RICHMOND, Va., Jan. 11 /PRNewswire-FirstCall/ -- Genworth Financial Inc.
(NYSE: GNW) today announced it has reached an agreement to sell its employee
benefits group (EBG) life and health business, based in Windsor, CT, to Sun
Life Financial Inc., for $650 million.
"This transaction is another key strategic move to better focus Genworth
for the future, enabling us to align our core business platforms for growth,
efficiency and improving returns," said Michael D. Fraizer, chairman and chief
executive officer. He also reaffirmed the company's outlook for 2007 net
operating earnings of $3.15 to $3.25 per diluted share, including the impact
of this transaction.
"Over the past six years, we have built EBG into a business that today
provides group life, disability, medical stop loss and dental insurance to
approximately 32,000 organizations and serves 2.9 million plan participants,"
Fraizer said. "Our 650 EBG associates have done a great job building the
operation and increasing its profitability. Based on our strategic
assessment, however, we concluded it was better for this business to grow
outside of Genworth and we are pleased to have such a top quality buyer that
brings scale and a dedication to growth in this market."
The sale is expected to close during the second quarter of 2007, subject
to regulatory approval. Genworth expects a modest gain on the sale upon
closing. Proceeds from the transaction will be used to fund core growth and
other capital priorities, potentially including acquisitions, share
repurchase, or dividends. Genworth expects to recognize EBG as part of
discontinued operations beginning with first quarter 2007 financial
statements. In 2005, EBG reported $31 million in net income on revenues of
$717 million, and has reported $24 million in net income on revenues of $554
million through the first nine months of 2006.
About Genworth Financial
Genworth is a leading insurance holding company, serving the lifestyle
protection, retirement income, investment and mortgage insurance needs of more
than 15 million customers, and has operations in 24 countries. For more
information, visit http://www.genworth.com.
Caution Concerning Forward-Looking Statements
This press release includes certain "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements include, but are not limited to our plans,
objectives, expectations and intentions and other statements contained in this
release that are not historical facts as well as statements identified by
words such as "expects," "anticipates," "intends," plans," "believes,"
"seeks," "estimates," or words of similar meaning. These statements are based
on our current beliefs or expectations and are inherently subject to
significant uncertainties and changes in circumstances, many of which are
beyond our control. Actual results may differ materially from these
expectations due to changes in global political, economic, business,
competitive, market and regulatory factors.
Use of Non-GAAP Measures
This press release includes the non-GAAP financial measure entitled "net
operating earnings." The company defines net operating earnings as net
earnings from continuing operations excluding after-tax net investment gains
(losses), which can fluctuate significantly from period to period, changes in
accounting principles and infrequent or unusual non-operating items.
Management believes that analysis of net operating earnings enhances
understanding and comparability of performance by highlighting underlying
business activity and profitability drivers. However, net operating earnings
should not be viewed as a substitute for GAAP net earnings. In addition, the
company's definition of net operating earnings may differ from the definitions
used by other companies. Due to the unpredictable nature of the items
excluded from the company's definition of net operating earnings, the company
is unable to reconcile its outlook for net operating earnings to net earnings
presented in accordance with GAAP.
SOURCE Genworth Financial, Inc.
CONTACT: Investors: Alicia Charity, +1-804-662-2248,
Media: Philip Moeller, +1-804-662-2534,
both of Genworth Financial Inc.