<PAGE>
PERFORMANCE SUMMARY
These performance results do not reflect any applicable surrender charges or
contract charges. Past performance is no guarantee of future results.
<TABLE>
<CAPTION>
Unit Value
------------------------------------
December 31, Percent Change
1998 June 30, 1999 in Unit Value
---------------- ----------------- --------------
<S> <C> <C> <C>
MFS/Sun Life Series Trust
Capital Appreciation Series........... $12.7776 $13.8383 8.30%
Emerging Growth Series................ 14.7307 16.4978 12.00
Government Securities Series.......... 11.4882 11.2547 (2.03)
Massachusetts Investors Growth Stock
Series............................... 10.0940* 10.4471 3.50
Total Return Series................... 11.6974 12.2799 4.98
Global Growth Series.................. 12.1073 13.7143 13.27
Fidelity Variable Insurance Products
Fund
VIP Equity Income Portfolio........... 12.1812 13.7280 12.70
VIP Growth Portfolio.................. 14.2799 16.3388 14.42
VIP High Income Portfolio............. 10.1740 10.9843 7.96
VIP Money Market Portfolio............ 11.1396 11.4103 2.43
Fidelity Variable Insurance Products
Fund II
VIP II Contrafund Portfolio........... 14.3350 15.9482 11.25
VIP II Investment Grade Bond
Portfolio............................ 10.5894* 10.4681 (1.15)
VIP II Index 500 Portfolio............ 14.8244 16.6099 12.04
Neuberger Berman Advisers Management
Trust
Limited Maturity Bond Portfolio....... 10.8064 10.8418 0.33
Partners Portfolio.................... 11.0484 12.5150 13.27
J.P. Morgan Series Trust II
J.P. Morgan Bond Portfolio............ 11.4626 11.2425 (1.92)
J.P. Morgan Equity Portfolio.......... 12.6050 14.3502 13.84
J.P. Morgan Small Company Portfolio... 10.3154 10.9509 6.16
Templeton Variable Products Series Fund
Templeton Stock Fund: Class 1......... 9.7515 10.9836 12.64
Dreyfus Variable Investment Fund
Small Cap Portfolio................... 9.3498* 9.6250 2.94
Quality Bond Portfolio................ 9.9709* 10.0800 1.09
Dreyfus Stock Index Fund................ 9.8374* 10.1514 3.19
T. Rowe Price Equity Series, Inc.
T. Rowe Price Equity Income
Portfolio............................ 11.1526* 11.1526 0.00
</TABLE>
*Unit value on the date of commencement of operations of the Sub-Account.
1
<PAGE>
SUN LIFE (U.S.) VARIABLE ACCOUNT G
STATEMENT OF CONDITION -- June 30, 1999
<TABLE>
<CAPTION>
ASSETS:
<S> <C> <C> <C>
Investments in Mutual Funds: Shares Cost Value
---------- ------------ ------------
Investments in MFS/Sun Life Series
Trust:
Capital Appreciation Series
("CAS")............................. 4,371 $ 181,700 $ 193,159
Emerging Growth Series ("EGS")...... 3,286 72,652 84,322
Government Securities Series
("GSS")............................. 35,109 452,734 437,456
Massachusetts Investors Growth Stock
Series ("MIS")...................... 14,734 193,622 194,191
Total Return Series ("TRS")......... 69,164 1,453,817 1,324,500
Global Growth Series ("GGR")........ 94,888 1,488,756 1,616,897
Investments in Fidelity Variable
Insurance Products Fund:
VIP Equity Income Portfolio
("FEI")............................. 113,845 2,745,739 3,102,281
VIP Growth Portfolio ("FGP")........ 102,912 4,005,061 4,706,184
VIP High Income Portfolio ("FHI")... 10,668 117,085 120,443
VIP Money Market Portfolio
("FMM")............................. 562,991 562,991 562,991
Investments in Fidelity Variable
Insurance Products Fund II:
VIP II Contrafund Portfolio
("FCN")............................. 26,327 550,982 687,132
VIP II Investment Grade Bond
Portfolio ("FIG")................... 36,429 445,164 440,064
VIP II Index 500 Portfolio
("FIP")............................. 50,615 6,631,573 7,878,167
Investments in Neuberger Berman
Advisers Management Trust:
Limited Maturity Bond Portfolio
("NLM")............................. 401 5,313 5,250
Partners Portfolio ("NPP").......... 54,942 1,082,256 1,138,396
Investments in J.P. Morgan Series
Trust II:
J.P. Morgan Bond Portfolio
("JBP")............................. 138,476 1,603,704 1,568,933
J.P. Morgan Equity Portfolio
("JEP")............................. 14,020 219,492 249,980
J.P. Morgan Small Company Portfolio
("JSC")............................. 30,783 374,446 387,254
Investments in Templeton Variable
Products Series Fund:
Templeton Stock Fund: Class 1
("TSF")............................. 28,179 606,447 599,647
Investments in Dreyfus Variable
Investment Fund:
Small Cap Portfolio ("DSC")......... 200 11,757 12,103
Quality Bond Portfolio ("DQB")...... 1,788 19,595 19,809
Investments in Dreyfus Stock Index
Fund ("DSI")......................... 36,601 1,297,348 1,321,652
Investments in T. Rowe Price Equity
Series, Inc.:
T. Rowe Price Equity Income
Portfolio ("REI")................... 4,925 105,151 105,151
------------ ------------
NET ASSETS.................................... $ 24,227,385 $ 26,755,962
------------ ------------
------------ ------------
</TABLE>
See notes to financial statements
2
<PAGE>
SUN LIFE (U.S.) VARIABLE ACCOUNT G
STATEMENT OF CONDITION-- June 30, 1999 -- continued
<TABLE>
<CAPTION>
Units Unit Value Value
--------- ---------- ------------
<S> <C> <C> <C>
NET ASSETS APPLICABLE TO CONTRACT OWNERS
CAS............................................................................. 13,958 $ 13.8383 $ 193,159
EGS............................................................................. 5,111 16.4978 84,322
GSS............................................................................. 38,869 11.2547 437,456
MIS............................................................................. 18,588 10.4471 194,191
TRS............................................................................. 107,859 12.2799 1,324,500
GGR............................................................................. 117,898 13.7143 1,616,897
FEI............................................................................. 225,982 13.7280 3,102,281
FGP............................................................................. 288,038 16.3388 4,706,184
FHI............................................................................. 10,965 10.9843 120,443
FMM............................................................................. 39,338 11.4103 448,856
FCN............................................................................. 43,085 15.9482 687,132
FIG............................................................................. 42,039 10.4681 440,064
FIP............................................................................. 474,304 16.6099 7,878,167
NLM............................................................................. 484 10.8418 5,250
NPP............................................................................. 90,963 12.5150 1,138,396
JBP............................................................................. 139,553 11.2425 1,568,933
JEP............................................................................. 17,420 14.3502 249,980
JSC............................................................................. 35,363 10.9509 387,254
TSF............................................................................. 54,595 10.9836 599,647
DSC............................................................................. 1,257 9.6250 12,103
DQB............................................................................. 1,965 10.0800 19,809
DSI............................................................................. 130,194 10.1514 1,321,652
REI............................................................................. 9,428 11.1526 105,151
------------
Net Assets Applicable to Contract Owners...................................... 26,641,827
------------
Net Assets Applicable to Sponsor.............................................. 10,000 11.4103 114,135
Net Assets......................................................................................... $ 26,755,962
------------
------------
</TABLE>
See notes to financial statements
3
<PAGE>
SUN LIFE (U.S.) VARIABLE ACCOUNT G
STATEMENT OF OPERATIONS-- Six Months Ended June 30, 1999
<TABLE>
<CAPTION>
CAS EGS GSS MIS(b) TRS GGR
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INCOME AND EXPENSES:
Dividend income and capital gain
distributions received............... $16,738 $ 739 $ 16,132 -$- $ 195,833 $ 53,421
----------- ----------- ----------- --- ----------- -----------
REALIZED AND UNREALIZED GAINS (LOSSES):
Realized gains (losses) on investment
transactions:
Proceeds from sales................. $ 4,066 $ 1,248 $ 4,238 $ 1 $ 78,318 $ 20,956
Cost of investments sold............ 4,204 833 4,201 1 86,983 17,899
----------- ----------- ----------- --- ----------- -----------
Net realized gains (losses)......... $ (138) $ 415 $ 37 -$- $ (8,665) $ 3,057
----------- ----------- ----------- --- ----------- -----------
Net unrealized appreciation
(depreciation) on investments:
End of period....................... $11,459 $11,670 $(15,278) $569 $(129,317) $128,141
Beginning of period................. 15,085 6,747 6,736 -- (6,224) 27,953
----------- ----------- ----------- --- ----------- -----------
Change in unrealized appreciation
(depreciation)................... $(3,626) $ 4,923 $(22,014) $569 $(123,093) $100,188
----------- ----------- ----------- --- ----------- -----------
Realized and unrealized gains
(losses)........................... $(3,764) $ 5,338 $(21,977) $569 $(131,758) $103,245
----------- ----------- ----------- --- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS............................. $12,974 $ 6,077 $ (5,845) $569 $ 64,075 $156,666
----------- ----------- ----------- --- ----------- -----------
----------- ----------- ----------- --- ----------- -----------
</TABLE>
<TABLE>
<CAPTION>
FEI FGP FHI FMM FCN FIG(d)
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INCOME AND EXPENSES:
Dividend income and capital gain
distributions received............... $ 84,128 $289,893 $16,590 $12,230 $ 21,709 $--
----------- ----------- ----------- ----------- ----------- -----------
REALIZED AND UNREALIZED GAINS (LOSSES):
Realized gains (losses) on investment
transactions:
Proceeds from sales................. $155,113 $109,898 $87,723 $ 7,927 $ 15,422 $ 4,542
Cost of investments sold............ 137,166 91,104 93,004 7,927 13,171 4,556
----------- ----------- ----------- ----------- ----------- -----------
Net realized gains (losses)....... $ 17,947 $ 18,794 $(5,281) $-- $ 2,251 $ (14)
----------- ----------- ----------- ----------- ----------- -----------
Net unrealized appreciation
(depreciation) on investments:
End of period....................... $356,542 $701,123 $ 3,358 $-- $136,150 $(5,100)
Beginning of period................. 124,054 530,726 1,576 -- 97,673 --
----------- ----------- ----------- ----------- ----------- -----------
Change in unrealized appreciation
(depreciation)................... $232,488 $170,397 $ 1,782 $-- $ 38,477 $(5,100)
----------- ----------- ----------- ----------- ----------- -----------
Realized and unrealized gains
(losses)........................... $250,435 $189,191 $(3,499) $-- $ 40,728 $(5,114)
----------- ----------- ----------- ----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS............................. $334,563 $479,084 $13,091 $12,230 $ 62,437 $(5,114)
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
</TABLE>
(b) For the period June 25, 1999 (commencement of operations of Sub-Account)
through June 30, 1999.
(d) For the period March 16, 1999 (commencement of operations of Sub-Account)
through June 30, 1999.
See notes to financial statements
4
<PAGE>
SUN LIFE (U.S.) VARIABLE ACCOUNT G
STATEMENT OF OPERATIONS -- Six Months Ended June 30, 1999 -- continued
<TABLE>
<CAPTION>
FIP NLM NPP JBP JEP JSC
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INCOME AND EXPENSES:
Dividend income and capital gain
distributions received............... $ 77,078 $ 1,844 $ 33,511 $ 10,716 $ 2,587 $ 289
----------- ----------- ----------- ----------- ----------- -----------
REALIZED AND UNREALIZED GAINS (LOSSES):
Realized gains (losses) on investment
transactions:
Proceeds from sales................. $ 387,821 $30,153 $ 65,307 $ 19,179 $11,118 $ 9,126
Cost of investments sold............ 263,918 31,337 69,750 19,001 10,335 10,803
----------- ----------- ----------- ----------- ----------- -----------
Net realized gains (losses)......... $ 123,903 $(1,184) $ (4,443) $ 178 $ 783 $ (1,677)
----------- ----------- ----------- ----------- ----------- -----------
Net unrealized appreciation
(depreciation) on investments:
End of period....................... $1,246,594 $ (63) $ 56,140 $(34,771) $30,488 $ 12,808
Beginning of period................. 698,312 489 (48,732) 6,550 4,990 (11,212)
----------- ----------- ----------- ----------- ----------- -----------
Change in unrealized appreciation
(depreciation)................... $ 548,282 $ (552) $104,872 $(41,321) $25,498 $ 24,020
----------- ----------- ----------- ----------- ----------- -----------
Realized and unrealized gains
(losses)........................... $ 672,185 $(1,736) $100,429 $(41,143) $26,281 $ 22,343
----------- ----------- ----------- ----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS............................. $ 749,263 $ 108 $133,940 $(30,427) $28,868 $ 22,632
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
</TABLE>
<TABLE>
<CAPTION>
TSF DSC(b) DQB(b) DSI(c) REI(a)
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
INCOME AND EXPENSES:
Dividend income and capital gain
distributions received............... $ 49,240 -$- -$- $ 3,048 -$-
----------- --- --- ----------- -----
REALIZED AND UNREALIZED GAINS (LOSSES):
Realized gains (losses) on investment
transactions:
Proceeds from sales................. $ 12,416 $ 35 $ 57 $ 1,327 -$-
Cost of investments sold............ 14,430 34 57 1,354 --
----------- --- --- ----------- -----
Net realized gains (losses)......... $ (2,014) $ 1 -$- $ (27) -$-
----------- --- --- ----------- -----
Net unrealized appreciation
(depreciation) on investments:
End of period....................... $ (6,800) $346 $214 $24,304 -$-
Beginning of period................. (22,684) -- -- -- --
----------- --- --- ----------- -----
Change in unrealized appreciation
(depreciation)................... $ 15,884 $346 $214 $24,304 -$-
----------- --- --- ----------- -----
Realized and unrealized gains
(losses)........................... $ 13,870 $347 $214 $24,277 -$-
----------- --- --- ----------- -----
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS............................. $ 63,110 $347 $214 $27,325 -$-
----------- --- --- ----------- -----
----------- --- --- ----------- -----
</TABLE>
(a) For the period June 30, 1999 (commencement of operations of Sub-Account)
through June 30, 1999.
(b) For the period June 25, 1999 (commencement of operations of Sub-Account)
through June 30, 1999.
(c) For the period May 6, 1999 (commencement of operations of Sub-Account)
through June 30, 1999.
See notes to financial statements
5
<PAGE>
SUN LIFE (U.S.) VARIABLE ACCOUNT G
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
EGS
CAS Sub-Account GSS
Sub-Account --------------------- Sub-Account
----------------------- -------------------------
Six
Six Months Year Ended Months Year Ended Six Months
Ended December Ended December Ended Year Ended
June 30, 31, June 30, 31, June 30, December 31,
1999 1998(e) 1999 1998 1999 1998
---------- ----------- -------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)..................... $ 16,738 $ 7,994 $ 739 $ 598 $ 16,132 $ 8,657
Net realized gains (losses)...................... (138) (2,035) 415 362 37 186
Net unrealized gains (losses).................... (3,626) 15,085 4,923 6,490 (22,014) 6,237
---------- ----------- -------- ----------- ----------- ------------
Increase (Decrease) in net assets from
operations.................................. $ 12,974 $ 21,044 $ 6,077 $ 7,450 $ (5,845) $ 15,080
---------- ----------- -------- ----------- ----------- ------------
CONTRACT OWNER TRANSACTIONS:
Purchase payments received..................... $ 14,076 $ 69,165 $ 3,519 $18,930 $ 84,837 $165,413
Net transfers between Sub-Accounts............. 33,982 49,909 34,169 13,669 34,813 --
Withdrawals, surrenders, annuitizations and
contract charges.............................. (4,087) (3,904) (1,254) (1,061) (5,397) (7,748)
---------- ----------- -------- ----------- ----------- ------------
Increase (Decrease) in net assets from contract
owner transactions.............................. $ 43,971 $115,170 $36,434 $31,538 $114,253 $157,665
---------- ----------- -------- ----------- ----------- ------------
Increase (Decrease) in net assets.............. $ 56,945 $136,214 $42,511 $38,988 $108,408 $172,745
NET ASSETS:
Beginning of period.............................. 136,214 -- 41,811 2,823 329,048 156,303
---------- ----------- -------- ----------- ----------- ------------
End of period.................................... $193,159 $136,214 $84,322 $41,811 $437,456 $329,048
---------- ----------- -------- ----------- ----------- ------------
---------- ----------- -------- ----------- ----------- ------------
</TABLE>
<TABLE>
<CAPTION>
MIS TRS GGR
Sub-Account Sub-Account Sub-Account
----------- ------------------------- ------------------------
Six Months Six Months Year Ended Six Months Year Ended
Ended Ended December Ended December
June 30, June 30, 31, June 30, 31,
1999(b) 1999 1998(f) 1999 1998
----------- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss).................................. $ -- $ 195,833 $ 64,091 $ 53,421 $ 39,888
Net realized gains (losses)................................... -- (8,665) 4,643 3,057 1,466
Net unrealized gains (losses)................................. 569 (123,093) (6,224) 100,188 16,998
----------- ------------ ----------- ----------- -----------
Increase (Decrease) in net assets from operations......... $ 569 $ 64,075 $ 62,510 $ 156,666 $ 58,352
----------- ------------ ----------- ----------- -----------
CONTRACT OWNER TRANSACTIONS:
Purchase payments received.................................. $ 87,160 $ 686,729 $ 742,106 $ 672,141 $540,355
Net transfers between Sub-Accounts.......................... 106,968 (56,884) (115,350) 27,119 2,700
Withdrawals, surrenders, annuitizations and contract
charges.................................................... (506) (23,733) (34,953) (19,943) (26,751)
----------- ------------ ----------- ----------- -----------
Increase (Decrease) in net assets from contract owner
transactions................................................. $193,622 $ 606,112 $ 591,803 $ 679,317 $516,304
----------- ------------ ----------- ----------- -----------
Increase (Decrease) in net assets........................... $194,191 $ 670,187 $ 654,313 $ 835,983 $574,656
NET ASSETS:
Beginning of period........................................... -- 654,313 -- 780,914 206,258
----------- ------------ ----------- ----------- -----------
End of period................................................. $194,191 $ 1,324,500 $ 654,313 $ 1,616,897 $780,914
----------- ------------ ----------- ----------- -----------
----------- ------------ ----------- ----------- -----------
</TABLE>
(b) For the period June 25, 1999 (commencement of operations of Sub-Account)
through June 30, 1999.
(e) For the period April 23, 1998 (commencement of operations of Sub-Account)
through December 31, 1998.
(f) For the period February 11, 1998 (commencement of operations of Sub-Account)
through December 31, 1998.
See notes to financial statements
6
<PAGE>
SUN LIFE (U.S.) VARIABLE ACCOUNT G
STATEMENTS OF CHANGES IN NET ASSETS -- continued
<TABLE>
<CAPTION>
FEI FGP FHI
Sub-Account Sub-Account Sub-Account
------------------------ ------------------------ -----------------------
Six Months Year Ended Six Months Year Ended Six Months Year Ended
Ended December Ended December Ended December
June 30, 31, June 30, 31, June 30, 31,
1999 1998 1999 1998 1999 1998(f)
----------- ----------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss).................... $ 84,128 $ 821 $ 289,893 $ 34,173 $ 16,590 $ --
Net realized gains (losses)..................... 17,947 (5,033) 18,794 1,372 (5,281) (254)
Net unrealized gains (losses)................... 232,488 122,975 170,397 529,196 1,782 1,576
----------- ----------- ----------- ----------- ---------- -----------
Increase (Decrease) in net assets from
operations................................. $ 334,563 $ 118,763 $ 479,084 $ 564,741 $ 13,091 $ 1,322
----------- ----------- ----------- ----------- ---------- -----------
CONTRACT OWNER TRANSACTIONS:
Purchase payments received.................... $ 1,535,705 $1,756,032 $ 1,759,144 $1,547,362 $ 27,703 $ 75,590
Net transfers between Sub-Accounts............ (464,104) (58,426) 8,166 259,472 (82,979) 94,193
Withdrawals, surrenders, annuitizations and
contract charges............................. (54,801) (78,355) (78,445) (80,050) (4,808) (3,669)
----------- ----------- ----------- ----------- ---------- -----------
Increase (Decrease) in net assets from contract
owner transactions............................. $ 1,016,800 $1,619,251 $ 1,688,865 $1,726,784 $(60,084) $166,114
----------- ----------- ----------- ----------- ---------- -----------
Increase (Decrease) in net assets............. $ 1,351,363 $1,738,014 $ 2,167,949 $2,291,525 $(46,993) $167,436
NET ASSETS:
Beginning of period............................. 1,750,918 12,904 2,538,235 246,710 167,436 --
----------- ----------- ----------- ----------- ---------- -----------
End of period................................... $ 3,102,281 $1,750,918 $ 4,706,184 $2,538,235 $120,443 $167,436
----------- ----------- ----------- ----------- ---------- -----------
----------- ----------- ----------- ----------- ---------- -----------
</TABLE>
<TABLE>
<CAPTION>
FMM FCN FIG
Sub-Account Sub-Account Sub-Account
------------------------ ----------------------- -----------
Six Months Six Months Year Ended Six Months
Ended Year Ended Ended December Ended
June 30, December 31, June 30, 31, June 30,
1999 1998 1999 1998 1999(d)
---------- ------------ ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)................................ $ 12,230 $ 32,102 $ 21,709 $ 382 $ --
Net realized gains (losses)................................. -- -- 2,251 1,167 (14)
Net unrealized gains (losses)............................... -- -- 38,477 97,064 (5,100)
---------- ------------ ---------- ----------- -----------
Increase (Decrease) in net assets from operations....... $ 12,230 $ 32,102 $ 62,437 $ 98,613 $ (5,114)
---------- ------------ ---------- ----------- -----------
CONTRACT OWNER TRANSACTIONS:
Purchase payments received................................ $ 243,917 $ 1,495,810 $ 72,551 $153,403 $216,815
Net transfers between Sub-Accounts........................ (115,926) (1,173,716) 48,814 268,273 233,259
Withdrawals, surrenders, annuitizations and contract
charges.................................................. (8,331) (28,796) (15,632) (7,846) (4,896)
---------- ------------ ---------- ----------- -----------
Increase (Decrease) in net assets from contract owner
transactions............................................... $ 119,660 $ 293,298 $105,733 $413,830 $445,178
---------- ------------ ---------- ----------- -----------
Increase (Decrease) in net assets......................... $ 131,890 $ 325,400 $168,170 $512,443 $440,064
NET ASSETS:
Beginning of period......................................... 431,101 105,701 518,962 6,519 --
---------- ------------ ---------- ----------- -----------
End of period............................................... $ 562,991 $ 431,101 $687,132 $518,962 $440,064
---------- ------------ ---------- ----------- -----------
---------- ------------ ---------- ----------- -----------
</TABLE>
(d) For the period March 16, 1999 (commencement of operations of Sub-Account)
through June 30, 1999.
(f) For the period February 11, 1998 (commencement of operations of Sub-Account)
through December 31, 1998.
See notes to financial statements
7
<PAGE>
SUN LIFE (U.S.) VARIABLE ACCOUNT G
STATEMENTS OF CHANGES IN NET ASSETS -- continued
<TABLE>
<CAPTION>
FIP NLM NPP
Sub-Account Sub-Account Sub-Account
------------------------ ----------------------- ------------------------
Six Months Year Ended Six Months Year Ended Six Months Year Ended
Ended December Ended December Ended December
June 30, 31, June 30, 31, June 30, 31,
1999 1998 1999 1998 1999 1998
----------- ----------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss).................... $ 77,078 $ 48,449 $ 1,844 $ 167 $ 33,511 $ 97,246
Net realized gains (losses)..................... 123,903 111,953 (1,184) 506 (4,443) (40,762)
Net unrealized gains (losses)................... 548,282 595,373 (552) 399 104,872 (49,692)
----------- ----------- ---------- ----------- ----------- -----------
Increase (Decrease) in net assets from
operations................................. $ 749,263 $ 755,775 $ 108 $ 1,072 $ 133,940 $ 6,792
----------- ----------- ---------- ----------- ----------- -----------
CONTRACT OWNER TRANSACTIONS:
Purchase payments received.................... $ 2,751,116 $2,846,625 $ 3,519 $26,898 $ 231,286 $ 829,194
Net transfers between Sub-Accounts............ 126,040 320,272 (29,440) 2,696 (202,989) 80,931
Withdrawals, surrenders, annuitizations and
contract charges............................. (124,794) (524,138) (718) (1,541) (23,933) (40,375)
----------- ----------- ---------- ----------- ----------- -----------
Increase (Decrease) in net assets from contract
owner transactions............................. $ 2,752,362 $2,642,759 $(26,639) $28,053 $ 4,364 $ 869,750
----------- ----------- ---------- ----------- ----------- -----------
Increase (Decrease) in net assets............. $ 3,501,625 $3,398,534 $(26,531) $29,125 $ 138,304 $ 876,542
NET ASSETS:
Beginning of period............................. 4,376,542 978,008 31,781 2,656 1,000,092 123,550
----------- ----------- ---------- ----------- ----------- -----------
End of period................................... $ 7,878,167 $4,376,542 $ 5,250 $31,781 $ 1,138,396 $1,000,092
----------- ----------- ---------- ----------- ----------- -----------
----------- ----------- ---------- ----------- ----------- -----------
</TABLE>
<TABLE>
<CAPTION>
JBP JEP JSC
Sub-Account Sub-Account Sub-Account
------------------------ ----------------------- -----------------------
Six Months Year Ended Six Months Year Ended Six Months Year Ended
Ended December Ended December Ended December
June 30, 31, June 30, 31, June 30, 31,
1999 1998 1999 1998(f) 1999 1998(f)
----------- ----------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss).................... $ 10,716 $ 32,711 $ 2,587 $ 19,117 $ 289 $ 12,274
Net realized gains (losses)..................... 178 7,002 783 13,026 (1,677) (28,111)
Net unrealized gains (losses)................... (41,321) 6,645 25,498 4,990 24,020 (11,212)
----------- ----------- ---------- ----------- ---------- -----------
Increase (Decrease) in net assets from
operations................................. $ (30,427) $ 46,358 $ 28,868 $ 37,133 $ 22,632 $(27,049)
----------- ----------- ---------- ----------- ---------- -----------
CONTRACT OWNER TRANSACTIONS:
Purchase payments received.................... $ 794,254 $ 971,373 $ 78,938 $267,400 $ 24,636 $281,469
Net transfers between Sub-Accounts............ 36,452 42,894 (55,996) (92,224) 22,616 87,065
Withdrawals, surrenders, annuitizations and
contract charges............................. (24,329) (366,856) (5,772) (8,367) (9,178) (14,937)
----------- ----------- ---------- ----------- ---------- -----------
Increase (Decrease) in net assets from contract
owner transactions............................. $ 806,377 $ 647,411 $ 17,170 $166,809 $ 38,074 $353,597
----------- ----------- ---------- ----------- ---------- -----------
Increase (Decrease) in net assets............. $ 775,950 $ 693,769 $ 46,038 $203,942 $ 60,706 $326,548
NET ASSETS:
Beginning of period............................. 792,983 99,214 203,942 -- 326,548 --
----------- ----------- ---------- ----------- ---------- -----------
End of period................................... $ 1,568,933 $ 792,983 $249,980 $203,942 $387,254 $326,548
----------- ----------- ---------- ----------- ---------- -----------
----------- ----------- ---------- ----------- ---------- -----------
</TABLE>
(f) For the period February 11, 1998 (commencement of operations of Sub-Account)
through December 31, 1998.
See notes to financial statements
8
<PAGE>
SUN LIFE (U.S.) VARIABLE ACCOUNT G
STATEMENTS OF CHANGES IN NET ASSETS -- continued
<TABLE>
<CAPTION>
TSF DSC DQB
Sub-Account Sub-Account Sub-Account
----------------------- ----------- -----------
Six Months Year Ended Six Months Six Months
Ended December Ended Ended
June 30, 31, June 30, June 30,
1999 1998 1999(b) 1999(b)
---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)................................................ $ 49,240 $ 22,221 $-- $--
Net realized gains (losses)................................................. (2,014) (24,809) 1 --
Net unrealized gains (losses)............................................... 15,884 (21,918) 346 214
---------- ----------- ----------- -----------
Increase (Decrease) in net assets from operations....................... $ 63,110 $(24,506) $ 347 $ 214
---------- ----------- ----------- -----------
CONTRACT OWNER TRANSACTIONS:
Purchase payments received................................................ $ 63,920 $257,817 $11,859 $19,765
Net transfers between Sub-Accounts........................................ (758) 189,442 -- --
Withdrawals, surrenders, annuitizations and contract charges.............. (12,186) (17,017) (103) (170)
---------- ----------- ----------- -----------
Increase (Decrease) in net assets from contract owner transactions.......... $ 50,976 $430,242 $11,756 $19,595
---------- ----------- ----------- -----------
Increase (Decrease) in net assets......................................... $114,086 $405,736 $12,103 $19,809
NET ASSETS:
Beginning of period......................................................... 485,561 79,825 -- --
---------- ----------- ----------- -----------
End of period............................................................... $599,647 $485,561 $12,103 $19,809
---------- ----------- ----------- -----------
---------- ----------- ----------- -----------
</TABLE>
<TABLE>
<CAPTION>
DSI REI
Sub-Account Sub-Account
----------- ----------
Six Months Six Months
Ended Ended
June 30, June 30,
1999(c) 1999(a)
----------- ----------
<S> <C> <C>
OPERATIONS:
Net investment income (loss)............................................................................ $ 3,048 $ --
Net realized gains (losses)............................................................................. (27) --
Net unrealized gains (losses)........................................................................... 24,304 --
----------- ----------
Increase (Decrease) in net assets from operations................................................... $ 27,325 $ --
----------- ----------
CONTRACT OWNER TRANSACTIONS:
Purchase payments received............................................................................ $1,065,147 $ 42,160
Net transfers between Sub-Accounts.................................................................... 233,457 63,209
Withdrawals, surrenders, annuitizations and contract charges.......................................... (4,277) (218)
----------- ----------
Increase (Decrease) in net assets from contract owner transactions...................................... $1,294,327 $105,151
----------- ----------
Increase (Decrease) in net assets..................................................................... $1,321,652 $105,151
NET ASSETS:
Beginning of period..................................................................................... -- --
----------- ----------
End of period........................................................................................... $1,321,652 $105,151
----------- ----------
----------- ----------
</TABLE>
(a) For the period June 30, 1999 (commencement of operations of Sub-Account)
through June 30, 1999.
(b) For the period June 25, 1999 (commencement of operations of Sub-Account)
through June 30, 1999.
(c) For the period May 6, 1999 (commencement of operations of Sub-Account)
through June 30, 1999.
See notes to financial statements
9
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT G
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION
Sun Life of Canada (U.S.) Variable Account G (the "Variable Account"), a
separate account of Sun Life Assurance Company of Canada (U.S.) (the "Sponsor"),
was established on July 25, 1996 as a funding vehicle for the variable portion
of certain individual variable life insurance contracts. The Variable Account is
registered with the Securities and Exchange Commission under the Investment
Company Act of 1940 as a unit investment trust.
The assets of the Variable Account are divided into Sub-Accounts. Each
Sub-Account is invested in shares of a single corresponding investment portfolio
of one of the following mutual funds: MFS/Sun Life Series Trust, Fidelity
Variable Insurance Products Fund, Fidelity Variable Insurance Products Fund II,
Neuberger Berman Advisers Management Trust, J.P. Morgan Series Trust II,
Templeton Variable Products Series Fund, Dreyfus Variable Investment Fund,
Dreyfus Stock Index Fund and T. Rowe Price Equity Series, Inc.
(2) SIGNIFICANT ACCOUNTING POLICIES
GENERAL
The preparation of financial statements in conformity with generally accepted
accounting principles requires the Sponsor's management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
INVESTMENT VALUATIONS
Investments in shares of an investment portfolio of the mutual funds are
recorded at their net asset value. Realized gains and losses on sales of shares
are determined on the identified cost basis. Dividend income and capital gain
distributions received by the Sub-Accounts are reinvested in additional shares
and are recognized on the ex-dividend date.
Exchanges between Sub-Accounts requested by contract owners are recorded in the
new Sub-Account upon receipt of the redemption proceeds.
FEDERAL INCOME TAX STATUS
The operations of the Variable Account are part of the operations of the Sponsor
and are not taxed separately. The Variable Account is not taxed as a regulated
investment company. The Sponsor qualifies for the federal income tax treatment
granted to life insurance companies under Subchapter L of the Internal Revenue
Code. Under existing federal income tax law, investment income and capital gains
earned by the Variable Account on contract owner reserves are not taxable, and
therefore, no provision has been made for federal income taxes.
10
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT G
NOTES TO FINANCIAL STATEMENTS -- continued
(3) CONTRACT CHARGES
The Sponsor deducts expense charges applied to premium consisting of the premium
tax, the federal DAC tax and the sales load. The premium tax varies by state but
in general will range from 2% to 4% of the premium in most states (Kentucky
charges 7%). The DAC tax charge is 1.25% of the premium. The sales load is 8.75%
of the premium up to target premium and 2.25% of the premium in excess of the
target premium. A portion of the sales load is refunded for surrenders in the
first three policy years.
The Sponsor deducts certain charges from the account value of each contract,
through the cancellation of units, on a monthly basis. A monthly expense charge
of $13.75 per policy at the beginning of each month during the first policy year
and $7.50 for months thereafter is deducted to recover certain administration
expenses. The Sponsor also deducts a charge at the end of each policy month for
providing life insurance protection. This charge will be based upon the
Sponsor's expectations of future mortality, persistency, interest rates,
expenses and taxes. However, the maximum rates for the base death benefit for
insureds that are not rated substandard risks will not exceed those based on the
1980 CSO Mortality Tables, and the maximum rates for the APB rider death benefit
for similar insureds will not exceed those based on 125% of the 1980 CSO
Mortality Tables.
The Sponsor deducts certain charges from the account value of each contract,
through the cancellation of units, at the end of each valuation period for the
mortality and expense risks assumed by the Sponsor. The daily deduction is
currently 0.0016389% (which is equivalent to an annual rate of 0.60%) for
policies in their first ten policy years, 0.0005474% (which is equivalent to an
annual rate of 0.20%) for the next ten policy years and 0.0002738% (which is
equivalent to an annual rate of 0.10%) for policies in policy years twenty-one
and beyond.
11
<PAGE>
SUN LIFE (U.S.) VARIABLE ACCOUNT G
NOTES TO FINANCIAL STATEMENTS -- continued
(4) TRANSACTIONS IN UNITS OUTSTANDING
<TABLE>
<CAPTION>
Units Withdrawn,
Units Transferred Surrendered and
Units Outstanding Between Canceled for
Beginning of Period Units Purchased Sub-Accounts Contract Charges
------------------------- ----------------------- ---------------------- ---------------------
Six Six Six Six
Months Year Months Year Months Year Months Year
Ended Ended Ended Ended Ended Ended Ended Ended
June 30, December 31, June 30, December 31, June 30, December 31, June 30, December 31,
Sub-Accounts 1999 1998 1999 1998 1999 1998 1999 1998
- ------------------------------- ----------- ------------ --------- ------------ -------- ------------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CAS(e)......................... 10,660 -- 1,082 6,564 2,527 4,445 (311) (349)
EGS............................ 2,838 257 230 1,599 2,123 1,067 (80) (85)
GSS............................ 28,642 14,789 7,609 14,555 3,093 -- (475) (702)
MIS(b)......................... -- -- 8,398 -- 10,239 -- (49) --
TRS(f)......................... 55,937 -- 58,531 69,056 (4,615) (10,148) (1,994) (2,971)
GGR............................ 64,502 19,525 52,775 46,090 2,196 1,282 (1,575) (2,395)
FEI............................ 143,740 1,182 122,885 155,915 (36,365) (6,554) (4,278) (6,803)
FGP............................ 177,748 24,099 114,904 137,491 475 22,870 (5,089) (6,712)
FHI(f)......................... 16,457 -- 2,590 7,374 (7,636) 9,430 (446) (347)
FMM............................ 28,692 -- 21,693 141,043 (10,310) (109,762) (737) (2,589)
FCN............................ 36,202 591 4,791 9,406 3,119 26,828 (1,027) (623)
FIG(d)......................... -- -- 20,475 -- 22,028 -- (464) --
FIP............................ 295,225 84,660 178,054 225,497 8,979 24,933 (7,954) (39,865)
NLM............................ 2,941 257 325 2,523 (2,715) 305 (67) (144)
NPP............................ 90,519 11,653 19,864 76,494 (17,362) 6,112 (2,058) (3,740)
JBP............................ 69,180 9,348 69,274 89,677 3,238 3,925 (2,139) (33,770)
JEP(f)......................... 16,179 -- 5,586 24,048 (3,910) (7,212) (435) (657)
JSC(f)......................... 31,656 -- 2,438 27,699 2,170 5,298 (901) (1,341)
TSF............................ 49,794 8,289 6,061 27,080 (70) 16,159 (1,190) (1,734)
DSC(b)......................... -- -- 1,268 -- -- -- (11) --
DQB(b)......................... -- -- 1,982 -- -- -- (17) --
DSI(c)......................... -- -- 107,383 -- 23,245 -- (434) --
REI(a)......................... -- -- 3,780 -- 5,668 -- (20) --
Unit Activity
From Sponsor Transactions...... 10,000 10,000 -- -- -- -- -- --
----------- ------------ --------- ------------ -------- ------------- -------- ------------
Total Unit Activity............ 1,130,912 184,650 811,978 1,062,111 6,117 (11,022) (31,751) (104,827)
----------- ------------ --------- ------------ -------- ------------- -------- ------------
----------- ------------ --------- ------------ -------- ------------- -------- ------------
<CAPTION>
Units Outstanding
End of Period
----------------------
Six
Months Year
Ended Ended
June 30, December 31,
Sub-Accounts 1999 1998
- ------------------------------- --------- ------------
<S> <C> <C>
CAS(e)......................... 13,958 10,660
EGS............................ 5,111 2,838
GSS............................ 38,869 28,642
MIS(b)......................... 18,588 --
TRS(f)......................... 107,859 55,937
GGR............................ 117,898 64,502
FEI............................ 225,982 143,740
FGP............................ 288,038 177,748
FHI(f)......................... 10,965 16,457
FMM............................ 39,338 28,692
FCN............................ 43,085 36,202
FIG(d)......................... 42,039 --
FIP............................ 474,304 295,225
NLM............................ 484 2,941
NPP............................ 90,963 90,519
JBP............................ 139,553 69,180
JEP(f)......................... 17,420 16,179
JSC(f)......................... 35,363 31,656
TSF............................ 54,595 49,794
DSC(b)......................... 1,257 --
DQB(b)......................... 1,965 --
DSI(c)......................... 130,194 --
REI(a)......................... 9,428 --
Unit Activity
From Sponsor Transactions...... 10,000 10,000
--------- ------------
Total Unit Activity............ 1,917,256 1,130,912
--------- ------------
--------- ------------
</TABLE>
(a) For the period June 30, 1999 (commencement of operations of Sub-Account)
through June 30, 1999.
(b) For the period June 25, 1999 (commencement of operations of Sub-Account)
through June 30, 1999.
(c) For the period May 6, 1999 (commencement of operations of Sub-Account)
through June 30, 1999.
(d) For the period March 16, 1999 (commencement of operations of Sub-Account)
through June 30, 1999.
(e) For the period April 23, 1998 (commencement of operations of Sub-Account)
through December 31, 1998.
(f) For the period February 11, 1998 (commencement of operations of Sub-Account)
through December 31, 1998.
12
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Contract Owners participating in Sun Life of Canada (U.S.) Variable
Account G and the Board of Directors of Sun Life Assurance Company of Canada
(U.S.):
We have audited the accompanying statement of condition of Capital Appreciation
Sub-Account, Emerging Growth Sub-Account, Government Securities Sub-Account,
Massachusetts Investors Growth Stock Sub-Account, Total Return Sub-Account,
Global Growth Sub-Account, VIP Equity Income Sub-Account, VIP Growth
Sub-Account, VIP High Income Sub-Account, VIP Money Market Sub-Account, VIP II
Contrafund Sub-Account, VIP II Investment Grade Bond Sub-Account, VIP II Index
500 Sub-Account, Limited Maturity Bond Sub-Account, Partners Sub-Account, J.P.
Morgan Bond Sub-Account, J.P. Morgan Equity Sub-Account, J.P. Morgan Small
Company Sub-Account, Templeton Stock Fund: Class 1 Sub-Account, Small Cap
Sub-Account, Quality Bond Sub-Account, Dreyfus Stock Index Sub-Account and T.
Rowe Price Equity Income Sub-Account of Sun Life of Canada (U.S.) Variable
Account G (the "Sub-Accounts") as of June 30, 1999, the related statement of
operations for the period then ended and the statements of changes in net assets
for the six months ended June 30, 1999 and the year ended December 31, 1998.
These financial statements are the responsibility of management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities held at June 30, 1999 by correspondence with the
custodian. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Sub-Accounts at June 30, 1999, the
results of their operations and the changes in their net assets for the
respective stated periods in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
August 6, 1999
<PAGE>
DIRECTORS AND OFFICERS OF
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
DONALD A. STEWART, Chairman and Director
C. JAMES PRIEUR, President and Director
JAMES A. McNULTY, III, Senior Vice President and
General Manager and Director
S. CAESAR RABOY, Director
RICHARD B. BAILEY, Director
M. COLYER CRUM, Director
DAVID D. HORN, Director
GREGORY W. GEE, Director
ANGUS A. MacNAUGHTON, Director
PETER F. DEMUTH, Vice President and
Chief Counsel and Assistant Secretary
ELLEN B. KING, Counsel, Litigation and Secretary
ROBERT P. VROLYK, Vice President, Finance,
Actuary and Treasurer
JAMES M.A. ANDERSON, Vice President, Investments
SUN LIFE ASSURANCE COMPANY
OF CANADA (U.S.)
CORPORATE MARKETS:
One Sun Life Executive Park
Wellesley Hills, MA 02481
GENERAL DISTRIBUTOR
Clarendon Insurance Agency, Inc.
One Sun Life Executive Park, Wellesley Hills, MA 02481
AUDITORS
Deloitte & Touche LLP
200 Berkeley Street, Boston, Massachusetts 02116
This report is prepared for the general information of contract owners. It is
authorized for distribution to prospective purchasers only when preceded or
accompanied by an effective prospectus.
SUN LIFE CORPORATE VUL-SM-
SEMIANNUAL REPORT - JUNE 30, 1999
PROFESSIONALLY MANAGED LIFE INSURANCE ISSUED BY
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.),
A WHOLLY-OWNED SUBSIDIARY OF
SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.
