**MANAGEMENT’S DISCUSSION & ANALYSIS** For the period ended September 30, 2005Dated October 27, 2005Earnings and Profitability**FINANCIAL SUMMARY**                             (Unaudited)Quarterly Results  Year to Date   Q3’05  Q2’05  Q1’05  Q4’04  Q3’04  2005  2004  Revenues ($ millions)  **5,530**   6,026   5,119   5,269   5,390   **16,675**   16,479 CommonShareholders’ Net Income ($ millions)  **430**   477   458   438   439   **1,365**   1,242 OperatingEarnings(1)($ millions)  **481**   477   458   438   439   **1,416**   1,301 Earnings PerCommon Share (EPS) ($)  **0.74**   0.81   0.77   0.74   0.73   **2.32**   2.07 OperatingEPS(1)($)  **0.82**   0.81   0.77   0.74   0.73   **2.40**   2.17 Fullydiluted operating EPS(1)($)  **0.82**   0.81   0.77   0.73   0.73   **2.40**   2.16 Return onCommon Equity (ROE) (%)  **11.7**   13.0   12.6   12.1   11.9   **12.6**   11.4 OperatingROE(1)(%)  **13.1**   13.0   12.6   12.1   11.9   **13.0**   11.9 Average Common Shares Outstanding (millions)  **584.2**   587.4   591.8   595.2   598.7   **587.8**   599.8 S&P 500 Index (daily average)  **1,223**   1,181   1,192   1,162   1,104   **1,199**   1,120 S&P 500 Index (close)  **1,229**   1,191   1,181   1,212   1,115   **1,229**   1,115  Certain comparative figures have been restated to conform with thepresentation adopted in the first quarter of 2005.Sun Life Financial Inc.(2) reported common shareholders’ net income of $430million for the third quarter ended September 30, 2005, down $9 million from $439 million in 2004.The decline in common shareholders’ net income was largely due to a $51 million charge to earnings,related to the sale of Administradora de Fondos de Pensiones Cuprum S.A. (Cuprum)announced on August 12, 2005. The loss on the sale arose from the depreciation of the Chilean pesoagainst the Canadian dollar since the interest in Cuprum was acquired in 1998. The currency losswas previously reflected in the equity of Sun Life Financial and therefore this charge had aminimal effect on the consolidated capital position of the Company. The impact of this charge waslargely offset by higher earnings generated across the Company’s business groups. ROE forthe third quarter of 2005 was 11.7% compared with 11.9% for the third quarter of 2004. EPSwere $0.74 compared with $0.73 in the prior year.Operating EPS, which does not include the charge from the sale of Cuprum, were $0.82 forthe third quarter of 2005 up 12.3%, 18% on a constant currency basis, from the third quarter of2004. SLF Canada, SLF U.S. and MFS all contributed to the improvementin earnings. Operating ROE reached 13.1%, up 120 basis points from the third quarter of2004.Common shareholders’ net income of $1.4 billion for the first nine months of 2005 was $123 millionhigher than for the comparable period of 2004 and EPS of $2.32 for the first nine monthsof 2005 were 12.1% higher than EPS of $2.07 in the same period of 2004.The Company reported operating EPS of $2.40 for the first nine months of 2005, up 10.6%compared to the first nine months in 2004 as a result of increased operating earnings across allbusiness units despite the adverse impact of currency, and share repurchases. Operating ROEincreased 110 basis points to 13.0% for the first nine months of 2005, up from 11.9% for thefirst nine months of 2004.Performance by Business GroupThe Company has five reportable segments: SLF Canada, SLF U.S., MFS, SLF Asia, and Corporate. Where appropriate, information on a reportablesegment has been presented both in Canadian dollars and the segment’s local currency to facilitatethe analysis of underlying business trends. ROE for the business segments is a“non-GAAP” financial measure as outlined under “Use of Non-GAAP FinancialMeasures”. Additional details concerning the segments and the purpose and use of the segmentedinformation are outlined in Note 6 to Sun Life Financial Inc.’s third quarter 2005 InterimConsolidated Financial Statements, which are prepared in accordance with Canadian generallyaccepted accounting principles (GAAP).(1) See “Use of Non-GAAP Financial Measures”. Operating earnings, operating EPS andoperating ROE exclude the charge of $51 million related to the sale of Cuprum taken in thethird quarter of 2005 and the $59 million regulatory charge against MFS taken in the firstquarter of 2004.(2) Or together with its subsidiaries and joint ventures “the Company” or “Sun LifeFinancial”.Third Quarter 2005 | www.sunlife.com       3
 

 
Management’s Discussion and Analysis**SLF CANADA**                              Quarterly Results Year to Date   Q3’05  Q2’05  Q1’05  Q4’04  Q3'04  2005  2004  Revenues ($ millions)  **2,120**   2,104   2,146   2,029   1,960   **6,370**   6,133 Premiums & Deposits ($ millions)  **3,501**   3,800   5,412   3,900   3,942   **12,713**   12,856 Common Shareholders’ Net Income ($ millions)                            Individual Insurance & Investments  **128**   145   168   126   121   **441**   385 Group Benefits  **69**   54   38   63   66   **161**   189 Group Retirement Services & Institutional Investments  **31**   37   39   35   34   **107**   97  Total  **228**   236   245   224   221   **709**   671 ROE (%)  **13.5**   14.2   14.8   13.7   13.4   **14.3**   13.5  Certain comparative figures have been restated to conform with the presentation adopted inthe second quarter of 2004 and first quarter of 2005.In the third quarter of 2005, SLF Canada’s earnings were up slightly over the thirdquarter of 2004, primarily due to lower new business strain as a result of expense improvementsalong with improved mortality and morbidity experience. Premiums and deposits for the third quarterof 2005 were $3.5 billion, down 11% from the third quarter of 2004 due to lower institutionalinvestment sales. Premiums and deposits (excluding institutional investment sales) were up 18%reflecting growth in Group Benefits in force business, Group Retirement Services deposits and salesof CI Financial Inc. (CI Financial) mutual funds by the Clarica Sales Force.Year-to-date earnings increased by 6% over the same period in 2004 primarily due to favourablemortality experience, increased fee income in Group Retirement Services & InstitutionalInvestments, favourable credit experience, and increased earnings from the investment in CIFinancial, partially offset by lower first quarter Group Benefits results. Year-to-dateROE increased 80 basis points over the same period in 2004.**•** Individual Insurance & Investments earnings increased 6% over the third quarter of2004 due to higher investment income, lower unit costs and improved earnings from theinvestment in CI Financial.**•** Improved morbidity experience and changes to reinsurance arrangements contributed tothe 5% earnings growth in Group Benefits over the third quarter of 2004.**•** The reduction in Group Retirement Services & Institutional Investments earnings overthe third quarter of 2004 was attributable to more favourable mortality experience in thethird quarter of 2004.**SLF U.S.**                               Quarterly Results  Year to Date   Q3’05  Q2’05  Q1’05  Q4’04  Q3’04  2005  2004  Revenues (US$ millions)  **2,020**   2,281   1,539   1,825   1,832   **5,840**   5,420 Revenues (C$ millions)  **2,443**   2,835   1,889   2,228   2,399   **7,167**   7,201 Common Shareholders’ Net Income (US$ millions)                            Annuities  **78**   72   34   45   44   **184**   139 Individual Life  **21**   20   25   19   19   **66**   62 Group Life & Health  **10**   15   6   12   7   **31**   23  Total (US$ millions)  **109**   107   65   76   70   **281**   224 Total (C$ millions)  **133**   132   81   93   92   **346**   298 ROE (%)  **13.6**   13.8   8.6   10.5   9.9   **12.1**   10.4  The appreciation of the Canadian dollar against the U.S. dollar reduced earnings inSLF U.S. by CDN $12 million in the third quarter of 2005 compared to the thirdquarter of 2004 and by CDN $28 million for the first nine months of 2005.Third quarter 2005 earnings of US $109 million were 56% higher than in the third quarterof 2004. The third quarter of 2005 benefited from stronger equity markets performance and improvedinterest spreads. Year-to-date earnings of US$281 million were US$57 million,or 25%, higher than in the prior year, due to increased earnings in all lines of business, mostnotably Annuities.**•** Annuities earnings increased US$34 million compared to the third quarter of 2004 andUS$45 million year-to-date as a result of improved fixed annuity spreads and increasedearnings from equity market movement. Improvements in fixed annuity spreads were theresult of interest rate management, improved investment income and strong creditperformance.**•** Group Life & Health earnings increased $3 million compared to the third quarter of2004 due to improved mortality. Year-to-date earnings increased $8 million over 2004primarily as a result of improved persistency and claims experience.4      Sun Life Financial Inc.  |  Third Quarter 2005
 

 
Management’s Discussion and Analysis**MFS INVESTMENT MANAGEMENT**                               Quarterly Results  Year to Date   Q3’05  Q2’05  Q1’05  Q4’04  Q3’04  2005  2004  Revenues(US$ millions)  **342**   332   332   330   316   **1,006**   976 Revenues(C$ millions)  **412**   413   407   402   414   **1,232**   1,298 Common Shareholders’ NetIncome/(Loss) (US$ millions)  **38**   34   37   36   32   **109**   52 Operating Earnings (US$ millions)  **38**   34   37   36   32   **109**   97 Common Shareholders’ NetIncome/(Loss) (C$ millions)  **46**   42   46   44   42   **134**   70 Operating Earnings (C$ millions)  **46**   42   46   44   42   **134**   129 Average Net Assets (US$ billions)  **155**   147   145   140   132   **149**   138 Assets Under Management (US$ billions)  **157**   150   145   146   134   **157**   134 New 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**   2.7 S&P 500 Index (daily average)  **1,223**   1,181   1,192   1,162   1,104   **1,199**   1,120  MFS contributed net income of CDN$46 million for the third quarter of 2005. Theappreciation of the Canadian dollar against the U.S. dollar reduced earnings for MFSby CDN$4 million in the third quarter of 2005 compared to the third quarter of2004.Net sales were US$1.4 billion in the third quarter of 2005 compared to net sales ofUS$3.5 billion in the previous quarter and net redemptions of US$2.5 billionduring the third quarter a year ago. Strong positive net flows from institutional clients more thanoffset outflows of assets in retail mutual funds and annuities. MFS has experienced fourconsecutive quarters of positive net flows. Total assets under management grew 5% toUS$157 billion driven by market returns and positive net sales in the third quarter.Growth in average net assets of 17% to US$155 billion in the third quarter of 2005 from ayear ago increased current quarter revenues by US$26 million to US$342 million,supporting earnings growth to US$38 million in the third quarter of 2005, up 19% from thethird quarter of 2004. On a year-to-date basis, revenues were US$30 million higher in2005 at US$1,006 million and operating earnings improved by US$12 million or12%. Net sales on a year-to-date basis were US$5.6 billion, up US$14.6 billioncompared to the first nine months of 2004.**SLF ASIA**                               Quarterly Results  Year to Date   Q3'05  Q2'05  Q1'05  Q4'04  Q3'04  2005  2004  Revenues ($ millions)  **178**   205   214   239   189   **597**   529 Common Shareholders’ NetIncome ($ millions)  **10**   19   6   18   10   **35**   27 ROE (%)  **9.8**   17.6   5.4   16.8   9.3   **10.8**   8.2  Certain comparative figures have been restated to conform with the presentation adopted in the firstquarter of 2005.Revenues in the third quarter of 2005 were down 6% compared to the third quarter of 2004,largely due to lower single premium sales and weakening of the operating currencies relative to theCanadian dollar. In constant currency, revenues were up 3%. Revenues for the first nine months of2005 increased by $68 million or 13% over the first nine months of 2004 reflecting ongoing businessgrowth. On a constant currency basis, revenues for the first nine months were up $115 million, or22%, over 2004 revenues. Second quarter 2005 revenues were higher than third quarter 2005 mostlydue to sales seasonality in India.Net income in the third quarter of 2005 was unchanged from the third quarter of 2004. Net incomefor the first nine months of 2005 was up $8 million, or $10 million in constant currency comparedto the same period in 2004. The increase was largely due to the favourable resolution of a taxissue in the second quarter of 2005. Third quarter 2005 net income was down $9 million compared tothe second quarter 2005 mostly due to the favourable resolution of a tax issue and to higherinvestment income in the second quarter 2005.Third Quarter 2005 | www.sunlife.com       5
 

 
Management’s Discussion and Analysis**CORPORATE**Corporate includes the results of Sun Life Financial’s U.K. (SLF U.K.)operations, the Reinsurance business unit and Run-off Reinsurance as well as investment income,expenses, capital and other items not allocated to Sun Life Financial’s other business groups.Run-off Reinsurance is included in Other operations.                               Quarterly Results  Year to Date   Q3’05  Q2’05  Q1’05  Q4’04  Q3'04  2005  2004  Revenues($ millions)  **454**   538   530   477   534   **1,522**   1,660 Common Shareholders’ Net Income/(Loss) ($ millions)                            SLF U.K.  **48**   39   47   45   39   **134**   128 Reinsurance  **(6****)**  15   14   26   21   **23**   46 Other  **(29****)**  (6)  19   (12)  14   **(16****)**  2  Total  **13**   48   80   59   74   **141**   176  Certain comparative figures have been restated to conform with the presentation adopted inthe first quarter of 2005.Common shareholders’ net income of $13 million for the third quarter of 2005 reflected strongearnings in SLF U.K., the net loss on the sale of Cuprum and a strengthening ofReinsurance reserves.**•** Prior year earnings in SLF U.K. reflected poor mortality experience in the Group Lifeblock of business, which is now substantively run off following the sale of the renewalrights on this business in 2003.**•** The current quarter results in Reinsurance reflected the impact of actuarialassumption and methodology changes on in-force business in addition to poor mortalityexperience in the quarter.**•** The loss of $29 million in Corporate Other reflected the net loss of $51 million onthe Cuprum sale and foreign exchange losses which were partially offset by the resolutionof a prior year tax issue.Year-to-date common shareholders’ net income of $141 million reflected currency gains on therepatriation of capital from the U.K. in the first six months of 2005 which were morethan offset by the aforementioned loss on the disposition of Cuprum, higher project costs, theassumption changes in Reinsurance and the write-off of redundant software.Additional Financial Disclosure**REVENUE**Under Canadian GAAP, premium revenue includes annuity premiums, which are not included asrevenue under U.S. GAAP and are not included as revenue for similar products sold byother financial institutions.Revenues increased to $5.5 billion in the third quarter of 2005 from $5.4 billion in the comparableperiod a year ago. Excluding the unfavourable impact of $305 million due to the strengthening ofthe Canadian dollar against foreign currencies, revenues increased $445 million primarily due tohigher premiums in Canada and the U.S., increased investment income reflecting favourablecapital market conditions, and asset management fees earned on higher asset levels, partiallyoffset by lower U.S. fixed annuity premiums.Premium revenue was $3.3 billion in the third quarter of 2005, unchanged from the same quarter lastyear. Excluding the unfavourable impact of $175 million due to the strengthening of the Canadiandollar against foreign currencies, premium revenue was up 7% primarily due to higher group healthinsurance premiums in Canada and the US$300 million sale of medium-term notes, partiallyoffset by lower fixed annuity premiums in the U.S.Third quarter 2005 net investment income was up $54 million or 4% from the third quarter of2004. This increase was primarily due to derivative gains reflecting improving capital marketconditions and favourable credit experience, partially offset by an unfavourable impact of $77million due to the strengthening of the Canadian dollar against foreign currencies and the chargerelating to the sale of Cuprum.Fee income of $730 million in the third quarter of 2005 was up $31 million from the same period inthe previous year. Before an unfavourable currency impact of $52 million, fee income was up $83million primarily due to asset management fees earned on higher asset levels.Total revenue of $16.7 billion for the nine months ended September 30, 2005 was $196 million higherthan the same period in 2004. Increases due to the US$900 million sale of medium-termnotes, higher group health premiums in Canada, increases in individual insurance premiums in Asiaand higher investment income were partially offset by an $853 million reduction due to thestrengthening of the Canadian dollar against foreign currencies, lower U.S. annuitypremiums and lower U.K. life insurance premiums primarily reflecting the sale of SLFU.K.’s group life renewal rights in 2003.6       Sun Life Financial Inc.   |   Third Quarter 2005
 

 
Management’s Discussion and Analysis**ASSETS UNDER MANAGEMENT**AUM were $373.8 billion at September 30, 2005 compared to $377.1 billion at June 30,2005, and $355.4 billion at September 30, 2004.The decrease of $3.3 billion between June 30, 2005 and September 30, 2005, was primarily the resultof an unfavourable change of $15.7 billion due to currency fluctuations, partially offset by:(i) an increase of $11.2 billion from market movements, and(ii) net sales of mutual, managed and segregated funds of $1.1 billion.AUM increased $18.4 billion between September 30, 2004 and September 30, 2005 primarily due tocontinued business growth and:(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 offsetby a(iii) $25.6 billion decrease from the strengthening of the Canadian dollar against foreigncurrencies.**CHANGES IN THE BALANCE SHEET AND SHAREHOLDERS’ EQUITY**Total general fund assets were $107.9 billion at September 30, 2005, compared to $111.1 billion ayear earlier. Increases due to business growth, primarily in SLF U.S. and SLFAsia, were more than offset by a reduction of $5.9 billion due to the strengthening of theCanadian dollar against foreign currencies.Total general fund assets at September 30, 2005 were $111 million higher than December 31, 2004.The increase due to business growth primarily in SLF Canada and SLF U.S. wasmostly offset by a reduction of $2.8 billion due to the strengthening of the Canadian dollaragainst foreign currencies.Actuarial and other policy liabilities of $76.2 billion at September 30, 2005 were $1.7 billionlower than at September 30, 2004. An increase of $2.7 billion primarily due to the growth in theSLF Canada and SLF U.S. operations was more than offset by a reduction of $4.3billion due to the strengthening of the Canadian dollar against foreign currencies.Actuarial and other policy liabilities were $76.2 billion at September 30, 2005, unchanged fromDecember 31, 2004, as growth primarily in SLF Canada and SLF U.S. was largelyoffset by a $2.0 billion decrease due to the strengthening of the Canadian dollar against otherforeign currencies during the period.Shareholders’ equity, including Sun Life Financial Inc.’s preferred share capital, increased from$14.3 billion at December 31, 2004 to $15.2 billion at September 30, 2005. Shareholders’ netincome, before preferred share dividends of $15 million, contributed $1.4 billion to equity, whilethe issuance of preferred shares added $713 million. The strengthening of the Canadian dollaragainst foreign currencies decreased equity by $364 million, while the adjustments to the currencytranslation account, outlined in Notes 3 and 11 of the third quarter interim financial statements,further lowered equity by $17 million. The increase in equity was also offset by dividend paymentson common shares of $432 million and $406 million for the cost of common shares repurchased andcancelled, net of new issues for stock options.Shareholders’ equity, including Sun Life Financial Inc.’s preferred share capital, was $15.2billion at September 30, 2005, $143 million higher than at June 30, 2005. Shareholders’ net income,before preferred share dividends of $8 million, contributed $438 million. The increase in equitywas partly offset by dividend payments on common shares of $149 million and $63 million for thecost of common shares repurchased and cancelled, net of new issues for stock options. Currencyfluctuations and the adjustment to the currency translation account, outlined in Note 3 of thethird quarter interim financial statements, further reduced equity by $410 million.At September 30, 2005, Sun Life Financial Inc. had 582,937,030 common shares and 29,000,000preferred shares outstanding.Third Quarter 2005 | www.sunlife.com       7
 

 
Management’s Discussion and Analysis**CASH FLOWS**                   Quarterly Results  Year to Date ($ millions) Q3’05  Q3’04  2005  2004  Cash and cash equivalents, beginning of period  **4,343**   3,628   **3,748**   3,175 Cash flows provided by (used in):                Operating activities  **18**   672   **1,918**   2,173 Financing 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****)**  9  Cash and cash equivalents, end of period  **3,573**   3,184   **3,573**   3,184 Short-term securities, end of period  **2,709**   2,747   **2,709**   2,747  Total cash, cash equivalents and short-term securities  **6,282**   5,931   **6,282**   5,931  Certain comparative figures have been restated to conform with thepresentation adopted in the first quarter of 2005.Net cash, cash equivalents and short-term securities at the end of the third quarter of 2005increased $351 million from the third quarter of 2004.Cash and cash equivalents decreased $770 million during the third quarter of 2005 compared to adecrease of $444 million in the third quarter of 2004. Cash flows from operating activities in thethird quarter of 2005 were $654 million lower than in the same period a year ago as the inflow fromthe sale of medium-term notes was more than offset by higher maturities and surrenders and theimpact of the timing of investment transactions. Cash provided by financing activities increased$297 million mostly due to the issue of $325 million of preferred shares in July 2005, partiallyoffset by the decreased use of borrowed funds. Cash used in investing activities was down $111million from a year ago reflecting a lower level of net purchases of investment assets during thequarter.The Company had net cash outflows of $175 million in the first nine months of 2005 compared toinflows of $9 million in the comparable period of 2004. Decreases in cash flows as a result of theunfavourable impact of fluctuations in exchange rates and reduced cash provided by operatingactivities primarily due to the timing of investment transactions were partially offset by highercash flows provided by financing activities through the issuance of $725 million of preferredshares during the period, net of increases in share repurchases and dividend payments.**RISK MANAGEMENT**Sun Life Financial has developed a framework to assist in categorizing, monitoring and managing therisks to which it is exposed. The major categories of risk are credit risk, market risk, insurancerisk and operational risk. Operational risk is a broad category that includes legal and regulatoryrisks, people risks and systems and processing risks.Through its ongoing risk management procedures, Sun Life Financial reviews the various risk factorsidentified in the framework and reports to senior management on a monthly basis and to the RiskReview Committee of the Board quarterly. Sun Life Financial’s risk management procedures and riskfactors are described in Sun Life Financial Inc.’s annual and interim MD&A and AnnualInformation Form (AIF). Interest rate and equity market sensitivities are disclosed inthe annual MD&A, but change as market levels change, new business is added, or asmanagement actions are taken.**OUTLOOK**The outlook for growth in the North American economies has not changed significantly in the thirdquarter of 2005, despite the sharp rise in energy prices following Hurricane Katrina. The U.S.economy is still expected to grow at a rate of 3.0% to 3.5%, with the Canadian economy in the2.5% to 3.0% range. Both the Federal Reserve Board and the Bank of Canada are concerned about therise of inflation and are likely to raise interest rates in response.A gradually increasing interest rate environment would generallybenefit the Company’s businesses through wider spreads and lowerexposure to product guarantees. In a declining interest rateenvironment, mitigating actions taken by the Company would limitedthe Company’s exposure.8       Sun Life Financial Inc.   |   Third Quarter 2005
 

 
Management’s Discussion and Analysis**REGULATORY AND LEGAL MATTERS**Sun Life Financial Inc. and certain of its U.S. subsidiaries are cooperating withinsurance and securities regulators and other government and self-regulatory agencies in the UnitedStates in their continuing investigations and examinations with respect to various issues,including market timing and late trading of mutual funds, directed brokerage, revenue sharing andother arrangements with distributors, compensation arrangements and other business practicesbetween insurance companies and brokers, and recordkeeping requirements. Certain of thesesubsidiaries are engaged in discussions with U.S. regulators that may lead to settledadministrative actions and a provision has been recorded for such matters in the Corporate segment.While it is not possible to predict the resolution of these matters, management expects that theultimate resolution of these matters will not be material to the Company’s consolidated financialcondition.As previously disclosed, Sun Life Financial Inc., MFS and certain of itssubsidiaries, MFS Corporation Retirement Committee, various MFSfunds, certain current and/or former Trustees of those MFS funds, andcertain officers of MFS have been named as defendants in multiplelawsuits filed in the U.S. federal and state courts relating to the matters that led to the settlements between MFSand federal and state regulators in 2004. These actions are at an early state and Sun LifeFinancial Inc. cannot predict their outcome at this time.Additional information concerning these and related matters is provided in Sun Life FinancialInc.’s annual and interim MD&A, annual and interim financial statements and AIF. Copiesof these documents are available at www.sedar.com.**USE OF NON-GAAP FINANCIAL MEASURES**Management evaluates the Company’s performance on the basis of financial measures prepared inaccordance with GAAP, including earnings, EPS and ROE. Managementalso measures the Company’s performance based on certain non-GAAP measures, includingoperating earnings, and other financial measures based on operating earnings, including operatingEPS and operating ROE, that exclude certain significant items that are notoperational or ongoing in nature. Management also uses financial performance measures that areprepared on a constant currency basis, which excludes the impact of currency fluctuations.Management measures the performance of its business segments using ROE that is based onan allocation of common equity or risk capital to the business segments, using assumptions,judgments and methodologies that are regularly reviewed and revised by management. Managementbelieves that these non-GAAP financial measures provide information useful to investorsin understanding the Company’s performance and facilitate the comparison of the quarterly andfull-year results of the Company’s ongoing operations. These non-GAAP financial measuresdo not have any standardized meaning and may not be comparable with similar measures used by othercompanies. They should not be viewed as an alternative to measures of financial performancedetermined in accordance with GAAP. Additional information concerning these non-GAAPfinancial measures and reconciliations to GAAP measures are included in Sun LifeFinancial Inc.’s annual and interim MD&A and the Supplementary Financial Informationpackages that are available in the Investor Relations — Financial Publications section of Sun LifeFinancial’s website, www.sunlife.com.Operating earnings, operating EPS and operating ROE exclude the $51 millioncharge taken in the third quarter of 2005 related to the Cuprum sale and the $59 million chargetaken in the first quarter of 2004 with respect to the settlement in March 2004 of administrativeproceedings by U.S. regulators against MFS.**FORWARD-LOOKING STATEMENTS**Some of the statements contained in this document, including those relating to the Company’sstrategies and other statements that are predictive in nature, that depend upon or refer to futureevents or conditions, or that include words such as “expects”, “anticipates”, “intends”, “plans”,“believes”, “estimates” or similar expressions, are forward-looking statements within the meaningof securities laws. Forward-looking statements include, without limitation, the informationconcerning possible or assumed future results of operations of the Company. These statements arenot historical facts but instead represent only the Company’s expectations, estimates andprojections regarding future events.Forward-looking statements are not guarantees of future performance and involve certain risks anduncertainties that are difficult to predict. The future results and stockholder value of Sun LifeFinancial Inc. may differ materially from those expressed in these forward-looking statements dueto, among other factors, the matters set out under “Risk Factors” in Sun Life Financial Inc.’sAIF and the factors detailed in its other filings with Canadian and U.S.securities regulators, including its annual and interim MD&A, and annual andinterim financial statements which are available for review at www.sedar.com.Factors that could cause actual results to differ materially from expectations include, but are notlimited to: external factors, including changes in equity market performance, interest rates,currency exchange rates and government regulations; the amount and composition of assets undermanagement; the management of product pricing; mortality and morbidity rates; expense management; the maintenance of spreads between credited rates and investment returns;surrender and lapse rates; the management of market and credit risks; the management of risksinherent in products with guaranteed benefit options; and the results of regulatory investigationsinto the practices of the mutual fund, insurance, annuity and financial product distributionindustries in, including private legal proceedings and class actions that have been commenced orthreatened in connection with these practices. The Company does not undertake any obligation toupdate or release any revisions to these forward-looking statements to reflect events orcircumstances after the date of this report or to reflect the occurrence of unanticipated events,except as required by law.Third Quarter 2005 | www.sunlife.com       9