Sun Life 2010 Annual Report Download - page 122

We have accumulated tax losses, primarily in the United Kingdom, United States and Canada, totalling $3,939 ($2,232 in 2009). The
benefit of these tax losses has been recognized in future income taxes to the extent that they are more likely than not to be realized in
the amount of $941 as at December 31, 2010 ($517 in 2009). We will realize this benefit in future years through a reduction in current
income taxes as and when the losses are utilized. These tax losses are subject to examination by various tax authorities and could be
reduced as a result of the adjustments to tax returns. Furthermore, legislative, business or other changes may limit our ability to utilize
these losses. Some of our entities in certain jurisdictions have had cumulative losses in recent years. In determining if it is appropriate
to recognize a future income tax asset relating to tax losses of those entities, we considered the relative impact of the existence of the
cumulative losses against various forms of favourable evidence, including projections of future income, indicating that the benefit of
these losses will be realized.
The majority of capital losses in the United States expire beginning in 2014 while non-capital losses expire beginning in 2023. The
losses in Canada expire primarily in 2029 and 2030. The losses in the United Kingdom can be carried forward indefinitely.
The following are the future tax assets and liabilities in our Consolidated Balance Sheets as at December 31 by source of temporary
differences:
2010 2009
Assets Liabilities Assets Liabilities
Investments $ (60) $ 552 $ 319 $ 742
Actuarial liabilities (87) (216) (70) (476)
Deferred acquisition costs 297 (6) 381 (5)
Losses available for carry forward 637 (483) 372 (249)
Other (35) 97 77 (33)
752 (56) 1,079 (21)
Valuation allowance (43) 136 (25) 79
Total $ 709 $ 80 $ 1,054 $ 58
Future income taxes are the result of temporary differences between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. The sources of these temporary differences and the recognized tax effects in
our Consolidated Statements of Operations for the years ended December 31 are as follows:
2010 2009 2008
Investments $16$ 1,033 $ (2,070)
Actuarial liabilities 283 (1,383) 1,851
Deferred acquisition costs 73 42 (46)
Losses (incurred) utilized (395) (525) 71
Other 300 96 (295)
Future income tax expense (benefit) $ 277 $ (737) $ (489)
20. Income taxes included in OCI
OCI included in our Consolidated Statements of Comprehensive Income is presented net of income taxes. The following income tax
amounts are included in each component of OCI for the years ended December 31:
2010 2009
Unrealized foreign currency gains and losses on net investment hedges $3 $ (9)
Unrealized gains and losses on available-for-sale assets (80) (323)
Reclassifications to net income for available-for-sale assets 26 13
Unrealized gains and losses on cash flow hedging instruments (17) (38)
Reclassifications to net income for cash flow hedges 2–
Total income tax benefit (expense) included in OCI $ (66) $ (357)
21. Commitments, guarantees and contingencies
21.A Lease commitments
We lease offices and certain equipment. These are operating leases with rents charged to operations in the year to which they relate.
Total future rental payments for the remainder of these leases total $523. The future rental payments by year of payment are included
in Note 6B.
21.B Contractual commitments
In the normal course of business, various contractual commitments are outstanding, which are not reflected in our Consolidated
Financial Statements. In addition to the loan commitments for bonds and mortgages included in Note 6Ai, we have equity and real
estate commitments. We had a total of $968 of contractual commitments outstanding as at December 31, 2010, the expected
maturities of these commitments are included in Note 6B.
21.C Letters of credit
We issue commercial letters of credit in the normal course of business. As at December 31, 2010, letters of credit in the amount of
$577 are outstanding, of which $404 relate to internal reinsurance.
118 Sun Life Financial Inc. Annual Report 2010 Notes to the Consolidated Financial Statements