<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, 1995 December 31, 1996 in Unit Value
----------------- ----------------- --------------
<S> <C> <C> <C>
MFS REGATTA CONTRACTS:
Capital Appreciation Series -- Level
1.................................... $20.6225 $24.7064 +19.80
Capital Appreciation Series -- Level
2.................................... 10.0000* 9.9433 - 0.57**
Government Securities Series -- Level
1.................................... 15.5323 15.5644 + 0.21
Government Securities Series -- Level
2.................................... 10.0000* 9.9641 - 0.36**
High Yield Series -- Level 1.......... 17.8678 19.7545 +10.56
Managed Sectors Series -- Level 1..... 18.9987 22.0312 +15.96
Managed Sectors Series -- Level 2..... 10.0000* 9.8974 - 1.03**
Money Market Series -- Level 1........ 12.2910 12.7175 + 3.47
Money Market Series -- Level 2........ 10.0000* 10.0240 + 0.24**
Total Return Series -- Level 1........ 17.8185 20.0405 +12.47
Total Return Series -- Level 2........ 10.0000* 10.0182 + 0.18**
World Governments Series -- Level 1... 16.2514 16.7734 + 3.21
World Governments Series -- Level 2... 10.0000* 10.0242 + 0.24**
MFS REGATTA GOLD CONTRACTS:
Capital Appreciation Series........... $18.8392 $22.5700 +19.80
Conservative Growth Series............ 16.1344 19.9527 +23.67
Emerging Growth Series................ 12.5675 14.5136 +15.49
MFS/Foreign & Colonial Emerging
Markets Equity Series................ 10.0000* 9.9199 - 0.80**
MFS/Foreign & Colonial International
Growth Series........................ 10.0000* 9.7480 - 2.52**
MFS/Foreign & Colonial International
Growth and Income Series............. 10.0942 10.4404 + 3.43
Government Securities Series.......... 13.0981 13.1252 + 0.21
High Yield Series..................... 14.7137 16.2674 +10.56
Managed Sectors Series................ 15.9925 18.5452 +15.96
Money Market Series................... 11.0111 11.3932 + 3.47
Research Series....................... 13.3663 16.3209 +22.10
Total Return Series................... 14.8406 16.6932 +12.48
Utilities Series...................... 12.2403 14.5260 +18.67
Value Series.......................... 10.0000* 10.9234 + 9.23**
World Asset Allocation Series......... 12.0393 13.7702 +14.38
World Governments Series.............. 13.2523 13.6780 + 3.21
World Growth Series................... 12.3321 13.7523 +11.52
World Total Return Series............. 11.6516 13.1290 +12.68
</TABLE>
*Reflects unit value on date of commencement of operations.
**Not annualized.
1
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
STATEMENT OF CONDITION -- December 31, 1996
<TABLE>
<CAPTION>
Assets:
Investments in MFS/Sun Life Series Trust: Shares Cost Value
----------- -------------- --------------
<S> <C> <C> <C>
Capital Appreciation Series ("CAS").............................................. 25,132,284 $ 766,909,799 $ 900,536,472
Conservative Growth Series ("CGS")............................................... 19,770,779 401,011,161 523,882,326
Emerging Growth Series ("EGS")................................................... 16,666,213 230,812,345 247,167,495
MFS/Foreign & Colonial Emerging Markets Equity Series ("FCE").................... 327,100 3,224,047 3,271,436
MFS/Foreign & Colonial International Growth Series ("FCI")....................... 562,577 5,592,414 5,528,287
MFS/Foreign & Colonial International Growth and Income Series ("FCG")............ 3,306,816 34,327,842 35,129,529
Government Securities Series ("GSS")............................................. 24,278,758 306,999,943 312,399,099
High Yield Series ("HYS")........................................................ 17,514,023 154,164,774 161,352,366
Managed Sectors Series ("MSS")................................................... 9,317,147 215,659,135 244,571,670
Money Market Series ("MMS")...................................................... 361,990,229 361,990,229 361,990,229
Research Series ("RES").......................................................... 19,366,153 278,182,415 320,982,471
Total Return Series ("TRS")...................................................... 64,136,813 1,023,618,937 1,246,814,708
Utilities Series ("UTS")......................................................... 4,863,242 54,423,213 68,022,646
Value Series ("VAL")............................................................. 1,517,402 15,964,246 16,708,887
World Asset Allocation Series ("WAA")............................................ 5,558,878 69,593,015 76,595,693
World Governments Series ("WGS")................................................. 11,343,137 133,129,911 127,697,954
World Growth Series ("WGR")...................................................... 14,821,543 177,938,986 193,180,439
World Total Return Series ("WTR")................................................ 2,817,773 33,508,607 37,379,327
-------------- --------------
$4,267,051,019 $4,883,211,034
--------------
--------------
Liability:
Payable to sponsor.............................................................................................. 193,982
--------------
Net assets................................................................................................ $4,883,017,052
--------------
--------------
</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......................... 6,316,305 $24.7064 $ 156,017,899 $ 312,018 $ 156,329,917
CAS -- Level 2......................... 58,968 9.9433 586,262 -- 586,262
GSS -- Level 1......................... 3,362,650 15.5644 52,333,731 105,552 52,439,283
GSS -- Level 2......................... 55,891 9.9641 557,001 -- 557,001
HYS -- Level 1......................... 1,204,380 19.7545 23,789,006 6,482 23,795,488
MSS -- Level 1......................... 2,202,213 22.0312 48,508,121 154,423 48,662,544
MSS -- Level 2......................... 14,270 9.8974 141,231 -- 141,231
MMS -- Level 1......................... 3,859,738 12.7175 49,130,387 70,057 49,200,444
MMS -- Level 2......................... 59,562 10.0240 597,029 -- 597,029
TRS -- Level 1......................... 12,461,003 20.0405 249,689,122 1,231,911 250,921,033
TRS -- Level 2......................... 32,548 10.0182 325,990 -- 325,990
WGS -- Level 1......................... 1,460,289 16.7734 24,491,432 70,682 24,562,114
WGS -- Level 2......................... 3,325 10.0242 33,342 -- 33,342
-------------- ---------- --------------
$ 606,200,553 $1,951,125 $ 608,151,678
-------------- ---------- --------------
(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
---------- ---------- -------------- ---------- --------------
MFS Regatta Gold Contracts:
<S> <C> <C> <C> <C> <C>
CAS.................................... 32,796,793 $22.5700 $ 740,124,719 $3,625,224 $ 743,749,943
CGS.................................... 26,199,975 19.9527 522,718,845 1,066,236 523,785,081
EGS.................................... 16,998,044 14.5136 246,685,538 353,268 247,038,806
FCE.................................... 329,630 9,9199 3,269,984 -- 3,269,984
FCI.................................... 564,742 9.7480 5,505,724 -- 5,505,724
FCG.................................... 3,360,596 10.4404 35,086,469 44,540 35,131,009
GSS.................................... 19,714,114 13.1252 258,776,682 585,330 259,362,012
HYS.................................... 8,424,289 16.2674 137,014,091 379,983 137,394,074
MSS.................................... 10,541,726 18.5452 195,501,650 249,088 195,750,738
MMS.................................... 27,275,583 11.3932 310,768,495 1,123,193 311,891,688
RES.................................... 19,577,745 16.3209 319,523,687 1,325,790 320,849,477
TRS.................................... 59,508,016 16.6932 993,286,276 1,708,347 994,994,623
UTS.................................... 4,671,192 14.5260 67,842,478 94,818 67,937,296
VAL.................................... 1,520,787 10.9234 16,612,132 -- 16,612,132
WAA.................................... 5,539,010 13.7702 76,273,571 279,123 76,552,694
WGS.................................... 7,510,766 13.6780 102,745,888 402,541 103,148,429
WGR.................................... 13,989,946 13.7523 192,388,258 837,846 193,226,104
WTR.................................... 2,836,079 13.1290 37,233,242 151,430 37,384,672
-------------- ---------- --------------
$4,261,357,729 $12,226,757 $4,273,584,486
-------------- ---------- --------------
MFS Regatta Classic Contracts:
CAS.................................... 1,892 $ 9.8765 $ 18,695 $ -- $ 18,695
CGS.................................... 3,545 9.8549 34,931 -- 34,931
EGS.................................... 9,744 9.5644 93,182 -- 93,182
FCE.................................... 140 10.4127 1,452 -- 1,452
FCI.................................... 2,249 10.0270 22,563 -- 22,563
GSS.................................... 6,514 9.9631 64,981 -- 64,981
HYS.................................... 8,219 10.0910 82,946 -- 82,946
MMS.................................... 13,813 10.0239 138,477 3,211 141,688
RES.................................... 25,665 9.8296 253,132 -- 253,132
TRS.................................... 40,575 9.9034 401,899 3,152 405,051
VAL.................................... 9,578 10.1034 96,755 -- 96,755
WAA.................................... 6,448 10.0430 64,803 -- 64,803
WGR.................................... 71 10.0000 709 -- 709
-------------- ---------- --------------
$ 1,274,525 $ 6,363 $ 1,280,888
-------------- ---------- --------------
Net assets................................................. $4,868,832,807 $14,184,245 $4,883,017,052
-------------- ---------- --------------
-------------- ---------- --------------
</TABLE>
See notes to financial statements
3
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
STATEMENTS OF OPERATIONS -- Year Ended December 31, 1996
<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.......... $ 63,903,295 $ 14,154,274 $ 223,676 $ -- $ --
Mortality and expense risk
charges......................... 9,787,529 4,790,582 1,957,296 11,630 19,294
Distribution expense charges..... 220,157 -- -- -- --
Administrative expense charges... 954,346 574,870 234,876 1,396 2,315
------------- ------------- ------------ ----------- -----------
Net investment income
(expense)................... $ 52,941,263 $ 8,788,822 $ (1,968,496) $(13,026) $ (21,609)
------------- ------------- ------------ ----------- -----------
------------- ------------- ------------ ----------- -----------
REALIZED AND UNREALIZED GAINS
(LOSSES):
Realized gains (losses) on
investment transactions:
Proceeds from sales............ $ 267,285,199 $ 12,067,114 $ 29,861,505 $513,892 $1,726,076
Cost of investments sold....... 205,115,450 7,554,344 25,584,337 519,604 1,727,754
------------- ------------- ------------ ----------- -----------
Net realized gains (losses).. $ 62,169,749 $ 4,512,770 $ 4,277,168 $ (5,712) $ (1,678)
------------- ------------- ------------ ----------- -----------
Net unrealized appreciation
(depreciation) on investments:
End of year.................... $ 133,626,673 $ 122,871,165 $ 16,355,150 $ 47,389 $ (64,127)
Beginning of year.............. 106,570,446 52,910,544 3,552,956 -- --
------------- ------------- ------------ ----------- -----------
Change in unrealized
appreciation
(depreciation).............. $ 27,056,227 $ 69,960,621 $ 12,802,194 $ 47,389 $ (64,127)
------------- ------------- ------------ ----------- -----------
Realized and unrealized gains
(losses)...................... $ 89,225,976 $ 74,473,391 $ 17,079,362 $ 41,677 $ (65,805)
------------- ------------- ------------ ----------- -----------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS................. $ 142,167,239 $ 83,262,213 $ 15,110,866 $ 28,651 $ (87,414)
------------- ------------- ------------ ----------- -----------
------------- ------------- ------------ ----------- -----------
<CAPTION>
FCG GSS HYS
Sub-Account Sub-Account Sub-Account
----------- ------------- ------------
<S> <C> <C> <C>
INCOME AND EXPENSES:
Dividend income and capital gain
distributions received.......... $ -- $ 18,191,771 $ 9,492,026
Mortality and expense risk
charges......................... 293,242 3,900,496 1,670,108
Distribution expense charges..... -- 81,209 29,566
Administrative expense charges... 35,189 386,851 170,847
----------- ------------- ------------
Net investment income
(expense)................... $ (328,431) $ 13,823,215 $ 7,621,505
----------- ------------- ------------
----------- ------------- ------------
REALIZED AND UNREALIZED GAINS
(LOSSES):
Realized gains (losses) on
investment transactions:
Proceeds from sales............ $6,264,957 $ 80,691,084 $ 89,548,001
Cost of investments sold....... 6,013,559 83,195,407 83,844,433
----------- ------------- ------------
Net realized gains (losses).. $ 251,398 $ (2,504,323) $ 5,703,568
----------- ------------- ------------
Net unrealized appreciation
(depreciation) on investments:
End of year.................... $ 801,687 $ 5,399,156 $ 7,187,592
Beginning of year.............. 111,437 15,950,791 6,347,251
----------- ------------- ------------
Change in unrealized
appreciation
(depreciation).............. $ 690,250 $ (10,551,635) $ 840,341
----------- ------------- ------------
Realized and unrealized gains
(losses)...................... $ 941,648 $ (13,055,958) $ 6,543,909
----------- ------------- ------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS................. $ 613,217 $ 767,257 $ 14,165,414
----------- ------------- ------------
----------- ------------- ------------
</TABLE>
*For the period July 1, 1996 (commencement of operations) to December 31, 1996.
See notes to financial statements
4
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
STATEMENTS OF OPERATIONS -- continued
<TABLE>
<CAPTION>
MSS MMS RES TRS UTS
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............... $ 27,063,786 $ 13,803,397 $ 2,171,374 $ 80,430,595 $ 2,685,506
Mortality and expense risk charges.... 2,649,730 3,584,245 2,320,870 14,086,166 677,251
Distribution expense charges.......... 66,547 68,418 -- 359,085 --
Administrative expense charges........ 251,421 361,691 278,504 1,331,255 81,270
------------ ------------- ------------ ------------- ------------
Net investment income (expense)... $ 24,096,088 $ 9,789,043 $ (428,000) $ 64,654,089 $ 1,926,985
------------ ------------- ------------ ------------- ------------
------------ ------------- ------------ ------------- ------------
REALIZED AND UNREALIZED GAINS (LOSSES):
Realized gains (losses) on investment
transactions:
Proceeds from sales................. $ 31,986,225 $ 601,132,062 $ 5,303,758 $ 76,812,211 $ 6,901,492
Cost of investments sold............ 29,087,317 601,132,062 3,452,995 56,301,150 5,283,786
------------ ------------- ------------ ------------- ------------
Net realized gains (losses)....... $ 2,898,908 $ -- $ 1,850,763 $ 20,511,061 $ 1,617,706
------------ ------------- ------------ ------------- ------------
Net unrealized appreciation
(depreciation) on investments:
End of year......................... $ 28,912,535 $ -- $ 42,800,056 $ 223,195,771 $ 13,599,433
Beginning of year................... 24,275,006 -- 8,623,371 172,733,800 7,026,868
------------ ------------- ------------ ------------- ------------
Change in unrealized appreciation
(depreciation)................... $ 4,637,529 $ -- $ 34,176,685 $ 50,461,971 $ 6,572,565
------------ ------------- ------------ ------------- ------------
Realized and unrealized gains
(losses)........................... $ 7,536,437 $ -- $ 36,027,448 $ 70,973,032 $ 8,190,271
------------ ------------- ------------ ------------- ------------
INCREASE IN NET ASSETS FROM
OPERATIONS........................... $ 31,632,525 $ 9,789,043 $ 35,599,448 $ 135,627,121 $ 10,117,256
------------ ------------- ------------ ------------- ------------
------------ ------------- ------------ ------------- ------------
<CAPTION>
VAL WAA WGS
Sub-Account* Sub-Account Sub-Account
---------- ----------- -------------
<S> <C> <C> <C>
INCOME AND EXPENSES:
Dividend income and capital gain
distributions received............... $ -- $1,323,112 $ 18,375,771
Mortality and expense risk charges.... 47,876 649,587 1,642,776
Distribution expense charges.......... -- -- 38,491
Administrative expense charges........ 5,745 77,950 158,642
---------- ----------- -------------
Net investment income (expense)... $(53,621) $ 595,575 $ 16,535,862
---------- ----------- -------------
---------- ----------- -------------
REALIZED AND UNREALIZED GAINS (LOSSES):
Realized gains (losses) on investment
transactions:
Proceeds from sales................. $458,854 $7,401,713 $ 27,818,987
Cost of investments sold............ 435,556 5,772,117 30,531,078
---------- ----------- -------------
Net realized gains (losses)....... $ 23,298 $1,629,596 $ (2,712,091)
---------- ----------- -------------
Net unrealized appreciation
(depreciation) on investments:
End of year......................... $744,641 $7,002,678 $ (5,431,957)
Beginning of year................... -- 2,577,570 4,376,710
---------- ----------- -------------
Change in unrealized appreciation
(depreciation)................... $744,641 $4,425,108 $ (9,808,667)
---------- ----------- -------------
Realized and unrealized gains
(losses)........................... $767,939 $6,054,704 $ (12,520,758)
---------- ----------- -------------
INCREASE IN NET ASSETS FROM
OPERATIONS........................... $714,318 $6,650,279 $ 4,015,104
---------- ----------- -------------
---------- ----------- -------------
</TABLE>
*For the period June 3, 1996 (commencement of operations) to December 31, 1996.
See notes to financial statements
5
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
STATEMENTS OF OPERATIONS -- continued
<TABLE>
<CAPTION>
WGR WTR
Sub-Account Sub-Account Total
------------ ----------- ---------------
<S> <C> <C> <C>
INCOME AND EXPENSES:
Dividend income and capital gain
distributions received............... $ 12,008,681 $ 432,723 $ 264,259,987
Mortality and expense risk charges.... 2,171,808 322,479 50,582,965
Distribution expense charges.......... -- -- 863,473
Administrative expense charges........ 260,617 38,697 5,206,482
------------ ----------- ---------------
Net investment income............. $ 9,576,256 $ 71,547 $ 207,607,067
------------ ----------- ---------------
------------ ----------- ---------------
REALIZED AND UNREALIZED GAINS:
Realized gains on investment
transactions:
Proceeds from sales................. $ 43,985,963 $3,013,874 $ 1,292,772,967
Cost of investments sold............ 37,967,798 2,468,484 1,185,987,231
------------ ----------- ---------------
Net realized gains................ $ 6,018,165 $ 545,390 $ 106,785,736
------------ ----------- ---------------
Net unrealized appreciation on
investments:
End of year......................... $ 15,241,453 $3,870,720 $ 616,160,015
Beginning of year................... 13,826,397 1,024,871 419,908,018
------------ ----------- ---------------
Change in unrealized
appreciation...................... $ 1,415,056 $2,845,849 $ 196,251,997
------------ ----------- ---------------
Realized and unrealized gains....... $ 7,433,221 $3,391,239 $ 303,037,733
------------ ----------- ---------------
INCREASE IN NET ASSETS FROM
OPERATIONS........................... $ 17,009,477 $3,462,786 $ 510,644,800
------------ ----------- ---------------
------------ ----------- ---------------
</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
----------------------------- ----------------------------- -----------------------------
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
----------------------------- ----------------------------- -----------------------------
1996 1995 1996 1995 1996 1995*
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(expense).................. $ 52,941,263 $ 4,868,051 $ 8,788,822 $ 1,641,149 $ (1,968,496) $ (274,556)
Net realized gains.......... 62,169,749 8,669,752 4,512,770 1,559,779 4,277,168 2,216,787
Net unrealized gains........ 27,056,227 131,023,503 69,960,621 52,785,863 12,802,194 3,552,956
------------- ------------- ------------- ------------- ------------- -------------
Increase in net assets
from operations.......... $ 142,167,239 $ 144,561,306 $ 83,262,213 $ 55,986,791 $ 15,110,866 $ 5,495,187
------------- ------------- ------------- ------------- ------------- -------------
PARTICIPANT TRANSACTIONS:
Accumulation Activity:
Purchase payments
received................. $ 148,876,483 $ 120,979,478 $ 153,852,554 $ 74,122,408 $ 122,215,402 $ 34,471,454
Net transfers between
Sub-Accounts and Fixed
Account.................. (5,608,366) 51,189,081 36,048,717 19,980,665 50,369,380 27,751,346
Withdrawals, surrenders,
annuitizations and
contract charges......... (47,835,347) (35,672,499) (19,835,752) (11,060,939) (8,085,001) (532,429)
------------- ------------- ------------- ------------- ------------- -------------
Net accumulation
activity............... $ 95,432,770 $ 136,496,060 $ 170,065,519 $ 83,042,134 $ 164,499,781 $ 61,690,371
------------- ------------- ------------- ------------- ------------- -------------
Annuitization Activity:
Annuitizations............ $ 1,193,495 $ 1,153,294 $ 437,102 $ 201,542 $ 286,409 $ 50,528
Annuity payments and
contract charges......... (347,090) (216,005) (129,806) (58,715) (13,624) (593)
Net transfers between
Sub-Accounts............. 119,425 531,083 116,806 2,298 44,347 4,223
Adjustments to annuity
reserves................. (50,462) 131,042 (87,515) 30,462 21,044 (56,551)
------------- ------------- ------------- ------------- ------------- -------------
Net annuitization
activity............... $ 915,368 $ 1,599,414 $ 336,587 $ 175,587 $ 338,176 $ (2,393)
------------- ------------- ------------- ------------- ------------- -------------
Increase in net assets from
participant transactions... $ 96,348,138 $ 138,095,474 $ 170,402,106 $ 83,217,721 $ 164,837,957 $ 61,687,978
------------- ------------- ------------- ------------- ------------- -------------
Increase in net assets.... $ 238,515,377 $ 282,656,780 $ 253,664,319 $ 139,204,512 $ 179,948,823 $ 67,183,165
NET ASSETS:
Beginning of year........... 662,169,440 379,512,660 270,155,693 130,951,181 67,183,165 --
------------- ------------- ------------- ------------- ------------- -------------
End of year................. $ 900,684,817 $ 662,169,440 $ 523,820,012 $ 270,155,693 $ 247,131,988 $ 67,183,165
------------- ------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- ------------- -------------
</TABLE>
* For the period May 1, 1995 (commencement of operations) to December 31, 1995.
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>
FCE FCI FCG GSS
Sub-Account Sub-Account Sub-Account Sub-Account
----------- ----------- -------------------------- -----------------------------
Year Ended Year Ended
December December Year Ended Year Ended
31, 31, December 31, December 31,
-------------------------- -----------------------------
1996* 1996* 1996 1995** 1996 1995
----------- ----------- ------------ ----------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(expense).................... $ (13,026) $ (21,609) $ (328,431) $ (10,744) $ 13,823,215 $ 11,426,494
Net realized gains (losses)... (5,712) (1,678) 251,398 (243) (2,504,323) (1,546,621)
Net unrealized gains
(losses)..................... 47,389 (64,127) 690,250 111,437 (10,551,635) 29,605,147
----------- ----------- ------------ ----------- ------------- -------------
Increase (decrease) in net
assets from operations... $ 28,651 $ (87,414) $ 613,217 $ 100,450 $ 767,257 $ 39,485,020
----------- ----------- ------------ ----------- ------------- -------------
PARTICIPANT TRANSACTIONS:
Accumulation Activity:
Purchase payments
received................... $1,048,658 $2,460,672 $ 19,437,825 $ 4,120,619 $ 54,669,405 $ 47,266,837
Net transfers between
Sub-Accounts and Fixed
Account.................... 2,213,104 3,215,694 8,809,224 3,003,996 (14,448,899) (42,381,252)
Withdrawals, surrenders,
annuitizations and contract
charges.................... (18,977) (60,665) (951,163) (46,320) (21,010,408) (21,245,942)
----------- ----------- ------------ ----------- ------------- -------------
Net accumulation
activity................. $3,242,785 $5,615,701 $ 27,295,886 $ 7,078,295 $ 19,210,098 $ (16,360,357)
----------- ----------- ------------ ----------- ------------- -------------
Annuitization Activity:
Annuitizations.............. $ -- $ -- $ 43,066 $ -- $ 268,329 $ 354,393
Annuity payments and
contract charges........... -- -- (1,385) -- (240,819) (168,285)
Net transfers between
Sub-Accounts............... -- -- -- -- (309,558) (53,070)
Adjustments to annuity
reserves................... -- -- 1,480 -- (40,665) 33,716
----------- ----------- ------------ ----------- ------------- -------------
Net annuitization
activity................. $ -- $ -- $ 43,161 $ -- $ (322,713) $ 166,754
----------- ----------- ------------ ----------- ------------- -------------
Increase (decrease) in net
assets from participant
transactions................. $3,242,785 $5,615,701 $ 27,339,047 $ 7,078,295 $ 18,887,385 $ (16,193,603)
----------- ----------- ------------ ----------- ------------- -------------
Increase in net assets...... $3,271,436 $5,528,287 $ 27,952,264 $ 7,178,745 $ 19,654,642 $ 23,291,417
NET ASSETS:
Beginning of year............. -- -- 7,178,745 -- 292,768,635 269,477,218
----------- ----------- ------------ ----------- ------------- -------------
End of year................... $3,271,436 $5,528,287 $ 35,131,009 $ 7,178,745 $ 312,423,277 $ 292,768,635
----------- ----------- ------------ ----------- ------------- -------------
----------- ----------- ------------ ----------- ------------- -------------
</TABLE>
* For the period July 1, 1996 (commencement of operations) to December 31,
1996.
** For the period October 4, 1995 (commencement of operations) to December 31,
1995.
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>
HYS MSS
Sub-Account Sub-Account
----------------------------- -----------------------------
Year Ended Year Ended
December 31, December 31,
----------------------------- -----------------------------
1996 1995 1996 1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income................. $ 7,621,505 $ 5,123,994 $ 24,096,088 $ 2,070,924
Net realized gains.................... 5,703,568 1,889,832 2,898,908 2,778,352
Net unrealized gains.................. 840,341 6,838,912 4,637,529 30,322,483
------------- ------------- ------------- -------------
Increase in net assets from
operations....................... $ 14,165,414 $ 13,852,738 $ 31,632,525 $ 35,171,759
------------- ------------- ------------- -------------
PARTICIPANT TRANSACTIONS:
Accumulation Activity:
Purchase payments received.......... $ 33,898,269 $ 20,152,853 $ 40,598,625 $ 34,586,296
Net transfers between Sub-Accounts
and Fixed Account.................. 4,326,619 22,611,563 7,831,933 9,193,092
Withdrawals, surrenders,
annuitizations and contract
charges............................ (11,758,613) (7,980,818) (13,315,281) (9,392,233)
------------- ------------- ------------- -------------
Net accumulation activity......... $ 26,466,275 $ 34,783,598 $ 35,115,277 $ 34,387,155
------------- ------------- ------------- -------------
Annuitization Activity:
Annuitizations...................... $ 137,217 $ 16,894 $ 82,609 $ 92,920
Annuity payments and contract
charges............................ (79,990) (68,402) (76,110) (56,337)
Net transfers between
Sub-Accounts....................... 14,805 8,428 41,877 94,161
Adjustments to annuity reserves..... (42,595) (25,024) (12,576) (2,133)
------------- ------------- ------------- -------------
Net annuitization activity........ $ 29,437 $ (68,104) $ 35,800 $ 128,611
------------- ------------- ------------- -------------
Increase in net assets from
participant transactions............. $ 26,495,712 $ 34,715,494 $ 35,151,077 $ 34,515,766
------------- ------------- ------------- -------------
Increase in net assets.............. $ 40,661,126 $ 48,568,232 $ 66,783,602 $ 69,687,525
NET ASSETS:
Beginning of year..................... 120,611,382 72,043,150 177,770,911 108,083,386
------------- ------------- ------------- -------------
End of year........................... $ 161,272,508 $ 120,611,382 $ 244,554,513 $ 177,770,911
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
<CAPTION>
MMS
Sub-Account
-----------------------------
Year Ended
December 31,
-----------------------------
1996 1995
------------- -------------
<S> <C> <C>
OPERATIONS:
Net investment income................. $ 9,789,043 $ 7,468,244
Net realized gains.................... -- --
Net unrealized gains.................. -- --
------------- -------------
Increase in net assets from
operations....................... $ 9,789,043 $ 7,468,244
------------- -------------
PARTICIPANT TRANSACTIONS:
Accumulation Activity:
Purchase payments received.......... $ 208,990,259 $ 172,273,093
Net transfers between Sub-Accounts
and Fixed Account.................. (43,233,439) (115,663,895)
Withdrawals, surrenders,
annuitizations and contract
charges............................ (46,733,186) (34,523,223)
------------- -------------
Net accumulation activity......... $ 119,023,634 $ 22,085,975
------------- -------------
Annuitization Activity:
Annuitizations...................... $ 1,121,927 $ 583,368
Annuity payments and contract
charges............................ (206,726) (185,934)
Net transfers between
Sub-Accounts....................... (190,340) (656,607)
Adjustments to annuity reserves..... (23,831) (33,157)
------------- -------------
Net annuitization activity........ $ 701,030 $ (292,330)
------------- -------------
Increase in net assets from
participant transactions............. $ 119,724,664 $ 21,793,645
------------- -------------
Increase in net assets.............. $ 129,513,707 $ 29,261,889
NET ASSETS:
Beginning of year..................... 232,317,142 203,055,253
------------- -------------
End of year........................... $ 361,830,849 $ 232,317,142
------------- -------------
------------- -------------
</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>
RES TRS UTS
Sub-Account Sub-Account Sub-Account
---------------------------- --------------------------------- ------------
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
---------------------------- --------------------------------- ------------
1996 1995 1996 1995 1996
------------- ------------ --------------- --------------- ------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (expense)....... $ (428,000) $ (383,608) $ 64,654,089 $ 20,227,983 $ 1,926,985
Net realized gains.................... 1,850,763 380,832 20,511,061 16,423,720 1,617,706
Net unrealized gains.................. 34,176,685 8,612,162 50,461,971 159,794,143 6,572,565
------------- ------------ --------------- --------------- ------------
Increase in net assets from
operations......................... $ 35,599,448 $ 8,609,386 $ 135,627,121 $ 196,445,846 $ 10,117,256
------------- ------------ --------------- --------------- ------------
PARTICIPANT TRANSACTIONS:
Accumulation Activity:
Purchase payments received.......... $ 156,881,700 $ 44,406,655 $ 158,550,497 $ 114,688,434 $ 18,235,404
Net transfers between Sub-Accounts
and Fixed Account.................. 64,021,188 15,859,913 7,794,293 (1,317,333) 835,305
Withdrawals, surrenders,
annuitizations and contract
charges............................ (7,956,041) (1,251,158) (79,238,642) (63,409,172) (3,059,763)
------------- ------------ --------------- --------------- ------------
Net accumulation activity......... $ 212,946,847 $ 59,015,410 $ 87,106,148 $ 49,961,929 $ 16,010,946
------------- ------------ --------------- --------------- ------------
Annuitization Activity:
Annuitizations...................... $ 557,791 $ 404,830 $ 505,447 $ 238,231 $ 116,582
Annuity payments and contract
charges............................ (62,358) (20,548) (762,883) (656,053) (18,434)
Net transfers between Sub-Accounts.. 118,346 (57,959) 56,990 17,486 --
Adjustments to annuity reserves..... 38,061 82,075 (87,530) (16,966) (82,561)
------------- ------------ --------------- --------------- ------------
Net annuitization activity........ $ 651,840 $ 408,398 $ (287,976) $ (417,302) $ 15,587
------------- ------------ --------------- --------------- ------------
Increase in net assets from
participant transactions............. $ 213,598,687 $ 59,423,808 $ 86,818,172 $ 49,544,627 $ 16,026,533
------------- ------------ --------------- --------------- ------------
Increase in net assets.............. $ 249,198,135 $ 68,033,194 $ 222,445,293 $ 245,990,473 $ 26,143,789
NET ASSETS:
Beginning of year..................... 71,904,474 3,871,280 1,024,201,404 778,210,931 41,793,507
------------- ------------ --------------- --------------- ------------
End of year........................... $ 321,102,609 $ 71,904,474 $ 1,246,646,697 $ 1,024,201,404 $ 67,937,296
------------- ------------ --------------- --------------- ------------
------------- ------------ --------------- --------------- ------------
<CAPTION>
VAL
Sub-Account
------------
Year Ended
December 31,
1995 1996*
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income (expense)....... $ 270,357 $ (53,621)
Net realized gains.................... 265,908 23,298
Net unrealized gains.................. 7,447,367 744,641
------------ ------------
Increase in net assets from
operations......................... $ 7,983,632 714,318
------------ ------------
PARTICIPANT TRANSACTIONS:
Accumulation Activity:
Purchase payments received.......... $ 12,426,034 $ 10,936,155
Net transfers between Sub-Accounts
and Fixed Account.................. 2,364,291 5,122,274
Withdrawals, surrenders,
annuitizations and contract
charges............................ (2,335,754) (63,860)
------------ ------------
Net accumulation activity......... $ 12,454,571 $ 15,994,569
------------ ------------
Annuitization Activity:
Annuitizations...................... $ 16,672 $ --
Annuity payments and contract
charges............................ (7,291) --
Net transfers between Sub-Accounts.. 9,915 --
Adjustments to annuity reserves..... (2,791) --
------------ ------------
Net annuitization activity........ $ 16,505 --
------------ ------------
Increase in net assets from
participant transactions............. $ 12,471,076 $ 15,994,569
------------ ------------
Increase in net assets.............. $ 20,454,708 $ 16,708,887
NET ASSETS:
Beginning of year..................... 21,338,799 --
------------ ------------
End of year........................... $ 41,793,507 $ 16,708,887
------------ ------------
------------ ------------
</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>
WAA WGS WGR
Sub-Account Sub-Account Sub-Account
--------------------------- ----------------------------- -----------------------------
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
--------------------------- ----------------------------- -----------------------------
1996 1995 1996 1995 1996 1995
------------ ------------ ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(expense)....................... $ 595,575 $ (175,907) $ 16,535,862 $ 5,279,650 $ 9,576,256 $ 1,467,987
Net realized gains (losses)...... 1,629,596 120,590 (2,712,091) 21,142 6,018,165 871,201
Net unrealized gains (losses).... 4,425,108 2,559,790 (9,808,667) 12,299,610 1,415,056 14,693,578
------------ ------------ ------------- ------------- ------------- -------------
Increase in net assets from
operations.................... $ 6,650,279 $ 2,504,473 $ 4,015,104 $ 17,600,402 $ 17,009,477 $ 17,032,766
------------ ------------ ------------- ------------- ------------- -------------
PARTICIPANT TRANSACTIONS:
Accumulation Activity:
Purchase payments received..... $ 33,549,719 $ 14,182,774 $ 10,730,732 $ 12,226,329 $ 40,398,624 $ 27,109,744
Net transfers between
Sub-Accounts and Fixed
Account....................... 13,363,954 6,506,983 (13,803,477) (8,347,691) 3,588,236 5,024,725
Withdrawals, surrenders,
annuitizations and contract
charges....................... (2,987,226) (403,056) (11,401,973) (8,464,694) (9,375,496) (7,221,767)
------------ ------------ ------------- ------------- ------------- -------------
Net accumulation activity.... $ 43,926,447 $ 20,286,701 $ (14,474,718) $ (4,586,056) $ 34,611,364 $ 24,912,702
------------ ------------ ------------- ------------- ------------- -------------
Annuitization Activity:
Annuitizations................. $ 174,043 $ -- $ 55,515 $ 9,873 $ 157,641 $ 398,205
Annuity payments and contract
charges....................... (17,132) (10,989) (171,649) (159,462) (71,968) (48,306)
Net transfers between
Sub-Accounts.................. -- 78,757 (25,947) -- 13,731 6,845
Adjustments to annuity
reserves...................... 16,443 5,357 (4,679) 49,038 8,938 42,104
------------ ------------ ------------- ------------- ------------- -------------
Net annuitization activity... $ 173,354 $ 73,125 $ (146,760) $ (100,551) $ 108,342 $ 398,848
------------ ------------ ------------- ------------- ------------- -------------
Increase (decrease) in net assets
from participant transactions... $ 44,099,801 $ 20,359,826 $ (14,621,478) $ (4,686,607) $ 34,719,706 $ 25,311,550
------------ ------------ ------------- ------------- ------------- -------------
Increase (decrease) in net
assets........................ $ 50,750,080 $ 22,864,299 $ (10,606,374) $ 12,913,795 $ 51,729,183 $ 42,344,316
NET ASSETS:
Beginning of year................ 25,867,417 3,003,118 138,350,259 125,436,464 141,497,630 99,153,314
------------ ------------ ------------- ------------- ------------- -------------
End of year...................... $ 76,617,497 $ 25,867,417 $ 127,743,885 $ 138,350,259 $ 193,226,813 $ 141,497,630
------------ ------------ ------------- ------------- ------------- -------------
------------ ------------ ------------- ------------- ------------- -------------
</TABLE>
See notes to financial statements
11
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
STATEMENTS OF CHANGES IN NET ASSETS -- continued
<TABLE>
<CAPTION>
WTR
Sub-Account Total
--------------------------- ---------------------------------
Year Ended Year Ended
December 31, December 31,
--------------------------- ---------------------------------
1996 1995 1996 1995
------------ ------------ --------------- ---------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(expense)....................... $ 71,547 $ (87,058) $ 207,607,067 $ 58,912,960
Net realized gains............... 545,390 62,601 106,785,736 33,713,632
Net unrealized gains............. 2,845,849 1,020,693 196,251,997 460,667,644
------------ ------------ --------------- ---------------
Increase in net assets from
operations.................... $ 3,462,786 $ 996,236 $ 510,644,800 $ 553,294,236
------------ ------------ --------------- ---------------
PARTICIPANT TRANSACTIONS:
Accumulation Activity:
Purchase payments received..... $ 16,294,987 $ 10,064,130 $ 1,231,625,970 $ 743,077,138
Net transfers between
Sub-Accounts and Fixed
Account....................... 5,434,372 1,710,064 135,880,112 (2,514,452)
Withdrawals, surrenders,
annuitizations and contract
charges....................... (1,579,132) (505,397) (285,266,526) (204,045,401)
------------ ------------ --------------- ---------------
Net accumulation activity.... $ 20,150,227 $ 11,268,797 $ 1,082,239,556 $ 536,517,285
------------ ------------ --------------- ---------------
Annuitization Activity:
Annuitizations................. $ -- $ 141,543 $ 5,137,173 $ 3,662,293
Annuity payments and contract
charges....................... (17,146) (6,755) (2,217,120) (1,663,675)
Net transfers between
Sub-Accounts.................. -- (394) 482 (14,834)
Adjustments to annuity
reserves...................... (10,126) 15,473 (356,574) 252,645
------------ ------------ --------------- ---------------
Net annuitization activity... $ (27,272) $ 149,867 $ 2,563,961 $ 2,236,429
------------ ------------ --------------- ---------------
Increase in net assets from
participant transactions........ $ 20,122,955 $ 11,418,664 $ 1,084,803,517 $ 538,753,714
------------ ------------ --------------- ---------------
Increase in net assets......... $ 23,585,741 $ 12,414,900 $ 1,595,448,317 $ 1,092,047,950
NET ASSETS:
Beginning of year................ 13,798,931 1,384,031 3,287,568,735 2,195,520,785
------------ ------------ --------------- ---------------
End of year...................... $ 37,384,672 $ 13,798,931 $ 4,883,017,052 $ 3,287,568,735
------------ ------------ --------------- ---------------
------------ ------------ --------------- ---------------
</TABLE>
See notes to financial statements
12
<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.
13
<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.
14
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
NOTES TO FINANCIAL STATEMENTS -- continued
(5) UNIT ACTIVITY FROM PARTICIPANT TRANSACTIONS
<TABLE>
<CAPTION>
Units
Units Transferred Withdrawn,
Between Sub-Accounts and Surrendered
Units Outstanding and
Beginning of Year Units Purchased Fixed Account Annuitized
---------------------- ---------------------- --------------------------- -----------
Year Ended
Year Ended Year Ended Year Ended December
December 31, December 31, December 31, 31,
---------------------- ---------------------- --------------------------- -----------
1996 1995 1996 1995 1996 1995 1996
---------- ---------- ---------- ---------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
MFS REGATTA CONTRACTS
------------------------------
CAS Sub-Account -- Level 1.... 6,615,207 6,184,731 3,487 8,683 267,320 1,002,774 (569,709)
CAS Sub-Account -- Level 2*... -- -- 62,873 -- 142 -- (4,047)
GSS Sub-Account -- Level 1.... 3,535,152 4,235,203 1,574 48 206,595 (289,212) (380,671)
GSS Sub-Account -- Level 2*... -- -- 59,729 -- 3,442 -- (7,280)
HYS Sub-Account -- Level 1.... 1,068,412 839,825 -- -- 271,328 332,946 (135,360)
MSS Sub-Account -- Level 1.... 2,150,361 2,066,642 -- 12,503 253,891 206,072 (202,039)
MSS Sub-Account -- Level 2*... -- -- 18,662 -- -- -- (4,392)
MMS Sub-Account -- Level 1.... 3,453,907 3,873,044 7,940 6,171 1,420,458 315,466 (1,022,567)
MMS Sub-Account -- Level 2*... -- -- 74,316 -- (3,576) -- (11,178)
TRS Sub-Account -- Level 1.... 13,106,997 14,225,539 2,594 4,093 580,878 117,384 (1,229,466)
TRS Sub-Account -- Level 2*... -- -- 61,666 -- -- -- (29,118)
WGS Sub-Account -- Level 1.... 1,730,002 1,967,375 -- -- (4,348) (87,581) (265,365)
WGS Sub-Account -- Level 2*... -- -- 4,988 -- -- -- (1,663)
<CAPTION>
Units Outstanding
End of Year
----------------------
Year Ended
December 31,
----------------------
1995 1996 1995
----------- ---------- ----------
<S> <C> <C> <C>
MFS REGATTA CONTRACTS
------------------------------
CAS Sub-Account -- Level 1.... (580,981) 6,316,305 6,615,207
CAS Sub-Account -- Level 2*... -- 58,968 --
GSS Sub-Account -- Level 1.... (410,887) 3,362,650 3,535,152
GSS Sub-Account -- Level 2*... -- 55,891 --
HYS Sub-Account -- Level 1.... (104,359) 1,204,380 1,068,412
MSS Sub-Account -- Level 1.... (134,856) 2,202,213 2,150,361
MSS Sub-Account -- Level 2*... -- 14,270 --
MMS Sub-Account -- Level 1.... (740,774) 3,859,738 3,453,907
MMS Sub-Account -- Level 2*... -- 59,562 --
TRS Sub-Account -- Level 1.... (1,240,019) 12,461,003 13,106,997
TRS Sub-Account -- Level 2*... -- 32,548 --
WGS Sub-Account -- Level 1.... (149,792) 1,460,289 1,730,002
WGS Sub-Account -- Level 2*... -- 3,325 --
</TABLE>
*For the period December 9, 1996 (commencement of operations) to December 31,
1996.
15
<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
Withdrawn,
Units Transferred Surrendered
Between Sub-Accounts and and
Units Outstanding Annuitized
Beginning of Year Units Purchased Fixed Account -----------
---------------------- ---------------------- --------------------------- Year Ended
Year Ended Year Ended Year Ended December
December 31, December 31, December 31, 31,
---------------------- ---------------------- --------------------------- -----------
MFS REGATTA GOLD CONTRACTS 1996 1995 1996 1995 1996 1995 1996
------------------------------ ---------- ---------- ---------- ---------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CAS Sub-Account............... 27,782,739 19,909,649 7,263,696 7,106,728 (496,244) 2,287,026 (1,753,398)
CGS Sub-Account............... 16,712,586 10,979,711 8,644,701 5,181,021 2,000,284 1,359,507 (1,157,596)
EGS Sub-Account*.............. 5,346,104 -- 8,728,028 2,978,021 3,530,938 2,420,603 (607,026)
FCG Sub-Account**............. 711,179 -- 1,891,793 414,060 856,286 301,717 (98,662)
FCI Sub-Account***............ -- -- 250,279 -- 323,501 -- (9,038)
FCE Sub-Account***............ -- -- 107,088 -- 224,483 -- (1,941)
GSS Sub-Account............... 18,082,586 18,784,262 4,278,441 3,836,496 (1,392,606) (3,241,260) (1,254,307)
HYS Sub-Account............... 6,880,080 4,605,818 2,241,058 1,439,990 (53,191) 1,286,018 (643,658)
MSS Sub-Account............... 8,542,869 6,351,641 2,422,482 2,269,426 147,148 411,655 (570,773)
MMS Sub-Account............... 17,186,041 14,774,386 18,886,918 16,108,059 (5,479,056) (11,138,037) (3,318,320)
RES Sub-Account............... 5,341,160 392,528 10,525,524 3,726,811 4,302,978 1,346,160 (591,917)
TRS Sub-Account............... 53,091,748 48,270,556 10,291,268 8,512,923 (170,571) (391,980) (3,704,429)
UTS Sub-Account............... 3,410,047 2,273,439 1,448,517 1,164,148 68,243 204,917 (255,615)
VAL Sub-Account****........... -- -- 1,039,259 -- 492,924 -- (11,396)
WAA Sub-Account............... 2,141,041 299,210 2,590,553 1,294,348 1,048,013 590,509 (240,597)
WGS Sub-Account............... 8,272,858 8,334,019 818,386 981,591 (1,036,800) (532,375) (543,678)
WGR Sub-Account............... 11,421,691 9,182,555 3,069,026 2,422,350 227,986 475,925 (728,757)
WTR Sub-Account............... 1,170,586 138,126 1,353,637 922,160 448,221 159,909 (136,365)
<CAPTION>
Units Outstanding
End of Year
----------------------
Year Ended
December 31,
----------------------
MFS REGATTA GOLD CONTRACTS 1995 1996 1995
------------------------------ ----------- ---------- ----------
<S> <C> <C> <C>
CAS Sub-Account............... (1,520,664) 32,796,793 27,782,739
CGS Sub-Account............... (807,653) 26,199,975 16,712,586
EGS Sub-Account*.............. (52,520) 16,998,044 5,346,104
FCG Sub-Account**............. (4,598) 3,360,596 711,179
FCI Sub-Account***............ -- 564,742 --
FCE Sub-Account***............ -- 329,630 --
GSS Sub-Account............... (1,296,912) 19,714,114 18,082,586
HYS Sub-Account............... (451,746) 8,424,289 6,880,080
MSS Sub-Account............... (489,853) 10,541,726 8,542,869
MMS Sub-Account............... (2,558,367) 27,275,583 17,186,041
RES Sub-Account............... (124,339) 19,577,745 5,341,160
TRS Sub-Account............... (3,299,751) 59,508,016 53,091,748
UTS Sub-Account............... (232,457) 4,671,192 3,410,047
VAL Sub-Account****........... -- 1,520,787 --
WAA Sub-Account............... (43,026) 5,539,010 2,141,041
WGS Sub-Account............... (510,377) 7,510,766 8,272,858
WGR Sub-Account............... (659,139) 13,989,946 11,421,691
WTR Sub-Account............... (49,609) 2,836,079 1,170,586
</TABLE>
*1995 activity is for the period May 1, 1995 (commencement of operations) to
December 31, 1995.
**1995 activity is for the period October 4, 1995 (commencement of operations)
to December 31, 1995.
***For the period July 1, 1996 (commencement of operations) to December 31,
1996.
****For the period June 3, 1996 (commencement of operations) to December 31,
1996.
16
<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 Units
Units Between Sub- Withdrawn, Units
Outstanding Accounts and Surrendered Outstanding
Beginning Units Fixed and End of
of Period Purchased Account Annuitized Period
---------- ---------- ------------ ----------- ----------
MFS REGATTA CLASSIC CONTRACTS
------------------------------
<S> <C> <C> <C> <C> <C>
CAS Sub-Account*.............. -- 1,892 -- -- 1,892
CGS Sub-Account*.............. -- 8,005 (4,460) -- 3,545
EGS Sub-Account*.............. -- 11,935 (2,191) -- 9,744
FCI Sub-Account**............. -- 2,249 -- -- 2,249
FCE Sub-Account**............. -- 352 (212) -- 140
GSS Sub-Account**............. -- 6,514 -- -- 6,514
HYS Sub-Account*.............. -- 7,097 1,122 -- 8,219
MMS Sub-Account**............. -- 13,813 -- -- 13,813
RES Sub-Account***............ -- 25,659 6 -- 25,665
TRS Sub-Account***............ -- 33,797 6,778 -- 40,575
VAL Sub-Account*.............. -- 8,416 1,162 -- 9,578
WAA Sub-Account*.............. -- 7,086 (638) -- 6,448
WGR Sub-Account****........... -- -- 71 -- 71
</TABLE>
*For the period December 2, 1996 (commencement of operations) to December 31,
1996.
**For the period December 9, 1996 (commencement of operations) to December 31,
1996.
***For the period November 27, 1996 (commencement of operations) to December
31, 1996.
****Operations commenced on December 31, 1996.
17
<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 December 31, 1996, the
related statement of operations for the year then ended and the statements of
changes in net assets for the years ended December 31, 1996 and 1995. These
financial statements are the responsibility of management. Our responsibility is
to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities held at December 31, 1996 by correspondence with the
custodian. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Variable Account as of December 31,
1996, 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
February 7, 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.
18
<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
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 2/97 130M
[REGATTA LOGO]
[REGATTA GOLD LOGO]
[REGATTA CLASSIC LOGO]
ANNUAL REPORT - DECEMBER 31, 1996
PROFESSIONALLY MANAGED ANNUITIES ISSUED BY
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.),
A WHOLLY-OWNED SUBSIDIARY OF
SUN LIFE ASSURANCE COMPANY OF CANADA
