Sun Life 2010 Annual Report Download - page 74

We strive to achieve an optimal capital structure by balancing the use of debt and equity financing. The debt-to-capital ratio for SLF
Inc., which includes the SLEECS and preferred shares issued by SLF Inc. as part of debt for the purposes of this calculation declined
to 28.1% as at December 31, 2010, compared with 29.2% as at December 31, 2009.
Description
Interest
Rate
Earliest Par Call
Date/Redemption Date(1) Maturity
Principal/Face
Amount
($ millions)
Subordinated Debt Issued by Sun Life Assurance
6.30% Debentures, Series 2 6.30% n/a 2028 150
6.15% Debentures 6.15% June 30, 2012 2022 800
Subordinated Debt Issued by SLF Inc.
Series 2007-1 5.40% May 29, 2037 2042 400
Series 2008-1 5.59% January 30, 2018 2023 400
Series 2008-2 5.12% June 26, 2013 2018 350
Series 2009-1 7.90% March 31, 2014 2019 500
Subordinated Debt Issued by Sun Canada Financial Co.
7.25% Subordinated Notes (US denominated) 7.25% n/a 2015 150
Trust Units Issued by Sun Life Capital Trust
SLEECS – Series A 6.865% December 31, 2011 2031 950
SLEECS – Series B 7.093% June 30, 2032 2052 200
Debt Securities Issued by Sun Life Capital Trust II
SLEECS – Series 2009-1 5.863% December 31, 2019 2108 500
Class A Preferred Shares Issued by SLF Inc.
Series 1 4.75% March 31, 2010 Perpetual 400
Series 2 4.80% September 30, 2010 Perpetual 325
Series 3 4.45% March 31, 2011 Perpetual 250
Series 4 4.45% December 31, 2011 Perpetual 300
Series 5 4.50% March 31, 2012 Perpetual 250
Series 6R(2) 6.00% June 30, 2014 Perpetual 250
Series 8R(3) 4.35% June 30, 2015 Perpetual 280
(1) The earliest date on which the Company has the option, but not the obligation, to call securities for redemption at their par value.
(2) On June 30, 2014, 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 3.79%.
Holders of the Series 6R Shares will have the right, at their option, to convert their Series 6R Shares into Class A Non-Cumulative Floating Rate Preferred Shares Series 7QR
(Series 7QR Shares) on June 30, 2014 and every five years thereafter. Holders of Series 7QR 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 3.79%.
(3) 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 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%.
In addition to the above long-term debt, we have issued $2.2 billion of senior debentures and $1.4 billion of senior financings in
connection with financing arrangements to address U.S. statutory reserve requirements for certain universal life contracts.
The following table shows the number of common shares and stock options outstanding of SLF Inc. for the last three years.
Number of Common Shares Outstanding
(in millions) 2010 2009 2008
Balance, beginning of year 564.4 559.7 564.1
Stock options exercised 9.9 4.7 0.4
Shares repurchased –– (4.8)
Balance, end of year 574.3 564.4 559.7
Number of Stock Options Outstanding
(in millions) 2010 2009 2008
Balance, beginning of year 13.2 10.0 8.2
Options issued 2.8 4.3 2.3
Options exercised or cancelled (1.8) (1.1) (0.5)
Balance, end of year 14.2 13.2 10.0
In 2010, we did not repurchase or cancel any of our common shares.
The Company grants stock options to certain employees and directors. These options are granted at the closing price of SLF Inc.’s
common shares on the TSX on the grant date for stock options granted after January 1, 2007, and the closing price of the trading day
preceding the grant date for stock options granted before January 1, 2007. As at February 10, 2011, 13.9 million options to acquire SLF
Inc. common shares and 574.4 million common shares of SLF Inc. were outstanding.
70 Sun Life Financial Inc. Annual Report 2010 Management’s Discussion and Analysis