##### 



Sun Life Financial reports
record quarterly earnings of $512 million
Six-month earnings exceed $1 billion for first time
 Toronto  July 27, 2006 
    Financial Highlights
 
    
    ROE increased 60 basis points (100 basis points in constant
currency) to 13.6% from 13.0% in the second quarter of 2005.
    
    EPS for the quarter increased 8.6% (14.8% in constant
currency) compared to the second quarter of 2005. The
strengthening of the Canadian dollar reduced earnings by $28
million or 5 cents per common share this quarter.
    
    Sun Life Financial increased its quarterly common share
dividend to 30 cents per share, up 9% from 27.5 cents per
share paid previously, bringing the total increase this year
to 18%.
    
    Sun Life Financial repurchased more than 6.5 million common shares for $297 million under its share repurchase program
this quarter, for a total share buyback of $398 million in
the first six months of this year.
    
    Sun Life Financial completed a $300 million domestic public
offering of Series C Senior Unsecured 5% Fixed/Floating
Debentures due in 2031 in July 2006.




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##### 



Business Highlights
  
    
    The direct sales force in India grew to over 18,000 advisors in 84
branches serving 67 cities, contributing to a 114% local currency
growth in agency sales during the first six months of this year.
    
    In China, sales grew by 121% in local currency over the second
quarter of 2005. Sun Life Everbright Life Insurance Company
Limited received preliminary regulatory approval for a new branch
in Nanjing, opened a new sales office in Huzhou, and is preparing
to open an additional three sales offices in Zhejiang province,
increasing its presence to 11 cities in China.
    
    In July, Sun Life Financial signed an agreement with the China
Everbright Bank to distribute pension and protection products
throughout China.
    
    Philippines sales increased by 69% in local currency over the
second quarter of 2005 as Sun Life Financial continued to build on
its #2 market position in the Philippines.
    
    Individual Life sales in the United States increased 49% in local
currency over the first quarter of 2006, primarily on the strength
of sales through the independent distributor channel. With the
addition of National Financial Partners and M Financial Group, Sun
Life Financial U.S. now has active relationships with nine of the
top 10 independent distributors in the United States.
    
    Group Life & Health sales in the United States increased by 91% in
local currency over the first quarter of 2006, including strong
sales through Medical Group Insurance Services, Inc. (MGIS).
    
    Individual Insurance wholesale life and health sales in Canada
doubled compared to the second quarter of 2005 through deeper
penetration of the managing general agent and dealer channels.
    
    Group Benefits sales in Canada increased by 233% over the second
quarter of 2005. Group Benefits was chosen as the exclusive
provider of group insurance through the Canadian Federation of
Independent Business (CFIB) in Quebec, providing Group Benefits
with direct access to CFIBs small and medium-sized employer
members.
    
    Group Retirement Services retained $119 million of assets from
members leaving plans this quarter, an increase of 12% over the
second quarter of 2005.
    
    At MFS, the pre-tax operating profit margin ratio increased to 27%
in the second quarter of 2006 from 26% in the first quarter of
2006.
 Use of Non-GAAP Financial Measures




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##### 



Analysts Conference Call
  Sun Life Financial
   Note to Editors: All figures shown in Canadian dollars unless otherwise noted.
 Media Relations Contact:
    
    Investor Relations Contact:Susan Jantzi
    
    Kevin StrainManager, Media Relations
    
    Vice-President, Investor RelationsTel: 519-888-3160
    
    Tel: 416-204-8163susan.jantzi@sunlife.com
    
    investor.relations@sunlife.com




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##### 



Managements Discussion & Analysis
 Earnings and Profitability
  FINANCIAL SUMMARY
 Quarterly Results
    
    
    Year to DateQ2/06
    
    Q1/06
    
    Q4/05
    
    Q3/05
    
    Q2/05
    
    
    2006
    
    2005Revenues ($mm)
    
    
    6,231
    
    
    
    5,315
    
    
    
    5,338
    
    
    
    5,504
    
    
    
    5,988
    
    
    
    
    11,546
    
    
    
    11,076Common Shareholders Net Income ($mm)
    
    
    512
    
    
    
    491
    
    
    
    478
    
    
    
    430
    
    
    
    477
    
    
    
    
    1,003
    
    
    
    935Operating Earnings1($mm)
    
    
    512
    
    
    
    493
    
    
    
    490
    
    
    
    481
    
    
    
    477
    
    
    
    
    1,005
    
    
    
    935Earnings per Common Share (EPS) ($)
    
    
    0.88
    
    
    
    0.84
    
    
    
    0.82
    
    
    
    0.74
    
    
    
    0.81
    
    
    
    
    1.73
    
    
    
    1.58Operating EPS1($)
    
    
    0.88
    
    
    
    0.85
    
    
    
    0.84
    
    
    
    0.82
    
    
    
    0.81
    
    
    
    
    1.73
    
    
    
    1.58Fully Diluted Operating EPS1($)
    
    
    0.88
    
    
    
    0.84
    
    
    
    0.83
    
    
    
    0.82
    
    
    
    0.81
    
    
    
    
    1.71
    
    
    
    1.57Return on Common Equity (ROE) (%)
    
    
    13.6
    
    
    
    13.1
    
    
    
    13.0
    
    
    
    11.7
    
    
    
    13.0
    
    
    
    
    13.4
    
    
    
    12.8Operating ROE1(%)
    
    
    13.6
    
    
    
    13.2
    
    
    
    13.3
    
    
    
    13.1
    
    
    
    13.0
    
    
    
    
    13.4
    
    
    
    12.8Average Common Shares Outstanding (mm)
    
    
    578.8
    
    
    
    581.8
    
    
    
    582.8
    
    
    
    584.2
    
    
    
    587.4
    
    
    
    
    580.3
    
    
    
    589.6S&P500 Index (daily average)
    
    
    1,282
    
    
    
    1,283
    
    
    
    1,232
    
    
    
    1,223
    
    
    
    1,181
    
    
    
    
    1,283
    
    
    
    1,187S&P500 Index (close)
    
    
    1,270
    
    
    
    1,295
    
    
    
    1,248
    
    
    
    1,229
    
    
    
    1,191
    
    
    
    
    1,270
    
    
    
    1,191
 2 3
  
 1
    
    Operating earnings, operating EPS and operating ROE exclude the charge
of $51 million related to the sale of Administradora de Fondos de Pensiones Cuprum S.A. (Cuprum)
taken in the third quarter of 2005 and the after-tax charges of $12 million and $2 million for the
integration of CMG Asia taken in the fourth quarter of 2005 and the first quarter of 2006
respectively. See Use of Non-GAAP Financial Measures.2
    
    Or together with its subsidiaries and
joint ventures the Company or Sun Life Financial.3
    
    CMG Asia Limited and CommServe Financial
Limited are collectively referred to as CMG Asia.




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##### 



Performance by Business Group
  SLF Canada
  Quarterly Results
    
    
    Year to DateQ2/06
    
    Q1/06
    
    Q4/05
    
    Q3/05
    
    Q2/05
    
    
    2006
    
    2005Revenues ($mm)
    
    
    2,223
    
    
    
    2,255
    
    
    
    2,288
    
    
    
    2,120
    
    
    
    2,104
    
    
    
    
    4,478
    
    
    
    4,250Common Shareholders Net Income ($mm)Individual Insurance & Investments
    
    
    156
    
    
    
    150
    
    
    
    131
    
    
    
    128
    
    
    
    145
    
    
    
    
    306
    
    
    
    313Group Benefits
    
    
    65
    
    
    
    37
    
    
    
    85
    
    
    
    69
    
    
    
    54
    
    
    
    
    102
    
    
    
    92Group Wealth1
    
    
    43
    
    
    
    47
    
    
    
    38
    
    
    
    31
    
    
    
    37
    
    
    
    
    90
    
    
    
    76Total
    
    
    264
    
    
    
    234
    
    
    
    254
    
    
    
    228
    
    
    
    236
    
    
    
    
    498
    
    
    
    481ROE (%)
    
    
    15.0
    
    
    
    13.7
    
    
    
    15.1
    
    
    
    13.5
    
    
    
    14.2
    
    
    
    
    14.4
    
    
    
    14.5
 
 1
    
    Group Wealth comprises Group Retirement Services and Institutional Investments.
  
    
    Individual Insurance & Investments earnings for the second quarter
of 2006 increased by 7.6% over the second quarter of 2005 mainly
from higher CI earnings of $19 million and lower taxes partially
offset by the impact of new business strain and lower reserve
releases.
    
    Group Benefits earnings for the second quarter of 2006 increased
by 20% over the second quarter of 2005 on the impact of $14
million from strong investment results.
    
    Group Wealth earnings for the second quarter of 2006 grew by 16%
over the same period in 2005 on the positive effect of $6 million
from better mortality experience in the quarter.




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##### 



SLF U.S.
  Quarterly Results
    
    
    Year to DateQ2/06
    
    Q1/06
    
    Q4/05
    
    Q3/05
    
    Q2/05
    
    
    2006
    
    2005Revenues (US$mm)
    
    
    2,608
    
    
    
    1,734
    
    
    
    1,699
    
    
    
    2,020
    
    
    
    2,281
    
    
    
    
    4,342
    
    
    
    3,820Revenues (CDN$mm)
    
    
    2,929
    
    
    
    2,001
    
    
    
    1,994
    
    
    
    2,443
    
    
    
    2,835
    
    
    
    
    4,930
    
    
    
    4,724Common Shareholders Net Income (US$mm)Annuities
    
    
    64
    
    
    
    85
    
    
    
    84
    
    
    
    78
    
    
    
    72
    
    
    
    
    149
    
    
    
    106Individual Life
    
    
    (4
    )
    
    
    23
    
    
    
    34
    
    
    
    21
    
    
    
    20
    
    
    
    
    19
    
    
    
    45Group Life & Health
    
    
    20
    
    
    
    
    
    
    
    10
    
    
    
    10
    
    
    
    15
    
    
    
    
    20
    
    
    
    21Total (US$mm)
    
    
    80
    
    
    
    108
    
    
    
    128
    
    
    
    109
    
    
    
    107
    
    
    
    
    188
    
    
    
    172Total (CDN$mm)
    
    
    90
    
    
    
    125
    
    
    
    149
    
    
    
    133
    
    
    
    132
    
    
    
    
    215
    
    
    
    213ROE (%)
    
    
    9.4
    
    
    
    12.9
    
    
    
    15.6
    
    
    
    13.6
    
    
    
    13.8
    
    
    
    
    11.0
    
    
    
    11.2
   
    
    Annuities earnings decreased US$8 million compared to the second
quarter of 2005. The negative impact of equity market movements of
US$28 million and losses at MFS Retirement Services Inc. (RSI)
were partially offset by improved spread income.
    
    Individual Life earnings were US$24 million lower than in the
second quarter of 2005 primarily due to new business strain
resulting from increased sales and mix of business and the reserve
impact of increased reinsurance rates on new business, partially
offset by the impact of increased earnings from lower tax
jurisdictions.
    
    Group Life & Health earnings increased US$5 million compared to
the second quarter of 2005 due to improved claims experience and
business growth.
    
    SLF U.S. issued US$900 million of funding agreement backed medium
term notes (MTNs) in the second quarter of 2006 compared to US$600
million of MTNs issued in the second quarter of 2005, increasing
revenue by US$300 million compared to the same period in 2005.




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##### 



MFS
  Quarterly Results
    
    
    Year to DateQ2/06
    
    Q1/06
    
    Q4/05
    
    Q3/05
    
    Q2/05
    
    
    2006
    
    2005Revenues (US$mm)
    
    
    362
    
    
    
    360
    
    
    
    354
    
    
    
    342
    
    
    
    332
    
    
    
    
    722
    
    
    
    664Revenues (CDN$mm)
    
    
    407
    
    
    
    416
    
    
    
    416
    
    
    
    412
    
    
    
    413
    
    
    
    
    823
    
    
    
    820Common Shareholders Net Income (US$mm)
    
    
    47
    
    
    
    45
    
    
    
    38
    
    
    
    38
    
    
    
    34
    
    
    
    
    92
    
    
    
    71Common Shareholders Net Income (CDN$mm)
    
    
    53
    
    
    
    52
    
    
    
    45
    
    
    
    46
    
    
    
    42
    
    
    
    
    105
    
    
    
    88Average Net Assets (US$B)
    
    
    168
    
    
    
    167
    
    
    
    158
    
    
    
    155
    
    
    
    147
    
    
    
    
    168
    
    
    
    146Assets Under Management (US$B)
    
    
    168
    
    
    
    170
    
    
    
    162
    
    
    
    157
    
    
    
    150
    
    
    
    
    168
    
    
    
    150Net Sales/(Redemptions) (US$B)
    
    
    (0.4
    )
    
    
    (0.3
    )
    
    
    1.9
    
    
    
    1.4
    
    
    
    3.5
    
    
    
    
    (0.7
    )
    
    
    4.2Market Movement (US$B)
    
    
    (1.0
    )
    
    
    7.5
    
    
    
    2.9
    
    
    
    6.3
    
    
    
    1.8
    
    
    
    
    6.5
    
    
    
    (0.6
    )S&P500 Index (daily average)
    
    
    1,282
    
    
    
    1,283
    
    
    
    1,232
    
    
    
    1,223
    
    
    
    1,181
    
    
    
    
    1,283
    
    
    
    1,187
     SLF Asia
  Quarterly Results
    
    
    
    Year to DateQ2/06
    
    Q1/06
    
    Q4/05
    
    Q3/05
    
    Q2/05
    
    
    2006
    
    2005Revenues ($mm)
    
    
    259
    
    
    
    226
    
    
    
    257
    
    
    
    152
    
    
    
    167
    
    
    
    
    485
    
    
    
    350Common Shareholders Net Income ($mm)
    
    
    31
    
    
    
    24
    
    
    
    7
    
    
    
    10
    
    
    
    19
    
    
    
    
    55
    
    
    
    25ROE (%)
    
    
    12.6
    
    
    
    10.2
    
    
    
    4.3
    
    
    
    9.8
    
    
    
    17.6
    
    
    
    
    11.2
    
    
    
    11.4




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##### 



Corporate
   Quarterly Results
    
    
    Year to DateQ2/06
    
    Q1/06
    
    Q4/05
    
    Q3/05
    
    Q2/05
    
    
    2006
    
    2005Common Shareholders Net Income/(Loss) ($mm)SLF U.K.
    
    
    48
    
    
    
    38
    
    
    
    58
    
    
    
    48
    
    
    
    39
    
    
    
    
    86
    
    
    
    86Reinsurance
    
    
    24
    
    
    
    9
    
    
    
    (18
    )
    
    
    (6
    )
    
    
    15
    
    
    
    
    33
    
    
    
    29Other
    
    
    2
    
    
    
    9
    
    
    
    (17
    )
    
    
    (29
    )
    
    
    (6
    )
    
    
    
    11
    
    
    
    13Total
    
    
    74
    
    
    
    56
    
    
    
    23
    
    
    
    13
    
    
    
    48
    
    
    
    
    130
    
    
    
    128
  Additional Financial Disclosure
 Revenue




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##### 



Assets Under Management
  
 
      Changes in the Balance Sheet and Shareholders Equity




---



##### 



Cash Flows
  Quarterly Results
    
    
    Year to Date($mm)
    
    Q2/06
    
    Q2/05
    
    
    2006
    
    2005Cash and cash equivalents, beginning of period
    
    
    3,902
    
    
    
    3,959
    
    
    
    
    2,740
    
    
    
    3,748Cash flows provided by (used in):Operating activities
    
    
    671
    
    
    
    1,092
    
    
    
    
    1,538
    
    
    
    1,828Financing activities
    
    
    (441
    )
    
    
    (425
    )
    
    
    
    258
    
    
    
    (277
    )Investing activities
    
    
    (452
    )
    
    
    (282
    )
    
    
    
    (855
    )
    
    
    (992
    )Changes due to fluctuations in exchange rates
    
    
    (99
    )
    
    
    (4
    )
    
    
    
    (100
    )
    
    
    33Increase (Decrease) in cash and cash equivalents
    
    
    (321
    )
    
    
    381
    
    
    
    
    841
    
    
    
    592Cash and cash equivalents, end of period
    
    
    3,581
    
    
    
    4,340
    
    
    
    
    3,581
    
    
    
    4,340Short-term securities, end of period
    
    
    942
    
    
    
    1,886
    
    
    
    
    942
    
    
    
    1,886Total cash, cash equivalents and short-term securities
    
    
    4,523
    
    
    
    6,226
    
    
    
    
    4,523
    
    
    
    6,226




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##### 



Taxes
      Risk Management
   Outlook




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##### 



Regulatory and Legal Matters
   www.sedar.com
 Use of Non-GAAP Financial Measures
   Forward-Looking Statements




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#####