Sun Life 2012 Annual Report Download - page 26

Non-IFRS Financial Measures
We report certain financial information using non-IFRS financial measures, as we believe that they provide information that is useful to
investors in understanding our performance and facilitate a comparison of the quarterly and full year results from period to period.
These non-IFRS financial measures do not have any standardized meaning and may not be comparable with similar measures used by
other companies. For certain non-IFRS financial measures, there are no directly comparable amounts under IFRS. They should not be
viewed as an alternative to measures of financial performance determined in accordance with IFRS. Additional information concerning
these non-IFRS financial measures and reconciliations to IFRS measures are included in our annual and interim MD&A and the
Supplementary Financial Information packages that are available on www.sunlife.com under Investors – Financial Results & Reports.
Operating net income (loss) and other financial information based on operating net income (loss), including operating EPS or operating
loss per share, operating ROE and operating net income (loss) excluding the net impact of market factors, are non-IFRS financial
measures. Operating net income (loss) excludes: (i) the impact of certain hedges in SLF Canada that do not qualify for hedge
accounting; (ii) fair value adjustments on share-based payment awards at MFS; (iii) restructuring and other related costs; (iv) goodwill
and intangible asset impairment charges; and (v) other items that are not operational or ongoing in nature. Operating EPS also
excludes the dilutive impact of convertible securities.
Operating net income (loss) excluding the net impact of market factors removes from operating net income (loss) certain market-related
factors that create volatility in our results under IFRS. Specifically, it adjusts operating net income (loss) to exclude the following
amounts: (i) the net impact of changes in interest rates in the reporting period, including changes in credit and swap spreads, and any
changes to the fixed income reinvestment rates assumed in determining the actuarial liabilities; (ii) the net impact of changes in equity
markets above or below the expected level of change in the reporting period and of basis risk inherent in our hedging program; (iii) the
net impact of changes in the fair value of real estate properties in the reporting period; and (iv) the net impact of changes in actuarial
assumptions driven by capital market movements. Unless indicated otherwise, all other factors discussed in this document that impact
our results are applicable to both reported net income (loss) and operating net income (loss). Reported net income (loss) refers to net
income (loss) determined in accordance with IFRS.
The following tables set out the amounts that were excluded from our operating net income (loss), EPS and ROE in 2012 and 2011. A
reconciliation of operating net income (loss) to reported net income (loss) for the fourth quarter of 2012 is provided in this document
under the heading Financial Performance – Fourth Quarter 2012 Performance.
Reconciliation of Net Income to Operating Net Income
($ millions) 2012 2011(1)
Reported net income (loss) 1,554 (370)
After-tax gain (loss) on adjustments:
Impact of certain hedges in SLF Canada that do not qualify for hedge accounting (7) (3)
Fair value adjustments on share-based payment awards at MFS (94) (80)
Restructuring and other related costs (18) (55)
Goodwill and intangible asset impairment charges (6) (266)
Total adjusting items (125) (404)
Operating net income (loss) 1,679 34
(1) Some periods have been restated. See Accounting Adjustments.
Reconciliation of EPS to Operating EPS
($ millions) 2012 2011(1)
Reported EPS (diluted) ($) 2.59 (0.64)
Less:
Impact of certain hedges in SLF Canada that do not qualify for hedge accounting (0.01) (0.01)
Fair value adjustments on share-based payment awards at MFS (0.16) (0.14)
Restructuring and other related costs (0.03) (0.09)
Goodwill and intangible asset impairment charges (0.01) (0.46)
Impact of convertible securities on diluted EPS (0.03) –
Operating EPS (diluted) 2.83 0.06
(1) Some periods have been restated. See Accounting Adjustments.
Reconciliation of ROE to Operating ROE
($ millions) 2012 2011(1)
Reported ROE (%) 11.4% (2.7)%
Less:
Impact of certain hedges in SLF Canada that do not qualify for hedge accounting (0.1)% –
Fair value adjustments on share-based payment awards at MFS (0.7)% (0.6)%
Restructuring and other related costs (0.1)% (0.4)%
Goodwill and intangible asset impairment charges –(2.0)%
Operating ROE (%) 12.3% 0.3%
(1) Some periods have been restated. See Accounting Adjustments.
24 Sun Life Financial Inc. Annual Report 2012 Management’s Discussion and Analysis