Ladies and gentlemen, thank you for standing by. Welcome to the Sun Life Financial Third Quarter 2014 Earnings Conference Call and webcast. During the call, all participants will be in a listen-only mode. After the presentation, we will conduct a question-and-answer session. (Operator Instructions) Please note that this call is being recorded today, Thursday, November 6, 2014, at 10:00 Eastern Time. I would now like to turn the meeting over to your host for today's call, Mr. Phil Malek, Vice President, Investor Relations for Sun Life Financial. Please go ahead, Mr. Malek.

Thank you, Rob, and good morning, everyone. Welcome to Sun Life Financial's earnings conference call for the third quarter of 2014. Our earnings release and the slides for today's call are available on the Investor Relations section of our website at sunlife.com. We will begin today's presentation with an overview of our results by Dean Connor, President and Chief Executive Officer of Sun Life Financial. Following those remarks, Colm Freyne, Executive Vice President and Chief Financial Officer, will present the third quarter financial results, and Larry Madge, Senior Vice President and Chief Actuary, will provide an overview of our actuarial assumption changes. Following the prepared remarks, we'll have a question-and-answer session. Other members of management are also available to answer your questions on today's call. Turning to Slide 2. I draw your attention to the cautionary language regarding the use of forward-looking statements and non-IFRS financial measures, which form part of today's remarks. As noted in the slides, forward-looking statements may be rendered inaccurate by subsequent events. With that, I'll now turn things over to Dean.

Thanks, Phil, and good morning, everyone. Turning to Slide 4, in the third quarter Sun Life posted strong underlying net income of CAD517 million, up 15% from the year-ago period, an underlying ROE of 13.1%. As you can see in the sources of earnings, we grew expected profit 16%, with broad-based growth, and we grew earnings on surplus by 17%. Our results reflect strong underlying business growth and continued execution against our four pillar strategy. Insurance sales were up 9% over the prior-year period, driven by growth in both individual and group benefit products. Sales from wealth products were down 14%, driven by lower sales at MFS. Overall, our assets under management were up 18% from a year ago, and reached a record CAD698 billion. We continue to take a disciplined approach to capital allocation and ROE improvement in all aspects of our business, including organic growth plans, acquisitions and other capital deployment opportunities. In addition to putting capital to work behind sales, over the past 18 months, we've deployed over CAD1.3 billion towards our acquisition in Malaysia, seeding the launch of Sun Life Investment Management, recapturing reinsurance in our U.S. operation, and paying down debt. And today, we announced a share buyback program of up to 9 million shares i.e. up to 365 million at yesterday's share price. This program supports our focus on ROE improvement, while retaining flexibility for acquisitions and other growth opportunities. Our underlying earnings have been on a strong and steady growth trajectory. Underlying earnings averaged CAD318 million per quarter in 2012, CAD395 million per quarter in 2013, and CAD485 million per quarter so far this year. As you can see, this year's run rate is on track to exceed our 2015 earnings objective. And we need less capital to support new business than we…

Thank you, Dean, and good morning, everyone. Turning to Slide 9, we take a look at some of the financial results from the third quarter of 2014. We had strong earnings in the third quarter, with operating net income of CAD467 million, which includes a CAD4 million gain from our annual assumption review. And underlying net income of CAD517 million, which excludes the net impact in the quarter of market factors and assumption changes. Third quarter's adjusted premiums and deposits were CAD29 billion, and closing assets under management for the quarter were CAD698 billion, an all-time high. We also saw good year-over-year improvements in key lines of the sources of earnings, but expect to profit on in-force business increasing by CAD84 million, and earnings on surplus improving by CAD15 million. As Dean noted earlier, life and health sales increased 9% year-over-year, driven by growth in sales of both individual and group benefits products. Overall, wealth sales declined 14%, driven mainly by lower sales results at MFS. I will discuss these results in more detail later in the presentation. Moving to Slide 10, you can see key financial metrics for the third quarter. As noted, our earnings for the quarter were strong. Our underlying return on equity was robust at 13.1%, and our capital position remains strong. We ended the quarter with a minimum continuing capital and surplus requirements ratio of 218% at Sun Life Assurance Company of Canada, and with a cash level of CAD1.7 billion at the holding company, SLF Inc. As noted by Dean, we announced a share buyback program of up to 9 million shares, supported by our strong capital position. As you can see on Slide 11, the net impact of market factors reduced earnings in the quarter by CAD54 million. This was partially offset by…

Thank you, Colm. Turning to Slide 16, our 2014 review of actuarial methods and assumptions had a modest positive impact on income this quarter, of CAD4 million, with positive impacts from investment assumptions, modeling changes and expenses, offsetting negative impacts from changes to lapse and policyholder behavior assumptions, and to morbidity assumptions. The mortality and morbidity strengthening of CAD36 million resulted primarily from reducing termination rates on disability waiver of premium benefits in Canada individual. Lapse and policyholder behavior strengthening of CAD180 million resulted from changes across a number of products and business groups. In Canada, we lowered lapse rates for some universal life products, created more differentiation in term renewal assumptions by age, and adjusted critical illness lapse rates. In the U.S., domestic universal life lapse rates were reduced. And in Hong Kong, we reduced lapse rates on par products. These changes address the drivers of lapse and policyholder behavior experience losses over the last number of quarters. Actuarial liabilities for maintenance expenses were stable, with small positives from the UK and from Asia. We have had experience losses in this category over the last number of quarters, primarily from investments in growth initiatives. These growth initiatives don't impact the maintenance expenses that are provided for in the actuarial liabilities. Investment assumptions benefited from recent strong experience in the par accounts in Canada and Hong Kong. The strong par investment returns have reduced the likelihood that shareholder funds would be required to fund minimum guarantees embedded in the products, resulting in reductions to provisions for adverse deviations. In addition, there were modest positive impacts from changes to long-term credit spread assumptions and default assumptions. In the other category, the largest impacts were refinements made in Canadian group disability, to better model government disability payments offsets and other recoveries. There…

Thank you, Larry. We would like to ensure that all our participants have an opportunity to ask questions, so I'd ask each of you to please limit yourself to one or two questions, and then to re-queue with any additional questions. With that, I'll now ask Rob to please poll the participants for their questions.

(Operator Instructions) Your first question comes from the line of John Aiken from Barclays Capital. Your line is open.

But, Rob, I think we may have lost John, so why don't we move to our next question.

Your next question comes from the line of Robert Sedran from CIBC. Your line is open. Robert Sedran – CIBC World Markets: Hi, good morning. I think I'll try my hand with a couple of actuarial questions today. So Larry, do you feel like the changes you have put through on issue of lapse and policyholder behavior has finally put this issue to bed? I'm just trying to get a sense for the conservatism in these reserves. Because it just felt like, even this many years after the crisis period and the lower interest rates, we're still building reserves for policyholder behavior. Do you feel like the reserve is sufficiently conservative, now that you've captured it?

Well. We have completed a thorough review of our lapse assumptions and other policyholder behavior assumptions over the last several years. Although I would mention that we are still in the process of reviewing our international business lapse assumptions, and potentially may have a change in the fourth quarter, which at this point, we wouldn't know the size of. So we can't give you any guidance to that size. But if you look back, yes, we have done thorough review. A number of these assumptions, especially for late duration lapses, will not emerge to be extent that we have fully credible experience for still a number of years. So there continues to be risk here, but we have done a thorough review, and we think we're in good shape now. Robert Sedran – CIBC World Markets: Okay, thanks. And just a quick one, Dean. In terms of the announced buyback, and some discussion of a dividend in the materials as well, you have pointed in the past to a 50% payout ratio as a historical benchmark that you've used. Is that still the framework we should use, going forward, in terms of how much flexibility you want to leave for deployment and organic growth?

Rob, we're in a – we've – as you know, we've stated a dividend payout range of 40% to 50% of earnings, and we put that out there earlier this year. And we put that out independent of any potential buyback activity. And so, we are thinking about the two as separate streams of activity. We've not put a ring around the two of them combined; we think about the two of them as separate streams of activity. And if I can remind you that the dividends – that is an increase in our dividend payout policy. And it really goes to the question of underlying earnings growth, whereas the buybacks are focused more on deploying existing capital on the balance sheet. And I would also say that the intent behind the buybacks is that we view this as a recurring feature of capital deployment, as opposed to a one-time activity. Recurring feature that that's supported by a strong capital position and good, new capital generation. So that's how we're thinking about that. Robert Sedran – CIBC World Markets : Thank you.

Your next question comes from the line of Humphrey Lee from UBS. Your line is open. Humphrey Lee – UBS: Good morning, guys. Just a question on MFS flows. I understand the CAD2 billion outflow in institutional, due to one lost case. So for the balance of that CAD2.3 billion in the managed fun outflows, how should we think about the impact from capping sales on some of the more popular products, versus outflows due to over-concentration?

If you look at our sales being down around 70%, the net flow is really driven by the fact that we have not yet been able to replace the global and international products that we were successful in selling over the past five years. I can't tell you that the activity at MFS is very high, but the lead times in the products that we're going to market with now, as a focus, like our quant products, domestic equity, regional equity, as well as fixed income are more competitive, and are going to take more time. And that's why we guided the organic growth rate of the Company down, going forward. So we're in a transition period, it's going to take us time to replace those growth sales that we lost from the closed products, and we're making progress on it. And we hope, in the future, we'll be able to do that. Humphrey Lee – UBS: Is there any – a sense that, in terms of how things have been trending fourth quarter to date?

Can you repeat the question? I didn't hear that, Humphrey. Humphrey Lee – UBS: So in terms of how things have been trending in the fourth quarter to date, can you provide any comment in terms visibility, how things would looking in fourth quarter and in the near-term?

Yes, I mean we only have one month under our belt. I will tell you that the environment is very challenging for everybody in the asset management industry. October was a very volatile month. You had equity markets plunge around the globe. You had a central banks moving in different directions. And I will just tell you that everybody is in an environment right now where it is challenging. And we don't know what the rest of the year will look like, but it's too early for me to really give you an indication as to what's going to happen. Humphrey Lee – UBS: Okay. One last question on MFS. So in the slide presentation, it talks about year-to-date difference, in terms of expenses, around CAD86 million MFS. And then going back to earlier this year, you talked about high investment into the business. Are you kind of almost through, in terms of your (Audio Dip) investment spend in MFS? Or should we expect a high expenses in the near-term?

In terms of our margin, we did print a 43% pretax margin, which is above the range that I had been guiding you all to, as we do ramp up on project spending and branding at the Company. We finished October with assets under management of around CAD429 billion. And you should think about a run rate, going forward for our margin, being in the high 30%s to about 40%. And we think that margin is a good balance between investing in the business to keep the platform strong, as well as delivering good returns for shareholders. So the 43% is running higher than I would expect, going forward. Humphrey Lee – UBS: Got it. Thanks.

Your next question comes from the line of Steve Theriault from Bank of America. Your line is open. Steve Theriault – Bank of America Merrill Lynch: Thanks. Maybe, Rob, just to follow up on that question. You hinted at some challenging trends in October. Did you actually see net outflows in October? And I guess I'm wondering, if equity markets stabilize from here, do you worry? Do you think it's possible that you slip into a net redemptions on the retail side for a period of time? Or with some of the stuff you guys have coming on stream, is that less likely? I know that's a tricky question, but –

Yes, we don't want to talk about just one month. There's nothing alarming that happened at the firm, so you shouldn't worry about that. But what I will tell you is that the environment is difficult. If you look at the industry data, both retail and institutionally, you could see that things have slowed. It slowed at MFS in particular, as well, because of the actions that we've already described. But the environment could be tricky, as we move into next year, with the Fed potentially raising rates. And our job is to just to continue to put our head down, do a good job for our clients. And over the long run, we're very – we feel very confident that MFS will continue to grow and do a good job. But the environment, when it gets choppy like this, and there's uncertainty, people freeze and activity declines. And that's no different than anybody else. If you look at the publicly traded companies that have announced, they've all indicated that, and have shown that in their results. Steve Theriault – Bank of America Merrill Lynch: And then just on the expense side, the margin popped up, as you mentioned, this quarter. Is that just timing? You see the expense – like the dollar expenses come down in bidding Q3. Was there just some timing issues? Or did you actively pull back a little on the expense side in Q3, for any particular reason?

No, there was no anomaly in terms of changing our spending habits. Advertising is seasonal, as well as some of the project spending that we have. Everything that I say is – you have the caveat it by, at our current asset levels. The one thing that all you know about MFS is, we are very equity-oriented, so we have a highly levered operating model. So as markets rise, and if they do rise quickly in the short run, we get a boost to our margins. But it can be taken away very, very quickly, when markets do go down. So the variability is pretty large, in terms of quarter to quarter. But as we look out into the future and think about what the business looks like, the high 30%s to 40% level is what we would like you guys to think about. Steve Theriault – Bank of America Merrill Lynch: Okay, thanks. Thanks, Rob. I had a question for Dan, hopefully a quick one. Group benefits, this quarter you highlight poor morbidity and mortality experienced this quarter. That follows on indications last quarter that morbidity was an issue. I think last quarter, you mentioned changes in pricing. So maybe a bit of an update on how that has impacted sales thus far? How long do you expect the morbidity – poor morbidity to last? Are you seeing anything systemic there? And Larry mentioned, in the other assumption changes, that there was some I think some truing up on Canadian group disability. Was there anything in the assumption review on the U.S. group disability?

Okay, thanks. I'll make a few comments on those questions on the U.S. business. The U.S. underlying net income in the quarter was CAD48 million, and reported net income was a loss of CAD4 million. The primary difference being ACMA, mostly in the in-force life business. And these are – that's an obviously nonrecurring item. The primary drivers of the lower underlying net income in the quarter were adverse mortality in both the in-force life and group life businesses. Weak underwriting results in the group long-term disability business. And minimal AFS gains in the quarter, which had contributed meaningfully to results in the prior two quarters. The mortality experience was driven mostly by a small number of large claims in the quarter. The long-term disability results are primarily due to insufficient pricing on that product. We've taken aggressive actions, both earlier this year, and more significantly, in the third quarter, to adjust pricing, but this will take some time to work through the book. Therefore, it is likely that weak long-term disability results will continue into next year. We should see some improvement in these results early next year, as the significant portion of the business that is sold and renews on January 1 is repriced. It's worth noting that the marketplace pricing for disability is firming up this fall, which creates a favorable environment for our increases, and should result in a healthier industry. Also the stop loss and international business continued to perform very well in the quarter. You asked a question also about sales? We have seen, as we mentioned, 11% reduction year-over-year in group sales, quarter-to-quarter. And that is a direct result of the tightening of pricing. Although overall, we're still seeing strong sales. I think there was also a reserving question for Larry?

Yes. So U.S. Group reserve or assumption change impacts were relatively neutral. And I would just remind you that we include, in our group actuarial liabilities, only claim reserves, basically. And so we don't project forward premiums, incidents or expenses, other than expenses related to claim management. So the termination experience has been in line with our assumptions, and we didn't have big changes there. Steve Theriault – Bank of America Merrill Lynch: Thanks very much, everyone.

Your next question comes from the line of Doug Young from Desjardins Capital. Doug Young – Desjardins Securities: Hi, good morning. Maybe the first question, for Dean, the mortality charge that you're taking in the third quarter obviously signals that you have a lot of longevity, or you're taking on more longevity risk. And what I'm trying to get a sense of, are you comfortable continuing to take on this amount of longevity risk? Are you thinking about – and how would you re-balance it with mortality risk, such that – because obviously the trend is, people are living longer. I'm trying to get a sense of your appetite for continuing to grow out in this business, which obviously as continues to be negatively impacted, as mortality improves?

Thanks, Doug. The – we are – there are a number of tools at our disposal that we are using to manage and balance out these risks, and the natural hedge that I think you're referring to, between longevity and mortality. One is reinsurance. And as we started building the defined-benefit solutions business five years ago in Canada, we were very early into building relationships with reinsurance partners. And so that is one helpful mechanism to kind of load balance risk. We have, as you would expect, a very robust risk appetite framework that details how much longevity risk, and how much mortality risk, that we want to run the Company with. I think the other lever we have to pull, and we are pulling, is recapturing mortality reinsurance, and bringing that back onto the balance sheet, as well as selling more mortality business and reducing, over time, the use of life reinsurance. And that's what you see, as you see – you look at our life book in Canada, in particular. The other thing I'd say is that when you look at the margins inherent in defined benefit solutions business, there is robust demand for this business. And when you reflect that against the supply, we see strong margins in this business. So when you put it all together, and back it with as strong longevity improvement assumption that Larry described, we're confident we've got – we're in the right market, and we've got the right tools to be able to manage the risks, and return good returns to shareholders. Doug Young – Desjardins Securities: Just on that, obviously, recapturing mortality has been something that's been talked about – and I don't know if this is for Larry or whatnot. But in terms of how much can you recapture? And how quickly can you recapture some of this mortality risk? And what are you doing to do so?

Yes, this is Larry Madge here. So it's contract by contract, in terms of some contracts give the potential to recapture. Others, it's more locked in, unless you can negotiate something that's win/win with the counter-parties. So it's different in each jurisdiction and by each contract. Doug Young – Desjardins Securities: So it's not as easy as just recapturing all of these different agreements? Dan?

That’s true. Doug Young – Desjardins Securities: Okay. I may come back to you later on this. But the other one I wanted think about is – I think it's around Rob's question, in terms of the payout ratio and buybacks. And I think if I went back, and I went pre-crisis, I think if I looked at your dividends and your buybacks as a percent of GAAP earnings, I think it was between 55% and 60%. And you obviously are in a significantly better capital position. Your business is significantly more capital-light. Is that what we should be thinking about, from a return of capital perspective? Or is there any reason why you shouldn't or couldn't go higher.

Well, Doug you're right to point out that we are in a very different place than we were pre-crisis. We put out there before that the amount of capital we need to back current 12-month worth of sales is about half of what we needed back in 2011. And that obviously creates a very different picture, in terms of the capital we need to grow the business, and the ability to both run a dividend payout ratio 40% to 50%, and entertain buybacks. But it is at this red hot moment, we're not going to wrap a big ring around the two pieces and produce a new range or a new limit. We're – as I said earlier, we're going to manage the two in parallel. And I think we’ve got a very good story here with which to do so. Doug Young – Desjardins Securities: Thank you.

Your next question comes from the line of Peter Routledge from National Bank. Your line is open. Peter, your line is open.

Rob, why don't you move to the next caller?

Your next question comes from the line of Gabriel Dechaine from Canaccord Genuity. Your line is open. Your next question comes from the line of Mario Mendonca, TD Securities. Your line is open. Mario Mendonca – TD Securities: Good morning, can you hear me?

Yes, we can hear you, Mario. Mario Mendonca – TD Securities: Good. First, last quarter, Colm, you described the CAD0.81 as being somewhat higher than you would expect. And you referred to higher AFS gains, and how they flowed through earnings on surplus. Earnings on surplus stayed pretty much the same, in fact maybe a little better, and the number moved higher, the underlying earnings moved higher. Is there anything you'd offer on earnings on surplus this quarter? Does it also look elevated this quarter? Or have you reached a higher level?

Well. I think certainly, Mario, we've reached a higher level relative to a year ago. And we're down a little this quarter compared to last quarter, but definitely up year-over-year. And we do think that there's probably about CAD10 million of AFS gains, it's a little higher in the quarter, that benefited earnings on surplus this quarter. And what happens when interest rates decline, as we saw in the past quarter, we tend to take a little more on AFS gains. We lock in a little bit more there. So that was a factor. And the earnings on surplus can be a little bit lumpy. There are some non-coupon payments that can bump around a little bit. I think last quarter, I mentioned that, I think, CAD85 million to CAD90 million as being a good, sustainable level. I think, based on what we're seeing, I think around that CAD90 million mark is where we'd feel pretty comfortable. Maybe I’ll ask Steve Peacher just to say a few words on some of the drivers that we've seen.

Yes. Thanks, Colm. Mario, as I mentioned in the past, we have been focused on our surplus portfolio over the last two years. And by reviewing asset allocation and trying to optimize that and moving into some new investment areas incrementally, we've been able to increase the run rate level of net income, and you've see that come through in the numbers. And we will continue to focus on that. I will say that we've probably reached most of the low hanging fruit there, as we go into 2015. I would emphasize that, as we've done that, we've been very cognizant of maintaining high levels of liquidity in surplus, for obvious reasons. And also, we've been somewhat cautious – or fairly cautious about adding risk, given that in this environment, the – you're being compensated less for taking on credit risk, for instance. So we are very cognizant of that. Mario Mendonca – TD Securities: That's helpful. A question for Rob Manning. You referred to the environment being challenging for everyone. I get that. Numbers are there. What would be helpful to know is if MFS has lost any step on a relative basis? And perhaps if you could update us on – in prior quarters, you've given pretty good information on where MFS stands one year and three years in Lipper. Is there any update you could provide us this quarter?

Yes, in terms of momentum, if you look at our retail businesses, both offshore and domestic, we've maintained a healthy, faster than market growth rate, in terms of both gross and net sales. Clearly, if you look at our global institutional business, we've lost share because the gross sales are down. So again, it's just pivoting to new products. But as I always tell everybody, the global investment management industry is 70 trillion in assets, and we're 430 trillion or so. So there is a lot of opportunity by channel, geography and distribution. So we – as we sit here today, the firm is very actively engaged, and we have capacity, and a lot of other products to sell. It just takes time to reorient the firm to those products. You have to go through consultants, gate keepers, and obviously, there have to be natural searches in the market place in order for you to pick up those wins. So it's a time of patience we run pretty strongly over the last five years. We're taking a step back in order to take two forward, and patience is on order. In terms of performance, over the 10-year period, including the global financial crisis, 97% of our funds are above the Lipper average. Clearly, the one-year number have moderated substantially below that, and our three- and five-year numbers maintain very competitive performance in the 70%-ish range. One of the issues that the industry is facing is, over the last five years, we've dropped the global financial crisis out of the numbers. And the S&P 500 is up 300%. And it's been a challenging environment for all active managers, because you have trading costs, you have expenses, and usually a cash drain on the portfolios that make it difficult to beat the…

Your next question comes from the line of Meny Grauman from Cormark Securities. Your line is open. Meny Grauman – Cormark Securities Inc.: Morning. Question is on tax. You noted that you would expect tax rate to be toward the higher end of your range in the medium term, and I’m wondering what is driving that?

Yes, Meny, so the tax rate this quarter was bonus by approximately CAD29 million. And CAD8 million of that came from some foreign tax credits, and respective MFS that we recognized in the quarter hadn’t been previously recognized. That wouldn’t be considered to be a regular recurring item. And there was CAD21 million that came from the UK, in respect of some previously unrecognized tax loss attributes in the UK. Again, a nonrecurring item. So if you adjusted for both of those items, you’d find that our effective tax rate for the quarter would be just a shade under 22%, which is at the top end of that range of 18% to 22% that we’ve commented on consistently. And it does reflect the higher earnings that we have, and higher tax jurisdictions, particularly in the US, obviously, with the strong performance that continues at MFS. Meny Grauman – Cormark Securities Inc.: Got it. And just a point of clarification. I’m just wondering, when you talk about the anticipated Q4 impacts, that last item of the three items, that CAD190 million release of liability for future funding costs. Was I correct in understanding that there is an element of uncertainty surrounding that number? Or is that not a correct characterization?

Yes, Meny, there is uncertainty around that. If we had full certainty on it, we would’ve actually put it through in Q3. So we are monitoring closely the developments at the NAIC. And we’ll be looking to those to give us – if there’s increase certainty, then we’d release it. But we thought there was enough probability, given the activity on that front that we wanted to disclose this potential to you. Meny Grauman – Cormark Securities Inc.: Thank you very much.

Your next question comes from the line of Tom MacKinnon from BMO Capital. Your line is open. Tom MacKinnon – BMO Capital Markets: Yes, thanks very much. Two questions, one kind of a numbers one, and then a follow-up. Would you be able to share with us the hold co cash position? And also, would the CAD190 million release of liability for future funding costs on universal – on US universal life business, would that actually flow to the hold co? Or would that flow into the SLA MCCSR?

Yes, so Tom, the hold co cash position is CAD1.7 billion. And we have to disclose that in the material, so just a clarification around that. With respect to the reserve release, no, I wouldn’t think of that as being a cash item that improves the cash position. It’s a bit more complicated than that, in terms of how it flows. But it is a strengthening of reserves, but it does – or of the overall capital position for the enterprise, at the SLF level. But it doesn’t flow through as a cash item. Tom MacKinnon – BMO Capital Markets: No, the – you’re releasing a liability, it’s CAD190 million. That’s going to flow to earnings, correct?

That’s correct. Tom MacKinnon – BMO Capital Markets: So that goes into retained earnings. Does it go into the SLA MCCSR? Or does – how does that – where does that go? Does that – in terms of your – does it go – would it go into hold co cash? Or would it go into the SLA MCCSR? Is that – how do I think of that?

Yes that should – that will go to the SLA MCCSR. Tom MacKinnon – BMO Capital Markets: Okay, all right. I’d like to clarify there, Tom, that that doesn’t automatically, then, give rise to a higher dividend from SLA up to the parent company, so it impact the hold co cash. Tom MacKinnon – BMO Capital Markets: Okay. Okay, but it would add 4 points to the MCCSR, is what my – I’m estimating? Now, the other is maybe a question for Dean. It looks like you’re kind of on track to surpass the earnings objectives that you had set for 2015? And we’re going to be moving into 2015 before you know it. And I’m wondering if you would be in a position, at any time to try to update what we should be looking at for objectives in each one of the pillars? And when that might be? And – because I think that certainly is beneficial to everyone.

Tom, we’re going to be coming out to you in the community with a date for an Investor Day in the first quarter sometime. It will be after our Q4 earnings release. And that will be a great opportunity to update you on our 2015 objectives, and what we expect will come beyond 2015. So stay tuned for that. Tom MacKinnon – BMO Capital Markets: Okay, thanks.

Your next question comes from the line of Darko Mihelic from RBC Capital Markets. Your line is open. Darko Mihelic – RBC Capital Markets: Great, thank you. Good morning. I just want to revisit the performance issue. And it was a good answer to Mario’s question. I guess what I’m curious about, and it would be helpful to understand, is how important is the performance relative to sales? Because I think last quarter, 91% of your retail funds were in the top half of their Lipper categories. And if I am reading it right, it’s 76% this quarter. And so it’s a fairly significant decline. And I’m not sure which funds they were, or – and I just would be curious to understand, from your perspective, how important that is to the sales process? And then, as a follow-on question to that, on page 16 of your MD&A, for the first time I can remember, there is a large asset depreciation in the fund of CAD11.8 [million] (ph), and I’m wondering if that’s also performance related? And what caused that? And any sort of discussion on, perhaps, a decline in the performance of the funds? And what we should expect going forward would be helpful. And maybe you can relate that to past experience? That would be helpful to understand, in terms of our modeling. Thank you.

Darko, I guess the way that I would answer the question is that everything is driven off of investment performance. And so if you do not have competitive investment performance, you’re not going to sell a lot of anything and be successful in the business. The question is over what time frame do you need to think about managing that? And so, as you know, our whole system here, in terms how we manage money, is making good long-term decisions. And we sell all of our products through the clients, and through the consultant community, on longer-term performance. And you always have years where the one-year number moves around. And as you all know from the Investor Day that we had here, we don’t even compensate people on the one-year numbers. You are right that our numbers have dropped from the 90%s into the 70%s on the three to five year time horizon, but that is still very good performance in the industry. Being in the 90s is almost – it actually is an anomaly, and we were very fortunate to be in that position over the past five years, particularly in our global and international products, which is where we, on the institutional side, raised a lot of assets. But our clients are oriented, and understand that the short-term numbers can move around quite a bit, just like the flows in the margins in our business. But as long as the process is in place, and the people are still here, and they are confident that MFS is going to deliver to them what they expect, they stick with you. But you have conversations, and you meet with them constantly, and it’s part of the whole process. So what I will say to you is that 90% plus in terms of performance is rare. Very few companies actually ever deliver that. And if you’re in the 70%s, which is sort of our corporate goal over the long run, that’s very competitive, and it cuts across a lot of different products, and gives you an opportunity to raise assets in a variety of different asset classes. So it is what it is, and we move forward on that. I have to tell you that I do not know what number you’re actually pointing to, in terms of asset depreciation. I’m assuming it was a flow number, in terms of what was going in and what was going out? There was nothing happening here from a specific und point of view that would drive any wild depreciation. In fact, the whole – the way we run the franchise here is to protect on a downside. So when we have downturns in the market, MFS tends to pick up ground and pick up performance. But maybe I could have Phil follow up with you on that number later on, and walk you through what your question was.

Yes, it’s Colm here. Maybe I could just help to clarify that. So Darko, you were talking about the point-to-point, I believe, in terms of assets under management. And of course, point-to-point is going to reflect all of international markets in which MFS operates. So there were some markets that were down, there were some currency impacts, because the U.S. dollar has been appreciating against other currencies. So re-measuring those will bring that number down. So that’s – it’s a combination of those factors. But interestingly and importantly, the average net assets for the quarter was up quarter-over-quarter, so reflecting the fact that this was more of a point-to-point measurement. Darko Mihelic – RBC Capital Markets: Great, thank you. I appreciate the currency impact, and I was looking at currencies, and parsing out your breakdown of assets by currency. Still didn’t seem to explain the large drop. But maybe we can take that up after. Thank you.

Your next question comes from the line of Peter Routledge from National Bank. Your line is open. Peter Routledge – National Bank Financial: Hi, can you hear me now?

We can Peter. Peter Routledge – National Bank Financial: Okay. Most of my questions have been asked and answered, but a follow-up on the mortality improvement. As it stands today, is Sun Life short or long mortality improvement, overall, enterprise-wide?

Enterprise wide we additional mortality improvement is adverse to the organization. Peter Routledge – National Bank Financial: You’re short improvement. And given the trends in sales, in both the defined benefit product or institutional pension money, and in individual life insurance, that might widen, if you don’t interrupt that. Is that correct?

Dean gave the list of tools at our disposal that we’ll be using to manage that and we’ll certainly also manage it within our risk capacity and risk limits. Peter Routledge – National Bank Financial: So basically, you will retain more mortality risk? And I suspect close out or reduce some reinsurance relationships? What will that do to strain?

The mortality improvement change itself will actually have a negative impact on strain for the payout annuity books and DB solutions. But it will have a positive impact on strain for our individual insurance sales. So those are somewhat offsetting. Peter Routledge – National Bank Financial: So by retaining more mortality risk for new sales, you don’t anticipate strain becoming a greater drag on earnings? Is that fair to say?

Yes that’s true. Especially with the mortality improvement change that is – will be applied also to the insurance book. Peter Routledge – National Bank Financial: Okay. And just one last question. You continue to grow share – SLGI share in the Canadian career sales force. I’m wondering, as we look ahead to CRM 2, is there a shakeout coming? And is that an opportunity for SLGI within the career sales force?

It’s Kevin speaking. So we’ve got great momentum, really, in Sun Life Global Investments, across a number of channels, including our career sales force. We believe our career sales force is very well positioned around CRM 2. In particular, they are really focused around financial planning, like very holistic financial planning, as opposed to just investment advice. And so they are quite focused on full financial plans, life insurance, health insurance, wealth management, retirement, annuities. So that, I think, positions them quite uniquely. As individual advisors, they’re not dependent on just one set of products, like mutual funds. They have got a very broad suite to build their businesses around. So that’s a big plus. And we’ve got our own dealer, and that gives us the opportunity to continue to evolve the model, and create different models for different segments. And a lot of choice in the way that they want to position themselves. So net/net/net, we think that CRM 2 is going to be good for us, and we think it’s good for the industry. Peter Routledge – National Bank Financial: Will it be continued gradual improvement in market share? Or is there a step change on the horizon?

These changes are going to going to go in slowly over time. And the big change is in the middle of 2016. So that is a ways away. I think it will be more of a gradual than a shock. Peter Routledge – National Bank Financial: Thanks very much.

Your next question comes from the line of Gabriel Dechaine from Canaccord. Your line is open. Gabriel Dechaine – Canaccord Genuity: Thanks. Let’s try this again. So can you remind me, what is the biggest driver of strain in Canada? So that while the new business gains in Canada? It has been positive for eight quarters in a row, a little bit on the high side last quarter? Last two quarters, sorry.

It’s Kevin speaking. So it comes from a number of different places. But on balance here, our life insurance is positive, our annuities are positive, and our DB solutions are positive. So we’re in place now where our pricing is quite strong, our underlying investment engine is very strong. And so you’re seeing those come through the results and you would have seen us have improved gains this quarter, year over year. Gabriel Dechaine – Canaccord Genuity: Okay. So to the extent that it is life insurance, you’re starting to see some of your competitors cutting pricing on UL. Not sure yet if that is going to have an impact on your par sales. But if it does, and your par sales go down, would we expect a fairly sizable decrease in new business gains in Canada?

We’ve been monitoring changes in the marketplace, and you won’t be surprised to know that we track these very closely, cell by cell, product by product. The most recent adjustments are quite minor, in the context of the cumulative increases that have occurred over the last couple of years, and they’re actually quite targeted at certain cells. We don’t see those changes really impacting the market overall, and we tend to focus on different areas of the market then IEG does, in particular with our wholesale strategy. So we don’t see that as impacting us on this aspect. Also, our go to market strategy is about much more than just price. It’s – we maintain a competitive position, but it is very much about underwriting, and a personal touch, and technical support on highly technical large sales. And so we’re very comfortable with our value proposition, and we think that the numbers are positioned to hold up quite well at this time. Gabriel Dechaine – Canaccord Genuity: Okay, thanks. And my last question, for Dean. Just so I get an understanding of how you’re viewing the drivers of dividends, and your actions, potentially there, and then the buyback activity. Sounds like buyback is derived off of the existing capital position. And your internal capital generation, which is driven by reported earnings. But then your dividend outlook is based on underlying earnings growth. I’m just wondering if that’s a correct interpretation, why there might be divergence?

Yes, thanks, Gabriel. I think, just on the dividend, and how we’re thinking about that, and as I said earlier, and as you know, we’ve set our payout range at 40% to 50% of earnings. And year to date, after three quarters, our payout ratio is around the middle of that range. And the other thing I should add to this discussion is that when we do consider dividend increases, and do a resume dividend increases, it will be with the intent that the program is regular and sustainable. So that is another piece of the puzzle when we think about dividends. I think as far as buybacks, I would say that we’ve – we don’t have a specific formula that ties the buyback program to a particular level of capital of capital, or excess capital, or cash, or capital generation metrics. So it’s just – it’s one more thing we look at. It’s one more way we think about deploying capital, in addition to all of the other elements that we’ve talked about before, i.e. investing in acquisitions like Malaysia, recapturing re-insurance in the United States, launching slim, paying down debt, we have deployed over CAD1.3 billion of capital in the past 18 months. And we think about buybacks as just one more thing in the suite of capital deployment. So I don’t think there’s an answer to your narrow question, which is, do you tie one to report any other to underlying or operating? It’s – maybe Colm…

Gabriel, I just had a little rider to that. And that is that, on a prospective basis, there really is no difference between underlying and what we would consider to be our operating earnings. Because we’re not forecasting where interest rates will be a year from now, or where equity markets will be. We have a steady equity appreciation factor that we use for planning purposes, but we’re not calling market movements. So there really is no inconsistency. Gabriel Dechaine – Canaccord Genuity: And you plan on – thanks for that – the clarification. And then on the – your activity, you plan on being active with the buyback? As some companies have a buyback program, don’t do anything with it, it’s out there? Your intention, though, is to be active with it?

We do intend to be active with it, absolutely. Gabriel Dechaine – Canaccord Genuity: Okay, thank you.

Rob, this is Phil Malek. We have time for one more question before we have to end the call today.

Okay. Your final question is comes from the line of Sumit Malhotra from Scotiabank. Your line is open. Sumit Malhotra – Scotiabank: Thanks for getting me in. Back to Rob Manning, just wanted to talk about a couple of things in MFS. Firstly, I have in my notes here that you had talked, at the investor session earlier this year, about CAD3 billion to CAD5 billion in net flows being a reasonable target in the interim. If you could just confirm for me, is that on a total MFS basis? Or is that for the mutual funds business only?

Yes, when we talked about that, our assets were around CAD438 billion or so. And so what we were doing is backing into what we thought the organic – long-term organic growth rate of the business would be, as we sat at that level. And it worked out to around a 3% organic growth rate. The global asset management industry grows at global GDP. So call it 2%, 2.5%, and we think that we can do better than that. So that’s really where that number came from. It was based off of total assets of the firm, what we thought we could grow organically in the long run. And that hasn’t changed, although we’ve obviously not delivered that in the last couple of quarters. And there are reasons for it, but we do think, in the long run that MFS, if it performs the way that we expect it to, should grow faster than the industry. And so that’s our expectation. Sumit Malhotra – Scotiabank: I certainly hear you on the volatility that we’ve seen in markets, and maybe, compared to what we’ve had the last couple of years, that’s going to be more par for the course. So my question really becomes, in tying that in with the 40% pretax margin outlook and some of the investment spend you’ve discussed, how sticky is that investment spend? And what I mean is, if the flow trend was to be somewhat worse than you had originally anticipated, are you able to slow some of that spend that you’ve discussed? And maybe like we saw in the numbers this quarter?

Yes, our cost structure at the firm is highly variable. If you look at most of the major categories of expense, it’s tied assets under management at some form of basis point charge. And so we – our expense is do move up and down with the assets, depending upon how quickly they move. Some of the project spend that is decreasing the margin, as I have described, is really spend that we have to make. It’s our order entry and compliance system on the investment side; it’s CRM for all of our distribution company, its client service, which is a differentiator. Some of the spend is highly variable, including digital media, as well as branding and advertising. We could pull that back immediately. But as I mentioned earlier in the call, it’s a blessing and a curse at MFS, but we have a very operationally leveraged income statement. Out of our CAD430 billion or so of assets, around CAD335 billion or CAD340 billion of it is in global equities. So we get a big boost when the markets go up, and it takes it just as fast away when it goes down. So depending upon what the environment unfolds, unravels in the future, we’ll see how it is. But the Company can react from a cost structure, and will. And obviously, we can move compensation around, depending upon what’s going on, as well. So it’s a highly dynamic environment, but we do have a lot of control over what happens. Sumit Malhotra – Scotiabank: Thanks for your time.

Great, this is Phil Malek. I would like to thank all the participants on our call today. And if there are any additional questions, we’ll be available after the call. With that, I will say thank you and good day.

Ladies and gentlemen thank you for your participation. This concludes today’s conference call. And you may now disconnect.