Sun Life 2010 Annual Report Download - page 39

The IASB continues to make changes to other IFRSs and has a number of ongoing projects. We continue to monitor all of the IASB
projects that are in progress to ensure timely implementation and accounting.
Disclosure Controls and Procedures
The Company has established disclosure controls and procedures that are designed to provide reasonable assurance that all relevant
information is gathered and reported to senior management, including the Company’s Chief Executive Officer (“CEO”), Executive Vice-
President and Chief Financial Officer (“CFO”) and Executive Vice-President, Business Development and General Counsel, on a timely
basis so that appropriate decisions can be made regarding public disclosure.
An evaluation of the effectiveness of our disclosure controls and procedures, as defined under rules adopted by the Canadian
securities regulatory authorities and the SEC, as of December 31, 2010, was carried out under the supervision of and with the
participation of the Company’s management, including the CEO and the CFO. Based on that evaluation, the CEO and the CFO
concluded that the design and operation of these disclosure controls and procedures were effective as of December 31, 2010.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable
assurance regarding the reliability of our financial reporting and the preparation of our financial statements in accordance with GAAP.
Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis.
Projections of any evaluation of the effectiveness of internal control over financial reporting to future periods are subject to the risk that
the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
We conducted an assessment of the effectiveness of our internal control over financial reporting, as of December 31, 2010, based on
the framework and criteria established in Internal Control – Integrated Framework, issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on that assessment, we have concluded that our internal control over financial
reporting was effective as of December 31, 2010.
Our internal control over financial reporting, as of December 31, 2010, has been audited by Deloitte & Touche LLP, the Company’s
Independent Registered Chartered Accountants, who also audited our Consolidated Financial Statements for the year ended
December 31, 2010. As stated in the Report of Independent Registered Chartered Accountants, they have expressed an unqualified
opinion on our internal control over financial reporting as of December 31, 2010.
Changes in Internal Control over Financial Reporting
No changes were made in our internal control over financial reporting for the period beginning January 1, 2010, and ended
December 31, 2010 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
Non-GAAP Financial Measures
Management evaluates the Company’s performance on the basis of financial measures prepared in accordance with GAAP and certain
non-GAAP financial measures. We believe that these non-GAAP financial measures provide information useful to investors in
understanding our performance and facilitate the comparison of the quarterly and full-year results of our ongoing operations. These
non-GAAP financial measures do not have any standardized meaning and may not be comparable with similar measures used by other
companies. They should not be viewed as an alternative to measures of financial performance determined in accordance with GAAP.
Additional information concerning these non-GAAP financial measures and reconciliations to GAAP measures are included in SLF
Inc.’s annual and interim MD&A and the Supplementary Financial Information packages that are available on www.sunlife.com under
Investors – Financial Results & Reports.
Management measures the Company’s performance based on operating earnings and financial measures based on operating
earnings, including operating EPS and operating ROE, that exclude certain items that are not operational or ongoing in nature. Other
non-GAAP measures that we use include:
(i) financial performance measures that are prepared on a constant currency basis, which exclude the impact of currency
fluctuations;
(ii) adjusted revenue, which excludes the impact of currency and fair value changes in HFT assets and derivative instruments
from total revenue;
(iii) pre-tax operating profit margin ratios for MFS, the denominator of which excludes certain investment income and includes
certain commission expenses, as a means of measuring the underlying profitability of MFS;
(iv) assets under management, mutual fund assets, managed fund assets and other AUM; and
(v) the value of new business is used to measure overall profitability, which is based on actuarial amounts for which there are no
comparable amounts under GAAP.
The following amounts were not included in the Company’s operating earnings in the prior three years.
In the first quarter of 2009, the Company incurred an after-tax charge of $27 million for restructuring costs taken as part of the
Company’s actions to reduce expense levels and improve operational efficiency.
In the fourth quarter of 2008, the Company sold its 37% interest in CI Financial for $2.2 billion. The after-tax gain of $825 million was
not included in the 2008 operating earnings.
Management’s Discussion and Analysis Sun Life Financial Inc. Annual Report 2010 35