Sun Life 2012 Annual Report Download - page 108

4. Segmented Information
We have five reportable segments: SLF Canada, SLF U.S., MFS, Sun Life Financial Asia (“SLF Asia”) and Corporate. These reportable
segments operate in the financial services industry and reflect our management structure and internal financial reporting. Corporate
includes the results of our U.K. business unit and our Corporate Support operations, which include our run-off reinsurance operations
as well as investment income, expenses, capital and other items not allocated to our other business groups. In the fourth quarter of
2011, we transferred McLean Budden Limited to our subsidiary MFS. Consequently, the results of McLean Budden Limited are
reported as part of MFS instead of SLF Canada. The related intangible assets previously reported as a part of SLF Canada were
reported as part Corporate in 2011. In the fourth quarter of 2012, the indefinite life intangible assets were transferred from Corporate
back to SLF Canada and the finite life intangible assets were transferred from Corporate to MFS.
Revenues from our reportable segments are derived principally from life and health insurance, investment management and annuities
and mutual funds. Revenues not attributed to the strategic business units are derived primarily from Corporate investments and
earnings on capital. Transactions between segments are executed and priced on an arm’s-length basis in a manner similar to
transactions with third parties. These transactions consist primarily of internal financing agreements. They are measured at fair values
prevailing when the arrangements are negotiated. Inter-segment revenue consists of interest income and fee income and is presented
in the consolidation adjustments column in the tables that follow.
Intersegment transactions consist primarily of internal financing agreements which are measured at fair values prevailing when the
arrangements are settled. Intersegment investment income consists primarily of interest paid by SLF U.S. to Corporate. Intersegment
fee income is primarily asset management fees paid by SLF Canada and Corporate to MFS, and by MFS and SLF Asia to SLF U.S.
Results by segment for the years ended December 31, are as follows:
SLF
Canada SLF U.S. MFS
SLF
Asia Corporate
Consolidation
adjustments Total
2012
Gross premiums:
Annuities $ 1,739 $ 281 $ – $ – $ 233 $ – $ 2,253
Life insurance 3,318 2,014 – 660 104 – 6,096
Health insurance 3,550 1,496 – 10 10 – 5,066
Total gross premiums 8,607 3,791 – 670 347 – 13,415
Less: ceded premiums 4,725 388 – 31 24 – 5,168
Net investment income (loss) 3,354 1,491 9 778 707 (55) 6,284
Fee income 769 182 1,848 138 152 (61) 3,028
Total revenue 8,005 5,076 1,857 1,555 1,182 (116) 17,559
Less:
Total benefits and expenses 7,163 4,664 1,472 1,390 1,275 (116) 15,848
Income tax expense (benefit) 50 87 177 36 (140) – 210
Total net income (loss) from
continuing operations $ 792 $ 325 $ 208 $ 129 $ 47 $ – $ 1,501
Total net income (loss) from
discontinued operation (Note 3) $–$173$–$–$7 $– $180
2011
Gross premiums:
Annuities $ 1,840 $ 398 $ – $ – $ 202 $ – $ 2,440
Life insurance 3,249 1,843 – 674 116 – 5,882
Health insurance 3,376 1,504 – 9 10 – 4,899
Total gross premiums 8,465 3,745 – 683 328 – 13,221
Less: ceded premiums 4,551 356 – 49 27 – 4,983
Net investment income (loss) 4,958 2,209 – 684 1,015 (70) 8,796
Fee income 746 176 1,640 119 171 (56) 2,796
Total revenue 9,618 5,774 1,640 1,437 1,487 (126) 19,830
Less:
Total benefits and expenses(1) 9,215 6,140 1,305 1,266 1,840 (126) 19,640
Income tax expense
(benefit)(1) (22) (61) 140 33 (241) – (151)
Total net income (loss) from
continuing operations $ 425 $ (305) $ 195 $ 138 $ (112) $ – $ 341
Total net income (loss) from
discontinued operation (Note 3) $ – $ (624) $ – $ – $ 29 $ – $ (595)
(1) Balances have been restated. Refer to Note 2.
106 Sun Life Financial Inc. Annual Report 2012 Notes to Consolidated Financial Statements