<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
PERFORMANCE SUMMARY
These performance results do not reflect any applicable surrender charges. Past
performance is no guarantee of future results.
<TABLE>
<CAPTION>
Unit Value
------------------------------------- Percent Change
December 31, 1996 June 30, 1997 in Unit Value
----------------- ----------------- --------------
<S> <C> <C> <C>
MFS REGATTA CONTRACTS:
Capital Appreciation Series -- Level
1.................................... $24.7064 $28.2889 14.50%
Capital Appreciation Series -- Level
2.................................... 9.9433 11.3934 14.58
Government Securities Series -- Level
1.................................... 15.5644 15.8613 1.91
Government Securities Series -- Level
2.................................... 9.9641 10.1616 1.98
High Yield Series -- Level 1.......... 19.7545 20.8187 5.39
High Yield Series -- Level 2.......... 10.0000* 10.5377 5.38
Managed Sectors Series -- Level 1..... 22.0312 24.8628 12.85
Managed Sectors Series -- Level 2..... 9.8974 11.1777 12.94
Money Market Series -- Level 1........ 12.7175 12.9395 1.75
Money Market Series -- Level 2........ 10.0240 10.2065 1.82
Total Return Series -- Level 1........ 20.0405 22.3221 11.38
Total Return Series -- Level 2........ 10.0182 11.1670 11.47
World Governments Series -- Level 1... 16.7734 16.3668 (2.42)
World Governments Series -- Level 2... 10.0242 9.7883 (2.35)
MFS REGATTA GOLD CONTRACTS:
Capital Appreciation Series........... $22.5700 $25.8426 14.50%
Conservative Growth Series............ 19.9527 23.5759 18.16
Emerging Growth Series................ 14.5136 15.9269 9.74
MFS/Foreign & Colonial Emerging
Markets Equity Series................ 9.9199 12.0156 21.13
MFS/Foreign & Colonial International
Growth Series........................ 9.7480 10.9870 12.71
MFS/Foreign & Colonial International
Growth and Income Series............. 10.4404 10.0541 (3.70)
Government Securities Series.......... 13.1252 13.3755 1.91
High Yield Series..................... 16.2674 17.1437 5.39
Managed Sectors Series................ 18.5452 20.9287 12.85
Money Market Series................... 11.3932 11.5921 1.75
Research Series....................... 16.3209 18.3768 12.60
Research Growth and Income Series..... 10.0000* 10.1777 1.78
Total Return Series................... 16.6932 18.5937 11.38
Utilities Series...................... 14.5260 16.2325 11.75
Value Series.......................... 10.9234 12.1963 11.65
World Asset Allocation Series......... 13.7702 14.9130 8.30
World Governments Series.............. 13.6780 13.3464 (2.42)
World Growth Series................... 13.7523 15.5743 13.25
World Total Return Series............. 13.1290 14.0716 7.18
MFS REGATTA CLASSIC CONTRACTS:
Capital Appreciation Series........... $ 9.8765 $11.3086 14.50%
Conservative Growth Series............ 9.8549 11.6444 18.16
Emerging Growth Series................ 9.5644 10.4957 9.74
MFS/Foreign & Colonial Emerging
Markets Equity Series................ 10.4127 12.6126 21.13
MFS/Foreign & Colonial International
Growth Series........................ 10.0270 10.5905 5.62
MFS/Foreign & Colonial International
Growth and Income Series............. 10.0000* 10.3418 3.42
Government Securities Series.......... 9.9631 10.1531 1.91
High Yield Series..................... 10.0910 10.6346 5.39
Managed Sectors Series................ 10.0000* 10.8475 8.48
Money Market Series................... 10.0239 10.1989 1.75
Research Series....................... 9.8296 11.0678 12.60
Total Return Series................... 9.9034 11.0310 11.39
Utilities Series...................... 10.0000* 10.8976 8.98
Value Series.......................... 10.1034 11.2808 11.65
World Asset Allocation Series......... 10.0430 10.8765 8.30
World Governments Series.............. 10.0000* 9.9956 (0.04)
World Growth Series................... 10.0000* 11.3249 13.25
World Total Return Series............. 10.0000* 10.6667 6.67
</TABLE>
*Reflects unit value on date of commencement of operations.
1
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
STATEMENT OF CONDITION -- June 30, 1997
<TABLE>
<CAPTION>
Assets:
Investment in MFS/Sun Life Series Trust Shares Cost Value
----------- -------------- --------------
<S> <C> <C> <C>
Capital Appreciation Series ("CAS").............................................. 27,829,955 $ 910,972,418 $1,045,987,179
Conservative Growth Series ("CGS")............................................... 26,170,998 585,912,047 782,271,749
Emerging Growth Series ("EGS")................................................... 20,141,045 287,793,991 328,559,480
MFS/Foreign & Colonial Emerging Markets Equity Series ("FCE").................... 1,588,576 17,421,176 19,366,255
MFS/Foreign & Colonial International Growth Series ("FCI")....................... 1,697,570 16,566,083 17,291,468
MFS/Foreign & Colonial International Growth and Income Series ("FCG")............ 3,906,561 40,813,820 43,417,584
Government Securities Series ("GSS")............................................. 24,532,459 308,665,271 301,868,913
High Yield Series ("HYS")........................................................ 21,119,410 189,573,138 192,232,375
Managed Sectors Series ("MSS")................................................... 10,261,944 245,503,333 270,654,311
Money Market Series ("MMS")...................................................... 369,322,026 369,322,026 369,322,026
Research Series ("RES").......................................................... 26,956,795 410,672,772 491,458,982
Research Growth and Income Series ("RGS")........................................ 60,240 611,067 614,258
Total Return Series ("TRS")...................................................... 72,185,919 1,208,319,065 1,415,011,846
Utilities Series ("UTS")......................................................... 6,095,701 71,875,193 84,793,376
Value Series ("VAL")............................................................. 3,654,618 40,466,837 44,870,593
World Asset Allocation Series ("WAA")............................................ 7,523,346 98,091,862 107,584,726
World Governments Series ("WGS")................................................. 10,528,659 121,345,699 111,821,662
World Growth Series ("WGR")...................................................... 16,097,933 198,542,508 233,734,591
World Total Return Series ("WTR")................................................ 4,061,102 50,410,928 56,689,788
-------------- --------------
$5,172,879,234 $5,917,551,162
--------------
--------------
Liability:
Payable to Sponsor.............................................................................................. (763,099)
--------------
Net Assets................................................................................................ $5,916,788,063
--------------
--------------
</TABLE>
<TABLE>
<CAPTION>
Applicable to Owners of Reserve
Deferred Variable Annuity Contracts for
------------------------------------- Variable
NET ASSETS APPLICABLE TO CONTRACT OWNERS: Units Unit Value Value Annuities Total
---------- ---------- ------------ ---------- --------------
<S> <C> <C> <C> <C> <C>
MFS REGATTA CONTRACTS:
CAS -- Level 1......................... 4,704,326 $28.2889 $133,139,298 $ 324,460 $ 133,463,758
CAS -- Level 2......................... 2,937,378 11.3934 33,362,689 13,288 33,375,977
GSS -- Level 1......................... 2,274,024 15.8613 36,079,718 61,897 36,141,615
GSS -- Level 2......................... 902,297 10.1616 9,153,785 28,430 9,182,215
HYS -- Level 1......................... 957,688 20.8187 19,942,567 16,106 19,958,673
HYS -- Level 2......................... 371,393 10.5377 3,915,531 -- 3,915,531
MSS -- Level 1......................... 1,538,280 24.8628 38,144,135 151,981 38,296,116
MSS -- Level 2......................... 1,024,241 11.1777 11,533,086 -- 11,533,086
MMS -- Level 1......................... 3,544,810 12.9395 46,043,313 47,100 46,090,413
MMS -- Level 2......................... 1,637,212 10.2065 16,494,922 2,972 16,497,894
TRS -- Level 1......................... 9,286,433 22.3221 207,308,596 1,218,576 208,527,172
TRS -- Level 2......................... 3,893,022 11.1670 43,417,020 31,632 43,448,652
WGS -- Level 1......................... 1,130,416 16.3668 18,510,125 66,754 18,576,879
WGS -- Level 2......................... 216,897 9.7883 2,111,872 -- 2,111,872
------------ ---------- --------------
$619,156,657 $1,963,196 $ 621,119,853
------------ ---------- --------------
(continued)
</TABLE>
See notes to financial statements
2
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
STATEMENT OF CONDITION -- continued
<TABLE>
<CAPTION>
Applicable to Owners of Reserve
Deferred Variable Annuity Contracts for
NET ASSETS APPLICABLE TO CONTRACT OWNERS --------------------------------------- Variable
(CONTINUED): Units Unit Value Value Annuities Total
---------- ---------- -------------- ---------- --------------
<S> <C> <C> <C> <C> <C>
MFS REGATTA GOLD CONTRACTS:
CAS.................................... 33,801,757 $25.8426 $ 873,377,810 $4,652,335 $ 878,030,145
CGS.................................... 32,951,414 23.5759 776,971,721 2,128,927 779,100,648
EGS.................................... 20,513,238 15.9269 326,694,399 388,348 327,082,747
FCE.................................... 1,580,908 12.0156 18,995,483 32,037 19,027,520
FCI.................................... 1,676,206 10.9870 16,852,069 9,929 16,861,998
FCG.................................... 3,913,389 10.0541 42,997,589 80,695 43,078,284
GSS.................................... 19,111,341 13.3755 255,659,214 489,392 256,148,606
HYS.................................... 9,717,537 17.1437 166,565,377 510,000 167,075,377
MSS.................................... 10,514,186 20.9287 219,806,601 577,435 220,384,036
MMS.................................... 26,239,418 11.5921 304,250,441 795,936 305,046,377
RES.................................... 26,480,094 18.3768 486,613,161 1,548,424 488,161,585
RGS.................................... 60,345 10.1777 614,258 -- 614,258
TRS.................................... 62,106,071 18.5937 1,154,651,045 2,258,856 1,156,909,901
UTS.................................... 5,195,002 16.2325 84,317,543 264,765 84,582,308
VAL.................................... 3,603,026 12.1963 43,944,094 98,219 44,042,313
WAA.................................... 7,163,796 14.9130 106,824,150 433,803 107,257,953
WGS.................................... 6,795,150 13.3464 90,704,140 376,057 91,080,197
WGR.................................... 14,938,339 15.5743 232,809,547 581,057 233,390,604
WTR.................................... 4,008,259 14.0716 56,401,042 188,488 56,589,530
-------------- ---------- --------------
$5,259,049,684 $15,414,703 $5,274,464,387
-------------- ---------- --------------
MFS REGATTA CLASSIC CONTRACTS:
CAS.................................... 88,065 $11.3086 $ 997,014 $ -- $ 997,014
CGS.................................... 268,976 11.6444 3,132,831 -- 3,132,831
EGS.................................... 135,868 10.4957 1,427,497 -- 1,427,497
FCE.................................... 26,605 12.6126 335,768 -- 335,768
FCI.................................... 41,499 10.3418 429,457 -- 429,457
FCG.................................... 31,569 10.5905 334,469 -- 334,469
GSS.................................... 42,413 10.1531 431,120 -- 431,120
HYS.................................... 108,473 10.6346 1,153,269 -- 1,153,269
MSS.................................... 32,142 10.8475 348,850 -- 348,850
MMS.................................... 147,627 10.1989 1,506,729 -- 1,506,729
RES.................................... 308,683 11.0678 3,417,962 -- 3,417,962
TRS.................................... 530,000 11.0310 5,850,855 -- 5,850,855
UTS.................................... 12,440 10.8976 132,574 -- 132,574
VAL.................................... 72,777 11.2808 821,480 -- 821,480
WAA.................................... 32,224 10.8765 350,811 -- 350,811
WGS.................................... 9,551 9.9956 95,514 -- 95,514
WGR.................................... 29,393 11.3249 332,856 -- 332,856
WTR.................................... 9,815 10.6667 104,767 -- 104,767
-------------- ---------- --------------
$ 21,203,823 $ -- $ 21,203,823
-------------- ---------- --------------
Net Assets................................................. $5,899,410,164 $17,377,899 $5,916,788,063
-------------- ---------- --------------
-------------- ---------- --------------
</TABLE>
See notes to financial statements
3
<PAGE>
SUN LIFE (U.S.) VARIABLE ACCOUNT F
STATEMENTS OF OPERATIONS -- Six Months Ended June 30, 1997
<TABLE>
<CAPTION>
CAS CGS EGS FCE FCI
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
------------ ------------ ------------ ------------- -----------
<S> <C> <C> <C> <C> <C>
INCOME AND EXPENSES:
Dividend income and capital gain
distributions received.......... $ 88,676,113 $ 35,535,241 $ 1,301,804 $ 7,806 $ 24,244
Mortality and expense risk
charges......................... 5,827,177 3,901,076 1,721,985 61,978 63,279
Distribution expense charges..... 115,734 -- -- -- --
Administrative expense charges... 583,528 468,129 206,638 7,437 7,594
------------ ------------ ------------ ------------- -----------
Net investment income
(expense)................... $ 82,149,674 $ 31,166,036 $ (626,819) $ (61,609) $ (46,629)
------------ ------------ ------------ ------------- -----------
------------ ------------ ------------ ------------- -----------
REALIZED AND UNREALIZED GAINS
(LOSSES):
Realized gains (losses) on
investment transactions
Proceeds from sales............ $195,307,163 $ 9,859,828 $ 21,067,371 $1,181,745 $1,598,548
Cost of investments sold....... 148,645,619 5,642,822 17,849,082 1,085,636 1,667,007
------------ ------------ ------------ ------------- -----------
Net realized gains (losses).. $ 46,661,544 $ 4,217,006 $ 3,218,289 $ 96,109 $ (68,459)
------------ ------------ ------------ ------------- -----------
Net unrealized appreciation
(depreciation) on investments
End of period.................. $135,014,761 $196,359,702 $ 40,765,489 $1,945,079 $ 725,385
Beginning of period............ 133,626,673 122,871,165 16,355,150 47,389 (64,127)
------------ ------------ ------------ ------------- -----------
Change in unrealized
appreciation
(depreciation).............. $ 1,388,088 $ 73,488,537 $ 24,410,339 $1,897,690 $ 789,512
------------ ------------ ------------ ------------- -----------
Realized and unrealized gains
(losses)...................... $ 48,049,632 $ 77,705,543 $ 27,628,628 $1,993,799 $ 721,053
------------ ------------ ------------ ------------- -----------
INCREASE IN NET ASSETS FROM
OPERATIONS...................... $130,199,306 $108,871,579 $ 27,001,809 $1,932,190 $ 674,424
------------ ------------ ------------ ------------- -----------
------------ ------------ ------------ ------------- -----------
<CAPTION>
FCG GSS HYS
Sub-Account Sub-Account Sub-Account
----------- ------------ -----------
<S> <C> <C> <C>
INCOME AND EXPENSES:
Dividend income and capital gain
distributions received.......... $ 506,953 $ 20,574,577 $12,574,875
Mortality and expense risk
charges......................... 234,615 1,887,187 1,066,400
Distribution expense charges..... -- 35,842 17,197
Administrative expense charges... 28,154 190,620 110,771
----------- ------------ -----------
Net investment income
(expense)................... $ 244,184 $ 18,460,928 $11,380,507
----------- ------------ -----------
----------- ------------ -----------
REALIZED AND UNREALIZED GAINS
(LOSSES):
Realized gains (losses) on
investment transactions
Proceeds from sales............ $4,829,449 $ 46,890,858 $61,061,280
Cost of investments sold....... 4,675,189 47,432,259 58,412,803
----------- ------------ -----------
Net realized gains (losses).. $ 154,260 $ (541,401) $ 2,648,477
----------- ------------ -----------
Net unrealized appreciation
(depreciation) on investments
End of period.................. $2,603,764 $ (6,796,358) $ 2,659,237
Beginning of period............ 801,687 5,399,156 7,187,592
----------- ------------ -----------
Change in unrealized
appreciation
(depreciation).............. $1,802,077 $(12,195,514) $(4,528,355)
----------- ------------ -----------
Realized and unrealized gains
(losses)...................... $1,956,337 $(12,736,915) $(1,879,878)
----------- ------------ -----------
INCREASE IN NET ASSETS FROM
OPERATIONS...................... $2,200,521 $ 5,724,013 $ 9,500,629
----------- ------------ -----------
----------- ------------ -----------
</TABLE>
See notes to financial statements
4
<PAGE>
SUN LIFE (U.S.) VARIABLE ACCOUNT F
STATEMENTS OF OPERATIONS -- continued
<TABLE>
<CAPTION>
MSS MMS RES RGS TRS UTS
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............... $29,226,909 $ 8,610,382 $12,704,276 $-- $136,291,376 $ 8,922,718
Mortality and expense risk charges.... 1,536,157 2,181,746 2,421,591 492 8,083,035 456,817
Distribution expense charges.......... 35,145 37,279 -- -- 183,058 --
Administrative expense charges........ 149,194 224,530 290,591 -- 786,906 54,818
----------- ------------ ----------- ----------- ------------ -----------
Net investment income (expense)... $27,506,413 $ 6,166,827 $ 9,992,094 $ (492) $127,238,377 $ 8,411,083
----------- ------------ ----------- ----------- ------------ -----------
----------- ------------ ----------- ----------- ------------ -----------
REALIZED AND UNREALIZED GAINS:
Realized gains on investment
transactions
Proceeds from sales................. $37,529,402 $397,826,095 $ 5,850,961 $ 308 $113,750,588 $ 2,661,036
Cost of investments sold............ 30,767,503 397,826,095 3,799,181 303 81,358,565 1,829,950
----------- ------------ ----------- ----------- ------------ -----------
Net realized gains................ $ 6,761,899 $ -- $ 2,051,780 $ 5 $ 32,392,023 $ 831,086
----------- ------------ ----------- ----------- ------------ -----------
Net unrealized appreciation
(depreciation) on investments
End of period....................... $25,150,978 $ -- $80,786,210 $3,191 $206,692,781 $12,918,183
Beginning of period................. 28,912,535 -- 42,800,056 -- 223,195,771 13,599,433
----------- ------------ ----------- ----------- ------------ -----------
Change in unrealized appreciation
(depreciation)................... $(3,761,557) $ -- $37,986,154 $3,191 $(16,502,990) $ (681,250)
----------- ------------ ----------- ----------- ------------ -----------
Realized and unrealized gains....... $ 3,000,342 $ -- $40,037,934 $3,196 $ 15,889,033 $ 149,836
----------- ------------ ----------- ----------- ------------ -----------
INCREASE IN NET ASSETS FROM
OPERATIONS........................... $30,506,755 $ 6,166,827 $50,030,028 $2,704 $143,127,410 $ 8,560,919
----------- ------------ ----------- ----------- ------------ -----------
----------- ------------ ----------- ----------- ------------ -----------
<CAPTION>
VAL WAA
Sub-Account Sub-Account
----------- -----------
<S> <C> <C>
INCOME AND EXPENSES:
Dividend income and capital gain
distributions received............... $ 287,830 $4,694,705
Mortality and expense risk charges.... 182,909 556,958
Distribution expense charges.......... -- --
Administrative expense charges........ 21,949 66,835
----------- -----------
Net investment income (expense)... $ 82,972 $4,070,912
----------- -----------
----------- -----------
REALIZED AND UNREALIZED GAINS:
Realized gains on investment
transactions
Proceeds from sales................. $ 933,496 $3,617,191
Cost of investments sold............ 847,432 2,748,040
----------- -----------
Net realized gains................ $ 86,064 $ 869,151
----------- -----------
Net unrealized appreciation
(depreciation) on investments
End of period....................... $4,403,756 $9,492,864
Beginning of period................. 744,641 7,002,678
----------- -----------
Change in unrealized appreciation
(depreciation)................... $3,659,115 $2,490,186
----------- -----------
Realized and unrealized gains....... $3,745,179 $3,359,337
----------- -----------
INCREASE IN NET ASSETS FROM
OPERATIONS........................... $3,828,151 $7,430,249
----------- -----------
----------- -----------
</TABLE>
See notes to financial statements
5
<PAGE>
SUN LIFE (U.S.) VARIABLE ACCOUNT F
STATEMENTS OF OPERATIONS -- continued
<TABLE>
<CAPTION>
WGS WGR WTR
Sub-Account Sub-Account Sub-Account Total
----------- ----------- ----------- ---------------
<S> <C> <C> <C> <C>
INCOME AND EXPENSES:
Dividend income and capital gain
distributions received............... $ 4,501,932 $ 4,834,251 $1,265,181 $ 370,541,173
Mortality and expense risk charges.... 715,465 1,272,362 277,158 32,448,387
Distribution expense charges.......... 16,143 -- -- 440,398
Administrative expense charges........ 69,713 152,683 33,259 3,453,349
----------- ----------- ----------- ---------------
Net investment income............. $ 3,700,611 $ 3,409,206 $ 954,764 $ 334,199,039
----------- ----------- ----------- ---------------
----------- ----------- ----------- ---------------
REALIZED AND UNREALIZED GAINS (LOSSES):
Realized gains (losses) on investment
transactions
Proceeds from sales................. $18,912,547 $20,572,556 $1,165,333 $ 944,615,755
Cost of investments sold............ 21,671,636 17,549,867 921,187 844,730,176
----------- ----------- ----------- ---------------
Net realized gains (losses)....... $(2,759,089) $ 3,022,689 $ 244,146 $ 99,885,579
----------- ----------- ----------- ---------------
Net unrealized appreciation
(depreciation) on investments
End of period....................... $(9,524,037) $35,192,083 $6,278,860 $ 744,671,928
Beginning of period................. (5,431,957) 15,241,453 3,870,720 616,160,015
----------- ----------- ----------- ---------------
Change in unrealized appreciation
(depreciation)................... $(4,092,080) $19,950,630 $2,408,140 $ 128,511,913
----------- ----------- ----------- ---------------
Realized and unrealized gains
(losses)........................... $(6,851,169) $22,973,319 $2,652,286 $ 228,397,492
----------- ----------- ----------- ---------------
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS........................... $(3,150,558) $26,382,525 $3,607,050 $ 562,596,531
----------- ----------- ----------- ---------------
----------- ----------- ----------- ---------------
</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
Sub-Account Sub-Account Sub-Account
------------------------------ ---------------------------- ----------------------------
Six Months Six Months Six Months
Ended Year Ended Ended Year Ended Ended Year Ended
June 30, Dec. 31, June 30, Dec. 31, June 30, Dec. 31,
1997 1996 1997 1996 1997 1996
--------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(expense).................. $ 82,149,674 $ 52,941,263 $ 31,166,036 $ 8,788,822 $ (626,819) $ (1,968,496)
Net realized gains
(losses)................... 46,661,544 62,169,749 4,217,006 4,512,770 3,218,289 4,277,168
Net unrealized gains........ 1,388,088 27,056,227 73,488,537 69,960,621 24,410,339 12,802,194
--------------- ------------- ------------- ------------- ------------- -------------
Increase in net assets
from operations........ $ 130,199,306 $ 142,167,239 $ 108,871,579 $ 83,262,213 $ 27,001,809 $ 15,110,866
--------------- ------------- ------------- ------------- ------------- -------------
PARTICIPANT TRANSACTIONS:
Accumulation Activity:
Purchase payments
received................. $ 93,210,535 $ 148,876,483 $ 99,020,909 $ 153,852,554 $ 50,655,411 $ 122,215,402
Net transfers between Sub-
Accounts and Fixed
Account.................. 1,749,491 (5,608,366) 67,083,350 36,048,717 10,066,995 50,369,380
Withdrawals, surrenders,
annuitizations and
contract charges......... (80,367,760) (47,835,347) (17,330,976) (19,835,752) (6,338,884) (8,085,001)
--------------- ------------- ------------- ------------- ------------- -------------
Net accumulation
activity............... $ 14,592,266 $ 95,432,770 $ 148,773,283 $ 170,065,519 $ 54,383,522 $ 164,499,781
--------------- ------------- ------------- ------------- ------------- -------------
Annuitization Activity:
Annuitizations............ $ 1,073,202 $ 1,193,495 $ 490,544 $ 437,102 $ 19,165 $ 286,409
Annuity payments and
contract charges......... (454,889) (347,090) (99,940) (129,806) (28,284) (13,624)
Net transfers between Sub-
Accounts................. 40,820 119,425 353,957 116,806 15,772 44,347
Adjustments to annuity
reserve.................. (268,628) (50,462) 24,044 (87,515) (13,728) 21,044
--------------- ------------- ------------- ------------- ------------- -------------
Net annuitization
activity............... $ 390,505 $ 915,368 $ 768,605 $ 336,587 $ (7,075) $ 338,176
--------------- ------------- ------------- ------------- ------------- -------------
Increase in net assets from
participant transactions... $ 14,982,771 $ 96,348,138 $ 149,541,888 $ 170,402,106 $ 54,376,447 $ 164,837,957
--------------- ------------- ------------- ------------- ------------- -------------
Increase in net assets.... $ 145,182,077 $ 238,515,377 $ 258,413,467 $ 253,664,319 $ 81,378,256 $ 179,948,823
--------------- ------------- ------------- ------------- ------------- -------------
NET ASSETS:
Beginning of period......... 900,684,817 662,169,440 523,820,012 270,155,693 247,131,988 67,183,165
--------------- ------------- ------------- ------------- ------------- -------------
End of period............... $ 1,045,866,894 $ 900,684,817 $ 782,233,479 $ 523,820,012 $ 328,510,244 $ 247,131,988
--------------- ------------- ------------- ------------- ------------- -------------
--------------- ------------- ------------- ------------- ------------- -------------
<CAPTION>
FCE
Sub-Account
-------------------------
Six Months
Ended Year Ended
June 30, Dec. 31,
1997 1996*
------------ -----------
<S> <C> <C>
OPERATIONS:
Net investment income
(expense).................. $ (61,609) $ (13,026)
Net realized gains
(losses)................... 96,109 (5,712)
Net unrealized gains........ 1,897,690 47,389
------------ -----------
Increase in net assets
from operations........ $ 1,932,190 $ 28,651
------------ -----------
PARTICIPANT TRANSACTIONS:
Accumulation Activity:
Purchase payments
received................. $ 4,713,663 $ 1,048,658
Net transfers between Sub-
Accounts and Fixed
Account.................. 9,614,930 2,213,104
Withdrawals, surrenders,
annuitizations and
contract charges......... (197,418) (18,977)
------------ -----------
Net accumulation
activity............... $ 14,131,175 $ 3,242,785
------------ -----------
Annuitization Activity:
Annuitizations............ $ 33,202 $ --
Annuity payments and
contract charges......... (1,748) --
Net transfers between Sub-
Accounts................. -- --
Adjustments to annuity
reserve.................. (2,967) --
------------ -----------
Net annuitization
activity............... $ 28,487 $ --
------------ -----------
Increase in net assets from
participant transactions... $ 14,159,662 $ 3,242,785
------------ -----------
Increase in net assets.... $ 16,091,852 $ 3,271,436
------------ -----------
NET ASSETS:
Beginning of period......... 3,271,436 --
------------ -----------
End of period............... $ 19,363,288 $ 3,271,436
------------ -----------
------------ -----------
</TABLE>
*For the period July 1, 1996 (commencement of operations) to December 31, 1996
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>
FCI FCG GSS
Sub-Account Sub-Account Sub-Account
------------------------------ ---------------------------- --------------------------
Six Months Six Months Six Months
Ended Year Ended Ended Year Ended Ended Year Ended
June 30, Dec. 31, June 30, Dec. 31, June 30, Dec. 31,
1997 1996 1997 1996 1997 1996
--------------- ------------- ------------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(expense).................... $ (46,629) $ (21,609) $ 244,184 $ (328,431) $ 18,460,928 $ 13,823,215
Net realized gains (losses)... (68,459) (1,678) 154,260 251,398 (541,401) (2,504,323)
Net unrealized gains
(losses)..................... 789,512 (64,127) 1,802,077 690,250 (12,195,514) (10,551,635)
--------------- ------------- ------------- ------------- ------------ ------------
Increase (decrease) in net
assets from operations... $ 674,424 $ (87,414) $ 2,200,521 $ 613,217 $ 5,724,013 $ 767,257
--------------- ------------- ------------- ------------- ------------ ------------
PARTICIPANT TRANSACTIONS:
Accumulation Activity:
Purchase payments
received................... $ 5,842,344 $ 2,460,672 $ 4,851,344 $ 19,437,825 $ 24,659,007 $ 54,669,405
Net transfers between Sub-
Accounts and Fixed
Account.................... 5,399,579 3,215,694 2,249,045 8,809,224 (12,680,987) (14,448,899)
Withdrawals, surrenders,
annuitizations and contract
charges.................... (162,532) (60,665) (1,049,715) (951,163) (28,096,584) (21,010,408)
--------------- ------------- ------------- ------------- ------------ ------------
Net accumulation
activity................. $ 11,079,391 $ 5,615,701 $ 6,050,674 $ 27,295,886 $(16,118,564) $ 19,210,098
--------------- ------------- ------------- ------------- ------------ ------------
Annuitization Activity:
Annuitizations.............. $ 9,715 $ -- $ 39,180 $ 43,066 $ 19,232 $ 268,329
Annuity payments and
contract charges........... (349) -- (2,320) (1,385) (107,765) (240,819)
Net transfers between Sub-
Accounts................... -- -- -- -- (47,101) (309,558)
Adjustments to annuity
reserve.................... (13) -- (6,311) 1,480 10,464 (40,665)
--------------- ------------- ------------- ------------- ------------ ------------
Net annuitization
activity................. $ 9,353 $ -- $ 30,549 $ 43,161 $ (125,170) $ (322,713)
--------------- ------------- ------------- ------------- ------------ ------------
Increase (decrease) in net
assets from participant
transactions................. $ 11,088,744 $ 5,615,701 $ 6,081,223 $ 27,339,047 $(16,243,734) $ 18,887,385
--------------- ------------- ------------- ------------- ------------ ------------
Increase (decrease) in net
assets..................... $ 11,763,168 $ 5,528,287 $ 8,281,744 $ 27,952,264 $(10,519,721) $ 19,654,642
--------------- ------------- ------------- ------------- ------------ ------------
NET ASSETS:
Beginning of period........... 5,528,287 -- 35,131,009 7,178,745 312,423,277 292,768,635
--------------- ------------- ------------- ------------- ------------ ------------
End of period................. $ 17,291,455 $ 5,528,287 $ 43,412,753 $ 35,131,009 $301,903,556 $312,423,277
--------------- ------------- ------------- ------------- ------------ ------------
--------------- ------------- ------------- ------------- ------------ ------------
<CAPTION>
HYS
Sub-Account
--------------------------
Six Months
Ended Year Ended
June 30, Dec. 31,
1997 1996
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income
(expense).................... $ 11,380,507 $ 7,621,505
Net realized gains (losses)... 2,648,477 5,703,568
Net unrealized gains
(losses)..................... (4,528,355) 840,341
------------ ------------
Increase (decrease) in net
assets from operations... $ 9,500,629 $ 14,165,414
------------ ------------
PARTICIPANT TRANSACTIONS:
Accumulation Activity:
Purchase payments
received................... $ 25,312,838 $ 33,898,269
Net transfers between Sub-
Accounts and Fixed
Account.................... 11,912,336 4,326,619
Withdrawals, surrenders,
annuitizations and contract
charges.................... (15,999,113) (11,758,613)
------------ ------------
Net accumulation
activity................. $ 21,226,061 $ 26,466,275
------------ ------------
Annuitization Activity:
Annuitizations.............. $ 264,273 $ 137,217
Annuity payments and
contract charges........... (110,954) (79,990)
Net transfers between Sub-
Accounts................... -- 14,805
Adjustments to annuity
reserve.................... (49,667) (42,595)
------------ ------------
Net annuitization
activity................. $ 103,652 $ 29,437
------------ ------------
Increase (decrease) in net
assets from participant
transactions................. $ 21,329,713 $ 26,495,712
------------ ------------
Increase (decrease) in net
assets..................... $ 30,830,342 $ 40,661,126
------------ ------------
NET ASSETS:
Beginning of period........... 161,272,508 120,611,382
------------ ------------
End of period................. $192,102,850 $161,272,508
------------ ------------
------------ ------------
</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>
MSS MMS RES
Sub-Account Sub-Account Sub-Account
-------------------------- -------------------------- --------------------------
Six Months Six Months Six Months
Ended Year Ended Ended Year Ended Ended Year Ended
June 30, Dec. 31, June 30, Dec. 31, June 30, Dec. 31,
1997 1996 1997 1996 1997 1996
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (expense)............ $ 27,506,413 $ 24,096,088 $ 6,166,827 $ 9,789,043 $ 9,992,094 $ (428,000)
Net realized gains......................... 6,761,899 2,898,908 -- -- 2,051,780 1,850,763
Net unrealized gains (losses).............. (3,761,557) 4,637,529 -- -- 37,986,154 34,176,685
------------ ------------ ------------ ------------ ------------ ------------
Increase in net assets from
operations............................ $ 30,506,755 $ 31,632,525 $ 6,166,827 $ 9,789,043 $ 50,030,028 $ 35,599,448
------------ ------------ ------------ ------------ ------------ ------------
PARTICIPANT TRANSACTIONS:
Accumulation Activity:
Purchase payments received............... $ 23,865,913 $ 40,598,625 $ 85,455,847 $208,990,259 $ 84,861,749 $156,881,700
Net transfers between Sub-Accounts and
Fixed Account........................... (3,984,708) 7,831,933 24,982,011 (43,233,439) 44,523,918 64,021,188
Withdrawals, surrenders, annuitizations
and contract charges.................... (24,622,225) (13,315,281) (108,913,115) (46,733,186) (8,989,643) (7,956,041)
------------ ------------ ------------ ------------ ------------ ------------
Net accumulation activity.............. $ (4,741,020) $ 35,115,277 $ 1,524,743 $119,023,634 $120,396,024 $212,946,847
------------ ------------ ------------ ------------ ------------ ------------
Annuitization Activity:
Annuitizations........................... $ 425,193 $ 82,609 $ 71,081 $ 1,121,927 $ 108,461 $ 557,791
Annuity payments and contract charges.... (104,198) (76,110) (121,650) (206,726) (66,219) (62,358)
Net transfers between Sub-Accounts....... (4,090) 41,877 (309,205) (190,340) 8,218 118,346
Adjustments to annuity reserve........... (75,065) (12,576) (21,232) (23,831) 426 38,061
------------ ------------ ------------ ------------ ------------ ------------
Net annuitization activity............. $ 241,840 $ 35,800 $ (381,006) $ 701,030 $ 50,886 $ 651,840
------------ ------------ ------------ ------------ ------------ ------------
Increase (decrease) in net assets from
participant transactions.................. $ (4,499,180) $ 35,151,077 $ 1,143,737 $119,724,664 $120,446,910 $213,598,687
------------ ------------ ------------ ------------ ------------ ------------
Increase in net assets................... $ 26,007,575 $ 66,783,602 $ 7,310,564 $129,513,707 $170,476,938 $249,198,135
------------ ------------ ------------ ------------ ------------ ------------
NET ASSETS:
Beginning of period........................ 244,554,513 177,770,911 361,830,849 232,317,142 321,102,609 71,904,474
------------ ------------ ------------ ------------ ------------ ------------
End of period.............................. $270,562,088 $244,554,513 $369,141,413 $361,830,849 $491,579,547 $321,102,609
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
<CAPTION>
RGS
Sub-Account
-----------
Six Months
Ended
June 30,
1997**
-----------
<S> <C>
OPERATIONS:
Net investment income (expense)............ $ (492)
Net realized gains......................... 5
Net unrealized gains (losses).............. 3,191
-----------
Increase in net assets from
operations............................ $ 2,704
-----------
PARTICIPANT TRANSACTIONS:
Accumulation Activity:
Purchase payments received............... $ 176,856
Net transfers between Sub-Accounts and
Fixed Account........................... 435,234
Withdrawals, surrenders, annuitizations
and contract charges.................... (536)
-----------
Net accumulation activity.............. $ 611,554
-----------
Annuitization Activity:
Annuitizations........................... $ --
Annuity payments and contract charges.... --
Net transfers between Sub-Accounts....... --
Adjustments to annuity reserve........... --
-----------
Net annuitization activity............. $ --
-----------
Increase (decrease) in net assets from
participant transactions.................. $ 611,554
-----------
Increase in net assets................... $ 614,258
-----------
NET ASSETS:
Beginning of period........................ --
-----------
End of period.............................. $ 614,258
-----------
-----------
</TABLE>
**For the period June 1, 1997 (commencement of operations) to June 30, 1997
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>
TRS UTS VAL
Sub-Account Sub-Account Sub-Account
------------------------------ ---------------------------- ----------------------------
Six Months Six Months Six Months
Ended Year Ended Ended Year Ended Ended Year Ended
June 30, Dec. 31, June 30, Dec. 31, June 30, Dec. 31,
1997 1996 1997 1996 1997 1996***
-------------- -------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(expense)................. $ 127,238,377 $ 64,654,089 $ 8,411,083 $ 1,926,985 $ 82,972 $ (53,621)
Net realized gains......... 32,392,023 20,511,061 831,086 1,617,706 86,064 23,298
Net unrealized gains
(losses).................. (16,502,990) 50,461,971 (681,250) 6,572,565 3,659,115 744,641
-------------- -------------- ------------- ------------- ------------- -------------
Increase in net assets
from operations....... $ 143,127,410 $ 135,627,121 $ 8,560,919 $ 10,117,256 $ 3,828,151 $ 714,318
-------------- -------------- ------------- ------------- ------------- -------------
PARTICIPANT TRANSACTIONS:
Accumulation Activity:
Purchase payments
received................ $ 123,374,253 $ 158,550,497 $ 7,565,966 $ 18,235,404 $ 14,482,628 $ 10,936,155
Net transfers between
Sub-Accounts and Fixed
Account................. 24,461,303 7,794,293 2,719,052 835,305 10,501,636 5,122,274
Withdrawals, surrenders,
annuitizations and
contract charges........ (123,043,230) (79,238,642) (2,207,424) (3,059,763) (743,897) (63,860)
-------------- -------------- ------------- ------------- ------------- -------------
Net accumulation
activity.............. $ 24,792,326 $ 87,106,148 $ 8,077,594 $ 16,010,946 $ 24,240,367 $ 15,994,569
-------------- -------------- ------------- ------------- ------------- -------------
Annuitization Activity:
Annuitizations........... $ 681,293 $ 505,447 $ 123,749 $ 116,582 $ 96,594 $ --
Annuity payments and
contract charges........ (491,096) (762,883) (20,419) (18,434) (3,407) --
Net transfers between
Sub-Accounts............ 87,209 56,990 28,886 -- -- --
Adjustments to annuity
reserve................. (107,259) (87,530) 6,857 (82,561) (6,799) --
-------------- -------------- ------------- ------------- ------------- -------------
Net annuitization
activity.............. $ 170,147 $ (287,976) $ 139,073 $ 15,587 $ 86,388 $ --
-------------- -------------- ------------- ------------- ------------- -------------
Increase in net assets from
participant
transactions.............. $ 24,962,473 $ 86,818,172 $ 8,216,667 $ 16,026,533 $ 24,326,755 $ 15,994,569
-------------- -------------- ------------- ------------- ------------- -------------
Increase in net assets... $ 168,089,883 $ 222,445,293 $ 16,777,586 $ 26,143,789 $ 28,154,906 $ 16,708,887
-------------- -------------- ------------- ------------- ------------- -------------
NET ASSETS:
Beginning of period........ 1,246,646,697 1,024,201,404 67,937,296 41,793,507 16,708,887 --
-------------- -------------- ------------- ------------- ------------- -------------
End of period.............. $1,414,736,580 $1,246,646,697 $ 84,714,882 $ 67,937,296 $ 44,863,793 $ 16,708,887
-------------- -------------- ------------- ------------- ------------- -------------
-------------- -------------- ------------- ------------- ------------- -------------
<CAPTION>
WAA
Sub-Account
---------------------------
Six Months
Ended Year Ended
June 30, Dec. 31,
1997 1996
------------ -------------
<S> <C> <C>
OPERATIONS:
Net investment income
(expense)................. $ 4,070,912 $ 595,575
Net realized gains......... 869,151 1,629,596
Net unrealized gains
(losses).................. 2,490,186 4,425,108
------------ -------------
Increase in net assets
from operations....... $ 7,430,249 $ 6,650,279
------------ -------------
PARTICIPANT TRANSACTIONS:
Accumulation Activity:
Purchase payments
received................ $ 14,735,820 $ 33,549,719
Net transfers between
Sub-Accounts and Fixed
Account................. 10,766,471 13,363,954
Withdrawals, surrenders,
annuitizations and
contract charges........ (2,067,537) (2,987,226)
------------ -------------
Net accumulation
activity.............. $ 23,434,754 $ 43,926,447
------------ -------------
Annuitization Activity:
Annuitizations........... $ 62,840 $ 174,043
Annuity payments and
contract charges........ (18,397) (17,132)
Net transfers between
Sub-Accounts............ 79,587 --
Adjustments to annuity
reserve................. 2,234 16,443
------------ -------------
Net annuitization
activity.............. $ 126,264 $ 173,354
------------ -------------
Increase in net assets from
participant
transactions.............. $ 23,561,018 $ 44,099,801
------------ -------------
Increase in net assets... $ 30,991,267 $ 50,750,080
------------ -------------
NET ASSETS:
Beginning of period........ 76,617,497 25,867,417
------------ -------------
End of period.............. $107,608,764 $ 76,617,497
------------ -------------
------------ -------------
</TABLE>
***For the period June 3, 1996 (commencement of operations) to December 31, 1996
See notes to financial statements
10
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
STATEMENTS OF CHANGES IN NET ASSETS -- continued
<TABLE>
<CAPTION>
WGS WGR WTR
Sub-Account Sub-Account Sub-Account
-------------------------- -------------------------- ----------------------------
Six Months Six Months Six Months
Ended Year Ended Ended Year Ended Ended Year Ended
June 30, Dec. 31, June 30, Dec. 31, June 30, Dec. 31,
1997 1996 1997 1996 1997 1996
------------ ------------ ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income...... $ 3,700,611 $ 16,535,862 $ 3,409,206 $ 9,576,256 $ 954,764 $ 71,547
Net realized gains
(losses).................. (2,759,089) (2,712,091) 3,022,689 6,018,165 244,146 545,390
Net unrealized gains
(losses).................. (4,092,080) (9,808,667) 19,950,630 1,415,056 2,408,140 2,845,849
------------ ------------ ------------ ------------ ------------- -------------
Increase (decrease) in
net assets from
operations............ $ (3,150,558) $ 4,015,104 $ 26,382,525 $ 17,009,477 $ 3,607,050 $ 3,462,786
------------ ------------ ------------ ------------ ------------- -------------
PARTICIPANT TRANSACTIONS:
Accumulation Activity:
Purchase payments
received................ $ 5,498,038 $ 10,730,732 $ 13,330,233 $ 40,398,624 $ 8,369,537 $ 16,294,987
Net transfers between
Sub-Accounts and Fixed
Account................. (10,417,425) (13,803,477) 7,386,998 3,588,236 8,462,136 5,434,372
Withdrawals, surrenders,
annuitizations and
contract charges........ (7,786,812) (11,401,973) (6,264,580) (9,375,496) (1,153,299) (1,579,132)
------------ ------------ ------------ ------------ ------------- -------------
Net accumulation
activity.............. $(12,706,199) $(14,474,718) $ 14,452,651 $ 34,611,364 $ 15,678,374 $ 20,150,227
------------ ------------ ------------ ------------ ------------- -------------
Annuitization Activity:
Annuitizations........... $ 57,993 $ 55,515 $ 16,515 $ 157,641 $ 38,331 $ --
Annuity payments and
contract charges........ (69,340) (171,649) (47,449) (71,968) (13,293) (17,146)
Net transfers between
Sub-Accounts............ (8,188) (25,947) (250,090) 13,731 -- --
Adjustments to annuity
reserve................. (3,131) (4,679) (57,505) 8,938 (837) (10,126)
------------ ------------ ------------ ------------ ------------- -------------
Net annuitization
activity.............. $ (22,666) $ (146,760) $ (338,529) $ 108,342 $ 24,201 $ (27,272)
------------ ------------ ------------ ------------ ------------- -------------
Increase (decrease) in net
assets from participant
transactions.............. $(12,728,865) $(14,621,478) $ 14,114,122 $ 34,719,706 $ 15,702,575 $ 20,122,955
------------ ------------ ------------ ------------ ------------- -------------
Increase (decrease) in
net assets.............. $(15,879,423) $(10,606,374) $ 40,496,647 $ 51,729,183 $ 19,309,625 $ 23,585,741
------------ ------------ ------------ ------------ ------------- -------------
NET ASSETS:
Beginning of period........ 127,743,885 138,350,259 193,226,813 141,497,630 37,384,672 13,798,931
------------ ------------ ------------ ------------ ------------- -------------
End of period.............. $111,864,462 $127,743,885 $233,723,460 $193,226,813 $ 56,694,297 $ 37,384,672
------------ ------------ ------------ ------------ ------------- -------------
------------ ------------ ------------ ------------ ------------- -------------
<CAPTION>
Total
------------------------------
Six Months
Ended Year Ended
June 30, Dec. 31,
1997 1996
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income...... $ 334,199,039 $ 207,607,067
Net realized gains
(losses).................. 99,885,579 106,785,736
Net unrealized gains
(losses).................. 128,511,913 196,251,997
-------------- --------------
Increase (decrease) in
net assets from
operations............ $ 562,596,531 $ 510,644,800
-------------- --------------
PARTICIPANT TRANSACTIONS:
Accumulation Activity:
Purchase payments
received................ $ 689,982,891 $1,231,625,970
Net transfers between
Sub-Accounts and Fixed
Account................. 215,231,365 135,880,112
Withdrawals, surrenders,
annuitizations and
contract charges........ (435,335,280) (285,266,526)
-------------- --------------
Net accumulation
activity.............. $ 469,878,976 $1,082,239,556
-------------- --------------
Annuitization Activity:
Annuitizations........... $ 3,630,563 $ 5,137,173
Annuity payments and
contract charges........ (1,761,717) (2,217,120)
Net transfers between
Sub-Accounts............ (4,225) 482
Adjustments to annuity
reserve................. (569,117) (356,574)
-------------- --------------
Net annuitization
activity.............. $ 1,295,504 $ 2,563,961
-------------- --------------
Increase (decrease) in net
assets from participant
transactions.............. $ 471,174,480 $1,084,803,517
-------------- --------------
Increase (decrease) in
net assets.............. $1,033,771,011 $1,595,448,317
-------------- --------------
NET ASSETS:
Beginning of period........ 4,883,017,052 3,287,568,735
-------------- --------------
End of period.............. $5,916,788,063 $4,883,017,052
-------------- --------------
-------------- --------------
</TABLE>
See notes to financial statements
11
<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 subsidiary of the Sponsor, is investment adviser to the Series Trust.
(2) SIGNIFICANT ACCOUNTING POLICIES
GENERAL
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue 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 Series Trust shares
and are recognized on the ex-dividend date.
Exchanges between Sub-Accounts requested by participants 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. The deductions are
transferred periodically to the Sponsor. Currently, the deduction is at an
effective annual rate of 1.25% for Regatta and Regatta Gold contracts and 1.00%
for Regatta Classic contracts.
12
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
NOTES TO FINANCIAL STATEMENTS -- continued
Each year on the account anniversary, an account administration fee ("Account
Fee") equal to the lesser of $30 or 2% of the participant's account value in the
case of Regatta and Regatta Gold and $50 for Regatta Classic 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.
The Sponsor does not deduct a sales charge from purchase payments. However, in
the case of Regatta and Regatta Gold, 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. In the case of Regatta Classic, a withdrawal charge of 1% is
applied to purchase payments withdrawn which have been credited to a
participant's account for less than one year.
For assuming the risk that withdrawal charges may be insufficient to compensate
it for the costs of distributing the 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. Accounts are transferred from MFS Regatta --
Level 1 to MFS Regatta -- Level 2 in the month following the seventh account
anniversary. No deduction for the distribution expense charge is made after the
seventh account anniversary.
As reimbursement for administrative expenses attributable to Regatta Gold and
Regatta Classic 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% or 3%, as stated in each participant's
certificate. Required adjustments to the reserves are accomplished by transfers
to or from the Sponsor.
13
<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
and
Units Outstanding Fixed Accumulation
Beginning of Period Units Purchased Account
---------------------- ---------------------- ---------------------------
Six Months Six Months Six Months
Ended Year Ended Ended Year Ended Ended Year Ended
June 30, Dec. 31, June 30, Dec. 31, June 30, Dec. 31,
1997 1996 1997 1996 1997 1996
---------- ---------- ---------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
MFS REGATTA CONTRACTS:
------------------------------
CAS -- Level 1................ 6,316,305 6,615,207 201 3,487 (1,016,799) 267,320
CAS -- Level 2*............... 58,968 -- 622,946 62,873 2,988,825 142
GSS -- Level 1................ 3,362,650 3,535,152 -- 1,574 (711,782) 206,595
GSS -- Level 2*............... 55,891 -- 265,628 59,729 893,700 3,442
HYS -- Level 1................ 1,204,380 1,068,412 -- -- (136,528) 271,328
HYS -- Level 2................ 0 0 64,794 0 499,104 0
MSS -- Level 1................ 2,202,213 2,150,361 189 -- (422,298) 253,891
MSS -- Level 2*............... 14,270 -- 240,391 18,662 987,126 --
MMS -- Level 1................ 3,859,738 3,453,907 (298) 7,940 2,566,850 1,420,458
MMS -- Level 2*............... 59,562 -- 289,247 74,316 3,276,362 (3,576)
TRS -- Level 1................ 12,461,003 13,106,997 1,598 2,594 (1,826,352) 580,878
TRS -- Level 2*............... 32,548 -- 814,971 61,666 4,271,011 --
WGS -- Level 1................ 1,460,289 1,730,002 -- -- (242,191) (4,348)
WGS -- Level 2*............... 3,325 -- 34,073 4,988 262,550 --
<CAPTION>
Units Withdrawn,
Surrendered and Units Outstanding
Annuitized End of Period
------------------------- ----------------------
Six Months Six Months
Ended Year Ended Ended Year Ended
June 30, Dec. 31, June 30, Dec. 31,
1997 1996 1997 1996
----------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
MFS REGATTA CONTRACTS:
------------------------------
CAS -- Level 1................ (595,381) (569,709) 4,704,326 6,316,305
CAS -- Level 2*............... (733,361) (4,047) 2,937,378 58,968
GSS -- Level 1................ (376,844) (380,671) 2,274,024 3,362,650
GSS -- Level 2*............... (312,922) (7,280) 902,297 55,891
HYS -- Level 1................ (110,164) (135,360) 957,688 1,204,380
HYS -- Level 2................ (192,505) 0 371,393 0
MSS -- Level 1................ (241,824) (202,039) 1,538,280 2,202,213
MSS -- Level 2*............... (217,546) (4,392) 1,024,241 14,270
MMS -- Level 1................ (2,881,480) (1,022,567) 3,544,810 3,859,738
MMS -- Level 2*............... (1,987,959) (11,178) 1,637,212 59,562
TRS -- Level 1................ (1,349,816) (1,229,466) 9,286,433 12,461,003
TRS -- Level 2*............... (1,225,508) (29,118) 3,893,022 32,548
WGS -- Level 1................ (87,682) (265,365) 1,130,416 1,460,289
WGS -- Level 2*............... (83,051) (1,663) 216,897 3,325
</TABLE>
*Level 2 units for the year ended December 31, 1996 are for the period December
9, 1996 (date of commencement of Level 2 units) to December 31, 1996
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
MFS REGATTA GOLD
CONTRACTS:
------------------------------
CAS........................... 32,796,793 27,782,739 2,316,467 7,263,696 (202,947) (496,244)
CGS........................... 26,199,975 16,712,586 4,534,845 8,644,701 3,050,429 2,000,284
EGS........................... 16,998,044 5,346,104 3,351,623 8,728,028 614,306 3,530,938
FCE*.......................... 329,630 -- 400,838 107,088 868,457 224,483
FCI*.......................... 564,742 -- 573,952 250,279 555,129 323,501
FCG........................... 3,360,596 711,179 444,229 1,891,793 213,214 856,286
GSS........................... 19,714,114 18,082,586 939,344 4,278,441 (794,165) (1,392,606)
HYS........................... 8,424,289 6,880,080 1,170,965 2,241,058 548,888 (53,191)
MSS........................... 10,541,726 8,542,869 561,315 2,422,482 (254,907) 147,148
MMS........................... 27,275,583 17,186,041 4,615,043 18,886,918 (3,559,815) (5,479,056)
RES........................... 19,577,745 5,341,160 4,857,903 10,525,524 2,601,963 4,302,978
TRS........................... 59,508,016 53,091,748 3,714,530 10,291,268 990,518 (170,571)
UTS........................... 4,671,192 3,410,047 495,448 1,448,517 175,406 68,243
VAL**......................... 1,520,787 -- 1,228,096 1,039,259 924,534 492,924
WAA........................... 5,539,010 2,141,041 1,016,172 2,590,553 756,601 1,048,013
WGS........................... 7,510,766 8,272,858 191,344 818,386 (680,322) (1,036,800)
WGR........................... 13,989,946 11,421,691 921,938 3,069,026 478,431 227,986
WTR........................... 2,836,079 1,170,586 622,066 1,353,637 638,474 448,221
<CAPTION>
MFS REGATTA GOLD
<C> <C> <C> <C>
------------------------------
CAS........................... (1,108,556) (1,753,398) 33,801,757 32,796,793
CGS........................... (833,835) (1,157,596) 32,951,414 26,199,975
EGS........................... (450,735) (607,026) 20,513,238 16,998,044
FCE*.......................... (18,017) (1,941) 1,580,908 329,630
FCI*.......................... (17,617) (9,038) 1,676,206 564,742
FCG........................... (104,650) (98,662) 3,913,389 3,360,596
GSS........................... (747,952) (1,254,307) 19,111,341 19,714,114
HYS........................... (426,605) (643,658) 9,717,537 8,424,289
MSS........................... (333,948) (570,773) 10,514,186 10,541,726
MMS........................... (2,091,393) (3,318,320) 26,239,418 27,275,583
RES........................... (557,517) (591,917) 26,480,094 19,577,745
TRS........................... (2,106,993) (3,704,429) 62,106,071 59,508,016
UTS........................... (147,044) (255,615) 5,195,002 4,671,192
VAL**......................... (70,391) (11,396) 3,603,026 1,520,787
WAA........................... (147,987) (240,597) 7,163,796 5,539,010
WGS........................... (226,638) (543,678) 6,795,150 7,510,766
WGR........................... (451,976) (728,757) 14,938,339 13,989,946
WTR........................... (88,360) (136,365) 4,008,259 2,836,079
<CAPTION>
CONTRACTS:
</TABLE>
*Units for the year ended December 31, 1996 are for the period July 1, 1996
(commencement of operations of the Sub-Account) to December 31, 1996
**Units for the year ended December 31, 1996 are for the period June 3, 1996
(commencement of operations of the Sub-Account) to December 31, 1996
14
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
NOTES TO FINANCIAL STATEMENTS -- continued
(5) UNIT ACTIVITY FROM PARTICIPANT TRANSACTIONS -- continued
<TABLE>
<CAPTION>
Units Transferred
Between Sub-Accounts
and
Units Outstanding Fixed Accumulation
Beginning of Period Units Purchased Account
---------------------- ---------------------- ---------------------------
Six Months Six Months Six Months
Ended Year Ended Ended Year Ended Ended Year Ended
June 30, Dec. 31, June 30, Dec. 31, June 30, Dec. 31,
1997 1996 1997 1996 1997 1996
---------- ---------- ---------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
MFS REGATTA CLASSIC
CONTRACTS:
------------------------------
CAS*.......................... 1,892 -- 79,107 1,892 7,089 --
CGS*.......................... 3,545 -- 211,255 8,005 54,554 (4,460)
EGS*.......................... 9,744 -- 165,917 11,935 (39,338) (2,191)
FCE**......................... 140 -- 23,054 352 3,612 (212)
FCG+.......................... -- -- 29,450 -- 2,119 --
FCI**......................... 2,249 -- 37,781 2,249 1,819 --
GSS**......................... 6,514 -- 36,905 6,514 (983) --
HYS*.......................... 8,219 -- 41,886 7,097 58,869 1,122
MSS++......................... -- -- 26,421 -- 5,721 --
MMS**......................... 13,813 -- 187,117 13,813 (53,283) --
RES***........................ 25,665 -- 311,338 25,659 (26,147) 6
TRS***........................ 40,575 -- 477,682 33,797 15,292 6,778
UTS++......................... -- -- 12,772 -- (308) --
VAL*.......................... 9,578 -- 63,847 8,416 (369) 1,162
WAA*.......................... 6,448 -- 24,975 7,086 810 (638)
WGS++++....................... -- -- 7,297 -- 2,254 --
WGR****....................... 71 -- 27,602 -- 1,720 71
WTR+++........................ -- -- 9,815 -- -- --
<CAPTION>
Units Withdrawn,
Surrendered and Units Outstanding
Annuitized End of Period
------------------------- ----------------------
Six Months Six Months
Ended Year Ended Ended Year Ended
June 30, Dec. 31, June 30, Dec. 31,
1997 1996 1997 1996
----------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
MFS REGATTA CLASSIC
CONTRACTS:
------------------------------
CAS*.......................... (23) -- 88,065 1,892
CGS*.......................... (378) -- 268,976 3,545
EGS*.......................... (455) -- 135,868 9,744
FCE**......................... (201) -- 26,605 140
FCG+.......................... -- -- 31,569 --
FCI**......................... (350) -- 41,499 2,249
GSS**......................... (23) -- 42,413 6,514
HYS*.......................... (501) -- 108,473 8,219
MSS++......................... -- -- 32,142 --
MMS**......................... (20) -- 147,627 13,813
RES***........................ (2,173) -- 308,683 25,665
TRS***........................ (3,549) -- 530,000 40,575
UTS++......................... (24) -- 12,440 --
VAL*.......................... (279) -- 72,777 9,578
WAA*.......................... (9) -- 32,224 6,448
WGS++++....................... -- -- 9,551 --
WGR****....................... -- -- 29,393 71
WTR+++........................ -- -- 9,815 --
</TABLE>
*Units for the year ended December 31, 1996 are for the period December 2,
1996 (commencement of operations of the Sub-Account) to December 31, 1996.
**Units for the year ended December 31, 1996 are for the period December 9,
1996 (commencement of operations of the Sub-Account) to December 31, 1996.
***Units for the year ended December 31, 1996 are for the period November 27,
1996 (commencement of operations of the Sub-Account) to December 31, 1996.
****Operations commenced December 31, 1996.
+Units for the period ended June 30, 1997 are for the period January 7, 1997
(commencement of operations of the Sub-Account) to June 30, 1997.
++Units for the period ended June 30, 1997 are for the period January 22, 1997
(commencement of operations of the Sub-Account) to June 30, 1997.
+++Units for the period ended June 30, 1997 are for the period February 11,
1997 (commencement of operations of the Sub-Account) to June 30, 1997.
++++Units for the period ended June 30, 1997 are for the period February 21,
1997 (commencement of operations of the Sub-Account) to June 30, 1997.
15
<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, 1997, the
related statements of operations for the six months then ended and the
statements of changes in net assets for the six months ended June 30, 1997 and
the year ended December 31, 1996. 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. 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, 1997,
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 8, 1997
----------------------------------------
This report is prepared for the general information of contract owners and
participants. It is authorized for distribution to prospective purchasers only
when preceded or accompanied by an effective prospectus.
16
<PAGE>
MFS REGATTA
MFS REGATTA GOLD
MFS REGATTA CLASSIC
DIRECTORS AND OFFICERS OF
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
JOHN D. McNEIL, Chairman and Director
DONALD A. STEWART, President and Director
DAVID D. HORN, Senior Vice President and
General Manager and Director
S. CAESAR RABOY, Senior Vice President and
Deputy General Manager and Director
RICHARD B. BAILEY, Director
A. KEITH BRODKIN, Director
M. COLYER CRUM, Director
JOHN S. LANE, Director
ANGUS A. MacNAUGHTON, Director
MARGARET SEARS MEAD, Assistant Vice President
and Secretary
L. BROCK THOMSON, 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-2 8/97 130M
FG
HI
ACDE
SEMIANNUAL REPORT - JUNE 30, 1997
PROFESSIONALLY MANAGED ANNUITIES ISSUED BY
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.),
A WHOLLY-OWNED SUBSIDIARY OF
SUN LIFE ASSURANCE COMPANY OF CANADA
