Sun Life 2010 Annual Report Download - page 73

Notes 10, 11, 13 and 15 to our 2010 Consolidated Financial Statements include additional details on our capital. The following table
summarizes the sources of our capital and capital position over the past three years.
Source of Capital
($ millions) 2010 2009 2008
Subordinated debt 2,741 3,048 2,576
Trust Securities(1) 1,644 1,644 1,150
Equity
Participating policyholders’ equity 114 107 106
Preferred shareholders’ equity 2,015 1,741 1,495
Common shareholders’ equity(2) 16,230 15,489 15,731
Total Equity 18,359 17,337 17,332
Total Capital 22,744 22,029 21,058
Ratio of debt to total capital(3) 19.3% 21.3% 17.7%
Ratio of debt plus preferred shares to total capital(3) 28.1% 29.2% 24.8%
(1) SLEECS net of associated transaction costs.
(2) Unrealized gain and losses on cash flow hedges and AFS debt securities are excluded from regulatory capital.
(3) Debt includes all short-term and long-term obligations. Total capital includes debt, preferred shares and common stock.
Common shareholders’ equity was $16.2 billion, as at December 31, 2010, compared with $15.5 billion as at December 31, 2009, an
increase of $0.7 billion reflecting stronger income from improved equity and credit markets.
On May 25, 2010, SLF Inc. issued $280 million of 4.35% Class A Non-Cumulative 5-Year Rate Reset Preferred Shares Series 8R
(Series 8R Shares) yielding 4.35% annually until June 30, 2015. 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 on June 30 every five years thereafter. Holders of Series 9QR Shares will be
entitled to receive fixed non-cumulative quarterly dividends at an annual rate equal to the then 3-month Government of Canada
Treasury bill yield plus 1.41%.
On October 12, 2010, Sun Life Assurance redeemed all the outstanding $300 million principal amount of 6.65% Subordinated
Debentures, Series 3, due October 12, 2015.
As at December 31, 2010, our debt capital consisted of $2.7 billion in subordinated debentures with maturity dates between 2015 and
2052 and $1.6 billion of SLEECS with maturity dates between 2031 and 2108. The maturity dates of our long-term debt are well
distributed over the medium- to long-term horizon to maximize our financial flexibility and to minimize refinancing requirements within a
given year. The table below provides the first call and maturity dates for our subordinated debt, SLEECS and preferred shares.
Management’s Discussion and Analysis Sun Life Financial Inc. Annual Report 2010 69