##### 








---



##### 



CANADIAN RESIDENTS PARTICIPATING IN THE SHARE ACCOUNT




---



##### 



Toronto  October 27, 2005 
    
    
    Operating ROE increased 120 basis points to 13.1% from 11.9% in the third quarter of
2004, exceeding the Companys goal to increase its operating ROE by 75 to 100 basis points
for the year.
    
    Operating EPS for the quarter increased 12.3% compared to the third quarter of 2004.
Excluding the negative impact of the Canadian dollars appreciation against foreign
currencies, operating EPS were up 18% for the quarter. This result exceeded the Companys
2005 target of 10% constant currency earnings growth.
    
    In the third quarter of 2005, Sun Life Financial Inc. repurchased approximately 2
million common shares at an average price of $43.91 under its share repurchase program.
Year-to-date 11.5 million shares have been repurchased for $464 million, on track to meet
or exceed the stated objective of $500 million for the year.
    
    Sun Life Financial Inc. issued $325 million of Non-Cumulative Preferred Shares,
Series 2 priced at $25 per share and paying non-cumulative quarterly dividends of $0.30
per share, yielding 4.8% annually. The offering closed on July 15, 2005 and provides Sun
Life Financial with attractive, low-cost capital.
  CORPORATE DEVELOPMENTS
 
    
    Sun Life Financial closed the acquisition of CMG Asia and CommServe Financial on
October 18, 2005. As a result of the transaction, Sun Life Financial Hong Kong is now
among the top ten life insurance organizations in Hong Kong as measured by sales, with a
proprietary sales force of approximately 1,700 advisors. The transaction is expected to be
accretive to earnings and ROE in 2006.
    
    Consistent with its ongoing focus on building scale in core strategic markets and
exiting those where it does not have a meaningful presence, Sun Life Financial sold its
31.72% interest in Cuprum, a Chilean pension manager.
    
    Sun Life Financial has been selected as one of Canadas Top 100 employers out of more
than 7,500 employers who were invited to compete in the annual listing published by
Macleansmagazine.
 SUN LIFE FINANCIAL CANADA (SLF CANADA)
 
    
    Focused efforts on asset retention in Group Retirement Services continued to produce
positive results as retained assets were $135 million for the quarter and $346 million
year-to-date, a 65% increase over last year.
    
    Group Retirement Services continued to lead the Canadian market, with 48% of defined
contribution pension sales for the first half of 2005.
    
    Group Benefits strengthened its mandate with Canada Post by securing the Life
Benefits plan for its 64,000 members.
    
    Individual insurance sales in the third quarter were up 20% over the third quarter of
2004, reflecting productivity gains in the Clarica Sales Force and continued growth in the
wholesale channel.




---



##### 



SUN LIFE FINANCIAL U.S. (SLF U.S.)
 
    
    The variable annuity suite of products is being enhanced with the launch of a new
guaranteed living benefit, Secured ReturnsSMfor Life. This new rider includes
a guaranteed withdrawal benefit for life, while maintaining the innovative feature of Sun
Life Financials Secured
ReturnsSM2 rider  a refund of fees if the guarantee
is not needed.
    
    Group Life & Health showed strong growth, with gross sales up US$22 million or 51%
over third quarter 2004. Business in force grew 19% since the third quarter of last year.
    
    Individual Life announced the introduction of Sun ValueSMSingle Premium
Universal Life Insurance in New York, featuring simplified underwriting processes. Sun
ValueSMis available to customers through financial institutions in New York
State and will soon be available to bank and credit union customers in other states.
 MFS INVESTMENT MANAGEMENT (MFS)
 
    
    MFS generated positive net flows for the fourth consecutive quarter, producing
US$1.4 billion in net sales during the third quarter of 2005. Year-to-date net flows were
US$5.6 billion, up US$14.6 billion compared to the same period in 2004.
    
    Assets under management (AUM) increased US$7 billion to US$157.4 billion at the end of
September 2005.
    
    MFS has consolidated multiple offshore retail fund families into new MFS Meridian
Funds registered in Luxembourg, with over US$6 billion in assets. The new MFS Meridian
Funds offer investors in markets across Europe a comprehensive and flexible range of
investment choices. The Funds are Euro dollars, pounds sterling and U.S. dollar denominated and offer
both accumulation and income shares.
 SUN LIFE FINANCIAL ASIA (SLF ASIA)
 
    
    Birla Sun Life Asset Management Company Limited (BSLAMC) expanded its operations with
the acquisition of the Indian mutual fund business of Alliance Capital Mutual Fund. BSLAMC
now has approximately CDN$3.5 billion under management.
    
    Sun Life Everbright extended its reach by commencing operations in Zhejiang province
with the opening of a third branch office in the provincial capital city of Hangzhou.
 USE OF NON-GAAP FINANCIAL MEASURES




---



##### 



MANAGEMENTS DISCUSSION & ANALYSIS
 
 For the period ended September 30, 2005
Dated October 27, 2005
 Earnings and Profitability
 FINANCIAL SUMMARY
 (Unaudited)
    Quarterly Results
    
    
    Year to DateQ305
    
    
    Q205
    
    
    Q105
    
    
    Q404
    
    
    Q304
    
    
    2005
    
    
    2004Revenues ($ millions)
    
    
    5,530
    
    
    
    6,026
    
    
    
    5,119
    
    
    
    5,269
    
    
    
    5,390
    
    
    
    16,675
    
    
    
    16,479Common
Shareholders Net Income ($ millions)
    
    
    430
    
    
    
    477
    
    
    
    458
    
    
    
    438
    
    
    
    439
    
    
    
    1,365
    
    
    
    1,242Operating
Earnings(1)($ millions)
    
    
    481
    
    
    
    477
    
    
    
    458
    
    
    
    438
    
    
    
    439
    
    
    
    1,416
    
    
    
    1,301Earnings Per
Common Share (EPS) ($)
    
    
    0.74
    
    
    
    0.81
    
    
    
    0.77
    
    
    
    0.74
    
    
    
    0.73
    
    
    
    2.32
    
    
    
    2.07Operating
EPS(1)($)
    
    
    0.82
    
    
    
    0.81
    
    
    
    0.77
    
    
    
    0.74
    
    
    
    0.73
    
    
    
    2.40
    
    
    
    2.17Fully
diluted operating EPS(1)($)
    
    
    0.82
    
    
    
    0.81
    
    
    
    0.77
    
    
    
    0.73
    
    
    
    0.73
    
    
    
    2.40
    
    
    
    2.16Return on
Common Equity (ROE) (%)
    
    
    11.7
    
    
    
    13.0
    
    
    
    12.6
    
    
    
    12.1
    
    
    
    11.9
    
    
    
    12.6
    
    
    
    11.4Operating
ROE(1)(%)
    
    
    13.1
    
    
    
    13.0
    
    
    
    12.6
    
    
    
    12.1
    
    
    
    11.9
    
    
    
    13.0
    
    
    
    11.9Average Common Shares Outstanding (millions)
    
    
    584.2
    
    
    
    587.4
    
    
    
    591.8
    
    
    
    595.2
    
    
    
    598.7
    
    
    
    587.8
    
    
    
    599.8S&P 500 Index (daily average)
    
    
    1,223
    
    
    
    1,181
    
    
    
    1,192
    
    
    
    1,162
    
    
    
    1,104
    
    
    
    1,199
    
    
    
    1,120S&P 500 Index (close)
    
    
    1,229
    
    
    
    1,191
    
    
    
    1,181
    
    
    
    1,212
    
    
    
    1,115
    
    
    
    1,229
    
    
    
    1,115
  (2)
      (1)
    
    See Use of Non-GAAP Financial Measures. Operating earnings, operating EPS and
operating ROE exclude the charge of $51 million related to the sale of Cuprum taken in the
third quarter of 2005 and the $59 million regulatory charge against MFS taken in the first
quarter of 2004.(2)
    
    Or together with its subsidiaries and joint ventures the Company or Sun Life
Financial.




---



##### 



SLF CANADA
 Quarterly Results
    
    Year to DateQ305
    
    
    Q205
    
    
    Q105
    
    
    Q404
    
    
    Q3'04
    
    
    2005
    
    
    2004Revenues ($ millions)
    
    
    2,120
    
    
    
    2,104
    
    
    
    2,146
    
    
    
    2,029
    
    
    
    1,960
    
    
    
    6,370
    
    
    
    6,133Premiums & Deposits ($ millions)
    
    
    3,501
    
    
    
    3,800
    
    
    
    5,412
    
    
    
    3,900
    
    
    
    3,942
    
    
    
    12,713
    
    
    
    12,856Common Shareholders Net Income ($ millions)Individual Insurance & Investments
    
    
    128
    
    
    
    145
    
    
    
    168
    
    
    
    126
    
    
    
    121
    
    
    
    441
    
    
    
    385Group Benefits
    
    
    69
    
    
    
    54
    
    
    
    38
    
    
    
    63
    
    
    
    66
    
    
    
    161
    
    
    
    189Group Retirement Services & Institutional Investments
    
    
    31
    
    
    
    37
    
    
    
    39
    
    
    
    35
    
    
    
    34
    
    
    
    107
    
    
    
    97Total
    
    
    228
    
    
    
    236
    
    
    
    245
    
    
    
    224
    
    
    
    221
    
    
    
    709
    
    
    
    671ROE (%)
    
    
    13.5
    
    
    
    14.2
    
    
    
    14.8
    
    
    
    13.7
    
    
    
    13.4
    
    
    
    14.3
    
    
    
    13.5
    
    
    Individual Insurance & Investments earnings increased 6% over the third quarter of
2004 due to higher investment income, lower unit costs and improved earnings from the
investment in CI Financial.
    
    Improved morbidity experience and changes to reinsurance arrangements contributed to
the 5% earnings growth in Group Benefits over the third quarter of 2004.
    
    The reduction in Group Retirement Services & Institutional Investments earnings over
the third quarter of 2004 was attributable to more favourable mortality experience in the
third quarter of 2004.
 SLF U.S.
 Quarterly Results
    
    
    Year to DateQ305
    
    
    Q205
    
    
    Q105
    
    
    Q404
    
    
    Q304
    
    
    2005
    
    
    2004Revenues (US$ millions)
    
    
    2,020
    
    
    
    2,281
    
    
    
    1,539
    
    
    
    1,825
    
    
    
    1,832
    
    
    
    5,840
    
    
    
    5,420Revenues (C$ millions)
    
    
    2,443
    
    
    
    2,835
    
    
    
    1,889
    
    
    
    2,228
    
    
    
    2,399
    
    
    
    7,167
    
    
    
    7,201Common Shareholders Net Income (US$ millions)Annuities
    
    
    78
    
    
    
    72
    
    
    
    34
    
    
    
    45
    
    
    
    44
    
    
    
    184
    
    
    
    139Individual Life
    
    
    21
    
    
    
    20
    
    
    
    25
    
    
    
    19
    
    
    
    19
    
    
    
    66
    
    
    
    62Group Life & Health
    
    
    10
    
    
    
    15
    
    
    
    6
    
    
    
    12
    
    
    
    7
    
    
    
    31
    
    
    
    23Total (US$ millions)
    
    
    109
    
    
    
    107
    
    
    
    65
    
    
    
    76
    
    
    
    70
    
    
    
    281
    
    
    
    224Total (C$ millions)
    
    
    133
    
    
    
    132
    
    
    
    81
    
    
    
    93
    
    
    
    92
    
    
    
    346
    
    
    
    298ROE (%)
    
    
    13.6
    
    
    
    13.8
    
    
    
    8.6
    
    
    
    10.5
    
    
    
    9.9
    
    
    
    12.1
    
    
    
    10.4
   
    
    Annuities earnings increased US$34 million compared to the third quarter of 2004 and
US$45 million year-to-date as a result of improved fixed annuity spreads and increased
earnings from equity market movement. Improvements in fixed annuity spreads were the
result of interest rate management, improved investment income and strong credit
performance.
    
    Group Life & Health earnings increased $3 million compared to the third quarter of
2004 due to improved mortality. Year-to-date earnings increased $8 million over 2004
primarily as a result of improved persistency and claims experience.




---



##### 



MFS INVESTMENT MANAGEMENT
 Quarterly Results
    
    
    Year to DateQ305
    
    
    Q205
    
    
    Q105
    
    
    Q404
    
    
    Q304
    
    
    2005
    
    
    2004Revenues
(US$ millions)
    
    
    342
    
    
    
    332
    
    
    
    332
    
    
    
    330
    
    
    
    316
    
    
    
    1,006
    
    
    
    976Revenues
(C$ millions)
    
    
    412
    
    
    
    413
    
    
    
    407
    
    
    
    402
    
    
    
    414
    
    
    
    1,232
    
    
    
    1,298Common Shareholders Net
Income/(Loss) (US$ millions)
    
    
    38
    
    
    
    34
    
    
    
    37
    
    
    
    36
    
    
    
    32
    
    
    
    109
    
    
    
    52Operating Earnings (US$ millions)
    
    
    38
    
    
    
    34
    
    
    
    37
    
    
    
    36
    
    
    
    32
    
    
    
    109
    
    
    
    97Common Shareholders Net
Income/(Loss) (C$ millions)
    
    
    46
    
    
    
    42
    
    
    
    46
    
    
    
    44
    
    
    
    42
    
    
    
    134
    
    
    
    70Operating Earnings (C$ millions)
    
    
    46
    
    
    
    42
    
    
    
    46
    
    
    
    44
    
    
    
    42
    
    
    
    134
    
    
    
    129Average Net Assets (US$ billions)
    
    
    155
    
    
    
    147
    
    
    
    145
    
    
    
    140
    
    
    
    132
    
    
    
    149
    
    
    
    138Assets Under Management (US$ billions)
    
    
    157
    
    
    
    150
    
    
    
    145
    
    
    
    146
    
    
    
    134
    
    
    
    157
    
    
    
    134New Sales/(Redemptions) (US$ billions)
    
    
    1.4
    
    
    
    3.5
    
    
    
    0.7
    
    
    
    0.1
    
    
    
    (2.5
    )
    
    
    5.6
    
    
    
    (9.0
    )Market Movement (US$ billions)
    
    
    6.3
    
    
    
    1.8
    
    
    
    (2.4
    )
    
    
    12.1
    
    
    
    (0.9
    )
    
    
    5.7
    
    
    
    2.7S&P 500 Index (daily average)
    
    
    1,223
    
    
    
    1,181
    
    
    
    1,192
    
    
    
    1,162
    
    
    
    1,104
    
    
    
    1,199
    
    
    
    1,120
    SLF ASIA
 Quarterly Results
    
    
    Year to DateQ3'05
    
    
    Q2'05
    
    
    Q1'05
    
    
    Q4'04
    
    
    Q3'04
    
    
    2005
    
    
    2004Revenues ($ millions)
    
    
    178
    
    
    
    205
    
    
    
    214
    
    
    
    239
    
    
    
    189
    
    
    
    597
    
    
    
    529Common Shareholders Net
Income ($ millions)
    
    
    10
    
    
    
    19
    
    
    
    6
    
    
    
    18
    
    
    
    10
    
    
    
    35
    
    
    
    27ROE (%)
    
    
    9.8
    
    
    
    17.6
    
    
    
    5.4
    
    
    
    16.8
    
    
    
    9.3
    
    
    
    10.8
    
    
    
    8.2




---



##### 



CORPORATE
  Quarterly Results
    
    
    Year to DateQ305
    
    
    Q205
    
    
    Q105
    
    
    Q404
    
    
    Q3'04
    
    
    2005
    
    
    2004Revenues
($ millions)
    
    
    454
    
    
    
    538
    
    
    
    530
    
    
    
    477
    
    
    
    534
    
    
    
    1,522
    
    
    
    1,660Common Shareholders Net Income/(Loss) ($ millions)SLF U.K.
    
    
    48
    
    
    
    39
    
    
    
    47
    
    
    
    45
    
    
    
    39
    
    
    
    134
    
    
    
    128Reinsurance
    
    
    (6
    )
    
    
    15
    
    
    
    14
    
    
    
    26
    
    
    
    21
    
    
    
    23
    
    
    
    46Other
    
    
    (29
    )
    
    
    (6
    )
    
    
    19
    
    
    
    (12
    )
    
    
    14
    
    
    
    (16
    )
    
    
    2Total
    
    
    13
    
    
    
    48
    
    
    
    80
    
    
    
    59
    
    
    
    74
    
    
    
    141
    
    
    
    176
   
    
    Prior year earnings in SLF U.K. reflected poor mortality experience in the Group Life
block of business, which is now substantively run off following the sale of the renewal
rights on this business in 2003.
    
    The current quarter results in Reinsurance reflected the impact of actuarial
assumption and methodology changes on in-force business in addition to poor mortality
experience in the quarter.
    
    The loss of $29 million in Corporate Other reflected the net loss of $51 million on
the Cuprum sale and foreign exchange losses which were partially offset by the resolution
of a prior year tax issue.
   REVENUE




---



##### 



ASSETS UNDER MANAGEMENT
  (i)
    
    an increase of $11.2 billion from market movements, and(ii)
    
    net sales of mutual, managed and segregated funds of $1.1 billion.
  (i)
    
    an increase of $32.3 billion from higher capital markets, and(ii)
    
    $8.9 billion of net sales of mutual, managed and segregated funds, partially offset
by a(iii)
    
    $25.6 billion decrease from the strengthening of the Canadian dollar against foreign
currencies.
 CHANGES IN THE BALANCE SHEET AND SHAREHOLDERS EQUITY




---



##### 



CASH FLOWS
 Quarterly Results
    
    
    Year to Date($ millions)
    
    Q305
    
    
    Q304
    
    
    2005
    
    
    2004Cash and cash equivalents, beginning of period
    
    
    4,343
    
    
    
    3,628
    
    
    
    3,748
    
    
    
    3,175Cash flows provided by (used in):Operating activities
    
    
    18
    
    
    
    672
    
    
    
    1,918
    
    
    
    2,173Financing activities
    
    
    72
    
    
    
    (225
    )
    
    
    (205
    )
    
    
    (505
    )Investing activities
    
    
    (697
    )
    
    
    (808
    )
    
    
    (1,689
    )
    
    
    (1,641
    )Changes due to fluctuations in exchange rates
    
    
    (163
    )
    
    
    (83
    )
    
    
    (199
    )
    
    
    (18
    )Increase in cash and cash equivalents
    
    
    (770
    )
    
    
    (444
    )
    
    
    (175
    )
    
    
    9Cash and cash equivalents, end of period
    
    
    3,573
    
    
    
    3,184
    
    
    
    3,573
    
    
    
    3,184Short-term securities, end of period
    
    
    2,709
    
    
    
    2,747
    
    
    
    2,709
    
    
    
    2,747Total cash, cash equivalents and short-term securities
    
    
    6,282
    
    
    
    5,931
    
    
    
    6,282
    
    
    
    5,931
     RISK MANAGEMENT
   OUTLOOK




---



##### 



REGULATORY AND LEGAL MATTERS
    USE OF NON-GAAP FINANCIAL MEASURES
   FORWARD-LOOKING STATEMENTS




---



##### 



For the three months ended
    
    
    For the nine months endedSeptember 30
    
    
    September 30*
    
    
    September 30
    
    
    September 30*(unaudited, in millions of Canadian dollars, except for per share amounts)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004RevenuePremium income:Annuities
    
    $
    1,198
    
    
    $
    1,176
    
    
    $
    3,769
    
    
    $
    3,691Life insurance
    
    
    1,379
    
    
    
    1,474
    
    
    
    4,232
    
    
    
    4,347Health insurance
    
    
    739
    
    
    
    611
    
    
    
    1,994
    
    
    
    1,8003,316
    
    
    
    3,261
    
    
    
    9,995
    
    
    
    9,838Net investment income
    
    
    1,484
    
    
    
    1,430
    
    
    
    4,510
    
    
    
    4,422Fee income
    
    
    730
    
    
    
    699
    
    
    
    2,170
    
    
    
    2,2195,530
    
    
    
    5,390
    
    
    
    16,675
    
    
    
    16,479Policy Benefits and ExpensesPayments to policyholders, beneficiaries and depositors:Maturities and surrenders
    
    
    1,612
    
    
    
    1,400
    
    
    
    4,540
    
    
    
    4,551Annuity payments
    
    
    362
    
    
    
    370
    
    
    
    1,118
    
    
    
    1,128Death and disability benefits
    
    
    617
    
    
    
    607
    
    
    
    1,840
    
    
    
    1,933Health benefits
    
    
    476
    
    
    
    426
    
    
    
    1,380
    
    
    
    1,323Policyholder dividends and interest on claims and deposits
    
    
    282
    
    
    
    240
    
    
    
    819
    
    
    
    8063,349
    
    
    
    3,043
    
    
    
    9,697
    
    
    
    9,741Net transfers to segregated funds
    
    
    189
    
    
    
    84
    
    
    
    499
    
    
    
    447Increase in actuarial liabilities (Note 7)
    
    
    159
    
    
    
    571
    
    
    
    901
    
    
    
    931Commissions
    
    
    428
    
    
    
    478
    
    
    
    1,285
    
    
    
    1,453Operating expenses
    
    
    667
    
    
    
    663
    
    
    
    2,106
    
    
    
    2,085Premium taxes
    
    
    50
    
    
    
    44
    
    
    
    139
    
    
    
    135Interest expense
    
    
    65
    
    
    
    68
    
    
    
    200
    
    
    
    2024,907
    
    
    
    4,951
    
    
    
    14,827
    
    
    
    14,994Income before Income Taxes and Non-controlling Interests
    
    
    623
    
    
    
    439
    
    
    
    1,848
    
    
    
    1,485Income taxes expense (benefit)
    
    
    179
    
    
    
    (7
    )
    
    
    444
    
    
    
    214Non-controlling interests in net income of subsidiaries
    
    
    5
    
    
    
    7
    
    
    
    18
    
    
    
    20Total Net Income
    
    
    439
    
    
    
    439
    
    
    
    1,386
    
    
    
    1,251Less: Participating policyholders net income
    
    
    1
    
    
    
    
    
    
    
    6
    
    
    
    9Preferred shareholder dividends
    
    
    8
    
    
    
    
    
    
    
    15
    
    
    
    Common Shareholders Net Income
    
    $
    430
    
    
    $
    439
    
    
    $
    1,365
    
    
    $
    1,242Average exchange rates:U.S. Dollars
    
    
    1.21
    
    
    
    1.31
    
    
    
    1.23
    
    
    
    1.33U.K. Pounds
    
    
    2.16
    
    
    
    2.38
    
    
    
    2.26
    
    
    
    2.42* As restated for adoption of Consolidation of Variable Interest Entities, Canadian Institute of Chartered Accountants (CICA) Handbook Accounting Guideline 15 (AcG 15) (Note 2)Earnings per share (Note 5)Basic
    
    $
    0.74
    
    
    $
    0.73
    
    
    $
    2.32
    
    
    $
    2.07Diluted
    
    $
    0.73
    
    
    $
    0.73
    
    
    $
    2.30
    
    
    $
    2.06Weighted
average shares outstanding in millions (Note 5)Basic
    
    
    584
    
    
    
    599
    
    
    
    588
    
    
    
    600Diluted
    
    
    588
    
    
    
    601
    
    
    
    591
    
    
    
    603




---



##### 



As atSeptember 30
    
    
    December 31*
    
    
    September 30*(unaudited, in millions of Canadian dollars)
    
    2005
    
    
    2004
    
    
    2004AssetsBonds
    
    $
    63,690
    
    
    $
    64,496
    
    
    $
    66,151Mortgages
    
    
    14,035
    
    
    
    13,862
    
    
    
    13,968Stocks
    
    
    3,404
    
    
    
    3,463
    
    
    
    3,640Real estate
    
    
    3,216
    
    
    
    3,148
    
    
    
    3,157Cash, cash equivalents and short-term securities
    
    
    6,282
    
    
    
    5,958
    
    
    
    5,931Policy loans and other invested assets
    
    
    5,643
    
    
    
    5,984
    
    
    
    6,035Invested assets
    
    
    96,270
    
    
    
    96,911
    
    
    
    98,882Goodwill
    
    
    5,459
    
    
    
    5,471
    
    
    
    5,575Intangible assets
    
    
    758
    
    
    
    751
    
    
    
    758Other assets
    
    
    5,427
    
    
    
    4,670
    
    
    
    5,876Total general fund assets
    
    $
    107,914
    
    
    $
    107,803
    
    
    $
    111,091Segregated funds net assets
    
    $
    59,160
    
    
    $
    56,564
    
    
    $
    55,054Liabilities and EquityActuarial
liabilities and other policy liabilities (Note
7)
    
    $
    76,150
    
    
    $
    76,056
    
    
    $
    77,835Amounts on deposit
    
    
    3,126
    
    
    
    3,144
    
    
    
    3,147Deferred net realized gains
    
    
    3,658
    
    
    
    3,466
    
    
    
    3,348Other liabilities
    
    
    8,193
    
    
    
    9,072
    
    
    
    10,194Total general fund liabilities
    
    
    91,127
    
    
    
    91,738
    
    
    
    94,524Subordinated debt
    
    
    1,455
    
    
    
    1,462
    
    
    
    1,729Non-controlling interests in subsidiaries
    
    
    31
    
    
    
    188
    
    
    
    184Total equity
    
    
    15,301
    
    
    
    14,415
    
    
    
    14,654Total general fund liabilities and equity
    
    $
    107,914
    
    
    $
    107,803
    
    
    $
    111,091Segregated funds contract liabilities
    
    $
    59,160
    
    
    $
    56,564
    
    
    $
    55,054Exchange rate at balance sheet date:U.S. Dollars
    
    
    1.16
    
    
    
    1.20
    
    
    
    1.28U.K. Pounds
    
    
    2.05
    
    
    
    2.32
    
    
    
    2.30




---



##### 



For the nine months endedParticipating
    
    
    
    
    
    
    September 30
    
    
    September 30*(unaudited, in millions of Canadian dollars)
    
    Policyholders
    
    
    Shareholders
    
    
    2005
    
    
    2004Preferred SharesBalance, beginning of period
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Preferred
shares issued (Note 9)
    
    
    
    
    
    
    725
    
    
    
    725
    
    
    
    Issuance
costs, net of taxes (Note 9)
    
    
    
    
    
    
    (12
    )
    
    
    (12
    )
    
    
    Balance, end of period
    
    
    
    
    
    
    713
    
    
    
    713
    
    
    
    Common SharesBalance, beginning of period
    
    
    
    
    
    
    7,238
    
    
    
    7,238
    
    
    
    7,289Stock options exercised
    
    
    
    
    
    
    73
    
    
    
    73
    
    
    
    54Common shares purchased for cancellation (Note 4)
    
    
    
    
    
    
    (142
    )
    
    
    (142
    )
    
    
    (62
    )Balance, end of period
    
    
    
    
    
    
    7,169
    
    
    
    7,169
    
    
    
    7,281Contributed SurplusBalance, beginning of period
    
    
    
    
    
    
    70
    
    
    
    70
    
    
    
    76Stock based compensation
    
    
    
    
    
    
    22
    
    
    
    22
    
    
    
    11Stock options exercised
    
    
    
    
    
    
    (15
    )
    
    
    (15
    )
    
    
    (13
    )Balance, end of period
    
    
    
    
    
    
    77
    
    
    
    77
    
    
    
    74Retained EarningsBalance, beginning of period, as previously reported
    
    
    85
    
    
    
    8,116
    
    
    
    8,201
    
    
    
    7,284Adjustment for change in accounting policy (Note 2)
    
    
    
    
    
    
    3
    
    
    
    3
    
    
    
    4Balance, beginning of period, as restated
    
    
    85
    
    
    
    8,119
    
    
    
    8,204
    
    
    
    7,288Net income
    
    
    6
    
    
    
    1,380
    
    
    
    1,386
    
    
    
    1,251Dividends on common shares
    
    
    
    
    
    
    (432
    )
    
    
    (432
    )
    
    
    (384
    )Dividends on preferred shares
    
    
    
    
    
    
    (15
    )
    
    
    (15
    )
    
    
    Common shares purchased for cancellation (Note 4)
    
    
    
    
    
    
    (322
    )
    
    
    (322
    )
    
    
    (123
    )Balance, end of period
    
    
    91
    
    
    
    8,730
    
    
    
    8,821
    
    
    
    8,032Currency Translation AccountBalance, beginning of period
    
    
    (8
    )
    
    
    (1,089
    )
    
    
    (1,097
    )
    
    
    (673
    )Adjustment for foreign exchange gain (Notes 3 and 11)
    
    
    
    
    
    
    (17
    )
    
    
    (17
    )
    
    
    Changes for the period
    
    
    (1
    )
    
    
    (364
    )
    
    
    (365
    )
    
    
    (60
    )Balance, end of period
    
    
    (9
    )
    
    
    (1,470
    )
    
    
    (1,479
    )
    
    
    (733
    )Total equity
    
    $
    82
    
    
    $
    15,219
    
    
    $
    15,301
    
    
    $
    14,654
 *




---



##### 



For the three months ended
    
    
    For the nine months endedSeptember 30
    
    
    September 30*
    
    
    September 30
    
    
    September 30*(unaudited, in millions of Canadian dollars)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Cash Flows Provided by (Used in) Operating ActivitiesTotal net income
    
    $
    439
    
    
    $
    439
    
    
    $
    1,386
    
    
    $
    1,251New mutual fund business acquisition costs capitalized
    
    
    (17
    )
    
    
    (23
    )
    
    
    (69
    )
    
    
    (74
    )Redemption fees of mutual funds
    
    
    7
    
    
    
    16
    
    
    
    31
    
    
    
    51Items not affecting cash
    
    
    (411
    )
    
    
    240
    
    
    
    570
    
    
    
    945Net cash provided by operating activities
    
    
    18
    
    
    
    672
    
    
    
    1,918
    
    
    
    2,173Cash Flows Provided by (Used in) Financing ActivitiesBorrowed funds
    
    
    (23
    )
    
    
    29
    
    
    
    (58
    )
    
    
    23Issuance of
preferred shares (Note 9)
    
    
    325
    
    
    
    
    
    
    
    725
    
    
    
    Payments to
underwriters (Note 9)
    
    
    (10
    )
    
    
    
    
    
    
    (19
    )
    
    
    Issuance of common shares on exercise of stock options
    
    
    22
    
    
    
    6
    
    
    
    58
    
    
    
    41Common
shares purchased for cancellation (Note 4)
    
    
    (85
    )
    
    
    (128
    )
    
    
    (464
    )
    
    
    (185
    )Dividends paid on common shares
    
    
    (149
    )
    
    
    (132
    )
    
    
    (432
    )
    
    
    (384
    )Dividends paid on preferred shares
    
    
    (8
    )
    
    
    
    
    
    
    (15
    )
    
    
    Net cash provided by (used in) financing activities
    
    
    72
    
    
    
    (225
    )
    
    
    (205
    )
    
    
    (505
    )Cash Flows Provided by (Used in) Investing ActivitiesSales, maturities and repayments of bonds, mortgages, stocks
and real estate
    
    
    7,128
    
    
    
    7,880
    
    
    
    23,959
    
    
    
    29,552Purchases of bonds, mortgages, stocks and real estate
    
    
    (7,077
    )
    
    
    (8,725
    )
    
    
    (25,085
    )
    
    
    (30,212
    )Policy loans
    
    
    (15
    )
    
    
    (6
    )
    
    
    (49
    )
    
    
    (7
    )Short-term securities
    
    
    (845
    )
    
    
    19
    
    
    
    (496
    )
    
    
    (977
    )Other investments
    
    
    (18
    )
    
    
    24
    
    
    
    2
    
    
    
    3Disposal
(Note 3)
    
    
    130
    
    
    
    
    
    
    
    130
    
    
    
    Redemption
of preferred shares of subsidiary (Note 9)
    
    
    
    
    
    
    
    
    
    
    (150
    )
    
    
    Net cash used in investing activities
    
    
    (697
    )
    
    
    (808
    )
    
    
    (1,689
    )
    
    
    (1,641
    )Changes due to fluctuations in exchange rates
    
    
    (163
    )
    
    
    (83
    )
    
    
    (199
    )
    
    
    (18
    )Increase (decrease) in cash and cash equivalents
    
    
    (770
    )
    
    
    (444
    )
    
    
    (175
    )
    
    
    9Cash and cash equivalents, beginning of period
    
    
    4,343
    
    
    
    3,628
    
    
    
    3,748
    
    
    
    3,175Cash and cash equivalents, end of period
    
    
    3,573
    
    
    
    3,184
    
    
    
    3,573
    
    
    
    3,184Short-term securities, end of period
    
    
    2,709
    
    
    
    2,747
    
    
    
    2,709
    
    
    
    2,747Cash, cash equivalents and short-term securities, end of period
    
    $
    6,282
    
    
    $
    5,931
    
    
    $
    6,282
    
    
    $
    5,931Supplementary InformationCash and cash equivalents:Cash
    
    
    
    
    
    
    
    
    
    $
    846
    
    
    $
    258Cash equivalents
    
    
    
    
    
    
    
    
    
    
    2,727
    
    
    
    2,926$
    3,573
    
    
    $
    3,184Cash disbursements made for:Interest on borrowed funds and subordinated debt
    
    $
    5
    
    
    $
    1
    
    
    $
    139
    
    
    $
    136Income taxes, net of refunds
    
    $
    68
    
    
    $
    75
    
    
    $
    244
    
    
    $
    191
 *




---



##### 



For the three months ended
    
    
    For the nine months endedSeptember 30
    
    
    September 30
    
    
    September 30
    
    
    September 30(unaudited, in millions of Canadian dollars)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Additions to Segregated FundsDeposits:Annuities
    
    $
    1,417
    
    
    $
    1,191
    
    
    $
    5,264
    
    
    $
    4,567Life insurance
    
    
    66
    
    
    
    777
    
    
    
    186
    
    
    
    1,0861,483
    
    
    
    1,968
    
    
    
    5,450
    
    
    
    5,653Net transfers from general funds
    
    
    189
    
    
    
    84
    
    
    
    499
    
    
    
    447Net realized and unrealized gains (losses)
    
    
    2,307
    
    
    
    (314
    )
    
    
    3,466
    
    
    
    940Other investment income
    
    
    267
    
    
    
    246
    
    
    
    942
    
    
    
    9214,246
    
    
    
    1,984
    
    
    
    10,357
    
    
    
    7,961Deductions from Segregated FundsPayments to policyholders and their beneficiaries
    
    
    1,733
    
    
    
    2,583
    
    
    
    5,420
    
    
    
    6,220Management fees
    
    
    164
    
    
    
    155
    
    
    
    498
    
    
    
    466Taxes and other expenses
    
    
    54
    
    
    
    29
    
    
    
    124
    
    
    
    89Effect of changes in currency exchange rates
    
    
    2,024
    
    
    
    1,761
    
    
    
    1,719
    
    
    
    2183,975
    
    
    
    4,528
    
    
    
    7,761
    
    
    
    6,993Net additions (reductions) to segregated funds for the period
    
    
    271
    
    
    
    (2,544
    )
    
    
    2,596
    
    
    
    968Segregated funds net assets, beginning of period
    
    
    58,889
    
    
    
    57,598
    
    
    
    56,564
    
    
    
    54,086Segregated funds net assets, end of period
    
    $
    59,160
    
    
    $
    55,054
    
    
    $
    59,160
    
    
    $
    55,054
  As atSeptember 30
    
    
    December 31
    
    
    September 30(unaudited, in millions of Canadian dollars)
    
    2005
    
    
    2004
    
    
    2004AssetsSegregated and mutual fund units
    
    $
    45,868
    
    
    $
    43,589
    
    
    $
    42,154Stocks
    
    
    7,411
    
    
    
    7,082
    
    
    
    6,792Bonds
    
    
    5,550
    
    
    
    5,600
    
    
    
    5,625Cash, cash equivalents and short-term securities
    
    
    1,168
    
    
    
    961
    
    
    
    1,396Real estate
    
    
    152
    
    
    
    159
    
    
    
    153Mortgages
    
    
    49
    
    
    
    61
    
    
    
    67Other assets
    
    
    970
    
    
    
    716
    
    
    
    1,76461,168
    
    
    
    58,168
    
    
    
    57,951Liabilities
    
    
    2,008
    
    
    
    1,604
    
    
    
    2,897Net assets attributable to segregated funds policyholders
    
    $
    59,160
    
    
    $
    56,564
    
    
    $
    55,054




---



##### 



1. Basis of Presentation
  2. Changes in Accounting Policies
 Consolidation of Variable Interest Entities:
  
 
 
 Financial
Instruments  Disclosure and Presentation:




---



##### 



For the three months ended
    
    
    For the nine months endedSeptember 30
    
    
    September 30*
    
    
    September 30
    
    
    September 30*2005
    
    
    2004
    
    
    2005
    
    
    2004Common shareholders net income
    
    $
    430
    
    
    $
    439
    
    
    $
    1,365
    
    
    $
    1,242Less: Effect of stock options of subsidiaries(1)
    
    
    1
    
    
    
    1
    
    
    
    4
    
    
    
    1Common shareholders net income on a diluted basis
    
    $
    429
    
    
    $
    438
    
    
    $
    1,361
    
    
    $
    1,241Weighted average number of shares outstanding for basic earnings per share
(in millions)
    
    
    584
    
    
    
    599
    
    
    
    588
    
    
    
    600Add: Adjustments relating to the dilutive impact of stock options(1)
    
    
    4
    
    
    
    2
    
    
    
    3
    
    
    
    3Weighted average number of shares outstanding on a diluted basis (in millions)
    
    
    588
    
    
    
    601
    
    
    
    591
    
    
    
    603
 (1)
    
    The effect of stock options is calculated based on the treasury stock method
requirements which assume that unrecognized compensation, as well as any proceeds from the
exercise of the options, would be used to purchase common shares at the average market
prices during the period.*
    
    As restated for adoption of AcG 15 (Note 2)




---



##### 



Results by segment for the three months ended

September 30, 2005United States
    
    
    
    
    
    
    
    
    
    
    ConsolidationCanada
    
    
    Sun Life
    
    
    MFS
    
    
    Asia
    
    
    Corporate
    
    
    Adjustments
    
    
    TotalRevenue
    
    $
    2,120
    
    
    $
    2,443
    
    
    $
    412
    
    
    $
    178
    
    
    $
    454
    
    
    $
    (77
    )
    
    $
    5,530Total net income
    
    $
    229
    
    
    $
    133
    
    
    $
    46
    
    
    $
    10
    
    
    $
    21
    
    
    $
    
    
    
    $
    439Results by segment for the three months ended

September 30, 2004*United States
    
    
    
    
    
    
    
    
    
    
    ConsolidationCanada
    
    
    Sun Life
    
    
    MFS
    
    
    Asia
    
    
    Corporate
    
    
    Adjustments
    
    
    TotalRevenue
    
    $
    1,960
    
    
    $
    2,399
    
    
    $
    414
    
    
    $
    189
    
    
    $
    534
    
    
    $
    (106
    )
    
    $
    5,390Total net income
    
    $
    221
    
    
    $
    92
    
    
    $
    42
    
    
    $
    10
    
    
    $
    74
    
    
    $
    
    
    
    $
    439Results
and assets by segment for the nine months ended

September 30, 2005United States
    
    
    
    
    
    
    
    
    
    
    ConsolidationCanada
    
    
    Sun Life
    
    
    MFS
    
    
    Asia
    
    
    Corporate
    
    
    Adjustments
    
    
    TotalRevenue
    
    $
    6,370
    
    
    $
    7,167
    
    
    $
    1,232
    
    
    $
    597
    
    
    $
    1,522
    
    
    $
    (213
    )
    
    $
    16,675Total net income
    
    $
    715
    
    
    $
    346
    
    
    $
    134
    
    
    $
    35
    
    
    $
    156
    
    
    $
    
    
    
    $
    1,386Assets
General fund assets
    
    $
    51,108
    
    
    $
    40,343
    
    
    $
    819
    
    
    $
    2,490
    
    
    $
    15,072
    
    
    $
    (1,918
    )
    
    $
    107,914Segregated funds net assets
    
    $
    27,740
    
    
    $
    24,412
    
    
    $
    
    
    
    $
    62
    
    
    $
    6,946
    
    
    $
    
    
    
    $
    59,160Results
and assets by segment for the nine months ended

September 30, 2004*United States
    
    
    
    
    
    
    
    
    
    
    ConsolidationCanada
    
    
    Sun Life
    
    
    MFS
    
    
    Asia
    
    
    Corporate
    
    
    Adjustments
    
    
    TotalRevenue
    
    $
    6,133
    
    
    $
    7,201
    
    
    $
    1,298
    
    
    $
    529
    
    
    $
    1,660
    
    
    $
    (342
    )
    
    $
    16,479Total net income
    
    $
    679
    
    
    $
    299
    
    
    $
    70
    
    
    $
    27
    
    
    $
    176
    
    
    $
    
    
    
    $
    1,251AssetsGeneral fund assets
    
    $
    50,792
    
    
    $
    41,580
    
    
    $
    861
    
    
    $
    2,273
    
    
    $
    16,434
    
    
    $
    (849
    )
    
    $
    111,091Segregated funds net assets
    
    $
    22,909
    
    
    $
    25,220
    
    
    $
    
    
    
    $
    24
    
    
    $
    6,901
    
    
    $
    
    
    
    $
    55,054
    2005
    
    
    2004Actuarial liabilities, January 1
    
    $
    74,258
    
    
    $
    75,324Change in liabilities on in-force business and arising from new policies
    
    
    903
    
    
    
    931Significant changes in assumptions and methodology(1):Gross increases
    
    
    167
    
    
    
    Gross decreases
    
    
    (169
    )
    
    
    Increase in actuarial liabilities
    
    
    901
    
    
    
    931Actuarial liabilities before the following:
    
    
    75,159
    
    
    
    76,255Change due to termination of reinsurance agreement(2)
    
    
    1,223
    
    
    
    Other
    
    
    50
    
    
    
    (73
    )Effect of changes in currency exchange rates
    
    
    (2,029
    )
    
    
    (314
    )Actuarial liabilities, September 30
    
    
    74,403
    
    
    
    75,868Add: other policy liabilities
    
    
    1,747
    
    
    
    1,967Actuarial liabilities and other policy liabilities, September 30
    
    $
    76,150
    
    
    $
    77,835
 (1)
    
    The increase in reserves arises from lapse and morbidity assumption changes in the
Reinsurance Business Unit. The decreases arise mainly from mortality assumption changes in
the same business.(2)
    
    Reserve increase due to the termination of a reinsurance treaty on Canada Group
business, and the resulting recapture of the business. An associated
decrease in other liabilities was also recorded to reflect this
recapture.




---



##### 



For the three months ended
    
    
    For the nine months endedSeptember 30
    
    
    September 30
    
    
    September 30
    
    
    September 302005
    
    
    2004
    
    
    2005
    
    
    2004Pension benefit cost
    
    $
    3
    
    
    $
    2
    
    
    $
    10
    
    
    $
    7Other post-retirement benefit cost
    
    $
    6
    
    
    $
    5
    
    
    $
    18
    
    
    $
    18
     LEGAL AND REGULATORY PROCEEDINGS
   (In re Mutual Funds Investment Litigation (Alger, Columbia, Janus,
MFS, One Group,
Putnam, Allianz Dresdner), No.1:04-md-15863 (transfer began March 19, 2004) Riggs v. MFS et al., Case No. 04-CV-01162-JFM Hammerslough v. MFS et al., Case No. 04-MD-01620 Anita Walker
v. MFS et al., Case No. 1:04-CV-01758 (Forsythe v. Sun Life Financial Inc., et al., No. 04cv10584
(GAO) (a consolidated action); and Marcus Dumond, et al. v. Massachusetts Financial Servs. Co., et
al., No. 04cv11458 (GAO) Securities Act of 1933 Securities




---



##### 



Exchange
Act of 1934 Investment Company Act of 1940 Investment Advisers Act of 1940 Employee
Retirement Income Security Act of 1974
 (Reaves, et al. v. MFS Series Trust I, et al, Mass, Super.Ct, C.A. No. 05-1094)
   PROVISIONS IN THE UNITED KINGDOM




---



##### 



MAJOR OFFICES
 
  Sun Life Financial Canada
 
 
 
 Sun Life Financial U.S.
 Sun Life Financial U.K.
 Sun Life Financial Asia
 
 
 th
 th th
 nd
 nd
 th th
 th




---



##### 



CORPORATE AND SHAREHOLDER INFORMATION
 
  CORPORATE OFFICE
 INVESTOR RELATIONS
 
 SHAREHOLDER SERVICES
 TRANSFER AGENT
 Canada and the United States
 United Kingdom
 Philippines
 Hong Kong
 DIVIDENDS
2005 Dividend Dates
Common Shares
 Record Dates
    
    Payment DatesFebruary 23
    
    March 31May 25
    
    June 30August 24
    
    September 30November 23
    
    December 30
 Direct
Deposit Dividend Service
  STOCK EXCHANGE LISTINGS




---



#####