<PAGE>
DEAR CONTRACT OWNERS:
A general slowdown in most major economies has resulted in favorable performance
for both stock and bond markets around the world during the past six months.
Yields on many fixed-income securities declined over the period, and as bond
prices rose in response to these declines, all of the fixed-income options
available in the MFS/Sun Life Series Trust experienced positive total returns.
At the same time, the decline in interest rates and strong corporate earnings
reports caused many stock prices to rise over the period. For the six months
ended June 30, 1995, the market, as measured by the Standard & Poor's 500
Composite Index (the S&P 500), a popular, unmanaged index of common stock
performance, returned +20.19%. All of the equity alternatives in the MFS/Sun
Life Series Trust achieved positive results.
U.S. Outlook
In response to increasing evidence of economic weakness during the second
quarter, the Federal Reserve Board has reversed policy by lowering the federal
funds rate 0.25%. This marks the first time in three years that this rate has
been lowered, and brings the Federal Reserve's 18-month monetary-tightening
initiative to at least a temporary conclusion. Although inflation at the
consumer level has been trending higher this year at a 3 1/2% annualized rate,
recent evidence suggests that these pressures are beginning to moderate,
allowing the Federal Reserve to shift its policy focus toward sustaining
economic growth. Despite the economy's apparent lackluster performance in the
second quarter, we do not anticipate that the economy will lapse into recession.
Rather, we believe it will continue to expand at a more moderate, sustainable
pace, supported by lower prevailing interest rates and a healthy export sector.
Global Outlook
Economic recoveries in both Europe and Japan have been inhibited by the strength
of the yen and deutsche mark against the U.S. dollar. These export-led
expansions are struggling to compete in a global marketplace in which their
products are less competitively priced. Consumer sectors in these economies have
been impaired by relatively high unemployment rates and continued low growth in
domestic money supplies. Recently, the Bank of Japan lowered interest rates in
an effort to stimulate domestic demand as well as to arrest the strength of the
yen against the dollar. Germany's Bundesbank lowered rates in March, yet it
appears that controlled inflation and sluggish domestic demand should leave it
with further room to ease. Our view is that the global expansion remains intact,
yet at a sluggish pace, particularly in Japan. Inflation in overseas economies
remains in a downward trend, providing fixed-income investors with opportunities
for relatively attractive real (adjusted for inflation) rates of interest,
possibly accompanied by moderate price appreciation. While we view emerging
markets with caution, selected opportunities exist in both fixed-income and
equity markets, particularly at the more attractive levels resulting from
selloffs in many of those markets last year. Recently, the U.S. dollar has
stabilized in world currency markets. Although we believe that the dollar
continues to represent a sound store of value over the long term, in the near
term its relative strength will be restrained by the persistently large U.S.
current-account deficit.
1
<PAGE>
Bond Markets
As the economy's ability to create jobs has diminished along with its use of
available productive capacity, fixed-income markets have been increasingly
convinced that inflationary pressures will remain subdued. As a result,
long-term U.S. Treasury bond yields have declined to 6.50% from their 7.85%
level at the beginning of the year. As bond yields continued to decline, it
became apparent that the markets had been anticipating an easing of the Federal
Reserve's policy. Now that the easing has begun, we believe that prevailing
rates may consolidate near present levels in the near term. Longer term, we feel
that continuing moderate growth should result in interest rates maintaining
their present levels or perhaps declining moderately over the balance of this
year.
The general slowdown of world economies has resulted in solid performance in
world bond markets during the past six months. European markets continue to be
buoyed by slow growth, low and controlled inflation, and recent interest rate
cuts from key central banks. The Japanese market also has been strong as anemic
economic growth and consumer price deflation have helped interest rates stage a
major decline. We remain positive on overseas markets because we anticipate
continued slow growth and minimal inflationary pressures.
Stock Market
The U.S. stock market has maintained its upward momentum as stock prices have
responded to the cessation of the Federal Reserve's monetary-tightening
initiative and to the belief that gains in corporate earnings may remain
substantial. Although we expect growth to remain moderate, our outlook for
corporate earnings growth remains favorable. We have been de-emphasizing many
cyclical areas such as autos and basic materials because of their less
attractive earnings outlook and have been emphasizing growth areas such as
technology, health care, consumer and household products, and financial
services.
Information on the current investment strategy for each series of MFS/Sun Life
Series Trust may be found in the accompanying Series Trust semiannual report.
We appreciate your support and welcome any questions or comments you may have.
On behalf of the
Board of Directors,
John D. McNeil
July 18, 1995 Chairman
2
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
STATEMENT OF CONDITION -- June 30, 1995
<TABLE>
<CAPTION>
Assets:
Investments in MFS/Sun Life Series Trust: Shares Cost Value
----------- -------------- --------------
<S> <C> <C> <C>
Capital Appreciation Series ("CAS")......... 18,748,266 $ 485,019,913 $ 533,864,469
Conservative Growth Series ("CGS").......... 9,448,024 158,502,226 178,715,109
Emerging Growth Series ("EGS").............. 1,114,645 11,515,457 11,676,096
Government Securities Series ("GSS")........ 19,659,736 248,208,607 247,463,174
High Yield Series ("HYS")................... 11,898,914 98,317,274 99,877,045
Managed Sectors Series ("MSS").............. 6,157,097 130,260,691 144,716,082
Money Market Series ("MMS")................. 211,745,752 211,745,752 211,745,752
Research Series ("RES")..................... 1,983,483 20,913,509 22,856,254
Total Return Series ("TRS")................. 53,418,501 803,436,396 885,869,657
Utilities Series ("UTS").................... 2,652,185 25,738,830 27,609,205
World Asset Allocation Series ("WAA")....... 1,226,196 12,789,328 13,600,062
World Governments Series ("WGS")............ 11,827,982 142,858,146 143,608,242
World Growth Series ("WGR")................. 10,518,325 115,356,959 117,839,651
World Total Return Series ("WTR")........... 565,441 5,918,503 6,201,339
-------------- --------------
$2,470,581,591 $2,645,642,137
--------------
--------------
Liability:
Payable to sponsor....................................................... 10,052
--------------
Net assets........................................................... $2,645,632,085
--------------
--------------
</TABLE>
See notes to financial statements
3
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
STATEMENT OF CONDITION -- continued
<TABLE>
<CAPTION>
Deferred Variable Annuity Contracts Reserve for
---------------------------------------- Variable
Units Unit Value Value Annuities Total
----------- ---------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C>
Net Assets Applicable to
Contract Owners:
MFS Regatta Contracts:
CAS....................... 6,652,456 $18.4857 $ 122,965,315 $ 284,147 $ 123,249,462
GSS....................... 3,518,852 14.7025 51,736,032 208,791 51,944,823
HYS....................... 998,350 16.9246 16,900,112 9,372 16,909,484
MSS....................... 2,084,947 17.6708 36,840,318 118,400 36,958,718
MMS....................... 3,381,190 12.0575 40,762,486 284,215 41,046,701
TRS....................... 13,532,670 16.1826 218,982,905 1,145,856 220,128,761
WGS....................... 1,795,829 15.9121 28,578,846 84,530 28,663,376
-------------- ----------- --------------
$ 516,766,014 $2,135,311 $ 518,901,325
-------------- ----------- --------------
MFS Regatta Gold Contracts:
CAS....................... 24,275,610 $16.8872 $ 409,900,594 $ 738,948 $ 410,639,542
CGS....................... 12,788,361 13.9572 178,473,548 233,676 178,707,224
EGS....................... 1,117,271 10.4513 11,676,096 -- 11,676,096
GSS....................... 15,733,004 12.3984 195,069,891 540,092 195,609,983
HYS....................... 5,929,792 13.9370 82,623,467 320,296 82,943,763
MSS....................... 7,236,962 14.8748 107,643,460 110,658 107,754,118
MMS....................... 15,715,970 10.8019 169,751,331 762,612 170,513,943
RES....................... 1,966,657 11.4236 22,467,658 401,713 22,869,371
TRS....................... 49,270,433 13.4797 664,110,088 1,554,231 665,664,319
UTS....................... 2,635,019 10.4657 27,575,624 32,743 27,608,367
WAA....................... 1,228,863 10.9993 13,516,709 80,956 13,597,665
WGS....................... 8,817,732 12.9756 114,416,054 529,722 114,945,776
WGR....................... 10,414,544 11.2684 117,354,135 517,892 117,872,027
WTR....................... 563,369 10.8748 6,126,529 78,243 6,204,772
-------------- ----------- --------------
$2,120,705,184 $5,901,782 $2,126,606,966
-------------- ----------- --------------
Net Assets Applicable to Sponsor....................... $ 123,794 $ -- $ 123,794
-------------- ----------- --------------
Net assets..................................... $2,637,594,992 $8,037,093 $2,645,632,085
-------------- ----------- --------------
-------------- ----------- --------------
</TABLE>
See notes to financial statements
4
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
STATEMENT OF OPERATIONS -- Six Months Ended June 30, 1995
<TABLE>
<CAPTION>
CAS CGS EGS GSS HYS MSS
Income and Expenses: Sub-Account Sub-Account Sub-Account* Sub-Account Sub-Account Sub-Account
------------ ----------- ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Dividend income and capital gain
distributions received............... $ 12,222,330 $ 4,213,752 $ -- $ 15,080,454 $ 6,506,329 $ 4,070,752
Mortality and expense risk charges.... 2,836,221 940,877 10,767 1,609,702 558,010 769,227
Distribution expense charges.......... 82,155 -- -- 41,105 11,682 24,403
Administrative expense charges........ 258,191 112,905 1,292 152,060 55,280 67,905
------------ ----------- ----------- ------------ ----------- -----------
Net investment income
(expense)...................... $ 9,045,763 $ 3,159,970 $(12,059) $ 13,277,587 $ 5,881,357 $ 3,209,217
------------ ----------- ----------- ------------ ----------- -----------
Realized and Unrealized Gains (Losses):
Realized gains (losses) on investment
transactions:
Proceeds from sales................. $ 75,937,857 $ 4,825,232 $ 34,154 $ 62,810,214 $23,911,838 $11,615,574
Cost of investments sold............ 77,659,145 4,062,606 32,846 64,645,869 23,830,242 11,282,348
------------ ----------- ----------- ------------ ----------- -----------
Net realized gains (losses)..... $ (1,721,288) $ 762,626 $ 1,308 $ (1,835,655) $ 81,596 $ 333,226
------------ ----------- ----------- ------------ ----------- -----------
Net unrealized appreciation
(depreciation) on investments:
End of period....................... $ 48,844,556 $20,212,883 $160,639 $ (745,433) $ 1,559,771 $14,455,391
Beginning of period................. (24,453,057) 124,681 -- (13,654,356) (491,661) (6,047,477)
------------ ----------- ----------- ------------ ----------- -----------
Change in unrealized
appreciation..................... $ 73,297,613 $20,088,202 $160,639 $ 12,908,923 $ 2,051,432 $20,502,868
------------ ----------- ----------- ------------ ----------- -----------
Realized and unrealized gains....... $ 71,576,325 $20,850,828 $161,947 $ 11,073,268 $ 2,133,028 $20,836,094
------------ ----------- ----------- ------------ ----------- -----------
Increase in net assets.................. $ 80,622,088 $24,010,798 $149,888 $ 24,350,855 $ 8,014,385 $24,045,311
------------ ----------- ----------- ------------ ----------- -----------
------------ ----------- ----------- ------------ ----------- -----------
<CAPTION>
MMS RES
Income and Expenses: Sub-Account Sub-Account
------------ -----------
<S> <C> <C>
Dividend income and capital gain
distributions received............... $ 4,469,463 $ 5,213
Mortality and expense risk charges.... 1,025,550 74,482
Distribution expense charges.......... 27,569 --
Administrative expense charges........ 95,497 8,938
------------ -----------
Net investment income
(expense)...................... $ 3,320,847 $ (78,207)
------------ -----------
Realized and Unrealized Gains (Losses):
Realized gains (losses) on investment
transactions:
Proceeds from sales................. $180,147,294 $2,367,661
Cost of investments sold............ 180,147,294 2,225,400
------------ -----------
Net realized gains (losses)..... $ -- $ 142,261
------------ -----------
Net unrealized appreciation
(depreciation) on investments:
End of period....................... $ -- $1,942,745
Beginning of period................. -- 11,209
------------ -----------
Change in unrealized
appreciation..................... $ -- $1,931,536
------------ -----------
Realized and unrealized gains....... $ -- $2,073,797
------------ -----------
Increase in net assets.................. $ 3,320,847 $1,995,590
------------ -----------
------------ -----------
<FN>
*For the period from May 1, 1995 (commencement of investment operations) to June
30, 1995.
</TABLE>
See notes to financial statements
5
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
STATEMENT OF OPERATIONS -- continued
<TABLE>
<CAPTION>
TRS UTS WAA WGS WGR WTR
Income and Expenses: Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
------------ ----------- --------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Dividend income and capital gain
distributions received............... $ 32,466,536 $ 667,466 $ 6,089 $ 7,171,231 $ 3,100,162 $ 2,399
Mortality and expense risk charges.... 5,081,115 149,418 45,317 829,658 663,070 21,936
Distribution expense charges.......... 155,976 -- -- 20,912 -- --
Administrative expense charges........ 453,758 17,930 5,438 78,647 79,568 2,632
------------ ----------- --------- ----------- ----------- ---------
Net investment income
(expense)...................... $ 26,775,687 $ 500,118 $(44,666) $ 6,242,014 $ 2,357,524 $(22,169)
------------ ----------- --------- ----------- ----------- ---------
Realized and Unrealized Gains (Losses):
Realized gains (losses) on investment
transactions:
Proceeds from sales................. $ 51,964,171 $5,537,684 $536,762 $11,035,279 $10,741,187 $717,616
Cost of investments sold............ 43,442,372 5,613,176 496,529 11,299,972 10,994,759 682,867
------------ ----------- --------- ----------- ----------- ---------
Net realized gains (losses)..... $ 8,521,799 $ (75,492) $ 40,233 $ (264,693) $ (253,572) $ 34,749
------------ ----------- --------- ----------- ----------- ---------
Net unrealized appreciation
(depreciation) on investments:
End of period....................... $ 82,433,261 $1,870,375 $810,734 $ 750,096 $ 2,482,692 $282,836
Beginning of period................. 12,939,657 (420,499) 17,780 (7,922,900) (867,181) 4,178
------------ ----------- --------- ----------- ----------- ---------
Change in unrealized
appreciation..................... $ 69,493,604 $2,290,874 $792,954 $ 8,672,996 $ 3,349,873 $278,658
------------ ----------- --------- ----------- ----------- ---------
Realized and unrealized gains....... $ 78,015,403 $2,215,382 $833,187 $ 8,408,303 $ 3,096,301 $313,407
------------ ----------- --------- ----------- ----------- ---------
Increase in net assets.................. $104,791,090 $2,715,500 $788,521 $14,650,317 $ 5,453,825 $291,238
------------ ----------- --------- ----------- ----------- ---------
------------ ----------- --------- ----------- ----------- ---------
<CAPTION>
Income and Expenses: Total
------------
<S> <C>
Dividend income and capital gain
distributions received............... $ 89,982,176
Mortality and expense risk charges.... 14,615,350
Distribution expense charges.......... 363,802
Administrative expense charges........ 1,390,041
------------
Net investment income
(expense)...................... $ 73,612,983
------------
Realized and Unrealized Gains (Losses):
Realized gains (losses) on investment
transactions:
Proceeds from sales................. $442,182,523
Cost of investments sold............ 436,415,425
------------
Net realized gains (losses)..... $ 5,767,098
------------
Net unrealized appreciation
(depreciation) on investments:
End of period....................... $175,060,546
Beginning of period................. (40,759,626)
------------
Change in unrealized
appreciation..................... $215,820,172
------------
Realized and unrealized gains....... $221,587,270
------------
Increase in net assets.................. $295,200,253
------------
------------
</TABLE>
See notes to financial statements
6
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
CAS CGS EGS GSS
Sub-Account Sub-Account Sub-Account Sub-Account
---------------------------- ---------------------------- --------------- -------------
Six Months Six Months Six Months Six Months
Ended Year Ended Ended Year Ended Ended Ended
Operations: June 30, 1995 Dec. 31, 1994 June 30, 1995 Dec. 31, 1994 June 30, 1995* June 30, 1995
------------- ------------- ------------- ------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net investment income
(expense)................ $ 9,045,763 $ 27,825,823 $ 3,159,970 $ 147,916 $ (12,059) $ 13,277,587
Net realized gains
(losses)................. (1,721,288) 12,649,928 762,626 469,410 1,308 (1,835,655)
Net unrealized gains
(losses)................. 73,297,613 (57,996,267) 20,088,202 (3,896,273) 160,639 12,908,923
------------- ------------- ------------- ------------- --------------- -------------
Increase (decrease) in
net assets from
operations............. $ 80,622,088 $(17,520,516) $ 24,010,798 $ (3,278,947) $ 149,888 $ 24,350,855
------------- ------------- ------------- ------------- --------------- -------------
Participant Transactions:
Accumulation activity:
Purchase payments
received............... $ 47,511,782 $131,738,032 $ 23,523,510 $ 54,704,628 $ 4,732,650 $ 14,021,804
Net transfers between
Sub-Accounts and Fixed
Account................ 43,205,962 (30,000,160) 4,412,140 5,906,300 6,802,071 (48,012,728)
Withdrawls, surrenders,
annuitizations and
contract charges....... (17,334,073) (22,127,701) (4,124,196) (4,909,494) (8,513) (12,243,786)
------------- ------------- ------------- ------------- --------------- -------------
Net accumulation
activity............. $ 73,383,671 $ 79,610,171 $ 23,811,454 $ 55,701,434 $11,526,208 $(46,234,710)
------------- ------------- ------------- ------------- --------------- -------------
Annuitization activity:
Annuitizations.......... $ 387,327 $ 325,123 $ 16,358 $ 131,189 $ -- $ 52,455
Annuity payments and
contract charges....... (71,164) (135,087) (22,199) (58,514) -- (80,813)
Net transfers between
Sub-Accounts........... 97,650 (13,777) (57,743) 68,480 -- (70,702)
Adjustments to annuity
reserve................ (43,228) (138,996) (2,625) (3,424) -- 60,503
------------- ------------- ------------- ------------- --------------- -------------
Net annuitization
activity............. $ 370,585 $ 37,263 $ (66,209) $ 137,731 $ -- $ (38,557)
------------- ------------- ------------- ------------- --------------- -------------
Increase in net assets
from participant
transactions............. $ 73,754,256 $ 79,647,434 $ 23,745,245 $ 55,839,165 $11,526,208 $(46,273,267)
------------- ------------- ------------- ------------- --------------- -------------
Increase in net
assets................. $154,376,344 $ 62,126,918 $ 47,756,043 $ 52,560,218 $11,676,096 $(21,922,412)
Net Assets:
Beginning of period....... 379,512,660 317,385,742 130,951,181 78,390,963 -- 269,477,218
------------- ------------- ------------- ------------- --------------- -------------
End of period............. $533,889,004 $379,512,660 $178,707,224 $130,951,181 $11,676,096 $247,554,806
------------- ------------- ------------- ------------- --------------- -------------
------------- ------------- ------------- ------------- --------------- -------------
<CAPTION>
Year Ended
Operations: Dec. 31, 1994
-------------
<S> <C>
Net investment income
(expense)................ $ 10,541,212
Net realized gains
(losses)................. 989,314
Net unrealized gains
(losses)................. (19,932,794)
-------------
Increase (decrease) in
net assets from
operations............. $ (8,402,268)
-------------
Participant Transactions:
Accumulation activity:
Purchase payments
received............... $ 81,307,573
Net transfers between
Sub-Accounts and Fixed
Account................ (10,559,956)
Withdrawls, surrenders,
annuitizations and
contract charges....... (18,857,834)
-------------
Net accumulation
activity............. $ 51,889,783
-------------
Annuitization activity:
Annuitizations.......... $ 519,211
Annuity payments and
contract charges....... (131,378)
Net transfers between
Sub-Accounts........... (128,389)
Adjustments to annuity
reserve................ 41,563
-------------
Net annuitization
activity............. $ 301,007
-------------
Increase in net assets
from participant
transactions............. $ 52,190,790
-------------
Increase in net
assets................. $ 43,788,522
Net Assets:
Beginning of period....... 225,688,696
-------------
End of period............. $269,477,218
-------------
-------------
<FN>
* For the period from May 1, 1995 (commencement of investment operations) to
June 30, 1995.
</TABLE>
See notes to financial statements
7
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
STATEMENTS OF CHANGES IN NET ASSETS -- continued
<TABLE>
<CAPTION>
HYS MSS MMS RES
Sub-Account Sub-Account Sub-Account Sub-Account
--------------------------- ---------------------------- ---------------------------- -------------
Six Months Year Ended Six Months Six Months Six Months
Ended Dec. 31, Ended Year Ended Ended Year Ended Ended
June 30, 1995 1994 June 30, 1995 Dec. 31, 1994 June 30, 1995 Dec. 31, 1994 June 30, 1995
------------- ------------ ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income
(expense)................ $ 5,881,357 $ 3,353,160 $ 3,209,217 $ 10,371,457 $ 3,320,847 $ 4,088,955 $ (78,207)
Net realized gains
(losses)................. 81,596 (1,835,584) 333,226 2,312,910 -- -- 142,261
Net unrealized gains
(losses)................. 2,051,432 (3,354,235) 20,502,868 (16,183,713) -- -- 1,931,536
------------- ------------ ------------- ------------- ------------- ------------- -------------
Increase (decrease) in
net assets from
operations............. $ 8,014,385 $(1,836,659) $ 24,045,311 $ (3,499,346) $ 3,320,847 $ 4,088,955 $ 1,995,590
------------- ------------ ------------- ------------- ------------- ------------- -------------
Participant Transactions:
Accumulation activity:
Purchase payments
received............... $ 7,541,507 $25,863,588 $ 10,712,072 $ 29,286,189 $ 74,731,580 $169,065,890 $12,339,287
Net transfers between
Sub-Accounts and Fixed
Account................ 16,602,849 (10,800,800) 6,790,033 (4,775,869) (54,904,949) (47,970,496) 4,855,245
Withdrawls, surrenders,
annuitizations and
contract charges....... (4,312,538) (6,561,955) (4,995,637) (7,012,701) (14,790,891) (21,288,054) (554,342)
------------- ------------ ------------- ------------- ------------- ------------- -------------
Net accumulation
activity............. $19,831,818 $ 8,500,833 $ 12,506,468 $ 17,497,619 $ 5,035,740 $ 99,807,340 $16,640,190
------------- ------------ ------------- ------------- ------------- ------------- -------------
Annuitization activity:
Annuitizations.......... $ 3,996 $ 143,700 $ 84,279 $ 68,728 $ 371,914 $ 559,738 $ 356,845
Annuity payments and
contract charges....... (36,970) (71,050) (38,440) (32,033) (92,010) (103,980) (7,652)
Net transfers between
Sub-Accounts........... 8,428 119,221 32,629 976 (48,385) 122,710 --
Adjustments to annuity
reserve................ (11,560) (8,871) (797) (388) 41,079 96,065 13,118
------------- ------------ ------------- ------------- ------------- ------------- -------------
Net annuitization
activity............. $ (36,106) $ 183,000 $ 77,671 $ 37,283 $ 272,598 $ 674,533 $ 362,311
------------- ------------ ------------- ------------- ------------- ------------- -------------
Increase in net assets
from participant
transactions............. $19,795,712 $ 8,683,833 $ 12,584,139 $ 17,534,902 $ 5,308,338 $100,481,873 $17,002,501
------------- ------------ ------------- ------------- ------------- ------------- -------------
Increase in net assets.. $27,810,097 $ 6,847,174 $ 36,629,450 $ 14,035,556 $ 8,629,185 $104,570,828 $18,998,091
Net Assets:
Beginning of period....... 72,043,150 65,195,976 108,083,386 94,047,830 203,055,253 98,484,425 3,871,280
------------- ------------ ------------- ------------- ------------- ------------- -------------
End of period............. $99,853,247 $72,043,150 $144,712,836 $108,083,386 $211,684,438 $203,055,253 $22,869,371
------------- ------------ ------------- ------------- ------------- ------------- -------------
------------- ------------ ------------- ------------- ------------- ------------- -------------
<CAPTION>
Year Ended
Dec. 31, 1994*
--------------
<S> <C>
Operations:
Net investment income
(expense)................ $ (4,034)
Net realized gains
(losses)................. (3,877)
Net unrealized gains
(losses)................. 11,209
--------------
Increase (decrease) in
net assets from
operations............. $ 3,298
--------------
Participant Transactions:
Accumulation activity:
Purchase payments
received............... $1,223,399
Net transfers between
Sub-Accounts and Fixed
Account................ 2,663,995
Withdrawls, surrenders,
annuitizations and
contract charges....... (19,412)
--------------
Net accumulation
activity............. $3,867,982
--------------
Annuitization activity:
Annuitizations.......... $ --
Annuity payments and
contract charges....... --
Net transfers between
Sub-Accounts........... --
Adjustments to annuity
reserve................ --
--------------
Net annuitization
activity............. $ --
--------------
Increase in net assets
from participant
transactions............. $3,867,982
--------------
Increase in net assets.. $3,871,280
Net Assets:
Beginning of period....... --
--------------
End of period............. $3,871,280
--------------
--------------
<FN>
* For the period from November 7, 1994 (commencement of investment operations)
to December 31, 1994.
</TABLE>
See notes to financial statements
8
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
STATEMENTS OF CHANGES IN NET ASSETS -- continued
<TABLE>
<CAPTION>
TRS UTS WAA
Sub-Account Sub-Account Sub-Account
---------------------------- ---------------------------- -----------------------------
Six Months Six Months Six Months
Ended Year Ended Ended Year Ended Ended Year Ended
June 30, 1995 Dec. 31, 1994 June 30, 1995 Dec. 31, 1994 June 30, 1995 Dec. 31, 1994*
------------- ------------- ------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income
(expense)................ $ 26,775,687 $ 19,183,787 $ 500,118 $ (199,726) $ (44,666) $ (2,966)
Net realized gains
(losses)................. 8,521,799 9,131,549 (75,492) (122,032) 40,233 (147)
Net unrealized gains
(losses)................. 69,493,604 (56,210,282) 2,290,874 (443,189) 792,954 17,780
------------- ------------- ------------- ------------- ------------- --------------
Increase (decrease) in
net assets from
operations............. $104,791,090 $(27,894,946) $ 2,715,500 $ (764,947) $ 788,521 $ 14,667
------------- ------------- ------------- ------------- ------------- --------------
Participant Transactions:
Accumulation activity:
Purchase payments
received............... $ 45,172,408 $222,713,883 $ 4,872,457 $17,617,955 $ 6,691,636 $1,457,362
Net transfers between
Sub-Accounts and Fixed
Account................ (11,558,616) (7,151,070) (212,398) 2,488,460 3,199,633 1,534,984
Withdrawls, surrenders,
annuitizations and
contract charges....... (30,562,687) (51,917,624) (1,107,106) (828,336) (156,905) (3,895)
------------- ------------- ------------- ------------- ------------- --------------
Net accumulation
activity............. $ 3,051,105 $163,645,189 $ 3,552,953 $19,278,079 $ 9,734,364 $2,988,451
------------- ------------- ------------- ------------- ------------- --------------
Annuitization activity:
Annuitizations.......... $ 93,361 $ 816,949 $ 4,695 $ 27,927 $ -- $ --
Annuity payments and
contract charges....... (295,586) (624,252) (2,741) -- (4,698) --
Net transfers between
Sub-Accounts........... (44,756) (63,499) -- -- 78,757 --
Adjustments to annuity
reserve................ (13,065) 21,464 (839) 1 (2,397) --
------------- ------------- ------------- ------------- ------------- --------------
Net annuitization
activity............. $ (260,046) $ 150,662 $ 1,115 $ 27,928 $ 71,662 $ --
------------- ------------- ------------- ------------- ------------- --------------
Increase in net assets
from participant
transactions............. $ 2,791,059 $163,795,851 $ 3,554,068 $19,306,007 $ 9,806,026 $2,988,451
------------- ------------- ------------- ------------- ------------- --------------
Increase in net assets.. $107,582,149 $135,900,905 $ 6,269,568 $18,541,060 $10,594,547 $3,003,118
Net Assets:
Beginning of period....... 778,210,931 642,310,026 21,338,799 2,797,739 3,003,118 --
------------- ------------- ------------- ------------- ------------- --------------
End of period............. $885,793,080 $778,210,931 $27,608,367 $21,338,799 $13,597,665 $3,003,118
------------- ------------- ------------- ------------- ------------- --------------
------------- ------------- ------------- ------------- ------------- --------------
<CAPTION>
WGS
Sub-Account
----------------------------
Six Months
Ended Year Ended
June 30, 1995 Dec. 31, 1994
------------- -------------
<S> <C> <C>
Operations:
Net investment income
(expense)................ $ 6,242,014 $ 9,480,795
Net realized gains
(losses)................. (264,693) (873,333)
Net unrealized gains
(losses)................. 8,672,996 (16,425,541)
------------- -------------
Increase (decrease) in
net assets from
operations............. $ 14,650,317 $ (7,818,079)
------------- -------------
Participant Transactions:
Accumulation activity:
Purchase payments
received............... $ 5,354,816 $ 37,946,650
Net transfers between
Sub-Accounts and Fixed
Account................ 2,722,693 (17,688,160)
Withdrawls, surrenders,
annuitizations and
contract charges....... (4,488,515) (8,869,406)
------------- -------------
Net accumulation
activity............. $ 3,588,994 $ 11,389,084
------------- -------------
Annuitization activity:
Annuitizations.......... $ -- $ 303,841
Annuity payments and
contract charges....... (65,956) (162,696)
Net transfers between
Sub-Accounts........... -- (142,264)
Adjustments to annuity
reserve................ (667) (338)
------------- -------------
Net annuitization
activity............. $ (66,623) $ (1,457)
------------- -------------
Increase in net assets
from participant
transactions............. $ 3,522,371 $ 11,387,627
------------- -------------
Increase in net assets.. $ 18,172,688 $ 3,569,548
Net Assets:
Beginning of period....... 125,436,464 121,866,916
------------- -------------
End of period............. $143,609,152 $125,436,464
------------- -------------
------------- -------------
<FN>
* For the period from November 7, 1994 (commencement of investment operations)
to December 31, 1994.
</TABLE>
See notes to financial statements
9
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
STATEMENTS OF CHANGES IN NET ASSETS -- continued
<TABLE>
<CAPTION>
WGR WTR
Sub-Account Sub-Account Total
---------------------------- ----------------------------- -----------------------------
Six Months Six Months Six Months
Ended Year Ended Ended Year Ended Ended Year Ended
Operations: June 30, 1995 Dec. 31, 1994 June 30, 1995 Dec. 31, 1994* June 30, 1995 Dec. 31, 1994
------------- ------------- ------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net investment income
(expense)................ $ 2,357,524 $ (890,634) $ (22,169) $ (1,446) $ 73,612,983 $ 83,894,299
Net realized gains
(losses)................. (253,572) 1,495,414 34,749 63 5,767,098 24,213,615
Net unrealized gains
(losses)................. 3,349,873 (1,584,010) 278,658 4,178 215,820,172 (175,993,137)
------------- ------------- ------------- -------------- -------------- --------------
Increase (decrease) in
net assets from
operations............. $ 5,453,825 $ (979,230) $ 291,238 $ 2,795 $ 295,200,253 $ (67,885,223)
------------- ------------- ------------- -------------- -------------- --------------
Participant Transactions:
Accumulation activity:
Purchase payments
received............... $ 13,566,123 $62,712,792 $3,650,578 $ 756,005 $ 274,422,210 $ 836,393,946
Net transfers between
Sub-Accounts and Fixed
Account................ 3,056,928 21,605,891 978,761 626,641 (22,062,376) (94,120,240)
Withdrawls, surrenders,
annuitizations and
contract charges....... (3,680,553) (3,238,104) (176,134) (1,410) (98,535,876) (145,635,926)
------------- ------------- ------------- -------------- -------------- --------------
Net accumulation
activity............. $ 12,942,498 $81,080,579 $4,453,205 $1,381,236 $ 153,823,958 $ 596,637,780
------------- ------------- ------------- -------------- -------------- --------------
Annuitization activity:
Annuitizations.......... $ 300,813 $ 139,258 $ 74,072 $ -- $ 1,746,115 $ 3,035,664
Annuity payments and
contract charges....... (19,591) (9,292) (1,207) -- (739,027) (1,328,282)
Net transfers between
Sub-Accounts........... 4,122 36,542 -- -- -- --
Adjustments to annuity
reserve................ 37,046 (4,670) 3,433 -- 80,001 2,406
------------- ------------- ------------- -------------- -------------- --------------
Net annuitization
activity............. $ 322,390 $ 161,838 $ 76,298 $ -- $ 1,087,089 $ 1,709,788
------------- ------------- ------------- -------------- -------------- --------------
Increase in net assets
from participant
transactions............. $ 13,264,888 $81,242,417 $4,529,503 $1,381,236 $ 154,911,047 $ 598,347,568
------------- ------------- ------------- -------------- -------------- --------------
Increase in net
assets................. $ 18,718,713 $80,263,187 $4,820,741 $1,384,031 $ 450,111,300 $ 530,462,345
Net Assets:
Beginning of period....... 99,153,314 18,890,127 1,384,031 -- 2,195,520,785 1,665,058,440
------------- ------------- ------------- -------------- -------------- --------------
End of period............. $117,872,027 $99,153,314 $6,204,772 $1,384,031 $2,645,632,085 $2,195,520,785
------------- ------------- ------------- -------------- -------------- --------------
------------- ------------- ------------- -------------- -------------- --------------
<FN>
* For the period from November 7, 1994 (commencement of investment operations)
to December 31,1994.
</TABLE>
See notes to financial statements
10
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION
Sun Life of Canada (U.S.) Variable Account F (the "Variable Account"), a
separate account of Sun Life Assurance Company of Canada (U.S.), the Sponsor,
was established on July 13, 1989 as a funding vehicle for the variable portion
of certain group combination fixed/variable annuity 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, a
wholly-owned subsidiary of the Sponsor, is investment adviser to the Series
Trust.
(2) SIGNIFICANT ACCOUNTING POLICIES
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 Series Trust 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
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. These deductions are
transferred periodically to the Sponsor. Currently, the deduction is at an
effective annual rate of 1.25%.
Each year on the contract anniversary, an account administration fee ("Account
Fee") equal to the lesser of $30 and 2% of the participant's account value is
deducted from the participant's account to reimburse the Sponsor for certain
administrative expenses. After the annuity commencement date the Account Fee
will be deducted pro rata from each variable annuity payment made during the
year.
11
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
NOTES TO FINANCIAL STATEMENTS -- continued
The Sponsor does not deduct a sales charge from purchase payments. However, a
withdrawal charge (contingent deferred sales charge) of up to 6% of certain
amounts withdrawn, when applicable, may be deducted to cover certain expenses
relating to the sale of the contracts and certificates.
For assuming the risk that withdrawal charges may be insufficient to compensate
it for the costs of distributing the MFS Regatta contracts, the Sponsor makes a
deduction from the Variable Account at the end of each valuation period for the
first seven account years at an effective annual rate of 0.15% of the net assets
attributable to such contracts. No deduction for the distribution expense charge
is made after the seventh account anniversary.
As reimbursement for administrative expenses attributable to MFS Regatta Gold
contracts which exceed the revenues received from the Account Fees described
above derived from such contracts, the Sponsor makes a deduction from the
Variable Account at the end of each valuation period at an effective annual rate
of 0.15% of the net assets attributable to such contracts.
(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 reserves
are accomplished by transfers to or from the Sponsor.
12
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
NOTES TO FINANCIAL STATEMENTS -- continued
(5) UNIT ACTIVITY FROM PARTICIPANT TRANSACTIONS
<TABLE>
<CAPTION>
Units Transferred
Between Sub-Accounts Units Withdrawn,
Units Outstanding and Fixed Accumulation Surrendered and
Beginning of Period Units Purchased Account Annuitized
---------------------- ---------------------- ------------------------- -------------------------
Six Months Six Months Six Months Six Months
Ended Year Ended Ended Year Ended Ended Year Ended Ended Year Ended
June 30, Dec. 31, June 30, Dec. 31, June 30, Dec. 31, June 30, Dec. 31,
MFS REGATTA CONTRACTS 1995 1994 1995 1994 1995 1994 1995 1994
-------------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CAS Sub-Account........... 6,184,731 7,272,302 8,648 9,333 810,218 (455,183) (351,141) (641,721)
GSS Sub-Account........... 4,235,203 4,708,841 -- 10,633 (441,946) (21,084) (274,405) (463,187)
HYS Sub-Account........... 839,825 1,087,265 -- -- 224,360 (47,560) (65,835) (199,880)
MSS Sub-Account........... 2,066,642 2,431,072 12,503 1,536 89,691 (134,616) (83,889) (231,350)
MMS Sub-Account........... 3,873,044 3,081,737 4,921 4,866 (208,498) 1,706,748 (288,277) (920,307)
TRS Sub-Account........... 14,225,539 15,806,723 3,798 10,133 (123,769) (92,067) (572,898) (1,499,250)
WGS Sub-Account........... 1,967,375 2,300,611 -- 2,332 (90,967) (73,063) (80,579) (262,505)
<CAPTION>
MFS REGATTA GOLD CONTRACTS
--------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CAS Sub-Account........... 19,909,649 13,245,124 3,066,165 9,091,150 2,047,106 (1,559,101) (747,310) (867,524)
CGS Sub-Account........... 10,979,711 6,412,270 1,799,934 4,513,854 336,666 483,956 (327,950) (430,369)
EGS Sub-Account........... -- -- 459,482 -- 658,602 -- (813) --
GSS Sub-Account........... 18,784,262 13,661,303 1,178,314 7,175,667 (3,518,513) (868,594) (711,059) (1,184,114)
HYS Sub-Account........... 4,605,818 3,599,473 561,175 1,996,981 1,002,710 (717,869) (239,911) (272,767)
MSS Sub-Account........... 6,351,641 4,525,423 764,315 2,365,855 393,247 (238,446) (272,241) (301,191)
MMS Sub-Account........... 14,774,386 6,055,673 7,067,641 16,275,632 (4,978,118) (6,440,721) (1,147,939) (1,116,198)
RES Sub-Account........... 392,528 -- 1,164,202 124,868 468,222 269,642 (58,295) (1,982)
TRS Sub-Account........... 48,270,556 32,979,812 3,561,281 18,470,599 (821,216) (520,442) (1,740,188) (2,659,413)
UTS Sub-Account........... 2,273,439 279,796 498,294 1,824,507 (21,771) 258,454 (114,943) (89,318)
WAA Sub-Account........... 299,210 -- 643,741 145,953 305,591 153,647 (19,679) (390)
WGS Sub-Account........... 8,334,019 7,008,613 425,701 3,238,912 321,028 (1,467,047) (263,016) (446,459)
WGR Sub-Account........... 9,182,555 1,778,644 1,288,163 5,802,910 302,206 1,954,152 (358,380) (353,151)
WTR Sub-Account........... 138,126 -- 347,191 75,613 94,977 62,654 (16,925) (141)
<CAPTION>
Units Outstanding
End of Period
----------------------
Six Months
Ended Year Ended
June 30, Dec. 31,
MFS REGATTA CONTRACTS 1995 1994
-------------------------- ---------- ----------
<S> <C> <C>
CAS Sub-Account........... 6,652,456 6,184,731
GSS Sub-Account........... 3,518,852 4,235,203
HYS Sub-Account........... 998,350 839,825
MSS Sub-Account........... 2,084,947 2,066,642
MMS Sub-Account........... 3,381,190 3,873,044
TRS Sub-Account........... 13,532,670 14,225,539
WGS Sub-Account........... 1,795,829 1,967,375
MFS REGATTA GOLD CONTRACTS
--------------------------
<S> <C> <C>
CAS Sub-Account........... 24,275,610 19,909,649
CGS Sub-Account........... 12,788,361 10,979,711
EGS Sub-Account........... 1,117,271 --
GSS Sub-Account........... 15,733,004 18,784,262
HYS Sub-Account........... 5,929,792 4,605,818
MSS Sub-Account........... 7,236,962 6,351,641
MMS Sub-Account........... 15,715,970 14,774,386
RES Sub-Account........... 1,966,657 392,528
TRS Sub-Account........... 49,270,433 48,270,556
UTS Sub-Account........... 2,635,019 2,273,439
WAA Sub-Account........... 1,228,863 299,210
WGS Sub-Account........... 8,817,732 8,334,019
WGR Sub-Account........... 10,414,544 9,182,555
WTR Sub-Account........... 563,369 138,126
</TABLE>
13
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Participants in Sun Life of Canada (U.S.) Variable Account F
and the Board of Directors of Sun Life Assurance Company of Canada (U.S.):
We have audited the accompanying statement of condition of Sun Life of Canada
(U.S.) Variable Account F (the "Variable Account") as of June 30, 1995, the
related statement of operations for the six months then ended and the statements
of changes in net assets for the six months then ended and the year ended
December 31, 1994. 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 with the custodian of securities held for the Variable Account as
of June 30, 1995. 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 Variable Account as of June 30, 1995,
the results of its operations and the changes in its net assets for the
respective stated periods in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
August 4, 1995
---------------------------------------------
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.
14
<PAGE>
MFS REGATTA
MFS REGATTA GOLD
Directors and Officers of
Sun Life Assurance Company
of Canada (U.S.)
JOHN D. McNEIL, Chairman and Director
JOHN R. GARDNER, President and Director
DAVID D. HORN, Senior Vice President and
General Manager and Director
RICHARD B. BAILEY, Director
A. KEITH BRODKIN, Director
M. COLYER CRUM, Director
JOHN S. LANE, Director
ANGUS A. MacNAUGHTON, Director
BONNIE S. ANGUS, Secretary
L. BROCK THOMSON, Assistant Vice
President and Treasurer
SUN LIFE ASSURANCE COMPANY
OF CANADA (U.S.)
Annuity Service Mailing Address:
Sun Life Annuity Service Center
P.O. Box 1024, Boston, Massachusetts 02103-9986
General Distributor
Clarendon Insurance Agency, Inc.
500 Boylston Street
Boston, Massachusetts 02116-3741
Legal Counsel
Covington & Burling
1201 Pennsylvania Avenue, N.W.
P.O. Box 7566, Washington, D.C. 20044-7566
Auditors
Deloitte & Touche LLP
125 Summer Street
Boston, Massachusetts 02110-1616
Account Information
For account information, please 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 any business day from 8 a.m. to 6 p.m. Eastern time.
GOLD-3 8/95 95M
[REGATTA LOGO]
&
SEMIANNUAL REPORT - JUNE 30, 1995
PROFESSIONALLY MANAGED ANNUITIES ISSUED BY
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.),
A WHOLLY-OWNED SUBSIDIARY OF
SUN LIFE ASSURANCE COMPANY OF CANADA
