Sun Life 2010 Annual Report Download - page 46
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Second Quarter 2010
Net income of $213 million in the second quarter of 2010 was adversely impacted by declining equity markets and unfavourable
interest rate movements. These adverse impacts were partially offset by the favourable impact of fixed income investing activities on
policy liabilities, and an overall tax recovery during the quarter.
First Quarter 2010
Net income of $409 million in the first quarter of 2010 benefited from positive equity market performance, favourable movements in
interest rates and the positive impact of asset-liability re-balancing. Our acquisition in the fourth quarter of 2009 in the U.K. contributed
to the improved performance in our U.K. operations. Higher costs associated with writing increased volumes of new business offset
some of the gains from improved economic conditions.
Fourth Quarter 2009
Net income of $296 million for the fourth quarter of 2009 reflected a return to more favourable market conditions, including the positive
impact of asset-liability re-balancing, improvements in equity markets and increased interest rates, and benefited from an overall tax
recovery. These impacts were partially offset by net impairments, downgrades on our investment portfolio and lower asset
reinvestment gains from changes in credit spreads.
Third Quarter 2009
The loss of $140 million for the third quarter of 2009 was largely as a result of the implementation of equity- and interest rate-related
actuarial assumption updates of $513 million and reserve increases of $194 million for downgrades on our investment portfolio, partially
offset by reserve releases of $161 million as a result of favourable equity markets.
Second Quarter 2009
Net income of $591 million in the second quarter of 2009 was favourably impacted by reserve releases as a result of higher equity
markets, increased interest rates and the positive impact of narrowing credit spreads. Strong results from improvements in capital
markets in the quarter were partially offset by increased reserves for downgrades on our investment portfolio, changes in asset default
assumptions in anticipation of future credit-related losses, and credit impairments.
First Quarter 2009
The loss of $213 million in the first quarter of 2009 was due to reserve strengthening, net of hedging, related to equity market declines;
reserve increases for downgrades on our investment portfolio; and credit and equity impairments. Excluding after-tax charges of
$27 million for restructuring costs taken as part of our actions to reduce expense levels and improve operational efficiency, we reported
an operating loss of $186 million.
42 Sun Life Financial Inc. Annual Report 2010 Management’s Discussion and Analysis