##### 



(Q1 2005 COVER)




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##### 



CANADIAN RESIDENTS PARTICIPATING IN THE SHARE ACCOUNT
Shareholders holding shares in the Canadian Share Account can sell
their shares for $15 plus 5 cents per share.
Complete Form A on the front of your Share Ownership Statement, tear it off and
return it by mail to CIBC Mellon.
For more information call CIBC Mellon at 1 877 224-1760.




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##### 



Sun Life Financial reports
record quarterly earnings of $458 million for Q1 2005 Operating earnings per share grew to $0.77, up 9% over Q1 2004
Operating ROE improved 60 basis points to 12.6%
 Toronto 
April 28, 2005 Sun Life Financial Inc. (NYSE/TSX: SLF) today announced
record operating earnings of $458 million or $0.77 per share for the quarter ended March 31, 2005.
Operating earnings for the quarter increased 8% compared to the first quarter of 2004 and operating
earnings per common share (EPS) were up 9% over the same period. Operating return on
common equity (ROE) grew to 12.6% for the quarter, up from 12.0% for the first quarter of
2004. The financial results presented in this press release are unaudited. Strength in sales production in the first quarter of 2005 was supported by the US$728
million in net sales at MFS Investment Management, a turnaround of approximately
US$2 billion compared to a year ago, and by a 45% increase in
market-based RRSP product sales in SLF Canada. Donald A. Stewart, Chief Executive Officer, said, Our strategy of diversifying across geographies
and between protection and wealth management products has once again generated strong results.
Notably, the Companys operating ROE improved by 60 basis points over the first quarter
of 2004. We continue to write profitable business, as evidenced by the value of new business generated by
our sales. In 2005 Sun Life Financial is placing significant focus on expanding distribution
capacity in all of our operations. Significant additions have been made to the number of
wholesalers in the annuity sales force in the U.S. and the third-party distribution
channel in Canada. In China, we have received initial approval to commence operations in a third
city and have obtained a license to sell group insurance in that country, he said. Financial Highlights  l

Operating ROE increased 60 basis points to 12.6% from 12.0% in the first
quarter of 2004.l

Operating EPS for the quarter increased 9% compared to the first quarter
of 2004. Operating EPS would have been up 13% for the quarter except for the
negative impact resulting from the strengthening of the Canadian dollar against foreign
currencies compared to the exchange rates in the first quarter of 2004.l

In the first quarter of 2005, Sun Life Financial Inc. repurchased approximately 4
million common shares at an average price of $39.48 under its share repurchase program. Business Highlights CORPORATE DEVELOPMENTS l

On January 4, 2005, Sun Life Financial completed a reorganization under which most
of its asset management businesses in Canada and the United States were transferred to a
newly incorporated subsidiary. The reorganization will allow the Company to optimize its
capital structure and will give it increased flexibility by positioning it to benefit from
new capital rules proposed by the Office of the Superintendent of Financial Institutions
in Canada.l

Sun Life Financial Inc. issued $400 million of Class A Non-Cumulative Perpetual
Preferred Shares, Series 1 yielding 4.75% annually, providing it with attractive, low cost
capital. Sun Life Assurance Company of Canada announced its intention to redeem its
Non-Cumulative Redeemable Class E Preferred Shares, Series 1.l

Sun Life Financial ranked first among insurance companies in the Report on
Businessmagazines second annual Corporate Social Responsibility ranking.l

The Boards of Directors of Sun Life Financial Inc. and Sun Life Assurance Company
of Canada announced their intention to appoint Ronald W. Osborne as non-executive
Chairman. Mr. Osbornes appointment is pending his re-election as a director by
shareholders and voting policyholders at the companies upcoming annual meetings on
May 11, 2005.l

Sun Life Financial has appointed Robert W. Mansbridge as Executive Vice-President
and Chief Information Officer, responsible for the Companys shared technology and
business services, information technology architecture and information security. SUN LIFE FINANCIAL CANADA (SLF CANADA) l

Group Retirement Services successfully completed the implementation of the Deferred Profit
Sharing Plans (DPSP) for employees of the Canadian operations of the Magna
International Inc. group of companies (Magna). The addition of the DPSP plan makes
Sun Life Financial the sole provider of group retirement services to all of Magnas Canadian
employees. Magnas DPSP is one of the largest defined contribution plans to change providers
in Canada.l

Group Retirement Services has introduced the Milestone series of segregated funds, the first
lifecycle funds for employer-sponsored group retirement and savings plans in Canada to feature
a guaranteed unit value at maturity. First Quarter 2005  |  www.sunlife.com     1




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##### 



Shareholders Report l

In a survey conducted by Research Dynamics, advisors ranked Group Retirement
Services number one in all categories, including customer service satisfaction, product
flexibility, innovation and communication.l

The Individual Insurance & Investments business unit recorded strong RRSP campaign
results, with $687 million in market-based product sales, up 45% over sales in the first quarter
of 2004.l

Individual Insurance & Investments introduced Sun Critical Illness Insurance
(Sun CII). This new product targets the affluent and business markets and
complements Clarica CII, which has been a market leader since 1997 and addresses
the needs of the mid-market.l

SLF Canada announced it is expanding its Long-Term Care Insurance
(LTCI) distribution channel and investing in technology to automate the LTCI
application, policy issue and administration systems. LTCI sales were
strong in the first quarter, up 33% over the first quarter of 2004. SUN LIFE FINANCIAL U.S. (SLF U.S.) l

As part of its continuing efforts to achieve its strategic objective to grow
annuity sales in the U.S., the Company increased its wholesale sales
force to 57 at March 31, 2005, up from 32 at the end of 2004. At April 25, 2005, the sales force stood at 63.l

The Group Life & Health division entered into a partnership with ComPsych
Corporation (ComPsych) to provide a comprehensive employee assistance program to its group
disability customers, including a wide range of work-life services. ComPsych is the
worlds largest provider of employee assistance programs.l

The Group Life & Health division introduced a global security solution called
SecurAssist®.
SecurAssist® will be offered through an arrangement with Assist America
Inc., the largest U.S. provider of global emergency services through employee
benefits. SecurAssist® helps employers prevent and plan for security threats anywhere in
the world. MFS INVESTMENT MANAGEMENT (MFS) l

MFS was recognized for the performance of its funds. In the recent Barrons
Fund Families Survey, which ranks fund firms annually based on their performance, MFS
improved to the number 12 ranking overall in 2004 out of 73 firms surveyed during the
year.l

MFS continued to produce positive net sales with US $728 million of
net inflows for the three-month period ended March 31, 2005. SUN LIFE FINANCIAL ASIA (SLF ASIA) l

Birla Sun Life Insurance Company Limited, the Companys India life insurance joint
venture, completed a very successful fourth year of operation with individual life
insurance sales up 74% over the prior year.l

Sun Life Everbright Life Insurance Company Limited, a joint venture with China
Everbright Group Limited, was granted approval by the China Insurance Regulatory
Commission to begin preparing operations to sell life insurance in Hangzhou. Hangzhou has
a population of 6.4 million and is the capital of the Zhejiang Province. Sun Life
Financial anticipates that sales in Hangzhou will commence in the third quarter of 2005.l

Sun Life Everbright has obtained a license to begin selling group insurance in
China. USE OF NON-GAAP FINANCIAL MEASURES  Operating earnings, operating EPS and operating ROE exclude the $59 million
charge taken in the first quarter of 2004 with respect to the settlement in March 2004 of
administrative proceedings by the U.S. Securities and Exchange Commission against
MFS. Sun Life Financial Sun Life Financial is a leading international financial services organization providing a
diverse range of wealth accumulation and protection products and services to individuals and
corporate customers. Tracing its roots back to 1865, Sun Life Financial and its partners today have
operations in key markets worldwide, including Canada, the United States, the United Kingdom, Hong
Kong, the Philippines, Japan, Indonesia, India, China and Bermuda. As of March 31, 2005, the Sun
Life Financial group of companies had total assets under management of $366 billion. Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and
Philippine (PSE) stock exchanges under ticker symbol SLF. 2     Sun Life Financial Inc.  |  First Quarter 2005




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##### 



MANAGEMENTS DISCUSSION & ANALYSIS  Dated April 28, 2005 Earnings and Profitability FINANCIAL SUMMARY (Unaudited)
    
    Quarterly ResultsQ105
    
    
    Q404
    
    
    Q304
    
    
    Q204
    
    
    Q104Revenues ($ millions)
    
    
    5,119
    
    
    
    5,269
    
    
    
    5,390
    
    
    
    5,551
    
    
    
    5,538Common Shareholders Net Income ($ millions)
    
    
    458
    
    
    
    438
    
    
    
    439
    
    
    
    438
    
    
    
    365Operating Earnings(2)($ millions)
    
    
    458
    
    
    
    438
    
    
    
    439
    
    
    
    438
    
    
    
    424Earnings Per Common Share (EPS) ($)
    
    
    0.77
    
    
    
    0.74
    
    
    
    0.73
    
    
    
    0.73
    
    
    
    0.61Operating EPS(2)($)
    
    
    0.77
    
    
    
    0.74
    
    
    
    0.73
    
    
    
    0.73
    
    
    
    0.71Fully diluted operating EPS(2)($)
    
    
    0.77
    
    
    
    0.73
    
    
    
    0.73
    
    
    
    0.72
    
    
    
    0.70Return on Common Equity (ROE) (%)
    
    
    12.6
    
    
    
    12.1
    
    
    
    11.9
    
    
    
    12.0
    
    
    
    10.3Operating ROE(2)(%)
    
    
    12.6
    
    
    
    12.1
    
    
    
    11.9
    
    
    
    12.0
    
    
    
    12.0Average Common Shares Outstanding (millions)
    
    
    591.8
    
    
    
    595.2
    
    
    
    598.7
    
    
    
    600.7
    
    
    
    600.0S&P500 Index (daily average)
    
    
    1,192
    
    
    
    1,162
    
    
    
    1,104
    
    
    
    1,123
    
    
    
    1,132S&P500 Index (close)
    
    
    1,181
    
    
    
    1,212
    
    
    
    1,115
    
    
    
    1,141
    
    
    
    1,126
  Sun Life Financial Inc.(1) reported a $34 million increase in operating earnings(2) for the first quarter ended March 31, 2005 compared to the first quarter of 2004.
Earnings were up despite a decrease of $13 million, or 3 cents per share, due to the depreciation
of foreign currencies against the Canadian dollar compared to first quarter 2004 exchange rates. As a result of the increase
in operating earnings and Sun Life Financial Inc.s share repurchase program,
operating EPS grew from $0.71 per share for the first quarter of 2004 to $0.77 per share for the same period in 2005, a 9%
increase, and operating ROE increased 60 basis points, from 12.0% for the first quarter
of 2004 to 12.6% for the first quarter of 2005. Common shareholders net income of $458 million for the first quarter of 2005 was up $93 million
compared to the first quarter of 2004. EPS was $0.77 per share, up $0.16 per share
compared to the first quarter of 2004. As previously disclosed, common shareholders net income in
the first quarter of 2004 included regulatory charges against MFS. Performance by Business Group The Company has five reportable segments: SLF Canada, SLF U.S.,
MFS, SLF Asia, and Corporate. Effective January 1, 2005, the Company realigned
certain of its reportable segments whereby the Reinsurance business unit, previously reported as
part of SLF Canada, and SLF U.K. are reported as part of Corporate. This change
reflects the ongoing evolution of Sun Life Financials businesses and has no impact on the
Companys consolidated results. The discussion in the remainder
of this MD&A is based on
the current segmentation reflecting the realignment of reportable segments described above. Prior
period results have been restated on this basis to facilitate comparison. Where appropriate,
information on a reportable segment has been presented both in Canadian dollars and the segments
functional currency to facilitate the analysis of underlying business trends. ROE for the
business segments is a non-GAAP financial measure as outlined under Use of Non-GAAP
Financial Measures. Additional details of the segments and the purpose and use of the
segmented information are outlined in Note 5 to Sun Life Financial Inc.s first quarter 2005
Interim Consolidated Financial Statements, which are prepared in accordance with Canadian
GAAP .  (1)
    
    Or together with its subsidiaries and
joint ventures the Company or Sun Life Financial.(2)
    
    See Use of Non-GAAP Financial
Measures. First Quarter 2005  |  www.sunlife.com     3




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Managements Discussion and Analysis SLF CANADA Quarterly ResultsQ105
    
    
    Q404
    
    
    Q304
    
    
    Q204
    
    
    Q104Revenues
($ millions)
    
    
    2,146
    
    
    
    2,029
    
    
    
    1,960
    
    
    
    2,032
    
    
    
    2,141Common Shareholders Net Income ($ millions)Individual Insurance & Investments
    
    
    168
    
    
    
    126
    
    
    
    121
    
    
    
    139
    
    
    
    125Group Benefits
    
    
    38
    
    
    
    63
    
    
    
    66
    
    
    
    47
    
    
    
    76Group Retirement Services & Institutional Investments
    
    
    39
    
    
    
    35
    
    
    
    34
    
    
    
    34
    
    
    
    29Total
    
    
    245
    
    
    
    224
    
    
    
    221
    
    
    
    220
    
    
    
    230ROE (%)
    
    
    14.8
    
    
    
    13.7
    
    
    
    13.4
    
    
    
    13.2
    
    
    
    13.7
  In the first quarter of 2005, SLF Canadas earnings increased 7% over the first
quarter of 2004 primarily due to favourable annuity mortality experience, the benefits of reduced
unit expenses, increased fee income and favourable credit experience, partially offset by lower
Group Benefits results. Premiums and deposits for the first quarter of 2005 were $5.4 billion, up
19% over the first quarter of 2004. Earnings increased 9% over the fourth quarter of 2004 for the reasons mentioned above as well as
increased earnings from the investment in CI Funds Management Inc. (CI Funds).
ROE of 14.8% for the quarter increased 110 basis points over both the first and fourth
quarters of 2004. l

Individual Insurance & Investments earnings increased 34% over the first quarter
of 2004 due to favourable annuity mortality and credit experience in individual wealth and
the benefits of reduced unit expenses in individual life insurance. Earnings increased 33%
over the fourth quarter of 2004 and included increased earnings from the investment in
CI Funds in addition to the above-mentioned items.l

First quarter 2005 earnings for Group Benefits were lower than in the first and
fourth quarters of 2004. The earnings in the first quarter of 2004 reflected exceptional
mortality experience which did not recur in the first quarter of 2005. In comparison with
the fourth quarter of 2004, earnings in the first quarter of 2005 were negatively affected
by seasonal factors in health and morbidity experience. First quarter 2005 results were
also affected by additional investments to further enhance customer service.l

Group Retirement Services & Institutional Investments earnings increased 34% over
the first quarter of 2004 partially due to improvements in fee income and favourable
credit experience. Assets under management for Group
Retirement Services & Institutional Investments, including McLean Budden Limited, continued
to increase as a result of strong sales in the first quarter of 2005 and higher equity
market levels. SLF U.S. Quarterly ResultsQ105
    
    
    Q404
    
    
    Q304
    
    
    Q204
    
    
    Q104Revenues (US$ millions)
    
    
    1,539
    
    
    
    1,825
    
    
    
    1,832
    
    
    
    1,807
    
    
    
    1,781Revenues (C$ millions)
    
    
    1,889
    
    
    
    2,228
    
    
    
    2,399
    
    
    
    2,453
    
    
    
    2,349Common Shareholders Net Income (US$ millions)Annuities
    
    
    34
    
    
    
    45
    
    
    
    44
    
    
    
    33
    
    
    
    62Individual Life
    
    
    25
    
    
    
    19
    
    
    
    19
    
    
    
    33
    
    
    
    10Group Life & Health
    
    
    6
    
    
    
    12
    
    
    
    7
    
    
    
    14
    
    
    
    2Total (US$ millions)
    
    
    65
    
    
    
    76
    
    
    
    70
    
    
    
    80
    
    
    
    74Total (C$ millions)
    
    
    81
    
    
    
    93
    
    
    
    92
    
    
    
    109
    
    
    
    97ROE (%)
    
    
    8.6
    
    
    
    10.5
    
    
    
    9.9
    
    
    
    11.2
    
    
    
    10.0
  The appreciation of the Canadian dollar against the U.S. dollar reduced earnings in
SLF U.S. by CDN$6 million in the first quarter of 2005 compared to the first
quarter of 2004. First quarter 2005 earnings
of US$65 million were 12% lower than in the first quarter of
2004. The first quarter of 2004 benefited from rising equity markets and an adjustment of prior
year tax accruals. However, the decline in equity markets in the first quarter of 2005 necessitated
a reserve increase of US$22 million. The decrease in first quarter 2005 earnings relative to the fourth quarter of 2004 also reflected
the impact of a decline in closing equity markets and adverse mortality partially offset by
improved credit experience. In addition, positive claims experience in the Group Life & Health
division benefited the fourth quarter of 2004. 4     Sun Life Financial Inc.  |  First Quarter 2005




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Managements Discussion and Analysis l

Annuities earnings decreased US$28 million compared to the first quarter of 2004
primarily as a result of declining equity markets during the first quarter of 2005
compared to rising equity markets in the first quarter of 2004 and an adjustment of prior
year tax accruals in 2004. The lower value of equity markets at March 31, 2005 compared to
December 31, 2004 contributed significantly to the decline in earnings from the fourth
quarter of 2004.l

Individual Life earnings were US$15 million higher in the first quarter of 2005
compared to the first quarter of 2004 primarily due to the offshore universal life
business. Earnings in the first quarter of 2004 were adversely affected by the impact of
the low interest environment on universal life products prior to the implementation of a
hedging program in the second quarter of 2004. Earnings in the first quarter of 2005 were
adversely affected by unfavourable mortality experience and earnings strain resulting from
strong sales of corporate-owned life insurance.l

Group Life & Health earnings increased US$4 million in the first quarter of 2005
compared to the first quarter of 2004 primarily due to adjustments in the first quarter of
2004. Unfavourable Group Life mortality in the first quarter of 2005 was a major driver of
the decline in earnings as compared to the fourth quarter of 2004. Sun Life Financial Inc. and its U.S. subsidiaries are cooperating with the SEC
and other regulators in their continuing investigations and examinations with respect to
various issues, including market timing related issues, directed brokerage and revenue sharing
arrangements with distributors, and recordkeeping requirements. No regulatory proceedings have been
commenced as a result of these investigations and examinations, but Sun Life Financial Inc. and
certain of its U.S. subsidiaries are engaged in discussions with the SEC that
may lead to settled administrative actions involving those subsidiaries and a provision for the
estimated losses for such matters has been made in the Corporate segment. While it is not possible
to predict the final resolution of these discussions, management expects that the ultimate
liability with respect to such matters will not be material to the consolidated financial condition
of the Company. MFS INVESTMENT MANAGEMENT Quarterly ResultsQ105
    
    
    Q404
    
    
    Q304
    
    
    Q204
    
    
    Q104Revenues (US$ millions)
    
    
    332
    
    
    
    330
    
    
    
    316
    
    
    
    319
    
    
    
    341Revenues (C$ millions)
    
    
    407
    
    
    
    402
    
    
    
    414
    
    
    
    434
    
    
    
    450Common Shareholders Net Income/(Loss) (US$ millions)
    
    
    37
    
    
    
    36
    
    
    
    32
    
    
    
    30
    
    
    
    (10
    )Operating Earnings (US$ millions)
    
    
    37
    
    
    
    36
    
    
    
    32
    
    
    
    30
    
    
    
    35Common Shareholders Net Income/(Loss) (C$ millions)
    
    
    46
    
    
    
    44
    
    
    
    42
    
    
    
    41
    
    
    
    (13
    )Operating Earnings (C$ millions)
    
    
    46
    
    
    
    44
    
    
    
    42
    
    
    
    41
    
    
    
    46Average Net Assets (US$ billions)
    
    
    145
    
    
    
    140
    
    
    
    132
    
    
    
    138
    
    
    
    144Assets Under Management (US$ billions)
    
    
    145
    
    
    
    146
    
    
    
    134
    
    
    
    137
    
    
    
    142Net New Sales/(Redemptions) (US$ billions)
    
    
    0.7
    
    
    
    0.1
    
    
    
    (2.5
    )
    
    
    (5.3
    )
    
    
    (1.2
    )Market Movement (US$ billions)
    
    
    (2.4
    )
    
    
    12.1
    
    
    
    (0.9
    )
    
    
    0.5
    
    
    
    3.1S&P 500 Index (daily average)
    
    
    1,192
    
    
    
    1,162
    
    
    
    1,104
    
    
    
    1,123
    
    
    
    1,132
 MFS contributed net
income of CDN$46 million for the first quarter of 2005. The
appreciation of the Canadian dollar against the U.S. dollar reduced earnings for MFS
by CDN$3 million in the first quarter of 2005 compared to the first quarter of
2004. Net new sales
at MFS improved to US$728 million in the first quarter of 2005
compared to net new sales of US$139 million in the previous quarter and redemptions of
US$1.2 billion during the first quarter a year ago. Strong positive net flows from
institutional clients more than offset outflows of assets in retail mutual funds and annuities.
Assets under management declined 1% to US$145 billion due to negative market activity in
the first quarter. MFSs contribution to Sun Life Financials earnings in the first quarter of 2005 was
US$37 million, up US$2 million from the first quarter of 2004. As previously disclosed, a number of lawsuits have been commenced in the United States against Sun
Life Financial Inc., MFS, various MFS Funds and certain of their directors,
officers and fund trustees relating to the matters that led to the settlements between MFS
and federal and state regulators in 2004. Additional information concerning these actions is
provided in Sun Life Financial Inc.s annual MD&A and
annual and interim financial statements. These actions are
at an early stage and Sun Life Financial Inc. cannot predict their outcome at this time. First Quarter 2005  |  www.sunlife.com     5




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Managements Discussion and Analysis SLF ASIA Quarterly ResultsQ105
    
    
    Q404
    
    
    Q304
    
    
    Q204
    
    
    Q104Revenues ($ millions)
    
    
    214
    
    
    
    239
    
    
    
    189
    
    
    
    182
    
    
    
    158Common Shareholders Net Income ($ millions)
    
    
    6
    
    
    
    18
    
    
    
    10
    
    
    
    10
    
    
    
    7ROE (%)
    
    
    5.4
    
    
    
    16.8
    
    
    
    9.3
    
    
    
    9.0
    
    
    
    6.2
  Revenues in the first quarter of 2005 grew 35% compared to the first quarter of 2004, largely
due to strong single premium life insurance sales during the quarter and increased volume of
in-force business. First quarter 2005 sales were up 19% over 2004. Net income was down $1 million for the first quarter 2005 compared to the first quarter of 2004,
due to lower investment income. Net income was down from the fourth quarter of 2004 which benefited
from the favourable effect of productivity improvement initiatives on actuarial liabilities in the
Philippines. CORPORATE Corporate includes the results of SLF U.K., 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 ResultsQ105
    
    
    Q404
    
    
    Q304
    
    
    Q204
    
    
    Q104Revenues ($ millions)
    
    
    530
    
    
    
    477
    
    
    
    534
    
    
    
    576
    
    
    
    550Common Shareholders Net Income/(Loss) ($ millions)SLF U.K.
    
    
    47
    
    
    
    45
    
    
    
    39
    
    
    
    42
    
    
    
    47Reinsurance
    
    
    14
    
    
    
    26
    
    
    
    21
    
    
    
    10
    
    
    
    15Other
    
    
    19
    
    
    
    (12
    )
    
    
    14
    
    
    
    6
    
    
    
    (18
    )Total
    
    
    80
    
    
    
    59
    
    
    
    74
    
    
    
    58
    
    
    
    44
  Common shareholders net income in the Corporate segment of $80 million was $36 million
higher than in the first quarter of 2004. Earnings for SLF U.K. and Reinsurance were
virtually unchanged for the first quarter of 2005 compared to the first quarter of 2004 while
earnings in Other increased by $37 million. Earnings in Other benefited by $16 million in the first
quarter of 2005 as the result of a favourable resolution of outstanding tax issues. The Company
also recorded a $53 million foreign exchange gain on the repatriation of capital from the U.K.
which was offset by an increase in costs related to the write-off of redundant software, a
provision for the resolution of certain regulatory matters in the U.S. and the impact of
equity markets on the run-off reinsurance business. In addition to the previously mentioned
variances between the first quarter of 2005 and the first quarter of 2004, the fourth quarter 2004
results included the impact of favourable mortality in Reinsurance. Additional Financial Disclosure REVENUE  Revenues were $5.1 billion in the first quarter of 2005 compared to $5.5 billion in the comparable
period a year ago. The decrease of $419 million was primarily due to lower fixed annuity premiums
in the U.S. and an unfavourable impact of $211 million due to the strengthening of the
Canadian dollar against foreign currencies. These decreases were partially offset by higher
premiums in SLF Asia as a result of business growth. Premium revenue was $2.9 billion in the first quarter of 2005, compared to $3.3 billion in the
comparable period of 2004. Excluding the unfavourable impact of $119 million due to the
strengthening of the Canadian dollar against foreign currencies, premium revenue was down 6%. The
decrease was primarily due to lower annuity premiums in the U.S. as a result of
particularly strong 2004 sales of equity-indexed annuities, partially offset by higher life
insurance premiums in SLF Asia as a result of business growth. 6     Sun Life Financial Inc.  |  First Quarter 2005




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##### 



Managements Discussion and Analysis First quarter 2005 investment income was down $43 million or 3% from the first quarter of
2004, primarily reflecting fluctuations in equity market and interest rate levels. A foreign
exchange gain in the first quarter of 2005 relating to the repatriation of capital from the
U.K. operations was mostly offset by an unfavourable impact of $50 million due to the
strengthening of the Canadian dollar against foreign currencies. Fee income of $714 million in the first quarter of 2005 was down $62 million from the same period
in the previous year mainly due to a reduction of $43 million from the strengthening of the
Canadian dollar against foreign currencies. Before the impact of currency exchange, MFS
first quarter fee income declined $11 million compared to a year ago, primarily reflecting
the full quarter impact of fee reductions as agreed to in regulatory settlements in early 2004. ASSETS UNDER MANAGEMENT 
 (i)

an increase of $3.7 billion due to fluctuation in currency
exchange rates; and(ii)

net sales of mutual, managed and
segregated funds of $2.5 billion; partly offset by(iii)

a decrease of $2.1 billion from equity market declines. AUM decreased $3.9 billion between March 31, 2004, and March 31, 2005. Continued business
growth and an increase of $17.0 billion from increases in equity markets were more than offset by
reductions of: (i)

$17.2 billion from the strengthening of the Canadian dollar against
foreign currencies; and(ii)

$6.7 billion of net redemptions of mutual,
managed and segregated funds. CHANGES IN THE BALANCE SHEET AND SHAREHOLDERS EQUITY  Total general fund assets at March 31, 2005, were $2.7 billion higher than December 31, 2004,
mostly due to business growth and investment activity in SLF Canada and SLF U.S.
and an increase of $618 million from the strengthening of foreign currencies against the
Canadian dollar. Actuarial and other policy liabilities of $76.7 billion at March 31, 2005, were $1.3 billion lower
than March 31, 2004. An increase of $1.7 billion primarily due to the growth in the SLF U.S.
operations was more than offset by a reduction of $2.9 billion due to the strengthening of
the Canadian dollar against foreign currencies. Actuarial and other policy liabilities were $627 million higher at March 31, 2005, compared to
December 31, 2004, primarily due to growth in SLF U.S. and a $469 million increase due to
the strengthening of foreign currencies against the Canadian dollar during the quarter. Shareholders equity, including the Companys preferred share capital, was $14.9 billion at March
31, 2005, $606 million higher than December 31, 2004. Shareholders net income, before preferred
share dividends of $2 million, contributed $460 million to equity, while the issuance of preferred
shares added $394 million. The strengthening of foreign currencies against the Canadian dollar
further increased equity by $87 million which was partly offset by the adjustment to the currency
translation account for the foreign currency gain of $53 million, as outlined in Note 10 of the
first quarter interim financial statements. The increase in equity was partly offset by dividend
payments on common shares of $142 million and $140 million for the cost of common shares
repurchased and cancelled, net of new issues for stock options. At March 31, 2005, Sun Life Financial Inc. had 588,974,846 common shares and 16,000,000 preferred
shares outstanding. Sun Life Assurance Company of Canada has announced its intention to redeem its
Non-Cumulative Redeemable Class E Preferred Shares, Series 1. First Quarter 2005  |  www.sunlife.com     7




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##### 



Managements Discussion and Analysis CASH FLOWS Quarterly Results($ millions)
    
    Q105
    
    
    Q104Cash and cash equivalents, beginning of period
    
    
    3,748
    
    
    
    3,175Cash flows provided by (used in):Operating activities
    
    
    791
    
    
    
    54Financing activities
    
    
    148
    
    
    
    10Investing activities
    
    
    (710
    )
    
    
    138Changes due to fluctuations in exchange rates
    
    
    (16
    )
    
    
    9Increase in cash and cash equivalents
    
    
    213
    
    
    
    211Cash and cash equivalents, end of period
    
    
    3,961
    
    
    
    3,386Short-term securities, end of period
    
    
    1,903
    
    
    
    1,775Total cash, cash equivalents and short-term securities
    
    
    5,864
    
    
    
    5,161
  Net cash, cash equivalents and short-term securities at the end of the first quarter of 2005
increased $703 million from the first quarter of 2004 primarily due to U.S. individual
life insurance premiums exceeding client disbursements and a reduction in the level of investments
in long-term assets during the past 12 months. The $213 million increase in cash and cash
equivalents during the first quarter of 2005 was comparable to the same period in the prior year.
The increase in cash flow generated from operating activities was partly due to improved net flows
of U.S. fixed annuities in the first quarter of 2005 compared to the first quarter of
2004. The increase in cash used in investing activities reflected in part the increase in
investments relative to the prior year to support the fixed annuity business. Cash provided by
financing activities increased $138 million in the first quarter of 2005 compared to 2004 primarily
due to the issuance of $400 million of Sun Life Financial Inc.s Class A Non-Cumulative Perpetual
Preferred Shares, partially offset by common share dividends of $142 million and common share
repurchases of $161 million during the first quarter of 2005. ACCOUNTING CHANGES  RISK MANAGEMENT  Through its ongoing risk management procedures, Sun Life Financial reviews the various risk factors
identified in the framework and reports to senior management on a monthly basis and to the Risk
Review Committee of the Board quarterly. Sun Life Financials risk management procedures and risk
factors are described in Sun Life Financial Inc.s annual MD&A and Annual Information Form (AIF).
Interest rate and equity market sensitivities are disclosed in the MD&A, but change as
market levels change, new business is added, or as management actions are taken. OUTLOOK  8     Sun Life Financial Inc.  |  First Quarter 2005




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##### 



Managements Discussion and Analysis REGULATORY MATTERS  FORWARD-LOOKING STATEMENTS  Forward-looking statements are not guarantees of future performance and involve certain risks and
uncertainties that are difficult to predict. The future results and
stockholder value of Sun Life Financial Inc. may differ materially from those expressed in these forward-looking statements due to,
among other factors, the matters set out under Risk
Factors in Sun Life Financial Inc.s AIF
and the factors detailed in its other filings with Canadian and
U.S. securities
regulators, including its annual MD&A, and annual and interim 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 not
limited to: external factors, including changes in equity market performance, interest rates,
currency exchange rates and government regulations; the amount and composition of assets under
management; 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 risks
inherent in products with guaranteed benefit options; and the results of regulatory investigations
into the practices of the mutual fund, insurance, annuity and financial product distribution
industries, including private legal proceedings and class actions
that have been commenced or threatened in connection with these practices. The Company does not
undertake any obligation to update or release any revisions to these forward-looking statements to
reflect events or circumstances after the date of this presentation or to reflect the occurrence of
unanticipated events, except as required by law. First Quarter 2005  |  www.sunlife.com     9




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##### 



Interim Consolidated Financial Statements Consolidated Statements of Operations For the three months endedMarch 31
    
    
    March 31
    *(unaudited, in millions of Canadian dollars, except for per share amounts)
    
    2005
    
    
    2004RevenuePremium income:Annuities
    
    $
    909
    
    
    $
    1,204Life insurance
    
    
    1,419
    
    
    
    1,461Health insurance
    
    
    612
    
    
    
    5892,940
    
    
    
    3,254Net investment income
    
    
    1,465
    
    
    
    1,508Fee income
    
    
    714
    
    
    
    7765,119
    
    
    
    5,538Policy Benefits and ExpensesPayments to policyholders, beneficiaries and depositors:Maturities and surrenders
    
    
    1,300
    
    
    
    1,807Annuity payments
    
    
    367
    
    
    
    375Death and disability benefits
    
    
    617
    
    
    
    698Health benefits
    
    
    441
    
    
    
    459Policyholder dividends and interest on claims and deposits
    
    
    279
    
    
    
    2813,004
    
    
    
    3,620Net transfers to segregated funds
    
    
    175
    
    
    
    255Increase (decrease) in actuarial liabilities
    
    
    91
    
    
    
    (170
    )Commissions
    
    
    426
    
    
    
    483Operating expenses
    
    
    727
    
    
    
    735Premium taxes
    
    
    44
    
    
    
    46Interest expense
    
    
    65
    
    
    
    674,532
    
    
    
    5,036Income before Income Taxes and Non-controlling Interests
    
    
    587
    
    
    
    502Income taxes
    
    
    117
    
    
    
    128Non-controlling interests in net income of subsidiaries
    
    
    6
    
    
    
    4Total Net Income
    
    
    464
    
    
    
    370Less: Participating policyholders net income
    
    
    4
    
    
    
    5Preferred shareholder dividends
    
    
    2
    
    
    
    Common Shareholders Net Income
    
    $
    458
    
    
    $
    365Average exchange rates:U.S. Dollars
    
    
    1.23
    
    
    
    1.32U.K. Pounds
    
    
    2.32
    
    
    
    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 4)Basic
    
    $
    0.77
    
    
    $
    0.61Diluted
    
    $
    0.77
    
    
    $
    0.61Weighted
average shares outstanding in millions
(Note 4)Basic
    
    
    592
    
    
    
    600Diluted
    
    
    595
    
    
    
    603
 The attached notes form part of these interim consolidated financial statements. 10     Sun Life Financial Inc.  |  First Quarter 2005




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##### 



Interim Consolidated Financial Statements Consolidated Balance Sheets As atMarch 31
    
    
    December 31
    *
    
    March 31
    *(unaudited, in millions of Canadian dollars)
    
    2005
    
    
    2004
    
    
    2004AssetsBonds
    
    $
    66,080
    
    
    $
    64,496
    
    
    $
    66,820Mortgages
    
    
    13,999
    
    
    
    13,862
    
    
    
    13,516Stocks
    
    
    3,494
    
    
    
    3,463
    
    
    
    3,769Real estate
    
    
    3,155
    
    
    
    3,148
    
    
    
    3,109Cash, cash equivalents and short-term securities
    
    
    5,864
    
    
    
    5,958
    
    
    
    5,161Policy loans and other invested assets
    
    
    6,007
    
    
    
    5,984
    
    
    
    6,171Invested assets
    
    
    98,599
    
    
    
    96,911
    
    
    
    98,546Goodwill
    
    
    5,534
    
    
    
    5,471
    
    
    
    5,611Intangible assets
    
    
    770
    
    
    
    751
    
    
    
    760Other assets
    
    
    5,571
    
    
    
    4,670
    
    
    
    6,443Total general fund assets
    
    $
    110,474
    
    
    $
    107,803
    
    
    $
    111,360Segregated funds net assets
    
    $
    57,565
    
    
    $
    56,564
    
    
    $
    55,682Liabilities and EquityActuarial liabilities and other policy liabilities
    
    $
    76,683
    
    
    $
    76,056
    
    
    $
    77,997Amounts on deposit
    
    
    3,166
    
    
    
    3,144
    
    
    
    3,123Deferred net realized gains
    
    
    3,553
    
    
    
    3,466
    
    
    
    3,385Other liabilities
    
    
    10,411
    
    
    
    9,072
    
    
    
    10,581Total general fund liabilities
    
    
    93,813
    
    
    
    91,738
    
    
    
    95,086Subordinated debt
    
    
    1,465
    
    
    
    1,462
    
    
    
    1,734Non-controlling interests in subsidiaries
    
    
    171
    
    
    
    188
    
    
    
    174Total equity
    
    
    15,025
    
    
    
    14,415
    
    
    
    14,366Total general fund liabilities and equity
    
    $
    110,474
    
    
    $
    107,803
    
    
    $
    111,360Segregated funds contract liabilities
    
    $
    57,565
    
    
    $
    56,564
    
    
    $
    55,682Exchange rate at balance sheet date:U.S. Dollars
    
    
    1.22
    
    
    
    1.20
    
    
    
    1.31U.K. Pounds
    
    
    2.28
    
    
    
    2.32
    
    
    
    2.39
  *
    
    As restated for adoption of AcG 15 (Note 2) The attached notes form part of these interim consolidated financial statements. Approved on behalf of the Board of Directors -s- Donald A. Stewart
Donald A. Stewart
Chief Executive Officer -s- Ronald W. Osborne
Ronald W. Osborne
Director First Quarter 2005  |  www.sunlife.com     11




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##### 



Interim Consolidated Financial Statements Consolidated Statements of Equity For the three months endedParticipating
    
    
    
    
    
    
    March 31
    
    
    March 31
    *(unaudited, in millions of Canadian dollars)
    
    Policyholders
    
    
    Shareholders
    
    
    2005
    
    
    2004Preferred SharesBalance, beginning of period
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Preferred shares issued (Note 8)
    
    
    
    
    
    
    400
    
    
    
    400
    
    
    
    Issuance costs, net of taxes (Note 8)
    
    
    
    
    
    
    (6
    )
    
    
    (6
    )
    
    
    Balance, end of period
    
    
    
    
    
    
    394
    
    
    
    394
    
    
    
    Common SharesBalance, beginning of period
    
    
    
    
    
    
    7,238
    
    
    
    7,238
    
    
    
    7,289Stock options exercised
    
    
    
    
    
    
    27
    
    
    
    27
    
    
    
    24Common shares purchased for cancellation (Note 3)
    
    
    
    
    
    
    (50
    )
    
    
    (50
    )
    
    
    (3
    )Balance, end of period
    
    
    
    
    
    
    7,215
    
    
    
    7,215
    
    
    
    7,310Contributed SurplusBalance, beginning of period
    
    
    
    
    
    
    70
    
    
    
    70
    
    
    
    76Stock option compensation
    
    
    
    
    
    
    2
    
    
    
    2
    
    
    
    4Stock options exercised
    
    
    
    
    
    
    (6
    )
    
    
    (6
    )
    
    
    (6
    )Balance, end of period
    
    
    
    
    
    
    66
    
    
    
    66
    
    
    
    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
    
    
    4
    
    
    
    460
    
    
    
    464
    
    
    
    370Dividends on common shares
    
    
    
    
    
    
    (142
    )
    
    
    (142
    )
    
    
    (126
    )Dividends on preferred shares
    
    
    
    
    
    
    (2
    )
    
    
    (2
    )
    
    
    Common shares purchased for cancellation (Note 3)
    
    
    
    
    
    
    (111
    )
    
    
    (111
    )
    
    
    (5
    )Balance, end of period
    
    
    89
    
    
    
    8,324
    
    
    
    8,413
    
    
    
    7,527Currency Translation AccountBalance, beginning of period
    
    
    (8
    )
    
    
    (1,089
    )
    
    
    (1,097
    )
    
    
    (673
    )Adjustment for foreign exchange gain (Note 10)
    
    
    
    
    
    
    (53
    )
    
    
    (53
    )
    
    
    Changes for the period
    
    
    
    
    
    
    87
    
    
    
    87
    
    
    
    128Balance, end of period
    
    
    (8
    )
    
    
    (1,055
    )
    
    
    (1,063
    )
    
    
    (545
    )Total equity
    
    $
    81
    
    
    $
    14,944
    
    
    $
    15,025
    
    
    $
    14,366
  *
    
    As restated for adoption of AcG 15 (Note 2) The attached notes form part of these interim consolidated financial statements. 12     Sun Life Financial Inc.  |  First Quarter 2005




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##### 



Interim Consolidated Financial Statements Condensed Consolidated Statements of Cash Flows For the three months endedMarch 31
    
    
    March 31
    *(unaudited, in millions of Canadian dollars)
    
    2005
    
    
    2004Cash Flows Provided by (Used in) Operating ActivitiesTotal net income
    
    $
    464
    
    
    $
    370New mutual fund business acquisition costs capitalized
    
    
    (27
    )
    
    
    (30
    )Redemption fees of mutual funds
    
    
    13
    
    
    
    18Items not affecting cash
    
    
    341
    
    
    
    (304
    )Net cash provided by operating activities
    
    
    791
    
    
    
    54Cash Flows Provided by (Used in) Financing ActivitiesBorrowed funds
    
    
    39
    
    
    
    126Issuance of preferred shares (Note 8)
    
    
    400
    
    
    
    Payments to underwriters (Note 8)
    
    
    (9
    )
    
    
    Issuance of common shares on exercise of stock options
    
    
    21
    
    
    
    18Common shares purchased for cancellation (Note 3)
    
    
    (161
    )
    
    
    (8
    )Dividends paid on common shares
    
    
    (142
    )
    
    
    (126
    )Net cash provided by financing activities
    
    
    148
    
    
    
    10Cash Flows Provided by (Used in) Investing ActivitiesSales, maturities and repayments of bonds, mortgages, stocks and real estate
    
    
    7,638
    
    
    
    11,317Purchases of bonds, mortgages, stocks and real estate
    
    
    (8,622
    )
    
    
    (11,137
    )Policy loans
    
    
    (14
    )
    
    
    13Short-term securities
    
    
    337
    
    
    
    18Other investments
    
    
    (49
    )
    
    
    (73
    )Net cash provided by (used in) investing activities
    
    
    (710
    )
    
    
    138Changes due to fluctuations in exchange rates
    
    
    (16
    )
    
    
    9Increase in cash and cash equivalents
    
    
    213
    
    
    
    211Cash and cash equivalents, beginning of period
    
    
    3,748
    
    
    
    3,175Cash and cash equivalents, end of period
    
    
    3,961
    
    
    
    3,386Short-term securities, end of period
    
    
    1,903
    
    
    
    1,775Cash, cash equivalents and short-term securities, end of period
    
    $
    5,864
    
    
    $
    5,161Supplementary InformationCash and cash equivalents:Cash
    
    $
    467
    
    
    $
    282Cash equivalents
    
    
    3,494
    
    
    
    3,104$
    3,961
    
    
    $
    3,386Cash disbursements made for:Interest on borrowed funds and subordinated debt
    
    $
    4
    
    
    $
    2Income taxes, net of refunds
    
    $
    89
    
    
    $
    (8
    )
  *
    
    As restated for adoption of AcG 15 (Note 2) The attached notes form part of these interim consolidated financial statements. First Quarter 2005  |  www.sunlife.com     13




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##### 



Interim Consolidated Financial Statements Consolidated Statements of Changes in Segregated Funds Net Assets For the three months endedMarch 31
    
    
    March 31(unaudited, in millions of Canadian dollars)
    
    2005
    
    
    2004Additions to Segregated FundsDeposits:Annuities
    
    $
    2,188
    
    
    $
    1,761Life insurance
    
    
    77
    
    
    
    912,265
    
    
    
    1,852Net transfers from general funds
    
    
    175
    
    
    
    255Net realized and unrealized gains
    
    
    80
    
    
    
    709Other investment income
    
    
    213
    
    
    
    2092,733
    
    
    
    3,025Deductions from Segregated FundsPayments to policyholders and their beneficiaries
    
    
    1,836
    
    
    
    1,891Management fees
    
    
    161
    
    
    
    154Taxes and other expenses
    
    
    33
    
    
    
    47Effect of changes in currency exchange rates
    
    
    (298
    )
    
    
    (663
    )1,732
    
    
    
    1,429Net additions to segregated funds for the period
    
    
    1,001
    
    
    
    1,596Segregated funds net assets, beginning of period
    
    
    56,564
    
    
    
    54,086Segregated funds net assets, end of period
    
    $
    57,565
    
    
    $
    55,682
 Consolidated Statements of Segregated Funds Net Assets As atMarch 31
    
    
    December 31
    
    
    March 31(unaudited, in millions of Canadian dollars)
    
    2005
    
    
    2004
    
    
    2004AssetsSegregated and mutual fund units
    
    $
    44,274
    
    
    $
    43,589
    
    
    $
    43,272Stocks
    
    
    7,298
    
    
    
    7,082
    
    
    
    6,834Bonds
    
    
    5,693
    
    
    
    5,600
    
    
    
    5,437Cash, cash equivalents and short-term securities
    
    
    1,616
    
    
    
    961
    
    
    
    853Real estate
    
    
    164
    
    
    
    159
    
    
    
    148Mortgages
    
    
    56
    
    
    
    61
    
    
    
    77Other assets
    
    
    2,755
    
    
    
    716
    
    
    
    1,14061,856
    
    
    
    58,168
    
    
    
    57,761Liabilities
    
    
    4,291
    
    
    
    1,604
    
    
    
    2,079Net assets attributable to segregated funds policyholders
    
    $
    57,565
    
    
    $
    56,564
    
    
    $
    55,682
 The attached notes form part of these interim consolidated financial statements. 14     Sun Life Financial Inc.  |  First Quarter 2005




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##### 



Condensed Notes to the Interim Consolidated Financial Statements  1.   Basis of Presentation Sun Life Financial Inc. together with all its subsidiaries, including its wholly-owned
consolidated subsidiaries Sun Life Assurance Company of Canada (Sun Life Assurance) and Sun Life
Financial Corp., are collectively referred to as Sun Life Financial or the Company. On January
4, 2005, Sun Life Assurance completed a reorganization under which most of its asset management
businesses in Canada and the U.S. were transferred to a newly incorporated subsidiary of
Sun Life Financial Inc., Sun Life Financial Corp. The Company prepares its interim consolidated
financial statements according to Canadian generally accepted accounting principles
(GAAP). The accounting policies and methods of computation applied in these interim
financial statements are the same as those applied in the 2004 annual consolidated financial
statements, except as described in Note 2. The interim consolidated financial statements should be
read in conjunction with the most recent annual consolidated financial statements, as they do not
include all information and notes required by GAAP for annual consolidated financial
statements. 2.   Changes in Accounting Policies Consolidation of Variable Interest Entities:The Company adopted Consolidation of Variable
Interest Entities, CICA Handbook Accounting Guideline 15 (AcG 15), on January
1, 2005. This change in accounting policy was applied retroactively and prior period financial
statements have been restated accordingly. This Guideline provides guidance for application of
consolidation principles to those entities defined as variable interest entities (VIEs).
VIEs are entities in which equity investors do not have a controlling financial interest or where
the equity invested is considered insufficient to finance the entitys activities without
additional subordinated financial support. Under this Guideline, the Company is required to
consolidate those VIEs where the Company is exposed to a majority of expected losses,
benefits from a majority of expected residual returns, or both. The following is a summary of the impact of this Guideline for the major categories of VIEs that
the Company is involved with. Sun Life ExchangEable Capital Securities (SLEECS):  Cumulative Capital Securities (Securities):  Other Variable Interest Entities:  Financial Instruments  Disclosure and Presentation:The Company adopted the amendments to the
accounting requirements in CICA Handbook Section 3860, Financial Instruments  Disclosure
and Presentation, on January 1, 2005. Securities issued by the Company that give the Company an
unrestricted obligation to settle the principal amount in cash or in the equivalent value of its
own shares, must be classified as debt. This change in accounting policy did not have a material
impact on these interim consolidated financial statements. First Quarter 2005  |  www.sunlife.com     15




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##### 



Condensed Notes to the Interim Consolidated Financial Statements (unaudited) 3.   Normal Course Issuer Bid and Cancellation of Common Shares On January 6, 2005, the Company announced the renewal of its normal course issuer bid to
purchase, for cancellation, through the Toronto Stock Exchange (the Exchange) up to 30 million
common shares, representing approximately 5% of the common shares issued and outstanding at that
time. This normal course issuer bid covers the period from January 12, 2005 to January 11, 2006.
Purchases will be executed on the Exchange at the prevailing market price in amounts and times
determined by the Company. The Company will make no purchases of common shares other than
open-market purchases. In 2004, the Company announced a similar normal course issuer bid that
covered the period from January 12, 2004 to January 11, 2005. In the first quarter of 2005, the
Company purchased under these plans approximately 4 million of its common shares at an average
price of $39.48 per share for a total amount of $161. Of this amount, purchases of approximately $6
were not cancelled until April 2005. An additional $11 were subscribed for, but not settled, at
March 31, 2005. 4.   Earnings Per Share Details of the calculation of the net income and the weighted average number of shares used
in the earnings per share computations are as follows: For the three months endedMarch 31
    
    
    March 31
    *2005
    
    
    2004Common shareholders net income
    
    $
    458
    
    
    $
    365Less: Effect of stock options of subsidiaries(1)
    
    
    1
    
    
    
    Common shareholders net income on a diluted basis
    
    $
    457
    
    
    $
    365Weighted average number of shares outstanding for basic earnings per share (in millions)
    
    
    592
    
    
    
    600Add: Adjustments relating to the dilutive impact of stock options(1)
    
    
    3
    
    
    
    3Weighted average number of shares outstanding on a diluted basis (in millions)
    
    
    595
    
    
    
    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) 5.   Segmented Information Effective January 1, 2005, the Company realigned certain of its reportable segments whereby
the reinsurance business unit previously included in the SLF Canada segment, and the United Kingdom
business, are now reported as part of the Corporate segment (formerly Corporate Capital). The
change reflects the ongoing evolution of the business of the Company and does not impact the
consolidated results. The prior period results and assets by segment presented in this note reflect
this realignment. The Company has five reportable segments: SLF Canada, SLF United States,
MFS Investment Management (MFS), SLF Asia, and Corporate. These
reportable segments reflect the Companys management structure and internal financial reporting.
Each of these segments operates in the financial services industry and has its own management. They
derive their revenues principally from mutual funds, investment management and annuities, life and
health insurance and life retrocession. Revenues not attributed to the strategic business units are
derived primarily from investments of a corporate nature and earnings on capital. Corporate includes the Companys reinsurance operations, both ongoing and run-off, the United
Kingdom operations, and those other operations for which management responsibility resides in head
office. Total net income (loss) in this category is shown net of certain expenses borne centrally. Inter-segment transactions consist primarily of internal financing agreements. They are measured at
market values prevailing when the arrangements were negotiated. Inter-segment revenue for the three
months ended March 31, 2005, consists of interest of $55 ($98 in 2004) and fee income of $12 ($12
in 2004). The results of the segments operations are discussed in the Managements Discussion and Analysis. Results and assets by segment for the three months ended March 31, 2005United StatesConsolidationCanada
    
    
    Sun Life
    
    
    MFS
    
    
    Asia
    
    
    Corporate
    
    
    Adjustments
    
    
    TotalRevenue
    
    $
    2,146
    
    
    $
    1,889
    
    
    $
    407
    
    
    $
    214
    
    
    $
    530
    
    
    $
    (67
    )
    
    $
    5,119Total net income
    
    $
    248
    
    
    $
    82
    
    
    $
    46
    
    
    $
    6
    
    
    $
    82
    
    
    $
    
    
    
    $
    464AssetsGeneral fund assets
    
    $
    51,222
    
    
    $
    41,697
    
    
    $
    816
    
    
    $
    2,523
    
    
    $
    15,073
    
    
    $
    (857
    )
    
    $
    110,474Segregated funds net assets
    
    $
    25,414
    
    
    $
    24,994
    
    
    $
    
    
    
    $
    51
    
    
    $
    7,106
    
    
    $
    
    
    
    $
    57,565
 16     Sun Life Financial Inc.  |  First Quarter 2005




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Condensed Notes to the Interim Consolidated Financial Statements (unaudited) Results and assets by segment for the three months ended March 31, 2004*United StatesConsolidationCanada
    
    
    Sun Life
    
    
    MFS
    
    
    Asia
    
    
    Corporate
    
    
    Adjustments
    
    
    TotalRevenue
    
    $
    2,141
    
    
    $
    2,349
    
    
    $
    450
    
    
    $
    158
    
    
    $
    550
    
    
    $
    (110
    )
    
    $
    5,538Total net income (loss)
    
    $
    235
    
    
    $
    97
    
    
    $
    (13
    )
    
    $
    7
    
    
    $
    44
    
    
    $
    
    
    
    $
    370AssetsGeneral fund assets
    
    $
    50,496
    
    
    $
    41,672
    
    
    $
    1,094
    
    
    $
    2,150
    
    
    $
    16,416
    
    
    $
    (468
    )
    
    $
    111,360Segregated funds net assets
    
    $
    23,672
    
    
    $
    25,447
    
    
    $
    
    
    
    $
    16
    
    
    $
    6,547
    
    
    $
    
    
    
    $
    55,682
  *
    
    As restated for adoption of AcG 15 (Note 2) 6.   Changes in Actuarial Liabilities Changes in actuarial liabilities for the three months ended March 31, 2005, and March 31,
2004, are as follows: 2005
    
    
    2004Actuarial liabilities, January 1
    
    $
    74,258
    
    
    $
    75,324Increase (decrease) in actuarial liabilities
    
    
    91
    
    
    
    (170
    )Actuarial liabilities before the following:
    
    
    74,349
    
    
    
    75,154Other
    
    
    53
    
    
    
    (99
    )Effect of changes in currency exchange rates
    
    
    441
    
    
    
    818Actuarial liabilities, March 31
    
    
    74,843
    
    
    
    75,873Add: other policy liabilities
    
    
    1,840
    
    
    
    2,124Actuarial liabilities and other policy liabilities, March 31
    
    $
    76,683
    
    
    $
    77,997
 7.   Pension Plans and Other Post-Retirement Benefits For the three months endedMarch 31
    
    
    March 312005
    
    
    2004Pension benefit cost (income)
    
    $
    3
    
    
    $
    3Other post-retirement benefit cost
    
    $
    6
    
    
    $
    6
 8.   Significant Capital Transaction On February 25, 2005, Sun Life Financial Inc. issued $400 million of Class A Non-Cumulative
Preferred Shares, Series 1 (the Preferred Shares) at $25 per share, under a prospectus dated
February 17, 2005. Holders are entitled to receive a non-cumulative quarterly dividend of $0.297 per share, yielding 4.75% annually. The initial dividend,
if declared, will be payable on June 30, 2005, and will be $0.407 per share. Underwriting
commissions of $6 (net of taxes of $3) were deducted from preferred shares in the interim
consolidated statements of equity. Subject to regulatory approval, on or after March 2010, the
Company may redeem the Preferred Shares, in whole or in part at a declining premium. On February 8, 2005, Sun Life Assurance announced that, subject to regulatory approval, its Board
of Directors approved the redemption of its Non-Cumulative Redeemable Class E Preferred Shares,
Series I, included in non-controlling interest, on June 30, 2005. These preferred shares will be
redeemed at a price equal to $25 per share, together with declared but unpaid dividends. 9.   Commitments, Guarantees and Contingencies LEGAL AND REGULATORY PROCEEDINGS  First Quarter 2005  |  www.sunlife.com     17




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Condensed Notes to the Interim Consolidated Financial Statements (unaudited) provision for the estimated losses for such matters has been made in the Corporate segment.
While it is not possible to predict the final resolution of these discussions, management expects
that the ultimate liability with respect to such matters will not be material to the consolidated
financial condition of the Company. Sun Life Financial Inc., MFS and certain of its subsidiaries, MFS Corporation
Retirement Committee, various MFS funds, certain current and/or former Trustees of those
MFS funds, and certain officers of MFS have been named as defendants in
multiple lawsuits filed in the U.S. federal and state courts. The lawsuits variously have
been commenced as class actions or individual actions on behalf of investors who purchased, held or
redeemed shares of the MFS funds during specified periods, as class actions on behalf of
participants in certain retirement plan accounts, or as derivative actions on behalf of MFS
funds. The lawsuits relating to market timing and related matters have been transferred to,
and consolidated before, the United States District Court for the District of Maryland, as part of
a multi-district litigation of market timing and related claims involving several other fund
complexes (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)). The plaintiffs in
these consolidated lawsuits generally seek injunctive relief including removal of the named
Trustees, adviser and distributor, rescission of contracts and 12b-1 Plans, disgorgement of fees
and profits, monetary damages, punitive damages, attorneys fees and costs, and other equitable and
declaratory relief. The market timing cases related to the MFS funds are Riggs v. MFS et
al., Case No. 04-CV-01162-JFM(direct), Hammerslough v. MFS et al., Case No. 04-MD-01620
(derivative) and Anita Walker v. MFS et al., Case No. 1:04-CV-01758(ERISA). Two lawsuits
alleging improper brokerage allocation practices and excessive compensation are pending in the
United States District Court for the District of Massachusetts (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) (May 4, 2004)). The plaintiffs in
these lawsuits generally seek compensatory damages, punitive damages, recovery of fees, rescission
of contracts, an accounting, restitution, declaratory relief, equitable and/or injunctive relief
and attorneys fees and costs. The various lawsuits generally allege that some or all of the
defendants (i) permitted or acquiesced in market timing and/or late trading in some of the MFS
funds and, inadequately disclosed MFS internal policies concerning market timing
and such matters, (ii) received excessive compensation as fiduciaries to the MFS funds,
or (iii) permitted or acquiesced in the improper use of fund assets by MFS to support the
distribution of MFS fund shares and inadequately disclosed MFS use of fund
assets in this manner. The actions assert that some or all of the defendants violated U.S.
federal securities laws, including the Securities Act of 1933and the Securities Exchange Act
of 1934, the Investment Company Act of 1940and the Investment Advisers Act of 1940, the Employee
Retirement Income Security Act of 1974, as well as fiduciary duties and other violations of common
law. Additional lawsuits based upon similar allegations may be filed in the future. These actions
are at an early stage and Sun Life Financial cannot predict their outcome with certainty and is
accordingly unable to determine the potential impact that they may have on Sun Life Financials
results of operations, financial position and cash flows. Additional information concerning these and related matters is provided in Sun Life Financial
Inc.s Managements Discussion and Analysis and Renewal Annual Information Form for the year ended
December 31, 2004, and in its interim Managements Discussion and Analysis. PROVISIONS IN THE UNITED KINGDOM  The Company has provisions for future costs and expenses relating to all reviews of past business
sold in the United Kingdom, as components of both actuarial liabilities and other liabilities. At
March 31, 2005, the combined provision was $95 ($117 in 2004). 10.   Foreign Exchange Gain During the first quarter of 2005, the Company reduced its net investment in its United
Kingdom self-sustaining foreign operation. The reduction was a result of a capital restructuring
whereby the foreign operation repaid capital of 250 U.K. Pounds. A foreign exchange gain
of $53, equivalent to the proportional amount of the foreign exchange gain accumulated in the
currency translation account, was recognized in net investment income. 11.   Comparative Figures Certain comparative figures have been restated to conform with the presentation adopted in
2005. 18     Sun Life Financial Inc.  |  First Quarter 2005




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MAJOR OFFICES  The following is contact
information for Sun Life
Financials major offices and
joint venture companies around
the world. For inquiries and
customer service, please contact
the appropriate office in your
area. Sun Life Financial Canada
Sun Life Assurance Company of Canada Canadian Headquarters
227 King Street South
P.O. Box 1601, STN Waterloo
Waterloo, Ontario
Canada N2J 4C5
Tel: 519-888-3900
Call Centre: 1 800 SUN-LIFE/1 800 786-5433
Mon. to Fri. 8:00 a.m.  8:00 p.m. Eastern Time
Website: www.sunlife.ca Toronto Office
225 King Street West
Toronto, Ontario
Canada M5V 3C5
Tel: 416-408-7500
Call Centre: 1 800 SUN-LIFE/1 800 786-5433
Mon. to Fri. 8:00 a.m.  8:00 p.m. Eastern Time
Website: www.sunlife.ca Montreal Office
1155 Metcalfe Street
Montreal, Quebec
Canada H3B 2V9
Tel: 514-866-6411
Call Centre: 1 800 SUN-LIFE/1 800 786-5433
Mon. to Fri. 8:00 a.m.  8:00 p.m. Eastern Time
Website: www.sunlife.ca Sun Life Financial U.S.
 Sun Life Financial U.K.
Sun Life Assurance Company of Canada
(U.K.) Limited
Matrix House
Basing View, Basingstoke
Hampshire
United Kingdom RG21 4DZ
Tel: (0870) 160-5040
Call Centre: (0870) 161-1111
Mon. to Fri. 8:00 a.m.  6:00 p.m.
Website: www.sunlifeofcanada.co.uk Sun Life Financial Asia
Regional Headquarters
2001 Two Pacific Place
88 Queensway
Hong Kong
Tel: (852) 2918-3888
Fax: (852) 2918-3800
Website: www.sunlife.com China
Sun Life Everbright Life Insurance
Company Limited
37/F Tianjin International Building
75 Nanjing Road
Tianjin, China 300050
Tel: (8622) 2339-1188
Fax: (8622) 2339-9929
Website: www.sunlife-everbright.com Beijing Representative Office
Bright China Chang An Building
Suite 1010, Tower A
No. 7 Jianguomennei Dajie
Beijing, China 100005
Tel: (8610) 6510-2783
Fax: (8610) 6510-2784 Hong Kong
Sun Life Financial (Hong Kong) Limited
20th Floor, One Exchange Square
Central, Hong Kong
Tel: (852) 2103-8888
Fax: (852) 2103-8181
Call Centre: (852) 2103-8928
Mon. to Fri. 8:30 a.m.  5:00 p.m.
Website: www.sunlife.com.hk
 India
Birla Sun Life Insurance Company Limited
Vaman Centre, 5th & 6th Floors
Makhwana Road, Andheri (East)
Mumbai, India 400 059
Tel: 91-22-5678-3333
Fax: 91-22-5678-3232
Mon. to Fri. 9:30 a.m.  6:30 p.m.
Website: www.birlasunlife.com Birla Sun Life Asset Management
Company Limited
Ahura Centre, 2nd Floor, Tower A
Mahakali Caves Road, Andheri (East)
Mumbai, India 400 093
Tel: 91-22-5692-8000
Fax: 91-22-5692-8110/8111
Mon. to Fri. 9:30 a.m.  6:00 p.m.
Website: www.birlasunlife.com Birla Sun Life Distribution Company Limited
Ahura Centre, 2nd Floor, Tower A 96 A/D
Mahakali Caves Road, Andheri (East)
Mumbai, India 400 093
Tel: 91-22-5692-8200
Fax: 91-22-5692-8201
Website: www.birlasunlife.com Indonesia
PT Sun Life Financial Indonesia
World Trade Centre, 8th & 9th Floors
JL Jend. Sudirman Kav 29-31
Jakarta, Indonesia 12920
Tel: (6221) 5289-0000
Fax: (6221) 521-1432
Mon. to Fri. 8:30 a.m.  5:30 p.m.
Website: www.sunlife.co.id Philippines
Sun Life of Canada (Philippines), Inc.
12th Floor, The Enterprise Centre Tower 2
6766 Ayala Avenue cor.
Paseo de Roxas
Makati City, Philippines 1229
Tel: (632) 886-6188
Fax: (632) 849-9988
Call Centre: (632) 849-9888
Mon. to Fri. 8:00 a.m.  6:00 p.m.
Website: www.sunlife.com.ph
   First Quarter 2005  |  www.sunlife.com     19




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##### 



CORPORATE AND SHAREHOLDER INFORMATION  For information about the
Sun Life Financial group of
companies, corporate news and
financial results, please visit
www.sunlife.com. CORPORATE OFFICE
Sun Life Financial Inc.
150 King Street West
Toronto, Ontario
Canada M5H 1J9
Tel: 416-979-9966
Website: www.sunlife.com INVESTOR RELATIONS
For financial analysts, portfolio
managers and institutional
investors requiring information,
please contact:
Thomas G. Reid
Vice-President, Public and Investor Relations
Tel: 416-204-8163
Fax: 416-585-7892
E-mail: investor.relations@sunlife.com
Please note that financial information
can also be obtained from
www.sedar.com. SHAREHOLDER SERVICES
For shareholder account
inquiries, please contact the
Transfer Agent in the country
where you reside, or
Shareholder Services:
Fax: 416-598-3121
English E-mail: shareholderservices@sunlife.com
French E-mail: servicesauxactionnaires@sunlife.com
 TRANSFER AGENT
For information about your
shareholdings, dividends, change
in share registration or address,
estate transfers, lost
certificates, or to advise of
duplicate mailings, please
contact the Transfer Agent in the
country where you reside. If you
do not live in any of the
countries listed, please contact
the Canadian Transfer Agent. Canada and the United States
CIBC Mellon Trust Company
P.O. Box 7010
Adelaide Street Postal Station
Toronto, Ontario
Canada M5C 2W9
Within North America:
Tel: 1 877 224-1760 (English)
       1 888 290-0048 (French)
Outside of North America:
Tel: 416-348-9412
Fax: 416-643-5501
E-mail: inquiries@cibcmellon.com
Website: www.cibcmellon.com
Shareholders can view their
account details using CIBC
Mellon Trust Companys
Internet service,
Answerline®. Register at
www.cibcmellon.com/answerlineregistration. United Kingdom
Capita IRG Plc
34 Beckenham Road
Beckenham, Kent
United Kingdom BR3 4TU
Within the U.K.:
Tel: (0845) 602 1587
Outside the U.K.:
Tel: +44 20 8639 2064
E-mail: ssd@capitaregistrars.com Philippines
The Hongkong and Shanghai Banking Corporation Limited
30/F The Discovery Suites
#25 ADB Avenue
Ortigas Centre, Pasig
Metro Manila, Philippines
From Metro Manila:
Tel: (632) 683-2601
From the Provinces: 1 800 1 888-2422 Hong Kong
Computershare Hong Kong Investor Services Limited
Hopewell Centre, 46th Floor
183 Queens Road East
Wanchai, Hong Kong
Tel: (852) 2862-8628
E-mail: hkinfo@computershare.com.hk
 DIVIDENDS2005 Dividend Dates
Common Shares Record Dates
    
    Payment DatesFebruary 23
    
    March 31May 25
    
    June 30August 24*
    
    September 30November 23*
    
    December 30  *
    
    Subject to approval by the Board of Directors Direct Deposit Dividend Service(Canada and the United States)  As of 2005, shareholders
receiving U.S. dollar
common share dividend payments
can also use this service if
their bank or financial
institution is a member of the
American Banking Association. A detachable enrolment form is
located on the back of Sun Life
Financials dividend cheque. The
Request for Electronic Payment of
Dividends Form is also available
for downloading from CIBC
Mellons website,
www.cibcmellon.com/investorforms,
or you can contact CIBC
Mellon to have one sent to
you. STOCK EXCHANGE LISTINGS   Ticker Symbol: SLF.PR.A
Sun Life Financial Inc.
Class A preferred shares are
listed on the TSX. As of March 31, 2005, there
were 588,974,846 outstanding
common shares, which are the
only voting securities.
   20     Sun Life Financial Inc.  |  First Quarter 2005




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