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Genworth Financial Announces Sale of Group Benefits Unit for $650 Million


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

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,, or
Media: Philip Moeller, +1-804-662-2534,,
both of Genworth Financial Inc.

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