<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT D
STATEMENT OF CONDITION-- June 30, 1999
<TABLE>
<CAPTION>
ASSETS:
<S> <C> <C> <C>
Investments in mutual funds: Shares Cost Value
--------- ------------ ------------
Massachusetts Investors Trust
("MIT")*............................. 2,025,142 $ 33,180,430 $ 43,036,293
Massachusetts Investors Growth Stock
Fund ("MIG")*........................ 1,075,869 14,105,604 19,199,072
MFS Total Return Fund ("MTR")*........ 2,076,322 31,693,086 31,943,368
MFS Growth Opportunities Fund
("MGO")*............................. 345,870 4,988,081 5,827,089
MFS Bond Fund ("MFB")*................ 182,915 2,434,093 2,314,241
MFS Global Governments Fund
("MGG")*............................. 149,226 1,644,163 1,524,152
MFS/Sun Life Series Trust:
Capital Appreciation Series
("CAS")............................ 1,366,583 52,833,503 60,396,004
Government Securities Series
("GSS")............................ 710,366 9,002,470 8,849,244
High Yield Series ("HYS")........... 533,940 4,880,947 4,732,273
Money Market Series ("MMS")......... 6,454,482 6,454,482 6,454,482
------------ ------------
$161,216,859 $184,276,218
------------
------------
<CAPTION>
LIABILITY:
<S> <C> <C> <C>
Payable to sponsor............................................... (5,205)
------------
Net Assets................................................. $184,271,013
------------
------------
</TABLE>
NET ASSETS:
<TABLE>
<CAPTION>
Applicable to Owners of
Deferred Variable Annuity Contracts Reserve for
----------------------------------- Variable
Units Unit Value Value Annuities Total
--------- ---------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
MIT-Level 2................... 530,738 $ 56.3950 $ 29,918,770 $122,081 $ 30,040,851
MIT-Level 3................... 158,489 56.9538 8,918,126 -- 8,918,126
MIT-Level 4................... 96,530 42.2157 4,076,076 -- 4,076,076
MIG-Level 2................... 169,187 67.6836 11,451,197 -- 11,451,197
MIG-Level 3................... 63,460 74.9923 4,756,996 -- 4,756,996
MIG-Level 4................... 77,170 38.7586 2,990,878 -- 2,990,878
MTR-Level 2................... 597,513 38.2459 22,788,773 -- 22,788,773
MTR-Level 3................... 144,662 34.9609 5,042,031 -- 5,042,031
MTR-Level 4................... 153,619 26.7572 4,112,564 -- 4,112,564
MGO-Level 2................... 98,795 44.5250 4,425,356 -- 4,425,356
MGO-Level 3................... 21,919 47.9298 1,054,321 -- 1,054,321
MGO-Level 4................... 10,770 32.0418 347,412 -- 347,412
MFB-Level 2................... 66,952 21.3102 1,458,591 -- 1,458,591
MFB-Level 3................... 23,122 21.6211 514,967 -- 514,967
MFB-Level 4................... 18,269 17.9225 340,683 -- 340,683
MGG-Level 2................... 31,705 21.3513 676,667 -- 676,667
MGG-Level 3................... 11,734 18.9530 222,585 -- 222,585
MGG-Level 4................... 46,906 13.3247 624,901 -- 624,901
CAS-Level 2................... 611,015 59.2770 36,207,317 157,331 36,364,648
CAS-Level 3................... 105,572 63.2208 6,667,954 4,846 6,672,800
CAS-Level 4................... 280,964 61.8062 17,356,320 -- 17,356,320
GSS-Level 2................... 273,848 21.0071 5,750,681 3,006 5,753,687
GSS-Level 3................... 98,492 20.4962 2,021,038 2,425 2,023,463
GSS-Level 4................... 52,791 20.2694 1,070,240 -- 1,070,240
HYS-Level 2................... 135,035 25.5703 3,453,084 2,681 3,455,765
HYS-Level 3................... 31,802 23.8784 759,806 2,184 761,990
HYS-Level 4................... 21,936 23.4155 514,562 -- 514,562
MMS-Level 2................... 257,320 16.6780 4,285,028 2,552 4,287,580
MMS-Level 3................... 81,595 15.5668 1,268,432 -- 1,268,432
MMS-Level 4................... 58,635 15.3108 898,551 -- 898,551
------------ ----------- ------------
Net Assets....................................... $183,973,907 $297,106 $184,271,013
------------ ----------- ------------
------------ ----------- ------------
</TABLE>
* Investments are made in Class A shares of the Fund
See notes to financial statements
1
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT D
STATEMENT OF OPERATIONS-- Six Months Ended June 30, 1999
<TABLE>
<CAPTION>
MIT MIG MTR MGO MFB MGG
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............... $ 324,749 $ -- $ 573,838 $ 140,322 $ 83,000 $ --
Mortality and expense risk charges.... (258,752) (109,828 ) (195,660 ) (32,624 ) (14,203 ) (8,968)
----------- ---------- ----------- ---------- ------------ -----------
Net investment income (loss)...... $ 65,997 $(109,828 ) $ 378,178 $ 107,698 $ 68,797 $ (8,968)
----------- ---------- ----------- ---------- ------------ -----------
REALIZED AND UNREALIZED GAINS (LOSSES):
Realized gains (losses) on investment
transactions:
Proceeds from sales................. $ 6,037,746 $3,012,106 $4,746,186 $ 453,718 $ 432,317 $ 275,561
Cost of investments sold............ (4,115,800) (2,026,982) (4,635,625 ) (382,058 ) (439,897 ) (290,650)
----------- ---------- ----------- ---------- ------------ -----------
Net realized gains (losses)....... $ 1,921,946 $ 985,124 $ 110,561 $ 71,660 $ (7,580 ) $ (15,089)
----------- ---------- ----------- ---------- ------------ -----------
Net unrealized appreciation
(depreciation) on investments:
End of period....................... $ 9,855,863 $5,093,468 $ 250,282 $ 839,008 $ (119,852 ) $ (120,011)
Beginning of period................. 9,682,996 3,947,317 (559,144 ) 606,768 (4,549 ) (82,136)
----------- ---------- ----------- ---------- ------------ -----------
Change in unrealized appreciation
(depreciation)................... $ 172,867 $1,146,151 $ 809,426 $ 232,240 $ (115,303 ) $ (37,875)
----------- ---------- ----------- ---------- ------------ -----------
Realized and unrealized gains
(losses):.......................... $ 2,094,813 $2,131,275 $ 919,987 $ 303,900 $ (122,883 ) $ (52,964)
----------- ---------- ----------- ---------- ------------ -----------
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS............................. $ 2,160,810 $2,021,447 $1,298,165 $ 411,598 $ (54,086 ) $ (61,932)
----------- ---------- ----------- ---------- ------------ -----------
----------- ---------- ----------- ---------- ------------ -----------
<CAPTION>
CAS GSS HYS MMS
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............... $ 6,455,360 $ 473,834 $ 383,877 $ 144,452
Mortality and expense risk charges.... (325,378) (56,971 ) (28,650 ) (39,332 )
----------- ---------- ----------- ----------
Net investment income (loss)...... $ 6,129,982 $ 416,863 $ 355,227 $ 105,120
----------- ---------- ----------- ----------
REALIZED AND UNREALIZED GAINS (LOSSES)
Realized gains (losses) on investment
transactions:
Proceeds from sales................. $ 3,715,563 $1,787,311 $ 672,841 $2,443,268
Cost of investments sold............ (2,660,903) (1,716,747) (623,122 ) (2,443,268)
----------- ---------- ----------- ----------
Net realized gains (losses)....... $ 1,054,660 $ 70,564 $ 49,719 $ --
----------- ---------- ----------- ----------
Net unrealized appreciation
(depreciation) on investments:
End of period....................... $ 7,562,501 $(153,226 ) $ (148,674 ) $ --
Beginning of period................. 10,408,666 597,563 41,951 --
----------- ---------- ----------- ----------
Change in unrealized appreciation
(depreciation)................... $(2,846,165) $(750,789 ) $ (190,625 ) $ --
----------- ---------- ----------- ----------
Realized and unrealized gains
(losses)........................... $(1,791,505) $(680,225 ) $ (140,906 ) $ --
----------- ---------- ----------- ----------
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS............................. $ 4,338,477 $(263,362 ) $ 214,321 $ 105,120
----------- ---------- ----------- ----------
----------- ---------- ----------- ----------
</TABLE>
See notes to financial statements
2
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT D
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MIT MIG MTR
Sub-Account Sub-Account Sub-Account
-------------------------- ------------------------ -------------------------
Six Months Six Months Year Ended Six Months
Ended Year Ended Ended December Ended Year Ended
June 30, December 31, June 30, 31, June 30, December 31,
1999 1998 1999 1998 1999 1998
------------ ------------ ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss).......... $ 65,997 $ 2,158,411 $ (109,828) $1,293,592 $ 378,178 $ 5,114,145
Net realized gains (losses)........... 1,921,946 5,509,297 985,124 1,702,339 110,561 2,000,585
Net unrealized gains (losses)......... 172,867 702,599 1,146,151 2,483,740 809,426 (3,555,136 )
------------ ------------ ----------- ----------- ----------- ------------
Increase (Decrease) in net assets
from operations.................. $ 2,160,810 $ 8,370,307 $ 2,021,447 $5,479,671 $ 1,298,165 $ 3,559,594
------------ ------------ ----------- ----------- ----------- ------------
PARTICIPANT TRANSACTIONS:
Accumulation Activity:
Purchase payments received.......... $ 2,045,186 $ 4,615,049 $ 993,414 $1,648,663 $ 1,476,069 $ 3,371,244
Net transfers between Sub-Accounts
and Fixed Account.................. 34,030 (179,472 ) 437,428 583,305 (549,852) (1,254,402 )
Withdrawals, surrenders,
annuitizations and contract
charges............................ (5,934,575) (13,124,763 ) (2,730,461) (4,889,909 ) (4,331,992) (9,074,024 )
------------ ------------ ----------- ----------- ----------- ------------
Net accumulation activity......... $ (3,855,359) $(8,689,186 ) $(1,299,619) $(2,657,941) $(3,405,775) $(6,957,182 )
------------ ------------ ----------- ----------- ----------- ------------
Annuitization Activity:
Annuitizations...................... $ -- $ 117,436 $ -- $ -- $ -- $ --
Annuity payments and contract
charges............................ (15,068) (6,831 ) -- -- -- --
Adjustments to annuity reserve...... (801) (439 ) -- -- -- --
------------ ------------ ----------- ----------- ----------- ------------
Net annuitization activity........ $ (15,869) $ 110,166 $ -- $ -- $ -- $ --
------------ ------------ ----------- ----------- ----------- ------------
Increase (Decrease) in net assets from
participant transactions............. $ (3,871,228) $(8,579,020 ) $(1,299,619) $(2,657,941) $(3,405,775) $(6,957,182 )
------------ ------------ ----------- ----------- ----------- ------------
Increase (Decrease) in net assets... $ (1,710,418) $ (208,713 ) $ 721,828 $2,821,730 $(2,107,610) $(3,397,588 )
NET ASSETS:
Beginning of period................... 44,745,471 44,954,184 18,477,243 15,655,513 34,050,978 37,448,566
------------ ------------ ----------- ----------- ----------- ------------
End of period......................... $ 43,035,053 $44,745,471 $19,199,071 $18,477,243 $31,943,368 $34,050,978
------------ ------------ ----------- ----------- ----------- ------------
------------ ------------ ----------- ----------- ----------- ------------
</TABLE>
See notes to financial statements
3
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT D
STATEMENTS OF CHANGES IN NET ASSETS-- continued
<TABLE>
<CAPTION>
MGO MFB MGG
Sub-Account Sub-Account Sub-Account
-------------------------- ------------------------ -------------------------
Six Months Six Months Year Ended Six Months
Ended Year Ended Ended December Ended Year Ended
June 30, December 31, June 30, 31, June 30, December 31,
1999 1998 1999 1998 1999 1998
------------ ------------ ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss).......... $ 107,698 $ 514,502 $ 68,797 $ 148,154 $ (8,968) $ 91,080
Net realized gains (losses)........... 71,660 246,705 (7,580) 48,083 (15,089) (38,711 )
Net unrealized gains (losses)......... 232,240 391,771 (115,303) (116,828 ) (37,875) 5,053
------------ ------------ ----------- ----------- ----------- ------------
Increase (Decrease) in net assets
from operations.................. $ 411,598 $ 1,152,978 $ (54,086) $ 79,409 $ (61,932) $ 57,422
------------ ------------ ----------- ----------- ----------- ------------
PARTICIPANT TRANSACTIONS:
Accumulation Activity:
Purchase payments received.......... $ 403,755 $ 497,233 $ 166,390 $ 314,355 $ 93,452 $ 257,208
Net transfers between Sub-Accounts
and Fixed Account.................. 33,903 225,820 (60,271) (108,141 ) (75,827) (382,786 )
Withdrawals, surrenders,
annuitizations and contract
charges............................ (353,360) (860,467 ) (326,687) (461,894 ) (188,149) (317,138 )
------------ ------------ ----------- ----------- ----------- ------------
Net accumulation activity......... $ 84,298 $ (137,414 ) $ (220,568) $ (255,680 ) $ (170,524) $ (442,716 )
------------ ------------ ----------- ----------- ----------- ------------
Increase (Decrease) in net assets
from participant transactions...... $ 84,298 $ (137,414 ) $ (220,568) $ (255,680 ) $ (170,524) $ (442,716 )
------------ ------------ ----------- ----------- ----------- ------------
Increase (Decrease) in net assets... $ 495,896 $ 1,015,564 $ (274,654) $ (176,271 ) $ (232,456) $ (385,294 )
NET ASSETS:
Beginning of period................... 5,331,193 4,315,629 2,588,895 2,765,166 1,756,609 2,141,903
------------ ------------ ----------- ----------- ----------- ------------
End of period......................... $ 5,827,089 $ 5,331,193 $ 2,314,241 $2,588,895 $ 1,524,153 $ 1,756,609
------------ ------------ ----------- ----------- ----------- ------------
------------ ------------ ----------- ----------- ----------- ------------
</TABLE>
See notes to financial statements
4
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT D
STATEMENTS OF CHANGES IN NET ASSETS-- continued
<TABLE>
<CAPTION>
HYS
CAS GSS Sub-Account MMS
Sub-Account Sub-Account ---------------------- Sub-Account
----------------------- ----------------------- Six -----------------------
Six Months Year Ended Six Months Year Ended Months Year Ended Six Months Year Ended
Ended December Ended December Ended December Ended December
June 30, 31, June 30, 31, June 30, 31, June 30, 31,
1999 1998 1999 1998 1999 1998 1999 1998
---------- ----------- ---------- ----------- --------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)...................... $6,129,982 $5,538,986 $ 416,863 $ 481,238 $ 355,227 $ 309,508 $ 105,120 $ 238,825
Net realized gains
(losses).................... 1,054,660 7,762,453 70,564 138,735 49,719 269,156 -- --
Net unrealized gains
(losses).................... (2,846,165) (725,520) (750,789) 165,097 (190,625) (593,830) -- --
---------- ----------- ---------- ----------- --------- ----------- ---------- -----------
Increase (Decrease) in
net assets from
operations.............. $4,338,477 1$2,575,919 $ (263,362) $ 785,070 $ 214,321 $ (15,166) $ 105,120 $ 238,825
---------- ----------- ---------- ----------- --------- ----------- ---------- -----------
PARTICIPANT TRANSACTIONS:
Accumulation Activity:
Purchase payments
received.................. $1,803,952 $4,587,562 $ 300,613 $ 924,333 $ 191,268 $ 507,550 $ 253,284 $ 802,246
Net transfers between Sub-
Accounts and Fixed
Account................... (544,197) (174,891) 2,503 (179,536) (159,724) (454,744) 1,111,040 1,431,968
Withdrawals, surrenders,
annuitizations and
contract charges.......... (2,801,575) (9,072,386) (1,494,735) (3,281,848) (411,277) (1,191,705) (1,512,907) (2,316,756)
---------- ----------- ---------- ----------- --------- ----------- ---------- -----------
Net accumulation
activity................ $(1,541,820) ($4,659,715) $(1,191,619) ($2,537,051) $(379,733) ($1,138,899) $ (148,583) $ (82,542)
---------- ----------- ---------- ----------- --------- ----------- ---------- -----------
Annuitization Activity:
Annuitizations............. $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ --
Annuity payments and
contract charges.......... (7,858) (13,867) (1,065) (2,138) (949) (1,925) (110) $ (221)
Adjustments to annuity
reserve................... (1,014) (1,562) 92 (133) 11 7 (1) (7)
---------- ----------- ---------- ----------- --------- ----------- ---------- -----------
Net annuitization
activity................ $ (8,872) $ (15,429) $ (973) $ (2,271) $ (938) $ (1,918) $ (111) $ (228)
---------- ----------- ---------- ----------- --------- ----------- ---------- -----------
Increase (Decrease) in net
assets from participant
transactions................ $(1,550,692) ($4,675,144) $(1,192,592) ($2,539,322) $(380,671) ($1,140,817) $ (148,694) $ (82,770)
---------- ----------- ---------- ----------- --------- ----------- ---------- -----------
Increase (Decrease) in net
assets.................... $2,787,785 $7,900,775 $(1,455,954) ($1,754,252) $(166,350) ($1,155,983) $ (43,574) $ 156,055
NET ASSETS:
Beginning of period.......... 57,605,983 49,705,208 10,303,344 12,057,596 4,898,667 6,054,650 6,498,137 6,342,082
---------- ----------- ---------- ----------- --------- ----------- ---------- -----------
End of period................ $60,393,768 5$7,605,983 $8,847,390 1$0,303,344 $4,732,317 $4,898,667 $6,454,563 $6,498,137
---------- ----------- ---------- ----------- --------- ----------- ---------- -----------
---------- ----------- ---------- ----------- --------- ----------- ---------- -----------
</TABLE>
See notes to financial statements
5
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT D
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION
Sun Life of Canada (U.S.) Variable Account D (the "Variable Account"), a
separate account of Sun Life Assurance Company of Canada (U.S.) (the "Sponsor"),
was established on August 20, 1985 as a funding vehicle for the variable portion
of group combination fixed/variable annuities. 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 from among available mutual funds (the "Funds")
advised by Massachusetts Financial Services Company ("MFS"), an affiliate of the
Sponsor.
(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 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 taxable and,
therefore, no provision has been made for federal income taxes.
6
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT D
NOTES TO FINANCIAL STATEMENTS -- continued
(3) CONTRACT CHARGES
A mortality and expense risk charge is deducted from the Variable Account at the
end of each valuation period for the mortality and expense risks assumed by the
Sponsor. These deductions are transferred periodically to the Sponsor. The rate
of this deduction varies, based on total purchase payments credited to all
participants' accounts under a contract as follows:
<TABLE>
<CAPTION>
Mortality
and Expense
Level Purchase Payments Risk Charge
- ---------- -------------------------- ------------
<S> <C> <C>
1 up to $250,000 1.30%
2 $250,000 to $1,499,999 1.25%
3 $1,500,000 to $4,999,999 1.10%
4 $5,000,000 and over 0.95%
</TABLE>
Since 1987, the Sponsor has reduced the Level 1 mortality and expense risk
charge to 1.25% and, therefore, has been accounting for all Level 1 units as
Level 2 units.
Each year on the account anniversary, an account administration fee is deducted
from the participant's account to cover administrative expenses relating to the
contract and the participant's account. The amount of the fee varies from $12 to
$25 and is based on total purchase payments credited to all participants'
accounts under a contract. After the annuity commencement date, the account fee
is deducted pro rata from each annuity payment made during the year.
The Sponsor does not deduct a sales charge from purchase payments. However, a
withdrawal charge (contingent deferred sales charge) may be deducted to cover
certain expenses relating to the sale of the contract. In no event shall the
aggregate withdrawal charges exceed 6% of the purchase payments made under the
contract.
A deduction, when applicable, is made for premium taxes or similar state or
local taxes. It is currently the policy of the Sponsor to deduct the taxes from
the amount applied to provide an annuity at the time annuity payments commence;
however, the Sponsor reserves the right to deduct such taxes when incurred.
(4) ANNUITY RESERVES
Annuity reserves are calculated using the 1983 Individual Annuitant Mortality
Table and an assumed interest rate of 4%. Required adjustments to the reserve
are accomplished by transfers to or from the Sponsor.
7
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT D
NOTES TO FINANCIAL STATEMENTS -- continued
(5) UNIT ACTIVITY FROM PARTICIPANT TRANSACTIONS
<TABLE>
<CAPTION>
Units
Transferred
Units Between
Outstanding Sub-Accounts
Beginning of and Fixed
Period Account
--------------- Units Purchased ---------------
Six ---------------- Six
Months Year Six Year Months Year
Ended Ended Months Ended Ended Ended
June December Ended December June December
30, 31, June 30, 31, 30, 31,
1999 1998 1999 1998 1999 1998
------- ------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
MIT-Level 2 567,275 668,603 23,997 62,980 (53 ) (16,795)
MIT-Level 3 196,235 347,926 8,076 17,821 (1,288 ) (45,958)
MIT-Level 4 90,975 -- 10,462 18,926 (344 ) 77,367
MIG-Level 2 165,654 225,178 7,275 15,127 2,425 112
MIG-Level 3 89,584 118,801 4,160 9,647 2,447 (20,150)
MIG-Level 4 69,102 -- 7,705 11,428 1,892 60,010
MTR-Level 2 628,337 759,684 24,265 63,621 (6,406 ) (29,130)
MTR-Level 3 206,850 403,015 9,691 17,807 (8,526 ) (115,565)
MTR-Level 4 157,727 17 13,357 23,626 (4,425 ) 141,628
MGO-Level 2 95,086 100,623 4,549 9,995 2,312 1,211
MGO-Level 3 23,225 29,668 3,729 2,401 281 (2,227)
MGO-Level 4 11,370 -- 1,739 1,670 (154 ) 9,880
MFB-Level 2 76,030 86,309 3,357 8,189 690 (4,987)
MFB-Level 3 23,254 41,360 2,761 3,535 (1,903 ) (14,129)
MFB-Level 4 19,478 -- 1,838 3,393 (1,873 ) 16,625
MGG-Level 2 35,699 50,083 1,183 4,145 (1,898 ) (9,529)
MGG-Level 3 16,947 55,415 527 2,132 (2,047 ) (34,966)
MGG-Level 4 45,525 -- 5,011 9,171 (385 ) 37,118
CAS-Level 2 628,268 680,351 17,437 52,252 (5,041 ) (7,521)
CAS-Level 3 111,749 431,268 2,843 13,268 (275 ) (280,709)
CAS-Level 4 284,604 5,247 13,775 27,865 (6,869 ) 288,727
GSS-Level 2 317,889 377,706 10,128 27,776 (4,374 ) (8,985)
GSS-Level 3 107,677 225,343 3,402 13,066 5,281 (71,055)
GSS-Level 4 56,137 2,450 2,679 4,162 (2,785 ) 71,003
HYS-Level 2 147,334 161,891 5,252 14,548 (6,632 ) (13,379)
HYS-Level 3 32,554 89,331 1,740 3,878 734 (38,390)
HYS-Level 4 24,009 102 1,471 2,247 (1,247 ) 33,560
MMS-Level 2 254,576 246,919 10,921 32,188 32,856 55,799
MMS-Level 3 113,042 158,492 4,966 17,325 6,700 (8,342)
MMS-Level 4 39,132 6,803 1,638 1,532 28,864 44,744
<CAPTION>
Units
Withdrawn, Units
Surrendered and Outstanding
Annuitized End of Period
--------------- ---------------
Six Six
Months Year Months Year
Ended Ended Ended Ended
June December June December
30, 31, 30, 31,
1999 1998 1999 1998
------- ------- ------- -------
<S> <C> <C> <C> <C>
MIT-Level 2 (60,481) (147,513) 530,738 567,275
MIT-Level 3 (44,534) (123,554) 158,489 196,235
MIT-Level 4 (4,563) (5,318 ) 96,530 90,975
MIG-Level 2 (6,167) (74,763) 169,187 165,654
MIG-Level 3 (32,731) (18,714) 63,460 89,584
MIG-Level 4 (1,529) (2,336 ) 77,170 69,102
MTR-Level 2 (48,683) (165,838) 597,513 628,337
MTR-Level 3 (63,353) (98,407) 144,662 206,850
MTR-Level 4 (13,040) (7,544 ) 153,619 157,727
MGO-Level 2 (3,152) (16,743) 98,795 95,086
MGO-Level 3 (5,316) (6,617 ) 21,919 23,225
MGO-Level 4 (2,185) (180 ) 10,770 11,370
MFB-Level 2 (13,125) (13,481) 66,952 76,030
MFB-Level 3 (990) (7,512 ) 23,122 23,254
MFB-Level 4 (1,174) (540 ) 18,269 19,478
MGG-Level 2 (3,279) (9,000 ) 31,705 35,699
MGG-Level 3 (3,693) (5,634 ) 11,734 16,947
MGG-Level 4 (3,245) (764 ) 46,906 45,525
CAS-Level 2 (29,649) (96,814) 611,015 628,268
CAS-Level 3 (8,745) (52,078) 105,572 111,749
CAS-Level 4 (10,546) (37,235) 280,964 284,604
GSS-Level 2 (49,795) (78,608) 273,848 317,889
GSS-Level 3 (17,868) (59,677) 98,492 107,677
GSS-Level 4 (3,240) (21,478) 52,791 56,137
HYS-Level 2 (10,919) (15,726) 135,035 147,334
HYS-Level 3 (3,226) (22,265) 31,802 32,554
HYS-Level 4 (2,297) (11,900) 21,936 24,009
MMS-Level 2 (41,033) (80,330) 257,320 254,576
MMS-Level 3 (43,113) (54,433) 81,595 113,042
MMS-Level 4 (10,999) (13,947) 58,635 39,132
</TABLE>
8
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Participants in Sun Life of Canada (U.S.) Variable Account D
and the Board of Directors of Sun Life Assurance Company of Canada (U.S.):
We have audited the accompanying statement of condition of Massachusetts
Investors Trust Sub-Account, Massachusetts Investors Growth Stock Sub-Account,
MFS Total Return Sub-Account, MFS Growth Opportunities Sub-Account, MFS Bond
Sub-Account, MFS Global Governments Sub-Account, MFS Capital Appreciation
Sub-Account, MFS Government Securities Sub-Account, MFS High Yield Sub-Account,
and MFS Money Market Sub-Account of Sun Life of Canada (U.S.) Variable Account D
(the "Sub-Accounts") as of June 30, 1999, the related statement of operations
for the six month period then ended and the statements of changes in net assets
for the six month period 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 as of 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>
COMPASS-G
DIRECTORS AND OFFICERS OF
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
DONALD A. STEWART, Chairman and Director
C. JAMES PRIEUR, President and Director
S. CAESAR RABOY, Director
RICHARD B. BAILEY, Director
M. COLYER CRUM, Director
DAVID D. HORN, Director
JOHN S. LANE, Director
ANGUS A. MacNAUGHTON, Director
JOHN D. McNEIL, Director
PETER F. DEMUTH, Vice President, Chief
Counsel and Assistant Secretary
JAMES A. McNULTY, III, Vice President and
Assistant General Manager
JAMES M. A. ANDERSON, Vice President, Investments
ROBERT P. VROLYK, Vice President, Finance and
Actuary
L. BROCK THOMSON, Vice President and
Treasurer
ELLEN B. KING, Assistant Counsel and Secretary
SUN LIFE ASSURANCE COMPANY
OF CANADA (U.S.)
ANNUITY SERVICE MAILING ADDRESS:
Sun Life Retirement Products and Services
P.O. Box 1024, Boston, Massachusetts 02103-9986
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
LEGAL COUNSEL
Covington & Burling
1201 Pennsylvania Avenue, N.W.
P.O. Box 7566, Washington, D.C. 20044-7566
AUDITORS
Deloitte & Touche LLP
200 Berkeley Street, Boston, Massachusetts 02116
ACCOUNT INFORMATION
For account information, call toll free: 1-800-752-7218 anytime from a
touch-tone telephone.
To speak with a customer service representative,
please call toll free 1-800-752-7215 from
8 a.m. to 6 p.m. Eastern time on any business day.
This report is prepared for the general information of
contract owners and participants. It is authorized for
distribution to prospective purchasers only if
preceded or accompanied by an effective prospectus.
COG3-8/99 24M
[LOGO]
PROFESSIONALLY MANAGED COMBINATION
FIXED/VARIABLE GROUP ANNUITY
FOR QUALIFIED AND NON-QUALIFIED
RETIREMENT PLANS
---------------------------------------------
SEMI-ANNUAL REPORT, JUNE 30, 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.
