<PAGE>
MFS REGATTA
MFS REGATTA GOLD
MFS REGATTA CLASSIC
MFS REGATTA PLATINUM
DIRECTORS AND OFFICERS OF
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
DONALD A. STEWART, Chairman and Director
C. JAMES PRIEUR, President and Director
S. CAESAR RABOY, Senior Vice President and
Deputy General Manager and Director
RICHARD B. BAILEY, Director
M. COLYER CRUM, Director
DAVID D. HORN, Director
JOHN S. LANE, Director
ANGUS A. MacNAUGHTON, Director
JOHN D. McNEIL, Director
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 Retirement Products & Services
P.O. Box 1024, Boston, Massachusetts 02103-9986
GENERAL DISTRIBUTOR
Clarendon Insurance Agency, Inc.
One Sun Life Executive Park
Wellesley Hills, Massachusetts 02481
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 8/98 166M
FG
[LOGO]
[LOGO]
[LOGO]
SEMIANNUAL REPORT - JUNE 30, 1998
PROFESSIONALLY MANAGED ANNUITIES ISSUED BY
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.),
A WHOLLY-OWNED SUBSIDIARY OF
SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.
<PAGE>
REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS
INCLUDED IN 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, 1997 June 30, 1998 in Unit Value
----------------- ----------------- --------------
<S> <C> <C> <C>
MFS REGATTA CONTRACTS:
Capital Appreciation Series - Level
1.................................... $29.9999 $35.7137 19.05%
Capital Appreciation Series - Level
2.................................... 12.0916 14.4052 19.13
Government Securities Series - Level
1.................................... 16.6923 17.2224 3.18
Government Securities Series - Level
2.................................... 10.7020 11.0500 3.25
High Yield Series - Level 1........... 22.0555 23.0605 4.56
High Yield Series - Level 2........... 11.1721 11.6898 4.63
Managed Sectors Series - Level 1...... 27.2960 30.2684 10.89
Managed Sectors Series - Level 2...... 12.2808 13.6281 10.97
Money Market Series - Level 1......... 13.1780 13.4150 1.80
Money Market Series - Level 2......... 10.4025 10.5973 1.87
Total Return Series - Level 1......... 24.1056 26.0286 7.98
Total Return Series - Level 2......... 12.0683 13.0406 8.06
World Governments Series - Level 1.... 16.4146 16.5622 0.90
World Governments Series - Level 2.... 9.8243 9.9199 0.97
MFS REGATTA GOLD CONTRACTS:
Bond Series........................... $10.0000* $10.1778 1.78%
Capital Appreciation Series........... 27.4057 32.6368 19.09
Conservative Growth Series............ 25.9656 30.1470 16.10
Emerging Growth Series................ 17.4544 21.0049 20.34
Equity Income Series.................. 10.0000* 9.9511 (0.49)
MFS/Foreign & Colonial Emerging
Markets Equity Series................ 10.8010 8.8556 (18.01)
International Growth Series........... 9.4566 10.1926 7.78
International Growth and Income
Series............................... 10.9674 13.0388 18.89
Government Securities Series.......... 14.0763 14.5283 3.21
High Yield Series..................... 18.1622 18.9964 4.59
Managed Sectors Series................ 22.9770 25.4878 10.93
Massachusetts Investors Growth Stock
Series............................... 10.0000* 10.5928 5.93
Money Market Series................... 11.8058 12.0222 1.83
New Discovery Series.................. 10.0000* 10.4925 4.93
Research Series....................... 19.4490 22.9209 17.85
Research Growth & Income Series....... 10.9235 12.6944 16.21
Research International Series......... 10.0000* 9.8982 (1.02)
Strategic Income Series............... 10.0000* 10.0886 0.89
Total Return Series................... 20.0793 21.6885 8.01
Utilities Series...................... 19.0140 21.0767 10.85
Capital Opportunities Series.......... 13.7450 16.2261 18.05
World Asset Allocation Series......... 15.0565 16.4278 9.11
World Governments Series.............. 13.3854 13.5104 0.93
World Growth Series................... 15.6398 17.5484 12.20
World Total Return Series............. 14.7153 16.2318 10.31
</TABLE>
*Reflects unit value on date of commencement of operations.
1
<PAGE>
REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS
INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
PERFORMANCE SUMMARY -- continued
<TABLE>
<CAPTION>
Unit Value
------------------------------------- Percent Change
December 31, 1997 June 30, 1998 in Unit Value
----------------- ----------------- --------------
<S> <C> <C> <C>
MFS REGATTA CLASSIC CONTRACTS:
Bond Series........................... $10.0000* $10.0000 0.00%
Capital Appreciation Series........... 11.9926 14.3133 19.35
Conservative Growth Series............ 12.8247 14.9230 16.36
Emerging Growth Series................ 11.5023 13.8728 20.61
Equity Income Series.................. 10.0000* 10.1539 1.54
MFS/Foreign & Colonial Emerging
Markets Equity Series................ 11.3377 9.3162 (17.83)
International Growth Series........... 9.7271 10.5075 8.02
International Growth and Income
Series............................... 10.5716 12.5961 19.15
Government Securities Series.......... 10.6850 11.0526 3.44
High Yield Series..................... 11.2665 11.8100 4.82
Managed Sectors Series................ 11.9091 13.2398 11.17
Massachusetts Investors Growth Stock
Series............................... 10.0000* 10.5969 5.97
Money Market Series................... 10.3869 10.6008 2.06
New Discovery Series.................. 10.0000* 10.4966 4.97
Research Series....................... 11.7136 13.8353 18.11
Research Growth & Income Series....... 10.7281 12.4950 16.47
Research International Series......... 10.0000* 10.0000 0.00
Strategic Income Series............... 10.0000* 10.0072 0.07
Total Return Series................... 11.9123 12.8955 8.25
Utilities Series...................... 12.7649 14.1811 11.09
Capital Opportunities Series.......... 12.7132 15.0413 18.31
World Asset Allocation Series......... 10.9812 12.0079 9.35
World Governments Series.............. 10.0247 10.1408 1.16
World Growth Series................... 11.3725 12.7887 12.45
World Total Return Series............. 11.1546 12.3315 10.55
</TABLE>
*Reflects unit value on date of commencement of operations.
2
<PAGE>
REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS
INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
PERFORMANCE SUMMARY -- continued
<TABLE>
<CAPTION>
Unit Value
-------------------------------------
Beginning of Percent Change
Period June 30, 1998 in Unit Value
----------------- ----------------- --------------
<S> <C> <C> <C>
MFS REGATTA PLATINUM CONTRACTS:
Bond Series........................... $10.0000* $10.0135 0.14%
Capital Appreciation Series........... 10.0000* 10.6368 6.37
Conservative Growth Series............ 10.0000* 10.2590 2.59
Emerging Growth Series................ 10.0000* 10.5559 5.56
Equity Income Series.................. 10.0000* 10.0639 0.64
MFS/Foreign & Colonial Emerging
Markets Equity Series................ 10.0000* 9.6842 (3.16)
International Growth Series........... 10.0000* 9.9979 (0.02)
International Growth and Income
Series............................... 10.0000* 10.2449 2.45
Government Securities Series.......... 10.0000* 10.0189 0.19
High Yield Series..................... 10.0000* 10.0150 0.15
Managed Sectors Series................ 10.0000* 10.6032 6.03
Massachusetts Investors Growth Stock
Series............................... 10.0000* 10.5460 5.46
Money Market Series................... 10.0000* 10.0137 0.14
New Discovery Series.................. 10.0000* 10.3805 3.81
Research Series....................... 10.0000* 10.6487 6.49
Research Growth & Income Series....... 10.0000* 9.9728 (0.27)
Research International Series......... 10.0000* 10.0599 0.60
Strategic Income Series............... 10.0000* 10.0069 0.07
Total Return Series................... 10.0000* 10.0842 0.84
Utilities Series...................... 10.0000* 10.4392 4.39
Capital Opportunities Series.......... 10.0000* 10.1855 1.86
World Asset Allocation Series......... 10.0000* 10.0785 0.79
World Governments Series.............. 10.0000* 9.9817 (0.18)
World Growth Series................... 10.0000* 10.2101 2.10
</TABLE>
*Reflects unit value on date of commencement of operations.
3
<PAGE>
REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS
INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
STATEMENT OF CONDITION -- June 30, 1998
<TABLE>
<CAPTION>
Assets:
<S> <C> <C> <C>
Investment in MFS/Sun Life Series Trust Shares Cost Value
----------- -------------- --------------
Bond Series ("BDS").............................................................. 254,829 $ 2,570,222 $ 2,599,227
Capital Appreciation Series ("CAS").............................................. 32,100,756 1,166,504,717 1,373,198,897
Conservative Growth Series ("CGS")............................................... 40,973,184 1,102,642,448 1,478,937,337
Emerging Growth Series ("EGS")................................................... 28,548,027 459,079,738 601,403,300
Equity Income Series ("EIS")..................................................... 181,272 1,803,085 1,807,792
MFS/Foreign & Colonial Emerging Markets Equity Series ("FCE").................... 2,300,168 26,045,059 20,297,153
International Growth Series ("FCI").............................................. 3,139,184 31,421,701 32,599,085
International Growth and Income Series ("FCG")................................... 5,411,177 62,907,783 70,205,470
Government Securities Series ("GSS")............................................. 29,305,377 372,835,122 375,054,342
High Yield Series ("HYS")........................................................ 31,444,170 297,742,705 301,514,908
Managed Sectors Series ("MSS")................................................... 12,305,999 327,044,356 345,674,970
Massachusetts Investors Growth Stock Series ("MIS").............................. 989,468 10,083,625 10,503,985
Money Market Series ("MMS")...................................................... 321,548,997 321,548,997 321,548,997
New Discovery Series ("NWD")..................................................... 289,863 2,950,734 3,047,999
Research Series ("RES").......................................................... 39,454,632 672,637,688 871,632,357
Research Growth & Income Series ("RGS").......................................... 1,571,171 18,346,110 20,150,795
Research International Series ("RSS")............................................ 55,564 548,647 551,186
Strategic Income Series ("SIS").................................................. 137,629 1,383,117 1,391,509
Total Return Series ("TRS")...................................................... 86,311,616 1,562,310,586 1,785,720,955
Utilities Series ("UTS")......................................................... 10,253,016 141,553,744 166,218,188
Capital Opportunities Series ("VAL")............................................. 9,683,714 131,042,672 153,924,043
World Asset Allocation Series ("WAA")............................................ 9,127,874 126,667,878 135,912,391
World Governments Series ("WGS")................................................. 8,215,785 92,515,774 88,389,898
World Growth Series ("WGR")...................................................... 17,719,021 236,398,711 273,506,449
World Total Return Series ("WTR")................................................ 5,634,096 77,005,341 87,779,130
-------------- --------------
$7,245,590,560 $8,523,570,363
--------------
--------------
Liability:
Payable to Sponsor.............................................................................................. 146,183
--------------
Net Assets................................................................................................ $8,523,424,180
--------------
--------------
</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......................... 1,828,840 $35.7137 $ 65,324,153 $ 141,015 $ 65,465,168
CAS -- Level 2......................... 6,738,140 14.4052 96,940,399 393,596 97,333,995
GSS -- Level 1......................... 966,997 17.2224 16,666,498 50,100 16,716,598
GSS -- Level 2......................... 2,117,639 11.0500 23,384,523 59,400 23,443,923
HYS -- Level 1......................... 385,510 23.0605 8,896,354 17,181 8,913,535
HYS -- Level 2......................... 1,031,037 11.6898 12,055,208 12,275 12,067,483
MSS -- Level 1......................... 646,350 30.2684 19,440,860 82,129 19,522,989
MSS -- Level 2......................... 2,343,843 13.6281 32,022,739 77,689 32,100,428
MMS -- Level 1......................... 1,018,796 13.4150 13,850,082 8,987 13,859,069
MMS -- Level 2......................... 2,262,818 10.5973 23,750,987 4,216 23,755,203
TRS -- Level 1......................... 3,384,998 26.0286 88,119,252 314,809 88,434,061
TRS -- Level 2......................... 9,987,805 13.0406 130,188,155 1,059,893 131,248,048
WGS -- Level 1......................... 325,491 16.5622 5,401,411 59,083 5,460,494
WGS -- Level 2......................... 753,169 9.9199 7,458,598 14,966 7,473,564
------------ ---------- --------------
$543,499,219 $2,295,339 $ 545,794,558
------------ ---------- --------------
</TABLE>
See notes to financial statements
4
<PAGE>
REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS
INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
STATEMENT OF CONDITION -- June 30, 1998 -- 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:
BDS.................................... 255,218 $10.1778 $ 2,596,972 $ -- $ 2,596,972
CAS.................................... 36,737,983 32.6368 1,198,457,568 5,804,546 1,204,262,114
CGS.................................... 48,421,042 30.1470 1,459,218,549 4,366,977 1,463,585,526
EGS.................................... 28,271,190 21.0049 593,631,210 888,745 594,519,955
EIS.................................... 173,145 9.9511 1,723,378 -- 1,723,378
FCE.................................... 2,241,348 8.8556 19,841,441 26,650 19,868,091
FCI.................................... 3,100,609 10.1926 31,593,805 52,413 31,646,218
FCG.................................... 5,288,530 13.0388 68,931,286 70,792 69,002,078
GSS.................................... 22,799,870 14.5283 331,180,929 1,032,876 332,213,805
HYS.................................... 14,533,449 18.9964 275,988,461 930,418 276,918,879
MSS.................................... 11,442,679 25.4878 291,255,335 957,295 292,212,630
MIS.................................... 948,575 10.5928 10,047,688 -- 10,047,688
MMS.................................... 23,297,460 12.0222 280,074,698 1,526,565 281,601,263
NWD.................................... 251,177 10.4925 2,635,374 -- 2,635,374
RES.................................... 37,494,058 22.9209 858,600,474 2,173,290 860,773,764
RGS.................................... 1,557,205 12.6944 19,762,801 143,383 19,906,184
RSS.................................... 53,236 9.8982 527,002 -- 527,002
SIS.................................... 135,482 10.0886 1,367,044 -- 1,367,044
TRS.................................... 71,223,495 21.6885 1,544,040,813 3,475,834 1,547,516,647
UTS.................................... 7,698,840 21.0767 162,200,025 607,248 162,807,273
VAL.................................... 9,231,846 16.2261 149,754,225 258,054 150,012,279
WAA.................................... 8,194,157 16.4278 134,591,922 592,726 135,184,648
WGS.................................... 5,535,939 13.5104 74,784,074 395,239 75,179,313
WGR.................................... 15,453,392 17.5484 271,094,913 710,383 271,805,296
WTR.................................... 5,331,222 16.2318 86,507,591 459,590 86,967,181
-------------- ---------- --------------
$7,870,407,578 $24,473,024 $7,894,880,602
-------------- ---------- --------------
MFS REGATTA CLASSIC CONTRACTS:
BDS.................................... 54 $10.0000 $ 542 $ -- $ 542
CAS.................................... 392,453 14.3133 5,615,470 -- 5,615,470
CGS.................................... 960,933 14.9230 14,332,526 -- 14,332,526
EGS.................................... 458,813 13.8728 6,361,291 -- 6,361,291
EIS.................................... 3,556 10.1539 36,100 -- 36,100
FCE.................................... 44,459 9.3162 414,379 -- 414,379
FCI.................................... 86,506 10.5075 909,055 -- 909,055
FCG.................................... 82,108 12.5961 1,033,693 -- 1,033,693
GSS.................................... 240,106 11.0526 2,658,903 -- 2,658,903
HYS.................................... 288,587 11.8100 3,407,740 -- 3,407,740
MSS.................................... 133,307 13.2398 1,764,304 -- 1,764,304
MIS.................................... 15,310 10.5969 162,231 -- 162,231
MMS.................................... 194,990 10.6008 2,066,645 -- 2,066,645
NWD.................................... 20,804 10.4966 218,483 -- 218,483
RES.................................... 759,857 13.8353 10,510,310 -- 10,510,310
RGS.................................... 18,850 12.4950 235,301 -- 235,301
SIS.................................... 1,726 10.0072 17,273 -- 17,273
TRS.................................... 1,384,083 12.8955 17,848,000 -- 17,848,000
UTS.................................... 238,951 14.1811 3,383,034 -- 3,383,034
VAL.................................... 247,614 15.0413 3,720,431 -- 3,720,431
WAA.................................... 60,243 12.0079 723,751 -- 723,751
WGS.................................... 31,335 10.1408 317,762 -- 317,762
WGR.................................... 127,250 12.7887 1,626,588 -- 1,626,588
WTR.................................... 65,832 12.3315 811,440 -- 811,440
-------------- ---------- --------------
$ 78,175,252 $ -- $ 78,175,252
-------------- ---------- --------------
</TABLE>
See notes to financial statements
5
<PAGE>
REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS
INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
STATEMENT OF CONDITION -- June 30, 1998 -- continued
<TABLE>
<CAPTION>
Applicable to Owners of
Deferred Variable Annuity Contracts Reserve for
NET ASSETS APPLICABLE TO CONTRACT OWNERS: ------------------------------------- Variable
(CONTINUED): Units Unit Value Value Annuities Total
-------- ---------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C>
MFS REGATTA PLATINUM CONTRACTS:
BDS.................................... 171 $10.0135 $ 1,713 $ -- $ 1,713
CAS.................................... 52,015 10.6368 553,255 -- 553,255
CGS.................................... 103,098 10.2590 1,057,723 -- 1,057,723
EGS.................................... 46,981 10.5559 495,928 -- 495,928
EIS.................................... 4,801 10.0639 48,314 -- 48,314
FCE.................................... 1,382 9.6842 13,391 -- 13,391
FCI.................................... 4,301 9.9979 42,995 -- 42,995
FCG.................................... 15,888 10.2449 162,764 -- 162,764
GSS.................................... 18,946 10.0189 189,818 -- 189,818
HYS.................................... 15,884 10.0150 159,037 -- 159,037
MSS.................................... 1,103 10.6032 11,690 -- 11,690
MIS.................................... 27,891 10.5460 294,066 -- 294,066
MMS.................................... 16,420 10.0137 164,433 -- 164,433
NWD.................................... 18,707 10.3805 194,142 -- 194,142
RES.................................... 38,656 10.6487 411,649 -- 411,649
RGS.................................... 1,445 9.9728 14,409 -- 14,409
RSS.................................... 2,400 10.0599 24,184 -- 24,184
SIS.................................... 719 10.0069 7,192 -- 7,192
TRS.................................... 40,048 10.0842 403,821 -- 403,821
UTS.................................... 2,582 10.4392 26,951 -- 26,951
VAL.................................... 17,552 10.1855 178,764 -- 178,764
WAA.................................... 2,606 10.0785 26,267 -- 26,267
WGS.................................... 100 9.9817 998 -- 998
WGR.................................... 8,839 10.2101 90,264 -- 90,264
-------------- ----------- --------------
$ 4,573,768 $ -- $ 4,573,768
-------------- ----------- --------------
Net Assets............................. $8,496,655,817 $26,768,363 $8,523,424,180
-------------- ----------- --------------
-------------- ----------- --------------
</TABLE>
See notes to financial statements
6
<PAGE>
REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS
INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
STATEMENT OF OPERATIONS -- Six Months Ended June 30, 1998
<TABLE>
<CAPTION>
BDS CAS CGS EGS EIS
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.......... $-- $145,841,372 $ 93,715,025 $ 18,895,418 $--
Mortality and expense risk
charges......................... 2,675 7,770,010 7,846,311 3,224,040 989
Distribution expense charges..... -- 58,842 -- -- --
Administrative expense charges... 321 873,558 941,558 386,885 120
------------ ------------ ------------- ------------- ------------
Net investment income (loss)... $(2,996) $137,138,962 $ 84,927,156 $ 15,284,493 $(1,109)
------------ ------------ ------------- ------------- ------------
REALIZED AND UNREALIZED GAINS
(LOSSES):
Realized gains (losses) on
investment transactions
Proceeds from sales............ $77,444 $156,417,322 $ 16,684,059 $ 17,477,609 $ 699
Cost of investments sold....... 76,167 115,178,575 7,839,859 10,818,045 703
------------ ------------ ------------- ------------- ------------
Net realized gains (losses).. $ 1,277 $ 41,238,747 $ 8,844,200 $ 6,659,564 $ (4)
------------ ------------ ------------- ------------- ------------
Net unrealized appreciation
(depreciation) on investments
End of period.................. $29,005 $206,694,180 $ 376,294,889 $ 142,323,562 $ 4,707
Beginning of period............ -- 165,968,995 285,383,733 69,992,703 --
------------ ------------ ------------- ------------- ------------
Change in unrealized
appreciation
(depreciation).............. $29,005 $ 40,725,185 $ 90,911,156 $ 72,330,859 $ 4,707
------------ ------------ ------------- ------------- ------------
Realized and unrealized gains
(losses)...................... $30,282 $ 81,963,932 $ 99,755,356 $ 78,990,423 $ 4,703
------------ ------------ ------------- ------------- ------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS................... $27,286 $219,102,894 $ 184,682,512 $ 94,274,916 $ 3,594
------------ ------------ ------------- ------------- ------------
------------ ------------ ------------- ------------- ------------
<CAPTION>
FCE FCI FCG
Sub-Account Sub-Account Sub-Account
------------ ----------- ------------
<S> <C> <C> <C>
INCOME AND EXPENSES:
Dividend income and capital gain
distributions received.......... $ 747,426 $ 253,294 $ 1,908,465
Mortality and expense risk
charges......................... 142,998 175,286 363,826
Distribution expense charges..... -- -- --
Administrative expense charges... 17,160 21,035 43,659
------------ ----------- ------------
Net investment income (loss)... $ 587,268 $ 56,973 $ 1,500,980
------------ ----------- ------------
REALIZED AND UNREALIZED GAINS
(LOSSES):
Realized gains (losses) on
investment transactions
Proceeds from sales............ $ 11,162,130 $1,984,882 $ 21,499,589
Cost of investments sold....... 12,149,488 1,858,670 18,095,070
------------ ----------- ------------
Net realized gains (losses).. $ (987,358) $ 126,212 $ 3,404,519
------------ ----------- ------------
Net unrealized appreciation
(depreciation) on investments
End of period.................. $ (5,747,906) $1,177,384 $ 7,297,687
Beginning of period............ (1,673,420) (418,012) 2,425,793
------------ ----------- ------------
Change in unrealized
appreciation
(depreciation).............. $ (4,074,486) $1,595,396 $ 4,871,894
------------ ----------- ------------
Realized and unrealized gains
(losses)...................... $ (5,061,844) $1,721,608 $ 8,276,413
------------ ----------- ------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS................... $ (4,474,576) $1,778,581 $ 9,777,393
------------ ----------- ------------
------------ ----------- ------------
</TABLE>
*For the period May 4, 1998 (commencement of operations of Sub-Account) through
June 30, 1998.
See notes to financial statements
7
<PAGE>
REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS
INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
STATEMENT OF OPERATIONS -- Six Months Ended June 30, 1998 -- continued
<TABLE>
<CAPTION>
GSS HYS MSS MIS MMS NWD
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............... $20,116,757 $ 17,576,617 $ 49,435,052 $ -- $ 7,917,051 $ --
Mortality and expense risk charges.... 2,100,351 1,658,465 2,072,479 9,185 1,942,282 2,698
Distribution expense charges.......... 14,923 7,991 17,323 -- 10,977 --
Administrative expense charges........ 237,119 191,024 231,374 1,103 222,098 322
----------- ------------ ------------ -------------- ------------ -------------
Net investment income (loss)...... $17,764,364 $ 15,719,137 $ 47,113,876 $(10,288) $ 5,741,694 $ (3,020)
----------- ------------ ------------ -------------- ------------ -------------
REALIZED AND UNREALIZED GAINS (LOSSES):
Realized gains (losses) on investment
transactions
Proceeds from sales................. $50,661,473 $ 41,889,999 $ 36,525,524 $176,975 $290,463,593 $ 9,743
Cost of investments sold............ 48,309,841 37,311,828 27,000,415 175,899 290,463,593 9,762
----------- ------------ ------------ -------------- ------------ -------------
Net realized gains (losses)....... $ 2,351,632 $ 4,578,171 $ 9,525,109 $ 1,076 $ -- $ (19)
----------- ------------ ------------ -------------- ------------ -------------
Net unrealized appreciation on
investments
End of period....................... $ 2,219,220 $ 3,772,203 $ 18,630,614 $420,360 $ -- $ 97,265
Beginning of period................. 11,293,081 12,659,920 40,525,807 -- -- --
----------- ------------ ------------ -------------- ------------ -------------
Change in unrealized
appreciation..................... $(9,073,861) $ (8,887,717) $(21,895,193) $420,360 $ -- $ 97,265
----------- ------------ ------------ -------------- ------------ -------------
Realized and unrealized gains
(losses)........................... $(6,722,229) $ (4,309,546) $(12,370,084) $421,436 $ -- $ 97,246
----------- ------------ ------------ -------------- ------------ -------------
INCREASE IN NET ASSETS FROM
OPERATIONS............................. $11,042,135 $ 11,409,591 $ 34,743,792 $411,148 $ 5,741,694 $ 94,226
----------- ------------ ------------ -------------- ------------ -------------
----------- ------------ ------------ -------------- ------------ -------------
<CAPTION>
RES RGS
Sub-Account Sub-Account
------------- -----------
<S> <C> <C>
INCOME AND EXPENSES:
Dividend income and capital gain
distributions received............... $ 34,036,093 $ 75,267
Mortality and expense risk charges.... 4,749,258 73,665
Distribution expense charges.......... -- --
Administrative expense charges........ 569,912 8,840
------------- -----------
Net investment income (loss)...... $ 28,716,923 $ (7,238)
------------- -----------
REALIZED AND UNREALIZED GAINS (LOSSES):
Realized gains (losses) on investment
transactions
Proceeds from sales................. $ 12,356,716 $ 724,314
Cost of investments sold............ 6,406,014 594,574
------------- -----------
Net realized gains (losses)....... $ 5,950,702 $ 129,740
------------- -----------
Net unrealized appreciation on
investments
End of period....................... $ 198,994,669 $1,804,685
Beginning of period................. 111,290,775 263,416
------------- -----------
Change in unrealized
appreciation..................... $ 87,703,894 $1,541,269
------------- -----------
Realized and unrealized gains
(losses)........................... $ 93,654,596 $1,671,009
------------- -----------
INCREASE IN NET ASSETS FROM
OPERATIONS............................. $ 122,371,519 $1,663,771
------------- -----------
------------- -----------
</TABLE>
*For the period May 4, 1998 (commencement of operations of Sub-Account) through
June 30, 1998.
See notes to financial statements
8
<PAGE>
REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS
INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
STATEMENT OF OPERATIONS -- Six Months Ended June 30, 1998 -- continued
<TABLE>
<CAPTION>
RSS SIS TRS UTS VAL
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.......... $-- $-- $ 187,021,256 $ 17,526,264 $ 5,578,765
Mortality and expense risk
charges......................... 313 1,228 10,309,327 868,747 751,477
Distribution expense charges..... -- -- 84,623 -- --
Administrative expense charges... 37 144 1,152,496 104,249 90,176
----------- ------------ ------------- -------------- ------------
Net investment income
(loss)...................... $ (350) $(1,372) $ 175,474,810 $ 16,553,268 $ 4,737,112
----------- ------------ ------------- -------------- ------------
REALIZED AND UNREALIZED GAINS
(LOSSES):
Realized gains (losses) on
investment transactions
Proceeds from sales............ $5,522 $56,422 $ 114,363,461 $ 3,243,070 $ 7,611,534
Cost of investments sold....... 5,684 56,293 86,523,184 1,919,207 5,077,062
----------- ------------ ------------- -------------- ------------
Net realized gains
(losses).................... $ (162) $ 129 $ 27,840,277 $ 1,323,863 $ 2,534,472
----------- ------------ ------------- -------------- ------------
Net unrealized appreciation
(depreciation) on investments
End of period.................. $2,539 $ 8,392 $ 223,410,369 $ 24,664,444 $ 22,881,371
Beginning of period............ -- -- 297,846,753 28,380,652 11,851,082
----------- ------------ ------------- -------------- ------------
Change in unrealized
appreciation
(depreciation).............. $2,539 $ 8,392 $ (74,436,384) $ (3,716,208) $ 11,030,289
----------- ------------ ------------- -------------- ------------
Realized and unrealized gains
(losses)...................... $2,377 $ 8,521 $ (46,596,107) $ (2,392,345) $ 13,564,761
----------- ------------ ------------- -------------- ------------
INCREASE IN NET ASSETS FROM
OPERATIONS........................ $2,027 $ 7,149 $ 128,878,703 $ 14,160,923 $ 18,301,873
----------- ------------ ------------- -------------- ------------
----------- ------------ ------------- -------------- ------------
<CAPTION>
WAA WGS WGR
Sub-Account Sub-Account Sub-Account
------------ ------------ -----------
<S> <C> <C> <C>
INCOME AND EXPENSES:
Dividend income and capital gain
distributions received.......... $ 9,239,610 $ 1,161,945 $18,963,494
Mortality and expense risk
charges......................... 800,899 566,067 1,593,073
Distribution expense charges..... -- 6,188 --
Administrative expense charges... 96,109 61,744 191,169
------------ ------------ -----------
Net investment income
(loss)...................... $ 8,342,602 $ 527,946 $17,179,252
------------ ------------ -----------
REALIZED AND UNREALIZED GAINS
(LOSSES):
Realized gains (losses) on
investment transactions
Proceeds from sales............ $ 12,684,261 $ 19,096,319 $20,373,825
Cost of investments sold....... 9,806,978 20,309,489 14,148,801
------------ ------------ -----------
Net realized gains
(losses).................... $ 2,877,283 $ (1,213,170) $ 6,225,024
------------ ------------ -----------
Net unrealized appreciation
(depreciation) on investments
End of period.................. $ 9,244,513 $ (4,125,876) $37,107,738
Beginning of period............ 9,486,253 (5,701,264) 31,911,034
------------ ------------ -----------
Change in unrealized
appreciation
(depreciation).............. $ (241,740) $ 1,575,388 $ 5,196,704
------------ ------------ -----------
Realized and unrealized gains
(losses)...................... $ 2,635,543 $ 362,218 $11,421,728
------------ ------------ -----------
INCREASE IN NET ASSETS FROM
OPERATIONS........................ $ 10,978,145 $ 890,164 $28,600,980
------------ ------------ -----------
------------ ------------ -----------
</TABLE>
*For the period May 4, 1998 (commencement of operations of Sub-Account) through
June 30, 1998.
See notes to financial statements
9
<PAGE>
REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS
INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
STATEMENT OF OPERATIONS -- Six Months Ended June 30, 1998 -- continued
<TABLE>
<CAPTION>
WTR
Sub-Account Total
----------- -------------
<S> <C> <C>
INCOME AND EXPENSES:
Dividend income and capital gain
distributions received............... $ 3,790,536 $ 633,799,707
Mortality and expense risk charges.... 485,097 47,510,746
Distribution expense charges.......... -- 200,867
Administrative expense charges........ 58,211 5,500,423
----------- -------------
Net investment income............. $ 3,247,228 $ 580,587,671
----------- -------------
REALIZED AND UNREALIZED GAINS:
Realized gains on investment
transactions
Proceeds from sales................. $ 6,700,118 $ 842,246,603
Cost of investments sold............ 4,926,041 719,061,242
----------- -------------
Net realized gains................ $ 1,774,077 $ 123,185,361
----------- -------------
Net unrealized appreciation on
investments
End of period....................... $10,773,789 $1,277,979,803
Beginning of period................. 8,223,467 1,079,710,768
----------- -------------
Change in unrealized
appreciation...................... $ 2,550,322 $ 198,269,035
----------- -------------
Realized and unrealized gains....... $ 4,324,399 $ 321,454,396
----------- -------------
INCREASE IN NET ASSETS FROM
OPERATIONS............................. $ 7,571,627 $ 902,042,067
----------- -------------
----------- -------------
</TABLE>
See notes to financial statements
10
<PAGE>
REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS
INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
BDS CAS CGS
Sub-Account Sub-Account Sub-Account
----------- -------------------------------- --------------------------------
Period Six Months Six Months
Ended Ended Year Ended Ended Year Ended
June 30, June 30, Dec. 31, June 30, Dec. 31,
1998* 1998 1997 1998 1997
----------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)....................... $ (2,996) $ 137,138,962 $ 74,369,495 $ 84,927,156 $ 24,679,106
Net realized gains (losses)... 1,277 41,238,747 86,668,781 8,844,200 9,412,903
Net unrealized gains.......... 29,005 40,725,185 32,342,322 90,911,156 162,512,568
----------- --------------- --------------- --------------- ---------------
Increase in net assets
from operations.......... $ 27,286 $ 219,102,894 $ 193,380,598 $ 184,682,512 $ 196,604,577
----------- --------------- --------------- --------------- ---------------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments
received................... $1,877,699 $ 95,988,761 $ 191,209,464 $ 149,326,373 $ 211,472,643
Net transfers between Sub-
Accounts and Fixed
Account.................... 702,620 11,079,875 28,967,751 117,383,531 176,163,947
Withdrawals, surrenders,
annuitizations and contract
charges.................... (8,378) (89,797,076) (177,738,789) (40,335,248) (42,133,444)
----------- --------------- --------------- --------------- ---------------
Net accumulation
activity................. $2,571,941 $ 17,271,560 $ 42,438,426 $ 226,374,656 $ 345,503,146
----------- --------------- --------------- --------------- ---------------
Annuitization Activity:
Annuitizations.............. $ -- $ 477,300 $ 1,367,156 $ 1,040,803 $ 947,612
Annuity payments and
contract charges........... -- (639,013) (736,487) (250,148) (271,967)
Net Transfers between Sub-
Accounts................... -- (40,853) 40,842 69,263 354,557
Adjustments to annuity
reserves................... -- (52,300) (64,938) 48,003 52,749
----------- --------------- --------------- --------------- ---------------
Net annuitization
activity................. $ -- $ (254,866) $ 606,573 $ 907,921 $ 1,082,951
----------- --------------- --------------- --------------- ---------------
Increase in net assets from
contract owner
transactions................. $2,571,941 $ 17,016,694 $ 43,044,999 $ 227,282,577 $ 346,586,097
----------- --------------- --------------- --------------- ---------------
Increase in net assets...... $2,599,227 $ 236,119,588 $ 236,425,597 $ 411,965,089 $ 543,190,674
----------- --------------- --------------- --------------- ---------------
NET ASSETS:
Beginning of period........... -- 1,137,110,414 900,684,817 1,067,010,686 523,820,012
----------- --------------- --------------- --------------- ---------------
End of period................. $2,599,227 $ 1,373,230,002 $ 1,137,110,414 $ 1,478,975,775 $ 1,067,010,686
----------- --------------- --------------- --------------- ---------------
----------- --------------- --------------- --------------- ---------------
<CAPTION>
EGS EIS
Sub-Account Sub-Account
---------------------------- -----------
Six Months Period
Ended Year Ended Ended
June 30, Dec. 31, June 30,
1998 1997 1998*
------------- ------------- -----------
<S> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)....................... $ 15,284,493 $ (3,455,859) $ (1,109)
Net realized gains (losses)... 6,659,564 8,307,222 (4)
Net unrealized gains.......... 72,330,859 53,637,553 4,707
------------- ------------- -----------
Increase in net assets
from operations.......... $ 94,274,916 $ 58,488,916 $ 3,594
------------- ------------- -----------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments
received................... $ 49,650,070 $ 95,095,489 $ 786,102
Net transfers between Sub-
Accounts and Fixed
Account.................... 30,118,030 57,336,795 1,018,195
Withdrawals, surrenders,
annuitizations and contract
charges.................... (14,124,450) (16,909,470) (99)
------------- ------------- -----------
Net accumulation
activity................. $ 65,643,650 $ 135,522,814 $1,804,198
------------- ------------- -----------
Annuitization Activity:
Annuitizations.............. $ 240,990 $ 158,875 $ --
Annuity payments and
contract charges........... (57,596) (58,246) --
Net Transfers between Sub-
Accounts................... 471 21,015 --
Adjustments to annuity
reserves................... 1,558 7,823 --
------------- ------------- -----------
Net annuitization
activity................. $ 185,423 $ 129,467 $ --
------------- ------------- -----------
Increase in net assets from
contract owner
transactions................. $ 65,829,073 $ 135,652,281 $1,804,198
------------- ------------- -----------
Increase in net assets...... $ 160,103,989 $ 194,141,197 $1,807,792
------------- ------------- -----------
NET ASSETS:
Beginning of period........... 441,273,185 247,131,988 --
------------- ------------- -----------
End of period................. $ 601,377,174 $ 441,273,185 $1,807,792
------------- ------------- -----------
------------- ------------- -----------
</TABLE>
*For the period May 4, 1998 (commencement of operations of Sub-Account) through
June 30, 1998.
See notes to financial statements
11
<PAGE>
REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS
INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
STATEMENTS OF CHANGES IN NET ASSETS -- continued
<TABLE>
<CAPTION>
FCE FCI
Sub-Account Sub-Account
-------------------------- --------------------------
Six Months Six Months
Ended Year Ended Ended Year Ended
June 30, Dec. 31, June 30, Dec. 31,
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)........ $ 587,268 $ (230,489) $ 56,973 $ (193,476)
Net realized gains (losses)......... (987,358) 974,141 126,212 (156,246)
Net unrealized gains (losses)....... (4,074,486) (1,720,809) 1,595,396 (353,885)
------------ ------------ ------------ ------------
Increase (decrease) in net
assets from operations......... $ (4,474,576) $ (977,157) $ 1,778,581 $ (703,607)
------------ ------------ ------------ ------------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received........ $ 1,677,759 $ 9,918,873 $ 3,490,058 $ 10,356,882
Net transfers between Sub-Accounts
and Fixed Account................ (240,967) 12,522,767 4,406,891 8,764,120
Withdrawals, surrenders,
annuitizations and contract
charges.......................... (481,179) (953,005) (388,395) (683,649)
------------ ------------ ------------ ------------
Net accumulation activity....... $ 955,613 $ 21,488,635 $ 7,508,554 $ 18,437,353
------------ ------------ ------------ ------------
Annuitization Activity:
Annuitizations.................... $ 3,586 $ 39,195 $ -- $ 55,177
Annuity payments and contract
charges.......................... (3,715) (5,864) (2,855) (2,405)
Net transfers between
Sub-Accounts..................... -- -- -- --
Adjustments to annuity reserves... 173 (1,465) (401) (416)
------------ ------------ ------------ ------------
Net annuitization activity...... $ 44 $ 31,866 $ (3,256) $ 52,356
------------ ------------ ------------ ------------
Increase (decrease) in net assets
from contract owner transactions... $ 955,657 $ 21,520,501 $ 7,505,298 $ 18,489,709
------------ ------------ ------------ ------------
Increase (decrease) in net
assets........................... $ (3,518,919) $ 20,543,344 $ 9,283,879 $ 17,786,102
------------ ------------ ------------ ------------
NET ASSETS:
Beginning of period................. 23,814,780 3,271,436 23,314,389 5,528,287
------------ ------------ ------------ ------------
End of period....................... $ 20,295,861 $ 23,814,780 $ 32,598,268 $ 23,314,389
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
<CAPTION>
FCG GSS
Sub-Account Sub-Account
-------------------------- ----------------------------
Six Months Six Months
Ended Year Ended Ended Year Ended
June 30, Dec. 31, June 30, Dec. 31,
1998 1997 1998 1997
------------ ------------ ------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)........ $ 1,500,980 $ (87,178) $ 17,764,364 $ 16,257,472
Net realized gains (losses)......... 3,404,519 575,848 2,351,632 (320,218)
Net unrealized gains (losses)....... 4,871,894 1,624,106 (9,073,861) 5,893,925
------------ ------------ ------------- -------------
Increase (decrease) in net
assets from operations......... $ 9,777,393 $ 2,112,776 $ 11,042,135 $ 21,831,179
------------ ------------ ------------- -------------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received........ $ 4,114,790 $ 8,465,356 $ 24,733,344 $ 45,924,248
Net transfers between Sub-Accounts
and Fixed Account................ 8,808,810 5,802,185 35,419,647 9,720,766
Withdrawals, surrenders,
annuitizations and contract
charges.......................... (1,813,436) (2,204,864) (27,506,143) (58,612,247)
------------ ------------ ------------- -------------
Net accumulation activity....... $ 11,110,164 $ 12,062,677 $ 32,646,848 $ (2,967,233)
------------ ------------ ------------- -------------
Annuitization Activity:
Annuitizations.................... $ 14,531 $ 45,941 $ 331,421 $ 142,666
Annuity payments and contract
charges.......................... (24,264) (6,247) (124,096) (181,979)
Net transfers between
Sub-Accounts..................... (17,030) -- (10,173) (55,523)
Adjustments to annuity reserves... (8,477) 62 32,670 111,855
------------ ------------ ------------- -------------
Net annuitization activity...... $ (35,240) $ 39,756 $ 229,822 $ 17,019
------------ ------------ ------------- -------------
Increase (decrease) in net assets
from contract owner transactions... $ 11,074,924 $ 12,102,433 $ 32,876,670 $ (2,950,214)
------------ ------------ ------------- -------------
Increase (decrease) in net
assets........................... $ 20,852,317 $ 14,215,209 $ 43,918,805 $ 18,880,965
------------ ------------ ------------- -------------
NET ASSETS:
Beginning of period................. 49,346,218 35,131,009 331,304,242 312,423,277
------------ ------------ ------------- -------------
End of period....................... $ 70,198,535 $ 49,346,218 $ 375,223,047 $ 331,304,242
------------ ------------ ------------- -------------
------------ ------------ ------------- -------------
</TABLE>
See notes to financial statements
12
<PAGE>
REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS
INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
STATEMENTS OF CHANGES IN NET ASSETS -- continued
<TABLE>
<CAPTION>
HYS MSS MIS
Sub-Account Sub-Account Sub-Account
---------------------------- ---------------------------- ------------
Six Months Six Months Period
Ended Year Ended Ended Year Ended Ended
June 30, Dec. 31, June 30, Dec. 31, June 30,
1998 1997 1998 1997 1998*
------------- ------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss).... $ 15,719,137 $ 9,894,976 $ 47,113,876 $ 25,345,850 $ (10,288)
Net realized gains (losses)..... 4,578,171 6,191,967 9,525,109 19,553,090 1,076
Net unrealized gains (losses)... (8,887,717) 5,472,328 (21,895,193) 11,613,272 420,360
------------- ------------- ------------- ------------- ------------
Increase in net assets
from operations............ $ 11,409,591 $ 21,559,271 $ 34,743,792 $ 56,512,212 $ 411,148
------------- ------------- ------------- ------------- ------------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received.... $ 36,489,413 $ 56,445,474 $ 22,987,799 $ 56,177,555 $ 6,564,373
Net transfers between Sub-
Accounts and Fixed Account... 31,513,876 35,346,824 (1,873,760) 12,554,894 3,565,500
Withdrawals, surrenders,
annuitizations and contract
charges...................... (15,828,970) (37,189,764) (23,130,038) (57,321,938) (37,036)
------------- ------------- ------------- ------------- ------------
Net accumulation activity... $ 52,174,319 $ 54,602,534 $ (2,015,999) $ 11,410,511 $ 10,092,837
------------- ------------- ------------- ------------- ------------
Annuitization Activity:
Annuitizations................ $ 382,108 $ 403,156 $ 266,733 $ 558,077 $ --
Annuity payments and contract
charges...................... (204,011) (164,426) (205,779) (166,248) --
Net transfers between
Sub-Accounts................. -- -- -- -- --
Adjustments to annuity
reserves..................... 29,255 2,369 (2,232) (43,539) --
------------- ------------- ------------- ------------- ------------
Net annuitization
activity................... $ 207,352 $ 241,099 $ 58,722 $ 348,290 $ --
------------- ------------- ------------- ------------- ------------
Increase (decrease) in net
assets from contract owner
transactions................... $ 52,381,671 $ 54,843,633 $ (1,957,277) $ 11,758,801 $ 10,092,837
------------- ------------- ------------- ------------- ------------
Increase (decrease) in net
assets....................... $ 63,791,262 $ 76,402,904 $ 32,786,515 $ 68,271,013 $ 10,503,985
------------- ------------- ------------- ------------- ------------
NET ASSETS:
Beginning of period............. 237,675,412 161,272,508 312,825,526 244,554,513 --
------------- ------------- ------------- ------------- ------------
End of period................... $ 301,466,674 $ 237,675,412 $ 345,612,041 $ 312,825,526 $ 10,503,985
------------- ------------- ------------- ------------- ------------
------------- ------------- ------------- ------------- ------------
<CAPTION>
MMS NWD
Sub-Account Sub-Account
---------------------------- -----------
Six Months Period
Ended Year Ended Ended
June 30, Dec. 31, June 30,
1998 1997 1998*
------------- ------------- -----------
<S> <C> <C> <C>
OPERATIONS:
Net investment income (loss).... $ 5,741,694 $ 12,238,449 $ (3,020)
Net realized gains (losses)..... -- -- (19)
Net unrealized gains (losses)... -- -- 97,265
------------- ------------- -----------
Increase in net assets
from operations............ $ 5,741,694 $ 12,238,449 $ 94,226
------------- ------------- -----------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received.... $ 57,876,769 $ 151,523,026 $1,366,456
Net transfers between Sub-
Accounts and Fixed Account... 35,255,444 (1,240,893) 1,637,428
Withdrawals, surrenders,
annuitizations and contract
charges...................... (72,380,224) (229,658,956) (50,111)
------------- ------------- -----------
Net accumulation activity... $ 20,751,989 $ (79,376,823) $2,953,773
------------- ------------- -----------
Annuitization Activity:
Annuitizations................ $ 763,861 $ 79,534 $ --
Annuity payments and contract
charges...................... (124,814) (200,563) --
Net transfers between
Sub-Accounts................. (2,353) (312,207) --
Adjustments to annuity
reserves..................... 88,747 (31,750) --
------------- ------------- -----------
Net annuitization
activity................... $ 725,441 $ (464,986) $ --
------------- ------------- -----------
Increase (decrease) in net
assets from contract owner
transactions................... $ 21,477,430 $ (79,841,809) $2,953,773
------------- ------------- -----------
Increase (decrease) in net
assets....................... $ 27,219,124 $ (67,603,360) $3,047,999
------------- ------------- -----------
NET ASSETS:
Beginning of period............. 294,227,489 361,830,849 --
------------- ------------- -----------
End of period................... $ 321,446,613 $ 294,227,489 $3,047,999
------------- ------------- -----------
------------- ------------- -----------
</TABLE>
*For the period May 4, 1998 (commencement of operations of Sub-Account) through
June 30, 1998.
See notes to financial statements
13
<PAGE>
REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS
INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
STATEMENTS OF CHANGES IN NET ASSETS -- continued
<TABLE>
<CAPTION>
RES RGS RSS
Sub-Account Sub-Account Sub-Account
---------------------------- ------------------------- -----------
Six Months Six Months Period
Ended Year Ended Ended Year Ended Ended
June 30, Dec. 31, June 30, Dec. 31, June 30,
1998 1997 1998 1997 1998*
------------- ------------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss).... $ 28,716,923 $ 5,840,008 $ (7,238) $ (21,782) $ (350)
Net realized gains (losses)..... 5,950,702 5,057,991 129,740 8,741 (162)
Net unrealized gains (losses)... 87,703,894 68,490,719 1,541,269 263,416 2,539
------------- ------------- ------------ ----------- -----------
Increase in net assets from
operations................. $ 122,371,519 $ 79,388,718 $ 1,663,771 $ 250,375 $ 2,027
------------- ------------- ------------ ----------- -----------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received.... $ 64,186,831 $ 153,316,348 $ 6,897,443 $ 2,950,897 $ 90,264
Net transfers between Sub-
Accounts and Fixed Account... 56,834,275 119,233,197 6,216,724 2,726,224 459,725
Withdrawals, surrenders,
annuitizations and contract
charges...................... (20,968,759) (24,008,616) (653,292) (29,969) (830)
------------- ------------- ------------ ----------- -----------
Net accumulation activity... $ 100,052,347 $ 248,540,929 $ 12,460,875 $ 5,647,152 $549,159
------------- ------------- ------------ ----------- -----------
Annuitization Activity:.........
Annuitizations................ $ 155,096 $ 415,748 $ 73,112 $ -- $ --
Annuity payments and contract
charges...................... (107,248) (139,282) (3,109) -- --
Net transfers between
Sub-Accounts................. (40,932) 12,992 58,619 -- --
Adjustments to annuity
reserves..................... (16,245) (40,528) 5,099 -- --
------------- ------------- ------------ ----------- -----------
Net annuitization
activity................... $ (9,329) $ 248,930 $ 133,721 $ -- $ --
------------- ------------- ------------ ----------- -----------
Increase in net assets from
contract owner transactions.... $ 100,043,018 $ 248,789,859 $ 12,594,596 $ 5,647,152 $549,159
------------- ------------- ------------ ----------- -----------
Increase in net assets........ $ 222,414,537 $ 328,178,577 $ 14,258,367 $ 5,897,527 $551,186
------------- ------------- ------------ ----------- -----------
NET ASSETS:
Beginning of period............. 649,281,186 321,102,609 5,897,527 -- --
------------- ------------- ------------ ----------- -----------
End of period................... $ 871,695,723 $ 649,281,186 $ 20,155,894 $ 5,897,527 $551,186
------------- ------------- ------------ ----------- -----------
------------- ------------- ------------ ----------- -----------
<CAPTION>
SIS TRS
Sub-Account Sub-Account
----------- --------------------------------
Period Six Months
Ended Ended Year Ended
June 30, June 30, Dec. 31,
1998* 1998 1997
----------- --------------- ---------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income (loss).... $ (1,372) $ 175,474,810 $ 116,769,728
Net realized gains (losses)..... 129 27,840,277 66,640,057
Net unrealized gains (losses)... 8,392 (74,436,384) 74,650,982
----------- --------------- ---------------
Increase in net assets from
operations................. $ 7,149 $ 128,878,703 $ 258,060,767
----------- --------------- ---------------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received.... $ 677,608 $ 140,854,291 $ 260,379,742
Net transfers between Sub-
Accounts and Fixed Account... 707,631 74,565,969 90,568,461
Withdrawals, surrenders,
annuitizations and contract
charges...................... (879) (139,130,301) (276,158,725)
----------- --------------- ---------------
Net accumulation activity... $1,384,360 $ 76,289,959 $ 74,789,478
----------- --------------- ---------------
Annuitization Activity:.........
Annuitizations................ $ -- $ 1,086,425 $ 1,271,371
Annuity payments and contract
charges...................... -- (623,300) (935,550)
Net transfers between
Sub-Accounts................. -- 588 87,811
Adjustments to annuity
reserves..................... -- 34,218 (136,590)
----------- --------------- ---------------
Net annuitization
activity................... $ -- $ 497,931 $ 287,042
----------- --------------- ---------------
Increase in net assets from
contract owner transactions.... $1,384,360 $ 76,787,890 $ 75,076,520
----------- --------------- ---------------
Increase in net assets........ $1,391,509 $ 205,666,593 $ 333,137,287
----------- --------------- ---------------
NET ASSETS:
Beginning of period............. -- 1,579,783,984 1,246,646,697
----------- --------------- ---------------
End of period................... $1,391,509 $ 1,785,450,577 $ 1,579,783,984
----------- --------------- ---------------
----------- --------------- ---------------
</TABLE>
*For the period May 4, 1998 (commencement of operations of Sub-Account) through
June 30, 1998.
See notes to financial statements
14
<PAGE>
REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS
INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
STATEMENTS OF CHANGES IN NET ASSETS -- continued
<TABLE>
<CAPTION>
UTS VAL
Sub-Account Sub-Account
---------------------------- ---------------------------
Six Months Six Months
Ended Year Ended Ended Year Ended
June 30, Dec. 31, June 30, Dec. 31,
1998 1997 1998 1997
------------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss).... $ 16,553,268 $ 7,729,340 $ 4,737,112 $ (375,236)
Net realized gains (losses)..... 1,323,863 2,083,741 2,534,472 337,679
Net unrealized gains (losses)... (3,716,208) 14,781,219 11,030,289 11,106,441
------------- ------------- ------------- ------------
Increase (decrease) in net
assets from operations..... $ 14,160,923 $ 24,594,300 $ 18,301,873 $ 11,068,884
------------- ------------- ------------- ------------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received.... $ 21,043,806 $ 16,090,619 $ 24,931,157 $ 29,587,412
Net transfers between Sub-
Accounts and Fixed Account... 19,024,517 13,552,388 26,814,499 31,786,583
Withdrawals, surrenders,
annuitizations and contract
charges...................... (5,535,361) (5,005,318) (3,290,878) (2,199,052)
------------- ------------- ------------- ------------
Net accumulation activity... $ 34,532,962 $ 24,637,689 $ 48,454,778 $ 59,174,943
------------- ------------- ------------- ------------
Annuitization Activity:
Annuitizations................ $ 177,413 $ 165,628 $ 117,497 $ 136,454
Annuity payments and contract
charges...................... (41,732) (60,528) (23,693) (15,580)
Net transfers between
Sub-Accounts................. -- 28,886 -- --
Adjustments to annuity
reserves..................... 81,617 2,804 (8,313) (4,256)
------------- ------------- ------------- ------------
Net annuitization
activity................... $ 217,298 $ 136,790 $ 85,491 $ 116,618
------------- ------------- ------------- ------------
Increase (decrease) in net
assets from contract owner
transactions................... $ 34,750,260 $ 24,774,479 $ 48,540,269 $ 59,291,561
------------- ------------- ------------- ------------
Increase (decrease) in net
assets....................... $ 48,911,183 $ 49,368,779 $ 66,842,142 $ 70,360,445
------------- ------------- ------------- ------------
NET ASSETS:
Beginning of period............. 117,306,075 67,937,296 87,069,332 16,708,887
------------- ------------- ------------- ------------
End of period................... $ 166,217,258 $ 117,306,075 $ 153,911,474 $ 87,069,332
------------- ------------- ------------- ------------
------------- ------------- ------------- ------------
<CAPTION>
WAA WGS
Sub-Account Sub-Account
---------------------------- ----------------------------
Six Months Six Months
Ended Year Ended Ended Year Ended
June 30, Dec. 31, June 30, Dec. 31,
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss).... $ 8,342,602 $ 3,255,293 $ 527,946 $ 2,978,724
Net realized gains (losses)..... 2,877,283 2,612,317 (1,213,170) (5,597,019)
Net unrealized gains (losses)... (241,740) 2,483,575 1,575,388 (269,307)
------------- ------------- ------------- -------------
Increase (decrease) in net
assets from operations..... $ 10,978,145 $ 8,351,185 $ 890,164 $ (2,887,602)
------------- ------------- ------------- -------------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received.... $ 5,005,378 $ 23,232,543 $ 6,466,164 $ 11,552,959
Net transfers between Sub-
Accounts and Fixed Account... 2,679,895 17,783,698 (7,738,448) (19,473,409)
Withdrawals, surrenders,
annuitizations and contract
charges...................... (3,143,896) (5,742,891) (10,112,421) (17,997,612)
------------- ------------- ------------- -------------
Net accumulation activity... $ 4,541,377 $ 35,273,350 $ (11,384,705) $ (25,918,062)
------------- ------------- ------------- -------------
Annuitization Activity:
Annuitizations................ $ 23,239 $ 167,170 $ 112,019 $ 101,934
Annuity payments and contract
charges...................... (46,450) (51,214) (81,536) (132,080)
Net transfers between
Sub-Accounts................. 589 79,307 -- (8,188)
Adjustments to annuity
reserves..................... (16) 487 1,357 (5,055)
------------- ------------- ------------- -------------
Net annuitization
activity................... $ (22,638) $ 195,750 $ 31,840 $ (43,389)
------------- ------------- ------------- -------------
Increase (decrease) in net
assets from contract owner
transactions................... $ 4,518,739 $ 35,469,100 $ (11,352,865) $ (25,961,451)
------------- ------------- ------------- -------------
Increase (decrease) in net
assets....................... $ 15,496,884 $ 43,820,285 $ (10,462,701) $ (28,849,053)
------------- ------------- ------------- -------------
NET ASSETS:
Beginning of period............. 120,437,782 76,617,497 98,894,832 127,743,885
------------- ------------- ------------- -------------
End of period................... $ 135,934,666 $ 120,437,782 $ 88,432,131 $ 98,894,832
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
See notes to financial statements
15
<PAGE>
REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS
INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
STATEMENTS OF CHANGES IN NET ASSETS -- continued
<TABLE>
<CAPTION>
WGR WTR
Sub-Account Sub-Account Total
----------------------------- --------------------------- ---------------
Six Months Six Months Six Months
Ended Year Ended Ended Year Ended Ended
June 30, Dec. 31, June 30, Dec. 31, June 30,
1998 1997 1998 1997 1998
------------- ------------- ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income...................... $ 17,179,252 $ 1,724,285 $ 3,247,228 $ 518,499 $ 580,587,671
Net realized gains......................... 6,225,024 8,571,645 1,774,077 1,518,827 123,185,361
Net unrealized gains....................... 5,196,704 16,669,581 2,550,322 4,352,747 198,269,035
------------- ------------- ------------ ------------ ---------------
Increase in net assets from
operations............................ $ 28,600,980 $ 26,965,511 $ 7,571,627 $ 6,390,073 $ 902,042,067
------------- ------------- ------------ ------------ ---------------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received............... $ 10,299,491 $ 26,811,741 $ 5,372,721 $ 15,459,554 $ 742,754,920
Net transfers between Sub-Accounts and
Fixed Account........................... 4,535,439 3,906,046 7,539,964 13,106,711 470,435,310
Withdrawals, surrenders, annuitizations
and contract charges.................... (6,994,774) (13,503,627) (2,447,683) (2,840,427) (478,159,857)
------------- ------------- ------------ ------------ ---------------
Net accumulation activity.............. $ 7,840,156 $ 17,214,160 $ 10,465,002 $ 25,725,838 $ 735,030,373
------------- ------------- ------------ ------------ ---------------
Annuitization Activity:
Annuitizations........................... $ 5,584 $ 112,909 $ 87,814 $ 215,870 $ 5,359,532
Annuity payments and contract charges.... (53,125) (92,720) (27,495) (28,925) (2,643,979)
Net transfers between Sub-Accounts....... (17,953) (249,492) -- -- 236
Adjustments to annuity reserves.......... 805 (31,480) (2,615) (3,240) 232,903
------------- ------------- ------------ ------------ ---------------
Net annuitization activity............. $ (64,689) $ (260,783) $ 57,704 $ 183,705 $ 2,948,692
------------- ------------- ------------ ------------ ---------------
Increase in net assets from contract owner
transactions.............................. $ 7,775,467 $ 16,953,377 $ 10,522,706 $ 25,909,543 $ 737,979,065
------------- ------------- ------------ ------------ ---------------
Increase in net assets................... $ 36,376,447 $ 43,918,888 $ 18,094,333 $ 32,299,616 $ 1,640,021,132
------------- ------------- ------------ ------------ ---------------
NET ASSETS:
Beginning of period........................ 237,145,701 193,226,813 69,684,288 37,384,672 6,883,403,048
------------- ------------- ------------ ------------ ---------------
End of period.............................. $ 273,522,148 $ 237,145,701 $ 87,778,621 $ 69,684,288 $ 8,523,424,180
------------- ------------- ------------ ------------ ---------------
------------- ------------- ------------ ------------ ---------------
<CAPTION>
Year Ended
Dec. 31,
1997
---------------
<S> <C>
OPERATIONS:
Net investment income...................... $ 297,237,205
Net realized gains......................... 212,441,467
Net unrealized gains....................... 463,550,753
---------------
Increase in net assets from
operations............................ $ 973,229,425
---------------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received............... $ 1,375,970,825
Net transfers between Sub-Accounts and
Fixed Account........................... 619,129,055
Withdrawals, surrenders, annuitizations
and contract charges.................... (970,892,363)
---------------
Net accumulation activity.............. $ 1,024,207,517
---------------
Annuitization Activity:
Annuitizations........................... $ 6,384,473
Annuity payments and contract charges.... (3,250,311)
Net transfers between Sub-Accounts....... --
Adjustments to annuity reserves.......... (185,108)
---------------
Net annuitization activity............. $ 2,949,054
---------------
Increase in net assets from contract owner
transactions.............................. $ 1,027,156,571
---------------
Increase in net assets................... $ 2,000,385,996
---------------
NET ASSETS:
Beginning of period........................ 4,883,017,052
---------------
End of period.............................. $ 6,883,403,048
---------------
---------------
</TABLE>
See notes to financial statements
16
<PAGE>
REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS
INCLUDED IN 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 Regatta contracts, Regatta Gold contracts, Regatta Classic contracts, Regatta
Platinum contracts (the "Contracts") and certain other fixed and variable
annuity contracts issued by the Sponsor. 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 attributable to the Contracts is invested in shares of a specific
corresponding series of MFS/Sun Life Series Trust (the "Series Trust"), an
open-end management investment company registered under the Investment Company
Act of 1940. Massachusetts Financial Services Company, an affiliate of the
Sponsor, is 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
17
<PAGE>
REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS
INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
NOTES TO FINANCIAL STATEMENTS -- continued
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 and Regatta Platinum contracts and 1.00% for Regatta Classic contracts.
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, $35 in the case of Regatta Platinum 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, Regatta Gold and Regatta Platinum, 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,
Regatta Classic and Regatta Platinum 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.
18
<PAGE>
REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS
INCLUDED IN 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,
1998 1997 1998 1997 1998 1997
---------- ---------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
MFS REGATTA CONTRACTS:
------------------------------
CAS -- Level 1................ 2,993,020 6,316,305 -- 860 (1,038,348) (2,421,311)
CAS -- Level 2................ 5,390,680 58,968 -- 624,374 2,272,008 6,542,104
GSS -- Level 1................ 1,462,222 3,362,650 -- -- (368,645) (1,340,875)
GSS -- Level 2................ 1,514,633 55,891 -- 265,628 967,654 2,012,610
HYS -- Level 1................ 537,033 1,204,380 -- -- (120,454) (510,706)
HYS -- Level 2*............... 975,126 -- -- 64,893 234,109 1,416,411
MSS -- Level 1................ 941,686 2,202,213 -- 881 (266,357) (924,959)
MSS -- Level 2................ 2,022,757 14,270 -- 240,391 636,106 2,378,532
MMS -- Level 1................ 1,518,722 3,859,738 -- 1,948 117,525 3,301,197
MMS -- Level 2................ 1,845,809 59,562 8,252 310,378 1,843,792 6,074,695
TRS -- Level 1................ 5,756,653 12,461,003 1,974 1,598 (2,012,028) (4,580,966)
TRS -- Level 2................ 7,838,741 32,548 2,056 815,196 4,076,210 10,202,663
WGS -- Level 1................ 700,338 1,460,289 -- -- (320,408) (584,950)
WGS -- Level 2................ 483,253 3,325 -- 34,073 401,276 686,256
<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,
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
MFS REGATTA CONTRACTS:
------------------------------
CAS -- Level 1................ (125,832) (902,834) 1,828,840 2,993,020
CAS -- Level 2................ (924,548) (1,834,766) 6,738,140 5,390,680
GSS -- Level 1................ (126,580) (559,553) 966,997 1,462,222
GSS -- Level 2................ (364,648) (819,496) 2,117,639 1,514,633
HYS -- Level 1................ (31,069) (156,641) 385,510 537,033
HYS -- Level 2*............... (178,198) (506,178) 1,031,037 975,126
MSS -- Level 1................ (28,979) (336,449) 646,350 941,686
MSS -- Level 2................ (315,020) (610,436) 2,343,843 2,022,757
MMS -- Level 1................ (617,451) (5,644,161) 1,018,796 1,518,722
MMS -- Level 2................ (1,435,035) (4,598,826) 2,262,818 1,845,809
TRS -- Level 1................ (361,601) (2,124,982) 3,384,998 5,756,653
TRS -- Level 2................ (1,929,202) (3,211,666) 9,987,805 7,838,741
WGS -- Level 1................ (54,439) (175,001) 325,491 700,338
WGS -- Level 2................ (131,360) (240,401) 753,169 483,253
</TABLE>
*Units for the Year Ended December 31, 1997 are for the period January 6, 1997
(commencement of operations) through December 31, 1997.
19
<PAGE>
REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS
INCLUDED IN 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,
1998 1997 1998 1997 1998 1997
----------- ------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
MFS REGATTA GOLD
CONTRACTS:
------------------------------
BDS+.......................... -- -- 186,229 -- 69,816 --
CAS........................... 35,528,897 32,796,793 1,971,007 4,171,857 536,333 753,855
CGS........................... 40,709,531 26,199,975 5,046,432 8,951,992 4,078,867 7,405,405
EGS........................... 25,039,986 16,998,044 2,399,254 5,826,649 1,551,380 3,279,517
EIS+.......................... -- -- 70,966 -- 102,215 --
FCE........................... 2,159,228 329,630 145,696 815,491 (17,575) 1,097,883
FCI........................... 2,390,056 564,742 314,771 997,740 433,480 902,857
FCG........................... 4,441,911 3,360,596 290,483 760,057 704,401 531,069
GSS........................... 20,508,844 19,714,114 1,103,257 1,627,923 2,126,423 723,328
HYS........................... 11,699,195 8,424,289 1,649,230 2,340,052 1,684,813 1,768,446
MSS........................... 11,326,719 10,541,726 574,386 1,191,194 (62,709) 289,858
MIS+.......................... -- -- 609,092 -- 343,332 --
MMS........................... 21,463,139 27,275,583 3,683,651 7,818,118 1,461,442 (8,894,337)
NWD+.......................... -- -- 112,417 -- 143,539 --
RES........................... 35,654,917 19,577,745 149,218 10,988,440 2,653,148 6,437,281
RGS........................... 533,928 -- 563,853 276,177 513,009 260,605
RSS+.......................... -- -- 6,585 -- 46,734 --
SIS+.......................... -- -- 66,863 -- 70,505 --
TRS........................... 66,303,467 59,508,016 3,997,264 7,069,596 3,461,584 4,111,016
UTS........................... 6,101,638 4,671,192 985,490 966,544 884,220 773,360
VAL........................... 6,175,224 1,520,787 1,533,556 2,333,873 1,742,548 2,499,269
WAA........................... 7,928,833 5,539,010 304,518 1,565,894 161,737 1,218,708
WGS........................... 6,127,641 7,510,766 138,862 324,862 (475,978) (1,252,245)
WGR........................... 15,058,757 13,989,946 560,649 1,725,746 244,698 242,250
WTR........................... 4,676,854 2,836,079 326,370 1,085,978 481,799 962,291
<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,
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
MFS REGATTA GOLD
CONTRACTS:
------------------------------
BDS+.......................... (827) -- 255,218 --
CAS........................... (1,298,254) (2,193,608) 36,737,983 35,528,897
CGS........................... (1,413,788) (1,847,841) 48,421,042 40,709,531
EGS........................... (719,430) (1,064,224) 28,271,190 25,039,986
EIS+.......................... (36) -- 173,145 --
FCE........................... (46,001) (83,776) 2,241,348 2,159,228
FCI........................... (37,698) (75,283) 3,100,609 2,390,056
FCG........................... (148,265) (209,811) 5,288,530 4,441,911
GSS........................... (938,654) (1,556,521) 22,799,870 20,508,844
HYS........................... (499,789) (833,592) 14,533,449 11,699,195
MSS........................... (395,717) (696,059) 11,442,679 11,326,719
MIS+.......................... (3,849) -- 948,575 --
MMS........................... (3,310,772) (4,736,225) 23,297,460 21,463,139
NWD+.......................... (4,779) -- 251,177 --
RES........................... (963,225) (1,348,549) 37,494,058 35,654,917
RGS........................... (53,585) (2,854) 1,557,205 533,928
RSS+.......................... (83) -- 53,236 --
SIS+.......................... (1,886) -- 135,482 --
TRS........................... (2,538,820) (4,385,161) 71,223,495 66,303,467
UTS........................... (272,508) (309,458) 7,698,840 6,101,638
VAL........................... (219,482) (178,705) 9,231,846 6,175,224
WAA........................... (200,931) (394,779) 8,194,157 7,928,833
WGS........................... (254,586) (455,742) 5,535,939 6,127,641
WGR........................... (410,712) (899,185) 15,453,392 15,058,757
WTR........................... (153,801) (207,494) 5,331,222 4,676,854
</TABLE>
+For the period May 6, 1998 (commencement of operations) through June 30, 1998.
20
<PAGE>
REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS
INCLUDED IN 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,
1998 1997 1998 1997 1998 1997
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
MFS REGATTA CLASSIC
CONTRACTS:
------------------------------
BDS+.......................... -- -- -- -- 54 --
CAS........................... 265,497 1,892 114,261 246,247 16,820 23,978
CGS........................... 554,216 3,545 293,623 446,522 137,173 122,228
EGS........................... 318,028 9,744 130,447 289,836 20,696 22,223
EIS+.......................... -- -- 3,556 -- -- --
FCE........................... 40,698 140 14,810 44,896 (10,601) (3,278)
FCI........................... 67,892 2,249 18,069 75,178 767 (7,901)
FCG*.......................... 51,038 -- 22,720 42,039 9,430 9,735
GSS........................... 113,243 6,514 61,979 89,817 67,659 21,240
HYS........................... 155,306 8,219 143,329 120,521 (6,942) 30,370
MSS**......................... 118,243 -- 36,944 92,458 (20,869) 28,860
MIS++......................... -- -- 7,162 -- 8,153 --
MMS........................... 77,105 13,813 415,935 366,163 (271,331) (259,749)
NWD++......................... -- -- 2,500 -- 18,305 --
RES........................... 553,995 25,665 187,243 497,934 39,237 37,701
RGS#.......................... 6,085 -- 5,358 5,777 7,647 320
SIS+++........................ -- -- 1,726 -- -- --
TRS........................... 951,205 40,575 353,587 859,444 107,403 66,034
UTS**......................... 77,009 -- 68,307 41,263 99,571 36,412
VAL........................... 160,778 9,578 75,765 107,548 15,110 46,458
WAA........................... 50,531 6,448 11,012 44,701 (879) (150)
WGS****....................... 19,394 -- 10,844 18,266 1,242 2,357
WGR........................... 85,526 71 42,912 77,864 33 7,879
WTR***........................ 45,122 -- 20,887 49,398 310 (3,919)
<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,
1998 1997 1998 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
MFS REGATTA CLASSIC
CONTRACTS:
------------------------------
BDS+.......................... -- -- 54 --
CAS........................... (4,125) (6,620) 392,453 265,497
CGS........................... (24,079) (18,079) 960,933 554,216
EGS........................... (10,358) (3,775) 458,813 318,028
EIS+.......................... -- -- 3,556 --
FCE........................... (448) (1,060) 44,459 40,698
FCI........................... (222) (1,634) 86,506 67,892
FCG*.......................... (1,080) (736) 82,108 51,038
GSS........................... (2,775) (4,328) 240,106 113,243
HYS........................... (3,106) (3,804) 288,587 155,306
MSS**......................... (1,011) (3,075) 133,307 118,243
MIS++......................... (5) -- 15,310 --
MMS........................... (26,719) (43,122) 194,990 77,105
NWD++......................... (1) -- 20,804 --
RES........................... (20,618) (7,305) 759,857 553,995
RGS#.......................... (240) (12) 18,850 6,085
SIS+++........................ -- -- 1,726 --
TRS........................... (28,112) (14,848) 1,384,083 951,205
UTS**......................... (5,936) (666) 238,951 77,009
VAL........................... (4,039) (2,806) 247,614 160,778
WAA........................... (421) (468) 60,243 50,531
WGS****....................... (145) (1,229) 31,335 19,394
WGR........................... (1,221) (288) 127,250 85,526
WTR***........................ (487) (357) 65,832 45,122
</TABLE>
*Units for the year ended December 31, 1997 are for the period January 7, 1997
(commencement of operations) through December 31, 1997.
**Units for the year ended December 31, 1997 are for the period January 22,
1997 (commencement of operations) through December 31, 1997.
***Units for the year ended December 31, 1997 are for the period February 11,
1997 (commencement of operations) through December 31, 1997.
****Units for the year ended December 31, 1997 are for the period February 21,
1997 (commencement of operations) through December 31, 1997.
#Units for the year ended December 31, 1997 are for the period July 7, 1997
(commencement of operations) through December 31, 1997.
+Units for the period ended June 30, 1998 are for the period June 22, 1998
(commencement of operations) through June 30, 1998.
++Units for the period ended June 30, 1998 are for the period May 7, 1998
(commencement of operations) through June 30, 1998.
+++Units for the period ended June 30, 1998 are for the period June 26, 1998
(commencement of operations) through June 30, 1998.
21
<PAGE>
REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS
INCLUDED IN 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
Units Outstanding and Units Withdrawn,
Beginning of Fixed Accumulation Surrendered, and Units Outstanding
Period Units Purchased Account Annuitized End of Period
------------------ --------------- -------------------- ---------------- -----------------
Six Months
Six Months Ended Ended Six Months Ended Six Months Ended Six Months Ended
June 30, June 30, June 30, June 30, June 30,
1998 1998 1998 1998 1998
------------------ --------------- -------------------- ---------------- -----------------
<S> <C> <C> <C> <C> <C>
MFS REGATTA PLATINUM
CONTRACTS:
------------------------------
BDS+.......................... -- 171 -- -- 171
CAS++......................... -- 52,119 -- (104) 52,015
CGS++......................... -- 103,397 -- (299) 103,098
EGS++......................... -- 47,687 -- (706) 46,981
EIS+++........................ -- 4,801 -- -- 4,801
FCE+++........................ -- 1,382 -- -- 1,382
FCI+++........................ -- 4,301 -- -- 4,301
FCG*.......................... -- 15,888 -- -- 15,888
GSS*.......................... -- 18,990 -- (44) 18,946
HYS+++........................ -- 15,917 -- (33) 15,884
MSS**......................... -- 1,103 -- -- 1,103
MIS++......................... -- 27,971 -- (80) 27,891
MMS+++........................ -- 16,420 -- -- 16,420
NWD+++........................ -- 18,887 -- (180) 18,707
RES**......................... -- 39,359 -- (703) 38,656
RGS+.......................... -- 1,445 -- -- 1,445
RSS***........................ -- 2,400 -- -- 2,400
SIS#.......................... -- 719 -- -- 719
TRS+++........................ -- 40,048 -- -- 40,048
UTS**......................... -- 2,582 -- -- 2,582
VAL*.......................... -- 17,633 -- (81) 17,552
WAA*.......................... -- 2,606 -- -- 2,606
WGS+++........................ -- 100 -- -- 100
WGR*.......................... -- 8,868 -- (29) 8,839
</TABLE>
+For the period June 30, 1998 (commencement of operations) through June 30,
1998.
++For the period June 5, 1998 (commencement of operations) through June 30,
1998.
+++For the period June 18, 1998 (commencement of operations) through June 30,
1998.
*For the period June 23, 1998 (commencement of operations) through June 30,
1998.
**For the period June 16, 1998 (commencement of operations) through June 30,
1998.
***For the period June 29, 1998 (commencement of operations) through June 30,
1998.
#For the period June 26, 1998 (commencement of operations) through June 30,
1998.
22
<PAGE>
To the Participants in Regatta, Regatta Gold, Regatta Classic and Regatta
Platinum
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.) Bond Sub-Account, Capital Appreciation Sub-Account, Conservative Growth
Sub-Account, Emerging Growth Sub-Account, Equity Income Sub-Account, MFS/Foreign
& Colonial Emerging Markets Equity Sub-Account, International Growth
Sub-Account, International Growth and Income Sub-Account, Government Securities
Sub-Account, High Yield Sub-Account, Managed Sectors Sub-Account, Massachusetts
Investors Growth Stock Sub-Account, Money Market Sub-Account, New Discovery
Sub-Account, Research Sub-Account, Research Growth and Income Sub-Account,
Research International Sub-Account, Strategic Income Sub-Account, Total Return
Sub-Account, Utilities Sub-Account, Capital Opportunities Sub-Account, World
Asset Allocation Sub-Account, World Governments Sub-Account, World Growth
Sub-Account, and World Total Return Sub-Account of Sun Life of Canada (U.S.)
Variable Account F, (the "Sub-Accounts") as of June 30, 1998, the related
statement of operations for the six month period then ended and the statements
of changes in net assets for the six month period ended June 30, 1998 and the
year ended December 31, 1997. These financial statements are the responsibility
of management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities held at June 30, 1998 by correspondence with the
custodian. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Sub-Accounts as of June 30, 1998, 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 14, 1998
----------------------------------------
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.
23
