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SUN LIFE OF CANADA (U.S.)
VARIABLE ACCOUNT A
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FINANCIAL STATEMENTS FOR THE
YEAR ENDED DECEMBER 31, 1996
AND INDEPENDENT AUDITORS' REPORT
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[LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Participants in Sun Life of Canada (U.S.) Variable Account A and the
Board of Directors of Sun Life Assurance Company of Canada (U.S.):
We have audited the accompanying statement of condition of Sun Life of Canada
(U.S.) Variable Account A as of December 31, 1996 and the related statement of
operations for the year then ended and the statements of changes in net assets
for the years ended December 31, 1996 and 1995. These financial statements are
the responsibility of management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation with the custodian of securities held for the Variable Account as
of December 31, 1996. 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 Sun Life of Canada (U.S.) Variable Account A
as of December 31, 1996, and the results of its operations for the year then
ended and the changes in its net assets for the years ended December 31,1996 and
1995 in conformity with generally accepted accounting principles.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
February 3, 1997
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SUN LIFE OF CANADA (U.S.)
VARIABLE ACCOUNT A
STATEMENT OF CONDITION
DECEMBER 31, 1996
ASSETS:
Investment in MFS/Sun Life Series Trust:
Money Market Series ("MMS"),
305,505 shares at $1.00 per share
(cost $305,505) $ 305,505
LIABILITY:
Payable to sponsor (3,842)
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NET ASSETS $ 301,663
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APPLICABLE TO OWNERS OF VARIABLE ANNUITY CONTRACTS:
Deferred contracts (67,886 units at
$2.8975 per unit) $ 196,700
Reserve for variable annuities 104,963
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$ 301,663
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See notes to financial statements.
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SUN LIFE OF CANADA (U.S.)
VARIABLE ACCOUNT A
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996
INVESTMENT INCOME:
Dividends $ 27,512
EXPENSE:
Mortality and expense risk charges 2,977
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NET INVESTMENT INCOME 24,535
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS:
Net realized losses (316,971)
Change in unrealized (losses) on investments:
Beginning of year (302,665)
End of year 0
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Unrealized gains 302,665
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NET REALIZED AND UNREALIZED LOSSES (14,306)
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NET INCREASE IN NET ASSETS FROM OPERATIONS $ 10,229
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See notes to financial statements.
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SUN LIFE OF CANADA (U.S.)
VARIABLE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED
DECEMBER 31,
1996 1995
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OPERATIONS:
Net investment income $ 24,535 $ 3,247
Net realized losses (316,971) (43,079)
Net unrealized gains 302,665 49,417
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Net increase in net assets
from operations 10,229 9,585
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PARTICIPANT TRANSACTIONS:
Accumulation activity:
Redemptions (36,693) (6,150)
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Net accumulation activity (36,693) (6,150)
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Annuitization activity:
Annuity payments (22,639) (24,313)
Actuarial adjustment 9,097 13,184
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Net annuitization activity (13,542) (11,129)
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Net decrease in net assets from
participant activity (50,235) (17,279)
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NET DECREASE IN NET ASSETS (40,006) (7,694)
NET ASSETS:
Beginning of year 341,669 349,363
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End of year $ 301,663 $ 341,669
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See notes to financial statements.
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SUN LIFE OF CANADA (U.S.)
VARIABLE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION:
Sun Life of Canada (U.S.) Variable Account A (the "Variable Account"), a
separate account of Sun Life Assurance Company of Canada (U.S.) (the
"Sponsor"), was established as a funding vehicle for individual variable
annuities. The Variable Account is registered with the Securities and
Exchange Commission under the Investment Company Act of 1940 as a unit
investment trust. 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 tax law, investment income and capital gains of the Variable
Account are not taxable and, therefore, no provision has been made for
federal income taxes.
2. INVESTMENT VALUATIONS:
At December 31, 1995, the Variable Account was fully invested in shares of
Sun Growth Variable Annuity Fund, Inc. ("SGVA"), an affiliated mutual fund.
During 1996, SGVA ceased operations. The Variable Account redeemed all
shares of SGVA and at December 31, 1996 is fully invested in shares of
MFS/Sun Life Series Trust, Money Market Series ("MMS"). Investment in
shares of MMS are recorded at their net asset value. Realized gains and
losses on sales of SGVA and MMS are determined on the identified cost
basis. Dividend income and capital gain distributions received by MMS are
reinvested in additional shares of MMS and are recognized on the
ex-dividend date.
3. MORTALITY AND EXPENSES RISK CHARGES:
A deduction based on the value of either the variable accumulation units
credited to a deferred contract's accumulation account or the annuity units
credited to either an immediate or a deferred contract, as the case may be,
is made by the Sponsor from the Variable Account at the end of each
valuation period for the mortality and expense risks assumed by the
Sponsor. These deductions are transferred periodically to the Sponsor.
Currently, the deduction is at an effective annual rate of 1.0% of the
respective values.
4. RESERVE FOR VARIABLE ANNUITIES:
The reserve for variable annuities (contracts in payment period) has been
calculated using the Progressive Annuity Table (for year of birth 1900)
with interest equal to the assumed interest rate used in determining the
annuity units and the annuity unit values. Separate tables were used for
male and female annuitants. Required adjustments to the reserve will be
accomplished by transfers to or from the Sponsor.
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SUN LIFE OF CANADA (U.S.)
VARIABLE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (continued)
5. ESTABLISHMENT OF NEW VARIABLE ACCOUNTS:
During 1982, the Sponsor established other separate accounts as investment
vehicles for qualified and non-qualified individual variable annuity
contracts and no longer accepts applications for new annuity contracts
participating in Variable Account A.
6. CHANGE IN ACCUMULATION UNITS OUTSTANDING:
YEARS ENDED
DECEMBER 31,
1996 1995
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Redeemed during the year (12,677) (2,440)
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Net decrease in
accumulation units (12,677) (2,440)
Units outstanding:
Beginning of year 80,563 83,003
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End of year 67,886 80,563
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