<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT E
STATEMENT OF CONDITION -- December 31, 1999
<TABLE>
<CAPTION>
ASSETS:
<S> <C> <C> <C>
Investments in MFS/Sun Life Series Trust: Shares Cost Value
--------- ----------- ------------
Capital Appreciation Series ("CAS")........... 662,713 $27,181,094 $ 35,863,216
Conservative Growth Series ("CGS")............ 813,427 26,015,939 30,868,432
Government Securities Series ("GSS").......... 532,461 6,770,793 6,643,509
High Yield Series ("HYS")..................... 663,775 6,197,331 5,984,700
Managed Sectors Series ("MSS")................ 152,185 4,544,264 7,977,778
Money Market Series ("MMS")................... 6,283,259 6,283,258 6,283,258
Total Return Series ("TRS")................... 398,122 8,107,810 7,468,478
Global Governments Series ("GGS")............. 76,340 819,625 783,711
Zero Coupon Series:
2000 Portfolio ("ZCS-2000")................. 354,593 3,088,460 3,056,720
----------- ------------
Net Assets:.......................................... $89,008,574 $104,929,802
=========== ============
</TABLE>
NET ASSETS APPLICABLE TO CONTRACT OWNERS:
<TABLE>
<CAPTION>
Units Unit Value Value
-------- ---------- ------------
<S> <C> <C> <C>
CAS - Level 1........................................... 29,598 $75.9510 $ 2,249,073
CAS - Level 2........................................... 436,402 76.8881 33,614,143
CGS - Level 1........................................... 31,021 55.2910 1,713,091
CGS - Level 2........................................... 523,139 55.9733 29,155,341
GSS - Level 1........................................... 35,165 21.2383 748,283
GSS - Level 2........................................... 273,830 21.5006 5,895,226
HYS - Level 1........................................... 12,479 26.3029 321,363
HYS - Level 2........................................... 212,563 26.6276 5,663,337
MSS - Level 1........................................... 8,837 85.1301 757,742
MSS - Level 2........................................... 83,771 86.1802 7,220,036
MMS - Level 1........................................... 89,975 16.9931 1,525,435
MMS - Level 2........................................... 276,650 17.2029 4,757,823
TRS - Level 1........................................... 24,261 32.8898 797,533
TRS - Level 2........................................... 201,163 33.2958 6,670,945
GGS - Level 1........................................... 4,189 19.4425 76,477
GGS - Level 2........................................... 35,924 19.6827 707,234
ZCS-2000 - Level 1...................................... 14,117 21.7168 306,986
ZCS-2000 - Level 2...................................... 125,098 21.9850 2,749,734
------------
Net Assets:................................................................ $104,929,802
============
</TABLE>
See notes to financial statements
1
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT E
STATEMENT OF OPERATIONS -- Year Ended December 31, 1999
<TABLE>
<CAPTION>
CAS CGS GSS HYS MSS
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
INCOME:
Dividend income and capital gain
distributions received............... $3,280,434 $2,393,460 $ 377,865 $ 511,037 $ --
---------- ----------- ---------- ---------- ----------
EXPENSES:
Mortality and expense risk charges.... $ 177,776 $ 185,359 $ 43,574 $ 37,202 $ 27,929
Minimum death benefit guarantee
charges............................. 5,238 4,328 1,979 783 1,334
Administrative charges................ 62,402 64,383 15,712 12,870 10,110
---------- ----------- ---------- ---------- ----------
Total expenses...................... $ 245,416 $ 254,070 $ 61,265 $ 50,855 $ 39,373
---------- ----------- ---------- ---------- ----------
Net investment income (loss)...... $3,035,018 $2,139,390 $ 316,600 $ 460,182 $ (39,373)
---------- ----------- ---------- ---------- ----------
REALIZED AND UNREALIZED GAINS (LOSSES):
Realized gains (losses) on investment
transactions:
Proceeds from sales................. $5,258,044 $3,616,364 $1,907,884 $1,195,271 $1,730,373
Costs of investments sold........... 4,266,753 2,734,680 1,823,782 1,172,672 1,573,811
---------- ----------- ---------- ---------- ----------
Net realized gains (losses)....... $ 991,291 $ 881,684 $ 84,102 $ 22,599 $ 156,562
---------- ----------- ---------- ---------- ----------
Net unrealized appreciation
(depreciation) on investments:
End of period....................... $8,682,122 $4,852,493 $ (127,284) $ (212,631) $3,433,514
Beginning of period................. 4,071,355 6,046,832 484,778 (94,921) 120,307
---------- ----------- ---------- ---------- ----------
Change in unrealized appreciation
(depreciation).................. $4,610,767 $(1,194,339) $ (612,062) $ (117,710) $3,313,207
---------- ----------- ---------- ---------- ----------
Realized and unrealized gains
(losses).......................... $5,602,058 $ (312,655) $ (527,960) $ (95,111) $3,469,769
---------- ----------- ---------- ---------- ----------
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS............................. $8,637,076 $1,826,735 $ (211,360) $ 365,071 $3,430,396
========== =========== ========== ========== ==========
<CAPTION>
MMS TRS GGS ZCS-2000
Sub-Account Sub-Account Sub-Account Sub-Account
----------- ----------- ----------- -----------
INCOME:
<S> <C> <C> <C> <C> <C>
Dividend income and capital gain
distributions received............... $ 291,146 $1,240,326 $ 96,959 $ 207,141
---------- ----------- ---------- ----------
EXPENSES:
Mortality and expense risk charges.... $ 38,142 $ 50,283 $ 4,991 $ 19,205
Minimum death benefit guarantee
charges............................. 3,906 2,276 214 865
Administrative charges................ 15,058 18,127 1,792 6,921
---------- ----------- ---------- ----------
Total expenses...................... $ 57,106 $ 70,686 $ 6,997 $ 26,991
---------- ----------- ---------- ----------
Net investment income (loss)...... $ 234,040 $1,169,640 $ 89,962 $ 180,150
---------- ----------- ---------- ----------
Realized and Unrealized Gains
(Losses):
Realized gains (losses) on investment
transactions:
Proceeds from sales................. $5,000,076 $2,353,538 $ 409,457 $ 701,466
Costs of investments sold........... 5,000,076 2,302,765 406,690 673,547
---------- ----------- ---------- ----------
Net realized gains (losses)....... $ -- $ 50,773 $ 2,767 $ 27,919
---------- ----------- ---------- ----------
Net unrealized appreciation
(depreciation) on investments:
End of period....................... $ -- $ (639,332) $ (35,914) $ (31,740)
Beginning of period................. 81 418,488 105,791 112,982
---------- ----------- ---------- ----------
Change in unrealized appreciation
(depreciation).................. $ (81) $(1,057,820) $ (141,705) $ (144,722)
---------- ----------- ---------- ----------
Realized and unrealized gains
(losses).......................... $ (81) $(1,007,047) $ (138,938) $ (116,803)
---------- ----------- ---------- ----------
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS............................. $ 233,959 $ 162,593 $ (48,976) $ 63,347
========== =========== ========== ==========
</TABLE>
See notes to financial statements
2
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT E
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
CAS CGS
Sub-Account Sub-Account
-------------------------- --------------------------
Year Ended Year Ended
December 31, December 31,
-------------------------- --------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss).......... $ 3,035,018 $ 2,990,468 $ 2,139,390 $ 1,849,587
Net realized gains (losses)........... 991,291 888,948 881,684 1,372,038
Net unrealized gains (losses)......... 4,610,767 2,781,163 (1,194,339) 2,676,351
----------- ----------- ----------- -----------
Increase (Decrease) in net assets
from operations................. $ 8,637,076 $ 6,660,579 $ 1,826,735 $ 5,897,976
----------- ----------- ----------- -----------
CONTRACT OWNER TRANSACTIONS:
Transfers between Sub-Accounts........ $ 399,891 $ (765,823) $ 245,979 $ (209,959)
Transfers to loan value account....... (618,675) (667,691) (585,188) (478,245)
Contract surrenders................... (1,046,372) (1,159,053) (795,332) (397,789)
Charges for life insurance
protection.......................... (140,181) (147,415) (160,115) (172,639)
Death benefits........................ (680,194) (946,644) (503,343) (1,015,161)
----------- ----------- ----------- -----------
(Decrease) in net assets from contract
owner transactions.................. $(2,085,531) $(3,686,626) $(1,797,999) $(2,273,793)
----------- ----------- ----------- -----------
Increase (Decrease) in net assets... $ 6,551,545 $ 2,973,953 $ 28,736 $ 3,624,183
NET ASSETS:
Beginning of Period................... 29,311,671 26,337,718 30,839,696 27,215,513
----------- ----------- ----------- -----------
End of Period......................... $35,863,216 $29,311,671 $30,868,432 $30,839,696
=========== =========== =========== ===========
<CAPTION>
GSS
Sub-Account
--------------------------
Year Ended
December 31,
--------------------------
1999 1998
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss).......... $ 316,600 $ 360,564
Net realized gains (losses)........... 84,102 69,619
Net unrealized gains (losses)......... (612,062) 183,715
----------- ----------
Increase (Decrease) in net assets
from operations................. $ (211,360) $ 613,898
----------- ----------
CONTRACT OWNER TRANSACTIONS:
Transfers between Sub-Accounts........ $ (441,064) $ 184,794
Transfers to loan value account....... (51,448) (158,811)
Contract surrenders................... (633,755) (495,964)
Charges for life insurance
protection.......................... (75,173) (80,019)
Death benefits........................ (26,988) (85,670)
----------- ----------
(Decrease) in net assets from contract
owner transactions.................. $(1,228,428) $ (635,670)
----------- ----------
Increase (Decrease) in net assets... $(1,439,788) $ (21,772)
NET ASSETS:
Beginning of Period................... 8,083,297 8,105,069
----------- ----------
End of Period......................... $ 6,643,509 $8,083,297
=========== ==========
</TABLE>
See notes to financial statements
3
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT E
STATEMENTS OF CHANGES IN NET ASSETS -- continued
<TABLE>
<CAPTION>
HYS MSS MMS
Sub-Account Sub-Account Sub-Account
-------------------------- -------------------------- ------------------------
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
-------------------------- -------------------------- ------------------------
1999 1998 1999 1998 1999 1998
------------ ------------ ------------ ------------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss).......... $ 460,182 $ 388,076 $ (39,373) $ 516,294 $ 234,040 $ 268,232
Net realized gains (losses)........... 22,599 62,109 156,562 (90,320) -- --
Net unrealized gains (losses)......... (117,710) (418,866) 3,313,207 1,389 (81) 81
---------- ----------- ---------- ---------- ---------- ----------
Increase (Decrease) in net assets
from operations................. $ 365,071 $ 31,319 $3,430,396 $ 427,363 $ 233,959 $ 268,313
---------- ----------- ---------- ---------- ---------- ----------
CONTRACT OWNER TRANSACTIONS:
Transfers between Sub-Accounts........ $ (35,370) $ (348,204) $ 717,312 $ 81,592 $ 341,633 $1,451,763
Transfers to loan value account....... (49,490) (23,783) (92,409) (185,353) (146,857) (90,938)
Contract surrenders................... (137,137) (551,609) (36,423) (42,285) (983,718) (442,507)
Charges for life insurance
protection.......................... (42,205) (46,752) (31,563) (35,874) (118,797) (122,919)
Death benefits........................ (216,718) (87,084) (14,695) -- (32,357) (1,996)
---------- ----------- ---------- ---------- ---------- ----------
Increase (Decrease) in net assets from
contract owner transactions............ $ (480,920) $(1,057,432) $ 542,222 $ (181,920) $ (940,096) $ 793,403
---------- ----------- ---------- ---------- ---------- ----------
Increase (Decrease) in net assets... $ (115,849) $(1,026,113) $3,972,618 $ 245,443 $ (706,137) $1,061,716
NET ASSETS:
Beginning of period................... 6,100,549 7,126,662 4,005,160 3,759,717 6,989,395 5,927,679
---------- ----------- ---------- ---------- ---------- ----------
End of period......................... $5,984,700 $ 6,100,549 $7,977,778 $4,005,160 $6,283,258 $6,989,395
========== =========== ========== ========== ========== ==========
</TABLE>
See notes to financial statements
4
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT E
STATEMENTS OF CHANGES IN NET ASSETS -- continued
<TABLE>
<CAPTION>
TRS GGS
Sub-Account Sub-Account
------------------------- ----------------------
Year Ended Year Ended
December 31, December 31,
------------------------- ----------------------
1999 1998 1999 1998
----------- ------------ ---------- ----------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss).......... $1,169,640 $ 868,254 $ 89,962 $ 4,434
Net realized gains (losses)........... 50,773 225,177 2,767 (889)
Net unrealized gains (losses)......... (1,057,820) (249,777) (141,705) 120,753
----------- ---------- --------- ----------
Increase (Decrease) in net assets
from operations................. $ 162,593 $ 843,654 $ (48,976) $ 124,298
----------- ---------- --------- ----------
CONTRACT OWNER TRANSACTIONS:
Transfers between Sub-Accounts........ $ (711,472) $ 42,584 $(123,567) $ (409,530)
Transfers from loan value account..... (161,443) (134,636) 103 3,877
Contract surrenders................... (232,433) (399,794) -- (23,214)
Charges for life insurance
protection.......................... (61,769) (66,761) (9,547) (11,409)
Death benefits........................ (206,887) (69,378) -- --
----------- ---------- --------- ----------
Increase (Decrease) in net assets from
contract owner transactions............ $(1,374,004) $ (627,985) $(133,011) $ (440,276)
----------- ---------- --------- ----------
Increase (Decrease) in net assets... $(1,211,411) $ 215,669 $(181,987) $ (315,978)
NET ASSETS:
Beginning of period................... 8,679,889 8,464,220 965,698 1,281,676
----------- ---------- --------- ----------
End of period......................... $7,468,478 $8,679,889 $ 783,711 $ 965,698
=========== ========== ========= ==========
</TABLE>
See notes to financial statements
5
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT E
STATEMENTS OF CHANGES IN NET ASSETS -- continued
<TABLE>
<CAPTION>
ZCS-2000
Sub-Account
------------------------
Year Ended
December 31,
------------------------
1999 1998
----------- -----------
<S> <C> <C>
OPERATIONS:
Net investment income (loss).......... $ 180,150 $ 181,510
Net realized gains (losses)........... 27,919 (5,342)
Net unrealized gains (losses)......... (144,722) 37,371
---------- ----------
Increase (Decrease) in net assets
from operations.................. $ 63,347 $ 213,539
---------- ----------
CONTRACT OWNER TRANSACTIONS:
Transfers between Sub-Accounts........ $ (393,342) $ (27,217)
Transfers to loan value account....... 58,677 (117,344)
Contract surrenders................... (103,066) (190,173)
Charges for life insurance
protection.......................... (12,382) (19,412)
Death benefits........................ (29,993) --
---------- ----------
Decrease in net assets from contract
owner transactions.................. $ (480,106) $ (354,146)
---------- ----------
Increase (Decrease) in net assets... $ (416,759) $ (140,607)
NET ASSETS:
Beginning of period................... 3,473,479 3,614,086
---------- ----------
End of period......................... $3,056,720 $3,473,479
========== ==========
</TABLE>
See notes to financial statements
6
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT E
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION
Sun Life of Canada (U.S.) Variable Account E (the "Variable Account"), a
separate account of Sun Life Assurance Company of Canada (U.S.) (the "Sponsor"),
was established on December 3, 1985 as a funding vehicle for single premium
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 specific series of MFS/Sun Life Series
Trust (the "Series Trust") an open-end management investment company registered
under the Investment Company Act of 1940. Massachusetts Financial Services
Company, an affiliate of the Sponsor, is the investment adviser to the Series
Trust.
(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 the Series Trust are recorded at their net asset value.
Realized gains and losses on sales of shares of the Series Trust are determined
on the identified cost basis. Dividend income and capital gain distributions
received by the Sub-Accounts are reinvested in additional shares of the Series
Trust 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.
(3) CONTRACT CHARGES
Certain charges based on the value of the Variable Account are paid to the
Sponsor from the Variable Account at the end of each valuation period as
follows: (i) an administrative charge of 0.35% for the first ten contract years
and 0.20% thereafter; (ii) a mortality and expense risk charge of 0.60%; and
(iii) a minimum
7
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT E
NOTES TO FINANCIAL STATEMENTS -- continued
(3) CONTRACT CHARGES -- continued
death benefit guarantee charge of 0.25% for the first ten contract years with no
deduction thereafter. Accounts are transferred from Level 1 to Level 2 in the
month following the tenth contract anniversary.
On each Monthly Anniversary Date after the Contract Date, a charge for providing
life insurance protection is imposed by the Sponsor against the contract's
account value. This charge will be based upon the Sponsor's expectations of
future mortality experience, but it will never be higher than the amount based
upon the 1980 CSO Mortality Table C, and in most cases it will be lower.
The Sponsor does not deduct a sales charge from the premium payment. 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 8% of the single premium payment made under
the contract.
8
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT E
NOTES TO FINANCIAL STATEMENTS -- continued
(4) UNIT ACTIVITY FROM CONTRACT OWNER TRANSACTIONS
<TABLE>
<CAPTION>
CAS CAS CGS CGS GSS
Level 1 Level 2 Level 1 Level 2 Level 1
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Accounts
------------------ ------------------ ------------------ ------------------ ------------------
Year Year Year Year Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended Ended Ended Ended Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1999 1998 1999 1998 1999 1998 1999 1998 1999 1998
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Units Outstanding
beginning of period......... 46,335 92,847 454,818 482,707 36,127 78,746 550,067 556,809 38,842 62,704
Units transferred between
Sub-Accounts............. (14,243) (45,455) 19,597 28,736 (3,878) (40,339) 10,362 34,927 (2,877) (22,653)
Units transferred (to) from
loan value account....... (252) 430 (9,450) (12,565) (1,044) (91) (9,821) (9,084) (367) (111)
Units surrendered.......... (1,774) (1,137) (15,319) (23,466) -- (1,069) (15,011) (8,422) -- (602)
Units cancelled in payment
of charges for life
insurance protection..... (183) (350) (2,106) (2,545) (184) (311) (2,986) (3,340) (433) (496)
Units cancelled in payment
of death benefits........ (285) -- (11,138) (18,049) -- (809) (9,472) (20,823) -- --
-------- -------- -------- -------- ------- -------- -------- -------- ------- --------
Units Outstanding end of
period...................... 29,598 46,335 436,402 454,818 31,021 36,127 523,139 550,067 35,165 38,842
======== ======== ======== ======== ======= ======== ======== ======== ======= ========
</TABLE>
<TABLE>
<CAPTION>
GSS HYS HYS MSS MSS
Level 2 Level 1 Level 2 Level 1 Level 2
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Accounts
------------------ ------------------ ------------------ ------------------ ------------------
Year Year Year Year Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended Ended Ended Ended Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1999 1998 1999 1998 1999 1998 1999 1998 1999 1998
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Units Outstanding
beginning of period......... 326,819 332,752 17,206 43,889 225,883 238,993 11,622 35,850 73,971 53,716
Units transferred between
Sub-Accounts............. (17,614) 31,761 (4,676) (26,154) 3,515 13,090 (2,349) (22,738) 12,387 24,929
Units transferred (to) from
loan value account....... (1,965) (7,241) (5) 88 (1,863) (1,007) (264) (1,187) (1,212) (2,788)
Units surrendered.......... (29,112) (23,198) -- -- (5,163) (20,572) -- -- (686) (1,361)
Units cancelled in payment
of charges for life
insurance protection..... (3,037) (3,268) (46) (168) (1,566) (1,662) (172) (303) (403) (525)
Units cancelled in payment
of death benefits........ (1,261) (3,987) -- (449) (8,243) (2,959) -- -- (286) --
-------- -------- ------- -------- -------- -------- ------- -------- ------- -------
Units Outstanding end of
period...................... 273,830 326,819 12,479 17,206 212,563 225,883 8,837 11,622 83,771 73,971
======== ======== ======= ======== ======== ======== ======= ======== ======= =======
</TABLE>
9
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT E
NOTES TO FINANCIAL STATEMENTS -- continued
(4) UNIT ACTIVITY FROM CONTRACT OWNER TRANSACTIONS -- continued
<TABLE>
<CAPTION>
MMS MMS TRS TRS GGS
Level 1 Level 2 Level 1 Level 2 Level 1
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Accounts
------------------ ------------------ ------------------ ------------------ ------------------
Year Year Year Year Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended Ended Ended Ended Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1999 1998 1999 1998 1999 1998 1999 1998 1999 1998
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Units Outstanding
beginning of period......... 82,874 133,612 339,983 240,045 38,827 83,559 228,221 204,285 4,750 21,982
Units transferred between
Sub-Accounts............. 12,126 (42,257) 8,188 132,055 (14,161) (37,608) (7,482) 38,610 (457) (17,007)
Units transferred (to) from
loan value account....... (1,196) (3,427) (7,547) (2,230) (182) (58) (4,664) (4,388) -- (55)
Units surrendered.......... (181) (1,540) (58,613) (25,686) -- (5,081) (7,022) (7,889) -- --
Units cancelled in payment
of charges for life
insurance protection..... (3,032) (3,514) (4,040) (4,078) (223) (454) (1,643) (1,701) (104) (170)
Units cancelled in payment
of death benefits........ (616) -- (1,321) (123) -- (1,531) (6,247) (696) -- --
------- -------- -------- -------- -------- -------- -------- -------- ------- --------
Units outstanding end of
period...................... 89,975 82,874 276,650 339,983 24,261 38,827 201,163 228,221 4,189 4,750
======= ======== ======== ======== ======== ======== ======== ======== ======= ========
</TABLE>
<TABLE>
<CAPTION>
GGS ZCS-2000 ZCS-2000
Level 2 Level 1 Level 2
Sub-Account Sub-Account Sub-Account
------------------ ------------------ ------------------
Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1999 1998 1999 1998 1999 1998
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Units Outstanding
beginning of period.................... 41,683 48,519 19,758 62,003 141,678 116,837
Units transferred between
Sub-Accounts........................ (5,391) (5,411) (5,610) (35,269) (12,630) 33,694
Units transferred (to) from loan value
account............................. 7 262 -- (2,887) 2,720 (2,818)
Units surrendered..................... -- (1,257) -- (3,970) (4,757) (5,225)
Units cancelled in payment of charges
for life insurance protection....... (375) (430) (31) (119) (541) (810)
Units cancelled in payment of death
benefits............................ -- -- -- -- (1,372) --
------- ------- ------- -------- -------- --------
Units outstanding end of period......... 35,924 41,683 14,117 19,758 125,098 141,678
======= ======= ======= ======== ======== ========
</TABLE>
10
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Participants in Sun Life of Canada (U.S.) Variable Account E
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, Conservative Growth Sub-Account, Government Securities Sub-Account,
High Yield Sub-Account, Managed Sectors Sub-Account, Money Market Sub-Account,
Total Return Sub-Account, Global Governments Sub-Account and Zero Coupon
Portfolio 2000 Sub-Account of Sun Life of Canada (U.S.) Variable Account E (the
"Sub-Accounts") as of December 31, 1999, the related statement of operations for
the year then ended and the statements of changes in net assets for the years
ended December 31, 1999 and 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 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 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 December 31, 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
February 10, 2000
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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.
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COMPASS-LIFE
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT E
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 1278
One Sun Life Executive Park
Wellesley Hills, MA 02481
Call Toll Free 1-800-445-4070
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 LLP
200 Berkeley Street
Boston, MA 02116-5022
CO2-2/99 6M
LOGO
SINGLE PREMIUM VARIABLE
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.
