Total deferred tax assets	$	1,526		$	1,482	$	44
Total deferred tax liabilities		1,605			1,583		22
Net deferred tax assets (liabilities)	$	(79	)	$	(101)	$	22
Tax effect of unrealized gains and losses							(159)
Tax effect of unrealized foreign exchange gains (losses)							(2)
Other							34
Change in net deferred income taxes						$	149

59

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

The provision for federal and foreign income taxes incurred is different from that which would be obtained by applying the statutory federal income tax rate of 21% to income before income tax (including realized capital gains). The significant items causing this difference are as follows:

	Years Ended December 31,
	2020			2019			2018
(in millions)
Ordinary provisions computed at statutory rate	$	67		$	221		$	(7)
Net realized capital gains (losses) before IMR at statutory rate		246			87			153
Change in nonadmitted assets		-			-			-
Reinsurance		47			(49	)		77
Valuation allowance		-			-			-
Tax-exempt income		(18	)		(22	)		1
Nondeductible expenses		3			2			2
Foreign tax expense gross up		5			6			5
Amortization of IMR		(87	)		(32	)		(138)
Tax recorded in surplus		(11	)		(11	)		14
Dividend received deduction		(95	)		(134	)		(159)
Investment in subsidiaries		(15	)		(16	)		(18)
Prior year adjustment		(12	)		(19	)		(69)
Tax credits		(21	)		(27	)		(23)
Change in tax reserve		1			(13	)		33
Pension		-			-			-
Tax rate change		(32	)		-			(185)
Other		-			-			2
Total	$	78		$	(7	)	$	(312)
Federal and foreign income taxes incurred	$	(64	)	$	(286	)	$	(725)
Capital gains tax		291			201			396
Change in net deferred income taxes		(149	)		78			17
Total statutory income tax expense (benefit)	$	78		$	(7	)	$	(312)

As of December 31, 2020, the Company had the following carry forwards:

	Origination     Year		Expiration Year		Amount
(in millions)
Affordable Housing Tax Credits		2007		2027		19
		2008		2028		53
		2009		2029		49
						$      121

The federal income taxes incurred on capital gains available for recoupment in the event of future net capital losses were $268 million, $0 million and $0 million for the years 2020, 2019 and 2018 respectively.

The Company has no deposits under Section 6603 of the Internal Revenue Code.

60

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

The Company is included in the consolidated federal income tax return of JHFC with the following entities:

Essex Corporation	John Hancock Insurance Agency Inc.
Farmland Management Services, Inc.	John Hancock Leasing Corp.
Guide Financial, Inc.	John Hancock Life & Health Insurance Company
Hancock Farmland Services, Inc.	John Hancock Life Insurance Company of New York
Hancock Forest Management Inc.	John Hancock Realty Advisors Inc.
Hancock Natural Resource Group Inc.	John Hancock Realty Mgt. Inc.
JH 575 Rengstorff LLC	John Hancock Signature Services Inc.
JH Hostetler LLC	John Hancock Natural Resource Corp.
JH Kearny Mesa 5 LLC	Manulife (Michigan) Reassurance Company
JH Kearny Mesa 7 LLC	Manulife Reinsurance (Bermuda) Limited
JH Kearny Mesa 9 LLC	Manulife Reinsurance Limited
JH Networking Insurance Agency Inc.	Manulife Service Corporation
JH Ott LLC	MCC Asset Management Inc.
JH Tulare 8 LLC	PT Timber Inc.
	JH Signature Insurance Agency, Inc. (formerly
John Hancock Assignment Company	Signator Insurance Agency Inc.)
John Hancock Financial Corporation	The Manufacturers Investment Corporation
John Hancock Financial Network Inc.
John Hancock Funding Company LLC

In accordance with the income tax sharing agreements in effect for the applicable tax years, the Company’s income tax expense (benefit) is computed as if the Company filed separate federal income tax returns with tax benefits provided for operating losses and tax credits when utilized by the consolidated group. Intercompany settlements of income taxes are made through an increase or reduction to amounts due to or from affiliates. Such settlements occur on a periodic basis in accordance with the tax sharing agreements.

Taxes receivable from / (payable to) affiliates are $37 million and $52 million at December 31, 2020 and 2019, respectively, and are included in other assets or current federal income taxes payable on the Balance Sheets.

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 Internal Revenue Service (“IRS”). The IRS completed the audit of tax years 2014-2015 with the exception of one issue that is currently in appeals. The audit of tax years 2016-2018 is currently in process.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	2020		2019
(in millions)
Balance at beginning of year	$	71	$	108
Additions based on tax positions related to the current year		1		1
Payments		-		-
Additions for tax positions of prior years		-		-
Reductions for tax positions of prior years		-		(38)
Balance at end of year	$	72	$	71

Included in the balances as of December 31, 2020 and 2019, are $72 million and $71 million, respectively, of unrecognized benefits that, if recognized, would affect the Company’s effective tax rate. Included in the balances as of December 31, 2020 and 2019, are $0 million and $0 million of tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.

The Company’s liability for unrecognized tax benefits is not expected to materially change in the next twelve months.

61

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

The Company recognizes interest accrued related to unrecognized tax benefits and penalties in income tax expense in the Statements of Operations. The Company recognized approximately $0 million, $0 million, and ($3) million of interest expense / (benefit) for the years ended December 31, 2020, 2019 and 2018, respectively. The Company had approximately $4 million and $7 million accrued for interest as of December 31, 2020 and 2019, respectively. The Company did not recognize any material penalties for the years ended December 31, 2020, 2019 and 2018.

The Company filed a refund claim with the IRS for the AMT credit carryforward balance that remained as of December 31, 2017. The Company is awaiting the refund and has recorded a current tax recoverable for the full amount of the refundable credit of $243 million.

On March 27, 2020, Congress signed into law the Coronavirus Aid, Relief, and Economic Security Act, (“CARES Act”) in response to the economic fallout of the COVID-19 pandemic in the United States. The CARES Act provided a 5-year carryback for net operating losses arising in tax years 2018, 2019 and 2020 to provide relief to businesses. In 2020, the Company filed a claim with the IRS to carry back 2018 net operating losses to recoup taxes paid in 2017, in lieu of carrying forward to 2019. The effect of the tax rate differential in years 2018 and 2017 (21% vs. 35%, respectively) resulted in a $(32) million benefit on the effective tax rate.

In 2018, the Company updated policy level tax reserves in accordance with the Tax Cuts and Jobs Act and reflected impacts of $108 million in its temporary differences for Actuarial Liabilities in both deferred tax assets and deferred tax liabilities. The transitional deferred tax liability is being amortized into taxable income over 8 years, in the amount of $14 million per year.

10. Capital and Surplus

There are no restrictions placed on the Company’s unassigned surplus other than restrictions on dividend payments described below.

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 excluding realized capital gains and (losses) for the 12 month period ending December 31 of the immediately preceding year. For the years ended December 31, 2020, 2019 and 2018, the Company paid ordinary dividends of $975 million, $845 million and $600 million and extraordinary dividends of $0 million, $0 million, and $0 million to its parent company MIC, respectively.

Life/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/health insurance company is to be determined based on the various risk factors related to it. As of December 31, 2020 and 2019, based on calculations pursuant to those requirements, the Company’s total adjusted capital exceeds the company action level RBC.

The Company has surplus notes described below in the amount of $585 million outstanding as of December 31, 2020.    The issuance of the surplus notes was approved by the insurance regulators with the following repayment conditions and restrictions: payment of principal and accrued interest otherwise required or permissible cannot be made unless approved by the Board of Directors, approved in writing by the Director, and the Company has sufficient earned surplus or such other funds as may be approved by the Director available for such payment.

Surplus notes in the amount of $450 million were issued on February 25, 1994, for cash pursuant to Rule 144A under the Securities Act of 1933. 100% of the issued and outstanding surplus notes are represented by a global note registered in the name of a nominee of the Depository Trust Company. The interest rate is fixed at 7.375%, and interest is payable semi-annually. The notes mature on February 15, 2024. Interest expense was $33 million for years ended December 31, 2020, 2019 and 2018. Total interest paid through December 31, 2020 was $879 million.

Pursuant to an amended and restated subordinated surplus note dated September 30, 2008, the Company borrowed $136 million from JHFC. Interest is calculated and reset quarterly at a fluctuating rate equal to 3-month London Inter-Bank Offered Rate (“LIBOR”) plus 125 basis points and is payable semi-annually. The note which was to have matured on December 15, 2016

62

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

was extended to December 14, 2021. Interest expense was $3 million, $5 million, and $5 million for the years ended December 31, 2020, 2019 and 2018, respectively. Total interest paid through December 31, 2020 was $32 million.

Under Michigan State liquidation statutes, the claims of the Depository Trust Company and JHFC (“the surplus noteholders”) come before those of the Company’s shareholders. There is no preferential treatment in claims between the surplus noteholders.

11. 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 a fee for services received under the agreement which includes legal, actuarial, investment, data processing, accounting, and certain other administrative services. Management fees relating to the agreement were $178 million, $216 million, and $296 million, respectively, for the years ended December 31, 2020, 2019 and 2018.

The Company has Administrative Service Agreements with its subsidiaries and affiliates whereby the Company will be reimbursed for operating expenses incurred by the Company. Services provided under the agreement include legal, personnel, marketing, investment accounting, and certain other administrative services and are billed based on intercompany cost allocations or total average daily net assets. The amounts earned under the agreements were $688 million, $744 million, and $748 million for the years ended December 31, 2020, 2019 and 2018, respectively.

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

Other

During 2020, 2019 and 2018, respectively, the Company received dividends of $21 million, $22 million, and $28 million from John Hancock Variable Trust Advisors LLC (“JHVTA”) (formerly John Hancock Investment Management Services LLC), $72 million, $77 million, and $83 million from JHD, $0 million, $100 million, and $100 million from JHNY, $0 million, $0 million, and $0 million from JHLH, $217 million, $251 million, and $404 million from John Hancock Subsidiaries LLC (“JHS LLC”), and $0 million, $0 million, and $1 million from CLA CRE Opportunity Fund I LP and $0 million, $0 million and $27 million from CIP / MCRT Longview Meadows LLC (“Concord Mews”). These dividends are included in the Company’s net investment income.

During 2018, the Company received a return of capital of $80 million from its 91% ownership of Concord Mews.

The Company did not own any shares of the stock of its parent, MIC, or its ultimate parent, MFC at December 31, 2020 and 2019, respectively.

The Company did not recognize any impairment write-down for its investment in subsidiaries, controlled or affiliated companies for the years ended December 31, 2020, 2019 and 2018, respectively.

The Company is the owner and beneficiary of corporate owned life insurance (“COLI”) policies issued by JHLH. The asset balances equal to the cash surrender value of the internal COLI policies was $596 million and $586 million at December 31, 2020 and 2019, respectively.

The Company 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. By acting as the banker the Company can earn a spread over the amount it pays its affiliates and this aggregation and resulting economies of scale allows the affiliates to improve the investment return on their excess cash. Interest payable on U.S. dollar funds will be reset daily to the one-month U.S. Dollar- London

63

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

Inter-Bank Bid Rate (“LIBID”) and interest payable on 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 the Company’s Liquidity Pool:

	December 31,
	2020		2019
(In millions)
The Manufacturers Investment Corporation	$	1,262	$	320
John Hancock Financial Corporation		53		89
Manulife Reinsurance Limited		23		27
Manulife Reinsurance (Bermuda) Ltd.		185		229
Manulife (Michigan) Reassurance Company		2		7
John Hancock Life & Health Insurance Company		187		228
John Hancock Reassurance Company, Ltd.		172		65
John Hancock Life Insurance Company New York		377		520
John Hancock Variable Trust Advisers LLC (formerly John Hancock Investment Management Services LLC)		20		20
John Hancock Subsidiaries LLC		23		18
John Hancock Insurance Agency, Inc.		6		6
Essex Corporation		1		1
John Hancock Signature Services Inc.		8		7
John Hancock Realty Advisors		2		3
John Hancock Investment Management LLC (formerly John Hancock Advisers LLC)		82		41
Manulife Investment Management (US) LLC (formerly Manulife Asset Management (US) LLC)		33		39
Manulife Investment Management Private Markets (US) LLC (formerly Hancock Capital Investment Management LLC)		7		8
John Hancock Retirement Plan Services LLC		23		49
The Berkeley Financial Group, LLC		3		2
JH Signature Insurance Agency, Inc. (formerly Signator Insurance Agency, Inc.)		23		19
JH Networking Insurance Agency, Inc.		2		6
John Hancock Administrative Services LLC		-		-
John Hancock Financial Network, Inc.		43		45
Hancock Natural Resource Group, Inc.		19		35
Hancock Forest Management, Inc.		4		6
John Hancock Personal Financial Services, LLC		7		2
John Hancock Funding Company LLC		10		(4)
Total	$	2,577	$	1,788

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.

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.

64

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

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.

The Company also enters into debt and reinsurance transactions with its affiliates. Refer to the debt and reinsurance notes for further details.

12. Commitments, Guarantees, Contingencies, and Legal Proceedings

Commitments: The Company has extended commitments to purchase long-term bonds of $383 million, purchase other invested assets of $2,381 million, purchase real estate of $112 million, and issue agricultural and commercial mortgages of $71 million at December 31, 2020. If funded, loans related to real estate mortgages would be fully collateralized by related properties. Approximately 34% of these commitments expire in 2021.

There were no leasing arrangements that the Company entered into as lessee which could have a material financial effect.

During 2001, the Company entered into an office ground lease agreement, which expires on September 20, 2096. In conjunction with the September 25, 2018 sale of the home office property, the total lease commitment for future years related to the office ground lease was reduced by $343 million. 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
(in millions)
2021	$	9
2022		8
2023		5
2024		3
2025		3
Thereafter		12
Total	$	40

The Company does not have any sublease income related to its office space.

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.

As of December 31, 2018, the Company recorded a restructuring charge of approximately $56 million, net of tax, primarily related to a voluntary early retirement program as well as costs to optimize our real estate footprint in the United States.

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 statutory accounting principles.

The Company has issued guarantee agreements pursuant to which the Company guarantees the obligations of JHNY and JHLH under the OTC International Swaps and Derivatives Association, Inc. (“ISDA”) cleared and exchange-traded derivative agreements and transactions entered into by JHNY and JHLH with external counterparties. The ISDA guarantees are subject

65

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

to an overall limit of $1 billion of Potential Future Exposure, using a three-week and 95% confidence parameters, in calculating the counterparty risk exposure.

The Company is party to a financial support agreement with JHLH pursuant to which it has agreed to maintain JHLH’s capital level such that its risk-based capital ratio shall be at or above 225% of the company action level annually. In addition, under the terms of the financial support agreement, the Company undertakes to provide sufficient liquidity to enable JHLH to make timely payment of its contractual obligations.

Contingencies: 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.

The Company is subject to insurance guaranty fund laws in the states in which it does business. Pursuant to these laws, insurance companies are assessed, and required to make periodic payments, to be used to pay benefits to policyholders and claimants of insolvent or rehabilitated insurance companies. Many states allow these assessments to be credited against future premium taxes. The Company believes such assessments in excess of amounts accrued will not materially affect its financial position.

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, the Michigan Attorney General, the Securities and Exchange Commission (“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.

A class action against the Company in the U.S. District Court for the Southern District of New York (the “Southern District of NY”) in which claims are made that the Company breached, and continues to breach, the contractual terms of certain universal life policies issued between approximately 1990 and 2006 by including impermissible charges in its cost of insurance (“COI”) calculations and certain other rider charges. The Company believes that its COI calculations have been, and continue to be, in accordance with the terms of the policies. In May 2018, the parties agreed to the financial terms of a settlement in the amount of $91 million. On March 18, 2019, the court approved the $91 million settlement, and proceeds were distributed beginning in June 2019.

In June 2018, a class action was initiated against the Company in the Southern District of NY on behalf of owners of performance universal life policies first issued between 2003 and 2009 whose policies are subject to a COI increase announced in 2018. This case has been consolidated with an almost identical related class action that was initiated in October 2018 against the Company in the Southern District of New York and was assigned to the same judge. Discovery has commenced in these cases. No hearings on substantive matters have been scheduled. It is too early to assess the range of potential outcomes for these lawsuits.

66

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

13. Annuity Actuarial Reserves

The Company’s annuity actuarial reserves and deposit fund liabilities and related separate account liabilities that are subject to discretionary withdrawal (with adjustment), subject to discretionary withdrawal (without adjustment), and not subject to discretionary withdrawal provisions are summarized as follows:

	December 31, 2020
	General     Account		Separate Account with   Guarantees		Separate Account   Nonguaranteed		Total		Percent     of Total
(in millions)
Subject to discretionary withdrawal:
With fair value adjustment	$	356	$	241	$	1,590	$	2,187		2%
At book value less current surrender charge of 5% or more		1		-		-		1		0%
At fair value		144		-		132,278		132,422		86%
Total with adjustment or at fair value		501		241		133,868		134,610		88%
At book value without adjustment (minimal or no charge or adjustment)		4,376		-		-		4,376		3%
Not subject to discretionary withdrawal		14,043		199		239		14,481		9%
Total (gross)		18,920		440		134,107		153,467		100%
Reinsurance ceded		9,493		-		-		9,493
Total (net)	$	9,427	$	440	$	134,107	$	143,974
Amount included in book value less current surrender charge above that will move to book value without adjustment in the year after the statement date	$	1	$	-	$	-	$	1

	December 31, 2019
	General         Account		Separate Account with   Guarantees		Separate Account   Nonguaranteed		Total		Percent     of Total
(in millions)
Subject to discretionary withdrawal:
With fair value adjustment	$	459	$	302	$	1,567	$	2,328		2%
At book value less current surrender charge of 5% or more		2		-		-		2		0%
At fair value		-		-		123,248		123,248		85%
Total with adjustment or at fair value		461		302		124,815		125,578		87%
At book value without adjustment (minimal or no charge or adjustment)		4,479		-		-		4,479		3%
Not subject to discretionary withdrawal		14,322		205		189		14,716		10%
Total (gross)		19,262		507		125,004		144,773		100%
Reinsurance ceded		10,116		-		-		10,116
Total (net)	$	9,146	$	507	$	125,004	$	134,657
Amount included in book value less current surrender charge above that will move to book value without adjustment in the year after the statement date	$	-	$	-	$	-	$	-

67

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

14. Life Actuarial Reserves

The Company’s life actuarial reserves and related separate account liabilities that are subject to discretionary withdrawal and not subject to discretionary withdrawal provisions are summarized as follows:

	December 31, 2020
	Account Value		Cash Value		Reserve
A. General Account
(1) Subject to discretionary withdrawal, surrender values, or policy loans:
a. Term Policies with Cash Value	$	-	$	-	$	1
b. Universal Life		4,671		4,610		4,843
c. Universal Life with Secondary Guarantees		15,668		13,900		26,244
d. Indexed Universal Life		464		365		631
e. Indexed Universal Life with Secondary Guarantees		1,861		1,574		2,091
f. Indexed Life		-		-		-
g. Other Permanent Cash Value Life Insurance		17,154		17,154		17,221
h. Variable Life		31		15		24
i. Variable Universal Life		3,068		3,048		2,850
j. Miscellaneous Reserves		-		-		6,624
(2) Not subject to discretionary withdrawal or no cash values
a. Term Policies without Cash Value		-		-		3,043
b. Accidental Death Benefits		-		-		8
c. Disability - Active Lives		-		-		34
d. Disability - Disabled Lives		-		-		149
e. Miscellaneous Reserves		-		-		285
(3) Total (gross: direct + assumed)	$	42,917	$	40,666	$	64,048
(4) Reinsurance Ceded		11,657		11,148		20,837
(5) Total (net) (3) - (4)	$	31,260	$	29,518	$	43,211
B. Separate Account with Guarantees
(1) Subject to discretionary withdrawal, surrender values, or policy loans:
h. Variable Life	$	-	$	-	$	-
i. Variable Universal Life		-		-		-
(2) Not subject to discretionary withdrawal or no cash values
a. Term Policies without Cash Value		-		-		-
b. Accidental Death Benefits		-		-		-
c. Disability - Active Lives		-		-		-
d. Disability - Disabled Lives		-		-		-
e. Miscellaneous Reserves		-		-		-
(3) Total (gross: direct + assumed)	$	-	$	-	$	-
(4) Reinsurance Ceded		-		-		-
(5) Total (net) (3) - (4)	$	-	$	-	$	-
C. Separate Account Nonguaranteed
(1) Subject to discretionary withdrawal, surrender values, or policy loans:
h. Variable Life	$	2,119	$	2,091	$	2,118
i. Variable Universal Life		14,302		14,044		14,093
(2) Not subject to discretionary withdrawal or no cash values
a. Term Policies without Cash Value		-		-		-
b. Accidental Death Benefits		-		-		-
c. Disability - Active Lives		-		-		-
d. Disability - Disabled Lives		-		-		-
e. Miscellaneous Reserves		-		-		-
(3) Total (gross: direct + assumed)	$	16,421	$	16,135	$	16,211
(4) Reinsurance Ceded		-		-		-
(5) Total (net) (3) - (4)	$	16,421	$	16,135	$	16,211

68

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

	December 31, 2019
	Account Value		Cash Value		Reserve
A. General Account
(1) Subject to discretionary withdrawal, surrender values, or policy loans:
a. Term Policies with Cash Value	$	-	$	-	$	-
b. Universal Life		6,018		5,911		6,692
c. Universal Life with Secondary Guarantees		14,070		12,258		24,355
d. Indexed Universal Life		878		627		869
e. Indexed Universal Life with Secondary Guarantees		829		706		735
f. Indexed Life		-		-		-
g. Other Permanent Cash Value Life Insurance		17,608		17,608		18,733
h. Variable Life		-		-		23
i. Variable Universal Life		2,963		2,944		3,054
j. Miscellaneous Reserves		-		-		4,947
(2) Not subject to discretionary withdrawal or no cash values
a. Term Policies without Cash Value		-		-		3,062
b. Accidental Death Benefits		-		-		9
c. Disability - Active Lives		-		-		43
d. Disability - Disabled Lives		-		-		148
e. Miscellaneous Reserves		-		-		320
(3) Total (gross: direct + assumed)	$	42,366	$	40,054	$	62,990
(4) Reinsurance Ceded		9,223		9,150		19,466
(5) Total (net) (3) - (4)	$	33,143	$	30,904	$	43,524
B. Separate Account with Guarantees
(1) Subject to discretionary withdrawal, surrender values, or policy loans:
h. Variable Life	$	-	$	-	$	-
i. Variable Universal Life		-		-		-
(2) Not subject to discretionary withdrawal or no cash values
a. Term Policies without Cash Value		-		-		-
b. Accidental Death Benefits		-		-		-
c. Disability - Active Lives		-		-		-
d. Disability - Disabled Lives		-		-		-
e. Miscellaneous Reserves		-		-		-
(3) Total (gross: direct + assumed)	$	-	$	-	$	-
(4) Reinsurance Ceded		-		-		-
(5) Total (net) (3) - (4)	$	-	$	-	$	-
C. Separate Account Nonguaranteed
(1) Subject to discretionary withdrawal, surrender values, or policy loans:
h. Variable Life	$	1,957	$	1,927	$	1,957
i. Variable Universal Life		12,947		12,647		12,697
(2) Not subject to discretionary withdrawal or no cash values
a. Term Policies without Cash Value		-		-		-
b. Accidental Death Benefits		-		-		-
c. Disability - Active Lives		-		-		-
d. Disability - Disabled Lives		-		-		-
e. Miscellaneous Reserves		-		-		-
(3) Total (gross: direct + assumed)	$	14,904	$	14,574	$	14,654
(4) Reinsurance Ceded		-		-		-
(5) Total (net) (3) - (4)	$	14,904	$	14,574	$	14,654

15. Separate Accounts

Separate accounts held by the Company include individual and group variable annuity and variable life products that offer guaranteed and non-guaranteed returns. The net investment experience of the separate account is credited directly to the policyholder and can be positive or negative.

69

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

For guarantees of amounts in the event of death, the net amount at risk is defined as the excess of the initial sum insured over the current sum insured for fixed premium variable life insurance contracts, and, for other variable life insurance contracts, is equal to the sum insured when the account value is zero and the policy is still in force.

The deposits related to variable annuities generally provide a GMDB. For annuity products, this can take the form of either (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 benefit of (b) and (c) above. The assets and liabilities of these accounts are carried at fair value. The GMDB reserve is held in the Company’s general account policy reserves.

The Company sold contracts with GMIB riders from 1998 to 2004. The GMIB rider provides 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 could purchase at then-current annuity purchase rates.

The Company sold contracts with a GMWB rider and has since offered multiple variations of this optional benefit. 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.

Reinsurance has been utilized to mitigate risk related to some of the GMDB and GMIB 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.

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

The assets legally insulated from the general account are attributed to the following products/transactions:

Product/Transaction	Separate Account Legally   Insulated Assets				Separate Account Not Legally Insulated     Assets
	December 31,
(in millions)	2020		2019		2020		2019
Group Annuity Contracts (401K)	$	102,008	$	91,376	$	-	$	-
Variable and Fixed Annuities		28,882		30,453		20		20
Life Insurance		16,710		15,022		-		-
Fixed Products - Institutional and stable value fund		2,067		2,009		-		-
Fixed Products - Retail		29		28		285		324
Investments - Funds		1,487		1,515		-		-
Total	$	151,183	$	140,403	$	305	$	344

70

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

To compensate the general account for the risk taken, the separate account paid risk charges and amounts toward separate account guarantees as follows:

	Risk Charges     Paid to General     Account		Amounts toward Separate Account     Guarantees
(in millions)
2020	$	177	$	61
2019	$	196	$	67
2018	$	210	$	54
2017	$	220	$	62
2016	$	231	$	89

The Company had the following variable annuities with guaranteed benefits:

	December 31,
	2020		2019
(in millions, except for ages)
Account value	$	29,088	$	30,730
Amount of reserve held		2,873		1,000
Net amount at risk - gross		4,757		4,670
Weighted average attained age		70		70

The following assumptions and methodology were used to determine the amounts above at December 31, 2020 and 2019:

● VM-21 is used in 2020 to determine the aggregate reserve for variable annuity products. Actuarial Guideline 43 (“AG 43”) is used in the 2019 reserve calculations.

● For 2020, the prescribed Economic Scenario Generator (“ESG”) is used for VM-21, so there are no calibration criteria requirements. The stochastically generated projection scenarios have met the scenario calibration criteria prescribed in AG 43 for 2019.

● In 2020 and 2019, annuity mortality is based on the Ruark Variable Annuity Table, which is based on an industry study of variable annuity deaths. The table is further adjusted by factors varied by rider types (living benefit/GMDB only) and qualified and non-qualified business.

● In 2020 and 2019, annuity base lapse rates vary by product, policy year, and rider type, where the lapse rates range from 0.5% to 40% for GMDB, GMIB and GMWB. These rates are dynamically reduced for guarantees that are in-the-money and rates are also dynamically increased for GMWBs that are out-of-the-money.

● For variable annuities, the applicable swap curve at December 31 is used for discounting each year.

71

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

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

	December 31,
	2020		2019
(in millions)
Type of Fund
Equity	$	26,756	$	26,688
Balanced		8,257		8,787
Bonds		5,588		5,634
Money Market		483		360
Total	$	41,084	$	41,469

Information regarding the separate accounts of the Company is as follows:

	December 31,
	2020						2019
	Nonindexed Guarantee Less than or Equal to 4%		Nonguaranteed Separate Account		Total		Nonindexed Guarantee Less than or Equal to 4%		Nonguaranteed Separate Account		Total
(in millions)
Premiums, deposits and other considerations	$	-	$	13,370	$	13,370	$	-	$	14,538	$	14,538
Reserves for accounts with assets at:
Fair value		440		150,318		150,758		507		139,658		140,165
Amortized cost		-		-		-		-		-		-
Total	$	440	$	150,318	$	150,758	$	507	$	139,658	$	140,165

72

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

	December 31,
	2020						2019
	Nonindexed Guarantee Less than or Equal to 4%		Nonguaranteed Separate Account		Total		Nonindexed Guarantee Less than or Equal to 4%		Nonguaranteed Separate Account		Total
(in millions)
Reserves for separate accounts by withdrawal characteristics:
Subject to discretionary withdrawal:
With fair value adjustment	$	241		$        1,590	$	1,831		$        302		$        1,567	$	1,869
At book value without fair value adjustments and with current surrender charge of 5% or more		-		1,118		1,118		-		1,240		1,240
At fair value		-		145,636		145,636		-		134,458		134,458
At book value without fair value adjustments and with current surrender charge of less than 5%		-		1,735		1,735		-		2,204		2,204
Subtotal		241		150,079		150,320		302		139,469		139,771
Not subject to discretionary withdrawal		199		239		438		205		189		394
Total	$	440		$    150,318	$	150,758		$            507		$    139,658	$	140,165

Amounts transferred to and from separate accounts are as follows:

	December 31,
	2020			2019			2018
(in millions)
Transfers to separate accounts	$	18,902		$	16,277		$	15,071
Transfers from separate accounts		25,329			23,327			22,687
Net transfers to (from) separate accounts	$	(6,427	)	$	(7,050	)	$	(7,616)

73

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

16. Employee 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 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 $32 million, $30 million, and $26 million in 2020, 2019 and 2018, 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 not material for the years ended 2020, 2019 and 2018, 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 a separate rabbi trust for the purpose of holding assets to be used to satisfy its obligations with respect to certain other non-qualified retirement plans of $333 million and $313 million at December 31, 2020 and 2019, respectively. In the event of insolvency of the Company, the rabbi trust assets can be used to satisfy claims of general creditors.

During 2018, the Company implemented its North American voluntary early retirement program. The program resulted in the voluntary separation of 229 employees in the U.S. by the end of 2019. A curtailment loss of $7 million resulting from the program was recorded by MIC in earnings during the 4th quarter of 2018. This loss represents the change in net defined benefit and retiree welfare liabilities due to employees separating sooner and with different post-retirement benefits than had previously been assumed. The Company will recognize its allocation of the curtailment loss in earnings as payments to participants are made.

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 not material for the years ended 2020, 2019 and 2018, respectively.

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, 2020 and 2019 was $147 million and $127 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 was not material as of December 31, 2020 and 2019 respectively.

Postretirement Benefit Plan: The Company participates in the John Hancock Employee Welfare Plan which is sponsored by MIC. 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 Statements of Operations. The allocation is derived by utilizing participant data, provided by the plan actuary, to calculate the benefits earned; i.e., service cost, relating to participants employed by the Company. In addition, any difference between actual cash paid for benefits to plan participants and benefits earned is recorded directly to unassigned surplus. The expense

74

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

and charge to surplus for the John Hancock Employee Welfare Plan were not material for the years ended 2020, 2019 and 2018, respectively.

17. Lines of Credit, Consumer Notes and Affiliated Debt

Lines of Credit: At December 31, 2020, JHUSA and MIC share in a committed line of credit established by MFC totaling $1 billion, which was extended to 2023. 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, 2020, the Company had no outstanding borrowings under the agreement.

The Company had a committed line of credit agreement established by MLI totaling $1 billion. MLI committed, 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. The committed line of credit expired on March 18, 2018.

At December 31, 2020, 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 was extended to 2023. 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, 2020. At December 31, 2020, MFC and its subsidiaries, including the Company, had no outstanding borrowings under the agreement.

At December 31, 2020, the Company had a line of credit agreement established with JHS LLC totaling up to $120 million, which will expire February 15, 2022. Under the agreement, the Company may loan funds, when requested, at prevailing interest rates as determined in accordance with the line of credit agreement. At December 31, 2020, the Company had $115 million outstanding borrowings under the agreement with a fair value of $115 million. This loan replaced a senior note receivable for $30 million issued by JHS LLC during 2016, and additional advances of $25 million on February 15, 2017 and $60 million on May 21, 2018. Interest on the loan is calculated at a fluctuating rate equal to the 360 day-year for the actual number of days elapsed and is payable annually. The combined interest income on the loans was $3 million and $4 million for the years ended December 31, 2020 and 2019.    

Pursuant to a revolving promissory note dated November 2, 2020, the Company entered into a line of credit agreement with John Hancock GA Senior Loan Trust (Delaware) (“SL Trust”) totaling up to $50 million. The term of the line of credit will be one year and is expected to be renewed on an annual basis. Under the agreement, the Company may loan funds, when requested, at prevailing interest rates as determined in accordance with the line of credit agreement. Interest on the loan is calculated at a fluctuating rate equal to the 3-month LIBOR rate plus 30 basis points per annum and is payable quarterly. At December 31, 2020, the Company had no outstanding borrowings under the agreement.

Effective June 30, 2020, the Company entered into a senior loan facility with The Manufacturers Life Insurance Company (“MLI”) and Manulife Financial Asia Limited (“MFAL”). Under the terms of the agreement, the Company may loan up to $750 million to MLI and/or MFAL. Interest on the loan is calculated at a fluctuating rate equal to the 3-month LIBOR plus 140 basis points per annum. The loan will be repaid and the facility terminated on or before June 30, 2021. At December 31, 2020, the Company had no outstanding borrowings under the agreement.

Effective April 30, 2020, the Company entered into a short-term loan facility with MLI. Under the terms of the agreement, the Company may loan up to $750 million to MLI at prevailing interest rates in accordance with the loan agreement. Effective June 30, 2020, the loan facility was terminated. The Company had no borrowings under the agreement.

Effective April 17, 2018, the Company entered into a committed line of credit agreement with John Hancock Funding Company LLC, (“JHFLLC”), a wholly-owned subsidiary of JHS LLC, totaling up to $400 million which will expire April 27, 2023. Under the agreement, the Company may loan funds, when requested, at prevailing interest rates as determined in accordance with the line of credit agreement. Interest on the loan is calculated at a fluctuating rate equal to the 360 day-year for the actual number of days elapsed and is payable quarterly. Effective June 13, 2019, the agreement was terminated, and the Company had no outstanding borrowings under the agreement.

75

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

Consumer Notes: The Company issued consumer notes through its SignatureNotes Program. SignatureNotes may be redeemed upon the death of the holder, subject to an annual overall program redemption limitation of 1% of the aggregate securities outstanding, or $1 million, or an individual redemption limitation of $200,000 of aggregate principal. SignatureNotes have a variety of issue dates, maturities, interest rates and call provisions. The notes payable balance as of December 31, 2020 and 2019 was $138 million and $138 million, respectively. Interest ranging from 4.8% to 6.0%. The notes are due in varying amounts to 2032.

Aggregate maturities of consumer notes are as follows: 2021-$0 million; 2022-$13 million; 2023-$33 million; 2024-$0 million; 2025-$0 million; and thereafter $92 million.

Interest expense on consumer notes, included in benefits to policyholders, was $8 million, $4 million, and $10 million in 2020, 2019 and 2018, respectively. Interest paid amounted to $8 million, $6 million, and $8 million in 2020, 2019 and 2018, respectively.

Affiliated Debt: Pursuant to a senior note receivable dated December 9, 2014, the Company had $40 million outstanding with JHS LLC as of December 31, 2016. During 2017, JHS LLC repaid $15 million of the outstanding loan bringing the outstanding principal balance to $25 million with a fair value of $25 million as of December 31, 2017. During 2018, JHS LLC repaid $15 million of the outstanding loan bringing the outstanding principal balance to $10 million with a fair value of $10 million as of December 31, 2018. The senior note was fully repaid on December 9, 2019. Interest on the loan is calculated at a fluctuating rate equal to the 3-month LIBOR rate plus 180 basis points per annum and is payable quarterly. Interest income was $0 million, $0 million, and $1 million for the years ended December 31, 2020, 2019 and 2018, respectively.

FHLB (Federal Home Loan Bank) Agreements: The Company is a member of the Federal Home Loan Bank of Indianapolis (FHLBI). The Company uses advances from the FHLBI as a part of its liquidity management program, and any funds obtained for this purpose would be accounted for as borrowed money.

76

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

The following table indicates the aggregate amount of the FHLBI capital stock held related to the agreement:

	December 31, 2020
	(1) (Col 2 +3) Total		(2) General Account		(3) Separate Account
(in millions)
(a) Membership stock - Class A	$	-	$	-	$	-
(b) Membership stock - Class B		21		21		-
(c) Activity stock		2		2		-
(d) Excess stock		-		-		-
(e) Aggregate total	$	23	$	23	$	-
(f) Actual or estimated borrowing capacity as determined by the insurer	$	500
	December 31, 2019
	(1) (Col 2 +3) Total		(2) General Account		(3) Separate Account
(in millions)
(a) Membership stock - Class A	$	-	$	-	$	-
(b) Membership stock - Class B		20		20		-
(c) Activity stock		-		-		-
(d) Excess stock		-		-		-
(e) Aggregate total	$	20	$	20	$	-
(f) Actual or estimated borrowing capacity as determined by the insurer	$	451

FHLBI membership stock of $21 million and $20 million was classified as not eligible for redemption for the years ended December 31, 2020 and 2019, respectively.

The following table indicates the collateral pledged to the FHLBI at the end of the year:

	December 31, 2020
	Fair Value		Carrying Value		Aggregate Total Borrowing
(in millions)
(a) General account	$	2,575	$	2,191	$	500
(b) Separate account		-		-		-
(c) Total collateral pledged	$	2,575	$	2,191	$	500
	December 31, 2019
(in millions)	Fair Value		Carrying Value		Aggregate Total Borrowing
(a) General account	$	-	$	-	$	-
(b) Separate account		-		-		-
(c) Total collateral pledged	$	-	$	-	$	-

77

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

The following table indicates the maximum collateral pledged to the FHLBI during the year:

	December 31, 2020
(in millions)	Fair Value		Carrying Value		Amount         Borrowed at    Time of   Maximum Collateral
(a) General account	$	2,701	$	2,326	$	500
(b) Separate account		-		-		-
(c) Total maximum collateral pledged	$	2,701	$	2,326	$	500
	December 31, 2019
(in millions)	Fair Value		Carrying Value		Amount         Borrowed at    Time of   Maximum Collateral
(a) General account	$	572	$	526	$	300
(b) Separate account		-		-		-
(c) Total maximum collateral pledged	$	572	$	526	$	300

78

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

The following table represents the aggregate amount of borrowing from FHLBI at the end of the year:

	December 31, 2020
	(1) (Col 2 +3) Total		(2) General Account		(3) Separate Account		(4) Funding Agreements Reserves Established
(in millions)
(a) Debt	$	500	$	500	$	-	$	-
(b) Funding agreements		-		-		-		-
(c) Other		-		-		-		-
(d) Aggregate total	$	500	$	500	$	-	$	-
	December 31, 2019
	(1) (Col 2 +3) Total		(2) General Account		(3) Separate Account		(4) Funding Agreements Reserves Established
(in millions)
(a) Debt	$	-	$	-	$	-	$	-
(b) Funding agreements		-		-		-		-
(c) Other		-		-		-		-
(d) Aggregate total	$	-	$	-	$	-	$	-

The maximum amount of aggregate borrowings from FHLBI during 2020 was $500 million. The Company is not subject to any prepayment obligations under current borrowing agreements.

18. Closed Block

The Company operates a closed block 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.

Assets were allocated to the closed block in an amount that, together with anticipated revenues from policies included in the closed block, 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 block inure solely to the benefit of policyholders included in the closed block and will not revert to the benefit of the shareholders of the Company. In addition, if the assets allocated to the closed block and the revenues from the closed block business prove to be insufficient to pay the benefits guaranteed in the closed block, the Company will be required to make payments from its general funds in an amount equal to the shortfall.

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.

79

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

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

No reallocation, transfer, borrowing, or lending of assets can be made between the closed block and other portions of the Company’s general account, any of its separate accounts, or any affiliate of the Company without prior notification to or approval of the Insurance Department.

The excess of the closed block liabilities over the closed block assets represents the expected future post-tax contribution from the closed block which may be recognized in income over the period the policies and contracts in the closed block remain in force.

The following table sets forth certain summarized financial information relating to the JHUSA closed block.

	December 31,
	2020		2019
(in millions)
Assets:
Bonds	$	1,837	$	2,145
Stocks:
Preferred stocks		-		-
Common stocks		-		-
Mortgage loans on real estate		391		429
Real estate		640		668
Cash, cash equivalents and short-term investments		12		5
Policy loans		1,654		1,780
Other invested assets		655		437
Total cash and invested assets		5,189		5,464
Investment income due and accrued		99		113
Premiums due		4		4
Net deferred tax asset		36		35
Other closed block assets		27		7
Total closed block assets	$	5,355	$	5,623
Obligations:
Policy reserves		5,040		5,346
Policyholders’ and beneficiaries’ funds		54		56
Dividends payable to policyholders		274		295
Policy benefits in process of payment		173		65
Other policy obligations		-		2
Other closed block obligations		194		192
Total closed block obligations	$	5,735	$	5,956

19. Subsequent Events

The Company evaluated the recognition and disclosure of subsequent events for its December 31, 2020 financial statements through March 31, 2021, the date the financial statements were issued. The Company did not have any subsequent events requiring disclosure.

80

A U D I T E D     F I N A N C I A L     S T A T E M E N T S

John Hancock Life Insurance Company (U.S.A.) Separate Account N

December 31, 2020

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

Separate Account N

Audited Financial Statements

December 31, 2020

Contents

Report of Independent Registered Public Accounting Firm	3
Statements of Assets and Liabilities	6
Statements of Operations and Changes in Contract Owners’ Equity	22
Notes to Financial Statements	53

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Report of Independent Registered Public Accounting Firm

To the Board of Directors of John Hancock Life Insurance Company (U.S.A.) and Contract Owners of

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Opinion on the Financial Statements

We have audited the accompanying statements of assets and liabilities of each of the subaccounts listed in the Appendix that comprise John Hancock Life Insurance Company (U.S.A.) Separate Account N (the “Separate Account”) as of December 31, 2020, and the related statements of operations and changes in contract owners’ equity for the two years in the period then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each subaccount as of December 31, 2020 and the results of its operations and changes in contract owners’ equity for each of the two years then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Separate Account’s management. Our responsibility is to express an opinion on each of the subaccounts’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Separate Account in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2020 by correspondence with the fund companies, or their transfer agents, as applicable. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

We have served as the auditor of the Separate Account since 1987.

Boston, Massachusetts

March 31, 2021

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Appendix

Subaccounts comprising John Hancock Life

Insurance Company (U.S.A) Separate Account N

500 Index Fund Series NAV	Lifestyle Growth Portfolio Series I
Active Bond Trust Series I	Lifestyle Growth Portfolio Series NAV
Active Bond Trust Series NAV	Lifestyle Moderate Portfolio Series NAV
American Asset Allocation Trust Series I	M Capital Appreciation
American Global Growth Trust Series I	M Large Cap Growth
American Growth Trust Series I	Managed Volatility Aggressive Portfolio Series I
American Growth-Income Trust Series I	Managed Volatility Aggressive Portfolio Series NAV
American International Trust Series I	Managed Volatility Balanced Portfolio Series I
Blue Chip Growth Trust Series I	Managed Volatility Balanced Portfolio Series NAV
Blue Chip Growth Trust Series NAV	Managed Volatility Conservative Portfolio Series I
Capital Appreciation Trust Series I	Managed Volatility Conservative Portfolio Series NAV
Capital Appreciation Trust Series NAV	Managed Volatility Growth Portfolio Series I
Capital Appreciation Value Trust Series I	Managed Volatility Growth Portfolio Series NAV
Capital Appreciation Value Trust Series NAV	Managed Volatility Moderate Portfolio Series I
Core Bond Trust Series I	Managed Volatility Moderate Portfolio Series NAV
Core Bond Trust Series NAV	Mid Cap Index Trust Series I
Emerging Markets Value Trust Series I	Mid Cap Index Trust Series NAV
Emerging Markets Value Trust Series NAV	Mid Cap Stock Trust Series I
Equity Income Trust Series I	Mid Cap Stock Trust Series NAV
Equity Income Trust Series NAV	Mid Value Trust Series I
Financial Industries Trust Series I	Mid Value Trust Series NAV
Financial Industries Trust Series NAV	Money Market Trust Series I
Fundamental All Cap Core Trust Series I	Money-Market Trust Series NAV
Fundamental All Cap Core Trust Series NAV	PIMCO All Asset
Fundamental Large Cap Value Trust Series I	Real Estate Securities Trust Series I
Fundamental Large Cap Value Trust Series NAV	Real Estate Securities Trust Series NAV
Opportunistic Fixed Income Trust Series I	Science & Technology Trust Series I
Opportunistic Fixed Income Trust Series NAV	Science & Technology Trust Series NAV
Global Trust Series I	Select Bond Trust Series I
Global Trust Series NAV	Select Bond Trust Series NAV
Health Sciences Trust Series I	Short Term Government Income Trust Series I
Health Sciences Trust Series NAV	Short Term Government Income Trust Series NAV
High Yield Trust Series I	Small Cap Index Trust Series I
High Yield Trust Series NAV	Small Cap Index Trust Series NAV
International Equity Index Series I	Small Cap Opportunities Trust Series I
International Equity Index Series NAV	Small Cap Opportunities Trust Series NAV
International Small Company Trust Series I	Small Cap Stock Trust Series I
International Small Company Trust Series NAV	Small Cap Stock Trust Series NAV
Disciplined Value International Trust Series I	Small Cap Value Trust Series I
Disciplined Value International Trust Series NAV	Small Cap Value Trust Series NAV
Investment Quality Bond Trust Series I	Small Company Value Trust Series I
Investment Quality Bond Trust Series NAV	Small Company Value Trust Series NAV
Lifestyle Balanced Portfolio Series NAV	Strategic Income Opportunities Trust Series I
Lifestyle Conservative Portfolio Series NAV	Strategic Income Opportunities Trust Series NAV

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Appendix

Subaccounts comprising John Hancock Life

Insurance Company (U.S.A) Separate Account N

Total Bond Market Series Trust NAV	Ultra Short Term Bond Trust Series I
Total Stock Market Index Trust Series I	Ultra Short Term Bond Trust Series NAV
Total Stock Market Index Trust Series NAV

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JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF ASSETS AND LIABILITIES

December 31, 2020

	500 Index Fund     Series NAV		Active Bond Trust   Series I		Active Bond Trust     Series NAV		American Asset      Allocation Trust      Series I		American Global     Growth Trust Series   I		American Growth   Trust Series I
Total Assets
Investments at fair value	$	95,867,436	$	646,272	$	1,363,473	$	12,616,357	$	2,519,552	$	19,328,419
Units outstanding		1,436,819		24,629		14,792		532,006		77,951		302,994
Unit value	$	66.72	$	26.24	$	92.18	$	23.71	$	32.32	$	63.79
Shares		2,225,852		62,502		131,864		1,029,067		127,572		829,190
Cost	$	72,182,885	$	611,311	$	1,303,400	$	13,173,981	$	1,990,123	$	15,023,719

See accompanying notes.

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JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF ASSETS AND LIABILITIES

December 31, 2020

	American Growth-  Income Trust Series  I		American   International Trust   Series I		Blue Chip Growth     Trust Series I		Blue Chip Growth   Trust Series NAV		Capital Appreciation   Trust Series I		Capital Appreciation   Trust Series NAV
Total Assets
Investments at fair value	$	11,159,909	$	7,437,346	$	14,630,105	$	90,642,472	$	10,094,122	$	4,010,020
Units outstanding		238,549		254,376		122,595		272,483		141,360		53,069
Unit value	$	46.78	$	29.24	$	119.34	$	332.65	$	71.41	$	75.56
Shares		703,208		347,377		363,842		2,250,868		1,328,174		523,501
Cost	$	11,645,546	$	6,818,492	$	12,231,279	$	80,567,348	$	8,252,046	$	3,240,362

See accompanying notes.

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JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF ASSETS AND LIABILITIES

December 31, 2020

	Capital Appreciation  Value Trust Series I		Capital Appreciation   Value Trust Series NAV		Core Bond Trust     Series I		Core Bond Trust      Series NAV		Emerging Markets   Value Trust Series I		Emerging Markets   Value Trust Series   NAV
Total Assets
Investments at fair value	$	1,298,432	$	3,720,618	$	9,293,737	$	52,532,621	$	940,157	$	4,753,889
Units outstanding		40,965		110,255		387,869		2,583,628		55,031		332,587
Unit value	$	31.70	$	33.75	$	23.96	$	20.33	$	17.08	$	14.29
Shares		96,970		278,698		653,109		3,707,313		97,224		492,121
Cost	$	1,150,508	$	3,286,857	$	8,648,250	$	50,181,384	$	970,615	$	4,470,430

See accompanying notes.

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JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF ASSETS AND LIABILITIES

December 31, 2020

	Equity Income Trust  Series I		Equity Income Trust   Series NAV		Financial Industries     Trust Series I		Financial Industries   Trust Series NAV		Fundamental All     Cap Core Trust Series I		Fundamental All     Cap Core Trust Series NAV
Total Assets
Investments at fair value	$	7,053,432	$	18,553,866	$	639,450	$	287,605	$	135,424	$	3,032,676
Units outstanding		116,178		270,673		19,506		6,527		1,829		64,502
Unit value	$	60.71	$	68.55	$	32.78	$	44.06	$	74.04	$	47.02
Shares		511,487		1,354,297		49,996		22,557		4,492		99,923
Cost	$	7,660,623	$	18,203,957	$	631,877	$	280,330	$	102,612	$	2,427,811

See accompanying notes.

9 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF ASSETS AND LIABILITIES

December 31, 2020

	Fundamental Large  Cap Value Trust Series I		Fundamental Large   Cap Value Trust Series NAV		Opportunistic Fixed     Income Trust Series I		Opportunistic Fixed   Income Trust Series   NAV		Global Trust Series I		Global Trust Series   NAV
Total Assets
Investments at fair value	$	3,674,393	$	7,350,912	$	1,537,607	$	9,443,616	$	1,438,932	$	3,217,695
Units outstanding		86,233		227,315		42,487		237,986		40,520		144,285
Unit value	$	42.61	$	32.34	$	36.19	$	39.68	$	35.51	$	22.30
Shares		146,390		292,748		114,235		704,222		68,881		154,178
Cost	$	2,727,706	$	6,202,999	$	1,426,443	$	8,870,318	$	1,380,345	$	2,998,602

See accompanying notes.

10 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF ASSETS AND LIABILITIES

December 31, 2020

	Health Sciences     Trust Series I		Health Sciences    Trust Series NAV		High Yield Trust     Series I		High Yield Trust    Series NAV		International Equity   Index Series I		International Equity   Index Series NAV
Total Assets
Investments at fair value	$	6,633,419	$	8,980,175	$	2,512,627	$	2,885,159	$	8,848,158	$	31,345,685
Units outstanding		48,771		78,574		63,782		100,002		545,200		476,485
Unit value	$	136.01	$	114.29	$	39.39	$	28.85	$	16.23	$	65.79
Shares		213,499		283,465		476,779		556,980		452,591		1,603,360
Cost	$	5,722,500	$	7,481,981	$	2,483,048	$	2,845,376	$	7,089,486	$	27,461,620

See accompanying notes.

11 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF ASSETS AND LIABILITIES

December 31, 2020

	International Small    Company Trust Series I		International Small   Company Trust Series NAV		Disciplined Value     International Trust     Series I		Disciplined Value   International Trust   Series NAV		Investment Quality   Bond Trust Series I		Investment Quality   Bond Trust Series NAV
Total Assets
Investments at fair value	$	526,519	$	1,711,532	$	4,593,379	$	3,392,567	$	3,937,507	$	933,683
Units outstanding		25,889		78,191		174,586		183,339		100,929		45,344
Unit value	$	20.34	$	21.89	$	26.31	$	18.50	$	39.01	$	20.59
Shares		35,745		116,115		351,983		262,177		323,542		76,973
Cost	$	482,621	$	1,562,510	$	4,308,079	$	3,205,610	$	3,657,194	$	895,357

See accompanying notes.

12 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF ASSETS AND LIABILITIES

December 31, 2020

	Lifestyle Balanced   Portfolio Series NAV		Lifestyle Conservative     Portfolio Series     NAV		Lifestyle Growth     Portfolio Series I		Lifestyle Growth    Portfolio Series NAV		Lifestyle Moderate   Portfolio Series NAV		M Capital      Appreciation
Total Assets
Investments at fair value	$	14,757	$	230,783	$	877,240	$	2,957,534	$	109,084	$	507,060
Units outstanding		908		15,928		58,179		169,372		6,965		3,400
Unit value	$	16.25	$	14.49	$	15.08	$	17.46	$	15.66	$	149.14
Shares		901		16,004		49,311		166,340		6,930		17,625
Cost	$	13,632	$	218,587	$	810,906	$	2,723,046	$	102,942	$	387,307

See accompanying notes.

13 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF ASSETS AND LIABILITIES

December 31, 2020

	M Large Cap      Growth		Managed Volatility   Aggressive Portfolio   Series I		Managed Volatility     Aggressive Portfolio     Series NAV		Managed Volatility   Balanced Portfolio   Series I		Managed Volatility   Balanced Portfolio Series NAV		Managed Volatility   Conservative Portfolio Series I
Total Assets
Investments at fair value	$	17	$	1,371,380	$	5,092,752	$	3,379,001	$	17,066,661	$	1,068,165
Units outstanding		-		40,865		219,216		83,740		725,432		27,690
Unit value	$	0.00	$	33.56	$	23.23	$	40.35	$	23.53	$	38.58
Shares		1		138,383		513,900		289,794		1,459,937		91,925
Cost	$	13	$	1,405,061	$	5,439,271	$	3,521,169	$	18,263,580	$	1,039,462

See accompanying notes.

14 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF ASSETS AND LIABILITIES

December 31, 2020

	Managed Volatility  Conservative Portfolio Series NAV		Managed Volatility   Growth Portfolio Series I		Managed Volatility      Growth Portfolio Series NAV		Managed Volatility   Moderate Portfolio   Series I		Managed Volatility   Moderate Portfolio Series NAV		Mid Cap Index Trust   Series I
Total Assets
Investments at fair value	$	8,883,927	$	2,595,327	$	22,134,661	$	1,917,870	$	7,349,255	$	10,288,792
Units outstanding		417,382		69,153		950,612		45,804		313,894		157,559
Unit value	$	21.28	$	37.53	$	23.28	$	41.87	$	23.41	$	65.30
Shares		762,569		215,738		1,836,901		167,646		641,856		482,136
Cost	$	8,769,404	$	2,842,976	$	24,103,797	$	1,976,056	$	7,901,950	$	9,846,258

See accompanying notes.

15 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF ASSETS AND LIABILITIES

December 31, 2020

	Mid Cap Index      Trust Series NAV		Mid Cap Stock Trust   Series I		Mid Cap Stock       Trust Series NAV		Mid Value Trust     Series I		Mid Value Trust     Series NAV		Money Market Trust   Series I
Total Assets
Investments at fair value	$	14,128,608	$	6,925,301	$	18,329,546	$	4,165,833	$	9,740,781	$	31,067,036
Units outstanding		299,241		75,901		85,007		106,591		156,005		1,446,038
Unit value	$	47.21	$	91.24	$	215.62	$	39.08	$	62.44	$	21.48
Shares		662,072		264,224		685,986		409,217		963,480		31,067,036
Cost	$	13,496,806	$	4,607,804	$	14,462,755	$	4,080,545	$	8,759,377	$	31,067,036

See accompanying notes.

16 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF ASSETS AND LIABILITIES

December 31, 2020

	Money-Market Trust  Series NAV		PIMCO All Asset		Real Estate     Securities Trust     Series I		Real Estate     Securities Trust     Series NAV		Science &    Technology Trust    Series I		Science &   Technology Trust   Series NAV
Total Assets
Investments at fair value	$	49,973,286	$	5,675,490	$	8,270,632	$	10,386,684	$	15,835,747	$	15,081,560
Units outstanding		4,772,604		256,410		38,850		54,210		150,722		158,746
Unit value	$	10.47	$	22.13	$	212.89	$	191.60	$	105.07	$	95.00
Shares		49,973,286		502,701		435,985		551,310		378,212		354,443
Cost	$	49,973,286	$	5,216,615	$	6,494,578	$	10,877,596	$	10,685,792	$	12,644,639

See accompanying notes.

17 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF ASSETS AND LIABILITIES

December 31, 2020

	Select Bond Trust    Series I		Select Bond Trust    Series NAV		Short Term    Government Income    Trust Series I		Short Term   Government Income   Trust Series NAV		Small Cap Index     Trust Series I		Small Cap Index     Trust Series NAV
Total Assets
Investments at fair value	$	3,259,588	$	1,490,571	$	2,725,657	$	5,072,790	$	4,622,204	$	9,407,163
Units outstanding		239,609		104,983		245,307		431,955		88,734		207,217
Unit value	$	13.60	$	14.20	$	11.11	$	11.74	$	52.09	$	45.40
Shares		223,413		102,234		221,778		412,758		283,397		576,066
Cost	$	3,062,392	$	1,403,001	$	2,708,688	$	5,007,781	$	4,078,929	$	7,925,655

See accompanying notes.

18 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF ASSETS AND LIABILITIES

December 31, 2020

	Small Cap   Opportunities Trust   Series I		Small Cap   Opportunities Trust   Series NAV		Small Cap Stock     Trust Series I		Small Cap Stock   Trust Series NAV		Small Cap Value    Trust Series I		Small Cap Value    Trust Series NAV
Total Assets
Investments at fair value	$	12,707,814	$	418,307	$	1,854,830	$	4,725,035	$	965,016	$	7,345,185
Units outstanding		239,808		14,349		30,400		61,462		31,573		81,660
Unit value	$	52.99	$	29.15	$	61.01	$	76.88	$	30.56	$	89.95
Shares		484,292		16,064		155,607		388,253		65,647		502,063
Cost	$	13,524,208	$	376,127	$	1,478,440	$	3,754,255	$	1,037,155	$	7,269,656

See accompanying notes.

19 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF ASSETS AND LIABILITIES

December 31, 2020

	Small Company  Value Trust Series I		Small Company   Value Trust Series   NAV		Strategic Income     Opportunities Trust     Series I		Strategic Income   Opportunities Trust   Series NAV		Total Bond Market   Series Trust NAV		Total Stock Market   Index Trust Series I
Total Assets
Investments at fair value	$	1,880,955	$	1,882,142	$	1,287,638	$	4,840,976	$	24,996,849	$	6,638,501
Units outstanding		35,853		49,472		40,820		196,151		858,937		146,979
Unit value	$	52.46	$	38.04	$	31.54	$	24.68	$	29.10	$	45.17
Shares		178,290		179,594		89,172		336,412		2,295,395		252,799
Cost	$	2,290,135	$	2,109,851	$	1,201,311	$	4,523,689	$	24,425,366	$	5,499,666

See accompanying notes.

20 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF ASSETS AND LIABILITIES

December 31, 2020

	Total Stock Market   Index Trust Series   NAV		Ultra Short Term     Bond Trust Series I		Ultra Short Term     Bond Trust Series     NAV
Total Assets
Investments at fair value	$	5,974,626	$	1,896	$	933,256
Units outstanding		37,377		185		86,027
Unit value	$	159.85	$	10.25	$	10.85
Shares		227,605		165		81,365
Cost	$	5,239,750	$	1,957	$	934,831

See accompanying notes.

21 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS’ EQUITY

For the years ended December 31,

	500 Index Fund Series NAV				Active Bond Trust Series I				Active Bond Trust Series NAV
	2020		2019		2020		2019		2020		2019
Income:
Dividend distributions received	$	1,588,117	$	1,526,889	$	17,642	$	17,133	$	35,193	$	35,412
Expenses:
Mortality and expense risk and administrative charges		(144,052)		(134,133)		(2,926)		(3,149)		-		-
Net investment income (loss)		1,444,065		1,392,756		14,716		13,984		35,193		35,412
Realized gains (losses) on investments:
Capital gain distributions received		1,634,251		1,336,643		(2)		(3)		-		-
Net realized gain (loss)		8,351,708		4,955,401		9,505		(1,834)		33,139		1,898
Realized gains (losses)		9,985,959		6,292,044		9,503		(1,837)		33,139		1,898
Unrealized appreciation (depreciation) during the period		3,442,603		15,505,795		27,505		43,068		28,290		86,169
Net increase (decrease) in net assets from operations		14,872,627		23,190,595		51,724		55,215		96,622		123,479
Changes from principal transactions:
Purchase payments		1,367,418		1,564,857		126,786		97,859		96,265		134,516
Transfers between sub-accounts and the company		(8,799,278)		(781,717)		8,556		7,970		124,793		(35,614)
Transfers on general account policy loans		(9,572)		(417,555)		152		15,329		(8,830)		-
Withdrawals		(4,149,979)		(5,175,510)		603		(15,229)		(77,950)		(392,141)
Annual contract fee		(1,767,889)		(1,771,993)		(190,015)		(187,829)		(24,588)		(29,749)
Net increase (decrease) in net assets from principal transactions		(13,359,300)		(6,581,918)		(53,918)		(81,900)		109,690		(322,988)
Total increase (decrease) in net assets		1,513,327		16,608,677		(2,194)		(26,685)		206,312		(199,509)
Net assets at beginning of period		94,354,109		77,745,432		648,466		675,151		1,157,161		1,356,670
Net assets at end of period	$	95,867,436	$	94,354,109	$	646,272	$	648,466	$	1,363,473	$	1,157,161
	2020		2019		2020		2019		2020		2019
Units, beginning of period		1,646,870		1,733,291		26,800		30,449		13,650		17,492
Units issued		274,894		269,737		6,040		5,731		5,459		6,030
Units redeemed		(484,945)		(356,158)		(8,211)		(9,380)		(4,317)		(9,872)
Units, end of period		1,436,819		1,646,870		24,629		26,800		14,792		13,650

See accompanying notes.

22 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS’ EQUITY

For the years ended December 31,

	American Asset Allocation Trust Series I				American Global Growth Trust Series I				American Growth Trust Series I
	2020		2019		2020		2019		2020		2019
Income:
Dividend distributions received	$	158,490	$	138,387	$	1,421	$	12,822	$	12,887	$	111,317
Expenses:
Mortality and expense risk and administrative charges		(46,743)		(47,117)		(1,881)		(1,436)		(12,463)		(10,937)
Net investment income (loss)		111,747		91,270		(460)		11,386		424		100,380
Realized gains (losses) on investments:
Capital gain distributions received		1,392,452		1,243,638		175,334		195,473		2,059,702		2,509,749
Net realized gain (loss)		39,744		13,524		13,247		(2,923)		(197,911)		(540,969)
Realized gains (losses)		1,432,196		1,257,162		188,581		192,550		1,861,791		1,968,780
Unrealized appreciation (depreciation) during the period		(220,232)		720,243		395,044		257,726		4,958,613		1,561,215
Net increase (decrease) in net assets from operations		1,323,711		2,068,675		583,165		461,662		6,820,828		3,630,375
Changes from principal transactions:
Purchase payments		379,181		662,735		110,208		146,444		448,191		356,503
Transfers between sub-accounts and the company		1,113,002		(1,446,342)		(214,487)		947,780		(1,631,855)		(600,995)
Transfers on general account policy loans		6,788		(12,931)		(5,465)		(5,262)		15,358		24,907
Withdrawals		(287,885)		(408,383)		(47,845)		(103,294)		(857,339)		(592,975)
Annual contract fee		(672,523)		(770,269)		(42,361)		(38,977)		(297,178)		(281,637)
Net increase (decrease) in net assets from principal transactions		538,563		(1,975,190)		(199,950)		946,691		(2,322,823)		(1,094,197)
Total increase (decrease) in net assets		1,862,274		93,485		383,215		1,408,353		4,498,005		2,536,178
Net assets at beginning of period		10,754,083		10,660,598		2,136,337		727,984		14,830,414		12,294,236
Net assets at end of period	$	12,616,357	$	10,754,083	$	2,519,552	$	2,136,337	$	19,328,419	$	14,830,414
	2020		2019		2020		2019		2020		2019
Units, beginning of period		509,142		604,317		85,836		39,140		353,730		380,816
Units issued		67,246		30,342		9,436		55,386		81,408		67,752
Units redeemed		(44,382)		(125,517)		(17,321)		(8,690)		(132,144)		(94,838)
Units, end of period		532,006		509,142		77,951		85,836		302,994		353,730

See accompanying notes.

23 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS’ EQUITY

For the years ended December 31,

	American Growth-Income Trust Series  I				American International Trust Series I				Blue Chip Growth Trust Series I
	2020		2019		2020		2019		2020		2019
Income:
Dividend distributions received	$	137,096	$	160,506	$	23,637	$	71,273	$	-	$	-
Expenses:
Mortality and expense risk and administrative charges		(45,795)		(46,607)		(5,795)		(8,558)		(46,117)		(41,425)
Net investment income (loss)		91,301		113,899		17,842		62,715		(46,117)		(41,425)
Realized gains (losses) on investments:
Capital gain distributions received		1,367,766		1,229,419		286,561		559,619		1,717,417		1,505,358
Net realized gain (loss)		(15,648)		114,611		(237,183)		(63,916)		317,864		329,844
Realized gains (losses)		1,352,118		1,344,030		49,378		495,703		2,035,281		1,835,202
Unrealized appreciation (depreciation) during the period		(187,504)		818,870		715,064		843,406		1,609,694		931,171
Net increase (decrease) in net assets from operations		1,255,915		2,276,799		782,284		1,401,824		3,598,858		2,724,948
Changes from principal transactions:
Purchase payments		651,267		530,860		391,343		323,763		57,107		52,201
Transfers between sub-accounts and the company		(71,845)		(154,234)		(539,161)		843,155		548,284		(491,274)
Transfers on general account policy loans		5,291		(14,472)		(5,607)		(4,451)		465		(9,216)
Withdrawals		(1,209,904)		(197,757)		(855,492)		(546,053)		(233,268)		(210,241)
Annual contract fee		(642,649)		(630,703)		(216,631)		(255,479)		(433,318)		(408,196)
Net increase (decrease) in net assets from principal transactions		(1,267,840)		(466,306)		(1,225,548)		360,935		(60,730)		(1,066,726)
Total increase (decrease) in net assets		(11,925)		1,810,493		(443,264)		1,762,759		3,538,128		1,658,222
Net assets at beginning of period		11,171,834		9,361,341		7,880,610		6,117,851		11,091,977		9,433,755
Net assets at end of period	$	11,159,909	$	11,171,834	$	7,437,346	$	7,880,610	$	14,630,105	$	11,091,977
	2020		2019		2020		2019		2020		2019
Units, beginning of period		269,324		279,840		283,725		268,373		124,335		137,342
Units issued		23,717		19,057		76,583		60,683		17,208		18,962
Units redeemed		(54,492)		(29,573)		(105,932)		(45,331)		(18,948)		(31,969)
Units, end of period		238,549		269,324		254,376		283,725		122,595		124,335

See accompanying notes.

24 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS’ EQUITY

For the years ended December 31,

	Blue Chip Growth Trust Series NAV				Capital Appreciation Trust Series I				Capital Appreciation Trust Series NAV
	2020		2019		2020		2019		2020		2019
Income:
Dividend distributions received	$	-	$	5,118	$	-	$	2,476	$	-	$	1,138
Expenses:
Mortality and expense risk and administrative charges		-		-		(29,466)		(25,533)		-		-
Net investment income (loss)		-		5,118		(29,466)		(23,057)		-		1,138
Realized gains (losses) on investments:
Capital gain distributions received		10,602,598		9,280,985		877,629		4,580,433		352,452		1,756,562
Net realized gain (loss)		(126,628)		(623,070)		(2,026,105)		(540,233)		(848,756)		(32,436)
Realized gains (losses)		10,475,970		8,657,915		(1,148,476)		4,040,200		(496,304)		1,724,126
Unrealized appreciation (depreciation) during the period		12,240,373		8,397,648		4,857,920		(2,023,790)		1,977,250		(1,009,352)
Net increase (decrease) in net assets from operations		22,716,343		17,060,681		3,679,978		1,993,353		1,480,946		715,912
Changes from principal transactions:
Purchase payments		432,305		551,542		28,318		26,514		(51,541)		259,070
Transfers between sub-accounts and the company		(1,234,333)		(4,789,274)		(746,441)		(1,704,526)		(53,174)		94,679
Transfers on general account policy loans		154,381		(61,498)		765		(981)		(20,766)		(3,772)
Withdrawals		(1,424,185)		(2,208,817)		(82,814)		(80,801)		(312,215)		(73,955)
Annual contract fee		(623,013)		(525,411)		(217,947)		(189,410)		(58,661)		(66,850)
Net increase (decrease) in net assets from principal transactions		(2,694,845)		(7,033,458)		(1,018,119)		(1,949,204)		(496,357)		209,172
Total increase (decrease) in net assets		20,021,498		10,027,223		2,661,859		44,149		984,589		925,084
Net assets at beginning of period		70,620,974		60,593,751		7,432,263		7,388,114		3,025,431		2,100,347
Net assets at end of period	$	90,642,472	$	70,620,974	$	10,094,122	$	7,432,263	$	4,010,020	$	3,025,431
	2020		2019		2020		2019		2020		2019
Units, beginning of period		285,330		317,840		161,870		213,043		62,578		57,726
Units issued		89,243		21,076		10,963		5,507		3,434		8,034
Units redeemed		(102,090)		(53,586)		(31,473)		(56,680)		(12,943)		(3,182)
Units, end of period		272,483		285,330		141,360		161,870		53,069		62,578

See accompanying notes.

25 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS’ EQUITY

For the years ended December 31,

	Capital Appreciation Value Trust Series I				Capital Appreciation Value Trust Series NAV				Core Bond Trust Series I
	2020		2019		2020		2019		2020		2019
Income:
Dividend distributions received	$	12,558	$	16,435	$	37,631	$	42,437	$	213,704	$	200,028
Expenses:
Mortality and expense risk and administrative charges		(5,498)		(5,372)		-		-		(30,058)		(26,120)
Net investment income (loss)		7,060		11,063		37,631		42,437		183,646		173,908
Realized gains (losses) on investments:
Capital gain distributions received		97,330		73,022		279,633		177,326		(1)		1
Net realized gain (loss)		(1,430)		34,072		4,592		8,142		56,128		(33,604)
Realized gains (losses)		95,900		107,094		284,225		185,468		56,127		(33,603)
Unrealized appreciation (depreciation) during the period		82,996		155,734		233,206		375,266		470,802		476,567
Net increase (decrease) in net assets from operations		185,956		273,891		555,062		603,171		710,575		616,872
Changes from principal transactions:
Purchase payments		8,463		3,273		51,304		84,610		41,750		37,581
Transfers between sub-accounts and the company		(96,684)		(64,531)		75,585		91,032		238,977		395,893
Transfers on general account policy loans		-		-		(31)		(214)		30		805
Withdrawals		(352)		(292)		(33,890)		(5,363)		(5,680)		(143,445)
Annual contract fee		(32,342)		(30,165)		(58,110)		(58,586)		(212,192)		(242,083)
Net increase (decrease) in net assets from principal transactions		(120,915)		(91,715)		34,858		111,479		62,885		48,751
Total increase (decrease) in net assets		65,041		182,176		589,920		714,650		773,460		665,623
Net assets at beginning of period		1,233,391		1,051,215		3,130,698		2,416,048		8,520,277		7,854,654
Net assets at end of period	$	1,298,432	$	1,233,391	$	3,720,618	$	3,130,698	$	9,293,737	$	8,520,277
	2020		2019		2020		2019		2020		2019
Units, beginning of period		45,522		47,729		108,931		104,608		384,699		382,086
Units issued		1,254		17,476		3,926		9,748		42,344		72,204
Units redeemed		(5,811)		(19,683)		(2,602)		(5,425)		(39,174)		(69,591)
Units, end of period		40,965		45,522		110,255		108,931		387,869		384,699

See accompanying notes.

26 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS’ EQUITY

For the years ended December 31,

	Core Bond Trust Series NAV				Emerging Markets Value Trust Series I				Emerging Markets Value Trust Series NAV
	2020		2019		2020		2019		2020		2019
Income:
Dividend distributions received	$	1,177,919	$	836,213	$	19,422 $		31,898	$	99,945	$	132,328
Expenses:
Mortality and expense risk and administrative charges		-		-		(2,192)		(2,767)		-		-
Net investment income (loss)		1,177,919		836,213		17,230		29,131		99,945		132,328
Realized gains (losses) on investments:
Capital gain distributions received		-		-		-		1		1		-
Net realized gain (loss)		397,655		(17,879)		(26,242)		(110,462)		(103,822)		14,003
Realized gains (losses)		397,655		(17,879)		(26,242)		(110,461)		(103,821)		14,003
Unrealized appreciation (depreciation) during the period		1,943,352		1,601,025		26,461		229,000		339,947		263,710
Net increase (decrease) in net assets from operations		3,518,926		2,419,359		17,449		147,670		336,071		410,041
Changes from principal transactions:
Purchase payments		162,462		268,425		3,085		1,375		378,183		288,528
Transfers between sub-accounts and the company		14,894,974		5,574,382		(125,383)		(993,488)		431,762		5,246
Transfers on general account policy loans		(28,125)		(21,840)		-		-		(12,416)		(8,561)
Withdrawals		(250,219)		(407,883)		-		(2)		(585,063)		(44,633)
Annual contract fee		(434,959)		(344,746)		(6,431)		(8,579)		(96,429)		(107,753)
Net increase (decrease) in net assets from principal transactions		14,344,133		5,068,338		(128,729)		(1,000,694)		116,037		132,827
Total increase (decrease) in net assets		17,863,059		7,487,697		(111,280)		(853,024)		452,108		542,868
Net assets at beginning of period		34,669,562		27,181,865		1,051,437		1,904,461		4,301,781		3,758,913
Net assets at end of period	$	52,532,621	$	34,669,562	$	940,157	$	1,051,437	$	4,753,889	$	4,301,781
	2020		2019		2020		2019		2020		2019
Units, beginning of period		1,855,062		1,575,653		63,460		126,708		312,163		302,479
Units issued		1,248,195		353,754		526		6,607		91,808		42,119
Units redeemed		(519,629)		(74,345)		(8,955)		(69,855)		(71,384)		(32,435)
Units, end of period		2,583,628		1,855,062		55,031		63,460		332,587		312,163

See accompanying notes.

27 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS’ EQUITY

For the years ended December 31,

	Equity Income Trust Series I				Equity Income Trust Series NAV				Financial Industries Trust Series I
	2020		2019		2020		2019		2020		2019
Income:
Dividend distributions received	$	186,270	$	142,390	$	505,493	$	859,712	$	7,457	$	29,022
Expenses:
Mortality and expense risk and administrative charges		(25,689)		(27,762)		-		-		(3,117)		(3,864)
Net investment income (loss)		160,581		114,628		505,493		859,712		4,340		25,158
Realized gains (losses) on investments:
Capital gain distributions received		481,705		564,614		1,286,380		3,638,954		52,754		38,486
Net realized gain (loss)		(417,093)		(428,833)		(7,174,622)		(1,803,267)		(57,254)		(4,847)
Realized gains (losses)		64,612		135,781		(5,888,242)		1,835,687		(4,500)		33,639
Unrealized appreciation (depreciation) during the period		(315,718)		1,282,943		3,417,279		6,797,213		(8,291)		119,866
Net increase (decrease) in net assets from operations		(90,525)		1,533,352		(1,965,470)		9,492,612		(8,451)		178,663
Changes from principal transactions:
Purchase payments		248,618		182,897		147,351		203,501		55,832		42,116
Transfers between sub-accounts and the company		(463,052)		236,823		(22,923,972)		(1,489,503)		(70,921)		82,995
Transfers on general account policy loans		412		(5,194)		(1,087)		(8,535)		(58)		(23)
Withdrawals		(110,587)		(162,838)		(911,099)		(1,719,466)		3,641		(60,059)
Annual contract fee		(543,103)		(553,555)		(279,542)		(336,801)		(101,531)		(94,635)
Net increase (decrease) in net assets from principal transactions		(867,712)		(301,867)		(23,968,349)		(3,350,804)		(113,037)		(29,606)
Total increase (decrease) in net assets		(958,237)		1,231,485		(25,933,819)		6,141,808		(121,488)		149,057
Net assets at beginning of period		8,011,669		6,780,184		44,487,685		38,345,877		760,938		611,881
Net assets at end of period	$	7,053,432	$	8,011,669	$	18,553,866	$	44,487,685	$	639,450	$	760,938
	2020		2019		2020		2019		2020		2019
Units, beginning of period		133,140		141,225		655,585		714,628		23,654		24,878
Units issued		11,841		31,349		108,921		91,140		5,639		9,004
Units redeemed		(28,803)		(39,434)		(493,833)		(150,183)		(9,787)		(10,228)
Units, end of period		116,178		133,140		270,673		655,585		19,506		23,654

See accompanying notes.

28 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS’ EQUITY

For the years ended December 31,

	Financial Industries Trust Series NAV				Fundamental All Cap Core Trust Series I				Fundamental All Cap Core Trust Series NAV
	2020		2019		2020		2019		2020		2019
Income:
Dividend distributions received	$	3,777	$	11,523	$	435	$	723	$	10,119	$	12,110
Expenses:
Mortality and expense risk and administrative charges		-		-		(591)		(575)		-		-
Net investment income (loss)		3,777		11,523		(156)		148		10,119		12,110
Realized gains (losses) on investments:
Capital gain distributions received		25,797		15,049		3,497		12,519		72,505		185,621
Net realized gain (loss)		(16,862)		(4,351)		6,452		(750)		73,959		20,194
Realized gains (losses)		8,935		10,698		9,949		11,769		146,464		205,815
Unrealized appreciation (depreciation) during the period		(981)		67,653		28,460		37,584		432,365		554,349
Net increase (decrease) in net assets from operations		11,731		89,874		38,253		49,501		588,948		772,274
Changes from principal transactions:
Purchase payments		17,878		29,137		1,169		221		370,122		213,127
Transfers between sub-accounts and the company		(21,037)		(49,932)		(69,102)		(58,860)		79,433		74,095
Transfers on general account policy loans		-		(177)		-		-		7,500		(29)
Withdrawals		(350)		(117,808)		(1,320)		(94)		(628,409)		(689,254)
Annual contract fee		(6,784)		(11,616)		(8,895)		(8,184)		(65,240)		(59,716)
Net increase (decrease) in net assets from principal transactions		(10,293)		(150,396)		(78,148)		(66,917)		(236,594)		(461,777)
Total increase (decrease) in net assets		1,438		(60,522)		(39,895)		(17,416)		352,354		310,497
Net assets at beginning of period		286,167		346,689		175,319		192,735		2,680,322		2,369,825
Net assets at end of period	$	287,605	$	286,167	$	135,424	$	175,319	$	3,032,676	$	2,680,322
	2020		2019		2020		2019		2020		2019
Units, beginning of period		6,644		10,602		2,989		4,466		72,382		87,406
Units issued		2,189		944		1,248		134		15,601		9,905
Units redeemed		(2,306)		(4,902)		(2,408)		(1,611)		(23,481)		(24,929)
Units, end of period		6,527		6,644		1,829		2,989		64,502		72,382

See accompanying notes.

29 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS’ EQUITY

For the years ended December 31,

	Fundamental Large Cap Value Trust Series I				Fundamental Large Cap Value Trust Series NAV				Opportunistic Fixed Income Trust Series I
	2020		2019		2020		2019		2020		2019
Income:
Dividend distributions received	$	34,191	$	37,759	$	74,820 $		98,339	$	57,834 $		96,920
Expenses:
Mortality and expense risk and administrative charges		(13,606)		(14,246)		-		-		(6,147)		(6,557)
Net investment income (loss)		20,585		23,513		74,820		98,339		51,687		90,363
Realized gains (losses) on investments:
Capital gain distributions received		61,901		53,137		129,809		130,903		(1)		(2)
Net realized gain (loss)		88,714		81,281		956,326		153,285		39,302		1,020
Realized gains (losses)		150,615		134,418		1,086,135		284,188		39,301		1,018
Unrealized appreciation (depreciation) during the period		193,688		783,374		(653,654)		1,976,580		141,388		(12,844)
Net increase (decrease) in net assets from operations		364,888		941,305		507,301		2,359,107		232,376		78,537
Changes from principal transactions:
Purchase payments		174,697		142,474		336,418		409,524		36,210		31,738
Transfers between sub-accounts and the company		(91,878)		62,085		(1,703,579)		84,269		(183,357)		582,421
Transfers on general account policy loans		393		1,621		(2,244)		(3,786)		100		107
Withdrawals		(12,409)		(154,727)		(801,064)		(110,055)		(252)		(125,446)
Annual contract fee		(308,990)		(286,673)		(91,827)		(102,603)		(90,568)		(89,266)
Net increase (decrease) in net assets from principal transactions		(238,187)		(235,220)		(2,262,296)		277,349		(237,867)		399,554
Total increase (decrease) in net assets		126,701		706,085		(1,754,995)		2,636,456		(5,491)		478,091
Net assets at beginning of period		3,547,692		2,841,607		9,105,907		6,469,451		1,543,098		1,065,007
Net assets at end of period	$	3,674,393	$	3,547,692	$	7,350,912	$	9,105,907	$	1,537,607	$	1,543,098
	2020		2019		2020		2019		2020		2019
Units, beginning of period		92,873		100,819		315,409		304,694		49,660		36,145
Units issued		6,481		9,073		154,258		43,668		20,348		30,854
Units redeemed		(13,121)		(17,019)		(242,352)		(32,953)		(27,521)		(17,339)
Units, end of period		86,233		92,873		227,315		315,409		42,487		49,660

See accompanying notes.

30 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS’ EQUITY

For the years ended December 31,

	Opportunistic Fixed Income Trust Series NAV				Global Trust Series I				Global Trust Series NAV
	2020		2019		2020		2019		2020		2019
Income:
Dividend distributions received	$	349,668	$	614,438	$	17,137	$	31,950	$	39,487	$	64,764
Expenses:
Mortality and expense risk and administrative charges		-		-		(6,593)		(8,009)		-		-
Net investment income (loss)		349,668		614,438		10,544		23,941		39,487		64,764
Realized gains (losses) on investments:
Capital gain distributions received		-		-		11,947		56,991		26,552		103,911
Net realized gain (loss)		6,272		(24,413)		(56,884)		(21,582)		(9,715)		(3,494)
Realized gains (losses)		6,272		(24,413)		(44,937)		35,409		16,837		100,417
Unrealized appreciation (depreciation) during the period		843,897		8,791		102,272		150,489		170,547		230,246
Net increase (decrease) in net assets from operations		1,199,837		598,816		67,879		209,839		226,871		395,427
Changes from principal transactions:
Purchase payments		279,259		207,596		10,492		24,098		79,279		81,099
Transfers between sub-accounts and the company		(927,042)		356,343		(23,225)		(103,958)		(40,423)		389,137
Transfers on general account policy loans		2,419		2,294		(160)		301		(4,920)		(4,491)
Withdrawals		(893,021)		(354,387)		(71,152)		(37,308)		(41,019)		(76,233)
Annual contract fee		(128,523)		(126,725)		(66,915)		(85,943)		(71,366)		(73,229)
Net increase (decrease) in net assets from principal transactions		(1,666,908)		85,121		(150,960)		(202,810)		(78,449)		316,283
Total increase (decrease) in net assets		(467,071)		683,937		(83,081)		7,029		148,422		711,710
Net assets at beginning of period		9,910,687		9,226,750		1,522,013		1,514,984		3,069,273		2,357,563
Net assets at end of period	$	9,443,616	$	9,910,687	$	1,438,932	$	1,522,013	$	3,217,695	$	3,069,273
	2020		2019		2020		2019		2020		2019
Units, beginning of period		284,473		281,707		45,508		52,210		146,862		130,924
Units issued		71,333		70,265		7,818		7,795		18,020		23,998
Units redeemed		(117,820)		(67,499)		(12,806)		(14,497)		(20,597)		(8,060)
Units, end of period		237,986		284,473		40,520		45,508		144,285		146,862

See accompanying notes.

31 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS’ EQUITY

For the years ended December 31,

	Health Sciences Trust Series I				Health Sciences Trust Series NAV				High Yield Trust Series I
	2020		2019		2020		2019		2020		2019
Income:
Dividend distributions received	$	-	$	-	$	-	$	-	$	150,647	$	137,791
Expenses:
Mortality and expense risk and administrative charges		(20,918)		(19,781)		-		-		(9,108)		(9,948)
Net investment income (loss)		(20,918)		(19,781)		-		-		141,539		127,843
Realized gains (losses) on investments:
Capital gain distributions received		616,412		391,659		807,423		487,670		(1)		(1)
Net realized gain (loss)		25,942		(191,267)		89,251		44,615		(35,928)		(43,669)
Realized gains (losses)		642,354		200,392		896,674		532,285		(35,929)		(43,670)
Unrealized appreciation (depreciation) during the period		784,742		1,133,510		941,900		1,087,744		24,146		271,166
Net increase (decrease) in net assets from operations		1,406,178		1,314,121		1,838,574		1,620,029		129,756		355,339
Changes from principal transactions:
Purchase payments		43,444		24,037		241,199		277,877		115,226		86,606
Transfers between sub-accounts and the company		(110,663)		(470,688)		70,175		(29,161)		(90,894)		(66,703)
Transfers on general account policy loans		(150)		(132)		194,862		(63,540)		-		385
Withdrawals		(100,698)		(281,438)		(393,668)		(248,244)		(33,781)		(53,485)
Annual contract fee		(162,690)		(131,503)		(112,420)		(106,681)		(234,020)		(218,630)
Net increase (decrease) in net assets from principal transactions		(330,757)		(859,724)		148		(169,749)		(243,469)		(251,827)
Total increase (decrease) in net assets		1,075,421		454,397		1,838,722		1,450,280		(113,713)		103,512
Net assets at beginning of period		5,557,998		5,103,601		7,141,453		5,691,173		2,626,340		2,522,828
Net assets at end of period	$	6,633,419	$	5,557,998	$	8,980,175	$	7,141,453	$	2,512,627	$	2,626,340
	2020		2019		2020		2019		2020		2019
Units, beginning of period		51,822		61,069		79,521		81,539		70,562		78,312
Units issued		2,605		3,134		13,168		10,266		8,248		7,537
Units redeemed		(5,656)		(12,381)		(14,115)		(12,284)		(15,028)		(15,287)
Units, end of period		48,771		51,822		78,574		79,521		63,782		70,562

See accompanying notes.

32 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS’ EQUITY

For the years ended December 31,

	High Yield Trust Series NAV				International Equity Index Series I				International Equity Index Series NAV
	2020		2019		2020		2019		2020		2019
Income:
Dividend distributions received	$	175,366	$	145,866	$	193,167	$	167,357	$	687,740	$	546,685
Expenses:
Mortality and expense risk and administrative charges		-		-		(27,676)		(29,173)		-		-
Net investment income (loss)		175,366		145,866		165,491		138,184		687,740		546,685
Realized gains (losses) on investments:
Capital gain distributions received		-		2		75,950		2		265,329		-
Net realized gain (loss)		25,122		3,848		20,307		(2,314)		(181,741)		406,363
Realized gains (losses)		25,122		3,850		96,257		(2,312)		83,588		406,363
Unrealized appreciation (depreciation) during the period		(28,982)		195,694		581,729		1,270,217		2,428,623		2,619,089
Net increase (decrease) in net assets from operations		171,506		345,410		843,477		1,406,089		3,199,951		3,572,137
Changes from principal transactions:
Purchase payments		58,217		138,474		20,926		18,553		354,071		383,155
Transfers between sub-accounts and the company		37,993		279,544		727,964		(902,059)		181,755		11,023,187
Transfers on general account policy loans		(69)		(1,420)		1,088		(172)		(6,529)		(7,948)
Withdrawals		(70,124)		(13,683)		(218,505)		(136,144)		(357,908)		(1,617,802)
Annual contract fee		(41,523)		(30,243)		(144,494)		(151,468)		(324,620)		(250,910)
Net increase (decrease) in net assets from principal transactions		(15,506)		372,672		386,979		(1,171,290)		(153,231)		9,529,682
Total increase (decrease) in net assets		156,000		718,082		1,230,456		234,799		3,046,720		13,101,819
Net assets at beginning of period		2,729,159		2,011,077		7,617,702		7,382,903		28,298,965		15,197,146
Net assets at end of period	$	2,885,159	$	2,729,159	$	8,848,158	$	7,617,702	$	31,345,685	$	28,298,965
	2020		2019		2020		2019		2020		2019
Units, beginning of period		100,052		85,515		518,592		607,637		476,451		310,723
Units issued		12,001		18,407		74,725		58,470		188,679		224,355
Units redeemed		(12,051)		(3,870)		(48,117)		(147,515)		(188,645)		(58,627)
Units, end of period		100,002		100,052		545,200		518,592		476,485		476,451

See accompanying notes.

33 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS’ EQUITY

For the years ended December 31,

	International Small Company Trust Series I				International Small Company Trust Series NAV				Disciplined Value International Trust Series I
	2020		2019		2020		2019		2020		2019
Income:
Dividend distributions received	$	9,818	$	10,866	$	33,561	$	34,302	$	84,238	$	113,740
Expenses:
Mortality and expense risk and administrative charges		(2,890)		(3,059)		-		-		(13,690)		(15,286)
Net investment income (loss)		6,928		7,807		33,561		34,302		70,548		98,454
Realized gains (losses) on investments:
Capital gain distributions received		16,201		20,655		54,148		62,701		(5)		(1)
Net realized gain (loss)		(8,306)		2,176		17,282		28,183		(72,328)		(31,859)
Realized gains (losses)		7,895		22,831		71,430		90,884		(72,333)		(31,860)
Unrealized appreciation (depreciation) during the period		29,387		63,708		107,484		163,655		187,085		389,923
Net increase (decrease) in net assets from operations		44,210		94,346		212,475		288,841		185,300		456,517
Changes from principal transactions:
Purchase payments		8,197		10,727		19,607		27,525		69,204		78,557
Transfers between sub-accounts and the company		7,823		58,832		107,427		190,443		368,886		(396,255)
Transfers on general account policy loans		319		722		(577)		1,235		1,502		(172)
Withdrawals		(37,054)		(48,256)		(159,378)		(123,357)		(75,757)		(19,911)
Annual contract fee		(23,269)		(25,429)		(32,854)		(35,895)		(178,108)		(195,626)
Net increase (decrease) in net assets from principal transactions		(43,984)		(3,404)		(65,775)		59,951		185,727		(533,407)
Total increase (decrease) in net assets		226		90,942		146,700		348,792		371,027		(76,890)
Net assets at beginning of period		526,293		435,351		1,564,832		1,216,040		4,222,352		4,299,242
Net assets at end of period	$	526,519	$	526,293	$	1,711,532	$	1,564,832	$	4,593,379	$	4,222,352
	2020		2019		2020		2019		2020		2019
Units, beginning of period		27,892		28,135		77,503		73,902		164,989		187,925
Units issued		4,492		5,144		11,769		14,345		30,650		15,264
Units redeemed		(6,495)		(5,387)		(11,081)		(10,744)		(21,053)		(38,200)
Units, end of period		25,889		27,892		78,191		77,503		174,586		164,989

See accompanying notes.

34 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS’ EQUITY

For the years ended December 31,

	Disciplined Value International Trust Series NAV				Investment Quality Bond Trust Series I				Investment Quality Bond Trust Series NAV
	2020		2019		2020		2019		2020		2019
Income:
Dividend distributions received	$	66,460	$	146,027	$	88,699	$	97,786	$	27,229	$	18,430
Expenses:
Mortality and expense risk and administrative charges		-		-		(16,858)		(17,401)		-		-
Net investment income (loss)		66,460		146,027		71,841		80,385		27,229		18,430
Realized gains (losses) on investments:
Capital gain distributions received		-		1		2,098		1		629		1
Net realized gain (loss)		(362,752)		89,949		16,905		(16,015)		35,729		(1,904)
Realized gains (losses)		(362,752)		89,950		19,003		(16,014)		36,358		(1,903)
Unrealized appreciation (depreciation) during the period		207,852		364,827		246,723		296,191		15,474		51,305
Net increase (decrease) in net assets from operations		(88,440)		600,804		337,567		360,562		79,061		67,832
Changes from principal transactions:
Purchase payments		46,847		62,862		60,120		67,114		51,970		42,291
Transfers between sub-accounts and the company		(1,388,144)		(158,610)		(50,915)		(541,902)		187,174		(29,354)
Transfers on general account policy loans		1,555		109		12,264		978		764		(212)
Withdrawals		(304,547)		(447,868)		(155,367)		(84,919)		(60,498)		(96,065)
Annual contract fee		(55,759)		(67,780)		(170,277)		(176,545)		(20,815)		(15,878)
Net increase (decrease) in net assets from principal transactions		(1,700,048)		(611,287)		(304,175)		(735,274)		158,595		(99,218)
Total increase (decrease) in net assets		(1,788,488)		(10,483)		33,392		(374,712)		237,656		(31,386)
Net assets at beginning of period		5,181,055		5,191,538		3,904,115		4,278,827		696,027		727,413
Net assets at end of period	$	3,392,567	$	5,181,055	$	3,937,507	$	3,904,115	$	933,683	$	696,027
	2020		2019		2020		2019		2020		2019
Units, beginning of period		289,148		325,673		109,168		129,783		36,999		42,284
Units issued		31,667		52,753		3,172		4,405		35,595		10,716
Units redeemed		(137,476)		(89,278)		(11,411)		(25,020)		(27,250)		(16,001)
Units, end of period		183,339		289,148		100,929		109,168		45,344		36,999

See accompanying notes.

35 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS’ EQUITY

For the years ended December 31,

	Lifestyle Balanced Portfolio Series NAV				Lifestyle Conservative Portfolio Series NAV				Lifestyle Growth Portfolio Series I
	2020		2019		2020 (a)		2019		2020		2019
Income:
Dividend distributions received	$	353	$	216	$	6,382	$	-	$	19,393	$	17,979
Expenses:
Mortality and expense risk and administrative charges		-		-		-		-		(3,216)		(1,647)
Net investment income (loss)		353		216		6,382		-		16,177		16,332
Realized gains (losses) on investments:
Capital gain distributions received		466		315		4,630		-		39,661		5,497
Net realized gain (loss)		(53)		19		210		-		(3,160)		488
Realized gains (losses)		413		334		4,840		-		36,501		5,985
Unrealized appreciation (depreciation) during the period		695		837		12,196		-		26,321		50,156
Net increase (decrease) in net assets from operations		1,461		1,387		23,418		-		78,999		72,473
Changes from principal transactions:
Purchase payments		1,250		3,838		11,379		-		438		438
Transfers between sub-accounts and the company		1,181		(519)		201,867		-		(220,445)		853,380
Transfers on general account policy loans		-		-		-		-		-		-
Withdrawals		(1)		(6)		(5)		-		261		-
Annual contract fee		(314)		(297)		(5,876)		-		(11,158)		(4,664)
Net increase (decrease) in net assets from principal transactions		2,116		3,016		207,365		-		(230,904)		849,154
Total increase (decrease) in net assets		3,577		4,403		230,783		-		(151,905)		921,627
Net assets at beginning of period		11,180		6,777		-		-		1,029,145		107,518
Net assets at end of period	$	14,757	$	11,180	$	230,783	$	-	$	877,240	$	1,029,145
	2020		2019		2020		2019		2020		2019
Units, beginning of period		775		554		-		-		77,174		9,806
Units issued		208		280		16,232		-		4,630		69,168
Units redeemed		(75)		(59)		(304)		-		(23,625)		(1,800)
Units, end of period		908		775		15,928		-		58,179		77,174
	(a) Sub-account available in prior year but no activity.

See accompanying notes.

36 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS’ EQUITY

For the years ended December 31,

	Lifestyle Growth Portfolio Series NAV				Lifestyle Moderate Portfolio Series NAV				M Capital Appreciation
	2020		2019		2020		2019		2020		2019
Income:
Dividend distributions received	$	67,004	$	60,397	$	2,730	$	1,483	$	-	$	1,102
Expenses:
Mortality and expense risk and administrative charges		-		-		-		-		-		-
Net investment income (loss)		67,004		60,397		2,730		1,483		-		1,102
Realized gains (losses) on investments:
Capital gain distributions received		142,991		135,696		3,149		1,050		10,256		28,355
Net realized gain (loss)		12,483		957		166		34		(35,564)		(13,595)
Realized gains (losses)		155,474		136,653		3,315		1,084		(25,308)		14,760
Unrealized appreciation (depreciation) during the period		115,093		354,691		4,484		1,658		153,226		65,433
Net increase (decrease) in net assets from operations		337,571		551,741		10,529		4,225		127,918		81,295
Changes from principal transactions:
Purchase payments		98,762		134,409		4,038		4,422		-		-
Transfers between sub-accounts and the company		(672,399)		311,088		23,824		66,783		23,198		22,313
Transfers on general account policy loans		115		671		-		-		-		-
Withdrawals		(106,540)		(61,236)		(21)		1		-		-
Annual contract fee		(67,097)		(70,603)		(3,416)		(1,301)		(6,934)		(6,960)
Net increase (decrease) in net assets from principal transactions		(747,159)		314,329		24,425		69,905		16,264		15,353
Total increase (decrease) in net assets		(409,588)		866,070		34,954		74,130		144,182		96,648
Net assets at beginning of period		3,367,122		2,501,052		74,130		-		362,878		266,230
Net assets at end of period	$	2,957,534	$	3,367,122	$	109,084	$	74,130	$	507,060	$	362,878
	2020		2019		2020		2019		2020		2019
Units, beginning of period		219,120		197,788		5,312		-		2,865		2,708
Units issued		5,990		31,039		1,894		5,408		1,175		825
Units redeemed		(55,738)		(9,707)		(241)		(96)		(640)		(668)
Units, end of period		169,372		219,120		6,965		5,312		3,400		2,865

See accompanying notes.

37 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS’ EQUITY

For the years ended December 31,

	M Large Cap Growth				Managed Volatility Aggressive Portfolio Series I				Managed Volatility Aggressive Portfolio Series NAV
	2020		2019		2020		2019		2020		2019
Income:
Dividend distributions received	$	-	$	-	$	19,339	$	16,052	$	73,414	$	74,395
Expenses:
Mortality and expense risk and administrative charges		-		-		(6,473)		(7,003)		-		-
Net investment income (loss)		-		-		12,866		9,049		73,414		74,395
Realized gains (losses) on investments:
Capital gain distributions received		2		1		15,268		121,932		54,494		498,931
Net realized gain (loss)		-		-		(10,734)		8,173		(71,227)		35,451
Realized gains (losses)		2		1		4,534		130,105		(16,733)		534,382
Unrealized appreciation (depreciation) during the period		2		3		(74,170)		80,737		(388,039)		305,475
Net increase (decrease) in net assets from operations		4		4		(56,770)		219,891		(331,358)		914,252
Changes from principal transactions:
Purchase payments		-		-		21,132		28,518		629,999		831,920
Transfers between sub-accounts and the company		-		-		245,840		(91,792)		(344,217)		(148,038)
Transfers on general account policy loans		-		-		-		-		(58,727)		(2,775)
Withdrawals		-		-		(39,069)		(5,875)		(240,578)		(49,136)
Annual contract fee		-		-		(58,014)		(55,626)		(228,205)		(227,059)
Net increase (decrease) in net assets from principal transactions		-		-		169,889		(124,775)		(241,728)		404,912
Total increase (decrease) in net assets		4		4		113,119		95,116		(573,086)		1,319,164
Net assets at beginning of period		13		9		1,258,261		1,163,145		5,665,838		4,346,674
Net assets at end of period	$	17	$	13	$	1,371,380	$	1,258,261	$	5,092,752	$	5,665,838
	2020		2019		2020		2019		2020		2019
Units, beginning of period		-		-		35,747		39,564		232,177		215,205
Units issued		-		-		10,234		2,912		43,613		37,791
Units redeemed		-		-		(5,116)		(6,729)		(56,574)		(20,819)
Units, end of period		-		-		40,865		35,747		219,216		232,177

See accompanying notes.

38 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS’ EQUITY

For the years ended December 31,

	Managed Volatility Balanced Portfolio Series I				Managed Volatility Balanced Portfolio Series NAV				Managed Volatility Conservative Portfolio Series I
	2020		2019		2020		2019		2020		2019
Income:
Dividend distributions received	$	82,007	$	71,944	$	421,345	$	330,860	$	31,628	$	25,884
Expenses:
Mortality and expense risk and administrative charges		(18,764)		(20,224)		-		-		(5,587)		(6,247)
Net investment income (loss)		63,243		51,720		421,345		330,860		26,041		19,637
Realized gains (losses) on investments:
Capital gain distributions received		170,620		161,251		869,605		725,979		13,451		-
Net realized gain (loss)		(120,600)		(14,485)		(224,223)		(360,134)		2,892		(11,328)
Realized gains (losses)		50,020		146,766		645,382		365,845		16,343		(11,328)
Unrealized appreciation (depreciation) during the period		(109,174)		373,629		(788,518)		1,997,774		(12,629)		129,870
Net increase (decrease) in net assets from operations		4,089		572,115		278,209		2,694,479		29,755		138,179
Changes from principal transactions:
Purchase payments		61,494		70,632		303,356		453,250		9,573		10,128
Transfers between sub-accounts and the company		24,808		125,187		604,447		(312,003)		(20,246)		(222,664)
Transfers on general account policy loans		-		7,797		(51,352)		(34,683)		-		-
Withdrawals		(227,555)		(25,380)		(489,334)		(1,025,062)		(822)		(2,629)
Annual contract fee		(248,053)		(306,652)		(465,415)		(488,926)		(59,245)		(62,404)
Net increase (decrease) in net assets from principal transactions		(389,306)		(128,416)		(98,298)		(1,407,424)		(70,740)		(277,569)
Total increase (decrease) in net assets		(385,217)		443,699		179,911		1,287,055		(40,985)		(139,390)
Net assets at beginning of period		3,764,218		3,320,519		16,886,750		15,599,695		1,109,150		1,248,540
Net assets at end of period	$	3,379,001	$	3,764,218	$	17,066,661	$	16,886,750	$	1,068,165	$	1,109,150
	2020		2019		2020		2019		2020		2019
Units, beginning of period		94,109		97,349		730,465		796,399		29,523		37,037
Units issued		14,197		7,738		46,468		45,378		5,552		3,082
Units redeemed		(24,566)		(10,978)		(51,501)		(111,312)		(7,385)		(10,596)
Units, end of period		83,740		94,109		725,432		730,465		27,690		29,523

See accompanying notes.

39 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS’ EQUITY

For the years ended December 31,

	Managed Volatility Conservative Portfolio Series NAV				Managed Volatility Growth Portfolio Series I				Managed Volatility Growth Portfolio Series NAV
	2020		2019		2020		2019		2020		2019
Income:
Dividend distributions received	$	268,496	$	186,251	$	54,210	$	48,601	$	468,528	$	397,212
Expenses:
Mortality and expense risk and administrative charges		-		-		(13,291)		(14,696)		-		-
Net investment income (loss)		268,496		186,251		40,919		33,905		468,528		397,212
Realized gains (losses) on investments:
Capital gain distributions received		120,881		-		154,125		202,555		1,255,110		1,602,236
Net realized gain (loss)		23,621		(5,793)		(56,900)		(19,606)		(602,139)		(224,433)
Realized gains (losses)		144,502		(5,793)		97,225		182,949		652,971		1,377,803
Unrealized appreciation (depreciation) during the period		(139,802)		672,237		(205,310)		263,822		(1,428,154)		2,090,131
Net increase (decrease) in net assets from operations		273,196		852,695		(67,166)		480,676		(306,655)		3,865,146
Changes from principal transactions:
Purchase payments		1,939,800		1,831,190		100,149		97,683		1,322,300		1,668,729
Transfers between sub-accounts and the company		(687,929)		149,667		111,007		(181,104)		(851,219)		(485,248)
Transfers on general account policy loans		(56,467)		(66,439)		1,619		1,146		(60,924)		9,714
Withdrawals		(76,174)		(288,983)		(222,531)		(4,398)		(626,425)		(1,257,761)
Annual contract fee		(364,493)		(315,723)		(251,666)		(246,736)		(544,100)		(602,411)
Net increase (decrease) in net assets from principal transactions		754,737		1,309,712		(261,422)		(333,409)		(760,368)		(666,977)
Total increase (decrease) in net assets		1,027,933		2,162,407		(328,588)		147,267		(1,067,023)		3,198,169
Net assets at beginning of period		7,855,994		5,693,587		2,923,915		2,776,648		23,201,684		20,003,515
Net assets at end of period	$	8,883,927	$	7,855,994	$	2,595,327	$	2,923,915	$	22,134,661	$	23,201,684
	2020		2019		2020		2019		2020		2019
Units, beginning of period		381,750		314,017		76,203		85,836		982,810		1,014,085
Units issued		128,674		106,206		13,442		6,185		106,614		70,105
Units redeemed		(93,042)		(38,473)		(20,492)		(15,818)		(138,812)		(101,380)
Units, end of period		417,382		381,750		69,153		76,203		950,612		982,810

See accompanying notes.

40 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS’ EQUITY

For the years ended December 31,

	Managed Volatility Moderate Portfolio Series I				Managed Volatility Moderate Portfolio Series NAV				Mid Cap Index Trust Series I
	2020		2019		2020		2019		2020		2019
Income:
Dividend distributions received	$	49,911	$	41,428	$	195,324	$	152,922	$	139,029	$	102,662
Expenses:
Mortality and expense risk and administrative charges		(9,861)		(10,512)		-		-		(40,114)		(41,600)
Net investment income (loss)		40,050		30,916		195,324		152,922		98,915		61,062
Realized gains (losses) on investments:
Capital gain distributions received		84,301		72,697		337,222		258,260		923,581		717,331
Net realized gain (loss)		(38,406)		(49,962)		(40,021)		(36,362)		(203,891)		(92,286)
Realized gains (losses)		45,895		22,735		297,201		221,898		719,690		625,045
Unrealized appreciation (depreciation) during the period		(42,864)		257,153		(261,783)		690,690		309,861		1,284,551
Net increase (decrease) in net assets from operations		43,081		310,804		230,742		1,065,510		1,128,466		1,970,658
Changes from principal transactions:
Purchase payments		107,963		73,329		58,854		213,014		280,261		214,752
Transfers between sub-accounts and the company		(29,036)		(249,484)		162,540		(87,031)		(250,785)		565,212
Transfers on general account policy loans		579		868		(57,615)		(15,083)		257		3,742
Withdrawals		752		(2,952)		(250,209)		(84,844)		(390,235)		(67,147)
Annual contract fee		(229,951)		(198,864)		(119,243)		(130,885)		(563,892)		(529,847)
Net increase (decrease) in net assets from principal transactions		(149,693)		(377,103)		(205,673)		(104,829)		(924,394)		186,712
Total increase (decrease) in net assets		(106,612)		(66,299)		25,069		960,681		204,072		2,157,370
Net assets at beginning of period		2,024,482		2,090,781		7,324,186		6,363,505		10,084,720		7,927,350
Net assets at end of period	$	1,917,870	$	2,024,482	$	7,349,255	$	7,324,186	$	10,288,792	$	10,084,720
	2020		2019		2020		2019		2020		2019
Units, beginning of period		49,625		58,445		323,053		327,981		174,499		171,433
Units issued		7,971		11,805		30,705		13,757		19,603		29,598
Units redeemed		(11,792)		(20,625)		(39,864)		(18,685)		(36,543)		(26,532)
Units, end of period		45,804		49,625		313,894		323,053		157,559		174,499

See accompanying notes.

41 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS’ EQUITY

For the years ended December 31,

	Mid Cap Index Trust Series NAV				Mid Cap Stock Trust Series I				Mid Cap Stock Trust Series NAV
	2020		2019		2020		2019		2020		2019
Income:
Dividend distributions received	$	196,576	$	160,956	$	-	$	-	$	-	$	-
Expenses:
Mortality and expense risk and administrative charges		-		-		(18,075)		(15,834)		-		-
Net investment income (loss)		196,576		160,956		(18,075)		(15,834)		-		-
Realized gains (losses) on investments:
Capital gain distributions received		1,268,341		1,115,907		754,834		659,166		1,940,279		1,369,955
Net realized gain (loss)		(365,073)		(89,455)		77,190		222,521		444,822		40,635
Realized gains (losses)		903,268		1,026,452		832,024		881,687		2,385,101		1,410,590
Unrealized appreciation (depreciation) during the period		625,062		1,895,937		1,895,727		380,287		3,912,049		803,647
Net increase (decrease) in net assets from operations		1,724,906		3,083,345		2,709,676		1,246,140		6,297,150		2,214,237
Changes from principal transactions:
Purchase payments		200,155		490,566		24,456		26,219		69,446		445,784
Transfers between sub-accounts and the company		(1,064,086)		60,692		(67,889)		(103,060)		4,419,135		305,972
Transfers on general account policy loans		(13,083)		(19,785)		(400)		1,206		(2,559)		(64)
Withdrawals		(938,158)		(1,349,478)		(96,490)		(175,221)		(1,097,745)		(230,509)
Annual contract fee		(269,903)		(303,739)		(131,486)		(118,925)		(154,235)		(134,990)
Net increase (decrease) in net assets from principal transactions		(2,085,075)		(1,121,744)		(271,809)		(369,781)		3,234,042		386,193
Total increase (decrease) in net assets		(360,169)		1,961,601		2,437,867		876,359		9,531,192		2,600,430
Net assets at beginning of period		14,488,777		12,527,176		4,487,434		3,611,075		8,798,354		6,197,924
Net assets at end of period	$	14,128,608	$	14,488,777	$	6,925,301	$	4,487,434	$	18,329,546	$	8,798,354
	2020		2019		2020		2019		2020		2019
Units, beginning of period		347,586		377,811		81,156		87,718		67,518		64,035
Units issued		89,158		51,434		5,590		12,035		51,120		29,027
Units redeemed		(137,503)		(81,659)		(10,845)		(18,597)		(33,631)		(25,544)
Units, end of period		299,241		347,586		75,901		81,156		85,007		67,518

42 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS’ EQUITY

For the years ended December 31,

	Mid Value Trust Series I				Mid Value Trust Series NAV				Money Market Trust Series I
	2020		2019		2020		2019		2020		2019
Income:
Dividend distributions received	$	60,095	$	42,435	$	146,517	$	111,233	$	88,874	$	454,311
Expenses:
Mortality and expense risk and administrative charges		(11,286)		(11,455)		-		-		(112,948)		(91,802)
Net investment income (loss)		48,809		30,980		146,517		111,233		(24,074)		362,509
Realized gains (losses) on investments:
Capital gain distributions received		85,353		433,204		202,395		1,232,694		(4)		(3)
Net realized gain (loss)		(273,622)		(103,305)		(1,369,419)		(246,929)		-		-
Realized gains (losses)		(188,269)		329,899		(1,167,024)		985,765		(4)		(3)
Unrealized appreciation (depreciation) during the period		357,274		314,459		2,122,467		554,792		(3)		1
Net increase (decrease) in net assets from operations		217,814		675,338		1,101,960		1,651,790		(24,081)		362,507
Changes from principal transactions:
Purchase payments		13,109		8,841		144,869		202,242		379,576		249,055
Transfers between sub-accounts and the company		(507,136)		999,271		(808,392)		5,433		5,973,153		8,060,298
Transfers on general account policy loans		929		(678)		(8,807)		(10,084)		919		(19,835)
Withdrawals		1,042		(26,783)		(555,612)		(480,721)		(199,616)		(169,552)
Annual contract fee		(101,950)		(104,993)		(113,094)		(109,172)		(1,348,844)		(1,068,275)
Net increase (decrease) in net assets from principal transactions		(594,006)		875,658		(1,341,036)		(392,302)		4,805,188		7,051,691
Total increase (decrease) in net assets		(376,192)		1,550,996		(239,076)		1,259,488		4,781,107		7,414,198
Net assets at beginning of period		4,542,025		2,991,029		9,979,857		8,720,369		26,285,929		18,871,731
Net assets at end of period	$	4,165,833	$	4,542,025	$	9,740,781	$	9,979,857	$	31,067,036	$	26,285,929
	2020		2019		2020		2019		2020		2019
Units, beginning of period		127,097		99,663		175,374		183,104		1,225,903		904,658
Units issued		5,036		56,111		103,158		31,146		454,648		771,831
Units redeemed		(25,542)		(28,677)		(122,527)		(38,876)		(234,513)		(450,586)
Units, end of period		106,591		127,097		156,005		175,374		1,446,038		1,225,903

43 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS’ EQUITY

For the years ended December 31,

	Money-Market Trust Series  NAV				PIMCO All Asset				Real Estate Securities Trust Series I
	2020		2019		2020		2019		2020		2019
Income:
Dividend distributions received	$	216,997	$	1,240,217	$	248,977	$	138,363	$	164,260	$	190,280
Expenses:
Mortality and expense risk and administrative charges		-		-		(8,605)		(8,835)		(45,184)		(51,320)
Net investment income (loss)		216,997		1,240,217		240,372		129,528		119,076		138,960
Realized gains (losses) on investments:
Capital gain distributions received		(1)		-		-		-		977,761		72,381
Net realized gain (loss)		-		-		(57,557)		(3,592)		265,571		341,312
Realized gains (losses)		(1)		-		(57,557)		(3,592)		1,243,332		413,693
Unrealized appreciation (depreciation) during the period		-		(1)		248,174		430,902		(2,007,192)		1,647,748
Net increase (decrease) in net assets from operations		216,996		1,240,216		430,989		556,838		(644,784)		2,200,401
Changes from principal transactions:
Purchase payments		3,579,416		4,931,755		126,765		106,931		112,026		110,472
Transfers between sub-accounts and the company		(6,083,134)		(1,597,038)		27,115		186,227		(92,990)		154,732
Transfers on general account policy loans		(116,615)		(254,227)		-		(41)		12,170		(4,249)
Withdrawals		(8,361,103)		(5,596,102)		(298,974)		(70,251)		(350,360)		(278,639)
Annual contract fee		(1,058,899)		(1,077,371)		(164,034)		(168,016)		(367,318)		(383,448)
Net increase (decrease) in net assets from principal transactions		(12,040,335)		(3,592,983)		(309,128)		54,850		(686,472)		(401,132)
Total increase (decrease) in net assets		(11,823,339)		(2,352,767)		121,861		611,688		(1,331,256)		1,799,269
Net assets at beginning of period		61,796,625		64,149,392		5,553,629		4,941,941		9,601,888		7,802,619
Net assets at end of period	$	49,973,286	$	61,796,625	$	5,675,490	$	5,553,629	$	8,270,632	$	9,601,888
	2020		2019		2020		2019		2020		2019
Units, beginning of period		5,922,138		6,269,924		269,335		266,790		42,382		44,393
Units issued		5,326,142		3,158,645		35,961		18,011		1,204		3,010
Units redeemed		(6,475,676)		(3,506,431)		(48,886)		(15,466)		(4,736)		(5,021)
Units, end of period		4,772,604		5,922,138		256,410		269,335		38,850		42,382

See accompanying notes.

44 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS’ EQUITY

For the years ended December 31,

	Real Estate Securities Trust Series NAV				Science & Technology Trust Series I				Science & Technology Trust Series NAV
	2020		2019		2020		2019		2020		2019
Income:
Dividend distributions received	$	224,246	$	290,161	$	-	$	12,191	$	-	$	12,354
Expenses:
Mortality and expense risk and administrative charges		-		-		(44,173)		(34,576)		-		-
Net investment income (loss)		224,246		290,161		(44,173)		(22,385)		-		12,354
Realized gains (losses) on investments:
Capital gain distributions received		1,303,145		108,204		1,364,748		1,680,519		1,207,577		1,291,641
Net realized gain (loss)		(8,906)		635,178		581,115		275,683		1,185,199		47,147
Realized gains (losses)		1,294,239		743,382		1,945,863		1,956,202		2,392,776		1,338,788
Unrealized appreciation (depreciation) during the period		(2,617,769)		2,358,338		3,969,349		957,345		2,670,517		1,171,605
Net increase (decrease) in net assets from operations		(1,099,284)		3,391,881		5,871,039		2,891,162		5,063,293		2,522,747
Changes from principal transactions:
Purchase payments		296,588		370,682		93,995		61,623		327,803		302,060
Transfers between sub-accounts and the company		(2,209,578)		(113,796)		(88,950)		196,787		939,725		608,231
Transfers on general account policy loans		(10,999)		(3,986)		(1,573)		(9,722)		(25,074)		(11,339)
Withdrawals		(790,776)		(653,382)		(151,283)		(238,912)		(324,758)		(1,217,609)
Annual contract fee		(145,473)		(174,339)		(383,466)		(296,625)		(190,037)		(167,188)
Net increase (decrease) in net assets from principal transactions		(2,860,238)		(574,821)		(531,277)		(286,849)		727,659		(485,845)
Total increase (decrease) in net assets		(3,959,522)		2,817,060		5,339,762		2,604,313		5,790,952		2,036,902
Net assets at beginning of period		14,346,206		11,529,146		10,495,985		7,891,672		9,290,608		7,253,706
Net assets at end of period	$	10,386,684	$	14,346,206	$	15,835,747	$	10,495,985	$	15,081,560	$	9,290,608
	2020		2019		2020		2019		2020		2019
Units, beginning of period		70,696		73,556		156,118		160,836		154,096		166,136
Units issued		27,027		16,705		17,819		16,517		172,385		51,568
Units redeemed		(43,513)		(19,565)		(23,215)		(21,235)		(167,735)		(63,608)
Units, end of period		54,210		70,696		150,722		156,118		158,746		154,096

See accompanying notes.

45 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS’ EQUITY

For the years ended December 31,

	Select Bond Trust Series I				Select Bond Trust Series NAV				Short Term Government Income Trust Series I
	2020		2019		2020		2019		2020		2019
Income:
Dividend distributions received	$	99,559	$	86,267	$	44,544	$	32,687	$	46,215	$	81,533
Expenses:
Mortality and expense risk and administrative charges		(12,902)		(18,298)		-		-		(11,472)		(12,370)
Net investment income (loss)		86,657		67,969		44,544		32,687		34,743		69,163
Realized gains (losses) on investments:
Capital gain distributions received		-		-		-		-		-		(2)
Net realized gain (loss)		34,157		(44,226)		15,277		(2,091)		(14,322)		(10,011)
Realized gains (losses)		34,157		(44,226)		15,277		(2,091)		(14,322)		(10,013)
Unrealized appreciation (depreciation) during the period		131,902		386,740		58,516		72,052		52,107		16,528
Net increase (decrease) in net assets from operations		252,716		410,483		118,337		102,648		72,528		75,678
Changes from principal transactions:
Purchase payments		10,603		11,803		81,814		141,536		82,246		49,084
Transfers between sub-accounts and the company		(201,212)		(3,127,366)		75,307		(35,856)		(2,123,408)		3,371,115
Transfers on general account policy loans		(26)		812		7,974		7,032		(72)		375
Withdrawals		(469)		(108,526)		(7,175)		(75,522)		(20,356)		(4,155)
Annual contract fee		(93,394)		(109,389)		(57,641)		(55,748)		(209,203)		(157,656)
Net increase (decrease) in net assets from principal transactions		(284,498)		(3,332,666)		100,279		(18,558)		(2,270,793)		3,258,763
Total increase (decrease) in net assets		(31,782)		(2,922,183)		218,616		84,090		(2,198,265)		3,334,441
Net assets at beginning of period		3,291,370		6,213,553		1,271,955		1,187,865		4,923,922		1,589,481
Net assets at end of period	$	3,259,588	$	3,291,370	$	1,490,571	$	1,271,955	$	2,725,657	$	4,923,922
	2020		2019		2020		2019		2020		2019
Units, beginning of period		262,554		537,193		97,771		99,532		451,725		152,384
Units issued		37,887		37,255		25,253		12,705		80,510		323,652
Units redeemed		(60,832)		(311,894)		(18,041)		(14,466)		(286,928)		(24,311)
Units, end of period		239,609		262,554		104,983		97,771		245,307		451,725

See accompanying notes.

46 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS’ EQUITY

For the years ended December 31,

	Short Term Government Income Trust Series NAV				Small Cap Index Trust Series I				Small Cap Index Trust Series NAV
	2020		2019		2020		2019		2020		2019
Income:
Dividend distributions received	$	86,363	$	86,615	$	51,751	$	53,199	$	111,006	$	91,903
Expenses:
Mortality and expense risk and administrative charges		-		-		(14,881)		(21,724)		-		-
Net investment income (loss)		86,363		86,615		36,870		31,475		111,006		91,903
Realized gains (losses) on investments:
Capital gain distributions received		-		(1)		268,660		556,190		557,778		824,218
Net realized gain (loss)		43,535		(26,573)		(92,581)		(151,717)		(890,589)		(306,374)
Realized gains (losses)		43,535		(26,574)		176,079		404,473		(332,811)		517,844
Unrealized appreciation (depreciation) during the period		21,403		96,150		453,046		697,061		1,873,050		1,423,967
Net increase (decrease) in net assets from operations		151,301		156,191		665,995		1,133,009		1,651,245		2,033,714
Changes from principal transactions:
Purchase payments		29,302		43,642		8,717		8,749		76,499		287,879
Transfers between sub-accounts and the company		261,472		341,951		(131,400)		(2,255,718)		(862,799)		(113,982)
Transfers on general account policy loans		-		-		-		188		(38,129)		(5,668)
Withdrawals		(475,677)		(644,711)		(149,872)		(14,001)		(558,681)		(1,644,171)
Annual contract fee		(59,789)		(53,604)		(41,310)		(75,551)		(139,805)		(156,950)
Net increase (decrease) in net assets from principal transactions		(244,692)		(312,722)		(313,865)		(2,336,333)		(1,522,915)		(1,632,892)
Total increase (decrease) in net assets		(93,391)		(156,531)		352,130		(1,203,324)		128,330		400,822
Net assets at beginning of period		5,166,181		5,322,712		4,270,074		5,473,398		9,278,833		8,878,011
Net assets at end of period	$	5,072,790	$	5,166,181	$	4,622,204	$	4,270,074	$	9,407,163	$	9,278,833
	2020		2019		2020		2019		2020		2019
Units, beginning of period		455,948		485,904		97,502		155,055		243,880		291,837
Units issued		163,299		147,884		1,810		6,319		105,611		39,694
Units redeemed		(187,292)		(177,840)		(10,578)		(63,872)		(142,274)		(87,651)
Units, end of period		431,955		455,948		88,734		97,502		207,217		243,880

See accompanying notes.

47 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS’ EQUITY

For the years ended December 31,

	Small Cap Opportunities Trust Series I				Small Cap Opportunities Trust Series NAV				Small Cap Stock Trust Series I
	2020		2019		2020		2019		2020		2019
Income:
Dividend distributions received	$	73,721	$	48,726	$	3,039	$	1,536	$	-	$	-
Expenses:
Mortality and expense risk and administrative charges		(64,133)		(75,516)		-		-		(6,638)		(7,015)
Net investment income (loss)		9,588		(26,790)		3,039		1,536		(6,638)		(7,015)
Realized gains (losses) on investments:
Capital gain distributions received		609,430		1,033,728		23,546		28,449		171,495		400,383
Net realized gain (loss)		(506,729)		(313,900)		(23,973)		(42,121)		(12,773)		55,251
Realized gains (losses)		102,701		719,828		(427)		(13,672)		158,722		455,634
Unrealized appreciation (depreciation) during the period		765,440		2,018,523		55,952		93,163		475,092		(41,718)
Net increase (decrease) in net assets from operations		877,729		2,711,561		58,564		81,027		627,176		406,901
Changes from principal transactions:
Purchase payments		305,581		338,840		35,628		43,808		4,429		4,302
Transfers between sub-accounts and the company		(202,502)		(241,826)		(31,930)		42,515		(40,887)		(76,369)
Transfers on general account policy loans		29,526		(23,900)		(26)		(33)		(122)		82
Withdrawals		(388,157)		(588,050)		610		(120,084)		(67,009)		(37,846)
Annual contract fee		(757,093)		(809,657)		(9,571)		(13,077)		(72,531)		(69,314)
Net increase (decrease) in net assets from principal transactions		(1,012,645)		(1,324,593)		(5,289)		(46,871)		(176,120)		(179,145)
Total increase (decrease) in net assets		(134,916)		1,386,968		53,275		34,156		451,056		227,756
Net assets at beginning of period		12,842,730		11,455,762		365,032		330,876		1,403,774		1,176,018
Net assets at end of period	$	12,707,814	$	12,842,730	$	418,307	$	365,032	$	1,854,830	$	1,403,774
	2020		2019		2020		2019		2020		2019
Units, beginning of period		264,607		294,387		13,764		15,670		34,812		40,024
Units issued		3,339		2,093		5,104		6,133		6,049		8,341
Units redeemed		(28,138)		(31,873)		(4,519)		(8,039)		(10,461)		(13,553)
Units, end of period		239,808		264,607		14,349		13,764		30,400		34,812

See accompanying notes.

48 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS’ EQUITY

For the years ended December 31,

	Small Cap Stock Trust Series NAV				Small Cap Value Trust Series I				Small Cap Value Trust Series NAV
	2020		2019		2020		2019		2020		2019
Income:
Dividend distributions received	$	-	$	-	$	8,930	$	4,668	$	70,824	$	47,934
Expenses:
Mortality and expense risk and administrative charges		-		-		(2,733)		(3,209)		-		-
Net investment income (loss)		-		-		6,197		1,459		70,824		47,934
Realized gains (losses) on investments:
Capital gain distributions received		422,298		620,615		99,142		56,745		750,839		512,665
Net realized gain (loss)		(21,504)		39,566		(104,186)		(58,802)		(1,589,933)		(254,659)
Realized gains (losses)		400,794		660,181		(5,044)		(2,057)		(839,094)		258,006
Unrealized appreciation (depreciation) during the period		1,143,122		3,782		(36,338)		165,710		365,318		1,400,431
Net increase (decrease) in net assets from operations		1,543,916		663,963		(35,185)		165,112		(402,952)		1,706,371
Changes from principal transactions:
Purchase payments		98,411		179,955		2,200		1,725		264,718		241,308
Transfers between sub-accounts and the company		842,827		(19,198)		198,698		89,806		(543,352)		575,640
Transfers on general account policy loans		(116)		(526)		-		-		1,754		4,731
Withdrawals		(185,852)		(7,598)		(129)		(39,432)		(500,844)		(178,478)
Annual contract fee		(70,515)		(62,525)		(26,753)		(26,840)		(83,949)		(105,361)
Net increase (decrease) in net assets from principal transactions		684,755		90,108		174,016		25,259		(861,673)		537,840
Total increase (decrease) in net assets		2,228,671		754,071		138,831		190,371		(1,264,625)		2,244,211
Net assets at beginning of period		2,496,364		1,742,293		826,185		635,814		8,609,810		6,365,599
Net assets at end of period	$	4,725,035	$	2,496,364	$	965,016	$	826,185	$	7,345,185	$	8,609,810
	2020		2019		2020		2019		2020		2019
Units, beginning of period		49,236		47,456		25,157		24,550		89,324		83,621
Units issued		23,435		6,825		14,716		7,452		45,728		19,624
Units redeemed		(11,209)		(5,045)		(8,300)		(6,845)		(53,392)		(13,921)
Units, end of period		61,462		49,236		31,573		25,157		81,660		89,324

See accompanying notes.

49 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS’ EQUITY

For the years ended December 31,

	Small Company Value Trust Series I				Small Company Value Trust Series NAV				Strategic Income Opportunities Trust Series I
	2020		2019		2020		2019		2020		2019
Income:
Dividend distributions received	$	4,459	$	18,269	$	5,225	$	12,670	$	21,764	$	49,976
Expenses:
Mortality and expense risk and administrative charges		(5,477)		(7,289)		-		-		(4,538)		(6,639)
Net investment income (loss)		(1,018)		10,980		5,225		12,670		17,226		43,337
Realized gains (losses) on investments:
Capital gain distributions received		102,227		1,024,476		102,909		669,468		-		-
Net realized gain (loss)		(469,605)		(136,715)		(187,390)		(91,185)		(15,125)		(11,386)
Realized gains (losses)		(367,378)		887,761		(84,481)		578,283		(15,125)		(11,386)
Unrealized appreciation (depreciation) during the period		470,355		(415,044)		325,409		(303,856)		85,217		184,659
Net increase (decrease) in net assets from operations		101,959		483,697		246,153		287,097		87,318		216,610
Changes from principal transactions:
Purchase payments		14,230		16,972		61,598		114,792		18,067		23,434
Transfers between sub-accounts and the company		(375,020)		(320,773)		135,442		65,276		(461,985)		(626,414)
Transfers on general account policy loans		(864)		(838)		2,022		(5,309)		-		472
Withdrawals		(17,715)		(37,914)		(3,094)		(17,169)		(42,456)		(102,674)
Annual contract fee		(52,398)		(76,156)		(37,733)		(28,519)		(59,469)		(80,979)
Net increase (decrease) in net assets from principal transactions		(431,767)		(418,709)		158,235		129,071		(545,843)		(786,161)
Total increase (decrease) in net assets		(329,808)		64,988		404,388		416,168		(458,525)		(569,551)
Net assets at beginning of period		2,210,763		2,145,775		1,477,754		1,061,586		1,746,163		2,315,714
Net assets at end of period	$	1,880,955	$	2,210,763	$	1,882,142	$	1,477,754	$	1,287,638	$	1,746,163
	2020		2019		2020		2019		2020		2019
Units, beginning of period		45,971		55,895		42,437		38,304		60,088		87,920
Units issued		3,722		857		11,257		7,501		3,376		6,991
Units redeemed		(13,840)		(10,781)		(4,222)		(3,368)		(22,644)		(34,823)
Units, end of period		35,853		45,971		49,472		42,437		40,820		60,088

See accompanying notes.

50 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS’ EQUITY

For the years ended December 31,

	Strategic Income Opportunities Trust Series NAV				Total Bond Market Series Trust NAV				Total Stock Market Index Trust Series I
	2020		2019		2020		2019		2020		2019
Income:
Dividend distributions received	$	77,622	$	142,618	$	593,384	$	562,161	$	99,780	$	81,672
Expenses:
Mortality and expense risk and administrative charges		-		-		-		-		(15,084)		(19,241)
Net investment income (loss)		77,622		142,618		593,384		562,161		84,696		62,431
Realized gains (losses) on investments:
Capital gain distributions received		-		-		-		-		497,620		446,462
Net realized gain (loss)		1,937		(8,735)		1,207,511		232,220		97,930		471,752
Realized gains (losses)		1,937		(8,735)		1,207,511		232,220		595,550		918,214
Unrealized appreciation (depreciation) during the period		304,998		398,887		(172,243)		973,521		432,902		449,133
Net increase (decrease) in net assets from operations		384,557		532,770		1,628,652		1,767,902		1,113,148		1,429,778
Changes from principal transactions:
Purchase payments		402,289		339,447		155,077		115,865		20,502		23,700
Transfers between sub-accounts and the company		(362,562)		(490,611)		1,810,690		3,419,907		1,396,472		(3,367,018)
Transfers on general account policy loans		2,614		(3,668)		7,381		6,032		1,283		234
Withdrawals		(694,213)		(41,771)		(1,187,138)		(2,229,716)		(56,349)		(38,480)
Annual contract fee		(101,336)		(104,930)		(233,095)		(257,807)		(60,497)		(89,637)
Net increase (decrease) in net assets from principal transactions		(753,208)		(301,533)		552,915		1,054,281		1,301,411		(3,471,201)
Total increase (decrease) in net assets		(368,651)		231,237		2,181,567		2,822,183		2,414,559		(2,041,423)
Net assets at beginning of period		5,209,627		4,978,390		22,815,282		19,993,099		4,223,942		6,265,365
Net assets at end of period	$	4,840,976	$	5,209,627	$	24,996,849	$	22,815,282	$	6,638,501	$	4,223,942
	2020		2019		2020		2019		2020		2019
Units, beginning of period		229,226		243,138		841,869		798,955		113,912		219,468
Units issued		44,900		19,109		589,626		377,716		43,622		23,860
Units redeemed		(77,975)		(33,021)		(572,558)		(334,802)		(10,555)		(129,416)
Units, end of period		196,151		229,226		858,937		841,869		146,979		113,912

See accompanying notes.

51 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS’ EQUITY

For the years ended December 31,

	Total Stock Market Index Trust Series NAV				Ultra Short Term Bond Trust Series I				Ultra Short Term Bond Trust Series NAV
	2020		2019		2020		2019		2020		2019
Income:
Dividend distributions received	$	90,493	$	105,658	$	37	$	43	$	18,069	$	16,746
Expenses:
Mortality and expense risk and administrative charges		-		-		(13)		(15)		-		-
Net investment income (loss)		90,493		105,658		24		28		18,069		16,746
Realized gains (losses) on investments:
Capital gain distributions received		439,753		433,295		-		-		-		-
Net realized gain (loss)		65,244		17,273		(16)		(19)		(3,168)		(601)
Realized gains (losses)		504,997		450,568		(16)		(19)		(3,168)		(601)
Unrealized appreciation (depreciation) during the period		281,776		1,094,319		9		54		(922)		9,463
Net increase (decrease) in net assets from operations		877,266		1,650,545		17		63		13,979		25,608
Changes from principal transactions:
Purchase payments		550,836		681,410		-		-		16,094		7,111
Transfers between sub-accounts and the company		(2,264,630)		(147,153)		-		-		23,192		215,748
Transfers on general account policy loans		(43,574)		-		-		-		(47)		829
Withdrawals		(168,398)		(835,536)		-		-		-		(11,431)
Annual contract fee		(118,817)		(116,170)		(427)		(465)		(27,887)		(27,568)
Net increase (decrease) in net assets from principal transactions		(2,044,583)		(417,449)		(427)		(465)		11,352		184,689
Total increase (decrease) in net assets		(1,167,317)		1,233,096		(410)		(402)		25,331		210,297
Net assets at beginning of period		7,141,943		5,908,847		2,306		2,708		907,925		697,628
Net assets at end of period	$	5,974,626	$	7,141,943	$	1,896	$	2,306	$	933,256	$	907,925
	2020		2019		2020		2019		2020		2019
Units, beginning of period		54,287		58,253		227		274		85,043		67,356
Units issued		10,059		10,459		-		-		21,057		21,529
Units redeemed		(26,969)		(14,425)		(42)		(47)		(20,073)		(3,842)
Units, end of period		37,377		54,287		185		227		86,027		85,043

See accompanying notes.

52 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

1. Organization

John Hancock Life Insurance Company (U.S.A.) Separate Account N (the “Account”) is a separate account established by John Hancock Life Insurance Company (U.S.A.) (the “Company”). The Account operates as a Unit Investment Trust under the Investment Company Act of 1940, as amended (the “Act”) and is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946 Financial Services – Investment Companies. The Account consists of 90 active sub-accounts which are exclusively invested in a corresponding portfolio of the John Hancock Variable Insurance Trust (the “Trust”), and 3 active sub-accounts that are invested in portfolios of other Non-affiliated Trusts (the “Non-affiliated Trusts”). The Trust and Non-affiliated Trusts are registered under the Act as an open-ended management investment company, commonly known as a mutual fund, which does not transact with the general public. The Account is a funding vehicle for the allocation of net premiums under single premium variable life and variable universal life insurance contracts (the “Contracts”) issued by the Company.

The Company is a stock life insurance company organized originally under the laws of the State of Maine in 1955 and later in 1992, the Company changed its state of domicile to the State of Michigan. The Company is an indirect, wholly owned subsidiary of Manulife Financial Corporation (“MFC”), a Canadian based publicly traded life insurance company. MFC and its subsidiaries are known collectively as Manulife Financial.

The Company is required to maintain assets in the Account with a total fair value of 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.    

In addition to the Account, certain contract owners may also allocate funds to the fixed account, which is part of 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 Investment Company Act of 1940. Net interfund transfers include transfers between separate and general accounts.

Each sub-account holds shares of a particular series (“Portfolio”) of a registered investment company.     Sub-accounts that invest in Portfolios of the Trust may offer 2 classes of units to fund Contracts issued by the Company. These classes, Series I and Series NAV, represent an interest in the same Trust Portfolio, but in different classes of that Portfolio. Series I and Series NAV shares of the Trust Portfolio differ in the level of 12b-1 fees and other expenses assessed against the Portfolio’s assets.

53 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2020

2. Significant Accounting Policies

Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from reported results using those estimates.

The Company’s results and operations have been and may continue to be adversely impacted by the COVID-19 pandemic and the recent economic downturn. The adverse effects include but are not limited to significant volatility in equity markets and decline in interest rates, increase in credit risk, strain on commodity markets, foreign currency exchange rate volatility, increases in insurance claims, persistency and redemptions, and disruption of business operations. The breadth and depth of these events and how long they will continue have introduced additional uncertainty around estimates used in determining the carrying value of certain assets and liabilities included in these financial statements.

Valuation of Investments

Investments made in the Portfolios of the Trust, and of the Non-affiliated Trusts, are valued at fair value based on the reported net asset values of such Portfolios. Investment transactions are recorded on the trade date. Income from dividends, and gains from realized gain distributions are recorded on the ex-dividend date. Realized gains and losses on the sales of investments are computed on a first-in, first-out basis.

Amounts Receivable/Payable

Receivables/Payables from/to Portfolios/the Company are due to unsettled contract transactions (net of asset-based charges) and/or subsequent/preceding purchases/sales of the respective Portfolios’ shares. The amounts are due from/to either the respective Portfolio and/or the Company for the benefit of contract owners. There are no unsettled policy transactions at December 31, 2020.

54 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

3. 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 is the responsibility of the Company and the Company holds any and all tax contingencies on its financial statements. The Company’s consolidated federal tax return for the years 2014 and 2015 are currently under examination by the Internal Revenue Service. The years from 2015 are also open for examination by the internal revenue service. 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 ASC 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, 2020, 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 and Changes in Contract Owners’ Equity.

4. Transactions with Affiliates

The Company has an administrative services agreement with Manulife Financial, whereby Manulife Financial or its designee, with the consent of the Company, performs certain services on behalf of the Company necessary for the operation of the Account. John Hancock Investment Management Services, LLC (“JHIMS”), a Delaware limited liability company controlled by MFC, serves as investment adviser for the Trust.

John Hancock Distributors, LLC, a registered broker-dealer and wholly owned subsidiary of JHUSA, acts as the principle 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.    

Certain officers of the Account are officers and directors of JHUSA or the Trust.

Contract charges, as described in Note 9, are paid to the Company.

55 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2020

5. Fair Value Measurements

ASC 820 “Fair Value Measurements and Disclosures” 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 value 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.

All of the Account’s sub-accounts’ investments in a Portfolio of the Trust were valued at the reported net asset value of the Portfolio and categorized as Level 1 as of December 31, 2020. 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, 2020:

	Level 1		Level 2		Level 3		Total
Mutual Funds
Affiliated	$	847,794,157		-		-		847,794,157
Non Affiliated	$	6,182,567		-		-		6,182,567
Total	$	853,976,724		-		-		853,976,724

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.

Changes in valuation techniques may result in transfer in or out of an assigned level within the disclosure hierarchy. Transfers between investment levels may occur as the availability of a price source or data used in an investment’s valuation changes. Transfers between investment levels are recognized at the beginning of the reporting period. There have been no transfers between any level of fair value measurements during the period ended December 31, 2020.

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JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2020

6. Purchases and Sales of Investments

The cost of purchases including reinvestment of dividend distributions and proceeds from the sales of investments in the Portfolios of the Trust and Non-affiliated Trusts during 2020 were as follows:

Sub-Account	Purchases		Sales
500 Index Fund Series NAV	$	22,069,492	$	32,350,475
Active Bond Trust Series I		168,641		207,846
Active Bond Trust Series NAV		529,902		385,018
American Asset Allocation Trust Series I		3,019,583		976,821
American Global Growth Trust Series I		419,725		444,802
American Growth Trust Series I		5,614,377		5,877,073
American Growth-Income Trust Series I		2,288,171		2,096,944
American International Trust Series I		2,187,856		3,109,001
Blue Chip Growth Trust Series I		3,454,736		1,844,166
Blue Chip Growth Trust Series NAV		35,456,297		27,548,544
Capital Appreciation Trust Series I		1,503,360		1,673,315
Capital Appreciation Trust Series NAV		540,958		684,863
Capital Appreciation Value Trust Series I		144,417		160,942
Capital Appreciation Value Trust Series NAV		428,535		76,413
Core Bond Trust Series I		1,177,830		931,299
Core Bond Trust Series NAV		25,727,139		10,205,088
Emerging Markets Value Trust Series I		26,019		137,518
Emerging Markets Value Trust Series NAV		1,053,742		837,760
Equity Income Trust Series I		1,253,530		1,478,984
Equity Income Trust Series NAV		7,705,874		29,882,350
Financial Industries Trust Series I		212,088		268,032
Financial Industries Trust Series NAV		104,128		84,846
Fundamental All Cap Core Trust Series I		71,511		146,317
Fundamental All Cap Core Trust Series NAV		690,713		844,683
Fundamental Large Cap Value Trust Series I		312,065		467,765
Fundamental Large Cap Value Trust Series NAV		4,391,759		6,449,426
Opportunistic Fixed Income Trust Series I		710,505		896,685
Opportunistic Fixed Income Trust Series NAV		2,978,978		4,296,217
Global Trust Series I		267,241		395,709
Global Trust Series NAV		400,496		412,907
Health Sciences Trust Series I		898,165		633,434
Health Sciences Trust Series NAV		2,095,522		1,287,950
High Yield Trust Series I		436,144		538,072
High Yield Trust Series NAV		483,817		323,959
International Equity Index Series I		1,287,939		659,519
International Equity Index Series NAV		11,168,833		10,368,994
International Small Company Trust Series I		93,250		114,104
International Small Company Trust Series NAV		240,326		218,392
Disciplined Value International Trust Series I		733,216		476,947
Disciplined Value International Trust Series NAV		494,514		2,128,103
Investment Quality Bond Trust Series I		207,751		437,988
Investment Quality Bond Trust Series NAV		724,598		538,146
Lifestyle Balanced Portfolio Series NAV		3,910		976
Lifestyle Conservative Portfolio Series NAV		222,584		4,207
Lifestyle Growth Portfolio Series I		128,180		303,246
Lifestyle Growth Portfolio Series NAV Lifestyle		301,109		838,272
Moderate Portfolio Series NAV		33,728		3,424
M Capital Appreciation		89,836		63,317
M Large Cap Growth		2		0

57 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2020

6. Purchases and Sales of Investments (continued):

Sub-Account	Purchases		Sales
Managed Volatility Aggressive Portfolio Series I	$	352,742	$	154,718
Managed Volatility Aggressive Portfolio Series NAV		1,069,046		1,182,866
Managed Volatility Balanced Portfolio Series I		784,140		939,584
Managed Volatility Balanced Portfolio Series NAV		2,320,975		1,128,323
Managed Volatility Conservative Portfolio Series I		249,418		280,664
Managed Volatility Conservative Portfolio Series NAV		3,027,807		1,883,692
Managed Volatility Growth Portfolio Series I		670,771		737,148
Managed Volatility Growth Portfolio Series NAV		3,956,171		2,992,901
Managed Volatility Moderate Portfolio Series I		444,169		469,511
Managed Volatility Moderate Portfolio Series NAV		1,215,793		888,919
Mid Cap Index Trust Series I		2,020,003		1,921,902
Mid Cap Index Trust Series NAV		4,762,616		5,382,774
Mid Cap Stock Trust Series I		1,123,884		658,934
Mid Cap Stock Trust Series NAV		10,084,768		4,910,447
Mid Value Trust Series I		313,589		773,432
Mid Value Trust Series NAV		5,532,965		6,525,091
Money Market Trust Series I		9,878,351		5,097,241
Money-Market Trust Series NAV		55,897,065		67,720,404
PIMCO All Asset		928,396		997,152
Real Estate Securities Trust Series I		1,383,195		972,832
Real Estate Securities Trust Series NAV		6,151,610		7,484,457
Science & Technology Trust Series I		2,625,987		1,836,688
Science & Technology Trust Series NAV		13,796,383		11,861,145
Select Bond Trust Series I		599,003		796,843
Select Bond Trust Series NAV		392,722		247,898
Short Term Government Income Trust Series I		934,743		3,170,793
Short Term Government Income Trust Series NAV		1,996,110		2,154,438
Small Cap Index Trust Series I		387,696		396,031
Small Cap Index Trust Series NAV		4,201,744		5,055,877
Small Cap Opportunities Trust Series I		807,670		1,201,296
Small Cap Opportunities Trust Series NAV		140,953		119,658
Small Cap Stock Trust Series I		433,124		444,386
Small Cap Stock Trust Series NAV		1,704,970		597,917
Small Cap Value Trust Series I		483,720		204,364
Small Cap Value Trust Series NAV		4,013,818		4,053,829
Small Company Value Trust Series I		253,030		583,588
Small Company Value Trust Series NAV		385,865		119,495
Strategic Income Opportunities Trust Series I		117,386		646,002
Strategic Income Opportunities Trust Series NAV		1,092,562		1,768,148
Total Bond Market Series Trust NAV		17,289,673		16,143,375
Total Stock Market Index Trust Series I		2,270,206		386,478
Total Stock Market Index Trust Series NAV		1,873,832		3,388,168
Ultra Short Term Bond Trust Series I		37		440
Ultra Short Term Bond Trust Series NAV		244,093		214,672

58 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2020

7. Unit Values

A summary of unit values and units outstanding for variable life contracts and the expense and income ratios, excluding expenses of the underlying Portfolios, were as follows:

	At December 31,				For the years and periods ended December 31,
Sub-account	Year	Units (000s)	Unit Fair Value Highest to Lowest (a)	Assets (000s)	Expense Ratio Highest to Lowest (b)	Investment Income Ratio (c)	Total Return Highest to Lowest (d)
500 Index Fund Series NAV(*)	2020	1,437	$ 86.62 to $ 48.51	$ 95,867	0.70 % to 0.00 %	1.83 %	18.14 % to 17.31 %
	2019	1,647	73.32 to 41.36	94,354	0.70 to 0.00	1.75	31.16 to 30.24
	2018	1,733	55.90 to 31.75	77,745	0.70 to 0.00	1.37	-4.64 to -5.32
	2017	1,888	58.62 to 33.53	89,400	0.70 to 0.00	1.69	21.54 to 20.70
	2016	2,089	48.23 to 27.78	82,800	0.70 to 0.00	1.84	11.64 to 10.86
Active Bond Trust Series I(*)	2020	25	27.35 to 25.49	646	0.65 to 0.20	2.77	8.59 to 8.09
	2019	27	25.19 to 23.59	648	0.65 to 0.20	2.62	9.04 to 8.55
	2018	30	23.10 to 21.73	675	0.65 to 0.20	3.13	-0.80 to -1.25
	2017	34	23.29 to 22.00	763	0.65 to 0.20	4.13	4.63 to 4.16
	2016	28	22.26 to 21.12	586	0.65 to 0.20	3.60	4.14 to 3.66
Active Bond Trust Series NAV(*)	2020	15	92.17 to 92.17	1,363	0.00 to 0.00	2.97	8.73 to 8.73
	2019	14	84.77 to 84.77	1,157	0.00 to 0.00	2.64	9.29 to 9.29
	2018	17	77.56 to 77.56	1,357	0.00 to 0.00	3.48	-0.55 to -0.55
	2017	14	77.99 to 77.99	1,068	0.00 to 0.00	4.02	4.89 to 4.89
	2016	7	74.36 to 74.36	518	0.00 to 0.00	4.10	4.50 to 4.50
American Asset Allocation Trust Series I(*)	2020	532	24.97 to 22.85	12,616	0.70 to 0.00	1.44	12.02 to 11.24
	2019	509	22.29 to 20.54	10,754	0.70 to 0.00	1.22	20.78 to 19.94
	2018	604	18.46 to 17.12	10,661	0.70 to 0.00	1.64	-4.91 to -5.57
	2017	630	19.41 to 18.13	11,728	0.70 to 0.00	1.26	15.79 to 14.99
	2016	563	16.76 to 15.77	9,005	0.70 to 0.00	1.27	8.99 to 8.23
American Global Growth Trust Series I(*)	2020	78	32.61 to 30.53	2,520	0.65 to 0.00	0.07	29.96 to 29.11
	2019	86	25.09 to 23.64	2,136	0.65 to 0.00	0.74	34.71 to 33.84
	2018	39	18.63 to 17.67	728	0.65 to 0.00	0.68	-9.37 to -9.96
	2017	32	20.55 to 19.62	660	0.65 to 0.00	0.24	30.92 to 30.06
	2016	30	15.70 to 15.09	469	0.65 to 0.00	1.02	0.29 to -0.36
American Growth Trust Series I(*)	2020	303	82.85 to 61.65	19,328	0.65 to 0.00	0.08	51.52 to 50.54
	2019	354	55.03 to 40.69	14,830	0.65 to 0.00	0.79	30.30 to 29.46
	2018	381	42.51 to 31.23	12,294	0.65 to 0.00	0.33	-0.66 to -1.30
	2017	472	43.07 to 31.43	15,257	0.65 to 0.00	0.38	27.86 to 27.04
	2016	537	33.90 to 24.58	13,960	0.65 to 0.00	0.41	9.08 to 8.37
American Growth-Income Trust Series I(*)	2020	239	50.28 to 38.08	11,160	0.70 to 0.00	1.32	13.11 to 12.32
	2019	269	44.77 to 33.66	11,172	0.70 to 0.00	1.56	25.70 to 24.82
	2018	280	35.87 to 26.78	9,361	0.70 to 0.00	1.10	-2.18 to -2.87
	2017	414	36.92 to 27.38	13,401	0.70 to 0.00	1.06	22.03 to 21.18
	2016	486	30.47 to 22.44	13,415	0.70 to 0.00	1.72	11.10 to 10.33
American International Trust Series I(*)	2020	254	44.64 to 28.41	7,437	0.65 to 0.00	0.35	13.56 to 12.82
	2019	284	39.57 to 25.02	7,881	0.65 to 0.00	0.99	22.40 to 21.61
	2018	268	32.54 to 20.44	6,118	0.65 to 0.00	2.46	-13.46 to -14.02
	2017	306	37.84 to 23.62	7,988	0.65 to 0.00	0.53	31.65 to 30.80
	2016	776	28.93 to 17.94	14,938	0.65 to 0.00	0.97	3.12 to 2.45
Blue Chip Growth Trust Series I(*)	2020	123	127.50 to 115.37	14,630	0.70 to 0.20	0.00	34.03 to 33.36
	2019	124	95.13 to 86.50	11,092	0.70 to 0.20	0.00	29.53 to 28.89
	2018	137	73.44 to 67.11	9,434	0.70 to 0.20	0.02	1.77 to 1.26
	2017	142	72.16 to 66.28	9,564	0.70 to 0.20	0.07	36.01 to 35.33
	2016	153	53.06 to 48.98	7,724	0.70 to 0.20	0.01	0.61 to 0.11
Blue Chip Growth Trust Series NAV(*)	2020	272	332.65 to 332.65	90,642	0.00 to 0.00	0.00	34.40 to 34.40
	2019	285	247.50 to 247.50	70,621	0.00 to 0.00	0.01	29.83 to 29.83
	2018	318	190.64 to 190.64	60,594	0.00 to 0.00	0.04	2.03 to 2.03
	2017	366	186.84 to 186.84	68,329	0.00 to 0.00	0.11	36.34 to 36.34
	2016	394	137.04 to 137.04	54,032	0.00 to 0.00	0.06	0.85 to 0.85
Capital Appreciation Trust Series I(*)	2020	141	73.74 to 66.84	10,094	0.70 to 0.20	0.00	55.73 to 54.95
	2019	162	47.35 to 43.14	7,432	0.70 to 0.20	0.04	32.63 to 31.97
	2018	213	35.70 to 32.69	7,388	0.70 to 0.20	0.26	-1.00 to -1.50
	2017	244	36.06 to 33.18	8,566	0.70 to 0.20	0.06	36.26 to 35.58
	2016	274	26.47 to 24.48	7,058	0.70 to 0.20	0.00	-1.27 to -1.77
Capital Appreciation Trust Series NAV(*)	2020	53	75.55 to 75.55	4,010	0.00 to 0.00	0.00	56.29 to 56.29
	2019	63	48.34 to 48.34	3,025	0.00 to 0.00	0.04	32.88 to 32.88
	2018	58	36.38 to 36.38	2,100	0.00 to 0.00	0.38	-0.72 to -0.72
	2017	53	36.64 to 36.64	1,946	0.00 to 0.00	0.11	36.51 to 36.51
	2016	62	26.84 to 26.84	1,667	0.00 to 0.00	0.01	-1.00 to -1.00
Capital Appreciation Value Trust Series I(*)	2020	41	32.74 to 30.92	1,298	0.65 to 0.20	1.05	17.17 to 16.64
	2019	46	27.94 to 26.51	1,233	0.65 to 0.20	1.29	24.06 to 23.50
	2018	48	22.52 to 21.47	1,051	0.65 to 0.20	2.08	0.19 to -0.26
	2017	52	22.48 to 21.52	1,154	0.65 to 0.20	1.85	14.91 to 14.40
	2016	18	19.31 to 18.81	330	0.65 to 0.35	1.32	7.74 to 7.42

59 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2020

7. Unit Values (continued):

	At December 31,				For the years and periods ended December 31,
Sub-account	Year	Units (000s)	Unit Fair Value Highest to Lowest (a)	Assets (000s)	Expense Ratio Highest to Lowest (b)	Investment Income Ratio (c)	Total Return Highest to Lowest (d)
Capital Appreciation Value Trust Series NAV(*)	2020	110	$ 33.74 to $ 33.74	$ 3,721	0.00 % to 0.00 %	1.16 %	17.41 % to 17.41 %
	2019	109	28.74 to 28.74	3,131	0.00 to 0.00	1.50	24.44 to 24.44
	2018	105	23.09 to 23.09	2,416	0.00 to 0.00	2.24	0.45 to 0.45
	2017	102	22.99 to 22.99	2,356	0.00 to 0.00	1.53	15.13 to 15.13
	2016	95	19.97 to 19.97	1,900	0.00 to 0.00	2.04	8.19 to 8.19
Core Bond Trust Series I(*)	2020	388	24.46 to 22.80	9,294	0.65 to 0.20	2.34	8.42 to 7.92
	2019	385	22.56 to 21.13	8,520	0.65 to 0.20	2.45	8.10 to 7.62
	2018	382	20.87 to 19.63	7,855	0.65 to 0.20	2.54	-0.79 to -1.23
	2017	369	21.03 to 19.88	7,646	0.65 to 0.20	2.00	3.20 to 2.73
	2016	484	20.38 to 19.35	9,744	0.65 to 0.20	1.95	2.54 to 2.08
Core Bond Trust Series NAV(*)	2020	2,584	20.33 to 20.33	52,533	0.00 to 0.00	2.70	8.79 to 8.79
	2019	1,855	18.69 to 18.69	34,670	0.00 to 0.00	2.68	8.33 to 8.33
	2018	1,576	17.25 to 17.25	27,182	0.00 to 0.00	2.68	-0.54 to -0.54
	2017	1,480	17.35 to 17.35	25,673	0.00 to 0.00	2.30	3.47 to 3.47
	2016	1,270	16.76 to 16.76	21,287	0.00 to 0.00	2.15	2.73 to 2.73
Emerging Markets Value Trust Series I(*)	2020	55	17.26 to 16.23	940	0.65 to 0.20	2.41	3.35 to 2.88
	2019	63	16.70 to 15.78	1,051	0.65 to 0.20	3.07	10.71 to 10.21
	2018	127	15.09 to 14.31	1,904	0.65 to 0.20	2.71	-13.77 to -14.16
	2017	114	17.50 to 16.68	1,987	0.65 to 0.20	4.52	32.44 to 31.84
	2016	6	13.02 to 12.65	72	0.65 to 0.35	2.13	17.60 to 17.24
Emerging Markets Value Trust Series NAV(*)	2020	333	14.29 to 14.29	4,754	0.00 to 0.00	2.50	3.72 to 3.72
	2019	312	13.78 to 13.78	4,302	0.00 to 0.00	3.32	10.90 to 10.90
	2018	302	12.43 to 12.43	3,759	0.00 to 0.00	2.72	-13.48 to -13.48
	2017	285	14.36 to 14.36	4,086	0.00 to 0.00	2.38	32.67 to 32.67
	2016	126	10.83 to 10.83	1,368	0.00 to 0.00	2.42	18.09 to 18.09
Equity Income Trust Series I(*)	2020	116	63.69 to 57.62	7,053	0.70 to 0.20	2.96	0.81 to 0.31
	2019	133	63.17 to 57.45	8,012	0.70 to 0.20	2.15	26.09 to 25.46
	2018	141	50.10 to 45.79	6,780	0.70 to 0.20	1.85	-9.76 to -10.21
	2017	162	55.52 to 51.00	8,632	0.70 to 0.20	2.21	16.06 to 15.48
	2016	190	47.84 to 44.16	8,763	0.70 to 0.20	2.14	18.88 to 18.29
Equity Income Trust Series NAV(*)	2020	271	68.54 to 68.54	18,554	0.00 to 0.00	1.83	1.01 to 1.01
	2019	656	67.86 to 67.86	44,488	0.00 to 0.00	2.11	26.47 to 26.47
	2018	715	53.66 to 53.66	38,346	0.00 to 0.00	2.00	-9.52 to -9.52
	2017	785	59.30 to 59.30	46,533	0.00 to 0.00	2.47	16.28 to 16.28
	2016	730	51.00 to 51.00	37,229	0.00 to 0.00	2.26	19.18 to 19.18
Financial Industries Trust Series I(*)	2020	20	35.06 to 32.10	639	0.65 to 0.20	1.31	1.97 to 1.51
	2019	24	34.38 to 31.62	761	0.65 to 0.20	4.27	31.52 to 30.93
	2018	25	26.14 to 24.15	612	0.65 to 0.20	1.20	-14.66 to -15.05
	2017	28	30.63 to 28.43	821	0.65 to 0.20	1.03	15.05 to 14.54
	2016	35	26.63 to 24.82	888	0.65 to 0.20	1.31	19.13 to 18.60
Financial Industries Trust Series NAV(*)	2020	7	44.06 to 44.06	288	0.00 to 0.00	1.59	2.31 to 2.31
	2019	7	43.07 to 43.07	286	0.00 to 0.00	3.65	31.71 to 31.71
	2018	11	32.70 to 32.70	347	0.00 to 0.00	1.16	-14.38 to -14.38
	2017	10	38.19 to 38.19	379	0.00 to 0.00	1.32	15.29 to 15.29
	2016	9	33.13 to 33.13	300	0.00 to 0.00	1.30	19.47 to 19.47
Fundamental All Cap Core Trust Series I(*)	2020	2	76.15 to 70.34	135	0.65 to 0.20	0.27	26.62 to 26.05
	2019	3	60.14 to 55.80	175	0.65 to 0.20	0.45	36.17 to 35.56
	2018	4	44.17 to 41.16	193	0.65 to 0.20	0.36	-13.33 to -13.73
	2017	8	50.96 to 47.71	418	0.65 to 0.20	0.74	27.44 to 26.87
	2016	8	39.99 to 37.61	327	0.65 to 0.20	0.52	8.12 to 7.64
Fundamental All Cap Core Trust Series NAV(*)	2020	65	47.02 to 47.02	3,033	0.00 to 0.00	0.39	26.97 to 26.97
	2019	72	37.03 to 37.03	2,680	0.00 to 0.00	0.50	36.58 to 36.58
	2018	87	27.11 to 27.11	2,370	0.00 to 0.00	0.48	-13.16 to -13.16
	2017	88	31.22 to 31.22	2,761	0.00 to 0.00	0.92	27.77 to 27.77
	2016	59	24.44 to 24.44	1,446	0.00 to 0.00	0.70	8.40 to 8.40
Fundamental Large Cap Value Trust Series I(*)	2020	86	44.28 to 40.75	3,674	0.70 to 0.20	1.08	11.74 to 11.18
	2019	93	39.63 to 36.65	3,548	0.70 to 0.20	1.18	35.58 to 34.91
	2018	101	29.23 to 27.17	2,842	0.70 to 0.20	1.11	-17.20 to -17.61
	2017	108	35.30 to 32.98	3,699	0.70 to 0.20	1.51	17.20 to 16.62
.	2016	160	30.12 to 28.28	4,698	0.70 to 0.20	2.16	9.95 to 9.41
Fundamental Large Cap Value Trust Series NAV(*)	2020	227	32.34 to 32.34	7,351	0.00 to 0.00	1.03	12.01 to 12.01
	2019	315	28.87 to 28.87	9,106	0.00 to 0.00	1.23	35.97 to 35.97
	2018	305	21.23 to 21.23	6,469	0.00 to 0.00	1.18	-17.03 to -17.03
	2017	320	25.59 to 25.59	8,185	0.00 to 0.00	1.72	17.54 to 17.54
	2016	317	21.77 to 21.77	6,911	0.00 to 0.00	2.58	10.21 to 10.21

60 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2020

7. Unit Values (continued):

	At December 31,				For the years and periods ended December 31,
Sub-account	Year	Units (000s)	Unit Fair Value Highest to Lowest (a)	Assets (000s)	Expense Ratio Highest to Lowest (b)	Investment Income Ratio (c)	Total Return Highest to Lowest (d)
Opportunistic Fixed Income	2020	42	$ 36.98 to $ 33.47	$ 1,538	0.70 % to 0.20 %	3.24 %	13.56 % to 13.00 %
Trust Series I(*)	2019	50	32.56 to 29.62	1,543	0.70 to 0.20	6.61	6.16 to 5.63
	2018	36	30.67 to 28.04	1,065	0.70 to 0.20	2.71	-2.10 to -2.58
	2017	34	31.33 to 28.78	1,015	0.70 to 0.20	2.36	8.54 to 8.00
	2016	36	28.86 to 26.65	1,015	0.70 to 0.20	0.00	2.85 to 2.33
Opportunistic Fixed Income Trust	2020	238	39.68 to 39.68	9,444	0.00 to 0.00	3.78	13.90 to 13.90
Series NAV(*)	2019	284	34.84 to 34.84	9,911	0.00 to 0.00	6.38	6.37 to 6.37
	2018	282	32.75 to 32.75	9,227	0.00 to 0.00	2.70	-1.74 to -1.74
	2017	271	33.33 to 33.33	9,043	0.00 to 0.00	2.29	8.71 to 8.71
	2016	213	30.66 to 30.66	6,545	0.00 to 0.00	0.00	3.15 to 3.15
Global Trust Series I(*)	2020	41	38.56 to 34.88	1,439	0.70 to 0.20	1.32	6.38 to 5.85
	2019	46	36.24 to 32.95	1,522	0.70 to 0.20	2.08	15.81 to 15.23
	2018	52	31.30 to 28.60	1,515	0.70 to 0.20	1.53	-14.67 to -15.09
	2017	76	36.67 to 33.68	2,608	0.70 to 0.20	1.97	18.64 to 18.05
	2016	75	30.91 to 28.53	2,158	0.70 to 0.20	4.37	9.25 to 8.70
Global Trust Series NAV(*)	2020	144	22.30 to 22.30	3,218	0.00 to 0.00	1.36	6.71 to 6.71
	2019	147	20.90 to 20.90	3,069	0.00 to 0.00	2.34	16.06 to 16.06
	2018	131	18.01 to 18.01	2,358	0.00 to 0.00	1.91	-14.42 to -14.42
	2017	123	21.04 to 21.04	2,579	0.00 to 0.00	2.00	18.90 to 18.90
	2016	115	17.70 to 17.70	2,032	0.00 to 0.00	4.62	9.46 to 9.46
Health Sciences Trust Series I(*)	2020	49	140.55 to 128.65	6,633	0.65 to 0.20	0.00	26.91 to 26.34
	2019	52	110.75 to 101.82	5,558	0.65 to 0.20	0.00	28.42 to 27.85
	2018	61	86.24 to 79.65	5,104	0.65 to 0.20	0.00	0.48 to 0.03
	2017	62	85.82 to 79.62	5,158	0.65 to 0.20	0.00	27.25 to 26.68
	2016	67	67.44 to 62.85	4,375	0.65 to 0.20	0.06	-10.75 to -11.15
Health Sciences Trust Series NAV(*)	2020	79	114.29 to 114.29	8,980	0.00 to 0.00	0.00	27.26 to 27.26
	2019	80	89.80 to 89.80	7,141	0.00 to 0.00	0.00	28.67 to 28.67
	2018	82	69.79 to 69.79	5,691	0.00 to 0.00	0.00	0.76 to 0.76
	2017	95	69.27 to 69.27	6,555	0.00 to 0.00	0.00	27.61 to 27.61
	2016	93	54.28 to 54.28	5,051	0.00 to 0.00	0.11	-10.54 to -10.54
High Yield Trust Series I(*)	2020	64	40.84 to 36.97	2,513	0.70 to 0.20	6.25	5.60 to 5.07
	2019	71	38.67 to 35.18	2,626	0.70 to 0.20	5.48	15.43 to 14.85
	2018	78	33.50 to 30.63	2,523	0.70 to 0.20	5.76	-3.21 to -3.69
	2017	89	34.61 to 31.81	2,979	0.70 to 0.20	5.79	7.28 to 6.75
	2016	114	32.27 to 29.80	3,561	0.70 to 0.20	7.03	16.03 to 15.45
High Yield Trust Series NAV(*)	2020	100	28.85 to 28.85	2,885	0.00 to 0.00	6.56	5.77 to 5.77
	2019	100	27.28 to 27.28	2,729	0.00 to 0.00	5.91	15.99 to 15.99
	2018	86	23.52 to 23.52	2,011	0.00 to 0.00	6.89	-3.02 to -3.02
	2017	67	24.25 to 24.25	1,622	0.00 to 0.00	4.30	7.46 to 7.46
	2016	124	22.57 to 22.57	2,802	0.00 to 0.00	6.85	16.56 to 16.56
International Equity Index Series I(*)	2020	545	16.44 to 15.86	8,848	0.65 to 0.20	2.57	10.42 to 9.93
	2019	519	14.89 to 14.42	7,618	0.65 to 0.20	2.29	21.13 to 20.59
	2018	608	12.30 to 11.96	7,383	0.65 to 0.20	2.26	-14.27 to -14.66
	2017	651	14.34 to 14.02	9,241	0.65 to 0.20	2.46	27.05 to 26.49
	2016	498	11.29 to 11.08	5,569	0.65 to 0.20	2.47	4.24 to 3.77
International Equity Index Series NAV(*)	2020	476	65.78 to 65.78	31,346	0.00 to 0.00	2.61	10.76 to 10.76
	2019	476	59.39 to 59.39	28,299	0.00 to 0.00	3.08	21.44 to 21.44
	2018	311	48.91 to 48.91	15,197	0.00 to 0.00	2.43	-14.10 to -14.10
	2017	304	56.94 to 56.94	17,323	0.00 to 0.00	2.37	27.45 to 27.45
	2016	252	44.68 to 44.68	11,245	0.00 to 0.00	2.78	4.43 to 4.43
International Small Company Trust Series I(*)	2020	26	21.28 to 20.13	527	0.70 to 0.20	2.09	8.15 to 7.61
	2019	28	19.67 to 18.71	526	0.70 to 0.20	2.20	22.36 to 21.75
	2018	28	16.08 to 15.37	435	0.70 to 0.20	1.47	-20.26 to -20.66
	2017	44	20.16 to 19.37	854	0.70 to 0.20	1.44	29.20 to 28.56
	2016	33	15.61 to 15.06	497	0.70 to 0.20	1.86	4.69 to 4.17
International Small Company Trust Series NAV(*)	2020	78	21.89 to 21.89	1,712	0.00 to 0.00	2.23	8.41 to 8.41
	2019	78	20.19 to 20.19	1,565	0.00 to 0.00	2.34	22.71 to 22.71
	2018	74	16.45 to 16.45	1,216	0.00 to 0.00	1.17	-20.07 to -20.07
	2017	80	20.59 to 20.59	1,648	0.00 to 0.00	1.69	29.59 to 29.59
	2016	57	15.89 to 15.89	904	0.00 to 0.00	1.97	4.95 to 4.95
Disciplined Value International Trust Series I(*)	2020	175	27.19 to 24.60	4,593	0.70 to 0.20	2.25	3.07 to 2.55
	2019	165	26.38 to 23.99	4,222	0.70 to 0.20	2.75	12.10 to 11.55
	2018	188	23.54 to 21.51	4,299	0.70 to 0.20	2.28	-15.20 to -15.63
	2017	231	27.75 to 25.49	6,222	0.70 to 0.20	1.84	16.91 to 16.32
	2016	245	23.74 to 21.91	5,665	0.70 to 0.20	2.83	12.02 to 11.46

61 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2020

7. Unit Values (continued):

	At December 31,				For the years and periods ended December 31,
Sub-account	Year	Units (000s)	Unit Fair Value Highest to Lowest (a)	Assets (000s)	Expense Ratio Highest to Lowest (b)	Investment Income Ratio (c)	Total Return Highest to Lowest (d)
Disciplined Value International Trust	2020	183	$ 18.50 to $ 18.50	$ 3,393	0.00 % to 0.00 %	1.90 %	3.27 % to 3.27 %
Series NAV(*)	2019	289	17.92 to 17.92	5,181	0.00 to 0.00	2.89	12.40 to 12.40
	2018	326	15.94 to 15.94	5,192	0.00 to 0.00	2.53	-14.96 to -14.96
	2017	385	18.75 to 18.75	7,215	0.00 to 0.00	2.01	17.25 to 17.25
	2016	345	15.99 to 15.99	5,518	0.00 to 0.00	2.38	12.20 to 12.20
Investment Quality Bond Trust Series I(*)	2020	101	40.77 to 36.89	3,938	0.70 to 0.20	2.24	9.15 to 8.60
	2019	109	37.35 to 33.97	3,904	0.70 to 0.20	2.36	9.15 to 8.60
	2018	130	34.22 to 31.28	4,279	0.70 to 0.20	2.68	-1.02 to -1.51
	2017	139	34.57 to 31.76	4,608	0.70 to 0.20	2.62	4.39 to 3.88
	2016	147	33.12 to 30.57	4,666	0.70 to 0.20	2.20	4.09 to 3.56
Investment Quality Bond Trust Series NAV(*)	2020	45	20.59 to 20.59	934	0.00 to 0.00	2.89	9.45 to 9.45
	2019	37	18.81 to 18.81	696	0.00 to 0.00	2.47	9.35 to 9.35
	2018	42	17.20 to 17.20	727	0.00 to 0.00	3.02	-0.67 to -0.67
	2017	47	17.32 to 17.32	822	0.00 to 0.00	2.73	4.67 to 4.67
	2016	44	16.55 to 16.55	729	0.00 to 0.00	2.42	4.26 to 4.26
Lifestyle Balanced Portfolio Series NAV(*)	2020	1	16.26 to 16.26	15	0.00 to 0.00	3.00	12.68 to 12.68
	2019	1	14.43 to 14.43	11	0.00 to 0.00	2.40	17.89 to 17.89
	2018	1	12.24 to 12.24	7	0.00 to 0.00	10.50	-3.29 to -3.29
Lifestyle Conservative Portfolio Series NAV(*)	2020 (e)	16	14.49 to 14.49	231	0.00 to 0.00	4.53	10.81 to 10.81
Lifestyle Growth Portfolio Series I(*)	2020	58	15.12 to 14.93	877	0.65 to 0.35	2.50	13.19 to 12.84
	2019	77	13.36 to 13.23	1,029	0.65 to 0.35	4.98	21.03 to 20.68
	2018	10	10.96 to 10.96	108	0.65 to 0.65	1.45	-6.73 to -6.73
	2017	28	11.75 to 11.75	324	0.65 to 0.65	2.93	15.37 to 15.37
	2016	1	10.19 to 10.19	9	0.65 to 0.65	9.65	1.87 to 1.87
Lifestyle Growth Portfolio Series NAV(*)	2020	169	17.46 to 17.46	2,958	0.00 to 0.00	2.33	13.64 to 13.64
	2019	219	15.37 to 15.37	3,367	0.00 to 0.00	2.09	21.52 to 21.52
	2018	198	12.64 to 12.64	2,501	0.00 to 0.00	2.22	-6.07 to -6.07
	2017	197	13.46 to 13.46	2,653	0.00 to 0.00	8.30	16.20 to 16.20
	2016	11	11.59 to 11.59	128	0.00 to 0.00	10.08	1.99 to 1.99
Lifestyle Moderate Portfolio Series NAV(*)	2020	7	15.66 to 15.66	109	0.00 to 0.00	3.21	12.22 to 12.22
	2019 (e)	5	13.96 to 13.96	74	0.00 to 0.00	4.10	15.95 to 15.95
M Capital Appreciation	2020	3	149.12 to 149.12	507	0.00 to 0.00	0.00	17.73 to 17.73
	2019	3	126.67 to 126.67	363	0.00 to 0.00	0.30	28.85 to 28.85
	2018	3	98.31 to 98.31	266	0.00 to 0.00	0.30	-14.15 to -14.15
	2017	3	114.51 to 114.51	294	0.00 to 0.00	0.00	19.02 to 19.02
	2016	6	96.21 to 96.21	529	0.00 to 0.00	0.00	21.06 to 21.06
Managed Volatility Aggressive Portfolio Series I(*)	2020	41	36.27 to 33.16	1,371	0.65 to 0.20	1.66	-4.95 to -5.38
	2019	36	38.16 to 35.04	1,258	0.65 to 0.20	1.32	20.54 to 20.00
	2018	40	31.66 to 29.20	1,163	0.65 to 0.20	2.16	-8.65 to -9.06
	2017	37	34.65 to 32.11	1,200	0.65 to 0.20	1.71	22.57 to 22.03
	2016	40	28.27 to 26.31	1,056	0.65 to 0.20	1.55	1.75 to 1.29
Managed Volatility Aggressive Portfolio Series NAV(*)	2020	219	23.23 to 23.23	5,093	0.00 to 0.00	1.59	-4.80 to -4.80
	2019	232	24.40 to 24.40	5,666	0.00 to 0.00	1.51	20.82 to 20.82
	2018	215	20.19 to 20.19	4,347	0.00 to 0.00	2.20	-8.32 to -8.32
	2017	208	22.03 to 22.03	4,576	0.00 to 0.00	1.73	22.88 to 22.88
	2016	266	17.93 to 17.93	4,766	0.00 to 0.00	1.35	1.89 to 1.89
Managed Volatility Balanced Portfolio Series I(*)	2020	84	44.26 to 40.46	3,379	0.65 to 0.20	2.45	1.61 to 1.15
	2019	94	43.56 to 40.00	3,764	0.65 to 0.20	1.98	17.69 to 17.16
	2018	97	37.02 to 34.14	3,321	0.65 to 0.20	2.24	-5.08 to -5.51
	2017	109	39.00 to 36.13	3,941	0.65 to 0.20	2.02	13.90 to 13.40
	2016	133	34.24 to 31.86	4,245	0.65 to 0.20	1.95	4.58 to 4.11
Managed Volatility Balanced Portfolio Series NAV(*)	2020	725	23.52 to 23.52	17,067	0.00 to 0.00	2.60	1.77 to 1.77
	2019	730	23.11 to 23.11	16,887	0.00 to 0.00	2.03	18.02 to 18.02
	2018	796	19.58 to 19.58	15,600	0.00 to 0.00	2.37	-4.82 to -4.82
	2017	804	20.58 to 20.58	16,546	0.00 to 0.00	2.18	14.15 to 14.15
	2016	950	18.02 to 18.02	17,126	0.00 to 0.00	2.23	4.91 to 4.91
Managed Volatility Conservative Portfolio Series I(*)	2020	28	42.56 to 38.90	1,068	0.65 to 0.20	3.15	3.19 to 2.72
	2019	30	41.25 to 37.87	1,109	0.65 to 0.20	2.28	13.16 to 12.65
	2018	37	36.45 to 33.61	1,249	0.65 to 0.20	2.50	-2.37 to -2.82
	2017	42	37.34 to 34.59	1,464	0.65 to 0.20	2.40	7.60 to 7.12
	2016	56	34.70 to 32.29	1,829	0.65 to 0.20	2.39	4.37 to 3.91
Managed Volatility Conservative Portfolio Series NAV(*)	2020	417	21.28 to 21.28	8,884	0.00 to 0.00	3.15	3.43 to 3.43
	2019	382	20.58 to 20.58	7,856	0.00 to 0.00	2.68	13.51 to 13.51
	2018	314	18.13 to 18.13	5,694	0.00 to 0.00	2.96	-2.21 to -2.21

62 of 67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2020

7. Unit Values (continued):

	At December 31,				For the years and periods ended December 31,
Sub-account	Year	Units (000s)	Unit Fair Value Highest to Lowest (a)	Assets (000s)	Expense Ratio Highest to Lowest (b)	Investment Income Ratio (c)	Total Return Highest to Lowest (d)
Managed Volatility Conservative Portfolio Series NAV(*)	2017	259	$ 18.54 to $ 18.54	$ 4,800	0.00 % to 0.00 %	2.51 %	7.94 % to 7.94 %
	2016	282	17.17 to 17.17	4,839	0.00 to 0.00	2.57	4.53 to 4.53
Managed Volatility Growth Portfolio Series I(*)	2020	69	40.63 to 37.13	2,595	0.65 to 0.20	2.12	-1.62 to -2.06
	2019	76	41.30 to 37.91	2,924	0.65 to 0.20	1.76	19.32 to 18.78
	2018	86	34.61 to 31.91	2,777	0.65 to 0.20	2.09	-6.73 to -7.15
	2017	91	37.11 to 34.37	3,157	0.65 to 0.20	1.91	18.35 to 17.82
	2016	100	31.36 to 29.17	2,959	0.65 to 0.20	1.61	3.12 to 2.67
Managed Volatility Growth Portfolio Series NAV(*)	2020	951	23.28 to 23.28	22,135	0.00 to 0.00	2.27	-1.37 to -1.37
	2019	983	23.61 to 23.61	23,202	0.00 to 0.00	1.84	19.68 to 19.68
	2018	1,014	19.72 to 19.72	20,004	0.00 to 0.00	2.13	-6.56 to -6.56
	2017	1,108	21.11 to 21.11	23,388	0.00 to 0.00	1.88	18.71 to 18.71
	2016	1,378	17.78 to 17.78	24,499	0.00 to 0.00	1.95	3.38 to 3.38
Managed Volatility Moderate Portfolio Series I(*)	2020	46	45.53 to 41.60	1,918	0.65 to 0.20	2.76	3.11 to 2.64
	2019	50	44.15 to 40.53	2,024	0.65 to 0.20	2.05	16.49 to 15.96
	2018	58	37.90 to 34.95	2,091	0.65 to 0.20	2.57	-4.18 to -4.61
	2017	55	39.56 to 36.64	2,047	0.65 to 0.20	2.43	11.66 to 11.16
	2016	54	35.43 to 32.96	1,825	0.65 to 0.20	2.25	5.08 to 4.61
Managed Volatility Moderate Portfolio Series NAV(*)	2020	314	23.41 to 23.41	7,349	0.00 to 0.00	2.75	3.28 to 3.28
	2019	323	22.67 to 22.67	7,324	0.00 to 0.00	2.20	16.85 to 16.85
	2018	328	19.40 to 19.40	6,364	0.00 to 0.00	2.42	-3.93 to -3.93
	2017	344	20.19 to 20.19	6,949	0.00 to 0.00	1.92	12.02 to 12.02
	2016	534	18.03 to 18.03	9,624	0.00 to 0.00	2.22	5.25 to 5.25
Mid Cap Index Trust Series I(*)	2020	158	68.68 to 62.13	10,289	0.70 to 0.20	1.59	12.99 to 12.43
	2019	174	60.79 to 55.26	10,085	0.70 to 0.20	1.16	25.34 to 24.71
	2018	171	48.50 to 44.31	7,927	0.70 to 0.20	1.11	-11.63 to -12.08
	2017	186	54.88 to 50.40	9,765	0.70 to 0.20	0.53	15.58 to 15.00
	2016	154	47.49 to 43.83	7,075	0.70 to 0.20	1.18	19.87 to 19.28
Mid Cap Index Trust Series NAV(*)	2020	299	47.21 to 47.21	14,129	0.00 to 0.00	1.60	13.27 to 13.27
	2019	348	41.68 to 41.68	14,489	0.00 to 0.00	1.19	25.72 to 25.72
	2018	378	33.16 to 33.16	12,527	0.00 to 0.00	1.16	-11.45 to -11.45
	2017	406	37.45 to 37.45	15,217	0.00 to 0.00	0.58	15.86 to 15.86
	2016	335	32.32 to 32.32	10,816	0.00 to 0.00	0.87	20.17 to 20.17
Mid Cap Stock Trust Series I(*)	2020	76	93.90 to 84.94	6,925	0.70 to 0.20	0.00	65.06 to 64.24
	2019	81	56.89 to 51.72	4,487	0.70 to 0.20	0.00	34.26 to 33.59
	2018	88	42.37 to 38.72	3,611	0.70 to 0.20	0.00	-1.76 to -2.25
	2017	87	43.13 to 39.61	3,662	0.70 to 0.20	0.00	28.29 to 27.65
	2016	104	33.62 to 31.03	3,425	0.70 to 0.20	0.00	0.39 to -0.11
Mid Cap Stock Trust Series NAV(*)	2020	85	215.62 to 215.62	18,330	0.00 to 0.00	0.00	65.47 to 65.47
	2019	68	130.31 to 130.31	8,798	0.00 to 0.00	0.00	34.64 to 34.64
	2018	64	96.79 to 96.79	6,198	0.00 to 0.00	0.00	-1.54 to -1.54
	2017	62	98.30 to 98.30	6,056	0.00 to 0.00	0.00	28.66 to 28.66
	2016	78	76.41 to 76.41	5,992	0.00 to 0.00	0.00	0.58 to 0.58
Mid Value Trust Series I(*)	2020	107	39.56 to 37.54	4,166	0.65 to 0.20	1.65	9.38 to 8.89
	2019	127	36.17 to 34.48	4,542	0.65 to 0.20	1.11	19.29 to 18.76
	2018	100	30.32 to 29.03	2,991	0.65 to 0.20	0.78	-11.02 to -11.42
	2017	106	34.08 to 32.78	3,587	0.65 to 0.20	0.90	11.21 to 10.71
	2016	159	30.64 to 29.60	4,842	0.65 to 0.20	1.17	23.77 to 23.22
Mid Value Trust Series NAV(*)	2020	156	62.43 to 62.43	9,741	0.00 to 0.00	1.76	9.72 to 9.72
	2019	175	56.90 to 56.90	9,980	0.00 to 0.00	1.18	19.49 to 19.49
	2018	183	47.62 to 47.62	8,720	0.00 to 0.00	0.83	-10.68 to -10.68
	2017	210	53.32 to 53.32	11,222	0.00 to 0.00	0.99	11.46 to 11.46
	2016	231	47.84 to 47.84	11,066	0.00 to 0.00	1.24	24.09 to 24.09
Money Market Trust Series I(*)	2020	1,446	22.39 to 20.24	31,067	0.70 to 0.20	0.30	0.12 to -0.41
	2019	1,226	22.36 to 20.32	26,286	0.70 to 0.20	1.89	1.74 to 1.23
	2018	905	21.98 to 20.07	18,872	0.70 to 0.20	1.52	1.34 to 0.83
	2017	931	21.69 to 19.91	19,208	0.70 to 0.20	0.57	0.38 to -0.11
	2016	1,317	21.60 to 19.93	27,416	0.70 to 0.20	0.07	-0.15 to -0.62
Money -Market Trust Series NAV(*)	2020	4,773	10.46 to 10.46	49,973	0.00 to 0.00	0.35	0.33 to 0.33
	2019	5,922	10.43 to 10.43	61,797	0.00 to 0.00	1.97	1.97 to 1.97
	2018	6,270	10.23 to 10.23	64,149	0.00 to 0.00	1.58	1.60 to 1.60
	2017	5,280	10.07 to 10.07	53,181	0.00 to 0.00	0.63	0.61 to 0.61
	2016	3,628	10.00 to 10.00	36,318	0.00 to 0.00	0.16	0.05 to 0.05
PIMCO All Asset	2020	256	26.28 to 20.76	5,675	0.65 to 0.00	4.66	7.74 to 7.04
	2019	269	24.55 to 19.26	5,554	0.65 to 0.00	2.63	11.44 to 10.72
	2018	267	22.17 to 17.29	4,942	0.65 to 0.00	2.97	-5.59 to -6.21

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JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2020

7. Unit Values (continued):

	At December 31,				For the years and periods ended December 31,
Sub-account	Year	Units (000s)	Unit Fair Value Highest to Lowest (a)	Assets (000s)	Expense Ratio Highest to Lowest (b)	Investment Income Ratio (c)	Total Return Highest to Lowest (d)
PIMCO All Asset	2017	235	$ 23.64 to $ 18.31	$ 4,546	0.65 % to 0.00 %	4.49 %	13.19 % to 12.46 %
	2016	215	21.02 to 16.18	3,668	0.65 to 0.00	2.36	12.59 to 11.85
Real Estate Securities Trust Series I(*)	2020	39	229.18 to 207.35	8,271	0.70 to 0.20	2.03	-5.83 to -6.30
	2019	42	243.37 to 221.30	9,602	0.70 to 0.20	2.08	29.14 to 28.50
	2018	44	188.45 to 172.22	7,803	0.70 to 0.20	1.68	-3.66 to -4.14
	2017	47	195.60 to 179.66	8,670	0.70 to 0.20	0.50	6.02 to 5.50
	2016	57	184.49 to 170.30	9,971	0.70 to 0.20	3.37	6.71 to 6.17
Real Estate Securities Trust Series NAV(*)	2020	54	191.60 to 191.60	10,387	0.00 to 0.00	1.97	-5.58 to -5.58
	2019	71	202.92 to 202.92	14,346	0.00 to 0.00	2.12	29.47 to 29.47
	2018	74	156.74 to 156.74	11,529	0.00 to 0.00	1.70	-3.43 to -3.43
	2017	84	162.30 to 162.30	13,692	0.00 to 0.00	0.63	6.26 to 6.26
	2016	88	152.74 to 152.74	13,370	0.00 to 0.00	3.58	6.96 to 6.96
Science & Technology Trust Series I(*)	2020	151	112.08 to 101.40	15,836	0.70 to 0.20	0.00	57.14 to 56.36
	2019	156	71.33 to 64.86	10,496	0.70 to 0.20	0.13	37.78 to 37.09
	2018	161	51.77 to 47.31	7,892	0.70 to 0.20	0.00	-0.81 to -1.31
	2017	177	52.19 to 47.93	8,662	0.70 to 0.20	0.05	40.85 to 40.15
	2016	225	37.05 to 34.20	7,948	0.70 to 0.20	0.00	8.17 to 7.63
Science & Technology Trust Series NAV(*)	2020	159	95.00 to 95.00	15,082	0.00 to 0.00	0.00	57.58 to 57.58
	2019	154	60.29 to 60.29	9,291	0.00 to 0.00	0.16	38.09 to 38.09
	2018	166	43.66 to 43.66	7,254	0.00 to 0.00	0.00	-0.57 to -0.57
	2017	130	43.91 to 43.91	5,705	0.00 to 0.00	0.10	41.21 to 41.21
	2016	112	31.10 to 31.10	3,496	0.00 to 0.00	0.00	8.41 to 8.41
Select Bond Trust Series I(*)	2020	240	13.86 to 13.32	3,260	0.65 to 0.20	3.15	8.86 to 8.38
	2019	263	12.73 to 12.29	3,291	0.65 to 0.20	1.91	8.72 to 8.25
	2018	537	11.71 to 11.35	6,214	0.65 to 0.20	2.72	-0.64 to -1.08
	2017	571	11.79 to 11.47	6,653	0.65 to 0.20	2.69	3.45 to 2.99
	2016	636	11.39 to 11.14	7,180	0.65 to 0.20	3.14	2.85 to 2.39
Select Bond Trust Series NAV(*)	2020	105	14.20 to 14.20	1,491	0.00 to 0.00	3.22	9.13 to 9.13
	2019	98	13.01 to 13.01	1,272	0.00 to 0.00	2.70	9.01 to 9.01
	2018	100	11.94 to 11.94	1,188	0.00 to 0.00	2.32	-0.38 to -0.38
	2017	140	11.98 to 11.98	1,682	0.00 to 0.00	1.98	3.65 to 3.65
	2016	664	11.56 to 11.56	7,677	0.00 to 0.00	4.98	3.19 to 3.19
Short Term Government Income Trust Series I(*)	2020	245	11.39 to 10.84	2,726	0.70 to 0.20	1.84	3.36 to 2.89
	2019	452	11.02 to 10.53	4,924	0.70 to 0.20	2.45	3.12 to 2.66
	2018	152	10.69 to 10.26	1,589	0.70 to 0.20	2.09	0.60 to 0.12
	2017	140	10.63 to 10.25	1,451	0.70 to 0.20	1.38	0.35 to -0.13
	2016	138	10.59 to 10.26	1,436	0.70 to 0.20	1.80	0.33 to -0.13
Short Term Government Income Trust Series NAV(*)	2020	432	11.74 to 11.74	5,073	0.00 to 0.00	1.89	3.65 to 3.65
	2019	456	11.33 to 11.33	5,166	0.00 to 0.00	1.81	3.44 to 3.44
	2018	486	10.95 to 10.95	5,323	0.00 to 0.00	3.55	0.89 to 0.89
	2017	196	10.86 to 10.86	2,133	0.00 to 0.00	1.52	0.62 to 0.62
	2016	191	10.79 to 10.79	2,057	0.00 to 0.00	1.75	0.63 to 0.63
Small Cap Index Trust Series I(*)	2020	89	54.28 to 49.11	4,622	0.70 to 0.20	1.41	19.05 to 18.45
	2019	98	45.60 to 41.46	4,270	0.70 to 0.20	0.98	24.79 to 24.17
	2018	155	36.54 to 33.39	5,473	0.70 to 0.20	0.95	-11.60 to -12.05
	2017	155	41.34 to 37.96	6,187	0.70 to 0.20	0.44	14.16 to 13.59
	2016	168	36.21 to 33.42	5,910	0.70 to 0.20	1.13	20.73 to 20.13
Small Cap Index Trust Series NAV(*)	2020	207	45.40 to 45.40	9,407	0.00 to 0.00	1.44	19.32 to 19.32
	2019	244	38.05 to 38.05	9,279	0.00 to 0.00	1.03	25.07 to 25.07
	2018	292	30.42 to 30.42	8,878	0.00 to 0.00	1.22	-11.31 to -11.31
	2017	199	34.30 to 34.30	6,813	0.00 to 0.00	0.52	14.43 to 14.43
	2016	197	29.98 to 29.98	5,906	0.00 to 0.00	1.17	21.02 to 21.02
Small Cap Opportunities Trust Series I(*)	2020	240	56.97 to 52.14	12,708	0.70 to 0.20	0.70	9.66 to 9.11
	2019	265	51.95 to 47.79	12,843	0.70 to 0.20	0.39	25.28 to 24.66
	2018	294	41.46 to 38.34	11,456	0.70 to 0.20	0.42	-14.02 to -14.45
	2017	324	48.22 to 44.81	14,715	0.70 to 0.20	0.41	10.85 to 10.30
	2016	360	43.50 to 40.62	14,819	0.70 to 0.20	0.47	19.23 to 18.63
Small Cap Opportunities Trust Series NAV(*)	2020	14	29.15 to 29.15	418	0.00 to 0.00	0.92	9.93 to 9.93
	2019	14	26.52 to 26.52	365	0.00 to 0.00	0.42	25.60 to 25.60
	2018	16	21.11 to 21.11	331	0.00 to 0.00	0.50	-13.81 to -13.81
	2017	14	24.50 to 24.50	339	0.00 to 0.00	0.39	11.18 to 11.18
	2016	19	22.03 to 22.03	409	0.00 to 0.00	0.54	19.51 to 19.51
Small Cap Stock Trust Series I(*)	2020	30	63.07 to 59.72	1,855	0.65 to 0.20	0.00	51.24 to 50.56
	2019	35	41.70 to 39.66	1,404	0.65 to 0.20	0.00	37.75 to 37.13
	2018	40	30.27 to 28.93	1,176	0.65 to 0.20	0.00	-5.38 to -5.81

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JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2020

7. Unit Values (continued):

	At December 31,				For the years and periods ended December 31,
Sub-account	Year	Units (000s)	Unit Fair Value Highest to Lowest (a)	Assets (000s)	Expense Ratio Highest to Lowest (b)	Investment Income Ratio (c)	Total Return Highest to Lowest (d)
Small Cap Stock Trust Series I(*)	2017	44	$ 32.00 to $ 30.71	$ 1,372	0.65 % to 0.20 %	0.00	26.21 % to 25.65 %
	2016	63	25.35 to 24.44	1,544	0.65 to 0.20	0.00	2.09 to 1.63
Small Cap Stock Trust Series NAV(*)	2020	61	76.89 to 76.89	4,725	0.00 to 0.00	0.00	51.62 to 51.62
	2019	49	50.71 to 50.71	2,496	0.00 to 0.00	0.00	38.10 to 38.10
	2018	47	36.72 to 36.72	1,742	0.00 to 0.00	0.00	-5.22 to -5.22
	2017	135	38.74 to 38.74	5,244	0.00 to 0.00	0.00	26.70 to 26.70
	2016	257	30.58 to 30.58	7,850	0.00 to 0.00	0.00	2.27 to 2.27
Small Cap Value Trust Series I(*)	2020	32	31.37 to 29.56	965	0.65 to 0.20	1.25	-6.88 to -7.30
	2019	25	33.69 to 31.89	826	0.65 to 0.20	0.61	26.27 to 25.70
	2018	25	26.68 to 25.37	636	0.65 to 0.20	0.68	-12.67 to -13.07
	2017	27	30.55 to 29.18	808	0.65 to 0.20	0.86	3.52 to 3.06
	2016	38	29.51 to 28.32	1,090	0.65 to 0.20	0.74	22.43 to 21.88
Small Cap Value Trust Series NAV(*)	2020	82	89.94 to 89.94	7,345	0.00 to 0.00	1.17	-6.68 to -6.68
	2019	89	96.38 to 96.38	8,610	0.00 to 0.00	0.65	26.62 to 26.62
	2018	84	76.12 to 76.12	6,366	0.00 to 0.00	0.72	-12.45 to -12.45
	2017	96	86.94 to 86.94	8,356	0.00 to 0.00	0.94	3.79 to 3.79
	2016	108	83.77 to 83.77	9,050	0.00 to 0.00	0.76	22.68 to 22.68
Small Company Value Trust Series I(*)	2020	36	53.81 to 48.69	1,881	0.70 to 0.20	0.27	9.03 to 8.48
	2019	46	49.36 to 44.88	2,211	0.70 to 0.20	0.84	25.28 to 24.65
	2018	56	39.40 to 36.00	2,146	0.70 to 0.20	0.37	-13.12 to -13.55
	2017	62	45.35 to 41.65	2,739	0.70 to 0.20	0.22	11.27 to 10.72
	2016	87	40.75 to 37.62	3,467	0.70 to 0.20	0.77	32.05 to 31.39
Small Company Value Trust Series NAV(*)	2020	49	38.04 to 38.04	1,882	0.00 to 0.00	0.36	9.25 to 9.25
	2019	42	34.82 to 34.82	1,478	0.00 to 0.00	0.95	25.65 to 25.65
	2018	38	27.71 to 27.71	1,062	0.00 to 0.00	0.43	-12.93 to -12.93
	2017	35	31.83 to 31.83	1,129	0.00 to 0.00	0.24	11.58 to 11.58
	2016	23	28.53 to 28.53	648	0.00 to 0.00	0.90	32.33 to 32.33
Strategic Income Opportunities Trust Series I(*)	2020	41	32.11 to 29.77	1,288	0.65 to 0.20	1.53	8.37 to 7.89
	2019	60	29.63 to 27.60	1,746	0.65 to 0.20	2.43	10.68 to 10.18
	2018	88	26.77 to 25.05	2,316	0.65 to 0.20	3.68	-5.23 to -5.66
.	2017	92	28.25 to 26.55	2,561	0.65 to 0.20	3.00	5.38 to 4.90
	2016	108	26.80 to 25.31	2,834	0.65 to 0.20	2.56	4.92 to 4.45
Strategic Income Opportunities Trust Series NAV(*)	2020	196	24.69 to 24.69	4,841	0.00 to 0.00	1.59	8.61 to 8.61
	2019	229	22.73 to 22.73	5,210	0.00 to 0.00	2.78	11.00 to 11.00
	2018	243	20.48 to 20.48	4,978	0.00 to 0.00	3.90	-5.00 to -5.00
	2017	231	21.56 to 21.56	4,988	0.00 to 0.00	3.38	5.66 to 5.66
	2016	185	20.40 to 20.40	3,772	0.00 to 0.00	2.55	5.19 to 5.19
Total Bond Market Series Trust NAV(*)	2020	859	29.10 to 29.10	24,997	0.00 to 0.00	2.58	7.38 to 7.38
	2019	842	27.10 to 27.10	22,815	0.00 to 0.00	2.47	8.30 to 8.30
	2018	799	25.02 to 25.02	19,993	0.00 to 0.00	2.75	-0.24 to -0.24
	2017	923	25.08 to 25.08	23,146	0.00 to 0.00	2.73	3.34 to 3.34
	2016	1,152	24.27 to 24.27	27,955	0.00 to 0.00	3.32	2.45 to 2.45
Total Stock Market Index Trust Series I(*)	2020	147	45.80 to 41.43	6,639	0.70 to 0.20	1.79	21.20 to 20.60
	2019	114	37.78 to 34.35	4,224	0.70 to 0.20	1.39	29.37 to 28.73
	2018	219	29.21 to 26.69	6,265	0.70 to 0.20	1.11	-5.89 to -6.36
	2017	264	31.03 to 28.50	8,026	0.70 to 0.20	1.47	20.35 to 19.75
	2016	282	25.79 to 23.80	7,153	0.70 to 0.20	1.42	12.16 to 11.60
Total Stock Market Index Trust Series NAV(*)	2020	37	159.85 to 159.85	5,975	0.00 to 0.00	1.50	21.50 to 21.50
	2019	54	131.56 to 131.56	7,142	0.00 to 0.00	1.66	29.70 to 29.70
	2018	58	101.44 to 101.44	5,909	0.00 to 0.00	1.23	-5.66 to -5.66
	2017	55	107.52 to 107.52	5,861	0.00 to 0.00	1.62	20.65 to 20.65
	2016	28	89.11 to 89.11	2,505	0.00 to 0.00	1.60	12.38 to 12.38
Ultra Short Term Bond Trust Series I(*)	2020	0	10.33 to 10.06	2	0.65 to 0.45	1.77	1.04 to 0.79
	2019	0	10.22 to 9.98	2	0.65 to 0.45	1.73	2.67 to 2.42
	2018	0	9.95 to 9.75	3	0.65 to 0.45	1.64	0.97 to 0.70
	2017	0	9.86 to 9.68	3	0.65 to 0.45	0.90	0.23 to -0.04
	2016	1	9.84 to 9.68	9	0.65 to 0.45	1.53	0.10 to -0.17
Ultra Short Term Bond Trust Series NAV(*)	2020	86	10.85 to 10.85	933	0.00 to 0.00	1.90	1.62 to 1.62
	2019	85	10.68 to 10.68	908	0.00 to 0.00	1.96	3.08 to 3.08
	2018	67	10.36 to 10.36	698	0.00 to 0.00	1.81	1.53 to 1.53
	2017	58	10.20 to 10.20	590	0.00 to 0.00	1.55	0.62 to 0.62
	2016	63	10.14 to 10.14	635	0.00 to 0.00	1.36	0.67 to 0.67

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JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2020

7. Unit Values (continued):

(*) Sub-account that invests in affiliated Trust.

(a) As the unit fair value is presented as a range of minimum to maximum values, based on the product grouping representing the minimum and maximum expense ratio amounts, some individual contract unit values are not within the ranges presented.

(b) These ratios represent the annualized contract expenses of the separate account, consisting primarily of the items known as “Revenue from underlying fund (12b-1, ST A, Other)” and “Revenue from Sub-account” (formerly referred to as the administrative maintenance charges and sales and service fees (AMC and SSF)). The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to unitholder accounts through the redemption of units and expenses of the underlying fund are excluded.

(c) These ratios represent the distributions from net investment income received by the sub-account from the underlying Portfolio, net of management fees assessed by the portfolio manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that are assessed against policyholder accounts either through the reductions in the unit values or the redemptions of units. The recognition of investment income by the sub-account is affected by the timing of the declaration of dividends by the underlying Portfolio in which the sub-accounts invest.

(d) These ratios, represent the total return for the periods indicated, including changes in the value of the underlying Portfolio, and expenses assessed through the reduction of unit values. These ratios do not include any expenses assessed through the redemption of units. Investment options indicated in footnote 1 with a date notation, if any, denote the effective date of that investment option in the variable account. The total return is calculated for the period indicated or from the effective date through the end of the reporting period. For closed sub-accounts, the total return is calculated from the beginning of the reporting period to the date the sub-account closed. As the total return is presented as a range of minimum to maximum values, based on the product grouping representing the minimum and maximum expense ratio amounts, some individual contract total returns are not within the ranges presented.

(e) Sub-account available in prior year but no activity.

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JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT N

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2020

8. 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 Contract will not be treated as a variable 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 harbor test or diversification requirement set forth in regulations issued by the Secretary of the Treasury. The Company believes that the Account satisfies the current requirements of the regulations, and the Account will continue to meet such requirements.    

9. 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-accounts and are reflected as terminations.

The Company deducts from the assets of the Account a daily charge equivalent to annual rates between 0.00% and 0.70% of the average net value of the Account’s assets for the assumption of mortality and expense risks.

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