<PAGE>
[Logo] M F S (R)
INVESTMENT MANAGEMENT ANNUAL REPORT
We invented the mutual fund(R) DECEMBER 31, 1999
[graphic omitted]
A SERIES OF MFS(R) VARIABLE INSURANCE TRUST(SM)
MFS(R) MONEY
MARKET SERIES
<PAGE>
<TABLE>
MFS(R) MONEY MARKET SERIES
A SERIES OF MFS(R) VARIABLE INSURANCE TRUST(SM)
<S> <C>
TRUSTEES INVESTMENT ADVISER
Jeffrey L. Shames* Massachusetts Financial Services Company
Chairman and Chief Executive Officer, 500 Boylston Street
MFS Investment Management(R) Boston, MA 02116-3741
Nelson J. Darling, Jr.+ DISTRIBUTOR
Private investor and trustee MFS Fund Distributors, Inc.
500 Boylston Street
William R. Gutow+ Boston, MA 02116-3741
Private investor and real estate consultant;
Vice Chairman, Capitol Entertainment SHAREHOLDER SERVICE CENTER
Management Company (video franchise) MFS Service Center, Inc.
P.O. Box 2281
CHAIRMAN AND PRESIDENT Boston, MA 02107-9906
Jeffrey L. Shames*
For additional information,
PORTFOLIO MANAGER contact your financial consultant.
Jean O. Alessandro*
CUSTODIAN
TREASURER State Street Bank and Trust Company
W. Thomas London*
AUDITORS
ASSISTANT TREASURERS Deloitte & Touche LLP
Mark E. Bradley*
Ellen Moynihan* WORLD WIDE WEB
James O. Yost* www.mfs.com
SECRETARY
Stephen E. Cavan*
ASSISTANT SECRETARY
James R. Bordewick, Jr.*
* MFS Investment Management
+ Independent Trustee
- ---------------------------------------------------------------------------------------
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
- ---------------------------------------------------------------------------------------
</TABLE>
<PAGE>
LETTER FROM THE CHAIRMAN
Dear Shareholders,
One could easily argue that the Internet represents the greatest technological
development most of us may see in our lifetimes. There is no disputing that
this new communication medium is changing forever the way we work, play, and
shop. One might also argue that investing in this new technology represents
the investment opportunity of a lifetime. The question for any investor is
whether and how to take advantage of it.
The popular press, it seems, would have us believe that by surfing the Web, we
can learn everything we need to know about investing. Indeed, there is no
doubt that Internet-delivered information and brokerage services enable
individual investors to be well-informed and to trade at bargain prices. But
we believe the facts argue that, for most of us, professionally managed
investment portfolios purchased through a financial consultant will continue
to be one of the best products for long-term investing in this new millennium.
Why do we believe managed portfolios plus professional advice will continue to
define the best course of action for many investors? Let's look at some of the
characteristics of a successful long-term investment approach:
o HAVING A PLAN AND STICKING TO IT: Our experience is that successful investors
-- those whose lives are enriched by the fruits of their investing -- share
two characteristics. They have a plan for reaching their monetary goals, and
they stick with that plan through up markets and down. And for many investors,
working with a financial consultant may be the best way to develop a plan.
Although the Internet abounds with calculators for developing all sorts of
investment plans, none has your consultant's high level of experience and an
understanding of your unique situation. And no calculator can counsel you
during a down market, when you may be tempted to abandon your goals and your
plan.
o DIVERSIFICATION: Few individual investors can afford to own a large number of
holdings, so poor performance of one company can potentially drag down their
entire personal portfolio. This is especially true when investing in volatile
new areas such as the Internet. On the other hand, a diversified,
professionally managed investment portfolio that owns dozens or even hundreds
of holdings is better positioned to survive a disappointment in one or several
investments.
o GOOD IN A DOWN MARKET: As we enter the tenth year of the greatest bull market
in history, it's easy to forget that market downturns are an almost inevitable
part of investing. Few investment portfolios, of course, are going to be up
when the overall market is down. But we believe diversified, professionally
managed investment portfolios may be less likely to suffer the extreme
downturns experienced by a large number of individual holdings when the market
heads south.
o MFS ORIGINAL RESEARCH(R): The Internet is one of the greatest research tools
ever invented, but it's still not the same as being eyeball to eyeball with
the management of a company and discussing their plans for their firm's
future.
o GOOD PERFORMANCE AT AN ACCEPTABLE LEVEL OF RISK: Investing in individual
stocks or bonds does indeed offer the potential of exhilarating performance
that few managed portfolios even attempt. The downside is that the most
exciting investments are also likely to be the ones that give you sleepless
nights. The diversification and professional management of investment
portfolios help make them inherently less risky than individual stock picking,
and managed portfolios are available in a wide range of risk profiles.
We believe that now, more than ever, managed investment portfolios sold by an
investment professional may offer many investors the best way to participate
in whatever investment opportunities the new millennium may bring. The
combination of professional portfolio management and professional advice
recognizes the key reason that investors give us their money: because they
don't want to make a hobby or a second profession out of investing; they
simply want their money to work for them so they have a better likelihood of
realizing their dreams.
As always, we appreciate your confidence in MFS and welcome any questions or
comments you may have.
Respectfully,
/s/ Jeffrey L. Shames
Jeffrey L. Shames
Chairman and Chief Executive Officer
MFS Investment Management(R)
January 15, 2000
Investments in variable products will fluctuate and may be worth more or less
upon redemption. Please see your financial consultant for more information.
The opinions expressed in this letter are those of Jeffrey L. Shames, and no
forecasts can be guaranteed.
MANAGEMENT REVIEW AND OUTLOOK
Dear Shareholders,
The Series seeks as high a level of current income as is considered consistent
with the preservation of capital and liquidity by investing in short-term
money market securities issued or guaranteed by the U.S. Treasury, its
agencies, or instrumentalities of the U.S. government, as well as in the
highest-quality corporate and bank issues, in order to minimize credit risk.
As the Federal Reserve Board (the Fed) became nervous about inflationary
forces picking up steam due to the strength of the U.S. economy and the global
recovery, the Fed began its first in a series of three 0.25% interest-rate
increases on June 30, 1999. Essentially, these three rate hikes reversed the
effects of the three reductions in the federal funds target rate -- the rate
at which banks may lend overnight funds to each other -- in the fall of 1998.
In response to Fed rate hikes, interest rates on short-term (90-day)
securities increased approximately 100 basis points (1.00%) during the past
year. The federal funds rate, which began 1999 at 4.75%, ended the period at
5.50%. Because of what we think is the Fed's bias toward increasing rates,
we've targeted 35 days for the average maturity of the Series' holdings.
We continue to limit the Series' investments to securities issued or
guaranteed by the U.S. Treasury, agencies, or instrumentalities of the U.S.
government, as well as to the highest-quality corporate and bank issues, in
order to try to provide maximum security against credit risk. On December 31,
1999, approximately 83% of the portfolio was invested in high-quality
commercial paper, with the balance invested in U.S. government or government-
guaranteed issues.
Investments in the Series are not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the Series
seeks to preserve the value at $1.00 per share, it is possible to lose money
by investing in the Series.
Respectfully,
/s/ Jean O. Alessandro
Jean O. Alessandro
Portfolio Manager
<PAGE>
MANAGEMENT REVIEW AND OUTLOOK - continued
The opinions expressed in this report are those of the portfolio manager and
are current only through the end of the period of the report as stated on the
cover. The manager's views are subject to change at any time based on market
and other conditions, and no forecasts can be guaranteed.
The portfolio is actively managed, and current holdings may be different.
PORTFOLIO MANAGER'S PROFILE
Jean O. Alessandro is Assistant Vice President of MFS Investment Management(R)
and portfolio manager of MFS(R) Cash Reserve Fund, MFS(R) Government Money
Market Fund, MFS(R) Money Market Fund, the Money Market Series offered through
MFS(R)/Sun Life annuity products, and MFS(R) Money Market Series (part of
MFS(R) Variable Insurance Trust(SM)).
Ms. Alessandro joined MFS in 1986 as a fixed-income trading assistant. From
1986 to 1990, she was a money market trader and, from 1990 to 1993, a senior
money market specialist. She was named Investment Officer in 1993, portfolio
manager in 1998, and Assistant Vice President in 1999. Ms. Alessandro earned a
bachelor's degree from the University of Connecticut.
All portfolio managers at MFS Investment Management(R) are supported by an
investment staff of over 100 professionals utilizing MFS Original Research(R),
a global, company-oriented, bottom-up process of selecting securities.
SERIES FACTS
Objective: Seeks as high a level of current income as is considered consistent
with the preservation of capital and liquidity.
Commencement of investment operations: January 3, 1995
Size: $11.4 million net assets as of December 31, 1999
This report is prepared for the general information of shareholders. It is
authorized for distribution to prospective investors only when preceded or
accompanied by a current prospectus. A prospectus containing more information,
including all charges and expenses, for any other MFS product is available
from your financial consultant, or by calling MFS at 1-800-225-2606. Please
read it carefully before investing or sending money.
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS - December 31, 1999
Commercial Paper - 83.5%
<CAPTION>
- -----------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT
ISSUER (000 OMITTED) VALUE
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
American Express Credit Corp., due 1/28/00 $300 $ 298,684
American General Finance Corp., due 2/17/00 300 297,728
Anheuser Busch, Inc., due 2/11/00 350 347,561
Archer Daniels Midland Co., due 4/03/00 350 344,665
Associates First Capital Corp., due 1/03/00 400 399,911
AT&T Corp., due 2/18/00 200 198,480
BankAmerica Corp., due 3/08/00 100 98,922
Bell Atlantic Financial Services, due 1/20/00 350 348,929
Bellsouth Telecomm, Inc., due 1/25/00 200 199,295
Campbell Soup Co., due 2/04/00 300 298,277
Cargill, Inc., due 1/20/00 250 249,285
Caterpillar Financial Services N V, due 2/14/00 - 2/22/00 400 396,813
Citic Pacific Finance (Bank of America), due 1/14/00 250 249,463
Coca-Cola Co., due 1/31/00 350 348,326
Daimler Benz North America, due 1/21/00 - 2/24/00 400 398,114
Formosa Plastics (ABN Amro Bank), due 2/16/00 350 347,384
General Electric Capital Corp., due 2/03/00 - 3/07/00 400 396,773
General Motors Acceptance Corp., due 2/15/00 300 297,821
GTE Funding, Inc., due 1/18/00 - 2/08/00 450 447,998
Halliburton Corp., due 1/10/00 350 349,453
Heinz (H.J.) Co., due 1/19/00 - 2/01/00 450 448,281
IBM Credit Corp., due 1/13/00 300 299,419
Metropolitan Life Funding, Inc., due 1/27/00 250 248,944
Morgan (J.P.) & Co., Inc., due 1/18/00 250 249,363
Morgan Stanley Dean Witter, due 1/24/00 300 298,860
National Rural Utilities Cooperative Finance Corp.,
due 1/24/00 - 3/17/00 400 396,254
Salomon Smith Barney Holdings, Inc., due 2/02/00 300 298,461
SBC Communications, Inc., due 2/18/00 400 396,933
Sheffield Receivables Corp., due 2/04/00 300 298,306
Southern California Edison Co., due 2/18/00 300 297,560
- -----------------------------------------------------------------------------------------------------
Total Commercial Paper, at Amortized Cost $ 9,546,263
- -----------------------------------------------------------------------------------------------------
U.S. Government and Agency Obligations - 16.1%
- -----------------------------------------------------------------------------------------------------
Federal Agricultural Mortgage Corp., due 2/08/00 $300 $ 298,204
Federal Farm Credit Bank, due 3/10/00 330 326,414
Federal Home Loan Bank, due 1/03/00 270 269,978
Federal Home Loan Mortgage Corp., due 1/27/00 - 3/23/00 600 594,849
Federal National Mortgage Assn., due 3/16/00 350 345,836
- -----------------------------------------------------------------------------------------------------
Total U.S. Government and Agency Obligations, at Amortized Cost $ 1,835,281
- -----------------------------------------------------------------------------------------------------
Total Investments, at Amortized Cost $11,381,544
Other Assets, Less Liabilities - 0.4% 44,867
- -----------------------------------------------------------------------------------------------------
Net Assets - 100.0% $11,426,411
- -----------------------------------------------------------------------------------------------------
See notes to financial statements.
</TABLE>
<PAGE>
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
- --------------------------------------------------------------------------------
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
Assets:
Investments, at amortized cost and value $11,381,544
Cash 7,211
Receivable for Series shares sold 49,546
Prepaid insurance 338
Other assets 103
-----------
Total assets $11,438,742
-----------
Liabilities:
Payable for Series shares reacquired $ 11,974
Payable to affiliate for management fee 156
Accrued expenses and other liabilities 201
-----------
Total liabilities $ 12,331
-----------
Net assets (represented by paid-in capital) $11,426,411
===========
Shares of beneficial interest outstanding 11,426,411
===========
Net asset value per share
(net assets / shares of beneficial interest outstanding) $1.00
=====
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS - continued
Statement of Operations
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1999
- --------------------------------------------------------------------------------
Net investment income:
Interest income $637,492
--------
Expenses -
Management fee $ 62,309
Trustees' compensation 2,431
Shareholder servicing agent fee 4,362
Administrative fee 1,632
Custodian fee 7,658
Printing 5,212
Auditing fees 20,079
Legal fees 2,220
Amortization of prepaid insurance 339
Amortization of organization expenses 1,862
Miscellaneous 1,450
--------
Total expenses $109,554
Fees paid indirectly (1,356)
Reduction of expenses by investment adviser (33,428)
--------
Net expenses $ 74,770
--------
Net investment income $562,722
========
See notes to financial statements.
<PAGE>
<TABLE>
FINANCIAL STATEMENTS - continued
Statement of Changes in Net Assets
<CAPTION>
- --------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1999 1998
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income, declared as distributions to
shareholders $ 562,722 $ 430,322
------------ ------------
Series share (principal) transactions at net assets value
of $1.00 per share -
Net proceeds from sale of shares $ 11,892,729 $ 13,129,805
Net asset value of shares issued to shareholders in
reinvestment of distributions 562,473 430,497
Cost of shares reacquired (12,597,423) (10,747,102)
------------ ------------
Total increase (decrease) in net assets $ (142,221) $ 2,813,200
Net assets:
At beginning of period 11,568,632 8,755,432
------------ ------------
At end of period $ 11,426,411 $ 11,568,632
============ ============
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS - continued
Financial Highlights
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, PERIOD ENDED
--------------------------------------------------------- DECEMBER 31,
1999 1998 1997 1996 1995*
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share data (for a share outstanding
throughout each period):
Net asset value - beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------
Income from investment operations# -
Net investment income(S) $ 0.05 $ 0.05 $ 0.05 $ 0.04 $ 0.04
------ ------ ------ ------ ------
Less distributions declared to shareholders
from net investment income $(0.05) $(0.05) $(0.05) $(0.04) $(0.04)
------ ------ ------ ------ ------
Net asset value - end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ======
Total return 4.59% 4.91% 4.91% 4.55% 4.37%++
Ratios (to average net assets)/
Supplemental data(S):
Expenses## 0.61% 0.62% 0.61% 0.63% 0.63%+
Net investment income 4.52% 4.76% 4.91% 4.53% 4.54%+
Net assets at end of period (000 Omitted) $11,426 $11,569 $8,755 $ 633 $ 180
(S) Subject to reimbursement by the Series, MFS has voluntarily agreed under a temporary expense reimbursement agreement to pay
all of the Series' operating expenses, exclusive of management fees. In consideration, the Series pays MFS a fee not greater
than 0.10% of average daily net assets. To the extent actual expenses were over/under this limitation, the net investment
income (loss) per share and the ratios would have been:
Net investment income (loss) $ 0.04 $ 0.05 $ 0.04 $(0.21) $(0.14)
Ratios (to average net assets):
Expenses## 0.88% 0.96% 1.36% 27.74% 21.54%+
Net investment income (loss) 4.25% 4.42% 4.16% (22.58)% (16.37)%+
* For the period from the commencement of the Series' investment operations, January 3, 1995, through December 31, 1995.
+ Annualized.
++ Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset arrangements.
See notes to financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(1) Business and Organization
MFS Money Market Series (the Series) is a diversified series of MFS Variable
Insurance Trust (the Trust). The Trust is organized as a Massachusetts
business trust and is registered under the Investment Company Act of 1940, as
amended, as an open-end management investment company.
The shareholders of each Series of the Trust are separate accounts of
insurance companies which offer variable annuity and /or life insurance
products. As of December 31, 1999, there were 8 shareholders in the Series.
(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 revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Investment Valuations -- Money market instruments are valued at amortized
cost, which the Trustees have determined in good faith approximates market
value. The Trust's use of amortized cost is subject to the Trust's compliance
with certain conditions as specified under Rule 2a-7 of the Investment Company
Act of 1940.
Deferred Organization Expenses -- Costs incurred by the Series in connection
with its organization have been deferred and are being amortized on a
straight-line basis over a five-year period beginning on the date of
commencement of Series operations.
Investment Transactions and Income -- Investment transactions are recorded on
the trade date. Interest income is recorded on the accrual basis. All discount
is accreted for financial statement and tax reporting purposes as required by
federal income tax regulations.
Fees Paid Indirectly -- The Series' custody fee is calculated as a percentage
of the Series' month end net assets. The fee is reduced according to an
arrangement that measures the value of cash deposited with the custodian by
the Series. This amount is shown as a reduction of expenses on the Statement
of Operations.
Tax Matters and Distributions -- The Series' policy is to comply with the
provisions of the Internal Revenue Code (the Code) applicable to regulated
investment companies and to distribute to shareholders all of its taxable
income, including any net realized gain on investments. Accordingly, no
provision for federal income or excise tax is provided.
Distributions to shareholders are recorded on the ex-dividend date. The Fund
distinguishes between distributions on a tax basis and a financial reporting
basis and requires that only distributions in excess of tax basis earnings and
profits be reported in the financial statements as distributions from paid-in
capital. Differences in the recognition or classification of income between
the financial statements and tax earnings and profits, which result in
temporary over-distributions for financial statement purposes, are classified
as distributions in excess of net investment income or net realized gains.
At December 31, 1999, the Series, for federal income tax purposes, had a capital
loss carryforward of $53, which may be applied against any net taxable
realized gains of each succeeding year until the earlier of its utilization or
expiration on December 31, 2005, ($24), December 31, 2006, ($21), and December
31, 2007, ($8).
(3) Transactions with Affiliates
Investment Adviser -- The Series has an investment advisory agreement with
Massachusetts Financial Services Company (MFS) to provide overall investment
advisory and administrative services, and general office facilities. The
management fee is computed daily and paid monthly at an annual rate of 0.50%
of the Series' average daily net assets. The Series has a temporary expense
reimbursement agreement whereby MFS has voluntarily agreed to pay all of the
Series' operating expenses, exclusive of management fees. The Series in turn
will pay MFS an expense reimbursement fee not greater than 0.10% of average
daily net assets. To the extent that the expense reimbursement fee exceeds the
Series' actual expenses, the excess will be applied to amounts paid by MFS in
prior years. At December 31, 1999, the aggregate unreimbursed expenses
amounted to $176,105.
The Series pays no compensation directly to its Trustees who are officers of
the investment adviser, or to officers of the Series, all of whom receive
remuneration for their services to the Series from MFS. Certain officers and
Trustees of the Series are officers or directors of MFS and MFS Service
Center, Inc. (MFSC).
Administrator -- The Series has an administrative services agreement with MFS
to provide the Series with certain financial, legal, shareholder servicing,
compliance, and other administrative services. As a partial reimbursement for
the cost of providing these services, the Series pays MFS an administrative
fee at the following annual percentages of the Series' average daily net
assets:
First $1 billion 0.0150%
Next $1 billion 0.0125%
Next $1 billion 0.0100%
In excess of $3 billion 0.0000%
Shareholder Servicing Agent -- MFSC, a wholly owned subsidiary of MFS, earns a
fee for its services as shareholder servicing agent. The fee is calculated as
a percentage of the Series' average daily net assets at an annual rate of
0.035%.
(4) Portfolio Securities
Purchases and sales of money market investments, exclusive of securities
subject to repurchase agreements, aggregated $331,143,335 and $331,762,385
respectively.
(5) Shares of Beneficial Interest
The Series' Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest (without par
value, $1.00 per share).
(6) Line of Credit
The Series and other affiliated funds participate in a $820 million unsecured
line of credit provided by a syndication of banks under a line of credit
agreement. Borrowings may be made to temporarily finance the repurchase of
Series shares. Interest is charged to each fund, based on its borrowings, at a
rate equal to the bank's base rate. In addition, a commitment fee, based on
the average daily unused portion of the line of credit, is allocated among the
participating funds at the end of each quarter. The commitment fee allocated
to the Series for the year ended December 31, 1999, was $91. The Series had no
borrowings during the year.
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Trustees and Shareholders of MFS Money Market Series:
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of MFS Money Market Series (the
Series) (one of the series constituting MFS Variable Insurance Series) as of
December 31, 1999, the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years in
the period then ended. These financial statements and financial highlights are
the responsibility of the Series' management. Our responsibility is to express
an opinion on these financial statements and financial highlights 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 and
financial highlights 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 the
securities owned at December 31, 1999 by correspondence with the custodian and
brokers. 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 and financial highlights present
fairly, in all material respects, the financial position of MFS Money Market
Series at December 31, 1999, the results of its operations, the changes in its
net assets, and its financial highlights for the respective stated periods in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
February 3, 2000
<PAGE>
MFS' YEAR 2000 READINESS DISCLOSURE
MFS Investment Management(R), as an investment adviser and
on behalf of the MFS funds, is committed to the effective
use of technology in managing our portfolio investments,
delivering high-quality service to MFS fund shareholders, [Graphic Omitted]
retirement plan participants, and MFS' institutional
clients, and supporting the financial consultants who sell
our products.
MFS can now say that it is ready for the Year 2000. Our testing has demonstrated
that MFS' computer hardware and software will recognize "00" as the Year 2000
and will not confuse those digits with 1900. All of our critical business
applications and processes have been successfully tested, and we have adopted
companywide policies that will help us maintain our readiness through the
remainder of the year. Any new technology that is brought into the company
before the end of the year will be held to the same stringent standards as our
current technology. We have also developed a vendor readiness survey, contacted
over 700 of our vendors, and established an ongoing process to review responses,
as well as to review readiness statements of new vendors and products.
MFS recognizes that fund shareholders and institutional clients also are
concerned about whether the companies whose securities are held in their
portfolios are addressing Y2K issues. As part of the MFS Original Research(R)
process of evaluating portfolio investments, one of the many relevant factors
that MFS' portfolio managers and research analysts may consider is a company's
Y2K readiness.
Y2K readiness is an enormously complex, worldwide issue. No company or
institution can guarantee that it will be unaffected by the Y2K issue. While MFS
is taking significant steps to protect the integrity of its internal systems,
there can be no assurance that these steps will be sufficient to avoid any
adverse impact on MFS fund shareholders, retirement plan participants, or
institutional clients.
If you have further questions regarding MFS' Year 2000 Readiness Program, please
visit our Web site at www.mfs.com, call our toll-free line, 1-800-637-4406, or
write to the MFS Year 2000 Program Management Office by e-mail at [email protected] or
by letter at 500 Boylston Street, Boston, MA 02116-3741.
<PAGE>
(C) 2000 MFS Investment Management(R)
MFS(R) investment products are offered through MFS Fund Distributors, Inc.,
500 Boylston Street, Boston, MA 02116
VVM-2 02/00 1M
