Sun Life 2012 Annual Report Download - page 147

16.B Preferred Shares
The changes in issued and outstanding preferred shares for the years ended December 31 are as follows:
2012 2011
Class A Preferred shares (in millions of shares)
Number of
shares Amount
Number of
shares Amount
Balance, January 1 102 $ 2,503 82 $ 2,015
Issued, Series 10R –– 8 200
Issued, Series 12R ––12 300
Issuance costs, net of taxes –– – (12)
Balance, December 31 102 $ 2,503 102 $ 2,503
Further information on the preferred shares outstanding as at December 31, 2012, is as follows:
Class A Preferred shares
(in millions of shares) Issue Date
Annual
Dividend
Rate
Annual
Dividend
Per Share
Earliest
redemption date(1)
Number of
shares
Face
Amount
Net
Amount(2)
Series 1 February 25, 2005 4.75% $ 1.19 March 31, 2010(3) 16 $ 400 $ 394
Series 2 July 15, 2005 4.80% $ 1.20 September 30, 2010(3) 13 325 318
Series 3 January 13, 2006 4.45% $ 1.11 March 31, 2011(3) 10 250 245
Series 4 October 10, 2006 4.45% $ 1.11 December 31, 2011(3) 12 300 293
Series 5 February 2, 2007 4.50% $ 1.13 March 31, 2012(3) 10 250 245
Series 6R(4) May 20, 2009 6.00% $ 1.50 June 30, 2014(5) 10 250 246
Series 8R(6) May 25, 2010 4.35% $ 1.09 June 30, 2015(7) 11 280 274
Series 10R(8) August 12, 2011 3.90% $ 0.98 September 30, 2016(9) 8 200 195
Series 12R(10) November 10, 2011 4.25% $ 1.06 December 31, 2016(11) 12 300 293
Total Preferred shares 102 $ 2,555 $ 2,503
(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 floating 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 floating 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.
(8) On September 30, 2016, 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
2.17%. Holders of the Series 10R Shares will have the right, at their option, to convert their Series 10R Shares into Class A Non-Cumulative Floating Rate Preferred Shares
Series 11QR (“Series 11QR Shares”) on September 30, 2016 every five years thereafter. Holders of Series 11QR Shares will be entitled to receive floating non-cumulative
quarterly dividends at an annual rate equal to the then 3-month Government of Canada treasury bill yield plus 2.17%.
(9) On September 30, 2016 and September 30 each fifth year thereafter, SLF Inc. may redeem these shares in whole or in part, at par.
(10) On December 31, 2016, 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
2.73%. Holders of the Series 12R Shares will have the right, at their option, to convert their Series 12R Shares into Class A Non-Cumulative Floating Rate Preferred shares
Series 13QR (“Series 13QR Shares”) on December 31, 2016 and on every five years thereafter. Holders of Series 13QR Shares will be entitled to receive floating non-
cumulative quarterly dividends at an annual rate to the then 3-month Government of Canada treasury bill yield plus 2.73%.
(11) On December 31, 2016 and December 31 each fifth year thereafter, SLF Inc. may redeem these shares in whole or in part, at par.
17. Non-Controlling Interests in Subsidiaries
Non-controlling interests in our Consolidated Statements of Financial Position, Consolidated Statements of Changes in Equity, and Net
income (loss) attributable to non-controlling interests in our Consolidated Statements of Operations, consisted of non-controlling
interests in McLean Budden Limited until the fourth quarter of 2011.
In the fourth quarter of 2011, we purchased the minority shares of McLean Budden Limited, our investment management subsidiary for
consideration of approximately $144 plus additional consideration based on the attaining of performance targets. The consideration
consisted of cash of $48, common shares of SLF Inc. of $37 with the remaining amount payable in promissory notes. The difference
between the consideration paid and the non-controlling interest acquired was recorded as an adjustment to the equity attributable to
the SLF Inc. shareholders. Subsequent to the purchase of the minority shares, all of the shares of McLean Budden Limited were
transferred to our subsidiary MFS.
Notes to Consolidated Financial Statements Sun Life Financial Inc. Annual Report 2012 145