<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT I
STATEMENT OF CONDITION -- December 31, 1999
<TABLE>
<CAPTION>
ASSETS:
<S> <C> <C> <C>
Investments in mutual funds: Shares Cost Value
------ ------- -------
AIM Variable Insurance Funds, Inc.
V.I. Capital Appreciation Fund ("AIM1")............. 37 $ 1,028 $ 1,330
V.I. Growth Fund ("AIM2")........................... 49 1,417 1,585
V.I. Growth and Income Fund ("AIM3")................ 37 1,010 1,182
V.I. International Equity Fund ("AIM4")............. 76 1,797 2,235
The Alger American Fund
Growth Portfolio ("AL1")............................ 18 1,000 1,179
Income and Growth Portfolio ("AL2")................. 76 1,000 1,340
Small Capitalization Portfolio ("AL3").............. 24 1,000 1,340
Goldman Sachs Variable Insurance Trust
CORE Large Cap Growth Fund ("GS1").................. 75 1,001 1,191
CORE Small Cap Equity Fund ("GS2").................. 108 1,003 1,144
CORE US Equity Fund ("GS3")......................... 119 1,577 1,665
Growth and Income Fund ("GS4")...................... 92 1,011 999
International Equity Fund ("GS5")................... 85 1,091 1,226
MFS/Sun Life Series Trust
Capital Appreciation Series ("CAS")................. 23 1,000 1,266
Massachusetts Investors Trust Series ("CGS")........ 27 1,000 1,033
Emerging Growth Series ("EGS")...................... 290 9,765 11,676
Government Securities Series ("GGS")................ 125 1,561 1,561
High Yield Series ("HYS")........................... 134 1,187 1,210
Massachusetts Investors Growth Stock
Series ("MIS")...................................... 652 9,743 10,516
New Discovery Series ("NWD")........................ 91 1,000 1,533
Total Return Series ("TRS")......................... 259 4,876 4,867
Utilities Series ("UTS")............................ 62 1,000 1,220
OCC Accumulation Trust
Equity Portfolio ("OP1")............................ 26 1,000 972
Mid Cap Portfolio ("OP2")........................... 104 1,028 1,206
Small Cap Portfolio ("OP3")......................... 43 1,000 966
Managed Portfolio ("OP4")........................... 23 1,000 1,005
Sun Capital Advisers Trust
Sun Capital Money Market Fund ("SCA1").............. 1,017 1,017 1,017
Sun Capital Investment Grade Bond Fund ("SCA2")..... 187 1,771 1,747
Sun Capital Real Estate Fund ("SCA3")............... 109 1,051 972
Sun Capital Select Equity Fund ("SCA 4")............ 100 1,000 1,264
Sun Capital Blue Chip Mid-Cap Fund ("SCA 5")........ 151 1,600 1,857
Sun Capital Investors Foundation Fund ("SCA 6")..... 100 1,002 1,122
------- -------
Net Assets:............................................... $56,536 $63,426
======= =======
</TABLE>
1
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT I
STATEMENT OF CONDITION -- continued
<TABLE>
<CAPTION>
NET ASSETS APPLICABLE TO OWNERS OF Units Unit Value Value
DEFERRED VARIABLE ANNUITY CONTRACTS: -------- ---------- --------
<S> <C> <C> <C>
AIM Variable Insurance Funds, Inc.
V.I. Capital Appreciation Fund...................... -- $13.2630 $ 1,330
V.I. Growth Fund.................................... 32 12.0173 1,585
V.I. Growth and Income Fund......................... -- 11.7887 1,182
V.I. International Equity Fund...................... 53 14.5631 2,235
The Alger American Fund
Growth Portfolio.................................... -- 11.7559 1,179
Income and Growth Portfolio......................... -- 13.3516 1,340
Small Capitalization Portfolio...................... -- 13.3581 1,340
Goldman Sachs Variable Insurance Trust
CORE Large Cap Growth Fund.......................... -- 11.8769 1,191
CORE Small Cap Equity Fund.......................... -- 11.4055 1,144
CORE US Equity Fund................................. 52 10.9307 1,665
Growth and Income Fund.............................. -- 9.9587 999
International Equity Fund........................... -- 12.2243 1,226
MFS/Sun Life Series Trust
Capital Appreciation Series......................... -- 12.6212 1,266
Massachusetts Investors Trust Series................ -- 10.3059 1,033
Emerging Growth Series.............................. 742 15.7395 11,676
Government Securities Series........................ 56 9.9799 1,561
High Yield Series................................... 18 10.1980 1,210
Massachusetts Investors Growth Stock Series......... 851 12.3539 10,516
New Discovery Series................................ -- 15.2928 1,533
Total Return Series................................. 495 9.8304 4,867
Utilities Series.................................... -- 12.1675 1,220
OCC Accumulation Trust
Equity Portfolio.................................... -- 9.6931 972
Mid Cap Portfolio................................... -- 12.0310 1,206
Small Cap Portfolio................................. -- 9.6339 966
Managed Portfolio................................... -- 10.0177 1,005
Sun Capital Advisers Trust
Sun Capital Money Market Fund....................... -- 10.1492 1,017
Sun Capital Investment Grade Bond Fund.............. 75 9.9711 1,747
Sun Capital Real Estate Fund........................ -- 9.6829 972
Sun Capital Select Equity Fund...................... -- 12.6067 1,264
Sun Capital Blue Chip Mid-Cap Fund.................. 46 12.6740 1,857
Sun Capital Investors Foundation Fund............... -- 11.1831 1,122
-------
Net Assets:............................................................ $63,426
=======
</TABLE>
See notes to financial statements
2
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT I
STATEMENT OF OPERATIONS
For the Period from August 25, 1999 (commencement of operations) through
December 31, 1999
<TABLE>
<CAPTION>
AIM1 AIM2 AIM3 AIM4 AL1 AL2
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INCOME:
Dividend income and capital gain
distributions received............... $ 28 $ 42 $ 10 $ 48 $-- $--
----- ----- ----- ----- ----- -----
EXPENSES:
Mortality and expense risk charges.... $-- $-- $-- $-- $-- $--
Cost of insurance..................... -- -- -- -- -- --
----- ----- ----- ----- ----- -----
Total expenses........................ $-- $-- $-- $-- $-- $--
----- ----- ----- ----- ----- -----
Net investment income (loss)...... $ 28 $ 42 $ 10 $ 48 $-- $--
----- ----- ----- ----- ----- -----
REALIZED AND UNREALIZED GAINS (LOSSES):
Realized gains (losses) on investment
transactions:
Proceeds from sales................. $-- $-- $-- $-- $-- $--
Cost of investments sold............ -- -- -- -- -- --
----- ----- ----- ----- ----- -----
Net realized gains (losses)....... $-- $-- $-- $-- $-- $--
----- ----- ----- ----- ----- -----
Net unrealized appreciation
(depreciation) on investments:
End of year......................... $ 302 $ 168 $ 172 $ 438 $ 179 $ 340
Beginning of year................... -- -- -- -- -- --
----- ----- ----- ----- ----- -----
Change in unrealized appreciation
(depreciation).................. $ 302 $ 168 $ 172 $ 438 $ 179 $ 340
----- ----- ----- ----- ----- -----
Realized and unrealized gains
(losses).......................... $ 302 $ 168 $ 172 $ 438 $ 179 $ 340
----- ----- ----- ----- ----- -----
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS.......................... $ 330 $ 210 $ 182 $ 486 $ 179 $ 340
===== ===== ===== ===== ===== =====
</TABLE>
See notes to financial statements
3
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT I
STATEMENT OF OPERATIONS -- continued
For the Period from August 25, 1999 (commencement of operations) through
December 31, 1999
<TABLE>
<CAPTION>
AL3 GS1 GS2 GS3 GS4
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
INCOME:
Dividend income and capital gain
distributions received............... $-- $ 1 $ 3 $ 16 $ 11
----- ----- ----- ----- ----
EXPENSES:
Mortality and expense risk charges.... $-- $-- $-- $-- -$-
Cost of insurance..................... -- -- -- -- --
----- ----- ----- ----- ----
Total expenses........................ $-- $-- $-- $-- -$-
----- ----- ----- ----- ----
Net investment income (loss)...... $-- $ 1 $ 3 $ 16 $ 11
----- ----- ----- ----- ----
REALIZED AND UNREALIZED GAINS (LOSSES):
Realized gains (losses) on investment
transactions:
Proceeds from sales................. $-- $-- $-- $-- -$-
Cost of investments sold............ -- -- -- -- --
----- ----- ----- ----- ----
Net realized gains (losses)....... $-- $-- $-- $-- -$-
----- ----- ----- ----- ----
Net unrealized appreciation
(depreciation) on investments:
End of year......................... $ 340 $ 190 $ 141 $ 88 $(12)
Beginning of year................... -- -- -- -- --
----- ----- ----- ----- ----
Change in unrealized appreciation
(depreciation).................. $ 340 $ 190 $ 141 $ 88 $(12)
----- ----- ----- ----- ----
Realized and unrealized gains
(losses).......................... $ 340 $ 190 $ 141 $ 88 $(12)
----- ----- ----- ----- ----
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS.......................... $ 340 $ 191 $ 144 $ 104 $ (1)
===== ===== ===== ===== ====
</TABLE>
See notes to financial statements
4
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT I
STATEMENT OF OPERATIONS -- continued
For the Period from August 25, 1999 (commencement of operations) through
December 31, 1999
<TABLE>
<CAPTION>
GS5 CAS CGS EGS GGS HYS
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INCOME:
Dividend income and capital gain
distributions received............... $ 91 $-- $-- $-- $-- $--
----- ----- ----- ------- ----- -----
EXPENSES:
Mortality and expense risk charges.... $-- $-- $-- $ (6) $-- $--
Cost of insurance..................... -- -- -- (181) -- --
----- ----- ----- ------- ----- -----
Total expenses........................ $-- $-- $-- $ (187) $-- $--
----- ----- ----- ------- ----- -----
Net investment income (loss)...... $ 91 $-- $-- $ (187) $-- $--
----- ----- ----- ------- ----- -----
REALIZED AND UNREALIZED GAINS (LOSSES):
Realized gains (losses) on investment
transactions:
Proceeds from sales................. $-- $-- $-- $ 1,365 $-- $--
Cost of investments sold............ -- -- -- (1,000) -- --
----- ----- ----- ------- ----- -----
Net realized gains (losses)....... $-- $-- $-- $ 365 $-- $--
----- ----- ----- ------- ----- -----
Net unrealized appreciation
(depreciation) on investments:
End of year......................... $ 135 $ 266 $ 33 $ 1,911 $-- $ 23
Beginning of year................... -- -- -- -- -- --
----- ----- ----- ------- ----- -----
Change in unrealized appreciation
(depreciation).................. $ 135 $ 266 $ 33 $ 1,911 $-- $ 23
----- ----- ----- ------- ----- -----
Realized and unrealized gains
(losses).......................... $ 135 $ 266 $ 33 $ 2,276 $-- $ 23
----- ----- ----- ------- ----- -----
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS.......................... $ 226 $ 266 $ 33 $ 2,089 $-- $ 23
===== ===== ===== ======= ===== =====
</TABLE>
See notes to financial statements
5
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT I
STATEMENT OF OPERATIONS -- continued
For the Period from August 25, 1999 (commencement of operations) through
December 31, 1999
<TABLE>
<CAPTION>
MIS NWD TRS UTS OP1
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
INCOME:
Dividend income and capital gain
distributions received............... $-- -$- $-- -$- -$-
------- ---- ------- ---- ----
EXPENSES:
Mortality and expense risk charges.... $ (6) -$- $ (2) -$- -$-
Cost of insurance..................... (178) -- (85) -- --
------- ---- ------- ---- ----
Total expenses........................ $ (184) -$- $ (87) -$- -$-
------- ---- ------- ---- ----
Net investment income (loss)...... $ (184) -$- $ (87) -$- -$-
------- ---- ------- ---- ----
REALIZED AND UNREALIZED GAINS (LOSSES):
Realized gains (losses) on investment
transactions:
Proceeds from sales................. $ 1,171 -$- $ 997 -$- -$-
Cost of investments sold............ (1,000) -- (1,000) -- --
------- ---- ------- ---- ----
Net realized gains (losses)....... $ 171 -$- $ (3) -$- -$-
------- ---- ------- ---- ----
Net unrealized appreciation
(depreciation) on investments:
End of year......................... $ 773 $533 $ (9) $220 $(28)
Beginning of year................... -- -- -- -- --
------- ---- ------- ---- ----
Change in unrealized appreciation
(depreciation).................. $ 773 $533 $ (9) $220 $(28)
------- ---- ------- ---- ----
Realized and unrealized gains
(losses).......................... $ 944 $533 $ (12) $220 $(28)
------- ---- ------- ---- ----
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS.......................... $ 760 $533 $ (99) $220 $(28)
======= ==== ======= ==== ====
</TABLE>
See notes to financial statements
6
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT I
STATEMENT OF OPERATIONS -- continued
For the Period from August 25, 1999 (commencement of operations) through
December 31, 1999
<TABLE>
<CAPTION>
OP2 OP3 OP4 SCA1 SCA2
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
INCOME:
Dividend income and capital gain
distributions received............... $ 28 $-- $-- $ 17 $ 22
----- ----- ----- ----- -----
EXPENSES:
Mortality and expense risk charges.... $-- $-- $-- $-- $--
Cost of insurance..................... -- -- -- -- --
----- ----- ----- ----- -----
Total expenses........................ $-- $-- $-- $-- $--
----- ----- ----- ----- -----
Net investment income (loss)...... $ 28 $-- $-- $ 17 $ 22
----- ----- ----- ----- -----
REALIZED AND UNREALIZED GAINS (LOSSES):
Realized gains (losses) on investment
transactions:
Proceeds from sales................. $-- $-- $-- $-- $--
Cost of investments sold............ -- -- -- -- --
----- ----- ----- ----- -----
Net realized gains (losses)....... $-- $-- $-- $-- $--
----- ----- ----- ----- -----
Net unrealized appreciation
(depreciation) on investments:
End of year......................... $ 178 $ (34) $ 5 $-- $ (24)
Beginning of year................... -- -- -- -- --
----- ----- ----- ----- -----
Change in unrealized appreciation
(depreciation).................. $ 178 $ (34) $ 5 $-- $ (24)
----- ----- ----- ----- -----
Realized and unrealized gains
(losses).......................... $ 178 $ (34) $ 5 $-- $ (24)
----- ----- ----- ----- -----
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS.......................... $ 206 $ (34) $ 5 $ 17 $ (2)
===== ===== ===== ===== =====
</TABLE>
See notes to financial statements
7
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT I
STATEMENT OF OPERATIONS -- continued
For the Period from August 25, 1999 (commencement of operations) through
December 31, 1999
<TABLE>
<CAPTION>
SCA3 SCA4 SCA5 SCA6
Sub-Account Sub-Account Sub-Account Sub-Account
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INCOME:
Dividend income and capital gain
distributions received............... $ 51 $-- $ 38 $ 2
----- ----- ----- -----
EXPENSES:
Mortality and expense risk charges.... $-- $-- $-- $--
Cost of insurance..................... -- -- -- --
----- ----- ----- -----
Total expenses........................ $-- $-- $-- $--
----- ----- ----- -----
Net investment income (loss)...... $ 51 $-- $ 38 $ 2
----- ----- ----- -----
REALIZED AND UNREALIZED GAINS (LOSSES):
Realized gains (losses) on investment
transactions:
Proceeds from sales................. $-- $-- $-- $--
Cost of investments sold............ -- -- -- --
----- ----- ----- -----
Net realized gains (losses)....... $-- $-- $-- $--
----- ----- ----- -----
Net unrealized appreciation
(depreciation) on investments:
End of year......................... $ (79) $ 264 $ 257 $ 120
Beginning of year................... -- -- -- --
----- ----- ----- -----
Change in unrealized appreciation
(depreciation).................. $ (79) $ 264 $ 257 $ 120
----- ----- ----- -----
Realized and unrealized gains
(losses).......................... $ (79) $ 264 $ 257 $ 120
----- ----- ----- -----
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS.......................... $ (28) $ 264 $ 295 $ 122
===== ===== ===== =====
</TABLE>
See notes to financial statements
8
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT I
STATEMENT OF CHANGES IN NET ASSETS
For the Period from August 25, 1999 (commencement of operations) through
December 31, 1999
<TABLE>
<CAPTION>
AIM1 AIM2 AIM3 AIM4 AL1 AL2
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss).......... $ 28 $ 42 $ 10 $ 48 $-- $--
Net realized gains (losses)........... -- -- -- -- -- --
Net unrealized gains (losses)......... 302 168 172 438 179 340
------ ------ ------ ------ ------ ------
Increase (Decrease) in net assets
from operations:................ $ 330 $ 210 $ 182 $ 486 $ 179 $ 340
------ ------ ------ ------ ------ ------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received.......... $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
Net transfers between sub-accounts
and fixed accounts................. -- 375 -- 749 -- --
Withdrawals, surrenders and account
fees............................... -- -- -- -- -- --
------ ------ ------ ------ ------ ------
Net contract owner activity....... $1,000 $1,375 $1,000 $1,749 $1,000 $1,000
------ ------ ------ ------ ------ ------
Increase (Decrease) in net assets... $1,330 $1,585 $1,182 $2,235 $1,179 $1,340
NET ASSETS:
Beginning of period................... -- -- -- -- -- --
------ ------ ------ ------ ------ ------
End of period......................... $1,330 $1,585 $1,182 $2,235 $1,179 $1,340
====== ====== ====== ====== ====== ======
<CAPTION>
AL3 GS1 GS2 GS3 GS4
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
----------- ----------- ----------- ----------- -----------
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss).......... $-- $ 1 $ 3 $ 16 $ 11
Net realized gains (losses)........... -- -- -- -- --
Net unrealized gains (losses)......... 340 190 141 88 (12)
------ ------ ------ ------ ------
Increase (Decrease) in net assets
from operations:................ $ 340 $ 191 $ 144 $ 104 $ (1)
------ ------ ------ ------ ------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received.......... $1,000 $1,000 $1,000 $1,000 $1,000
Net transfers between sub-accounts
and fixed accounts................. -- -- -- 561 --
Withdrawals, surrenders and account
fees............................... -- -- -- -- --
------ ------ ------ ------ ------
Net contract owner activity....... $1,000 $1,000 $1,000 $1,561 $1,000
------ ------ ------ ------ ------
Increase (Decrease) in net assets... $1,340 $1,191 $1,144 $1,665 $ 999
NET ASSETS:
Beginning of period................... -- -- -- -- --
------ ------ ------ ------ ------
End of period......................... $1,340 $1,191 $1,144 $1,665 $ 999
====== ====== ====== ====== ======
</TABLE>
See notes to financial statements
9
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT I
STATEMENT OF CHANGES IN NET ASSETS -- continued
For the Period from August 25, 1999 (commencement of operations) through
December 31, 1999
<TABLE>
<CAPTION>
GS5 CAS CGS EGS GGS HYS
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss).......... $ 91 $-- $-- $ (187) $-- $--
Net realized gains (losses)........... -- -- -- 365 -- --
Net unrealized gains (losses)......... 135 266 33 1,911 -- 23
------- ------ ------ ------- ------ ------
Increase (Decrease) in net assets
from operations:................ $ 226 $ 266 $ 33 $ 2,089 $-- $ 23
------- ------ ------ ------- ------ ------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received.......... $ 1,000 $1,000 $1,000 $ 1,000 $1,000 $1,000
Net transfers between sub-accounts
and fixed accounts................. -- -- -- 9,901 561 187
Withdrawals, surrenders and account
fees............................... -- -- -- (1,314) -- --
------- ------ ------ ------- ------ ------
Net contract owner activity....... $ 1,000 $1,000 $1,000 $ 9,587 $1,561 $1,187
------- ------ ------ ------- ------ ------
Increase (Decrease) in net assets... $ 1,226 $1,266 $1,033 $11,676 $1,561 $1,210
NET ASSETS:
Beginning of period................... -- -- -- -- -- --
------- ------ ------ ------- ------ ------
End of period......................... $1,226 $1,266 $1,033 $11,676 $1,561 $1,210
======= ====== ====== ======= ====== ======
<CAPTION>
MIS NWD TRS UTS OP1
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
----------- ----------- ----------- ----------- -----------
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss).......... $ (184) $-- $ (87) $-- $--
Net realized gains (losses)........... 171 -- (3) -- --
Net unrealized gains (losses)......... 773 533 (9) 220 (28)
------- ------ ------ ------- ------
Increase (Decrease) in net assets
from operations:................ $ 760 $ 533 $ (99) $ 220 $ (28)
------- ------ ------ ------- ------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received.......... $ 1,000 $1,000 $1,000 $ 1,000 $1,000
Net transfers between sub-accounts
and fixed accounts................. 9,901 -- 4,951 -- --
Withdrawals, surrenders and account
fees............................... (1,145) -- (985) -- --
------- ------ ------ ------- ------
Net contract owner activity....... $ 9,756 $1,000 $4,966 $ 1,000 $1,000
------- ------ ------ ------- ------
Increase (Decrease) in net assets... $10,516 $1,533 $4,867 $ 1,220 $ 972
NET ASSETS:
Beginning of period................... -- -- -- -- --
------- ------ ------ ------- ------
End of period......................... $10,516 $1,533 $4,867 $1,220 $ 972
======= ====== ====== ======= ======
</TABLE>
See notes to financial statements
10
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT I
STATEMENT OF CHANGES IN NET ASSETS -- continued
For the Period from August 25, 1999 (commencement of operations) through
December 31, 1999
<TABLE>
<CAPTION>
OP2 OP3 OP4 SCA1 SCA2
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)....................... $ 28 $-- $-- $ 17 $ 22
Net realized gains (losses)........................ -- -- -- -- --
Net unrealized gains (losses)...................... 178 (34) 5 -- (24)
------ ------ ------ ------ ------
Increase (Decrease) in net assets from
operations:.................................. $ 206 $ (34) $ 5 $ 17 $ (2)
------ ------ ------ ------ ------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received....................... $1,000 $1,000 $1,000 $1,000 $1,000
Net transfers between sub-accounts and fixed
accounts........................................ -- -- -- -- 749
Withdrawals, surrenders and account fees......... -- -- -- -- --
------ ------ ------ ------ ------
Net contract owner activity.................... $1,000 $1,000 $1,000 $1,000 $1,749
------ ------ ------ ------ ------
Increase (Decrease) in net assets................ $1,206 $ 966 $1,005 $1,017 $1,747
NET ASSETS:
Beginning of period................................ -- -- -- -- --
------ ------ ------ ------ ------
End of period...................................... $1,206 $ 966 $1,005 $1,017 $1,747
====== ====== ====== ====== ======
<CAPTION>
SCA3 SCA4 SCA5 SCA6
Sub-Account Sub-Account Sub-Account Sub-Account
----------- ----------- ----------- -----------
OPERATIONS:
<S> <C> <C> <C> <C> <C>
Net investment income (loss)....................... $ 51 $-- $ 38 $ 2
Net realized gains (losses)........................ -- -- -- --
Net unrealized gains (losses)...................... (79) 264 257 120
------ ------ ------ ------
Increase (Decrease) in net assets from
operations:.................................. $ (28) $ 264 $ 295 $ 122
------ ------ ------ ------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received....................... $1,000 $1,000 $1,000 $1,000
Net transfers between sub-accounts and fixed
accounts........................................ -- -- 562 --
Withdrawals, surrenders and account fees......... -- -- -- --
------ ------ ------ ------
Net contract owner activity.................... $1,000 $1,000 $1,562 $1,000
------ ------ ------ ------
Increase (Decrease) in net assets................ $ 972 $1,264 $1,857 $1,122
NET ASSETS:
Beginning of period................................ -- -- -- --
------ ------ ------ ------
End of period...................................... $ 972 $1,264 $1,857 $1,122
====== ====== ====== ======
</TABLE>
See notes to financial statements
11
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT I
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION
Sun Life (U.S.) Variable Account I (the "Variable Account"), a separate account
of Sun Life Assurance Company of Canada (U.S.) (the "Sponsor") was established
on August 25, 1999 as a funding vehicle for the variable portion of certain
individual variable universal 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 specific mutual fund or series thereof
selected by contract owners. The funds currently offered are as follows: AIM
Variable Insurance Funds, Inc., the Alger American Fund, Goldman Sachs Variable
Insurance Trust, MFS/Sun Life Series Trust, OCC Accumulated Trust, and Sun
Capital Advisers Trust (collectively the "Funds"). The MFS/Sun Life Series Trust
and Sun Capital Advisers Trust are advised by affiliates of the Sponsor.
(2) SIGNIFICANT ACCOUNTING POLICIES
GENERAL
The preparation of financial statements in conformity with generally accepted
accounting principles requires 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 the Funds are recorded at their net asset value. Realized gains
and losses on sales of shares of the Funds are determined on the identified cost
basis. Dividend income and capital gain distributions received by the
Sub-Accounts are reinvested in additional Fund 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 subject to
tax.
(3) CONTRACT CHARGES
The Sponsor deducts a sales charge from purchase payments. The current charge is
5.25% of the amount of purchase payments. The maximum charge is guaranteed not
to exceed 7.25% of purchase payments.
12
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT I
NOTES TO FINANCIAL STATEMENTS -- continued
(3) CONTRACT CHARGES -- continued
A mortality and expense risk charge based on the value of the Variable Account
is deducted from the Variable Account at the end of each valuation period for
the mortality and expense risks assumed by the Sponsor. The maximum deduction is
at an effective annual rate of 0.90%. The current effective annual rate in
effect at December 31, 1999 is equivalent to 0.80% for Policy Years 1 through 10
and 0.50% thereafter.
Each month, a monthly administration charge ("Account Fee") of $8 is deducted
from each contract's account value to cover administrative expenses relating to
the contract.
Within the first 10 Policy Years or the 10 Policy Years following an increase in
the specified face amount of the policy, a surrender charge may be deducted to
cover certain expenses relating to the sale of the contract. The base surrender
charge will be an amount based on certain factors, including the specified face
amount of the policy, the insured's age, sex and rating class. The charge will
be 100% of the base surrender charge in the first 5 Policy Years, or the first 5
Policy Years after an increase in the specified face amount, scaling down to
zero after 10 Policy Years.
The Sponsor deducts a monthly cost of insurance from the account value to cover
anticipated costs of providing insurance coverage. The charge will be based on
the Sponsor's expectation of future mortality, persistency, interest rates,
expenses and taxes, but will not exceed the Guaranteed Maximum Monthly Cost of
Insurance Rates based on the 1980 Commissioner's Standard Ordinary Smoker and
Nonsmoker Mortality Tables.
13
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT I
NOTES TO FINANCIAL STATEMENTS -- continued
(4) UNIT ACTIVITY FROM PARTICIPANT TRANSACTIONS
During the year, the Sponsor deposited $1,000 of initial "seed" money into each
of the Sub-Accounts. Unlike normal participant transactions, the initial "seed"
money deposited is not issued with corresponding units.
Transactions in participant units during the period from August 25, 1999
(commencement of operations) through December 31, 1999 were as follows:
<TABLE>
<CAPTION>
Units transferred between Units withdrawn Units
Units Outstanding Units Sub-Accounts and Outstanding
Beginning of Period Purchased and Fixed Account Surrendered End of Period
------------------- --------- ------------------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
AIM1............................. -- -- -- -- --
AIM2............................. -- -- 32 -- 32
AIM3............................. -- -- -- -- --
AIM4............................. -- -- 53 -- 53
AL1.............................. -- -- -- -- --
AL2.............................. -- -- -- -- --
AL3.............................. -- -- -- -- --
GS1.............................. -- -- -- -- --
GS2.............................. -- -- -- -- --
GS3.............................. -- -- 52 -- 52
GS4.............................. -- -- -- -- --
GS5.............................. -- -- -- -- --
CAS.............................. -- -- -- -- --
CGS.............................. -- -- -- -- --
EGS.............................. -- -- 742 -- 742
GGS.............................. -- -- 56 -- 56
HYS.............................. -- -- 18 -- 18
MIS.............................. -- -- 851 -- 851
NWD.............................. -- -- -- -- --
TRS.............................. -- -- 495 -- 495
UTS.............................. -- -- -- -- --
OP1.............................. -- -- -- -- --
OP2.............................. -- -- -- -- --
OP3.............................. -- -- -- -- --
OP4.............................. -- -- -- -- --
SCA1............................. -- -- -- -- --
SCA2............................. -- -- 75 -- 75
SCA3............................. -- -- -- -- --
SCA4............................. -- -- -- -- --
SCA5............................. -- -- 46 -- 46
SCA6............................. -- -- -- -- --
</TABLE>
14
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Contract Owners participating in Sun Life (U.S.) Variable Account I and
the Board of Directors of Sun Life Assurance Company of Canada (U.S.):
We have audited the accompanying statement of condition of V.I. Capital
Appreciation Sub-Account, V.I. Growth Sub-Account, V.I. Growth and Income
Sub-Account, V.I. International Equity Sub-Account, Growth Sub-Account, Income
and Growth Sub-Account, Small Capitalization Sub-Account, CORE Large Cap Growth
Sub-Account, CORE Small Cap Equity Sub-Account, CORE US Equity Sub-Account,
Growth and Income Sub-Account, International Equity Sub-Account, Capital
Appreciation Sub-Account, Massachusetts Investors Trust Sub-Account, Emerging
Growth Sub-Account, Government Securities Sub-Account, High Yield Sub-Account,
Massachusetts Investors Growth Stock Sub-Account, New Discovery Sub-Account,
Total Return Sub-Account, Utilities Sub-Account, Equity Sub-Account, Mid Cap
Sub-Account, Small Cap Sub-Account, Managed Sub-Account, Sun Capital Money
Market Sub-Account, Sun Capital Investment Grade Bond Sub-Account, Sun Capital
Real Estate Sub-Account, Sun Capital Select Equity Sub-Account, Sun Capital Blue
Chip Mid-Cap Sub-Account, and Sun Capital Investors Foundation Sub-Account of
Sun Life (U.S.) Variable Account I (the "Sub-Accounts") as of December 31, 1999,
and the related statements of operations and changes in net assets for the
period from August 25, 1999 (the commencement of operations) through December
31, 1999. These financial statements are the responsibility of management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit 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 as of December 31, 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 audit provides 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 as of December 31, 1999,
the results of their operations and the changes in their net assets for the
period from August 25, 1999 (the commencement of operations) through December
31, 1999 in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, MA
February 10, 2000
<PAGE>
FUTURITY VARIABLE UNIVERSAL LIFE
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT I
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, Sr. Vice President and
General Manager and Director
RICHARD B. BAILEY, Director
M. COLYER CRUM, Director
GREGORY W. GEE, Director
DAVID D. HORN, Director
ANGUS A. MacNAUGHTON, Director
S. CAESAR RABOY, Director
PETER F. DEMUTH, Vice President, Chief
Counsel and Assistant Secretary
ELLEN B. KING, Counsel and Secretary
ROBERT P. VROLYK, Vice President and Actuary
DAVEY SCOON, Vice President, Finance and Treasurer
SUN LIFE ASSURANCE COMPANY
OF CANADA (U.S.)
Variable Life Service Unit, SC 1275
One Sun Life Executive Park
Wellesley Hills, MA 02481
Call Toll Free 1-800-770-6554
GENERAL DISTRIBUTOR
Clarendon Insurance Agency, Inc.
One Sun Life Executive Park
Wellesley Hills, Massachusetts 02481
CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street, Boston, Massachusetts 02110-2875
AUDITORS
Deloitte & Touche
200 Berkeley Street
Boston, MA 02116-0522
CO2-2/99 6M
FUTURITY-SM-
VARIABLE UNIVERSAL
LIFE INSURANCE
---------------------------
ANNUAL REPORT, DECEMBER 31, 1999
[LOGO]
ISSUED BY
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.),
A WHOLLY-OWNED SUBSIDIARY OF
SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.
