Sun Life 2015 Annual Report Download - page 39

Financial and Business Results
Summary statements of operations
(US$ millions) 2015 2014 2013(1)
Net premiums 3,307 3,959 4,077
Net investment income 645 2,795 (244)
Fee income 164 163 153
Revenue 4,116 6,917 3,986
Client disbursements and change in insurance contract liabilities 3,421 5,967 2,778
Commissions and other expenses 950 1,181 1,145
Reinsurance expenses (recoveries) (577) (613) (495)
Income tax expense (benefit) 71 74 (21)
Non-controlling interests in net income of subsidiaries and par policyholders’ income –32
Reported net income (loss) 251 305 577
Less: Assumption changes and management actions related to the sale of our U.S. Annuity
Business –– (30)
Less: Acquisition, integration and restructuring costs(2) (46) – (7)
Operating net income (loss)(3) 297 305 614
Less: Market related impacts 26 (37) 59
Less: Assumption changes and management actions (70) 102 273
Underlying net income (loss)(3) 341 240 282
Selected financial information in Canadian dollars
(C$ millions) 2015 2014 2013
Revenue 5,253 7,637 4,109
Reported net income (loss) 333 341 599
Less: Assumption changes and management actions related to the sale of our U.S. Annuity
Business –– (31)
Less: Acquisition, integration and restructuring costs(2) (63) – (7)
Operating net income (loss)(3) 396 341 637
Less: Market related impacts 30 (40) 60
Less: Assumption changes and management actions (75) 115 286
Underlying net income (loss)(3) 441 266 291
Operating ROE(3) 11.2 11.3 nm(4)
Underlying ROE(3) 12.8 8.9 n/a
(1) The discussion of our results in this document is of the Continuing Operations as there were no Discontinued Operations in 2015 or 2014. For additional information, see the
section in this MD&A under the heading Financial Performance – Discontinued Operations.
(2) In 2015, Acquisition, integration and restructuring costs consisted of the impact of US$46 million related to the closing of our wealth business in SLF U.S. International to
new sales, which included assumption changes and management actions of US$30 million to reflect assumption updates including the expense strengthening associated
with closing the business.
(3) Represents a non-IFRS financial measure. See Non-IFRS Financial Measures.
(4) This figure is not meaningful as our Operating ROE of 18.9% disclosed in 2013 included Discontinued Operations. For additional information, see the section in this MD&A
under the heading Financial Performance – Discontinued Operations.
SLF U.S.’s reported net income was C$333 million in 2015, compared to C$341 million in 2014. Operating net income was
C$396 million in 2015, compared to C$341 million in 2014. Operating net income in SLF U.S. excludes the impact of acquisition,
integration and restructuring costs which included assumption changes and management actions related to the closing of our
International wealth business to new sales in 2015 and the assumption changes and management actions related to the sale of our
U.S. Annuity Business in 2013, which are set out in the table above. Underlying net income was C$441 million in 2015, compared to
C$266 million in 2014. The favourable impact of the weakening Canadian dollar in 2015 relative to average exchange rates in 2014
increased operating net income by $54 million.
In U.S. dollars, SLF U.S.’s reported net income was US$251 million in 2015, compared to US$305 million in 2014. Operating net
income was US$297 million in 2015, compared to US$305 million in 2014. Underlying net income was US$341 million in 2015,
compared to US$240 million in 2014. Underlying net income excludes from operating net income market related impacts and
assumption changes and management actions, which are set out in the table above. The favourable effect of market related impacts in
2015 was primarily driven by credit spreads partially offset by equity market changes, compared to an unfavourable impact in 2014
primarily driven by interest rates. Assumption changes and management actions in 2014 included the release of the future funding cost
liability of US$170 million related to our closed block of individual universal life insurance products.
Net income in 2015 also reflected the impact in Group Benefits related to pricing increases on new and renewing business, expense
actions, and continued investment in our disability claim operations. Results also reflected positive credit experience, net realized gains
on the sale of AFS assets, favourable tax items related to prior years, the favourable impact of investing activities on insurance contract
liabilities, favourable mortality experience in International, and a change to post-retirement benefit liabilities. These items were partially
offset by unfavourable underwriting experience in Group Benefits and unfavourable mortality and policyholder behaviour experience in
In-force Management.
Management’s Discussion and Analysis Sun Life Financial Inc. Annual Report 2015 37