Sun Life 2010 Annual Report Download - page 117

15.A Common Shares
The changes in shares issued and outstanding common shares for the year ended December 31 are as follows:
2010 2009 2008
Common shares (in millions of shares )
Number of
shares Amount
Number of
shares Amount
Number of
shares Amount
Balance, January 1 564 $ 7,126 560 $ 6,983 564 $ 7,033
Stock options exercised (Note 18) 118 –7110
Common shares purchased for cancellation(1) ––– – (5) (60)
Shares issued under dividend reinvestment and share
purchase plan(2) 9 263 4 136 – –
Balance, December 31 574 $ 7,407 564 $ 7,126 560 $ 6,983
(1) SLF Inc. purchased and cancelled common shares under a normal course issuer bid program during 2008. Under this program, SLF Inc. purchased common shares for
cancellation through the facilities of the Toronto Stock Exchange (“TSX”). Common shares were repurchased at an average price of $45.30 per share for a total amount of
$217, $60 of which was allocated to common shares with the remaining $157 allocated to retained earnings in our Consolidated Statement of Equity. The amount recorded to
common shares is based on the average cost per common share.
(2) Under SLF Inc.’s Canadian Dividend Reinvestment and Share Purchase Plan, Canadian-resident common and preferred shareholders may choose to have their dividends
automatically reinvested in common shares and may also purchase common shares for cash. For dividend reinvestments, SLF Inc. may, at its option, issue common shares
from treasury at a discount of up to 5% to the volume weighted average trading price or direct that common shares be purchased for participants through the TSX at the
market price. Common shares acquired by participants through optional cash purchases may be issued from treasury or purchased through the TSX at SLF Inc.’s option, in
either case at no discount. The common shares issued from treasury for dividend reinvestments during 2010 and 2009 were issued at a discount of 2%. An insignificant
number of common shares were issued from treasury for optional cash purchases at no discount.
15.B Preferred shares
The changes in issued and outstanding preferred shares for the year ended December 31 are as follows:
2010 2009 2008
Class A Preferred shares
(in millions of shares)
Number of
shares Amount
Number of
shares Amount
Number of
shares Amount
Balance, January 1 71 $ 1,741 61 $ 1,495 61 $ 1,495
Issued, Series 6R –– 10 250 – –
Issued, Series 8R 11 280 –– ––
Issuance costs, net of taxes – (6) – (4) – –
Balance, December 31 82 $ 2,015 71 $ 1,741 61 $ 1,495
Further information on the preferred shares outstanding as at December 31, 2010, is as follows:
Class A Preferred shares
(in millions of shares) Issue Date
Dividend
Rate
Earliest
redemption date(1)
Number of
shares
Face
Amount
Net
Amount(2)
Series 1 February 25, 2005 4.75% March 31, 2010(3) 16 $ 400 $ 394
Series 2 July 15, 2005 4.80% September 30, 2010(3) 13 325 318
Series 3 January 13, 2006 4.45% March 31, 2011(3) 10 250 245
Series 4 October 10, 2006 4.45% December 31, 2011(3) 12 300 293
Series 5 February 2, 2007 4.50% March 31, 2012(3) 10 250 245
Series 6R(4) May 20, 2009 6.00% June 30, 2014(5) 10 250 246
Class A, Series 8R(6) May 25, 2010 4.35% June 30, 2015(7) 11 280 274
Total Preferred shares 82 $ 2,055 $ 2,015
(1) Redemption of all preferred shares is subject to regulatory approval.
(2) Net of after-tax issuance costs.
(3) On or after the earliest redemption date, SLF Inc. may redeem these shares in whole or in part, at a premium that declines from 4% of the par amount to Nil over the next
following four years.
(4) On June 30, 2014, and every five years thereafter, the annual dividend rate will reset to an annual rate equal to the 5-year Government of Canada bond yield plus 3.79%.
Holders of the Series 6R Shares will have the right, at their option, to convert their Series 6R Shares into Class A Non-Cumulative Floating Rate Preferred Shares Series 7QR
(“Series 7QR Shares”) on June 30, 2014 and every five years thereafter. Holders of Series 7QR Shares will be entitled to receive fixed non-cumulative quarterly dividends at
an annual rate equal to the then 3-month Government of Canada treasury bill yield plus 3.79%.
(5) On June 30, 2014 and June 30 each fifth year thereafter, SLF Inc. may redeem these shares in whole or in part, at par.
(6) On June 30, 2015, and every five years thereafter, the annual dividend rate will reset to an annual rate equal to the 5-year Government of Canada bond yield plus 1.41%.
Holders of the Series 8R Shares will have the right, at their option, to convert their Series 8R Shares into Class A Non-Cumulative Floating Rate Preferred Shares Series 9QR
(“Series 9QR Shares”) on June 30, 2015 and every five years thereafter. Holders of Series 9QR Shares will be entitled to receive fixed non-cumulative quarterly dividends at
an annual rate equal to the then 3-month Government of Canada treasury bill yield plus 1.41%.
(7) On June 30, 2015 and June 30 each fifth year thereafter, SLF Inc. may redeem these shares in whole or in part, at par.
16. Operating expenses
Operating expenses for the years ended December 31 consist of the following:
2010 2009 2008
Compensation costs $ 2,002 $ 1,885 $ 1,789
Premises and equipment costs 263 257 247
Capital asset depreciation and amortization (Note 8) 53 60 63
Other 1,086 974 904
Total operating expenses $ 3,404 $ 3,176 $ 3,003
Notes to the Consolidated Financial Statements Sun Life Financial Inc. Annual Report 2010 113