485BPOS 1 a2039328z485bpos.txt 485BPOS As Filed with the Securities and Exchange Commission on April 23, 2001 REGISTRATION NO. 333-30844 811-05846 -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------ POST-EFFECTIVE AMENDMENT NO. 4 /X/ TO FORM N-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 AND AMENDMENT NO. 32 /X/ TO REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (Exact Name of Registrant) SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (Name of Depositor) ONE SUN LIFE EXECUTIVE PARK WELLESLEY HILLS, MASSACHUSETTS 02481 (Address of Depositor's Principal Executive Offices) DEPOSITOR'S TELEPHONE NUMBER: (781) 237-6030 EDWARD M. SHEA, ASSISTANT VICE PRESIDENT AND SENIOR COUNSEL SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) ONE COPLEY PLACE BOSTON, MASSACHUSETTS 02116 (Name and Address of Agent for Service) COPIES OF COMMUNICATIONS TO: JOAN E. BOROS, ESQ. JORDEN BURT BOROS CICCHETTI BERENSON & JOHNSON LLP 1025 THOMAS JEFFERSON STREET, N.W. SUITE 400 EAST WASHINGTON, D.C. 20007-0805 IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (check appropriate box) / / IMMEDIATELY UPON FILING PURSUANT TO PARAGRAPH (b) OF RULE 485 /X/ ON MAY 1, 2001 PURSUANT TO PARAGRAPH (b) OF RULE 485 / / 60 DAYS AFTER FILING PURSUANT TO PARAGRAPH (a)(1) OF RULE 485 / / ON (DATE) PURSUANT TO PARAGRAPH (a)(1) OF RULE 485 IF APPROPRIATE CHECK THE FOLLOWING BOX: / / THIS POST-EFFECTIVE AMENDMENT DESIGNATES A NEW EFFECTIVE DATE FOR A PREVIOUSLY FILED POST-EFFECTIVE AMENDMENT. PART A INFORMATION REQUIRED IN A PROSPECTUS Attached hereto and made a part hereof is the Profile and Prospectus dated May 1, 2001 for each of the following: MFS Regatta Choice Variable and Fixed Annuity Futurity III Variable and Fixed Annuity SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) MAY 1, 2001 PROFILE MFS REGATTA CHOICE VARIABLE AND FIXED ANNUITY THIS PROFILE IS A SUMMARY OF SOME OF THE MORE IMPORTANT POINTS THAT YOU SHOULD KNOW AND CONSIDER BEFORE PURCHASING THE CONTRACT. THE CONTRACT IS MORE FULLY DESCRIBED IN THE FULL PROSPECTUS WHICH ACCOMPANIES THIS PROFILE. PLEASE READ THE PROSPECTUS CAREFULLY. THROUGHOUT THIS PROFILE, THE TERMS, "YOU" AND "YOUR" REFER TO "OWNER," "PARTICIPANT," AND/OR "COVERED PERSON" AS THOSE TERMS ARE DEFINED IN YOUR CONTRACT. 1. THE MFS REGATTA CHOICE ANNUITY The MFS Regatta Choice Annuity is a flexible payment deferred annuity contract ("Contract") designed for use in connection with retirement and deferred compensation plans, some of which may qualify for favorable federal income tax treatment. The Contract is intended to help you achieve your retirement savings or other long-term investment goals. The Contract has two phases: an Accumulation Phase and an Income Phase. During the Accumulation Phase, you make payments into the Contract; any investment earnings under your Contract accumulate on a tax-deferred basis and are taxed as income only when withdrawn. During the Income Phase, we make annuity payments in amounts determined in part by the amount of money you have accumulated under your Contract during the Accumulation Phase. You choose when the Income Phase begins. You may choose among 31 variable investment options and a range of fixed options. For a variable investment return you choose one or more Sub-Accounts in our Variable Account, each of which invests in shares of a corresponding series of the MFS/Sun Life Series Trust (collectively, the "Funds") listed in Section 4. The value of any portion of your Contract allocated to the Sub-Accounts will fluctuate up or down depending on the performance of the Series you select, and you may experience losses. For a fixed interest rate, you may choose one or more Guarantee Periods offered in our Fixed Account, each of which earns its own Guaranteed Interest Rate if you keep your money in that Guarantee Period for the specified length of time. The Contract is designed to meet your need for investment flexibility. Over the life of your Contract, you may allocate amounts among as many as 18 of the available variable and fixed options. You can, subject to certain limitations, transfer money between options up to 12 times each year without a transfer charge or adverse tax consequences. 2. ANNUITY PAYMENTS (THE INCOME PHASE) Just as you can elect to have your Contract value accumulate on either a variable or fixed basis, or a combination of both, you can elect to receive annuity payments on either a variable or fixed basis or both. If you choose to have any part of your annuity payments come from the Sub-Accounts, the dollar amount of your annuity payments may fluctuate. The Contract offers a variety of annuity options. You can select from among the following methods of receiving either variable or fixed annuity payments under your Contract: (1) monthly payments continuing for your lifetime (assuming you are the annuitant); (2) monthly payments for your lifetime, but with payments continuing to your chosen beneficiary for a specified number of years after your first payment if you die before the end of the period you have selected; (3) monthly payments for your lifetime and the life of another person (usually your spouse) you have chosen; and (4) monthly payments for a specified number of years, with a cash-out option for variable payments. We may also agree to other annuity options at our discretion. Once the Income Phase begins, you cannot change your choice of annuity payment method. 3. PURCHASING A CONTRACT You may purchase a Contract for $10,000 or more, under most circumstances. You may increase the value of your investment by adding $1,000 or more at any time during the Accumulation Phase. We may waive these limits. We will not accept a purchase payment if your account value is over $2 million, or if the purchase payment would cause your account value to exceed $2 million, unless we have approved the payment in advance. 4. ALLOCATION OPTIONS You can allocate your money among Sub-Accounts investing in the following Funds of the MFS/Sun Life Series Trust: Bond Series Managed Sectors Series Capital Appreciation Series Massachusetts Investors Growth Stock Series Capital Opportunities Series Massachusetts Investors Trust Series Emerging Growth Series Mid Cap Growth Series Emerging Markets Equity Series Money Market Series Global Asset Allocation Series New Discovery Series Global Governments Series Research Series Global Growth Series Research Growth and Income Series Global Health Sciences Series Research International Series Global Telecommunications Series Strategic Growth Series Global Total Return Series Strategic Income Series Government Securities Series Technology Series High Yield Series Total Return Series International Growth Series Utilities Series International Investors Trust Series Value Series International New Discovery Series
Market conditions will determine the value of an investment in any Fund. Each Fund is described in the prospectus of the MFS/Sun Life Series Trust. In addition to these variable options, you may also allocate your money to one or more of the Guarantee Periods we make available. For each Guarantee Period, we offer a Guaranteed Interest Rate for the specified length of time. 5. EXPENSES The charges under the Contracts are as follows: During the first 5 years of a Contract, if your account value is less than $75,000 on your Account Anniversary, we impose an annual Account Fee equal to $35. After the fifth year, we may change this fee annually, but it will never exceed $50. During the Income Phase, the annual Account Fee is $35. We will not assess an Account Fee if your Contract is fully invested in the Fixed Account during the entire Account Year. We will waive the Account Fee if your Contract value was $75,000 or more on your Account Anniversary, or if your Account was allocated only to the Fixed Account during the applicable Account Year. In addition, during both the Accumulation Phase and the Income Phase, we deduct insurance charges equal to 1.15% per year of the average daily value of the Contract allocated among the Sub-Accounts. If your initial purchase payment is greater than $1,000,000, we will decrease the insurance charges to 1.00%. If you annuitize before your seventh Account Anniversary, we will assess, during the Income Phase, an additional charge equal to 0.25% of your daily account value. 2 CHARGES FOR OPTIONAL DEATH BENEFIT RIDERS If you elect an optional death benefit rider, we will deduct, during the Accumulation Phase, a charge from the assets of the Variable Account depending upon which of the optional death benefit rider(s) you elect.
% OF AVERAGE RIDER(S) YOU ELECT* DAILY VALUE ------------------- ------------ "EEB" 0.15% "MAV" 0.15% "5% Roll-Up" 0.15% "EEB" and "MAV" 0.25% "EEB" and "5% Roll-Up" 0.25% "MAV" and "5% Roll-Up" 0.25% "EEB Plus" 0.25% "EEB" and "MAV" and "5% Roll-Up" 0.40% "EEB Plus MAV" 0.40% "EEB Plus 5% Roll-Up" 0.40%
------------------------ * As defined in Section 9 below No optional death benefit is offered if you are 80 or older at issue. No charges for optional death benefit riders are assessed during the Income Phase. There are no sales charges when you purchase your Contract. However, if you withdraw money from your Contract, we will, with certain exceptions, impose a withdrawal charge. Your Contract allows a "free withdrawal amount," which you may withdraw before you incur the withdrawal charge. The rest of your withdrawal is subject to a withdrawal charge equal to a percentage of each purchase payment you withdraw. Each payment begins a new 7-year period and moves down a declining surrender charge scale at each Account Anniversary. Payments received during the current Account Year will be charged 7%, if withdrawn. On your next scheduled Account Anniversary, that payment, along with any other payments made during that Account Year, will be considered to be in their second Account Year and will have a 7% withdrawal charge. On the next Account Anniversary, these payments will move into their third Account Year and will have a withdrawal charge of 6%, if withdrawn. This withdrawal charge decreases according to the number of Account Years the purchase payment has been held in your Account. The declining scale is as follows:
NUMBER OF ACCOUNT YEARS PAYMENT HAS BEEN IN YOUR CONTRACT WITHDRAWAL CHARGE ----------------------- ----------------- 0-1 7% 1-2 7% 2-3 6% 3-4 6% 4-5 5% 5-6 4% 6-7 3% 7 or more 0%
If you withdraw, transfer, or annuitize money allocated to a Guarantee Period more than 30 days before the expiration date of the Guarantee Period, the amount will be subject to a Market Value Adjustment. This adjustment reflects the relationship between our current Guaranteed Interest Rates and the Guaranteed Interest Rate applicable to the amount being withdrawn. Generally, if your Guaranteed Interest Rate is lower than the relevant current rate, then the adjustment will decrease your Contract value. Conversely, if your Guaranteed Interest Rate is higher than the relevant current rate, the adjustment will increase your Contract value. The Market Value Adjustment will not apply to the withdrawal of interest credited during the current Account Year, or to transfers as part of our dollar-cost averaging program. In addition to the charges we impose under the Contracts, there are charges (which include management fees and operating expenses) imposed by each Fund, depending upon which Funds you have selected. The investment adviser has agreed to waive or reimburse a portion of expenses for some 3 of the Funds; without this agreement, Fund expenses could be higher. Some of these agreements may be terminated at any time. The following chart is designed to help you understand the expenses you will incur under your Contract, if you invest in one or more of the Sub-Accounts. The column "Total Annual Expenses" shows the sum of the "Total Annual Insurance Charges," as defined just above the chart, and the total expenses (net of any applicable expense reimbursement and/or fee waiver) for each Fund. The next two columns show two examples of the expenses, in dollars, you would pay under a Contract. The examples assume that you invested $1,000 in a Contract which earns 5% annually and that you withdraw your money (1) at the end of one year or (2) at the end of 10 years. For the first year, the Total Annual Expenses are deducted, as well as withdrawal charges. For year 10, the example shows the aggregate of all of the annual expenses deducted for the 10 years, but there is no withdrawal charge. During the Accumulation Phase, "Total Annual Insurance Charges" of 1.25% as shown in the table below include insurance charges of 1.15% of your daily net assets (1.00% for mortality and expense risks and 0.15% for administrative expenses) plus an additional 0.10%, which is used to represent the current $35 annual Account Fee based on an assumed Contract value of $35,000. The actual impact of the Account Fee may be greater or less than 0.10%, depending upon the value of your Contract. After the fifth Account Anniversary, we may raise the annual Account Fee, but in no event will it ever exceed $50. The 10-year total expense examples, below, reflect a $50 annual Account Fee.
EXAMPLES: TOTAL EXPENSE AT END TOTAL ANNUAL TOTAL ANNUAL TOTAL NO RIDERS(A) WITH RIDER(B) INSURANCE FUND ANNUAL -------------------- -------------------- SUB-ACCOUNT CHARGES EXPENSES EXPENSES 1 YEAR 10 YEARS 1 YEAR 10 YEARS ----------- ------------ ------------ ---------- -------- --------- -------- --------- Bond Series...................... 1.25% 0.72% 1.97% $82 $232 $85 $273 Capital Appreciation Series...... 1.25% 0.75% 2.00% $82 $235 $86 $276 Capital Opportunities Series..... 1.25% 0.79% 2.04% $82 $239 $86 $280 Emerging Growth Series........... 1.25% 0.74% 1.99% $82 $234 $86 $275 Emerging Markets Equity Series... 1.25% 1.57% 2.82% $90 $317 $93 $354 Global Asset Allocation Series... 1.25% 0.90% 2.15% $83 $251 $87 $291 Global Governments Series........ 1.25% 0.94% 2.19% $84 $255 $87 $295 Global Growth Series............. 1.25% 1.04% 2.29% $85 $265 $88 $305 Global Health Sciences Series.... 1.25% 1.25% 2.50% $87 $286 $90 $325 Global Telecommunications Series.......................... 1.25% 1.28% 2.53% $87 $289 $91 $328 Global Total Return Series....... 1.25% 0.91% 2.16% $83 $252 $87 $292 Government Securities Series..... 1.25% 0.62% 1.87% $81 $222 $84 $263 High Yield Series................ 1.25% 0.83% 2.08% $83 $244 $86 $284 International Growth Series...... 1.25% 1.24% 2.49% $86 $285 $90 $324 International Investors Trust Series.......................... 1.25% 1.21% 2.46% $86 $282 $90 $321 International New Discovery Series.......................... 1.25% 1.23% 2.48% $86 $284 $90 $323 Managed Sectors Series........... 1.25% 0.76% 2.01% $82 $236 $86 $277 Massachusetts Investors Growth Stock Series.................... 1.25% 0.81% 2.06% $82 $242 $86 $282 Massachusetts Investors Trust Series.......................... 1.25% 0.60% 1.85% $80 $220 $84 $261 Mid Cap Growth Series............ 1.25% 0.89% 2.14% $83 $250 $87 $290 Money Market Series.............. 1.25% 0.58% 1.83% $80 $217 $84 $259 New Discovery Series............. 1.25% 0.99% 2.24% $84 $260 $88 $300 Research Series.................. 1.25% 0.74% 1.99% $82 $234 $86 $275 Research Growth and Income Series.......................... 1.25% 0.88% 2.13% $83 $249 $87 $289 Research International Series.... 1.25% 1.28% 2.53% $87 $289 $91 $328 Strategic Growth Series.......... 1.25% 0.94% 2.19% $84 $255 $87 $295 Strategic Income Series.......... 1.25% 0.98% 2.23% $84 $259 $88 $299 Technology Series................ 1.25% 0.92% 2.17% $83 $253 $87 $293 Total Return Series.............. 1.25% 0.70% 1.95% $81 $230 $85 $271 Utilities Series................. 1.25% 0.80% 2.05% $82 $240 $86 $281 Value Series..................... 1.25% 0.87% 2.12% $83 $248 $87 $288
------------------------------ (a) Assuming no optional death benefit riders have been elected. (b) Assuming EEB Plus MAV optional death benefit rider has been elected. If your initial purchase payment is $1,000,000 or more, we will reduce your insurance charges by 0.15%. If you annuitize before your 7th Account Anniversary, we will increase your insurance charges by 0.25% during the Income Phase. 4 For more detailed information about Contract fees and expenses, please refer to the fee table and discussion of Contract charges contained in the full Prospectus which accompanies this Profile. 6. TAXES Under current federal tax laws, your earnings are not taxed until you take them out of your Contract. If you take money out, earnings come out first and are taxed as income. If your Contract is funded with pre-tax or tax-deductible dollars (such as with a pension or IRA contribution) -- we call this a Qualified Contract -- your entire withdrawal will be taxable. If you are younger than 59 1/2 when you take money out, you may be charged a 10% federal penalty tax on the earnings. Annuity payments during the Income Phase are considered in part a return of your original investment. That portion of each payment is not taxable, except under a Qualified Contract, in which case the entire payment will be taxable. In all cases, you should consult with your tax adviser for specific tax information. Different laws apply if your Contract is issued in Puerto Rico. Under the tax laws of Puerto Rico, when an annuity payment is made under your Contract, your annuitant or any other payee is required to include as gross income the lesser of amounts received during the taxable year or the portion of each annuity payment equal to 3% of the aggregate purchase payments you made under the Contract. The amount if any, in excess of the included amount is excluded from gross income. After an amount equal to the aggregate amount excluded from gross income has been received, all of the annuity payments are considered to be taxable income. You should consult with your tax adviser for specific tax information. 7. ACCESS TO YOUR MONEY You can withdraw money from your Contract at any time during the Accumulation Phase. You may withdraw a portion of the value of your Contract in each year without the imposition of the withdrawal charge. In the first Account Year, the portion of your Account that is not subject to a withdrawal charge is equal to 15% of all purchase payments made during that Account Year. After your first Account Anniversary, the portion of your Account that is not subject to a withdrawal charge is 100% of all purchase payments made prior to the last 7 Account Years not previously withdrawn PLUS the greater of (1) 15% of all purchase payments you have made in the last 7 years minus any free withdrawals taken the current Account Year or (2) all earnings minus any withdrawals taken during the life of the Contract. All other purchase payments you withdraw will be subject to a withdrawal charge ranging from 7% to 3%. You may also be required to pay income tax and possible tax penalties on any money you withdraw. We do not assess a withdrawal charge upon annuitization or transfers. In certain circumstances, we will waive the withdrawal charges for a full or partial withdrawal when you are confined to an eligible nursing home. In addition, there may be other circumstances under which we may waive the withdrawal charge. In addition to the withdrawal charge, amounts you withdraw, transfer or annuitize from the Fixed Account before your Guarantee Period has ended may be subject to a Market Value Adjustment. 8. PERFORMANCE If you invest in one or more Sub-Accounts, the value of your Contract will increase or decrease depending upon the investment performance of the Funds you choose. The following chart shows total return for investment in the Sub-Accounts where the corresponding Series has had at least one full calendar year of operations. The returns reflect all charges and deductions of the Series and Sub-Account, including the annual Account Fee. They do not reflect deduction of any withdrawal charges or premium taxes. NOR DO THEY REFLECT THE DEDUCTION OF ANY CHARGES FOR OPTIONAL DEATH BENEFIT RIDERS. THESE DEDUCTIONS, IF INCLUDED, WOULD REDUCE THE PERFORMANCE SHOWN. Past performance is not a guarantee of future results. 5
SUB-ACCOUNT 2000 1999 1998 1997 1996 1995 1994 1993 ----------- --------- --------- --------- --------- --------- --------- --------- --------- Bond Series............................. 8.88% (2.96%) -- -- -- -- -- -- Capital Appreciation Series............. (12.50%) 30.92% 27.01% 21.48% 19.85% 32.66% (4.88%) 16.43% Capital Opportunities Series............ (6.04%) 45.70% 25.28% 25.88% -- -- -- -- Emerging Growth Series.................. (20.06%) 73.50% 32.09% 20.31% 15.53% -- -- -- Emerging Markets Equity Series.......... (23.66%) 50.50% (30.85%) 8.93% -- -- -- -- Global Asset Allocation Series.......... (3.51%) 17.02% 5.15% 9.39% 14.43% 20.00% -- -- Global Governments Series............... 0.04% (6.37%) 13.95% (2.09%) 3.26% 14.15% (5.76%) 17.31% Global Growth Series.................... (14.19%) 65.12% 13.04% 13.78% 11.57% 14.44% 1.55% -- Global Total Return Series.............. 1.04% 7.05% 16.79% 12.13% 12.73% 16.34% -- -- Government Securities Series............ 10.72% (3.16%) 7.31% 7.30% 0.26% 16.07% (3.46%) 7.22% High Yield Series....................... (7.92%) 5.49% (0.71%) 11.70% 10.61% 15.47% (3.53%) 16.16% International Growth Series............. (8.93%) 33.56% 0.58% (2.94%) -- -- -- -- International Investors Trust Series.... (3.58%) 15.78% 20.01% 5.10% 3.48% -- -- -- Managed Sectors Series.................. (21.78%) 83.16% 10.85% 23.95% 16.01% 30.49% (3.23%) 2.67% Massachusetts Investors Growth Stock Series................................ (7.28%) 34.02% -- -- -- -- -- -- Massachusetts Investors Trust Series.... (1.14%) 5.83% 22.20% 30.19% 23.72% 35.59% (2.42%) 6.97% Money Market Series..................... 4.64% 3.36% 3.65% 3.67% 3.52% 4.05% 2.32% 1.26% New Discovery Series.................... (0.86%) 58.09% -- -- -- -- -- -- Research Series......................... (5.30%) 22.56% 22.00% 19.21% 22.15% 35.59% -- -- Research Growth and Income Series....... 1.82% 6.79% 20.56% -- -- -- -- -- Research International Series........... (9.09%) 52.93% -- -- -- -- -- -- Strategic Growth Series................. (11.09%) 19.83% -- -- -- -- -- -- Strategic Income Series................. 1.62% 21.93% -- -- -- -- -- -- Total Return Series..................... 15.33% 1.53% 10.28% 20.33% 12.53% 25.08% (3.56%) 11.87% Utilities Series........................ 5.65% 29.57% 16.04% 30.95% 18.72% 30.63% (6.21%) -- Value Series............................ 28.60% 5.69% -- -- -- -- -- -- SUB-ACCOUNT 1992 1991 1990 ----------- --------- --------- --------- Bond Series............................. -- -- -- Capital Appreciation Series............. 11.68% 39.04% (10.87%) Capital Opportunities Series............ -- -- -- Emerging Growth Series.................. -- -- -- Emerging Markets Equity Series.......... -- -- -- Global Asset Allocation Series.......... -- -- -- Global Governments Series............... (0.86%) 13.25% 11.82% Global Growth Series.................... -- -- -- Global Total Return Series.............. -- -- -- Government Securities Series............ 5.29% 14.32% 7.41% High Yield Series....................... 13.49% 45.64% (15.50%) International Growth Series............. -- -- -- International Investors Trust Series.... -- -- -- Managed Sectors Series.................. 5.06% 59.82% (11.65%) Massachusetts Investors Growth Stock Series................................ -- -- -- Massachusetts Investors Trust Series.... 4.20% 35.02% (4.71%) Money Market Series..................... 1.96% 4.38% 6.41% New Discovery Series.................... -- -- -- Research Series......................... -- -- -- Research Growth and Income Series....... -- -- -- Research International Series........... -- -- -- Strategic Growth Series................. -- -- -- Strategic Income Series................. -- -- -- Total Return Series..................... 6.92% 20.02% 1.30% Utilities Series........................ -- -- -- Value Series............................ -- -- --
9. DEATH BENEFIT If you die before the Contract reaches the Income Phase, the beneficiary will receive a death benefit. To calculate the death benefit, we use a "Death Benefit Date," which is the earliest date we have both due proof of death and a written request specifying the manner of payment. BASIC DEATH BENEFIT If you were 85 or younger when we issued your Contract, the death benefit is the greatest of: (1) the value of the Contract on the Death Benefit Date; (2) the amount we would pay in the event of a full surrender of the Contract on the Death Benefit Date; and (3) your total purchase payments (adjusted for partial withdrawals) calculated as of the Death Benefit Date. If you were 86 or older when we issued your Contract, the death benefit is equal to the amount set forth in (2) above. Because this amount will reflect any applicable withdrawal charges and Market Value Adjustment, it may be less than your account value. OPTIONAL DEATH BENEFIT RIDERS Subject to availability in your state, if you are 79 or younger when we issue your Contract, you may enhance this basic death benefit by electing one or more of the following optional death benefit riders. The death benefit under all optional death benefit riders will be adjusted for all partial withdrawals as described in the Prospectus under the heading "Calculating the Death Benefit." For examples of how the death benefit is calculated under the optional death benefit riders, see Appendices D-H. MAXIMUM ANNIVERSARY ACCOUNT VALUE RIDER ("MAV") If you elect the Maximum Anniversary Account Value Rider, the death benefit is the greater of: - the amount payable under basic death benefit above, or - your highest Contract value on any Account Anniversary before your 81st birthday, adjusted for any subsequent purchase payments, partial withdrawals, and charges made between that Account Anniversary and the Death Benefit Date. 6 5% PREMIUM ROLL-UP RIDER ("5% ROLL-UP") If you elect the 5% Premium Roll-Up Rider, the death benefit is the greatest of: - the amount payable under basic death benefit above, or - the sum of your total purchase payment plus interest accruals, adjusted for partial withdrawals. Under this rider, interest accrues at 5% per year on purchase payments and transfers to the Variable Account while they remain in the Variable Account. The 5% accruals will continue until the earlier of: - first day of the month following your 80th birthday, or - the day the death benefit amount under this rider equals twice the total of the purchase payments and transferred amounts adjusted for withdrawals. EARNINGS ENHANCEMENT ("EEB") RIDER If you elect this EEB Rider, your death benefit will be the amount payable under the basic death benefit, PLUS the "EEB amount." Calculated as of your Death Benefit Date, the "EEB amount" is determined as follows: - If you are 69 or younger on your Contract Date, the "EEB amount" will be 40% of the difference between your Account Value and your Net Purchase Payments, up to a cap of 40% of the Net Purchase Payments made prior to your death. - If you are between the ages of 70 and 79 on your Contract Date, the "EEB amount" will be 25% of the difference between your Account Value and your Net Purchase Payments, up to a cap of 25% of the Net Purchase Payments prior to your death. EARNINGS ENHANCEMENT PLUS ("EEB PLUS") RIDER* If you elect this EEB Plus Rider, your death benefit will be the amount payable under the basic death benefit, PLUS the "EEB Plus amount." Calculated as of the Death Benefit Date, the "EEB Plus amount" is determined as follows: - If you are 69 or younger on your Contract Date, the "EEB Plus amount" will be 40% of the difference between your Account Value and your Net Purchase Payments, up to a cap of 100% of the Net Purchase Payments made prior to your death. After the 7th Contract year, the cap is 100% of the difference between your Net Purchase Payments and any Purchase Payments made within the twelve months prior to your death. - If you are between the ages of 70 and 79 on your Contract Date, the "EEB Plus amount" will be 25% of the difference between your Account Value and your Net Purchase Payments, up to a cap of 40% of the Net Purchase Payments made prior to your death. After the 7th Contract year, the cap is 40% of the difference between your Net Purchase Payments and any Purchase Payments made in the twelve months prior to your death. EARNINGS ENHANCEMENT PLUS WITH MAV ("EEB PLUS MAV") RIDER* If you elect this EEB Plus MAV Rider, your death benefit will be the death benefit payable under the MAV Rider PLUS the "EEB Plus MAV amount." Calculated as of your Death Benefit Date, the "EEB Plus MAV amount" is as follows: - If you are 69 or younger on your Contract Date, the "EEB Plus MAV amount" will be 40% of the difference between the death benefit payable under the MAV Rider and your Net Purchase Payments, up to a cap of 100% of Net Purchase Payments made prior to your death. After your 7th Contract year, the cap is 100% of the difference between your Net Purchase Payments and any Purchase Payments made in the twelve months prior to your death. - If you are between the ages of 70 and 79 on your Contract Date, the "EEB Plus MAV amount" will be 25% of the difference between the death benefit payable under the MAV Rider and your Net Purchase Payments, up to a cap of 40% of Net Purchase Payments made *See Section 6. "Taxes" if this Optional Death Benefit is being considered for an IRA plan. 7 prior to your death. After your 7th Contract year, the cap is 40% of the difference between your Net Purchase Payments and any Purchase Payments made in the twelve months prior to your death. EARNINGS ENHANCEMENT PLUS WITH 5% ROLL-UP ("EEB PLUS 5% ROLL-UP") RIDER* If you elect this EEB Plus 5% Roll-Up Rider, your death benefit will be the death benefit payable under the 5% Roll-Up Rider PLUS the "EEB Plus 5% Roll-Up amount." Calculated as of your Death Benefit Date, the "EEB Plus 5% Roll-Up amount" is determined as follows: - If you are 69 or younger on your Contract Date, the "EEB Plus 5% Roll-Up amount" will be 40% of the difference between the death benefit payable under the 5% Roll-Up Rider and your Net Purchase Payments, up to a cap of 100% of Net Purchase Payments made prior to your death. After your 7th Contract year, the cap is 100% of the difference between your Net Purchase Payments and any Purchase Payments made in the twelve months prior to your death. - If you are between the ages of 70 and 79 on your Contract Date, the "EEB Plus 5% Roll-Up amount" will be 25% of the difference between the death benefit payable under the 5% Roll-Up Rider and your Net Purchase Payments, up to a cap of 40% of Net Purchase Payments made prior to your death. After your 7th Contract year, the cap is 40% of the difference between your Net Purchase Payments and any Purchase Payments made in the twelve months prior to your death. SELECTING MULTIPLE DEATH BENEFIT RIDERS The MAV Rider, the 5% Roll-Up Rider, and the EEB Rider can be combined. If you elect more than one of these three optional death benefit riders, your death benefit will be calculated as follows: - MAV RIDER COMBINED WITH 5% ROLL-UP RIDER: The death benefit will equal the greater of the death benefit under the MAV Rider and the death benefit under the 5% Roll-Up Rider. - MAV RIDER COMBINED WITH EEB RIDER: The death benefit will equal the death benefit under the MAV Rider, plus the "EEB amount." The "EEB amount" is calculated using the Account Value before the application of the MAV Rider. - EEB RIDER COMBINED WITH 5% ROLL-UP RIDER: The death benefit will equal the death benefit under the 5% Roll-Up Rider, plus the "EEB amount." The "EEB amount" is calculated using the Account Value before the application of the 5% Roll-Up Rider. - MAV RIDER, THE 5% ROLL-UP RIDER AND THE EEB RIDER: The death benefit will equal the greater of the death benefit under the MAV Rider or the death benefit under the 5% Roll-Up Rider, plus the "EEB amount." The "EEB amount" is calculated using the Account Value before the application of the 5% Roll-Up Rider and the MAV Rider. The EEB Plus, EEB Plus MAV, and EEB Plus 5% Roll-Up Riders are designed to be "comprehensive" riders and may not be combined with each other or with any of the other death benefit riders. If your spouse is your beneficiary, upon your death your spouse may elect to continue the Contract as the Participant, rather than receive the death benefit amount. In that case, we will not pay a death benefit, but the value of your Contract will be equal to your Contract's death benefit amount. All Contract provisions, including any death benefit riders you selected, will continue as if your spouse purchased the Contract on the Death Benefit Date with a deposit equal to the death benefit amount. For purposes of calculating the death benefits and expenses from that date forward, your spouse's age on the original effective date of the Contract will be used. Upon surrender or annuitization, this step-up to the spouse will not be treated as premium, but will be treated as income. 10. OTHER INFORMATION FREE LOOK. Depending upon applicable state or federal law, if you cancel your Contract within 10 days after receiving it, we will send you the value of your Contract as of the day we received your cancellation request (this may be more or less than the original purchase payment) and we will not *See Section 6. "Taxes" if this Optional Death Benefit is being considered for an IRA plan. 8 deduct a withdrawal charge. However, based upon applicable state or federal law, we will refund the full amount of any purchase payment(s) we receive and the "free look" period may be greater than 10 days. NO PROBATE. In most cases, when you die, the beneficiary will receive the death benefit without going through probate. However, avoiding probate does not mean that the beneficiary will not have a tax liability as a result of receiving the death benefit. WHO SHOULD PURCHASE A CONTRACT? The Contract is designed for those seeking long-term tax-deferred accumulation of assets and annuity features, generally for retirement or other long-term investment purposes. The tax-deferred feature is most attractive to purchasers in high federal and state income tax brackets. You should note that qualified retirement investments automatically provide tax deferral regardless of whether or not the underlying contract is an annuity. You should not buy a Contract if you are looking for a short-term investment or if you do not wish to risk a decrease in the value of your investment. If this Contract is being considered as a replacement of another contract, you should compare this Contract's benefits and charges against the benefits and charges of the contract that is being replaced. CONFIRMATIONS AND QUARTERLY STATEMENTS. You will receive a confirmation or an acknowledgment of transactions within your Contract, except for those transactions which are part of an automated program, such as Dollar-Cost Averaging, Asset Allocation, Systematic Withdrawal and/or Portfolio Rebalancing. On a quarterly basis, you will receive a complete statement of your transactions over the past quarter and a summary of your Account values at the end of that period. ADDITIONAL FEATURES. The Contract offers the following additional convenient features, which you may choose at no extra charge. These features may be started or discontinued at any time by either you or the Company; however, we may require up to a 30-day notice. DOLLAR-COST AVERAGING -- This program lets you invest gradually in up to 12 Sub-Accounts. ASSET ALLOCATION -- This program rebalances your Account balance based on the terms of the program. Different asset allocation models may be available over the lifetime of the Contract; however, only one program can be in effect at any one time. SYSTEMATIC WITHDRAWAL PROGRAM -- This program allows you to receive monthly, quarterly, semi-annual or annual payments during the Accumulation Phase. PORTFOLIO REBALANCING PROGRAM -- Under this program, we automatically reallocate your investments in the Sub-Accounts to maintain the proportions you select. You can elect rebalancing on a quarterly, semi-annual or annual basis. SECURED FUTURE PROGRAM -- This program guarantees the return of your purchase payment by investing a portion of your investment into a Guarantee Period, and also allows you to allocate a portion of your investment to one or more Sub-Accounts. 11. INQUIRIES If you would like more information about buying a Contract, please contact your broker or registered representative. If you have any other questions, please contact us at: SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) C/O RETIREMENT PRODUCTS AND SERVICES P.O. BOX 1024 BOSTON, MASSACHUSETTS 02103 TELEPHONE: TOLL FREE (800) 752-7215 9 PROSPECTUS MAY 1, 2001 MFS REGATTA CHOICE Sun Life Assurance Company of Canada (U.S.) and Sun Life of Canada (U.S.) Variable Account F offer the flexible payment deferred annuity contracts and certificates described in this Prospectus to groups and individuals. You may choose among 31 variable investment options and a range of fixed options. The variable options are Sub-Accounts in the Variable Account, each of which invests in one of the following series of the MFS/Sun Life Series Trust (the "Funds"). The MFS/Sun Life Series Trust (the "Series Fund") is a mutual fund advised by our affiliate, Massachusetts Financial Services Company: Bond Series Managed Sectors Series Capital Appreciation Series Massachusetts Investors Growth Stock Series Capital Opportunities Series Massachusetts Investors Trust Series Emerging Growth Series Mid Cap Growth Series Emerging Markets Equity Series Money Market Series Global Asset Allocation Series New Discovery Series Global Governments Series Research Series Global Growth Series Research Growth and Income Series Global Health Sciences Series Research International Series Global Telecommunications Series Strategic Growth Series Global Total Return Series Strategic Income Series Government Securities Series Technology Series High Yield Series Total Return Series International Growth Series Utilities Series International Investors Trust Series Value Series International New Discovery Series
The fixed account options are available for specified time periods, called Guarantee Periods, and pay interest at a guaranteed rate for each period. THIS PROSPECTUS MUST BE ACCOMPANIED BY A CURRENT PROSPECTUS FOR THE SERIES FUND. PLEASE READ THIS PROSPECTUS AND THE SERIES FUND PROSPECTUS CAREFULLY BEFORE INVESTING AND KEEP THEM FOR FUTURE REFERENCE. THEY CONTAIN IMPORTANT INFORMATION ABOUT THE CONTRACTS AND THE FUNDS. We have filed a Statement of Additional Information dated May 1, 2001 (the "SAI") with the Securities and Exchange Commission (the "SEC"), which is incorporated by reference in this Prospectus. The table of contents for the SAI is on page ___ of this Prospectus. You may obtain a copy without charge by writing to us at the address shown below (which we sometimes refer to as our "Annuity Mailing Address") or by telephoning (800) 752-7215. In addition, the SEC maintains a website (http://www.sec.gov) that contains the SAI, material incorporated by reference, and other information regarding companies that file with the SEC. THE CONTRACTS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ANY REFERENCE IN THIS PROSPECTUS TO RECEIPT BY US MEANS RECEIPT AT THE FOLLOWING ADDRESS: SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) C/O RETIREMENT PRODUCTS AND SERVICES P.O. BOX 1024 BOSTON, MASSACHUSETTS 02103 TABLE OF CONTENTS
PAGE Special Terms 4 Expense Summary 4 Summary of Contract Expenses 4 Underlying Fund Annual Expenses 5 Examples 7 Condensed Financial Information 11 The Annuity Contract 11 Communicating To Us About Your Contract 11 Sun Life Assurance Company of Canada (U.S.) 12 The Variable Account 12 Variable Account Options: The Funds 12 The Fixed Account 15 The Fixed Account Options: The Guarantee Periods 15 The Accumulation Phase 15 Issuing Your Contract 16 Amount and Frequency of Purchase Payments 16 Allocation of Net Purchase Payments 16 Your Account 16 Your Account Value 16 Variable Account Value 16 Fixed Account Value 17 Transfer Privilege 18 Waivers; Reduced Charges; Credits; Special Guaranteed Interest Rates 19 Optional Programs 20 Withdrawals, Withdrawal Charge and Market Value Adjustment 21 Cash Withdrawals 21 Withdrawal Charge 22 Types of Withdrawals Not Subject to Withdrawal Charge 24 Market Value Adjustment 24 Contract Charges 25 Account Fee 25 Administrative Expense Charge 26 Mortality and Expense Risk Charge 26 Charges for Optional Death Benefit Riders 26 Premium Taxes 26 Fund Expenses 27 Modification in the Case of Group Contracts 27 Death Benefit 27 Amount of Death Benefit 27 The Basic Death Benefit 27 Optional Death Benefit Riders 28 Spousal Continuance 30 Calculating the Death Benefit 30 Method of Paying Death Benefit 30 Non-Qualified Contracts 31 Selection and Change of Beneficiary 31 Payment of Death Benefit 31 Due Proof of Death 31 The Income Phase -- Annuity Provisions 31 Selection of the Annuitant or Co-Annuitant 32 Selection of the Annuity Commencement Date 32 Annuity Options 33 Selection of Annuity Option 33 Amount of Annuity Payments 34 Exchange of Variable Annuity Units 35 Account Fee 35 Annuity Payment Rates 35
2 Annuity Options as Method of Payment for Death Benefit 35 Other Contract Provisions 35 Exercise of Contract Rights 35 Change of Ownership 36 Voting of Fund Shares 36 Periodic Reports 37 Substitution of Securities 37 Change in Operation of Variable Account 37 Splitting Units 38 Modification 38 Discontinuance of New Participants 38 Reservation of Rights 38 Right to Return 38 Tax Considerations 39 U.S. Federal Income Tax Considerations 39 DEDUCTIBILITY OF PURCHASE PAYMENTS 39 PRE-DISTRIBUTION TAXATION OF CONTRACTS 39 DISTRIBUTIONS AND WITHDRAWALS FROM NON-QUALIFIED CONTRACTS 39 DISTRIBUTION AND WITHDRAWALS FROM QUALIFIED CONTRACTS 40 WITHHOLDING 41 INVESTMENT DIVERSIFICATION AND CONTROL 41 TAX TREATMENT OF THE COMPANY AND THE VARIABLE ACCOUNT 41 QUALIFIED RETIREMENT PLANS 41 PENSION AND PROFIT-SHARING PLANS 41 TAX-SHELTERED ANNUITIES 42 INDIVIDUAL RETIREMENT ACCOUNTS 42 ROTH IRAS 42 STATUS OF OPTIONAL DEATH BENEFIT RIDERS 42 Puerto Rico Tax Considerations 43 Administration of the Contract 43 Distribution of the Contract 43 Performance Information 44 Available Information 45 Incorporation of Certain Documents by Reference 45 State Regulation 46 Legal Proceedings 46 Accountants 46 Financial Statements 46 Table of Contents of Statement of Additional Information 47 Appendix A -- Glossary 49 Appendix B -- Withdrawals, Withdrawal Charges and the Market Value Adjustment 52 Appendix C -- Calculation of Basic Death Benefit 55 Appendix D -- Calculation of Earnings Enhancement Optional Death Benefit Rider 56 Appendix E -- Calculation of Death Benefit When EEB and MAV and 5% Roll-Up Riders are Selected 57 Appendix F -- Calculation of Earnings Enhancement Plus Optional Death Benefit 58 Appendix G -- Calculation of Earnings Enhancement Plus With MAV Optional Death Benefit 59 Appendix H -- Calculation of Earnings Enhancement Plus With 5% Roll-up Optional Death Benefit 60 Appendix I -- Condensed Financial Information -- Accumulation Unit Values 61
3 SPECIAL TERMS Your Contract is a legal document that uses a number of specially defined terms. We explain most of the terms that we use in this Prospectus in the context where they arise, and some are self-explanatory. In addition, for convenient reference, we have compiled a list of these terms in the Glossary included at the back of this Prospectus as Appendix A. If, while you are reading this Prospectus, you come across a term that you do not understand, please refer to the Glossary for an explanation. EXPENSE SUMMARY The purpose of the following table is to help you understand the costs and expenses that you will bear directly and indirectly under a Contract WHEN YOU ALLOCATE MONEY TO THE VARIABLE ACCOUNT. The table reflects expenses of the Variable Account as well as of each Fund. The table should be considered together with the narrative provided under the heading "Contract Charges" in this Prospectus, and with the Funds' prospectus(es). In addition to the expenses listed below, we may deduct premium taxes, where required by state law. SUMMARY OF CONTRACT EXPENSES TRANSACTION EXPENSES Sales Load Imposed on Purchase Payments..................... $ 0 Deferred Sales Load (as a percentage of Purchase Payments withdrawn) (1) Number of complete Account Years Purchase Payment in Account 0-1..................................................... 7% 1-2..................................................... 7% 2-3..................................................... 6% 3-4..................................................... 6% 4-5..................................................... 5% 5-6..................................................... 4% 6-7..................................................... 3% 7 or more............................................... 0% Transfer Fee (2)............................................ $ 15 ANNUAL ACCOUNT FEE per Contract or Certificate (3).......... $ 50 VARIABLE ACCOUNT ANNUAL EXPENSES (as a percentage of average Variable Account assets)
FOR CONTRACTS WITH AN INITIAL FOR CONTRACTS WITH AN INITIAL PURCHASE PAYMENT PURCHASE PAYMENT LESS THAN $1,000,000: OF $1,000,000 OR MORE: Mortality and Expense Risks Mortality and Expense Risks Charge (4).............................. 1.00% Charge (4).............................. 0.85% Administrative Expenses Charge.......... 0.15% Administrative Expenses Charge.......... 0.15% ==== ==== Total Variable Annuity Annual Expenses.. 1.15% Total Variable Annuity Annual Expenses.. 1.00% DEATH BENEFIT CHARGE (if one or more of the optional death benefit riders is elected)
% OF AVERAGE RIDER(S) ELECTED(5) DAILY VALUE ------------------- ------------ "EEB" 0.15% "MAV" 0.15% "5% Roll-Up" 0.15% "EEB" and "MAV" 0.25% "EEB" and "5% Roll-Up" 0.25% "MAV" and "5% Roll-Up" 0.25% "EEB Plus" 0.25% "EEB" and "MAV" and "5% Roll-Up" 0.40% "EEB Plus MAV" 0.40% "EEB Plus 5% Roll-Up" 0.40%
------------------------ (1) A portion of your Account may be withdrawn each year without imposition of any withdrawal charge and, after a Purchase Payment has been in your Account for 7 Account Years, it may be withdrawn free of the withdrawal charge. (2) Currently, we impose no fee upon transfers; however, we reserve the right to impose a fee of up to $15 per transfer. In addition, a Market Value Adjustment may be imposed on amounts transferred from or within the Fixed Account. (3) The annual Account Fee is currently $35. After the fifth Account Year, the fee may be changed annually, but it will never exceed $50. (4) We will assess an additional 0.25% during the Income Phase on Contracts that annuitize before their seventh Contract Anniversary. (5) The optional death benefit riders are defined under "Death Benefit." 4 UNDERLYING FUND ANNUAL EXPENSES (1) (AS A PERCENTAGE OF FUND NET ASSETS)
TOTAL ANNUAL FUND OTHER FUND EXPENSES AFTER MANAGEMENT EXPENSES AFTER AND BEFORE FUND FEES REIMBURSEMENT(2) REIMBURSEMENT(2) ---- ---------- ---------------- ----------------- Bond Series................................... 0.60% 0.12% 0.72% Capital Appreciation Series................... 0.71% 0.04% 0.75% Capital Opportunities Series.................. 0.71% 0.08% 0.79% Emerging Growth Series........................ 0.69% 0.05% 0.74% Emerging Market Series........................ 1.25% 0.32% 1.57% Global Asset Allocation Series................ 0.75% 0.15% 0.90% Global Governments Series..................... 0.75% 0.19% 0.94% Global Growth Series.......................... 0.90% 0.14% 1.04% Global Health Sciences Series (3)............. 1.00% 0.25% 1.25 % [1.46%] Global Telecommunications Series (3).......... 1.00% 0.28% 1.28 % [8.50%] Global Total Return Series.................... 0.75% 0.16% 0.91% Government Securities Series.................. 0.55% 0.07% 0.62% High Yield Series............................. 0.75% 0.08% 0.83% International Growth Series................... 0.98% 0.26% 1.24% International Investors Trust Series.......... 0.98% 0.23% 1.21% International New Discoveries Series (3)...... 0.98% 0.25% 1.23 % [1.44%] Managed Sectors Series........................ 0.71% 0.05% 0.76% Massachusetts Investors Growth Stock Series... 0.75% 0.06% 0.81% Massachusetts Investors Trust Series.......... 0.55% 0.05% 0.60% Mid Cap Growth Series (3)..................... 0.75% 0.14% 0.89% Money Market Series........................... 0.50% 0.08% 0.58% New Discovery Series.......................... 0.90% 0.09% 0.99% Research Series............................... 0.69% 0.05% 0.74% Research Growth and Income Series............. 0.75% 0.13% 0.88% Research International Series................. 1.00% 0.28% 1.28% Strategic Growth Series....................... 0.75% 0.19% 0.94% Strategic Income Series....................... 0.75% 0.23% 0.98% Technology Series (3)......................... 0.75% 0.17% 0.92% Total Return Series........................... 0.66% 0.04% 0.70% Utilities Series.............................. 0.72% 0.08% 0.80% Value Series.................................. 0.75% 0.12% 0.87%
------------------------ (1) The information relating to Fund expenses was provided by the Fund and we have not independently verified it. You should consult the Fund prospectus for more information about Fund expenses. All expense figures are shown after expense reimbursements or waivers, except for the bracketed figures which show what the expense figures would have been absent reimbursement. All expense figures are based on actual expenses for the fiscal year ended December 31, 2000, except that the expense figures shown for Funds with less than 12 months of investment experience are estimates for the year 2001. Such Funds include the Global Health Sciences Series, Global Telecommunications Series, International New Discovery Series, the Mid Cap Growth Series, and the Technology Series. 5 (2) Each Fund has an expense offset arrangement which reduces the Fund's custodian fee based upon the amount of cash maintained by the Fund with its custodian and dividend disbursing agent. Each Fund may enter into such other arrangements and directed brokerage arrangements (which would also have the effect of reducing the Fund's expenses). Any such fee reductions are not reflected under "Other Fund Expenses" in the table. Had these fee reimbursements been taken into account, "Total Annual Fund Expenses" for certain of the Funds would be as follows: Bond Series................................................. 0.70% Capital Appreciation Series................................. 0.74% Emerging Growth Series...................................... 0.73% Emerging Markets Equity Series.............................. 1.55% Global Asset Allocation Series.............................. 0.89% Global Governments Series................................... 0.93% Global Growth Series........................................ 1.03% Global Telecommunications Series............................ 1.25% Global Total Return Series.................................. 0.90% High Yield Series........................................... 0.82% International Growth Series................................. 1.23% Massachusetts Investors Trust Series........................ 0.59% Mid Cap Growth Series....................................... 0.87% Research Growth and Income Series........................... 0.87% Research International Series............................... 1.27% Strategic Growth Series..................................... 0.92% Strategic Income Series..................................... 0.96% Technology Series........................................... 0.90% Total Return Series......................................... 0.69% Utilities Series............................................ 0.79% Value Series................................................ 0.86%
(3) MFS has contractually agreed to bear the expenses of the Global Health Series, Global Telecommunications Series, and International New Discovery Series such that "Other Fund Expenses," after taking into account the expense offset arrangement described in Footnote (2), above, do not exceed 0.25% annually. These contractual fee arrangements will continue until at least May 1, 2002, unless changed with the consent of the Series Fund's Board of Directors; provided, however, that a Fund's contractual fee arrangement will terminate prior to May 1, 2002, in the event that the Fund's "Other Fund Expenses" equal or fall below 0.25% annually. 6 EXAMPLES If you surrender your Contract at the end of the applicable time period, you would pay the following expenses on a $1,000 investment, assuming an average Contract size of $35,000, a 5% annual return, and no optional death benefit riders have been elected:
1 YEAR 3 YEARS 5 YEARS 10 YEARS -------- -------- -------- -------- Bond Series................................................. $82 $118 $156 $232 Capital Appreciation Series................................. $82 $119 $158 $235 Capital Opportunities Series................................ $82 $120 $160 $239 Emerging Growth Series...................................... $82 $119 $157 $234 Emerging Markets Equity Series.............................. $90 $142 $197 $317 Global Asset Allocation Series.............................. $83 $124 $165 $251 Global Governments Series................................... $84 $125 $167 $255 Global Growth Series........................................ $85 $128 $172 $265 Global Health Sciences Series............................... $87 $133 $182 $286 Global Telecommunications Series............................ $87 $134 $184 $289 Global Total Return Series.................................. $83 $124 $166 $252 Government Securities Series................................ $81 $116 $151 $222 High Yield Series........................................... $83 $122 $162 $244 International Growth Series................................. $86 $133 $182 $285 International Investors Trust Series........................ $86 $132 $180 $282 International New Discovery Series.......................... $86 $133 $181 $284 Managed Sectors Series...................................... $82 $120 $158 $236 Massachusetts Investors Growth Stock Series................. $82 $121 $161 $242 Massachusetts Investors Trust Series........................ $80 $115 $150 $220 Mid Cap Growth Series....................................... $83 $123 $165 $250 Money Market Series......................................... $80 $114 $149 $217 New Discovery Series........................................ $84 $126 $170 $260 Research Series............................................. $82 $119 $157 $234 Research Growth and Income Series........................... $83 $123 $164 $249 Research International Series............................... $87 $134 $184 $289 Strategic Growth Series..................................... $84 $125 $167 $255 Strategic Income Series..................................... $84 $126 $169 $259 Technology Series........................................... $83 $124 $166 $253 Total Return Series......................................... $81 $118 $155 $230 Utilities Series............................................ $82 $121 $160 $240 Value Series................................................ $83 $123 $164 $248
7 If you surrender your Contract at the end of the applicable time period, you would pay the following expenses on a $1,000 investment, assuming an average Contract size of $35,000, a 5% annual return, and the EEB Plus MAV optional death benefit rider has been elected:
1 YEAR 3 YEARS 5 YEARS 10 YEARS -------- -------- -------- -------- Bond Series................................................. $85 $130 $176 $273 Capital Appreciation Series................................. $86 $131 $177 $276 Capital Opportunities Series................................ $86 $132 $179 $280 Emerging Growth Series...................................... $86 $130 $177 $275 Emerging Markets Equity Series.............................. $93 $153 $215 $354 Global Asset Allocation Series.............................. $87 $135 $184 $291 Global Governments Series................................... $87 $136 $186 $295 Global Growth Series........................................ $88 $139 $191 $305 Global Health Sciences Series............................... $90 $145 $201 $325 Global Telecommunications Series............................ $91 $145 $202 $328 Global Total Return Series.................................. $87 $135 $185 $292 Government Securities Series................................ $84 $127 $171 $263 High Yield Series........................................... $86 $133 $181 $284 International Growth Series................................. $90 $144 $200 $324 International Investors Trust Series........................ $90 $144 $199 $321 International New Discovery Series.......................... $90 $144 $200 $323 Managed Sectors Series...................................... $86 $131 $178 $277 Massachusetts Investors Growth Stock Series................. $86 $132 $180 $282 Massachusetts Investors Trust Series........................ $84 $126 $170 $261 Mid Cap Growth Series....................................... $87 $135 $184 $290 Money Market Series......................................... $84 $126 $169 $259 New Discovery Series........................................ $88 $137 $189 $300 Research Series............................................. $86 $130 $177 $275 Research Growth and Income Series........................... $87 $134 $184 $289 Research International Series............................... $91 $145 $202 $328 Strategic Growth Series..................................... $87 $136 $186 $295 Strategic Income Series..................................... $88 $137 $188 $299 Technology Series........................................... $87 $135 $185 $293 Total Return Series......................................... $85 $129 $175 $271 Utilities Series............................................ $86 $132 $180 $281 Value Series................................................ $87 $134 $183 $288
8 If you do NOT surrender your Contract at the end of the applicable time period, you would pay the following expenses on a $1,000 investment, assuming an average Contract size of $35,000, a 5% annual return and no option death benefit riders have been elected:
1 YEAR 3 YEARS 5 YEARS 10 YEARS -------- -------- -------- -------- Bond Series................................................. $20 $62 $106 $232 Capital Appreciation Series................................. $20 $63 $108 $235 Capital Opportunities Series................................ $21 $64 $110 $239 Emerging Growth Series...................................... $20 $62 $107 $234 Emerging Markets Equity Series.............................. $29 $87 $149 $317 Global Asset Allocation Series.............................. $22 $67 $115 $251 Global Governments Series................................... $22 $69 $117 $255 Global Growth Series........................................ $23 $72 $123 $265 Global Health Sciences Series............................... $25 $78 $133 $286 Global Telecommunications Series............................ $26 $79 $135 $289 Global Total Return Series.................................. $22 $68 $116 $252 Government Securities Series................................ $19 $59 $101 $222 High Yield Series........................................... $21 $65 $112 $244 International Growth Series................................. $25 $78 $133 $285 International Investors Trust Series........................ $25 $77 $131 $282 International New Discovery Series.......................... $25 $77 $132 $284 Managed Sectors Series...................................... $20 $63 $108 $236 Massachusetts Investors Growth Stock Series................. $21 $65 $111 $242 Massachusetts Investors Trust Series........................ $19 $58 $100 $220 Mid Cap Growth Series....................................... $22 $67 $115 $250 Money Market Series......................................... $19 $58 $ 99 $217 New Discovery Series........................................ $23 $70 $120 $260 Research Series............................................. $20 $62 $107 $234 Research Growth and Income Series........................... $22 $67 $114 $249 Research International Series............................... $26 $79 $135 $289 Strategic Growth Series..................................... $22 $69 $117 $255 Strategic Income Series..................................... $23 $70 $119 $259 Technology Series........................................... $22 $68 $116 $253 Total Return Series......................................... $20 $61 $105 $230 Utilities Series............................................ $21 $64 $110 $240 Value Series................................................ $22 $66 $114 $248
9 If you do NOT surrender your Contract at the end of the applicable time period, you would pay the following expenses on a $1,000 investment, assuming an average Contract size of $35,000, a 5% annual return, and the EEB Plus MAV optional death benefit rider has been elected:
1 YEAR 3 YEARS 5 YEARS 10 YEARS -------- -------- -------- -------- Bond Series................................................. $24 $74 $127 $273 Capital Appreciation Series................................. $24 $75 $128 $276 Capital Opportunities Series................................ $25 $76 $130 $280 Emerging Growth Series...................................... $24 $75 $128 $275 Emerging Markets Series..................................... $32 $99 $168 $354 Global Asset Allocation Series.............................. $26 $79 $136 $291 Global Governments Series................................... $26 $81 $138 $295 Global Growth Series........................................ $27 $84 $142 $305 Global Health Sciences Series............................... $29 $90 $153 $325 Global Telecommunications Series............................ $30 $91 $154 $328 Global Total Return Series.................................. $26 $80 $136 $292 Government Securities Series................................ $23 $71 $122 $263 High Yield Series........................................... $25 $77 $132 $284 International Growth Series................................. $29 $89 $152 $324 International Investors Trust Series........................ $29 $89 $151 $321 International New Discovery Series.......................... $29 $89 $152 $323 Managed Sectors Series...................................... $24 $75 $129 $277 Massachusetts Investors Growth Stock Series................. $25 $77 $131 $282 Massachusetts Investors Trust Series........................ $23 $70 $120 $261 Mid Cap Growth Series....................................... $26 $79 $135 $290 Money Market Series......................................... $23 $70 $119 $259 New Discovery Series........................................ $27 $82 $140 $300 Research Series............................................. $24 $75 $128 $275 Research Growth and Income Series........................... $26 $79 $135 $289 Research International Series............................... $30 $91 $154 $328 Strategic Growth Series..................................... $26 $81 $138 $295 Strategic Income Series..................................... $27 $82 $140 $299 Technology Series........................................... $26 $80 $137 $293 Total Return Series......................................... $24 $73 $126 $271 Utilities Series............................................ $25 $76 $131 $281 Value Series................................................ $26 $78 $134 $288
THE EXAMPLES SHOULD NOT BE CONSIDERED TO BE REPRESENTATIONS OF PAST OR FUTURE EXPENSES, AND ACTUAL EXPENSES MAY BE GREATER OR LOWER THAN THOSE SHOWN. THE EXAMPLES ASSUME THAT ALL CURRENT WAIVERS AND REIMBURSEMENTS CONTINUE THROUGHOUT ALL PERIODS. 10 CONDENSED FINANCIAL INFORMATION Historical information about the value of the units we use to measure the variable portion of your Contract ("Variable Accumulation Units") is included in the back of this Prospectus as Appendix I. THE ANNUITY CONTRACT Sun Life Assurance Company of Canada (U.S.) (the "Company", "we" or "us") and Sun Life of Canada (U.S.) Variable Account F (the "Variable Account") offer the Contract to groups and individuals for use in connection with their retirement plans. The Contract is available on a group basis and, in certain states, may be available on an individual basis. We issue an Individual Contract directly to the individual owner of the Contract. We issue a Group Contract to the Owner, covering all individuals participating under the Group Contract; each individual receives a Certificate that evidences his or her participation under the Group Contract. In this Prospectus, unless we state otherwise, we refer to both the owners of Individual Contracts and participating individuals under Group Contracts as "Participants" and we address all Participants as "you"; we use the term "Contracts" to include Individual Contracts, Group Contracts, and Certificates issued under Group Contracts. For the purpose of determining benefits under both Individual Contracts and Group Contracts, we establish an Account for each Participant, which we will refer to as "your" Account or a "Participant Account." Your Contract provides a number of important benefits for your retirement planning. It has an Accumulation Phase, during which you make payments under the Contract and allocate them to one or more Variable Account or Fixed Account options, and an Income Phase, during which we make annuity payments based on the amount you have accumulated. Your Contract provides tax deferral, so that you do not pay taxes on your earnings under your Contract until you withdraw them. It provides a basic death benefit if you die during the Accumulation Phase. You may enhance the basic death benefit by electing one or more optional death benefit riders and paying an additional charge for each optional death benefit rider you elect. Finally, if you so elect, during the Income Phase we will make annuity payments to you or someone else for life or for another period that you choose. You choose these benefits on a variable or fixed basis or a combination of both. When you choose Variable Account investment options or a Variable Annuity option, your benefits will be responsive to changes in the economic environment, including inflationary forces and changes in rates of return available from different types of investments. With these variable options, you assume all investment risk under your Contract. When you choose a Guarantee Period in our Fixed Account or a Fixed Annuity option, we assume the investment risk, except in the case of early withdrawals in the Accumulation Phase, where you bear the risk of unfavorable interest rate changes. You also bear the risk that the interest rates we will offer in the future and the rates we will use in determining your Fixed Annuity might not exceed our minimum guaranteed rate, which is 3% per year during the Accumulation Phase and 2.5% per year during the Income Phase, compounded annually. The Contract is designed for use in connection with retirement and deferred compensation plans, some of which qualify for favorable federal income tax treatment under Sections 401, 403, 408 or 408A of the Internal Revenue Code. The Contract is also designed so that it may be used in connection with certain non-tax-qualified retirement plans, such as payroll savings plans and such other groups (trusteed or nontrusteed) as may be eligible under applicable law. We refer to Contracts used with plans that receive favorable tax treatment as "Qualified Contracts," and all other Contracts as "Non-Qualified Contracts." COMMUNICATING TO US ABOUT YOUR CONTRACT All materials sent to us, including Purchase Payments, must be sent to our Annuity Mailing Address as set forth on the first page of this Prospectus. For all telephone communications, you must call (800) 752-7215. Unless this Prospectus states differently, we will consider all materials sent to us and all telephone communications to be received on the date we actually receive them at our Annuity Mailing 11 Address. However, we will consider all financial transactions, including Purchase Payments, withdrawal requests and transfer instructions, to be received on the next Business Day if we receive them (1) on a day that is not a Business Day or (2) after 4:00 p.m., Eastern Time. When we specify that notice to us must be in writing, we reserve the right, at our sole discretion, to accept notice in another form. SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) We are a stock life insurance company incorporated under the laws of Delaware on January 12, 1970. We do business in 49 states, the District of Columbia, and Puerto Rico, and we have an insurance company subsidiary that does business in New York. Our Executive Office mailing address is One Sun Life Executive Park, Wellesley Hills, Massachusetts 02481. We are an indirect wholly-owned subsidiary of Sun Life Assurance Company of Canada ("Sun Life (Canada)"). Sun Life (Canada) completed its demutualization on March 22, 2000. As a result of the demutualization, a new holding company, Sun Life Financial Services of Canada Inc. ("Sun Life Financial"), is now the ultimate parent of Sun Life (Canada) and the Company. Sun Life Financial, a corporation organized in Canada, is a reporting company under the Securities Exchange Act of 1934 with common shares listed on the Toronto, New York, London, and Manila stock exchanges. THE VARIABLE ACCOUNT We established the Variable Account as a separate account on July 13, 1989, pursuant to a resolution of our Board of Directors.The Variable Account funds the Contract and various other variable annuity and variable life insurance product contracts which we offer. These other products may have features, benefits and charges that are different from those under the Contract. Under Delaware insurance law and the Contract, the income, gains or losses of the Variable Account are credited to or charged against the assets of the Variable Account without regard to the other income, gains, or losses of the Company. These assets are held in relation to the Contract and other variable annuity and variable life insurance contracts that provide benefits that vary in accordance with the investment performance of the Variable Account. Although the assets maintained in the Variable Account will not be charged with any liabilities arising out of any other business we conduct, all obligations arising under a Contract, including the promise to make annuity payments, are general corporate obligations of the Company. The assets of the Variable Account are divided into Sub-Accounts. Each Sub-Account invests exclusively in shares of a specific Fund. All amounts allocated to the Variable Account will be used to purchase Fund shares as designated by you at their net asset value. Any and all distributions made by the Funds with respect to the shares held by the Variable Account will be reinvested to purchase additional Fund shares at their net asset value. Deductions will be made from the Variable Account for cash withdrawals, annuity payments, death benefits, Account Fees, Contract charges against the assets of the Variable Account for the assumption of mortality and expense risks, administrative expenses and any applicable taxes. The Variable Account will be fully invested in Fund shares at all times. VARIABLE ACCOUNT OPTIONS: THE FUNDS The MFS/Sun Life Series Trust (the "Series Fund") is an open-end management investment company registered under the Investment Company Act of 1940. Our affiliate, Massachusetts Financial Services Company ("MFS"), serves as the investment adviser to the Series Fund. The Series Fund is composed of 31 independent portfolios of securities, each of which has separate investment objectives and policies. Shares of the Series Fund are issued in 31 series (each, a "Fund"), each corresponding to one of the portfolios. The Contract provides for investment by the Sub-Accounts in shares of the Funds described below. Additional portfolios may be added to the Series Fund which may or may not be available for investment by the Variable Account. 12 BOND SERIES will mainly seek as high a level of current income as is believed to be consistent with prudent investment risk; its secondary objective is to seek to protect shareholders' capital. CAPITAL APPRECIATION SERIES will seek to maximize capital appreciation by investing in securities of all types, with major emphasis on common stocks. CAPITAL OPPORTUNITIES SERIES will seek capital appreciation. EMERGING GROWTH SERIES will seek long-term growth of capital. EMERGING MARKETS EQUITY SERIES will seek capital appreciation. GLOBAL ASSET ALLOCATION SERIES will seek total return over the long term through investments in equity and fixed income securities and will also seek to have low volatility of share price (I.E., net asset value per share) and reduced risk (compared to an aggressive equity/fixed income portfolio). GLOBAL GOVERNMENTS SERIES will seek to provide moderate current income, preservation of capital and growth of capital by investing in debt obligations that are issued or guaranteed as to principal and interest by either (i) the U.S. Government, its agencies, authorities, or instrumentalities, or (ii) the governments of foreign countries (to the extent that the Fund's adviser believes that the higher yields available from foreign government securities are sufficient to justify the risks of investing in these securities). GLOBAL GROWTH SERIES will seek capital appreciation by investing in securities of companies worldwide growing at rates expected to be well above the growth rate of the overall U.S. economy. GLOBAL HEALTH SCIENCES SERIES will seek capital appreciation. GLOBAL TELECOMMUNICATIONS SERIES will seek to achieve long-term growth of capital. GLOBAL TOTAL RETURN SERIES will seek total return by investing in securities which will provide above average current income (compared to a portfolio invested entirely in equity securities) and opportunities for long-term growth of capital and income. GOVERNMENT SECURITIES SERIES will seek current income and preservation of capital by investing in U.S. Government and U.S. Government-related securities. HIGH YIELD SERIES will seek high current income and capital appreciation by investing primarily in certain low rated or unrated securities (possibly with equity features) of U.S. and foreign issuers. INTERNATIONAL GROWTH SERIES will seek capital appreciation. INTERNATIONAL INVESTORS TRUST SERIES will seek long-term growth of capital with a secondary objective to seek reasonable current income. INTERNATIONAL NEW DISCOVERY SERIES will seek capital appreciation. MANAGED SECTORS SERIES will seek capital appreciation by varying the weighting of its portfolio among 13 industry sectors. MASSACHUSETTS INVESTORS GROWTH STOCK SERIES will seek to provide long-term growth of capital and future income rather than current income. MASSACHUSETTS INVESTORS TRUST SERIES will seek long-term growth of capital with a secondary objective to seek reasonable current income. MID CAP GROWTH SERIES will seek long-term growth of capital. 13 MONEY MARKET SERIES will seek maximum current income to the extent consistent with stability of principal by investing exclusively in money market instruments maturing in less than 13 months. NEW DISCOVERY SERIES will seek capital appreciation. RESEARCH SERIES will seek to provide long-term growth of capital and future income. RESEARCH GROWTH AND INCOME SERIES will seek to provide long-term growth of capital, current income and growth of income. RESEARCH INTERNATIONAL SERIES will seek capital appreciation. STRATEGIC GROWTH SERIES will seek capital appreciation. STRATEGIC INCOME SERIES will seek to provide high current income by investing in fixed income securities and will seek to take advantage of opportunities to realize significant capital appreciation while maintaining a high level of current income. TECHNOLOGY SERIES will seek capital appreciation. TOTAL RETURN SERIES will seek mainly to obtain above-average income (compared to a portfolio entirely invested in equity securities) consistent with prudent employment of capital; its secondary objective is to take advantage of opportunities for growth of capital and income since many securities offering a better than average yield may also possess growth potential. UTILITIES SERIES will seek capital growth and current income (income above that available from a portfolio invested entirely in equity securities) by investing, under normal market conditions, at least 65% of its assets in equity and debt securities of both domestic and foreign companies in the utilities industry. VALUE SERIES will mainly seek capital appreciation and reasonable income. Each Fund pays fees to MFS, as its investment adviser, for services rendered pursuant to investment advisory agreements. MFS also serves as investment adviser to each of the funds in the MFS Family of Funds, and to certain other investment companies established by MFS and/or us. MFS Institutional Advisers, Inc., a wholly-owned subsidiary of MFS, provides investment advice to substantial private clients. MFS and its predecessor organizations have a history of money management dating from 1924. MFS operates as an autonomous organization and the obligation of performance with respect to the investment advisory and underwriting agreements (including supervision of the sub-advisers noted below) is solely that of MFS. We undertake no obligation in this regard. MFS may serve as the investment adviser to other mutual funds which have similar investment goals and principal investment policies and risks as the Funds, and which may be managed by a Fund's portfolio manager(s). While a Fund may have many similarities to these other funds, its investment performance will differ from their investment performance. This is due to a number of differences between the Fund and these similar products, including differences in sales charges, expense ratios and cash flows. The Series Fund also offers its shares to other separate accounts established by the Company and our New York subsidiary in connection with variable annuity and variable life insurance contracts. Although we do not anticipate any disadvantages to this arrangement, there is a possibility that a material conflict may arise between the interests of the Variable Account and one or more of the other separate accounts investing in the Series Fund. A conflict may occur due to differences in tax laws affecting the operations of variable life and variable annuity separate accounts, or some other reason. We and the Series Fund's Board of Trustees will monitor events for such conflicts, and, in the event of a conflict, we will take steps necessary to remedy the conflict, including withdrawal of the Variable Account from participation in the Fund which is involved in the conflict or substitution of shares of other Funds or other mutual funds. 14 MORE COMPREHENSIVE INFORMATION ABOUT THE SERIES FUND AND THE MANAGEMENT, INVESTMENT OBJECTIVES, POLICIES, RESTRICTIONS, EXPENSES AND POTENTIAL RISKS OF EACH FUND MAY BE FOUND IN THE ACCOMPANYING CURRENT SERIES FUND PROSPECTUS. YOU SHOULD READ THE SERIES FUND PROSPECTUS CAREFULLY BEFORE INVESTING. THE STATEMENT OF ADDITIONAL INFORMATION OF THE SERIES FUND IS AVAILABLE BY CALLING (800) 752-7215. THE FIXED ACCOUNT The Fixed Account is made up of all the general assets of the Company other than those allocated to any separate account. Amounts you allocate to Guarantee Periods become part of the Fixed Account, and are available to fund the claims of all classes of our customers, including claims for benefits under the Contracts. We will invest the assets of the Fixed Account in those assets we choose that are allowed by applicable state insurance laws. In general, these laws permit investments, within specified limits and subject to certain qualifications, in federal, state and municipal obligations, corporate bonds, preferred and common stocks, real estate mortgages, real estate and certain other investments. We intend to invest primarily in investment-grade fixed income securities (I.E., rated by a nationally recognized rating service within the 4 highest grades) or instruments we believe are of comparable quality. We are not obligated to invest amounts allocated to the Fixed Account according to any particular strategy, except as may be required by applicable state insurance laws. You will not have a direct or indirect interest in the Fixed Account investments. THE FIXED ACCOUNT OPTIONS: THE GUARANTEE PERIODS You may elect one or more Guarantee Period(s) from those we make available from time to time. We publish Guaranteed Interest Rates for each Guarantee Period offered. We may change the Guaranteed Interest Rates we offer from time to time, but no Guaranteed Interest Rate will ever be less than 3% per year, compounded annually. Also, once we have accepted your allocation to a particular Guarantee Period, we promise that the Guaranteed Interest Rate applicable to that allocation will not change for the duration of the Guarantee Period. We determine Guaranteed Interest Rates at our discretion. We do not have a specific formula for establishing the rates for different Guarantee Periods. Our determination will be influenced by the interest rates on fixed income investments in which we may invest amounts allocated to the Guarantee Periods. We will also consider other factors in determining these rates, including regulatory and tax requirements, sales commissions and administrative expenses borne by us, general economic trends and competitive factors. We cannot predict the level of future interest rates. We may from time to time at our discretion offer special interest rates for new Purchase Payments that are higher than the rates we are then offering for renewals or transfers. Early withdrawals from your allocation to a Guarantee Period, including cash withdrawals, transfers and commencement of an annuity option, may be subject to a Market Value Adjustment, which could decrease or increase the value of your Account. See "Withdrawals, Withdrawal Charge and Market Value Adjustment." THE ACCUMULATION PHASE During the Accumulation Phase of your Contract, you make payments into your Account, and your earnings accumulate on a tax-deferred basis. The Accumulation Phase begins with our acceptance of your first Purchase Payment and ends the Business Day before your Annuity Commencement Date. The Accumulation Phase will end sooner if you surrender your Contract or the "Covered Person" dies before the Annuity Commencement Date. 15 ISSUING YOUR CONTRACT When you purchase a Contract, a completed Application and the initial Purchase Payment are sent to us for acceptance. When we accept an Individual Contract, we issue the Contract to you. When we accept a Group Contract, we issue the Contract to the Owner; we issue a Certificate to you as a Participant. We will credit your initial Purchase Payment to your Account within 2 Business Days of receiving your completed Application. If your Application is not complete, we will notify you. If we do not have the necessary information to complete the Application within 5 Business Days, we will send your money back to you or ask your permission to retain your Purchase Payment until the Application is made complete. Then we will apply the Purchase Payment within 2 Business Days of when the Application is complete. AMOUNT AND FREQUENCY OF PURCHASE PAYMENTS The amount of Purchase Payments may vary; however, we will not accept an initial Purchase Payment of less than $10,000, and each additional Purchase Payment must be at least $1,000, unless we waive these limits. In addition, we will not accept a Purchase Payment if your Account Value is over $2 million, or if the Purchase Payment would cause your Account Value to exceed $2 million, unless we have approved the Payment in advance. Within these limits, you may make Purchase Payments at any time during the Accumulation Phase. ALLOCATION OF NET PURCHASE PAYMENTS You may allocate your Purchase Payments among the different Sub-Accounts and Guarantee Periods we offer, but any allocation to a Guarantee Period must be at least $1,000. Over the life of your Contract, you may allocate amounts among as many as 18 of the available investment options. In your Application, you may specify the percentage of each Purchase Payment to be allocated to each Sub-Account or Guarantee Period. These percentages are called your allocation factors. You may change the allocation factors for future Payments by sending us notice of the change in a form acceptable to us, as required. We will use your new allocation factors for the first Purchase Payment we receive with or after we have received notice of the change, and for all future Purchase Payments, until we receive another change notice. Although it is currently not our practice, we may deduct applicable premium taxes or similar taxes from your Purchase Payments (see "Contract Charges -- Premium Taxes"). In that case, we will credit your Net Purchase Payment, which is the Purchase Payment minus the amount of those taxes. YOUR ACCOUNT When we accept your first Purchase Payment, we establish an Account for you, which we maintain throughout the Accumulation Phase of your Contract. YOUR ACCOUNT VALUE Your Account Value is the sum of the value of the 2 components of your Contract: the Variable Account portion of your Contract ("Variable Account Value") and the Fixed Account portion of your Contract ("Fixed Account Value"). These 2 components are calculated separately, as described below under "Variable Account Value" and "Fixed Account Value." VARIABLE ACCOUNT VALUE VARIABLE ACCUMULATION UNITS In order to calculate your Variable Account Value, we use a measure called a Variable Accumulation Unit for each Sub-Account. Your Variable Account Value is the sum of your Account Value in each Sub-Account, which is the number of your Variable Accumulation Units for that Sub-Account times the value of each Unit. 16 VARIABLE ACCUMULATION UNIT VALUE The value of each Variable Accumulation Unit in a Sub-Account reflects the net investment performance of that Sub-Account. We determine that value once on each day that the New York Stock Exchange is open for trading, at the close of trading, which is currently 4:00 p.m., Eastern Time. (The close of trading is determined by the New York Stock Exchange.) We also may determine the value of Variable Accumulation Units of a Sub-Account on days the Exchange is closed if there is enough trading in securities held by that Sub-Account to materially affect the value of the Variable Accumulation Units. Each day we make a valuation is called a "Business Day." The period that begins at the time Variable Accumulation Units are valued on a Business Day and ends at that time on the next Business Day is called a Valuation Period. On days other than Business Days, the value of a Variable Accumulation Unit does not change. To measure these values, we use a factor -- which we call the Net Investment Factor -- which represents the net return on the Sub-Account's assets. At the end of any Valuation Period, the value of a Variable Accumulation Unit for a Sub-Account is equal to the value of that Sub-Account's Variable Accumulation Units at the end of the previous Valuation Period, multiplied by the Net Investment Factor. We calculate the Net Investment Factor by dividing (1) the net asset value of a Fund share held in the Sub-Account at the end of that Valuation Period, plus the per share amount of any dividend or capital gains distribution made by that Fund during the Valuation Period, by (2) the net asset value per share of the Fund share at the end of the previous Valuation Period; then, for each day in the Valuation Period, we deduct a factor representing the asset-based insurance charges (the mortality and expense risk charges and the administrative expense charge) plus any applicable charge for optional death benefit riders. See "Contract Charges." For a hypothetical example of how we calculate the value of a Variable Accumulation Unit, see the Statement of Additional Information. CREDITING AND CANCELING VARIABLE ACCUMULATION UNITS When we receive an allocation to a Sub-Account either from a Net Purchase Payment or a transfer of Account Value, we credit that amount to your Account in Variable Accumulation Units. Similarly, we cancel Variable Accumulation Units when you transfer or withdraw amounts from a Sub-Account, or when we deduct certain charges under the Contract. We determine the number of Units credited or canceled by dividing the dollar amount by the Variable Accumulation Unit value for that Sub-Account at the end of the Valuation Period during which the transaction or charge is effective. FIXED ACCOUNT VALUE Your Fixed Account value is the sum of all amounts allocated to Guarantee Periods, either from Net Purchase Payments, transfers or renewals, plus interest credited on those amounts, and minus withdrawals, transfers out of Guarantee Periods, and any deductions for charges under the Contract taken from your Fixed Account Value. A Guarantee Period begins the day we apply your allocation and ends when all calendar years (or months if the Guarantee Period is less than one year) in the Guarantee Period (measured from the end of the calendar month in which the amount was allocated to the Guarantee Period) have elapsed. The last day of the Guarantee Period is its Renewal Date. Each additional Purchase Payment, transfer or renewal credited to your Fixed Account Value will result in a new Guarantee Period with its own Renewal Date. Amounts allocated at different times to Guarantee Periods of the same duration may have different Renewal Dates. CREDITING INTEREST We credit interest on amounts allocated to a Guarantee Period at the applicable Guaranteed Interest Rate for the duration of the Guarantee Period. During the Guarantee Period, we credit interest daily at a rate that yields the Guaranteed Interest Rate on an annual effective basis. 17 GUARANTEE AMOUNTS Each separate allocation you make to a Guarantee Period, together with interest credited thereon, is called a Guarantee Amount. Each Guarantee Amount is treated separately for purposes of determining the Market Value Adjustment. We may restrict a Guarantee Period that will extend beyond your Maximum Annuity Commencement Date. Renewals into a Guarantee Period that extend beyond your maximum Annuity Commencement Date will result in an application of a Market Value Adjustment upon annuitization or withdrawals. Each new allocation to a Guarantee Period must be at least $1,000. RENEWALS We will notify you in writing between 45 and 75 days before the Renewal Date for any Guarantee Amount. A new Guarantee Period of the same duration will begin automatically for that Guarantee Amount on the first day following the Renewal Date, unless before the Renewal Date we receive: (1) written notice from you electing a different Guarantee Period from among those we then offer, or (2) instructions to transfer the Guarantee Amount to one or more Sub-Accounts, in accordance with the transfer privilege provisions of the Contract (see "Transfer Privilege"). A Guarantee Amount will not renew into a Guarantee Period that will extend beyond your Maximum Annuity Commencement Date. Unless you notify us otherwise, we will automatically renew your Guarantee Amount into the next available Guarantee Period. EARLY WITHDRAWALS If you withdraw, transfer, or annuitize an allocation to a Guarantee Period 30 days prior to the Renewal Date, we will apply a Market Value Adjustment to the transaction. This could result in an increase or a decrease of your Account Value, depending on interest rates at the time. You bear the risk that you will receive less than your principal if the Market Value Adjustment applies. TRANSFER PRIVILEGE PERMITTED TRANSFERS During the Accumulation Phase, you may transfer all or part of your Account Value to one or more Sub-Accounts or Guarantee Periods then available, subject to the following restrictions: - You may not make more than 12 transfers in any Account Year; - The amount transferred from a Sub-Account must be at least $1,000, unless you are transferring your entire balance in that Sub-Account; - Your Account Value remaining in a Sub-Account must be at least $1,000; - The amount transferred from a Guarantee Period must be the entire Guarantee Amount, except for transfers of interest credited during the current Account Year; - At least 30 days must elapse between transfers to or from Guarantee Periods; - Transfers to or from Sub-Accounts are subject to terms and conditions that may be imposed by the Funds; and - We impose additional restrictions on market timers, which are further described below. These restrictions do not apply to transfers made under an approved dollar-cost averaging program. There is usually no charge imposed on transfers; however, we reserve the right to impose a transfer charge of $15 for each transfer. Transfers out of a Guarantee Period more than 30 days before 18 the Renewal Date or any time after the Renewal Date will be subject to the Market Value Adjustment described below. Under current law, there is no tax liability for transfers. REQUESTS FOR TRANSFERS You may request transfers in writing or by telephone. The telephone transfer privilege is available automatically, and does not require your written election. We will require personal identifying information to process a request for a transfer made by telephone. We will not be liable for following instructions communicated by telephone that we reasonably believe are genuine. Your transfer request will be effective as of the close of the Business Day if we receive your transfer before the earlier of (a) 4:00 p.m. Eastern Time on a Business Day, or (b)the close of the New York Stock Exchange on days that the Stock Exchange closes before 4:00 p.m. Otherwise, your transfer request will be effective on the next Business Day. MARKET TIMERS The Contracts are not designed for professional market timing organizations or other entities using programmed and frequent transfers. If you wish to employ such strategies, you should not purchase a Contract. Accordingly, transfers may be subject to restrictions if exercised by a market timing firm or any other third party authorized to initiate transfer transactions on behalf of multiple Participants. In imposing such restrictions, we may, among other things, not accept (1) the transfer instructions of any agent acting under a power of attorney on behalf of more than one Participant, or (2) the transfer instructions of individual Participants who have executed preauthorized transfer forms that are submitted at the same time by market timing firms or other third parties on behalf of more than one Participant. We will not impose these restrictions unless our actions are reasonably intended to prevent the use of such transfers in a manner that will disadvantage or potentially impair the Contract rights of other Participants. In addition, the Series Fund has reserved the right to temporarily or permanently refuse exchange requests from the Variable Account if, in MFS' judgment, a Fund would be unable to invest effectively in accordance with its investment objective and policies, or would otherwise potentially be adversely affected. In particular, a pattern of exchanges that coincide with a market timing strategy may be disruptive to a Fund and therefore may be refused. Accordingly, the Variable Account may not be in a position to effectuate transfers and may refuse transfer requests without prior notice. We also reserve the right, for similar reasons, to refuse or delay exchange requests involving transfers to or from the Fixed Account. WAIVERS; REDUCED CHARGES; CREDITS; SPECIAL GUARANTEED INTEREST RATES We may reduce or waive the withdrawal charge, mortality and expense risk charges, the administrative service fee or the annual Account Fee, credit additional amounts, or grant special Guaranteed Interest Rates in certain situations. These situations may include sales of Contracts (1) where selling and/or maintenance costs associated with the Contracts are reduced, such as the sale of several Contracts to the same Participant, sales of large Contracts, and certain group sales, and (2) to officers, directors and employees of the Company or its affiliates, registered representatives and employees of broker-dealers with a current selling agreement with the Company and affiliates of such representatives and broker-dealers, employees of affiliated asset management firms, and persons who have retired from such positions ("Eligible Employees") and immediate family members of Eligible Employees. Eligible Employees and their immediate family members may also purchase a Contract without regard to minimum Purchase Payment requirements. For other situations in which withdrawal charges may be waived, see "Withdrawals, Withdrawal Charge and Market Value Adjustment." 19 OPTIONAL PROGRAMS DOLLAR-COST AVERAGING Dollar-cost averaging allows you to invest gradually, over time, in up to 12 Sub-Accounts. You may select a dollar-cost averaging program at no extra charge by allocating a minimum of $1,000 to a designated Sub-Account or to a Guarantee Period we make available in connection with the program. Amounts allocated to the Fixed Account under the program will earn interest at a rate declared by the Company for the Guarantee Period you select. Previously applied amounts may not be transferred to a Guarantee Period made available in connection with this program. At regular time intervals, we will transfer the same amount automatically to one or more Sub-Accounts that you choose, up to a maximum of 12 Sub-Accounts. The program continues until your Account Value allocated to the program is depleted or you elect to stop the program. The final amount transferred from the Fixed Account will include all interest earned. No Market Value Adjustment (either positive or negative) will apply to amounts automatically transferred from the Fixed Account under the dollar-cost averaging program. However, if you discontinue or alter the program prior to completion, amounts remaining in the Fixed Account will be transferred to the Money Market Fund investment option under the Contract, unless you instruct us otherwise, and the Market Value Adjustment will be applied. Any new allocation of a Purchase Payment to the program will be treated as commencing a new dollar-cost averaging program and is subject to the $1,000 minimum. The main objective of a dollar-cost averaging program is to minimize the impact of short-term price fluctuations on Account Value. In general, since you transfer the same dollar amount to the variable investment options at set intervals, dollar-cost averaging allows you to purchase more Variable Accumulation Units (and, indirectly, more Fund shares) when prices are low and fewer Variable Accumulation Units (and, indirectly, fewer Fund shares) when prices are high. Therefore, you may achieve a lower average cost per Variable Accumulation Unit over the long term. A dollar-cost averaging program allows you to take advantage of market fluctuations. However, it is important to understand that a dollar-cost averaging program does not assure a profit or protect against loss in a declining market. We do not allow transfers into any of the Guarantee Periods. ASSET ALLOCATION One or more asset allocation programs may be available in connection with the Contract, at no extra charge. Asset allocation is the process of investing in different asset classes -- such as equity funds, fixed income funds, and money market funds -- depending on your personal investment goals, tolerance for risk, and investment time horizon. By spreading your money among a variety of asset classes, you may be able to reduce the risk and volatility of investing, although there are no guarantees, and asset allocation does not insure a profit or protect against loss in a declining market. Currently, you may select one of 3 asset allocation models, each of which represents a combination of Sub-Accounts with a different level of risk. The available models are: the conservative asset allocation model, the moderate asset allocation model, and the aggressive asset allocation model. Each model allocates a different percentage of Account Value to Sub-Accounts investing in the various asset classes, with the conservative asset allocation model allocating the lowest percentage to Sub-Accounts investing in the equity asset class and the aggressive asset allocation model allocating the highest percentage to the equity asset class. These asset allocation models, as well as the terms and conditions of the asset allocation program, are fully described in a separate brochure. We may add or delete such programs in the future. If you elect an asset allocation program, we will automatically allocate your Purchase Payments among the Sub-Accounts represented in the model you choose. By electing an asset allocation program, you thereby authorize us to automatically reallocate your investment options that participate in the asset allocation program on a quarterly basis, or as determined by the terms of the Asset Allocation Program, to reflect the current composition of the model you have selected, without further instruction, until we receive notification that you wish to terminate the program or choose a different model. 20 SYSTEMATIC WITHDRAWAL PROGRAM If you have an Account Value of $10,000 or more, you may select our Systematic Withdrawal Program. Under this program, you determine the amount and frequency of regular withdrawals you would like to receive from your Fixed Account Value and/or Variable Account Value and we will effect them automatically. The withdrawals under this program may be subject to surrender charges or a Market Value Adjustment. They may also be included as income and subject to a 10% federal tax penalty. You should consult your tax adviser before choosing this option. You may change or stop this program at any time, by written notice to us. PORTFOLIO REBALANCING PROGRAM Under the Portfolio Rebalancing Program, we transfer funds among all Sub-Accounts to maintain the percentage allocation you have selected among these Sub-Accounts. At your election, we will make these transfers on a quarterly, semi-annual or annual basis. Portfolio Rebalancing does not permit transfers to or from any Guarantee Period. SECURED FUTURE PROGRAM Under the Secured Future Program, we divide your Purchase Payments between the Fixed Account and the Variable Account. For the Fixed Account portion, you choose a Guarantee Period from among those we offer. We then allocate to that Guarantee Period the portion of your Purchase Payment necessary so that, at the end of the Guarantee Period, your Fixed Account allocation, including interest, will equal the entire amount of your original Purchase Payment. The remainder of the original Purchase Payment will be invested in the Sub-Accounts of your choice. At the end of the Guarantee Period, you will be guaranteed the amount of your original Purchase Payment (assuming no withdrawals), plus you will have the benefit, if any, of the investment performance of the Sub-Accounts you have chosen. WITHDRAWALS, WITHDRAWAL CHARGE AND MARKET VALUE ADJUSTMENT CASH WITHDRAWALS REQUESTING A WITHDRAWAL At any time during the Accumulation Phase, you may withdraw in cash all or any portion of your Account Value. To make a withdrawal, you must send us a written request at our Annuity Mailing Address. Your request must specify whether you want to withdraw the entire amount of your Account or, if less, the amount you wish to receive. All withdrawals may be subject to a withdrawal charge (see "Withdrawal Charge"), and withdrawals from your Fixed Account Value also may be subject to a Market Value Adjustment (see "Market Value Adjustment"). Withdrawals also may have adverse income tax consequences, including a 10% penalty tax (see "Tax Considerations"). You should carefully consider these tax consequences before requesting a cash withdrawal. FULL WITHDRAWALS If you request a full withdrawal, we calculate the amount we will pay you as follows: We start with the total value of your Account at the end of the Valuation Period during which we receive your withdrawal request; we deduct the Account Fee for the Account Year in which the withdrawal is made; we add or subtract the amount of any Market Value Adjustment applicable to your Fixed Account Value; and finally, we deduct any applicable withdrawal charge. A full withdrawal results in the surrender of your Contract, and cancellation of all rights and privileges under your Contract. 21 PARTIAL WITHDRAWALS If you request a partial withdrawal, we will pay you the actual amount specified in your request and then adjust the value of your Account by deducting the amount paid, adding or deducting any Market Value Adjustment applicable to amounts withdrawn from the Fixed Account, and deducting any applicable withdrawal charge. You may specify the amount you want withdrawn from each Sub-Account and/or Guarantee Amount to which your Account is allocated. If you do not so specify, we will deduct the total amount you request pro rata, based on your Account Value at the end of the Valuation Period during which we receive your request. If you request a partial withdrawal that would result in your Account Value being reduced to an amount less than the Account Fee for the Account Year in which you make the withdrawal, we will treat it as a request for a full withdrawal. TIME OF PAYMENT We will pay you the applicable amount of any full or partial withdrawal within 7 days after we receive your withdrawal request, except in cases where we are permitted, and choose, to defer payment under the Investment Company Act of 1940 and applicable state insurance law. Currently, we may defer payment of amounts you withdraw from the Variable Account only for the following periods: - When the New York Stock Exchange is closed (except weekends and holidays) or when trading on the New York Stock Exchange is restricted; - When it is not reasonably practical to dispose of securities held by a Fund or to determine the value of the net assets of a Fund, because an emergency exists; or - When an SEC order permits us to defer payment for the protection of Participants. We also may defer payment of amounts you withdraw from the Fixed Account for up to 6 months from the date we receive your withdrawal request. We do not pay interest on the amount of any payments we defer. WITHDRAWAL RESTRICTIONS FOR QUALIFIED PLANS If your Contract is a Qualified Contract, you should carefully check the terms of your retirement plan for limitations and restrictions on cash withdrawals. Special restrictions apply to withdrawals from Contracts used for Section 403(b) annuities (see "Tax Considerations -- Tax-Sheltered Annuities"). WITHDRAWAL CHARGE We do not deduct any sales charge from your Purchase Payments when they are made. However, we may impose a withdrawal charge (known as a "contingent deferred sales charge") on certain amounts you withdraw. We impose this charge to defray some of our expenses related to the sale of the Contracts, such as commissions we pay to agents, the cost of sales literature, and other promotional costs and transaction expenses. FREE WITHDRAWAL AMOUNT In each Account Year you may withdraw a portion of your Account Value -- which we call the "free withdrawal amount" -- before incurring the withdrawal charge. For convenience in discussing free withdrawal amounts, we refer to Purchase Payments made during the last 7 Account Years, including the current Account Year, as "New Payments," and we refer to Purchase Payments made before the last 7 Account Years as "Old Payments." 22 For the first Account Year, the free withdrawal amount is equal to 15% of the amount of all Purchase Payments you have made. For all other Account Years, the free withdrawal amount is equal to the greater of: - your Contract's earnings (defined below), minus any free withdrawals taken during the life of your Contract, or - 15% of the amount of all New Payments minus any free withdrawals taken during the current Account Year. Your Contract's earnings are equal to: - your Account Value, minus - all Purchase Payments made plus - all partial withdrawals and charges taken. For an example of how we calculate the "free withdrawal amount," see Appendix B. WITHDRAWAL CHARGE ON PURCHASE PAYMENT If you withdraw more than the free withdrawal amount, we consider the excess amount to be withdrawn first from Payments that you have not previously withdrawn. We impose the withdrawal charge on the amount of New Payments withdrawn. Thus, the maximum amount on which we will impose the withdrawal charge will never exceed the total of New Payments that you have not previously withdrawn. ORDER OF WITHDRAWAL When you take a withdrawal, we liquidate your Contract in the following order: (1) the free withdrawal amount, and (2) unliquidated payments on a first-in, first-out basis. CALCULATION OF WITHDRAWAL CHARGE We calculate the amount of the withdrawal charge by multiplying the Purchase Payments you withdraw by a percentage. The percentage varies according to the number of Account Years the Purchase Payment has been held in your Account, including the Account Year in which you made the Payment, but not the Account Year in which you withdraw it. Each Payment begins a new 7-year period and moves down the declining surrender charge scale as shown below at each Account Anniversary. Payments received during the current Account Year will be charged 7%, if withdrawn. On your next scheduled Account Anniversary, that Payment, along with any other Payments made during that Account Year, will be considered to be in their second Account Year and will have a 7% withdrawal charge. On the next Account Anniversary, these Payments will move into their third Account Year and will have a withdrawal charge of 6%, if withdrawn. This withdrawal charge decreases according to the number of Account Years the Purchase Payment has been held in your Account.
NUMBER OF ACCOUNT YEARS PAYMENT HAS BEEN WITHDRAWAL IN YOUR CONTRACT CHARGE ---------------- ---------- 0-1 7% 1-2 7% 2-3 6% 3-4 6% 4-5 5% 5-6 4% 6-7 3% 7 or more 0%
23 For example, the percentage applicable to withdrawals of a Payment that has been in an Account for more than 2 Account Years but less than 3 will be 6%, regardless of the issue date of the Contract. The withdrawal charge will never be greater than 7% of the Purchase Payments you make under your Contract. For a Group Contract, we may modify the withdrawal charges and limits, upon notice to the Owner of the Group Contract. However, any modification will apply only to Accounts established after the date of the modification. For additional examples of how we calculate withdrawal charges, see Appendix B. TYPES OF WITHDRAWALS NOT SUBJECT TO WITHDRAWAL CHARGE NURSING HOME WAIVER If approved by your state, we will waive the withdrawal charge for a full or partial withdrawal if: - at least one year has passed since we issued your Contract, and - you are confined to an eligible nursing home and have been confined there for at least the preceding 180 days, or any shorter period required by your state. An "eligible nursing home" means a licensed hospital or licensed skilled or intermediate care nursing facility at which medical treatment is available on a daily basis and daily medical records are kept for each patient. You must provide us evidence of confinement in the form we determine. MINIMUM DISTRIBUTIONS For each Qualified Contract, the free withdrawal amount in any Account Year will be the greater of the free withdrawal amount described above or any amounts required to be withdrawn to comply with the minimum distribution requirement of the Internal Revenue Code. This waiver of the withdrawal charge applies only to the portion of the required minimum distribution attributable to that Qualified Contract. OTHER WITHDRAWALS We do not impose the withdrawal charge on amounts you apply to provide an annuity, amounts we pay as a death benefit, except under the Cash Surrender method, or amounts you transfer among the Sub-Accounts, between the Sub-Accounts and the Fixed Account, or within the Fixed Account. MARKET VALUE ADJUSTMENT If permitted under the laws of your state, we will apply a Market Value Adjustment if you withdraw or transfer amounts from your Fixed Account Value more than 30 days before the end of the applicable Guarantee Period. For this purpose, using Fixed Account Value to provide an annuity is considered a withdrawal, and the Market Value Adjustment will apply. However, we will not apply the Market Value Adjustment to automatic transfers to a Sub-Account from a Guarantee Period as part of our dollar-cost averaging program. We apply the Market Value Adjustment separately to each Guarantee Amount in the Fixed Account, that is to each separate allocation you have made to a Guarantee Period together with interest credited on that allocation. However, we do not apply the adjustment to the amount of interest credited during your current Account Year. Any withdrawal from a Guarantee Amount is attributed first to such interest. A Market Value Adjustment may decrease, increase or have no effect on your Account Value. This will depend on changes in interest rates since you made your allocation to the Guarantee Period and the length of time remaining in the Guarantee Period. In general, if the Guaranteed Interest Rate we currently declare for Guarantee Periods equal to the balance of your Guarantee Period (or your 24 entire Guarantee Period for Guarantee Periods of less than one year) is higher than your Guaranteed Interest Rate, the Market Value Adjustment is likely to decrease your Account Value. If our current Guaranteed Interest Rate is lower, the Market Value Adjustment is likely to increase your Account Value. We determine the amount of the Market Value Adjustment by multiplying the amount that is subject to the adjustment by the following formula: N/12 1 + I ( -------- ) - 1 1 + J + b where: I is the Guaranteed Interest Rate applicable to the Guarantee Amount from which you withdraw, transfer or annuitize; J is the Guaranteed Interest Rate we declare at the time of your withdrawal, transfer or annuitization for Guarantee Periods equal to the length of time remaining in the Guarantee Period applicable to your Guarantee Amount, rounded to the next higher number of complete years, for Guarantee Periods of one year or more. For any Guarantee Periods of less than one year, J is the Guaranteed Interest Rate we declare at the time of your withdrawal, transfer or annuitization for a Guarantee Period of the same length as your Guarantee Period. If, at that time, we do not offer the applicable Guarantee Period we will use an interest rate determined by straight-line interpolation of the Guaranteed Interest Rates for the Guarantee Periods we do offer; N is the number of complete months remaining in your Guarantee Period; and b is a factor that currently is 0%, but that in the future we may increase to up to 0.25%. Any increase would be applicable only to Participants who purchase their Contracts after the date of that increase. The "b" factor is the amount that will be used to cover market volatility (I.E., credit risk), basis risk, and/or liquidity costs. We will apply the Market Value Adjustment to the amount being withdrawn after deduction of any Account Fee, if applicable, but before we impose any withdrawal charge on the amount withdrawn. For examples of how we calculate the Market Value Adjustment, see Appendix B. CONTRACT CHARGES ACCOUNT FEE During the Accumulation Phase of your Contract, we will deduct from your Account an annual Account Fee to help cover the administrative expenses we incur related to the issuance of Contracts and the maintenance of Accounts. We deduct the Account Fee on each Account Anniversary. In Account Years 1 through 5, the annual Account Fee is $35. After Account Year 5, we may change the Account Fee each year, but the Account Fee will never exceed $50. We deduct the Account Fee pro rata from each Sub-Account and each Guarantee Period, based on the allocation of your Account Value on your Account Anniversary. We will not charge the Account Fee if: (1) your Account has been allocated only to the Fixed Account during the applicable Account Year; or (2) your Account Value is $75,000 or more on your Account Anniversary. If you make a full withdrawal of your Account, we will deduct the full amount of the Account Fee at the time of the withdrawal. In addition, on the Annuity Commencement Date we will deduct a pro rata portion of the Account Fee to reflect the time elapsed between the last Account Anniversary and the day before the Annuity Commencement Date. 25 After the Annuity Commencement Date, we will deduct an annual Account Fee of $35 in the aggregate in equal amounts from each Variable Annuity payment we make during the year. We do not deduct any Account Fee from Fixed Annuity payments. ADMINISTRATIVE EXPENSE CHARGE We deduct an administrative expense charge from the assets of the Variable Account at an annual effective rate equal to 0.15% during both the Accumulation Phase and the Income Phase. This charge is designed to reimburse us for expenses we incur in administering the Contracts, Participant Accounts and the Variable Account that are not covered by the annual Account Fee. MORTALITY AND EXPENSE RISK CHARGE During both the Accumulation Phase and the Income Phase, we deduct a mortality and expense risk charge from the assets of the Variable Account at an effective annual rate equal to 1.00%, if your initial Purchase Payment was less than $1,000,000, or 0.85% if your initial Purchase Payment was $1,000,000 or more. However, if you annuitize your Contract prior to your eighth Contract Anniversary, we will deduct an additional 0.25% during the Income Phase to offset the increased mortality risk during this phase. The mortality risk we assume arises from our contractual obligation to continue to make annuity payments to each Annuitant, regardless of how long the Annuitant lives and regardless of how long all Annuitants as a group live. This obligation assures each Annuitant that neither the longevity of fellow Annuitants nor an improvement in life expectancy generally will have an adverse effect on the amount of any annuity payment received under the Contract. The mortality risk also arises from our contractual obligation to pay a death benefit upon the death of the Participant prior to the Annuity Commencement Date. The expense risk we assume is the risk that the annual Account Fee and the administrative expense charge we assess under the Contract may be insufficient to cover the actual total administrative expenses we incur. If the amount of the charge is insufficient to cover the mortality and expense risks, we will bear the loss. If the amount of the charge is more than sufficient to cover the risks, we will make a profit on the charge. We may use this profit for any proper corporate purpose, including the payment of marketing and distribution expenses for the Contract. CHARGES FOR OPTIONAL DEATH BENEFIT RIDERS If you elect an optional death benefit rider, we will deduct, during the Accumulation Phase, a charge from the assets of the Variable Account depending upon which of the optional death benefit rider(s) you elect.
% OF AVERAGE RIDER(S) YOU ELECT* DAILY VALUE ------------------------------ ------------ "EEB" 0.15% "MAV" 0.15% "5% Roll-Up" 0.15% "EEB" and "MAV" 0.25% "EEB" and "5% Roll-Up" 0.25% "MAV" and "5% Roll-Up" 0.25% "EEB Plus" 0.25% "EEB" and "MAV" and "5% Roll-Up" 0.40% "EEB Plus MAV" 0.40% "EEB Plus 5% Roll-Up" 0.40%
------------------------ * As defined below PREMIUM TAXES Some states and local jurisdictions impose a premium tax on us that is equal to a specified percentage of the Purchase Payments you make. In many states there is no premium tax. We believe that the amounts of applicable premium taxes currently range from 0% to 3.5%. You should consult a tax adviser to find out if your state imposes a premium tax and the amount of any tax. 26 In order to reimburse us for the premium tax we may pay on Purchase Payments, our policy is to deduct the amount of such taxes from the amount you apply to provide an annuity at the time of annuitization. However, we reserve the right to deduct the amount of any applicable tax from your Account at any time, including at the time you make a Purchase Payment or make a full or partial withdrawal. We do not make any profit on the deductions we make to reimburse premium taxes. FUND EXPENSES There are fees and charges deducted from each Fund. These fees and expenses are described in the Fund prospectus(es) and related Statements of Additional Information. MODIFICATION IN THE CASE OF GROUP CONTRACTS For Group Contracts, we may modify the annual Account Fee, the administrative expense charge and the mortality and expense risk charge upon notice to Owners. However, such modification will apply only with respect to Participant Accounts established after the effective date of the modification. DEATH BENEFIT If the Covered Person dies during the Accumulation Phase, we will pay a death benefit to your Beneficiary, using the payment method elected (a single cash payment or one of our Annuity Options). If the Beneficiary is not living on the date of death of the Covered Person, we will pay the death benefit in one sum to your estate. We do not pay a death benefit if the Covered Person dies during the Income Phase. However, the Beneficiary will receive any annuity payments provided under an Annuity Option that is in effect. If your Contract names more than one Covered Person, we will pay the death benefit upon the first death of such Covered Persons. AMOUNT OF DEATH BENEFIT To calculate the amount of the death benefit, we use a "Death Benefit Date." The Death Benefit Date is the date we receive proof of the death of the Covered Person in an acceptable form ("Due Proof of Death") if you have elected a death benefit payment method before the death of the Covered Person and it remains in effect. Otherwise, the Death Benefit Date is the later of the date we receive Due Proof of Death or the date we receive the Beneficiary's election of either payment method or, if the Beneficiary is your spouse, Contract continuation. If we do not receive the Beneficiary's election within 60 days after we receive Due Proof of Death, we reserve the right to provide a lump sum to your Beneficiary. The amount of the death benefit is determined as of the Death Benefit Date. THE BASIC DEATH BENEFIT In general, if you were 85 or younger on your Contract Date (the date we accepted your first Purchase Payment), the death benefit will be the greatest of the following amounts: 1. Your Account Value for the Valuation Period during which the Death Benefit Date occurs; 2. The amount we would pay if you had surrendered your entire Account on the Death Benefit Date; and 3. Your total Purchase Payments (adjusted for partial withdrawals as described in "Calculating the Death Benefit") as of the Death Benefit Date. For examples of how to calculate this basic death benefit, see Appendix C. If you were 86 or older on your Contract Date, the death benefit is equal to amount (2) above. Because this amount will reflect any applicable withdrawal charges and Market Value Adjustment, it may be less than your Account Value. 27 OPTIONAL DEATH BENEFIT RIDERS Subject to availability in your state, you may enhance the "Basic Death Benefit" by electing one or more of the following optional death benefit riders. You must make your election before the date on which your Contract becomes effective. You will pay a charge for each optional death benefit rider you elect. (For a description of these charges, see "Charges for Optional Death Benefit Riders.") The riders are available only if you are younger than 80 on the Contract Date. Any optional death benefit election may not be changed after the Contract is issued. The death benefit under all optional death benefit riders will be adjusted for all partial withdrawals as described in the Prospectus under the heading "Calculating the Death Benefit." For examples of how the death benefit is calculated under the optional death benefit riders, see Appendices D - H. MAXIMUM ANNIVERSARY ACCOUNT VALUE RIDER ("MAV") Under this rider, the death benefit will be the greater of: - the amount payable under the basic death denefit above, or - your highest Account Value on any Account Anniversary before your 81st birthday, adjusted for any subsequent Purchase Payments, partial withdrawals and charges made between that Account Anniversary and the Death Benefit Date. 5% PREMIUM ROLL-UP RIDER ("5% ROLL-UP") Under this rider, the death benefit will be the greater of: - the amount payable under the basic death benefit above, or - the sum of your total Purchase Payments plus interest accruals, adjusted for partial withdrawals. Under this rider, interest accrues at a rate of 5% per year on Purchase Payments and transfers to the Variable Account while they remain in the Variable Account. The 5% interest accruals will continue until the earlier of: - the first day of the month following your 80th birthday, or - the day the death benefit amount under this rider equals twice the total of your Purchase Payments and transferred amounts, adjusted for withdrawals. EARNINGS ENHANCEMENT ("EEB") RIDER If you elect this EEB Rider, your death benefit will be the amount payable under the basic death benefit, PLUS the "EEB amount." Calculated as of your Death Benefit Date, the "EEB amount" is determined as follows: - If you are 69 or younger on your Contract Date, the "EEB amount" will be 40% of the difference between your Account Value and your Net Purchase Payments, up to a cap of 40% of the Net Purchase Payments made prior to your death. - If you are between the ages of 70 and 79 on your Contract Date, the "EEB amount" will be 25% of the difference between your Account Value and your Net Purchase Payments, up to a cap of 25% of the Net Purchase Payments prior to your death. EARNINGS ENHANCEMENT PLUS ("EEB PLUS") RIDER If you elect this EEB Plus Rider, your death benefit will be the amount payable under the basic death benefit, PLUS the "EEB Plus amount." Calculated as of the Death Benefit Date, the "EEB Plus amount" is determined as follows: - If you are 69 or younger on your Contract Date, the "EEB Plus amount" will be 40% of the difference between your Account Value and your Net Purchase Payments, up to a cap of 28 100% of the Net Purchase Payments made prior to your death. After the 7th Contract year, the cap is 100% of the difference between your Net Purchase Payments and any Purchase Payments made within the twelve months prior to your death. - If you are between the ages of 70 and 79 on your Contract Date, the "EEB Plus amount" will be 25% of the difference between your Account Value and your Net Purchase Payments, up to a cap of 40% of the Net Purchase Payments made prior to your death. After the 7th Contract year, the cap is 40% of the difference between your Net Purchase Payments and any Purchase Payments made in the twelve months prior to your death. EARNINGS ENHANCEMENT PLUS WITH MAV ("EEB PLUS MAV") RIDER If you elect this EEB Plus MAV Rider, your death benefit will be the death benefit payable under the MAV Rider PLUS the "EEB Plus MAV amount." Calculated as of your Death Benefit Date, the "EEB Plus MAV amount" is as follows: - If you are 69 or younger on your Contract Date, the "EEB Plus MAV amount" will be 40% of the difference between the death benefit payable under the MAV Rider and your Net Purchase Payments, up to a cap of 100% of Net Purchase Payments made prior to your death. After your 7th Contract year, the cap is 100% of the difference between your Net Purchase Payments and any Purchase Payments made in the twelve months prior to your death. - If you are between the ages of 70 and 79 on your Contract Date, the "EEB Plus MAV amount" will be 25% of the difference between the death benefit payable under the MAV Rider and your Net Purchase Payments, up to a cap of 40% of Net Purchase Payments made prior to your death. After your 7th Contract year, the cap is 40% of the difference between your Net Purchase Payments and any Purchase Payments made in the twelve months prior to your death. EARNINGS ENHANCEMENT PLUS WITH 5% ROLL-UP ("EEB PLUS 5% ROLL-UP") RIDER If you elect this EEB Plus 5% Roll-Up Rider, your death benefit will be the death benefit payable under the 5% Roll-Up Rider PLUS the "EEB Plus 5% Roll-Up amount." Calculated as of your Death Benefit Date, the "EEB Plus 5% Roll-Up amount" is determined as follows: - If you are 69 or younger on your Contract Date, the "EEB Plus 5% Roll-Up amount" will be 40% of the difference between the death benefit payable under the 5% Roll-Up Rider and your Net Purchase Payments, up to a cap of 100% of Net Purchase Payments made prior to your death. After your 7th Contract year, the cap is 100% of the difference between your Net Purchase Payments and any Purchase Payments made in the twelve months prior to your death. - If you are between the ages of 70 and 79 on your Contract Date, the "EEB Plus 5% Roll-Up amount" will be 25% of the difference between the death benefit payable under the 5% Roll-Up Rider and your Net Purchase Payments, up to a cap of 40% of Net Purchase Payments made prior to your death. After your 7th Contract year, the cap is 40% of the difference between your Net Purchase Payments and any Purchase Payments made in the twelve months prior to your death. SELECTING MULTIPLE DEATH BENEFIT RIDERS The MAV Rider, the 5% Roll-Up Rider, and the EEB Rider can be combined. If you elect more than one of these three optional death benefit riders, your death benefit will be calculated as follows: - MAV RIDER COMBINED WITH 5% ROLL-UP RIDER: The death benefit will equal the greater of the death benefit under the MAV Rider and the death benefit under the 5% Roll-Up Rider. 29 - MAV RIDER COMBINED WITH EEB RIDER: The death benefit will equal the death benefit under the MAV Rider, plus the "EEB amount." The "EEB amount" is calculated using the Account Value before the application of the MAV Rider. - EEB RIDER COMBINED WITH 5% ROLL-UP RIDER: The death benefit will equal the death benefit under the 5% Roll-Up Rider, plus the "EEB amount." The "EEB amount" is calculated using the Account Value before the application of the 5% Roll-Up Rider. - MAV RIDER, THE 5% ROLL-UP RIDER AND THE EEB RIDER: The death benefit will equal the greater of the death benefit under the MAV Rider or the death benefit under the 5% Roll-Up Rider, plus the "EEB amount." The "EEB amount" is calculated using the Account Value before the application of the 5% Roll-Up Rider and the MAV Rider. The EEB Plus, EEB Plus MAV, and EEB Plus 5% Roll-Up Riders are designed to be "comprehensive" riders and may not be combined with each other or with any of the other death benefit riders. SPOUSAL CONTINUANCE If your spouse is your Beneficiary, upon your death your spouse may elect to continue the Contract as the Participant, rather than receive the death benefit amount. In that case, we will not pay a death benefit, but the Contract's Account Value will be equal to your Contract's death benefit amount, as defined under the "Basic Death Benefit" or any optional death benefit rider you have selected. All Contract provisions, including any optional death benefit riders you have selected, will continue as if your spouse had purchased the Contract on the Death Benefit Date with a deposit equal to the death benefit amount. For purposes of calculating death benefits and expenses from that date forward, your spouse's age on the original effective date of the Contract will be used. Upon surrender or annuitization, this step-up to the spouse will not be treated as premium, but will be treated as income. CALCULATING THE DEATH BENEFIT In calculating the death benefit amount payable under option (3) of the "Basic Death Benefit" or any of the optional death benefit riders, any partial withdrawals will reduce the death benefit amount to an amount equal to the death benefit amount immediately before the withdrawal multiplied by the ratio of the Account Value immediately after the withdrawal to the Account Value immediately before the withdrawal. If the death benefit is the amount payable under options (2) or (3) of the "Basic Death Benefit" or under any of the optional death benefit riders, your Account Value may be increased by the excess, if any, of that amount over option (1) of the "Basic Death Benefit." Any such increase will be allocated to the Sub-Accounts in proportion to your Account Value in those Sub-Accounts on the Death Benefit Date. Such increase will be made only if the Beneficiary elects to annuitize, elects to defer annuitization, or elects to continue the Contract. Also, any portion of this new Account Value attributed to the Fixed Account will be transferred to the available Money Market Fund investment option (without the application of a Market Value Adjustment). If your spouse, as the named Beneficiary, elects to continue the Contract after your death, your spouse may transfer any such Fixed Account portion back to the Fixed Account and begin a new Guarantee Period. METHOD OF PAYING DEATH BENEFIT The death benefit may be paid in a single cash payment or as an annuity (either fixed, variable or a combination), under one or more of our Annuity Options. We describe the Annuity Options in this Prospectus under "The Income Phase -- Annuity Provisions." During the Accumulation Phase, you may elect the method of payment for the death benefit. If no such election is in effect on the date of your death, the Beneficiary may elect either a single cash payment or an annuity. If the Beneficiary is your spouse, the Beneficiary may elect to continue the Contract. These elections are made by sending us a completed election form, which we will provide. If 30 we do not receive the Beneficiary's election within 60 days after we receive Due Proof of Death, we will pay the death benefit in a single cash payment. If we pay the death benefit in the form of an Annuity Option, the Beneficiary becomes the Annuitant/Payee under the terms of that Annuity Option. NON-QUALIFIED CONTRACTS If your Contract is a Non-Qualified Contract, special distribution rules apply to the payment of the death benefit. The amount of the death benefit must be distributed either (1) as a lump sum within 5 years after your death, or (2) if in the form of an annuity, over a period not greater than the life or expected life of the "designated beneficiary" within the meaning of Section 72(s) of the Internal Revenue Code, with payments beginning no later than one year after your death. The person you have named as Beneficiary under your Contract, if any, will be the "designated beneficiary." If the named Beneficiary is not living and no contingent beneficiary has been named, the Annuitant automatically becomes the designated beneficiary. If the designated beneficiary is your surviving spouse, your spouse may continue the Contract in his or her own name as Participant. To make this election, your spouse must give us written notification within 60 days after we receive Due Proof of Death. The special distribution rules will then apply on the death of your spouse. To understand what happens when your spouse continues the Contract, see "Spousal Continuance," above. During the Income Phase, if the Annuitant dies, the remaining value of the Annuity Option in place must be distributed at least as rapidly as the method of distribution under that option. If the Participant is not a natural person, these distribution rules apply on a change in, or the death of, either the Annuitant or the Co-Annuitant. Payments made in contravention of these special rules would adversely affect the treatment of the Contracts as annuity contracts under the Internal Revenue Code. Neither you nor the Beneficiary may exercise rights that would have that effect. SELECTION AND CHANGE OF BENEFICIARY You select your Beneficiary in your Application. You may change your Beneficiary at any time by sending us written notice on our required form, unless you previously made an irrevocable Beneficiary designation. A new Beneficiary designation is not effective until we record the change. PAYMENT OF DEATH BENEFIT Payment of the death benefit in cash will be made within 7 days of the Death Benefit Date, except if we are permitted to defer payment in accordance with the Investment Company Act of 1940. If an Annuity Option is elected, the Annuity Commencement Date will be the first day of the second calendar month following the Death Benefit Date, and your Account will remain in effect until the Annuity Commencement Date. DUE PROOF OF DEATH We accept any of the following as proof of any person's death: - An original certified copy of an official death certificate; - An original certified copy of a decree of a court of competent jurisdiction as to the finding of death; or - Any other proof we find satisfactory. THE INCOME PHASE -- ANNUITY PROVISIONS During the Income Phase, we make regular monthly annuity payments to the Annuitant. 31 The Income Phase of your Contract begins with the Annuity Commencement Date. On that date, we apply your Account Value, adjusted as described below, under the Annuity Option(s) you have selected, and we make the first annuity payment. Once the Income Phase begins, no lump sum settlement option or cash withdrawals are permitted, except pursuant to Annuity Option D, Monthly Payments for a Specified Period Certain, as described below under the heading "Annuity Options," and you cannot change the Annuity Option selected. You may request a full withdrawal before the Annuity Commencement Date, which will be subject to all charges applicable on withdrawals (see "Withdrawals, Withdrawal Charge and Market Value Adjustment"). SELECTION OF THE ANNUITANT OR CO-ANNUITANT You select the Annuitant in your Application. The Annuitant is the person who receives annuity payments during the Income Phase and on whose life these payments are based. In your Contract, the Annuity Option(s) refer to the Annuitant as the "Payee." If you name someone other than yourself as Annuitant and the Annuitant dies before the Income Phase, you become the Annuitant. In a Non-Qualified Contract, if you name someone other than yourself as Annuitant, you may also select a Co-Annuitant, who will become the new Annuitant if the original Annuitant dies before the Income Phase. If both the Annuitant and Co-Annuitant die before the Income Phase, you become the Annuitant. If you have named both an Annuitant and a Co-Annuitant, you may designate one of them to become the sole Annuitant as of the Annuity Commencement Date, if both are living at that time. If you have not made that designation on the 30th day before the Annuity Commencement Date, and both the Annuitant and the Co-Annuitant are still living, the Co-Annuitant will become the Annuitant. When an Annuity Option has been selected as the method of paying the death benefit, the Beneficiary is the Payee of the annuity payment. SELECTION OF THE ANNUITY COMMENCEMENT DATE You select the Annuity Commencement Date in your Application. The following restrictions apply to the date you may select: - The earliest possible Annuity Commencement Date is the first day of the second month following your Contract Date. - The latest possible Annuity Commencement Date is the first day of the month following the Annuitant's 95th birthday or, if there is a Co-Annuitant, the 95th birthday of the younger of the Annuitant and Co-Annuitant. - The Annuity Commencement Date must always be the first day of a month. You may change the Annuity Commencement Date from time to time by sending us written notice, with the following additional limitations: - We must receive your notice at least 30 days before the current Annuity Commencement Date. - The new Annuity Commencement Date must be at least 30 days after we receive the notice. There may be other restrictions on your selection of the Annuity Commencement Date imposed by your retirement plan or applicable law. In most situations, current law requires that for a Qualified Contract, certain minimum distributions must commence no later than April 1 following the year the Annuitant reaches age 70 1/2 (or, for Qualified Contracts other than IRAs, no later than April 1 following the year the Annuitant retires, if later than the year the Annuitant reaches age 70 1/2). 32 ANNUITY OPTIONS We offer the following Annuity Options for payments during the Income Phase. Each Annuity Option may be selected for a Variable Annuity, a Fixed Annuity, or a combination of both. We may also agree to other settlement options, at our discretion. ANNUITY OPTION A -- LIFE ANNUITY We provide monthly payments during the lifetime of the Annuitant. Annuity payments stop when the Annuitant dies. There is no provision for continuation of any payments to a Beneficiary. ANNUITY OPTION B -- LIFE ANNUITY WITH 60, 120, 180 OR 240 MONTHLY PAYMENTS CERTAIN We make monthly payments during the lifetime of the Annuitant. In addition, we guarantee that the Beneficiary will receive monthly payments for the remainder of the period certain, if the Annuitant dies during that period. The election of a longer period results in smaller monthly payments. If no Beneficiary is designated, we pay the discounted value of the remaining payments in one sum to the Annuitant's estate. The Beneficiary may also elect to receive the discounted value of the remaining payments in one sum. The discount rate for a Variable Annuity will be the assumed interest rate in effect; the discount rate for a Fixed Annuity will be based on the interest rate we used to determine the amount of each payment. ANNUITY OPTION C -- JOINT AND SURVIVOR ANNUITY We make monthly payments during the lifetime of the Annuitant and another person you designate and during the lifetime of the survivor of the two. We stop making payments when the survivor dies. There is no provision for continuance of any payments to a Beneficiary. ANNUITY OPTION D -- MONTHLY PAYMENTS FOR A SPECIFIED PERIOD CERTAIN We make monthly payments for a specified period of time from 5 to 30 years, as you elect. If payments under this option are paid on a variable annuity basis, the Annuitant may elect to receive, at any time, some or all of the discounted value of the remaining payments, less any applicable withdrawal charge; the discount rate for this purpose will be the assumed interest rate in effect. If the Annuitant dies during the period selected, the remaining income payments are made as described under Annuity Option B. The election of this Annuity Option may result in the imposition of a penalty tax. The 5, 6, 7, 8, & 9-year period certain options are not available if your Account has been issued within the past 7 years. SELECTION OF ANNUITY OPTION You select one or more of the Annuity Options, which you may change from time to time during the Accumulation Phase, as long as we receive your selection or change in writing at least 30 days before the Annuity Commencement Date. If we have not received your written selection on the 30th day before the Annuity Commencement Date, you will receive Annuity Option B, for a life annuity with 120 monthly payments certain. You may specify the proportion of your Adjusted Account Value you wish to provide a Variable Annuity or a Fixed Annuity. Under a Variable Annuity, the dollar amount of payments will vary, while under a Fixed Annuity, the dollar amount of payments will remain the same. If you do not specify a Variable Annuity or a Fixed Annuity, your Adjusted Account Value will be divided between Variable Annuities and Fixed Annuities in the same proportions as your Account Value was divided between the Variable and Fixed Accounts on the Annuity Commencement Date. You may allocate your Adjusted Account Value applied to a Variable Annuity among the Sub-Accounts, or we will use your existing allocations. There may be additional limitations on the options you may elect under your particular retirement plan or applicable law. 33 REMEMBER THAT THE ANNUITY OPTIONS MAY NOT BE CHANGED ONCE ANNUITY PAYMENTS BEGIN. AMOUNT OF ANNUITY PAYMENTS ADJUSTED ACCOUNT VALUE The Adjusted Account Value is the amount we apply to provide a Variable Annuity and/or a Fixed Annuity. We calculate Adjusted Account Value by taking your Account Value on the Business Day just before the Annuity Commencement Date and making the following adjustments: - We deduct a proportional amount of the Account Fee, based on the fraction of the current Account Year that has elapsed. - If applicable, we apply the Market Value Adjustment to your Account Value in the Fixed Account, which may result in a deduction, an addition, or no change. - We deduct any applicable premium tax or similar tax if not previously deducted. VARIABLE ANNUITY PAYMENTS On the Annuity Commencement Date, we will exchange your Account's Variable Annuity Units for Annuitization Units which have annual insurance charges of 1.15% of your average daily net assets (1.00% if your initial Purchase Payment was $1,000,000 or more). If your Annuity Commencement Date is within 7 years of the Contract Date, the annual insurance charges will be increased by 0.25%. Variable Annuity payments may vary each month. We determine the dollar amount of the first payment using the portion of your Adjusted Account Value applied to a Variable Annuity and the Annuity Payment Rates in your Contract, which are based on an assumed interest rate of 3% per year, compounded annually. See "Annuity Payment Rates." To calculate the remaining payments, we convert the amount of the first payment into Annuity Units for each Sub-Account; we determine the number of those Annuity Units by dividing the portion of the first payment attributable to the Sub-Account by the Annuity Unit Value of that Sub-Account for the Valuation Period ending just before the Annuity Commencement Date. This number of Annuity Units for each Sub-Account will remain constant (unless the Annuitant requests an exchange of Annuity Units). However, the dollar amount of the next Variable Annuity payment -- which is the sum of the number of Annuity Units for each Sub-Account times its Annuity Unit Value for the Valuation Period ending just before the date of the payment -- will increase, decrease, or remain the same, depending on the net investment return of the Sub-Accounts. If the net investment return of the Sub-Accounts selected is the same as the assumed interest rate of 3%, compounded annually, the payments will remain level. If the net investment return exceeds the assumed interest rate, payments will increase and, conversely, if it is less than the assumed interest rate, payments will decrease. Please refer to the Statement of Additional Information for more information about calculating Variable Annuity Units and Variable Annuity payments, including examples of these calculations. FIXED ANNUITY PAYMENTS Fixed Annuity payments are the same each month. We determine the dollar amount of each Fixed Annuity payment using the fixed portion of your Adjusted Account Value and the applicable Annuity Payment Rates. These will be either (1) the rates in your Contract, which are based on a minimum guaranteed interest rate of 2.5% per year, compounded annually, or (2) new rates we have published and are using on the Annuity Commencement Date, if they are more favorable. See "Annuity Payment Rates." MINIMUM PAYMENTS If your Adjusted Account Value is less than $2,000, or the first annuity payment for any Annuity Option is less than $20, we will pay the Adjusted Account Value to the Annuitant in one payment. 34 EXCHANGE OF VARIABLE ANNUITY UNITS During the Income Phase, the Annuitant may exchange Annuity Units in one Sub-Account for Annuity Units in another Sub-Account, up to 12 times each Account Year. To make an exchange, the Annuitant sends us, at our Annuity Mailing Address, a written request stating the number of Annuity Units in the Sub-Account he or she wishes to exchange and the new Sub-Account for which Annuity Units are requested. The number of new Annuity Units will be calculated so the dollar amount of an annuity payment on the date of the exchange would not be affected. To calculate this number, we use Annuity Unit values for the Valuation Period during which we receive the exchange request. Before exchanging Annuity Units in one Sub-Account for those in another, the Annuitant should carefully review the Fund prospectus(es) for the investment objectives and risk disclosure of the Funds in which the Sub-Accounts invest. During the Income Phase, we permit only exchanges among Sub-Accounts. No exchanges to or from a Fixed Annuity are permitted. ACCOUNT FEE During the Income Phase, we deduct the annual Account Fee of $35 in equal amounts from each Variable Annuity payment. We do not deduct the annual Account Fee from Fixed Annuity payments. ANNUITY PAYMENT RATES The Contracts contain Annuity Payment Rates for each Annuity Option described in this Prospectus. The rates show, for each $1,000 applied, the dollar amount of (a) the first monthly Variable Annuity payment based on the assumed interest rate specified in the applicable Contract (3% per year, compounded annually), and (b) the monthly Fixed Annuity payment, when this payment is based on the minimum guaranteed interest rate specified in the Contract (at least 2.5% per year, compounded annually). We may change these rates under Group Contracts for Accounts established after the effective date of such change (see "Other Contract Provisions -- Modification"). The Annuity Payment Rates may vary according to the Annuity Option elected and the adjusted age of the Annuitant. The Contracts also describe the method of determining the adjusted age of the Annuitant. The mortality table used in determining the Annuity Payment Rates for Annuity Options A, B and C is the Annuity 2000 Table. ANNUITY OPTIONS AS METHOD OF PAYMENT FOR DEATH BENEFIT You or your Beneficiary may also select one or more Annuity Options to be used in the event of the covered person's death before the Income Phase, as described under the "Death Benefit" section of this Prospectus. In that case, your Beneficiary will be the Annuitant. The Annuity Commencement Date will be the first day of the second month beginning after the Death Benefit Date. OTHER CONTRACT PROVISIONS EXERCISE OF CONTRACT RIGHTS An Individual Contract belongs to the individual to whom the Contract is issued. A Group Contract belongs to the Owner. In the case of a Group Contract, the Owner may expressly reserve all Contract rights and privileges; otherwise, each Annuitant will be entitled to exercise such rights and privileges. In any case, such rights and privileges can be exercised without the consent of the Beneficiary (other than an irrevocably designated Beneficiary) or any other person. Such rights and privileges may be exercised only during the lifetime of the Annuitant before the Annuity Commencement Date, except as the Contract otherwise provides. The Annuitant becomes the Payee on and after the Annuity Commencement Date. The Beneficiary becomes the Payee on the death of the Covered Person prior to the Annuity Commencement 35 Date, or on the death of the Annuitant after the Annuity Commencement Date. Such Payee may thereafter exercise such rights and privileges, if any, of ownership which continue. CHANGE OF OWNERSHIP Ownership of a Qualified Contract may not be transferred except to: (1) the Annuitant; (2) a trustee or successor trustee of a pension or profit sharing trust which is qualified under Section 401 of the Internal Revenue Code; (3) the employer of the Annuitant, provided that the Qualified Contract after transfer is maintained under the terms of a retirement plan qualified under Section 403(a) of the Internal Revenue Code for the benefit of the Annuitant; (4) the trustee or custodian of an individual retirement account plan qualified under Section 408 of the Internal Revenue Code for the benefit of the Participants under a Group Contract; or (5) as otherwise permitted from time to time by laws and regulations governing the retirement or deferred compensation plans for which a Qualified Contract may be issued. Subject to the foregoing, a Qualified Contract may not be sold, assigned, transferred, discounted or pledged as collateral for a loan or as security for the performance of an obligation or for any other purpose to any person other than the Company. The Owner of a Non-Qualified Contract may change the ownership of the Contract prior to the Annuity Commencement Date; and each Participant, in like manner, may change the ownership interest in a Contract. A change of ownership will not be binding on us until we receive written notification. When we receive such notification, the change will be effective as of the date on which the request for change was signed by the Owner or Participant, as appropriate, but the change will be without prejudice to us on account of any payment we make or any action we take before receiving the change. If you change the Owner of a Non-Qualified Contract, you will become immediately liable for the payment of taxes on any gain realized under the Contract prior to the change of ownership, including possible liability for a 10% federal excise tax. Change of ownership may affect the availability of optional death benefit riders or the expenses incurred with the optional death benefit riders. VOTING OF FUND SHARES We will vote Fund shares held by the Sub-Accounts at meetings of shareholders of the Funds or in connection with similar solicitations, but will follow voting instructions received from persons having the right to give voting instructions. During the Accumulation Phase, you will have the right to give voting instructions, in the case of a Group Contract where the Owner has reserved this right. During the Income Phase, the Payee -- that is the Annuitant or Beneficiary entitled to receive benefits -- is the person having such voting rights. We will vote any shares attributable to us and Fund shares for which no timely voting instructions are received in the same proportion as the shares for which we receive instructions from Owners, Participants and Payees, as applicable. Owners of Qualified Contracts issued on a group basis may be subject to other voting provisions of the particular plan and of the Investment Company Act of 1940. Employees who contribute to plans that are funded by the Contracts may be entitled to instruct the Owners as to how to instruct us to vote the Fund shares attributable to their contributions. Such plans may also provide the additional extent, if any, to which the Owners shall follow voting instructions of persons with rights under the plans. If no voting instructions are received from any such person with respect to a particular Participant Account, the Owner may instruct the Company as to how to vote the number of Fund shares for which instructions may be given. Neither the Variable Account nor the Company is under any duty to provide information concerning the voting instruction rights of persons who may have such rights under plans, other than rights afforded by the Investment Company Act of 1940, or any duty to inquire as to the instructions received or the authority of Owners, Participants or others, as applicable, to instruct the voting of Fund shares. Except as the Variable Account or the Company has actual knowledge to the contrary, the instructions given by Owners under Group Contracts and Payees will be valid as they affect the Variable Account, the Company and any others having voting instruction rights with respect to the Variable Account. 36 All Fund proxy material, together with an appropriate form to be used to give voting instructions, will be provided to each person having the right to give voting instructions at least 10 days prior to each meeting of the shareholders of the Fund. We will determine the number of Fund shares as to which each such person is entitled to give instructions as of the record date set by the Fund for such meeting, which is expected to be not more than 90 days prior to each such meeting. Prior to the Annuity Commencement Date, the number of Fund shares as to which voting instructions may be given to the Company is determined by dividing the value of all of the Variable Accumulation Units of the particular Sub-Account credited to the Participant Account by the net asset value of one Fund share as of the same date. On or after the Annuity Commencement Date, the number of Fund shares as to which such instructions may be given by a Payee is determined by dividing the reserve held by the Company in the Sub-Account with respect to the particular Payee by the net asset value of a Fund share as of the same date. After the Annuity Commencement Date, the number of Fund shares as to which a Payee is entitled to give voting instructions will generally decrease due to the decrease in the reserve. PERIODIC REPORTS During the Accumulation Period we will send you, or such other person having voting rights, at least once during each Account Year, a statement showing the number, type and value of Accumulation Units credited to your Account and the Fixed Accumulation Value of your Account, which statement shall be accurate as of a date not more than 2 months previous to the date of mailing. These periodic statements contain important information concerning your transactions with respect to your Contract. It is your obligation to review each such statement carefully and to report to us, at the address or telephone number provided on the statement, any errors or discrepancies in the information presented therein within 60 days of the date of such statement. Unless we receive notice of any such error or discrepancy from you within such period, we may not be responsible for correcting the error or discrepancy. In addition, every person having voting rights will receive such reports or prospectuses concerning the Variable Account and the Funds as may be required by the Investment Company Act of 1940 and the Securities Act of 1933. We will also send such statements reflecting transactions in your Account as may be required by applicable laws, rules and regulations. Upon request, we will provide you with information regarding fixed and variable accumulation values. SUBSTITUTION OF SECURITIES Shares of any or all Funds may not always be available for investment under the Contract. We may add or delete Funds or other investment companies as variable investment options under the Contract. We may also substitute for the shares held in any Sub-Account shares of another Fund or shares of another registered open-end investment company or unit investment trust, provided that the substitution has been approved, if required, by the SEC. In the event of any substitution pursuant to this provision, we may make appropriate endorsement to the Contract to reflect the substitution. CHANGE IN OPERATION OF VARIABLE ACCOUNT At our election and subject to any necessary vote by persons having the right to give instructions with respect to the voting of Fund shares held by the Sub-Accounts, the Variable Account may be operated as a management company under the Investment Company Act of 1940 or it may be deregistered under the Investment Company Act of 1940 in the event registration is no longer required. Deregistration of the Variable Account requires an order by the SEC. In the event of any change in the operation of the Variable Account pursuant to this provision, we may make appropriate endorsement to the Contract to reflect the change and take such other action as may be necessary and appropriate to effect the change. 37 SPLITTING UNITS We reserve the right to split or combine the value of Variable Accumulation Units, Annuity Units or any of them. In effecting any such change of unit values, strict equity will be preserved and no change will have a material effect on the benefits or other provisions of the Contract. MODIFICATION Upon notice to the Participant, in the case of an Individual Contract, and the Owner and Participant(s), in the case of a Group Contract (or the Payee(s) during the Income Phase), we may modify the Contract if such modification: (i) is necessary to make the Contract or the Variable Account comply with any law or regulation issued by a governmental agency to which the Company or the Variable Account is subject; (ii) is necessary to assure continued qualification of the Contract under the Internal Revenue Code or other federal or state laws relating to retirement annuities or annuity contracts; (iii) is necessary to reflect a change in the operation of the Variable Account or the Sub-Account(s) (see "Change in Operation of Variable Account"); (iv) provides additional Variable Account and/or fixed accumulation options; or (v) as may otherwise be in the best interests of Owners, Participants, or Payees, as applicable. In the event of any such modification, we may make appropriate endorsement in the Contract to reflect such modification. In addition, upon notice to the Owner, we may modify a Group Contract to change the withdrawal charges, Account Fee, mortality and expense risk charges, administrative expense charges, the tables used in determining the amount of the first monthly variable annuity and fixed annuity payments and the formula used to calculate the Market Value Adjustment, provided that such modification applies only to Participant Accounts established after the effective date of such modification. In order to exercise our modification rights in these particular instances, we must notify the Owner of such modification in writing. The notice shall specify the effective date of such modification which must be at least 60 days following the date we mail notice of modification. All of the charges and the annuity tables which are provided in the Group Contract prior to any such modification will remain in effect permanently, unless improved by the Company, with respect to Participant Accounts established prior to the effective date of such modification. DISCONTINUANCE OF NEW PARTICIPANTS We may limit or discontinue the acceptance of new Applications and the issuance of new Certificates under a Group Contract by giving 30 days prior written notice to the Owner. This will not affect rights or benefits with respect to any Participant Accounts established under such Group Contract prior to the effective date of such limitation or discontinuance. RESERVATION OF RIGHTS We reserve the right, to the extent permitted by law, to: (1) combine any 2 or more variable accounts; (2) add or delete Funds, sub-series thereof or other investment companies and corresponding Sub-Accounts; (3) add or remove Guarantee Periods available at any time for election by a Participant; and (4) restrict or eliminate any of the voting rights of Participants (or Owners) or other persons who have voting rights as to the Variable Account. Where required by law, we will obtain approval of changes from Participants or any appropriate regulatory authority. In the event of any change pursuant to this provision, we may make appropriate endorsement to the Contract to reflect the change. RIGHT TO RETURN If you are not satisfied with your Contract, you may return it by mailing or delivering it to us at our Annuity Mailing Address, as shown on the cover of this Prospectus, within 10 days after it was delivered to you. When we receive the returned Contract, it will be cancelled and we will refund to you your Account Value. 38 If applicable state law requires, we will return the full amount of any Purchase Payment(s) we received. State law may also require us to give you a longer "free look" period or allow you to return the Contract to your sales representative. If you are establishing an Individual Retirement Account ("IRA"), the Internal Revenue Code requires that we give you a disclosure statement containing certain information about the Contract and applicable legal requirements. We must give you this statement on or before the date the IRA is established. If we give you the disclosure statement before the seventh day preceding the date the IRA is established, you will not have any right of revocation under the Code. If we give you the disclosure statement at a later date, then you may give us a notice of revocation at any time within 7 days after your Contract Date. Upon such revocation, we will refund your Purchase Payment(s). This right of revocation with respect to an IRA is in addition to the return privilege set forth in the preceding paragraph. We allow a Participant establishing an IRA a "ten day free-look," notwithstanding the provisions of the Internal Revenue Code. TAX CONSIDERATIONS This section describes general federal income tax consequences of the ownership of a Contract based upon our understanding of current federal tax laws. Actual federal tax consequences may vary depending on, among other things, the type of retirement plan with which you use and where the site where your Contract was issued. Also, legislation affecting the current tax treatment of annuity contracts could be enacted in the future and could apply retroactively to Contracts that you purchased before the date of enactment. We make no attempt to consider any applicable federal estate, federal gift, state or other tax laws. We do not make any guarantee regarding the federal, state, or local tax status of any Contract or any transaction involving any Contract. You should consult a qualified tax professional for advice before purchasing a Contract or executing any other transaction (such as a rollover, distribution, withdrawal or payment) involving a Contract. U.S. FEDERAL INCOME TAX CONSIDERATIONS The following discussion applies only to those Contracts issued in the United States. For a discussion of tax considerations effecting Contracts issued in Puerto Rico, see "Puerto Rico Tax Considerations," below. DEDUCTIBILITY OF PURCHASE PAYMENTS For federal income tax purposes, Purchase Payments made under Non-Qualified Contracts are not deductible. PRE-DISTRIBUTION TAXATION OF CONTRACTS Generally, an increase in the value of a Contract will not give rise to tax, prior to distribution. However, corporate (or other non-natural person) Owners of a Non-Qualified Contract incur current tax, regardless of distributions, on Contract value increases. Such current taxation does not apply, though, to (i) immediate annuities, which the Internal Revenue Code (the "Code") defines as a single premium contract with an annuity commencement date within one year of the date of purchase which provides for a series of substantially equal periodic payments (to be made not less frequently than annually) during the annuity period, or (ii) any Contract that the non-natural person holds as agent for a natural person (such as where a bank or other entity holds a Contract as trustee under a trust agreement). You should note that qualified retirement investments generally provide tax deferral regardless of whether the underlying contract is an annuity. DISTRIBUTIONS AND WITHDRAWALS FROM NON-QUALIFIED CONTRACTS The Account Value will include an amount attributable to Purchase Payments, the return of which is not taxable, and an amount attributable to investment earnings, the return of which is taxable 39 at ordinary income rates. The relative portions of a distribution that derive from nontaxable Purchase Payments and taxable investment earnings depend upon the timing of the distribution. If you withdraw less than your entire Account Value under a Non-Qualified Contract before the Annuity Commencement Date, you must treat the withdrawal first as a return of investment earnings. You may treat only withdrawals in excess of the amount of the Account Value attributable to investment earnings as a return of Purchase Payments. Account Value amounts assigned or pledged as collateral for a loan will be treated as if withdrawn from the Contract. For purposes of determining a contract owner's income, the Code provides that all Non-Qualified deferred annuity contracts issued by the same company (or its affiliates) to the same contract owner during any calendar year shall be treated as one annuity contract. If a Payee receives annuity payments under a Non-Qualified Contract after the Annuity Commencement Date, however, the Payee treats a portion of each payment as a nontaxable return of Purchase Payments. In general, the nontaxable portion of such a payment bears the same ratio to the total payment as the Purchase Payments bear to the Payee's expected return under the Contract. The remainder of the payment constitutes a taxable return of investment earnings. Once the Payee has received nontaxable payments in an amount equal to total Purchase Payments, all future distributions constitute fully taxable ordinary income. If the Annuitant dies before the Payee recovers the full amount of Purchase Payments, the Payee may deduct an amount equal to the unrecovered Purchase Payments. Upon the transfer of a Non-Qualified Contract by gift (other than to the Participant's spouse), the Participant must treat an amount equal to the Account Value minus the total amount paid for the Contract as income. Death benefits paid upon the death of a contract owner generally are includable in the income of the recipient as follows: (1) if distributed in a lump sum, they are taxed in the same manner as a full surrender of the contract or (2) if distributed under an annuity option, they are taxed in the same manner as annuity payments, as described above. For this purpose, the "investment in the contract" is not affected by the owner's or annuitant's death, i.e., it remains generally the total Purchase Payments, less amounts previously received which were not includable in income. Special distribution rules apply upon the death of the owner. A penalty tax of 10% may apply to taxable cash withdrawals and lump-sum payments from Non-Qualified Contracts. This penalty will not apply in certain circumstances, such as distributions pursuant to the death of the Participant, distributions that are a part of a series of substantially equal periodic payments made annually under a lifetime annuity, or distributions under an immediate annuity (as defined above), or after age 59 1/2. DISTRIBUTIONS AND WITHDRAWALS FROM QUALIFIED CONTRACTS Generally, distributions from a Qualified Contract will constitute fully taxable ordinary income. Also, a 10% penalty tax will, except in certain circumstances, apply to distributions prior to age 59 1/2. If you receive an eligible rollover distribution from a qualified Contract (other than from a Contract issued for use with an individual retirement account) and roll over that distribution to another eligible plan, such distribution will not be includible in your income. However, such distribution is subject to 20% mandatory withholding as described below. An "eligible rollover distribution" is any distribution to you of all or any portion of the balance to the credit of your account, other than: - A distribution which is one of a series of substantially equal periodic payments made annually under a lifetime annuity or for a specified period of ten years or more; - Any required minimum distribution, or - Any hardship distribution. Only you or your spouse may elect to roll over a distribution to an eligible retirement plan. 40 WITHHOLDING In the case of an eligible rollover distribution (as defined above) from a Qualified Contract (other than from a Contract issued for use with an individual retirement account), we (or the plan administrator) must withhold and remit to the U.S. Government 20% of the distribution, unless the Participant or Payee elects to make a direct rollover of the distribution to another qualified retirement plan that is eligible to receive the rollover; however, only you or your spouse may elect a direct rollover. In the case of a distribution from (i) a Non-Qualified Contract, (ii) a Qualified Contract issued for use with an individual retirement account, or (iii) a Qualified Contract where the distribution is not an eligible rollover distribution, we will withhold and remit to the U.S. Government a part of the taxable portion of each distribution unless, prior to the distribution, the Participant or Payee provides us his or her taxpayer identification number and instructs us (in the manner prescribed) not to withhold. The Participant or Payee may credit against his or her federal income tax liability for the year of distribution any amounts that we (or the plan administrator) withhold. INVESTMENT DIVERSIFICATION AND CONTROL The Treasury Department has issued regulations that prescribe investment diversification requirements for mutual fund series underlying nonqualified variable contracts. Contracts must comply with these regulations to qualify as annuities for federal income tax purposes. Contracts that do not meet the guidelines are subject to current taxation on annual increases in value. We believe that each Fund available as an investment option under the Contract complies with these regulations. The preamble to the regulations states that the Internal Revenue Service may promulgate guidelines under which an owner's excessive control over investments underlying the contract will preclude the contract from qualifying as an annuity for federal tax purposes. We cannot predict whether such guidelines, if in fact promulgated, will be retroactive. We reserve the right to modify the Contract and/or the Variable Account to the extent necessary to comply with any such guidelines, but cannot assure that such modifications would satisfy any retroactive guidelines. TAX TREATMENT OF THE COMPANY AND THE VARIABLE ACCOUNT As a life insurance company under the Code, we will record and report operations of the Variable Account separately from other operations. The Variable Account will not, however, constitute a regulated investment company or any other type of taxable entity distinct from our other operations. We will not incur tax on the income of the Variable Account (consisting primarily of interest, dividends, and net capital gains) if we use this income to increase reserves under Contracts participating in the Variable Account. QUALIFIED RETIREMENT PLANS You may use Qualified Contracts with several types of qualified retirement plans. Because tax consequences will vary with the type of qualified retirement plan and the plan's specific terms and conditions, we provide below only brief, general descriptions of the consequences that follow from using Qualified Contracts in connection with various types of qualified retirement plans. We stress that the rights of any person to any benefits under these plans may be subject to the terms and conditions of the plans themselves, regardless of the terms of the Qualified Contracts that you are using. These terms and conditions may include restrictions on, among other things, ownership, transferability, assignability, contributions and distributions. PENSION AND PROFIT-SHARING PLANS Sections 401(a), 401(k) and 403(a) of the Code permit business employers and certain associations to establish various types of retirement plans for employees. The Tax Equity and Fiscal Responsibility Act of 1982 eliminated most differences between qualified retirement plans of corporations and those of self-employed individuals. Self-employed persons, as a general rule, may therefore use Qualified Contracts as a funding vehicle for their retirement plans. 41 TAX-SHELTERED ANNUITIES Section 403(b) of the Code permits public school employees and employees of certain types of charitable, educational and scientific organizations specified in Section 501(c)(3) of the Code to purchase annuity contracts and, subject to certain limitations, exclude the amount of purchase payments from gross income for tax purposes. The Code imposes restrictions on cash withdrawals from Section 403(b) annuities. If the Contracts are to receive tax-deferred treatment, cash withdrawals of amounts attributable to salary reduction contributions (other than withdrawals of accumulation account value as of December 31, 1988) may be made only when the Participant attains age 59 1/2, separates from service with the employer, dies or becomes disabled (within the meaning of Section 72(m)(7) of the Code). These restrictions apply to (i) any post-1988 salary reduction contributions, (ii) any growth or interest on post-1988 salary reduction contributions, and (iii) any growth or interest on pre-1989 salary reduction contributions that occurs on or after January 1, 1989. It is permissible, however, to withdraw post-1988 salary reduction contributions (but not the earnings attributable to such contributions) in cases of financial hardship. While the Internal Revenue Service has not issued specific rules defining financial hardship, we expect that to qualify for a hardship distribution, the Participant must have an immediate and heavy bona fide financial need and lack other resources reasonably available to satisfy the need. Hardship withdrawals (as well as certain other premature withdrawals) will be subject to a 10% tax penalty, in addition to any withdrawal charge applicable under the Contracts. Under certain circumstances the 10% tax penalty will not apply if the withdrawal is for medical expenses. Under the terms of a particular Section 403(b) plan, the Participant may be entitled to transfer all or a portion of the Account Value to one or more alternative funding options. Participants should consult the documents governing their plan and the person who administers the plan for information as to such investment alternatives. INDIVIDUAL RETIREMENT ACCOUNTS Sections 219 and 408 of the Code permit eligible individuals to contribute to an individual retirement program, including Simplified Employee Pension Plans, Employer/Association of Employees Established Individual Retirement Account Trusts, and Simple Retirement Accounts. Such IRAs are subject to limitations on contribution levels, the persons who may be eligible, and on the time when distributions may commence. In addition, certain distributions from some other types of retirement plans may be placed in an IRA on a tax-deferred basis. If we sell Contracts for use with IRAs, the Internal Revenue Service or other agency may impose supplementary information requirements. We will provide purchasers of the Contracts for such purposes with any necessary information. You will have the right to revoke the Contract under certain circumstances, as described in the section of this Prospectus entitled "Right to Return." ROTH IRAS Section 408A of the Code permits an individual to contribute to an individual retirement program called a Roth IRA. Unlike contributions to a traditional IRA under Section 408 of the Code, contributions to a Roth IRA are not tax-deductible. Provided certain conditions are satisfied, distributions are generally tax-free. Like traditional IRAs, Roth IRAs are subject to limitations on contribution amounts and the timing of distributions. If an individual converts a traditional IRA into a Roth IRA the full amount of the IRA is included in taxable income. The Internal Revenue Service and other agencies may impose special information requirements with respect to Roth IRAs. We will provide the necessary information for Contracts issued in connection with Roth IRAs. STATUS OF OPTIONAL DEATH BENEFIT RIDERS Under the Code, IRAs may not invest in life insurance policies. Regulations issued by the Treasury Department provide that death benefits under IRAs do not violate this rule, provided that the death benefit is no more than the greater of the total premiums paid (net of prior withdrawals) or the cash value of the IRA. 42 In certain circumstances, the death benefit payable under the Contract's Optional Death Benefit Riders may exceed both the total premiums paid (net of prior withdrawals) and the cash value of the Contract. We have filed the Contract and the EEB Plus, EEB Plus MAV, and EEB Plus 5% Roll-Up Optional Death Benefit Riders ("New Riders") with the Internal Revenue Service ("IRS") requesting a ruling approving the use of the Contract with the New Riders as an IRA. We have already received a favorable determination letter with respect to the following Optional Death Benefit Riders: EEB; MAV; 5% Roll-Up; EEB and MAV; EEB and 5% Roll-Up; MAV and 5% Roll-Up; and EEB and MAV and 5% Roll-Up ("Old Riders"). Although we regard the New Riders as an investment protection feature that should not result in adverse tax treatment, WE GIVE NO ASSURANCE THAT THE IRS WILL APPROVE THE USE OF THE CONTRACT WITH THE NEW RIDERS IN IRAS. DENIAL OF OUR REQUEST BY THE IRS COULD RESULT IN TAXATION OF THE ENTIRE BALANCE OF YOUR IRA AND PENALTY TAXES. You should consult a qualified tax adviser before adding any of the New Riders to your Contract if it is an IRA. PUERTO RICO TAX CONSIDERATIONS The Contract offered by this Prospectus is considered an annuity contract under Section 1022 of the Puerto Rico Internal Revenue Code of 1994, as amended (the "1994 Code"). Under the current provisions of the 1994 Code, no income tax is payable on increases in value of accumulation shares of annuity units credited to a variable annuity contract until payments are made to the annuitant or other payee under such contract. When payments are made from your Contract in the form of an annuity, the annuitant or other payee will be required to include as gross income the lesser of the amounts received during the taxable year or the portion of each payment equal to 3% of the aggregate premiums or other consideration paid for the annuity. The amount, if any, in excess of the included amount is excluded from gross income. After an amount equal to the aggregate amount excluded from gross income has been received, all of the annuity payments are considered to be taxable income. When a payment under a Contract is made in a lump sum, the amount of the payment would be included in the gross income of the Annuitant or other Payee to the extent it exceeds the Annuitant's aggregate premiums or other consideration paid. The provisions of the 1994 Code with respect to qualified retirement plans described in this Prospectus vary significantly from those under the Internal Revenue Code. Although we currently offer the Contract in Puerto Rico in connection with qualified retirement plans, the text of this Prospectus under the heading "Federal Tax Status" dealing with such qualified retirement plans is inapplicable to Puerto Rico and should be disregarded. For information regarding the income tax consequences of owning a Contract, you should consult a qualified tax adviser. ADMINISTRATION OF THE CONTRACT We perform certain administrative functions relating to the Contract, Participant Accounts, and the Variable Account. These functions include, but are not limited to, maintaining the books and records of the Variable Account and the Sub-Accounts; maintaining records of the name, address, taxpayer identification number, Contract number, Participant Account number and type, the status of each Participant Account and other pertinent information necessary to the administration and operation of the Contract; processing Applications, Purchase Payments, transfers and full and partial withdrawals; issuing Contracts and Certificates; administering annuity payments; furnishing accounting and valuation services; reconciling and depositing cash receipts; providing confirmations; providing toll-free customer service lines; and furnishing telephonic transfer services. DISTRIBUTION OF THE CONTRACT We offer the Contract on a continuous basis. Contracts are sold by licensed insurance agents in those states where the Contract may be lawfully sold. Such agents will be registered representatives of 43 broker-dealers registered under the Securities Exchange Act of 1934 who are members of the National Association of Securities Dealers, Inc. and who have entered into distribution agreements with the Company and the general distributor, Clarendon Insurance Agency, Inc. ("Clarendon"), One Sun Life Executive Park, Wellesley Hills, Massachusetts 02481. Clarendon, a wholly-owned subsidiary of the Company, is registered with the SEC under the Securities Exchange Act of 1934 as a broker-dealer and is a member of the National Association of Securities Dealers, Inc. Commissions and other distribution compensation will be paid by the Company to the selling agents and will not be more than 6.50% of Purchase Payments. In addition, after the first Account Year, broker-dealers who have entered into distribution agreements with the Company may receive an annual renewal commission of no more than 0.50% of the Participant's Account Value. In addition to commissions, the Company may, from time to time, pay or allow additional promotional incentives, in the form of cash or other compensation. We reserve the right to offer these additional incentives only to certain broker-dealers that sell or are expected to sell during specified time periods certain minimum amounts of Contracts or Certificates or other contracts offered by the Company. Promotional incentives may change at any time. Commissions may be waived or reduced in connection with certain transactions described in this Prospectus under the heading "Waivers; Reduced Charges; Credits; Special Guaranteed Interest Rates." During 2000, approximately $1,166,659 in commissions were paid to and retained by Clarendon in connection with the distribution of the Contracts. PERFORMANCE INFORMATION From time to time the Variable Account may publish reports to shareholders, sales literature and advertisements containing performance information relating to the Sub-Accounts. This information may include standardized and non-standardized "Average Annual Total Return," "Cumulative Growth Rate" and "Compound Growth Rate." We may also advertise "yield" and "effective yield" for some variable options. Average Annual Total Return measures the net income of the Sub-Account and any realized or unrealized gains or losses of the Fund in which it invests, over the period stated. Average Annual Total Return figures are annualized and represent the average annual percentage change in the value of an investment in a Sub-Account over that period. Standardized Average Annual Total Return information covers the period after the Variable Account was established or, if shorter, the life of the Series. Non-standardized Average Annual Total Return covers the life of each Fund, which may predate the Variable Account. Cumulative Growth Rate represents the cumulative change in the value of an investment in the Sub-Account for the period stated, and is arrived at by calculating the change in the Accumulation Unit Value of a Sub-Account between the first and the last day of the period being measured. The difference is expressed as a percentage of the Accumulation Unit Value at the beginning of the base period. "Compound Growth Rate" is an annualized measure, calculated by applying a formula that determines the level of return which, if earned over the entire period, would produce the cumulative return. Average Annual Total Return figures assume an initial purchase payment of $1,000 and reflect all applicable withdrawal and Contract charges. The Cumulative Growth Rate and Compound Growth Rate figures that we advertise do not reflect withdrawal charges or the Account Fee, although such figures do reflect all recurring charges. Results calculated without withdrawal and/or certain Contract charges will be higher. We may also use other types of rates of return that do not reflect withdrawal and Contract charges. The performance figures used by the Variable Account are based on the actual historical performance of the underlying Funds for the specified periods, and the figures are not intended to indicate future performance. For periods before the date the Contracts became available, we calculate the performance information for the Sub-Account on a hypothetical basis. To do this, we reflect deductions of the current Contract fees and charges from the historical performance of the corresponding Funds. Yield is a measure of the net dividend and interest income earned over a specific one month or 30-day period (7-day period for the available Money Market Sub-Account), expressed as a percentage of the value of the Sub-Account's Accumulation Units. Yield is an annualized figure, which means that 44 we assume that the Sub-Account generates the same level of net income over a one-year period and compound that income on a semi-annual basis. We calculate the effective yield for the Money Market Sub-Account similarly, but include the increase due to assumed compounding. The Money Market Sub-Account's effective yield will be slightly higher than its yield as a result of its compounding effect. The Variable Account may also from time to time compare its investment performance to various unmanaged indices or other variable annuities and may refer to certain rating and other organizations in its marketing materials. More information on performance and our computations is set forth in the Statement of Additional Information. The Company may also advertise the ratings and other information assigned to it by independent industry ratings organizations. Some of these organizations are A.M. Best, Moody's Investor's Service, Standard and Poor's Insurance Rating Services, and Duff and Phelps. Each year A.M. Best reviews the financial status of thousands of insurers, culminating in the assignment of Best's rating. These ratings reflect A.M. Best's current opinion of the relevant financial strength and operating performance of an insurance company in comparison to the norms of the life/health industry. Best's ratings range from A++ to F. Standard and Poor's and Duff and Phelps' ratings measure the ability of an insurance company to meet its obligations under insurance policies it issues. These two ratings do not measure the insurance company's ability to meet non-policy obligations. Ratings in general do not relate to the performance of the Sub-Accounts. We may also advertise endorsements from organizations, individuals or other parties that recommend the Company or the Contracts. We may occasionally include in advertisements (1) comparisons of currently taxable and tax deferred investment programs, based on selected tax brackets; or (2) discussions of alternative investment vehicles and general economic conditions. AVAILABLE INFORMATION The Company and the Variable Account have filed with the SEC registration statements under the Securities Act of 1933 relating to the Contracts. This Prospectus does not contain all of the information contained in the registration statements and their exhibits. For further information regarding the Variable Account, the Company and the Contracts, please refer to the registration statements and their exhibits. In addition, the Company is subject to the informational requirements of the Securities Exchange Act of 1934. We file reports and other information with the SEC to meet these requirements. You can inspect and copy this information and our registration statements at the SEC's public reference facilities at the following locations: WASHINGTON, D.C. -- 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549; CHICAGO, ILLINOIS -- 500 West Madison Street, Chicago, IL 60661; NEW YORK, NEW YORK -- 7 World Trade Center, 13th Floor, New York, NY 10048. The Washington, D.C. office will also provide copies by mail for a fee. You may also find these materials on the SEC's website (http://www.sec.gov). INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The Company's Annual Report on Form 10-K for the year ended December 31, 2000 filed with the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") is incorporated herein by reference. All documents or reports we file pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, after the date of this prospectus and prior to the termination of the offering, shall be deemed incorporated by reference into the prospectus. The Company will furnish, without charge, to each person to whom a copy of this Prospectus is delivered, upon the written or oral request of such person, a copy of the documents referred to above which have been incorporated by reference into this Prospectus, other than exhibits to such document (unless such exhibits are specifically incorporated by reference in this Prospectus). Requests for such document should be directed to the Secretary, Sun Life Assurance Company of Canada (U.S.), One Sun Life Executive Park, Wellesley Hills, Massachusetts 02481, telephone (800) 225-3950. 45 STATE REGULATION The Company is subject to the laws of the State of Delaware governing life insurance companies and to regulation by the Commissioner of Insurance of Delaware. An annual statement is filed with the Commissioner of Insurance on or before March lst in each year relating to the operations of the Company for the preceding year and its financial condition on December 31st of such year. Its books and records are subject to review or examination by the Commissioner or his agents at any time and a full examination of its operations is conducted at periodic intervals. The Company is also subject to the insurance laws and regulations of the other states and jurisdictions in which it is licensed to operate. The laws of the various jurisdictions establish supervisory agencies with broad administrative powers with respect to licensing to transact business, overseeing trade practices, licensing agents, approving policy forms, establishing reserve requirements, fixing maximum interest rates on life insurance policy loans and minimum rates for accumulation of surrender values, prescribing the form and content of required financial statements and regulating the type and amounts of investments permitted. Each insurance company is required to file detailed annual reports with supervisory agencies in each of the fire jurisdictions in which it does business and its operations and accounts are subject to examination by such agencies at regular intervals. In addition, many states regulate affiliated groups of insurers, such as the Company, Sun Life (Canada) and its affiliates, under insurance holding company legislation. Under such laws, inter-company transfers of assets and dividend payments from insurance subsidiaries may be subject to prior notice or approval, depending on the size of such transfers and payments in relation to the financial positions of the companies involved. Under insurance guaranty fund laws in most states, insurers doing business therein can be assessed (up to prescribed limits) for policyholder losses incurred by insolvent companies. The amount of any future assessments of the Company under these laws cannot be reasonably estimated. However, most of these laws do provide that an assessment may be excused or deferred if it would threaten an insurer's own financial strength and many permit the deduction of all or a portion of any such assessment from any future premium or similar taxes payable. Although the federal government generally does not directly regulate the business of insurance, federal initiatives often have an impact on the business in a variety of ways. Current and proposed federal measures which may significantly affect the insurance business include employee benefit regulation, removal of barriers preventing banks from engaging in the insurance business, tax law changes affecting the taxation of insurance companies, the tax treatment of insurance products and its impact on the relative desirability of various personal investment vehicles. LEGAL PROCEEDINGS There are no pending legal proceedings affecting the Variable Account. We and our subsidiaries are engaged in various kinds of routine litigation which, in management's judgment, is not of material importance to our respective total assets or material with respect to the Variable Account. ACCOUNTANTS The financial statements of the Variable Account for the year ended December 31, 2000, and the consolidated financial statements of the Company for the years ended December 31, 2000, 1999, and 1998, both included in the Statement of Additional Information ("SAI") filed in the Company's Registration Statement under the Investment Company Act of 1940, have been audited by Deloitte & Touche LLP, independent auditors, as stated in their reports appearing herein, and are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. FINANCIAL STATEMENTS The financial statements of the Company which are included in the SAI should be considered only as bearing on the ability of the Company to meet its obligations with respect to amounts allocated to the Fixed Account and with respect to the death benefit and the Company's assumption of the 46 mortality and expense risks. They should not be considered as bearing on the investment performance of the Fund shares held in the Sub-Accounts of the Variable Account. The financial statements of the Variable Account for the year ended December 31, 2000 are also included in the SAI. ------------------------ TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION Calculation of Performance Data Advertising and Sales Literature Calculations Example of Variable Accumulation Unit Value Calculation Example of Variable Annuity Unit Calculation Example of Variable Annuity Payment Calculation Distribution of the Contracts Designation and Change of Beneficiary Custodian Financial Statements
47 This Prospectus sets forth information about the Contract and the Variable Account that a prospective purchaser should know before investing. Additional information about the Contract and the Variable Account has been filed with the Securities and Exchange Commission in a Statement of Additional Information dated May 1, 2001 which is incorporated herein by reference. The Statement of Additional Information is available upon request and without charge from Sun Life Assurance Company of Canada (U.S.). To receive a copy, return this request form to the address shown below or telephone (800) 752-7215. -------------------------------------------------------------------------------- To: Sun Life Assurance Company of Canada (U.S.) c/o Retirement Products and Services P.O. Box 1024 Boston, Massachusetts 02103 Please send me a Statement of Additional Information for MFS Regatta Choice Variable and Fixed Annuity Sun Life of Canada (U.S.) Variable Account F. Name ------------------------------------------------------------------ Address ------------------------------------------------------------------ ------------------------------------------------------------------ City State Zip -------------------------- -------------- ------- Telephone ------------------------------------------------------------------ 48 APPENDIX A GLOSSARY The following terms as used in this Prospectus have the indicated meanings: ACCOUNT or PARTICIPANT ACCOUNT: An account established for each Participant to which Net Purchase Payments are credited. ACCOUNT VALUE: The Variable Accumulation Value, if any, plus the Fixed Accumulation Value, if any, of your Account for any Valuation Period. ACCOUNT YEAR and ACCOUNT ANNIVERSARY: Your first Account Year is the period 365 days from the date on which we issued your Contract. Your Account Anniversary is the last day of an Account Year. Each Account Year after the first is the 365-day period that begins on your Account Anniversary. For example, if the Contract Date is on March 12, the first Account Year is determined from the Contract Date and ends on March 12 of the following year. Your Account Anniversary is March 12 and all Account Years after the first are measured from March 12. (If the Anniversary Date falls on a non-business day, the previous business day will be used.) ACCUMULATION PHASE: The period before the Annuity Commencement Date and during the lifetime of the Annuitant during which you make Purchase Payments under the Contract. This is called the "Accumulation Period" in the Contract. *ANNUITANT: The person or persons to whom the first annuity payment is made. If the Annuitant dies prior to the Annuity Commencement Date, the Co-Annuitant will become the sole Annuitant. If the Co-Annuitant dies or if no Co-Annuitant is named, the Participant becomes the Annuitant upon the Annuitant's death prior to the Annuity Commencement Date. If you have not named a sole Annuitant on the 30th day before the Annuity Commencement Date and both the Annuitant and Co-Annuitant are living, the Co-Annuitant will be the sole Annuitant/Payee during the Income Phase. ANNUITY COMMENCEMENT DATE: The date on which the first annuity payment under each Contract is to be made. ANNUITY OPTION: The method you choose for making annuity payments. ANNUITY UNIT: A unit of measure used in the calculation of the amount of the second and each subsequent Variable Annuity payment from the Variable Account. APPLICATION: The document signed by you or other evidence acceptable to us that serves as your application for participation under a Group Contract or purchase of an Individual Contract. *BENEFICIARY: Prior to the Annuity Commencement Date, the person or entity having the right to receive the death benefit and, for Non-Qualified Contracts, who, in the event of the Participant's death, is the "designated beneficiary" for purposes of Section 72(s) of the Internal Revenue Code. After the Annuity Commencement Date, the person or entity having the right to receive any payments due under the Annuity Option elected, if applicable, upon the death of the Payee. BUSINESS DAY: Any day the New York Stock Exchange is open for trading. Also, any day on which we make a determination of the value of a Variable Accumulation Unit. CERTIFICATE: The document for each Participant which evidences the coverage of the Participant under a Group Contract. COMPANY: Sun Life Assurance Company of Canada (U.S.). CONTRACT: Any Individual Contract, Group Contract, or Certificate issued under a Group Contract. CONTRACT DATE: The date on which we issue your Contract. This is called the "Date of Coverage" in the Contract. *You specify these items on the Application, and may change them, as we describe in this Prospectus. 49 COVERED PERSON: The person(s) identified as such in the Contract whose death will trigger the death benefit provisions of the Contract and whose medically necessary stay in a hospital or nursing facility may allow the Participant to be eligible for a waiver of the withdrawal charge. Unless otherwise noted, the the Participant/Owner is the Covered Person. DEATH BENEFIT DATE: If you have elected a death benefit payment option before the Covered Person's death that remains in effect, the date on which we receive Due Proof of Death. If your Beneficiary elects the death benefit payment option, the later of (a) the date on which we receive the Beneficiary's election and (b) the date on which we receive Due Proof of Death. If we do not receive the Beneficiary's election within 60 days after we receive Due Proof of Death, the Death Benefit Date will be the last day of the 60 day period and we will pay the death benefit in one lump sum. DUE PROOF OF DEATH: An original certified copy of an official death certificate, an original certified copy of a decree of a court of competent jurisdiction as to the finding of death, or any other proof satisfactory to the Company. FIXED ACCOUNT: The general account of the Company, consisting of all assets of the Company other than those allocated to a separate account of the Company. FIXED ACCOUNT VALUE: The value of that portion of your Account allocated to the Fixed Account. FIXED ANNUITY: An annuity with payments which do not vary as to dollar amount. FUND: A registered management investment company, or series thereof, in which assets of a Sub-Account may be invested. GROUP CONTRACT: A Contract issued by the Company on a group basis. GUARANTEE AMOUNT: Each separate allocation of Account Value to a particular Guarantee Period (including interest earned thereon). GUARANTEE PERIOD: The period for which a Guaranteed Interest Rate is credited. GUARANTEED INTEREST RATE: The rate of interest we credit on a compound annual basis during any Guarantee Period. INCOME PHASE: The period on and after the Annuity Commencement Date and during the lifetime of the Annuitant during which we make annuity payments under the Contract. INDIVIDUAL CONTRACT: A Contract issued by the Company on an individual basis. NET INVESTMENT FACTOR: An index applied to measure the investment performance of a Sub-Account from one Valuation Period to the next. The Net Investment Factor may be greater or less than or equal to one. NET PURCHASE PAYMENT (NET PAYMENTS): The portion of a Purchase Payment which remains after the deduction of any applicable premium tax or similar tax. NON-QUALIFIED CONTRACT: A Contract used in connection with a retirement plan that does not receive favorable federal income tax treatment under Sections 401, 403, 408, or 408A of the Internal Revenue Code. The Participant's interest in the Contract must be owned by a natural person or agent for a natural person for the Contract to receive income tax treatment as an annuity. *OWNER: The person, persons or entity entitled to the ownership rights stated in a Group Contract and in whose name or names the Group Contract is issued. The Owner may designate a trustee or custodian of a retirement plan which meets the requirements of Section 401, Section 408(c), Section 408(k), Section 408(p) or Section 408A of the Internal Revenue Code to serve as legal owner of assets of a retirement plan, but the term "Owner," as used herein, shall refer to the organization entering into the Group Contract. *You specify these items on the Application, and may change them, as we describe in this Prospectus. 50 *PARTICIPANT: In the case of an Individual Contract, the owner of the Contract. In the case of a Group Contract, the person named in the Contract who is entitled to exercise all rights and privileges of ownership under the Contract, except as reserved by the Owner. If there are two Participants, the death benefit is paid upon the death of either Participant. PAYEE: A recipient of payments under a Contract. The term includes an Annuitant or a Beneficiary who becomes entitled to benefits upon the death of the Participant, or on the Annuity Commencement Date. PURCHASE PAYMENT (PAYMENT): An amount paid to the Company as consideration for the benefits provided by a Contract. QUALIFIED CONTRACT: A Contract used in connection with a retirement plan which may receive favorable federal income tax treatment under Sections 401, 403, 408 or 408A of the Internal Revenue Code of 1986, as amended. RENEWAL DATE: The last day of a Guarantee Period. SERIES FUND: MFS/Sun Life Series Trust. SUB-ACCOUNT: That portion of the Variable Account which invests in shares of a specific Fund. VALUATION PERIOD: The period of time from one determination of Variable Accumulation Unit or Annuity Unit values to the next subsequent determination of these values. Value determinations are made as of the close of the New York Stock Exchange on each day that the Exchange is open for trading. VARIABLE ACCOUNT: Variable Account F of the Company, which is a separate account of the Company consisting of assets set aside by the Company, the investment performance of which is kept separate from that of the general assets of the Company. VARIABLE ACCUMULATION UNIT: A unit of measure used in the calculation of Variable Account Value. VARIABLE ACCOUNT VALUE: The value of that portion of your Account allocated to the Variable Account. VARIABLE ANNUITY: An annuity with payments which vary as to dollar amount in relation to the investment performance of the Variable Account. *You specify these items on the Application, and may change them, as we describe in this Prospectus. 51 APPENDIX B WITHDRAWALS, WITHDRAWAL CHARGES AND THE MARKET VALUE ADJUSTMENT PART 1: VARIABLE ACCOUNT (THE MARKET VALUE ADJUSTMENT DOES NOT APPLY TO THE VARIABLE ACCOUNT) WITHDRAWAL CHARGE CALCULATION: FULL WITHDRAWAL: Assume a Purchase Payment of $40,000 is made on the Contract Date, no additional Purchase Payments are made and there are no partial withdrawals. The table below presents three examples of the withdrawal charge resulting from a full withdrawal of your Account, based on hypothetical Account Values.
PAYMENT HYPOTHETICAL CUMULATIVE FREE SUBJECT TO WITHDRAWAL WITHDRAWAL ACCOUNT ACCOUNT ANNUAL ANNUAL WITHDRAWAL WITHDRAWAL CHARGE CHARGE YEAR VALUE EARNINGS EARNINGS AMOUNT CHARGE PERCENTAGE AMOUNT -------- ------------ -------- ---------- ---------- ---------- ---------- ---------- (a) 1 $41,000 $1,000 $ 1,000 $ 6,000 $35,000 7.00% $2,450 2 $45,100 $4,100 $ 5,100 $ 6,000 $39,100 7.00% $2,737 3 $49,600 $4,500 $ 9,600 $ 9,600 $40,000 6.00% $2,400 (b) 4 $52,100 $2,500 $12,100 $12,100 $40,000 6.00% $2,400 5 $57,300 $5,200 $17,300 $17,300 $40,000 5.00% $2,000 6 $63,000 $5,700 $23,000 $23,000 $40,000 4.00% $1,600 7 $66,200 $3,200 $26,200 $26,200 $40,000 3.00% $1,200 (c) 8 $72,800 $6,600 $32,800 $32,800 $ 0 0.00% $ 0
(a) The free withdrawal amount in any year is equal to the greater of (1) the Contract's earnings that were not previously withdrawn, and (2) 15% of any Purchase Payments made in the last 7 Account Years ("New Payments"). In Account Year 1, the free withdrawal amount is $6,000, which equals 15% of the Purchase Payment of $40,000. On a full withdrawal of $41,000, the amount subject to a withdrawal charge is $35,000, which equals the Account Value of $41,000 minus the free withdrawal amount of $6,000. (b) In Account Year 4, the free withdrawal amount is $12,100, which equals the prior Contract's cumulative earnings to date. On a full withdrawal of $52,100, the amount subject to a withdrawal charge is $40,000. (c) In Account Year 8, the free withdrawal amount is $32,800, which equals the Contract's cumulative earnings to date. On a full withdrawal of $72,800, the amount subject to a withdrawal charge is $0, since the New Payments equal $0. PARTIAL WITHDRAWAL Assume a single Purchase Payment of $40,000 is made on the Contract Date, no additional Purchase Payments are made, no partial withdrawals have been taken prior to the fourth Account Year, and there are a series of 4 partial withdrawals made during the fourth Account Year of $4,000, $9,000, $12,000, and $20,000.
REMAINING HYPOTHETICAL FREE AMOUNT OF ACCOUNT WITHDRAWAL WITHDRAWAL VALUE AMOUNT SUBJECT TO WITHDRAWAL WITHDRAWAL ACCOUNT BEFORE CUMULATIVE AMOUNT OF AFTER WITHDRAWAL CHARGE CHARGE YEAR WITHDRAWAL EARNINGS EARNINGS WITHDRAWAL WITHDRAWAL CHARGE PERCENTAGE AMOUNT --------------------- ------------ -------- ---------- ---------- ---------- ---------- ---------- ---------- 1 $41,000 $1,000 $ 1,000 $ 0 $6,000 $ 0 7.00% $ 0 2 $45,100 $4,100 $ 5,100 $ 0 $6,000 $ 0 7.00% $ 0 3 $49,600 $4,500 $ 9,600 $ 0 $9,600 $ 0 6.00% $ 0 4 (a) $50,100 $ 500 $10,100 $ 4,000 $6,100 $ 0 6.00% $ 0 4 (b) $46,900 $ 800 $10,900 $ 9,000 $ 0 $ 2,100 6.00% $ 126 4 (c) $38,500 $ 600 $11,500 $12,000 $ 0 $11,400 6.00% $ 684 4 (d) $26,900 $ 400 $11,900 $20,000 $ 0 $19,600 6.00% $1,176 HYPOTHETICAL ACCOUNT VALUE ACCOUNT AFTER YEAR WITHDRAWAL --------------------- ------------ 1 $41,000 2 $45,100 3 $49,600 4 (a) $46,100 4 (b) $37,900 4 (c) $26,500 4 (d) $ 6,900
52 (a) In Account Year 4, the free withdrawal amount is $10,100, which equals the Contract's cumulative earnings to date. The partial withdrawal amount of $4,000 is less than the free withdrawal amount, so there is no withdrawal charge. (b) Since a partial withdrawal of $4,000 was taken, the remaining free withdrawal amount in Account Year 4 is $10,900 - $4,000 = $6,900. Therefore, $6,900 of the $9,000 withdrawal is not subject to a withdrawal charge, and $2,100 is subject to a withdrawal charge. Of the $13,000 withdrawn to date, $10,900 has been from the free withdrawal amount and $21,000 has been from deposits. (c) Since $10,900 of the 2 prior Account Year 4 partial withdrawals was taken from the free withdrawal amount, the remaining free withdrawal amount in Account year 4 is $11,500 - $10,900 = $600. Therefore, $600 of the $12,000 withdrawal is not subject to a withdrawal charge, and $11,400 is subject to a withdrawal charge. Of the $25,000 withdrawn to date, $11,500 has been from the free withdrawal amount and $13,500 has been from deposits. (d) Since $11,500 of the 3 prior Account Year 4 partial withdrawals was taken from the free withdrawal amount, the remaining free withdrawal amount in Account Year 4 is $11,900 - $11,500 = $400. Therefore, $400 of the $20,000 withdrawal is not subject to a withdrawal charge, and $19,600 is subject to a withdrawal charge. Of the $45,000 withdrawn to date, $11,900 has been from the free withdrawal amount and $33,100 has been from deposits. Note that if the $6,900 hypothetical Account Value after withdrawal was withdrawn, it would all be from deposits and subject to a withdrawal charge. The withdrawal charge would be 6% of $6,900, which equals $414. The total Account Year 4 withdrawal charges would then be $2,400, which is the same amount that was assessed for a full liquidation in Account Year 4 in the example on the previous page. PART 2 -- FIXED ACCOUNT -- EXAMPLES OF THE MARKET VALUE ADJUSTMENT ("MVA") The MVA Factor is: N/12 1 + I ( -------- ) - 1 1 + J + b These examples assume the following: (1) The Guarantee Amount was allocated to a 5-year Guarantee Period with a Guaranteed Interest Rate of 6% or .06. (2) The date of surrender is 2 years from the Expiration Date (N = 24). (3) The value of the Guarantee Amount on the date of surrender is $11,910.16. (4) The interest earned in the current Account Year is $674.16. (5) No transfers or partial withdrawals affecting this Guarantee Amount have been made. (6) Withdrawal charges, if any, are calculated in the same manner as shown in the examples in Part 1. 53 EXAMPLE OF A NEGATIVE MVA: Assume that on the date of surrender, the current rate (J) is 8% or .08 and the b factor is zero. N/12 1 + I The MVA factor = ( -------- ) - 1 1 + J + b 24/12 1 + .06 = ( ------ ) - 1 1 + .08 = (.981)TO THE POWER OF 2 - 1 = .963 - 1 = - .037 The value of the Guarantee Amount less interest credited to the Guarantee Amount in the current Account Year is multiplied by the MVA factor to determine the MVA: ($11,910.16 - $674.16) X (.037) = -$415.73 -$415.73 represents the MVA that will be deducted from the value of the Guarantee Amount before the deduction of any withdrawal charge. For a partial withdrawal of $2,000 from this Guarantee Amount, the MVA would be ($2,000.00 - $674.16) X (.037) = -$49.06. -$49.06 represents the MVA that will be deducted from the partial withdrawal amount before the deduction of any withdrawal charge. EXAMPLE OF A POSITIVE MVA: Assume that on the date of surrender, the current rate (J) is 5% or .05 and the b factor is zero. N/12 1 + I The MVA factor = ( -------- ) - 1 1 + J + b 24/12 1 + .06 = ( ------ ) - 1 1 + .05 = (1.010)TO THE POWER OF 2 - 1 = 1.019 - 1 = .019 The value of the Guarantee Amount less interested credit to the Guarantee Amount in the current Account Year is multiplied by the MVA factor to determine the MVA: ($11,910.16 - $674.16) X .019 = $213.48 $213.48 represents the MVA that would be added to the value of the Guarantee Amount before the deduction of any withdrawal charge. For a partial withdrawal of $2,000 from this Guarantee Amount, the MVA would be ($2,000.00 - $674.16) X .019 = $25.19. $25.19 represents the MVA that would be added to the value of the partial withdrawal amount before the deduction of any withdrawal charge. 54 APPENDIX C CALCULATION OF BASIC DEATH BENEFIT EXAMPLE 1: Assume a Purchase Payment of $60,000.00 is made on the Contract Date and an additional Purchase Payment of $40,000.00 is made one year later. Assume that all of the money is invested in the Sub-Accounts, that no Withdrawals are made and that the Account Value on the Death Benefit Date is $80,000.00. The calculation of the Death Benefit to be paid is as follows: The Basic Death Benefit is the greatest of: Account Value = $ 80,000.00 Cash Surrender Value* = $ 76,100.00 Purchase Payments = $100,000.00 The Basic Death Benefit would therefore be: $100,000.00
EXAMPLE 2: Assume a Purchase Payment of $60,000.00 is made on the Contract Date and an additional Purchase Payment of $40,000.00 is made one year later. Assume that all of the money is invested in the Sub-Accounts and that the Account Value is $80,000.00 just prior to a $20,000.00 withdrawal. The Account Value on the Death Benefit Date is $60,000.00. The Basic Death Benefit is the greatest of: Account Value = $ 60,000.00 Cash Surrender Value* = $ 56,400.00 Adjusted Purchase Payments** = $ 75,000.00 The Basic Death Benefit would therefore be: $ 75,000.00 *Cash Surrender Value is the amount we would pay you if you surrendered your entire Account Value. For a description of how Cash Surrender Value is calculated, see "Full Withdrawals" under the subheading "Cash Withdrawals." **Adjusted Purchase Payments can be calculated as follows: Payments X (Account Value after withdrawal DIVIDED BY Account Value before withdrawal) $100,000.00 X ($60,000.00 DIVIDED BY $80,000.00)
55 APPENDIX D CALCULATION OF EARNINGS ENHANCEMENT OPTIONAL DEATH BENEFIT EXAMPLE 1: Assume a Purchase Payment of $60,000 is made on the Contract Date, and an additional Purchase Payment of $40,000 is made one year later. Assume that all of the money is invested into the Sub-Accounts, no withdrawals are made and the Account Value on the Death Benefit Date is $135,000. In addition, this Contract was issued prior to the owner's 70th birthday. Assume death occurs in Account Year 7. The calculation of the Death Benefit to be paid is as follows: The Death Benefit Amount will be the greatest of: Account Value = $135,000 Cash Surrender Value* = $132,000 Total of Adjusted Purchase Payments = $100,000 The Death Benefit Amount would therefore = $135,000 ~ PLUS ~ The EEB amount, calculated as follows: Account Value minus Adjusted Purchase Payments = $ 35,000 40% of the above amount = $ 14,000 Cap of 40% of Adjusted Purchase Payments = $ 40,000 The lesser of the above two amounts = the EEB amount = $ 14,000
The total Death Benefit would be the amount paid on the Basic Death Benefit plus the EEB amount = $135,000 + $14,000 = $149,000. EXAMPLE 2: Assume a Purchase Payment of $60,000 is made on the Contract Date, and an additional Purchase Payment of $40,000 is made one year later. Assume that all of the money is invested into the Sub-Accounts and that the Account Value is $135,000 just prior to a $20,000 withdrawal. The Account Value on the Death Benefit Date is $115,000. In addition, this Contract was issued prior to the owner's 70th birthday. The Death Benefit Amount will be the greatest of: Account Value = $115,000 Cash Surrender Value* = $112,000 Total of Adjusted Purchase Payments** = $ 85,185 The Death Benefit Amount would therefore = $115,000 ~ PLUS ~ The EEB amount, calculated as follows: Account Value minus Adjusted Purchase Payments = $ 29,815 40% of the above amount = $ 11,926 Cap of 40% of Adjusted Purchase Payments = $ 34,074 The lesser of the above two amounts = the EEB amount = $ 11,926
The total Death Benefit would be the amount paid on the Basic Death Benefit plus the EEB amount = $115,000 + $11,926 = $126,926. *Cash Surrender Value is the amount we would pay you if you surrendered your entire Account Value. For a description of how Cash Surrender Value is calculated, see "Full Withdrawals" under the subheading "Cash Withdrawals." **Adjusted Purchase Payments can be calculated as follows: Payments X (Account Value after withdrawal DIVIDED BY Account Value before withdrawal) = $100,000 X ($115,000 DIVIDED BY $135,000) = $85,185 56 APPENDIX E CALCULATION OF DEATH BENEFIT WHEN EEB AND MAV AND 5% ROLL-UP RIDERS ARE SELECTED Assume a Purchase Payment of $60,000 is made on the Contract Date, and an additional Purchase Payment of $40,000 is made one year later. Assume that all of the money is invested in Variable Accounts. No withdrawals are made. The Account Value at the Death Benefit Date is $135,000, the value of the Purchase Payments accumulated at 5% until the Death Benefit Date is $140,000, and the Maximum Anniversary Value is $142,000. Assume death occurs in Account Year 7. The calculation of the death benefit to be paid is as follows: The Death Benefit Amount will be the greatest of: Account Value = $135,000 Cash Surrender Value* = $132,000 Total of Adjusted Purchase Payments = $100,000 5% Premium Roll-up Value = $140,000 Maximum Anniversary Value = $142,000 The Death Benefit Amount would therefore = $142,000 ~ PLUS ~ The EEB amount, calculated as follows: Account Value minus Adjusted Purchase Payments = $ 35,000 40% of the above amount = $ 14,000 Cap of 40% of Adjusted Purchase Payments = $ 40,000 The lesser of the above two amounts = the EEB amount = $ 14,000
The total Death Benefit would be the amount paid on the Maximum Anniversary Rider plus the EEB amount = $142,000 + $14,000 = $156,000. *Cash Surrender Value is the amount we would pay you if you surrendered your entire Account Value. For a description of how Cash Surrender Value is calculated, see "Full Withdrawals" under the subheading "Cash Withdrawals." 57 APPENDIX F CALCULATION OF EARNINGS ENHANCEMENT PLUS OPTIONAL DEATH BENEFIT Assume a Purchase Payment of $60,000 is made on the Contract Date, and an additional Purchase Payment of $40,000 is made one year later. Assume that all of the money is invested into the Sub-Accounts, no withdrawals are made and the Account Value on the Death Benefit Date is $135,000. In addition, this Contract was issued prior to the owner's 70th birthday. Assume death occurs in Account Year 7. The calculation of the Death Benefit to be paid is as follows: The Death Benefit Amount will be the greatest of: Account Value = $135,000 Cash Surrender Value* = $132,000 Total of Adjusted Purchase Payments = $100,000 The Death Benefit Amount would therefore = $135,000 ~ PLUS ~ The EEB Plus amount, calculated as follows: Account Value minus Adjusted Purchase Payments = $ 35,000 40% of the above amount = $ 14,000 Cap of 100% of Adjusted Purchase Payments = $100,000 The lesser of the above two amounts = the EEB Plus amount = $ 14,000
The total Death Benefit would be the amount paid on the Basic Death Benefit plus the EEB Plus amount = $135,000 + $14,000 = $149,000. *Cash Surrender Value is the amount we would pay you if you surrendered your entire Account Value. For a description of how Cash Surrender Value is calculated, see "Full Withdrawals" under the subheading "Cash Withdrawals." 58 APPENDIX G CALCULATION OF EARNINGS ENHANCEMENT PLUS WITH MAV OPTIONAL DEATH BENEFIT Assume a Purchase Payment of $60,000 is made on the Contract Date, and an additional Purchase Payment of $40,000 is made one year later. Assume that all of the money is invested into the Sub-Accounts, no withdrawals are made and the Account Value on the Death Benefit Date is $135,000. The Maximum Anniversary Value on the Death Benefit Date is $140,000. In addition, this Contract was issued prior to the owner's 70th birthday. Assume death occurs in Account Year 7. The calculation of the Death Benefit to be paid is as follows: The Death Benefit Amount will be the greatest of: Account Value = $135,000 Cash Surrender Value* = $132,000 Total of Adjusted Purchase Payments = $100,000 Maximum Anniversary Value = $140,000 The Death Benefit Amount would therefore = $140,000 ~ PLUS ~ The EEB Plus amount, calculated as follows: Death Benefit Amount before EEB minus Adjusted Purchase Payments = $ 40,000 40% of the above amount = $ 16,000 Cap of 100% of Adjusted Purchase Payments = $100,000 The lesser of the above two amounts = the EEB Plus amount = $ 16,000
The total Death Benefit would be the amount paid on the Maximum Anniversary Rider plus the EEB Plus MAV amount = $140,000 + $16,000 = $156,000. *Cash Surrender Value is the amount we would pay you if you surrendered your entire Account Value. For a description of how Cash Surrender Value is calculated, see "Full Withdrawals" under the subheading "Cash Withdrawals." 59 APPENDIX H CALCULATION OF EARNINGS ENHANCEMENT PLUS WITH 5% ROLL-UP OPTIONAL DEATH BENEFIT Assume a Purchase Payment of $60,000 is made on the Contract Date, and an additional Purchase Payment of $40,000 is made one year later. Assume that all of the money is invested into the Sub-Accounts, no withdrawals are made and the Account Value on the Death Benefit Date is $135,000. The value of the Purchase Payments accumulated at 5% until the Death Benefit Date is $140,000. In addition, this Contract was issued prior to the owner's 70th birthday. Assume death occurs in Account Year 7. The calculation of the Death Benefit to be paid is as follows: The Death Benefit Amount will be the greatest of: Account Value = $135,000 Cash Surrender Value* = $132,000 Total of Adjusted Purchase Payments = $100,000 5% Premium Roll-up Value = $140,000 The Death Benefit Amount would therefore = $140,000 ~ PLUS ~ The EEB Plus amount, calculated as follows: Death Benefit Amount before EEB minus Adjusted Purchase Payments = $ 40,000 40% of the above amount = $ 16,000 Cap of 100% of Adjusted Purchase Payments = $100,000 The lesser of the above two amounts = the EEB Plus amount = $ 16,000
The total Death Benefit would be the amount paid on the 5% Roll-Up Rider plus the EEB Plus 5% Roll-Up amount = $140,000 + $16,000 = $156,000. *Cash Surrender Value is the amount we would pay you if you surrendered your entire Account Value. For a description of how Cash Surrender Value is calculated, see "Full Withdrawals" under the subheading "Cash Withdrawals." 60 APPENDIX I CONDENSED FINANCIAL INFORMATION -- ACCUMULATION UNIT VALUES The following information should be read in conjunction with the Variable Account's Financial Statements appearing in the Statement of Additional Information. All of the Variable Account's Financial Statements have been audited by Deloitte & Touche LLP, independent auditors.
YEAR ENDED DECEMBER 31, 2000* ------------------ BOND SERIES -- LEVEL 1+ Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.5347 Units outstanding at end of period........................ -- BOND SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.5347 Units outstanding at end of period........................ 62,271 BOND SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.5300 Units outstanding at end of period........................ 29,888 BOND SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.5277 Units outstanding at end of period........................ 41,361 BOND SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.5230 Units outstanding at end of period........................ 128,272 BOND SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.5160 Units outstanding at end of period........................ 49,564 CAPITAL APPRECIATION SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.0903 Units outstanding at end of period........................ 9,289
------------------------
+LEVEL PERCENTAGE OF AVERAGE DAILY NET ASSETS --------------------- -------------------------------------- 1 1.00% 2 1.15% 3 1.25% 4 1.30% 5 1.40% 6 1.55%
61
YEAR ENDED DECEMBER 31, 2000* ------------------ CAPITAL APPRECIATION SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.0848 Units outstanding at end of period........................ 358,590 CAPITAL APPRECIATION SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.0813 Units outstanding at end of period........................ 144,013 CAPITAL APPRECIATION SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.0795 Units outstanding at end of period........................ 621,987 CAPITAL APPRECIATION SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.0759 Units outstanding at end of period........................ 1,152,866 CAPITAL APPRECIATION SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.0705 Units outstanding at end of period........................ 410,764 CAPITAL OPPORTUNITIES SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.2259 Units outstanding at end of period........................ -- CAPITAL OPPORTUNITIES SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.2203 Units outstanding at end of period........................ 542,845 CAPITAL OPPORTUNITIES SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.2166 Units outstanding at end of period........................ 168,372 CAPITAL OPPORTUNITIES SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.2147 Units outstanding at end of period........................ 974,321 CAPITAL OPPORTUNITIES SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.2110 Units outstanding at end of period........................ 2,057,010
62
YEAR ENDED DECEMBER 31, 2000* ------------------ CAPITAL OPPORTUNITIES SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.2053 Units outstanding at end of period........................ 530,318 EMERGING GROWTH SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $7.7721 Units outstanding at end of period........................ 9,525 EMERGING GROWTH SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $7.7668 Units outstanding at end of period........................ 564,969 EMERGING GROWTH SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $7.7632 Units outstanding at end of period........................ 167,798 EMERGING GROWTH SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $7.7615 Units outstanding at end of period........................ 913,512 EMERGING GROWTH SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $7.7579 Units outstanding at end of period........................ 2,170,423 EMERGING GROWTH SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $7.7526 Units outstanding at end of period........................ 578,558 EMERGING MARKETS EQUITY SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.1649 Units outstanding at end of period........................ -- EMERGING MARKETS EQUITY SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.1595 Units outstanding at end of period........................ 16,933 EMERGING MARKETS EQUITY SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.1559 Units outstanding at end of period........................ 20,014
63
YEAR ENDED DECEMBER 31, 2000* ------------------ EMERGING MARKETS EQUITY SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.1540 Units outstanding at end of period........................ 50,636 EMERGING MARKETS EQUITY SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.1504 Units outstanding at end of period........................ 105,050 EMERGING MARKETS EQUITY SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.1450 Units outstanding at end of period........................ 54,411 GLOBAL ASSET ALLOCATION SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.5774 Units outstanding at end of period........................ -- GLOBAL ASSET ALLOCATION SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.5718 Units outstanding at end of period........................ 11,274 GLOBAL ASSET ALLOCATION SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.5681 Units outstanding at end of period........................ 9,347 GLOBAL ASSET ALLOCATION SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.5662 Units outstanding at end of period........................ 15,475 GLOBAL ASSET ALLOCATION SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.5625 Units outstanding at end of period........................ 38,826 GLOBAL ASSET ALLOCATION SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.5568 Units outstanding at end of period........................ 3,760 GLOBAL GOVERNMENTS SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.2804 Units outstanding at end of period........................ --
64
YEAR ENDED DECEMBER 31, 2000* ------------------ GLOBAL GOVERNMENTS SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.2736 Units outstanding at end of period........................ 10,314 GLOBAL GOVERNMENTS SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.2690 Units outstanding at end of period........................ 12,317 GLOBAL GOVERNMENTS SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.2667 Units outstanding at end of period........................ 12,672 GLOBAL GOVERNMENTS SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.2622 Units outstanding at end of period........................ 54,231 GLOBAL GOVERNMENTS SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.2553 Units outstanding at end of period........................ 33,261 GLOBAL GROWTH SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.9173 Units outstanding at end of period........................ -- GLOBAL GROWTH SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.9115 Units outstanding at end of period........................ 155,157 GLOBAL GROWTH SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.9077 Units outstanding at end of period........................ 4,354 GLOBAL GROWTH SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.9058 Units outstanding at end of period........................ 201,984 GLOBAL GROWTH SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.9020 Units outstanding at end of period........................ 376,659
65
YEAR ENDED DECEMBER 31, 2000* ------------------ GLOBAL GROWTH SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.8963 Units outstanding at end of period........................ 88,602 GLOBAL TELECOMMUNICATIONS SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000** End of Period........................................... $7.2919 Units outstanding at end of period........................ -- GLOBAL TELECOMMUNICATIONS SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000** End of Period........................................... $7.2886 Units outstanding at end of period........................ 11,107 GLOBAL TELECOMMUNICATIONS SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000** End of Period........................................... $7.2865 Units outstanding at end of period........................ 9,402 GLOBAL TELECOMMUNICATIONS SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000** End of Period........................................... $7.2854 Units outstanding at end of period........................ 3,533 GLOBAL TELECOMMUNICATIONS SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000** End of Period........................................... $7.2832 Units outstanding at end of period........................ 14,516 GLOBAL TELECOMMUNICATIONS SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000** End of Period........................................... $7.2799 Units outstanding at end of period........................ 2,093 GLOBAL TOTAL RETURN SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.9739 Units outstanding at end of period........................ -- GLOBAL TOTAL RETURN SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.9684 Units outstanding at end of period........................ 6,315 GLOBAL TOTAL RETURN SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.9648 Units outstanding at end of period........................ --
66
YEAR ENDED DECEMBER 31, 2000* ------------------ GLOBAL TOTAL RETURN SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.9630 Units outstanding at end of period........................ 25,601 GLOBAL TOTAL RETURN SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.9593 Units outstanding at end of period........................ 20,862 GLOBAL TOTAL RETURN SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.9538 Units outstanding at end of period........................ 5,255 GOVERNMENT SECURITIES SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.6328 Units outstanding at end of period........................ -- GOVERNMENT SECURITIES SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.6258 Units outstanding at end of period........................ 173,385 GOVERNMENT SECURITIES SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.6210 Units outstanding at end of period........................ 20,304 GOVERNMENT SECURITIES SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.6187 Units outstanding at end of period........................ 209,319 GOVERNMENT SECURITIES SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.6140 Units outstanding at end of period........................ 370,992 GOVERNMENT SECURITIES SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.6069 Units outstanding at end of period........................ 120,982 HIGH YIELD SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.1906 Units outstanding at end of period........................ --
67
YEAR ENDED DECEMBER 31, 2000* ------------------ HIGH YIELD SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.1845 Units outstanding at end of period........................ 112,132 HIGH YIELD SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.1804 Units outstanding at end of period........................ 25,020 HIGH YIELD SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.1784 Units outstanding at end of period........................ 143,301 HIGH YIELD SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.1743 Units outstanding at end of period........................ 278,253 HIGH YIELD SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.1682 Units outstanding at end of period........................ 104,240 INTERNATIONAL GROWTH SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.6014 Units outstanding at end of period........................ -- INTERNATIONAL GROWTH SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.5954 Units outstanding at end of period........................ 36,126 INTERNATIONAL GROWTH SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.5915 Units outstanding at end of period........................ -- INTERNATIONAL GROWTH SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.5895 Units outstanding at end of period........................ 31,240 INTERNATIONAL GROWTH SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.5855 Units outstanding at end of period........................ 72,137
68
YEAR ENDED DECEMBER 31, 2000* ------------------ INTERNATIONAL GROWTH SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.5796 Units outstanding at end of period........................ 26,179 INTERNATIONAL INVESTORS TRUST SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.1063 Units outstanding at end of period........................ 9,690 INTERNATIONAL INVESTORS TRUST SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.1002 Units outstanding at end of period........................ 75,354 INTERNATIONAL INVESTORS TRUST SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.0962 Units outstanding at end of period........................ 19,952 INTERNATIONAL INVESTORS TRUST SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.0941 Units outstanding at end of period........................ 143,533 INTERNATIONAL INVESTORS TRUST SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.0901 Units outstanding at end of period........................ 395,096 INTERNATIONAL INVESTORS TRUST SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.0840 Units outstanding at end of period........................ 116,665 MANAGED SECTORS SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.8725 Units outstanding at end of period........................ -- MANAGED SECTORS SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.8670 Units outstanding at end of period........................ 160,500 MANAGED SECTORS SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.8633 Units outstanding at end of period........................ 40,787
69
YEAR ENDED DECEMBER 31, 2000* ------------------ MANAGED SECTORS SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.8615 Units outstanding at end of period........................ 145,449 MANAGED SECTORS SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.8577 Units outstanding at end of period........................ 318,263 MANAGED SECTORS SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.8522 Units outstanding at end of period........................ 64,615 MASSACHUSETTS INVESTORS GROWTH STOCK SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.7153 Units outstanding at end of period........................ 41,788 MASSACHUSETTS INVESTORS GROWTH STOCK SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.7095 Units outstanding at end of period........................ 825,447 MASSACHUSETTS INVESTORS GROWTH STOCK SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.7988 Units outstanding at end of period........................ 147,610 MASSACHUSETTS INVESTORS GROWTH STOCK SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.7036 Units outstanding at end of period........................ 1,222,281 MASSACHUSETTS INVESTORS GROWTH STOCK SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.6997 Units outstanding at end of period........................ 3,410,945 MASSACHUSETTS INVESTORS GROWTH STOCK SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.6939 Units outstanding at end of period........................ 835,704 MASSACHUSETTS INVESTORS TRUST SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.7299 Units outstanding at end of period........................ --
70
YEAR ENDED DECEMBER 31, 2000* ------------------ MASSACHUSETTS INVESTORS TRUST SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.7233 Units outstanding at end of period........................ 662,105 MASSACHUSETTS INVESTORS TRUST SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.7190 Units outstanding at end of period........................ 106,576 MASSACHUSETTS INVESTORS TRUST SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.7168 Units outstanding at end of period........................ 744,449 MASSACHUSETTS INVESTORS TRUST SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.7125 Units outstanding at end of period........................ 1,982,246 MASSACHUSETTS INVESTORS TRUST SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.7060 Units outstanding at end of period........................ 623,357 MID CAP GROWTH SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000*** End of Period........................................... $9.2544 Units outstanding at end of period........................ -- MID CAP GROWTH SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000*** End of Period........................................... $9.2503 Units outstanding at end of period........................ 34,282 MID CAP GROWTH SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000*** End of Period........................................... $9.2475 Units outstanding at end of period........................ 32,880 MID CAP GROWTH SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000*** End of Period........................................... $9.2461 Units outstanding at end of period........................ 135,289 MID CAP GROWTH SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000*** End of Period........................................... $9.2434 Units outstanding at end of period........................ 257,499
71
YEAR ENDED DECEMBER 31, 2000* ------------------ MID CAP GROWTH SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000*** End of Period........................................... $9.2393 Units outstanding at end of period........................ 44,338 MONEY MARKET SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.2312 Units outstanding at end of period........................ 16,332 MONEY MARKET SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.2243 Units outstanding at end of period........................ 156,253 MONEY MARKET SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.2197 Units outstanding at end of period........................ -- MONEY MARKET SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.2174 Units outstanding at end of period........................ 136,521 MONEY MARKET SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.2128 Units outstanding at end of period........................ 324,280 MONEY MARKET SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.2059 Units outstanding at end of period........................ 204,046 NEW DISCOVERY SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.5988 Units outstanding at end of period........................ -- NEW DISCOVERY SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.5929 Units outstanding at end of period........................ 228,703 NEW DISCOVERY SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.5890 Units outstanding at end of period........................ 96,431
72
YEAR ENDED DECEMBER 31, 2000* ------------------ NEW DISCOVERY SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.5870 Units outstanding at end of period........................ 333,331 NEW DISCOVERY SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.5831 Units outstanding at end of period........................ 830,845 NEW DISCOVERY SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.5772 Units outstanding at end of period........................ 274,903 RESEARCH SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.8897 Units outstanding at end of period........................ -- RESEARCH SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.8839 Units outstanding at end of period........................ 287,774 RESEARCH SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.8800 Units outstanding at end of period........................ 136,123 RESEARCH SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.8781 Units outstanding at end of period........................ 474,565 RESEARCH SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.8742 Units outstanding at end of period........................ 1,097,956 RESEARCH SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.8684 Units outstanding at end of period........................ 377,470 RESEARCH GROWTH AND INCOME SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.0679 Units outstanding at end of period........................ --
73
YEAR ENDED DECEMBER 31, 2000* ------------------ RESEARCH GROWTH AND INCOME SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.0616 Units outstanding at end of period........................ 41,097 RESEARCH GROWTH AND INCOME SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.0574 Units outstanding at end of period........................ 11,505 RESEARCH GROWTH AND INCOME SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.0554 Units outstanding at end of period........................ 70,162 RESEARCH GROWTH AND INCOME SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.0512 Units outstanding at end of period........................ 127,800 RESEARCH GROWTH AND INCOME SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.0449 Units outstanding at end of period........................ 40,111 RESEARCH INTERNATIONAL SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.9251 Units outstanding at end of period........................ -- RESEARCH INTERNATIONAL SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.9190 Units outstanding at end of period........................ 147,311 RESEARCH INTERNATIONAL SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.9150 Units outstanding at end of period........................ 75,847 RESEARCH INTERNATIONAL SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.9129 Units outstanding at end of period........................ 160,450 RESEARCH INTERNATIONAL SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.9089 Units outstanding at end of period........................ 459,368
74
YEAR ENDED DECEMBER 31, 2000* ------------------ RESEARCH INTERNATIONAL SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.9028 Units outstanding at end of period........................ 113,049 STRATEGIC GROWTH SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.4812 Units outstanding at end of period........................ -- STRATEGIC GROWTH SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.4758 Units outstanding at end of period........................ 135,296 STRATEGIC GROWTH SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.4721 Units outstanding at end of period........................ 25,507 STRATEGIC GROWTH SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.4703 Units outstanding at end of period........................ 261,952 STRATEGIC GROWTH SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.4666 Units outstanding at end of period........................ 599,690 STRATEGIC GROWTH SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $8.4612 Units outstanding at end of period........................ 136,093 STRATEGIC INCOME SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.0495 Units outstanding at end of period........................ -- STRATEGIC INCOME SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.0431 Units outstanding at end of period........................ 28,461 STRATEGIC INCOME SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.0388 Units outstanding at end of period........................ 26,165
75
YEAR ENDED DECEMBER 31, 2000* ------------------ STRATEGIC INCOME SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.0366 Units outstanding at end of period........................ 65,392 STRATEGIC INCOME SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.0324 Units outstanding at end of period........................ 91,957 STRATEGIC INCOME SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.0259 Units outstanding at end of period........................ 22,010 TECHNOLOGY SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $7.7449 Units outstanding at end of period........................ 21,540 TECHNOLOGY SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $7.7398 Units outstanding at end of period........................ 141,204 TECHNOLOGY SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $7.7365 Units outstanding at end of period........................ 41,719 TECHNOLOGY SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $7.7348 Units outstanding at end of period........................ 183,811 TECHNOLOGY SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $7.7314 Units outstanding at end of period........................ 644,712 TECHNOLOGY SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $7.7263 Units outstanding at end of period........................ 156,214 TOTAL RETURN SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $11.2101 Units outstanding at end of period........................ --
76
YEAR ENDED DECEMBER 31, 2000* ------------------ TOTAL RETURN SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $11.2029 Units outstanding at end of period........................ 219,370 TOTAL RETURN SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $11.1981 Units outstanding at end of period........................ 10,625 TOTAL RETURN SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $11.1957 Units outstanding at end of period........................ 325,729 TOTAL RETURN SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $11.1909 Units outstanding at end of period........................ 556,497 TOTAL RETURN SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $11.1836 Units outstanding at end of period........................ 188,022 UTILITIES SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.6988 Units outstanding at end of period........................ -- UTILITIES SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.6922 Units outstanding at end of period........................ 348,917 UTILITIES SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.6878 Units outstanding at end of period........................ 95,664 UTILITIES SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.6856 Units outstanding at end of period........................ 487,384 UTILITIES SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.6812 Units outstanding at end of period........................ 985,298
77
YEAR ENDED DECEMBER 31, 2000* ------------------ UTILITIES SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $9.6745 Units outstanding at end of period........................ 245,771 VALUE SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $12.1507 Units outstanding at end of period........................ - VALUE SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $12.1428 Units outstanding at end of period........................ 112,270 VALUE SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $12.1376 Units outstanding at end of period........................ 20,757 VALUE SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $12.1349 Units outstanding at end of period........................ 131,403 VALUE SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $12.1296 Units outstanding at end of period........................ 329,803 VALUE SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $12.1217 Units outstanding at end of period........................ 70,298
------------------------ * From commencement of operations on July 17, 2000 to December 31, 2000. ** From commencement of operations on September 11, 2000 to December 31, 2000. 78 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) C/O RETIREMENT PRODUCTS AND SERVICES P.O. BOX 1024 BOSTON, MASSACHUSETTS 02103 TELEPHONE: Toll Free (800) 752-7215 GENERAL DISTRIBUTOR Clarendon Insurance Agency, Inc. One Sun Life Executive Park Wellesley Hills, Massachusetts 02481 AUDITORS Deloitte & Touche 200 Berkeley Street Boston, Massachusetts 02116 CHOICE- 1 5/01 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) MAY 1, 2001 PROFILE FUTURITY III VARIABLE AND FIXED ANNUITY THIS PROFILE IS A SUMMARY OF SOME OF THE MORE IMPORTANT POINTS THAT YOU SHOULD KNOW AND CONSIDER BEFORE PURCHASING THE CONTRACT. THE CONTRACT IS MORE FULLY DESCRIBED IN THE FULL PROSPECTUS WHICH ACCOMPANIES THIS PROFILE. PLEASE READ THE PROSPECTUS CAREFULLY. THROUGHOUT THIS PROFILE, THE TERMS, "YOU" AND "YOUR" REFER TO "OWNER," "PARTICIPANT," AND/OR "COVERED PERSON" AS THOSE TERMS ARE DEFINED IN YOUR CONTRACT. 1. THE FUTURITY III ANNUITY The Futurity III Annuity is a flexible payment deferred annuity contract ("Contract") designed for use in connection with retirement and deferred compensation plans, some of which may qualify for favorable federal income tax treatment. The Contract is intended to help you achieve your retirement savings or other long-term investment goals. The Contract has two phases: an Accumulation Phase and an Income Phase. During the Accumulation Phase, you make payments into the Contract; any investment earnings under your Contract accumulate on a tax-deferred basis and are taxed as income only when withdrawn. During the Income Phase, we make annuity payments in amounts determined in part by the amount of money you have accumulated under your Contract during the Accumulation Phase. You choose when the Income Phase begins. You may choose among a number of variable investment options and fixed options. For a variable investment return you choose one or more Sub-Accounts in our Variable Account, each of which invests in shares of a corresponding mutual fund or series thereof (collectively, the "Funds") listed in Section 4. The value of any portion of your Contract allocated to the Sub-Accounts will fluctuate up or down depending on the performance of the Series you select, and you may experience losses. For a fixed interest rate, you may choose one or more Guarantee Periods offered in our Fixed Account, each of which earns its own Guaranteed Interest Rate if you keep your money in that Guarantee Period for the specified length of time. The Contract is designed to meet your need for investment flexibility. Over the life of your Contract, you may allocate amounts among as many as 18 of the available variable and fixed options. You can, subject to certain limitations, transfer money between options up to 12 times each year without a transfer charge or adverse tax consequences. 2. ANNUITY PAYMENTS (THE INCOME PHASE) Just as you can elect to have your Contract value accumulate on either a variable or fixed basis, or a combination of both, you can elect to receive annuity payments on either a variable or fixed basis or both. If you choose to have any part of your annuity payments come from the Sub-Accounts, the dollar amount of your annuity payments may fluctuate. The Contract offers a variety of annuity options. You can select from among the following methods of receiving either variable or fixed annuity payments under your Contract: (1) monthly payments continuing for your lifetime (assuming you are the annuitant); (2) monthly payments for your lifetime, but with payments continuing to your chosen beneficiary for a specified number of years after your first payment if you die before the end of the period you have selected; (3) monthly payments for your lifetime and the life of another person (usually your spouse) you have chosen; and (4) monthly payments for a specified number of years, with a cash-out option for variable payments. We may also agree to other annuity options at our discretion. Once the Income Phase begins, you cannot change your choice of annuity payment method. 3. PURCHASING A CONTRACT You may purchase a Contract for $10,000 or more, under most circumstances. You may increase the value of your investment by adding $1,000 or more at any time during the Accumulation Phase. We may waive these limits. We will not accept a purchase payment if your account value is over $2 million, or if the purchase payment would cause your account value to exceed $2 million, unless we have approved the payment in advance. 4. ALLOCATION OPTIONS You can allocate your money among Sub-Accounts investing in the following Funds: AIM VARIABLE INSURANCE FUNDS FIDELITY VARIABLE INSURANCE PRODUCTS FUNDS AIM V.I. Capital Appreciation Fund Fidelity VIP Contrafund-TM- Portfolio AIM V.I. Growth Fund Fidelity VIP Growth Portfolio AIM V.I. Growth and Income Fund Fidelity VIP Overseas Portfolio AIM V.I. International Equity Fund MFS/SUN LIFE SERIES TRUST AIM V.I. Value Fund MFS/Sun Life Capital Appreciation Series THE ALGER AMERICAN FUND MFS/Sun Life Emerging Growth Series Alger American Growth Portfolio MFS/Sun Life Government Securities Series Alger American Income and Growth Portfolio MFS/Sun Life High Yield Series Alger American Small Capitalization Portfolio MFS/Sun Life Massachusetts Investors Growth ALLIANCE VARIABLE PRODUCTS SERIES FUND, INC. Stock Series Alliance VP Premier Growth Fund MFS/Sun Life Massachusetts Investors Trust Alliance VP Technology Fund Series Alliance VP Growth and Income Fund MFS/Sun Life New Discovery Series Alliance VP Worldwide Privatization Fund MFS/Sun Life Total Return Series Alliance VP Quasar Fund MFS/Sun Life Utilities Series GOLDMAN SACHS VARIABLE INSURANCE TRUST RYDEX VARIABLE TRUST VIT CORE-SM- Large Cap Growth Fund Rydex VT Nova Fund VIT CORE-SM- U.S. Equity Fund Rydex VT OTC Fund VIT CORE-SM- Small Cap Equity Fund* SUN CAPITAL ADVISERS TRUST VIT Internet Tollkeeper Fund SC-SM- Davis Financial Fund VIT Capital Growth Fund SC-SM- Davis Venture Value Fund VIT Growth and Income Fund* SC-SM- INVESCO Energy Fund VIT International Equity Fund* SC-SM- INVESCO Health Sciences Fund INVESCO VARIABLE INVESTMENT FUNDS, INC. SC-SM- INVESCO Technology Fund INVESCO VIF Dynamics Fund SC-SM- INVESCO Telecommunications Fund INVESCO VIF Small Company Growth Fund SC-SM- Neuberger Berman Mid Cap Growth Fund J.P. MORGAN SERIES TRUST II SC-SM- Neuberger Berman Mid Cap Value Fund J.P. Morgan International Opportunities SC-SM- Value Equity Fund Portfolio* SC-SM- Value Managed Fund J.P. Morgan Small Company Portfolio* SC-SM- Value Mid Cap Fund J.P. Morgan U.S. Disciplined Equity Portfolio* SC-SM- Value Small Cap Fund LORD ABBETT SERIES FUND, INC. SC-SM- Blue Chip Mid Cap Fund Lord Abbett Series Fund Mid Cap Value SC-SM- Investors Foundation Fund Lord Abbett Series Fund Growth and Income SC-SM- Select Equity Fund Lord Abbett Series Fund International Sun Capital Investment Grade Bond Fund-SM- Sun Capital Money Market Fund-SM- Sun Capital Real Estate Fund-SM-
------------------------ *Not available to Contracts issued on or after May 1, 2001 Market conditions will determine the value of an investment in any Fund. Each Fund is described in the relevant Fund prospectus. 2 In addition to these variable options, you may also allocate your money to one or more of the Guarantee Periods we make available. For each Guarantee Period, we offer a Guaranteed Interest Rate for the specified length of time. 5. EXPENSES The charges under the Contracts are as follows: During the first 5 years of a Contract, if your account value is less than $75,000 on your Account Anniversary, we impose an annual Account Fee equal to $35. After the fifth year, we may change this fee annually, but it will never exceed $50. During the Income Phase, the annual Account Fee is $35. We will not assess an Account Fee if your Contract is fully invested in the Fixed Account during the entire Account Year. We will waive the Account Fee if your Contract value was $75,000 or more on your Account Anniversary, or if your Account was allocated only to the Fixed Account during the applicable Account Year. In addition, during both the Accumulation Phase and the Income Phase, we deduct insurance charges equal to 1.15% per year of the average daily value of the Contract allocated among the Sub-Accounts. If your initial purchase payment is greater than $1,000,000, we will decrease the insurance charges to 1.00%. If you annuitize before your seventh Account Anniversary, we will assess, during the Income Phase, an additional charge equal to 0.25% of your daily account value. CHARGES FOR OPTIONAL DEATH BENEFIT RIDERS If you elect an optional death benefit rider, we will deduct, during the Accumulation Phase, a charge from the assets of the Variable Account depending upon which of the optional death benefit rider(s) you elect.
% OF AVERAGE RIDER(S) YOU ELECT* DAILY VALUE ------------------- ------------ "EEB" 0.15% "MAV" 0.15% "5% Roll-Up" 0.15% "EEB" and "MAV" 0.25% "EEB" and "5% Roll-Up" 0.25% "MAV" and "5% Roll-Up" 0.25% "EEB Plus" 0.25% "EEB" and "MAV" and "5% Roll-Up" 0.40% "EEB Plus MAV" 0.40% "EEB Plus 5% Roll-Up" 0.40%
------------------------ * As defined in Section 9 below No optional death benefit is offered if you are 80 or older at issue. No charges for optional death benefit riders are assessed during the Income Phase. There are no sales charges when you purchase your Contract. However, if you withdraw money from your Contract, we will, with certain exceptions, impose a withdrawal charge. Your Contract allows a "free withdrawal amount," which you may withdraw before you incur the withdrawal charge. The rest of your withdrawal is subject to a withdrawal charge equal to a percentage of each purchase payment you withdraw. Each payment begins a new 7-year period and moves down a declining surrender charge scale at each Account Anniversary. Payments received during the current Account Year will be charged 7%, if withdrawn. On your next scheduled Account Anniversary, that payment, along with any other payments made during that Account Year, will be considered to be in their second Account Year and will have a 7% withdrawal charge. On the next Account Anniversary, these payments will move into their third Account Year and will have a withdrawal charge of 6%, if withdrawn. This withdrawal 3 charge decreases according to the number of Account Years the purchase payment has been held in your Account. The declining scale is as follows:
NUMBER OF ACCOUNT YEARS PAYMENT HAS BEEN IN YOUR CONTRACT WITHDRAWAL CHARGE ----------------------- ----------------- 0-1 7% 1-2 7% 2-3 6% 3-4 6% 4-5 5% 5-6 4% 6-7 3% 7 or more 0%
If you withdraw, transfer, or annuitize money allocated to a Guarantee Period more than 30 days before the expiration date of the Guarantee Period, the amount will be subject to a Market Value Adjustment. This adjustment reflects the relationship between our current Guaranteed Interest Rates and the Guaranteed Interest Rate applicable to the amount being withdrawn. Generally, if your Guaranteed Interest Rate is lower than the relevant current rate, then the adjustment will decrease your Contract value. Conversely, if your Guaranteed Interest Rate is higher than the relevant current rate, the adjustment will increase your Contract value. The Market Value Adjustment will not apply to the withdrawal of interest credited during the current Account Year, or to transfers as part of our dollar-cost averaging program. In addition to the charges we impose under the Contracts, there are charges (which include management fees and operating expenses) imposed by each Fund, depending upon which Funds you have selected. The investment adviser has agreed to waive or reimburse a portion of expenses for some of the Funds; without this agreement, Fund expenses could be higher. Some of these agreements may be terminated at any time. The following chart is designed to help you understand the expenses you will incur under your Contract, if you invest in one or more of the Sub-Accounts. The column "Total Annual Expenses" shows the sum of the "Total Annual Insurance Charges," as defined just above the chart, and the total expenses (net of any applicable expense reimbursement and/or fee waiver) for each Fund. The next two columns show two examples of the expenses, in dollars, you would pay under a Contract. The examples assume that you invested $1,000 in a Contract which earns 5% annually and that you withdraw your money (1) at the end of one year or (2) at the end of 10 years. For the first year, the Total Annual Expenses are deducted, as well as withdrawal charges. For year 10, the example shows the aggregate of all of the annual expenses deducted for the 10 years, but there is no withdrawal charge. During the Accumulation Phase, "Total Annual Insurance Charges" of 1.25% as shown in the table below include insurance charges of 1.15% of your daily net assets (1.00% for mortality and expense risks and 0.15% for administrative expenses) plus an additional 0.10%, which is used to represent the current $35 annual Account Fee based on an assumed Contract value of $35,000. The actual impact of the Account Fee may be greater or less than 0.10%, depending upon the value of your Contract. After the fifth Account Anniversary, we may raise the annual Account Fee, but in no event will it ever exceed $50. The 10-year total expense examples, below, reflect a $50 annual Account Fee.
EXAMPLES: TOTAL EXPENSE AT END TOTAL ANNUAL TOTAL ANNUAL TOTAL NO RIDERS (A) WITH RIDER (B) INSURANCE FUND ANNUAL -------------------- -------------------- SUB-ACCOUNT CHARGES EXPENSES EXPENSES 1 YEAR 10 YEARS 1 YEAR 10 YEARS ----------- ------------ ------------ ---------- -------- --------- -------- --------- AIM V.I. Capital Appreciation Fund 1.25% 0.82% 2.07% $83 $243 $86 $283 AIM V.I. Growth Fund 1.25% 0.83% 2.08% $83 $244 $86 $284 AIM V.I. Growth and Income Fund 1.25% 0.84% 2.09% $83 $245 $86 $285 AIM V.I. International Equity Fund 1.25% 1.02% 2.27% $84 $263 $88 $303 AIM V.I. Value Fund 1.25% 0.84% 2.09% $83 $245 $86 $285 Alger American Growth Portfolio 1.25% 0.79% 2.04% $82 $239 $86 $280 Alger American Income and Growth Portfolio 1.25% 0.70% 1.95% $81 $230 $85 $271 Alger American Small Capitalization Portfolio 1.25% 0.90% 2.15% $83 $251 $87 $291
4
EXAMPLES: TOTAL EXPENSE AT END TOTAL ANNUAL TOTAL ANNUAL TOTAL NO RIDERS (A) WITH RIDER (B) INSURANCE FUND ANNUAL -------------------- -------------------- SUB-ACCOUNT CHARGES EXPENSES EXPENSES 1 YEAR 10 YEARS 1 YEAR 10 YEARS ----------- ------------ ------------ ---------- -------- --------- -------- --------- Alliance VP Premier Growth Fund 1.25% 1.30% 2.55% $87 $291 $91 $329 Alliance VP Technology Fund 1.25% 1.31% 2.56% $87 $292 $91 $330 Alliance VP Growth and Income Fund 1.25% 0.95% 2.20% $84 $256 $87 $296 Alliance VP Worldwide Privatization Fund 1.25% 1.20% 2.45% $86 $281 $90 $320 Alliance VP Quasar Fund 1.25% 1.20% 2.45% $86 $281 $90 $320 Goldman Sachs VIT CORE-SM- Large Cap Growth Fund 1.25% 0.90% 2.15% $83 $251 $87 $291 Goldman Sachs VIT CORE-SM- Small Cap Equity Fund 1.25% 1.00% 2.25% $84 $261 $88 $301 Goldman Sachs VIT CORE-SM- U.S. Equity Fund 1.25% 0.90% 2.15% $83 $251 $87 $291 Goldman Sachs VIT Internet Tollkeeper Fund 1.25% 1.25% 2.50% $87 $286 $90 $325 Goldman Sachs VIT Capital Growth Fund 1.25% 1.00% 2.25% $84 $261 $88 $301 Goldman Sachs VIT Growth and Income Fund 1.25% 1.00% 2.25% $84 $261 $88 $301 Goldman Sachs VIT International Equity Fund 1.25% 1.35% 2.60% $87 $296 $91 $334 INVESCO VIF Dynamics Fund 1.25% 1.09% 2.34% $85 $270 $89 $309 INVESCO VIF Small Company Growth Fund 1.25% 1.37% 2.62% $88 $298 $91 $336 J. P. Morgan International Opportunities Portfolio 1.25% 1.20% 2.45% $86 $281 $90 $320 J. P. Morgan Small Company Portfolio 1.25% 1.15% 2.40% $86 $276 $89 $315 J. P. Morgan U.S. Disciplined Equity Portfolio 1.25% 0.85% 2.10% $83 $246 $87 $286 Lord Abbett Series Fund Mid Cap Value 1.25% 1.10% 2.35% $85 $271 $89 $310 Lord Abbett Series Fund Growth & Income 1.25% 1.02% 2.27% $84 $263 $88 $303 Lord Abbett Series Fund International 1.25% 1.35% 2.60% $87 $296 $91 $334 Fidelity VIP Contrafund-TM- Portfolio 1.25% 0.92% 2.17% $83 $253 $87 $293 Fidelity VIP Growth Portfolio 1.25% 0.91% 2.16% $83 $252 $87 $292 Fidelity VIP Overseas Portfolio 1.25% 1.15% 2.40% $86 $276 $89 $315 MFS/Sun Life Capital Appreciation Series 1.25% 0.75% 2.00% $82 $235 $86 $276 MFS/Sun Life Emerging Growth Series 1.25% 0.74% 1.99% $82 $234 $86 $275 MFS/Sun Life Government Securities Series 1.25% 0.62% 1.87% $81 $222 $84 $263 MFS/Sun Life High Yield Series 1.25% 0.83% 2.08% $83 $244 $86 $284 MFS/Sun Life Massachusetts Investors Growth Stock Series 1.25% 0.81% 2.06% $82 $242 $86 $282 MFS/Sun Life Massachusetts Investors Trust Series 1.25% 0.60% 1.85% $80 $220 $84 $261 MFS/Sun Life New Discovery Series 1.25% 0.99% 2.24% $84 $260 $88 $300 MFS/Sun Life Total Return Series 1.25% 0.70% 1.95% $81 $230 $85 $271 MFS/Sun Life Utilities Series 1.25% 0.80% 2.05% $82 $240 $86 $281 Rydex VT Nova Fund 1.25% 1.42% 2.67% $88 $303 $92 $341 Rydex VT OTC Fund 1.25% 1.46% 2.71% $89 $307 $92 $344 SC-SM- Davis Financial Fund 1.25% 0.90% 2.15% $83 $251 $87 $291 SC-SM- Davis Venture Value Fund 1.25% 0.90% 2.15% $83 $251 $87 $291 SC-SM- INVESCO Energy Fund 1.25% 1.25% 2.50% $87 $286 $90 $325 SC-SM- INVESCO Health Sciences Fund 1.25% 1.25% 2.50% $87 $286 $90 $325 SC-SM- INVESCO Technology Fund 1.25% 1.25% 2.50% $87 $286 $90 $325 SC-SM- INVESCO Telecommunications Fund 1.25% 1.25% 2.50% $87 $286 $90 $325 SC-SM- Neuberger Berman Mid Cap Growth Fund 1.25% 1.10% 2.35% $85 $271 $89 $310 SC-SM- Neuberger Berman Mid Cap Value Fund 1.25% 1.10% 2.35% $85 $271 $89 $310 SC-SM- Value Equity Fund 1.25% 0.90% 2.15% $83 $251 $87 $291 SC-SM- Value Managed Fund 1.25% 0.90% 2.15% $83 $251 $87 $291 SC-SM- Value Mid Cap Fund 1.25% 1.00% 2.25% $84 $261 $88 $301 SC-SM- Value Small Cap Fund 1.25% 1.00% 2.25% $84 $261 $88 $301 SC-SM- Blue Chip Mid Cap Fund 1.25% 1.00% 2.25% $84 $261 $88 $301 SC-SM- Investors Foundation Fund 1.25% 0.90% 2.15% $83 $251 $87 $291 SC-SM- Select Equity Fund 1.25% 0.90% 2.15% $83 $251 $87 $291 Sun Capital Investment Grade Bond Fund-SM- 1.25% 0.75% 2.00% $82 $235 $86 $276 Sun Capital Money Market Fund-SM- 1.25% 0.65% 1.90% $81 $225 $85 $266 Sun Capital Real Estate Fund-SM- 1.25% 1.25% 2.50% $87 $286 $90 $325
------------------------------ (a) Assuming no optional death benefit riders are elected. (b) Assuming the EEB Plus MAV optional death benefit rider is elected. 5 If your initial purchase payment is $1,000,000 or more, we will reduce your insurance charges, during the Accumulation Phase, by 0.15%. If you annuitize before your 7th Account Anniversary, we will increase your insurance charges by 0.25% during the Income Phase. For more detailed information about Contract fees and expenses, please refer to the fee table and discussion of Contract charges contained in the full Prospectus which accompanies this Profile. 6. TAXES Under current federal tax laws, your earnings are not taxed until you take them out of your Contract. If you take money out, earnings come out first and are taxed as income. If your Contract is funded with pre-tax or tax-deductible dollars (such as with a pension or IRA contribution) -- we call this a Qualified Contract -- your entire withdrawal will be taxable. If you are younger than 59 1/2 when you take money out, you may be charged a 10% federal penalty tax on the earnings. Annuity payments during the Income Phase are considered in part a return of your original investment. That portion of each payment is not taxable, except under a Qualified Contract, in which case the entire payment will be taxable. Different laws apply if your Contract is issued in Puerto Rico. Under the tax laws of Puerto Rico, when an annuity payment is made under your Contract, your annuitant or any other payee is required to include as gross income the lesser of the amounts received during the taxable year or the portion of each annuity payment equal to 3% of the aggregate purchase payments you made under the Contract. The amount if any, in excess of the included amount is excluded from gross income. After an amount equal to the aggregate amount excluded from gross income has been received, all of the annuity payments are considered to be taxable income. In all cases, you should consult with your tax adviser for specific tax information. 7. ACCESS TO YOUR MONEY You can withdraw money from your Contract at any time during the Accumulation Phase. You may withdraw a portion of the value of your Contract in each year without the imposition of the withdrawal charge. In the first Account Year, the portion of your Account that is not subject to a withdrawal charge is equal to 15% of all purchase payments made during that Account Year. After your first Account Anniversary, the portion of your Account that is not subject to a withdrawal charge is 100% of all purchase payments made prior to the last 7 Account Years not previously withdrawn PLUS the greater of (1) 15% of all purchase payments you have made in the last 7 years minus any free withdrawals taken duirng the current Account Year or (2) all earnings minus any withdrawals taken during the life of the Contract. All other purchase payments you withdraw will be subject to a withdrawal charge ranging from 7% to 3%. You may also be required to pay income tax and possible tax penalties on any money you withdraw. We do not assess a withdrawal charge upon annuitization or transfers. In certain circumstances, we will waive the withdrawal charges for a full or partial withdrawal when you are confined to an eligible nursing home. In addition, there may be other circumstances under which we may waive the withdrawal charge. In addition to the withdrawal charge, amounts you withdraw, transfer or annuitize from the Fixed Account before your Guarantee Period has ended may be subject to a Market Value Adjustment. 8. PERFORMANCE If you invest in one or more Sub-Accounts, the value of your Contract will increase or decrease depending upon the investment performance of the Funds you choose. The following chart shows total return for investment in the Sub-Accounts where the corresponding Series has had at least one full calendar year of operations. The returns reflect all charges and deductions of the Series and Sub-Account, including the annual Account Fee. They do not reflect 6 deduction of any withdrawal charges or premium taxes. NOR DO THEY REFLECT THE DEDUCTION OF ANY CHARGES FOR OPTIONAL DEATH BENEFIT RIDERS. THESE DEDUCTIONS, IF INCLUDED, WOULD REDUCE THE PERFORMANCE SHOWN. Past performance is not a guarantee of future results.
2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- AIM V.I. Capital Appreciation Fund (12.12%) 42.78% -- -- -- -- -- -- -- -- AIM V.I. Growth Fund (21.59%) 33.50% -- -- -- -- -- -- -- -- AIM V.I. Growth and Income Fund (15.72%) 32.53% -- -- -- -- -- -- -- -- AIM V.I. International Equity Fund (27.44%) 53.09% -- -- -- -- -- -- -- -- Alger American Growth Portfolio (15.94%) 32.04% -- -- -- -- -- -- -- -- Alger American Income and Growth Portfolio (2.59%) 40.64% -- -- -- -- -- -- -- -- Alger American Small Capitalization Portfolio (28.22%) 41.59% -- -- -- -- -- -- -- -- Goldman Sachs VIT CORE-SM- Large Cap Growth Fund (23.56%) 33.69% -- -- -- -- -- -- -- -- Goldman Sachs VIT CORE-SM- Small Cap Equity Fund 0.40% 16.01% -- -- -- -- -- -- -- -- Goldman Sachs VIT CORE-SM- U.S. Equity Fund (10.84%) 22.69% -- -- -- -- -- -- -- -- Goldman Sachs VIT CORE-SM- Growth and Income Portfolio (5.97%) 4.02% -- -- -- -- -- -- -- -- Goldman Sachs VIT International Equity Fund (14.37%) 30.16% -- -- -- -- -- -- -- -- J.P. Morgan U.S. Disciplined Equity Portfolio (12.19%) 17.00% -- -- -- -- -- -- -- -- J.P. Morgan U.S. International Opportunities Portfolio (16.99%) 34.91% -- -- -- -- -- -- -- -- J.P. Morgan U.S. Small Company Portfolio (12.53%) 42.56% -- -- -- -- -- -- -- -- Lord Abbett Series Fund Growth and Portfolio 14.26% 15.22% -- -- -- -- -- -- -- -- MFS/Sun Life Capital Appreciation Series (12.87%) 30.69% 26.80% 21.29% 19.65% 32.49% (5.14%) 16.21% 11.87% 38.95% MFS/Sun Life Emerging Growth Series (20.24%) 73.57% 32.14% 20.31% 15.57% -- -- -- -- -- MFS/Sun Life High Yield Series (7.95%) 5.59% (0.68%) 11.84% 10.72% 15.49% (3.39%) 16.22% 13.57% 45.72% MFS/Sun Life Utilities Series 5.70% 29.76% 16.14% 31.14% 18.92% 30.79% (6.10%) -- -- -- MFS/Sun Life Government Securities Series 10.68% (3.17%) 7.29% 7.31% 0.31% 16.15% (3.50%) 7.29% 5.42% 14.33% MFS/Sun Life Total Return Series 15.28% 1.48% 10.24% 20.40% 12.60% 25.08% (3.52%) 11.88% 7.14% 20.04% MFS/Sun Life Massachusetts Investors Trust Series (1.23%) 5.77% 22.25% 30.24% 23.78% 35.66% (2.41%) 7.00% 4.31% -- MFS/Sun Life New Discovery Series (0.95%) 58.19% -- -- -- -- -- -- -- -- MFS/Sun Life Massachusetts Investors Growth Stock Series (7.39%) 34.03% -- -- -- -- -- -- -- -- Sun Capital Money Market Fund-SM- 4.48% 3.29% -- -- -- -- -- -- -- -- Sun Capital Investment Grade Bond Fund-SM- 8.46% (1.90%) -- -- -- -- -- -- -- -- Sun Capital Real Estate Fund-SM- 29.52% (5.18%) -- -- -- -- -- -- -- -- SC-SM- Select Equity Fund (10.89%) -- -- -- -- -- -- -- -- -- SC-SM- Blue Chip Mid Cap Fund 23.34% -- -- -- -- -- -- -- -- -- SC-SM- Investors Foundation Fund (7.23%) -- -- -- -- -- -- -- -- -- 1990 -------- AIM V.I. Capital Appreciation Fund -- AIM V.I. Growth Fund -- AIM V.I. Growth and Income Fund -- AIM V.I. International Equity Fund -- Alger American Growth Portfolio -- Alger American Income and Growth Portfolio -- Alger American Small Capitalization Portfolio -- Goldman Sachs VIT CORE-SM- Large Cap Growth Fund -- Goldman Sachs VIT CORE-SM- Small Cap Equity Fund -- Goldman Sachs VIT CORE-SM- U.S. Equity Fund -- Goldman Sachs VIT CORE-SM- Growth and Income Portfolio -- Goldman Sachs VIT International Equity Fund -- J.P. Morgan U.S. Disciplined Equity Portfolio -- J.P. Morgan U.S. International Opportunities Portfolio -- J.P. Morgan U.S. Small Company Portfolio -- Lord Abbett Series Fund Growth and Portfolio -- MFS/Sun Life Capital Appreciation Series (11.18%) MFS/Sun Life Emerging Growth Series -- MFS/Sun Life High Yield Series (15.27%) MFS/Sun Life Utilities Series -- MFS/Sun Life Government Securities Series 7.50% MFS/Sun Life Total Return Series 1.32% MFS/Sun Life Massachusetts Investors Trust Series -- MFS/Sun Life New Discovery Series -- MFS/Sun Life Massachusetts Investors Growth Stock Series -- Sun Capital Money Market Fund-SM- -- Sun Capital Investment Grade Bond Fund-SM- -- Sun Capital Real Estate Fund-SM- -- SC-SM- Select Equity Fund -- SC-SM- Blue Chip Mid Cap Fund -- SC-SM- Investors Foundation Fund --
9. DEATH BENEFIT If you die before the Contract reaches the Income Phase, the beneficiary will receive a death benefit. To calculate the death benefit, we use a "Death Benefit Date," which is the earliest date we have both due proof of death and a written request specifying the manner of payment. BASIC DEATH BENEFIT If you were 85 or younger when we issued your Contract, the death benefit is the greatest of: (1) the value of the Contract on the Death Benefit Date; 7 (2) the amount we would pay in the event of a full surrender of the Contract on the Death Benefit Date; and (3) your total purchase payments (adjusted for partial withdrawals) calculated as of the Death Benefit Date. If you were 86 or older when we issued your Contract, the death benefit is equal to the amount set forth in (2) above. Because this amount will reflect any applicable withdrawal charges and Market Value Adjustment, it may be less than your account value. OPTIONAL DEATH BENEFIT RIDERS Subject to availability in your state, if you are 79 or younger when we issue your Contract, you may enhance this basic death benefit by electing one or more of the following optional death benefit riders. The death benefit under all optional death benefit riders will be adjusted for all partial withdrawals as described in the Prospectus under the heading "Calculating the Death Benefit." For examples of how the death benefit is calculated under the optional death benefit riders, see Appendices D -- H. MAXIMUM ANNIVERSARY ACCOUNT VALUE RIDER ("MAV") If you elect the Maximum Anniversary Account Value Rider, the death benefit is the greater of: - the amount payable under basic death benefit above, or - your highest Contract value on any Account Anniversary before your 81st birthday, adjusted for any subsequent purchase payments, partial withdrawals, and charges made between that Account Anniversary and the Death Benefit Date. 5% PREMIUM ROLL-UP RIDER ("5% ROLL-UP") If you elect the 5% Premium Roll-Up Rider, the death benefit is the greatest of: - the amount payable under basic death benefit above, or - the sum of your total purchase payment plus interest accruals, adjusted for partial withdrawals. Under this rider, interest accrues at 5% per year on purchase payments and transfers to the Variable Account while they remain in the Variable Account. The 5% accruals will continue until the earlier of: - first day of the month following your 80th birthday or - the day the death benefit amount under this rider equals twice the total of the purchase payments and transferred amounts adjusted for withdrawals. EARNINGS ENHANCEMENT ("EEB") RIDER If you elect this EEB Rider, your death benefit will be the amount payable under the basic death benefit, PLUS the "EEB amount." Calculated as of your Death Benefit Date, the "EEB amount" is determined as follows: - If you are 69 or younger on your Contract Date, the "EEB amount" will be 40% of the difference between your Account Value and your Net Purchase Payments, up to a cap of 40% of the Net Purchase Payments made prior to your death. - If you are between the ages of 70 and 79 on your Contract Date, the "EEB amount" will be 25% of the difference between your Account Value and your Net Purchase Payments, up to a cap of 25% of the Net Purchase Payments prior to your death. 8 EARNINGS ENHANCEMENT PLUS ("EEB PLUS") RIDER* If you elect this EEB Plus Rider, your death benefit will be the amount payable under the basic death benefit, PLUS the "EEB Plus amount." Calculated as of the Death Benefit Date, the "EEB Plus amount" is determined as follows: - If you are 69 or younger on your Contract Date, the "EEB Plus amount" will be 40% of the difference between your Account Value and your Net Purchase Payments, up to a cap of 100% of the Net Purchase Payments made prior to your death. After the 7th Contract year, the cap is 100% of the difference between your Net Purchase Payments and any Purchase Payments made within the twelve months prior to your death. - If you are between the ages of 70 and 79 on your Contract Date, the "EEB Plus amount" will be 25% of the difference between your Account Value and your Net Purchase Payments, up to a cap of 40% of the Net Purchase Payments made prior to your death. After the 7th Contract year, the cap is 40% of the difference between your Net Purchase Payments and any Purchase Payments made in the twelve months prior to your death. EARNINGS ENHANCEMENT PLUS WITH MAV ("EEB PLUS MAV") RIDER* If you elect this EEB Plus MAV Rider, your death benefit will be the death benefit payable under the MAV Rider PLUS the "EEB Plus MAV amount." Calculated as of your Death Benefit Date, the "EEB Plus MAV amount" is as follows: - If you are 69 or younger on your Contract Date, the "EEB Plus MAV amount" will be 40% of the difference between the death benefit payable under the MAV Rider and your Net Purchase Payments, up to a cap of 100% of Net Purchase Payments made prior to your death. After your 7th Contract year, the cap is 100% of the difference between your Net Purchase Payments and any Purchase Payments made in the twelve months prior to your death. - If you are between the ages of 70 and 79 on your Contract Date, the "EEB Plus MAV amount" will be 25% of the difference between the death benefit payable under the MAV Rider and your Net Purchase Payments, up to a cap of 40% of Net Purchase Payments made prior to your death. After your 7th Contract year, the cap is 40% of the difference between your Net Purchase Payments and any Purchase Payments made in the twelve months prior to your death. EARNINGS ENHANCEMENT PLUS WITH 5% ROLL-UP ("EEB PLUS 5% ROLL-UP") RIDER* If you elect this EEB Plus 5% Roll-Up Rider, your death benefit will be the death benefit payable under the 5% Roll-Up Rider PLUS the "EEB Plus 5% Roll-Up amount." Calculated as of your Death Benefit Date, the "EEB Plus 5% Roll-Up amount" is determined as follows: - If you are 69 or younger on your Contract Date, the "EEB Plus 5% Roll-Up amount" will be 40% of the difference between the death benefit payable under the 5% Roll-Up Rider and your Net Purchase Payments, up to a cap of 100% of Net Purchase Payments made prior to your death. After your 7th Contract year, the cap is 100% of the difference between your Net Purchase Payments and any Purchase Payments made in the twelve months prior to your death. - If you are between the ages of 70 and 79 on your Contract Date, the "EEB Plus 5% Roll-Up amount" will be 25% of the difference between the death benefit payable under the 5% Roll-Up Rider and your Net Purchase Payments, up to a cap of 40% of Net Purchase Payments made prior to your death. After your 7th Contract year, the cap is 40% of the difference between your Net Purchase Payments and any Purchase Payments made in the twelve months prior to your death. * See Section 6. "Taxes" if this Optional Death Benefit is being considered for an IRA plan. 9 SELECTING MULTIPLE DEATH BENEFIT RIDERS The MAV Rider, the 5% Roll-Up Rider, and the EEB Rider can be combined. If you elect more than one of these three optional death benefit riders, your death benefit will be calculated as follows: - MAV RIDER COMBINED WITH 5% ROLL-UP RIDER: The death benefit will equal the greater of the death benefit under the MAV Rider and the death benefit under the 5% Roll-Up Rider. - MAV RIDER COMBINED WITH EEB RIDER: The death benefit will equal the death benefit under the MAV Rider, plus the "EEB amount." The "EEB amount" is calculated using the Account Value before the application of the MAV Rider. - EEB RIDER COMBINED WITH 5% ROLL-UP RIDER: The death benefit will equal the death benefit under the 5% Roll-Up Rider, plus the "EEB amount." The "EEB amount" is calculated using the Account Value before the application of the 5% Roll-Up Rider. - MAV RIDER, THE 5% ROLL-UP RIDER AND THE EEB RIDER: The death benefit will equal the greater of the death benefit under the MAV Rider or the death benefit under the 5% Roll-Up Rider, plus the "EEB amount." The "EEB amount" is calculated using the Account Value before the application of the 5% Roll-Up Rider and the MAV Rider. The EEB Plus, EEB Plus MAV, and EEB Plus 5% Roll-Up Riders are designed to be "comprehensive" riders and may not be combined with each other or with any of the other death benefit riders. If your spouse is your beneficiary, upon your death your spouse may elect to continue the Contact as the Participant, rather than receive the death benefit amount. In that case, we will not pay a death benefit, but the value of your Contract will be equal to your Contract's death benefit amount. All Contract provisions, including any death benefit riders you selected, will continue as if your spouse purchased the Contract on the Death Benefit Date with a deposit equal to the death benefit amount. For purposes of calculating the death benefits and expenses from that date forward, your spouse's age on the original effective date of the Contract will be used. Upon surrender or annuitization, this step-up to the spouse will not be treated as premium, but will be treated as income. 10. OTHER INFORMATION FREE LOOK. Depending upon applicable state or federal law, if you cancel your Contract within 10 days after receiving it, we will send you the value of your Contract as of the day we received your cancellation request (this may be more or less than the original purchase payment) and we will not deduct a withdrawal charge. However, based upon applicable state or federal law, we will refund the full amount of any purchase payment(s) we receive and the "free look" period may be greater than 10 days. NO PROBATE. In most cases, when you die, the beneficiary will receive the death benefit without going through probate. However, avoiding probate does not mean that the beneficiary will not have a tax liability as a result of receiving the death benefit. WHO SHOULD PURCHASE A CONTRACT? The Contract is designed for those seeking long-term tax-deferred accumulation of assets and annuity features, generally for retirement or other long-term investment purposes. The tax-deferred feature is most attractive to purchasers in high federal and state income tax brackets. You should note that qualified retirement investments automatically provide tax deferral regardless of whether or not the underlying contract is an annuity. You should not buy a Contract if you are looking for a short-term investment or if you do not wish to risk a decrease in the value of your investment. If this Contract is being considered as a replacement of another contract, you should compare this Contract's benefits and charges against the benefits and charges of the contract that is being replaced. CONFIRMATIONS AND QUARTERLY STATEMENTS. You will receive a confirmation or an acknowledgment of transactions within your Contract, except for those transactions which are part of an automated program, such as Dollar-Cost Averaging, Asset Allocation, Systematic Withdrawal and/or Portfolio 10 Rebalancing. On a quarterly basis, you will receive a complete statement of your transactions over the past quarter and a summary of your Account values at the end of that period. ADDITIONAL FEATURES. The Contract offers the following additional convenient features, which you may choose at no extra charge. These features may be started or discontinued at any time by either you or the Company; however, we may require up to a 30-day notice. DOLLAR-COST AVERAGING -- This program lets you invest gradually in up to 12 Sub-Accounts. ASSET ALLOCATION -- This program rebalances your Account balance based on the terms of the program. Different asset allocation models may be available over the lifetime of the Contract; however, only one program can be in effect at any one time. SYSTEMATIC WITHDRAWAL PROGRAM -- This program allows you to receive monthly, quarterly, semi-annual or annual payments during the Accumulation Phase. PORTFOLIO REBALANCING PROGRAM -- Under this program, we automatically reallocate your investments in the Sub-Accounts to maintain the proportions you select. You can elect rebalancing on a quarterly, semi-annual or annual basis. PRINCIPAL RETURNS PROGRAM -- This program guarantees the return of your purchase payment by investing a portion of your investment into a Guarantee Period, and also allows you to allocate a portion of your investment to one or more Sub-Accounts. 11. INQUIRIES If you would like more information about buying a Contract, please contact your broker or registered representative. If you have any other questions, please contact us at: SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) C/O RETIREMENT PRODUCTS AND SERVICES P.O. BOX 9133 BOSTON, MASSACHUSETTS 02117 TELEPHONE: TOLL FREE (888) 786-2435 11 PROSPECTUS MAY 1, 2001 FUTURITY III Sun Life Assurance Company of Canada (U.S.) and Sun Life of Canada (U.S.) Variable Account F offer the flexible payment deferred annuity contracts and certificates described in this Prospectus to groups and individuals. You may choose among a number of variable investment options and fixed options. The variable options are Sub-Accounts in the Variable Account, each of which invests in one of the following mutual funds or series thereof (the "Funds"): AIM VARIABLE INSURANCE FUNDS FIDELITY VARIABLE INSURANCE PRODUCTS FUNDS AIM V.I. Capital Appreciation Fund Fidelity VIP Contrafund-TM- Portfolio AIM V.I. Growth Fund Fidelity VIP Growth Portfolio AIM V.I. Growth and Income Fund Fidelity VIP Overseas Portfolio AIM V.I. International Equity Fund MFS/SUN LIFE SERIES TRUST AIM V.I. Value Fund MFS/Sun Life Capital Appreciation Series THE ALGER AMERICAN FUND MFS/Sun Life Emerging Growth Series Alger American Growth Portfolio MFS/Sun Life Government Securities Series Alger American Income and Growth Portfolio MFS/Sun Life High Yield Series Alger American Small Capitalization Portfolio MFS/Sun Life Massachusetts Investors Growth ALLIANCE VARIABLE PRODUCTS SERIES FUND, INC. Stock Series Alliance VP Premier Growth Fund MFS/Sun Life Massachusetts Investors Trust Alliance VP Technology Fund Series Alliance VP Growth and Income Fund MFS/Sun Life New Discovery Series Alliance VP Worldwide Privatization Fund MFS/Sun Life Total Return Series Alliance VP Quasar Fund MFS/Sun Life Utilities Series GOLDMAN SACHS VARIABLE INSURANCE TRUST RYDEX VARIABLE TRUST VIT CORE-SM- Large Cap Growth Fund Rydex VT Nova Fund VIT CORE-SM- U.S. Equity Fund Rydex VT OTC Fund VIT CORE-SM- Small Cap Equity Fund* SUN CAPITAL ADVISERS TRUST VIT Internet Tollkeeper Fund SC-SM- Davis Financial Fund VIT Capital Growth Fund SC-SM- Davis Venture Value Fund VIT Growth and Income Fund* SC-SM- INVESCO Energy Fund VIT International Equity Fund* SC-SM- INVESCO Health Sciences Fund INVESCO VARIABLE INVESTMENT FUNDS, INC. SC-SM- INVESCO Technology Fund INVESCO VIF Dynamics Fund SC-SM- INVESCO Telecommunications Fund INVESCO VIF Small Company Growth Fund SC-SM- Neuberger Berman Mid Cap Growth Fund J.P. MORGAN SERIES TRUST II SC-SM- Neuberger Berman Mid Cap Value Fund J.P. Morgan International Opportunities SC-SM- Value Equity Fund Portfolio* SC-SM- Value Managed Fund J.P. Morgan Small Company Portfolio* SC-SM- Value Mid Cap Fund J.P. Morgan U.S. Disciplined Equity Portfolio* SC-SM- Value Small Cap Fund LORD ABBETT SERIES FUND, INC. SC-SM- Blue Chip Mid Cap Fund Lord Abbett Series Fund Mid Cap Value SC-SM- Investors Foundation Fund Lord Abbett Series Fund Growth and Income SC-SM- Select Equity Fund Lord Abbett Series Fund International Sun Capital Investment Grade Bond Fund-SM- Sun Capital Money Market Fund-SM- Sun Capital Real Estate Fund-SM-
------------------------ * Not available to Contracts issued on or after May 1, 2001. The fixed account options are available for specified time periods, called Guarantee Periods, and pay interest at a guaranteed rate for each period. PLEASE READ THIS PROSPECTUS AND THE FUND PROSPECTUSES CAREFULLY BEFORE INVESTING AND KEEP THEM FOR FUTURE REFERENCE. THEY CONTAIN IMPORTANT INFORMATION ABOUT THE CONTRACTS AND THE FUNDS. 1 We have filed a Statement of Additional Information dated May 1, 2001 (the "SAI") with the Securities and Exchange Commission (the "SEC"), which is incorporated by reference in this Prospectus. The table of contents for the SAI is on page of this Prospectus. You may obtain a copy without charge by writing to us at the address shown below (which we sometimes refer to as our "Annuity Mailing Address") or by telephoning (888) 786-2435. In addition, the SEC maintains a website (http://www.sec.gov) that contains the SAI, material incorporated by reference, and other information regarding companies that file with the SEC. THE CONTRACTS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ANY REFERENCE IN THIS PROSPECTUS TO RECEIPT BY US MEANS RECEIPT AT THE FOLLOWING ADDRESS: SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) C/O RETIREMENT PRODUCTS AND SERVICES P.O. BOX 9133 BOSTON, MASSACHUSETTS 02117 2 TABLE OF CONTENTS
PAGE Special Terms 5 Expense Summary 5 Summary of Contract Expenses 5 Underlying Fund Annual Expenses 6 Examples 9 Condensed Financial Information 14 The Annuity Contract 14 Communicating To Us About Your Contract 15 Sun Life Assurance Company of Canada (U.S.) 15 The Variable Account 15 Variable Account Options: The Funds 16 The Fixed Account 21 The Fixed Account Options: The Guarantee Periods 21 The Accumulation Phase 21 Issuing Your Contract 22 Amount and Frequency of Purchase Payments 22 Allocation of Net Purchase Payments 22 Your Account 22 Your Account Value 22 Variable Account Value 22 Fixed Account Value 23 Transfer Privilege 24 Waivers; Reduced Charges; Credits; Special Guaranteed Interest Rates 25 Optional Programs 26 Withdrawals, Withdrawal Charge and Market Value Adjustment 27 Cash Withdrawals 27 Withdrawal Charge 28 Types of Withdrawals Not Subject to Withdrawal Charge 30 Market Value Adjustment 30 Contract Charges 31 Account Fee 31 Administrative Expense Charge 32 Mortality and Expense Risk Charge 32 Charges for Optional Death Benefit Riders 32 Premium Taxes 32 Fund Expenses 33 Modification in the Case of Group Contracts 33 Death Benefit 33 Amount of Death Benefit 33 The Basic Death Benefit 33 Optional Death Benefit Riders 34 Spousal Continuance 36 Calculating the Death Benefit 36 Method of Paying Death Benefit 36 Non-Qualified Contracts 37 Selection and Change of Beneficiary 37 Payment of Death Benefit 37 Due Proof of Death 37 The Income Phase -- Annuity Provisions 37 Selection of the Annuitant or Co-Annuitant 38 Selection of the Annuity Commencement Date 38 Annuity Options 38 Selection of Annuity Option 39 Amount of Annuity Payments 40 Exchange of Variable Annuity Units 41 Account Fee 41 Annuity Payment Rates 41 Annuity Options as Method of Payment for Death Benefit 41
3 Other Contract Provisions 41 Exercise of Contract Rights 41 Change of Ownership 42 Voting of Fund Shares 42 Periodic Reports 43 Substitution of Securities 43 Change in Operation of Variable Account 43 Splitting Units 44 Modification 44 Discontinuance of New Participants 44 Reservation of Rights 44 Right to Return 44 Tax Considerations 45 U.S. Federal Income Tax Considerations 45 DEDUCTIBILITY OF PURCHASE PAYMENTS 45 PRE-DISTRIBUTION TAXATION OF CONTRACTS 45 DISTRIBUTIONS AND WITHDRAWALS FROM NON-QUALIFIED CONTRACTS 46 DISTRIBUTION AND WITHDRAWALS FROM QUALIFIED CONTRACTS 46 WITHHOLDING 47 INVESTMENT DIVERSIFICATION AND CONTROL 47 TAX TREATMENT OF THE COMPANY AND THE VARIABLE ACCOUNT 47 QUALIFIED RETIREMENT PLANS 47 PENSION AND PROFIT-SHARING PLANS 47 TAX-SHELTERED ANNUITIES 48 INDIVIDUAL RETIREMENT ACCOUNTS 48 ROTH IRAS 48 STATUS OF OPTIONAL DEATH BENEFIT RIDERS 49 Puerto Rico Tax Considerations 49 Administration of the Contract 49 Distribution of the Contract 50 Performance Information 50 Available Information 51 Incorporation of Certain Documents by Reference 51 State Regulation 52 Legal Proceedings 52 Accountants 52 Financial Statements 53 Table of Contents of Statement of Additional Information 53 Appendix A -- Glossary 55 Appendix B -- Withdrawals, Withdrawal Charges and the Market Value Adjustment 58 Appendix C -- Calculation of Basic Death Benefit 61 Appendix D -- Calculation of Earnings Enhancement Optional Death Benefit Rider 62 Appendix E -- Calculation of Death Benefit When the EEB and MAV and 5% Roll-Up Riders are Selected 63 Appendix F -- Calculation of Earnings Enhancement Plus Optional Death Benefit 64 Appendix G -- Calculation of Earnings Enhancement Plus With MAV Optional Death Benefit 65 Appendix H -- Calculation of Earnings Enhancement Plus With 5% Roll-up Optional Death Benefit 66 Appendix I -- Condensed Financial Information -- Accumulation Unit Values 67
4 SPECIAL TERMS Your Contract is a legal document that uses a number of specially defined terms. We explain most of the terms that we use in this Prospectus in the context where they arise, and some are self-explanatory. In addition, for convenient reference, we have compiled a list of these terms in the Glossary included at the back of this Prospectus as Appendix A. If, while you are reading this Prospectus, you come across a term that you do not understand, please refer to the Glossary for an explanation. EXPENSE SUMMARY The purpose of the following table is to help you understand the costs and expenses that you will bear directly and indirectly under a Contract WHEN YOU ALLOCATE MONEY TO THE VARIABLE ACCOUNT. The table reflects expenses of the Variable Account as well as of each Fund. The table should be considered together with the narrative provided under the heading "Contract Charges" in this Prospectus, and with the Funds' prospectus(es). In addition to the expenses listed below, we may deduct premium taxes, where required by state law. SUMMARY OF CONTRACT EXPENSES TRANSACTION EXPENSES Sales Load Imposed on Purchase Payments..................... $ 0 Deferred Sales Load (as a percentage of Purchase Payments withdrawn) (1) Number of complete Account Years Purchase Payment in Account 0-1..................................................... 7% 1-2..................................................... 7% 2-3..................................................... 6% 3-4..................................................... 6% 4-5..................................................... 5% 5-6..................................................... 4% 6-7..................................................... 3% 7 or more............................................... 0% Transfer Fee (2)............................................ $ 15 ANNUAL ACCOUNT FEE per Contract or Certificate (3).......... $ 50 VARIABLE ACCOUNT ANNUAL EXPENSES (as a percentage of average Variable Account assets)
FOR CONTRACTS WITH AN INITIAL FOR CONTRACTS WITH AN INITIAL PURCHASE PAYMENT PURCHASE PAYMENT OF LESS THAN $1,000,000: $1,000,000 OR MORE: Mortality and Expense Risks Mortality and Expense Risks Charge (4)............................ 1.00% Charge (4)............................ 0.85% Administrative Expenses Charge........ 0.15% Administrative Expenses Charge........ 0.15% ----- ----- Total Variable Annuity Annual Total Variable Annuity Annual Expenses.............................. 1.15% Expenses.............................. 1.00%
DEATH BENEFIT CHARGE (if one or more of the optional death benefits is elected)
% OF AVERAGE RIDER(S) ELECTED(5) DAILY VALUE ------------------- ------------ "EEB" 0.15% "MAV" 0.15% "5% Roll-Up" 0.15% "EEB" and "MAV" 0.25% "EEB" and "5% Roll-Up" 0.25% "MAV" and "5% Roll-Up" 0.25% "EEB Plus" 0.25% "EEB" and "MAV" and "5% Roll-Up" 0.40% "EEB Plus MAV" 0.40% "EEB Plus 5% Roll-Up" 0.40%
------------------------ (1) A portion of your Account may be withdrawn each year without imposition of any withdrawal charge and, after a Purchase Payment has been in your Account for 7 Account Years, it may be withdrawn free of the withdrawal charge. (2) Currently, we impose no fee upon transfers; however, we reserve the right to impose up to $15 per transfer. In addition, a Market Value Adjustment may be imposed on amounts transferred from or within the Fixed Account. (3) The annual Account Fee is currently $35. After the fifth Account Year, the fee may be changed annually, but it will never exceed $50. (4) We will assess an additional 0.25% during the Income Phase on Contracts that annuitize before their seventh Contract Anniversary. (5) The optional death benefit riders are defined under "Death Benefit." 5 UNDERLYING FUND ANNUAL EXPENSES (1) (AS A PERCENTAGE OF FUND NET ASSETS)
TOTAL ANNUAL FUND OTHER FUND EXPENSES AFTER AND MANAGEMENT EXPENSES AFTER 12B-1 OR BEFORE FUND FEES REIMBURSEMENT(2) SERVICE FEES REIMBURSEMENT(2) ---- ---------- ---------------- ------------ ------------------------------------- AIM V.I. Capital Appreciation Fund......... 0.61% 0.21% 0.82% AIM V.I. Growth Fund....................... 0.61% 0.22% 0.83% AIM V.I. Growth and Income Fund............ 0.60% 0.24% 0.84% AIM V.I. International Equity Fund......... 0.73% 0.29% 1.02% AIM V.I. Value Fund........................ 0.61% 0.23% 0.84% Alger American Growth Portfolio............ 0.75% 0.04% 0.79% Alger American Income and Growth Portfolio................................. 0.62% 0.08% 0.70% Alger American Small Capitalization Portfolio................................. 0.85% 0.05% 0.90% Alliance VP Premier Growth Fund (3)........ 1.00% 0.05% 0.25% 1.30% Alliance VP Technology Fund (3)............ 0.97% 0.09% 0.25% 1.31% [1.33%] Alliance VP Growth and Income Fund (3)..... 0.63% 0.07% 0.25% 0.95% Alliance VP Worldwide Privatization Fund (3).................................. 0.51% 0.44% 0.25% 1.20% [1.80%] Alliance VP Quasar Fund (3)................ 0.81% 0.14% 0.25% 1.20% [1.41%] Goldman Sachs VIT CORE-SM- Large Cap Growth Fund (4).................................. 0.70% 0.20% 0.90% [1.23%] Goldman Sachs VIT CORE-SM- Small Cap Equity Fund (4).................................. 0.75% 0.25% 1.00% [1.55%] Goldman Sachs VIT CORE-SM- U.S. Equity Fund (4).................................. 0.70% 0.20% 0.90% [1.52%] Goldman Sachs VIT Internet Tollkeeper Fund (4).................................. 1.00% 0.25% 1.25% [5.62%] Goldman Sachs VIT Capital Growth Fund (4).................................. 0.75% 0.25% 1.00% [1.84%] Goldman Sachs VIT Growth and Income Fund (4).................................. 0.75% 0.25% 1.00% [1.22%] Goldman Sachs VIT International Equity Fund (4).................................. 1.00% 0.35% 1.35% [1.99%] INVESCO VIF Dynamics Fund (5).............. 0.75% 0.09% 0.25% 1.09% INVESCO VIF Small Company Growth Fund (5).................................. 0.75% 0.37% 0.25% 1.37% [1.43%] J.P. Morgan International Opportunities Portfolio (6)............................. 0.60% 0.60% 1.20% [1.73%] J.P. Morgan Small Company Portfolio (6).... 0.60% 0.55% 1.15% [1.32%] J.P. Morgan U.S. Disciplined Equity Portfolio (6)............................. 0.35% 0.50% 0.85% Lord Abbett Series Fund Mid Cap Value (7)................................. 0.75% 0.10% 0.25% 1.10% [1.56%] Lord Abbett Series Fund Growth and Income (7)................................ 0.50% 0.27% 0.25% 1.02% Lord Abbett Series Fund International (7)......................... 1.00% 0.10% 0.25% 1.35% [2.37%] Fidelity VIP Contrafund-TM- Portfolio (8)............................. 0.57% 0.10% 0.25% 0.92% Fidelity VIP Growth Portfolio (8).......... 0.57% 0.09% 0.25% 0.91% Fidelity VIP Overseas Portfolio (8)........ 0.72% 0.18% 0.25% 1.15% MFS/Sun Life Capital Appreciation Series (9)................................ 0.71% 0.04% 0.75% MFS/Sun Life Emerging Growth Series (9).... 0.69% 0.05% 0.74% MFS/Sun Life Government Securities Series.................................... 0.55% 0.07% 0.62% MFS/Sun Life High Yield Series (9)......... 0.75% 0.08% 0.83% MFS/Sun Life Massachusetts Investors Growth Stock Series.............................. 0.75% 0.06% 0.81%
6
TOTAL ANNUAL FUND OTHER FUND EXPENSES AFTER AND MANAGEMENT EXPENSES AFTER 12B-1 OR BEFORE FUND FEES REIMBURSEMENT(2) SERVICE FEES REIMBURSEMENT(2) ---- ---------- ---------------- ------------ ------------------------------------- MFS/Sun Life Massachusetts Investors Trust Series (9)................................ 0.55% 0.05% 0.60% MFS/Sun Life New Discovery Series.......... 0.90% 0.09% 0.99% MFS/Sun Life Total Return Series (9)....... 0.66% 0.04% 0.70% MFS/Sun Life Utilities Series (9).......... 0.72% 0.08% 0.80% Rydex VT Nova Fund......................... 0.75% 0.42% 0.25% 1.42% Rydex VT OTC Fund.......................... 0.75% 0.46% 0.25% 1.46% SC-SM- Davis Financial Fund (10)(11)....... 0.75% 0.15% 0.90% [5.50%] SC-SM- Davis Venture Value Fund (10)(11)............................. 0.75% 0.15% 0.90% [3.20%] SC-SM- INVESCO Energy Fund (10)(12)........ 1.05% 0.20% 1.25% [5.00%] SC-SM- INVESCO Health Sciences Fund (10)(12)............................. 1.05% 0.20% 1.25% [5.00%] SC-SM- INVESCO Telecommunications Fund (10)(12)............................. 1.05% 0.20% 1.25% [5.00%] SC-SM- INVESCO Technology Fund (10)(12).... 1.05% 0.20% 1.25% [5.00%] SC-SM- Neuberger Berman Mid Cap Growth Fund (9)(13).............................. 0.95% 0.15% 1.10% [5.00%] SC-SM- Neuberger Berman Mid Cap Value Fund (10)(13)............................. 0.95% 0.15% 1.10% [5.00%] SC-SM- Value Equity Fund (10)(14).......... 0.80% 0.10% 0.90% [7.65%] SC-SM- Value Managed Fund (10)(14)......... 0.80% 0.10% 0.90% [7.84%] SC-SM- Value Mid Cap Fund (10)(14)......... 0.80% 0.20% 1.00% [4.27%] SC-SM- Value Small Cap Fund (10)(14)....... 0.80% 0.20% 1.00% [5.02%] SC-SM- Blue Chip Mid Cap Fund (10)(15)..... 0.80% 0.20% 1.00% [1.96%] SC-SM- Investors Foundation Fund (10)(15)............................. 0.75% 0.15% 0.90% [3.99%] SC-SM- Select Equity Fund (10)(15)......... 0.75% 0.15% 0.90% [2.44%] Sun Capital Investment Grade Bond Fund-SM- (10)............................. 0.60% 0.15% 0.75% [1.31%] Sun Capital Money Market Fund-SM- (10)..... 0.50% 0.15% 0.65% [1.22%] Sun Capital Real Estate Fund-SM- (10)...... 0.95% 0.30% 1.25% [2.67%]
------------------------ (1) The information relating to Fund expenses was provided by the Funds and we have not independently verified it. You should consult the Fund prospectuses for more information about Fund expenses. (2) All expense figures are shown after expense reimbursements or waivers, except for the bracketed figures which show what the expense figures would have been absent reimbursement. All expense figures are based on actual expenses for the fiscal year ended December 31, 2000, except that (a) the expense figures shown for SC-SM- INVESCO Energy Fund, SC-SM- INVESCO Health Sciences Fund, SC-SM- INVESCO Telecommunications Fund, SC-SM- INVESCO Technology Fund, SC-SM- Neuberger Berman Mid Cap Growth Fund, and SC-SM- Neuberger Berman Mid Cap Value Fund are estimates for the year 2001 and (b) certain information relating to the Lord Abbett Series Fund has been restated as described in note (7) below. No actual expense figures are shown for the Funds listed in (a) because they commenced operations in May of 2001, and, therefore, have less than 10 months of investment experience. (3) For the year ended December 31, 2000, the investment advisor has voluntarily agreed to waive fund expenses to the extent such expenses exceed the "Total Fund Annual Expenses" shown in the table. 7 (4) The investment advisers to the following Goldman Sachs VIT Funds have voluntarily agreed to reduce or limit certain "Other Expenses" of such Funds (excluding management fees, taxes, interest, and brokerage fees, litigation, indemnification and other extraordinary expenses) to the extent such expenses exceed a certain percentage per annum of such Funds' average daily net assets: Goldman Sachs VIT CORE-SM- Large Capital Growth Fund.... 0.20% Goldman Sachs VIT CORE-SM- Small Cap Equity Fund........ 0.25% Goldman Sachs VIT CORE-SM- U.S. Equity Fund............. 0.20% Goldman Sachs VIT Growth and Income Fund................ 0.25% Goldman Sachs VIT International Equity Fund............. 0.35%
Fee waivers and expense reimbursements for the Goldman Sachs VIT Funds may be discontinued at any time. (5) The INVESCO VIF Dynamics and INVESCO VIF Small Company Growth Funds' actual "Other Fund Expenses" and "Total Annual Fund Expenses" were lower than the figures shown, because their custodian fees were reduced under an expense offset arrangement. (6) Through fiscal year 2000, an affiliate of the adviser has agreed to reimburse the Fund to the extent certain expenses exceed the following percentages of the Fund's average daily net assets: J.P. Morgan U.S. Disciplined Equity Portfolio........... 0.85% J.P. Morgan International Opportunities Portfolio....... 1.20% J.P. Morgan Small Company Portfolio..................... 1.15%
(7) For the year ended December 31, 2000, Lord, Abbett & Co. voluntarily waived its management fees of 0.75% of average daily net assets of Mid Cap Value Portfolio and 1.00% of average daily net assets of International Portfolio and voluntarily reimbursed all other fund expenses of the Mid Cap Value Portfolio and the International Portfolio. For the year 2001, Lord, Abbett & Co. does not intend to waive it management fees for these Portfolios but has agreed formally to continue to reimburse a portion of the Mid Cap Value Portfolio's and International Portfolio's expenses to the extent necessary to maintain its "Other Fund Expenses After Reimbursement" and "12b-1 or Service Fees" at an aggregate of 0.35% of its average net assets. In light of these developments, the information in the chart above relating to these portfolios has been restated to reflect the fees that are expected to be applicable during 2001. (8) Actual annual operating expenses of the Fidelity Funds were lower than those shown in the table because a portion of the brokerage commissions that each Fund paid was used to reduce the Fund's expenses, and/or because through arrangements with the Fund's custodian, credits realized as a result of uninvested cash balances were used to reduce a portion of the Fund's custodian expenses. Fidelity may terminate the expense reimbursement at any time. Had these reductions been taken into account, total expenses would have been lower: 0.90% for VIP Contrafund-TM-, 0.90% for VIP Growth, and 1.13% for VIP Overseas. (9) The MFS/SUN Life Series Trust has an expense offset arrangement which reduces the Fund's custodian fee based upon the amount of cash maintained by the Fund with its custodian and dividend disbursing agent, and may enter into such other arrangements and directed brokerage arrangement (which would also have the effect of reducing the Fund's expenses). Any such fee reductions are not reflected in the table. Had these fee reductions been taken into account, "Total Annual Fund Expenses" would have been lower for certain series: MFS/Sun Life Capital Appreciation Series................ 0.74% MFS/Sun Life Emerging Growth Series..................... 0.73% MFS/Sun Life High Yield Series.......................... 0.82% MFS/Sun Life Massachusetts Investors Trust Series....... 0.59% MFS/Sun Life Total Return Series........................ 0.69% MFS/Sun Life Utilities Series........................... 0.79%
8 (10) For the year ended December 31, 2000, the investment adviser waived all investment advisory fees of all Funds other than Sun Capital Investment Grade Bond Fund-SM-, for which the investment adviser waived a portion of its fees. Fee waivers and expense reimbursements for the Sun Capital Funds may be discontinued at any time after May 1, 2002. To the extent that the expense ratio of any Fund in the Sun Capital Advisers Trust falls below the Fund's expense limit, the Fund's adviser reserves the right to be reimbursed for management fees waived and Fund expenses paid by it during the prior two years. (11) The management fee for each of the SC-SM- Davis Funds decreases to 0.70% as the daily net assets of each Fund exceed $500 million. (12) The management fee for each of the SC-SM- INVESCO Funds decreases to 1.00% as the daily net assets of the Funds exceed $750 million. (13) The management fee for each of the SC-SM- Neuberger Berman Funds decreases to 0.90% as the daily net assets of the Funds exceed $750 million. (14) The management fee for each of the SC-SM- Value Funds decreases to 0.75% as the daily net assets of each Fund exceed $400 million, and decreases to 0.70% as the daily net assets of each Fund exceed $800 million. (15) The management fees for each of the SC-SM- Blue Chip Mid Cap Fund, the SC-SM- Investors Foundation Fund, and the SC-SM- Select Equity Fund decreases to 0.75%, 0.70%, and 0.70% respectively, as the daily net assets of each Fund exceed $300 million. EXAMPLES If you surrender your Contract at the end of the applicable period, you would pay the following expenses on a $1,000 investment, assuming a 5% annual return, an average Contract size of $35,000, and no optional death benefit riders have been elected:
1 YEAR 3 YEARS 5 YEARS 10 YEARS -------- -------- -------- -------- AIM V.I. Capital Appreciation Fund.......................... 83 121 161 243 AIM V.I. Growth Fund........................................ 83 122 162 244 AIM V.I. Growth and Income Fund............................. 83 122 162 245 AIM V.I. International Equity Fund.......................... 84 127 171 263 AIM V.I. Value Fund......................................... 83 122 162 245 Alger American Growth Portfolio............................. 82 120 160 239 Alger American Income and Growth Portfolio.................. 81 118 155 230 Alger American Small Capitalization Portfolio............... 83 124 165 251 Alliance VP Premier Growth Fund............................. 87 135 184 291 Alliance VP Technology Fund................................. 87 135 185 292 Alliance VP Growth and Income Fund.......................... 84 125 168 256 Alliance VP Worldwide Privatization Fund.................... 86 132 180 281 Alliance VP Quasar Fund..................................... 86 132 180 281 Goldman Sachs VIT CORE-SM- Large Cap Growth Fund............ 83 124 165 251 Goldman Sachs VIT CORE-SM- Small Cap Equity Fund............ 84 126 170 261 Goldman Sachs VIT CORE-SM- U.S. Equity Fund................. 83 124 165 251 Goldman Sachs VIT Internet Tollkeeper Fund.................. 87 133 182 286 Goldman Sachs VIT Capital Growth Fund....................... 84 126 170 261 Goldman Sachs VIT Growth and Income Fund.................... 84 126 170 261 Goldman Sachs VIT International Equity Fund................. 87 136 187 296 INVESCO VIF Dynamics Fund................................... 85 129 175 270 INVESCO VIF Small Company Growth Fund....................... 88 137 188 298 J.P. Morgan International Opportunities Portfolio........... 86 132 180 281 J.P. Morgan Small Company Portfolio......................... 86 131 177 276 J.P. Morgan U.S. Disciplined Equity Portfolio............... 83 122 163 246
9
1 YEAR 3 YEARS 5 YEARS 10 YEARS -------- -------- -------- -------- Lord Abbett Series Fund Mid Cap Value....................... 85 129 175 271 Lord Abbett Series Fund Growth and Income................... 84 127 171 263 Lord Abbett Series Fund International....................... 87 136 187 296 Fidelity VIP Contrafund-TM- Portfolio....................... 83 124 166 253 Fidelity VIP Growth Portfolio............................... 83 124 166 252 Fidelity VIP Overseas Portfolio............................. 86 131 177 276 MFS/Sun Life Capital Appreciation Series.................... 82 119 158 235 MFS/Sun Life Emerging Growth Series......................... 82 119 157 234 MFS/Sun Life Government Securities Series................... 81 116 151 222 MFS/Sun Life High Yield Series.............................. 83 122 162 244 MFS/Sun Life Massachusetts Investors Growth Stock Series.... 82 121 161 242 MFS/Sun Life Massachusetts Investors Trust Series........... 80 115 150 220 MFS/Sun Life New Discovery Series........................... 84 126 170 260 MFS/Sun Life Total Return Series............................ 81 118 155 230 MFS/Sun Life Utilities Series............................... 82 121 160 240 Rydex VT Nova Fund.......................................... 88 138 190 303 Rydex VT OTC Fund........................................... 89 139 192 307 SC-SM- Davis Financial Fund................................. 83 124 165 251 SC-SM- Davis Venture Value Fund............................. 83 124 165 251 SC-SM- INVESCO Energy Fund.................................. 87 133 182 286 SC-SM- INVESCO Health Science Fund.......................... 87 133 182 286 SC-SM- INVESCO Telecommunications Fund...................... 87 133 182 286 SC-SM- INVESCO Technology Fund.............................. 87 133 182 286 SC-SM- Neuberger Berman Mid Cap Growth Fund................. 85 129 175 271 SC-SM- Neuberger Berman Mid Cap Value Fund.................. 85 129 175 271 SC-SM- Value Equity Fund.................................... 83 124 165 251 SC-SM- Value Managed Fund................................... 83 124 165 251 SC-SM- Value Mid Cap Fund................................... 84 126 170 261 SC-SM- Value Small Cap Fund................................. 84 126 170 261 SC-SM- Blue Chip Mid Cap Fund............................... 84 126 170 261 SC-SM- Investors Foundation Fund............................ 83 124 165 251 SC-SM- Select Equity Fund................................... 83 124 165 251 Sun Capital Investment Grade Bond Fund-SM-.................. 82 119 158 235 Sun Capital Money Market Fund-SM-........................... 81 116 153 225 Sun Capital Real Estate Fund-SM-............................ 87 133 182 286
If you surrender your Contract at the end of the applicable period, you would pay the following expenses on a $1,000 investment, assuming a 5% annual return, an average Contract size of $35,000, and the EEB Plus MAV optional death benefit rider has been elected:
1 YEAR 3 YEARS 5 YEARS 10 YEARS -------- -------- -------- -------- AIM V.I. Capital Appreciation Fund.......................... 86 133 181 283 AIM V.I. Growth Fund........................................ 86 133 181 284 AIM V.I. Growth and Income Fund............................. 86 133 182 285 AIM V.I. International Equity Fund.......................... 88 138 190 303 AIM V.I. Value Fund......................................... 86 133 182 285 Alger American Growth Portfolio............................. 86 132 179 280 Alger American Income and Growth Portfolio.................. 85 129 175 271 Alger American Small Capitalization Portfolio............... 87 135 184 291 Alliance VP Premier Growth Fund............................. 91 146 203 329 Alliance VP Technology Fund................................. 91 146 204 330 Alliance VP Growth and Income Fund.......................... 87 136 187 296 Alliance VP Worldwide Privatization Fund.................... 90 143 198 320 Alliance VP Quasar Fund..................................... 90 143 198 320
10
1 YEAR 3 YEARS 5 YEARS 10 YEARS -------- -------- -------- -------- Goldman Sachs VIT CORE-SM- Large Cap Growth Fund............ 87 135 184 291 Goldman Sachs VIT CORE-SM- Small Cap Equity Fund............ 88 138 189 301 Goldman Sachs VIT CORE-SM- U.S. Equity Fund................. 87 135 184 291 Goldman Sachs VIT Internet Tollkeeper Fund.................. 90 145 201 325 Goldman Sachs VIT Capital Growth Fund....................... 88 138 189 301 Goldman Sachs VIT Growth and Income Fund.................... 88 138 189 301 Goldman Sachs VIT International Equity Fund................. 91 147 205 334 INVESCO VIF Dynamics Fund................................... 89 140 193 309 INVESCO VIF Small Company Growth Fund....................... 91 148 206 336 J.P. Morgan International Opportunities Portfolio........... 90 143 198 320 J.P. Morgan Small Company Portfolio......................... 89 142 196 315 J.P. Morgan U.S. Disciplined Equity Portfolio............... 87 133 182 286 Lord Abbett Series Fund Mid Cap Value....................... 89 140 194 310 Lord Abbett Series Fund Growth and Income................... 88 138 190 303 Lord Abbett Series Fund International....................... 91 147 205 334 Fidelity VIP Contrafund-TM- Portfolio....................... 87 135 185 293 Fidelity VIP Growth Portfolio............................... 87 135 185 292 Fidelity VIP Overseas Portfolio............................. 89 142 196 315 MFS/Sun Life Capital Appreciation Series.................... 86 131 177 276 MFS/Sun Life Emerging Growth Series......................... 86 130 177 275 MFS/Sun Life Government Securities Series................... 84 127 171 263 MFS/Sun Life High Yield Series.............................. 86 133 181 284 MFS/Sun Life Massachusetts Investors Growth Stock Series.... 86 132 180 282 MFS/Sun Life Massachusetts Investors Trust Series........... 84 126 170 261 MFS/Sun Life New Discovery Series........................... 88 137 189 300 MFS/Sun Life Total Return Series............................ 85 129 175 271 MFS/Sun Life Utilities Series............................... 86 132 180 281 Rydex VT Nova Fund.......................................... 92 149 209 341 Rydex VT OTC Fundv 92 150 210 344 SC-SM- Davis Financial Fund................................. 87 135 184 291 SC-SM- Davis Venture Value Fund............................. 87 135 184 291 SC-SM- INVESCO Energy Fund.................................. 90 145 201 325 SC-SM- INVESCO Health Science Fund.......................... 90 145 201 325 SC-SM- INVESCO Telecommunications Fund...................... 90 145 201 325 SC-SM- INVESCO Technology Fund.............................. 90 145 201 325 SC-SM- Neuberger Berman Mid Cap Growth Fund................. 89 140 194 310 SC-SM- Neuberger Berman Mid Cap Value Fund.................. 89 140 194 310 SC-SM- Value Equity Fund.................................... 87 135 184 291 SC-SM- Value Managed Fund................................... 87 135 184 291 SC-SM- Value Mid Cap Fund................................... 88 138 189 301 SC-SM- Value Small Cap Fund................................. 88 138 189 301 SC-SM- Blue Chip Mid Cap Fund............................... 88 138 189 301 SC-SM- Investors Foundation Fund............................ 87 135 184 291 SC-SM- Select Equity Fund................................... 87 135 184 291 Sun Capital Investment Grade Bond Fund-SM-.................. 86 131 177 276 Sun Capital Money Market Fund-SM-........................... 85 128 173 266 Sun Capital Real Estate Fund-SM-............................ 90 145 201 325
11 If you do not surrender your Contract, or if you annuitize at the end of the applicable period, you would pay the following expenses on a $1,000 investment, assuming a 5% annual return, an average Contract size of $35,000, and no optional death benefit riders have been elected:
1 YEAR 3 YEARS 5 YEARS 10 YEARS -------- -------- -------- -------- AIM V.I. Capital Appreciation Fund.......................... 21 65 111 243 AIM V.I. Growth Fund........................................ 21 65 112 244 AIM V.I. Growth and Income Fund............................. 21 65 112 245 AIM V.I. International Equity Fund.......................... 23 71 122 263 AIM V.I. Value Fund......................................... 21 65 112 245 Alger American Growth Portfolio............................. 21 64 110 239 Alger American Income and Growth Portfolio.................. 20 61 105 230 Alger American Small Capitalization Portfolio............... 22 67 115 251 Alliance VP Premier Growth Fund............................. 26 79 136 291 Alliance VP Technology Fund................................. 26 80 136 292 Alliance VP Growth and Income Fund.......................... 22 69 118 256 Alliance VP Worldwide Privatization Fund.................... 25 76 131 281 Alliance VP Quasar Fund..................................... 25 76 131 281 Goldman Sachs VIT CORE-SM- Large Cap Growth Fund............ 22 67 115 251 Goldman Sachs VIT CORE-SM- Small Cap Equity Fund............ 23 70 120 261 Goldman Sachs VIT CORE-SM- U.S. Equity Fund................. 22 67 115 251 Goldman Sachs VIT Internet Tollkeeper Fund.................. 25 78 133 286 Goldman Sachs VIT Capital Growth Fund....................... 23 70 120 261 Goldman Sachs VIT Growth and Income Fund.................... 23 70 120 261 Goldman Sachs VIT International Equity Fund................. 26 81 138 296 INVESCO VIF Dynamics Fund................................... 24 73 125 270 INVESCO VIF Small Company Growth Fund....................... 27 81 139 298 J.P. Morgan International Opportunities Portfolio........... 25 76 131 281 J.P. Morgan Small Company Portfolio......................... 24 75 128 276 J.P. Morgan U.S. Disciplined Equity Portfolio............... 21 66 113 246 Lord Abbett Series Fund Mid Cap Value....................... 24 73 126 271 Lord Abbett Series Fund Growth and Income................... 23 71 122 263 Lord Abbett Series Fund International....................... 26 81 138 296 Fidelity VIP Contrafund-TM- Portfolio....................... 22 68 116 253 Fidelity VIP Growth Portfolio............................... 22 68 116 252 Fidelity VIP Overseas Portfolio............................. 24 75 128 276 MFS/Sun Life Capital Appreciation Series.................... 20 63 108 235 MFS/Sun Life Emerging Growth Series......................... 20 62 107 234 MFS/Sun Life Government Securities Series................... 19 59 101 222 MFS/Sun Life High Yield Series.............................. 21 65 112 244 MFS/Sun Life Massachusetts Investors Growth Stock Series.... 21 65 111 242 MFS/Sun Life Massachusetts Investors Trust Series........... 19 58 100 220 MFS/Sun Life New Discovery Series........................... 23 70 120 260 MFS/Sun Life Total Return Series............................ 20 61 105 230 MFS/Sun Life Utilities Series............................... 21 64 110 240 Rydex VT Nova Fund.......................................... 27 83 141 303 Rydex VT OTC Fund........................................... 27 84 143 307 SC-SM- Davis Financial Fund................................. 22 67 115 251 SC-SM- Davis Venture Value Fund............................. 22 67 115 251 SC-SM- INVESCO Energy Fund.................................. 25 78 133 286 SC-SM- INVESCO Health Science Fund.......................... 25 78 133 286 SC-SM- INVESCO Telecommunications Fund...................... 25 78 133 286 SC-SM- INVESCO Technology Fund.............................. 25 78 133 286 SC-SM- Neuberger Berman Mid Cap Growth Fund................. 24 73 126 271 SC-SM- Neuberger Berman Mid Cap Value Fund.................. 24 73 126 271
12
1 YEAR 3 YEARS 5 YEARS 10 YEARS -------- -------- -------- -------- SC-SM- Value Equity Fund.................................... 22 67 115 251 SC-SM- Value Managed Fund................................... 22 67 115 251 SC-SM- Value Mid Cap Fund................................... 23 70 120 261 SC-SM- Value Small Cap Fund................................. 23 70 120 261 SC-SM- Blue Chip Mid Cap Fund............................... 23 70 120 261 SC-SM- Investors Foundation Fund............................ 22 67 115 251 SC-SM- Select Equity Fund................................... 22 67 115 251 Sun Capital Investment Grade Bond Fund-SM-.................. 20 63 108 235 Sun Capital Money Market Fund-SM-........................... 19 60 103 225 Sun Capital Real Estate Fund-SM-............................ 25 78 133 286
If you do NOT surrender your Contract, or if you annuitize at the end of the applicable period, you would pay the following expenses on a $1,000 investment, assuming a 5% annual return, an average Contract size of $35,000, and the EEB Plus MAV optional death benefit rider has been elected:
1 YEAR 3 YEARS 5 YEARS 10 YEARS -------- -------- -------- -------- AIM V.I. Capital Appreciation Fund.......................... 25 77 132 283 AIM V.I. Growth Fund........................................ 25 77 132 284 AIM V.I. Growth and Income Fund............................. 25 78 133 285 AIM V.I. International Equity Fund.......................... 27 83 141 303 AIM V.I. Value Fund......................................... 25 78 133 285 Alger American Growth Portfolio............................. 25 76 130 280 Alger American Income and Growth Portfolio.................. 24 73 126 271 Alger American Small Capitalization Portfolio............... 26 79 136 291 Alliance VP Premier Growth Fund............................. 30 91 155 329 Alliance VP Technology Fund................................. 30 92 156 330 Alliance VP Growth and Income Fund.......................... 26 81 138 296 Alliance VP Worldwide Privatization Fund.................... 29 88 150 320 Alliance VP Quasar Fund..................................... 29 88 150 320 Goldman Sachs VIT CORE-SM- Large Cap Growth Fund............ 26 79 136 291 Goldman Sachs VIT CORE-SM- Small Cap Equity Fund............ 27 82 141 301 Goldman Sachs VIT CORE-SM- U.S. Equity Fund................. 26 79 136 291 Goldman Sachs VIT Internet Tollkeeper Fund.................. 29 90 153 325 Goldman Sachs VIT Capital Growth Fund....................... 27 82 141 301 Goldman Sachs VIT Growth and Income Fund.................... 27 82 141 301 Goldman Sachs VIT International Equity Fund................. 30 93 158 334 INVESCO VIF Dynamics Fund................................... 28 85 145 309 INVESCO VIF Small Company Growth Fund....................... 30 93 159 336 J.P. Morgan International Opportunities Portfolio........... 29 88 150 320 J.P. Morgan Small Company Portfolio......................... 28 87 148 315 J.P. Morgan U.S. Disciplined Equity Portfolio............... 25 78 133 286 Lord Abbett Series Fund Mid Cap Value....................... 28 85 145 310 Lord Abbett Series Fund Growth and Income................... 27 83 141 303 Lord Abbett Series Fund International....................... 30 93 158 334 Fidelity VIP Contrafund-TM- Portfolio....................... 26 80 137 293 Fidelity VIP Growth Portfolio............................... 26 80 136 292 Fidelity VIP Overseas Portfolio............................. 28 87 148 315 MFS/Sun Life Capital Appreciation Series.................... 24 75 128 276 MFS/Sun Life Emerging Growth Series......................... 24 75 128 275 MFS/Sun Life Government Securities Series................... 23 71 122 263 MFS/Sun Life High Yield Series.............................. 25 77 132 284 MFS/Sun Life Massachusetts Investors Growth Stock Series.... 25 77 131 282 MFS/Sun Life Massachusetts Investors Trust Series........... 23 70 120 261
13
1 YEAR 3 YEARS 5 YEARS 10 YEARS -------- -------- -------- -------- MFS/Sun Life New Discovery Series........................... 27 82 140 300 MFS/Sun Life Total Return Series............................ 24 73 126 271 MFS/Sun Life Utilities Series............................... 25 76 131 281 Rydex VT Nova Fund.......................................... 31 95 161 341 Rydex VT OTC Fund........................................... 31 96 163 344 SC-SM- Davis Financial Fund................................. 26 79 136 291 SC-SM- Davis Venture Value Fund............................. 26 79 136 291 SC-SM- INVESCO Energy Fund.................................. 29 90 153 325 SC-SM- INVESCO Health Science Fund.......................... 29 90 153 325 SC-SM- INVESCO Telecommunications Fund...................... 29 90 153 325 SC-SM- INVESCO Technology Fund.............................. 29 90 153 325 SC-SM- Neuberger Berman Mid Cap Growth Fund................. 28 85 145 310 SC-SM- Neuberger Berman Mid Cap Value Fund.................. 28 85 145 310 SC-SM- Value Equity Fund.................................... 26 79 136 291 SC-SM- Value Managed Fund................................... 26 79 136 291 SC-SM- Value Mid Cap Fund................................... 27 82 141 301 SC-SM- Value Small Cap Fund................................. 27 82 141 301 SC-SM- Blue Chip Mid Cap Fund............................... 27 82 141 301 SC-SM- Investors Foundation Fund............................ 26 79 136 291 SC-SM- Select Equity Fund................................... 26 79 136 291 Sun Capital Investment Grade Bond Fund-SM-.................. 24 75 128 276 Sun Capital Money Market Fund-SM-........................... 23 72 123 266 Sun Capital Real Estate Fund-SM-............................ 29 90 153 325
CONDENSED FINANCIAL INFORMATION Historical information about the value of the units we use to measure the variable portion of your Contract ("Variable Accumulation Units") is included in the back of this Prospectus as Appendix I. THE ANNUITY CONTRACT Sun Life Assurance Company of Canada (U.S.) (the "Company", "we" or "us") and Sun Life of Canada (U.S.) Variable Account F (the "Variable Account") offer the Contract to groups and individuals for use in connection with their retirement plans. The Contract is available on a group basis and, in certain states, may be available on an individual basis. We issue an Individual Contract directly to the individual owner of the Contract. We issue a Group Contract to the Owner, covering all individuals participating under the Group Contract; each individual receives a Certificate that evidences his or her participation under the Group Contract. In this Prospectus, unless we state otherwise, we refer to both the owners of Individual Contracts and participating individuals under Group Contracts as "Participants" and we address all Participants as "you"; we use the term "Contracts" to include Individual Contracts, Group Contracts, and Certificates issued under Group Contracts. For the purpose of determining benefits under both Individual Contracts and Group Contracts, we establish an Account for each Participant, which we will refer to as "your" Account or a "Participant Account." Your Contract provides a number of important benefits for your retirement planning. It has an Accumulation Phase, during which you make payments under the Contract and allocate them to one or more Variable Account or Fixed Account options, and an Income Phase, during which we make annuity payments based on the amount you have accumulated. Your Contract provides tax deferral, so that you do not pay taxes on your earnings under your Contract until you withdraw them. It provides a basic death benefit if you die during the Accumulation Phase. You may enhance the basic death benefit by electing one or more optional death benefit riders and paying an additional charge for each optional death benefit rider you elect. Finally, if you so elect, during the Income Phase we will make annuity payments to you or someone else for life or for another period that you choose. 14 You choose these benefits on a variable or fixed basis or a combination of both. When you choose Variable Account investment options or a Variable Annuity option, your benefits will be responsive to changes in the economic environment, including inflationary forces and changes in rates of return available from different types of investments. With these variable options, you assume all investment risk under your Contract. When you choose a Guarantee Period in our Fixed Account or a Fixed Annuity option, we assume the investment risk, except in the case of early withdrawals in the Accumulation Phase, where you bear the risk of unfavorable interest rate changes. You also bear the risk that the interest rates we will offer in the future and the rates we will use in determining your Fixed Annuity might not exceed our minimum guaranteed rate, which is 3% per year during the Accumulation Phase and 2.5% per year during the Income Phase, compounded annually. The Contract is designed for use in connection with retirement and deferred compensation plans, some of which qualify for favorable federal income tax treatment under Sections 401, 403, 408 or 408A of the Internal Revenue Code. The Contract is also designed so that it may be used in connection with certain non-tax-qualified retirement plans, such as payroll savings plans and such other groups (trusteed or nontrusteed) as may be eligible under applicable law. We refer to Contracts used with plans that receive favorable tax treatment as "Qualified Contracts," and all other Contracts as "Non-Qualified Contracts." COMMUNICATING TO US ABOUT YOUR CONTRACT All materials sent to us, including Purchase Payments, must be sent to our Annuity Mailing Address as set forth on the first page of this Prospectus. For all telephone communications, you must call (888) 786-2435. Unless this Prospectus states differently, we will consider all materials sent to us and all telephone communications to be received on the date we actually receive them at our Annuity Mailing Address. However, we will consider all financial transactions, including Purchase Payments, withdrawal requests and transfer instructions, to be received on the next Business Day if we receive them (1) on a day that is not a Business Day or (2) after 4:00 p.m., Eastern Time. When we specify that notice to us must be in writing, we reserve the right, at our sole discretion, to accept notice in another form. SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) We are a stock life insurance company incorporated under the laws of Delaware on January 12, 1970. We do business in 49 states, the District of Columbia, and Puerto Rico, and we have an insurance company subsidiary that does business in New York. Our Executive Office mailing address is One Sun Life Executive Park, Wellesley Hills, Massachusetts 02481. We are an indirect wholly-owned subsidiary of Sun Life Assurance Company of Canada ("Sun Life (Canada)"). Sun Life (Canada) completed its demutualization on March 22, 2000. As a result of the demutualization, a new holding company, Sun Life Financial Services of Canada Inc. ("Sun Life Financial"), is now the ultimate parent of Sun Life (Canada) and the Company. Sun Life Financial, a corporation organized in Canada, is a reporting company under the Securities Exchange Act of 1934 with common shares listed on the Toronto, New York, London, and Manila stock exchanges. THE VARIABLE ACCOUNT We established the Variable Account as a separate account on July 13, 1989, pursuant to a resolution of our Board of Directors.The Variable Account funds the Contract and various other variable annuity and variable life insurance product contracts which we offer. These other products may have features, benefits and charges that are different from those under the Contract. Under Delaware insurance law and the Contract, the income, gains or losses of the Variable Account are credited to or charged against the assets of the Variable Account without regard to the other income, gains, or losses of the Company. These assets are held in relation to the Contract and other variable annuity and variable life insurance contracts that provide benefits that vary in accordance 15 with the investment performance of the Variable Account. Although the assets maintained in the Variable Account will not be charged with any liabilities arising out of any other business we conduct, all obligations arising under a Contract, including the promise to make annuity payments, are general corporate obligations of the Company. The assets of the Variable Account are divided into Sub-Accounts. Each Sub-Account invests exclusively in shares of a specific Fund. All amounts allocated to the Variable Account will be used to purchase Fund shares as designated by you at their net asset value. Any and all distributions made by the Funds with respect to the shares held by the Variable Account will be reinvested to purchase additional Fund shares at their net asset value. Deductions will be made from the Variable Account for cash withdrawals, annuity payments, death benefits, Account Fees, Contract charges against the assets of the Variable Account for the assumption of mortality and expense risks, administrative expenses and any applicable taxes. The Variable Account will be fully invested in Fund shares at all times. VARIABLE ACCOUNT OPTIONS: THE FUNDS The Contract offers Sub-Accounts that invest in a number of Fund investment options, which are briefly discussed below. Each Fund is a mutual fund registered under the Investment Company Act of 1940, or a separate series of shares of such a mutual fund. MORE COMPREHENSIVE INFORMATION ABOUT THE FUNDS, INCLUDING A DISCUSSION OF THEIR MANAGEMENT, INVESTMENT OBJECTIVES, EXPENSES, AND POTENTIAL RISKS, IS FOUND IN THE CURRENT PROSPECTUSES FOR THE FUNDS (THE "FUND PROSPECTUSES"). THE FUND PROSPECTUSES SHOULD BE READ IN CONJUNCTION WITH THIS PROSPECTUS BEFORE YOU INVEST. A COPY OF EACH FUND PROSPECTUS, AS WELL AS A STATEMENT OF ADDITIONAL INFORMATION FOR EACH FUND, MAY BE OBTAINED WITHOUT CHARGE FROM THE COMPANY BY CALLING (888) 786-2435 OR BY WRITING TO SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.), C/O RETIREMENT PRODUCTS AND SERVICES, P.O. BOX 9133, BOSTON MASSACHUSETTS 02117. The Funds currently available are: AIM VARIABLE INSURANCE FUNDS (advised by A I M Advisors, Inc.) AIM V.I. CAPITAL APPRECIATION FUND seeks growth of capital by investing principally in common stocks or companies which the Fund's portfolio managers believe are likely to benefit from new or innovative products, services or processes, as well as those that have experienced above- average, long-term growth in earnings and have excellent prospects for future growth. AIM V.I. GROWTH FUND seeks to achieve growth of capital by investing in seasoned and better-capitalized companies considered to have strong earnings momentum. AIM V.I. GROWTH AND INCOME FUND seeks to achieve growth of capital with a secondary objective of current income. AIM V.I. INTERNATIONAL EQUITY FUND seeks to achieve long-term growth of capital by investing in a diversified portfolio of international equity securities whose issuers are considered to have strong earnings momentum. AIM V.I. VALUE FUND seeks long-term growth of capital with a secondary objective of current income. THE ALGER AMERICAN FUND (advised by Fred Alger Management, Inc.) ALGER AMERICAN GROWTH PORTFOLIO seeks long-term capital appreciation by investing primarily in equity securities of companies which have market capitalizations of $1 billion or more. ALGER AMERICAN INCOME AND GROWTH PORTFOLIO seeks primarily to provide a high level of dividend income by investing in dividend paying equity securities. Capital appreciation is a secondary objective. 16 ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO seeks long-term capital appreciation. It invests primarily in the equity securities of small companies with market capitalizations within the range of the Russell 2000 Growth Index or the S&P SmallCap 600 Index. ALLIANCE VARIABLE PRODUCTS SERIES FUND, INC. (advised by Alliance Capital Management L.P.) ALLIANCE VP PREMIER GROWTH PORTFOLIO seeks to achieve growth of capital by pursuing aggressive investment policies. It invests principally in equity securities of a limited number of large, carefully selected, high-quality U.S. companies. ALLIANCE VP TECHNOLOGY PORTFOLIO seeks growth of capital and invests for capital appreciation, and only incidentally for current income. The Portfolio invests primarily in securities of companies expected to benefit from technological advances and improvements. ALLIANCE VP GROWTH AND INCOME PORTFOLIO seeks to provide reasonable current income and reasonable opportunities for appreciation by investing primarily in dividend-paying common stocks of good quality. ALLIANCE VP WORLDWIDE PRIVATIZATION PORTFOLIO seeks long-term capital appreciation by investing primarily in securities of issuers that are undergoing or have undergone privatizations. The Portfolio seeks to take advantage of investment opportunities that are created by privatizations of state enterprises in both established and developing countries. ALLIANCE VP QUASAR PORTFOLIO seeks growth of capital by pursuing aggressive investment policies. It invests primarily in U.S. common stocks and other equity-type securities issued by smaller companies with favorable growth prospects. GOLDMAN SACHS VARIABLE INSURANCE TRUST ("VIT") (advised by Goldman Sachs Asset Management, a unit of the Investment Management Division of Goldman, Sachs & Co. ("Goldman Sachs"), except for Goldman Sachs International Equity Fund, which is advised by Goldman Sachs Asset Management International, GSAMI). GOLDMAN SACHS VIT CORE-SM- LARGE CAP GROWTH FUND seeks long-term growth of capital by investing in a broadly diversified portfolio of equity securities of large cap U.S. issuers that are expected to have better prospects for earnings growth than the growth rate of the general domestic economy. Dividend income is a secondary consideration. GOLDMAN SACHS VIT CORE-SM- SMALL CAP EQUITY FUND seeks long-term growth of capital by investing in a broadly diversified portfolio of equity securities of U.S. issuers which are included in the Russell 2000 Index at the time of investment. GOLDMAN SACHS VIT CORE-SM- U.S. EQUITY FUND seeks long-term growth of capital and dividend income by investing in a broadly diversified portfolio of large cap and blue chip equity securities representing all major sectors of the U.S. economy. GOLDMAN SACHS VIT INTERNET TOLLKEEPER FUND seeks long-term growth of capital by investing at least 90% of its total assets in equity securities and at least 65% of its total assets in equity securities of Internet Tollkeeper companies, which are companies in the media, telecommunications, technology and Internet sectors. GOLDMAN SACHS VIT CAPITAL GROWTH FUND seeks long-term growth of capital by investing at least 90% of its total assets in equity securities. GOLDMAN SACHS VIT GROWTH AND INCOME FUND seeks long-term growth of capital and growth of income. GOLDMAN SACHS VIT INTERNATIONAL EQUITY FUND seeks long-term capital appreciation by investing in equity securities of companies that are organized outside the U.S. or whose securities are principally traded outside the U.S. 17 INVESCO VARIABLE INVESTMENT FUNDS, INC. (advised by INVESCO Funds Group, Inc.) INVESCO VIF DYNAMICS FUND seeks to achieve growth of capital by investing primarily in common stocks of companies with market capitalizations between $2 billion and $15 billion at the time of purchase. INVESCO VIF SMALL COMPANY GROWTH FUND seeks to achieve growth of capital by investing primarily in equity securities of companies with market capitalizations under $2 billion at the time of purchase. J.P. MORGAN SERIES TRUST II (advised by J.P. Morgan Investment Management Inc.) J.P. MORGAN INTERNATIONAL OPPORTUNITIES PORTFOLIO seeks to provide a high total return from a portfolio of equity securities of foreign companies. J.P. MORGAN SMALL COMPANY PORTFOLIO seeks to provide a high total return from a portfolio of small company stocks. J.P. MORGAN U.S. DISCIPLINED EQUITY PORTFOLIO seeks to provide a high total return from a portfolio of selected equity securities. LORD ABBETT SERIES FUND, INC. (advised by Lord, Abbett & Co.) MID CAP VALUE PORTFOLIO seeks capital appreciation through investments, primarily in equity securities, which are believed to be undervalued in the marketplace. GROWTH AND INCOME PORTFOLIO seeks to provide long-term growth of capital and income without excessive fluctuation in market value. INTERNATIONAL PORTFOLIO INTERNATIONAL PORTFOLIO seeks long-term capital appreciation. FIDELITY VARIABLE INSURANCE PRODUCTS FUNDS (Advised by Fidelity Management & Research Company. Fidelity, Fidelity Investments and Contrafund-TM- are registered trademarks of FMR Corp.) VIP CONTRAFUND-TM- PORTFOLIO seeks long-term capital appreciation by investing primarily in common stocks of companies whose stocks are undervalued by the market. VIP GROWTH PORTFOLIO seeks to achieve capital appreciation by investing primarily in common stocks with above-average growth potential. VIP OVERSEAS PORTFOLIO seeks long-term growth of capital by investing primarily in common stocks of foreign issuers. MFS/SUN LIFE SERIES TRUST (advised by Massachusetts Financial Services Company, an affiliate of the Company) CAPITAL APPRECIATION SERIES will seek to maximize capital appreciation by investing in securities of all types, with major emphasis on common stocks. EMERGING GROWTH SERIES will seek long-term growth of capital. GOVERNMENT SECURITIES SERIES will seek current income and preservation of capital by investing in U.S. Government and U.S. Government-related securities. HIGH YIELD SERIES will seek high current income and capital appreciation by investing primarily in certain low rated or unrated fixed income securities (possibly with equity features) of U.S. and foreign issuers. MASSACHUSETTS INVESTORS GROWTH STOCK SERIES will seek to provide long-term growth of capital and future income rather than current income. MASSACHUSETTS INVESTORS TRUST SERIES will seek long-term growth of capital with a secondary objective to seek reasonable current income. 18 NEW DISCOVERY SERIES will seek capital appreciation. TOTAL RETURN SERIES will mainly seek to obtain above-average income (compared to a portfolio entirely invested in equity securities) consistent with prudent employment of capital; its secondary objective is to take advantage of opportunities for growth of capital and income since many securities offering a better than average yield may also possess growth potential. UTILITIES SERIES will seek capital growth and current income (income above that available from a portfolio invested entirely in equity securities) by investing under normal market conditions, at least 65% of its assets in equity and debt securities of both domestic and foreign companies in the utilities industry. RYDEX VARIABLE TRUST (advised by Rydex Funds, Inc.) RYDEX VT NOVA FUND seeks to provide investment results that correspond to 150% of the daily performance of the S&P 500 Index. RYDEX VT OTC FUND seeks to provide investment results that correspond to a benchmark for over-the-counter securities. The Fund's current benchmark is the NASDAQ 100 Index. SUN CAPITAL ADVISERS TRUST-SM- (advised by Sun Capital Advisers, Inc., an affiliate of the Company; Davis Select Advisers, L.P., serves as investment subadviser to SC-SM- Davis Financial Fund and SC-SM- Davis Venture Value Fund; INVESCO Funds Group, Inc. serves as investment subadviser to the SC-SM- INVESCO Energy Fund, SC-SM- INVESCO Health Sciences Fund, SC-SM- INVESCO Technology Fund and SC-SM- INVESCO Telecommunications Fund; Neuberger Berman Management, Inc. serves as subadviser to SC-SM- Neuberger Berman Mid Cap Growth Fund and SC-SM- Neuberger Berman Mid Cap Value Fund; OpCap Advisors serves as investment subadviser to SC-SM- Value Equity Fund, SC-SM- Value Managed Fund, SC-SM- Value Mid Cap Fund, and SC-SM- Value Small Cap Fund; Wellington Management Company, LLP, serves as investment subadviser to SC-SM- Blue Chip Mid Cap Fund, SC-SM- Investors Foundation Fund and SC-SM- Select Equity Fund.) SC-SM- DAVIS FINANCIAL FUND seeks growth of capital by investing primarily in the common stock of financial services companies. SC-SM- DAVIS VENTURE VALUE FUND seeks growth of capital by investing primarily in the common stock of U.S. companies with market capitalizations of at least $5 billion. SC-SM- INVESCO ENERGY FUND seeks growth by investing primarily in the equity securities of companies doing business in the energy sector. SC-SM- INVESCO HEALTH SCIENCES FUND seeks growth by investing primarily in the equity securities of companies doing business in the health sciences sector. SC-SM- INVESCO TECHNOLOGY FUND seeks growth by investing primarily in the equity securities of companies doing business in the technology sector. SC-SM- INVESCO TELECOMMUNICATIONS FUND primarily seeks growth and, secondarily, seeks income by investing primarily in the equity securities of companies doing business in the telecommunications sector. SC-SM- NEUBERGER BERMAN MID CAP GROWTH FUND seeks growth of capital by investing primarily in equity securities of companies with market capitalizations from $1 billion to $12 billion at the time of purchase. The fund's subadviser targets already successful companies that could be even more so. SC-SM- NEUBERGER BERMAN MID CAP VALUE FUND seeks growth of capital by investing primarily in equity securities of companies with market capitalizations from $1 billion to $12 billion at the time of purchase. The fund's subadviser looks for well-managed companies whose stock prices are undervalued. 19 SC-SM- VALUE EQUITY FUND seeks long-term capital appreciation by investing primarily in a diversified portfolio of equity securities listed on the New York Stock Exchange. SC-SM- VALUE MANAGED FUND seeks growth of capital over time by investing primarily in a portfolio consisting of common stocks, fixed income securities, and cash equivalents. The subadviser will vary the allocation depending on its assessments of the relative values of such investments. SC-SM- VALUE MID CAP FUND seeks long-term capital appreciation by investing primarily in equity securities of companies with market capitalizations of between $500 million and $8 billion at time of purchase. SC-SM- VALUE SMALL CAP FUND seeks capital appreciation by investing primarily in a diversified portfolio of equity securities of companies with market capitalizations of under $2 billion at time of purchase. SC-SM- BLUE CHIP MID CAP FUND seeks long-term capital growth by investing primarily in common stocks and other equity securities of U.S. companies with market capitalizations within the range represented by the Standard & Poor's Mid Cap 400 Index. SC-SM- INVESTORS FOUNDATION FUND seeks long-term capital growth by investing primarily in a diversified portfolio of common stocks and other equity securities of U.S. companies with market capitalizations generally within the range represented by the Standard & Poor's 500 Index. Investments are selected using a combination of fundamental analysis and quantitative tools. SC-SM- SELECT EQUITY FUND seeks long-term capital growth by investing in 20 to 40 common stocks and other equity securities of large capitalization U.S. companies selected primarily from the Standard & Poor's 500 Index. SUN CAPITAL INVESTMENT GRADE BOND FUND-SM- seeks high current income consistent with relative stability of principal by investing at least 80% of its assets in investment grade bonds. The Fund may invest up to 20% of its assets in lower rated or unrated bonds (also known as high yield or junk bonds.) SUN CAPITAL MONEY MARKET FUND-SM- seeks to maximize current income, consistent with maintaining liquidity and preserving capital, by investing exclusively in high quality U.S. dollar-denominated money market securities. SUN CAPITAL REAL ESTATE FUND-SM- primarily seeks long-term capital growth and, secondarily, seeks current income and growth of income. The Fund invests at least 80% of its assets in securities of real estate investment trusts and other real estate companies. The Funds may also be available to registered separate accounts offering variable annuity and variable life products of other affiliated and unaffiliated insurance companies, as well as to the Variable Account and other separate accounts of the Company. Although we do not anticipate any disadvantages to this, there is a possibility that a material conflict may arise between the interests of the Variable Account and one or more of the other separate accounts participating in the Funds. A conflict may occur due to a change in law affecting the operations of variable life and variable annuity separate accounts, differences in the voting instructions of the Participants and Payees and those of other companies, or some other reason. In the event of conflict, we will take any steps necessary to protect Participants and Payees, including withdrawal of the Variable Account from participation in the underlying Funds which are involved in the conflict or substitution of shares of other Funds. Certain of the investment advisers, transfer agents, or underwriters to the Funds may reimburse us for administrative costs in connection with administering the Funds as options under the Contracts. These amounts are not charged to the Funds or Participants, but are paid from assets of the advisers, transfer agents, or underwriters, except for the administrative costs of the Lord Abbett Series Trust Portfolios and the Rydex Funds, which are paid from Fund assets and reflected in the fee table. 20 Certain publicly available mutual funds may have similar investment goals and principal investment policies and risks as one or more of the Funds, and may be managed by a Fund's portfolio manager(s). While a Fund may have many similarities to these other funds, its investment performance will differ from their investment performance. This is due to a number of differences between a Fund and these similar products, including differences in sales charges, expense ratios and cash flows. THE FIXED ACCOUNT The Fixed Account is made up of all the general assets of the Company other than those allocated to any separate account. Amounts you allocate to Guarantee Periods become part of the Fixed Account, and are available to fund the claims of all classes of our customers, including claims for benefits under the Contracts. We will invest the assets of the Fixed Account in those assets we choose that are allowed by applicable state insurance laws. In general, these laws permit investments, within specified limits and subject to certain qualifications, in federal, state and municipal obligations, corporate bonds, preferred and common stocks, real estate mortgages, real estate and certain other investments. We intend to invest primarily in investment-grade fixed income securities (I.E., rated by a nationally recognized rating service within the 4 highest grades) or instruments we believe are of comparable quality. We are not obligated to invest amounts allocated to the Fixed Account according to any particular strategy, except as may be required by applicable state insurance laws. You will not have a direct or indirect interest in the Fixed Account investments. THE FIXED ACCOUNT OPTIONS: THE GUARANTEE PERIODS You may elect one or more Guarantee Period(s) from those we make available from time to time. We publish Guaranteed Interest Rates for each Guarantee Period offered. We may change the Guaranteed Interest Rates we offer from time to time, but no Guaranteed Interest Rate will ever be less than 3% per year, compounded annually. Also, once we have accepted your allocation to a particular Guarantee Period, we promise that the Guaranteed Interest Rate applicable to that allocation will not change for the duration of the Guarantee Period. We determine Guaranteed Interest Rates at our discretion. We do not have a specific formula for establishing the rates for different Guarantee Periods. Our determination will be influenced by the interest rates on fixed income investments in which we may invest amounts allocated to the Guarantee Periods. We will also consider other factors in determining these rates, including regulatory and tax requirements, sales commissions and administrative expenses borne by us, general economic trends and competitive factors. We cannot predict the level of future interest rates. We may from time to time at our discretion offer special interest rates for new Purchase Payments that are higher than the rates we are then offering for renewals or transfers. Early withdrawals from your allocation to a Guarantee Period, including cash withdrawals, transfers and commencement of an annuity option, may be subject to a Market Value Adjustment, which could decrease or increase the value of your Account. See "Withdrawals, Withdrawal Charge and Market Value Adjustment." THE ACCUMULATION PHASE During the Accumulation Phase of your Contract, you make payments into your Account, and your earnings accumulate on a tax-deferred basis. The Accumulation Phase begins with our acceptance of your first Purchase Payment and ends the Business Day before your Annuity Commencement Date. The Accumulation Phase will end sooner if you surrender your Contract or the "Covered Person" dies before the Annuity Commencement Date. 21 ISSUING YOUR CONTRACT When you purchase a Contract, a completed Application and the initial Purchase Payment are sent to us for acceptance. When we accept an Individual Contract, we issue the Contract to you. When we accept a Group Contract, we issue the Contract to the Owner; we issue a Certificate to you as a Participant. We will credit your initial Purchase Payment to your Account within 2 Business Days of receiving your completed Application. If your Application is not complete, we will notify you. If we do not have the necessary information to complete the Application within 5 Business Days, we will send your money back to you or ask your permission to retain your Purchase Payment until the Application is made complete. Then we will apply the Purchase Payment within 2 Business Days of when the Application is complete. AMOUNT AND FREQUENCY OF PURCHASE PAYMENTS The amount of Purchase Payments may vary; however, we will not accept an initial Purchase Payment of less than $10,000, and each additional Purchase Payment must be at least $1,000, unless we waive these limits. In addition, we will not accept a Purchase Payment if your Account Value is over $2 million, or if the Purchase Payment would cause your Account Value to exceed $2 million, unless we have approved the Payment in advance. Within these limits, you may make Purchase Payments at any time during the Accumulation Phase. ALLOCATION OF NET PURCHASE PAYMENTS You may allocate your Purchase Payments among the different Sub-Accounts and Guarantee Periods we offer, but any allocation to a Guarantee Period must be at least $1,000. Over the life of your Contract, you may allocate amounts among as many as 18 of the available investment options. In your Application, you may specify the percentage of each Purchase Payment to be allocated to each Sub-Account or Guarantee Period. These percentages are called your allocation factors. You may change the allocation factors for future Payments by sending us notice of the change in a form acceptable to us, as required. We will use your new allocation factors for the first Purchase Payment we receive with or after we have received notice of the change, and for all future Purchase Payments, until we receive another change notice. Although it is currently not our practice, we may deduct applicable premium taxes or similar taxes from your Purchase Payments (see "Contract Charges -- Premium Taxes"). In that case, we will credit your Net Purchase Payment, which is the Purchase Payment minus the amount of those taxes. YOUR ACCOUNT When we accept your first Purchase Payment, we establish an Account for you, which we maintain throughout the Accumulation Phase of your Contract. YOUR ACCOUNT VALUE Your Account Value is the sum of the value of the 2 components of your Contract: the Variable Account portion of your Contract ("Variable Account Value") and the Fixed Account portion of your Contract ("Fixed Account Value"). These 2 components are calculated separately, as described below under "Variable Account Value" and "Fixed Account Value." VARIABLE ACCOUNT VALUE VARIABLE ACCUMULATION UNITS In order to calculate your Variable Account Value, we use a measure called a Variable Accumulation Unit for each Sub-Account. Your Variable Account Value is the sum of your Account Value in each Sub-Account, which is the number of your Variable Accumulation Units for that Sub-Account times the value of each Unit. 22 VARIABLE ACCUMULATION UNIT VALUE The value of each Variable Accumulation Unit in a Sub-Account reflects the net investment performance of that Sub-Account. We determine that value once on each day that the New York Stock Exchange is open for trading, at the close of trading, which is currently 4:00 p.m., Eastern Time. (The close of trading is determined by the New York Stock Exchange.) We also may determine the value of Variable Accumulation Units of a Sub-Account on days the Exchange is closed if there is enough trading in securities held by that Sub-Account to materially affect the value of the Variable Accumulation Units. Each day we make a valuation is called a "Business Day." The period that begins at the time Variable Accumulation Units are valued on a Business Day and ends at that time on the next Business Day is called a Valuation Period. On days other than Business Days, the value of a Variable Accumulation Unit does not change. To measure these values, we use a factor -- which we call the Net Investment Factor -- which represents the net return on the Sub-Account's assets. At the end of any Valuation Period, the value of a Variable Accumulation Unit for a Sub-Account is equal to the value of that Sub-Account's Variable Accumulation Units at the end of the previous Valuation Period, multiplied by the Net Investment Factor. We calculate the Net Investment Factor by dividing (1) the net asset value of a Fund share held in the Sub-Account at the end of that Valuation Period, plus the per share amount of any dividend or capital gains distribution made by that Fund during the Valuation Period, by (2) the net asset value per share of the Fund share at the end of the previous Valuation Period; then, for each day in the valuation period, we deduct a factor representing the asset-based insurance charges (the mortality and expense risk charges and the administrative expense charge) plus any applicable charge for optional death benefit riders. For a hypothetical example of how we calculate the value of a Variable Accumulation Unit, see the Statement of Additional Information. CREDITING AND CANCELING VARIABLE ACCUMULATION UNITS When we receive an allocation to a Sub-Account either from a Net Purchase Payment or a transfer of Account Value, we credit that amount to your Account in Variable Accumulation Units. Similarly, we cancel Variable Accumulation Units when you transfer or withdraw amounts from a Sub-Account, or when we deduct certain charges under the Contract. We determine the number of Units credited or canceled by dividing the dollar amount by the Variable Accumulation Unit value for that Sub-Account at the end of the Valuation Period during which the transaction or charge is effective. FIXED ACCOUNT VALUE Your Fixed Account value is the sum of all amounts allocated to Guarantee Periods, either from Net Purchase Payments, transfers or renewals, plus interest credited on those amounts, and minus withdrawals, transfers out of Guarantee Periods, and any deductions for charges under the Contract taken from your Fixed Account Value. A Guarantee Period begins the day we apply your allocation and ends when all calendar years (or months if the Guarantee Period is less than one year) in the Guarantee Period (measured from the end of the calendar month in which the amount was allocated to the Guarantee Period) have elapsed. The last day of the Guarantee Period is its Renewal Date. Each additional Purchase Payment, transfer or renewal credited to your Fixed Account Value will result in a new Guarantee Period with its own Renewal Date. Amounts allocated at different times to Guarantee Periods of the same duration may have different Renewal Dates. CREDITING INTEREST We credit interest on amounts allocated to a Guarantee Period at the applicable Guaranteed Interest Rate for the duration of the Guarantee Period. During the Guarantee Period, we credit interest daily at a rate that yields the Guaranteed Interest Rate on an annual effective basis. 23 GUARANTEE AMOUNTS Each separate allocation you make to a Guarantee Period, together with interest credited thereon, is called a Guarantee Amount. Each Guarantee Amount is treated separately for purposes of determining the Market Value Adjustment. We may restrict a Guarantee Period that will extend beyond your Maximum Annuity Commencement Date. Renewals into a Guarantee Period that extend beyond your maximum Annuity Commencement Date will result in an application of a Market Value Adjustment upon annuitization or withdrawals. Each new allocation to a Guarantee Period must be at least $1,000. RENEWALS We will notify you in writing between 45 and 75 days before the Renewal Date for any Guarantee Amount. A new Guarantee Period of the same duration will begin automatically for that Guarantee Amount on the first day following the Renewal Date, unless before the Renewal Date we receive: (1) written notice from you electing a different Guarantee Period from among those we then offer, or (2) instructions to transfer the Guarantee Amount to one or more Sub-Accounts, in accordance with the transfer privilege provisions of the Contract (see "Transfer Privilege"). A Guarantee Amount will not renew into a Guarantee Period that will extend beyond your Maximum Annuity Commencement Date. Unless you notify us otherwise, we will automatically renew your Guarantee Amount into the next available Guarantee Period. EARLY WITHDRAWALS If you withdraw, transfer, or annuitize an allocation to a Guarantee Period 30 days prior to the Renewal Date, we will apply a Market Value Adjustment to the transaction. This could result in an increase or a decrease of your Account Value, depending on interest rates at the time. You bear the risk that you will receive less than your principal if the Market Value Adjustment applies. TRANSFER PRIVILEGE PERMITTED TRANSFERS During the Accumulation Phase, you may transfer all or part of your Account Value to one or more Sub-Accounts or Guarantee Periods then available, subject to the following restrictions: - You may not make more than 12 transfers in any Account Year; - The amount transferred from a Sub-Account must be at least $1,000, unless you are transferring your entire balance in that Sub-Account; - Your Account Value remaining in a Sub-Account must be at least $1,000; - The amount transferred from a Guarantee Period must be the entire Guarantee Amount, except for transfers of interest credited during the current Account Year; - At least 30 days must elapse between transfers to or from Guarantee Periods; - Transfers to or from Sub-Accounts are subject to terms and conditions that may be imposed by the Funds; and - We impose additional restrictions on market timers, which are further described below. These restrictions do not apply to transfers made under an approved dollar-cost averaging program. There is usually no charge imposed on transfers; however, we reserve the right to impose a transfer charge of $15 for each transfer. Transfers out of a Guarantee Period more than 30 days before 24 the Renewal Date or any time after the Renewal Date will be subject to the Market Value Adjustment described below. Under current law, there is no tax liability for transfers. REQUESTS FOR TRANSFERS You may request transfers in writing or by telephone. The telephone transfer privilege is available automatically, and does not require your written election. We will require personal identifying information to process a request for a transfer made by telephone. We will not be liable for following instructions communicated by telephone that we reasonably believe are genuine. Your transfer request will be effective as of the close of the Business Day if we receive your transfer before the earlier of (a) 4:00 p.m. Eastern Time on a Business Day or (b) the close of the New York Stock Exchange on days that the Stock Exchange closes before 4:00 p.m. Otherwise, your transfer request will be effective on the next Business Day. MARKET TIMERS The Contracts are not designed for professional market timing organizations or other entities using programmed and frequent transfers. If you wish to employ such strategies, you should not purchase a Contract. Accordingly, transfers may be subject to restrictions if exercised by a market timing firm or any other third party authorized to initiate transfer transactions on behalf of multiple Participants. In imposing such restrictions, we may, among other things, not accept (1) the transfer instructions of any agent acting under a power of attorney on behalf of more than one Participant, or (2) the transfer instructions of individual Participants who have executed preauthorized transfer forms that are submitted at the same time by market timing firms or other third parties on behalf of more than one Participant. We will not impose these restrictions unless our actions are reasonably intended to prevent the use of such transfers in a manner that will disadvantage or potentially impair the Contract rights of other Participants. In addition, some of the Funds have reserved the right to temporarily or permanently refuse exchange requests from the Variable Account if, in the judgment of the Fund's investment adviser, the Fund would be unable to invest effectively in accordance with its investment objective and policies, or would otherwise potentially be adversely affected. In particular, a pattern of exchanges that coincide with a market timing strategy may be disruptive to a Fund and therefore may be refused. Accordingly, the Variable Account may not be in a position to effectuate transfers and may refuse transfer requests without prior notice. We also reserve the right, for similar reasons, to refuse or delay exchange requests involving transfers to or from the Fixed Account. WAIVERS; REDUCED CHARGES; CREDITS; SPECIAL GUARANTEED INTEREST RATES We may reduce or waive the withdrawal charge, mortality and expense risk charges, the administrative service fee or the annual Account Fee, credit additional amounts, or grant special Guaranteed Interest Rates in certain situations. These situations may include sales of Contracts (1) where selling and/or maintenance costs associated with the Contracts are reduced, such as the sale of several Contracts to the same Participant, sales of large Contracts, and certain group sales, and (2) to officers, directors and employees of the Company or its affiliates, registered representatives and employees of broker-dealers with a current selling agreement with the Company and affiliates of such representatives and broker-dealers, employees of affiliated asset management firms, and persons who have retired from such positions ("Eligible Employees") and immediate family members of Eligible Employees. Eligible Employees and their immediate family members may also purchase a Contract without regard to minimum Purchase Payment requirements. For other situations in which withdrawal charges may be waived, see "Withdrawals, Withdrawal Charge and Market Value Adjustment." 25 OPTIONAL PROGRAMS DOLLAR-COST AVERAGING Dollar-cost averaging allows you to invest gradually, over time, in up to 12 Sub-Accounts. You may select a dollar-cost averaging program at no extra charge by allocating a minimum of $1,000 to a designated Sub-Account or to a Guarantee Period we make available in connection with the program. Amounts allocated to the Fixed Account under the program will earn interest at a rate declared by the Company for the Guarantee Period you select. Previously applied amounts may not be transferred to a Guarantee Period made available in connection with this program. At regular time intervals, we will transfer the same amount automatically to one or more Sub-Accounts that you choose, up to a maximum of 12 Sub-Accounts. The program continues until your Account Value allocated to the program is depleted or you elect to stop the program. The final amount transferred from the Fixed Account will include all interest earned. No Market Value Adjustment (either positive or negative) will apply to amounts automatically transferred from the Fixed Account under the dollar-cost averaging program. However, if you discontinue or alter the program prior to completion, amounts remaining in the Fixed Account will be transferred to the Money Market Fund investment option under the Contract, unless you instruct us otherwise, and the Market Value Adjustment will be applied. Any new allocation of a Purchase Payment to the program will be treated as commencing a new dollar-cost averaging program and is subject to the $1,000 minimum. The main objective of a dollar-cost averaging program is to minimize the impact of short-term price fluctuations on Account Value. In general, since you transfer the same dollar amount to the variable investment options at set intervals, dollar-cost averaging allows you to purchase more Variable Accumulation Units (and, indirectly, more Fund shares) when prices are low and fewer Variable Accumulation Units (and, indirectly, fewer Fund shares) when prices are high. Therefore, you may achieve a lower average cost per Variable Accumulation Unit over the long term. A dollar-cost averaging program allows you to take advantage of market fluctuations. However, it is important to understand that a dollar-cost averaging program does not assure a profit or protect against loss in a declining market. We do not allow transfers into any of the Guarantee Periods. ASSET ALLOCATION One or more asset allocation programs may be available in connection with the Contract, at no extra charge. Asset allocation is the process of investing in different asset classes -- such as equity funds, fixed income funds, and money market funds -- depending on your personal investment goals, tolerance for risk, and investment time horizon. By spreading your money among a variety of asset classes, you may be able to reduce the risk and volatility of investing, although there are no guarantees, and asset allocation does not insure a profit or protect against loss in a declining market. Currently, you may select one of 4 asset allocation models, each of which represents a combination of Sub-Accounts with a different level of risk. The available models are: the conservative asset allocation model, the moderate asset allocation model, the aggressive asset allocation model and the total equity asset allocation model. Each model allocates a different percentage of Account Value to Sub-Accounts investing in the various asset classes, with the conservative asset allocation model allocating the lowest percentage to Sub-Accounts investing in the equity asset class and the total equity asset allocation model allocating the highest percentage to the equity asset class. These asset allocation models, as well as the terms and conditions of the asset allocation program, are fully described in a separate brochure. We may add or delete such programs in the future. If you elect an asset allocation program, we will automatically allocate your Purchase Payments among the Sub-Accounts represented in the model you choose. By electing an asset allocation program, you thereby authorize us to automatically reallocate your investment options that participate in the asset allocation program on a quarterly basis, or as determined by the terms of the Asset Allocation Program, to reflect the current composition of the model you have selected, without further instruction, until we receive notification that you wish to terminate the program or choose a different model. 26 SYSTEMATIC WITHDRAWAL PROGRAM If you have an Account Value of $10,000 or more, you may select our Systematic Withdrawal Program. Under this program, you determine the amount and frequency of regular withdrawals you would like to receive from your Fixed Account Value and/or Variable Account Value and we will effect them automatically. The withdrawals under this program may be subject to surrender charges or a Market Value Adjustment. They may also be included as income and subject to a 10% federal tax penalty. You should consult your tax adviser before choosing this option. You may change or stop this program at any time, by written notice to us. PORTFOLIO REBALANCING PROGRAM Under the Portfolio Rebalancing Program, we transfer funds among all Sub-Accounts to maintain the percentage allocation you have selected among these Sub-Accounts. At your election, we will make these transfers on a quarterly, semi-annual or annual basis. Portfolio Rebalancing does not permit transfers to or from any Guarantee Period. PRINCIPAL RETURNS PROGRAM Under the Principal Returns Program, we divide your Purchase Payments between the Fixed Account and the Variable Account. For the Fixed Account portion, you choose a Guarantee Period from among those we offer. We then allocate to that Guarantee Period the portion of your Purchase Payment necessary so that, at the end of the Guarantee Period, your Fixed Account allocation, including interest, will equal the entire amount of your original Purchase Payment. The remainder of the original Purchase Payment will be invested in the Sub-Accounts of your choice. At the end of the Guarantee Period, you will be guaranteed the amount of your original Purchase Payment (assuming no withdrawals), plus you will have the benefit, if any, of the investment performance of the Sub-Accounts you have chosen. WITHDRAWALS, WITHDRAWAL CHARGE AND MARKET VALUE ADJUSTMENT CASH WITHDRAWALS REQUESTING A WITHDRAWAL At any time during the Accumulation Phase, you may withdraw in cash all or any portion of your Account Value. To make a withdrawal, you must send us a written request at our Annuity Mailing Address. Your request must specify whether you want to withdraw the entire amount of your Account or, if less, the amount you wish to receive. All withdrawals may be subject to a withdrawal charge (see "Withdrawal Charge"), and withdrawals from your Fixed Account Value also may be subject to a Market Value Adjustment (see "Market Value Adjustment"). Withdrawals also may have adverse income tax consequences, including a 10% penalty tax (see "Tax Considerations"). You should carefully consider these tax consequences before requesting a cash withdrawal. FULL WITHDRAWALS If you request a full withdrawal, we calculate the amount we will pay you as follows: We start with the total value of your Account at the end of the Valuation Period during which we receive your withdrawal request; we deduct the Account Fee for the Account Year in which the withdrawal is made; we add or subtract the amount of any Market Value Adjustment applicable to your Fixed Account Value; and finally, we deduct any applicable withdrawal charge. A full withdrawal results in the surrender of your Contract, and cancellation of all rights and privileges under your Contract. 27 PARTIAL WITHDRAWALS If you request a partial withdrawal, we will pay you the actual amount specified in your request and then adjust the value of your Account by deducting the amount paid, adding or deducting any Market Value Adjustment applicable to amounts withdrawn from the Fixed Account, and deducting any applicable withdrawal charge. You may specify the amount you want withdrawn from each Sub-Account and/or Guarantee Amount to which your Account is allocated. If you do not so specify, we will deduct the total amount you request pro rata, based on your Account Value at the end of the Valuation Period during which we receive your request. If you request a partial withdrawal that would result in your Account Value being reduced to an amount less than the Account Fee for the Account Year in which you make the withdrawal, we will treat it as a request for a full withdrawal. TIME OF PAYMENT We will pay you the applicable amount of any full or partial withdrawal within 7 days after we receive your withdrawal request, except in cases where we are permitted, and choose, to defer payment under the Investment Company Act of 1940 and applicable state insurance law. Currently, we may defer payment of amounts you withdraw from the Variable Account only for the following periods: - When the New York Stock Exchange is closed (except weekends and holidays) or when trading on the New York Stock Exchange is restricted; - When it is not reasonably practical to dispose of securities held by a Fund or to determine the value of the net assets of a Fund, because an emergency exists; or - When an SEC order permits us to defer payment for the protection of Participants. We also may defer payment of amounts you withdraw from the Fixed Account for up to 6 months from the date we receive your withdrawal request. We do not pay interest on the amount of any payments we defer. WITHDRAWAL RESTRICTIONS FOR QUALIFIED PLANS If your Contract is a Qualified Contract, you should carefully check the terms of your retirement plan for limitations and restrictions on cash withdrawals. Special restrictions apply to withdrawals from Contracts used for Section 403(b) annuities (see "Tax Considerations -- Tax-Sheltered Annuities"). WITHDRAWAL CHARGE We do not deduct any sales charge from your Purchase Payments when they are made. However, we may impose a withdrawal charge (known as a "contingent deferred sales charge") on certain amounts you withdraw. We impose this charge to defray some of our expenses related to the sale of the Contracts, such as commissions we pay to agents, the cost of sales literature, and other promotional costs and transaction expenses. FREE WITHDRAWAL AMOUNT In each Account Year you may withdraw a portion of your Account Value -- which we call the "free withdrawal amount" -- before incurring the withdrawal charge. For convenience in discussing free withdrawal amounts, we refer to Purchase Payments made during the last 7 Account Years, including the current Account Year, as "New Payments," and we refer to Purchase Payments made before the last 7 Account Years as "Old Payments." 28 For the first Account Year, the free withdrawal amount is equal to 15% of the amount of all Purchase Payments you have made. For all other Account Years, the free withdrawal amount is equal to the greater of: - your Contract's earnings (defined below), minus any free withdrawals taken during the life of your Contract, or - 15% of the amount of all New Payments minus any free withdrawals taken during the current Account Year. Your Contract's earnings are equal to: - your Account Value, minus - all Purchase Payments made plus - all partial withdrawals and charges taken. For an example of how we calculate the "free withdrawal amount," see Appendix B. WITHDRAWAL CHARGE ON PURCHASE PAYMENT If you withdraw more than the free withdrawal amount, we consider the excess amount to be withdrawn first from Payments that you have not previously withdrawn. We impose the withdrawal charge on the amount of New Payments withdrawn. Thus, the maximum amount on which we will impose the withdrawal charge will never exceed the total of New Payments that you have not previously withdrawn. ORDER OF WITHDRAWAL When you take a withdrawal, we liquidate your Contract in the following order: (1) the free withdrawal amount, and (2) unliquidated payments on a first-in, first-out basis. CALCULATION OF WITHDRAWAL CHARGE We calculate the amount of the withdrawal charge by multiplying the Purchase Payments you withdraw by a percentage. The percentage varies according to the number of Account Years the Purchase Payment has been held in your Account, including the Account Year in which you made the Payment, but not the Account Year in which you withdraw it. Each Payment begins a new 7-year period and moves down the declining surrender charge scale as shown below at each Account Anniversary. Payments received during the current Account Year will be charged 7%, if withdrawn. On your next scheduled Account Anniversary, that Payment, along with any other Payments made during that Account Year, will be considered to be in their second Account Year and will have a 7% withdrawal charge. On the next Account Anniversary, these Payments will move into their third Account Year and will have a withdrawal charge of 6%, if withdrawn. This withdrawal charge decreases according to the number of Account Years the Purchase Payment has been held in your Account.
NUMBER OF ACCOUNT YEARS PAYMENT HAS BEEN WITHDRAWAL IN YOUR CONTRACT CHARGE ---------------- ---------- 0-1 7% 1-2 7% 2-3 6% 3-4 6% 4-5 5% 5-6 4% 6-7 3% 7 or more 0%
29 For example, the percentage applicable to withdrawals of a Payment that has been in an Account for more than 2 Account Years but less than 3 will be 6%, regardless of the issue date of the Contract. The withdrawal charge will never be greater than 7% of the Purchase Payments you make under your Contract. For a Group Contract, we may modify the withdrawal charges and limits, upon notice to the Owner of the Group Contract. However, any modification will apply only to Accounts established after the date of the modification. For additional examples of how we calculate withdrawal charges, see Appendix B. TYPES OF WITHDRAWALS NOT SUBJECT TO WITHDRAWAL CHARGE NURSING HOME WAIVER If approved by your state, we will waive the withdrawal charge for a full or partial withdrawal if: - at least one year has passed since we issued your Contract, and - you are confined to an eligible nursing home and have been confined there for at least the preceding 180 days, or any shorter period required by your state. An "eligible nursing home" means a licensed hospital or licensed skilled or intermediate care nursing facility at which medical treatment is available on a daily basis and daily medical records are kept for each patient. You must provide us evidence of confinement in the form we determine. MINIMUM DISTRIBUTIONS For each Qualified Contract, the free withdrawal amount in any Account Year will be the greater of the free withdrawal amount described above or any amounts required to be withdrawn to comply with the minimum distribution requirement of the Internal Revenue Code. This waiver of the withdrawal charge applies only to the portion of the required minimum distribution attributable to that Qualified Contract. OTHER WITHDRAWALS We do not impose the withdrawal charge on amounts you apply to provide an annuity, amounts we pay as a death benefit, except under the Cash Surrender method, or amounts you transfer among the Sub-Accounts, between the Sub-Accounts and the Fixed Account, or within the Fixed Account. MARKET VALUE ADJUSTMENT If permitted under the laws of your state, we will apply a Market Value Adjustment if you withdraw or transfer amounts from your Fixed Account Value more than 30 days before the end of the applicable Guarantee Period. For this purpose, using Fixed Account Value to provide an annuity is considered a withdrawal, and the Market Value Adjustment will apply. However, we will not apply the Market Value Adjustment to automatic transfers to a Sub-Account from a Guarantee Period as part of our dollar-cost averaging program. We apply the Market Value Adjustment separately to each Guarantee Amount in the Fixed Account, that is to each separate allocation you have made to a Guarantee Period together with interest credited on that allocation. However, we do not apply the adjustment to the amount of interest credited during your current Account Year. Any withdrawal from a Guarantee Amount is attributed first to such interest. A Market Value Adjustment may decrease, increase or have no effect on your Account Value. This will depend on changes in interest rates since you made your allocation to the Guarantee Period and the length of time remaining in the Guarantee Period. In general, if the Guaranteed Interest Rate we currently declare for Guarantee Periods equal to the balance of your Guarantee Period (or your 30 entire Guarantee Period for Guarantee Periods of less than one year) is higher than your Guaranteed Interest Rate, the Market Value Adjustment is likely to decrease your Account Value. If our current Guaranteed Interest Rate is lower, the Market Value Adjustment is likely to increase your Account Value. We determine the amount of the Market Value Adjustment by multiplying the amount that is subject to the adjustment by the following formula: N/12 1 + I ( -------- ) -1 1 + J + b
where: I is the Guaranteed Interest Rate applicable to the Guarantee Amount from which you withdraw, transfer or annuitize; J is the Guaranteed Interest Rate we declare at the time of your withdrawal, transfer or annuitization for Guarantee Periods equal to the length of time remaining in the Guarantee Period applicable to your Guarantee Amount, rounded to the next higher number of complete years, for Guarantee Periods of one year or more. For any Guarantee Periods of less than one year, J is the Guaranteed Interest Rate we declare at the time of your withdrawal, transfer or annuitization for a Guarantee Period of the same length as your Guarantee Period. If, at that time, we do not offer the applicable Guarantee Period we will use an interest rate determined by straight-line interpolation of the Guaranteed Interest Rates for the Guarantee Periods we do offer; N is the number of complete months remaining in your Guarantee Period; and b is a factor that currently is 0%, but that in the future we may increase to up to 0.25%. Any increase would be applicable only to Participants who purchase their Contracts after the date of that increase. The "b" factor is the amount that will be used to cover market volatility (I.E., credit risk), basis risk, and/or liquidity costs. We will apply the Market Value Adjustment to the amount being withdrawn after deduction of any Account Fee, if applicable, but before we impose any withdrawal charge on the amount withdrawn. For examples of how we calculate the Market Value Adjustment, see Appendix B. CONTRACT CHARGES ACCOUNT FEE During the Accumulation Phase of your Contract, we will deduct from your Account an annual Account Fee to help cover the administrative expenses we incur related to the issuance of Contracts and the maintenance of Accounts. We deduct the Account Fee on each Account Anniversary. In Account Years 1 through 5, the annual Account Fee is $35. After Account Year 5, we may change the Account Fee each year, but the Account Fee will never exceed $50. We deduct the Account Fee pro rata from each Sub-Account and each Guarantee Period, based on the allocation of your Account Value on your Account Anniversary. We will not charge the Account Fee if: (1) your Account has been allocated only to the Fixed Account during the applicable Account Year; or (2) your Account Value is $75,000 or more on your Account Anniversary. If you make a full withdrawal of your Account, we will deduct the full amount of the Account Fee at the time of the withdrawal. In addition, on the Annuity Commencement Date we will deduct a pro rata portion of the Account Fee to reflect the time elapsed between the last Account Anniversary and the day before the Annuity Commencement Date. 31 After the Annuity Commencement Date, we will deduct an annual Account Fee of $35 in the aggregate in equal amounts from each Variable Annuity payment we make during the year. We do not deduct any Account Fee from Fixed Annuity payments. ADMINISTRATIVE EXPENSE CHARGE We deduct an administrative expense charge from the assets of the Variable Account at an annual effective rate equal to 0.15% during both the Accumulation Phase and the Income Phase. This charge is designed to reimburse us for expenses we incur in administering the Contracts, Participant Accounts and the Variable Account that are not covered by the annual Account Fee. MORTALITY AND EXPENSE RISK CHARGE During both the Accumulation Phase and the Income Phase, we deduct a mortality and expense risk charge from the assets of the Variable Account at an effective annual rate equal to 1.00%, if your initial Purchase Payment was less than $1,000,000, or 0.85% if your initial Purchase Payment was $1,000,000 or more. However, if you annuitize your Contract prior to your eighth Contract Anniversary, we will deduct an additional 0.25% during the Income Phase to offset the increased mortality risk during this phase. The mortality risk we assume arises from our contractual obligation to continue to make annuity payments to each Annuitant, regardless of how long the Annuitant lives and regardless of how long all Annuitants as a group live. This obligation assures each Annuitant that neither the longevity of fellow Annuitants nor an improvement in life expectancy generally will have an adverse effect on the amount of any annuity payment received under the Contract. The mortality risk also arises from our contractual obligation to pay a death benefit upon the death of the Participant prior to the Annuity Commencement Date. The expense risk we assume is the risk that the annual Account Fee and the administrative expense charge we assess under the Contract may be insufficient to cover the actual total administrative expenses we incur. If the amount of the charge is insufficient to cover the mortality and expense risks, we will bear the loss. If the amount of the charge is more than sufficient to cover the risks, we will make a profit on the charge. We may use this profit for any proper corporate purpose, including the payment of marketing and distribution expenses for the Contract. CHARGES FOR OPTIONAL DEATH BENEFIT RIDERS If you elect an optional death benefit rider, we will deduct, during the Accumulation Phase, a charge from the assets of the Variable Account depending upon which of the optional death benefit rider(s) you elect.
% OF AVERAGE RIDER(S) YOU ELECT* DAILY VALUE ------------------- ------------ "EEB" 0.15% "MAV" 0.15% "5% Roll-Up" 0.15% "EEB" and "MAV" 0.25% "EEB" and "5% Roll-Up" 0.25% "MAV" and "5% Roll-Up" 0.25% "EEB Plus" 0.25% "EEB" and "MAV" and "5% Roll-Up" 0.40% "EEB Plus MAV" 0.40% "EEB Plus 5% Roll-Up" 0.40%
------------------------ * As defined below PREMIUM TAXES Some states and local jurisdictions impose a premium tax on us that is equal to a specified percentage of the Purchase Payments you make. In many states there is no premium tax. We believe that the amounts of applicable premium taxes currently range from 0% to 3.5%. You should consult a tax adviser to find out if your state imposes a premium tax and the amount of any tax. 32 In order to reimburse us for the premium tax we may pay on Purchase Payments, our policy is to deduct the amount of such taxes from the amount you apply to provide an annuity at the time of annuitization. However, we reserve the right to deduct the amount of any applicable tax from your Account at any time, including at the time you make a Purchase Payment or make a full or partial withdrawal. We do not make any profit on the deductions we make to reimburse premium taxes. FUND EXPENSES There are fees and charges deducted from each Fund. These fees and expenses are described in the Fund prospectus(es) and related Statements of Additional Information. MODIFICATION IN THE CASE OF GROUP CONTRACTS For Group Contracts, we may modify the annual Account Fee, the administrative expense charge and the mortality and expense risk charge upon notice to Owners. However, such modification will apply only with respect to Participant Accounts established after the effective date of the modification. DEATH BENEFIT If the Covered Person dies during the Accumulation Phase, we will pay a death benefit to your Beneficiary, using the payment method elected (a single cash payment or one of our Annuity Options). If the Beneficiary is not living on the date of death of the Covered Person, we will pay the death benefit in one sum to your estate. We do not pay a death benefit if the Covered Person dies during the Income Phase. However, the Beneficiary will receive any annuity payments provided under an Annuity Option that is in effect. If your Contract names more than one Covered Person, we will pay the death benefit upon the first death of such Covered Persons. AMOUNT OF DEATH BENEFIT To calculate the amount of the death benefit, we use a "Death Benefit Date." The Death Benefit Date is the date we receive proof of the death of the Covered Person in an acceptable form ("Due Proof of Death") if you have elected a death benefit payment method before the death of the Covered Person and it remains in effect. Otherwise, the Death Benefit Date is the later of the date we receive Due Proof of Death or the date we receive the Beneficiary's election of either payment method or, if the Beneficiary is your spouse, Contract continuation. If we do not receive the Beneficiary's election within 60 days after we receive Due Proof of Death, we reserve the right to provide a lump sum to your Beneficiary. The amount of the death benefit is determined as of the Death Benefit Date. THE BASIC DEATH BENEFIT In general, if you were 85 or younger on your Contract Date (the date we accepted your first Purchase Payment), the death benefit will be the greatest of the following amounts: 1. Your Account Value for the Valuation Period during which the Death Benefit Date occurs; 2. The amount we would pay if you had surrendered your entire Account on the Death Benefit Date; and 3. Your total Purchase Payments (adjusted for partial withdrawals as described in "Calculating the Death Benefit") as of the Death Benefit Date. For examples of how to calculate this basic death benefit, see Appendix C. If you were 86 or older on your Contract Date, the death benefit is equal to amount (2) above. Because this amount will reflect any applicable withdrawal charges and Market Value Adjustment, it may be less than your Account Value. 33 OPTIONAL DEATH BENEFIT RIDERS Subject to availability in your state, you may enhance the "Basic Death Benefit" by electing one or more of the following optional death benefit riders. You must make your election before the date on which your Contract becomes effective. You will pay a charge for each optional death benefit rider you elect. (For a description of these charges, see "Charges for Optional Death Benefit Riders.") The riders are available only if you are younger than 80 on the Contract Date. Any optional death benefit election may not be changed after the Contract is issued. The death benefit under all optional death benefit riders will be adjusted for all partial withdrawals as described in the Prospectus under the heading "Calculating the Death Benefit." For examples of how the death benefit is calculated under the optional death benefit riders, see Appendices D -- H. MAXIMUM ANNIVERSARY ACCOUNT VALUE RIDER ("MAV") Under this rider, the death benefit will be the greater of: - the amount payable under the basic death benefit above, or - your highest Account Value on any Account Anniversary before your 81st birthday, adjusted for any subsequent Purchase Payments, partial withdrawals and charges made between that Account Anniversary and the Death Benefit Date. 5% PREMIUM ROLL-UP RIDER ("5% ROLL-UP") Under this rider, the death benefit will be the greater of: - the amount payable under the basic death benefit above, or - the sum of your total Purchase Payments plus interest accruals, adjusted for partial withdrawals. Under this rider, interest accrues at a rate of 5% per year on Purchase Payments and transfers to the Variable Account while they remain in the Variable Account. The 5% interest accruals will continue until the earlier of: - the first day of the month following your 80th birthday, or - the day the death benefit amount under this rider equals twice the total of your Purchase Payments and transferred amounts, adjusted for withdrawals. EARNINGS ENHANCEMENT ("EEB") RIDER If you elect this EEB Rider, your death benefit will be the amount payable under the basic death benefit, PLUS the "EEB amount." Calculated as of your Death Benefit Date, the "EEB amount" is determined as follows: - If you are 69 or younger on your Contract Date, the "EEB amount" will be 40% of the difference between your Account Value and your Net Purchase Payments, up to a cap of 40% of the Net Purchase Payments made prior to your death. - If you are between the ages of 70 and 79 on your Contract Date, the "EEB amount" will be 25% of the difference between your Account Value and your Net Purchase Payments, up to a cap of 25% of the Net Purchase Payments prior to your death. EARNINGS ENHANCEMENT PLUS ("EEB PLUS") RIDER If you elect this EEB Plus Rider, your death benefit will be the amount payable under the basic death benefit, PLUS the "EEB Plus amount." Calculated as of the Death Benefit Date, the "EEB Plus amount" is determined as follows: - If you are 69 or younger on your Contract Date, the "EEB Plus amount" will be 40% of the difference between your Account Value and your Net Purchase Payments, up to a cap of 100% 34 of the Net Purchase Payments made prior to your death. After the 7th Contract year, the cap is 100% of the difference between your Net Purchase Payments and any Purchase Payments made within the twelve months prior to your death. - If you are between the ages of 70 and 79 on your Contract Date, the "EEB Plus amount" will be 25% of the difference between your Account Value and your Net Purchase Payments, up to a cap of 40% of the Net Purchase Payments made prior to your death. After the 7th Contract year, the cap is 40% of the difference between your Net Purchase Payments and any Purchase Payments made in the twelve months prior to your death. EARNINGS ENHANCEMENT PLUS WITH MAV ("EEB PLUS MAV") RIDER If you elect this EEB Plus MAV Rider, your death benefit will be the death benefit payable under the MAV Rider PLUS the "EEB Plus MAV amount." Calculated as of your Death Benefit Date, the "EEB Plus MAV amount" is as follows: - If you are 69 or younger on your Contract Date, the "EEB Plus MAV amount" will be 40% of the difference between the death benefit payable under the MAV Rider and your Net Purchase Payments, up to a cap of 100% of Net Purchase Payments made prior to your death. After your 7th Contract year, the cap is 100% of the difference between your Net Purchase Payments and any Purchase Payments made in the twelve months prior to your death. - If you are between the ages of 70 and 79 on your Contract Date, the "EEB Plus MAV amount" will be 25% of the difference between the death benefit payable under the MAV Rider and your Net Purchase Payments, up to a cap of 40% of Net Purchase Payments made prior to your death. After your 7th Contract year, the cap is 40% of the difference between your Net Purchase Payments and any Purchase Payments made in the twelve months prior to your death. EARNINGS ENHANCEMENT PLUS WITH 5% ROLL-UP ("EEB PLUS 5% ROLL-UP") RIDER If you elect this EEB Plus 5% Roll-Up Rider, your death benefit will be the death benefit payable under the 5% Roll-Up Rider PLUS the "EEB Plus 5% Roll-Up amount." Calculated as of your Death Benefit Date, the "EEB Plus 5% Roll-Up amount" is determined as follows: - If you are 69 or younger on your Contract Date, the "EEB Plus 5% Roll-Up amount" will be 40% of the difference between the death benefit payable under the 5% Roll-Up Rider and your Net Purchase Payments, up to a cap of 100% of Net Purchase Payments made prior to your death. After your 7th Contract year, the cap is 100% of the difference between your Net Purchase Payments and any Purchase Payments made in the twelve months prior to your death. - If you are between the ages of 70 and 79 on your Contract Date, the "EEB Plus 5% Roll-Up amount" will be 25% of the difference between the death benefit payable under the 5% Roll-Up Rider and your Net Purchase Payments, up to a cap of 40% of Net Purchase Payments made prior to your death. After your 7th Contract year, the cap is 40% of the difference between your Net Purchase Payments and any Purchase Payments made in the twelve months prior to your death. SELECTING MULTIPLE DEATH BENEFIT RIDERS The MAV Rider, the 5% Roll-Up Rider, and the EEB Rider can be combined. If you elect more than one of these three optional death benefit riders, your death benefit will be calculated as follows: - MAV RIDER COMBINED WITH 5% ROLL-UP RIDER: The death benefit will equal the greater of the death benefit under the MAV Rider and the death benefit under the 5% Roll-Up Rider. - MAV RIDER COMBINED WITH EEB RIDER: The death benefit will equal the death benefit under the MAV Rider, plus the "EEB amount." The "EEB amount" is calculated using the Account Value before the application of the MAV Rider. 35 - EEB RIDER COMBINED WITH 5% ROLL-UP RIDER: The death benefit will equal the death benefit under the 5% Roll-Up Rider, plus the "EEB amount." The "EEB amount" is calculated using the Account Value before the application of the 5% Roll-Up Rider. - MAV RIDER, THE 5% ROLL-UP RIDER AND THE EEB RIDER: The death benefit will equal the greater of the death benefit under the MAV Rider or the death benefit under the 5% Roll-Up Rider, plus the "EEB amount." The "EEB amount" is calculated using the Account Value before the application of the 5% Roll-Up Rider and the MAV Rider. The EEB Plus, EEB Plus MAV, and EEB Plus 5% Roll-Up Riders are designed to be "comprehensive" riders and may not be combined with each other or with any of the other death benefit riders. SPOUSAL CONTINUANCE If your spouse is your Beneficiary, upon your death your spouse may elect to continue the Contract as the Participant, rather than receive the death benefit amount. In that case, we will not pay a death benefit, but the Contract's Account Value will be equal to your Contract's death benefit amount, as defined under the "Basic Death Benefit" or any optional death benefit rider you have selected. All Contract provisions, including any optional death benefit riders you have selected, will continue as if your spouse had purchased the Contract on the Death Benefit Date with a deposit equal to the death benefit amount. For purposes of calculating death benefits and expenses from that date forward, your spouse's age on the original effective date of the Contract will be used. Upon surrender or annuitization, this step-up to the spouse will not be treated as premium, but will be treated as income. CALCULATING THE DEATH BENEFIT In calculating the death benefit amount payable under option (3) of the "Basic Death Benefit" or any of the optional death benefit riders, any partial withdrawals will reduce the death benefit amount to an amount equal to the death benefit amount immediately before the withdrawal multiplied by the ratio of the Account Value immediately after the withdrawal to the Account Value immediately before the withdrawal. If the death benefit is the amount payable under options (2) or (3) of the "Basic Death Benefit" or under any of the optional death benefit riders, your Account Value may be increased by the excess, if any, of that amount over option (1) of the "Basic Death Benefit." Any such increase will be allocated to the Sub-Accounts in proportion to your Account Value in those Sub-Accounts on the Death Benefit Date. Such increase will be made only if the Beneficiary elects to annuitize, elects to defer annuitization, or elects to continue the Contract. Also, any portion of this new Account Value attributed to the Fixed Account will be transferred to the available Money Market Fund investment option (without the application of a Market Value Adjustment). If your spouse, as the named Beneficiary, elects to continue the Contract after your death, your spouse may transfer any such Fixed Account portion back to the Fixed Account and begin a new Guarantee Period. METHOD OF PAYING DEATH BENEFIT The death benefit may be paid in a single cash payment or as an annuity (either fixed, variable or a combination), under one or more of our Annuity Options. We describe the Annuity Options in this Prospectus under "The Income Phase -- Annuity Provisions." During the Accumulation Phase, you may elect the method of payment for the death benefit. If no such election is in effect on the date of your death, the Beneficiary may elect either a single cash payment or an annuity. If the Beneficiary is your spouse, the Beneficiary may elect to continue the Contract. These elections are made by sending us a completed election form, which we will provide. If we do not receive the Beneficiary's election within 60 days after we receive Due Proof of Death, we will pay the death benefit in a single cash payment. If we pay the death benefit in the form of an Annuity Option, the Beneficiary becomes the Annuitant/Payee under the terms of that Annuity Option. 36 NON-QUALIFIED CONTRACTS If your Contract is a Non-Qualified Contract, special distribution rules apply to the payment of the death benefit. The amount of the death benefit must be distributed either (1) as a lump sum within 5 years after your death, or (2) if in the form of an annuity, over a period not greater than the life or expected life of the "designated beneficiary" within the meaning of Section 72(s) of the Internal Revenue Code, with payments beginning no later than one year after your death. The person you have named as Beneficiary under your Contract, if any, will be the "designated beneficiary." If the named Beneficiary is not living and no contingent beneficiary has been named, the Annuitant automatically becomes the designated beneficiary. If the designated beneficiary is your surviving spouse, your spouse may continue the Contract in his or her own name as Participant. To make this election, your spouse must give us written notification within 60 days after we receive Due Proof of Death. The special distribution rules will then apply on the death of your spouse. To understand what happens when your spouse continues the Contract, see "Spousal Continuance," above. During the Income Phase, if the Annuitant dies, the remaining value of the Annuity Option in place must be distributed at least as rapidly as the method of distribution under that option. If the Participant is not a natural person, these distribution rules apply on a change in, or the death of, either the Annuitant or the Co-Annuitant. Payments made in contravention of these special rules would adversely affect the treatment of the Contracts as annuity contracts under the Internal Revenue Code. Neither you nor the Beneficiary may exercise rights that would have that effect. SELECTION AND CHANGE OF BENEFICIARY You select your Beneficiary in your Application. You may change your Beneficiary at any time by sending us written notice on our required form, unless you previously made an irrevocable Beneficiary designation. A new Beneficiary designation is not effective until we record the change. PAYMENT OF DEATH BENEFIT Payment of the death benefit in cash will be made within 7 days of the Death Benefit Date, except if we are permitted to defer payment in accordance with the Investment Company Act of 1940. If an Annuity Option is elected, the Annuity Commencement Date will be the first day of the second calendar month following the Death Benefit Date, and your Account will remain in effect until the Annuity Commencement Date. DUE PROOF OF DEATH We accept any of the following as proof of any person's death: - An original certified copy of an official death certificate; - An original certified copy of a decree of a court of competent jurisdiction as to the finding of death; or - Any other proof we find satisfactory. THE INCOME PHASE -- ANNUITY PROVISIONS During the Income Phase, we make regular monthly annuity payments to the Annuitant. The Income Phase of your Contract begins with the Annuity Commencement Date. On that date, we apply your Account Value, adjusted as described below, under the Annuity Option(s) you have selected, and we make the first annuity payment. 37 Once the Income Phase begins, no lump sum settlement option or cash withdrawals are permitted, except pursuant to Annuity Option D, Monthly Payments for a Specified Period Certain, as described below under the heading "Annuity Options," and you cannot change the Annuity Option selected. You may request a full withdrawal before the Annuity Commencement Date, which will be subject to all charges applicable on withdrawals (see "Withdrawals, Withdrawal Charge and Market Value Adjustment"). SELECTION OF THE ANNUITANT OR CO-ANNUITANT You select the Annuitant in your Application. The Annuitant is the person who receives annuity payments during the Income Phase and on whose life these payments are based. In your Contract, the Annuity Option(s) refer to the Annuitant as the "Payee." If you name someone other than yourself as Annuitant and the Annuitant dies before the Income Phase, you become the Annuitant. In a Non-Qualified Contract, if you name someone other than yourself as Annuitant, you may also select a Co-Annuitant, who will become the new Annuitant if the original Annuitant dies before the Income Phase. If both the Annuitant and Co-Annuitant die before the Income Phase, you become the Annuitant. If you have named both an Annuitant and a Co-Annuitant, you may designate one of them to become the sole Annuitant as of the Annuity Commencement Date, if both are living at that time. If you have not made that designation on the 30th day before the Annuity Commencement Date, and both the Annuitant and the Co-Annuitant are still living, the Co-Annuitant will become the Annuitant. When an Annuity Option has been selected as the method of paying the death benefit, the Beneficiary is the Payee of the annuity payment. SELECTION OF THE ANNUITY COMMENCEMENT DATE You select the Annuity Commencement Date in your Application. The following restrictions apply to the date you may select: - The earliest possible Annuity Commencement Date is the first day of the second month following your Contract Date. - The latest possible Annuity Commencement Date is the first day of the month following the Annuitant's 95th birthday or, if there is a Co-Annuitant, the 95th birthday of the younger of the Annuitant and Co-Annuitant. - The Annuity Commencement Date must always be the first day of a month. You may change the Annuity Commencement Date from time to time by sending us written notice, with the following additional limitations: - We must receive your notice at least 30 days before the current Annuity Commencement Date. - The new Annuity Commencement Date must be at least 30 days after we receive the notice. There may be other restrictions on your selection of the Annuity Commencement Date imposed by your retirement plan or applicable law. In most situations, current law requires that for a Qualified Contract, certain minimum distributions must commence no later than April 1 following the year the Annuitant reaches age 70 1/2 (or, for Qualified Contracts other than IRAs, no later than April 1 following the year the Annuitant retires, if later than the year the Annuitant reaches age 70 1/2). ANNUITY OPTIONS We offer the following Annuity Options for payments during the Income Phase. Each Annuity Option may be selected for a Variable Annuity, a Fixed Annuity, or a combination of both. We may also agree to other settlement options, at our discretion. 38 ANNUITY OPTION A -- LIFE ANNUITY We provide monthly payments during the lifetime of the Annuitant. Annuity payments stop when the Annuitant dies. There is no provision for continuation of any payments to a Beneficiary. ANNUITY OPTION B -- LIFE ANNUITY WITH 60, 120, 180 OR 240 MONTHLY PAYMENTS CERTAIN We make monthly payments during the lifetime of the Annuitant. In addition, we guarantee that the Beneficiary will receive monthly payments for the remainder of the period certain, if the Annuitant dies during that period. The election of a longer period results in smaller monthly payments. If no Beneficiary is designated, we pay the discounted value of the remaining payments in one sum to the Annuitant's estate. The Beneficiary may also elect to receive the discounted value of the remaining payments in one sum. The discount rate for a Variable Annuity will be the assumed interest rate in effect; the discount rate for a Fixed Annuity will be based on the interest rate we used to determine the amount of each payment. ANNUITY OPTION C -- JOINT AND SURVIVOR ANNUITY We make monthly payments during the lifetime of the Annuitant and another person you designate and during the lifetime of the survivor of the two. We stop making payments when the survivor dies. There is no provision for continuance of any payments to a Beneficiary. ANNUITY OPTION D -- MONTHLY PAYMENTS FOR A SPECIFIED PERIOD CERTAIN We make monthly payments for a specified period of time from 5 to 30 years, as you elect. If payments under this option are paid on a variable annuity basis, the Annuitant may elect to receive, at any time, some or all of the discounted value of the remaining payments, less any applicable withdrawal charge; the discount rate for this purpose will be the assumed interest rate in effect. If the Annuitant dies during the period selected, the remaining income payments are made as described under Annuity Option B. The election of this Annuity Option may result in the imposition of a penalty tax. The 5, 6, 7, 8 and 9-year period certain options are not available if your Account has been issued within the past 7 years. SELECTION OF ANNUITY OPTION You select one or more of the Annuity Options, which you may change from time to time during the Accumulation Phase, as long as we receive your selection or change in writing at least 30 days before the Annuity Commencement Date. If we have not received your written selection on the 30th day before the Annuity Commencement Date, you will receive Annuity Option B, for a life annuity with 120 monthly payments certain. You may specify the proportion of your Adjusted Account Value you wish to provide a Variable Annuity or a Fixed Annuity. Under a Variable Annuity, the dollar amount of payments will vary, while under a Fixed Annuity, the dollar amount of payments will remain the same. If you do not specify a Variable Annuity or a Fixed Annuity, your Adjusted Account Value will be divided between Variable Annuities and Fixed Annuities in the same proportions as your Account Value was divided between the Variable and Fixed Accounts on the Annuity Commencement Date. You may allocate your Adjusted Account Value applied to a Variable Annuity among the Sub-Accounts, or we will use your existing allocations. There may be additional limitations on the options you may elect under your particular retirement plan or applicable law. REMEMBER THAT THE ANNUITY OPTIONS MAY NOT BE CHANGED ONCE ANNUITY PAYMENTS BEGIN. 39 AMOUNT OF ANNUITY PAYMENTS ADJUSTED ACCOUNT VALUE The Adjusted Account Value is the amount we apply to provide a Variable Annuity and/or a Fixed Annuity. We calculate Adjusted Account Value by taking your Account Value on the Business Day just before the Annuity Commencement Date and making the following adjustments: - We deduct a proportional amount of the Account Fee, based on the fraction of the current Account Year that has elapsed. - If applicable, we apply the Market Value Adjustment to your Account Value in the Fixed Account, which may result in a deduction, an addition, or no change. - We deduct any applicable premium tax or similar tax if not previously deducted. VARIABLE ANNUITY PAYMENTS On the Annuity Commencement Date, we will exchange your Account's Variable Annuity Units for Annuitization Units which have annual insurance charges of 1.15% of your average daily net assets (1.00% if your initial Purchase Payment was $1,000,000 or more). If your Annuity Commencement Date is within 7 years of the Contract Date, the annual insurance charges will be increased by 0.25%. Variable Annuity payments may vary each month. We determine the dollar amount of the first payment using the portion of your Adjusted Account Value applied to a Variable Annuity and the Annuity Payment Rates in your Contract, which are based on an assumed interest rate of 3% per year, compounded annually. See "Annuity Payment Rates." To calculate the remaining payments, we convert the amount of the first payment into Annuity Units for each Sub-Account; we determine the number of those Annuity Units by dividing the portion of the first payment attributable to the Sub-Account by the Annuity Unit Value of that Sub-Account for the Valuation Period ending just before the Annuity Commencement Date. This number of Annuity Units for each Sub-Account will remain constant (unless the Annuitant requests an exchange of Annuity Units). However, the dollar amount of the next Variable Annuity payment -- which is the sum of the number of Annuity Units for each Sub-Account times its Annuity Unit Value for the Valuation Period ending just before the date of the payment -- will increase, decrease, or remain the same, depending on the net investment return of the Sub-Accounts. If the net investment return of the Sub-Accounts selected is the same as the assumed interest rate of 3%, compounded annually, the payments will remain level. If the net investment return exceeds the assumed interest rate, payments will increase and, conversely, if it is less than the assumed interest rate, payments will decrease. Please refer to the Statement of Additional Information for more information about calculating Variable Annuity Units and Variable Annuity payments, including examples of these calculations. FIXED ANNUITY PAYMENTS Fixed Annuity payments are the same each month. We determine the dollar amount of each Fixed Annuity payment using the fixed portion of your Adjusted Account Value and the applicable Annuity Payment Rates. These will be either (1) the rates in your Contract, which are based on a minimum guaranteed interest rate of 2.5% per year, compounded annually, or (2) new rates we have published and are using on the Annuity Commencement Date, if they are more favorable. See "Annuity Payment Rates." MINIMUM PAYMENTS If your Adjusted Account Value is less than $2,000, or the first annuity payment for any Annuity Option is less than $20, we will pay the Adjusted Account Value to the Annuitant in one payment. 40 EXCHANGE OF VARIABLE ANNUITY UNITS During the Income Phase, the Annuitant may exchange Annuity Units in one Sub-Account for Annuity Units in another Sub-Account, up to 12 times each Account Year. To make an exchange, the Annuitant sends us, at our Annuity Mailing Address, a written request stating the number of Annuity Units in the Sub-Account he or she wishes to exchange and the new Sub-Account for which Annuity Units are requested. The number of new Annuity Units will be calculated so the dollar amount of an annuity payment on the date of the exchange would not be affected. To calculate this number, we use Annuity Unit values for the Valuation Period during which we receive the exchange request. Before exchanging Annuity Units in one Sub-Account for those in another, the Annuitant should carefully review the Fund prospectus(es) for the investment objectives and risk disclosure of the Funds in which the Sub-Accounts invest. During the Income Phase, we permit only exchanges among Sub-Accounts. No exchanges to or from a Fixed Annuity are permitted. ACCOUNT FEE During the Income Phase, we deduct the annual Account Fee of $35 in equal amounts from each Variable Annuity payment. We do not deduct the annual Account Fee from Fixed Annuity payments. ANNUITY PAYMENT RATES The Contracts contain Annuity Payment Rates for each Annuity Option described in this Prospectus. The rates show, for each $1,000 applied, the dollar amount of (a) the first monthly Variable Annuity payment based on the assumed interest rate specified in the applicable Contract (3% per year, compounded annually), and (b) the monthly Fixed Annuity payment, when this payment is based on the minimum guaranteed interest rate specified in the Contract (at least 2.5% per year, compounded annually). We may change these rates under Group Contracts for Accounts established after the effective date of such change (see "Other Contract Provisions -- Modification"). The Annuity Payment Rates may vary according to the Annuity Option elected and the adjusted age of the Annuitant. The Contracts also describe the method of determining the adjusted age of the Annuitant. The mortality table used in determining the Annuity Payment Rates for Annuity Options A, B and C is the Annuity 2000 Table. ANNUITY OPTIONS AS METHOD OF PAYMENT FOR DEATH BENEFIT You or your Beneficiary may also select one or more Annuity Options to be used in the event of the covered person's death before the Income Phase, as described under the "Death Benefit" section of this Prospectus. In that case, your Beneficiary will be the Annuitant. The Annuity Commencement Date will be the first day of the second month beginning after the Death Benefit Date. OTHER CONTRACT PROVISIONS EXERCISE OF CONTRACT RIGHTS An Individual Contract belongs to the individual to whom the Contract is issued. A Group Contract belongs to the Owner. In the case of a Group Contract, the Owner may expressly reserve all Contract rights and privileges; otherwise, each Annuitant will be entitled to exercise such rights and privileges. In any case, such rights and privileges can be exercised without the consent of the Beneficiary (other than an irrevocably designated Beneficiary) or any other person. Such rights and privileges may be exercised only during the lifetime of the Annuitant before the Annuity Commencement Date, except as the Contract otherwise provides. The Annuitant becomes the Payee on and after the Annuity Commencement Date. The Beneficiary becomes the Payee on the death of the Participant prior to the Annuity Commencement Date, or 41 on the death of the Annuitant after the Annuity Commencement Date. Such Payee may thereafter exercise such rights and privileges, if any, of ownership which continue. CHANGE OF OWNERSHIP Ownership of a Qualified Contract may not be transferred except to: (1) the Annuitant; (2) a trustee or successor trustee of a pension or profit sharing trust which is qualified under Section 401 of the Internal Revenue Code; (3) the employer of the Annuitant, provided that the Qualified Contract after transfer is maintained under the terms of a retirement plan qualified under Section 403(a) of the Internal Revenue Code for the benefit of the Annuitant; (4) the trustee or custodian of an individual retirement account plan qualified under Section 408 of the Internal Revenue Code for the benefit of the Participants under a Group Contract; or (5) as otherwise permitted from time to time by laws and regulations governing the retirement or deferred compensation plans for which a Qualified Contract may be issued. Subject to the foregoing, a Qualified Contract may not be sold, assigned, transferred, discounted or pledged as collateral for a loan or as security for the performance of an obligation or for any other purpose to any person other than the Company. The Owner of a Non-Qualified Contract may change the ownership of the Contract prior to the Annuity Commencement Date; and each Participant, in like manner, may change the ownership interest in a Contract. A change of ownership will not be binding on us until we receive written notification. When we receive such notification, the change will be effective as of the date on which the request for change was signed by the Owner or Participant, as appropriate, but the change will be without prejudice to us on account of any payment we make or any action we take before receiving the change. If you change the Owner of a Non-Qualified Contract, you will become immediately liable for the payment of taxes on any gain realized under the Contract prior to the change of ownership, including possible liability for a 10% federal excise tax. Change of ownership may affect the availability of optional death benefit riders or the expenses incurred with the optional death benefit riders. VOTING OF FUND SHARES We will vote Fund shares held by the Sub-Accounts at meetings of shareholders of the Funds or in connection with similar solicitations, but will follow voting instructions received from persons having the right to give voting instructions. During the Accumulation Phase, you will have the right to give voting instructions, in the case of a Group Contract where the Owner has reserved this right. During the Income Phase, the Payee -- that is the Annuitant or Beneficiary entitled to receive benefits -- is the person having such voting rights. We will vote any shares attributable to us and Fund shares for which no timely voting instructions are received in the same proportion as the shares for which we receive instructions from Owners, Participants and Payees, as applicable. Owners of Qualified Contracts issued on a group basis may be subject to other voting provisions of the particular plan and of the Investment Company Act of 1940. Employees who contribute to plans that are funded by the Contracts may be entitled to instruct the Owners as to how to instruct us to vote the Fund shares attributable to their contributions. Such plans may also provide the additional extent, if any, to which the Owners shall follow voting instructions of persons with rights under the plans. If no voting instructions are received from any such person with respect to a particular Participant Account, the Owner may instruct the Company as to how to vote the number of Fund shares for which instructions may be given. Neither the Variable Account nor the Company is under any duty to provide information concerning the voting instruction rights of persons who may have such rights under plans, other than rights afforded by the Investment Company Act of 1940, or any duty to inquire as to the instructions received or the authority of Owners, Participants or others, as applicable, to instruct the voting of Fund shares. Except as the Variable Account or the Company has actual knowledge to the contrary, the instructions given by Owners under Group Contracts and Payees will be valid as they affect the Variable Account, the Company and any others having voting instruction rights with respect to the Variable Account. 42 All Fund proxy material, together with an appropriate form to be used to give voting instructions, will be provided to each person having the right to give voting instructions at least 10 days prior to each meeting of the shareholders of the Fund. We will determine the number of Fund shares as to which each such person is entitled to give instructions as of the record date set by the Fund for such meeting, which is expected to be not more than 90 days prior to each such meeting. Prior to the Annuity Commencement Date, the number of Fund shares as to which voting instructions may be given to the Company is determined by dividing the value of all of the Variable Accumulation Units of the particular Sub-Account credited to the Participant Account by the net asset value of one Fund share as of the same date. On or after the Annuity Commencement Date, the number of Fund shares as to which such instructions may be given by a Payee is determined by dividing the reserve held by the Company in the Sub-Account with respect to the particular Payee by the net asset value of a Fund share as of the same date. After the Annuity Commencement Date, the number of Fund shares as to which a Payee is entitled to give voting instructions will generally decrease due to the decrease in the reserve. PERIODIC REPORTS During the Accumulation Period we will send you, or such other person having voting rights, at least once during each Account Year, a statement showing the number, type and value of Accumulation Units credited to your Account and the Fixed Accumulation Value of your Account, which statement shall be accurate as of a date not more than 2 months previous to the date of mailing. These periodic statements contain important information concerning your transactions with respect to your Contract. It is your obligation to review each such statement carefully and to report to us, at the address or telephone number provided on the statement, any errors or discrepancies in the information presented therein within 60 days of the date of such statement. Unless we receive notice of any such error or discrepancy from you within such period, we may not be responsible for correcting the error or discrepancy. In addition, every person having voting rights will receive such reports or prospectuses concerning the Variable Account and the Funds as may be required by the Investment Company Act of 1940 and the Securities Act of 1933. We will also send such statements reflecting transactions in your Account as may be required by applicable laws, rules and regulations. Upon request, we will provide you with information regarding fixed and variable accumulation values. SUBSTITUTION OF SECURITIES Shares of any or all Funds may not always be available for investment under the Contract. We may add or delete Funds or other investment companies as variable investment options under the Contract. We may also substitute for the shares held in any Sub-Account shares of another Fund or shares of another registered open-end investment company or unit investment trust, provided that the substitution has been approved, if required, by the SEC. In the event of any substitution pursuant to this provision, we may make appropriate endorsement to the Contract to reflect the substitution. CHANGE IN OPERATION OF VARIABLE ACCOUNT At our election and subject to any necessary vote by persons having the right to give instructions with respect to the voting of Fund shares held by the Sub-Accounts, the Variable Account may be operated as a management company under the Investment Company Act of 1940 or it may be deregistered under the Investment Company Act of 1940 in the event registration is no longer required. Deregistration of the Variable Account requires an order by the SEC. In the event of any change in the operation of the Variable Account pursuant to this provision, we may make appropriate endorsement to the Contract to reflect the change and take such other action as may be necessary and appropriate to effect the change. 43 SPLITTING UNITS We reserve the right to split or combine the value of Variable Accumulation Units, Annuity Units or any of them. In effecting any such change of unit values, strict equity will be preserved and no change will have a material effect on the benefits or other provisions of the Contract. MODIFICATION Upon notice to the Participant, in the case of an Individual Contract, and the Owner and Participant(s), in the case of a Group Contract (or the Payee(s) during the Income Phase), we may modify the Contract if such modification: (i) is necessary to make the Contract or the Variable Account comply with any law or regulation issued by a governmental agency to which the Company or the Variable Account is subject; (ii) is necessary to assure continued qualification of the Contract under the Internal Revenue Code or other federal or state laws relating to retirement annuities or annuity contracts; (iii) is necessary to reflect a change in the operation of the Variable Account or the Sub-Account(s) (see "Change in Operation of Variable Account"); (iv) provides additional Variable Account and/or fixed accumulation options; or (v) as may otherwise be in the best interests of Owners, Participants, or Payees, as applicable. In the event of any such modification, we may make appropriate endorsement in the Contract to reflect such modification. In addition, upon notice to the Owner, we may modify a Group Contract to change the withdrawal charges, Account Fee, mortality and expense risk charges, administrative expense charges, the tables used in determining the amount of the first monthly variable annuity and fixed annuity payments and the formula used to calculate the Market Value Adjustment, provided that such modification applies only to Participant Accounts established after the effective date of such modification. In order to exercise our modification rights in these particular instances, we must notify the Owner of such modification in writing. The notice shall specify the effective date of such modification which must be at least 60 days following the date we mail notice of modification. All of the charges and the annuity tables which are provided in the Group Contract prior to any such modification will remain in effect permanently, unless improved by the Company, with respect to Participant Accounts established prior to the effective date of such modification. DISCONTINUANCE OF NEW PARTICIPANTS We may limit or discontinue the acceptance of new Applications and the issuance of new Certificates under a Group Contract by giving 30 days prior written notice to the Owner. This will not affect rights or benefits with respect to any Participant Accounts established under such Group Contract prior to the effective date of such limitation or discontinuance. RESERVATION OF RIGHTS We reserve the right, to the extent permitted by law, to: (1) combine any 2 or more variable accounts; (2) add or delete Funds, sub-series thereof or other investment companies and corresponding Sub-Accounts; (3) add or remove Guarantee Periods available at any time for election by a Participant; and (4) restrict or eliminate any of the voting rights of Participants (or Owners) or other persons who have voting rights as to the Variable Account. Where required by law, we will obtain approval of changes from Participants or any appropriate regulatory authority. In the event of any change pursuant to this provision, we may make appropriate endorsement to the Contract to reflect the change. RIGHT TO RETURN If you are not satisfied with your Contract, you may return it by mailing or delivering it to us at our Annuity Mailing Address, as shown on the cover of this Prospectus, within 10 days after it was delivered to you. When we receive the returned Contract, it will be cancelled and we will refund to you your Account Value. 44 If applicable state law requires, we will return the full amount of any Purchase Payment(s) we received. State law may also require us to give you a longer "free look" period or allow you to return the Contract to your sales representative. If you are establishing an Individual Retirement Account ("IRA"), the Internal Revenue Code requires that we give you a disclosure statement containing certain information about the Contract and applicable legal requirements. We must give you this statement on or before the date the IRA is established. If we give you the disclosure statement before the seventh day preceding the date the IRA is established, you will not have any right of revocation under the Code. If we give you the disclosure statement at a later date, then you may give us a notice of revocation at any time within 7 days after your Contract Date. Upon such revocation, we will refund your Purchase Payment(s). This right of revocation with respect to an IRA is in addition to the return privilege set forth in the preceding paragraph. We allow a Participant establishing an IRA a "ten day free-look," notwithstanding the provisions of the Internal Revenue Code. TAX CONSIDERATIONS This section describes general federal income tax consequences of ownership of a contract based upon our understanding of current federal tax laws. Actual federal tax consequences may vary depending on, among other things, the type of retirement plan with which you use and where the site where your Contract was issued. Also, legislation affecting the current tax treatment of annuity contracts could be enacted in the future and could apply retroactively to Contracts that you purchased before the date of enactment. We make no attempt to consider any applicable federal estate, federal gift, state or other tax laws. We do not make any guarantee regarding the federal, state, or local tax status of any Contract or any transaction involving any Contract. You should consult a qualified tax professional for advice before purchasing a Contract or executing any other transaction (such as a rollover, distribution, withdrawal or payment) involving a Contract. U.S. FEDERAL INCOME TAX CONSIDERATIONS The following discussion applies only to those Contracts issued in the United States. For a discussion of tax considerations effecting Contracts issued in Puerto Rico, see "Puerto Rico Tax Considerations," below. DEDUCTIBILITY OF PURCHASE PAYMENTS For federal income tax purposes, Purchase Payments made under Non-Qualified Contracts are not deductible. PRE-DISTRIBUTION TAXATION OF CONTRACTS Generally, an increase in the value of a Contract will not give rise to tax, prior to distribution. However, corporate (or other non-natural person) Owners of a Non-Qualified Contract incur current tax, regardless of distributions, on Contract value increases. Such current taxation does not apply, though, to (i) immediate annuities, which the Internal Revenue Code (the "Code") defines as a single premium contract with an annuity commencement date within one year of the date of purchase which provides for a series of substantially equal periodic payments (to be made not less frequently than annually) during the annuity period, or (ii) any Contract that the non-natural person holds as agent for a natural person (such as where a bank or other entity holds a Contract as trustee under a trust agreement). You should note that qualified retirement investments generally provide tax deferral regardless of whether the underlying contract is an annuity. 45 DISTRIBUTIONS AND WITHDRAWALS FROM NON-QUALIFIED CONTRACTS The Account Value will include an amount attributable to Purchase Payments, the return of which is not taxable, and an amount attributable to investment earnings, the return of which is taxable at ordinary income rates. The relative portions of a distribution that derive from nontaxable Purchase Payments and taxable investment earnings depend upon the timing of the distribution. If you withdraw less than your entire Account Value under a Non-Qualified Contract before the Annuity Commencement Date, you must treat the withdrawal first as a return of investment earnings. You may treat only withdrawals in excess of the amount of the Account Value attributable to investment earnings as a return of Purchase Payments. Account Value amounts assigned or pledged as collateral for a loan will be treated as if withdrawn from the Contract. For purposes of determining a contract owner's income, the Code provides that all Non-Qualified deferred annuity contracts issued by the same company (or its affiliates) to the same contract owner during any calendar year shall be treated as one annuity contract. If a Payee receives annuity payments under a Non-Qualified Contract after the Annuity Commencement Date, however, the Payee treats a portion of each payment as a nontaxable return of Purchase Payments. In general, the nontaxable portion of such a payment bears the same ratio to the total payment as the Purchase Payments bear to the Payee's expected return under the Contract. The remainder of the payment constitutes a taxable return of investment earnings. Once the Payee has received nontaxable payments in an amount equal to total Purchase Payments, all future distributions constitute fully taxable ordinary income. If the Annuitant dies before the Payee recovers the full amount of Purchase Payments, the Payee may deduct an amount equal to the unrecovered Purchase Payments. Upon the transfer of a Non-Qualified Contract by gift (other than to the Participant's spouse), the Participant must treat an amount equal to the Account Value minus the total amount paid for the Contract as income. Death benefits paid upon the death of a contract owner generally are includable in the income of the recipient as follows: (1) if distributed in a lump sum, they are taxed in the same manner as a full surrender of the contract or (2) if distributed under an annuity option, they are taxed in the same manner as annuity payments, as described above. For this purpose, the "investment in the contract" is not affected by the owner's or annuitant's death, i.e., it remains generally the total Purchase Payments, less amounts previously received which were not includable in income. Special distribution rules apply upon the death of the owner. A penalty tax of 10% may apply to taxable cash withdrawals and lump-sum payments from Non-Qualified Contracts. This penalty will not apply in certain circumstances, such as distributions pursuant to the death of the Participant, distributions that are a part of a series of substantially equal periodic payments made annually under a lifetime annuity, or distributions under an immediate annuity (as defined above), or after age 59 1/2. DISTRIBUTIONS AND WITHDRAWALS FROM QUALIFIED CONTRACTS Generally, distributions from a Qualified Contract will constitute fully taxable ordinary income. Also, a 10% penalty tax will, except in certain circumstances, apply to distributions prior to age 59 1/2. If you receive an eligible rollover distribution from a qualified Contract (other than from a Contract issued for use with an individual retirement account) and roll over that distribution to another eligible plan, such distribution will not be includible in your income. However, such distribution is subject to 20% mandatory withholding as described below. An "eligible rollover distribution" is any distribution to you of all or any portion of the balance to the credit of you account, other than: - A distribution which is one of a series of substantially equal periodic payments made annually under a lifetime annuity or for a specified period of ten years or more; - Any required minimum distribution, or 46 - Any hardship distribution. Only you or your spouse may elect to roll over a distribution to an eligible retirement plan. WITHHOLDING In the case of an eligible rollover distribution (as defined above) from a Qualified Contract (other than from a Contract issued for use with an individual retirement account), we (or the plan administrator) must withhold and remit to the U.S. Government 20% of the distribution, unless the Participant or Payee elects to make a direct rollover of the distribution to another qualified retirement plan that is eligible to receive the rollover; however, only you or your spouse may elect a direct rollover. In the case of a distribution from (i) a Non-Qualified Contract, (ii) a Qualified Contract issued for use with an individual retirement account, or (iii) a Qualified Contract where the distribution is not an eligible rollover distribution, we will withhold and remit to the U.S. Government a part of the taxable portion of each distribution unless, prior to the distribution, the Participant or Payee provides us his or her taxpayer identification number and instructs us (in the manner prescribed) not to withhold. The Participant or Payee may credit against his or her federal income tax liability for the year of distribution any amounts that we (or the plan administrator) withhold. INVESTMENT DIVERSIFICATION AND CONTROL The Treasury Department has issued regulations that prescribe investment diversification requirements for mutual fund series underlying nonqualified variable contracts. Contracts must comply with these regulations to qualify as annuities for federal income tax purposes. Contracts that do not meet the guidelines are subject to current taxation on annual increases in value. We believe that each Fund available as an investment option under the Contract complies with these regulations. The preamble to the regulations states that the Internal Revenue Service may promulgate guidelines under which an owner's excessive control over investments underlying the contract will preclude the contract from qualifying as an annuity for federal tax purposes. We cannot predict whether such guidelines, if in fact promulgated, will be retroactive. We reserve the right to modify the Contract and/or the Variable Account to the extent necessary to comply with any such guidelines, but cannot assure that such modifications would satisfy any retroactive guidelines. TAX TREATMENT OF THE COMPANY AND THE VARIABLE ACCOUNT As a life insurance company under the Code, we will record and report operations of the Variable Account separately from other operations. The Variable Account will not, however, constitute a regulated investment company or any other type of taxable entity distinct from our other operations. We will not incur tax on the income of the Variable Account (consisting primarily of interest, dividends, and net capital gains) if we use this income to increase reserves under Contracts participating in the Variable Account. QUALIFIED RETIREMENT PLANS You may use Qualified Contracts with several types of qualified retirement plans. Because tax consequences will vary with the type of qualified retirement plan and the plan's specific terms and conditions, we provide below only brief, general descriptions of the consequences that follow from using Qualified Contracts in connection with various types of qualified retirement plans. We stress that the rights of any person to any benefits under these plans may be subject to the terms and conditions of the plans themselves, regardless of the terms of the Qualified Contracts that you are using. These terms and conditions may include restrictions on, among other things, ownership, transferability, assignability, contributions and distributions. PENSION AND PROFIT-SHARING PLANS Sections 401(a), 401(k) and 403(a) of the Code permit business employers and certain associations to establish various types of retirement plans for employees. The Tax Equity and Fiscal Responsibility Act of 1982 eliminated most differences between qualified retirement plans of corporations and 47 those of self-employed individuals. Self-employed persons, as a general rule, may therefore use Qualified Contracts as a funding vehicle for their retirement plans. TAX-SHELTERED ANNUITIES Section 403(b) of the Code permits public school employees and employees of certain types of charitable, educational and scientific organizations specified in Section 501(c)(3) of the Code to purchase annuity contracts and, subject to certain limitations, exclude the amount of purchase payments from gross income for tax purposes. The Code imposes restrictions on cash withdrawals from Section 403(b) annuities. If the Contracts are to receive tax-deferred treatment, cash withdrawals of amounts attributable to salary reduction contributions (other than withdrawals of accumulation account value as of December 31, 1988) may be made only when the Participant attains age 59 1/2, separates from service with the employer, dies or becomes disabled (within the meaning of Section 72(m)(7) of the Code). These restrictions apply to (i) any post-1988 salary reduction contributions, (ii) any growth or interest on post-1988 salary reduction contributions, and (iii) any growth or interest on pre-1989 salary reduction contributions that occurs on or after January 1, 1989. It is permissible, however, to withdraw post-1988 salary reduction contributions (but not the earnings attributable to such contributions) in cases of financial hardship. While the Internal Revenue Service has not issued specific rules defining financial hardship, we expect that to qualify for a hardship distribution, the Participant must have an immediate and heavy bona fide financial need and lack other resources reasonably available to satisfy the need. Hardship withdrawals (as well as certain other premature withdrawals) will be subject to a 10% tax penalty, in addition to any withdrawal charge applicable under the Contracts. Under certain circumstances the 10% tax penalty will not apply if the withdrawal is for medical expenses. Under the terms of a particular Section 403(b) plan, the Participant may be entitled to transfer all or a portion of the Account Value to one or more alternative funding options. Participants should consult the documents governing their plan and the person who administers the plan for information as to such investment alternatives. INDIVIDUAL RETIREMENT ACCOUNTS Sections 219 and 408 of the Code permit eligible individuals to contribute to an individual retirement program, including Simplified Employee Pension Plans, Employer/Association of Employees Established Individual Retirement Account Trusts, and Simple Retirement Accounts. Such IRAs are subject to limitations on contribution levels, the persons who may be eligible, and on the time when distributions may commence. In addition, certain distributions from some other types of retirement plans may be placed in an IRA on a tax-deferred basis. If we sell Contracts for use with IRAs, the Internal Revenue Service or other agency may impose supplementary information requirements. We will provide purchasers of the Contracts for such purposes with any necessary information. You will have the right to revoke the Contract under certain circumstances, as described in the section of this Prospectus entitled "Right to Return." ROTH IRAS Section 408A of the Code permits an individual to contribute to an individual retirement program called a Roth IRA. Unlike contributions to a traditional IRA under Section 408 of the Code, contributions to a Roth IRA are not tax-deductible. Provided certain conditions are satisfied, distributions are generally tax-free. Like traditional IRAs, Roth IRAs are subject to limitations on contribution amounts and the timing of distributions. If an individual converts a traditional IRA into a Roth IRA the full amount of the IRA is included in taxable income. The Internal Revenue Service and other agencies may impose special information requirements with respect to Roth IRAs. We will provide the necessary information for Contracts issued in connection with Roth IRAs. 48 STATUS OF OPTIONAL DEATH BENEFIT RIDERS Under the Code, IRAs may not invest in life insurance policies. Regulations issued by the Treasury Department provide that death benefits under IRAs do not violate this rule, provided that the death benefit is no more than the greater of the total premiums paid (net of prior withdrawals) or the cash value of the IRA. In certain circumstances, the death benefit payable under the Contract's Optional Death Benefit Riders may exceed both the total premiums paid (net of prior withdrawals) and the cash value of the Contract. We have filed the Contract and the EEB Plus, EEB Plus MAV, and EEB Plus 5% Roll-Up Optional Death Benefit Riders ("New Riders") with the Internal Revenue Service ("IRS") requesting a ruling approving the use of the Contract with the New Riders as an IRA. We have already received a favorable determination letter with respect to the following Optional Death Benefit Riders: EEB; MAV; 5% Roll-Up; EEB and MAV; EEB and 5% Roll-Up; MAV and 5% Roll-Up; and EEB and MAV and 5% Roll-Up ("Old Riders"). Although we regard the New Riders as an investment protection feature that should not result in adverse tax treatment, WE GIVE NO ASSURANCE THAT THE IRS WILL APPROVE THE USE OF THE CONTRACT WITH THE NEW RIDERS IN IRAS. DENIAL OF OUR REQUEST BY THE IRS COULD RESULT IN TAXATION OF THE ENTIRE BALANCE OF YOUR IRA AND PENALTY TAXES. You should consult a qualified tax adviser before adding any of the New Riders to your Contract if it is an IRA. PUERTO RICO TAX CONSIDERATIONS The Contract offered by this Prospectus is considered an annuity contract under Section 1022 of the Puerto Rico Internal Revenue Code of 1994, as amended (the "1994 Code"). Under the current provisions of the 1994 Code, no income tax is payable on increases in value of accumulation shares of annuity units credited to a variable annuity contract until payments are made to the annuitant or other payee under such contract. When payments are made from your Contract in the form of an annuity, the annuitant or other payee will be required to include as gross income the lesser of the amounts received during the taxable year or the portion of each payment equal to 3% of the aggregate premiums or other consideration paid for the annuity. The amount, if any, in excess of the included amount is excluded from gross income. After an amount equal to the aggregate amount excluded from gross income has been received, all of the annuity payments are considered to be taxable income. When a payment under a Contract is made in a lump sum, the amount of the payment would be included in the gross income of the Annuitant or other Payee to the extent it exceeds the Annuitant's aggregate premiums or other consideration paid. The provisions of the 1994 Code with respect to qualified retirement plans described in this Prospectus vary significantly from those under the Internal Revenue Code. Although we currently offer the Contract in Puerto Rico in connection with qualified retirement plans, the text of this Prospectus under the heading "Federal Tax Status" dealing with such qualified retirement plans is inapplicable to Puerto Rico and should be disregarded. For information regarding the income tax consequences of owning a Contract, you should consult a qualified tax adviser. ADMINISTRATION OF THE CONTRACT We perform certain administrative functions relating to the Contract, Participant Accounts, and the Variable Account. These functions include, but are not limited to, maintaining the books and records of the Variable Account and the Sub-Accounts; maintaining records of the name, address, taxpayer identification number, Contract number, Participant Account number and type, the status of each Participant Account and other pertinent information necessary to the administration and operation of the Contract; processing Applications, Purchase Payments, transfers and full and partial withdrawals; issuing Contracts and Certificates; administering annuity payments; furnishing accounting and 49 valuation services; reconciling and depositing cash receipts; providing confirmations; providing toll-free customer service lines; and furnishing telephonic transfer services. DISTRIBUTION OF THE CONTRACT We offer the Contract on a continuous basis. Contracts are sold by licensed insurance agents in those states where the Contract may be lawfully sold. Such agents will be registered representatives of broker-dealers registered under the Securities Exchange Act of 1934 who are members of the National Association of Securities Dealers, Inc. and who have entered into distribution agreements with the Company and the general distributor, Clarendon Insurance Agency, Inc. ("Clarendon"), One Sun Life Executive Park, Wellesley Hills, Massachusetts 02481. Clarendon, a wholly-owned subsidiary of the Company, is registered with the SEC under the Securities Exchange Act of 1934 as a broker-dealer and is a member of the National Association of Securities Dealers, Inc. Commissions and other distribution compensation will be paid by the Company to the selling agents and will not be more than 6.50% of Purchase Payments. In addition, after the first Account Year, broker-dealers who have entered into distribution agreements with the Company may receive an annual renewal commission of no more than 0.50% of the Participant's Account Value. In addition to commissions, the Company may, from time to time, pay or allow additional promotional incentives, in the form of cash or other compensation. We reserve the right to offer these additional incentives only to certain broker-dealers that sell or are expected to sell during specified time periods certain minimum amounts of Contracts or Certificates or other contracts offered by the Company. Promotional incentives may change at any time. Commissions may be waived or reduced in connection with certain transactions described in this Prospectus under the heading "Waivers; Reduced Charges; Credits; Special Guaranteed Interest Rates." During 2000, $0 in commissions was paid to and retained by Clarendon in connection with the distribution of the Contracts. PERFORMANCE INFORMATION From time to time the Variable Account may publish reports to shareholders, sales literature and advertisements containing performance information relating to the Sub-Accounts. This information may include standardized and non-standardized "Average Annual Total Return," "Cumulative Growth Rate" and "Compound Growth Rate." We may also advertise "yield" and "effective yield" for some variable options. Average Annual Total Return measures the net income of the Sub-Account and any realized or unrealized gains or losses of the Fund in which it invests, over the period stated. Average Annual Total Return figures are annualized and represent the average annual percentage change in the value of an investment in a Sub-Account over that period. Standardized Average Annual Total Return information covers the period after the Variable Account was established or, if shorter, the life of the Series. Non-standardized Average Annual Total Return covers the life of each Fund, which may predate the Variable Account. Cumulative Growth Rate represents the cumulative change in the value of an investment in the Sub-Account for the period stated, and is arrived at by calculating the change in the Accumulation Unit Value of a Sub-Account between the first and the last day of the period being measured. The difference is expressed as a percentage of the Accumulation Unit Value at the beginning of the base period. "Compound Growth Rate" is an annualized measure, calculated by applying a formula that determines the level of return which, if earned over the entire period, would produce the cumulative return. Average Annual Total Return figures assume an initial purchase payment of $1,000 and reflect all applicable withdrawal and Contract charges. The Cumulative Growth Rate and Compound Growth Rate figures that we advertise do not reflect withdrawal charges or the Account Fee, although such figures do reflect all recurring charges. Results calculated without withdrawal and/or certain Contract charges will be higher. We may also use other types of rates of return that do not reflect withdrawal and Contract charges. The performance figures used by the Variable Account are based on the actual historical performance of the underlying Funds for the specified periods, and the figures are not intended to indicate 50 future performance. For periods before the date the Contracts became available, we calculate the performance information for the Sub-Account on a hypothetical basis. To do this, we reflect deductions of the current Contract fees and charges from the historical performance of the corresponding Funds. Yield is a measure of the net dividend and interest income earned over a specific one month or 30-day period (7-day period for the available Money Market Sub-Account), expressed as a percentage of the value of the Sub-Account's Accumulation Units. Yield is an annualized figure, which means that we assume that the Sub-Account generates the same level of net income over a one-year period and compound that income on a semi-annual basis. We calculate the effective yield for the Money Market Sub-Account similarly, but include the increase due to assumed compounding. The Money Market Sub-Account's effective yield will be slightly higher than its yield as a result of its compounding effect. The Variable Account may also from time to time compare its investment performance to various unmanaged indices or other variable annuities and may refer to certain rating and other organizations in its marketing materials. More information on performance and our computations is set forth in the Statement of Additional Information. The Company may also advertise the ratings and other information assigned to it by independent industry ratings organizations. Some of these organizations are A.M. Best, Moody's Investor's Service, Standard and Poor's Insurance Rating Services, and Duff and Phelps. Each year A.M. Best reviews the financial status of thousands of insurers, culminating in the assignment of Best's rating. These ratings reflect A.M. Best's current opinion of the relevant financial strength and operating performance of an insurance company in comparison to the norms of the life/health industry. Best's ratings range from A++ to F. Standard and Poor's and Duff and Phelps' ratings measure the ability of an insurance company to meet its obligations under insurance policies it issues. These two ratings do not measure the insurance company's ability to meet non-policy obligations. Ratings in general do not relate to the performance of the Sub-Accounts. We may also advertise endorsements from organizations, individuals or other parties that recommend the Company or the Contracts. We may occasionally include in advertisements (1) comparisons of currently taxable and tax deferred investment programs, based on selected tax brackets; or (2) discussions of alternative investment vehicles and general economic conditions. AVAILABLE INFORMATION The Company and the Variable Account have filed with the SEC registration statements under the Securities Act of 1933 relating to the Contracts. This Prospectus does not contain all of the information contained in the registration statements and their exhibits. For further information regarding the Variable Account, the Company and the Contracts, please refer to the registration statements and their exhibits. In addition, the Company is subject to the informational requirements of the Securities Exchange Act of 1934. We file reports and other information with the SEC to meet these requirements. You can inspect and copy this information and our registration statements at the SEC's public reference facilities at the following locations: WASHINGTON, D.C. -- 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549; CHICAGO, ILLINOIS -- 500 West Madison Street, Chicago, IL 60661; NEW YORK, NEW YORK -- 7 World Trade Center, 13th Floor, New York, NY 10048. The Washington, D.C. office will also provide copies by mail for a fee. You may also find these materials on the SEC's website (http:// www.sec.gov). INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The Company's Annual Report on Form 10-K for the year ended December 31, 2000 filed with the SEC pursuant to Section 13 (a) or 15 (d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") is incorporated herein by reference. All documents or reports we file pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, after the date of this prospectus and prior to the termination of the offering, shall be deemed incorporated by reference into the prospectus. 51 The Company will furnish, without charge, to each person to whom a copy of this Prospectus is delivered, upon the written or oral request of such person, a copy of the documents referred to above which have been incorporated by reference into this Prospectus, other than exhibits to such document (unless such exhibits are specifically incorporated by reference in this Prospectus). Requests for such document should be directed to the Secretary, Sun Life Assurance Company of Canada (U.S.), One Sun Life Executive Park, Wellesley Hills, Massachusetts 02481, telephone (800) 225-3950. STATE REGULATION The Company is subject to the laws of the State of Delaware governing life insurance companies and to regulation by the Commissioner of Insurance of Delaware. An annual statement is filed with the Commissioner of Insurance on or before March lst in each year relating to the operations of the Company for the preceding year and its financial condition on December 31st of such year. Its books and records are subject to review or examination by the Commissioner or his agents at any time and a full examination of its operations is conducted at periodic intervals. The Company is also subject to the insurance laws and regulations of the other states and jurisdictions in which it is licensed to operate. The laws of the various jurisdictions establish supervisory agencies with broad administrative powers with respect to licensing to transact business, overseeing trade practices, licensing agents, approving policy forms, establishing reserve requirements, fixing maximum interest rates on life insurance policy loans and minimum rates for accumulation of surrender values, prescribing the form and content of required financial statements and regulating the type and amounts of investments permitted. Each insurance company is required to file detailed annual reports with supervisory agencies in each of the fire jurisdictions in which it does business and its operations and accounts are subject to examination by such agencies at regular intervals. In addition, many states regulate affiliated groups of insurers, such as the Company, Sun Life (Canada) and its affiliates, under insurance holding company legislation. Under such laws, inter-company transfers of assets and dividend payments from insurance subsidiaries may be subject to prior notice or approval, depending on the size of such transfers and payments in relation to the financial positions of the companies involved. Under insurance guaranty fund laws in most states, insurers doing business therein can be assessed (up to prescribed limits) for policyholder losses incurred by insolvent companies. The amount of any future assessments of the Company under these laws cannot be reasonably estimated. However, most of these laws do provide that an assessment may be excused or deferred if it would threaten an insurer's own financial strength and many permit the deduction of all or a portion of any such assessment from any future premium or similar taxes payable. Although the federal government generally does not directly regulate the business of insurance, federal initiatives often have an impact on the business in a variety of ways. Current and proposed federal measures which may significantly affect the insurance business include employee benefit regulation, removal of barriers preventing banks from engaging in the insurance business, tax law changes affecting the taxation of insurance companies, the tax treatment of insurance products and its impact on the relative desirability of various personal investment vehicles. LEGAL PROCEEDINGS There are no pending legal proceedings affecting the Variable Account. We and our subsidiaries are engaged in various kinds of routine litigation which, in management's judgment, is not of material importance to our respective total assets or material with respect to the Variable Account. ACCOUNTANTS The financial statements of the Variable Account for the year ended December 31, 2000, and the consolidated financial statements of the Company for the years ended December 31, 2000, 1999 and 1998, both included in the Statement of Additional Information ("SAI") filed in the Company's Registration Statement under the Investment Company Act of 1940, have been audited by Deloitte & Touche LLP, independent auditors, as stated in their reports appearing herein, and are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. 52 FINANCIAL STATEMENTS The financial statements of the Company which are included in the SAI should be considered only as bearing on the ability of the Company to meet its obligations with respect to amounts allocated to the Fixed Account and with respect to the death benefit and the Company's assumption of the mortality and expense risks. They should not be considered as bearing on the investment performance of the Fund shares held in the Sub-Accounts of the Variable Account. The financial statements of the Variable Account for the year ended December 31, 2000 are also included in the SAI. TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION Calculation of Performance Data Advertising and Sales Literature Calculations Example of Variable Accumulation Unit Value Calculation Example of Variable Annuity Unit Calculation Example of Variable Annuity Payment Calculation Distribution of the Contracts Designation and Change of Beneficiary Custodian Financial Statements
53 This Prospectus sets forth information about the Contract and the Variable Account that a prospective purchaser should know before investing. Additional information about the Contract and the Variable Account has been filed with the Securities and Exchange Commission in a Statement of Additional Information dated May 1, 2001 which is incorporated herein by reference. The Statement of Additional Information is available upon request and without charge from Sun Life Assurance Company of Canada (U.S.). To receive a copy, return this request form to the address shown below or telephone (888) 786-2435. -------------------------------------------------------------------------------- To: Sun Life Assurance Company of Canada (U.S.) c/o Retirement Products and Services P.O. Box 9133 Boston, Massachusetts 02117 Please send me a Statement of Additional Information for Futurity III Variable and Fixed Annuity Sun Life of Canada (U.S.) Variable Account F. Name --------------------------------------------- Address --------------------------------------------- --------------------------------------------- City ------------------------- State ---------- Zip ----- Telephone ------------------------------------------------------------
54 APPENDIX A GLOSSARY The following terms as used in this Prospectus have the indicated meanings: ACCOUNT or PARTICIPANT ACCOUNT: An account established for each Participant to which Net Purchase Payments are credited. ACCOUNT VALUE: The Variable Accumulation Value, if any, plus the Fixed Accumulation Value, if any, of your Account for any Valuation Period. ACCOUNT YEAR and ACCOUNT ANNIVERSARY: Your first Account Year is the period 365 days from the date on which we issued your Contract. Your Account Anniversary is the last day of an Account Year. Each Account Year after the first is the 365-day period that begins on your Account Anniversary. For example, if the Contract Date is on March 12, the first Account Year is determined from the Contract Date and ends on March 12 of the following year. Your Account Anniversary is March 12 and all Account Years after the first are measured from March 12. (If the Anniversary Date falls on a non-business day, the previous business day will be used.) ACCUMULATION PHASE: The period before the Annuity Commencement Date and during the lifetime of the Annuitant during which you make Purchase Payments under the Contract. This is called the "Accumulation Period" in the Contract. *ANNUITANT: The person or persons to whom the first annuity payment is made. If the Annuitant dies prior to the Annuity Commencement Date, the Co-Annuitant will become the sole Annuitant. If the Co-Annuitant dies or if no Co-Annuitant is named, the Participant becomes the Annuitant upon the Annuitant's death prior to the Annuity Commencement Date. If you have not named a sole Annuitant on the 30th day before the Annuity Commencement Date and both the Annuitant and Co-Annuitant are living, the Co-Annuitant will be the sole Annuitant/Payee during the Income Phase. ANNUITY COMMENCEMENT DATE: The date on which the first annuity payment under each Contract is to be made. ANNUITY OPTION: The method you choose for making annuity payments. ANNUITY UNIT: A unit of measure used in the calculation of the amount of the second and each subsequent Variable Annuity payment from the Variable Account. APPLICATION: The document signed by you or other evidence acceptable to us that serves as your application for participation under a Group Contract or purchase of an Individual Contract. *BENEFICIARY: Prior to the Annuity Commencement Date, the person or entity having the right to receive the death benefit and, for Non-Qualified Contracts, who, in the event of the Participant's death, is the "designated beneficiary" for purposes of Section 72(s) of the Internal Revenue Code. After the Annuity Commencement Date, the person or entity having the right to receive any payments due under the Annuity Option elected, if applicable, upon the death of the Payee. BUSINESS DAY: Any day the New York Stock Exchange is open for trading. Also, any day on which we make a determination of the value of a Variable Accumulation Unit. CERTIFICATE: The document for each Participant which evidences the coverage of the Participant under a Group Contract. COMPANY: Sun Life Assurance Company of Canada (U.S.). CONTRACT: Any Individual Contract, Group Contract, or Certificate issued under a Group Contract. CONTRACT DATE: The date on which we issue your Contract. This is called the "Date of Coverage" in the Contract. * You specify these items on the Application, and may change them, as we describe in this Prospectus. 55 COVERED PERSON: The person(s) identified as such in the Contract whose death will trigger the death benefit provisions of the Contract and whose medically necessary stay in a hospital or nursing facility may allow the Participant to be eligible for a waiver of the withdrawal charge. Unless otherwise noted, the the Participant/Owner is the Covered Person. DEATH BENEFIT DATE: If you have elected a death benefit payment option before the Covered Person's death that remains in effect, the date on which we receive Due Proof of Death. If your Beneficiary elects the death benefit payment option, the later of (a) the date on which we receive the Beneficiary's election and (b) the date on which we receive Due Proof of Death. If we do not receive the Beneficiary's election within 60 days after we receive Due Proof of Death, the Death Benefit Date will be the last day of the 60 day period and we will pay the death benefit in one lump sum. DUE PROOF OF DEATH: An original certified copy of an official death certificate, an original certified copy of a decree of a court of competent jurisdiction as to the finding of death, or any other proof satisfactory to the Company. FIXED ACCOUNT: The general account of the Company, consisting of all assets of the Company other than those allocated to a separate account of the Company. FIXED ACCOUNT VALUE: The value of that portion of your Account allocated to the Fixed Account. FIXED ANNUITY: An annuity with payments which do not vary as to dollar amount. FUND: A registered management investment company, or series thereof, in which assets of a Sub-Account may be invested. GROUP CONTRACT: A Contract issued by the Company on a group basis. GUARANTEE AMOUNT: Each separate allocation of Account Value to a particular Guarantee Period (including interest earned thereon). GUARANTEE PERIOD: The period for which a Guaranteed Interest Rate is credited. GUARANTEED INTEREST RATE: The rate of interest we credit on a compound annual basis during any Guarantee Period. INCOME PHASE: The period on and after the Annuity Commencement Date and during the lifetime of the Annuitant during which we make annuity payments under the Contract. INDIVIDUAL CONTRACT: A Contract issued by the Company on an individual basis. NET INVESTMENT FACTOR: An index applied to measure the investment performance of a Sub-Account from one Valuation Period to the next. The Net Investment Factor may be greater or less than or equal to one. NET PURCHASE PAYMENT (NET PAYMENTS): The portion of a Purchase Payment which remains after the deduction of any applicable premium tax or similar tax. NON-QUALIFIED CONTRACT: A Contract used in connection with a retirement plan that does not receive favorable federal income tax treatment under Sections 401, 403, 408, or 408A of the Internal Revenue Code. The Participant's interest in the Contract must be owned by a natural person or agent for a natural person for the Contract to receive income tax treatment as an annuity. *OWNER: The person, persons or entity entitled to the ownership rights stated in a Group Contract and in whose name or names the Group Contract is issued. The Owner may designate a trustee or custodian of a retirement plan which meets the requirements of Section 401, Section 408(c), Section 408(k), Section 408(p) or Section 408A of the Internal Revenue Code to serve as legal owner of assets of a retirement plan, but the term "Owner," as used herein, shall refer to the organization entering into the Group Contract. * You specify these items on the Application, and may change them, as we describe in this Prospectus. 56 *PARTICIPANT: In the case of an Individual Contract, the owner of the Contract. In the case of a Group Contract, the person named in the Contract who is entitled to exercise all rights and privileges of ownership under the Contract, except as reserved by the Owner. If there are two Participants, the death benefit is paid upon the death of either Participant. PAYEE: A recipient of payments under a Contract. The term includes an Annuitant or a Beneficiary who becomes entitled to benefits upon the death of the Participant, or on the Annuity Commencement Date. PURCHASE PAYMENT (PAYMENT): An amount paid to the Company as consideration for the benefits provided by a Contract. QUALIFIED CONTRACT: A Contract used in connection with a retirement plan which may receive favorable federal income tax treatment under Sections 401, 403, 408 or 408A of the Internal Revenue Code of 1986, as amended. RENEWAL DATE: The last day of a Guarantee Period. SUB-ACCOUNT: That portion of the Variable Account which invests in shares of a specific Fund. VALUATION PERIOD: The period of time from one determination of Variable Accumulation Unit or Annuity Unit values to the next subsequent determination of these values. Value determinations are made as of the close of the New York Stock Exchange on each day that the Exchange is open for trading. VARIABLE ACCOUNT: Variable Account F of the Company, which is a separate account of the Company consisting of assets set aside by the Company, the investment performance of which is kept separate from that of the general assets of the Company. VARIABLE ACCUMULATION UNIT: A unit of measure used in the calculation of Variable Account Value. VARIABLE ACCOUNT VALUE: The value of that portion of your Account allocated to the Variable Account. VARIABLE ANNUITY: An annuity with payments which vary as to dollar amount in relation to the investment performance of the Variable Account. * You specify these items on the Application, and may change them, as we describe in this Prospectus. 57 APPENDIX B WITHDRAWALS, WITHDRAWAL CHARGES AND THE MARKET VALUE ADJUSTMENT PART 1: VARIABLE ACCOUNT (THE MARKET VALUE ADJUSTMENT DOES NOT APPLY TO THE VARIABLE ACCOUNT) WITHDRAWAL CHARGE CALCULATION: FULL WITHDRAWAL: Assume a Purchase Payment of $40,000 is made on the Contract Date, no additional Purchase Payments are made and there are no partial withdrawals. The table below presents three examples of the withdrawal charge resulting from a full withdrawal of your Account, based on hypothetical Account Values.
PAYMENT HYPOTHETICAL CUMULATIVE FREE SUBJECT TO WITHDRAWAL WITHDRAWAL ACCOUNT ACCOUNT ANNUAL ANNUAL WITHDRAWAL WITHDRAWAL CHARGE CHARGE YEAR VALUE EARNINGS EARNINGS AMOUNT CHARGE PERCENTAGE AMOUNT -------- ------------ -------- ---------- ---------- ---------- ---------- ---------- (a) 1 $41,000 $1,000 $ 1,000 $ 6,000 $35,000 7.00% $2,450 2 $45,100 $4,100 $ 5,100 $ 6,000 $39,100 7.00% $2,737 3 $49,600 $4,500 $ 9,600 $ 9,600 $40,000 6.00% $2,400 (b) 4 $52,100 $2,500 $12,100 $12,100 $40,000 6.00% $2,400 5 $57,300 $5,200 $17,300 $17,300 $40,000 5.00% $2,000 6 $63,000 $5,700 $23,000 $23,000 $40,000 4.00% $1,600 7 $66,200 $3,200 $26,200 $26,200 $40,000 3.00% $1,200 (c) 8 $72,800 $6,600 $32,800 $32,800 $ 0 0.00% $ 0
(a) The free withdrawal amount in any year is equal to the greater of (1) the Contract's earnings that were not previously withdrawn, and (2) 15% of any Purchase Payments made in the last 7 Account Years ("New Payments"). In Account Year 1, the free withdrawal amount is $6,000, which equals 15% of the Purchase Payment of $40,000. On a full withdrawal of $41,000, the amount subject to a withdrawal charge is $35,000, which equals the Account Value of $41,000 minus the free withdrawal amount of $6,000. (b) In Account Year 4, the free withdrawal amount is $12,100, which equals the prior Contract's cumulative earnings to date. On a full withdrawal of $52,100, the amount subject to a withdrawal charge is $40,000. (c) In Account Year 8, the free withdrawal amount is $32,800, which equals the Contract's cumulative earnings to date. On a full withdrawal of $72,800, the amount subject to a withdrawal charge is $0, since the New Payments equal $0. PARTIAL WITHDRAWAL Assume a single Purchase Payment of $40,000 is made on the Contract Date, no additional Purchase Payments are made, no partial withdrawals have been taken prior to the fourth Account Year, and there are a series of 4 partial withdrawals made during the fourth Account Year of $4,000, $9,000, $12,000, and $20,000.
REMAINING HYPOTHETICAL FREE AMOUNT OF ACCOUNT WITHDRAWAL WITHDRAWAL VALUE AMOUNT SUBJECT TO WITHDRAWAL WITHDRAWAL ACCOUNT BEFORE CUMULATIVE AMOUNT OF AFTER WITHDRAWAL CHARGE CHARGE YEAR WITHDRAWAL EARNINGS EARNINGS WITHDRAWAL WITHDRAWAL CHARGE PERCENTAGE AMOUNT --------------------- ------------ -------- ---------- ---------- ---------- ---------- ---------- ---------- 1 $41,000 $1,000 $ 1,000 $ 0 $6,000 $ 0 7.00% $ 0 2 $45,100 $4,100 $ 5,100 $ 0 $6,000 $ 0 7.00% $ 0 3 $49,600 $4,500 $ 9,600 $ 0 $9,600 $ 0 6.00% $ 0 4 (a) $50,100 $ 500 $10,100 $ 4,000 $6,100 $ 0 6.00% $ 0 4 (b) $46,900 $ 800 $10,900 $ 9,000 $ 0 $ 2,100 6.00% $ 126 4 (c) $38,500 $ 600 $11,500 $12,000 $ 0 $11,400 6.00% $ 684 4 (d) $26,900 $ 400 $11,900 $20,000 $ 0 $19,600 6.00% $1,176 HYPOTHETICAL ACCOUNT VALUE ACCOUNT AFTER YEAR WITHDRAWAL --------------------- ------------ 1 $41,000 2 $45,100 3 $49,600 4 (a) $46,100 4 (b) $37,900 4 (c) $26,500 4 (d) $ 6,900
58 (a) In Account Year 4, the free withdrawal amount is $10,100, which equals the Contract's cumulative earnings to date. The partial withdrawal amount of $4,000 is less than the free withdrawal amount, so there is no withdrawal charge. (b) Since a partial withdrawal of $4,000 was taken, the remaining free withdrawal amount in Account Year 4 is $10,900 - $4,000 = $6,900. Therefore, $6,900 of the $9,000 withdrawal is not subject to a withdrawal charge, and $2,100 is subject to a withdrawal charge. Of the $13,000 withdrawn to date, $10,900 has been from the free withdrawal amount and $2,100 has been from deposits. (c) Since $10,900 of the 2 prior Account Year 4 partial withdrawals was taken from the free withdrawal amount, the remaining free withdrawal amount in Account year 4 is $11,500 - $10,900 = $600. Therefore, $600 of the $12,000 withdrawal is not subject to a withdrawal charge, and $11,400 is subject to a withdrawal charge. Of the $25,000 withdrawn to date, $11,500 has been from the free withdrawal amount and $13,500 has been from deposits. (d) Since $11,500 of the 3 prior Account Years' 4 partial withdrawals was taken from the free withdrawal amount, the remaining free withdrawal amount in Account Year 4 is $11,900 - $11,500 = $400. Therefore, $400 of the $20,000 withdrawal is not subject to a withdrawal charge, and $19,600 is subject to a withdrawal charge. Of the $45,000 withdrawn to date, $11,900 has been from the free withdrawal amount and $33,100 has been from deposits. Note that if the $6,900 hypothetical Account Value after withdrawal were withdrawn, it would all be from deposits and subject to a withdrawal charge. The withdrawal charge would be 6% of $6,900, which equals $414. The total Account Year 4 withdrawal charges would then be $2,400, which is the same amount that was assessed for a full liquidation in Account Year 4 in the example of a full withdrawal on the previous page. PART 2 -- FIXED ACCOUNT -- EXAMPLES OF THE MARKET VALUE ADJUSTMENT ("MVA") The MVA Factor is: N/12 1 + I ( -------- ) -1 1 + J + b These examples assume the following: (1) The Guarantee Amount was allocated to a 5-year Guarantee Period with a Guaranteed Interest Rate of 6% or .06. (2) The date of surrender is 2 years from the Expiration Date (N = 24). (3) The value of the Guarantee Amount on the date of surrender is $11,910.16. (4) The interest earned in the current Account Year is $674.16. (5) No transfers or partial withdrawals affecting this Guarantee Amount have been made. (6) Withdrawal charges, if any, are calculated in the same manner as shown in the examples in Part 1. 59 EXAMPLE OF A NEGATIVE MVA: Assume that on the date of surrender, the current rate (J) is 8% or .08 and the b factor is zero. N/12 1 + I The MVA factor = ( -------- ) -1 1 + J + b 24/12 1 + .06 = ( ------ ) -1 1 + .08 = (.981)TO THE POWER OF (2) -1 = .963 -1 = - .037 The value of the Guarantee Amount less interest credited to the Guarantee Amount in the current Account Year is multiplied by the MVA factor to determine the MVA: ($11,910.16 - $674.16) X (-.037) = -$415.73 -$415.73 represents the MVA that will be deducted from the value of the Guarantee Amount before the deduction of any withdrawal charge. For a partial withdrawal of $2,000 from this Guarantee Amount, the MVA would be ($2,000.00 - $674.16) X (-.037) = -$49.06. -$49.06 represents the MVA that will be deducted from the partial withdrawal amount before the deduction of any withdrawal charge. EXAMPLE OF A POSITIVE MVA: Assume that on the date of surrender, the current rate (J) is 5% or .05 and the b factor is zero. N/12 1 + I The MVA factor = ( -------- ) -1 1 + J + b 24/12 1 + .06 = ( ------ ) -1 1 + .05 = (1.010)TO THE POWER OF (2) -1 = 1.019 -1 = .019 The value of the Guarantee Amount less interested credit to the Guarantee Amount in the current Account Year is multiplied by the MVA factor to determine the MVA: ($11,910.16 - $674.16) X .019 = $213.48 $213.48 represents the MVA that would be added to the value of the Guarantee Amount before the deduction of any withdrawal charge. For a partial withdrawal of $2,000 from this Guarantee Amount, the MVA would be ($2,000.00 - $674.16) X .019 = $25.19. $25.19 represents the MVA that would be added to the value of the partial withdrawal amount before the deduction of any withdrawal charge. 60 APPENDIX C CALCULATION OF BASIC DEATH BENEFIT EXAMPLE 1: Assume a Purchase Payment of $60,000.00 is made on the Contract Date and an additional Purchase Payment of $40,000.00 is made one year later. Assume that all of the money is invested in the Sub-Accounts, that no Withdrawals are made and that the Account Value on the Death Benefit Date is $80,000.00. The calculation of the Death Benefit to be paid is as follows: The Basic Death Benefit is the greatest of: Account Value = $ 80,000.00 Cash Surrender Value* = $ 76,100.00 Purchase Payments = $100,000.00 The Basic Death Benefit would therefore be: $100,000.00
EXAMPLE 2: Assume a Purchase Payment of $60,000.00 is made on the Contract Date and an additional Purchase Payment of $40,000.00 is made one year later. Assume that all of the money is invested in the Sub-Accounts and that the Account Value is $80,000.00 just prior to a $20,000.00 withdrawal. The Account Value on the Death Benefit Date is $60,000.00. The Basic Death Benefit is the greatest of: Account Value = $ 60,000.00 Cash Surrender Value* = $ 56,400.00 Adjusted Purchase Payments** = $ 75,000.00 The Basic Death Benefit would therefore be: $ 75,000.00
*Cash Surrender Value is the amount we would pay you if you surrendered your entire Account Value. For a description of how Cash Surrender Value is calculated, see "FULL WITHDRAWALS" under the subheading "Cash Withdrawals". **Adjusted Purchase Payments can be calculated as follows: Payments X (Account Value after withdrawal DIVIDED BY Account Value before withdrawal) $100,000.00 X ($60,000.00 DIVIDED BY $80,000.00) 61 APPENDIX D CALCULATION OF EARNINGS ENHANCEMENT OPTIONAL DEATH BENEFIT EXAMPLE 1: Assume a Purchase Payment of $60,000 is made on the Contract Date, and an additional Purchase Payment of $40,000 is made one year later. Assume that all of the money is invested into the Sub-Accounts, no withdrawals are made and the Account Value on the Death Benefit Date is $135,000. In addition, this Contract was issued prior to the owner's 70th birthday. Assume death occurs in Account Year 7. The calculation of the Death Benefit to be paid is as follows: The Death Benefit Amount will be the greatest of: Account Value = $135,000 Cash Surrender Value* = $132,000 Total of Adjusted Purchase Payments = $100,000 The Death Benefit Amount would therefore = $135,000 ~ PLUS ~ The EEB amount, calculated as follows: Account Value minus Adjusted Purchase Payments = $ 35,000 40% of the above amount = $ 14,000 Cap of 40% of Adjusted Purchase Payments = $ 40,000 The lesser of the above two amounts = the EEB amount = $ 14,000
The total Death Benefit would be the amount paid on the Basic Death Benefit plus the EEB amount = $135,000 + $14,000 = $149,000. EXAMPLE 2: Assume a Purchase Payment of $60,000 is made on the Contract Date, and an additional Purchase Payment of $40,000 is made one year later. Assume that all of the money is invested into the Sub-Accounts and that the Account Value is $135,000 just prior to a $20,000 withdrawal. The Account Value on the Death Benefit Date is $115,000. Assume death occurs in Account Year 7. In addition, this Contract was issued prior to the owner's 70th birthday. The Death Benefit Amount will be the greatest of: Account Value = $115,000 Cash Surrender Value* = $112,000 Total of Adjusted Purchase Payments** = $ 85,185 The Death Benefit Amount would therefore = $115,000 ~ PLUS ~ The EEB amount, calculated as follows: Account Value minus Adjusted Purchase Payments = $ 29,815 40% of the above amount = $ 11,926 Cap of 40% of Adjusted Purchase Payments = $ 34,074 The lesser of the above two amounts = the EEB amount = $ 11,926
The total Death Benefit would be the amount paid on the Basic Death Benefit plus the EEB amount = $115,000 + $11,926 = $126,926. *Cash Surrender Value is the amount we would pay you if you surrendered your entire Account Value. For a description of how Cash Surrender Value is calculated, see "FULL WITHDRAWALS" under the subheading "Cash Withdrawals". **Adjusted Purchase Payments can be calculated as follows: Payments X (Account Value after withdrawal DIVIDED BY Account Value before withdrawal) = $100,000 X ($115,000 DIVIDED BY $135,000) = $85,185 62 APPENDIX E CALCULATION OF DEATH BENEFIT WHEN THE EEB AND MAV AND 5% ROLL-UP RIDERS ARE SELECTED Assume a Purchase Payment of $60,000 is made on the Contract Date, and an additional Purchase Payment of $40,000 is made one year later. Assume that all of the money is invested in Variable Accounts. No withdrawals are made. The Account Value at the Death Benefit Date is $135,000, the value of the Purchase Payments accumulated at 5% until the Death Benefit Date is $140,000, and the Maximum Anniversary Value is $142,000. Assume death occurs in Account Year 7. The calculation of the death benefit to be paid is as follows: The Death Benefit Amount will be the greatest of: Account Value = $135,000 Cash Surrender Value* = $132,000 Total of Adjusted Purchase Payments = $100,000 5% Premium Roll-up Value = $140,000 Maximum Anniversary Value = $142,000 The Death Benefit Amount would therefore = $142,000 ~ PLUS ~ The EEB amount, calculated as follows: Account Value minus Adjusted Purchase Payments = $ 35,000 40% of the above amount = $ 14,000 Cap of 40% of Adjusted Purchase Payments = $ 40,000 The lesser of the above two amounts = the EEB amount = $ 14,000
The total Death Benefit would be the amount paid on the Maximum Anniversary Rider plus the EEB amount = $142,000 + $14,000 = $156,000. *Cash Surrender Value is the amount we would pay you if you surrendered your entire Account Value. For a description of how Cash Surrender Value is calculated, see "FULL WITHDRAWALS" under the subheading "Cash Withdrawals." 63 APPENDIX F CALCULATION OF EARNINGS ENHANCEMENT PLUS OPTIONAL DEATH BENEFIT Assume a Purchase Payment of $60,000 is made on the Contract Date, and an additional Purchase Payment of $40,000 is made one year later. Assume that all of the money is invested into the Sub-Accounts, no withdrawals are made and the Account Value on the Death Benefit Date is $135,000. In addition, this Contract was issued prior to the owner's 70th birthday. Assume death occurs in Account Year 7. The calculation of the Death Benefit to be paid is as follows: The Death Benefit Amount will be the greatest of: Account Value = $135,000 Cash Surrender Value* = $132,000 Total of Adjusted Purchase Payments = $100,000 The Death Benefit Amount would therefore = $135,000 ~ PLUS ~ The EEB Plus amount, calculated as follows: Account Value minus Adjusted Purchase Payments = $ 35,000 40% of the above amount = $ 14,000 Cap of 100% of Adjusted Purchase Payments = $100,000 The lesser of the above two amounts = the EEB Plus amount = $ 14,000
The total Death Benefit would be the amount paid on the Basic Death Benefit plus the EEB Plus amount = $135,000 + $14,000 = $149,000. *Cash Surrender Value is the amount we would pay you if you surrendered your entire Account Value. For a description of how Cash Surrender Value is calculated, see "FULL WITHDRAWALS" under the subheading "Cash Withdrawals." 64 APPENDIX G CALCULATION OF EARNINGS ENHANCEMENT PLUS WITH MAV OPTIONAL DEATH BENEFIT Assume a Purchase Payment of $60,000 is made on the Contract Date, and an additional Purchase Payment of $40,000 is made one year later. Assume that all of the money is invested into the Sub-Accounts, no withdrawals are made and the Account Value on the Death Benefit Date is $135,000. The Maximum Anniversary Value on the Death Benefit Date is $140,000. In addition, this Contract was issued prior to the owner's 70th birthday. Assume death occurs in Account Year 7. The calculation of the Death Benefit to be paid is as follows: The Death Benefit Amount will be the greatest of: Account Value = $135,000 Cash Surrender Value* = $132,000 Total of Adjusted Purchase Payments = $100,000 Maximum Anniversary Value = $140,000 The Death Benefit Amount would therefore = $140,000 ~ PLUS ~ The EEB Plus MAV amount, calculated as follows: Death Benefit Amount before EEB minus Adjusted Purchase Payments = $ 40,000 40% of the above amount = $ 16,000 Cap of 100% of Adjusted Purchase Payments = $100,000 The lesser of the above two amounts = the EEB Plus MAV amount = $ 16,000
The total Death Benefit would be the amount paid on the Maximum Anniversary Rider plus the EEB Plus MAV amount = $140,000 + $16,000 = $156,000. *Cash Surrender Value is the amount we would pay you if you surrendered your entire Account Value. For a description of how Cash Surrender Value is calculated, see "FULL WITHDRAWALS" under the subheading "Cash Withdrawals." 65 APPENDIX H CALCULATION OF EARNINGS ENHANCEMENT PLUS WITH 5% ROLL-UP OPTIONAL DEATH BENEFIT Assume a Purchase Payment of $60,000 is made on the Contract Date, and an additional Purchase Payment of $40,000 is made one year later. Assume that all of the money is invested into the Sub-Accounts, no withdrawals are made and the Account Value on the Death Benefit Date is $135,000. The value of the Purchase Payments accumulated at 5% until the Death Benefit Date is $140,000. In addition, this Contract was issued prior to the owner's 70th birthday. Assume death occurs in Account Year 7. The calculation of the Death Benefit to be paid is as follows: The Death Benefit Amount will be the greatest of: Account Value = $135,000 Cash Surrender Value* = $132,000 Total of Adjusted Purchase Payments = $100,000 5% Premium Roll-up Value = $140,000 The Death Benefit Amount would therefore = $140,000 ~ PLUS ~ The EEB Plus 5% Roll-Up amount, calculated as follows: Death Benefit Amount before EEB minus Adjusted Purchase Payments = $ 40,000 40% of the above amount = $ 16,000 Cap of 100% of Adjusted Purchase Payments = $100,000 The lesser of the above two amounts = the EEB Plus 5% Roll-Up amount = $ 16,000
The total Death Benefit would be the amount paid on the 5% Roll-Up Rider plus the EEB Plus 5% Roll-Up amount = $140,000 + $16,000 = $156,000. *Cash Surrender Value is the amount we would pay you if you surrendered your entire Account Value. For a description of how Cash Surrender Value is calculated, see "FULL WITHDRAWALS" under the subheading "Cash Withdrawals." 66 APPENDIX I (FUTURITY III) CONDENSED FINANCIAL INFORMATION -- ACCUMULATION UNIT VALUES The following information should be read in conjunction with the Variable Account's Financial Statements appearing in the Statement of Additional Information. All of the Variable Account's Financial Statements have been audited by Deloitte & Touche LLP, independent auditors.
YEAR ENDED DECEMBER 31, 2000* ------------------- AIM V.I. CAPITAL APPRECIATION FUND -- LEVEL 1+ Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.6219 Units outstanding at end of period........................ -- AIM V.I. CAPITAL APPRECIATION FUND -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.6166 Units outstanding at end of period........................ 155,830 AIM V.I. CAPITAL APPRECIATION FUND -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.6131 Units outstanding at end of period........................ 24,807 AIM V.I. CAPITAL APPRECIATION FUND -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.6114 Units outstanding at end of period........................ 233,890 AIM V.I. CAPITAL APPRECIATION FUND -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.6079 Units outstanding at end of period........................ 333,237 AIM V.I. CAPITAL APPRECIATION FUND -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.6026 Units outstanding at end of period........................ 77,754 AIM V.I. GROWTH FUND -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.0030 Units outstanding at end of period........................ 3,421
------------------------
+LEVEL PERCENTAGE OF AVERAGE DAILY NET ASSETS --------------------- -------------------------------------- 1 1.00% 2 1.15% 3 1.25% 4 1.30% 5 1.40% 6 1.55%
67
YEAR ENDED DECEMBER 31, 2000* ------------------- AIM V.I. GROWTH FUND -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 6.9982 Units outstanding at end of period........................ 150,681 AIM V.I. GROWTH FUND -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 6.9950 Units outstanding at end of period........................ -- AIM V.I. GROWTH FUND -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 6.9934 Units outstanding at end of period........................ 251,183 AIM V.I. GROWTH FUND -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 6.9901 Units outstanding at end of period........................ 346,581 AIM V.I. GROWTH FUND -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 6.9853 Units outstanding at end of period........................ 80,277 AIM V. I. GROWTH AND INCOME FUND -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.8657 Units outstanding at end of period........................ -- AIM V. I. GROWTH AND INCOME FUND -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.8603 Units outstanding at end of period........................ 84,096 AIM V. I. GROWTH AND INCOME FUND -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.8567 Units outstanding at end of period........................ 158,631 AIM V. I. GROWTH AND INCOME FUND -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.8549 Units outstanding at end of period........................ 306,521 AIM V. I. GROWTH AND INCOME FUND -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.8513 Units outstanding at end of period........................ 428,310
68
YEAR ENDED DECEMBER 31, 2000* ------------------- AIM V. I. GROWTH AND INCOME FUND -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.8458 Units outstanding at end of period........................ 69,526 AIM V. I. INTERNATIONAL EQUITY FUND -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.8488 Units outstanding at end of period........................ 5,182 AIM V. I. INTERNATIONAL EQUITY FUND -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.8434 Units outstanding at end of period........................ 134,233 AIM V. I. INTERNATIONAL EQUITY FUND -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.8398 Units outstanding at end of period........................ 31,548 AIM V. I. INTERNATIONAL EQUITY FUND -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.8380 Units outstanding at end of period........................ 123,197 AIM V. I. INTERNATIONAL EQUITY FUND -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.8344 Units outstanding at end of period........................ 292,546 AIM V. I. INTERNATIONAL EQUITY FUND -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.8290 Units outstanding at end of period........................ 87,945 ALGER AMERICAN GROWTH PORTFOLIO -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.7636 Units outstanding at end of period........................ -- ALGER AMERICAN GROWTH PORTFOLIO -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.7583 Units outstanding at end of period........................ 130,516 ALGER AMERICAN GROWTH PORTFOLIO -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.7547 Units outstanding at end of period........................ 442,368
69
YEAR ENDED DECEMBER 31, 2000* ------------------- ALGER AMERICAN GROWTH PORTFOLIO -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.7530 Units outstanding at end of period........................ 244,731 ALGER AMERICAN GROWTH PORTFOLIO -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.7494 Units outstanding at end of period........................ 845,891 ALGER AMERICAN GROWTH PORTFOLIO -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.7441 Units outstanding at end of period........................ 134,394 ALGER AMERICAN INCOME AND GROWTH PORTFOLIO -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.9008 Units outstanding at end of period........................ 2,786 ALGER AMERICAN INCOME AND GROWTH PORTFOLIO -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.8947 Units outstanding at end of period........................ 86,979 ALGER AMERICAN INCOME AND GROWTH PORTFOLIO -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.8906 Units outstanding at end of period........................ 17,005 ALGER AMERICAN INCOME AND GROWTH PORTFOLIO -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.8886 Units outstanding at end of period........................ 159,859 ALGER AMERICAN INCOME AND GROWTH PORTFOLIO -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.8845 Units outstanding at end of period........................ 185,362 ALGER AMERICAN INCOME AND GROWTH PORTFOLIO -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.8784 Units outstanding at end of period........................ 61,918 ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 6.9821 Units outstanding at end of period........................ --
70
YEAR ENDED DECEMBER 31, 2000* ------------------- ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 6.9773 Units outstanding at end of period........................ 34,526 ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 6.9741 Units outstanding at end of period........................ 9,377 ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 6.9725 Units outstanding at end of period........................ 38,386 ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 6.9693 Units outstanding at end of period........................ 63,433 ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 6.9645 Units outstanding at end of period........................ 15,209 GOLDMAN SACHS VIT CORE-SM- LARGE CAP GROWTH FUND -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.0806 Units outstanding at end of period........................ -- GOLDMAN SACHS VIT CORE-SM- LARGE CAP GROWTH FUND -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.0758 Units outstanding at end of period........................ 49,638 GOLDMAN SACHS VIT CORE-SM- LARGE CAP GROWTH FUND -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.0725 Units outstanding at end of period........................ -- GOLDMAN SACHS VIT CORE-SM- LARGE CAP GROWTH FUND -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.0709 Units outstanding at end of period........................ 67,670 GOLDMAN SACHS VIT CORE-SM- LARGE CAP GROWTH FUND -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.0676 Units outstanding at end of period........................ 75,161
71
YEAR ENDED DECEMBER 31, 2000* ------------------- GOLDMAN SACHS VIT CORE-SM- LARGE CAP GROWTH FUND -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.0628 Units outstanding at end of period........................ 17,796 GOLDMAN SACHS VIT CORE-SM- SMALL CAP EQUITY FUND -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.3120 Units outstanding at end of period........................ -- GOLDMAN SACHS VIT CORE-SM- SMALL CAP EQUITY FUND -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.3056 Units outstanding at end of period........................ 9,427 GOLDMAN SACHS VIT CORE-SM- SMALL CAP EQUITY FUND -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.3014 Units outstanding at end of period........................ 12,386 GOLDMAN SACHS VIT CORE-SM- SMALL CAP EQUITY FUND -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.2992 Units outstanding at end of period........................ 3,948 GOLDMAN SACHS VIT CORE-SM- SMALL CAP EQUITY FUND -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.2950 Units outstanding at end of period........................ 12,019 GOLDMAN SACHS VIT CORE-SM- SMALL CAP EQUITY FUND -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.2886 Units outstanding at end of period........................ 2,665 GOLDMAN SACHS VIT CORE-SM- U.S. EQUITY FUND -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.7727 Units outstanding at end of period........................ -- GOLDMAN SACHS VIT CORE-SM- U.S. EQUITY FUND -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.7167 Units outstanding at end of period........................ 7,290 GOLDMAN SACHS VIT CORE-SM- U.S. EQUITY FUND -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.7127 Units outstanding at end of period........................ 17,483
72
YEAR ENDED DECEMBER 31, 2000* ------------------- GOLDMAN SACHS VIT CORE-SM- U.S. EQUITY FUND -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.7107 Units outstanding at end of period........................ 26,035 GOLDMAN SACHS VIT CORE-SM- U.S. EQUITY FUND -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.7067 Units outstanding at end of period........................ 59,730 GOLDMAN SACHS VIT CORE-SM- U.S. EQUITY FUND -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.7008 Units outstanding at end of period........................ 9,775 GOLDMAN SACHS VIT GROWTH AND INCOME FUND -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.0955 Units outstanding at end of period........................ -- GOLDMAN SACHS VIT GROWTH AND INCOME FUND -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.0892 Units outstanding at end of period........................ 3,407 GOLDMAN SACHS VIT GROWTH AND INCOME FUND -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.0851 Units outstanding at end of period........................ -- GOLDMAN SACHS VIT GROWTH AND INCOME FUND -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.0830 Units outstanding at end of period........................ 1,375 GOLDMAN SACHS VIT GROWTH AND INCOME FUND -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.0788 Units outstanding at end of period........................ 7,846 GOLDMAN SACHS VIT GROWTH AND INCOME FUND -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.0726 Units outstanding at end of period........................ 754 GOLDMAN SACHS VIT INTERNATIONAL EQUITY FUND -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.6241 Units outstanding at end of period........................ --
73
YEAR ENDED DECEMBER 31, 2000* ------------------- GOLDMAN SACHS VIT INTERNATIONAL EQUITY FUND -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.6182 Units outstanding at end of period........................ 19,327 GOLDMAN SACHS VIT INTERNATIONAL EQUITY FUND -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.6142 Units outstanding at end of period........................ 31,040 GOLDMAN SACHS VIT INTERNATIONAL EQUITY FUND -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.6123 Units outstanding at end of period........................ 38,546 GOLDMAN SACHS VIT INTERNATIONAL EQUITY FUND -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.6083 Units outstanding at end of period........................ 31,258 GOLDMAN SACHS VIT INTERNATIONAL EQUITY FUND -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.6024 Units outstanding at end of period........................ 15,344 J.P. MORGAN INTERNATIONAL OPPORTUNITIES PORTFOLIO -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.5782 Units outstanding at end of period........................ -- J.P. MORGAN INTERNATIONAL OPPORTUNITIES PORTFOLIO -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.5723 Units outstanding at end of period........................ 8,732 J.P. MORGAN INTERNATIONAL OPPORTUNITIES PORTFOLIO -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.5684 Units outstanding at end of period........................ 13,244 J.P. MORGAN INTERNATIONAL OPPORTUNITIES PORTFOLIO -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.5664 Units outstanding at end of period........................ 25,338 J.P. MORGAN INTERNATIONAL OPPORTUNITIES PORTFOLIO -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.5625 Units outstanding at end of period........................ 26,166
74
YEAR ENDED DECEMBER 31, 2000* ------------------- J.P. MORGAN INTERNATIONAL OPPORTUNITIES PORTFOLIO -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.5566 Units outstanding at end of period........................ 1,673 J.P. MORGAN SMALL COMPANY PORTFOLIO -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.5344 Units outstanding at end of period........................ -- J.P. MORGAN SMALL COMPANY PORTFOLIO -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.5285 Units outstanding at end of period........................ 21,708 J.P. MORGAN SMALL COMPANY PORTFOLIO -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.5246 Units outstanding at end of period........................ 13,334 J.P. MORGAN SMALL COMPANY PORTFOLIO -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.5227 Units outstanding at end of period........................ 16,703 J.P. MORGAN SMALL COMPANY PORTFOLIO -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.5188 Units outstanding at end of period........................ 20,851 J.P. MORGAN SMALL COMPANY PORTFOLIO -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.5129 Units outstanding at end of period........................ 13,957 J.P. MORGAN U.S. DISCIPLINED EQUITY PORTFOLIO -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.6137 Units outstanding at end of period........................ -- J.P. MORGAN U.S. DISCIPLINED EQUITY PORTFOLIO -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.6078 Units outstanding at end of period........................ 13,403 J.P. MORGAN U.S. DISCIPLINED EQUITY PORTFOLIO -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.6039 Units outstanding at end of period........................ 15,284
75
YEAR ENDED DECEMBER 31, 2000* ------------------- J.P. MORGAN U.S. DISCIPLINED EQUITY PORTFOLIO -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.6019 Units outstanding at end of period........................ 39,198 J.P. MORGAN U.S. DISCIPLINED EQUITY PORTFOLIO -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.5979 Units outstanding at end of period........................ 53,641 J.P. MORGAN U.S. DISCIPLINED EQUITY PORTFOLIO -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.5920 Units outstanding at end of period........................ 2,420 LORD ABBETT SERIES FUND GROWTH AND INCOME PORTFOLIO -- LEVEL 1 Unit Value: Beginning of Period..................................... $ 10.000 End of Period........................................... $11.4324 Units outstanding at end of period........................ -- LORD ABBETT SERIES FUND GROWTH AND INCOME PORTFOLIO -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $11.4245 Units outstanding at end of period........................ 52,400 LORD ABBETT SERIES FUND GROWTH AND INCOME PORTFOLIO -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $11.4193 Units outstanding at end of period........................ 23,743 LORD ABBETT SERIES FUND GROWTH AND INCOME PORTFOLIO -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $11.4167 Units outstanding at end of period........................ 55,535 LORD ABBETT SERIES FUND GROWTH AND INCOME PORTFOLIO -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $11.4115 Units outstanding at end of period........................ 125,200 LORD ABBETT SERIES FUND GROWTH AND INCOME PORTFOLIO -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $11.4037 Units outstanding at end of period........................ 116,974 MFS/SUN LIFE CAPITAL APPRECIATION SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.7778 Units outstanding at end of period........................ --
76
YEAR ENDED DECEMBER 31, 2000* ------------------- MFS/SUN LIFE CAPITAL APPRECIATION SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.7724 Units outstanding at end of period........................ 77,731 MFS/SUN LIFE CAPITAL APPRECIATION SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.7689 Units outstanding at end of period........................ 31,811 MFS/SUN LIFE CAPITAL APPRECIATION SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.7671 Units outstanding at end of period........................ 137,695 MFS/SUN LIFE CAPITAL APPRECIATION SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.7635 Units outstanding at end of period........................ 111,529 MFS/SUN LIFE CAPITAL APPRECIATION SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.7582 Units outstanding at end of period........................ 91,422 MFS/SUN LIFE EMERGING GROWTH SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.7719 Units outstanding at end of period........................ -- MFS/SUN LIFE EMERGING GROWTH SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.7666 Units outstanding at end of period........................ 172,848 MFS/SUN LIFE EMERGING GROWTH SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.7630 Units outstanding at end of period........................ 46,626 MFS/SUN LIFE EMERGING GROWTH SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.7612 Units outstanding at end of period........................ 260,438 MFS/SUN LIFE EMERGING GROWTH SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.7576 Units outstanding at end of period........................ 439,010
77
YEAR ENDED DECEMBER 31, 2000* ------------------- MFS/SUN LIFE EMERGING GROWTH SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 7.7523 Units outstanding at end of period........................ 142,901 MFS/SUN LIFE GOVERNMENT SECURITIES SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.7110 Units outstanding at end of period........................ -- MFS/SUN LIFE GOVERNMENT SECURITIES SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.7037 Units outstanding at end of period........................ 30,960 MFS/SUN LIFE GOVERNMENT SECURITIES SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.6988 Units outstanding at end of period........................ -- MFS/SUN LIFE GOVERNMENT SECURITIES SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.6963 Units outstanding at end of period........................ 18,410 MFS/SUN LIFE GOVERNMENT SECURITIES SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.6914 Units outstanding at end of period........................ 28,193 MFS/SUN LIFE GOVERNMENT SECURITIES SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.6841 Units outstanding at end of period........................ 1,703 MFS/SUN LIFE HIGH YIELD SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.9204 Units outstanding at end of period........................ -- MFS/SUN LIFE HIGH YIELD SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.1972 Units outstanding at end of period........................ 31,852 MFS/SUN LIFE HIGH YIELD SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.1930 Units outstanding at end of period........................ --
78
YEAR ENDED DECEMBER 31, 2000* ------------------- MFS/SUN LIFE HIGH YIELD SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.1909 Units outstanding at end of period........................ 44,961 MFS/SUN LIFE HIGH YIELD SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.1867 Units outstanding at end of period........................ 67,901 MFS/SUN LIFE HIGH YIELD SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.1804 Units outstanding at end of period........................ 15,842 MFS/SUN LIFE MASSACHUSETTS INVESTORS GROWTH STOCK SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.5799 Units outstanding at end of period........................ 2,827 MFS/SUN LIFE MASSACHUSETTS INVESTORS GROWTH STOCK SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.5740 Units outstanding at end of period........................ 129,303 MFS/SUN LIFE MASSACHUSETTS INVESTORS GROWTH STOCK SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.5701 Units outstanding at end of period........................ 41,225 MFS/SUN LIFE MASSACHUSETTS INVESTORS GROWTH STOCK SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.5681 Units outstanding at end of period........................ 161,937 MFS/SUN LIFE MASSACHUSETTS INVESTORS GROWTH STOCK SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.5642 Units outstanding at end of period........................ 309,307 MFS/SUN LIFE MASSACHUSETTS INVESTORS GROWTH STOCK SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.5583 Units outstanding at end of period........................ 181,314 MFS/SUN LIFE MASSACHUSETTS INVESTORS TRUST SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.6015 Units outstanding at end of period........................ --
79
YEAR ENDED DECEMBER 31, 2000* ------------------- MFS/SUN LIFE MASSACHUSETTS INVESTORS TRUST SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.5949 Units outstanding at end of period........................ 72,001 MFS/SUN LIFE MASSACHUSETTS INVESTORS TRUST SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.5905 Units outstanding at end of period........................ -- MFS/SUN LIFE MASSACHUSETTS INVESTORS TRUST SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.5883 Units outstanding at end of period........................ 75,067 MFS/SUN LIFE MASSACHUSETTS INVESTORS TRUST SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.5839 Units outstanding at end of period........................ 146,370 MFS/SUN LIFE MASSACHUSETTS INVESTORS TRUST SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.5773 Units outstanding at end of period........................ 68,760 MFS/SUN LIFE NEW DISCOVERY SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.5985 Units outstanding at end of period........................ 3,013 MFS/SUN LIFE NEW DISCOVERY SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.5926 Units outstanding at end of period........................ 108,572 MFS/SUN LIFE NEW DISCOVERY SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.5887 Units outstanding at end of period........................ 74,514 MFS/SUN LIFE NEW DISCOVERY SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.5867 Units outstanding at end of period........................ 119,748 MFS/SUN LIFE NEW DISCOVERY SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.5828 Units outstanding at end of period........................ 178,251
80
YEAR ENDED DECEMBER 31, 2000* ------------------- MFS/SUN LIFE NEW DISCOVERY SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.5769 Units outstanding at end of period........................ 113,259 MFS/SUN LIFE TOTAL RETURN SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $11.1781 Units outstanding at end of period........................ -- MFS/SUN LIFE TOTAL RETURN SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $11.1705 Units outstanding at end of period........................ 29,963 MFS/SUN LIFE TOTAL RETURN SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $11.1654 Units outstanding at end of period........................ -- MFS/SUN LIFE TOTAL RETURN SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $11.1628 Units outstanding at end of period........................ 27,987 MFS/SUN LIFE TOTAL RETURN SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $11.1577 Units outstanding at end of period........................ 58,375 MFS/SUN LIFE TOTAL RETURN SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $11.1500 Units outstanding at end of period........................ 4,270 MFS/SUN LIFE UTILITIES SERIES -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.6985 Units outstanding at end of period........................ -- MFS/SUN LIFE UTILITIES SERIES -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.6919 Units outstanding at end of period........................ 86,311 MFS/SUN LIFE UTILITIES SERIES -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.6874 Units outstanding at end of period........................ 23,829
81
YEAR ENDED DECEMBER 31, 2000* ------------------- MFS/SUN LIFE UTILITIES SERIES -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.6852 Units outstanding at end of period........................ 125,061 MFS/SUN LIFE UTILITIES SERIES -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.6808 Units outstanding at end of period........................ 144,204 MFS/SUN LIFE UTILITIES SERIES -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.6741 Units outstanding at end of period........................ 23,830 SC-SM- BLUE CHIP MID CAP FUND -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.5985 Units outstanding at end of period........................ 2,643 SC-SM- BLUE CHIP MID CAP FUND -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.5919 Units outstanding at end of period........................ 173,017 SC-SM- BLUE CHIP MID CAP FUND -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.5875 Units outstanding at end of period........................ 31,687 SC-SM- BLUE CHIP MID CAP FUND -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.5853 Units outstanding at end of period........................ 165,502 SC-SM- BLUE CHIP MID CAP FUND -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.5809 Units outstanding at end of period........................ 203,101 SC-SM- BLUE CHIP MID CAP FUND -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.5744 Units outstanding at end of period........................ 32,311 SC-SM- DAVIS FINANCIAL FUND -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $11.2864 Units outstanding at end of period........................ --
82
YEAR ENDED DECEMBER 31, 2000* ------------------- SC-SM- DAVIS FINANCIAL FUND -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $11.2787 Units outstanding at end of period........................ 9,476 SC-SM- DAVIS FINANCIAL FUND -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $11.2735 Units outstanding at end of period........................ -- SC-SM- DAVIS FINANCIAL FUND -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $11.2709 Units outstanding at end of period........................ 41,572 SC-SM- DAVIS FINANCIAL FUND -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $11.2658 Units outstanding at end of period........................ 8,334 SC-SM- DAVIS VENTURE VALUE FUND -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $11.2580 Units outstanding at end of period........................ 6,827 SC-SM- DAVIS VENTURE VALUE FUND -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.8112 Units outstanding at end of period........................ -- SC-SM- DAVIS VENTURE VALUE FUND -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.8045 Units outstanding at end of period........................ 101,048 SC-SM- DAVIS VENTURE VALUE FUND -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.8000 Units outstanding at end of period........................ 28,266 SC-SM- DAVIS VENTURE VALUE FUND -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.7978 Units outstanding at end of period........................ 86,152 SC-SM- DAVIS VENTURE VALUE FUND -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.7933 Units outstanding at end of period........................ 200,187
83
YEAR ENDED DECEMBER 31, 2000* ------------------- SC-SM- DAVIS VENTURE VALUE FUND -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 9.7865 Units outstanding at end of period........................ 87,552 SUN CAPITAL INVESTMENT GRADE BOND FUND-SM- -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.5833 Units outstanding at end of period........................ -- SUN CAPITAL INVESTMENT GRADE BOND FUND-SM- -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.5760 Units outstanding at end of period........................ 24,924 SUN CAPITAL INVESTMENT GRADE BOND FUND-SM- -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.5712 Units outstanding at end of period........................ -- SUN CAPITAL INVESTMENT GRADE BOND FUND-SM- -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.5688 Units outstanding at end of period........................ 74,085 SUN CAPITAL INVESTMENT GRADE BOND FUND-SM- -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.5639 Units outstanding at end of period........................ 74,451 SUN CAPITAL INVESTMENT GRADE BOND FUND-SM- -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.5567 Units outstanding at end of period........................ 18,259 SC-SM- INVESTORS FOUNDATION FUND -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.8717 Units outstanding at end of period........................ -- SC-SM- INVESTORS FOUNDATION FUND -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.8657 Units outstanding at end of period........................ 356 SC-SM- INVESTORS FOUNDATION FUND -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.8616 Units outstanding at end of period........................ --
84
YEAR ENDED DECEMBER 31, 2000* ------------------- SC-SM- INVESTORS FOUNDATION FUND -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.8596 Units outstanding at end of period........................ 15,627 SC-SM- INVESTORS FOUNDATION FUND -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.8555 Units outstanding at end of period........................ 11,148 SC-SM- INVESTORS FOUNDATION FUND -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.8494 Units outstanding at end of period........................ -- SUN CAPITAL MONEY MARKET FUND-SM- -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.2310 Units outstanding at end of period........................ -- SUN CAPITAL MONEY MARKET FUND-SM- -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.2240 Units outstanding at end of period........................ 157,296 SUN CAPITAL MONEY MARKET FUND-SM- -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.2193 Units outstanding at end of period........................ -- SUN CAPITAL MONEY MARKET FUND-SM- -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.2169 Units outstanding at end of period........................ 27,989 SUN CAPITAL MONEY MARKET FUND-SM- -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.2123 Units outstanding at end of period........................ 145,304 SUN CAPITAL MONEY MARKET FUND-SM- -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.2052 Units outstanding at end of period........................ 15,319 SUN CAPITAL REAL ESTATE FUND-SM- -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.7410 Units outstanding at end of period........................ --
85
YEAR ENDED DECEMBER 31, 2000* ------------------- SUN CAPITAL REAL ESTATE FUND-SM- -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.7336 Units outstanding at end of period........................ 58,623 SUN CAPITAL REAL ESTATE FUND-SM- -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.7287 Units outstanding at end of period........................ -- SUN CAPITAL REAL ESTATE FUND-SM- -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.7263 Units outstanding at end of period........................ 46,344 SUN CAPITAL REAL ESTATE FUND-SM- -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.7214 Units outstanding at end of period........................ 40,664 SUN CAPITAL REAL ESTATE FUND-SM- -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.7140 Units outstanding at end of period........................ 6,825 SC-SM- SELECT EQUITY FUND -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.0851 Units outstanding at end of period........................ -- SC-SM- SELECT EQUITY FUND -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.0795 Units outstanding at end of period........................ 36,473 SC-SM- SELECT EQUITY FUND -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.0758 Units outstanding at end of period........................ -- SC-SM- SELECT EQUITY FUND -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.0740 Units outstanding at end of period........................ 39,843 SC-SM- SELECT EQUITY FUND -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.0702 Units outstanding at end of period........................ 126,576
86
YEAR ENDED DECEMBER 31, 2000* ------------------- SC-SM- SELECT EQUITY FUND -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $ 8.0647 Units outstanding at end of period........................ 16,622 SC-SM- VALUE EQUITY FUND -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $11.2841 Units outstanding at end of period........................ -- SC-SM- VALUE EQUITY FUND -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $11.2764 Units outstanding at end of period........................ 2,611 SC-SM- VALUE EQUITY FUND -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $11.2712 Units outstanding at end of period........................ -- SC-SM- VALUE EQUITY FUND -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $11.2687 Units outstanding at end of period........................ 3,087 SC-SM- VALUE EQUITY FUND -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $11.2635 Units outstanding at end of period........................ 8,870 SC-SM- VALUE EQUITY FUND -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $11.2558 Units outstanding at end of period........................ 61 SC-SM- VALUE MANAGED FUND -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $11.3305 Units outstanding at end of period........................ -- SC-SM- VALUE MANAGED FUND -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $11.3227 Units outstanding at end of period........................ 3,151 SC-SM- VALUE MANAGED FUND -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $11.3175 Units outstanding at end of period........................ --
87
YEAR ENDED DECEMBER 31, 2000* ------------------- SC-SM- VALUE MANAGED FUND -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $11.3149 Units outstanding at end of period........................ 712 SC-SM- VALUE MANAGED FUND -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $11.3098 Units outstanding at end of period........................ 3,796 SC-SM- VALUE MANAGED FUND -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $11.3020 Units outstanding at end of period........................ -- SC-SM- VALUE MID CAP FUND -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.2926 Units outstanding at end of period........................ -- SC-SM- VALUE MID CAP FUND -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.2856 Units outstanding at end of period........................ 59,661 SC-SM- VALUE MID CAP FUND -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.2809 Units outstanding at end of period........................ 11,156 SC-SM- VALUE MID CAP FUND -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.2785 Units outstanding at end of period........................ 47,213 SC-SM- VALUE MID CAP FUND -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.2738 Units outstanding at end of period........................ 99,042 SC-SM- VALUE MID CAP FUND -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $10.2667 Units outstanding at end of period........................ 28,275 SC-SM- VALUE SMALL CAP FUND -- LEVEL 1 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $12.1343 Units outstanding at end of period........................ --
88
YEAR ENDED DECEMBER 31, 2000* ------------------- SC-SM- VALUE SMALL CAP FUND -- LEVEL 2 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $12.1260 Units outstanding at end of period........................ 27,336 SC-SM- VALUE SMALL CAP FUND -- LEVEL 3 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $12.1204 Units outstanding at end of period........................ 9,948 SC-SM- VALUE SMALL CAP FUND -- LEVEL 4 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $12.1177 Units outstanding at end of period........................ 30,580 SC-SM- VALUE SMALL CAP FUND -- LEVEL 5 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $12.1121 Units outstanding at end of period........................ 30,730 SC-SM- VALUE SMALL CAP FUND -- LEVEL 6 Unit Value: Beginning of Period..................................... $10.0000 End of Period........................................... $12.1038 Units outstanding at end of period........................ 7,205
------------------------ * From commencement of operations on July 17, 2000 to December 31, 2000. 89 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) C/O RETIREMENT PRODUCTS AND SERVICES P.O. BOX 9133 BOSTON, MASSACHUSETTS 02117 TELEPHONE: Toll Free (888) 786-2435 GENERAL DISTRIBUTOR Clarendon Insurance Agency, Inc. One Sun Life Executive Park Wellesley Hills, Massachusetts 02481 AUDITORS Deloitte & Touche LLP 200 Berkeley Street FUT462 Boston, Massachusetts 02116
PART B INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION Attached hereto and made a part hereof is the Statement of Additional Information dated May 1, 2001 for each of the following: MFS Regatta Choice Variable and Fixed Annuity Futurity III Variable and Fixed Annuity May 1, 2001 MFS REGATTA CHOICE VARIABLE AND FIXED ANNUITY STATEMENT OF ADDITIONAL INFORMATION SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F TABLE OF CONTENTS Calculation of Performance Data .............................................. 2 Advertising and Sales Literature ............................................. 5 Calculations ................................................................. 9 Example of Variable Accumulation Unit Value Calculation.................. 9 Example of Variable Annuity Unit Calculation ............................ 9 Example of Variable Annuity Payment Calculation ......................... 9 Distribution of the Contracts ................................................ 9 Designation and Change of Beneficiary ........................................10 Custodian ....................................................................10 Financial Statements .........................................................10 The Statement of Additional Information sets forth information which may be of interest to prospective purchasers of MFS Regatta Choice Variable and Fixed Annuity Contracts (the "Contracts") issued by Sun Life Assurance Company of Canada (U.S.) (the "Company") in connection with Sun Life of Canada (U.S.) Variable Account F (the "Variable Account") which is not included in the Prospectus dated May 1, 2001. This Statement of Additional Information should be read in conjunction with the Prospectus, a copy of which may be obtained without charge from the Company by writing to Sun Life Assurance Company of Canada (U.S.), c/o Retirement Products and Services, P.O. Box 1024, Boston, Massachusetts 02103, or by telephoning (800) 752-7215. The terms used in this Statement of Additional Information have the same meanings as in the Prospectus. -------------------------------------------------------------------------------- THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE PURCHASERS ONLY IF PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS. -2- CALCULATION OF PERFORMANCE DATA STANDARDIZED AVERAGE ANNUAL TOTAL RETURN: The table below shows, for various Sub-Accounts of the Variable Account, the Standardized Average Annual Total Return for the stated periods (or shorter period indicated in the note below), based upon a hypothetical initial Purchase Payment of $1,000, calculated in accordance with the formula set out below. For purposes of determining these investment results, the actual investment performance of each Fund is reflected from the date the Variable Account was established, or such later date that the Fund commenced operations (the "Commencement Date"), although the Contracts have been offered only since June 2000. No information is shown for the Funds that had not commenced operations as of December 31, 2000. The Securities and Exchange Commission defines "standardized" total return information to mean Average Annual Total Return, based on a hypothetical initial purchase payment of $1,000 and calculated in accordance with the formula set forth after the table, but presented only for periods subsequent to the commencement of the offering in the separate account. STANDARDIZED AVERAGE ANNUAL TOTAL RETURN PERIOD ENDING DECEMBER 31, 2000
FUND NAME CLASS SECINCEPTION DATE 1 YR LOAD 5 YR LOAD 10 YR LOAD LIFE LOAD REGATTA CHOICE MONEY MARKET - CL 01 01 11/30/1989 -1.42 3.20 3.59 3.90 REGATTA CHOICE MONEY MARKET - CL 02 02 11/30/1989 -1.57 3.03 3.44 3.74 REGATTA CHOICE MONEY MARKET - CL 03 03 11/30/1989 -1.66 2.93 3.33 3.64 REGATTA CHOICE MONEY MARKET - CL 04 04 11/30/1989 -1.71 2.87 3.28 3.59 REGATTA CHOICE MONEY MARKET - CL 05 05 11/30/1989 -1.81 2.76 3.18 3.48 REGATTA CHOICE MONEY MARKET - CL 06 06 11/30/1989 -1.96 2.60 3.02 3.33 REGATTA CHOICE TECHNOLOGY - CL 01 01 06/16/2000 -20.06 REGATTA CHOICE TECHNOLOGY - CL 02 02 06/16/2000 -20.12 REGATTA CHOICE TECHNOLOGY - CL 03 03 06/16/2000 -20.17 REGATTA CHOICE TECHNOLOGY - CL 04 04 06/16/2000 -20.19 REGATTA CHOICE TECHNOLOGY - CL 05 05 06/16/2000 -20.23 REGATTA CHOICE TECHNOLOGY - CL 06 06 06/16/2000 -20.29 REGATTA CHOICE GLOBAL TELECOMMUNICATIONS - CL 01 01 08/31/2000 -40.13 REGATTA CHOICE GLOBAL TELECOMMUNICATIONS - CL 02 02 08/31/2000 -40.16 REGATTA CHOICE GLOBAL TELECOMMUNICATIONS - CL 03 03 08/31/2000 -40.19 REGATTA CHOICE GLOBAL TELECOMMUNICATIONS - CL 04 04 08/31/2000 -40.20 REGATTA CHOICE GLOBAL TELECOMMUNICATIONS - CL 05 05 08/31/2000 -40.22 REGATTA CHOICE GLOBAL TELECOMMUNICATIONS - CL 06 06 08/31/2000 -40.25 REGATTA CHOICE MID CAP GROWTH - CL 01 01 08/31/2000 -15.50 REGATTA CHOICE MID CAP GROWTH - CL 02 02 08/31/2000 -15.55 REGATTA CHOICE MID CAP GROWTH - CL 03 03 08/31/2000 -15.58 REGATTA CHOICE MID CAP GROWTH - CL 04 04 08/31/2000 -15.59 REGATTA CHOICE MID CAP GROWTH - CL 05 05 08/31/2000 -15.62 REGATTA CHOICE MID CAP GROWTH - CL 06 06 08/31/2000 -15.67 REGATTA CHOICE INTERNATIONAL INVESTORS TRUST - CL 01 01 10/02/1995 -9.08 7.41 7.41 REGATTA CHOICE INTERNATIONAL INVESTORS TRUST - CL 02 02 10/02/1995 -9.21 7.24 7.24 REGATTA CHOICE INTERNATIONAL INVESTORS TRUST - CL 03 03 10/02/1995 -9.30 7.13 7.13 REGATTA CHOICE INTERNATIONAL INVESTORS TRUST - CL 04 04 10/02/1995 -9.35 7.07 7.07 REGATTA CHOICE INTERNATIONAL INVESTORS TRUST - CL 05 05 10/02/1995 -9.44 6.96 6.96 REGATTA CHOICE INTERNATIONAL INVESTORS TRUST - CL 06 06 10/02/1995 -9.57 6.79 6.79 REGATTA CHOICE CAPITAL APPRECIATION - CL 01 01 11/30/1989 -17.58 15.88 17.36 14.28 REGATTA CHOICE CAPITAL APPRECIATION - CL 02 02 11/30/1989 -17.70 15.70 17.18 14.10 REGATTA CHOICE CAPITAL APPRECIATION - CL 03 03 11/30/1989 -17.78 15.58 17.06 13.99 REGATTA CHOICE CAPITAL APPRECIATION - CL 04 04 11/30/1989 -17.82 15.52 17.00 13.93 REGATTA CHOICE CAPITAL APPRECIATION - CL 05 05 11/30/1989 -17.91 15.40 16.89 13.82 REGATTA CHOICE CAPITAL APPRECIATION - CL 06 06 11/30/1989 -18.03 15.22 16.71 13.64 REGATTA CHOICE UTILITIES - CL 01 01 11/16/1993 -0.62 19.59 17.06 REGATTA CHOICE UTILITIES - CL 02 02 11/16/1993 -0.77 19.41 16.88 REGATTA CHOICE UTILITIES - CL 03 03 11/16/1993 -0.87 19.29 16.77 REGATTA CHOICE UTILITIES - CL 04 04 11/16/1993 -0.92 19.22 16.71 REGATTA CHOICE UTILITIES - CL 05 05 11/16/1993 -1.01 19.10 16.59 REGATTA CHOICE UTILITIES - CL 06 06 11/16/1993 -1.16 18.92 16.41 REGATTA CHOICE GLOBAL GOVERNMENTS - CL 01 01 11/30/1989 -5.69 0.94 4.67 5.55 REGATTA CHOICE GLOBAL GOVERNMENTS - CL 02 02 11/30/1989 -5.83 0.79 4.51 5.39 REGATTA CHOICE GLOBAL GOVERNMENTS - CL 03 03 11/30/1989 -5.93 0.69 4.41 5.28 REGATTA CHOICE GLOBAL GOVERNMENTS - CL 04 04 11/30/1989 -5.98 0.64 4.36 5.23 REGATTA CHOICE GLOBAL GOVERNMENTS - CL 05 05 11/30/1989 -6.07 0.54 4.25 5.13 REGATTA CHOICE GLOBAL GOVERNMENTS - CL 06 06 11/30/1989 -6.21 0.38 4.09 4.97 REGATTA CHOICE MANAGED SECTORS - CL 01 01 11/30/1989 -26.11 17.78 17.76 14.50 REGATTA CHOICE MANAGED SECTORS - CL 02 02 11/30/1989 -26.22 17.60 17.59 14.33 REGATTA CHOICE MANAGED SECTORS - CL 03 03 11/30/1989 -26.29 17.48 17.47 14.21 REGATTA CHOICE MANAGED SECTORS - CL 04 04 11/30/1989 -26.33 17.42 17.41 14.16 REGATTA CHOICE MANAGED SECTORS - CL 05 05 11/30/1989 -26.40 17.29 17.29 14.04 REGATTA CHOICE MANAGED SECTORS - CL 06 06 11/30/1989 -26.51 17.11 17.11 13.87 REGATTA CHOICE TOTAL RETURN - CL 01 01 11/30/1989 8.54 11.46 12.03 11.03 REGATTA CHOICE TOTAL RETURN - CL 02 02 11/30/1989 8.37 11.29 11.86 10.86 REGATTA CHOICE TOTAL RETURN - CL 03 03 11/30/1989 8.25 11.18 11.75 10.75 REGATTA CHOICE TOTAL RETURN - CL 04 04 11/30/1989 8.19 11.12 11.69 10.69 REGATTA CHOICE TOTAL RETURN - CL 05 05 11/30/1989 8.08 11.00 11.58 10.58 REGATTA CHOICE TOTAL RETURN - CL 06 06 11/30/1989 7.91 10.83 11.41 10.41 REGATTA CHOICE GOVERNMENT SECURITIES - CL 01 01 11/30/1989 4.22 3.76 6.29 6.36 REGATTA CHOICE GOVERNMENT SECURITIES - CL 02 02 11/30/1989 4.07 3.60 6.13 6.20 REGATTA CHOICE GOVERNMENT SECURITIES - CL 03 03 11/30/1989 3.96 3.49 6.02 6.10 REGATTA CHOICE GOVERNMENT SECURITIES - CL 04 04 11/30/1989 3.91 3.44 5.97 6.04 REGATTA CHOICE GOVERNMENT SECURITIES - CL 05 05 11/30/1989 3.81 3.33 5.86 5.93 REGATTA CHOICE GOVERNMENT SECURITIES - CL 06 06 11/30/1989 3.65 3.16 5.70 5.77 REGATTA CHOICE MASS INVESTORS TRUST - CL 01 01 10/31/1991 -7.07 15.14 13.98 REGATTA CHOICE MASS INVESTORS TRUST - CL 02 02 10/31/1991 -7.21 14.96 13.81 REGATTA CHOICE MASS INVESTORS TRUST - CL 03 03 10/31/1991 -7.30 14.84 13.70 REGATTA CHOICE MASS INVESTORS TRUST - CL 04 04 10/31/1991 -7.35 14.78 13.64 REGATTA CHOICE MASS INVESTORS TRUST - CL 05 05 10/31/1991 -7.44 14.66 13.52 REGATTA CHOICE MASS INVESTORS TRUST - CL 06 06 10/31/1991 -7.58 14.49 13.35 REGATTA CHOICE GLOBAL GROWTH - CL 01 01 11/16/1993 -19.04 15.00 14.11 REGATTA CHOICE GLOBAL GROWTH - CL 02 02 11/16/1993 -19.16 14.82 13.94 REGATTA CHOICE GLOBAL GROWTH - CL 03 03 11/16/1993 -19.24 14.70 13.82 REGATTA CHOICE GLOBAL GROWTH - CL 04 04 11/16/1993 -19.28 14.64 13.76 REGATTA CHOICE GLOBAL GROWTH - CL 05 05 11/16/1993 -19.36 14.52 13.65 REGATTA CHOICE GLOBAL GROWTH - CL 06 06 11/16/1993 -19.48 14.34 13.48 REGATTA CHOICE RESEARCH - CL 01 01 11/07/1994 -10.82 15.50 18.20 REGATTA CHOICE RESEARCH - CL 02 02 11/07/1994 -10.95 15.24 17.95 REGATTA CHOICE RESEARCH - CL 03 03 11/07/1994 -11.04 15.06 17.78 REGATTA CHOICE RESEARCH - CL 04 04 11/07/1994 -11.08 14.97 17.70 REGATTA CHOICE RESEARCH - CL 05 05 11/07/1994 -11.17 14.79 17.53 REGATTA CHOICE RESEARCH - CL 06 06 11/07/1994 -11.31 14.53 17.28 REGATTA CHOICE CAPITAL OPPORTUNITIES - CL 01 01 06/03/1996 -11.62 20.24 REGATTA CHOICE CAPITAL OPPORTUNITIES - CL 02 02 06/03/1996 -11.75 20.06 REGATTA CHOICE CAPITAL OPPORTUNITIES - CL 03 03 06/03/1996 -11.84 19.94 REGATTA CHOICE CAPITAL OPPORTUNITIES - CL 04 04 06/03/1996 -11.88 19.87 REGATTA CHOICE CAPITAL OPPORTUNITIES - CL 05 05 06/03/1996 -11.97 19.75 REGATTA CHOICE CAPITAL OPPORTUNITIES - CL 06 06 06/03/1996 -12.10 19.56 REGATTA CHOICE INTERNATIONAL GROWTH - CL 01 01 06/03/1996 -14.15 2.49 REGATTA CHOICE INTERNATIONAL GROWTH - CL 02 02 06/03/1996 -14.28 2.33 REGATTA CHOICE INTERNATIONAL GROWTH - CL 03 03 06/03/1996 -14.37 2.22 REGATTA CHOICE INTERNATIONAL GROWTH - CL 04 04 06/03/1996 -14.41 2.16 REGATTA CHOICE INTERNATIONAL GROWTH - CL 05 05 06/03/1996 -14.50 2.06 REGATTA CHOICE INTERNATIONAL GROWTH - CL 06 06 06/03/1996 -14.62 1.90 REGATTA CHOICE EMERGING MARKETS EQUITY - CL 01 01 06/05/1996 -27.84 -3.91 REGATTA CHOICE EMERGING MARKETS EQUITY - CL 02 02 06/05/1996 -27.94 -4.05 REGATTA CHOICE EMERGING MARKETS EQUITY - CL 03 03 06/05/1996 -28.02 -4.15 REGATTA CHOICE EMERGING MARKETS EQUITY - CL 04 04 06/05/1996 -28.05 -4.19 REGATTA CHOICE EMERGING MARKETS EQUITY - CL 05 05 06/05/1996 -28.12 -4.29 REGATTA CHOICE EMERGING MARKETS EQUITY - CL 06 06 06/05/1996 -28.23 -4.43 REGATTA CHOICE MASS INVESTORS GROWTH - CL 01 01 05/06/1998 -12.86 14.47 REGATTA CHOICE MASS INVESTORS GROWTH - CL 02 02 05/06/1998 -12.99 14.29 REGATTA CHOICE MASS INVESTORS GROWTH - CL 03 03 05/06/1998 -13.08 14.17 REGATTA CHOICE MASS INVESTORS GROWTH - CL 04 04 05/06/1998 -13.12 14.11 REGATTA CHOICE MASS INVESTORS GROWTH - CL 05 05 05/06/1998 -13.21 13.99 REGATTA CHOICE MASS INVESTORS GROWTH - CL 06 06 05/06/1998 -13.34 13.81 REGATTA CHOICE VALUE - CL 01 01 05/06/1998 21.90 12.34 REGATTA CHOICE VALUE - CL 02 02 05/06/1998 21.70 12.16 REGATTA CHOICE VALUE - CL 03 03 05/06/1998 21.57 12.04 REGATTA CHOICE VALUE - CL 04 04 05/06/1998 21.51 11.98 REGATTA CHOICE VALUE - CL 05 05 05/06/1998 21.38 11.86 REGATTA CHOICE VALUE - CL 06 06 05/06/1998 21.18 11.69 REGATTA CHOICE STRATEGIC INCOME - CL 01 01 05/06/1998 -4.22 -0.10 REGATTA CHOICE STRATEGIC INCOME - CL 02 02 05/06/1998 -4.36 -0.25 REGATTA CHOICE STRATEGIC INCOME - CL 03 03 05/06/1998 -4.46 -0.35 REGATTA CHOICE STRATEGIC INCOME - CL 04 04 05/06/1998 -4.51 -0.40 REGATTA CHOICE STRATEGIC INCOME - CL 05 05 05/06/1998 -4.60 -0.50 REGATTA CHOICE STRATEGIC INCOME - CL 06 06 05/06/1998 -4.74 -0.65 REGATTA CHOICE EMERGING GROWTH - CL 01 01 05/01/1995 -24.75 20.25 22.72 REGATTA CHOICE EMERGING GROWTH - CL 02 02 05/01/1995 -24.86 20.06 22.53 REGATTA CHOICE EMERGING GROWTH - CL 03 03 05/01/1995 -24.94 19.94 22.40 REGATTA CHOICE EMERGING GROWTH - CL 04 04 05/01/1995 -24.97 19.88 22.34 REGATTA CHOICE EMERGING GROWTH - CL 05 05 05/01/1995 -25.05 19.75 22.22 REGATTA CHOICE EMERGING GROWTH - CL 06 06 05/01/1995 -25.16 19.57 22.03 REGATTA CHOICE RESEARCH INTERNATIONAL - CL 01 01 05/06/1998 -14.27 8.61 REGATTA CHOICE RESEARCH INTERNATIONAL - CL 02 02 05/06/1998 -14.40 8.44 REGATTA CHOICE RESEARCH INTERNATIONAL - CL 03 03 05/06/1998 -14.48 8.33 REGATTA CHOICE RESEARCH INTERNATIONAL - CL 04 04 05/06/1998 -14.53 8.27 REGATTA CHOICE RESEARCH INTERNATIONAL - CL 05 05 05/06/1998 -14.61 8.15 REGATTA CHOICE RESEARCH INTERNATIONAL - CL 06 06 05/06/1998 -14.74 7.98 REGATTA CHOICE RESEARCH GROWTH & INCOME - CL 01 01 05/12/1997 -4.05 9.41 REGATTA CHOICE RESEARCH GROWTH & INCOME - CL 02 02 05/12/1997 -4.19 9.24 REGATTA CHOICE RESEARCH GROWTH & INCOME - CL 03 03 05/12/1997 -4.28 9.12 REGATTA CHOICE RESEARCH GROWTH & INCOME - CL 04 04 05/12/1997 -4.33 9.06 REGATTA CHOICE RESEARCH GROWTH & INCOME - CL 05 05 05/12/1997 -4.43 8.95 REGATTA CHOICE RESEARCH GROWTH & INCOME - CL 06 06 05/12/1997 -4.57 8.78 REGATTA CHOICE STRATEGIC GROWTH - CL 01 01 11/01/1999 -16.15 1.76 REGATTA CHOICE STRATEGIC GROWTH - CL 02 02 11/01/1999 -16.28 1.60 REGATTA CHOICE STRATEGIC GROWTH - CL 03 03 11/01/1999 -16.36 1.50 REGATTA CHOICE STRATEGIC GROWTH - CL 04 04 11/01/1999 -16.40 1.45 REGATTA CHOICE STRATEGIC GROWTH - CL 05 05 11/01/1999 -16.48 1.35 REGATTA CHOICE STRATEGIC GROWTH - CL 06 06 11/01/1999 -16.61 1.20 REGATTA CHOICE BOND - CL 01 01 05/06/1998 2.55 2.52 REGATTA CHOICE BOND - CL 02 02 05/06/1998 2.40 2.37 REGATTA CHOICE BOND - CL 03 03 05/06/1998 2.30 2.26 REGATTA CHOICE BOND - CL 04 04 05/06/1998 2.25 2.21 REGATTA CHOICE BOND - CL 05 05 05/06/1998 2.14 2.11 REGATTA CHOICE BOND - CL 06 06 05/06/1998 1.99 1.96 REGATTA CHOICE GLOBAL TOTAL RETURN - CL 01 01 11/07/1994 -4.75 9.47 10.70 REGATTA CHOICE GLOBAL TOTAL RETURN - CL 02 02 11/07/1994 -4.89 9.30 10.53 REGATTA CHOICE GLOBAL TOTAL RETURN - CL 03 03 11/07/1994 -4.99 9.19 10.42 REGATTA CHOICE GLOBAL TOTAL RETURN - CL 04 04 11/07/1994 -5.03 9.13 10.36 REGATTA CHOICE GLOBAL TOTAL RETURN - CL 05 05 11/07/1994 -5.13 9.01 10.25 REGATTA CHOICE GLOBAL TOTAL RETURN - CL 06 06 11/07/1994 -5.27 8.84 10.08 REGATTA CHOICE NEW DISCOVERY - CL 01 01 05/06/1998 -6.68 19.26 REGATTA CHOICE NEW DISCOVERY - CL 02 02 05/06/1998 -6.82 19.07 REGATTA CHOICE NEW DISCOVERY - CL 03 03 05/06/1998 -6.91 18.95 REGATTA CHOICE NEW DISCOVERY - CL 04 04 05/06/1998 -6.96 18.88 REGATTA CHOICE NEW DISCOVERY - CL 05 05 05/06/1998 -7.05 18.76 REGATTA CHOICE NEW DISCOVERY - CL 06 06 05/06/1998 -7.19 18.57 REGATTA CHOICE HIGH YIELD - CL 01 01 11/30/1989 -13.21 2.93 10.12 7.33 REGATTA CHOICE HIGH YIELD - CL 02 02 11/30/1989 -13.34 2.77 9.96 7.17 REGATTA CHOICE HIGH YIELD - CL 03 03 11/30/1989 -13.42 2.66 9.85 7.06 REGATTA CHOICE HIGH YIELD - CL 04 04 11/30/1989 -13.47 2.60 9.79 7.01 REGATTA CHOICE HIGH YIELD - CL 05 05 11/30/1989 -13.55 2.50 9.68 6.90 REGATTA CHOICE HIGH YIELD - CL 06 06 11/30/1989 -13.68 2.33 9.51 6.73 REGATTA CHOICE GLOBAL ASSET ALLOCATION - CL 01 01 11/07/1994 -9.01 7.86 9.99 REGATTA CHOICE GLOBAL ASSET ALLOCATION - CL 02 02 11/07/1994 -9.14 7.69 9.82 REGATTA CHOICE GLOBAL ASSET ALLOCATION - CL 03 03 11/07/1994 -9.23 7.57 9.71 REGATTA CHOICE GLOBAL ASSET ALLOCATION - CL 04 04 11/07/1994 -9.28 7.52 9.65 REGATTA CHOICE GLOBAL ASSET ALLOCATION - CL 05 05 11/07/1994 -9.37 7.41 9.54 REGATTA CHOICE GLOBAL ASSET ALLOCATION - CL 06 06 11/07/1994 -9.50 7.24 9.37
The length of the period and the last day of each period used in the above table are set out in the table heading and in the footnotes above. The Average Annual Total Return for each period was determined by finding the average annual compounded rate of return over each period that would equate the initial amount invested to the ending redeemable value for that period, in accordance with the following formula: n P(l + T) = ERV Where: P = a hypothetical initial Purchase Payment of $1,000 T = average annual total return for the period n = number of years ERV = redeemable value (as of the end of the period) of a hypothetical $1,000 Purchase Payment made at the beginning of the 1-year, 5-year, or 10-year period (or fractional portion thereof) The formula assumes that: 1) all recurring fees have been deducted from the Participant's Account; 2) all applicable non-recurring Contract charges are deducted at the end of the period, and 3) there will be a full surrender at the end of the period. The annual Account Fee will be allocated among the Sub-Accounts so that each Sub-Account's allocated portion of the Account Fee is proportional to the percentage of the number of Contracts and Certificates that have amounts allocated to that Sub-Account. Because the impact of the Account Fee on a particular Contract may differ from those assumed in the computation due to differences between actual allocations and the assumed ones, the total return that would have been experienced by an actual Contract over these same time periods may have been different from that shown above. -3- NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURN: The table below shows, for various Sub-Accounts of the Variable Account, the Non-Standardized Average Annual Total Return for the stated periods (or shorter period indicated in the note below), based upon a hypothetical initial Purchase Payment of $1,000, calculated in accordance with the formula set out under "Standardized Average Annual Total Return." For purposes of determining these investment results, the actual investment performance of each Fund is reflected from the date such Fund commenced operations ("Inception"), although the Contracts have been offered only since June 9, 2000. NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURN PERIOD ENDING DECEMBER 31, 2000
FUND NAME CLASS SEC INCEPTION DATE 1 YR NAV 5 YR NAV 10 YR NAV LIFE NAV REGATTA CHOICE MONEY MARKET - CL 01 01 08/29/1985 4.91 4.10 3.62 4.45 REGATTA CHOICE MONEY MARKET - CL 02 02 08/29/1985 4.75 3.94 3.47 4.29 REGATTA CHOICE MONEY MARKET - CL 03 03 08/29/1985 4.64 3.83 3.36 4.19 REGATTA CHOICE MONEY MARKET - CL 04 04 08/29/1985 4.59 3.78 3.31 4.13 REGATTA CHOICE MONEY MARKET - CL 05 05 08/29/1985 4.49 3.68 3.21 4.03 REGATTA CHOICE MONEY MARKET - CL 06 06 08/29/1985 4.33 3.52 3.05 3.87 REGATTA CHOICE TECHNOLOGY - CL 01 01 06/16/2000 -15.05 REGATTA CHOICE TECHNOLOGY - CL 02 02 06/16/2000 -15.12 REGATTA CHOICE TECHNOLOGY - CL 03 03 06/16/2000 -15.16 REGATTA CHOICE TECHNOLOGY - CL 04 04 06/16/2000 -15.19 REGATTA CHOICE TECHNOLOGY - CL 05 05 06/16/2000 -15.23 REGATTA CHOICE TECHNOLOGY - CL 06 06 06/16/2000 -15.30 REGATTA CHOICE GLOBAL TELECOMMUNICATIONS - CL 01 01 08/31/2000 -34.18 REGATTA CHOICE GLOBAL TELECOMMUNICATIONS - CL 02 02 08/31/2000 -34.21 REGATTA CHOICE GLOBAL TELECOMMUNICATIONS - CL 03 03 08/31/2000 -34.23 REGATTA CHOICE GLOBAL TELECOMMUNICATIONS - CL 04 04 08/31/2000 -34.24 REGATTA CHOICE GLOBAL TELECOMMUNICATIONS - CL 05 05 08/31/2000 -34.26 REGATTA CHOICE GLOBAL TELECOMMUNICATIONS - CL 06 06 08/31/2000 -34.30 REGATTA CHOICE MID CAP GROWTH - CL 01 01 08/31/2000 -9.52 REGATTA CHOICE MID CAP GROWTH - CL 02 02 08/31/2000 -9.57 REGATTA CHOICE MID CAP GROWTH - CL 03 03 08/31/2000 -9.60 REGATTA CHOICE MID CAP GROWTH - CL 04 04 08/31/2000 -9.61 REGATTA CHOICE MID CAP GROWTH - CL 05 05 08/31/2000 -9.64 REGATTA CHOICE MID CAP GROWTH - CL 06 06 08/31/2000 -9.69 REGATTA CHOICE INTERNATIONAL INVESTORS TRUST - CL 01 01 10/02/1995 -3.34 8.16 7.98 REGATTA CHOICE INTERNATIONAL INVESTORS TRUST - CL 02 02 10/02/1995 -3.49 8.00 7.82 REGATTA CHOICE INTERNATIONAL INVESTORS TRUST - CL 03 03 10/02/1995 -3.59 7.89 7.71 REGATTA CHOICE INTERNATIONAL INVESTORS TRUST - CL 04 04 10/02/1995 -3.64 7.84 7.65 REGATTA CHOICE INTERNATIONAL INVESTORS TRUST - CL 05 05 10/02/1995 -3.73 7.73 7.54 REGATTA CHOICE INTERNATIONAL INVESTORS TRUST - CL 06 06 10/02/1995 -3.88 7.56 7.38 REGATTA CHOICE CAPITAL APPRECIATION - CL 01 01 08/13/1985 -12.30 16.57 17.46 15.34 REGATTA CHOICE CAPITAL APPRECIATION - CL 02 02 08/13/1985 -12.43 16.40 17.28 15.17 REGATTA CHOICE CAPITAL APPRECIATION - CL 03 03 08/13/1985 -12.52 16.28 17.17 15.05 REGATTA CHOICE CAPITAL APPRECIATION - CL 04 04 08/13/1985 -12.56 16.22 17.11 14.99 REGATTA CHOICE CAPITAL APPRECIATION - CL 05 05 08/13/1985 -12.65 16.10 16.99 14.88 REGATTA CHOICE CAPITAL APPRECIATION - CL 06 06 08/13/1985 -12.78 15.93 16.81 14.71 REGATTA CHOICE UTILITIES - CL 01 01 11/16/1993 5.92 20.21 17.21 REGATTA CHOICE UTILITIES - CL 02 02 11/16/1993 5.76 20.03 17.03 REGATTA CHOICE UTILITIES - CL 03 03 11/16/1993 5.66 19.91 16.91 REGATTA CHOICE UTILITIES - CL 04 04 11/16/1993 5.60 19.85 16.85 REGATTA CHOICE UTILITIES - CL 05 05 11/16/1993 5.50 19.73 16.74 REGATTA CHOICE UTILITIES - CL 06 06 11/16/1993 5.34 19.54 16.56 REGATTA CHOICE GLOBAL GOVERNMENTS - CL 01 01 05/16/1988 0.30 1.85 4.69 5.64 REGATTA CHOICE GLOBAL GOVERNMENTS - CL 02 02 05/16/1988 0.14 1.70 4.53 5.48 REGATTA CHOICE GLOBAL GOVERNMENTS - CL 03 03 05/16/1988 0.04 1.60 4.42 5.38 REGATTA CHOICE GLOBAL GOVERNMENTS - CL 04 04 05/16/1988 -0.01 1.54 4.37 5.32 REGATTA CHOICE GLOBAL GOVERNMENTS - CL 05 05 05/16/1988 -0.11 1.44 4.27 5.22 REGATTA CHOICE GLOBAL GOVERNMENTS - CL 06 06 05/16/1988 -0.26 1.29 4.11 5.06 REGATTA CHOICE MANAGED SECTORS - CL 01 01 05/27/1988 -21.61 18.34 17.79 16.48 REGATTA CHOICE MANAGED SECTORS - CL 02 02 05/27/1988 -21.73 18.16 17.62 16.30 REGATTA CHOICE MANAGED SECTORS - CL 03 03 05/27/1988 -21.81 18.04 17.50 16.19 REGATTA CHOICE MANAGED SECTORS - CL 04 04 05/27/1988 -21.85 17.98 17.44 16.13 REGATTA CHOICE MANAGED SECTORS - CL 05 05 05/27/1988 -21.93 17.86 17.32 16.01 REGATTA CHOICE MANAGED SECTORS - CL 06 06 05/27/1988 -22.05 17.68 17.15 15.84 REGATTA CHOICE TOTAL RETURN - CL 01 01 05/16/1988 15.64 12.18 12.09 11.37 REGATTA CHOICE TOTAL RETURN - CL 02 02 05/16/1988 15.47 12.01 11.93 11.20 REGATTA CHOICE TOTAL RETURN - CL 03 03 05/16/1988 15.35 11.90 11.81 11.09 REGATTA CHOICE TOTAL RETURN - CL 04 04 05/16/1988 15.29 11.84 11.76 11.03 REGATTA CHOICE TOTAL RETURN - CL 05 05 05/16/1988 15.18 11.73 11.64 10.92 REGATTA CHOICE TOTAL RETURN - CL 06 06 05/16/1988 15.00 11.56 11.48 10.75 REGATTA CHOICE GOVERNMENT SECURITIES - CL 01 01 08/12/1985 11.02 4.69 6.35 7.19 REGATTA CHOICE GOVERNMENT SECURITIES - CL 02 02 08/12/1985 10.85 4.53 6.19 7.03 REGATTA CHOICE GOVERNMENT SECURITIES - CL 03 03 08/12/1985 10.74 4.43 6.09 6.92 REGATTA CHOICE GOVERNMENT SECURITIES - CL 04 04 08/12/1985 10.69 4.37 6.03 6.87 REGATTA CHOICE GOVERNMENT SECURITIES - CL 05 05 08/12/1985 10.57 4.27 5.93 6.76 REGATTA CHOICE GOVERNMENT SECURITIES - CL 06 06 08/12/1985 10.41 4.11 5.77 6.60 REGATTA CHOICE MASS INVESTORS TRUST - CL 01 01 12/05/1986 -0.89 15.91 15.54 13.07 REGATTA CHOICE MASS INVESTORS TRUST - CL 02 02 12/05/1986 -1.04 15.74 15.37 12.90 REGATTA CHOICE MASS INVESTORS TRUST - CL 03 03 12/05/1986 -1.14 15.62 15.26 12.79 REGATTA CHOICE MASS INVESTORS TRUST - CL 04 04 12/05/1986 -1.19 15.56 15.20 12.73 REGATTA CHOICE MASS INVESTORS TRUST - CL 05 05 12/05/1986 -1.29 15.45 15.08 12.62 REGATTA CHOICE MASS INVESTORS TRUST - CL 06 06 12/05/1986 -1.44 15.27 14.91 12.45 REGATTA CHOICE GLOBAL GROWTH - CL 01 01 11/16/1993 -13.99 15.62 14.17 REGATTA CHOICE GLOBAL GROWTH - CL 02 02 11/16/1993 -14.12 15.45 14.00 REGATTA CHOICE GLOBAL GROWTH - CL 03 03 11/16/1993 -14.21 15.33 13.88 REGATTA CHOICE GLOBAL GROWTH - CL 04 04 11/16/1993 -14.25 15.27 13.82 REGATTA CHOICE GLOBAL GROWTH - CL 05 05 11/16/1993 -14.34 15.16 13.71 REGATTA CHOICE GLOBAL GROWTH - CL 06 06 11/16/1993 -14.47 14.98 13.54 REGATTA CHOICE RESEARCH - CL 01 01 11/07/1994 -5.07 16.17 18.51 REGATTA CHOICE RESEARCH - CL 02 02 11/07/1994 -5.21 15.91 18.26 REGATTA CHOICE RESEARCH - CL 03 03 11/07/1994 -5.31 15.74 18.10 REGATTA CHOICE RESEARCH - CL 04 04 11/07/1994 -5.36 15.65 18.02 REGATTA CHOICE RESEARCH - CL 05 05 11/07/1994 -5.45 15.48 17.85 REGATTA CHOICE RESEARCH - CL 06 06 11/07/1994 -5.59 15.22 17.60 REGATTA CHOICE CAPITAL OPPORTUNITIES - CL 01 01 06/03/1996 -5.81 21.01 REGATTA CHOICE CAPITAL OPPORTUNITIES - CL 02 02 06/03/1996 -5.96 20.82 REGATTA CHOICE CAPITAL OPPORTUNITIES - CL 03 03 06/03/1996 -6.05 20.70 REGATTA CHOICE CAPITAL OPPORTUNITIES - CL 04 04 06/03/1996 -6.10 20.64 REGATTA CHOICE CAPITAL OPPORTUNITIES - CL 05 05 06/03/1996 -6.19 20.52 REGATTA CHOICE CAPITAL OPPORTUNITIES - CL 06 06 06/03/1996 -6.33 20.34 REGATTA CHOICE INTERNATIONAL GROWTH - CL 01 01 06/03/1996 -8.72 3.58 REGATTA CHOICE INTERNATIONAL GROWTH - CL 02 02 06/03/1996 -8.86 3.42 REGATTA CHOICE INTERNATIONAL GROWTH - CL 03 03 06/03/1996 -8.95 3.32 REGATTA CHOICE INTERNATIONAL GROWTH - CL 04 04 06/03/1996 -8.99 3.27 REGATTA CHOICE INTERNATIONAL GROWTH - CL 05 05 06/03/1996 -9.08 3.16 REGATTA CHOICE INTERNATIONAL GROWTH - CL 06 06 06/03/1996 -9.22 3.00 REGATTA CHOICE EMERGING MARKETS EQUITY - CL 01 01 06/05/1996 -23.50 -2.98 REGATTA CHOICE EMERGING MARKETS EQUITY - CL 02 02 06/05/1996 -23.62 -3.12 REGATTA CHOICE EMERGING MARKETS EQUITY - CL 03 03 06/05/1996 -23.69 -3.22 REGATTA CHOICE EMERGING MARKETS EQUITY - CL 04 04 06/05/1996 -23.73 -3.27 REGATTA CHOICE EMERGING MARKETS EQUITY - CL 05 05 06/05/1996 -23.81 -3.37 REGATTA CHOICE EMERGING MARKETS EQUITY - CL 06 06 06/05/1996 -23.93 -3.52 REGATTA CHOICE MASS INVESTORS GROWTH - CL 01 01 05/05/1998 -7.06 16.60 REGATTA CHOICE MASS INVESTORS GROWTH - CL 02 02 05/05/1998 -7.20 16.42 REGATTA CHOICE MASS INVESTORS GROWTH - CL 03 03 05/05/1998 -7.29 16.30 REGATTA CHOICE MASS INVESTORS GROWTH - CL 04 04 05/05/1998 -7.34 16.25 REGATTA CHOICE MASS INVESTORS GROWTH - CL 05 05 05/05/1998 -7.43 16.13 REGATTA CHOICE MASS INVESTORS GROWTH - CL 06 06 05/05/1998 -7.57 15.95 REGATTA CHOICE VALUE - CL 01 01 05/05/1998 28.96 14.25 REGATTA CHOICE VALUE - CL 02 02 05/05/1998 28.77 14.08 REGATTA CHOICE VALUE - CL 03 03 05/05/1998 28.64 13.96 REGATTA CHOICE VALUE - CL 04 04 05/05/1998 28.58 13.90 REGATTA CHOICE VALUE - CL 05 05 05/05/1998 28.45 13.79 REGATTA CHOICE VALUE - CL 06 06 05/05/1998 28.25 13.61 REGATTA CHOICE STRATEGIC INCOME - CL 01 01 05/05/1998 1.88 1.92 REGATTA CHOICE STRATEGIC INCOME - CL 02 02 05/05/1998 1.72 1.77 REGATTA CHOICE STRATEGIC INCOME - CL 03 03 05/05/1998 1.62 1.67 REGATTA CHOICE STRATEGIC INCOME - CL 04 04 05/05/1998 1.57 1.61 REGATTA CHOICE STRATEGIC INCOME - CL 05 05 05/05/1998 1.47 1.51 REGATTA CHOICE STRATEGIC INCOME - CL 06 06 05/05/1998 1.32 1.36 REGATTA CHOICE EMERGING GROWTH - CL 01 01 05/01/1995 -19.89 20.94 23.18 REGATTA CHOICE EMERGING GROWTH - CL 02 02 05/01/1995 -20.01 20.76 23.00 REGATTA CHOICE EMERGING GROWTH - CL 03 03 05/01/1995 -20.09 20.64 22.88 REGATTA CHOICE EMERGING GROWTH - CL 04 04 05/01/1995 -20.13 20.58 22.81 REGATTA CHOICE EMERGING GROWTH - CL 05 05 05/01/1995 -20.21 20.46 22.69 REGATTA CHOICE EMERGING GROWTH - CL 06 06 05/01/1995 -20.34 20.28 22.51 REGATTA CHOICE RESEARCH INTERNATIONAL - CL 01 01 05/05/1998 -8.87 10.63 REGATTA CHOICE RESEARCH INTERNATIONAL - CL 02 02 05/05/1998 -9.01 10.47 REGATTA CHOICE RESEARCH INTERNATIONAL - CL 03 03 05/05/1998 -9.10 10.35 REGATTA CHOICE RESEARCH INTERNATIONAL - CL 04 04 05/05/1998 -9.14 10.30 REGATTA CHOICE RESEARCH INTERNATIONAL - CL 05 05 05/05/1998 -9.24 10.19 REGATTA CHOICE RESEARCH INTERNATIONAL - CL 06 06 05/05/1998 -9.37 10.02 REGATTA CHOICE RESEARCH GROWTH & INCOME - CL 01 01 05/12/1997 2.08 10.72 REGATTA CHOICE RESEARCH GROWTH & INCOME - CL 02 02 05/12/1997 1.92 10.55 REGATTA CHOICE RESEARCH GROWTH & INCOME - CL 03 03 05/12/1997 1.82 10.44 REGATTA CHOICE RESEARCH GROWTH & INCOME - CL 04 04 05/12/1997 1.77 10.38 REGATTA CHOICE RESEARCH GROWTH & INCOME - CL 05 05 05/12/1997 1.67 10.27 REGATTA CHOICE RESEARCH GROWTH & INCOME - CL 06 06 05/12/1997 1.51 10.10 REGATTA CHOICE STRATEGIC GROWTH - CL 01 01 11/01/1999 -10.88 7.49 REGATTA CHOICE STRATEGIC GROWTH - CL 02 02 11/01/1999 -11.02 7.33 REGATTA CHOICE STRATEGIC GROWTH - CL 03 03 11/01/1999 -11.11 7.22 REGATTA CHOICE STRATEGIC GROWTH - CL 04 04 11/01/1999 -11.15 7.16 REGATTA CHOICE STRATEGIC GROWTH - CL 05 05 11/01/1999 -11.24 7.06 REGATTA CHOICE STRATEGIC GROWTH - CL 06 06 11/01/1999 -11.38 6.89 REGATTA CHOICE BOND - CL 01 01 05/05/1998 9.17 4.63 REGATTA CHOICE BOND - CL 02 02 05/05/1998 9.00 4.47 REGATTA CHOICE BOND - CL 03 03 05/05/1998 8.89 4.37 REGATTA CHOICE BOND - CL 04 04 05/05/1998 8.84 4.31 REGATTA CHOICE BOND - CL 05 05 05/05/1998 8.73 4.21 REGATTA CHOICE BOND - CL 06 06 05/05/1998 8.56 4.05 REGATTA CHOICE GLOBAL TOTAL RETURN - CL 01 01 11/07/1994 1.30 10.17 11.00 REGATTA CHOICE GLOBAL TOTAL RETURN - CL 02 02 11/07/1994 1.15 10.00 10.83 REGATTA CHOICE GLOBAL TOTAL RETURN - CL 03 03 11/07/1994 1.05 9.89 10.72 REGATTA CHOICE GLOBAL TOTAL RETURN - CL 04 04 11/07/1994 0.99 9.83 10.66 REGATTA CHOICE GLOBAL TOTAL RETURN - CL 05 05 11/07/1994 0.89 9.72 10.55 REGATTA CHOICE GLOBAL TOTAL RETURN - CL 06 06 11/07/1994 0.74 9.55 10.38 REGATTA CHOICE NEW DISCOVERY - CL 01 01 05/05/1998 -0.61 21.10 REGATTA CHOICE NEW DISCOVERY - CL 02 02 05/05/1998 -0.76 20.92 REGATTA CHOICE NEW DISCOVERY - CL 03 03 05/05/1998 -0.86 20.79 REGATTA CHOICE NEW DISCOVERY - CL 04 04 05/05/1998 -0.91 20.73 REGATTA CHOICE NEW DISCOVERY - CL 05 05 05/05/1998 -1.01 20.61 REGATTA CHOICE NEW DISCOVERY - CL 06 06 05/05/1998 -1.16 20.43 REGATTA CHOICE HIGH YIELD - CL 01 01 08/13/1985 -7.70 3.89 10.18 7.25 REGATTA CHOICE HIGH YIELD - CL 02 02 08/13/1985 -7.84 3.74 10.01 7.09 REGATTA CHOICE HIGH YIELD - CL 03 03 08/13/1985 -7.94 3.63 9.90 6.98 REGATTA CHOICE HIGH YIELD - CL 04 04 08/13/1985 -7.98 3.58 9.84 6.93 REGATTA CHOICE HIGH YIELD - CL 05 05 08/13/1985 -8.07 3.47 9.73 6.82 REGATTA CHOICE HIGH YIELD - CL 06 06 08/13/1985 -8.21 3.32 9.57 6.66 REGATTA CHOICE GLOBAL ASSET ALLOCATION - CL 01 01 11/07/1994 -3.28 8.59 10.29 REGATTA CHOICE GLOBAL ASSET ALLOCATION - CL 02 02 11/07/1994 -3.42 8.43 10.13 REGATTA CHOICE GLOBAL ASSET ALLOCATION - CL 03 03 11/07/1994 -3.52 8.32 10.02 REGATTA CHOICE GLOBAL ASSET ALLOCATION - CL 04 04 11/07/1994 -3.57 8.26 9.96 REGATTA CHOICE GLOBAL ASSET ALLOCATION - CL 05 05 11/07/1994 -3.66 8.15 9.85 REGATTA CHOICE GLOBAL ASSET ALLOCATION - CL 06 06 11/07/1994 -3.81 7.99 9.68
-4- NON-STANDARDIZED COMPOUND GROWTH RATE The table below shows, for various Sub-Accounts of the Variable Account, the Non-Standardized Compound Growth Rate for the stated periods (or shorter period indicated in the note below), based upon a hypothetical investment, calculated in accordance with the formula set out under "Standardized Average Annual Return," except that no withdrawal charges or annual Account Fees have been deducted. If withdrawal charges or Account Fees were reflected, returns would be lower (see "Standardized Average Annual Total Return" and "Non-Standardized Average Annual Return"). For purposes of determining these investment results, the actual investment performance of each Fund is reflected from the date such Fund commenced operations ("Inception"), although the Contracts have been offered only since June 9, 2000. NON-STANDARDIZED COMPOUND GROWTH RATE PERIOD ENDING DECEMBER 31, 2000
FUND NAME CLASS SEC INCEPTION DATE 1 YR LOAD 5 YR LOAD 10 YR LOAD LIFE LOAD REGATTA CHOICE MONEY MARKET - CL 01 01 08/29/1985 -1.42 3.20 3.59 4.33 REGATTA CHOICE MONEY MARKET - CL 02 02 08/29/1985 -1.57 3.03 3.44 4.17 REGATTA CHOICE MONEY MARKET - CL 03 03 08/29/1985 -1.66 2.93 3.33 4.07 REGATTA CHOICE MONEY MARKET - CL 04 04 08/29/1985 -1.71 2.87 3.28 4.01 REGATTA CHOICE MONEY MARKET - CL 05 05 08/29/1985 -1.81 2.76 3.18 3.91 REGATTA CHOICE MONEY MARKET - CL 06 06 08/29/1985 -1.96 2.60 3.02 3.75 REGATTA CHOICE TECHNOLOGY - CL 01 01 06/16/2000 -20.06 REGATTA CHOICE TECHNOLOGY - CL 02 02 06/16/2000 -20.12 REGATTA CHOICE TECHNOLOGY - CL 03 03 06/16/2000 -20.17 REGATTA CHOICE TECHNOLOGY - CL 04 04 06/16/2000 -20.19 REGATTA CHOICE TECHNOLOGY - CL 05 05 06/16/2000 -20.23 REGATTA CHOICE TECHNOLOGY - CL 06 06 06/16/2000 -20.29 REGATTA CHOICE GLOBAL TELECOMMUNICATIONS - CL 01 01 08/31/2000 -40.13 REGATTA CHOICE GLOBAL TELECOMMUNICATIONS - CL 02 02 08/31/2000 -40.16 REGATTA CHOICE GLOBAL TELECOMMUNICATIONS - CL 03 03 08/31/2000 -40.19 REGATTA CHOICE GLOBAL TELECOMMUNICATIONS - CL 04 04 08/31/2000 -40.20 REGATTA CHOICE GLOBAL TELECOMMUNICATIONS - CL 05 05 08/31/2000 -40.22 REGATTA CHOICE GLOBAL TELECOMMUNICATIONS - CL 06 06 08/31/2000 -40.25 REGATTA CHOICE MID CAP GROWTH - CL 01 01 08/31/2000 -15.50 REGATTA CHOICE MID CAP GROWTH - CL 02 02 08/31/2000 -15.55 REGATTA CHOICE MID CAP GROWTH - CL 03 03 08/31/2000 -15.58 REGATTA CHOICE MID CAP GROWTH - CL 04 04 08/31/2000 -15.59 REGATTA CHOICE MID CAP GROWTH - CL 05 05 08/31/2000 -15.62 REGATTA CHOICE MID CAP GROWTH - CL 06 06 08/31/2000 -15.67 REGATTA CHOICE INTERNATIONAL INVESTORS TRUST - CL 01 01 10/02/1995 -9.08 7.41 7.41 REGATTA CHOICE INTERNATIONAL INVESTORS TRUST - CL 02 02 10/02/1995 -9.21 7.24 7.24 REGATTA CHOICE INTERNATIONAL INVESTORS TRUST - CL 03 03 10/02/1995 -9.30 7.13 7.13 REGATTA CHOICE INTERNATIONAL INVESTORS TRUST - CL 04 04 10/02/1995 -9.35 7.07 7.07 REGATTA CHOICE INTERNATIONAL INVESTORS TRUST - CL 05 05 10/02/1995 -9.44 6.96 6.96 REGATTA CHOICE INTERNATIONAL INVESTORS TRUST - CL 06 06 10/02/1995 -9.57 6.79 6.79 REGATTA CHOICE CAPITAL APPRECIATION - CL 01 01 08/13/1985 -17.58 15.88 17.36 15.25 REGATTA CHOICE CAPITAL APPRECIATION - CL 02 02 08/13/1985 -17.70 15.70 17.18 15.08 REGATTA CHOICE CAPITAL APPRECIATION - CL 03 03 08/13/1985 -17.78 15.58 17.06 14.96 REGATTA CHOICE CAPITAL APPRECIATION - CL 04 04 08/13/1985 -17.82 15.52 17.00 14.90 REGATTA CHOICE CAPITAL APPRECIATION - CL 05 05 08/13/1985 -17.91 15.40 16.89 14.79 REGATTA CHOICE CAPITAL APPRECIATION - CL 06 06 08/13/1985 -18.03 15.22 16.71 14.62 REGATTA CHOICE UTILITIES - CL 01 01 11/16/1993 -0.62 19.59 17.06 REGATTA CHOICE UTILITIES - CL 02 02 11/16/1993 -0.77 19.41 16.88 REGATTA CHOICE UTILITIES - CL 03 03 11/16/1993 -0.87 19.29 16.77 REGATTA CHOICE UTILITIES - CL 04 04 11/16/1993 -0.92 19.22 16.71 REGATTA CHOICE UTILITIES - CL 05 05 11/16/1993 -1.01 19.10 16.59 REGATTA CHOICE UTILITIES - CL 06 06 11/16/1993 -1.16 18.92 16.41 REGATTA CHOICE GLOBAL GOVERNMENTS - CL 01 01 05/16/1988 -5.69 0.94 4.67 5.54 REGATTA CHOICE GLOBAL GOVERNMENTS - CL 02 02 05/16/1988 -5.83 0.79 4.51 5.38 REGATTA CHOICE GLOBAL GOVERNMENTS - CL 03 03 05/16/1988 -5.93 0.69 4.41 5.28 REGATTA CHOICE GLOBAL GOVERNMENTS - CL 04 04 05/16/1988 -5.98 0.64 4.36 5.22 REGATTA CHOICE GLOBAL GOVERNMENTS - CL 05 05 05/16/1988 -6.07 0.54 4.25 5.12 REGATTA CHOICE GLOBAL GOVERNMENTS - CL 06 06 05/16/1988 -6.21 0.38 4.09 4.96 REGATTA CHOICE MANAGED SECTORS - CL 01 01 05/27/1988 -26.11 17.78 17.76 16.40 REGATTA CHOICE MANAGED SECTORS - CL 02 02 05/27/1988 -26.22 17.60 17.59 16.22 REGATTA CHOICE MANAGED SECTORS - CL 03 03 05/27/1988 -26.29 17.48 17.47 16.11 REGATTA CHOICE MANAGED SECTORS - CL 04 04 05/27/1988 -26.33 17.42 17.41 16.05 REGATTA CHOICE MANAGED SECTORS - CL 05 05 05/27/1988 -26.40 17.29 17.29 15.93 REGATTA CHOICE MANAGED SECTORS - CL 06 06 05/27/1988 -26.51 17.11 17.11 15.76 REGATTA CHOICE TOTAL RETURN - CL 01 01 05/16/1988 8.54 11.46 12.03 11.25 REGATTA CHOICE TOTAL RETURN - CL 02 02 05/16/1988 8.37 11.29 11.86 11.08 REGATTA CHOICE TOTAL RETURN - CL 03 03 05/16/1988 8.25 11.18 11.75 10.97 REGATTA CHOICE TOTAL RETURN - CL 04 04 05/16/1988 8.19 11.12 11.69 10.91 REGATTA CHOICE TOTAL RETURN - CL 05 05 05/16/1988 8.08 11.00 11.58 10.80 REGATTA CHOICE TOTAL RETURN - CL 06 06 05/16/1988 7.91 10.83 11.41 10.63 REGATTA CHOICE GOVERNMENT SECURITIES - CL 01 01 08/12/1985 4.22 3.76 6.29 7.08 REGATTA CHOICE GOVERNMENT SECURITIES - CL 02 02 08/12/1985 4.07 3.60 6.13 6.92 REGATTA CHOICE GOVERNMENT SECURITIES - CL 03 03 08/12/1985 3.96 3.49 6.02 6.81 REGATTA CHOICE GOVERNMENT SECURITIES - CL 04 04 08/12/1985 3.91 3.44 5.97 6.76 REGATTA CHOICE GOVERNMENT SECURITIES - CL 05 05 08/12/1985 3.81 3.33 5.86 6.65 REGATTA CHOICE GOVERNMENT SECURITIES - CL 06 06 08/12/1985 3.65 3.16 5.70 6.49 REGATTA CHOICE MASS INVESTORS TRUST - CL 01 01 12/05/1986 -7.07 15.14 15.40 12.95 REGATTA CHOICE MASS INVESTORS TRUST - CL 02 02 12/05/1986 -7.21 14.96 15.23 12.78 REGATTA CHOICE MASS INVESTORS TRUST - CL 03 03 12/05/1986 -7.30 14.84 15.12 12.67 REGATTA CHOICE MASS INVESTORS TRUST - CL 04 04 12/05/1986 -7.35 14.78 15.06 12.61 REGATTA CHOICE MASS INVESTORS TRUST - CL 05 05 12/05/1986 -7.44 14.66 14.94 12.50 REGATTA CHOICE MASS INVESTORS TRUST - CL 06 06 12/05/1986 -7.58 14.49 14.77 12.33 REGATTA CHOICE GLOBAL GROWTH - CL 01 01 11/16/1993 -19.04 15.00 14.11 REGATTA CHOICE GLOBAL GROWTH - CL 02 02 11/16/1993 -19.16 14.82 13.94 REGATTA CHOICE GLOBAL GROWTH - CL 03 03 11/16/1993 -19.24 14.70 13.82 REGATTA CHOICE GLOBAL GROWTH - CL 04 04 11/16/1993 -19.28 14.64 13.76 REGATTA CHOICE GLOBAL GROWTH - CL 05 05 11/16/1993 -19.36 14.52 13.65 REGATTA CHOICE GLOBAL GROWTH - CL 06 06 11/16/1993 -19.48 14.34 13.48 REGATTA CHOICE RESEARCH - CL 01 01 11/07/1994 -10.82 15.50 18.20 REGATTA CHOICE RESEARCH - CL 02 02 11/07/1994 -10.95 15.24 17.95 REGATTA CHOICE RESEARCH - CL 03 03 11/07/1994 -11.04 15.06 17.78 REGATTA CHOICE RESEARCH - CL 04 04 11/07/1994 -11.08 14.97 17.70 REGATTA CHOICE RESEARCH - CL 05 05 11/07/1994 -11.17 14.79 17.53 REGATTA CHOICE RESEARCH - CL 06 06 11/07/1994 -11.31 14.53 17.28 REGATTA CHOICE CAPITAL OPPORTUNITIES - CL 01 01 06/03/1996 -11.62 20.24 REGATTA CHOICE CAPITAL OPPORTUNITIES - CL 02 02 06/03/1996 -11.75 20.06 REGATTA CHOICE CAPITAL OPPORTUNITIES - CL 03 03 06/03/1996 -11.84 19.94 REGATTA CHOICE CAPITAL OPPORTUNITIES - CL 04 04 06/03/1996 -11.88 19.87 REGATTA CHOICE CAPITAL OPPORTUNITIES - CL 05 05 06/03/1996 -11.97 19.75 REGATTA CHOICE CAPITAL OPPORTUNITIES - CL 06 06 06/03/1996 -12.10 19.56 REGATTA CHOICE INTERNATIONAL GROWTH - CL 01 01 06/03/1996 -14.15 2.49 REGATTA CHOICE INTERNATIONAL GROWTH - CL 02 02 06/03/1996 -14.28 2.33 REGATTA CHOICE INTERNATIONAL GROWTH - CL 03 03 06/03/1996 -14.37 2.22 REGATTA CHOICE INTERNATIONAL GROWTH - CL 04 04 06/03/1996 -14.41 2.16 REGATTA CHOICE INTERNATIONAL GROWTH - CL 05 05 06/03/1996 -14.50 2.06 REGATTA CHOICE INTERNATIONAL GROWTH - CL 06 06 06/03/1996 -14.62 1.90 REGATTA CHOICE EMERGING MARKETS EQUITY - CL 01 01 06/05/1996 -27.84 -3.91 REGATTA CHOICE EMERGING MARKETS EQUITY - CL 02 02 06/05/1996 -27.94 -4.05 REGATTA CHOICE EMERGING MARKETS EQUITY - CL 03 03 06/05/1996 -28.02 -4.15 REGATTA CHOICE EMERGING MARKETS EQUITY - CL 04 04 06/05/1996 -28.05 -4.19 REGATTA CHOICE EMERGING MARKETS EQUITY - CL 05 05 06/05/1996 -28.12 -4.29 REGATTA CHOICE EMERGING MARKETS EQUITY - CL 06 06 06/05/1996 -28.23 -4.43 REGATTA CHOICE MASS INVESTORS GROWTH - CL 01 01 05/05/1998 -12.86 14.47 REGATTA CHOICE MASS INVESTORS GROWTH - CL 02 02 05/05/1998 -12.99 14.29 REGATTA CHOICE MASS INVESTORS GROWTH - CL 03 03 05/05/1998 -13.08 14.17 REGATTA CHOICE MASS INVESTORS GROWTH - CL 04 04 05/05/1998 -13.12 14.11 REGATTA CHOICE MASS INVESTORS GROWTH - CL 05 05 05/05/1998 -13.21 13.99 REGATTA CHOICE MASS INVESTORS GROWTH - CL 06 06 05/05/1998 -13.34 13.81 REGATTA CHOICE VALUE - CL 01 01 05/05/1998 21.90 12.34 REGATTA CHOICE VALUE - CL 02 02 05/05/1998 21.70 12.16 REGATTA CHOICE VALUE - CL 03 03 05/05/1998 21.57 12.04 REGATTA CHOICE VALUE - CL 04 04 05/05/1998 21.51 11.98 REGATTA CHOICE VALUE - CL 05 05 05/05/1998 21.38 11.86 REGATTA CHOICE VALUE - CL 06 06 05/05/1998 21.18 11.69 REGATTA CHOICE STRATEGIC INCOME - CL 01 01 05/05/1998 -4.22 -0.10 REGATTA CHOICE STRATEGIC INCOME - CL 02 02 05/05/1998 -4.36 -0.25 REGATTA CHOICE STRATEGIC INCOME - CL 03 03 05/05/1998 -4.46 -0.35 REGATTA CHOICE STRATEGIC INCOME - CL 04 04 05/05/1998 -4.51 -0.40 REGATTA CHOICE STRATEGIC INCOME - CL 05 05 05/05/1998 -4.60 -0.50 REGATTA CHOICE STRATEGIC INCOME - CL 06 06 05/05/1998 -4.74 -0.65 REGATTA CHOICE EMERGING GROWTH - CL 01 01 05/01/1995 -24.75 20.25 22.72 REGATTA CHOICE EMERGING GROWTH - CL 02 02 05/01/1995 -24.86 20.06 22.53 REGATTA CHOICE EMERGING GROWTH - CL 03 03 05/01/1995 -24.94 19.94 22.40 REGATTA CHOICE EMERGING GROWTH - CL 04 04 05/01/1995 -24.97 19.88 22.34 REGATTA CHOICE EMERGING GROWTH - CL 05 05 05/01/1995 -25.05 19.75 22.22 REGATTA CHOICE EMERGING GROWTH - CL 06 06 05/01/1995 -25.16 19.57 22.03 REGATTA CHOICE RESEARCH INTERNATIONAL - CL 01 01 05/05/1998 -14.27 8.61 REGATTA CHOICE RESEARCH INTERNATIONAL - CL 02 02 05/05/1998 -14.40 8.44 REGATTA CHOICE RESEARCH INTERNATIONAL - CL 03 03 05/05/1998 -14.48 8.33 REGATTA CHOICE RESEARCH INTERNATIONAL - CL 04 04 05/05/1998 -14.53 8.27 REGATTA CHOICE RESEARCH INTERNATIONAL - CL 05 05 05/05/1998 -14.61 8.15 REGATTA CHOICE RESEARCH INTERNATIONAL - CL 06 06 05/05/1998 -14.74 7.98 REGATTA CHOICE RESEARCH GROWTH & INCOME - CL 01 01 05/12/1997 -4.05 9.41 REGATTA CHOICE RESEARCH GROWTH & INCOME - CL 02 02 05/12/1997 -4.19 9.24 REGATTA CHOICE RESEARCH GROWTH & INCOME - CL 03 03 05/12/1997 -4.28 9.12 REGATTA CHOICE RESEARCH GROWTH & INCOME - CL 04 04 05/12/1997 -4.33 9.06 REGATTA CHOICE RESEARCH GROWTH & INCOME - CL 05 05 05/12/1997 -4.43 8.95 REGATTA CHOICE RESEARCH GROWTH & INCOME - CL 06 06 05/12/1997 -4.57 8.78 REGATTA CHOICE STRATEGIC GROWTH - CL 01 01 11/01/1999 -16.15 1.76 REGATTA CHOICE STRATEGIC GROWTH - CL 02 02 11/01/1999 -16.28 1.60 REGATTA CHOICE STRATEGIC GROWTH - CL 03 03 11/01/1999 -16.36 1.50 REGATTA CHOICE STRATEGIC GROWTH - CL 04 04 11/01/1999 -16.40 1.45 REGATTA CHOICE STRATEGIC GROWTH - CL 05 05 11/01/1999 -16.48 1.35 REGATTA CHOICE STRATEGIC GROWTH - CL 06 06 11/01/1999 -16.61 1.20 REGATTA CHOICE BOND - CL 01 01 05/05/1998 2.55 2.52 REGATTA CHOICE BOND - CL 02 02 05/05/1998 2.40 2.37 REGATTA CHOICE BOND - CL 03 03 05/05/1998 2.30 2.26 REGATTA CHOICE BOND - CL 04 04 05/05/1998 2.25 2.21 REGATTA CHOICE BOND - CL 05 05 05/05/1998 2.14 2.11 REGATTA CHOICE BOND - CL 06 06 05/05/1998 1.99 1.96 REGATTA CHOICE GLOBAL TOTAL RETURN - CL 01 01 11/07/1994 -4.75 9.47 10.70 REGATTA CHOICE GLOBAL TOTAL RETURN - CL 02 02 11/07/1994 -4.89 9.30 10.53 REGATTA CHOICE GLOBAL TOTAL RETURN - CL 03 03 11/07/1994 -4.99 9.19 10.42 REGATTA CHOICE GLOBAL TOTAL RETURN - CL 04 04 11/07/1994 -5.03 9.13 10.36 REGATTA CHOICE GLOBAL TOTAL RETURN - CL 05 05 11/07/1994 -5.13 9.01 10.25 REGATTA CHOICE GLOBAL TOTAL RETURN - CL 06 06 11/07/1994 -5.27 8.84 10.08 REGATTA CHOICE NEW DISCOVERY - CL 01 01 05/05/1998 -6.68 19.26 REGATTA CHOICE NEW DISCOVERY - CL 02 02 05/05/1998 -6.82 19.07 REGATTA CHOICE NEW DISCOVERY - CL 03 03 05/05/1998 -6.91 18.95 REGATTA CHOICE NEW DISCOVERY - CL 04 04 05/05/1998 -6.96 18.88 REGATTA CHOICE NEW DISCOVERY - CL 05 05 05/05/1998 -7.05 18.76 REGATTA CHOICE NEW DISCOVERY - CL 06 06 05/05/1998 -7.19 18.57 REGATTA CHOICE HIGH YIELD - CL 01 01 08/13/1985 -13.21 2.93 10.12 7.14 REGATTA CHOICE HIGH YIELD - CL 02 02 08/13/1985 -13.34 2.77 9.96 6.98 REGATTA CHOICE HIGH YIELD - CL 03 03 08/13/1985 -13.42 2.66 9.85 6.87 REGATTA CHOICE HIGH YIELD - CL 04 04 08/13/1985 -13.47 2.60 9.79 6.82 REGATTA CHOICE HIGH YIELD - CL 05 05 08/13/1985 -13.55 2.50 9.68 6.71 REGATTA CHOICE HIGH YIELD - CL 06 06 08/13/1985 -13.68 2.33 9.51 6.55 REGATTA CHOICE GLOBAL ASSET ALLOCATION - CL 01 01 11/07/1994 -9.01 7.86 9.99 REGATTA CHOICE GLOBAL ASSET ALLOCATION - CL 02 02 11/07/1994 -9.14 7.69 9.82 REGATTA CHOICE GLOBAL ASSET ALLOCATION - CL 03 03 11/07/1994 -9.23 7.57 9.71 REGATTA CHOICE GLOBAL ASSET ALLOCATION - CL 04 04 11/07/1994 -9.28 7.52 9.65 REGATTA CHOICE GLOBAL ASSET ALLOCATION - CL 05 05 11/07/1994 -9.37 7.41 9.54 REGATTA CHOICE GLOBAL ASSET ALLOCATION - CL 06 06 11/07/1994 -9.50 7.24 9.37
ADDITIONAL NON-STANDARDIZED INVESTMENT PERFORMANCE: The Variable Account may illustrate its results over various periods and compare its results to indices and other variable annuities in sales materials including advertisements, brochures and sports. Such results may be computed on a "cumulative" and/or "annualized" basis. "Cumulative" quotations are arrived at by calculating the change in the Accumulation Unit value of a Sub-Account between the first and last day of the base period being measured, and expressing the difference as a percentage of the Accumulation Unit value at the beginning of the base period. "Annualized" quotations are calculated by applying a formula which determines the level rate of return which, if earned over the entire base period, would produce the cumulative return. -5- ADVERTISING AND SALES LITERATURE As set forth in the Prospectus, the Company may refer to the following organizations (and others) in its marketing materials: A.M. BEST'S RATING SYSTEM is designed to evaluate the various factors affecting the overall performance of an insurance company in order to provide an opinion as to an insurance company's relative financial strength and ability to meet its contractual obligations. The procedure includes both a quantitative and qualitative review of each company. DUFF & PHELPS CREDIT RATING Company's Insurance Company Claims Paying Ability Rating is an independent evaluation by a nationally accredited rating organization of an insurance company's ability to meet its future obligations under the contracts and products it sells. The rating takes into account both quantitative and qualitative factors. LIPPER VARIABLE INSURANCE PRODUCTS PERFORMANCE ANALYSIS SERVICE is a publisher of statistical data covering the investment company industry in the United States and overseas. Lipper is recognized as the leading source of data on open-end and closed-end funds. Lipper currently tracks the performance of over 5,000 investment companies and publishes numerous specialized reports, including reports on performance and portfolio analysis, fee and expense analysis. STANDARD & POOR's insurance claims-paying ability rating is an opinion of an operating insurance company's financial capacity to meet obligations of its insurance policies in accordance with their terms. VARDS (Variable Annuity Research Data Service) provides a comprehensive guide to variable annuity contract features and historical fund performance. The service also provides a readily understandable analysis of the comparative characteristics and market performance of funds inclusive in variable contracts. MOODY'S Investors Services, Inc.'s insurance claims-paying rating is a system of rating an insurance company's financial strength, market leadership, and ability to meet financial obligations. The purpose of Moody's ratings is to provide investors with a simple system of gradation by which the relative quality of insurance companies may be noted. STANDARD & POOR'S INDEX - broad-based measurement of changes in stock-market conditions based on the average performance of 500 widely held common stocks; commonly known as the Standard & Poor's 500 (S&P 500). The selection of stocks, their relative weightings to reflect differences in the number of outstanding shares, and publication of the index itself are services of Standard & Poor's Corporation, a financial advisory, securities rating, and publishing firm. The index tracks 400 industrial company stocks, 20 transportation stocks, 40 financial company stocks, and 40 public utilities. -6- NASDAQ-OTC Price Index - this index is based on the National Association of Securities Dealers Automated Quotations (NASDAQ) and represents all domestic over-the-counter stocks except those traded on exchanges and those having only one market maker, a total of some 3,500 stocks. It is market valueweighted and was introduced with a base of 100.00 on February 5, 1971. DOW JONES INDUSTRIAL AVERAGE (DJIA) - price-weighted average of 30 actively traded blue chip stocks, primarily industrials, but including American Express Company and American Telephone and Telegraph Company. Prepared and Published by Dow Jones & Company, it is the oldest and most widely quoted of all the market indicators. The average is quoted in points, not dollars. MORNINGSTAR, Inc. is an independent financial publisher offering comprehensive statistical and analytical coverage of open-end and closed-end funds and variable annuities. This coverage for mutual funds includes, among other information, performance analysis rankings, risk rankings (e.g. aggressive, moderate or conservative), and "style box" matrices. Style box matrices display, for equity funds, the investment philosophy and size of the companies in which the fund invests and, for fixed-income funds, interest rate sensitivity and credit quality of the investment instruments. IBBOTSON ASSOCIATES, Inc. is a consulting firm that provides a variety of historical data, including total return, capital appreciation and income, on the stock market as well as other investment asset classes, and inflation. This information will be used primarily for comparative purposes and to illustrate general financial planning principles. In its advertisements and other sales literature for the Variable Account and the Series Fund, the Company may illustrate the advantages of the Contracts in a number of ways: DOLLAR-COST AVERAGING ILLUSTRATIONS. These illustrations will generally discuss the price-leveling effect of making regular investments in the same Sub-Accounts over a period of time, to take advantage of the trends in market prices of the portfolio securities purchased by those Sub-Accounts. SYSTEMATIC WITHDRAWAL PROGRAM. A service provided by the Company, through which a Participant may take any distribution allowed by Internal Revenue Code Section 401 (a) (9) in the case of Qualified Contracts, or permitted under Internal Revenue Code Section 72 in the case of Non-Qualified Contracts, by way of a series of partial withdrawals. Withdrawals under this program may be fully or partially includible in income and may be subject to a 10% penalty tax. Consult your tax advisor. THE COMPANY'S OR THE FUNDS' CUSTOMERS. Sales literature for the Variable Account and the Funds may refer to the number of clients which they serve. THE COMPANY'S ASSETS, SIZE. The Company may discuss its general financial condition (see, for example, the references to Standard & Poor's, Duff & Phelps and A.M. Best Company above). It may refer to its assets; it may also discuss its -7- relative size and/or ranking among companies in the industry or among any sub-classification of those companies, based upon recognized evaluation criteria. For example, at December 31, 1998 the Company was the 36th largest U.S. life insurance company based upon overall assets. COMPOUND INTEREST ILLUSTRATIONS. These will emphasize several advantages of the variable annuity contract. For example, but not by way of limitation, the literature may emphasize the potential savings through tax deferral; the potential advantage of the Variable Account over the Fixed Account; and the compounding effect when a participant makes regular deposits to his or her account. The Company may use hypothetical illustrations of the benefits of tax deferral, including but not limited to the following chart: The chart below assumes an initial investment of $10,000 which remains fully invested for the entire time period, an 8% annual return, and a 33% combined federal and state income tax rate. It compares how three different investments might fare over 10, 20, and 30 years. The first example illustrates an investment in a non-tax-deferred account and assumes that taxes are paid annually out of that account. The second example illustrates how the same investment would grow in a tax-deferred investment, such as an annuity. And the third example illustrates the net value of the tax-deferred investment after paying taxes on the full account value.
-------------------------------------------------------------------------------- 10 YEARS 20 YEARS 30 YEARS -------------------------------------------------------------------------------- Non-Tax-Deferred Account $16,856 $28,413 $ 47,893 -------------------------------------------------------------------------------- Tax-Deferred Account $21,589 $46,610 $100,627 -------------------------------------------------------------------------------- Tax-Deferred Account After $17,765 $34,528 $ 70,720 -------------------------------------------------------------------------------- Paying Taxes --------------------------------------------------------------------------------
THIS ILLUSTRATION IS HYPOTHETICAL AND DOES NOT REPRESENT THE PROJECTED PERFORMANCE OF THE CONTRACTS OR ANY OF THE INVESTMENT OPTIONS THEREUNDER. THE ILLUSTRATION DOES NOT REFLECT THE DEDUCTION OF ANY CHARGES OR FEES RELATED TO PORTFOLIO MANAGEMENT, MORTALITY AND EXPENSE, OR ACCOUNT ADMINISTRATION. TAXES ON EARNINGS WITHIN AN ANNUITY ARE DUE UPON WITHDRAWAL. WITHDRAWALS MAY ALSO BE SUBJECT TO SURRENDER CHARGES AND, IF MADE PRIOR TO AGE 59 1/2, A 10% FEDERAL PENALTY TAX. -8- TAX-DEFERRED ACCUMULATION In general, individuals who own annuity contracts are not taxed on increases in the value of their annuity contracts until some form of distribution is made under the contract. As a result, the annuity contract would benefit from tax deferral during the contract's accumulation phase; this would have the effect of permitting an investment in an annuity contract to grow more rapidly that a comparable investment under which increases in value are taxed on a current basis. In reports or other communications to you or in advertising or sales materials, we may also describe the effects of tax-deferred compounding on the Variable Account's investment returns. We may illustrate these effects in charts or graphs and from time to time may include comparisons of returns under the Contracts or in general on a tax deferred basis, with the returns on a taxable basis. Different tax rates may be assumed. Any such illustrative chart or graph would show accumulations on an initial investment or Purchase Payment, assuming a given amount (including the applicable interest credit), hypothetical gross annual returns compounded annually, and a stated rate of return. The values shown for the taxable investment would not include any deduction for management fees or other expenses, but would assume the annual deduction of federal and state taxes from investment returns. The values shown for the Contracts in a chart would reflect the deduction of Contract expenses, such as the mortality and expense risk charge, the 0.15% administrative charge, and the annual Account Fee. In addition, the values shown would assume that the Participant has not surrendered his or her Contract or made any partial surrenders until the end of the period shown. The chart would assume a full surrender at the end of the period shown and the payment of federal and state taxes, at a rate of not more than 33%, on the amount in excess of the Purchase Payments. In developing illustrative tax deferral charts, we will observe these general principles: - The assumed rate of earnings will be realistic. - The illustrative chart will accurately depict the effect of all fees and charges or provide a narrative that prominently discloses all fees and charges under the Contract. - Charts comparing accumulation values for tax-deferred and non-tax- deferred investments will depict the implications of any surrender. - A narrative accompanying the chart will prominently disclose that there may be a 10% tax penalty on a surrender by a Participant who has not reached age 59 1/2 at the time of surrender. The rates of return illustrated in any chart would be hypothetical and are not an estimate or guaranty of performance. Actual tax returns may vary for among Participants. -9- CALCULATIONS EXAMPLE OF VARIABLE ACCUMULATION UNIT VALUE CALCULATION Suppose the net asset value of a Fund share at the end of the current valuation period is $18.38; at the end of the immediately preceding valuation period was $18.32; the Valuation Period is one day; and no dividends or distributions caused Fund shares to go "ex-dividend" during the current Valuation Period. $18.38 divided by $18.32 is 1.00327511. Subtracting the one day risk factor for mortality and expense risks and the administrative expense charge of .00004280 (the daily equivalent of the current maximum charge of 1.55% on an annual basis) gives a net investment factor of 1.00323231. If the value of the variable accumulation unit for the immediately preceding valuation period had been 14.5645672, the value for the current valuation period would be 14.6116444 (14.5645672 X 1.00323231). EXAMPLE OF VARIABLE ANNUITY UNIT CALCULATION Suppose the circumstances of the first example exist, and the value of an annuity unit for the immediately preceding valuation period had been 12.3456789. If the first variable annuity payment is determined by using an annuity payment based on an assumed interest rate of 3% per year, the value of the annuity unit for the current valuation period would be 12.3456789 (12.3456789 X 1.00323648 (the Net Investment Factor (based on the daily equivalent of maximum annuity phase charge of 1.40% on an annual basis) X 0.99991902). 0.99991902 is the factor, for a one day Valuation Period, that neutralizes the assumed interest rate of 3% per year used to establish the Annuity Payment Rates found in certain Contracts. EXAMPLE OF VARIABLE ANNUITY PAYMENT CALCULATION Suppose that a Participant Account is credited with 8,765.4321 variable accumulation units of a particular Sub-Account but is not credited with any fixed accumulation units; that the variable accumulation unit value and the annuity unit value for the particular Sub-Account for the valuation period which ends immediately preceding the annuity commencement date are 14.5645672 and 12.3456789 respectively; that the annuity payment rate for the age and option elected is $6.78 per $1,000; and that the annuity unit value on the day prior to the second variable annuity payment date is 12.3846325. The first variable annuity payment would be $865.57 (8,765.4321 X 14.5645672 X 6.78 divided by 1,000). The number of annuity units credited would be 70.1112 ($865.57 divided by 12.3456789) and the second variable annuity payment would be $868.30 (70.1112 X 12.3846325). DISTRIBUTION OF THE CONTRACTS We offer the Contracts on a continuous basis. The Contracts are sold by licensed insurance agents in those states where the Contracts may be lawfully sold. Such agents will be registered representatives of broker-dealers registered under the Securities Exchange Act of 1934 who are members of the National Association of Securities Dealers, Inc. and who have entered into distribution agreements with the Company and the general distributor and principal underwriter of the Contracts, Clarendon Insurance Agency, Inc. ("Clarendon"), One Sun Life Executive Park, Wellesley Hills, Massachusetts 02481. Clarendon is a wholly-owned subsidiary of the Company. Clarendon is registered with the SEC under the Securities Exchange Act of 1934 as broker-dealer and is a member of the National Association of Securities Dealers, Inc. Clarendon also acts as the general distributor of certain other annuity contracts issued by the Company and its wholly-owned subsidiary, Sun Life Insurance and Annuity Company of New York, and variable life insurance contracts issued by the Company. Commissions and other distribution compensation will be paid by the Company to the selling agents and will not be more than 6.50% of Purchase Payments. In addition, after the first Account Year, broker-dealers who have entered into distribution agreements with the Company may receive an annual renewal commission of no more than 1.00% of the Participant's Account Value. In addition to commissions, the Company may, from time to time, pay or allow additional promotional incentives, in the form of cash or other compensation. The Company reserves the right to offer these additional incentives only to certain -10- broker-dealers that sell or are expected to sell during specified time periods certain minimum amounts of the Contracts or Certificates or other contracts offered by the Company. Promotional incentives may change at any time. Commissions will not be paid with respect to Participant Accounts established for the personal account of employees of the Company or any of its affiliates, or of persons engaged in the distribution of the Contracts, or of immediate family members of such employees or persons. In addition, commissions may be waived or reduced in connection with certain transactions described in the Prospectus under the heading "Waivers; Reduced Charges; Credits; Bonus Guaranteed Interest Rates." DESIGNATION AND CHANGE OF BENEFICIARY The Beneficiary designation in the Application will remain in effect until changed. Subject to the rights of an irrevocably designated Beneficiary, you may change or revoke the designation of Beneficiary by filing the change or revocation with us in the form we require. The change or revocation will not be binding on us until we receive it. When we receive it, the change or revocation will be effective as of the date on which it was signed, but the change or revocation will be without prejudice to us on account of any payment we make or any action we take before receiving the change or revocation. Please refer to the terms of your particular retirement plan and any applicable legislation for any restrictions on the beneficiary designation. CUSTODIAN We are the Custodian of the assets of the Variable Account. We will purchase Fund shares at net asset value in connection with amounts allocated to the Sub-Accounts in accordance with your instructions, and we will redeem Fund shares at net asset value for the purpose of meeting the contractual obligations of the Variable Account, paying charges relative to the Variable Account or making adjustments for annuity reserves held in the Variable Account. FINANCIAL STATEMENTS The Financial Statements of Sun Life Assurance Company of Canada (U.S.) and Sun Life of Canada (U.S.) Variable Account F for the year ended December 31, 2000 included in this Statement of Additional Information have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report appearing herein, and are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. -11- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF CONDITION -- December 31, 2000
Assets: Shares Cost Value Investments in MFS/Sun Life Series Trust: ----------- --------------- --------------- Bond Series (BDS)........................................................... 6,945,956 $ 72,485,326 $ 75,801,229 Capital Appreciation Series (CAS)........................................... 37,638,137 1,635,436,901 1,563,811,316 Capital Opportunities Series (COS).......................................... 32,764,491 678,089,522 678,556,339 Massachusetts Investors Trust Series (MIT).................................. 60,265,885 2,048,447,416 2,116,714,768 Emerging Growth Series (EGS)................................................ 44,167,497 1,126,340,305 1,294,761,902 Equity Income Series (EIS).................................................. 8,517,056 103,491,732 123,096,195 Foreign & Colonial Emerging Markets Equity Series (FCE)..................... 4,099,557 42,036,603 36,172,421 International Growth Series (FCG)........................................... 9,804,688 116,223,967 116,091,019 International Growth and Income Series (FCI)................................ 6,061,251 79,600,507 79,749,350 Government Securities Series (GSS).......................................... 36,895,933 469,497,913 483,680,403 High Yield Series (HYS)..................................................... 36,535,651 319,096,935 278,690,582 Managed Sectors Series (MSS)................................................ 15,462,169 532,038,910 515,662,970 Massachusetts Investors Growth Stock Series (MIS)........................... 63,183,460 920,880,421 916,516,646 Money Market Series (MMS)................................................... 407,274,585 407,274,585 407,274,585 New Discovery Series (NWD).................................................. 12,727,441 209,332,996 203,436,519 Research Series (RES)....................................................... 49,272,086 1,035,114,094 1,165,268,770 Research Growth and Income Series (RGS)..................................... 6,080,086 84,747,546 88,881,190 Research International Series (RSS)......................................... 6,461,987 85,640,617 82,067,000 Strategic Income Series (SIS)............................................... 3,265,125 32,716,399 32,973,500 Technology Series (TEC)..................................................... 3,743,550 39,324,251 31,977,258 Total Return Series (TRS)................................................... 87,037,789 1,673,301,652 1,714,191,583 Utilities Series (UTS)...................................................... 28,869,333 500,952,829 550,728,451 Global Asset Allocation Series (GAA)........................................ 7,491,154 109,670,687 112,086,374 Global Governments Series (GGS)............................................. 5,520,332 58,383,981 54,951,929 Global Growth Series (GGR).................................................. 20,941,469 357,009,908 386,864,303 Global Total Return Series (GTR)............................................ 6,175,093 93,043,314 97,206,196 Strategic Growth Series (SGS)............................................... 7,950,192 99,085,196 86,726,239 Global Telecommunications Series (GTS)...................................... 211,831 1,681,089 1,399,652 Mid Cap Growth Series (MCS)................................................. 2,903,366 27,549,609 26,352,613 --------------- --------------- $12,958,495,211 $13,321,691,302 =============== Liability: Payable to Sponsor.......................................................................................... (279,403) --------------- Net Assets............................................................................................ $13,321,411,899 ===============
Applicable to Owners of Deferred Variable Annuity Contracts NET ASSETS APPLICABLE TO CONTRACT OWNERS: -------------------------------------- Reserve for Variable Units Unit Value Value Annuities Total ------------ ---------- ------------ ----------- ------------ MFS REGATTA CONTRACTS: CAS -- Level 1......................... 11,530 $43.5138 $ 511,586 $ 46,689 $ 558,275 CAS -- Level 2......................... 6,760,138 17.6165 118,930,021 746,211 119,676,232 GSS -- Level 1......................... -- 19.1452 15,308 -- 15,308 GSS -- Level 2......................... 2,286,456 12.3292 28,170,455 64,583 28,235,038 HYS -- Level 1......................... -- 21.1985 9,327 1,960 11,287 HYS -- Level 2......................... 793,524 10.7858 8,560,582 56,342 8,616,924 MSS -- Level 1......................... 1,925 43.1986 176,432 -- 176,432 MSS -- Level 2......................... 2,338,746 19.5219 45,497,710 145,062 45,642,772 MMS -- Level 1......................... 17,506 14.7250 465,085 14,372 479,457 MMS -- Level 2......................... 1,879,078 11.6753 21,668,078 198,994 21,867,072 TRS -- Level 1......................... 1,939 31.0297 78,798 26,922 105,720 TRS -- Level 2......................... 7,233,035 15.6038 112,785,165 1,295,690 114,080,855 GGS -- Level 1......................... -- 17.4601 11,753 43,625 55,378 GGS -- Level 2......................... 467,220 10.4696 4,891,197 146,695 5,037,892 ------------ ---------- ------------ $341,771,497 $2,787,145 $344,558,642 ------------ ---------- ------------
See notes to financial statements -12- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF CONDITION -- December 31, 2000 -- continued
Applicable to Owners of Deferred Variable Annuity Contracts Reserve for NET ASSETS APPLICABLE TO CONTRACT OWNERS: -- CONTINUED -------------------------------------- Variable Units Unit Value Value Annuities Total ---------- ---------- -------------- ----------- -------------- MFS REGATTA GOLD CONTRACTS: BDS......................................... 2,088,013 $11.1632 $ 23,325,656 $ 70,900 $ 23,396,556 CAS......................................... 28,788,776 39.7512 1,144,152,064 6,672,392 1,150,824,456 COS......................................... 14,107,765 23.5054 331,610,649 630,174 332,240,823 MIT......................................... 41,704,826 33.0944 1,380,070,314 5,208,217 1,385,278,531 EGS......................................... 26,624,559 31.8797 848,805,757 2,482,522 851,288,279 EIS......................................... 2,482,414 14.1123 35,029,470 -- 35,029,470 FCE......................................... 2,106,206 8.5507 18,007,002 69,650 18,076,652 FCG......................................... 3,565,669 11.5330 41,121,331 90,137 41,211,468 FCI......................................... 3,893,735 14.6479 57,042,462 119,258 57,161,720 GSS......................................... 19,297,556 16.1449 311,600,059 1,525,301 313,125,360 HYS......................................... 9,905,313 17.4566 172,937,634 778,097 173,715,731 MSS......................................... 9,988,070 36.3635 362,735,711 1,245,724 363,981,435 MIS......................................... 15,174,988 14.8314 225,045,214 614,989 225,660,203 MMS......................................... 19,204,526 13.1917 253,381,243 1,505,142 254,886,385 NWD......................................... 3,434,468 16.4626 56,537,092 147,189 56,684,281 RES......................................... 32,640,173 27.4545 895,861,573 3,106,197 898,967,770 RGS......................................... 2,575,213 14.2743 36,760,751 109,786 36,870,537 RSS......................................... 1,479,722 12.9474 19,160,003 7,435 19,167,438 SIS......................................... 933,731 10.4119 9,731,528 -- 9,731,528 TEC......................................... 427,471 7.2306 3,090,988 -- 3,090,988 TRS......................................... 48,765,253 25.8470 1,260,204,332 5,706,508 1,265,910,840 UTS......................................... 9,961,031 30.1152 299,955,671 857,552 300,813,223 GAA......................................... 5,558,481 17.8190 99,068,332 616,922 99,685,254 GGS......................................... 2,796,363 14.2380 39,830,602 285,003 40,115,605 GGR......................................... 12,229,092 24.9770 305,431,837 1,168,731 306,600,568 GTR......................................... 4,242,817 18.5311 78,621,904 388,442 79,010,346 SGS......................................... 2,390,144 10.8282 25,880,022 160,152 26,040,174 GTS......................................... 10,929 7.2836 79,611 -- 79,611 MCS......................................... 730,917 9.2484 6,759,318 -- 6,759,318 -------------- ----------- -------------- $8,341,838,130 $33,566,420 $8,375,404,550 -------------- ----------- --------------
See notes to financial statements -13- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF CONDITION -- December 31, 2000 -- continued
Applicable to Owners of Deferred Variable Annuity Contracts Reserve for NET ASSETS APPLICABLE TO CONTRACT OWNERS: -- CONTINUED ------------------------------------- Variable Units Unit Value Value Annuities Total ---------- ---------- ------------- ----------- ------------- MFS REGATTA CLASSIC CONTRACTS: BDS......................................... 29,104 $11.0360 $ 321,141 $ -- $ 321,141 CAS......................................... 543,964 17.5473 9,542,181 -- 9,542,181 COS......................................... 485,523 21.9313 10,641,365 -- 10,641,365 MIT......................................... 1,238,791 16.4889 20,416,920 402 20,417,322 EGS......................................... 1,263,787 21.1925 26,776,379 -- 26,776,379 EIS......................................... 89,759 14.4888 1,300,277 -- 1,300,277 FCE......................................... 79,524 9.0542 719,753 -- 719,753 FCG......................................... 119,386 11.9669 1,428,734 -- 1,428,734 FCI......................................... 90,031 14.2429 1,282,901 -- 1,282,901 GSS......................................... 311,094 12.3626 3,852,942 -- 3,852,942 HYS......................................... 299,513 10.9236 3,265,147 -- 3,265,147 MSS......................................... 297,796 19.0125 5,660,845 -- 5,660,845 MIS......................................... 730,554 14.9288 10,908,008 -- 10,908,008 MMS......................................... 292,942 11.7080 3,431,394 -- 3,431,394 NWD......................................... 225,158 16.5708 3,730,897 -- 3,730,897 RES......................................... 1,050,110 16.6799 17,512,399 -- 17,512,399 RGS......................................... 59,489 14.1418 840,958 -- 840,958 RSS......................................... 71,931 15.3492 1,104,049 -- 1,104,049 SIS......................................... 34,656 10.3918 360,075 -- 360,075 TEC......................................... 21,219 7.2387 153,611 -- 153,611 TRS......................................... 1,811,237 15.4684 28,011,820 890 28,012,710 UTS......................................... 362,778 20.3946 7,388,822 -- 7,388,822 GAA......................................... 46,359 13.1098 608,387 -- 608,387 GGS......................................... 29,465 10.7567 316,925 -- 316,925 GGR......................................... 161,980 18.3211 2,966,236 -- 2,966,236 GTR......................................... 103,608 14.1702 1,467,677 429 1,468,106 SGS......................................... 124,043 9.9709 1,236,782 -- 1,236,782 GTS......................................... 987 7.2889 7,197 -- 7,197 MCS......................................... 17,306 9.2506 160,070 -- 160,070 ------------ ------ ------------ $165,413,892 $1,721 $165,415,613 ------------ ------ ------------
See notes to financial statements -14- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF CONDITION -- December 31, 2000 -- continued
Applicable to Owners of Deferred Variable Annuity Contracts Reserve for NET ASSETS APPLICABLE TO CONTRACT OWNERS: -- CONTINUED -------------------------------------- Variable Units Unit Value Value Annuities Total ---------- ---------- -------------- ----------- -------------- MFS REGATTA PLATINUM CONTRACTS: BDS......................................... 3,829,426 $10.9776 $ 42,040,531 $ 21,214 $ 42,061,745 CAS......................................... 16,123,178 12.9537 208,840,865 1,075,133 209,915,998 COS......................................... 13,234,146 14.7527 195,235,300 396,872 195,632,172 MIT......................................... 49,003,728 11.2603 551,778,317 1,812,833 553,591,150 EGS......................................... 17,416,607 16.0186 278,979,541 834,633 279,814,174 EIS......................................... 3,963,761 14.2652 56,538,115 47,256 56,585,371 FCE......................................... 1,169,900 9.3494 10,936,740 119,873 11,056,613 FCG......................................... 4,164,308 11.3110 47,100,258 53,133 47,153,391 FCI......................................... 1,256,955 11.5075 14,463,725 54,886 14,518,611 GSS......................................... 9,623,917 11.1320 107,127,330 203,501 107,330,831 HYS......................................... 7,800,151 9.2019 71,741,864 243,330 71,985,194 MSS......................................... 4,523,093 15.1253 68,410,605 233,688 68,644,293 MIS......................................... 32,630,497 14.7585 481,554,423 929,998 482,484,421 MMS......................................... 5,319,403 10.9862 58,436,533 274,148 58,710,681 NWD......................................... 4,753,246 16.2788 77,375,239 410,350 77,785,589 RES......................................... 14,126,725 12.7530 180,153,426 555,788 180,709,214 RGS......................................... 3,623,901 11.2123 40,631,607 74,567 40,706,174 RSS......................................... 2,001,503 13.1523 26,324,194 236,665 26,560,859 SIS......................................... 1,535,324 10.3225 15,848,663 15,688 15,864,351 TEC......................................... 283,087 7.2300 2,046,823 -- 2,046,823 TRS......................................... 20,955,708 12.0159 251,798,788 1,225,092 253,023,880 UTS......................................... 11,646,870 14.9137 173,708,503 264,839 173,973,342 GAA......................................... 694,593 10.9303 7,591,399 5,832 7,597,231 GGS......................................... 558,947 10.5176 5,877,135 52,957 5,930,092 GGR......................................... 3,209,391 14.5301 46,629,481 102,594 46,732,075 GTR......................................... 1,216,055 11.2785 13,715,480 38,078 13,753,558 SGS......................................... 1,785,408 10.6697 19,048,533 -- 19,048,533 GTS......................................... 31,509 7.1839 226,409 -- 226,409 MCS......................................... 353,162 9.2479 3,265,982 -- 3,265,982 -------------- ---------- -------------- $3,057,425,809 $9,282,948 $3,066,708,757 -------------- ---------- --------------
See notes to financial statements -15- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF CONDITION -- December 31, 2000 -- continued
Applicable to Owners of Deferred Variable Annuity Contracts Reserve for NET ASSETS APPLICABLE TO CONTRACT OWNERS: -- CONTINUED ------------------------------------ Variable Units Unit Value Value Annuities Total --------- ---------- ------------- ----------- ------------- MFS REGATTA EXTRA CONTRACTS: BDS -- Level 1............................. 77,459 $10.7940 $ 836,092 $ -- $ 836,092 BDS -- Level 2............................. 65,066 10.7836 701,646 -- 701,646 BDS -- Level 3............................. 214,623 10.7767 2,312,917 -- 2,312,917 BDS -- Level 4............................. 86,798 10.7662 934,501 -- 934,501 CAS -- Level 1............................. 693,430 8.8067 6,106,838 -- 6,106,838 CAS -- Level 2............................. 1,128,952 8.7981 9,932,647 -- 9,932,647 CAS -- Level 3............................. 2,130,547 8.7924 18,732,587 -- 18,732,587 CAS -- Level 4............................. 541,268 8.7838 4,752,477 -- 4,752,477 COS -- Level 1............................. 1,309,871 9.3555 12,254,520 -- 12,254,520 COS -- Level 2............................. 1,690,475 9.3464 15,799,775 -- 15,799,775 COS -- Level 3............................. 3,382,049 9.3402 31,589,168 -- 31,589,168 COS -- Level 4............................. 1,139,592 9.3310 10,630,350 -- 10,630,350 MIT -- Level 1............................. 1,567,339 10.0762 15,792,847 -- 15,792,847 MIT -- Level 2............................. 2,171,833 10.0663 21,862,426 -- 21,862,426 MIT -- Level 3............................. 4,232,336 10.0598 42,576,344 -- 42,576,344 MIT -- Level 4............................. 1,325,352 10.0499 13,314,939 -- 13,314,939 EGS -- Level 1............................. 1,479,829 8.7059 12,883,212 -- 12,883,212 EGS -- Level 2............................. 2,015,613 8.6973 17,530,447 -- 17,530,447 EGS -- Level 3............................. 4,326,107 8.6916 37,601,000 -- 37,601,000 EGS -- Level 4............................. 1,307,630 8.6831 11,351,835 -- 11,351,835 EIS -- Level 1............................. 203,752 12.5910 2,565,453 -- 2,565,453 EIS -- Level 2............................. 208,713 12.5789 2,625,371 -- 2,625,371 EIS -- Level 3............................. 454,482 12.5708 5,713,195 -- 5,713,195 EIS -- Level 4............................. 111,256 12.5586 1,396,992 -- 1,396,992 FCE -- Level 1............................. 57,546 8.1666 469,951 -- 469,951 FCE -- Level 2............................. 124,787 8.1587 1,018,101 -- 1,018,101 FCE -- Level 3............................. 128,994 8.1534 1,051,745 -- 1,051,745 FCE -- Level 4............................. 60,368 8.1455 491,687 -- 491,687 FCG -- Level 1............................. 233,234 9.3003 2,169,146 -- 2,169,146 FCG -- Level 2............................. 341,396 9.2913 3,171,996 -- 3,171,996 FCG -- Level 3............................. 818,429 9.2852 7,599,307 -- 7,599,307 FCG -- Level 4............................. 224,129 9.2762 2,078,176 -- 2,078,176 FCI -- Level 1............................. 96,662 9.7297 940,491 -- 940,491 FCI -- Level 2............................. 78,014 9.7205 758,336 -- 758,336 FCI -- Level 3............................. 229,167 9.7143 2,226,203 -- 2,226,203 FCI -- Level 4............................. 11,409 9.7051 110,563 -- 110,563 GSS -- Level 1............................. 217,774 10.7679 2,344,964 -- 2,344,964 GSS -- Level 2............................. 364,621 10.7573 3,922,333 -- 3,922,333 GSS -- Level 3............................. 531,971 10.7502 5,718,811 -- 5,718,811 GSS -- Level 4............................. 310,046 10.7396 3,328,604 -- 3,328,604 HYS -- Level 1............................. 246,939 9.2152 2,275,601 -- 2,275,601 HYS -- Level 2............................. 277,607 9.2064 2,555,758 -- 2,555,758 HYS -- Level 3............................. 410,208 9.2005 3,774,115 -- 3,774,115 HYS -- Level 4............................. 174,044 9.1916 1,599,237 -- 1,599,237 MSS -- Level 1............................. 342,650 8.2945 2,842,108 -- 2,842,108 MSS -- Level 2............................. 485,882 8.2864 4,026,200 -- 4,026,200 MSS -- Level 3............................. 1,051,021 8.2810 8,703,493 -- 8,703,493 MSS -- Level 4............................. 395,973 8.2729 3,273,475 -- 3,273,475 MIS -- Level 1............................. 2,157,835 9.4222 20,331,535 -- 20,331,535
See notes to financial statements -16- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF CONDITION -- December 31, 2000 -- continued
Applicable to Owners of Deferred Variable Annuity Contracts Reserve for NET ASSETS APPLICABLE TO CONTRACT OWNERS: -- CONTINUED ------------------------------------ Variable Units Unit Value Value Annuities Total --------- ---------- ------------- ----------- ------------- MFS REGATTA EXTRA CONTRACTS: -- CONTINUED MIS -- Level 2............................. 2,559,854 $ 9.4130 $ 24,095,833 $ -- $ 24,095,833 MIS -- Level 3............................. 4,923,997 9.4068 46,319,165 -- 46,319,165 MIS -- Level 4............................. 1,511,093 9.3976 14,147,054 -- 14,147,054 MMS -- Level 1............................. 728,487 10.3184 7,516,806 -- 7,516,806 MMS -- Level 2............................. 741,527 10.3084 7,643,965 -- 7,643,965 MMS -- Level 3............................. 1,220,849 10.3018 12,576,905 -- 12,576,905 MMS -- Level 4............................. 568,861 10.2918 5,849,664 -- 5,849,664 NWD -- Level 1............................. 529,521 10.3314 5,470,703 -- 5,470,703 NWD -- Level 2............................. 869,196 10.3213 8,971,234 -- 8,971,234 NWD -- Level 3............................. 1,704,282 10.3146 17,578,921 -- 17,578,921 NWD -- Level 4............................. 664,181 10.3044 6,842,369 -- 6,842,369 RES -- Level 1............................. 661,535 9.4985 6,283,600 -- 6,283,600 RES -- Level 2............................. 721,446 9.4892 6,845,949 -- 6,845,949 RES -- Level 3............................. 1,500,613 9.4830 14,230,303 -- 14,230,303 RES -- Level 4............................. 443,675 9.4737 4,202,002 -- 4,202,002 RGS -- Level 1............................. 67,362 10.2001 687,107 -- 687,107 RGS -- Level 2............................. 117,704 10.1903 1,199,444 -- 1,199,444 RGS -- Level 3............................. 222,322 10.1838 2,264,077 -- 2,264,077 RGS -- Level 4............................. 91,377 10.1739 929,458 -- 929,458 RSS -- Level 1............................. 307,752 9.2229 2,838,382 -- 2,838,382 RSS -- Level 2............................. 504,142 9.2139 4,645,141 -- 4,645,141 RSS -- Level 3............................. 995,558 9.2080 9,167,060 -- 9,167,060 RSS -- Level 4............................. 272,786 9.1989 2,508,193 -- 2,508,193 SIS -- Level 1............................. 41,244 10.2398 422,325 -- 422,325 SIS -- Level 2............................. 72,666 10.2299 743,367 -- 743,367 SIS -- Level 3............................. 213,393 10.2234 2,181,592 -- 2,181,592 SIS -- Level 4............................. 23,478 10.2135 239,566 -- 239,566 TEC -- Level 1............................. 76,758 7.2283 554,831 -- 554,831 TEC -- Level 2............................. 118,443 7.2234 855,560 -- 855,560 TEC -- Level 3............................. 211,211 7.2201 1,524,959 -- 1,524,959 TEC -- Level 4............................. 80,731 7.2151 582,467 -- 582,467 TRS -- Level 1............................. 531,259 11.4353 6,075,091 -- 6,075,091 TRS -- Level 2............................. 732,960 11.4242 8,373,481 -- 8,373,481 TRS -- Level 3............................. 767,913 11.4169 8,767,151 -- 8,767,151 TRS -- Level 4............................. 263,691 11.4058 3,007,124 -- 3,007,124 UTS -- Level 1............................. 670,496 10.4779 7,025,377 -- 7,025,377 UTS -- Level 2............................. 609,336 10.4676 6,378,303 -- 6,378,303 UTS -- Level 3............................. 1,283,992 10.4608 13,431,577 -- 13,431,577 UTS -- Level 4............................. 401,366 10.4505 4,191,416 -- 4,191,416 GAA -- Level 1............................. 26,394 9.8099 258,923 -- 258,923 GAA -- Level 2............................. 78,745 9.8001 771,716 -- 771,716 GAA -- Level 3............................. 172,825 9.7937 1,692,603 -- 1,692,603 GAA -- Level 4............................. 9,050 9.7841 88,473 -- 88,473 GGS -- Level 1............................. 20,989 10.3268 216,746 -- 216,746 GGS -- Level 2............................. 70,817 10.3167 730,598 -- 730,598 GGS -- Level 3............................. 49,235 10.3100 507,615 -- 507,615 GGS -- Level 4............................. 27,812 10.2999 286,376 -- 286,376 GGR -- Level 1............................. 346,962 9.0816 3,150,977 -- 3,150,977 GGR -- Level 2............................. 349,891 9.0727 3,174,465 -- 3,174,465
See notes to financial statements -17- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF CONDITION -- December 31, 2000 -- continued
Applicable to Owners of Deferred Variable Annuity Contracts Reserve for NET ASSETS APPLICABLE TO CONTRACT OWNERS: -- CONTINUED ------------------------------------ Variable Units Unit Value Value Annuities Total --------- ---------- ------------- ----------- ------------- MFS REGATTA EXTRA CONTRACTS: -- CONTINUED GGR -- Level 3............................. 869,483 $ 9.0668 $ 7,883,427 $ -- $ 7,883,427 GGR -- Level 4............................. 297,452 9.0579 2,693,256 -- 2,693,256 GTR -- Level 1............................. 37,443 10.1186 378,868 -- 378,868 GTR -- Level 2............................. 42,261 10.1087 427,205 -- 427,205 GTR -- Level 3............................. 61,103 10.1022 617,272 -- 617,272 GTR -- Level 4............................. 19,112 10.0923 192,795 -- 192,795 SGS -- Level 1............................. 253,737 8.5749 2,175,773 -- 2,175,773 SGS -- Level 2............................. 401,168 8.5665 3,436,614 -- 3,436,614 SGS -- Level 3............................. 850,553 8.5609 7,281,535 -- 7,281,535 SGS -- Level 4............................. 236,104 8.5525 2,018,462 -- 2,018,462 GTS -- Level 1............................. 3,116 7.2821 22,691 -- 22,691 GTS -- Level 2............................. 24,218 7.2788 176,276 -- 176,276 GTS -- Level 3............................. 33,185 7.2767 241,477 -- 241,477 GTS -- Level 4............................. 4,925 7.2734 35,824 -- 35,824 MCS -- Level 1............................. 76,464 9.2420 706,681 -- 706,681 MCS -- Level 2............................. 142,977 9.2379 1,320,803 -- 1,320,803 MCS -- Level 3............................. 399,687 9.2351 3,691,168 -- 3,691,168 MCS -- Level 4............................. 137,221 9.2310 1,265,810 -- 1,265,810 ------------ ------- ------------ $709,191,466 $ -- $709,191,466 ------------ ------- ------------
See notes to financial statements -18- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF CONDITION -- December 31, 2000 -- continued
Applicable to Owners of Deferred Variable Annuity Contracts Reserve for NET ASSETS APPLICABLE TO CONTRACT OWNERS: -- CONTINUED ------------------------------------ Variable Units Unit Value Value Annuities Total --------- ---------- ------------- ----------- ------------- MFS REGATTA ACCESS CONTRACTS: BDS -- Level 1............................. 9,176 $10.5347 $ 96,664 $ -- $ 96,664 BDS -- Level 3............................. 86,674 10.5230 912,064 -- 912,064 BDS -- Level 4............................. 31,146 10.5160 327,529 -- 327,529 BDS -- Level 5............................. 47,680 10.5113 501,176 -- 501,176 BDS -- Level 6............................. 5,855 10.5043 61,446 -- 61,446 CAS -- Level 1............................. 17,139 8.1552 139,770 -- 139,770 CAS -- Level 2............................. 60,648 8.1499 494,276 -- 494,276 CAS -- Level 3............................. 460,577 8.1463 3,751,999 -- 3,751,999 CAS -- Level 4............................. 381,675 8.1410 3,107,214 -- 3,107,214 CAS -- Level 5............................. 374,097 8.1375 3,044,200 -- 3,044,200 CAS -- Level 6............................. 135,475 8.1322 1,101,281 -- 1,101,281 COS -- Level 1............................. 354,251 8.5007 3,011,399 -- 3,011,399 COS -- Level 2............................. 169,833 8.4951 1,442,746 -- 1,442,746 COS -- Level 3............................. 1,194,561 8.4913 10,143,378 -- 10,143,378 COS -- Level 4............................. 1,030,852 8.4856 8,747,433 -- 8,747,433 COS -- Level 5............................. 1,008,384 8.4818 8,552,957 -- 8,552,957 COS -- Level 6............................. 343,358 8.4762 2,908,997 -- 2,908,997 MIT -- Level 1............................. 155,553 9.5952 1,492,565 -- 1,492,565 MIT -- Level 2............................. 79,848 9.5887 765,634 -- 765,634 MIT -- Level 3............................. 710,024 9.5843 6,805,064 -- 6,805,064 MIT -- Level 4............................. 581,022 9.5777 5,564,875 -- 5,564,875 MIT -- Level 5............................. 786,960 9.5734 7,533,867 -- 7,533,867 MIT -- Level 6............................. 176,975 9.5668 1,692,439 -- 1,692,439 EGS -- Level 1............................. 71,231 7.7668 553,239 -- 553,239 EGS -- Level 2............................. 110,511 7.7615 857,732 -- 857,732 EGS -- Level 3............................. 998,232 7.7579 7,744,221 -- 7,744,221 EGS -- Level 4............................. 633,716 7.7526 4,912,963 -- 4,912,963 EGS -- Level 5............................. 974,229 7.7491 7,549,369 -- 7,549,369 EGS -- Level 6............................. 251,053 7.7437 1,943,622 -- 1,943,622 EIS -- Level 1............................. 109,245 11.7525 1,283,898 -- 1,283,898 EIS -- Level 2............................. 32,395 11.7453 380,487 -- 380,487 EIS -- Level 3............................. 294,819 11.7405 3,461,316 -- 3,461,316 EIS -- Level 4............................. 199,328 11.7333 2,338,763 -- 2,338,763 EIS -- Level 5............................. 161,525 11.7284 1,894,438 -- 1,894,438 EIS -- Level 6............................. 37,230 11.7212 435,075 -- 435,075 FCE -- Level 1............................. 14,188 8.3380 118,298 -- 118,298 FCE -- Level 3............................. 68,158 8.3301 567,760 -- 567,760 FCE -- Level 4............................. 31,548 8.3254 262,651 -- 262,651 FCE -- Level 5............................. 42,569 8.3222 354,270 -- 354,270 FCE -- Level 6............................. 5,839 8.3175 48,485 -- 48,485 FCG -- Level 1............................. 32,935 9.1340 300,833 -- 300,833 FCG -- Level 3............................. 181,787 9.1242 1,658,657 -- 1,658,657 FCG -- Level 4............................. 130,104 9.1183 1,186,324 -- 1,186,324 FCG -- Level 5............................. 99,249 9.1144 904,589 -- 904,589 FCG -- Level 6............................. 31,392 9.1085 285,802 -- 285,802 FCI -- Level 1............................. 10,749 9.5757 102,933 -- 102,933 FCI -- Level 3............................. 35,314 9.5657 337,807 -- 337,807 FCI -- Level 4............................. 16,087 9.5597 153,787 -- 153,787 FCI -- Level 5............................. 56,398 9.5558 538,927 -- 538,927
See notes to financial statements -19- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF CONDITION -- December 31, 2000 -- continued
Applicable to Owners of Deferred Variable Annuity Contracts Reserve for NET ASSETS APPLICABLE TO CONTRACT OWNERS: -- CONTINUED ------------------------------------ Variable Units Unit Value Value Annuities Total --------- ---------- ------------- ----------- ------------- MFS REGATTA ACCESS CONTRACTS: -- CONTINUED FCI -- Level 6............................. 1,488 $ 9.5498 $ 14,223 -- $ 14,223 GSS -- Level 3............................. 276,644 10.5268 2,912,171 -- 2,912,171 GSS -- Level 4............................. 172,554 10.5206 1,815,361 -- 1,815,361 GSS -- Level 5............................. 112,889 10.5164 1,187,189 -- 1,187,189 GSS -- Level 6............................. 31,047 10.5102 326,367 -- 326,367 HYS -- Level 1............................. 16,006 9.1975 147,213 -- 147,213 HYS -- Level 2............................. 56,265 9.1912 517,149 -- 517,149 HYS -- Level 3............................. 220,014 9.1871 2,021,281 -- 2,021,281 HYS -- Level 4............................. 128,702 9.1808 1,181,588 -- 1,181,588 HYS -- Level 5............................. 66,044 9.1766 606,057 -- 606,057 HYS -- Level 6............................. 21,175 9.1703 193,853 -- 193,853 MSS -- Level 2............................. 58,759 8.4348 495,617 -- 495,617 MSS -- Level 3............................. 191,874 8.4311 1,617,706 -- 1,617,706 MSS -- Level 4............................. 294,369 8.4256 2,480,233 -- 2,480,233 MSS -- Level 5............................. 141,896 8.4219 1,195,038 -- 1,195,038 MSS -- Level 6............................. 39,119 8.4164 328,184 -- 328,184 MIS -- Level 1............................. 365,773 8.7095 3,185,698 -- 3,185,698 MIS -- Level 2............................. 112,876 8.7036 982,431 -- 982,431 MIS -- Level 3............................. 1,292,384 8.6997 11,243,402 -- 11,243,402 MIS -- Level 4............................. 947,835 8.6939 8,240,377 -- 8,240,377 MIS -- Level 5............................. 1,040,996 8.6900 9,046,254 -- 9,046,254 MIS -- Level 6............................. 415,337 8.6842 3,605,845 -- 3,605,845 MMS -- Level 1............................. 283,269 10.2182 2,894,488 24,077 2,918,565 MMS -- Level 2............................. 72,291 10.2114 738,193 -- 738,193 MMS -- Level 3............................. 707,627 10.2068 7,222,622 -- 7,222,622 MMS -- Level 4............................. 535,216 10.2000 5,459,210 -- 5,459,210 MMS -- Level 5............................. 657,819 10.1955 6,706,772 -- 6,706,772 MMS -- Level 6............................. 228,956 10.1887 2,330,558 -- 2,330,558 NWD -- Level 1............................. 36,344 9.1201 331,460 -- 331,460 NWD -- Level 2............................. 43,265 9.1140 394,316 -- 394,316 NWD -- Level 3............................. 390,879 9.1099 3,560,886 -- 3,560,886 NWD -- Level 4............................. 356,653 9.1039 3,246,921 -- 3,246,921 NWD -- Level 5............................. 349,625 9.0998 3,181,516 -- 3,181,516 NWD -- Level 6............................. 72,653 9.0937 660,456 -- 660,456 RES -- Level 2............................. 151,887 8.5408 1,297,237 -- 1,297,237 RES -- Level 3............................. 638,978 8.5369 5,454,881 -- 5,454,881 RES -- Level 4............................. 518,562 8.5310 4,423,875 -- 4,423,875 RES -- Level 5............................. 375,730 8.5271 3,203,902 -- 3,203,902 RES -- Level 6............................. 116,003 8.5213 988,054 -- 988,054 RGS -- Level 2............................. 57,880 9.9879 578,097 -- 578,097 RGS -- Level 3............................. 72,193 9.9838 720,756 -- 720,756 RGS -- Level 4............................. 68,556 9.9776 684,025 -- 684,025 RGS -- Level 5............................. 40,063 9.9735 399,565 -- 399,565 RGS -- Level 6............................. 7,486 9.9674 74,405 -- 74,405 RSS -- Level 1............................. 31,247 9.0485 282,742 -- 282,742 RSS -- Level 3............................. 268,522 9.0384 2,427,015 -- 2,427,015 RSS -- Level 4............................. 195,584 9.0324 1,766,592 -- 1,766,592 RSS -- Level 5............................. 298,934 9.0284 2,698,882 -- 2,698,882 RSS -- Level 6............................. 62,079 9.0223 566,159 -- 566,159
See notes to financial statements -20- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF CONDITION -- December 31, 2000 -- continued
Applicable to Owners of Deferred Variable Annuity Contracts Reserve for NET ASSETS APPLICABLE TO CONTRACT OWNERS: -- CONTINUED ------------------------------------ Variable Units Unit Value Value Annuities Total --------- ---------- ------------- ----------- ------------- MFS REGATTA ACCESS CONTRACTS: -- CONTINUED SIS -- Level 1............................. 9,689 $10.0595 $ 97,468 $ -- $ 97,468 SIS -- Level 3............................. 39,367 10.0496 395,626 -- 395,626 SIS -- Level 4............................. 35,590 10.0437 357,452 -- 357,452 SIS -- Level 5............................. 21,966 10.0397 220,530 -- 220,530 SIS -- Level 6............................. 1,141 10.0338 11,793 -- 11,793 TEC -- Level 1............................. 281,559 7.7100 2,170,821 -- 2,170,821 TEC -- Level 2............................. 142,694 7.7050 1,099,455 -- 1,099,455 TEC -- Level 3............................. 548,800 7.7016 4,226,652 -- 4,226,652 TEC -- Level 4............................. 538,339 7.6966 4,143,373 -- 4,143,373 TEC -- Level 5............................. 253,221 7.6932 1,948,088 -- 1,948,088 TEC -- Level 6............................. 49,366 7.6882 380,021 -- 380,021 TRS -- Level 1............................. 41,995 10.9931 461,653 -- 461,653 TRS -- Level 2............................. 68,186 10.9864 749,119 -- 749,119 TRS -- Level 3............................. 307,559 10.9819 3,377,578 -- 3,377,578 TRS -- Level 4............................. 295,198 10.9752 3,239,851 -- 3,239,851 TRS -- Level 5............................. 324,903 10.9707 3,564,412 -- 3,564,412 TRS -- Level 6............................. 37,554 10.9640 411,537 -- 411,537 UTS -- Level 1............................. 54,728 9.8521 539,186 -- 539,186 UTS -- Level 2............................. 109,577 9.8458 1,078,870 -- 1,078,870 UTS -- Level 3............................. 526,275 9.8415 5,179,336 -- 5,179,336 UTS -- Level 4............................. 449,790 9.8351 4,423,733 -- 4,423,733 UTS -- Level 5............................. 491,066 9.8308 4,827,592 -- 4,827,592 UTS -- Level 6............................. 50,011 9.8244 488,819 -- 488,819 GAA -- Level 3............................. 9,938 9.4535 93,953 -- 93,953 GAA -- Level 4............................. 15,496 9.4484 146,410 -- 146,410 GAA -- Level 5............................. 37,076 9.4450 350,184 -- 350,184 GAA -- Level 6............................. 1,677 9.4399 15,772 -- 15,772 GGS -- Level 3............................. 38,750 10.3375 400,579 -- 400,579 GGS -- Level 4............................. 12,309 10.3312 127,172 -- 127,172 GGS -- Level 5............................. 10,061 10.3271 103,900 -- 103,900 GGS -- Level 6............................. 490 10.3208 5,033 -- 5,033 GGR -- Level 2............................. 61,167 8.4073 514,249 -- 514,249 GGR -- Level 3............................. 165,543 8.4035 1,391,143 -- 1,391,143 GGR -- Level 4............................. 248,860 8.3977 2,089,868 -- 2,089,868 GGR -- Level 5............................. 244,064 8.3939 2,048,650 -- 2,048,650 GGR -- Level 6............................. 30,327 8.3882 254,086 -- 254,086 GTR -- Level 1............................. 9,849 9.9824 98,318 -- 98,318 GTR -- Level 3............................. 13,660 9.9713 136,205 -- 136,205 GTR -- Level 4............................. 19,009 9.9647 189,420 -- 189,420 GTR -- Level 5............................. 29,500 9.9602 293,829 -- 293,829 GTR -- Level 6............................. 6,961 9.9536 69,234 -- 69,234 SGS -- Level 1............................. 268,479 8.3629 2,245,262 -- 2,245,262 SGS -- Level 2............................. 124,382 8.3575 1,039,516 -- 1,039,516 SGS -- Level 3............................. 648,834 8.3538 5,420,248 -- 5,420,248 SGS -- Level 4............................. 451,638 8.3484 3,770,449 -- 3,770,449 SGS -- Level 5............................. 198,417 8.3448 1,655,740 -- 1,655,740 SGS -- Level 6............................. 185,004 8.3393 1,541,807 -- 1,541,807 GTS -- Level 3............................. 11,974 7.2832 87,210 -- 87,210 GTS -- Level 4............................. 7,540 7.2799 54,887 -- 54,887
See notes to financial statements -21- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF CONDITION -- December 31, 2000 -- continued
Applicable to Owners of Deferred Variable Annuity Contracts Reserve for NET ASSETS APPLICABLE TO CONTRACT OWNERS: -- CONTINUED ------------------------------------ Variable Units Unit Value Value Annuities Total --------- ---------- ------------- ----------- ------------- MFS REGATTA ACCESS CONTRACTS: -- CONTINUED GTS -- Level 5............................. 23,618 $ 7.2777 $ 171,869 $ -- $ 171,869 MCS -- Level 1............................. 10,530 9.2503 97,409 -- 97,409 MCS -- Level 2............................. 14,752 9.2461 136,395 -- 136,395 MCS -- Level 3............................. 94,439 9.2434 872,937 -- 872,937 MCS -- Level 4............................. 107,236 9.2393 990,779 -- 990,779 MCS -- Level 5............................. 160,531 9.2365 1,482,749 -- 1,482,749 MCS -- Level 6............................. 99,581 9.2324 919,140 -- 919,140 ------------ ------- ------------ $300,219,408 $24,077 $300,243,485 ------------ ------- ------------
See notes to financial statements -22- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF CONDITION -- December 31, 2000 -- continued
Applicable to Owners of Deferred Variable Annuity Contracts Reserve for NET ASSETS APPLICABLE TO CONTRACT OWNERS: -- CONTINUED ------------------------------------ Variable Units Unit Value Value Annuities Total --------- ---------- ------------- ----------- ------------- MFS REGATTA CHOICE CONTRACTS: BDS -- Level 2............................. 62,271 $10.5347 $ 656,008 $ -- $ 656,008 BDS -- Level 3............................. 29,888 10.5300 314,721 -- 314,721 BDS -- Level 4............................. 41,361 10.5277 435,439 -- 435,439 BDS -- Level 5............................. 128,272 10.5230 1,349,803 -- 1,349,803 BDS -- Level 6............................. 49,564 10.5160 519,473 -- 519,473 CAS -- Level 1............................. 9,289 8.0903 75,150 4,484 79,634 CAS -- Level 2............................. 358,590 8.0848 2,899,144 -- 2,899,144 CAS -- Level 3............................. 144,013 8.0813 1,163,803 -- 1,163,803 CAS -- Level 4............................. 621,987 8.0795 5,025,322 -- 5,025,322 CAS -- Level 5............................. 1,152,866 8.0759 9,310,382 -- 9,310,382 CAS -- Level 6............................. 410,764 8.0705 3,314,840 -- 3,314,840 COS -- Level 2............................. 542,845 8.2203 4,462,360 10,029 4,472,389 COS -- Level 3............................. 168,372 8.2166 1,383,439 -- 1,383,439 COS -- Level 4............................. 974,321 8.2147 8,003,760 -- 8,003,760 COS -- Level 5............................. 2,057,010 8.2110 16,890,006 -- 16,890,006 COS -- Level 6............................. 530,318 8.2053 4,350,722 -- 4,350,722 MIT -- Level 2............................. 662,105 9.7233 6,437,881 5,992 6,443,873 MIT -- Level 3............................. 106,576 9.7190 1,035,812 -- 1,035,812 MIT -- Level 4............................. 744,449 9.7168 7,233,692 -- 7,233,692 MIT -- Level 5............................. 1,982,246 9.7125 19,252,546 -- 19,252,546 MIT -- Level 6............................. 623,357 9.7060 6,049,214 -- 6,049,214 EGS -- Level 1............................. 9,525 7.7721 74,029 4,932 78,961 EGS -- Level 2............................. 564,969 7.7668 4,387,993 -- 4,387,993 EGS -- Level 3............................. 167,798 7.7632 1,302,661 -- 1,302,661 EGS -- Level 4............................. 913,512 7.7615 7,090,203 -- 7,090,203 EGS -- Level 5............................. 2,170,423 7.7579 16,837,999 -- 16,837,999 EGS -- Level 6............................. 578,558 7.7526 4,485,365 -- 4,485,365 EIS -- Level 2............................. 112,270 12.1428 1,363,271 -- 1,363,271 EIS -- Level 3............................. 20,757 12.1376 251,945 -- 251,945 EIS -- Level 4............................. 131,403 12.1349 1,594,559 -- 1,594,559 EIS -- Level 5............................. 329,803 12.1296 4,000,382 -- 4,000,382 EIS -- Level 6............................. 70,298 12.1217 847,318 -- 847,318 FCE -- Level 2............................. 16,933 8.1595 138,163 -- 138,163 FCE -- Level 3............................. 20,014 8.1559 163,231 -- 163,231 FCE -- Level 4............................. 50,636 8.1540 412,891 -- 412,891 FCE -- Level 5............................. 105,050 8.1504 856,203 -- 856,203 FCE -- Level 6............................. 54,411 8.1450 443,296 -- 443,296 FCG -- Level 1............................. 9,690 9.1063 88,236 -- 88,236 FCG -- Level 2............................. 75,354 9.1002 685,738 -- 685,738 FCG -- Level 3............................. 19,952 9.0962 181,484 -- 181,484 FCG -- Level 4............................. 143,533 9.0941 1,305,313 -- 1,305,313 FCG -- Level 5............................. 395,096 9.0901 3,591,468 -- 3,591,468 FCG -- Level 6............................. 116,665 9.0840 1,059,428 -- 1,059,428 FCI -- Level 2............................. 36,126 9.5954 346,649 -- 346,649 FCI -- Level 4............................. 31,240 9.5915 299,577 -- 299,577 FCI -- Level 5............................. 72,137 9.5855 691,474 -- 691,474 FCI -- Level 6............................. 26,179 9.5796 250,853 -- 250,853 GSS -- Level 2............................. 173,385 10.6258 1,842,349 -- 1,842,349 GSS -- Level 3............................. 20,304 10.6210 215,652 -- 215,652 GSS -- Level 4............................. 209,319 10.6187 2,222,697 -- 2,222,697 GSS -- Level 5............................. 370,992 10.6140 3,937,694 -- 3,937,694 GSS -- Level 6............................. 120,982 10.6069 1,283,193 -- 1,283,193
See notes to financial statements -23- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF CONDITION -- December 31, 2000 -- continued
Applicable to Owners of Deferred Variable Annuity Contracts Reserve for NET ASSETS APPLICABLE TO CONTRACT OWNERS: -- CONTINUED ------------------------------------ Variable Units Unit Value Value Annuities Total --------- ---------- ------------- ----------- ------------- MFS REGATTA CHOICE CONTRACTS: -- CONTINUED HYS -- Level 2............................. 112,132 $ 9.1845 $ 1,029,879 $ -- $ 1,029,879 HYS -- Level 3............................. 25,020 9.1804 229,694 -- 229,694 HYS -- Level 4............................. 143,301 9.1784 1,315,272 -- 1,315,272 HYS -- Level 5............................. 278,253 9.1743 2,552,777 -- 2,552,777 HYS -- Level 6............................. 104,240 9.1682 955,158 -- 955,158 MSS -- Level 2............................. 160,500 8.8670 1,423,152 -- 1,423,152 MSS -- Level 3............................. 40,787 8.8633 361,509 -- 361,509 MSS -- Level 4............................. 145,449 8.8615 1,288,890 -- 1,288,890 MSS -- Level 5............................. 318,263 8.8577 2,819,093 -- 2,819,093 MSS -- Level 6............................. 64,615 8.8522 569,486 -- 569,486 MIS -- Level 1............................. 41,788 8.7153 364,198 10,053 374,251 MIS -- Level 2............................. 825,447 8.7095 7,189,214 -- 7,189,214 MIS -- Level 3............................. 147,610 8.7988 1,298,791 -- 1,298,791 MIS -- Level 4............................. 1,222,281 8.7036 10,638,301 -- 10,638,301 MIS -- Level 5............................. 3,410,945 8.6997 29,674,334 -- 29,674,334 MIS -- Level 6............................. 835,704 8.6939 7,263,050 -- 7,263,050 MMS -- Level 1............................. 16,332 10.2312 167,094 -- 167,094 MMS -- Level 2............................. 156,253 10.2243 1,597,571 -- 1,597,571 MMS -- Level 4............................. 136,521 10.2174 1,394,886 -- 1,394,886 MMS -- Level 5............................. 324,280 10.2128 3,311,807 -- 3,311,807 MMS -- Level 6............................. 204,046 10.2059 2,082,689 -- 2,082,689 NWD -- Level 2............................. 228,703 8.5929 1,965,223 -- 1,965,223 NWD -- Level 3............................. 96,431 8.5890 828,245 -- 828,245 NWD -- Level 4............................. 333,331 8.5870 2,862,316 -- 2,862,316 NWD -- Level 5............................. 830,845 8.5831 7,131,229 -- 7,131,229 NWD -- Level 6............................. 274,903 8.5772 2,358,208 -- 2,358,208 RES -- Level 2............................. 287,774 8.8839 2,556,553 4,684 2,561,237 RES -- Level 3............................. 136,123 8.8800 1,208,774 -- 1,208,774 RES -- Level 4............................. 474,565 8.8781 4,213,231 -- 4,213,231 RES -- Level 5............................. 1,097,956 8.8742 9,743,498 -- 9,743,498 RES -- Level 6............................. 377,470 8.8684 3,347,075 -- 3,347,075 RGS -- Level 2............................. 41,097 10.0616 413,500 -- 413,500 RGS -- Level 3............................. 11,505 10.0574 115,711 -- 115,711 RGS -- Level 4............................. 70,162 10.0554 705,500 -- 705,500 RGS -- Level 5............................. 127,800 10.0512 1,284,536 -- 1,284,536 RGS -- Level 6............................. 40,111 10.0449 402,939 -- 402,939 RSS -- Level 2............................. 147,311 8.9190 1,313,871 -- 1,313,871 RSS -- Level 3............................. 75,847 8.9150 676,174 -- 676,174 RSS -- Level 4............................. 160,450 8.9129 1,430,082 -- 1,430,082 RSS -- Level 5............................. 459,368 8.9089 4,092,445 -- 4,092,445 RSS -- Level 6............................. 113,049 8.9028 1,004,180 -- 1,004,180 SIS -- Level 2............................. 28,461 10.0431 285,832 -- 285,832 SIS -- Level 3............................. 26,165 10.0388 262,662 -- 262,662 SIS -- Level 4............................. 65,392 10.0366 656,316 -- 656,316 SIS -- Level 5............................. 91,957 10.0324 922,540 -- 922,540 SIS -- Level 6............................. 22,010 10.0259 220,596 -- 220,596 TEC -- Level 1............................. 21,540 7.7449 166,828 -- 166,828 TEC -- Level 2............................. 141,204 7.7398 1,092,896 -- 1,092,896 TEC -- Level 3............................. 41,719 7.7365 322,759 -- 322,759 TEC -- Level 4............................. 183,811 7.7348 1,421,734 -- 1,421,734 TEC -- Level 5............................. 644,712 7.7314 4,984,512 -- 4,984,512 TEC -- Level 6............................. 156,214 7.7263 1,207,638 -- 1,207,638
See notes to financial statements -24- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF CONDITION -- December 31, 2000 -- continued
Applicable to Owners of Deferred Variable Annuity Contracts Reserve for NET ASSETS APPLICABLE TO CONTRACT OWNERS: -- CONTINUED ------------------------------------ Variable Units Unit Value Value Annuities Total --------- ---------- ------------- ----------- ------------- MFS REGATTA CHOICE CONTRACTS: -- CONTINUED TRS -- Level 2............................. 219,370 $11.2029 $ 2,457,576 $13,856 $ 2,471,432 TRS -- Level 3............................. 10,625 11.1981 118,984 -- 118,984 TRS -- Level 4............................. 325,729 11.1957 3,646,755 -- 3,646,755 TRS -- Level 5............................. 556,497 11.1909 6,227,677 -- 6,227,677 TRS -- Level 6............................. 188,022 11.1836 2,102,566 -- 2,102,566 UTS -- Level 2............................. 348,917 9.6922 3,381,763 10,460 3,392,223 UTS -- Level 3............................. 95,664 9.6878 926,768 -- 926,768 UTS -- Level 4............................. 487,384 9.6856 4,720,588 -- 4,720,588 UTS -- Level 5............................. 985,298 9.6812 9,538,822 -- 9,538,822 UTS -- Level 6............................. 245,771 9.6745 2,376,495 -- 2,376,495 GAA -- Level 2............................. 11,274 9.5718 107,910 -- 107,910 GAA -- Level 3............................. 9,347 9.5681 89,429 -- 89,429 GAA -- Level 4............................. 15,475 9.5662 148,035 -- 148,035 GAA -- Level 5............................. 38,826 9.5625 371,270 -- 371,270 GAA -- Level 6............................. 3,760 9.5568 36,000 -- 36,000 GGS -- Level 2............................. 10,314 10.2736 105,965 -- 105,965 GGS -- Level 3............................. 12,317 10.2690 126,480 -- 126,480 GGS -- Level 4............................. 12,672 10.2667 130,099 -- 130,099 GGS -- Level 5............................. 54,231 10.2622 556,531 -- 556,531 GGS -- Level 6............................. 33,261 10.2553 341,166 -- 341,166 GGR -- Level 2............................. 155,157 8.9115 1,382,692 -- 1,382,692 GGR -- Level 3............................. 4,354 8.9077 38,787 -- 38,787 GGR -- Level 4............................. 201,984 8.9058 1,798,837 -- 1,798,837 GGR -- Level 5............................. 376,659 8.9020 3,353,028 -- 3,353,028 GGR -- Level 6............................. 88,602 8.8963 786,087 -- 786,087 GTR -- Level 2............................. 6,315 9.9684 62,947 -- 62,947 GTR -- Level 4............................. 25,601 9.9630 255,066 -- 255,066 GTR -- Level 5............................. 20,862 9.9593 207,774 -- 207,774 GTR -- Level 6............................. 5,255 9.9538 52,293 -- 52,293 SGS -- Level 2............................. 135,296 8.4758 1,146,734 3,620 1,150,354 SGS -- Level 3............................. 25,507 8.4721 216,098 -- 216,098 SGS -- Level 4............................. 261,952 8.4703 2,218,809 -- 2,218,809 SGS -- Level 5............................. 599,690 8.4666 5,077,349 -- 5,077,349 SGS -- Level 6............................. 136,093 8.4612 1,151,231 -- 1,151,231 GTS -- Level 2............................. 11,107 7.2886 80,953 -- 80,953 GTS -- Level 3............................. 9,402 7.2865 68,504 -- 68,504 GTS -- Level 4............................. 3,533 7.2854 25,742 -- 25,742 GTS -- Level 5............................. 14,516 7.2832 105,725 -- 105,725 GTS -- Level 6............................. 2,093 7.2799 15,277 -- 15,277 MCS -- Level 2............................. 34,282 9.2503 317,116 -- 317,116 MCS -- Level 3............................. 32,880 9.2475 304,063 -- 304,063 MCS -- Level 4............................. 135,289 9.2461 1,250,905 -- 1,250,905 MCS -- Level 5............................. 257,499 9.2434 2,380,166 -- 2,380,166 MCS -- Level 6............................. 44,338 9.2393 409,435 -- 409,435 ------------ ------- ------------ $359,355,776 $68,110 $359,423,886 ------------ ------- ------------
See notes to financial statements -25- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF CONDITION -- December 31, 2000 -- continued
Applicable to Owners of Deferred Variable Annuity Contracts Reserve for NET ASSETS APPLICABLE TO CONTRACT OWNERS: -- CONTINUED -------------------------------------- Variable Units Unit Value Value Annuities Total --------- ---------- --------------- ----------- --------------- MFS REGATTA FLEX 4 CONTRACTS: CAS -- Level 5............................. 3,309 $ 8.7653 $ 29,008 $ -- $ 29,008 COS -- Level 3............................. 528 8.9505 4,726 -- 4,726 COS -- Level 5............................. 404 8.9472 3,616 -- 3,616 MIT -- Level 3............................. 484 9.7203 4,706 -- 4,706 MIT -- Level 4............................. 309 9.7182 3,000 -- 3,000 MIT -- Level 5............................. 4,449 9.7168 43,226 -- 43,226 EGS -- Level 5............................. 2,246 8.7702 19,690 -- 19,690 EIS -- Level 4............................. 707 10.6075 7,500 -- 7,500 EIS -- Level 5............................. 1,998 10.6059 21,180 -- 21,180 FCG -- Level 5............................. 2,079 9.7135 20,191 -- 20,191 GSS -- Level 5............................. 4,857 10.3667 50,346 -- 50,346 HYS -- Level 5............................. 2,068 9.7171 20,086 -- 20,086 MIS -- Level 3............................. 526 8.9598 4,709 -- 4,709 MIS -- Level 4............................. 1,172 8.9578 10,500 -- 10,500 MIS -- Level 5............................. 3,062 8.9565 27,432 -- 27,432 MMS -- Level 5............................. 9,973 10.0682 100,410 -- 100,410 NWD -- Level 4............................. 164 9.1675 1,500 -- 1,500 NWD -- Level 5............................. 2,248 9.1661 20,610 -- 20,610 RSS -- Level 4............................. 314 9.5692 3,000 -- 3,000 TRS -- Level 3............................. 453 10.3812 4,699 -- 4,699 TRS -- Level 4............................. 289 10.3789 3,000 -- 3,000 TRS -- Level 5............................. 376 10.3774 3,908 -- 3,908 UTS -- Level 5............................. 2,091 9.8905 20,684 -- 20,684 GGR -- Level 5............................. 1,747 9.2069 16,086 -- 16,086 MCS -- Level 4............................. 169 8.8813 1,500 -- 1,500 MCS -- Level 5............................. 2,273 8.8800 20,187 -- 20,187 --------------- ----------- --------------- $ 465,500 $ -- $ 465,500 --------------- ----------- --------------- Net Assets............................................................... $13,275,681,478 $45,730,421 $13,321,411,899 =============== =========== ===============
See notes to financial statements -26- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF OPERATIONS -- Year Ended December 31, 2000
BDS CAS COS MIT Sub-Account Sub-Account Sub-Account Sub-Account ------------ ------------- ------------- ------------- INCOME AND EXPENSES: Dividend income and capital gain distributions received.......... $ 2,376,672 $ 229,759,796 $ 59,697,952 $ 151,163,534 Mortality and expense risk charges......................... (748,920) (22,105,743) (7,397,836) (25,648,793) Distribution and administrative expense charges................. (89,870) (2,652,689) (887,740) (3,077,855) ------------ ------------- ------------- ------------- Net investment income (loss)...................... $ 1,537,882 $ 205,001,364 $ 51,412,376 $ 122,436,886 ------------ ------------- ------------- ------------- REALIZED AND UNREALIZED GAINS (LOSSES): Realized gains (losses) on investment transactions: Proceeds from sales............ $ 13,754,085 $ 404,615,495 $ 59,298,268 $ 335,636,379 Cost of investments sold....... (13,997,518) (289,475,762) (33,473,926) (225,129,416) ------------ ------------- ------------- ------------- Net realized gains (losses).................... $ (243,433) $ 115,139,733 $ 25,824,342 $ 110,506,963 ------------ ------------- ------------- ------------- Net unrealized appreciation (depreciation) on investments: End of year.................... $ 3,315,903 $ (71,625,585) $ 466,817 $ 68,267,352 Beginning of year.............. (731,928) 473,751,561 136,961,819 331,150,359 ------------ ------------- ------------- ------------- Change in unrealized appreciation (depreciation).............. $ 4,047,831 $(545,377,146) $(136,495,002) $(262,883,007) ------------ ------------- ------------- ------------- Realized and unrealized gains (losses)...................... $ 3,804,398 $(430,237,413) $(110,670,660) $(152,376,044) ------------ ------------- ------------- ------------- INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS................... $ 5,342,280 $(225,236,049) $ (59,258,284) $ (29,939,158) ============ ============= ============= ============= EGS Sub-Account ------------- INCOME AND EXPENSES: Dividend income and capital gain distributions received.......... $ 132,865,620 Mortality and expense risk charges......................... (17,653,345) Distribution and administrative expense charges................. (2,118,401) ------------- Net investment income (loss)...................... $ 113,093,874 ------------- REALIZED AND UNREALIZED GAINS (LOSSES): Realized gains (losses) on investment transactions: Proceeds from sales............ $ 174,185,082 Cost of investments sold....... (76,408,253) ------------- Net realized gains (losses).................... $ 97,776,829 ------------- Net unrealized appreciation (depreciation) on investments: End of year.................... $ 168,421,597 Beginning of year.............. 696,941,762 ------------- Change in unrealized appreciation (depreciation).............. $(528,520,165) ------------- Realized and unrealized gains (losses)...................... $(430,743,336) ------------- INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS................... $(317,649,462) =============
EIS FCE FCG FCI Sub-Account Sub-Account Sub-Account Sub-Account ------------ ------------- ------------- ------------- INCOME AND EXPENSES: Dividend income and capital gain distributions received.......... $ 546,227 $ 4,859 $ 1,557,547 $ 8,131,650 Mortality and expense risk charges......................... (817,047) (491,167) (1,133,631) (999,935) Distribution and administrative expense charges................. (98,046) (58,940) (136,036) (119,992) ------------ ------------- ------------- ------------- Net investment income (loss)...................... $ (368,866) $ (545,248) $ 287,880 $ 7,011,723 ------------ ------------- ------------- ------------- REALIZED AND UNREALIZED GAINS (LOSSES): Realized gains (losses) on investment transactions: Proceeds from sales............ $ 11,874,492 $ 19,608,577 $ 36,665,018 $ 53,493,994 Cost of investments sold....... (10,688,070) (16,662,160) (31,280,492) (51,585,346) ------------ ------------- ------------- ------------- Net realized gains (losses).................... $ 1,186,422 $ 2,946,417 $ 5,384,526 $ 1,908,648 ------------ ------------- ------------- ------------- Net unrealized appreciation (depreciation) on investments: End of year.................... $ 19,604,463 $ (5,864,182) $ (132,948) $ 148,843 Beginning of year.............. 815,964 7,573,821 14,196,828 11,755,882 ------------ ------------- ------------- ------------- Change in unrealized appreciation (depreciation).............. $ 18,788,499 $ (13,438,003) $ (14,329,776) $ (11,607,039) ------------ ------------- ------------- ------------- Realized and unrealized gains (losses)...................... $ 19,974,921 $ (10,491,586) $ (8,945,250) $ (9,698,391) ------------ ------------- ------------- ------------- INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS................... $ 19,606,055 $ (11,036,834) $ (8,657,370) $ (2,686,668) ============ ============= ============= ============= GSS Sub-Account ------------- INCOME AND EXPENSES: Dividend income and capital gain distributions received.......... $ 27,076,668 Mortality and expense risk charges......................... (5,592,042) Distribution and administrative expense charges................. (671,045) ------------- Net investment income (loss)...................... $ 20,813,581 ------------- REALIZED AND UNREALIZED GAINS (LOSSES): Realized gains (losses) on investment transactions: Proceeds from sales............ $ 142,112,893 Cost of investments sold....... (143,756,023) ------------- Net realized gains (losses).................... $ (1,643,130) ------------- Net unrealized appreciation (depreciation) on investments: End of year.................... $ 14,182,490 Beginning of year.............. (13,183,512) ------------- Change in unrealized appreciation (depreciation).............. $ 27,366,002 ------------- Realized and unrealized gains (losses)...................... $ 25,722,872 ------------- INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS................... $ 46,536,453 =============
See notes to financial statements -27- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF OPERATIONS -- YEAR ENDED DECEMBER 31, 2000 -- continued
HYS MSS MIS MMS Sub-Account Sub-Account Sub-Account Sub-Account ------------ ------------- ------------- ------------- INCOME AND EXPENSES: Dividend income and capital gain distributions received.......... $ 26,830,340 $ 115,341,726 $ 28,048,136 $ 22,048,663 Mortality and expense risk charges......................... (3,601,020) (7,562,475) (9,622,355) (4,688,059) Distribution and administrative expense charges................. (432,122) (907,497) (1,154,683) (562,567) ------------ ------------- ------------- ------------- Net investment income (loss)....................... $ 22,797,198 $ 106,871,754 $ 17,271,098 $ 16,798,037 ------------ ------------- ------------- ------------- REALIZED AND UNREALIZED GAINS (LOSSES): Realized gains (losses) on investment transactions: Proceeds from sales............ $100,905,968 $ 127,174,981 $ 59,635,661 $ 704,416,907 Cost of investments sold....... (115,457,467) (82,422,477) (39,367,628) (704,416,907) ------------ ------------- ------------- ------------- Net realized gains (losses)..................... $(14,551,499) $ 44,752,504 $ 20,268,033 $ -- ------------ ------------- ------------- ------------- Net unrealized appreciation (depreciation) on investments: End of year.................... $(40,406,353) $ (16,375,940) $ (4,363,775) $ -- Beginning of year.............. (8,680,569) 284,470,613 114,855,426 -- ------------ ------------- ------------- ------------- Change in unrealized appreciation (depreciation)............... $(31,725,784) $(300,846,553) $(119,219,201) $ -- ------------ ------------- ------------- ------------- Realized and unrealized gains (losses)........................ $(46,277,283) $(256,094,049) $ (98,951,168) $ -- ------------ ------------- ------------- ------------- INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS................... $(23,480,085) $(149,222,295) $ (81,680,070) $ 16,798,037 ============ ============= ============= =============
NWD RES RGS RSS Sub-Account Sub-Account Sub-Account Sub-Account ------------ ------------- ------------- ------------- INCOME AND EXPENSES: Dividend income and capital gain distributions received.......... $ 6,461,103 $ 127,950,420 $ 1,397,379 $ 2,181,345 Mortality and expense risk charges......................... (1,703,893) (15,360,179) (1,017,234) (648,894) Distribution and administrative expense charges................. (204,467) (1,843,221) (122,068) (77,867) ------------ ------------- ------------- ------------- Net investment income (loss)...................... $ 4,552,743 $ 110,747,020 $ 258,077 $ 1,454,584 ------------ ------------- ------------- ------------- REALIZED AND UNREALIZED GAINS (LOSSES): Realized gains (losses) on investment transactions: Proceeds from sales............ $ 29,303,100 $ 142,562,970 $ 18,581,040 $ 10,780,660 Cost of investments sold....... (17,575,743) (82,951,340) (16,169,422) (8,475,182) ------------ ------------- ------------- ------------- Net realized gains (losses).................... $ 11,727,357 $ 59,611,630 $ 2,411,618 $ 2,305,478 ------------ ------------- ------------- ------------- Net unrealized appreciation (depreciation) on investments: End of year.................... $ (5,896,477) $ 130,154,676 $ 4,133,644 $ (3,573,617) Beginning of year.............. 21,187,835 369,190,915 5,552,651 6,041,356 ------------ ------------- ------------- ------------- Change in unrealized appreciation (depreciation).............. $(27,084,312) $(239,036,239) $ (1,419,007) $ (9,614,973) ------------ ------------- ------------- ------------- Realized and unrealized gains (losses)........................ $(15,356,955) $(179,424,609) $ 992,611 $ (7,309,495) ------------ ------------- ------------- ------------- INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS................... $(10,804,212) $ (68,677,589) $ 1,250,688 $ (5,854,911) ============ ============= ============= ============= SIS Sub-Account ------------- INCOME AND EXPENSES: Dividend income and capital gain distributions received.......... $ 896,243 Mortality and expense risk charges......................... (301,003) Distribution and administrative expense charges................. (36,120) ------------- Net investment income (loss)...................... $ 559,120 ------------- REALIZED AND UNREALIZED GAINS (LOSSES): Realized gains (losses) on investment transactions: Proceeds from sales............ $ 6,293,880 Cost of investments sold....... (6,135,359) ------------- Net realized gains (losses).................... $ 158,521 ------------- Net unrealized appreciation (depreciation) on investments: End of year.................... $ 257,101 Beginning of year.............. 463,814 ------------- Change in unrealized appreciation (depreciation).............. $ (206,713) ------------- Realized and unrealized gains (losses)........................ $ (48,192) ------------- INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS................... $ 510,928 =============
See notes to financial statements -28- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF OPERATIONS -- YEAR ENDED DECEMBER 31, 2000 -- continued
TEC(a) TRS UTS GAA Sub-Account Sub-Account Sub-Account Sub-Account ------------ ------------- ------------- ------------- INCOME AND EXPENSES: Dividend income and capital gain distributions received.......... $ -- $ 162,152,566 $ 43,299,993 $ 6,310,603 Mortality and expense risk charges......................... (84,183) (19,977,714) (5,801,483) (1,463,441) Distribution and administrative expense charges................. (10,102) (2,397,326) (696,178) (175,613) ------------ ------------- ------------- ------------- Net investment income (loss)...................... $ (94,285) $ 139,777,526 $ 36,802,332 $ 4,671,549 ------------ ------------- ------------- ------------- REALIZED AND UNREALIZED GAINS (LOSSES): Realized gains (losses) on investment transactions: Proceeds from sales............ $ 1,089,248 $ 437,583,044 $ 36,501,474 $ 18,697,962 Cost of investments sold....... (1,261,166) (405,658,555) (25,602,884) (16,412,606) ------------ ------------- ------------- ------------- Net realized gains (losses).................... $ (171,918) $ 31,924,489 $ 10,898,590 $ 2,285,356 ------------ ------------- ------------- ------------- Net unrealized appreciation (depreciation) on investments: End of year.................... $ (7,346,993) $ 40,889,931 $ 49,775,622 $ 2,415,687 Beginning of year.............. -- (14,746,361) 77,255,375 13,719,084 ------------ ------------- ------------- ------------- Change in unrealized appreciation (depreciation).............. $ (7,346,993) $ 55,636,292 $ (27,479,753) $ (11,303,397) ------------ ------------- ------------- ------------- Realized and unrealized gains (losses)........................ $ (7,518,911) $ 87,560,781 $ (16,581,163) $ (9,018,041) ------------ ------------- ------------- ------------- INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS................... $ (7,613,196) $ 227,338,307 $ 20,221,169 $ (4,346,492) ============ ============= ============= ============= GGS Sub-Account ------------- INCOME AND EXPENSES: Dividend income and capital gain distributions received.......... $ 2,420,231 Mortality and expense risk charges......................... (703,794) Distribution and administrative expense charges................. (84,455) ------------- Net investment income (loss)...................... $ 1,631,982 ------------- REALIZED AND UNREALIZED GAINS (LOSSES): Realized gains (losses) on investment transactions: Proceeds from sales............ $ 21,940,086 Cost of investments sold....... (26,088,019) ------------- Net realized gains (losses).................... $ (4,147,933) ------------- Net unrealized appreciation (depreciation) on investments: End of year.................... $ (3,432,052) Beginning of year.............. (5,513,624) ------------- Change in unrealized appreciation (depreciation).............. $ 2,081,572 ------------- Realized and unrealized gains (losses)........................ $ (2,066,361) ------------- INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS................... $ (434,379) =============
GGR GTR SGS GTS(b) Sub-Account Sub-Account Sub-Account Sub-Account ------------- ------------- ------------- ------------- INCOME AND EXPENSES: Dividend income and capital gain distributions received.......... $ 63,822,469 $ 7,281,344 $ 27,121 $ -- Mortality and expense risk charges......................... (5,269,745) (1,197,368) (649,970) (2,843) Distribution and administrative expense charges................. (632,369) (143,684) (77,996) (341) ------------- ------------- ------------- ------------- Net investment income (loss)...................... $ 57,920,355 $ 5,940,292 $ (700,845) $ (3,184) ------------- ------------- ------------- ------------- REALIZED AND UNREALIZED GAINS (LOSSES): Realized gains (losses) on investment transactions: Proceeds from sales............ $ 74,146,265 $ 16,807,198 $ 12,683,045 $ 27,491 Cost of investments sold....... (48,140,444) (14,227,229) (11,644,958) (30,602) ------------- ------------- ------------- ------------- Net realized gains (losses).................... $ 26,005,821 $ 2,579,969 $ 1,038,087 $ (3,111) ------------- ------------- ------------- ------------- Net unrealized appreciation (depreciation) on investments: End of year.................... $ 29,854,395 $ 4,162,882 $ (12,358,957) $ (281,437) Beginning of year.............. 178,498,769 11,918,237 1,072,320 -- ------------- ------------- ------------- ------------- Change in unrealized appreciation (depreciation).............. $(148,644,374) $ (7,755,355) $ (13,431,277) $ (281,437) ------------- ------------- ------------- ------------- Realized and unrealized gains (losses)........................ $(122,638,553) $ (5,175,386) $ (12,393,190) $ (284,548) ------------- ------------- ------------- ------------- INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS................... $ (64,718,198) $ 764,906 $ (13,094,035) $ (287,732) ============= ============= ============= ============= MCS(b) Sub-Account ------------- INCOME AND EXPENSES: Dividend income and capital gain distributions received.......... $ -- Mortality and expense risk charges......................... (51,675) Distribution and administrative expense charges................. (6,201) ------------- Net investment income (loss)...................... $ (57,876) ------------- REALIZED AND UNREALIZED GAINS (LOSSES): Realized gains (losses) on investment transactions: Proceeds from sales............ $ 698,854 Cost of investments sold....... (758,794) ------------- Net realized gains (losses).................... $ (59,940) ------------- Net unrealized appreciation (depreciation) on investments: End of year.................... $ (1,196,996) Beginning of year.............. -- ------------- Change in unrealized appreciation (depreciation).............. $ (1,196,996) ------------- Realized and unrealized gains (losses)........................ $ (1,256,936) ------------- INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS................... $ (1,314,812) =============
(a) For the period July 17, 2000 (commencement of operations) through December 31, 2000. (b) For the period September 11, 2000 (commencement of operations) through December 31, 2000. See notes to financial statements -29- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENTS OF CHANGES IN NET ASSETS
BDS CAS Sub-Account Sub-Account ---------------------------- ----------------------------------- Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, 2000 1999 2000 1999 ------------- ------------- -------------- ------------------- OPERATIONS: Net investment income (loss)...................... $ 1,537,882 $ (64,548) $ 205,001,364 $ 144,473,869 Net realized gains (losses).................... (243,433) (20,595) 115,139,733 105,714,742 Net unrealized gains (losses).................... 4,047,831 (1,017,930) (545,377,146) 186,413,366 ----------- ----------- -------------- ------------------ Increase (Decrease) in net assets from operations.............. $ 5,342,280 $(1,103,073) $(225,236,049) $ 436,601,977 ----------- ----------- -------------- ------------------ CONTRACT OWNER TRANSACTIONS: Accumulation Activity: Purchase payments received.................. $12,292,708 $11,283,792 $ 120,462,569 $ 76,869,793 Net transfers between Sub-Accounts and Fixed Account................... 11,704,451 26,002,672 53,567,502 2,132,992 Withdrawals, surrenders, annuitizations and contract charges.......... (5,586,301) (3,714,192) (220,619,568) (174,746,999) ----------- ----------- -------------- ------------------ Net accumulation activity................ $18,410,858 $33,572,272 $ (46,589,497) $ (95,744,214) ----------- ----------- -------------- ------------------ Annuitization Activity: Annuitizations............. $ 20,734 $ 79,698 $ 1,565,991 $ 1,893,718 Annuity payments and contract charges.......... (90,994) (25,302) (1,975,291) (1,271,221) Net Transfers between Sub-Accounts.............. -- -- 1,603 109,831 Adjustments to annuity reserves.................. (52,288) 2,648 (31,320) (272,714) ----------- ----------- -------------- ------------------ Net annuitization activity................ $ (122,548) $ 57,044 $ (439,017) $ 459,614 ----------- ----------- -------------- ------------------ Increase (Decrease) in net assets from contract owner transactions...... $18,288,310 $33,629,316 $ (47,028,514) $ (95,284,600) ----------- ----------- -------------- ------------------ Increase (Decrease) in net assets.................... $23,630,590 $32,526,243 $(272,264,563) $ 341,317,377 NET ASSETS: Beginning of year............ 52,108,331 19,582,088 1,835,767,127 1,494,449,750 ----------- ----------- -------------- ------------------ End of year.................. $75,738,921 $52,108,331 $1,563,502,564 $ 1,835,767,127 =========== =========== ============== ================== COS Sub-Account ---------------------------- Year Ended Year Ended December 31, December 31, 2000 1999 ------------- ------------- OPERATIONS: Net investment income (loss)..................... $ 51,412,376 $ 1,603,428 Net realized gains (losses)................... 25,824,342 10,214,814 Net unrealized gains (losses)................... (136,495,002) 104,479,069 ------------ ------------ Increase (Decrease) in net assets from operations............. $(59,258,284) $116,297,311 ------------ ------------ CONTRACT OWNER TRANSACTIONS: Accumulation Activity: Purchase payments received................. $188,488,711 $ 42,581,763 Net transfers between Sub-Accounts and Fixed Account.................. 173,050,060 100,363,903 Withdrawals, surrenders, annuitizations and contract charges......... (52,708,744) (18,079,962) ------------ ------------ Net accumulation activity............... $308,830,027 $124,865,704 ------------ ------------ Annuitization Activity: Annuitizations............ $ 645,834 $ 359,014 Annuity payments and contract charges......... (448,595) (143,073) Net Transfers between Sub-Accounts............. -- 33,759 Adjustments to annuity reserves................. 205,602 (43,544) ------------ ------------ Net annuitization activity............... $ 402,841 $ 206,156 ------------ ------------ Increase (Decrease) in net assets from contrac owner transactions..... $309,232,868 $125,071,860 ------------ ------------ Increase (Decrease) in net assets................... $249,974,584 $241,369,171 NET ASSETS: Beginning of year........... 428,729,157 187,359,986 ------------ ------------ End of year................. $678,703,741 $428,729,157 ============ ============
See notes to financial statements -30- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENTS OF CHANGES IN NET ASSETS -- continued
MIT EGS Sub-Account Sub-Account ------------------------------ ----------------------------------- Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, 2000 1999 2000 1999 -------------- -------------- -------------- ------------------- OPERATIONS: Net investment income (loss).................... $ 122,436,886 $ 116,479,963 $ 113,093,874 $ 452,941 Net realized gains (losses).................. 110,506,963 116,205,611 97,776,829 60,071,700 Net unrealized gains (losses).................. (262,883,007) (121,684,348) (528,520,165) 502,048,606 -------------- -------------- -------------- ------------------ Increase (Decrease) in net assets from operations............ $ (29,939,158) $ 111,001,226 $(317,649,462) $ 562,573,247 -------------- -------------- -------------- ------------------ CONTRACT OWNER TRANSACTIONS: Accumulation Activity: Purchase payments received................ $ 204,855,593 $ 200,798,865 $ 211,141,201 $ 72,378,390 Net transfers between Sub-Accounts and Fixed Account................. 47,197,414 215,949,849 168,377,777 80,609,004 Withdrawals, surrenders, annuitizations and contract charges........ (201,810,388) (159,633,917) (121,215,216) (63,348,442) -------------- -------------- -------------- ------------------ Net accumulation activity.............. $ 50,242,619 $ 257,114,797 $ 258,303,762 $ 89,638,952 -------------- -------------- -------------- ------------------ Annuitization Activity: Annuitizations........... $ 1,238,034 $ 2,805,581 $ 1,078,807 $ 1,166,495 Annuity payments and contract charges........ (1,378,085) (993,419) (980,952) (240,170) Net Transfers between Sub-Accounts............ 18,376 (31,426) 70 24,221 Adjustments to annuity reserves................ (147,752) (68,461) 152,251 (5,370) -------------- -------------- -------------- ------------------ Net annuitization activity.............. $ (269,427) $ 1,712,275 $ 250,176 $ 945,176 -------------- -------------- -------------- ------------------ Increase (Decrease) in net assets from contract owner transactions.............. $ 47,973,192 $ 258,827,072 $ 258,553,938 $ 90,584,128 -------------- -------------- -------------- ------------------ Increase (Decrease) in net assets.............. $ 20,034,034 $ 369,828,298 $ (59,095,524) $ 653,157,375 NET ASSETS: Beginning of year.......... 2,096,720,038 1,726,891,740 1,354,104,868 700,947,493 -------------- -------------- -------------- ------------------ End of year................ $2,116,754,072 $2,096,720,038 $1,295,009,344 $ 1,354,104,868 ============== ============== ============== ================== EIS Sub-Account ---------------------------- Year Ended Year Ended December 31, December 31, 2000 1999 ------------- ------------- OPERATIONS: Net investment income (loss)................... $ (368,866) $ (268,821) Net realized gains (losses)................. 1,186,422 950,678 Net unrealized gains (losses)................. 18,788,499 220,608 ------------ ----------- Increase (Decrease) in net assets from operations........... $ 19,606,055 $ 902,465 ------------ ----------- CONTRACT OWNER TRANSACTIONS: Accumulation Activity: Purchase payments received............... $ 28,419,453 $11,769,375 Net transfers between Sub-Accounts and Fixed Account................ 40,299,271 22,083,804 Withdrawals, surrenders, annuitizations and contract charges....... (6,195,560) (2,323,339) ------------ ----------- Net accumulation activity............. $ 62,523,164 $31,529,840 ------------ ----------- Annuitization Activity: Annuitizations.......... $ 31,514 $ 12,343 Annuity payments and contract charges....... (762) (181) Net Transfers between Sub-Accounts........... -- -- Adjustments to annuity reserves............... 243 (177) ------------ ----------- Net annuitization activity............. $ 30,995 $ 11,985 ------------ ----------- Increase (Decrease) in net assets from contract owne transactions............. $ 62,554,159 $31,541,825 ------------ ----------- Increase (Decrease) in net assets............. $ 82,160,214 $32,444,290 NET ASSETS: Beginning of year......... 40,936,047 8,491,757 ------------ ----------- End of year............... $123,096,261 $40,936,047 ============ ===========
See notes to financial statements -31- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENTS OF CHANGES IN NET ASSETS -- continued
FCE FCG Sub-Account Sub-Account ---------------------------- ----------------------------------- Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, 2000 1999 2000 1999 ------------- ------------- -------------- ------------------- OPERATIONS: Net investment income (loss)...................... $ (545,248) $ (333,930) $ 287,880 $ (399,246) Net realized gains (losses).................... 2,946,417 (1,729,186) 5,384,526 1,603,586 Net unrealized gains (losses).................... (13,438,003) 12,931,317 (14,329,776) 14,716,273 ------------ ----------- ------------- ------------------ Increase (Decrease) in net assets from operations.............. $(11,036,834) $10,868,201 $ (8,657,370) $ 15,920,613 ------------ ----------- ------------- ------------------ CONTRACT OWNER TRANSACTIONS: Accumulation Activity: Purchase payments received.................. $ 8,051,513 $ 2,257,666 $ 32,252,354 $ 7,721,195 Net transfers between Sub-Accounts and Fixed Account................... 5,817,273 10,148,747 32,339,634 10,540,394 Withdrawals, surrenders, annuitizations and contract charges.......... (4,459,000) (2,575,449) (6,112,540) (3,292,901) ------------ ----------- ------------- ------------------ Net accumulation activity................ $ 9,409,786 $ 9,830,964 $ 58,479,448 $ 14,968,688 ------------ ----------- ------------- ------------------ Annuitization Activity: Annuitizations............. $ 61,320 $ 154,638 $ 69,727 $ 39,173 Annuity payments and contract charges.......... (139,157) (8,635) (23,992) (9,967) Net transfers between Sub-Accounts.............. -- 54,153 -- -- Adjustments to annuity reserves.................. 81,906 (3,330) 2,479 (15,216) ------------ ----------- ------------- ------------------ Net annuitization activity................ $ 4,069 $ 196,826 $ 48,214 $ 13,990 ------------ ----------- ------------- ------------------ Increase (Decrease) in net assets from contract owner transactions................ $ 9,413,855 $10,027,790 $ 58,527,662 $ 14,982,678 ------------ ----------- ------------- ------------------ Increase (Decrease) in net assets.................... $ (1,622,979) $20,895,991 $ 49,870,292 $ 30,903,291 NET ASSETS: Beginning of year............ 37,872,729 16,976,738 66,209,989 35,306,698 ------------ ----------- ------------- ------------------ End of year.................. $ 36,249,750 $37,872,729 $ 116,080,281 $ 66,209,989 ============ =========== ============= ================== FCI Sub-Account ---------------------------- Year Ended Year Ended December 31, December 31, 2000 1999 ------------- ------------- OPERATIONS: Net investment income (loss)..................... $ 7,011,723 $ 1,191,818 Net realized gains (losses)................... 1,908,648 5,298,157 Net unrealized gains (losses)................... (11,607,039) 5,260,268 ------------ ----------- Increase (Decrease) in net assets from operations............. $ (2,686,668) $11,750,243 ------------ ----------- CONTRACT OWNER TRANSACTIONS: Accumulation Activity: Purchase payments received................. $ 8,797,559 $ 4,415,080 Net transfers between Sub-Accounts and Fixed Account.................. 1,735,722 (1,761,772) Withdrawals, surrenders, annuitizations and contract charges......... (9,033,320) (5,447,333) ------------ ----------- Net accumulation activity............... $ 1,499,961 $(2,794,025) ------------ ----------- Annuitization Activity: Annuitizations............ $ 54,002 $ 59,613 Annuity payments and contract charges......... (27,655) (14,579) Net transfers between Sub-Accounts............. -- -- Adjustments to annuity reserves................. (1,298) (4,391) ------------ ----------- Net annuitization activity............... $ 25,049 $ 40,643 ------------ ----------- Increase (Decrease) in net assets from contract owner transactions............... $ 1,525,010 $(2,753,382) ------------ ----------- Increase (Decrease) in net assets................... $ (1,161,658) $ 8,996,861 NET ASSETS: Beginning of year........... 80,896,713 71,899,852 ------------ ----------- End of year................. $ 79,735,055 $80,896,713 ============ ===========
See notes to financial statements -32- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENTS OF CHANGES IN NET ASSETS -- continued
GSS HYS Sub-Account Sub-Account ---------------------------- ----------------------------------- Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, 2000 1999 2000 1999 ------------- ------------- -------------- ------------------- OPERATIONS: Net investment income (loss)...................... $ 20,813,581 $ 15,668,791 $ 22,797,198 $ 20,575,633 Net realized gains (losses).................... (1,643,130) (2,683,104) (14,551,499) (3,849,529) Net unrealized gains (losses).................... 27,366,002 (27,290,375) (31,725,784) (700,282) ------------ ------------ ------------- ------------------ Increase (Decrease) in net assets from operations.............. $ 46,536,453 $(14,304,688) $ (23,480,085) $ 16,025,822 ------------ ------------ ------------- ------------------ CONTRACT OWNER TRANSACTIONS: Accumulation Activity: Purchase payments received.................. $ 35,907,984 $ 26,767,871 $ 28,351,368 $ 20,195,648 Net transfers between Sub-Accounts and Fixed Account................... 29,420,853 91,170,433 4,517,525 20,734,522 Withdrawals, surrenders, annuitizations and contract charges.......... (72,893,970) (59,337,154) (37,586,369) (36,583,190) ------------ ------------ ------------- ------------------ Net accumulation activity................ $ (7,565,133) $ 58,601,150 $ (4,717,476) $ 4,346,980 ------------ ------------ ------------- ------------------ Annuitization Activity: Annuitizations............. $ 709,592 $ 665,654 $ 459,830 $ 333,040 Annuity payments and contract charges.......... (510,647) (452,725) (353,292) (295,312) Net transfers between Sub-Accounts.............. 17,643 (3,904) -- -- Adjustments to annuity reserves.................. (161,780) (4,610) (65,995) (22,546) ------------ ------------ ------------- ------------------ Net annuitization activity................ $ 54,808 $ 204,415 $ 40,543 $ 15,182 ------------ ------------ ------------- ------------------ Increase (Decrease) in net assets from contract owner transactions................ $ (7,510,325) $ 58,805,565 $ (4,676,933) $ 4,362,162 ------------ ------------ ------------- ------------------ Increase (Decrease) in net assets.................... $ 39,026,128 $ 44,500,877 $ (28,157,018) $ 20,387,984 NET ASSETS: Beginning of year............ 444,641,082 400,140,205 306,726,019 286,338,035 ------------ ------------ ------------- ------------------ End of year.................. $483,667,210 $444,641,082 $ 278,569,001 $ 306,726,019 ============ ============ ============= ================== MSS Sub-Account ---------------------------- Year Ended Year Ended December 31, December 31, 2000 1999 ------------- ------------- OPERATIONS: Net investment income (loss)..................... $106,871,754 $ (5,294,340) Net realized gains (losses)................... 44,752,504 15,953,711 Net unrealized gains (losses)................... (300,846,553) 267,741,266 ------------- ------------ Increase (Decrease) in net assets from operations............. $(149,222,295) $278,400,637 ------------- ------------ CONTRACT OWNER TRANSACTIONS: Accumulation Activity: Purchase payments received................. $58,847,500 $ 16,920,035 Net transfers between Sub-Accounts and Fixed Account.................. 55,157,431 52,096,752 Withdrawals, surrenders, annuitizations and contract charges......... (79,521,840) (51,120,379) ------------- ------------ Net accumulation activity............... $34,483,091 $ 17,896,408 ------------- ------------ Annuitization Activity: Annuitizations............ $ 561,125 $ 135,661 Annuity payments and contract charges......... (555,108) (320,573) Net transfers between Sub-Accounts............. -- 118,980 Adjustments to annuity reserves................. (17,561) (51,415) ------------- ------------ Net annuitization activity............... $ (11,544) $ (117,347) ------------- ------------ Increase (Decrease) in net assets from contract owner transactions............... $34,471,547 $ 17,779,061 ------------- ------------ Increase (Decrease) in net assets................... $(114,750,748) $296,179,698 NET ASSETS: Beginning of year........... 630,280,709 334,101,011 ------------- ------------ End of year................. $515,529,961 $630,280,709 ============= ============
See notes to financial statements -33- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENTS OF CHANGES IN NET ASSETS -- continued
MIS MMS Sub-Account Sub-Account ---------------------------- ----------------------------------- Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, 2000 1999 2000 1999 ------------- ------------- -------------- ------------------- OPERATIONS: Net investment income (loss)...................... $ 17,271,098 $ (519,923) $ 16,798,037 $ 14,066,908 Net realized gains (losses).................... 20,268,033 6,220,402 -- -- Net unrealized gains (losses).................... (119,219,201) 103,443,251 -- -- ------------ ------------ ------------- ------------------ Increase (Decrease) in net assets from operations.............. $(81,680,070) $109,143,730 $ 16,798,037 $ 14,066,908 ------------ ------------ ------------- ------------------ CONTRACT OWNER TRANSACTIONS: Accumulation Activity: Purchase payments received.................. $267,501,421 $137,436,213 $ 149,152,285 $ 77,465,420 Net transfers between Sub-Accounts and Fixed Account................... 259,239,622 223,731,514 (3,045,639) 176,379,832 Withdrawals, surrenders, annuitizations and contract charges.......... (60,579,090) (20,457,443) (210,393,152) (230,737,769) ------------ ------------ ------------- ------------------ Net accumulation activity................ $466,161,953 $340,710,284 $ (64,286,506) $ 23,107,483 ------------ ------------ ------------- ------------------ Annuitization Activity: Annuitizations............. $ 744,161 $ 755,518 $ 196,898 $ 1,593,879 Annuity payments and contract charges.......... (510,101) (48,148) (341,950) (347,973) Net transfers between Sub-Accounts.............. -- 47,324 (349) (646,987) Adjustments to annuity reserves.................. 268,875 (53,623) (18,308) (33,773) ------------ ------------ ------------- ------------------ Net annuitization activity................ $ 502,935 $ 701,071 $ (163,709) $ 565,146 ------------ ------------ ------------- ------------------ Increase (Decrease) in net assets from contract owner transactions................ $466,664,888 $341,411,355 $ (64,450,215) $ 23,672,629 ------------ ------------ ------------- ------------------ Increase (Decrease) in net assets.................... $384,984,818 $450,555,085 $ (47,652,178) $ 37,739,537 NET ASSETS: Beginning of year............ 531,745,990 81,190,905 454,644,884 416,905,347 ------------ ------------ ------------- ------------------ End of year.................. $916,730,808 $531,745,990 $ 406,992,706 $ 454,644,884 ============ ============ ============= ================== NWD Sub-Account ---------------------------- Year Ended Year Ended December 31, December 31, 2000 1999 ------------- ------------- OPERATIONS: Net investment income (loss)..................... $ 4,552,743 $ (241,342) Net realized gains (losses)................... 11,727,357 1,355,381 Net unrealized gains (losses)................... (27,084,312) 19,683,822 ------------ ------------ Increase (Decrease) in net assets from operations............. $(10,804,212) $ 20,797,861 ------------ ------------ CONTRACT OWNER TRANSACTIONS: Accumulation Activity: Purchase payments received................. $ 77,725,960 $ 10,051,271 Net transfers between Sub-Accounts and Fixed Account.................. 83,840,994 20,319,479 Withdrawals, surrenders, annuitizations and contract charges......... (9,896,594) (2,113,261) ------------ ------------ Net accumulation activity............... $151,670,360 $ 28,257,489 ------------ ------------ Annuitization Activity: Annuitizations............ $ 162,539 $ 339,593 Annuity payments and contract charges......... (291,928) (15,934) Net transfers between Sub-Accounts............. -- 41,259 Adjustments to annuity reserves................. 219,356 (46,627) ------------ ------------ Net annuitization activity............... $ 89,967 $ 318,291 ------------ ------------ Increase (Decrease) in net assets from contract owner transactions............... $151,760,327 $ 28,575,780 ------------ ------------ Increase (Decrease) in net assets................... $140,956,115 $ 49,373,641 NET ASSETS: Beginning of year........... 62,650,765 13,277,124 ------------ ------------ End of year................. $203,606,880 $ 62,650,765 ============ ============
See notes to financial statements -34- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENTS OF CHANGES IN NET ASSETS -- continued
RES RGS Sub-Account Sub-Account ------------------------------ ----------------------------------- Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, 2000 1999 2000 1999 -------------- -------------- -------------- ------------------- OPERATIONS: Net investment income (loss).................... $ 110,747,020 $ 19,843,457 $ 258,077 $ (620,571) Net realized gains (losses).................. 59,611,630 51,545,740 2,411,618 1,981,525 Net unrealized gains (losses).................. (239,036,239) 146,995,453 (1,419,007) 2,065,260 -------------- -------------- ------------- ------------------ Increase (Decrease) in net assets from operations............ $ (68,677,589) $ 218,384,650 $ 1,250,688 $ 3,426,214 -------------- -------------- ------------- ------------------ CONTRACT OWNER TRANSACTIONS: Accumulation Activity: Purchase payments received................ $ 100,944,068 $ 60,172,716 $ 12,619,642 $ 12,282,216 Net transfers between Sub-Accounts and Fixed Account................. 51,033,381 46,692,915 9,092,151 27,754,724 Withdrawals, surrenders, annuitizations and contract charges........ (113,908,235) (78,027,604) (9,255,795) (4,602,039) -------------- -------------- ------------- ------------------ Net accumulation activity.............. $ 38,069,214 $ 28,838,027 $ 12,455,998 $ 35,434,901 -------------- -------------- ------------- ------------------ Annuitization Activity: Annuitizations........... $ 897,331 $ 727,314 $ 46,392 $ 45,656 Annuity payments and contract charges........ (661,710) (340,066) (33,136) (22,411) Net transfers between Sub-Accounts............ 18,306 45,500 -- -- Adjustments to annuity reserves................ (3,286) (116,242) (2,338) 646 -------------- -------------- ------------- ------------------ Net annuitization activity.............. $ 250,641 $ 316,506 $ 10,918 $ 23,891 -------------- -------------- ------------- ------------------ Increase (Decrease) in net assets from contract owner transactions.............. $ 38,319,855 $ 29,154,533 $ 12,466,916 $ 35,458,792 -------------- -------------- ------------- ------------------ Increase (Decrease) in net assets.............. $ (30,357,734) $ 247,539,183 $ 13,717,604 $ 38,885,006 NET ASSETS: Beginning of year.......... 1,195,550,735 948,011,552 75,159,185 36,274,179 -------------- -------------- ------------- ------------------ End of year................ $1,165,193,001 $1,195,550,735 $ 88,876,789 $ 75,159,185 ============== ============== ============= ================== RSS Sub-Account ---------------------------- Year Ended Year Ended December 31, December 31, 2000 1999 ------------- ------------- OPERATIONS: Net investment income (loss)................... $ 1,454,584 $ (141,943) Net realized gains (losses)................. 2,305,478 1,511,865 Net unrealized gains (losses)................. (9,614,973) 5,914,674 ----------- ----------- Increase (Decrease) in net assets from operations........... $(5,854,911) $ 7,284,596 ----------- ----------- CONTRACT OWNER TRANSACTIONS: Accumulation Activity: Purchase payments received............... $41,763,940 $ 4,475,044 Net transfers between Sub-Accounts and Fixed Account................ 19,743,913 15,355,290 Withdrawals, surrenders, annuitizations and contract charges....... (3,286,019) (1,000,866) ----------- ----------- Net accumulation activity............. $58,221,834 $18,829,468 ----------- ----------- Annuitization Activity: Annuitizations.......... $ 89,297 $ 206,502 Annuity payments and contract charges....... (229,096) -- Net transfers between Sub-Accounts........... -- -- Adjustments to annuity reserves............... 185,264 -- ----------- ----------- Net annuitization activity............. $ 45,465 $ 206,502 ----------- ----------- Increase (Decrease) in net assets from contract owne transactions............. $58,267,299 $19,035,970 ----------- ----------- Increase (Decrease) in net assets............. $52,412,388 $26,320,566 NET ASSETS: Beginning of year......... 29,839,876 3,519,310 ----------- ----------- End of year............... $82,252,264 $29,839,876 =========== ===========
See notes to financial statements -35- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENTS OF CHANGES IN NET ASSETS -- continued
SIS TEC Sub-Account Sub-Account ---------------------------- --------------- Year Ended Year Ended Period Ended December 31, December 31, December 31, 2000 1999 2000(a) ------------- ------------- --------------- OPERATIONS: Net investment income (loss)..... $ 559,120 $ 83,369 $ (94,285) Net realized gains (losses)...... 158,521 89,915 (171,918) Net unrealized gains (losses).... (206,713) 246,639 (7,346,993) ----------- ----------- --------------- Increase (Decrease) in net assets from operations...... $ 510,928 $ 419,923 $ (7,613,196) ----------- ----------- --------------- CONTRACT OWNER TRANSACTIONS: Accumulation Activity: Purchase payments received..... $ 8,750,504 $ 3,507,488 $ 29,889,473 Net transfers between Sub-Accounts and Fixed Account....................... 6,354,616 8,565,548 10,157,396 Withdrawals, surrenders, annuitizations and contract charges....................... (2,101,610) (830,463) (462,508) ----------- ----------- --------------- Net accumulation activity.... $13,003,510 $11,242,573 $ 39,584,361 ----------- ----------- --------------- Annuitization Activity: Annuitizations................. $ 15,749 $ -- $ 6,170 Annuity payments and contract charges....................... (281) -- (77) Net transfers between Sub-Accounts.................. -- -- -- Adjustments to annuity reserves...................... 119 -- (3,242) ----------- ----------- --------------- Net annuitization activity... $ 15,587 $ -- $ 2,851 ----------- ----------- --------------- Increase (Decrease) in net assets from contract owner transactions.................... $13,019,097 $11,242,573 $ 39,587,212 ----------- ----------- --------------- Increase (Decrease) in net assets........................ $13,530,025 $11,662,496 $ 31,974,016 NET ASSETS: Beginning of year................ 19,443,594 7,781,098 -- ----------- ----------- --------------- End of year...................... $32,973,619 $19,443,594 $ 31,974,016 =========== =========== =============== TRS Sub-Account ------------------------------ Year Ended Year Ended December 31, December 31, 2000 1999 -------------- -------------- OPERATIONS: Net investment income (loss)..... $ 139,777,526 $ 244,657,574 Net realized gains (losses)...... 31,924,489 43,556,184 Net unrealized gains (losses).... 55,636,292 (262,617,068) -------------- -------------- Increase (Decrease) in net assets from operations...... $ 227,338,307 $ 25,596,690 -------------- -------------- CONTRACT OWNER TRANSACTIONS: Accumulation Activity: Purchase payments received..... $ 74,804,184 $ 88,544,205 Net transfers between Sub-Accounts and Fixed Account....................... (97,365,584) 81,610,921 Withdrawals, surrenders, annuitizations and contract charges....................... (253,512,922) (250,384,445) -------------- -------------- Net accumulation activity.... $(276,074,322) $ (80,229,319) -------------- -------------- Annuitization Activity: Annuitizations................. $ 2,349,159 $ 2,259,139 Annuity payments and contract charges....................... (1,744,305) (1,437,038) Net transfers between Sub-Accounts.................. (55,788) (39,113) Adjustments to annuity reserves...................... (135,198) (169,445) -------------- -------------- Net annuitization activity... $ 413,868 $ 613,543 -------------- -------------- Increase (Decrease) in net assets from contract owner transactions.................... $(275,660,454) $ (79,615,776) -------------- -------------- Increase (Decrease) in net assets........................ $ (48,322,147) $ (54,019,086) NET ASSETS: Beginning of year................ 1,762,062,170 1,816,081,256 -------------- -------------- End of year...................... $1,713,740,023 $1,762,062,170 ============== ==============
(a) For the period July 17, 2000 (commencement of operations of Sub-Account) through December 31, 2000. See notes to financial statements -36- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENTS OF CHANGES IN NET ASSETS -- continued
UTS GAA Sub-Account Sub-Account ---------------------------- ----------------------------------- Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, 2000 1999 2000 1999 ------------- ------------- -------------- ------------------- OPERATIONS: Net investment income (loss)...................... $ 36,802,332 $ 24,907,386 $ 4,671,549 $ 4,809,747 Net realized gains (losses).................... 10,898,590 10,701,662 2,285,356 2,885,303 Net unrealized gains (losses).................... (27,479,753) 42,961,865 (11,303,397) 10,272,405 ------------ ------------ ------------- ------------------ Increase (Decrease) in net assets from operations.............. $ 20,221,169 $ 78,570,913 $ (4,346,492) $ 17,967,455 ------------ ------------ ------------- ------------------ CONTRACT OWNER TRANSACTIONS: Accumulation Activity: Purchase payments received.................. $ 89,663,057 $ 34,302,650 $ 5,808,656 $ 2,661,148 Net transfers between Sub-Accounts and Fixed Account................... 109,620,267 67,737,731 716,468 (14,351,525) Withdrawals, surrenders, annuitizations and contract charges.......... (41,180,443) (19,915,248) (11,518,734) (8,142,859) ------------ ------------ ------------- ------------------ Net accumulation activity................ $158,102,881 $ 82,125,133 $ (4,993,610) $ (19,833,236) ------------ ------------ ------------- ------------------ Annuitization Activity: Annuitizations............. $ 459,117 $ 111,619 $ 197,229 $ 12,744 Annuity payments and contract charges.......... (252,731) (154,181) (144,114) (102,934) Net transfers between Sub-Accounts.............. -- 324,919 70 (33,199) Adjustments to annuity reserves.................. (33,064) (15,579) (22,183) 14,208 ------------ ------------ ------------- ------------------ Net annuitization activity................ $ 173,322 $ 266,778 $ 31,002 $ (109,181) ------------ ------------ ------------- ------------------ Increase (Decrease) in net assets from contract owner transactions................ $158,276,203 $ 82,391,911 $ (4,962,608) $ (19,942,417) ------------ ------------ ------------- ------------------ Increase (Decrease) in net assets.................... $178,479,372 $160,962,824 $ (9,309,100) $ (1,974,962) NET ASSETS: Beginning of year............ 372,217,804 211,254,980 121,370,650 123,345,612 ------------ ------------ ------------- ------------------ End of year.................. $550,715,176 $372,217,804 $ 112,061,550 $ 121,370,650 ============ ============ ============= ================== GGS Sub-Account ---------------------------- Year Ended Year Ended December 31, December 31, 2000 1999 ------------- ------------- OPERATIONS: Net investment income (loss)..................... $ 1,631,982 $ 8,275,209 Net realized gains (losses)................... (4,147,933) (1,779,438) Net unrealized gains (losses)................... 2,081,572 (12,083,431) ------------ ------------ Increase (Decrease) in net assets from operations............. $ (434,379) $ (5,587,660) ------------ ------------ CONTRACT OWNER TRANSACTIONS: Accumulation Activity: Purchase payments received................. $ 4,548,344 $ 1,751,874 Net transfers between Sub-Accounts and Fixed Account.................. (2,827,337) (4,727,708) Withdrawals, surrenders, annuitizations and contract charges......... (13,142,608) (14,312,841) ------------ ------------ Net accumulation activity............... $(11,421,601) $(17,288,675) ------------ ------------ Annuitization Activity: Annuitizations............ $ 52,911 $ 100,118 Annuity payments and contract charges......... (123,868) (114,238) Net transfers between Sub-Accounts............. -- -- Adjustments to annuity reserves................. 120,294 (22,713) ------------ ------------ Net annuitization activity............... $ 49,337 $ (36,833) ------------ ------------ Increase (Decrease) in net assets from contract owner transactions............... $(11,372,264) $(17,325,508) ------------ ------------ Increase (Decrease) in net assets................... $(11,806,643) $(22,913,168) NET ASSETS: Beginning of year........... 66,900,795 89,813,963 ------------ ------------ End of year................. $ 55,094,152 $ 66,900,795 ============ ============
See notes to financial statements -37- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENTS OF CHANGES IN NET ASSETS -- continued
GGR GTR Sub-Account Sub-Account ---------------------------- ----------------------------------- Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, 2000 1999 2000 1999 ------------- ------------- -------------- ------------------- OPERATIONS: Net investment income (loss)...................... $ 57,920,355 $ 6,750,260 $ 5,940,292 $ 5,898,913 Net realized gains (losses).................... 26,005,821 12,474,312 2,579,969 3,497,527 Net unrealized gains (losses).................... (148,644,374) 145,129,697 (7,755,355) (2,696,231) ------------ ------------ ------------- ------------------ Increase (Decrease) in net assets from operations.............. $(64,718,198) $164,354,269 $ 764,906 $ 6,700,209 ------------ ------------ ------------- ------------------ CONTRACT OWNER TRANSACTIONS: Accumulation Activity: Purchase payments received.................. $ 46,331,287 $ 10,448,847 $ 4,441,533 $ 5,485,526 Net transfers between Sub-Accounts and Fixed Account................... 36,422,023 11,508,041 (1,546,986) 1,803,965 Withdrawals, surrenders, annuitizations and contract charges.......... (51,898,609) (26,312,080) (8,818,488) (6,850,689) ------------ ------------ ------------- ------------------ Net accumulation activity................ $ 30,854,701 $ (4,355,192) $ (5,923,941) $ 438,802 ------------ ------------ ------------- ------------------ Annuitization Activity: Annuitizations............. $ 456,789 $ 166,248 $ 20,713 $ 114,644 Annuity payments and contract charges.......... (234,872) (116,958) (86,584) (78,129) Net transfers between Sub-Accounts.............. 70 (12,182) -- -- Adjustments to annuity reserves.................. (21,859) 22,465 (8,028) (3,828) ------------ ------------ ------------- ------------------ Net annuitization activity................ $ 200,128 $ 59,573 $ (73,899) $ 32,687 ------------ ------------ ------------- ------------------ Increase (Decrease) in net assets from contract owner transactions................ $ 31,054,829 $ (4,295,619) $ (5,997,840) $ 471,489 ------------ ------------ ------------- ------------------ Increase (Decrease) in net assets.................... $(33,663,369) $160,058,650 $ (5,232,934) $ 7,171,698 NET ASSETS: Beginning of year............ 420,537,886 260,479,236 102,446,170 95,274,472 ------------ ------------ ------------- ------------------ End of year.................. $386,874,517 $420,537,886 $ 97,213,236 $ 102,446,170 ============ ============ ============= ================== SGS Sub-Account ---------------------------- Year Ended Period Ended December 31, December 31, 2000 1999(b) ------------- ------------- OPERATIONS: Net investment income (loss)..................... $ (700,845) $ (7,994) Net realized gains (losses)................... 1,038,087 (341,864) Net unrealized gains (losses)................... (13,431,277) 1,072,320 ------------ ----------- Increase (Decrease) in net assets from operations............. $(13,094,035) $ 722,462 ------------ ----------- CONTRACT OWNER TRANSACTIONS: Accumulation Activity: Purchase payments received................. $ 50,262,282 $ 421,107 Net transfers between Sub-Accounts and Fixed Account.................. 43,860,963 8,018,971 Withdrawals, surrenders, annuitizations and contract charges......... (3,596,813) (4,249) ------------ ----------- Net accumulation activity............... $ 90,526,432 $ 8,435,829 ------------ ----------- Annuitization Activity: Annuitizations............ $ 144,114 $ -- Annuity payments and contract charges......... (8,563) -- Net transfers between Sub-Accounts............. -- -- Adjustments to annuity reserves................. (1,503) -- ------------ ----------- Net annuitization activity............... $ 134,048 $ -- ------------ ----------- Increase (Decrease) in net assets from contract owner transactions............... $ 90,660,480 $ 8,435,829 ------------ ----------- Increase (Decrease) in net assets................... $ 77,566,445 $ 9,158,291 NET ASSETS: Beginning of year........... 9,158,291 -- ------------ ----------- End of year................. $ 86,724,736 $ 9,158,291 ============ ===========
(b) For the period November 5, 1999 (commencement of operations of Sub-Account) through December 31, 1999. See notes to financial statements -38- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENTS OF CHANGES IN NET ASSETS -- continued
GTS MCS Sub-Account Sub-Account ------------- ------------- Period Ended Period Ended December 31, December 31, 2000(c) 2000(c) ------------- ------------- OPERATIONS: Net investment income (loss)..... $ (3,184) $ (57,876) Net realized gains (losses)...... (3,111) (59,940) Net unrealized gains (losses).... (281,437) (1,196,996) ----------- ----------- Increase (Decrease) in net assets from operations....... $ (287,732) $(1,314,812) ----------- ----------- CONTRACT OWNER TRANSACTIONS: Accumulation Activity: Purchase payments received..... $ 1,154,514 $15,246,105 Net transfers between Sub-Accounts and Fixed Account....................... 535,070 12,544,803 Withdrawals, surrenders, annuitizations and contract charges....................... (2,200) (123,483) ----------- ----------- Net accumulation activity.... $ 1,687,384 $27,667,425 ----------- ----------- Annuitization Activity: Annuitizations................. $ -- $ -- Annuity payments and contract charges....................... -- -- Net transfers between Sub-Accounts.................. -- -- Adjustments to annuity reserves...................... -- -- ----------- ----------- Net annuitization activity... $ -- $ -- ----------- ----------- Increase (Decrease) in net assets from contract owner transactions.................... $ 1,687,384 $27,667,425 ----------- ----------- Increase (Decrease) in net assets........................ $ 1,399,652 $26,352,613 NET ASSETS: Beginning of year................ -- -- ----------- ----------- End of year...................... $ 1,399,652 $26,352,613 =========== ===========
(c) For the period September 11, 2000 (commencement of operations of Sub-Account) through December 31, 2000. See notes to financial statements -39- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 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, Regatta Extra contracts, Regatta Access contracts, Regatta Choice contracts and Regatta Flex 4 contracts (collectively, 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 ("MFS"), an affiliate of the Sponsor, is the investment adviser to the Series Trust. (2) SIGNIFICANT ACCOUNTING POLICIES GENERAL The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Sponsor's 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 under the Contracts 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 taxable and, therefore, no provision has been made for federal income taxes. -40- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F NOTES TO FINANCIAL STATEMENTS -- continued (3) CONTRACT CHARGES A mortality and expense risk charge based on the value of the Variable Account is deducted from the Variable Account at the end of each valuation period for the mortality and expense risks assumed by the Sponsor. The deductions are transferred periodically to the Sponsor. Currently, the deduction is at an effective annual rate as follows:
Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 -------- -------- -------- -------- -------- -------- Regatta contracts.............................. 1.25% -- -- -- -- -- Regatta Gold contracts......................... 1.25% -- -- -- -- -- Regatta Classic contracts...................... 1.00% -- -- -- -- -- Regatta Platinum contracts..................... 1.25% -- -- -- -- -- Regatta Extra contracts........................ 1.30% 1.45% 1.55% 1.70% -- -- Regatta Choice contracts....................... 0.85% 1.00% 1.10% 1.15% 1.25% 1.40% Regatta Access contracts....................... 1.00% 1.15% 1.25% 1.40% 1.50% 1.65% Regatta Flex 4 contracts....................... 0.95% 1.10% 1.20% 1.35% 1.45% 1.60%
Each year on the account anniversary, an account administration fee ("Account Fee") equal to $30 in the case of Regatta contracts, the lesser of $30 or 2% of the participant's account value in the case of Regatta Gold contracts, the lesser of $35 or 2% of the participant's account value in the case of Regatta Platinum contracts, $35 in the case of Regatta Extra contracts and $50 in the case of Regatta Classic, Regatta Access, Regatta Choice and Regatta Flex 4 contracts (after account year 5, the account fee, for Regatta Gold, Regatta Platinum, Regatta Extra and Regatta Choice contracts, may be changed annually, but it may not exceed the lesser of $50 or 2% of the participant's account value) 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, Regatta Platinum, Regatta Extra, Regatta Choice and Regatta Flex 4 contracts, a withdrawal charge (contingent deferred sales charge) of up to 8% of certain amounts withdrawn, when applicable, may -41- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F NOTES TO FINANCIAL STATEMENTS -- continued (3) CONTRACT CHARGES -- CONTINUED be deducted to cover certain expenses relating to the sale of the contracts and certificates. In the case of Regatta Classic contracts, 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. 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, Regatta Platinum, Regatta Extra, Regatta Access, Regatta Choice and Regatta Flex 4 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 at least 4% or 3%, for Regatta, Regatta Gold, Regatta Classic and Regatta Platinum as stated in each participant's contract or certificate, as applicable, and the 2000 Individual Annuitant Mortality Table and an assumed rate of 3% for Regatta Extra, Regatta Access, Regatta Choice and Regatta Flex 4. Required adjustments to the reserves are accomplished by transfers to or from the Sponsor. -42- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F NOTES TO FINANCIAL STATEMENTS -- continued (5) UNIT ACTIVITY FROM PARTICIPANT TRANSACTIONS
Units Transferred Between Sub-Accounts and Units Outstanding Fixed Accumulation Beginning of Year Units Purchased Account ----------------------- ----------------------- ----------------------- Year Ended Year Ended Year Ended December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ---------- ----------- ---------- ----------- ---------- ----------- MFS REGATTA CONTRACTS: ------------------------------ CAS -- Level 1 22,958 464,349 1,434 1,694 (12,093) (403,678) CAS -- Level 2 7,847,274 9,053,993 5,852 6,466 190,764 841,337 GSS -- Level 1 -- 325,241 441 1,870 -- (310,743) GSS -- Level 2 2,795,724 2,656,978 18,617 10,259 6,818 1,016,504 HYS -- Level 1 165 73,632 -- 165 (165) (69,249) HYS -- Level 2 1,075,336 1,320,379 -- -- (38,144) 160,884 MSS -- Level 1 5,113 196,463 380 719 (3,537) (170,145) MSS -- Level 2 2,678,028 2,730,897 4,329 8,046 160,720 791,231 MMS -- Level 1 16,140 268,447 6,124 6,604 (3,167) (78,142) MMS -- Level 2 2,672,617 3,722,758 7,930 46,627 707,544 4,208,078 TRS -- Level 1 31,742 898,137 933 980 (23,876) (753,744) TRS -- Level 2 9,929,414 12,506,430 11,299 12,834 (363,128) 1,380,346 GGS -- Level 1 495 89,328 -- 762 (495) (80,050) GGS -- Level 2 630,136 834,010 2,983 -- (32,500) 81,087 Units Withdrawn, Surrendered, and Units Outstanding Annuitized End of Year ------------------------ ----------------------- Year Ended Year Ended December 31, December 31, 2000 1999 2000 1999 ---------- ------------ ---------- ----------- MFS REGATTA CONTRACTS: ------------------------------ CAS -- Level 1 (769) (39,407) 11,530 22,958 CAS -- Level 2 (1,283,752) (2,054,522) 6,760,138 7,847,274 GSS -- Level 1 (441) (16,368) -- -- GSS -- Level 2 (534,703) (888,017) 2,286,456 2,795,724 HYS -- Level 1 -- (4,383) -- 165 HYS -- Level 2 (243,668) (405,927) 793,524 1,075,336 MSS -- Level 1 (31) (21,924) 1,925 5,113 MSS -- Level 2 (504,331) (852,146) 2,338,746 2,678,028 MMS -- Level 1 (1,591) (180,769) 17,506 16,140 MMS -- Level 2 (1,509,013) (5,304,846) 1,879,078 2,672,617 TRS -- Level 1 (6,860) (113,631) 1,939 31,742 TRS -- Level 2 (2,344,550) (3,970,196) 7,233,035 9,929,414 GGS -- Level 1 -- (9,545) -- 495 GGS -- Level 2 (133,399) (284,961) 467,220 630,136
-43- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 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
Units Transferred Between Sub-Accounts and Units Outstanding Fixed Accumulation Beginning of Year Units Purchased Account ----------------------- ----------------------- ----------------------- Year Ended Year Ended Year Ended December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ---------- ----------- ---------- ----------- ---------- ----------- MFS REGATTA GOLD CONTRACTS: ------------------------------ BDS 2,085,322 1,182,239 29,483 128,326 197,581 1,055,550 CAS 32,846,090 37,500,481 320,065 515,449 (454,290) (1,432,874) COS 12,845,672 10,262,282 247,279 317,640 2,522,261 3,084,055 MIT 49,201,899 51,880,765 449,673 1,104,376 (2,923,924) 814,616 EGS 28,061,821 28,900,957 373,147 564,144 824,391 856,790 EIS 1,301,166 528,238 52,382 96,901 1,386,697 840,387 FCE 2,761,034 2,147,348 26,228 49,578 (318,783) 814,122 FCG 3,187,799 3,290,043 70,013 103,809 641,167 71,906 FCI 4,509,596 5,214,558 40,386 53,226 (105,015) (373,297) GSS 23,230,411 23,218,234 194,879 381,294 (187,738) 2,812,014 HYS 12,537,119 14,190,817 106,514 209,455 (1,083,157) (264,388) MSS 11,032,465 11,245,144 122,892 111,495 257,111 874,242 MIS 11,985,320 4,121,518 418,399 1,179,064 4,724,782 7,769,109 MMS 28,447,843 29,387,086 668,574 1,347,998 2,650,231 10,642,975 NWD 1,599,416 794,859 115,422 99,202 2,018,575 818,140 RES 35,935,779 38,553,986 370,413 602,325 (246,706) (220,117) RGS 3,153,242 2,408,676 32,925 120,353 (131,337) 906,773 RSS 1,114,581 190,267 93,854 29,576 393,052 929,786 SIS 892,490 622,914 19,211 67,062 168,195 260,781 TEC(b) -- -- 15,067 -- 422,042 -- TRS 62,923,966 71,102,020 543,287 922,198 (5,944,884) (771,786) UTS 9,588,408 9,023,102 147,605 323,450 1,258,562 972,853 GAA 6,188,330 7,576,691 55,903 61,909 (106,997) (972,115) GGS 3,941,088 5,048,219 61,047 51,599 (383,157) (404,547) GGR 13,513,835 14,522,129 124,310 189,567 338,996 82,020 GTR 4,907,545 5,354,633 32,245 80,538 (251,581) (144,224) SGS(a) 558,856 -- 89,653 4,006 1,913,412 555,135 GTS(c) -- -- 892 -- 10,039 -- MCS(c) -- -- 22,458 -- 714,808 -- Units Withdrawn, Surrendered, and Units Outstanding Annuitized End of Year ------------------------- ----------------------- Year Ended Year Ended December 31, December 31, 2000 1999 2000 1999 ----------- ------------ ---------- ----------- MFS REGATTA GOLD CONTRACTS: ------------------------------ BDS (224,373) (280,793) 2,088,013 2,085,322 CAS (3,923,089) (3,736,966) 28,788,776 32,846,090 COS (1,507,447) (818,305) 14,107,765 12,845,672 MIT (5,022,822) (4,597,858) 41,704,826 49,201,899 EGS (2,634,800) (2,260,070) 26,624,559 28,061,821 EIS (257,831) (164,360) 2,482,414 1,301,166 FCE (362,273) (250,014) 2,106,206 2,761,034 FCG (333,310) (277,959) 3,565,669 3,187,799 FCI (551,232) (384,891) 3,893,735 4,509,596 GSS (3,939,996) (3,181,131) 19,297,556 23,230,411 HYS (1,655,163) (1,598,765) 9,905,313 12,537,119 MSS (1,424,398) (1,198,416) 9,988,070 11,032,465 MIS (1,953,513) (1,084,371) 15,174,988 11,985,320 MMS (12,562,122) (12,930,216) 19,204,526 28,447,843 NWD (298,945) (112,785) 3,434,468 1,599,416 RES (3,419,313) (3,000,415) 32,640,173 35,935,779 RGS (479,617) (282,560) 2,575,213 3,153,242 RSS (121,765) (35,048) 1,479,722 1,114,581 SIS (146,165) (58,267) 933,731 892,490 TEC(b) (9,638) -- 427,471 -- TRS (8,757,116) (8,328,466) 48,765,253 62,923,966 UTS (1,033,544) (730,997) 9,961,031 9,588,408 GAA (578,755) (478,155) 5,558,481 6,188,330 GGS (822,615) (754,183) 2,796,363 3,941,088 GGR (1,748,049) (1,279,881) 12,229,092 13,513,835 GTR (445,392) (383,402) 4,242,817 4,907,545 SGS(a) (171,777) (285) 2,390,144 558,856 GTS(c) (2) -- 10,929 -- MCS(c) (6,349) -- 730,917 --
(a) For the period November 5, 1999 (commencement of operations of Sub-Account) through December 31, 1999. (b) For the period July 17, 2000 (commencement of operations of Sub-Account) through December 31, 2000. (c) For the period September 11, 2000 (commencement of operations of Sub-Account) through December 31, 2000. -44- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 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
Units Transferred Between Sub-Accounts and Units Outstanding Fixed Accumulation Beginning of Year Units Purchased Account ----------------------- ----------------------- ----------------------- Year Ended Year Ended Year Ended December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ---------- ----------- ---------- ----------- ---------- ----------- MFS REGATTA CLASSIC CONTRACTS: ------------------------------ BDS 48,210 35,123 6,449 38,838 (4,522) (23,411) CAS 643,838 465,812 47,992 98,517 (91,372) 127,840 COS 450,750 277,518 72,724 98,185 11,676 94,668 MIT 1,467,541 1,213,193 121,498 343,708 (181,647) 47,381 EGS 1,130,669 959,802 107,075 206,621 107,369 (6,847) EIS 74,460 12,113 19,357 36,114 7,202 28,711 FCE 72,781 43,654 4,806 14,933 8,698 17,553 FCG 98,698 83,820 28,426 33,705 (2,948) (6,058) FCI 89,652 90,582 4,662 5,230 (1,445) 289 GSS 282,054 297,310 57,825 100,923 13,071 (71,777) HYS 312,392 342,363 44,389 64,265 (25,745) (62,579) MSS 305,995 140,324 43,035 64,332 (34,510) 112,516 MIS 501,609 232,788 159,372 298,311 192,879 (19,461) MMS 1,078,121 270,417 430,188 1,348,530 (55,091) (15,060) NWD 99,057 29,182 39,582 55,212 100,551 19,871 RES 963,271 872,289 87,336 161,577 74,874 (26,160) RGS 74,418 33,882 2,644 40,357 (6,504) 2,489 RSS 28,986 2,234 30,538 11,775 18,241 15,565 SIS 22,950 2,577 10,026 17,748 2,769 2,629 TEC(b) -- -- -- -- 21,220 -- TRS 1,987,855 1,731,292 112,889 455,454 (177,947) (52,461) UTS 356,269 178,136 70,517 90,782 (19,451) 119,327 GAA 43,343 53,167 4,434 1,943 1,625 (7,138) GGS 42,359 40,074 1,316 13,692 (11,024) (7,500) GGR 135,881 121,297 25,375 17,448 8,187 7,909 GTR 118,027 91,253 2,425 35,847 (10,402) (2,772) SGS(a) 5,701 -- 21,212 -- 100,435 5,701 GTS(c) -- -- -- -- 987 -- MCS(c) -- -- 2,795 -- 14,513 -- Units Withdrawn, Surrendered, and Units Outstanding Annuitized End of Year ------------------------ ----------------------- Year Ended Year Ended December 31, December 31, 2000 1999 2000 1999 ---------- ------------ ---------- ----------- MFS REGATTA CLASSIC CONTRACTS: ------------------------------ BDS (21,033) (2,340) 29,104 48,210 CAS (56,494) (48,331) 543,964 643,838 COS (49,627) (19,621) 485,523 450,750 MIT (168,601) (136,741) 1,238,791 1,467,541 EGS (81,326) (28,907) 1,263,787 1,130,669 EIS (11,260) (2,478) 89,759 74,460 FCE (6,761) (3,359) 79,524 72,781 FCG (4,790) (12,769) 119,386 98,698 FCI (2,838) (6,449) 90,031 89,652 GSS (41,856) (44,402) 311,094 282,054 HYS (31,523) (31,657) 299,513 312,392 MSS (16,724) (11,177) 297,796 305,995 MIS (123,306) (10,029) 730,554 501,609 MMS (1,160,276) (525,766) 292,942 1,078,121 NWD (14,032) (5,208) 225,158 99,057 RES (75,371) (44,435) 1,050,110 963,271 RGS (11,069) (2,310) 59,489 74,418 RSS (5,834) (588) 71,931 28,986 SIS (1,089) (4) 34,656 22,950 TEC(b) (1) -- 21,219 -- TRS (111,560) (146,430) 1,811,237 1,987,855 UTS (44,557) (31,976) 362,778 356,269 GAA (3,043) (4,629) 46,359 43,343 GGS (3,186) (3,904) 29,465 42,362 GGR (7,463) (10,773) 161,980 135,881 GTR (6,442) (6,301) 103,608 118,027 SGS(a) (3,305) -- 124,043 5,701 GTS(c) -- -- 987 -- MCS(c) (2) -- 17,306 --
(a) For the period November 5, 1999 (commencement of operations of Sub-Account) through December 31, 1999. (b) For the period July 17, 2000 (commencement of operations of Sub-Account) through December 31, 2000. (c) For the period September 11, 2000 (commencement of operations of Sub-Account) through December 31, 2000. -45- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 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
Units Transferred Between Sub-Accounts and Units Outstanding Fixed Accumulation Beginning of Year Units Purchased Account ----------------------- ----------------------- ----------------------- Year Ended Year Ended Year Ended December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ---------- ----------- ---------- ----------- ---------- ----------- MFS REGATTA PLATINUM CONTRACTS: ------------------------------ BDS 2,970,448 628,000 337,748 941,360 803,381 1,491,043 CAS 10,770,738 1,683,164 2,222,193 4,849,607 3,992,428 4,545,428 COS 6,088,167 556,955 2,451,530 2,758,794 5,345,713 2,891,912 MIT 36,443,681 5,331,018 4,108,166 14,730,220 11,223,464 17,398,081 EGS 9,952,208 1,651,404 2,814,750 4,181,549 5,547,646 4,397,355 EIS 2,322,545 272,362 328,675 946,919 1,540,804 1,153,460 FCE 471,834 72,586 145,280 171,566 619,215 260,658 FCG 1,960,439 338,938 644,767 649,457 1,719,085 1,016,982 FCI 904,331 199,346 126,464 355,635 287,699 379,426 GSS 6,917,529 816,102 512,807 1,959,697 2,809,781 4,315,488 HYS 5,126,512 1,000,705 774,008 1,613,791 2,245,875 2,693,972 MSS 2,096,399 211,044 1,104,838 948,374 1,579,363 986,589 MIS 20,741,206 2,428,134 4,004,053 9,327,754 9,439,739 9,497,539 MMS 4,848,739 886,479 2,395,381 4,525,979 (470,338) (51,593) NWD 2,064,540 436,178 883,056 750,621 2,018,745 945,469 RES 9,822,632 1,751,713 1,535,726 3,783,737 3,458,592 4,553,399 RGS 2,692,647 387,080 261,850 945,769 872,750 1,427,602 RSS 914,188 181,131 425,124 366,014 760,729 418,385 SIS 987,192 157,634 187,142 270,681 415,463 588,831 TEC(b) -- -- 18,709 -- 269,987 -- TRS 17,437,345 2,318,847 1,478,906 5,942,946 3,433,759 9,684,842 UTS 6,397,913 819,649 1,609,498 2,177,718 4,219,138 3,571,380 GAA 502,791 228,839 116,025 168,337 157,956 134,452 GGS 301,714 76,270 76,948 79,719 220,704 159,520 GGR 1,328,571 162,856 738,615 536,984 1,312,689 661,623 GTR 901,334 152,857 99,579 356,243 270,448 417,027 SGS(a) 189,701 -- 591,218 32,991 1,068,999 156,786 GTS(c) -- -- 6,534 -- 25,103 -- MCS(c) -- -- 14,982 -- 341,205 -- Units Withdrawn, Surrendered, and Units Outstanding Annuitized End of Year ------------------------ ----------------------- Year Ended Year Ended December 31, December 31, 2000 1999 2000 1999 ---------- ------------ ---------- ----------- MFS REGATTA PLATINUM CONTRACTS: ------------------------------ BDS (282,151) (89,955) 3,829,426 2,970,448 CAS (862,181) (307,461) 16,123,178 10,770,738 COS (651,264) (119,494) 13,234,146 6,088,167 MIT (2,771,583) (1,015,638) 49,003,728 36,443,681 EGS (897,997) (278,100) 17,416,607 9,952,208 EIS (228,263) (50,196) 3,963,761 2,322,545 FCE (66,429) (32,976) 1,169,900 471,834 FCG (159,983) (44,938) 4,164,308 1,960,439 FCI (61,539) (30,076) 1,256,955 904,331 GSS (616,200) (173,758) 9,623,917 6,917,529 HYS (346,244) (181,956) 7,800,151 5,126,512 MSS (257,507) (49,608) 4,523,093 2,096,399 MIS (1,554,501) (512,221) 32,630,497 20,741,206 MMS (1,454,379) (512,126) 5,319,403 4,848,739 NWD (213,095) (67,728) 4,753,246 2,064,540 RES (690,225) (266,217) 14,126,725 9,822,632 RGS (203,346) (67,804) 3,623,901 2,692,647 RSS (98,538) (51,342) 2,001,503 914,188 SIS (54,473) (29,954) 1,535,324 987,192 TEC(b) (5,609) -- 283,087 -- TRS (1,394,302) (509,290) 20,955,708 17,437,345 UTS (579,679) (170,834) 11,646,870 6,397,913 GAA (82,179) (28,837) 694,593 502,791 GGS (40,419) (13,795) 558,947 301,714 GGR (170,484) (32,892) 3,209,391 1,328,571 GTR (55,306) (24,793) 1,216,055 901,334 SGS(a) (64,510) (76) 1,785,408 189,701 GTS(c) (128) -- 31,509 -- MCS(c) (3,025) -- 353,162 --
(a) For the period November 5, 1999 (commencement of operations of Sub-Account) through December 31, 1999. (b) For the period July 17, 2000 (commencement of operations of Sub-Account) through December 31, 2000. (c) For the period September 11, 2000 (commencement of operations of Sub-Account) through December 31, 2000. -46- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 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
Units Transferred Between Sub-Accounts and Units Outstanding Fixed Accumulation Beginning of Year Units Purchased Account ----------------------- ----------------------- ----------------------- Year Ended Year Ended Year Ended December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ---------- ----------- ---------- ----------- ---------- ----------- MFS REGATTA EXTRA CONTRACTS(E): ------------------------------ BDS -- Lvl 1 -- -- 77,077 -- 796 -- BDS -- Lvl 2 -- -- 62,912 -- 2,803 -- BDS -- Lvl 3 -- -- 222,942 -- (5,025) -- BDS -- Lvl 4 -- -- 75,311 -- 13,433 -- CAS -- Lvl 1 -- -- 680,390 -- 23,317 -- CAS -- Lvl 2 -- -- 1,033,055 -- 110,405 -- CAS -- Lvl 3 -- -- 1,907,665 -- 256,865 -- CAS -- Lvl 4 -- -- 488,014 -- 60,792 -- COS -- Lvl 1 -- -- 1,190,224 -- 133,254 -- COS -- Lvl 2 -- -- 1,591,686 -- 143,194 -- COS -- Lvl 3 -- -- 3,318,251 -- 151,354 -- COS -- Lvl 4 -- -- 1,057,412 -- 108,455 -- MIT -- Lvl 1 -- -- 1,498,395 -- 92,725 -- MIT -- Lvl 2 -- -- 2,012,563 -- 184,391 -- MIT -- Lvl 3 -- -- 3,932,058 -- 348,599 -- MIT -- Lvl 4 -- -- 1,139,347 -- 210,626 -- EGS -- Lvl 1 -- -- 1,413,122 -- 81,652 -- EGS -- Lvl 2 -- -- 1,839,133 -- 190,313 -- EGS -- Lvl 3 -- -- 3,949,575 -- 481,371 -- EGS -- Lvl 4 -- -- 1,116,415 -- 220,227 -- EIS -- Lvl 1 -- -- 210,896 -- (5,637) -- EIS -- Lvl 2 -- -- 188,585 -- 25,367 -- EIS -- Lvl 3 -- -- 319,797 -- 136,114 -- EIS -- Lvl 4 -- -- 75,114 -- 36,757 -- FCE -- Lvl 1 -- -- 65,132 -- (7,263) -- FCE -- Lvl 2 -- -- 113,467 -- 14,628 -- FCE -- Lvl 3 -- -- 114,612 -- 14,751 -- FCE -- Lvl 4 -- -- 46,533 -- 14,151 -- FCG -- Lvl 1 -- -- 232,385 -- 7,679 -- FCG -- Lvl 2 -- -- 303,737 -- 41,490 -- FCG -- Lvl 3 -- -- 766,877 -- 70,769 -- FCG -- Lvl 4 -- -- 193,897 -- 32,825 -- FCI -- Lvl 1 -- -- 95,403 -- 1,544 -- FCI -- Lvl 2 -- -- 78,122 -- (57) -- FCI -- Lvl 3 -- -- 262,892 -- (32,066) -- FCI -- Lvl 4 -- -- 11,462 -- (10) -- GSS -- Lvl 1 -- -- 225,047 -- 7,190 -- GSS -- Lvl 2 -- -- 321,622 -- 45,135 -- GSS -- Lvl 3 -- -- 464,609 -- 74,024 -- GSS -- Lvl 4 -- -- 317,136 -- (5,772) -- Units Withdrawn, Surrendered, and Units Outstanding Annuitized End of Year ------------------------ -------------------------- Year Ended Year Ended December 31, December 31, 2000 1999 2000 1999 ---------- ------------ ------------- ----------- MFS REGATTA EXTRA CONTRACTS(E): ------------------------------ BDS -- Lvl 1 (414) -- 77,459 -- BDS -- Lvl 2 (649) -- 65,066 -- BDS -- Lvl 3 (3,294) -- 214,623 -- BDS -- Lvl 4 (1,946) -- 86,798 -- CAS -- Lvl 1 (10,277) -- 693,430 -- CAS -- Lvl 2 (14,508) -- 1,128,952 -- CAS -- Lvl 3 (33,983) -- 2,130,547 -- CAS -- Lvl 4 (7,538) -- 541,268 -- COS -- Lvl 1 (13,607) -- 1,309,871 -- COS -- Lvl 2 (44,405) -- 1,690,475 -- COS -- Lvl 3 (87,556) -- 3,382,049 -- COS -- Lvl 4 (26,275) -- 1,139,592 -- MIT -- Lvl 1 (23,781) -- 1,567,339 -- MIT -- Lvl 2 (25,121) -- 2,171,833 -- MIT -- Lvl 3 (48,321) -- 4,232,336 -- MIT -- Lvl 4 (24,621) -- 1,325,352 -- EGS -- Lvl 1 (14,945) -- 1,479,829 -- EGS -- Lvl 2 (13,833) -- 2,015,613 -- EGS -- Lvl 3 (104,839) -- 4,326,107 -- EGS -- Lvl 4 (29,012) -- 1,307,630 -- EIS -- Lvl 1 (1,507) -- 203,752 -- EIS -- Lvl 2 (5,239) -- 208,713 -- EIS -- Lvl 3 (1,429) -- 454,482 -- EIS -- Lvl 4 (615) -- 111,256 -- FCE -- Lvl 1 (323) -- 57,546 -- FCE -- Lvl 2 (3,308) -- 124,787 -- FCE -- Lvl 3 (369) -- 128,994 -- FCE -- Lvl 4 (316) -- 60,368 -- FCG -- Lvl 1 (6,830) -- 233,234 -- FCG -- Lvl 2 (3,831) -- 341,396 -- FCG -- Lvl 3 (19,217) -- 818,429 -- FCG -- Lvl 4 (2,593) -- 224,129 -- FCI -- Lvl 1 (285) -- 96,662 -- FCI -- Lvl 2 (51) -- 78,014 -- FCI -- Lvl 3 (1,659) -- 229,167 -- FCI -- Lvl 4 (43) -- 11,409 -- GSS -- Lvl 1 (14,463) -- 217,774 -- GSS -- Lvl 2 (2,136) -- 364,621 -- GSS -- Lvl 3 (6,662) -- 531,971 -- GSS -- Lvl 4 (1,318) -- 310,046 --
(e) For the period April 10, 2000 (commencement of operations of Sub-Account) through December 31, 2000. -47- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 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
Units Transferred Between Sub-Accounts and Units Outstanding Fixed Accumulation Beginning of Year Units Purchased Account ----------------------- ----------------------- ----------------------- Year Ended Year Ended Year Ended December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ---------- ----------- ---------- ----------- ---------- ----------- MFS REGATTA EXTRA CONTRACTS: -- CONTINUED ------------------------------ HYS -- Lvl 1(e) -- -- 235,632 -- 14,308 -- HYS -- Lvl 2(e) -- -- 242,523 -- 38,522 -- HYS -- Lvl 3(e) -- -- 326,549 -- 87,658 -- HYS -- Lvl 4(e) -- -- 131,035 -- 45,724 -- MSS -- Lvl 1(e) -- -- 302,915 -- 40,377 -- MSS -- Lvl 2(e) -- -- 414,616 -- 77,676 -- MSS -- Lvl 3(e) -- -- 992,377 -- 67,757 -- MSS -- Lvl 4(e) -- -- 282,270 -- 130,557 -- MIS -- Lvl 1(e) -- -- 2,056,580 -- 146,812 -- MIS -- Lvl 2(e) -- -- 2,334,007 -- 247,941 -- MIS -- Lvl 3(e) -- -- 4,631,317 -- 392,717 -- MIS -- Lvl 4(e) -- -- 1,421,692 -- 123,009 -- MMS -- Lvl 1(e) -- -- 1,006,383 -- (270,906) -- MMS -- Lvl 2(e) -- -- 1,279,574 -- (511,073) -- MMS -- Lvl 3(e) -- -- 2,142,025 -- (891,754) -- MMS -- Lvl 4(e) -- -- 1,270,770 -- (688,902) -- NWD -- Lvl 1(e) -- -- 507,275 -- 29,043 -- NWD -- Lvl 2(e) -- -- 780,552 -- 94,477 -- NWD -- Lvl 3(e) -- -- 1,576,036 -- 157,156 -- NWD -- Lvl 4(e) -- -- 535,656 -- 148,861 -- RES -- Lvl 1(e) -- -- 637,219 -- 31,756 -- RES -- Lvl 2(e) -- -- 682,547 -- 50,516 -- RES -- Lvl 3(e) -- -- 1,408,384 -- 111,740 -- RES -- Lvl 4(e) -- -- 418,793 -- 27,864 -- RGS -- Lvl 1(e) -- -- 89,324 -- (19,035) -- RGS -- Lvl 2(e) -- -- 110,158 -- 9,358 -- RGS -- Lvl 3(e) -- -- 210,380 -- 13,610 -- RGS -- Lvl 4(e) -- -- 43,559 -- 47,987 -- RSS -- Lvl 1(e) -- -- 295,187 -- 13,324 -- RSS -- Lvl 2(e) -- -- 478,591 -- 27,493 -- RSS -- Lvl 3(e) -- -- 941,554 -- 60,287 -- RSS -- Lvl 4(e) -- -- 262,211 -- 23,307 -- SIS -- Lvl 1(e) -- -- 38,770 -- 2,672 -- SIS -- Lvl 2(e) -- -- 67,296 -- 5,488 -- SIS -- Lvl 3(e) -- -- 242,412 -- (26,790) -- SIS -- Lvl 4(e) -- -- 23,889 -- (57) -- TEC -- Lvl 1(b) -- -- 69,715 -- 7,183 -- TEC -- Lvl 2(b) -- -- 88,509 -- 30,027 -- TEC -- Lvl 3(b) -- -- 199,447 -- 12,188 -- TEC -- Lvl 4(b) -- -- 39,603 -- 52,970 -- Units Withdrawn, Surrendered, and Units Outstanding Annuitized End of Year ------------------------ -------------------------- Year Ended Year Ended December 31, December 31, 2000 1999 2000 1999 ---------- ------------ ------------- ----------- MFS REGATTA EXTRA CONTRACTS: -- CONTINUED ------------------------------ HYS -- Lvl 1(e) (3,001) -- 246,939 -- HYS -- Lvl 2(e) (3,438) -- 277,607 -- HYS -- Lvl 3(e) (3,999) -- 410,208 -- HYS -- Lvl 4(e) (2,715) -- 174,044 -- MSS -- Lvl 1(e) (642) -- 342,650 -- MSS -- Lvl 2(e) (6,410) -- 485,882 -- MSS -- Lvl 3(e) (9,113) -- 1,051,021 -- MSS -- Lvl 4(e) (16,854) -- 395,973 -- MIS -- Lvl 1(e) (45,557) -- 2,157,835 -- MIS -- Lvl 2(e) (22,094) -- 2,559,854 -- MIS -- Lvl 3(e) (100,037) -- 4,923,997 -- MIS -- Lvl 4(e) (33,608) -- 1,511,093 -- MMS -- Lvl 1(e) (6,990) -- 728,487 -- MMS -- Lvl 2(e) (26,974) -- 741,527 -- MMS -- Lvl 3(e) (29,422) -- 1,220,849 -- MMS -- Lvl 4(e) (13,007) -- 568,861 -- NWD -- Lvl 1(e) (6,797) -- 529,521 -- NWD -- Lvl 2(e) (5,833) -- 869,196 -- NWD -- Lvl 3(e) (28,910) -- 1,704,282 -- NWD -- Lvl 4(e) (20,336) -- 664,181 -- RES -- Lvl 1(e) (7,440) -- 661,535 -- RES -- Lvl 2(e) (11,617) -- 721,446 -- RES -- Lvl 3(e) (19,511) -- 1,500,613 -- RES -- Lvl 4(e) (2,982) -- 443,675 -- RGS -- Lvl 1(e) (2,927) -- 67,362 -- RGS -- Lvl 2(e) (1,812) -- 117,704 -- RGS -- Lvl 3(e) (1,668) -- 222,322 -- RGS -- Lvl 4(e) (169) -- 91,377 -- RSS -- Lvl 1(e) (759) -- 307,752 -- RSS -- Lvl 2(e) (1,942) -- 504,142 -- RSS -- Lvl 3(e) (6,283) -- 995,558 -- RSS -- Lvl 4(e) (12,732) -- 272,786 -- SIS -- Lvl 1(e) (198) -- 41,244 -- SIS -- Lvl 2(e) (118) -- 72,666 -- SIS -- Lvl 3(e) (2,229) -- 213,393 -- SIS -- Lvl 4(e) (354) -- 23,478 -- TEC -- Lvl 1(b) (140) -- 76,758 -- TEC -- Lvl 2(b) (93) -- 118,443 -- TEC -- Lvl 3(b) (424) -- 211,211 -- TEC -- Lvl 4(b) (11,842) -- 80,731 --
(b) For the period September 11, 2000 (commencement of operations) through December 31, 2000. (e) For the period April 10, 2000 (commencement of operations) through December 31, 2000. -48- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 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
Units Transferred Between Sub-Accounts and Units Outstanding Fixed Accumulation Beginning of Year Units Purchased Account ----------------------- ----------------------- ----------------------- Year Ended Year Ended Year Ended December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ---------- ----------- ---------- ----------- ---------- ----------- MFS REGATTA EXTRA CONTRACTS: -- CONTINUED ------------------------------ TRS -- Lvl 1(e) -- -- 512,577 -- 37,281 -- TRS -- Lvl 2(e) -- -- 689,736 -- 52,988 -- TRS -- Lvl 3(e) -- -- 676,014 -- 97,385 -- TRS -- Lvl 4(e) -- -- 236,116 -- 29,070 -- UTS -- Lvl 1(e) -- -- 647,526 -- 27,476 -- UTS -- Lvl 2(e) -- -- 559,668 -- 71,924 -- UTS -- Lvl 3(e) -- -- 1,174,009 -- 132,727 -- UTS -- Lvl 4(e) -- -- 388,151 -- 19,794 -- GAA -- Lvl 1(e) -- -- 18,269 -- 8,164 -- GAA -- Lvl 2(e) -- -- 66,862 -- 11,883 -- GAA -- Lvl 3(e) -- -- 162,337 -- 15,749 -- GAA -- Lvl 4(e) -- -- 8,281 -- 838 -- GGS -- Lvl 1(e) -- -- 24,434 -- (3,217) -- GGS -- Lvl 2(e) -- -- 65,227 -- 6,379 -- GGS -- Lvl 3(e) -- -- 45,784 -- 3,522 -- GGS -- Lvl 4(e) -- -- 21,452 -- 6,547 -- GGR -- Lvl 1(e) -- -- 325,910 -- 25,418 -- GGR -- Lvl 2(e) -- -- 328,791 -- 22,995 -- GGR -- Lvl 3(e) -- -- 812,364 -- 66,093 -- GGR -- Lvl 4(e) -- -- 299,404 -- 8,629 -- GTR -- Lvl 1(e) -- -- 39,513 -- (1,796) -- GTR -- Lvl 2(e) -- -- 32,819 -- 9,510 -- GTR -- Lvl 3(e) -- -- 62,443 -- (962) -- GTR -- Lvl 4(e) -- -- 14,314 -- 5,123 -- SGS -- Lvl 1(e) -- -- 232,164 -- 26,438 -- SGS -- Lvl 2(e) -- -- 390,558 -- 26,941 -- SGS -- Lvl 3(e) -- -- 728,011 -- 151,060 -- SGS -- Lvl 4(e) -- -- 241,617 -- 6,098 -- GTS -- Lvl 1(b) -- -- 2,425 -- 691 -- GTS -- Lvl 2(b) -- -- 23,605 -- 623 -- GTS -- Lvl 3(b) -- -- 23,501 -- 9,743 -- GTS -- Lvl 4(b) -- -- 3,365 -- 1,560 -- MCS -- Lvl 1(b) -- -- 75,541 -- 1,798 -- MCS -- Lvl 2(b) -- -- 129,409 -- 13,819 -- MCS -- Lvl 3(b) -- -- 356,625 -- 44,440 -- MCS -- Lvl 4(b) -- -- 127,368 -- 9,903 -- Units Withdrawn, Surrendered, and Units Outstanding Annuitized End of Year ------------------------ -------------------------- Year Ended Year Ended December 31, December 31, 2000 1999 2000 1999 ---------- ------------ ------------- ----------- MFS REGATTA EXTRA CONTRACTS: -- CONTINUED ------------------------------ TRS -- Lvl 1(e) (18,599) -- 531,259 -- TRS -- Lvl 2(e) (9,764) -- 732,960 -- TRS -- Lvl 3(e) (5,486) -- 767,913 -- TRS -- Lvl 4(e) (1,495) -- 263,691 -- UTS -- Lvl 1(e) (4,506) -- 670,496 -- UTS -- Lvl 2(e) (22,256) -- 609,336 -- UTS -- Lvl 3(e) (22,744) -- 1,283,992 -- UTS -- Lvl 4(e) (6,579) -- 401,366 -- GAA -- Lvl 1(e) (39) -- 26,394 -- GAA -- Lvl 2(e) -- -- 78,745 -- GAA -- Lvl 3(e) (5,261) -- 172,825 -- GAA -- Lvl 4(e) (69) -- 9,050 -- GGS -- Lvl 1(e) (228) -- 20,989 -- GGS -- Lvl 2(e) (789) -- 70,817 -- GGS -- Lvl 3(e) (71) -- 49,235 -- GGS -- Lvl 4(e) (187) -- 27,812 -- GGR -- Lvl 1(e) (4,366) -- 346,962 -- GGR -- Lvl 2(e) (1,895) -- 349,891 -- GGR -- Lvl 3(e) (8,974) -- 869,483 -- GGR -- Lvl 4(e) (10,581) -- 297,452 -- GTR -- Lvl 1(e) (274) -- 37,443 -- GTR -- Lvl 2(e) (68) -- 42,261 -- GTR -- Lvl 3(e) (378) -- 61,103 -- GTR -- Lvl 4(e) (325) -- 19,112 -- SGS -- Lvl 1(e) (4,865) -- 253,737 -- SGS -- Lvl 2(e) (16,331) -- 401,168 -- SGS -- Lvl 3(e) (28,518) -- 850,553 -- SGS -- Lvl 4(e) (11,611) -- 236,104 -- GTS -- Lvl 1(b) -- -- 3,116 -- GTS -- Lvl 2(b) (10) -- 24,218 -- GTS -- Lvl 3(b) (59) -- 33,185 -- GTS -- Lvl 4(b) -- -- 4,925 -- MCS -- Lvl 1(b) (875) -- 76,464 -- MCS -- Lvl 2(b) (251) -- 142,977 -- MCS -- Lvl 3(b) (1,378) -- 399,687 -- MCS -- Lvl 4(b) (50) -- 137,221 --
(b) For the period September 11, 2000 (commencement of operations) through December 31, 2000. (e) For the period April 10, 2000 (commencement of operations) through December 31, 2000. -49- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 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
Units Transferred Between Sub-Accounts and Units Outstanding Fixed Accumulation Beginning of Year Units Purchased Account ----------------------- ----------------------- ----------------------- Year Ended Year Ended Year Ended December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ---------- ----------- ---------- ----------- ---------- ----------- MFS REGATTA ACCESS CONTRACTS(D): ------------------------------ BDS -- Lvl 1 -- -- -- -- 9,176 -- BDS -- Lvl 3 -- -- 92,288 -- (3,744) -- BDS -- Lvl 4 -- -- 27,288 -- 4,242 -- BDS -- Lvl 5 -- -- 53,617 -- 7,032 -- BDS -- Lvl 6 -- -- 5,487 -- 368 -- CAS -- Lvl 1 -- -- 17,139 -- -- -- CAS -- Lvl 2 -- -- 58,950 -- 1,706 -- CAS -- Lvl 3 -- -- 445,038 -- 17,024 -- CAS -- Lvl 4 -- -- 337,175 -- 45,022 -- CAS -- Lvl 5 -- -- 325,104 -- 53,725 -- CAS -- Lvl 6 -- -- 132,789 -- 2,833 -- COS -- Lvl 1 -- -- 297,676 -- 66,379 -- COS -- Lvl 2 -- -- 169,833 -- -- -- COS -- Lvl 3 -- -- 1,222,042 -- (20,163) -- COS -- Lvl 4 -- -- 1,008,030 -- 25,953 -- COS -- Lvl 5 -- -- 923,767 -- (3,830) -- COS -- Lvl 6 -- -- 347,475 -- (2,335) -- MIT -- Lvl 1 -- -- 115,897 -- 39,656 -- MIT -- Lvl 2 -- -- 74,699 -- 5,174 -- MIT -- Lvl 3 -- -- 712,877 -- 2,271 -- MIT -- Lvl 4 -- -- 578,007 -- 8,417 -- MIT -- Lvl 5 -- -- 782,447 -- 28,653 -- MIT -- Lvl 6 -- -- 171,712 -- 5,766 -- EGS -- Lvl 1 -- -- 42,767 -- 28,464 -- EGS -- Lvl 2 -- -- 108,750 -- 1,770 -- EGS -- Lvl 3 -- -- 988,646 -- 14,150 -- EGS -- Lvl 4 -- -- 597,129 -- 39,997 -- EGS -- Lvl 5 -- -- 926,888 -- 52,576 -- EGS -- Lvl 6 -- -- 181,445 -- 69,783 -- EIS -- Lvl 1 -- -- 82,907 -- 26,338 -- EIS -- Lvl 2 -- -- 32,395 -- -- -- EIS -- Lvl 3 -- -- 276,916 -- 18,731 -- EIS -- Lvl 4 -- -- 191,804 -- 7,887 -- EIS -- Lvl 5 -- -- 143,015 -- 18,814 -- EIS -- Lvl 6 -- -- 30,780 -- 6,455 -- FCE -- Lvl 1 -- -- 14,188 -- -- -- FCE -- Lvl 3 -- -- 66,108 -- 2,124 -- FCE -- Lvl 4 -- -- 31,174 -- 436 -- Units Withdrawn, Surrendered, and Units Outstanding Annuitized End of Year ------------------------ ----------------------- Year Ended Year Ended December 31, December 31, 2000 1999 2000 1999 ---------- ------------ ---------- ----------- MFS REGATTA ACCESS CONTRACTS(D): ------------------------------ BDS -- Lvl 1 -- -- 9,176 -- BDS -- Lvl 3 (1,870) -- 86,674 -- BDS -- Lvl 4 (384) -- 31,146 -- BDS -- Lvl 5 (12,969) -- 47,680 -- BDS -- Lvl 6 -- -- 5,855 -- CAS -- Lvl 1 -- -- 17,139 -- CAS -- Lvl 2 (8) -- 60,648 -- CAS -- Lvl 3 (1,485) -- 460,577 -- CAS -- Lvl 4 (522) -- 381,675 -- CAS -- Lvl 5 (4,732) -- 374,097 -- CAS -- Lvl 6 (147) -- 135,475 -- COS -- Lvl 1 (9,804) -- 354,251 -- COS -- Lvl 2 -- -- 169,833 -- COS -- Lvl 3 (7,318) -- 1,194,561 -- COS -- Lvl 4 (3,131) -- 1,030,852 -- COS -- Lvl 5 88,447 -- 1,008,384 -- COS -- Lvl 6 (1,782) -- 343,358 -- MIT -- Lvl 1 -- -- 155,553 -- MIT -- Lvl 2 (25) -- 79,848 -- MIT -- Lvl 3 (5,124) -- 710,024 -- MIT -- Lvl 4 (5,402) -- 581,022 -- MIT -- Lvl 5 (24,140) -- 786,960 -- MIT -- Lvl 6 (503) -- 176,975 -- EGS -- Lvl 1 -- -- 71,231 -- EGS -- Lvl 2 (9) -- 110,511 -- EGS -- Lvl 3 (4,564) -- 998,232 -- EGS -- Lvl 4 (3,410) -- 633,716 -- EGS -- Lvl 5 (5,235) -- 974,229 -- EGS -- Lvl 6 (175) -- 251,053 -- EIS -- Lvl 1 -- -- 109,245 -- EIS -- Lvl 2 -- -- 32,395 -- EIS -- Lvl 3 (828) -- 294,819 -- EIS -- Lvl 4 (363) -- 199,328 -- EIS -- Lvl 5 (304) -- 161,525 -- EIS -- Lvl 6 (5) -- 37,230 -- FCE -- Lvl 1 -- -- 14,188 -- FCE -- Lvl 3 (74) -- 68,158 -- FCE -- Lvl 4 (62) -- 31,548 --
(d) For the period July 17, 2000 (commencement of operations) through December 31, 2000. -50- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 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
Units Transferred Between Sub-Accounts and Units Outstanding Fixed Accumulation Beginning of Year Units Purchased Account ----------------------- ----------------------- ----------------------- Year Ended Year Ended Year Ended December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ---------- ----------- ---------- ----------- ---------- ----------- MFS REGATTA ACCESS CONTRACTS(D): -- CONTINUED ------------------------------ FCE -- Lvl 5 -- -- 41,496 -- 1,182 -- FCE -- Lvl 6 -- -- 4,421 -- 1,418 -- FCG -- Lvl 1 -- -- 22,170 -- 10,765 -- FCG -- Lvl 3 -- -- 180,762 -- 1,345 -- FCG -- Lvl 4 -- -- 113,599 -- 16,838 -- FCG -- Lvl 5 -- -- 101,721 -- 4,755 -- FCG -- Lvl 6 -- -- 25,683 -- 5,709 -- FCI -- Lvl 1 -- -- 10,749 -- -- -- FCI -- Lvl 3 -- -- 34,084 -- 1,230 -- FCI -- Lvl 4 -- -- 12,252 -- 4,281 -- FCI -- Lvl 5 -- -- 46,985 -- 9,553 -- FCI -- Lvl 6 -- -- 1,488 -- -- -- GSS -- Lvl 3 -- -- 260,476 -- 22,723 -- GSS -- Lvl 4 -- -- 162,689 -- 10,421 -- GSS -- Lvl 5 -- -- 108,916 -- 6,837 -- GSS -- Lvl 6 -- -- 71,456 -- (40,406) -- HYS -- Lvl 1 -- -- 5,501 -- 10,505 -- HYS -- Lvl 2 -- -- 56,265 -- -- -- HYS -- Lvl 3 -- -- 214,071 -- 7,525 -- HYS -- Lvl 4 -- -- 118,825 -- 10,458 -- HYS -- Lvl 5 -- -- 59,936 -- 7,414 -- HYS -- Lvl 6 -- -- 19,471 -- 1,704 -- MSS -- Lvl 2 -- -- 55,463 -- 3,312 -- MSS -- Lvl 3 -- -- 196,212 -- (4,021) -- MSS -- Lvl 5 -- -- 112,036 -- 30,963 -- MSS -- Lvl 6 -- -- 40,500 -- (1,350) -- MIS -- Lvl 1 -- -- 287,769 -- 87,613 -- MIS -- Lvl 2 -- -- 108,030 -- 4,870 -- MIS -- Lvl 3 -- -- 1,340,933 -- (42,963) -- MIS -- Lvl 4 -- -- 948,571 -- 4,729 -- MIS -- Lvl 5 -- -- 1,009,256 -- 53,559 -- MIS -- Lvl 6 -- -- 411,370 -- 5,388 -- MMS -- Lvl 1 -- -- 310,767 -- (19,643) -- MMS -- Lvl 2 -- -- 112,065 -- (39,419) -- MMS -- Lvl 3 -- -- 1,005,660 -- (245,090) -- MMS -- Lvl 4 -- -- 904,443 -- (267,010) -- MMS -- Lvl 5 -- -- 1,027,019 -- (363,865) -- MMS -- Lvl 6 -- -- 243,256 -- (10,311) -- NWD -- Lvl 1 -- -- 25,069 -- 11,275 -- NWD -- Lvl 2 -- -- 43,265 -- -- -- NWD -- Lvl 3 -- -- 392,642 -- 2,950 -- Units Withdrawn, Surrendered, and Units Outstanding Annuitized End of Year ------------------------ ----------------------- Year Ended Year Ended December 31, December 31, 2000 1999 2000 1999 ---------- ------------ ---------- ----------- MFS REGATTA ACCESS CONTRACTS(D): -- CONTINUED ------------------------------ FCE -- Lvl 5 (109) -- 42,569 -- FCE -- Lvl 6 -- -- 5,839 -- FCG -- Lvl 1 -- -- 32,935 -- FCG -- Lvl 3 (320) -- 181,787 -- FCG -- Lvl 4 (333) -- 130,104 -- FCG -- Lvl 5 (7,227) -- 99,249 -- FCG -- Lvl 6 -- -- 31,392 -- FCI -- Lvl 1 -- -- 10,749 -- FCI -- Lvl 3 -- -- 35,314 -- FCI -- Lvl 4 (446) -- 16,087 -- FCI -- Lvl 5 (140) -- 56,398 -- FCI -- Lvl 6 -- -- 1,488 -- GSS -- Lvl 3 (6,555) -- 276,644 -- GSS -- Lvl 4 (556) -- 172,554 -- GSS -- Lvl 5 (2,864) -- 112,889 -- GSS -- Lvl 6 (3) -- 31,047 -- HYS -- Lvl 1 -- -- 16,006 -- HYS -- Lvl 2 -- -- 56,265 -- HYS -- Lvl 3 (1,582) -- 220,014 -- HYS -- Lvl 4 (581) -- 128,702 -- HYS -- Lvl 5 (1,306) -- 66,044 -- HYS -- Lvl 6 -- -- 21,175 -- MSS -- Lvl 2 (16) -- 58,759 -- MSS -- Lvl 3 (317) -- 191,874 -- MSS -- Lvl 5 (1,103) -- 141,896 -- MSS -- Lvl 6 (31) -- 39,119 -- MIS -- Lvl 1 (9,609) -- 365,773 -- MIS -- Lvl 2 (24) -- 112,876 -- MIS -- Lvl 3 (5,586) -- 1,292,384 -- MIS -- Lvl 4 (5,465) -- 947,835 -- MIS -- Lvl 5 (21,819) -- 1,040,996 -- MIS -- Lvl 6 (1,421) -- 415,337 -- MMS -- Lvl 1 (7,855) -- 283,269 -- MMS -- Lvl 2 (355) -- 72,291 -- MMS -- Lvl 3 (52,943) -- 707,627 -- MMS -- Lvl 4 (102,217) -- 535,216 -- MMS -- Lvl 5 (5,335) -- 657,819 -- MMS -- Lvl 6 (3,989) -- 228,956 -- NWD -- Lvl 1 -- -- 36,344 -- NWD -- Lvl 2 -- -- 43,265 -- NWD -- Lvl 3 (4,713) -- 390,879 --
(d) For the period July 17, 2000 (commencement of operations) through December 31, 2000. -51- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 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
Units Transferred Between Sub-Accounts and Units Outstanding Fixed Accumulation Beginning of Year Units Purchased Account ----------------------- ----------------------- ----------------------- Year Ended Year Ended Year Ended December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ---------- ----------- ---------- ----------- ---------- ----------- MFS REGATTA ACCESS CONTRACTS(D): -- CONTINUED ------------------------------ NWD -- Lvl 4 -- -- 319,525 -- 39,050 -- NWD -- Lvl 5 -- -- 297,223 -- 60,778 -- NWD -- Lvl 6 -- -- 67,405 -- 5,259 -- RES -- Lvl 2 -- -- 145,358 -- 6,562 -- RES -- Lvl 3 -- -- 622,562 -- 23,395 -- RES -- Lvl 4 -- -- 484,762 -- 35,550 -- RES -- Lvl 5 -- -- 341,181 -- 38,072 -- RES -- Lvl 6 -- -- 113,893 -- 3,126 -- RGS -- Lvl 2 -- -- 54,890 -- 3,004 -- RGS -- Lvl 3 -- -- 67,290 -- 5,289 -- RGS -- Lvl 4 -- -- 67,436 -- 1,466 -- RGS -- Lvl 5 -- -- 32,267 -- 8,347 -- RGS -- Lvl 6 -- -- 7,486 -- -- -- RSS -- Lvl 1 -- -- 31,247 -- -- -- RSS -- Lvl 3 -- -- 264,090 -- 5,539 -- RSS -- Lvl 4 -- -- 184,142 -- 11,673 -- RSS -- Lvl 5 -- -- 294,578 -- 4,998 -- RSS -- Lvl 6 -- -- 62,652 -- 332 -- SIS -- Lvl 1 -- -- -- -- 9,689 -- SIS -- Lvl 3 -- -- 45,606 -- (6,163) -- SIS -- Lvl 4 -- -- 33,176 -- 2,443 -- SIS -- Lvl 5 -- -- 22,371 -- 149 -- SIS -- Lvl 6 -- -- 996 -- 145 -- TEC -- Lvl 1 -- -- 178,954 -- 111,629 -- TEC -- Lvl 2 -- -- 142,694 -- -- -- TEC -- Lvl 3 -- -- 649,187 -- (95,987) -- TEC -- Lvl 4 -- -- 527,552 -- 12,037 -- TEC -- Lvl 5 -- -- 228,768 -- 26,231 -- TEC -- Lvl 6 -- -- 52,741 -- (3,278) -- TRS -- Lvl 1 -- -- 32,936 -- 9,059 -- TRS -- Lvl 2 -- -- 68,186 -- -- -- TRS -- Lvl 3 -- -- 305,887 -- 8,304 -- TRS -- Lvl 4 -- -- 276,810 -- 19,855 -- TRS -- Lvl 5 -- -- 320,927 -- 8,066 -- TRS -- Lvl 6 -- -- 37,276 -- 315 -- UTS -- Lvl 1 -- -- 54,728 -- -- -- UTS -- Lvl 2 -- -- 93,726 -- 15,929 -- UTS -- Lvl 3 -- -- 487,398 -- 47,630 -- Units Withdrawn, Surrendered, and Units Outstanding Annuitized End of Year ------------------------ ----------------------- Year Ended Year Ended December 31, December 31, 2000 1999 2000 1999 ---------- ------------ ---------- ----------- MFS REGATTA ACCESS CONTRACTS(D): -- CONTINUED ------------------------------ NWD -- Lvl 4 (1,922) -- 356,653 -- NWD -- Lvl 5 (8,376) -- 349,625 -- NWD -- Lvl 6 (11) -- 72,653 -- RES -- Lvl 2 (33) -- 151,887 -- RES -- Lvl 3 (6,979) -- 638,978 -- RES -- Lvl 4 (1,750) -- 518,562 -- RES -- Lvl 5 (3,523) -- 375,730 -- RES -- Lvl 6 (1,016) -- 116,003 -- RGS -- Lvl 2 (14) -- 57,880 -- RGS -- Lvl 3 (386) -- 72,193 -- RGS -- Lvl 4 (346) -- 68,556 -- RGS -- Lvl 5 (551) -- 40,063 -- RGS -- Lvl 6 -- -- 7,486 -- RSS -- Lvl 1 -- -- 31,247 -- RSS -- Lvl 3 (1,107) -- 268,522 -- RSS -- Lvl 4 (231) -- 195,584 -- RSS -- Lvl 5 (642) -- 298,934 -- RSS -- Lvl 6 (905) -- 62,079 -- SIS -- Lvl 1 -- -- 9,689 -- SIS -- Lvl 3 (76) -- 39,367 -- SIS -- Lvl 4 (29) -- 35,590 -- SIS -- Lvl 5 (554) -- 21,966 -- SIS -- Lvl 6 -- -- 1,141 -- TEC -- Lvl 1 (9,024) -- 281,559 -- TEC -- Lvl 2 -- -- 142,694 -- TEC -- Lvl 3 (4,400) -- 548,800 -- TEC -- Lvl 4 (1,250) -- 538,339 -- TEC -- Lvl 5 (1,778) -- 253,221 -- TEC -- Lvl 6 (97) -- 49,366 -- TRS -- Lvl 1 -- -- 41,995 -- TRS -- Lvl 2 -- -- 68,186 -- TRS -- Lvl 3 (6,632) -- 307,559 -- TRS -- Lvl 4 (1,467) -- 295,198 -- TRS -- Lvl 5 (4,090) -- 324,903 -- TRS -- Lvl 6 (37) -- 37,554 -- UTS -- Lvl 1 -- -- 54,728 -- UTS -- Lvl 2 (78) -- 109,577 -- UTS -- Lvl 3 (8,753) -- 526,275 --
(d) For the period July 17, 2000 (commencement of operations) through December 31, 2000. -52- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 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
Units Transferred Between Sub-Accounts and Units Outstanding Fixed Accumulation Beginning of Year Units Purchased Account ----------------------- ----------------------- ----------------------- Year Ended Year Ended Year Ended December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ---------- ----------- ---------- ----------- ---------- ----------- MFS REGATTA ACCESS CONTRACTS: -- CONTINUED ------------------------------ UTS -- Lvl 4(d) -- -- 416,529 -- 36,299 -- UTS -- Lvl 5(d) -- -- 452,340 -- 43,617 -- UTS -- Lvl 6(d) -- -- 46,380 -- 3,680 -- GAA -- Lvl 3(d) -- -- 9,847 -- 104 -- GAA -- Lvl 4(d) -- -- 14,172 -- 1,324 -- GAA -- Lvl 5(d) -- -- 37,437 -- 138 -- GAA -- Lvl 6(d) -- -- 1,607 -- 70 -- GGS -- Lvl 3(d) -- -- 39,164 -- (356) -- GGS -- Lvl 4(d) -- -- 8,966 -- 3,343 -- GGS -- Lvl 5(d) -- -- 9,506 -- 572 -- GGS -- Lvl 6(d) -- -- 490 -- -- -- GGR -- Lvl 2(d) -- -- 61,167 -- -- -- GGR -- Lvl 3(d) -- -- 155,833 -- 12,046 -- GGR -- Lvl 4(d) -- -- 224,962 -- 25,109 -- GGR -- Lvl 5(d) -- -- 225,009 -- 20,754 -- GGR -- Lvl 6(d) -- -- 32,776 -- (2,390) -- GTR -- Lvl 1(d) -- -- -- -- 9,849 -- GTR -- Lvl 3(d) -- -- 24,570 -- (10,879) -- GTR -- Lvl 4(d) -- -- 18,023 -- 1,024 -- GTR -- Lvl 5(d) -- -- 29,641 -- 34 -- GTR -- Lvl 6(d) -- -- 6,826 -- 135 -- SGS -- Lvl 1(d) -- -- 251,792 -- 26,284 -- SGS -- Lvl 2(d) -- -- 124,382 -- -- -- SGS -- Lvl 3(d) -- -- 669,384 -- (16,639) -- SGS -- Lvl 4(d) -- -- 446,607 -- 6,475 -- SGS -- Lvl 5(d) -- -- 195,553 -- 3,631 -- SGS -- Lvl 6(d) -- -- 185,822 -- 262 -- GTS -- Lvl 3(b) -- -- 11,075 -- 899 -- GTS -- Lvl 4(b) -- -- 7,540 -- -- -- GTS -- Lvl 5(b) -- -- 21,428 -- 2,263 -- MCS -- Lvl 1(b) -- -- -- -- 10,530 -- MCS -- Lvl 2(b) -- -- 14,752 -- -- -- MCS -- Lvl 3(b) -- -- 91,815 -- 2,634 -- MCS -- Lvl 4(b) -- -- 100,929 -- 6,567 -- MCS -- Lvl 5(b) -- -- 130,062 -- 30,704 -- MCS -- Lvl 6(b) -- -- 92,261 -- 7,619 -- Units Withdrawn, Surrendered, and Units Outstanding Annuitized End of Year ------------------------ ----------------------- Year Ended Year Ended December 31, December 31, 2000 1999 2000 1999 ---------- ------------ ---------- ----------- MFS REGATTA ACCESS CONTRACTS: -- CONTINUED ------------------------------ UTS -- Lvl 4(d) (3,038) -- 449,790 -- UTS -- Lvl 5(d) (4,891) -- 491,066 -- UTS -- Lvl 6(d) (49) -- 50,011 -- GAA -- Lvl 3(d) (13) -- 9,938 -- GAA -- Lvl 4(d) -- -- 15,496 -- GAA -- Lvl 5(d) (499) -- 37,076 -- GAA -- Lvl 6(d) -- -- 1,677 -- GGS -- Lvl 3(d) (58) -- 38,750 -- GGS -- Lvl 4(d) -- 12,309 -- GGS -- Lvl 5(d) (17) -- 10,061 -- GGS -- Lvl 6(d) -- -- 490 -- GGR -- Lvl 2(d) -- -- 61,167 -- GGR -- Lvl 3(d) (2,336) -- 165,543 -- GGR -- Lvl 4(d) (1,211) -- 248,860 -- GGR -- Lvl 5(d) (1,699) -- 244,064 -- GGR -- Lvl 6(d) (59) -- 30,327 -- GTR -- Lvl 1(d) -- 9,849 -- GTR -- Lvl 3(d) (31) -- 13,660 -- GTR -- Lvl 4(d) (38) -- 19,009 -- GTR -- Lvl 5(d) (175) -- 29,500 -- GTR -- Lvl 6(d) -- -- 6,961 -- SGS -- Lvl 1(d) (9,597) -- 268,479 -- SGS -- Lvl 2(d) -- -- 124,382 -- SGS -- Lvl 3(d) (3,911) -- 648,834 -- SGS -- Lvl 4(d) (1,444) -- 451,638 -- SGS -- Lvl 5(d) (767) -- 198,417 -- SGS -- Lvl 6(d) (1,080) -- 185,004 -- GTS -- Lvl 3(b) -- -- 11,974 -- GTS -- Lvl 4(b) -- -- 7,540 -- GTS -- Lvl 5(b) (73) -- 23,618 -- MCS -- Lvl 1(b) -- -- 10,530 -- MCS -- Lvl 2(b) -- -- 14,752 -- MCS -- Lvl 3(b) (10) -- 94,439 -- MCS -- Lvl 4(b) (260) -- 107,236 -- MCS -- Lvl 5(b) (235) -- 160,531 -- MCS -- Lvl 6(b) (299) -- 99,581 --
(b) For the period September 11, 2000 (commencement of operations) through December 31, 2000. (d) For the period July 17, 2000 (commencement of operations) through December 31, 2000. -53- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 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
Units Transferred Between Sub-Accounts and Units Outstanding Fixed Accumulation Beginning of Year Units Purchased Account ----------------------- ----------------------- ----------------------- Year Ended Year Ended Year Ended December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ---------- ----------- ---------- ----------- ---------- ----------- MFS REGATTA CHOICE CONTRACTS(D): ------------------------------ BDS -- Lvl 2 -- -- 50,774 -- 11,897 -- BDS -- Lvl 3 -- -- 11,238 -- -- -- BDS -- Lvl 4 -- -- 28,648 -- 12,813 -- BDS -- Lvl 5 -- -- 99,084 -- 29,732 -- BDS -- Lvl 6 -- -- 31,195 -- 18,431 -- CAS -- Lvl 1 -- -- 9,736 -- -- -- CAS -- Lvl 2 -- -- 289,370 -- 70,328 -- CAS -- Lvl 3 -- -- 110,023 -- -- -- CAS -- Lvl 4 -- -- 499,177 -- 136,648 -- CAS -- Lvl 5 -- -- 770,953 -- 388,356 -- CAS -- Lvl 6 -- -- 292,731 -- 119,930 -- COS -- Lvl 2 -- -- 449,757 -- 97,828 -- COS -- Lvl 3 -- -- 97,149 -- 71,942 -- COS -- Lvl 4 -- -- 803,269 -- 180,154 -- COS -- Lvl 5 -- -- 1,563,367 -- 506,949 -- COS -- Lvl 6 -- -- 451,066 -- 98,869 -- MIT -- Lvl 2 -- -- 551,411 -- 112,275 -- MIT -- Lvl 3 -- -- 65,873 -- 40,840 -- MIT -- Lvl 4 -- -- 584,272 -- 170,775 -- MIT -- Lvl 5 -- -- 1,445,002 -- 549,782 -- MIT -- Lvl 6 -- -- 514,191 -- 117,809 -- EGS -- Lvl 1 -- -- 9,983 -- -- -- EGS -- Lvl 2 -- -- 449,982 -- 115,994 -- EGS -- Lvl 3 -- -- 103,846 -- 64,672 -- EGS -- Lvl 4 -- -- 790,156 -- 132,030 -- EGS -- Lvl 5 -- -- 1,586,921 -- 600,407 -- EGS -- Lvl 6 -- -- 468,077 -- 133,586 -- EIS -- Lvl 2 -- -- 99,487 -- 13,386 -- EIS -- Lvl 3 -- -- 22,141 -- (1,384) -- EIS -- Lvl 4 -- -- 100,423 -- 32,488 -- EIS -- Lvl 5 -- -- 286,901 -- 43,947 -- EIS -- Lvl 6 -- -- 51,229 -- 19,294 -- FCE -- Lvl 2 -- -- 12,303 -- 4,634 -- FCE -- Lvl 3 -- -- 5,569 -- 14,445 -- FCE -- Lvl 4 -- -- 41,598 -- 9,163 -- FCE -- Lvl 5 -- -- 76,480 -- 28,646 -- FCE -- Lvl 6 -- -- 35,873 -- 18,807 -- FCG -- Lvl 1 -- -- 10,156 -- -- -- FCG -- Lvl 2 -- -- 56,769 -- 18,687 -- FCG -- Lvl 3 -- -- -- -- 19,952 -- Units Withdrawn, Surrendered, and Units Outstanding Annuitized End of Year ------------------------ ----------------------- Year Ended Year Ended December 31, December 31, 2000 1999 2000 1999 ---------- ------------ ---------- ----------- MFS REGATTA CHOICE CONTRACTS(D): ------------------------------ BDS -- Lvl 2 (400) -- 62,271 -- BDS -- Lvl 3 18,650 -- 29,888 -- BDS -- Lvl 4 (100) -- 41,361 -- BDS -- Lvl 5 (544) -- 128,272 -- BDS -- Lvl 6 (62) -- 49,564 -- CAS -- Lvl 1 (447) -- 9,289 -- CAS -- Lvl 2 (1,108) -- 358,590 -- CAS -- Lvl 3 33,990 -- 144,013 -- CAS -- Lvl 4 (13,838) -- 621,987 -- CAS -- Lvl 5 (6,443) -- 1,152,866 -- CAS -- Lvl 6 (1,897) -- 410,764 -- COS -- Lvl 2 (4,740) -- 542,845 -- COS -- Lvl 3 (719) -- 168,372 -- COS -- Lvl 4 (9,102) -- 974,321 -- COS -- Lvl 5 (13,306) -- 2,057,010 -- COS -- Lvl 6 (19,617) -- 530,318 -- MIT -- Lvl 2 (1,581) -- 662,105 -- MIT -- Lvl 3 (137) -- 106,576 -- MIT -- Lvl 4 (10,598) -- 744,449 -- MIT -- Lvl 5 (12,538) -- 1,982,246 -- MIT -- Lvl 6 (8,643) -- 623,357 -- EGS -- Lvl 1 (458) -- 9,525 -- EGS -- Lvl 2 (1,007) -- 564,969 -- EGS -- Lvl 3 (720) -- 167,798 -- EGS -- Lvl 4 (8,674) -- 913,512 -- EGS -- Lvl 5 (16,905) -- 2,170,423 -- EGS -- Lvl 6 (23,105) -- 578,558 -- EIS -- Lvl 2 (603) -- 112,270 -- EIS -- Lvl 3 -- -- 20,757 -- EIS -- Lvl 4 (1,508) -- 131,403 -- EIS -- Lvl 5 (1,045) -- 329,803 -- EIS -- Lvl 6 (225) -- 70,298 -- FCE -- Lvl 2 (4) -- 16,933 -- FCE -- Lvl 3 -- -- 20,014 -- FCE -- Lvl 4 (125) -- 50,636 -- FCE -- Lvl 5 (76) -- 105,050 -- FCE -- Lvl 6 (269) -- 54,411 -- FCG -- Lvl 1 (466) -- 9,690 -- FCG -- Lvl 2 (102) -- 75,354 -- FCG -- Lvl 3 -- -- 19,952 --
(d) For the period July 17, 2000 (commencement of operations) through December 31, 2000. -54- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 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
Units Transferred Between Sub-Accounts and Units Outstanding Fixed Accumulation Beginning of Year Units Purchased Account ----------------------- ----------------------- ----------------------- Year Ended Year Ended Year Ended December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ---------- ----------- ---------- ----------- ---------- ----------- MFS REGATTA CHOICE CONTRACTS(D): -- CONTINUED ------------------------------ FCG -- Lvl 4 -- -- 101,565 -- 42,918 -- FCG -- Lvl 5 -- -- 275,792 -- 120,360 -- FCG -- Lvl 6 -- -- 81,209 -- 36,364 -- FCI -- Lvl 2 -- -- 35,431 -- 819 -- FCI -- Lvl 4 -- -- 23,791 -- 7,482 -- FCI -- Lvl 5 -- -- 47,901 -- 24,382 -- FCI -- Lvl 6 -- -- 20,079 -- 6,108 -- GSS -- Lvl 2 -- -- 118,847 -- 55,719 -- GSS -- Lvl 3 -- -- 20,821 -- (517) -- GSS -- Lvl 4 -- -- 162,839 -- 47,763 -- GSS -- Lvl 5 -- -- 283,147 -- 89,678 -- GSS -- Lvl 6 -- -- 93,677 -- 28,595 -- HYS -- Lvl 2 -- -- 89,124 -- 23,351 -- HYS -- Lvl 3 -- -- 12,240 -- 12,780 -- HYS -- Lvl 4 -- -- 103,655 -- 40,191 -- HYS -- Lvl 5 -- -- 193,244 -- 85,857 -- HYS -- Lvl 6 -- -- 78,394 -- 26,510 -- MSS -- Lvl 2 -- -- 146,285 -- 16,561 -- MSS -- Lvl 3 -- -- 40,787 -- -- -- MSS -- Lvl 4 -- -- 122,398 -- 32,851 -- MSS -- Lvl 5 -- -- 254,040 -- 64,556 -- MSS -- Lvl 6 -- -- 53,728 -- 10,890 -- MIS -- Lvl 1 -- -- 43,799 -- -- -- MIS -- Lvl 2 -- -- 703,016 -- 129,541 -- MIS -- Lvl 3 -- -- 77,099 -- 71,234 -- MIS -- Lvl 4 -- -- 985,524 -- 250,996 -- MIS -- Lvl 5 -- -- 2,525,259 -- 907,991 -- MIS -- Lvl 6 -- -- 683,757 -- 161,102 -- MMS -- Lvl 1 -- -- -- -- 16,332 -- MMS -- Lvl 2 -- -- 306,512 -- (149,129) -- MMS -- Lvl 4 -- -- 292,278 -- (116,278) -- MMS -- Lvl 5 -- -- 616,692 -- (291,537) -- MMS -- Lvl 6 -- -- 327,632 -- (55,288) -- NWD -- Lvl 2 -- -- 185,101 -- 43,783 -- NWD -- Lvl 3 -- -- 73,021 -- 23,410 -- NWD -- Lvl 4 -- -- 253,686 -- 80,833 -- NWD -- Lvl 5 -- -- 628,499 -- 205,769 -- NWD -- Lvl 6 -- -- 237,581 -- 56,356 -- RES -- Lvl 2 -- -- 253,790 -- 39,138 -- RES -- Lvl 3 -- -- 93,254 -- 43,435 -- Units Withdrawn, Surrendered, and Units Outstanding Annuitized End of Year ------------------------ ----------------------- Year Ended Year Ended December 31, December 31, 2000 1999 2000 1999 ---------- ------------ ---------- ----------- MFS REGATTA CHOICE CONTRACTS(D): -- CONTINUED ------------------------------ FCG -- Lvl 4 (950) -- 143,533 -- FCG -- Lvl 5 (1,056) -- 395,096 -- FCG -- Lvl 6 (908) -- 116,665 -- FCI -- Lvl 2 (124) -- 36,126 -- FCI -- Lvl 4 (33) -- 31,240 -- FCI -- Lvl 5 (146) -- 72,137 -- FCI -- Lvl 6 (8) -- 26,179 -- GSS -- Lvl 2 (1,181) -- 173,385 -- GSS -- Lvl 3 -- 20,304 -- GSS -- Lvl 4 (1,283) -- 209,319 -- GSS -- Lvl 5 (1,833) -- 370,992 -- GSS -- Lvl 6 (1,290) -- 120,982 -- HYS -- Lvl 2 (343) -- 112,132 -- HYS -- Lvl 3 -- -- 25,020 -- HYS -- Lvl 4 (545) -- 143,301 -- HYS -- Lvl 5 (848) -- 278,253 -- HYS -- Lvl 6 (664) -- 104,240 -- MSS -- Lvl 2 (2,346) -- 160,500 -- MSS -- Lvl 3 -- -- 40,787 -- MSS -- Lvl 4 (9,800) -- 145,449 -- MSS -- Lvl 5 (333) -- 318,263 -- MSS -- Lvl 6 (3) -- 64,615 -- MIS -- Lvl 1 (2,011) -- 41,788 -- MIS -- Lvl 2 (7,110) -- 825,447 -- MIS -- Lvl 3 (723) -- 147,610 -- MIS -- Lvl 4 (14,239) -- 1,222,281 -- MIS -- Lvl 5 (22,305) -- 3,410,945 -- MIS -- Lvl 6 (9,155) -- 835,704 -- MMS -- Lvl 1 -- -- 16,332 -- MMS -- Lvl 2 (1,130) -- 156,253 -- MMS -- Lvl 4 (39,479) -- 136,521 -- MMS -- Lvl 5 (875) -- 324,280 -- MMS -- Lvl 6 (68,298) -- 204,046 -- NWD -- Lvl 2 (181) -- 228,703 -- NWD -- Lvl 3 -- -- 96,431 -- NWD -- Lvl 4 (1,188) -- 333,331 -- NWD -- Lvl 5 (3,423) -- 830,845 -- NWD -- Lvl 6 (19,034) -- 274,903 -- RES -- Lvl 2 (5,154) -- 287,774 -- RES -- Lvl 3 (566) -- 136,123 --
(d) For the period July 17, 2000 (commencement of operations) through December 31, 2000. -55- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 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
Units Transferred Between Sub-Accounts and Units Outstanding Fixed Accumulation Beginning of Year Units Purchased Account ----------------------- ----------------------- ----------------------- Year Ended Year Ended Year Ended December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ---------- ----------- ---------- ----------- ---------- ----------- MFS REGATTA CHOICE CONTRACTS(D): -- CONTINUED ------------------------------ RES -- Lvl 4 -- -- 417,491 -- 70,763 -- RES -- Lvl 5 -- -- 823,495 -- 283,061 -- RES -- Lvl 6 -- -- 305,189 -- 74,556 -- RGS -- Lvl 2 -- -- 37,909 -- 3,216 -- RGS -- Lvl 3 -- -- 11,310 -- 195 -- RGS -- Lvl 4 -- -- 48,224 -- 23,125 -- RGS -- Lvl 5 -- -- 93,247 -- 34,798 -- RGS -- Lvl 6 -- -- 34,798 -- 5,338 -- RSS -- Lvl 2 -- -- 124,803 -- 22,624 -- RSS -- Lvl 3 -- -- 76,583 -- (736) -- RSS -- Lvl 4 -- -- 116,209 -- 47,189 -- RSS -- Lvl 5 -- -- 347,279 -- 113,077 -- RSS -- Lvl 6 -- -- 90,288 -- 23,011 -- SIS -- Lvl 2 -- -- 21,978 -- 6,730 -- SIS -- Lvl 3 -- -- 22,057 -- 4,108 -- SIS -- Lvl 4 -- -- 51,706 -- 16,078 -- SIS -- Lvl 5 -- -- 74,381 -- 17,848 -- SIS -- Lvl 6 -- -- 15,926 -- 6,115 -- TEC -- Lvl 1 -- -- 22,577 -- -- -- TEC -- Lvl 2 -- -- 130,795 -- 14,093 -- TEC -- Lvl 3 -- -- 41,384 -- 335 -- TEC -- Lvl 4 -- -- 156,322 -- 30,026 -- TEC -- Lvl 5 -- -- 527,657 -- 120,846 -- TEC -- Lvl 6 -- -- 120,854 -- 35,835 -- TRS -- Lvl 2 -- -- 212,637 -- 9,121 -- TRS -- Lvl 3 -- -- 10,625 -- -- -- TRS -- Lvl 4 -- -- 259,249 -- 67,892 -- TRS -- Lvl 5 -- -- 419,802 -- 139,294 -- TRS -- Lvl 6 -- -- 165,294 -- 23,487 -- UTS -- Lvl 2 -- -- 303,891 -- 52,224 -- UTS -- Lvl 3 -- -- 89,955 -- 5,849 -- UTS -- Lvl 4 -- -- 375,532 -- 122,159 -- UTS -- Lvl 5 -- -- 729,834 -- 269,079 -- UTS -- Lvl 6 -- -- 180,195 -- 66,053 -- GAA -- Lvl 2 -- -- 10,571 -- 1,849 -- GAA -- Lvl 3 -- -- -- -- 9,347 -- Units Withdrawn, Surrendered, and Units Outstanding Annuitized End of Year ------------------------ ----------------------- Year Ended Year Ended December 31, December 31, 2000 1999 2000 1999 ---------- ------------ ---------- ----------- MFS REGATTA CHOICE CONTRACTS(D): -- CONTINUED ------------------------------ RES -- Lvl 4 (13,689) -- 474,565 -- RES -- Lvl 5 (8,600) -- 1,097,956 -- RES -- Lvl 6 (2,275) -- 377,470 -- RGS -- Lvl 2 (28) -- 41,097 -- RGS -- Lvl 3 -- -- 11,505 -- RGS -- Lvl 4 (1,187) -- 70,162 -- RGS -- Lvl 5 (245) -- 127,800 -- RGS -- Lvl 6 (25) -- 40,111 -- RSS -- Lvl 2 (116) -- 147,311 -- RSS -- Lvl 3 -- -- 75,847 -- RSS -- Lvl 4 (2,948) -- 160,450 -- RSS -- Lvl 5 (988) -- 459,368 -- RSS -- Lvl 6 (250) -- 113,049 -- SIS -- Lvl 2 (247) -- 28,461 -- SIS -- Lvl 3 -- -- 26,165 -- SIS -- Lvl 4 (2,392) -- 65,392 -- SIS -- Lvl 5 (272) -- 91,957 -- SIS -- Lvl 6 (31) -- 22,010 -- TEC -- Lvl 1 (1,037) -- 21,540 -- TEC -- Lvl 2 (3,684) -- 141,204 -- TEC -- Lvl 3 -- -- 41,719 -- TEC -- Lvl 4 (2,537) -- 183,811 -- TEC -- Lvl 5 (3,791) -- 644,712 -- TEC -- Lvl 6 (475) -- 156,214 -- TRS -- Lvl 2 (2,388) -- 219,370 -- TRS -- Lvl 3 -- -- 10,625 -- TRS -- Lvl 4 (1,412) -- 325,729 -- TRS -- Lvl 5 (2,599) -- 556,497 -- TRS -- Lvl 6 (759) -- 188,022 -- UTS -- Lvl 2 (7,198) -- 348,917 -- UTS -- Lvl 3 (140) -- 95,664 -- UTS -- Lvl 4 (10,307) -- 487,384 -- UTS -- Lvl 5 (13,615) -- 985,298 -- UTS -- Lvl 6 (477) -- 245,771 -- GAA -- Lvl 2 (1,146) -- 11,274 -- GAA -- Lvl 3 -- -- 9,347 --
(d) For the period July 17, 2000 (commencement of operations) through December 31, 2000. -56- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 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
Units Transferred Between Sub-Accounts and Units Outstanding Fixed Accumulation Beginning of Year Units Purchased Account ----------------------- ----------------------- ----------------------- Year Ended Year Ended Year Ended December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ---------- ----------- ---------- ----------- ---------- ----------- MFS REGATTA CHOICE CONTRACTS: -- CONTINUED ------------------------------ GAA -- Lvl 4(d) -- -- 11,101 -- 4,672 -- GAA -- Lvl 5(d) -- -- 14,445 -- 24,446 -- GAA -- Lvl 6(d) -- -- 1,888 -- 1,907 -- GGS -- Lvl 2(d) -- -- 7,670 -- 2,666 -- GGS -- Lvl 3(d) -- -- -- -- 12,317 -- GGS -- Lvl 4(d) -- -- 9,238 -- 3,436 -- GGS -- Lvl 5(d) -- -- 36,690 -- 17,619 -- GGS -- Lvl 6(d) -- -- 22,072 -- 11,437 -- GGR -- Lvl 2(d) -- -- 140,567 -- 14,818 -- GGR -- Lvl 3(d) -- -- -- -- 4,465 -- GGR -- Lvl 4(d) -- -- 168,573 -- 34,209 -- GGR -- Lvl 5(d) -- -- 268,257 -- 109,191 -- GGR -- Lvl 6(d) -- -- 61,081 -- 30,008 -- GTR -- Lvl 2(d) -- -- 8,505 -- (1,666) -- GTR -- Lvl 4(d) -- -- 19,659 -- 5,942 -- GTR -- Lvl 5(d) -- -- 15,161 -- 5,747 -- GTR -- Lvl 6(d) -- -- 3,943 -- 1,316 -- SGS -- Lvl 2(d) -- -- 115,884 -- 19,600 -- SGS -- Lvl 3(d) -- -- 20,225 -- 5,282 -- SGS -- Lvl 4(d) -- -- 206,951 -- 56,747 -- SGS -- Lvl 5(d) -- -- 485,291 -- 119,296 -- SGS -- Lvl 6(d) -- -- 123,420 -- 12,846 -- GTS -- Lvl 2(b) -- -- 7,143 -- 3,972 -- GTS -- Lvl 3(b) -- -- 9,402 -- -- -- GTS -- Lvl 4(b) -- -- 2,002 -- 1,543 -- GTS -- Lvl 5(b) -- -- 12,754 -- 1,762 -- GTS -- Lvl 6(b) -- -- 1,836 -- 257 -- MCS -- Lvl 2(b) -- -- 18,044 -- 16,264 -- MCS -- Lvl 3(b) -- -- 14,934 -- 17,946 -- MCS -- Lvl 4(b) -- -- 112,179 -- 23,357 -- MCS -- Lvl 5(b) -- -- 240,449 -- 17,519 -- MCS -- Lvl 6(b) -- -- 39,602 -- 4,746 -- Units Withdrawn, Surrendered, and Units Outstanding Annuitized End of Year ------------------------ ----------------------- Year Ended Year Ended December 31, December 31, 2000 1999 2000 1999 ---------- ------------ ---------- ----------- MFS REGATTA CHOICE CONTRACTS: -- CONTINUED ------------------------------ GAA -- Lvl 4(d) (298) -- 15,475 -- GAA -- Lvl 5(d) (65) -- 38,826 -- GAA -- Lvl 6(d) (35) -- 3,760 -- GGS -- Lvl 2(d) (22) -- 10,314 -- GGS -- Lvl 3(d) -- -- 12,317 -- GGS -- Lvl 4(d) (2) -- 12,672 -- GGS -- Lvl 5(d) (78) -- 54,231 -- GGS -- Lvl 6(d) (248) -- 33,261 -- GGR -- Lvl 2(d) (228) -- 155,157 -- GGR -- Lvl 3(d) (111) -- 4,354 -- GGR -- Lvl 4(d) (798) -- 201,984 -- GGR -- Lvl 5(d) (789) -- 376,659 -- GGR -- Lvl 6(d) (2,487) -- 88,602 -- GTR -- Lvl 2(d) (524) -- 6,315 -- GTR -- Lvl 4(d) -- -- 25,601 -- GTR -- Lvl 5(d) (46) -- 20,862 -- GTR -- Lvl 6(d) (4) -- 5,255 -- SGS -- Lvl 2(d) (188) -- 135,296 -- SGS -- Lvl 3(d) -- -- 25,507 -- SGS -- Lvl 4(d) (1,746) -- 261,952 -- SGS -- Lvl 5(d) (4,897) -- 599,690 -- SGS -- Lvl 6(d) (173) -- 136,093 -- GTS -- Lvl 2(b) (8) -- 11,107 -- GTS -- Lvl 3(b) -- -- 9,402 -- GTS -- Lvl 4(b) (12) -- 3,533 -- GTS -- Lvl 5(b) -- -- 14,516 -- GTS -- Lvl 6(b) -- 2,093 -- MCS -- Lvl 2(b) (26) -- 34,282 -- MCS -- Lvl 3(b) -- -- 32,880 -- MCS -- Lvl 4(b) (247) -- 135,289 -- MCS -- Lvl 5(b) (469) -- 257,499 -- MCS -- Lvl 6(b) (10) -- 44,338 --
(b) For the period September 11, 2000 (commencement of operations) through December 31, 2000. (d) For the period July 17, 2000 (commencement of operations) through December 31, 2000. -57- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 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
Units Transferred Between Sub-Accounts and Units Outstanding Fixed Accumulation Beginning of Year Units Purchased Account ----------------------- ----------------------- ----------------------- Year Ended Year Ended Year Ended December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ---------- ----------- ---------- ----------- ---------- ----------- MFS REGATTA FLEX 4 CONTRACTS(D): ------------------------------ CAS -- Lvl 5 -- -- 3,309 -- -- -- COS -- Lvl 3 -- -- 528 -- -- -- COS -- Lvl 5 -- -- 404 -- -- -- MIT -- Lvl 3 -- -- 484 -- -- -- MIT -- Lvl 4 -- -- 309 -- -- -- MIT -- Lvl 5 -- -- 7,185 -- (29) -- EGS -- Lvl 5 -- -- 5,222 -- 13 -- EIS -- Lvl 4 -- -- 707 -- -- -- EIS -- Lvl 5 -- -- 1,998 -- -- -- FCI -- Lvl 5 -- -- 2,079 -- -- -- GSS -- Lvl 5 -- -- 4,857 -- -- -- HYS -- Lvl 5 -- -- 2,068 -- -- -- MIS -- Lvl 3 -- -- 526 -- -- -- MIS -- Lvl 4 -- -- 1,172 -- -- -- MIS -- Lvl 5 -- -- 5,967 -- -- -- MMS -- Lvl 5 -- -- 9,973 -- -- -- NWD -- Lvl 4 -- -- 164 -- -- -- NWD -- Lvl 5 -- -- 2,248 -- -- -- RSS -- Lvl 4 -- -- 314 -- -- -- TRS -- Lvl 3 -- -- 453 -- -- -- TRS -- Lvl 4 -- -- 289 -- -- -- TRS -- Lvl 5 -- -- 376 -- -- -- UTS -- Lvl 5 -- -- 2,091 -- -- -- GGR -- Lvl 5 -- -- 1,747 -- -- -- MCS -- Lvl 4 -- -- 169 -- -- -- MCS -- Lvl 5 -- -- 2,273 -- -- -- Units Withdrawn, Surrendered, and Units Outstanding Annuitized End of Year ------------------------ ----------------------- Year Ended Year Ended December 31, December 31, 2000 1999 2000 1999 ---------- ------------ ---------- ----------- MFS REGATTA FLEX 4 CONTRACTS(D): ------------------------------ CAS -- Lvl 5 -- -- 3,309 -- COS -- Lvl 3 -- -- 528 -- COS -- Lvl 5 -- -- 404 -- MIT -- Lvl 3 -- -- 484 -- MIT -- Lvl 4 -- -- 309 -- MIT -- Lvl 5 (2,707) -- 4,449 -- EGS -- Lvl 5 (2,989) -- 2,246 -- EIS -- Lvl 4 -- -- 707 -- EIS -- Lvl 5 -- -- 1,998 -- FCI -- Lvl 5 -- -- 2,079 -- GSS -- Lvl 5 -- -- 4,857 -- HYS -- Lvl 5 -- -- 2,068 -- MIS -- Lvl 3 -- -- 526 -- MIS -- Lvl 4 -- -- 1,172 -- MIS -- Lvl 5 (2,905) -- 3,062 -- MMS -- Lvl 5 -- -- 9,973 -- NWD -- Lvl 4 -- -- 164 -- NWD -- Lvl 5 -- -- 2,248 -- RSS -- Lvl 4 -- -- 314 -- TRS -- Lvl 3 -- -- 453 -- TRS -- Lvl 4 -- -- 289 -- TRS -- Lvl 5 -- -- 376 -- UTS -- Lvl 5 -- -- 2,091 -- GGR -- Lvl 5 -- -- 1,747 -- MCS -- Lvl 4 -- -- 169 -- MCS -- Lvl 5 -- -- 2,273 --
(d) For the period July 17, 2000 (commencement of operations of Sub-Account) through December 31, 2000. -58- REGATTA, REGATTA GOLD, REGATTA CLASSIC, REGATTA PLATINUM, REGATTA EXTRA, REGATTA ACCESS, REGATTA CHOICE AND REGATTA FLEX 4 SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F NOTES TO FINANCIAL STATEMENTS -- continued (6) INVESTMENT PURCHASES AND SALES The following table shows the aggregate cost of shares purchased and proceeds from the sales of shares for each Sub-account for the year ended December 31, 2000:
Purchases Sales ------------ ------------ Bond Series $ 33,632,565 $ 13,754,085 Capital Appreciation Series 562,619,665 404,615,495 Capital Opportunities Series 419,737,910 59,298,268 Massachusetts Investors Trust Series 508,194,209 335,636,379 Emerging Growth Series 545,680,643 174,185,082 Equity Income Series 74,059,542 11,874,492 Foreign & Colonial Emerging Markets Equity Series 28,395,278 19,608,577 International Growth Series 95,478,081 36,665,018 International Growth and Income Series 62,032,025 53,493,994 Government Securities Series 155,577,929 142,112,893 High Yield Series 119,092,228 100,905,968 Managed Sectors Series 268,535,843 127,174,981 Massachusetts Investors Growth Stock Series 543,302,772 59,635,661 Money Market Series 656,783,037 704,416,907 New Discovery Series 185,396,814 29,303,100 Research Series 291,633,131 142,562,970 Research Growth and Income Series 31,308,371 18,581,040 Research International Series 70,317,279 10,780,660 Strategic Income Series 19,871,978 6,293,880 Technology Series 40,585,417 1,089,248 Total Return Series 301,835,314 437,583,044 Utilities Series 231,613,073 36,501,474 Global Asset Allocation Series 18,429,086 18,697,962 Global Governments Series 12,079,510 21,940,086 Global Growth Series 163,143,308 74,146,265 Global Total Return Series 16,757,678 16,807,198 Strategic Growth Series 102,644,183 12,683,045 Global Telecommunications Series 1,711,691 27,491 Mid Cap Growth Series 28,308,403 698,854
-59- INDEPENDENT AUDITORS' REPORT To the Participants in Regatta, Regatta Gold, Regatta Classic, Regatta Platinum, Regatta Extra, Regatta Access, Regatta Choice and Regatta Flex 4 Sub-Accounts and the Board of Directors of Sun Life Assurance Company of Canada (U.S.): We have audited the accompanying statement of condition of Bond Sub-Account, Capital Appreciation Sub-Account, Capital Opportunities Sub-Account, Massachusetts Investors Trust Sub-Account, Emerging Growth Sub-Account, Equity Income Sub-Account, 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, Technology Series Sub-Account, Total Return Sub-Account, Utilities Sub-Account, Global Asset Allocation Sub-Account, Global Governments Sub-Account, Global Growth Sub-Account, Global Total Return Sub-Account, Strategic Growth Sub-Account, Global Telecommunications Sub-Account and Mid Cap Growth Sub-Account of Sun Life of Canada (U.S.) Variable Account F (the "Sub- Accounts") as of December 31, 2000, the related statement of operations for the year then ended and the statements of changes in net assets for the years ended December 31, 2000 and 1999. 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 auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities held at December 31, 2000 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 December 31, 2000 and the results of their operations and the changes in their net assets for the respective stated periods in conformity with accounting principles generally accepted in the United States of America. DELOITTE & TOUCHE LLP Boston, Massachusetts February 9, 2001 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) CONSOLIDATED STATEMENTS OF INCOME (in millions) For the years ended December 31, 2000, 1999 and 1998
2000 1999 1998 --------------- --------------- --------------- Revenues Premiums and annuity considerations $ 44.8 $ 45.1 $ 203.3 Net investment income 287.7 365.0 455.9 Net realized investment gains (losses) (19.9) 2.3 8.4 Fee and other income 297.8 217.5 179.1 --------------- --------------- --------------- Total revenues 610.4 629.9 846.7 --------------- --------------- --------------- Benefits and expenses Policyowner benefits 338.3 334.9 588.1 Other operating expenses 164.9 101.1 100.0 Amortization of deferred policy acquisition costs 123.8 67.8 88.8 --------------- --------------- --------------- Total benefits and expenses 627.0 503.8 776.9 --------------- --------------- --------------- Income (loss) from operations (16.6) 126.1 69.8 Interest expense 44.7 43.3 44.9 --------------- --------------- --------------- Income (loss) before income tax expense and discontinued operations (61.3) 82.8 24.9 --------------- --------------- --------------- Income tax expense (benefit): Federal (61.7) 28.8 10.9 State (2.1) 0.3 (0.1) --------------- --------------- --------------- Income tax expense (benefit) (63.8) 29.1 10.8 --------------- --------------- --------------- Net income from continuing operations 2.5 53.7 14.1 Net loss on disposal of subsidiaries, after tax - (12.3) - Discontinued operations - 1.0 0.1 --------------- --------------- --------------- Net income $ 2.5 $ 42.4 $ 14.2 =============== =============== ===============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL STATEMENTS. F-1 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) CONSOLIDATED BALANCE SHEETS (in millions except per share data) December 31, 2000 and 1999
ASSETS 2000 1999 ---------------- ---------------- Investments Available-for-sale fixed maturities at fair value (amortized cost of $2,454.5 and $2,685.4 in 2000 and 1999, respectively) $ 2,501.4 $ 2,677.3 Trading fixed maturities at fair value (amortized cost of $635.5 and $1.0 in 2000 and 1999, respectively) 648.2 1.0 Held-to-maturity fixed maturities at amortized cost 600.0 - Short-term investments 112.1 177.2 Mortgage loans 846.4 931.4 Real estate 77.7 95.1 Policy loans 41.5 40.7 Other invested assets 74.6 67.9 ---------------- ---------------- Total investments 4,901.9 3,990.6 Cash and cash equivalents 390.0 550.3 Accrued investment income 64.9 50.5 Deferred policy acquisition costs 762.0 686.3 Outstanding premiums 3.0 2.7 Other assets 61.7 81.2 Separate account assets 17,874.2 16,123.3 ---------------- ---------------- Total assets $ 24,057.7 $ 21,484.9 ================ ================ LIABILITIES Future contract and policy benefits $ 714.7 $ 729.3 Contractholder deposit funds and other policy liabilities 3,313.0 3,144.8 Unearned revenue 4.5 7.1 Accrued expenses and taxes 52.7 98.8 Deferred federal income taxes 41.4 77.7 Long-term debt payable to affiliates 565.0 565.0 Partnership Capital Securities 607.8 - Other liabilities 123.2 67.7 Separate account liabilities 17,874.2 16,123.3 ---------------- ---------------- Total liabilities 23,296.5 20,813.7 ---------------- ---------------- Commitments and contingencies - Note 15 STOCKHOLDER'S EQUITY Common stock, $1,000 par value - 10,000 shares authorized; 6,437 and 5,900 shares issued and outstanding in 2000 and 1999, respectively $ 6.4 $ 5.9 Additional paid-in capital 264.9 199.4 Accumulated other comprehensive income 38.6 7.1 Retained earnings 451.3 458.8 ---------------- ---------------- Total stockholder's equity 761.2 671.2 ---------------- ---------------- Total liabilities and stockholder's equity $ 24,057.7 $ 21,484.9 ================ ================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL STATEMENTS. F-2 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in millions) For the years ended December 31, 2000, 1999, and 1998
2000 1999 1998 Net income $ 2.5 $ 42.4 $ 14.2 ------------- ------------- ------------- Other comprehensive income Net unrealized holding gains (losses) on available-for-sale securities, net of tax 31.4 (68.6) (4.3) Other 0.1 (0.2) - ------------- ------------- -------------- 31.5 (68.8) (4.3) ------------- ------------- -------------- Comprehensive income $ 34.0 $ (26.4) $ 9.9 ============= ============= ==============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL STATEMENTS. F-3 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY (in millions) For the years ended December 31, 2000, 1999, and 1998
ACCUMULATED ADDITIONAL OTHER TOTAL COMMON STOCK PAID-IN COMPREHENSIVE RETAINED STOCKHOLDER'S CAPITAL INCOME EARNINGS EQUITY --------------- --------------- ----------------- -------------- ---------------- Balance at December 31, 1997 $ 5.9 $ 199.4 $ 80.2 $ 532.2 $ 817.7 Net income 14.2 14.2 Other comprehensive income (4.3) (4.3) Dividends to stockholder (50.0) (50.0) --------------- --------------- ----------------- -------------- ---------------- Balance at December 31, 1998 5.9 199.4 75.9 496.4 777.6 Net income 42.4 42.4 Other comprehensive income (68.8) (68.8) Dividends to stockholder (80.0) (80.0) --------------- --------------- ----------------- -------------- ---------------- Balance at December 31, 1999 5.9 199.4 7.1 458.8 671.2 Net income 2.5 2.5 Other comprehensive income 31.5 31.5 Common shares issued 0.5 0.5 Additional paid-in-capital 65.5 65.5 Dividends to stockholder (10.0) (10.0) --------------- --------------- ----------------- -------------- ---------------- Balance at December 31, 2000 $ 6.4 $ 264.9 $ 38.6 $ 451.3 $ 761.2 =============== =============== ================= ============== ================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL STATEMENTS. F-4 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) For the years ended December 31, 2000, 1999 and 1998
2000 1999 1998 ---------------- ---------------- ------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income from continuing operations $ 2.5 $ 53.7 $ 14.1 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of discount and premiums (0.8) (0.5) 0.2 Depreciation and amortization 2.8 3.7 2.2 Net realized (gains) losses on investments 19.9 (2.3) (8.4) Net unrealized gains on trading fixed maturities (12.7) - - Interest credited to contractholder deposits 195.5 216.4 238.7 Deferred federal income taxes (53.1) 14.5 (8.6) Cash dividends from subsidiaries - 19.3 - Changes in assets and liabilities: Deferred acquisition costs (83.0) (88.4) 208.7 Accrued investment income (5.7) 11.4 31.1 Other assets 15.0 (75.3) 78.5 Future contract and policy benefits (14.5) (7.5) (1,124.0) Other, net 38.7 72.3 896.6 ---------------- ---------------- ------------- Net cash provided by operating activities 104.6 217.3 329.1 ---------------- ---------------- ------------- CASH FLOWS FROM INVESTING ACTIVITIES: Sales, maturities and repayments of: Available-for-sale fixed maturities 1,001.9 1,240.9 1,665.6 Trading fixed maturities 186.9 - - Subsidiaries - 57.5 0.6 Other invested assets - - 0.9 Mortgage loans 208.5 385.7 316.9 Real estate 36.0 2.8 6.0 Purchases of: Available-for-sale fixed maturities (738.3) (615.2) (1,346.7) Trading fixed maturities (821.3) - - Equity securities - - (0.2) Other invested assets (2.2) (7.4) (11.4) Mortgage loans (121.9) (344.9) (123.0) Real estate (15.0) (1.6) (1.1) Changes in other investing activities, net 2.8 3.1 (14.4) Net change in policy loans (0.8) 1.9 (1.6) Net change in short-term investments 34.9 155.9 (38.2) ---------------- ---------------- ------------- Net cash provided by (used in) investing activities (228.5) 878.7 453.4 ---------------- ---------------- ------------- CASH FLOWS FROM FINANCING ACTIVITIES: Deposits to contractholder deposit funds 1,962.3 1,536.8 910.8 Withdrawals from contractholder deposit funds (1,988.7) (2,267.2) (1,803.2) Repayment of long-term debt and borrowed funds - - (110.1) Dividends paid to stockholder (10.0) (80.0) (50.0) ---------------- ---------------- ------------- Net cash provided by (used in) financing activities (36.4) (810.4) (1,052.5) ---------------- ---------------- ------------- Net change in cash and cash equivalents (160.3) 285.6 (270.0) Cash and cash equivalents, beginning of year 550.3 264.7 534.7 ---------------- ---------------- ------------- Cash and cash equivalents, end of year $ 390.0 $ 550.3 $ 264.7 ================ ================ ============= SUPPLEMENTAL CASH FLOW INFORMATION Interest paid $ 43.3 $ 43.3 $ 40.5 Income taxes paid 63.7 5.5 50.6
NON-CASH TRANSACTION On December 21, 2000, the Company's parent, Sun Life of Canada (U.S.) Holdings, Inc., transferred its 100% ownership in Sun Life of Canada (U.S.) Holdings General Partner, Inc. to the Company in exchange for 537 shares of the Company's common stock totaling $537,000 plus $65,520,000 of additional paid in capital. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL STATEMENTS F-5 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES GENERAL Sun Life Assurance Company of Canada (U.S.) (the "Company") was incorporated in 1970 as a life insurance company domiciled in the state of Delaware. As of December 31, 2000, the Company was licensed in 48 states and certain other territories. Effective January 31, 2001, the Company became authorized to do business in 49 states. In addition, the Company's wholly-owned insurance subsidiary, Sun Life Insurance and Annuity Company of New York, is licensed in New York. The Company and its subsidiaries are engaged in the sale of individual and group variable life insurance, individual fixed and variable annuities, group fixed and variable annuities, group pension contracts, guaranteed investment contracts, group life and disability insurance, and other asset management services. The Company is a wholly-owned subsidiary of Sun Life of Canada (U.S.) Holdings, Inc., which is an indirect wholly-owned subsidiary of Sun Life Assurance Company of Canada. Sun Life Assurance Company of Canada is a life insurance company domiciled in Canada which reorganized from a mutual life insurance company to a stock life insurance company on March 22, 2000. As a result of the demutualization, a new holding company, Sun Life Financial Services of Canada Inc. ("SLC"), is now the ultimate parent of Sun Life Assurance Company of Canada and the Company. BASIS OF PRESENTATION The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for stockholder-owned life insurance companies. For the year ended December 31, 1999, the Company filed its Annual Report on Form 10-K using audited statutory financial statements prepared in accordance with accounting practices prescribed or permitted by the Insurance Department of the State of Delaware, which is a comprehensive basis of accounting other than GAAP. During 2000 the Company changed its basis of accounting to GAAP and has restated the financial statements for the prior years ended December 31, 1999 and 1998 to conform with GAAP. See Note 13 for a reconciliation of statutory surplus to GAAP equity and statutory net income to GAAP net income. The consolidated financial statements include the accounts of the Company and its subsidiaries. The Company owns all of the outstanding shares of Sun Life Insurance and Annuity Company of New York, Sun Life of Canada (U.S.) Distributors, Inc., Sun Life Financial Services Limited, Sun Benefit Services Company, Inc., Sun Capital Advisers, Inc., Sun Life Finance Corporation, Sun Financial Group Advisers, Inc., Sun Life of Canada (U.S.) SPE 97-1, Inc., Sun Life of Canada (U.S.) Holdings General Partner, Inc., and Clarendon Insurance Agency, Inc. The results are also consolidated with Sun Life of Canada Funding, LLC, which is owned by a trust sponsored by the Company and Sun Life of Canada (U.S.) Limited Partnership I, for which Sun Life of Canada (U.S.) Holdings General Partner, Inc. is the sole general partner. All significant intercompany transactions have been eliminated in consolidation. F-6 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): Sun Life Insurance and Annuity Company of New York is engaged in the sale of individual fixed and variable annuity contracts and group life and disability insurance contracts in its state of domicile, New York. Sun Life of Canada (U.S.) Distributors, Inc. is a registered investment adviser and broker-dealer. Sun Life Financial Services Limited serves as the marketing administrator for the distribution of the offshore products of Sun Life Assurance Company of Canada (Bermuda), an affiliate. Sun Capital Advisers, Inc. is a registered investment adviser. Sun Life of Canada (U.S.) SPE 97-1 was organized for the purpose of engaging in activities incidental to securitizing mortgage loans. Sun Life of Canada (U.S.) Holdings General Partner, Inc. is the sole general partner of Sun Life of Canada (U.S.) Limited Partnership I. Clarendon Insurance Agency, Inc. is a registered broker-dealer that acts as the general distributor of certain annuity and life insurance contracts issued by the Company and its affiliates. Sun Benefit Services Company, Inc., Sun Life Finance Corporation and Sun Financial Group Advisers, Inc. are currently inactive. Sun Life of Canada Funding, LLC. was organized for the purpose of engaging in activities incidental to establishing the new guaranteed investment products of the Company. Sun Life of Canada (U.S.) Limited Partnership I was established to purchase subordinated debentures issued by the Company's parent, Sun Life of Canada (U.S.) Holdings, Inc., and to issue Partnership Capital Securities to an affiliated business trust, Sun Life of Canada (U.S.) Capital Trust I. In June 2000, the Company sold Sun Life Information Services Ireland, Limited to Sun Life Assurance Company of Canada. Sun Life Information Services Ireland, Limited provides information systems development services to Sun Life Assurance Company of Canada and its subsidiaries. During 1999, the Company sold two of its subsidiaries, Massachusetts Casualty Insurance Company ("MCIC") (sold February 1999) and New London Trust F.S.B. ("NLT") (sold October 1999). MCIC is a life insurance company that issues only individual disability income policies. NLT is a federally chartered savings bank, which grants commercial, residential real estate and installment loans. The results of operations of MCIC and NLT are reported as discontinued operations. USE OF ESTIMATES The preparation of financial statements in conformity with GAAP 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 amount of revenues and expenses during the reporting period. The most significant estimates are those used in determining deferred policy acquisition costs, investment allowances and the liabilities for future policyholder benefits. Actual results could differ from those estimates. RECLASSIFICATIONS Certain amounts in the prior years' financial statements have been reclassified to conform to the 2000 presentation. FINANCIAL INSTRUMENTS In the normal course of business, the Company enters into transactions involving various types of financial instruments, including cash and cash equivalents, investments such as fixed maturities, mortgage loans and equity securities, off balance sheet financial instruments, debt, loan commitments and financial guarantees. These instruments involve credit risk and also may be subject to risk of loss due to interest rate fluctuation. The Company evaluates and monitors each financial instrument individually and, when appropriate, obtains collateral or other security to minimize losses. Financial instruments are more fully described in Note 6. F-7 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): CASH AND CASH EQUIVALENTS Cash and cash equivalents primarily include cash, commercial paper, money market investments, and short-term bank participations. All such investments have maturities of three months or less and are considered cash equivalents for purposes of reporting cash flows. INVESTMENTS The Company accounts for its investments in accordance with Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities." At the time of purchase, fixed maturity securities are classified based on intent, as held-to-maturity, trading, or available-for-sale. In order for the security to be classified as held-to- maturity, the Company must have positive intent and ability to hold the securities to maturity. Securities held-to-maturity are stated at cost adjusted for amortization of premiums, and accretion of discounts. Securities that are bought and held principally for the purpose of selling them in the near term are classified as trading. Securities that do not meet this criterion are classified as available-for-sale. Available-for- sale securities are carried at aggregate fair value with changes in unrealized gains or losses reported net of policyholder related amounts and of deferred income taxes in a separate component of other comprehensive income. Trading securities are carried at aggregate fair value with changes in unrealized gains or losses reported as a component of net investment income. Fair values for publicly traded securities are obtained from external market quotations. For privately placed fixed maturities, fair values are estimated by taking into account prices for publicly traded securities of similar credit risk, maturities repayment and liquidity characteristics. All security transactions are recorded on a trade date basis. The Company's accounting policy for impairment requires recognition of an other than temporary impairment charge on a security if it is determined that the Company is unable to recover all amounts due under the contractual obligations of the security. In addition, for securities expected to be sold, an other than temporary impairment charge is recognized if the Company does not expect the fair value of a security to recover to cost or amortized cost prior to the expected date of sale. Once an impairment charge has been recorded, the Company then continues to review the other than temporarily impaired securities for additional impairment, if necessary. Mortgage loans are stated at unpaid principal balances, net of provisions for estimated losses. Mortgage loans acquired at a premium or discount are carried at amortized values net of provisions for estimated losses. Mortgage loans, which include primarily commercial first mortgages, are diversified by property type and geographic area throughout the United States. Mortgage loans are collateralized by the related properties and generally are no more than 75% of the properties' value at the time that the original loan is made. F-8 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): A loan is recognized as impaired when it is probable that the principal or interest is not collectible in accordance with the contractual terms of the loan. Measurement of impairment is based on the present value of expected future cash flows discounted at the loan's effective interest rate, or at the loan's observable market price. A specific valuation allowance is established if the fair value of the impaired loan is less than the recorded amount. Loans are also charged against the allowance when determined to be uncollectible. The allowance is based on a continuing review of the loan portfolio, past loss experience and current economic conditions, which may affect the borrower's ability to pay. While management believes that it uses the best information available to establish the allowance, future adjustments to the allowance may become necessary if economic conditions differ from the assumptions used in making the evaluation. Real estate investments are held for the production of income or held-for- sale. Real estate investments held for the production of income are carried at the lower of cost adjusted for accumulated depreciation or fair value. Depreciation of buildings and improvements is calculated using the straight-line method over the estimated useful life of the property, generally 40 to 50 years. Real estate investments held-for-sale are primarily acquired through foreclosure of mortgage loans. The cost of real estate that has been acquired through foreclosure is the estimated fair value less estimated costs to dispose at the time of foreclosure. Real estate investments are diversified by property type and geographic area throughout the United States. Policy loans are carried at the amount of outstanding principal balance not in excess of net cash surrender values of the related insurance policies. Other invested assets consist primarily of leveraged leases and tax credit partnerships. The Company uses derivative financial instruments including swaps and options as a means of hedging exposure to interest rate, currency and equity price risk. Investment income is recognized on an accrual basis. Realized gains and losses on the sales of investments are recognized in operations at the date of sale and are determined using the specific cost identification method. When an impairment of a specific investment or a group of investments is determined to be other than temporary, a realized investment loss is recorded. Changes in the provision for estimated losses on mortgage loans and real estate are included in net realized investment gains and losses. Interest income on loans is recorded on the accrual basis. Loans are placed in a non-accrual status when management believes that the borrower's financial condition, after giving consideration to economic and business conditions and collection efforts, is such that collection of principal and interest is doubtful. When a loan is placed in non-accrual status, all interest previously accrued is reversed against current period interest income. Interest accruals are resumed on such loans only when they are brought fully current with respect to principal and interest, have performed on a sustained basis for a reasonable period of time, and when, in the judgment of management, the loans are estimated to be fully collectible as to both principal and interest. F-9 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): DEFERRED POLICY ACQUISITION COSTS Acquisition costs consist of commissions, underwriting and other costs, which vary with and are primarily related to the production of new business. Acquisition costs related to investment-type contracts, primarily deferred annuity and guaranteed investment contracts, and universal and variable life products are deferred and amortized with interest in proportion to the present value of estimated gross profits to be realized over the estimated lives of the contracts. Estimated gross profits are composed of net investment income, net realized investment gains and losses, life and variable annuity fees, surrender charges and direct variable administrative expenses. This amortization is reviewed annually and adjusted retrospectively when the Company revises its estimate of current or future gross profits to be realized from this group of products, including realized and unrealized gains and losses from investments. Acquisition costs related to fixed annuities and other life insurance products are deferred and amortized; generally in proportion to the ratio of annual revenue to the estimated total revenues over the contract periods based upon the same assumptions used in estimating the liability for future policy benefits. Deferred acquisition costs for each life product are reviewed to determine if they are recoverable from future income, including investment income. If such costs are determined to be unrecoverable, they are expensed at the time of determination. Although realization of deferred policy acquisition costs is not assured, the Company believes it is more likely than not that all of these costs will be realized. The amount of deferred policy acquisition costs considered realizable, however, could be reduced in the near term if the estimates of gross profits or total revenues discussed above are reduced. The amount of amortization of deferred policy acquisition costs could be revised in the near term if any of the estimates discussed above are revised. OTHER ASSETS Property, equipment, leasehold improvements and capitalized software costs which are included in other assets are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are provided using the straight-line or accelerated method over the estimated useful lives of the related assets, which generally range from 3 to 30 years. Amortization of leasehold improvements is provided using the straight-line method over the lesser of the term of the leases or the estimated useful life of the improvements. Reinsurance receivables from reinsurance ceded are also included in other assets. F-10 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): POLICY LIABILITIES AND ACCRUALS Future policy benefits are liabilities for life, health and annuity products. Such liabilities are established in amounts adequate to meet the estimated future obligations of policies in force. Future policy benefits for individual life insurance and annuity policies are computed using interest rates ranging from 4.5% to 5.5% for life insurance and 6.0% to 11.3% for annuities. The liabilities associated with traditional life insurance, annuity and disability insurance products are computed using the net level premium method based on assumptions about future investment yields, mortality, morbidity and persistency. The assumptions used are based upon both the Company and its affiliates' experience and industry standards. Estimated liabilities are established for group life and health policies that contain experience-rating provisions. Contractholder deposit funds consist of policy values that accrue to the holders of universal life-type contracts and investment-related products such as deferred annuities and guaranteed investment contracts. The liabilities are determined using the retrospective deposit method and consist of net deposits and investment earnings less administrative charges. The liability is before the deduction of any applicable surrender charges. Other policy liabilities include liabilities for policy and contract claims. These amounts consist of the estimated amount payable for claims reported but not yet settled and an estimate of claims incurred but not reported. The amount reported is based upon historical experience, adjusted for trends and current circumstances. Management believes that the recorded liability is sufficient to provide for the associated claims adjustment expenses. Revisions of these estimates are included in operations in the year such refinements are made. REVENUE AND EXPENSES Premiums for traditional individual life and annuity products are considered revenue when due. Premiums related to group life and group disability insurance are recognized as revenue pro-rata over the contract period. The unexpired portion of these premiums is recorded as unearned premiums. Revenue from universal life-type products and investment-related products includes charges for cost of insurance (mortality), initiation and administration of the policy and surrender charges. Revenue is recognized when the charges are assessed except that any portion of an assessment that relates to services to be provided in future years is deferred and recognized over the period during which the services are provided. Benefits and expenses, other than deferred policy acquisition costs, related to traditional life, annuity, and disability contracts, including group policies, are recognized when incurred in a manner designed to match them with related premium revenue and spread income recognition over expected policy lives. For universal life-type and investment-type contracts, benefits include interest credited to policyholders' accounts and death benefits in excess of account values, which are recognized as incurred. F-11 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): INCOME TAXES The Company and its subsidiaries participate in a consolidated federal income tax return with Sun Life Assurance Company of Canada - U.S. Operations Holdings, Inc. and other affiliates. Deferred income taxes are generally recognized when assets and liabilities have different values for financial statement and tax reporting purposes, and for other temporary taxable and deductible differences as defined by Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes". These differences result primarily from policy reserves, policy acquisition expenses and unrealized gains or losses on investments, and are generally not chargeable with liabilities that arise from any other business of the Company. SEPARATE ACCOUNTS The Company has established separate accounts applicable to various classes of contracts providing for variable benefits. Separate account assets are subject to general account claims only to the extent the value of such assets exceeds the separate account liabilities. Contracts for which funds are invested in separate accounts include variable life insurance and individual and group qualified and non-qualified variable annuity contracts. Assets and liabilities of the separate accounts, representing net deposits and accumulated net investment earnings less fees, held primarily for the benefit of contractholders, are shown as separate captions in the financial statements. Assets held in the separate accounts are carried at market value and the investment risk of such securities is retained by the contractholder. NEW ACCOUNTING PRONOUNCEMENTS In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities", which establishes accounting and reporting standards for derivative instruments. SFAS No. 133 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities including fair value hedges and cash flow hedges. All derivatives, whether designated in hedging relationships or not, will be required to be recorded on the balance sheet at fair value. For a derivative that does not qualify as a hedge, changes in fair value will be recognized in earnings. In June 1999, the FASB issued SFAS No. 137, "Accounting for Derivative Instruments and Hedging Activities -- Deferral of the Effective Date of FASB Statement No. 133." SFAS No. 137 delays the effective date of SFAS No. 133 for all fiscal quarters until fiscal years beginning after June 15, 2000. In June 2000, the FASB issued SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities", which amended SFAS No. 133. SFAS No. 138 amended SFAS No. 133 so that for interest rate hedges, a company may designate as the hedged risk, the risk of changes only in a benchmark interest rate. Also, credit risk is newly defined as the company-specific spread over the benchmark interest rate and may be hedged separately from, or in combination with, the benchmark interest rate. F-12 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): Initial application of SFAS No. 133, as amended, for the Company will begin January 1, 2001. The Company estimates that at January 1, 2001, it will record $8,600,000 as a cumulative transition adjustment that will increase earnings relating to derivatives not designated as hedges prior to adoption of SFAS 133. On January 1, 1999, the Company adopted AICPA SOP 98-1, "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use." This SOP provides guidance for determining whether costs of software developed or obtained for internal use should be capitalized or expensed as incurred. In the past, the Company has expensed such costs as they were incurred. The adoption of SOP 98-1, resulted in an increase in pre-tax income of $6,232,000 for the year ended December 31, 1999. In July 2000, the Emerging Issues Task Force (EITF) reached consensus on Issue No. 99-20, "Recognition of Interest Income and Impairment on Certain Investments". This pronouncement requires investors in certain asset-backed securities to record changes in their estimated yield on a prospective basis and to evaluate these securities for an other-than-temporary decline in value. This consensus is effective for financial statements with fiscal quarters beginning after December 15, 2000. While the Company is currently in the process of quantifying the impact of EITF No. 99-20, the consensus provisions are not expected to have a material impact on the Company's financial condition or results of operations. In September 2000, the FASB issued SFAS 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities" which replaces SFAS No. 125, "Accounting for Transfers and Services of Financial Assets and Extinguishment of Liabilities". This standard revises the methods for accounting for securitizations and other transfers of financial assets and collateral as outlined in SFAS No. 125, and requires certain additional disclosures. For transfers and servicing of financial assets and Extinguishment of liabilities, this standard will be effective for the Company's June 30, 2001 unaudited financial statements. However, for disclosures regarding securitizations and collateral, as well as recognition and reclassification of collateral, this standard will be effective for the Company's December 31, 2000 financial statements. The Company is currently evaluating the financial statement impact of the adoption of this standard, however, it does not expect the adoption of this standard to have a material effect on its financial position or results of operations. F-13 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 2. SIGNIFICANT TRANSACTIONS WITH AFFILIATES Effective October 1, 1998, the Company terminated a reinsurance agreement with Sun Life Assurance Company of Canada resulting in a decrease in income from operations to the Company of approximately $64,000,000 in 1998. On February 11, 1999, two notes previously issued to the Company by Massachusetts Financial Services Company ("MFS"), an affiliate, were combined into a new note with a February 11, 2000 maturity date. The original notes were each issued for $110,000,000. One note was issued on February 11, 1998 at an interest rate of 6.0% and a due date of February 11, 1999. The other note was issued on December 22, 1998 at an interest rate of 5.55% and a due date of February 11, 1999. These two notes and an additional $10,000,000 were combined into a new note of $230,000,000 with a floating interest rate based on the six-month LIBOR rate plus 25 basis points. The $230,000,000 note was repaid to the Company on December 21,1999. On December 31, 1998, the Company had an additional $20,000,000 investment in notes issued by MFS, scheduled to mature in 2000. These notes were repaid to the Company on December 21, 1999. On January 14, 2000, the Company purchased $200,000,000 of notes from MFS. On November 1, 2000, MFS repaid $100,000,000 of these notes. On February 5, 1999, the Company sold MCIC to an unaffiliated company. The net proceeds of this sale were $33,965,000. The Company realized a loss of $25,465,000 net of a $14,482,000 tax benefit. On October 29, 1999, the Company sold NLT to an unaffiliated company for $30,254,000. The Company realized a gain of $13,170,000 after taxes of $10,186,000. On December 22, 1999, the Company acquired twenty-eight mortgages from Sun Life Assurance Company of Canada for a total cost of $118,092,000. On June 27, 2000, the Company sold Sun Life Information Services Ireland, Limited to Sun Life Assurance Company of Canada. The Company realized a pretax gain of $451,000 on the sale. On December 21, 2000, the Company's parent, Sun Life of Canada (U.S.) Holdings, Inc., transferred its ownership in all 200 shares issued and outstanding of Sun Life of Canada (U.S.) Holdings General Partner, Inc. to the Company in exchange for 537 shares of the Company's common stock totaling $537,000 plus $65,520,000 of additional paid in capital. As a result of the acquisition of Sun Life of Canada (U.S.) Holdings General Partner, Inc. on December 21, 2000, and its ownership interest in Sun Life of Canada (U.S.) Limited Partnership I, the Company became the owner of a $600,000,000 8.526% subordinated debenture due May 6, 2027 issued by the Company's parent, Sun Life of Canada (U.S.) Holdings, Inc. The Company also assumed the liability of the partnership capital securities issued to Sun Life of Canada (U.S.) Capital Trust I, a Delaware business Trust sponsored by the Company's parent. Partnership capital securities issued of $600,010,000 accrue interest at 8.526% and have no scheduled maturity date. These partnership capital securities, which represent the limited partner interest of Sun Life (U.S.) Limited Partnership I, may be redeemed on or after May 6, 2027. The Company is accounting for the acquisition of Sun Life of Canada (U.S.) General Partner, Inc. using the purchase method of accounting. The attached proforma statements of income for the years ended December 31, 2000 and 1999 illustrate the Company's results of operations as if the acquisition of Sun Life of Canada (U.S.) Holdings General Partner, Inc. took place at the beginning of the year, respectively. F-14
Proforma Proforma 2000 1999 --------------- -------------- Revenues Premiums and annuity considerations $ 44.8 $ 45.1 Net investment income 338.8 419.8 Net realized investment gains (losses) (19.9) 2.3 Fee and other income 297.9 217.5 --------------- -------------- Total revenues 661.6 684.7 --------------- -------------- Benefits and expenses Policyowner benefits 338.3 334.9 Other operating expenses 164.9 101.1 Amortization of deferred policy acquisition costs 123.8 67.8 --------------- -------------- Total benefits and expenses 627.0 503.8 --------------- -------------- Income (loss) from operations 34.6 180.9 Interest expense 94.5 94.5 --------------- -------------- Income (loss) before income tax expense and discontinued operations (59.9) 86.4 --------------- -------------- Income tax expense (benefit): Federal (61.7) 30.0 State (2.1) 0.4 --------------- -------------- Income tax expense (benefit) (63.8) 30.4 --------------- -------------- Net income from continuing operations 3.9 56.0 Net loss on disposal of subsidiaries, after tax - (12.3) Discontinued operations - 1.0 --------------- -------------- Net income $ 3.9 $ 44.7 =============== ==============
F-15 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 2. SIGNIFICANT TRANSACTIONS WITH AFFILIATES (CONTINUED) Dividends in the amounts of $10,000,000, $80,000,000, and $50,000,000, were declared and paid by the Company to its parent, Sun Life of Canada (U.S.) Holdings, Inc. during 2000, 1999, and 1998, respectively. The Company and its subsidiaries have management services agreements with Sun Life Assurance Company of Canada which provide that Sun Life Assurance Company of Canada will furnish, as requested, personnel as well as certain services and facilities on a cost-reimbursement basis. Expenses under these agreements amounted to approximately $31,857,416 in 2000, $30,745,000 in 1999, and $17,381,000 in 1998. As more fully described in Note 7, the Company has been involved in several reinsurance transactions with Sun Life Assurance Company of Canada. The Company has accrued $4,259,000 for unpaid interest on surplus notes at December 31, 2000 and 1999, respectively. The Company expensed $43,266,000, $43,266,000, and $44,903,000 for interest on surplus notes and notes payable for the years ended December 31, 2000, 1999 and 1998, respectively. On December 21, 2000, the Company's parent, Sun Life of Canada (U.S.) Holdings, Inc., transferred its $350,000,000 Sun Life Assurance Company of Canada subordinated note to Sun Canada Financial Co., an affiliate, in the form of additional capitalization. On the same day, Sun Canada Financial Co. transferred its ownership in the Company's surplus notes totaling $315,000,000 to Sun Life of Canada (U.S.) Holdings, Inc. in the form of a dividend. As a result, the Company had $565,000,000 of surplus notes issued to its parent, Sun Life of Canada (U.S.) Holdings Inc., as of December 31, 2000. The following table lists the details of the surplus notes outstanding (in 000's):
MATURITY PRINCIPAL RATE ---------------------------------- Sun Life of Canada (U.S.) Holdings, Inc. 12/15/07 $150,000 6.625% Sun Life of Canada (U.S.) Holdings, Inc. 12/15/15 150,000 7.250% Sun Life of Canada (U.S.) Holdings, Inc. 12/15/15 7,500 6.125% Sun Life of Canada (U.S.) Holdings, Inc. 12/15/07 7,500 5.750% Sun Life of Canada (U.S.) Holdings, Inc. 11/06/27 250,000 8.625% ------------ Total $565,000 ============
F-16 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 3. INVESTMENTS FIXED MATURITIES The amortized cost and fair value of fixed maturities were as follows (in 000's):
DECEMBER 31, 2000 GROSS GROSS ESTIMATED AMORTIZED UNREALIZED UNREALIZED FAIR COST GAINS LOSSES VALUE -------------------------------------------------------- Available-for-sale fixed maturities: United States treasury securities, U.S. Government and agency securities $ 183,733 $ 8,286 $ (68) $ 191,951 States, provinces and political subdivisions 22,515 653 - 23,168 Mortgage-backed securities 123,113 2,132 (317) 124,928 Public utilities 286,744 12,805 (5,914) 293,635 Transportation 245,675 13,406 (3,821) 255,260 Finance 299,440 8,141 (5,761) 301,820 Corporate 1,293,302 52,597 (35,271) 1,310,628 ------------------------------------------------------------ Total available-for-sale fixed maturities $ 2,454,522 $ 98,020 $ (51,152) $ 2,501,390 ============================================================ Trading fixed maturities: United States treasury securities, U.S. Government and agency securities $ 500 $ 1 $ - $ 501 Mortgage-backed securities 18,281 556 (156) 18,681 Public utilities 30,918 1,293 (243) 31,968 Transportation 97,900 3,218 (266) 100,852 Finance 159,250 5,470 (348) 164,372 Corporate 328,662 9,116 (5,975) 331,803 ------------------------------------------------------------ Total trading fixed securities $ 635,511 $ 19,654 $ (6,988) $ 648,177 ============================================================ Held-to-maturity fixed maturities: Sun Life of Canada (U.S.) Holdings, Inc., 8.526% subordinated debt, due 2027 $ 600,000 $ - $ (53,888) $ 546,112 ------------------------------------------------------------ Total held-to-maturity fixed maturities $ 600,000 $ - $ (53,888) $ 546,112 ============================================================ DECEMBER 31, 1999 GROSS GROSS ESTIMATED AMORTIZED UNREALIZED UNREALIZED FAIR COST GAINS LOSSES VALUE --------------------------------------------------------- Available-for-sale fixed maturities: United States treasury securities, U.S. Government and agency securities $ 107,272 $ 2,104 $ (3,191) $ 106,185 States, provinces and political subdivisions 32,593 15 (161) 32,447 Mortgage-backed securities 98,903 1,225 (541) 99,587 Public utilities 360,672 7,954 (9,780) 358,846 Transportation 327,544 8,585 (4,258) 331,871 Finance 281,303 4,632 (6,935) 279,000 Corporate 1,477,105 22,851 (30,556) 1,469,400 ------------------------------------------------------------ Total available-for-sale fixed maturities $ 2,685,392 $ 47,366 $ (55,422) $ 2,677,336 ============================================================ Trading fixed maturities: United States treasury securities, U.S. Government and agency securities $ 1,000 $ 2 $ - $ 1,002 ------------------------------------------------------------ Total trading fixed securities $ 1,000 $ 2 $ - $ 1,002 ============================================================
F-17 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 3. INVESTMENTS (CONTINUED) The amortized cost and estimated fair value by maturity periods for fixed maturity investments are shown below (in 000's). Actual maturities may differ from contractual maturities on mortgage-backed securities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties, or the Company may have the right to put or sell the obligations back to the issuers.
DECEMBER 31, 2000 AMORTIZED ESTIMATED COST FAIR VALUE ------------------------------------- Maturities of available-for-sale fixed securities: Due in one year or less $ 190,837 $ 187,267 Due after one year through five years 949,281 959,260 Due after five years through ten years 537,068 563,360 Due after ten years 777,336 791,503 ------------------------------------- $ 2,454,522 $ 2,501,390 ===================================== Maturities of trading fixed securities: Due in one year or less $ 500 $ 501 Due after one year through five years 186,541 190,300 Due after five years through ten years 266,573 270,476 Due after ten years 181,897 186,900 ------------------------------------- $ 635,511 $ 648,177 ===================================== Maturities of held-to-maturity securities: Due after ten years $ 600,000 $ 546,112 =====================================
Gross gains of $9,056,000, $12,496,000 and $25,752,000 and gross losses of $24,018,000, $7,646,000, and $1,439,000 were realized on the voluntary sale of fixed maturities for the years ended December 31, 2000, 1999, and 1998, respectively. Fixed maturities with an amortized cost of approximately $2,991,000 and $3,009,000 at December 31, 2000 and 1999 respectively, were on deposit with Federal and State governmental authorities as required by law. No fixed maturities have been pledged to collateralize various liabilities at December 31, 2000 and 1999, respectively. F-18 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 3. INVESTMENTS (CONTINUED) As of December 31, 2000 and 1999, 98% and 94%, respectively, of the Company's fixed maturities were investment grade. Investment grade securities are those that are rated "BBB" or better by nationally recognized rating agencies. During 2000, the Company incurred realized losses totalling $14,956,000 for other than temporary impairment of value of some of its fixed maturities after determining that not all of the year 2000 unrealized losses are temporary in nature. Also in 2000, the Company stopped accruing income on its holdings of an issuer that declared bankruptcy. $243,000 of interest income on these holdings was not accrued. All of the Company's securities were income producing for the years ended December 31, 1999 and 1998. MORTGAGE LOANS AND REAL ESTATE The Company invests in commercial first mortgage loans and real estate throughout the United States. Investments are diversified by property type and geographic area. Mortgage loans are collateralized by the related properties and generally are no more than 75% of the properties' value at the time that the original loan is made. Real estate investments classified as held-for-sale have been obtained primarily through foreclosure. The carrying value of mortgage loans and real estate investments net of applicable reserves and accumulated depreciation on real estate were as follows (in 000's):
DECEMBER 31, 2000 1999 --------------------------------------- Total mortgage loans $ 846,439 $ 931,351 ======================================= Real estate: Held-for-sale 7,483 7,804 Held for production of income 70,239 87,290 --------------------------------------- Total real estate $ 77,722 $ 95,094 =======================================
Accumulated depreciation on real estate was $14,879,000 and $18,529,000 at December 31, 2000 and 1999, respectively. F-19 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 3. INVESTMENTS (CONTINUED): The Company monitors the condition of the mortgage loans in its portfolio. In those cases where mortgages have been restructured, mortgage loans' values are impaired or mortgage loans' values are impaired but they are performing, appropriate allowances for losses have been made. The Company has restructured mortgage loans, impaired mortgage loans and impaired but performing mortgage loans totaling $18,165,000 and $33,577,000 at December 31, 2000 and 1999, respectively, against which there are allowances for losses of $4,675,000 and $7,750,000, respectively. During 2000, non-cash investing activities included real estate acquired through foreclosure of mortgage loans, which had a fair value of $1,500,000. The investment valuation allowances, which have been deducted in arriving at investment carrying values as presented in the consolidated balance sheets, were as follows (in 000's):
BALANCE AT BALANCE AT JANUARY 1, ADDITIONS SUBTRACTIONS DECEMBER 31, --------------------------------------------------------------- 2000 Mortgage loans $ 7,750 $ 3,837 $ (6,912) $ 4,675 Real estate 1,723 - (1,723) - 1999 Mortgage loans $ 6,600 $ 4,045 $ (2,895) $ 7,750 Real estate 1,250 1,379 (906) 1,723
Mortgage loans and real estate investments comprise the following property types and geographic regions (in 000's):
DECEMBER 31, 2000 1999 ------------------------------- Property Type: Office building $ 328,976 $ 357,466 Residential 47,805 58,546 Retail 379,326 433,970 Industrial/warehouse 153,580 156,204 Other 19,149 29,732 Valuation allowances (4,675) (9,473) ------------------------------- Total $ 924,161 $ 1,026,445 ===============================
F-20 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 3. INVESTMENTS (CONTINUED):
DECEMBER 31, 2000 1999 ------------------------------- Geographic region: Arizona $ 19,809 $ 16,155 California 87,607 117,355 Colorado 8,636 13,019 Connecticut 38,401 25,229 Delaware 15,131 15,919 Florida 36,179 43,718 Georgia 46,895 52,178 Indiana 13,496 19,174 Kentucky 14,941 12,225 Maryland 20,849 10,826 Massachusetts 98,377 99,661 Michigan 45,948 69,545 Nevada 5,308 5,532 New Jersey 16,653 18,806 New York 69,529 65,107 North Carolina 11,009 10,111 Ohio 35,966 43,947 Pennsylvania 132,615 159,328 Tennessee 12,889 13,385 Texas 22,380 17,924 Utah 11,171 11,583 Virginia 20,911 21,731 Washington 60,560 68,657 All other 83,576 104,803 Valuation allowances (4,675) (9,473) ------------------------------- Total $ 924,161 $ 1,026,445 ===============================
F-21 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 3. INVESTMENTS (CONTINUED): At December 31, 2000, scheduled mortgage loan maturities were as follows (000's): 2001 $ 81,373 2002 53,711 2003 31,245 2004 50,392 2005 89,651 Thereafter 540,067 ------------------- Total $ 846,439 ===================
Actual maturities could differ from contractual maturities because borrowers may have the right to prepay obligations with or without prepayment penalties and loans may be refinanced. The Company has made commitments of mortgage loans on real estate and other loans into the future. The outstanding commitments for these mortgages amount to $45,119,000 and $15,911,000 at December 31, 2000 and 1999, respectively. During 2000, the Company sold commercial mortgage loans in a securitization transaction. In the transaction, the Company retained servicing responsibilities, a Class B and a Class I interest only certificate. The Class B certificate is a subordinated interest. The Company receives annual servicing fees, before expenses, of 0.1 percent of the outstanding balance and rights to future cash flows arising after the investors in the securitization trust have received the return for which they contracted. The investors in the securitization trust have no recourse to the Company's other assets for failure of debtors to pay when due. The value of the Company's retained interest is subject to credit, and interest rate risk on the transferred financial assets. The Company recognized a pretax gain of $763,000 on the securitization transaction. Key economic assumptions used in measuring the retained interests at the date of securitization resulting from securitizations completed during the year were as follows:
CLASS B CLASS I Prepayment speed 0 0 Weighted average life in years 7.25 4.54 Expected credit losses 0 0 Residual cash flows discount rate 7.798 8.844 Treasury rate interpolated for average life 4.97 4.96 Spread over treasuries 2.83% 3.88% Duration in years 5.201 3.611
F-22 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 3. INVESTMENTS (CONTINUED): Key economic assumptions and the sensitivity of the current fair value of cash flows in those assumptions are as follows (in 000's):
COMMERCIAL MORTGAGES CLASS B CLASS I ---------- ---------- Carrying amount of retained interests $ 2,737 $ 1,634 Fair value of retained interests 2,875 1,716 Weighted average life in years 7.254 4.543 EXPECTED CREDIT LOSSES Impact on fair value of .025% of adverse change 4 36 Impact on fair value of .05% of adverse change 8 73 RESIDUAL CASH FLOWS DISCOUNT RATE Impact on fair value of .5% of adverse change 75 31 Impact on fair value of 1% of adverse change 150 62
The total principal amount of the commercial mortgage loans was $32,035,000 at December 31, 2000, none of which were 60 days or more past due. There were no net credit losses incurred relating to the commercial mortgage loans at the date of the securitization and at December 31, 2000. SECURITIES LENDING The Company has a securities lending program operated on its behalf by the Company's primary custodian, Chase Manhattan of New York. The custodian has indemnified the Company against losses arising from this program. There were no securities out on loan at December 31, 2000 and 1999, respectively. The Company requires collateral at 102% of the value of securities loaned. As of December 31, 2000 and 1999, the Company had received no collateral for securities on loan. The income resulting from this program was $48,000, $37,000 and $135,000 for the years ended December 31, 2000, 1999 and 1998, respectively. LEVERAGED LEASES The Company is a lessor in a leverage lease agreement entered into on October 21, 1994, under which equipment having an estimated economic life of 25-40 years was leased for a term of 9.78 years. The Company's equity investment represented 22.9% of the purchase price of the equipment. The balance of the purchase price was furnished by third-party long-term debt financing, collateralized by the equipment and non-recourse to the Company. At the end of the lease term, the master Lessee may exercise a fixed price purchase option to purchase the equipment. The Company's net investment in leveraged leases is composed of the following elements (in 000's): F-23 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 3. INVESTMENTS (CONTINUED):
YEAR ENDED DECEMBER 31, 2000 1999 --------------- --------------- Lease contracts receivable $ 57,623 $ 69,766 Less: non-recourse debt (57,607) (69,749) --------------- --------------- Net Receivable 16 17 Estimated residual value of leased assets 41,150 41,150 Less: unearned and deferred income (6,718) (7,808) --------------- --------------- Investment in leverage lease 34,448 33,359 Less: fees (88) (113) --------------- --------------- Net investment in leverage leases $ 34,360 $ 33,246 =============== ===============
DERIVATIVES The Company uses derivative financial instruments for risk management purposes to hedge against specific interest rate risk, to alter investment rate exposures arising from mismatches between assets and liabilities, and to minimize the Company's exposure to fluctuations in interest rates, foreign currency exchange rates and general market conditions. The derivative financial instruments used by the Company include swaps and options. The Company does not hold or issue any derivative instruments for trading purposes. SWAPS Swap agreements are contracts with other parties to exchange at specified intervals, the difference between fixed and floating rate interest amounts based upon a notional principal amount. No cash is exchanged at the outset of the contract and no principal payments are made by either party. A single net payment is usually made by one counter-party at each interest payment date. The Company enters into interest rate swap agreements to hedge against exposure to interest rate fluctuations. Because the underlying principal is not exchanged, the Company's maximum exposure to counterparty credit risk is the difference in payments exchanged. The net payable/receivable is recognized over the life of the swap contract as an adjustment to net investment income. In 2000, the Company launched a new guaranteed investment contract program. The purpose of the program was to increase market place and interest for these products. Each deal is highly individualized but typically involves the issuance of foreign currency denominated contracts backed by cross currency swaps or equity linked cross currency swaps. The combination of these swaps with interest rate swaps allows the Company to lock in U.S. dollar fixed rate payments for the life of the note. The net increase (decrease) in net investment income related to interest rate swaps was $166,000, ($2,513,000) and ($1,686,000) for the years ended December 31, 2000, 1999 and 1998, respectively. The Company did not employ hedge accounting treatment in 2000, 1999 and 1998. As a result, the unrealized gains and losses were realized immediately in those years and the deferred balances as of the year ended December 31, 1997 were realized during 1998. F-24 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 3. INVESTMENTS (CONTINUED): The Company recognized gross realized gains on swaps of $3,924,000, $4,735,000, and $6,568,000 in 2000, 1999, and 1998, respectively, as well as gross realized losses of $1,156,000, $1,789,000, and $20,538,000 during 2000, 1999, and 1998, respectively. The Company's primary risks associated with these transactions are exposure to potential credit loss in the event of non-performance by counter-parties and market risk. The Company regularly assesses the strength of the counter-parties and generally enters into transactions with counter-parties rated "A" or better by nationally recognized ratings agencies. Management believes that the risk of incurring losses related to credit risk is remote. As of December 31, 2000 and 1999, the Company's derivatives had no significant concentration of credit risk. The Company does not require collateral or other security to support derivative financial instruments with credit risk. OPTIONS Options are legal contracts that give the contractholder the right to buy or sell a specific amount of the underlying interest at a strike price upon exercise of the option. Cash is exchanged to purchase the option and through the exercise date, the holder can elect to exercise the option or allow it to expire. The Company also utilizes options to hedge against stock market exposure inherent in the mortality and expense risk charges and guaranteed minimum death benefit features of the Company's variable annuities. The Company's underlying notional or principal amounts associated with open derivatives positions were as follows (in 000's):
OUTSTANDING AT DECEMBER 31, 2000 --------------------------------- NOTIONAL PRINCIPAL UNREALIZED GAIN AMOUNTS (LOSS) Interest rate swaps $1,308,496 $ (40,432) Currency swaps 370,554 1,839 Equity swaps 162,576 (16,883) --------------------------------- Total $1,841,626 $ (55,476) ================================= OUTSTANDING AT DECEMBER 31, 1999 --------------------------------- NOTIONAL PRINCIPAL UNREALIZED GAIN AMOUNTS (LOSS) Interest rate swaps $ 368,000 $ 9,522 Currency swaps 1,700 295 --------------------------------- Total $ 369,700 $ 9,817 =================================
At December 31, 2000, the unrealized gains (losses) on derivatives are included with other liabilities on the financial statements. The unrealized gains (losses) on derivatives are included with other assets at December 31, 1999. F-25 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 4. NET REALIZED INVESTMENT GAINS AND LOSSES Net realized investment gains (losses) consisted of the following (in 000's):
2000 1999 1998 --------------------------------------------- Fixed maturities $ (14,962) $ 4,846 $ 24,268 Mortgage and other loans 2,057 1,981 36 Real estate 5,211 (742) 499 Derivative instruments 2,768 2,945 (13,970) Short term investments (22) 4 24 Write-down of fixed maturities (14,956) (6,689) (2,481) --------------------------------------------- Total $ (19,904) $ 2,345 $ 8,376 =============================================
5. NET INVESTMENT INCOME Net investment income consisted of the following (in 000's):
2000 1999 1998 --------------------------------------------- Fixed maturities $ 265,608 $ 254,390 $ 295,167 Equity securities - (33) 37 Mortgage and other loans 77,807 90,638 103,804 Real estate 8,868 6,829 7,844 Policy loans 3,047 3,172 2,934 Derivatives (66,773) 17,671 (11,880) Income on funds withheld under reinsurance - - 67,045 Other 4,664 (1,416) (817) --------------------------------------------- Gross investment income 293,221 371,251 464,134 Less: Investment expenses 5,510 6,273 8,277 --------------------------------------------- Net investment income $ 287,711 $ 364,978 $ 455,857 =============================================
F-26 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 6. FAIR VALUE OF FINANCIAL INSTRUMENTS SFAS 107 "Disclosure about Fair Value of Financial Instruments" excludes certain insurance liabilities and other non-financial instruments from its disclosure requirements. The fair value amounts presented herein do not include the expected interest margin (interest earnings over interest credited) to be earned in the future on investment-type products or other intangible items. Accordingly, the aggregate fair value amounts presented herein do not necessarily represent the underlying value of the Company; likewise, care should be exercised in deriving conclusions about the Company's business or financial condition based on the fair value information presented herein. The following table presents the carrying amounts and estimated fair values of the Company's financial instruments at December 31, 2000 and 1999 (in 000's):
DECEMBER 31, 2000 DECEMBER 31, 1999 CARRYING ESTIMATED CARRYING ESTIMATED AMOUNT FAIR VALUE AMOUNT FAIR VALUE ------------------------------------------------------------------------ Financial assets: Cash and cash equivalents $ 390,049 $ 390,049 $ 550,265 $ 550,265 Fixed maturities 3,749,567 3,695,679 2,678,340 2,678,340 Short-term investments 112,077 112,077 177,213 177,213 Mortgages 846,439 886,384 931,351 933,725 Derivatives (55,476) (55,476) 9,817 9,817 Policy loans 41,459 41,459 40,660 40,660 Other invested assets 74,551 74,551 67,938 67,938 Financial liabilities: Guaranteed investment contracts $ 1,002,865 $ 998,544 $ 677,265 $ 665,830 Contractholder deposit funds 2,129,758 2,090,197 2,279,413 2,213,896 Fixed annuity contracts 102,637 98,337 112,794 105,845 Interest sensitive life insurance 114,198 116,900 116,999 119,659 Long-term debt 565,000 510,962 565,000 529,212 Partnership capital securities 607,826 553,938 - -
F-27 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 6. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED): The fair values of cash and cash equivalents are estimated to be cost plus accrued interest which approximates fair value. The fair values of short-term bonds are estimated to be the amortized cost. The fair values of publicly traded fixed maturities are based upon market prices or dealer quotes. For privately placed fixed maturities, fair values are estimated by taking into account prices for publicly traded securities of similar credit risk, maturity, repayment and liquidity characteristics. The fair values of mortgage and other loans are estimated by discounting future cash flows using current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Policy loans are stated at unpaid principal balances, which approximate fair value. The fair values of the Company's general account insurance reserves and contractholder deposits under investment-type contracts (insurance, annuity and pension contracts that do not involve mortality or morbidity risks) are estimated using discounted cash flow analyses or surrender values based on interest rates currently being offered for similar contracts with maturities consistent with those remaining for all contracts being valued. Those contracts that are deemed to have short-term guarantees have a carrying amount equal to the estimated market value. The fair values of other deposits with future maturity dates are estimated using discounted cash flows. The fair value of notes payable and other borrowings are estimated using discounted cash flow analyses based upon the Company's current incremental borrowing rates for similar types of borrowings. The carrying amount of all other assets is assumed to approximate fair value. 7. REINSURANCE INDIVIDUAL INSURANCE The Company had several agreements with Sun Life Assurance Company of Canada, which provided that Sun Life Assurance Company of Canada would reinsure the mortality risk and certain ancillary benefits under various individual life insurance contracts sold by the Company. Under these agreements, basic death benefits and supplementary benefits were reinsured on a yearly renewable term basis and coinsurance basis, respectively. The effective dates of these agreements were June 1, 1982, November 1, 1986, and January 1, 1987. These agreements were terminated on December 31, 2000. Effective January 1, 1991, the Company entered into an agreement with Sun Life Assurance Company of Canada under which certain individual life insurance contracts issued by Sun Life Assurance Company of Canada were reinsured by the Company on a 90% coinsurance basis. Also effective January 1, 1991, the Company entered into an agreement with Sun Life Assurance Company of Canada which provides that Sun Life Assurance Company of Canada will reinsure the mortality risks in excess of $500,000 per policy for the individual life insurance contracts assumed by the Company in the reinsurance agreement described above. Such death benefits are reinsured on a yearly renewable term basis. These two agreements were terminated effective October 1, 1998. F-28 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 7. REINSURANCE (CONTINUED): The Company had an agreement with an unrelated company which provided reinsurance of a small block of individual life insurance contracts on a modified coinsurance basis. This agreement was terminated on December 31, 2000. The Company has agreements with Sun Life Assurance Company of Canada and with other unrelated companies which provide for reinsurance of certain mortality risks associated with the individual and corporate owned life insurance (COLI) contracts. These amounts are reinsured on a yearly renewable term basis. GROUP INSURANCE The Company has an agreement with Sun Life Assurance Company of Canada whereby Sun Life Assurance Company of Canada reinsures the mortality risks of the group life insurance contracts. Under this agreement, certain death benefits are reinsured on a yearly renewable term basis. The Company has an agreement with an unrelated company whereby the unrelated company reinsures the morbidity risks of the group long-term disability contracts. Under this agreement, certain long-term disability benefits are reinsured on a yearly renewable term basis. The effects of reinsurance were as follows (in 000's):
FOR THE YEARS ENDED DECEMBER 31, 2000 1999 1998 ---------------------------------------------------- Insurance premiums: Direct $ 51,058 $ 54,662 $ 58,940 Assumed - - 159,787 Ceded 6,255 9,595 15,414 ---------------------------------------------------- Net premiums $ 44,803 $ 45,067 $ 203,313 ==================================================== Insurance and other individual policy benefits and claims: Direct $ 346,411 $ 342,284 $ 352,968 Assumed - - 248,664 Ceded 8,077 7,433 13,523 ---------------------------------------------------- Net policy benefits and claims $ 338,334 $ 334,851 $ 588,109 ====================================================
The Company is contingently liable for the portion of the policies reinsured under each of its existing reinsurance agreements in the event the reinsurance companies are unable to pay their portion of any reinsured claim. Management believes that any liability from this contingency is unlikely. However, to limit the possibility of such losses, the Company evaluates the financial condition of its reinsurers and monitors concentration of credit risk. F-29 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 8. RETIREMENT PLANS: PENSION PLAN The Company and its subsidiaries participate with Sun Life Assurance Company of Canada in a non-contributory defined benefit pension plan covering essentially all employees. Benefits under all plans are based on years of service and employees' average compensation. The Company's funding policies for the pension plans are to contribute amounts which at least satisfy the minimum amount required by the Employee Retirement Income Security Act of 1974 ("ERISA"); currently the plans are fully funded. Most pension plan assets consist of separate accounts of Sun Life Assurance Company of Canada or other insurance company contracts. The following table sets forth the change in the pension plan's projected benefit obligations and assets, as well as the plan's funded status at December 31, 2000, 1999, and 1998 (in 000's):
YEAR ENDED DECEMBER 31, ---------------------------------------------------------- 2000 1999 1998 ---------------------------------------------------------- CHANGE IN PROJECTED BENEFIT OBLIGATION: Projected benefit obligation at beginning of $ 99,520 $ 110,792 $ 79,684 year Service cost 5,242 5,632 4,506 Interest cost 7,399 6,952 6,452 Actuarial loss (gain) 579 (21,480) 21,975 Benefits paid (3,065) (2,376) (1,825) ---------------------------------------------------------- Projected benefit obligation at end of year $ 109,675 $ 99,520 $ 110,792 ========================================================== CHANGE IN FAIR VALUE OF PLAN ASSETS: Fair value of plan assets at beginning of year $ 158,271 $ 151,575 $ 136,610 Actual return on plan assets 8,218 9,072 16,790 Benefits paid (3,285) (2,376) (1,825) ---------------------------------------------------------- Fair value of plan assets at end of year $ 163,204 $ 158,271 $ 151,575 ========================================================== Funded status $ 53,529 $ 58,752 $ 40,783 Unrecognized net actuarial loss (12,620) (20,071) (2,113) Unrecognized transition obligation (20,561) (22,617) (24,674) Unrecognized prior service cost 6,501 7,081 7,661 ---------------------------------------------------------- Prepaid benefit cost $ 26,849 $ 23,145 $ 21,657 ==========================================================
F-30 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 8. RETIREMENT PLANS (CONTINUED): The following table sets forth the components of the net periodic pension cost for the years ended December 31, 2000, 1999, and 1998 (in 000's).
YEAR ENDED DECEMBER 31, 2000 1999 1998 ----------------------------------------------------- COMPONENTS OF NET PERIODIC BENEFIT COST: Service cost $ 5,242 $ 5,632 $ 4,506 Interest cost 7,399 6,952 6,452 Expected return on plan assets (13,723) (12,041) (10,172) Amortization of transition obligation asset (2,056) (2,056) (2,056) Amortization of prior service cost 580 580 580 Recognized net actuarial gain (1,146) (554) (677) ----------------------------------------------------- Net periodic benefit cost $ (3,704) $ (1,487) $ (1,367) ===================================================== The Company's share of net periodic benefit cost $ 805 $ 736 $ 586 =====================================================
The projected benefit obligations were based on calculations that utilize certain assumptions. The assumed weighted average discount rate was 7.5% for the years ended December 31, 2000 and 1999. The expected return on plan assets for 2000 and 1999 was 8.75% and the assumed rate of compensation increase for both 2000 and 1999 was 4.50%. The Company and certain subsidiaries also participate with Sun Life Assurance Company of Canada and certain affiliates in a 401(k) savings plan for which substantially all employees are eligible. Under the various plans the Company matches, up to specified amounts, employees' contributions to the plan. The Company's contributions were $354,000, $284,000, and $231,000 for the years ended December 31, 2000, 1999, and 1998, respectively. OTHER POST-RETIREMENT BENEFIT PLANS In addition to pension benefits, the Company and certain subsidiaries provide certain health, dental, and life insurance benefits ("postretirement benefits") for retired employees and dependents. Substantially all employees of the participating companies may become eligible for these benefits if they reach normal retirement age while working for the Company, or retire early upon satisfying an alternate age plus service condition. Life insurance benefits are generally set at a fixed amount. The following table sets forth the change in other postretirement benefit plans' obligations and assets, as well as the plans' funded status at December 31, 2000 and 1999 (in 000's). F-31 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 8. RETIREMENT PLANS (CONTINUED):
YEAR ENDED DECEMBER 31, 2000 1999 1998 ----------------------------------------------------- CHANGE IN BENEFIT OBLIGATION: Benefit obligation at beginning of year $ 12,217 $ 10,419 $ 9,845 Service cost 529 413 240 Interest cost 1,139 845 673 Actuarial loss 3,665 1,048 308 Benefits paid (465) (508) (647) ----------------------------------------------------- Benefit obligation at end of year $ 17,085 $ 12,217 $ 10,419 ===================================================== CHANGE IN FAIR VALUE OF PLAN ASSETS: Fair value of plan assets at beginning of year $ - $ - $ - Employer contributions 465 508 647 Benefits paid (465) (508) (647) ----------------------------------------------------- Fair value of plan assets at end of year $ - $ - $ - ===================================================== Funded Status $ (17,085) $ (12,217) $ (10,419) Unrecognized net actuarial loss 4,914 1,469 586 Unrecognized transition obligation 95 140 185 ----------------------------------------------------- Prepaid (accrued) benefit cost $ (12,076) $ (10,608) $ (9,648) =====================================================
F-32 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 8. RETIREMENT PLANS (CONTINUED): The following table sets forth the components of the net periodic postretirement benefit costs for the years ended December 31, 2000, 1999, and 1998 (in 000's).
2000 1999 1998 ---------------------------------------------------------- COMPONENTS OF NET PERIODIC BENEFIT COST Service cost $ 529 $ 413 $ 240 Interest cost 1,139 845 673 Amortization of transition obligation(asset) 45 45 45 Recognized net actuarial loss (gain) 219 164 (20) ---------------------------------------------------------- Net periodic benefit cost $ 1,932 $ 1,467 $ 938 ========================================================== The Company's share of net periodic benefit cost $ 219 $ 185 $ 95 ==========================================================
In order to measure the postretirement benefit obligation at December 31, 2000 the Company assumed a 10.9% annual rate of increase in the per capita cost of covered health care benefits (5.5% for dental benefits). These rates were assumed to decrease gradually to 5.0% for 2006 and remain at that level thereafter. Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. For example, increasing the health care cost trend rate assumptions by one percentage point in each year would increase the accumulated postretirement benefit obligation at December 31, 2000 by $3.4 million, and the aggregate of the service and interest cost components of net periodic postretirement benefit expense for 2000 by $405 thousand. Conversely, decreasing assumed rates by one percentage point in each year would decrease the accumulated postretirement benefit obligation at December 31, 2000 by $2.8 million, and the aggregate of the service and interest cost components of net periodic postretirement benefit expense for 2000 by $320 thousand. The assumed weighted average discount rate used in determining the postretirement benefit obligation for both 2000 and 1999 was 7.50%. F-33 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 9. FEDERAL INCOME TAXES The Company and its subsidiaries file a consolidated federal income tax return with Sun Life Assurance Company of Canada - U.S. Operations Holdings, Inc. as previously described in Note 1. Federal income taxes are calculated as if the Company was filing a separate federal income tax return. A summary of the components of federal income tax expense (benefit) in the consolidated statements of income for the years ended December 31, 2000, 1999 and 1998 was as follows (in 000's):
2000 1999 1998 ----------- ------------- ------------- Federal income tax expense (benefit): Current $ (8,536) $ 18,570 $ 19,476 Deferred (53,145) 10,210 (8,551) ---------- ------------ ------------ Total $ (61,681) $ 28,780 $ 10,925 ========== ============ ============
Federal income taxes attributable to the consolidated operations are different from the amounts determined by multiplying income before federal income taxes by the expected federal income tax rate of 35%. The Company's effective rate differs from the federal income tax rate as follows:
2000 1999 1998 ----------- ------------- ------------- Expected federal income tax expense $ (21,455) $ 28,969 $ 9,405 Low income housing credit (5,805) (6,348) (4,446) Additional tax provision (35,897) 6,851 5,423 Other 1,476 (692) 543 ---------- ------------ ------------ Federal income tax expense $ (61,681) $ 28,780 $ 10,925 ========== ============ ============
The deferred income tax (asset) liability represents the tax effects of temporary differences between the carrying amounts of assets and liabilities used for financial reporting purposes and the amounts used for income tax purposes. The components of the Company's deferred tax (assets) and liabilities as of December 31, 2000 and 1999 were as follows (in 000's):
2000 1999 ----------------- ----------------- Deferred tax assets: Actuarial liabilities $ 177,709 $ 136,560 Other 845 943 ----------------- ----------------- Total deferred tax assets $ 178,554 $ 137,503 Deferred tax liabilities: Deferred policy acquisition costs (189,447) (193,238) Investments, net (30,513) (21,940) ----------------- ----------------- Total deferred tax liabilities $ (219,960) $ (215,178) ----------------- ----------------- Net deferred tax liabilities $ (41,406) $ (77,675) ================= =================
F-34 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 9. FEDERAL INCOME TAXES (CONTINUED) The Company makes payments under the tax sharing agreements as if it were filing as a separate company. The Company's federal income tax returns are routinely audited by the Internal Revenue Service ("IRS"), and provisions are made in the consolidated financial statements in anticipation of the results of these audits. The Company is currently under audit by the IRS for the years 1994 and 1995. In the Company's opinion, adequate tax liabilities have been established for all years and any adjustments that might be required for the years under audit will not have a material effect on the Company's financial statements. However, the amounts of these tax liabilities could be revised in the future if estimates of the Company's ultimate liability are revised. 10. LIABILITY FOR UNPAID CLAIMS AND CLAIMS ADJUSTMENT EXPENSES Activity in the liability for unpaid claims and claims adjustment expenses related to the group life and group disability products is summarized below (in 000's):
2000 1999 --------------------------------------- Balance at January 1 $ 17,755 $ 15,002 Less reinsurance recoverables (4,036) (3,232) --------------------------------------- Net balance at January 1 13,719 11,770 --------------------------------------- Incurred related to: Current year 10,670 12,187 Prior years (14) (1,487) --------------------------------------- Total incurred 10,656 10,700 --------------------------------------- Paid losses related to: Current year (5,473) (6,755) Prior years (3,395) (1,996) --------------------------------------- Total paid (8,868) (8,751) --------------------------------------- Net balance at December 31 20,574 17,755 Plus reinsurance recoverables (5,067) (4,036) --------------------------------------- Balance at December 31 $ 15,507 $ 13,719 =======================================
The Company regularly updates its estimates of liabilities for unpaid claims and claims adjustment expenses as new information becomes available and further events occur which may impact the resolution of unsettled claims for its individual and group disability lines of business. Changes in prior estimates are recorded in results of operations in the year such changes are determined to be needed. F-35 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 11. DEFERRED POLICY ACQUISITION COSTS The following illustrates the changes to the deferred policy acquisition costs (in 000's):
2000 1999 ----------------- ---------------- Balance at January 1 $ 686,278 $ 523,872 Acquisition costs deferred 206,869 156,228 Amortized to expense during the year (123,832) (67,815) Adjustment for unrealized investment gains (losses) during the year (7,327) 73,993 ----------------- ---------------- Balance at December 31 $ 761,988 $ 686,278 ================= ================
12. SEGMENT INFORMATION The Company offers financial products and services such as fixed and variable annuities, guaranteed investment contracts, retirement plan services, and life insurance on an individual and group basis, as well as disability insurance on a group basis. Within these areas, the Company conducts business principally in three operating segments and maintains a corporate segment to provide for the capital needs of the three operating segments and to engage in other financing related activities. Net investment income is allocated based on segmented assets by line of business. The Individual Protection segment markets and administers a variety of life insurance products sold to individuals and corporate owners of life insurance. The products include whole life, universal life and variable life products. The Group Protection segment markets and administers group life and long-term disability insurance to small and mid-size employers in the State of New York. The Wealth Management segment markets and administers individual and group variable annuity products, individual and group fixed annuity products which include market value adjusted annuities, and other retirement benefit products. The Company began offering guaranteed investment contracts to unrelated third parties in overseas markets during the second quarter of 2000. These contracts may contain any of a number of features including variable or fixed interest rates and equity index options and may be denominated in foreign currencies. The Company uses derivative instruments to manage the risks inherent in the contract options. The Corporate segment includes the unallocated capital of the Company, its debt financing, and items not otherwise attributable to the other segments. Management evaluates the results of the operating segments on an after-tax basis. The Company does not materially depend on one or a few customers, brokers or agents. F-36 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 12. SEGMENT INFORMATION (CONTINUED) The following amounts pertain to the various business segments (in 000's):
YEAR ENDED DECEMBER 31, 2000 PRETAX TOTAL TOTAL INCOME NET OPERATING TOTAL REVENUES EXPENDITURES (LOSS) INCOME (LOSS) ASSETS -------------- ----------------- ------------ ----------------- ---------------- Individual Protection $ 44,206 $ 44,477 $ (271) $ (176) $ 1,242,549 Group Protection 17,194 15,350 1,844 1,199 30,514 Wealth Management 533,517 556,864 (23,347) (6,911) 22,094,736 Corporate 15,552 55,025 (39,473) 8,419 689,869 -------------- ----------------- ------------ ----------------- ---------------- Total $ 610,469 $ 671,716 $ (61,247) $ 2,531 $ 24,057,668 ============== ================= ============ ================= ================
YEAR ENDED DECEMBER 31, 1999 Individual Protection $ 17,625 $ 18,001 $ (376) $ 198 $ 302,100 Group Protection 16,415 15,541 874 568 27,286 Wealth Management 563,836 460,788 103,048 73,002 20,911,529 Corporate 31,996 52,731 (20,735) (20,036) 243,998 -------------- ----------------- ------------ ----------------- ---------------- Total $ 629,872 $ 547,061 $ 82,811 $ 53,732 $ 21,484,913 ============== ================= ============ ================= ================
YEAR ENDED DECEMBER 31, 1998 Individual Protection $ 232,193 $ 300,478 $ (68,285) $ (45,186) $ 365,397 Group Protection 15,259 13,023 2,236 1,433 23,297 Wealth Management 560,643 457,483 103,160 74,662 17,572,436 Corporate 38,600 50,838 (12,238) (16,803) 287,132 -------------- ----------------- ------------ ----------------- ---------------- Total $ 846,695 $ 821,822 $ 24,873 $ 14,106 $ 18,248,262 ============== ================= ============ ================= ================
13. REGULATORY FINANCIAL INFORMATION The insurance subsidiaries are required to file annual statements with state regulatory authorities prepared on an accounting basis prescribed or permitted by such authorities (statutory basis). Statutory surplus differs from shareholder's equity reported in accordance with GAAP for stock life insurance companies primarily because policy acquisition costs are expensed when incurred, reserves are based on different assumptions, investments are valued differently, post-retirement benefit costs are based on different assumptions and reflect a different method of adoption, and income tax expense reflects only taxes paid or currently payable. F-37 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 13. REGULATORY FINANCIAL INFORMATION (CONTINUED): The following information reconciles statutory net income and statutory surplus with net income and equity on a GAAP basis (in 000's):
YEAR ENDED DECEMBER 31, 2000 1999 1998 -------------- -------------- ---------------- Statutory net income $ (236) $ 90,358 $ 125,401 Adjustments to GAAP for life insurance companies: Statutory interest maintenance reserve 4,341 3,956 2,925 Investment income and realized gains (losses) (90,373) 13,803 (4,532) Policyowner premiums and benefits (36,572) (135,416) (178,973) Deferred policy acquisition costs 83,037 88,413 60,527 Deferred income taxes 45,358 (13,615) 8,886 Other, net (3,024) (5,057) - -------------- -------------- ---------------- GAAP net income $ 2,531 $ 42,442 $ 14,234 ============== ============== ================
DECEMBER 31, 2000 DECEMBER 31, 1999 ----------------------- ----------------------- Statutory capital stock and surplus $ 940,335 $ 886,342 Adjustments to GAAP for life insurance companies: Valuation of investments (37,011) 3,697 Deferred policy acquisition costs 761,988 686,278 Future policy benefits and Contractholder deposit funds (388,946) (350,181) Deferred income taxes (41,406) (77,675) Statutory interest maintenance reserve 39,979 42,325 Statutory asset valuation reserve 45,376 45,281 Surplus notes (565,000) (565,000) Other, net 5,848 178 ----------------------- ----------------------- GAAP equity $ 761,163 $ 671,245 ======================= =======================
The NAIC has codified statutory accounting practices, which are expected to constitute the only source of prescribed statutory accounting practices effective January 1, 2001. The codification has resulted in changes to many of the prescribed accounting practices that insurance companies use to prepare their statutory financial statements. The effect of the changes to accounting practices as a result of codification in 2001 is estimated to be an increase in the Company's statutory surplus of $24 million, primarily from the establishment of deferred tax assets. F-38 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 14. DIVIDEND RESTRICTIONS The Company and its insurance subsidiary's ability to pay dividends are subject to certain restrictions. Delaware and New York have enacted laws governing the payment of dividends to stockholders by insurers. These laws affect the dividend paying ability of the Company and Sun Life Insurance and Annuity Company of New York. Pursuant to Delaware's statute, the maximum amount of dividends and other distributions that an insurer may pay in any twelve-month period, without prior approval of the Delaware Commissioner of Insurance, is limited to the greater of (i) 10% of its statutory surplus as of the preceding December 31, or (ii) the individual company's statutory net gain from operations for the preceding calendar year (if such insurer is a life company), or its net income (not including realized capital gains) for the preceding calendar year (if such insurer is not a life company). Any dividends to be paid by an insurer, whether or not in excess of the aforementioned threshold, from a source other than statutory surplus, would also require the prior approval of the Delaware Commissioner of Insurance. Dividends in the amounts of $10,000,000, $80,000,000 and $50,000,000 were declared and paid by the Company to its parent, Sun Life of Canada (U.S.) Holdings, Inc. during 2000, 1999, and 1998. These dividends were approved by the Board of Directors. On September 20, 2000, New York insurance law was amended to permit a domestic stock life insurance company to distribute a dividend to its shareholders, without notice to the Superintendent of Insurance of the State of New York, where the aggregate amount of such dividend in any calendar year does not exceed the lesser of: (1) ten percent of its surplus to policyholders as of the immediately preceding calendar year; or (2) its net gain from operations for the immediately preceding calendar year, not including realized capital gains. Under the previous law, domestic stock life insurers were prohibited from distributing any dividends to shareholders unless the insurer filed a notice of its intention to declare a dividend and its amount with the Superintendent at least 30 days in advance of the proposed declaration, and such proposed distribution was not disapproved by the Superintendent. Dividends in the amount of $4,700,000, $6,500,000, and $3,000,000 were declared and paid during 2000, 1999, and 1998, respectively, by the Sun Life Insurance and Annuity Company of New York to the Company. These dividends were approved by the Board of Directors and the State of New York Insurance Department. F-39 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 15. COMMITMENTS AND CONTINGENCIES REGULATORY AND INDUSTRY DEVELOPMENTS Unfavorable economic conditions may contribute to an increase in the number of insurance companies that are under regulatory supervision. This may result in an increase in mandatory assessments by state guaranty funds, or voluntary payments by solvent insurance companies to cover losses to policyholders of insolvent or rehabilitated companies. Mandatory assessments, which are subject to statutory limits, can be partially recovered through a reduction in future premium taxes in some states. The Company is not able to reasonably estimate the potential effect on it of any such future assessments. Under insurance guaranty fund laws in each state, the District of Columbia and Puerto Rico, insurers licensed to do business can be assessed by state insurance guaranty associations for certain obligations of insolvent insurance companies to policyholders and claimants. Recent regulatory actions against certain large life insurers encountering financial difficulty have prompted various state insurance guaranty associations to begin assessing life insurance companies for the deemed losses. Most of these laws do provide, however, that an assessment may be excused or deferred if it would threaten an insurer's solvency and further provide annual limits on such assessments. Part of the assessments paid by the Company and its subsidiaries pursuant to these laws may be used as credits for a portion of the associated premium taxes. The Company incurred guaranty fund assessments of approximately $4,000,000, $3,500,000, and $3,500,000 in 2000, 1999 and 1998, respectively. LITIGATION The Company is involved in pending and threatened litigation in the normal course of its business in which claims for monetary and punitive damages have been asserted. Although there can be no assurance, management, at the present time, does not anticipate that the ultimate liability arising from such pending and threatened litigation will have a material effect on the financial condition or operating results of the Company. LINES OF CREDIT The Company has syndicated two lines of credit each in the amount of $250 million. There are 14 banks in the syndicate of lenders, which is led by Chase Bank, New York. The banks have committed to lend funds of up to $500 million when requested by the Company at prevailing rates determined in accordance with the line of credit agreements. One line of credit terminates October, 2001, the other in October, 2003. As of December 31, 2000, no amounts have been borrowed. LEASE COMMITMENTS The Company leases various facilities and equipment under operating leases with terms of up to 25 years. As of December 31, 2000, minimum future lease payments under such leases are as follows (in 000's): 2001 $4,090,800 2002 4,144,350 2003 3,090,600 2004 2,575,500 Thereafter - ------------ Total $13,901,250 ============
Total rental expense for the years ended December 31, 2000, 1999 and 1998 was $4,582,913, $4,656,000, and $4,139,000, respectively. F-40 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 16. DISCONTINUED OPERATIONS During 1999, the Company discontinued its individual disability segment and its banking and trust segment. These segments were composed of MCIC and NLT, which were both sold during 1999 to separate, unaffiliated parties. Net proceeds on the sale of MCIC were approximately $33,965,000 and the Company realized a net loss after taxes of $25,465,000. Net proceeds on the sale of NLT were approximately $30,000,000; the Company realized a net gain after taxes of $13,170,000. Immediately before the sale date of NLT, the Company received a $19 million dividend distribution from NLT. There were no results from discontinued operations in 2000. Income from discontinued operations for the years ended December 31, 1999 and 1998 were as follows (in 000's):
1999 1998 ------------------- ------------------ Revenue $ 22,667 $ 104,225 Expenses 21,430 104,593 Provision for income taxes 203 (445) ------------------- ------------------ Income from discontinued operations $ 1,034 $ 77 =================== ==================
F-41 INDEPENDENT AUDITORS' REPORT To the Board of Directors and Stockholder of Sun Life Assurance Company of Canada (U.S.): We have audited the accompanying consolidated balance sheets of Sun Life Assurance Company of Canada (U.S.) and its subsidiaries (the "Company") as of December 31, 2000 and 1999, and the related consolidated statements of income, stockholder's equity, comprehensive income and of cash flows for each of the three years in the period ended December 31, 2000. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Sun Life Assurance Company of Canada (U.S.) and its subsidiaries as of December 31, 2000 and 1999, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2000 in conformity with accounting principles generally accepted in the United States of America. Deloitte & Touche LLP Boston, Massachusetts February 7, 2001 F-42 PART B INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION Attached hereto and made a part hereof is the Statement of Additional Information dated May 1, 2001 for each of the following: MFS Regatta Choice Variable and Fixed Annuity Futurity III Variable and Fixed Annuity May 1, 2001 FUTURITY III VARIABLE AND FIXED ANNUITY STATEMENT OF ADDITIONAL INFORMATION SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F TABLE OF CONTENTS Calculation of Performance Data ............................................. 2 Advertising and Sales Literature ............................................41 Calculations ................................................................41 Example of Variable Accumulation Unit Value Calculation.................41 Example of Variable Annuity Unit Calculation ...........................41 Example of Variable Annuity Payment Calculation ........................41 Distribution of the Contracts ...............................................41 Designation and Change of Beneficiary .......................................46 Custodian ...................................................................46 Financial Statements ........................................................46 The Statement of Additional Information sets forth information which may be of interest to prospective purchasers of Futurity III Variable and Fixed Annuity Contracts (the "Contracts") issued by Sun Life Assurance Company of Canada (U.S.) (the "Company") in connection with Sun Life of Canada (U.S.) Variable Account F (the "Variable Account") which is not included in the Prospectus dated May 1, 2001. This Statement of Additional Information should be read in conjunction with the Prospectus, a copy of which may be obtained without charge from the Company by writing to Sun Life Assurance Company of Canada (U.S.), c/o Retirement Products and Services, P.O. Box 9133, Boston, Massachusetts 02117, or by telephoning (888) 786-2435. The terms used in this Statement of Additional Information have the same meanings as in the Prospectus. -------------------------------------------------------------------------------- THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE PURCHASERS ONLY IF PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS. -2- CALCULATION OF PERFORMANCE DATA STANDARDIZED AVERAGE ANNUAL TOTAL RETURN The table below shows, for various Sub-Accounts of the Variable Account, the Average Annual Total Return for the stated periods (or shorter period indicated in the note below), based upon a hypothetical initial Purchase Payment of $1,000, calculated in accordance with the formula set out after the table. For purposes of determining the investment results in this table, the actual investment performance of each Fund is reflected from the date the Fund commenced operations ("Inception"), although the Contracts have been offered only since June 9, 2000. No information is shown for the Funds that had not commenced operations as of December 31, 2000. The Securities and Exchange Commission defines "standardized" total return information to mean Average Annual Total Return, based on a hypothetical initial purchase payment of $1,000 and calculated in accordance with the formula set forth after the table, but presented only for periods subsequent to the commencement of the offering of the Futurity annuities. FUTURITY III STANDARDIZED AVERAGE ANNUAL TOTAL RETURN PERIOD ENDING DECEMBER 31, 2000
1 YEAR 5 YEAR 10 YEAR FUTURITY 1.00% PERIOD PERIOD OR LIFE ( 1 ) INCEPTION DATE ----- ------ ------ ------------- -------------- AIM V.I. Capital Appreciation Fund (17.10%) -- 11.35% 2/18/1998 AIM V.I. Growth Fund (25.92%) -- 8.31% 2/17/1998 AIM V.I. Growth and Income Fund (20.46%) -- 7.07% 3/26/1998 AIM V.I. International Equity Fund (31.36%) -- 5.57% 2/17/1998 Alger American Growth Portfolio (20.66%) -- 11.52% 3/26/1998 Alger American Income and Growth Portfolio (8.22%) -- 17.74% 3/26/1998 Alger American Small Capitalization Portfolio (32.10%) -- 0.23% 3/26/1998 Goldman Sachs V.I.T. CORE-sm Large Cap Growth Fund (27.75%) -- 2.48% 3/11/1998 Goldman Sachs V.I.T. CORE-sm Small Cap Equity Fund (5.44%) -- (0.27%) 2/18/1998 Goldman Sachs V.I.T. CORE-sm U.S. Equity Fund (15.91%) -- 6.04% 2/17/1998 Goldman Sachs V.I.T. Growth and Income Fund (11.37%) -- (5.03%) 2/18/1998 Goldman Sachs V.I.T. International Equity Fund (19.19%) -- 4.01% 3/16/1998 J.P. Morgan U.S. Disciplined Equity Portfolio ( 2 ) (17.16%) -- 2.11% 3/26/1998 J.P. Morgan International Opportunities Portfolio ( 2 ) (21.63%) -- (0.52%) 3/26/1998 J.P. Morgan Small Company Portfolio ( 2 ) (17.48%) -- (0.29%) 3/26/1998 Lord Abbett Growth and Income Portfolio 7.48% -- 9.10% 3/26/1998 MFS/Sun Life Capital Appreciation Series (17.79%) 15.71% 17.29% 11/30/1989 MFS/Sun Life Emerging Growth Series (24.66%) 20.32% 22.77% 5/1/1995 MFS/Sun Life High Yield Series (13.22%) 2.93% 10.10% 11/30/1989 MFS/Sun Life Utilities Series (0.50%) 19.68% 17.15% 11/16/1993 MFS/Sun Life Government Securities Series 4.14% 3.68% 6.23% 11/30/1989 MFS/Sun Life Total Return Series 8.45% 11.39% 11.99% 11/30/1989 MFS/Sun Life Massachusetts Investors Trust Series (6.96%) 15.22% 14.06% 10/31/1991 MFS/Sun Life New Discovery Series (6.70%) -- 19.27% 5/6/1998 MFS/Sun Life Massachusetts Investors Growth Stock Series (12.69%) -- 14.49% 5/6/1998 Sun Capital Money Market Fund (1.64%) -- 0.92% 12/14/1998 Sun Capital Investment Grade Bond Fund 2.07% -- 0.05% 12/14/1998 Sun Capital Real Estate Fund 22.72% -- 8.10% 12/14/1998 SC Select Equity Fund (15.95%) -- 3.06% 9/13/1999 SC Blue Chip Mid Cap Fund 16.52% -- 34.31% 9/13/1999 SC Investors Foundation Fund (12.55%) -- (3.08%) 9/13/1999 SC Davis Venture Value Fund -- -- (7.89%) 7/17/2000 SC Davis Financial Fund -- -- 5.83% 7/17/2000 SC Value Equity Portfolio ( 3 ) -- -- 5.81% 7/17/2000 SC Value Mid Cap Portfolio -- -- (3.41%) 7/17/2000 SC Value Small Cap Portfolio ( 3 ) -- -- 14.15% 7/17/2000 SC Value Managed Portfolio ( 3 ) 6.24% 7/17/2000
-3-
1 YEAR 5 YEAR 10 YEAR FUTURITY 1.15% PERIOD PERIOD OR LIFE ( 1 ) INCEPTION DATE ----- ------ ------ ------------- -------------- AIM V.I. Capital Appreciation Fund (17.22%) -- 11.18% 2/18/1998 AIM V.I. Growth Fund (26.03%) -- 8.14% 2/17/1998 AIM V.I. Growth and Income Fund (20.57%) -- 6.90% 3/26/1998 AIM V.I. International Equity Fund (31.47%) -- 5.41% 2/17/1998 Alger American Growth Portfolio (20.78%) -- 11.34% 3/26/1998 Alger American Income and Growth Portfolio (8.36%) -- 17.56% 3/26/1998 Alger American Small Capitalization Portfolio (32.20%) -- 0.08% 3/26/1998 Goldman Sachs V.I.T. CORE-sm Large Cap Growth Fund (27.86%) -- 2.33% 3/11/1998 Goldman Sachs V.I.T. CORE-sm Small Cap Equity Fund (5.58%) -- (0.42%) 2/18/1998 Goldman Sachs V.I.T. CORE-sm U.S. Equity Fund (16.03%) -- 5.87% 2/17/1998 Goldman Sachs V.I.T. Growth and Income Fund (11.50%) -- (5.17%) 2/18/1998 Goldman Sachs V.I.T. International Equity Fund (19.32%) -- 3.85% 3/16/1998 J.P. Morgan U.S. Disciplined Equity Portfolio ( 2 ) (17.29%) -- 1.96% 3/26/1998 J.P. Morgan International Opportunities Portfolio ( 2 ) (21.75%) -- (0.67%) 3/26/1998 J.P. Morgan Small Company Portfolio ( 2 ) (17.60%) -- (0.44%) 3/26/1998 Lord Abbett Growth and Income Portfolio 7.32% -- 8.92% 3/26/1998 MFS/Sun Life Capital Appreciation Series (17.92%) 15.53% 17.11% 11/30/1989 MFS/Sun Life Emerging Growth Series (24.78%) 20.13% 22.58% 5/1/1995 MFS/Sun Life High Yield Series (13.35%) 2.77% 9.94% 11/30/1989 MFS/Sun Life Utilities Series (0.65%) 19.50% 16.98% 11/16/1993 MFS/Sun Life Government Securities Series 3.98% 3.51% 6.06% 11/30/1989 MFS/Sun Life Total Return Series 8.28% 11.22% 11.82% 11/30/1989 MFS/Sun Life Massachusetts Investors Trust Series (7.10%) 15.04% 13.89% 10/31/1991 MFS/Sun Life New Discovery Series (6.83%) -- 19.09% 5/6/1998 MFS/Sun Life Massachusetts Investors Growth Stock Series (12.82%) -- 14.31% 5/6/1998 Sun Capital Money Market Fund (1.79%) -- 0.76% 12/14/1998 Sun Capital Investment Grade Bond Fund 1.91% -- (0.10%) 12/14/1998 Sun Capital Real Estate Fund 22.52% -- 7.92% 12/14/1998 SC Select Equity Fund (16.08%) -- 2.91% 9/13/1999 SC Blue Chip Mid Cap Fund 16.34% -- 34.10% 9/13/1999 SC Investors Foundation Fund (12.68%) -- (3.22%) 9/13/1999 SC Davis Venture Value Fund -- -- (7.95%) 7/17/2000 SC Davis Financial Fund -- -- 5.76% 7/17/2000 SC Value Equity Portfolio ( 3 ) -- -- 5.74% 7/17/2000 SC Value Mid Cap Portfolio -- -- (3.48%) 7/17/2000 SC Value Small Cap Portfolio ( 3 ) -- -- 14.07% 7/17/2000 SC Value Managed Portfolio ( 3 ) -- -- 6.17% 7/17/2000
-4-
1 YEAR 5 YEAR 10 YEAR FUTURITY 1.25% PERIOD PERIOD OR LIFE ( 1 ) INCEPTION DATE ----- ------ ------ ------------- -------------- AIM V.I. Capital Appreciation Fund (17.30%) -- 11.06% 2/18/1998 AIM V.I. Growth Fund (26.10%) -- 8.03% 2/17/1998 AIM V.I. Growth and Income Fund (20.65%) -- 6.79% 3/26/1998 AIM V.I. International Equity Fund (31.54%) -- 5.29% 2/17/1998 Alger American Growth Portfolio (20.85%) -- 11.22% 3/26/1998 Alger American Income and Growth Portfolio (8.45%) -- 17.44% 3/26/1998 Alger American Small Capitalization Portfolio (32.27%) -- (0.02%) 3/26/1998 Goldman Sachs V.I.T. CORE-sm Large Cap Growth Fund (27.93%) -- 2.23% 3/11/1998 Goldman Sachs V.I.T. CORE-sm Small Cap Equity Fund (5.68%) -- (0.52%) 2/18/1998 Goldman Sachs V.I.T. CORE-sm U.S. Equity Fund (16.12%) -- 5.76% 2/17/1998 Goldman Sachs V.I.T. Growth and Income Fund (11.59%) -- (5.27%) 2/18/1998 Goldman Sachs V.I.T. International Equity Fund (19.40%) -- 3.74% 3/16/1998 J.P. Morgan U.S. Disciplined Equity Portfolio ( 2 ) (17.37%) -- 1.86% 3/26/1998 J.P. Morgan International Opportunities Portfolio ( 2 ) (21.83%) -- (0.77%) 3/26/1998 J.P. Morgan Small Company Portfolio ( 2 ) (17.68%) -- (0.54%) 3/26/1998 Lord Abbett Growth and Income Portfolio 7.21% -- 8.81% 3/26/1998 MFS/Sun Life Capital Appreciation Series (18.00%) 15.41% 16.99% 11/30/1989 MFS/Sun Life Emerging Growth Series (24.85%) 20.01% 22.46% 5/1/1995 MFS/Sun Life High Yield Series (13.43%) 2.66% 9.82% 11/30/1989 MFS/Sun Life Utilities Series (0.75%) 19.37% 16.86% 11/16/1993 MFS/Sun Life Government Securities Series 3.88% 3.40% 5.96% 11/30/1989 MFS/Sun Life Total Return Series 8.16% 11.10% 11.71% 11/30/1989 MFS/Sun Life Massachusetts Investors Trust Series (7.19%) 14.92% 13.77% 10/31/1991 MFS/Sun Life New Discovery Series (6.93%) -- 18.96% 5/6/1998 MFS/Sun Life Massachusetts Investors Growth Stock Series (12.91%) -- 14.19% 5/6/1998 Sun Capital Money Market Fund (1.88%) -- 0.66% 12/14/1998 Sun Capital Investment Grade Bond Fund 1.81% -- (0.20%) 12/14/1998 Sun Capital Real Estate Fund 22.40% -- 7.81% 12/14/1998 SC Select Equity Fund (16.16%) -- 2.80% 9/13/1999 SC Blue Chip Mid Cap Fund 16.22% -- 33.96% 9/13/1999 SC Investors Foundation Fund (12.76%) -- (3.32%) 9/13/1999 SC Davis Venture Value Fund -- -- (7.99%) 7/17/2000 SC Davis Financial Fund -- -- 5.71% 7/17/2000 SC Value Equity Portfolio ( 3 ) -- -- 5.69% 7/17/2000 SC Value Mid Cap Portfolio -- -- (3.52%) 7/17/2000 SC Value Small Cap Portfolio ( 3 ) -- -- 14.01% 7/17/2000 SC Value Managed Portfolio ( 3 ) -- -- 6.12% 7/17/2000
-5-
1 YEAR 5 YEAR 10 YEAR FUTURITY 1.30% PERIOD PERIOD OR LIFE ( 1 ) INCEPTION DATE ----- ------ ------ ------------- -------------- AIM V.I. Capital Appreciation Fund (17.34%) -- 11.00% 2/18/1998 AIM V.I. Growth Fund (26.14%) -- 7.97% 2/17/1998 AIM V.I. Growth and Income Fund (20.69%) -- 6.73% 3/26/1998 AIM V.I. International Equity Fund (31.57%) -- 5.24% 2/17/1998 Alger American Growth Portfolio (20.89%) -- 11.17% 3/26/1998 Alger American Income and Growth Portfolio (8.49%) -- 17.38% 3/26/1998 Alger American Small Capitalization Portfolio (32.30%) -- (0.07%) 3/26/1998 Goldman Sachs V.I.T. CORE-sm Large Cap Growth Fund (27.97%) -- 2.17% 3/11/1998 Goldman Sachs V.I.T. CORE-sm Small Cap Equity Fund (5.72%) -- (0.57%) 2/18/1998 Goldman Sachs V.I.T. CORE-sm U.S. Equity Fund (16.16%) -- 5.70% 2/17/1998 Goldman Sachs V.I.T. Growth and Income Fund (11.63%) -- (5.32%) 2/18/1998 Goldman Sachs V.I.T. International Equity Fund (19.44%) -- 3.68% 3/16/1998 J.P. Morgan U.S. Disciplined Equity Portfolio ( 2 ) (17.41%) -- 1.81% 3/26/1998 J.P. Morgan International Opportunities Portfolio ( 2 ) (21.87%) -- (0.82%) 3/26/1998 J.P. Morgan Small Company Portfolio ( 2 ) (17.72%) -- (0.59%) 3/26/1998 Lord Abbett Growth and Income Portfolio 7.15% -- 8.75% 3/26/1998 MFS/Sun Life Capital Appreciation Series (18.04%) 15.35% 16.93% 11/30/1989 MFS/Sun Life Emerging Growth Series (24.89%) 19.95% 22.39% 5/1/1995 MFS/Sun Life High Yield Series (13.48%) 2.61% 9.77% 11/30/1989 MFS/Sun Life Utilities Series (0.80%) 19.31% 16.80% 11/16/1993 MFS/Sun Life Government Securities Series 3.83% 3.35% 5.90% 11/30/1989 MFS/Sun Life Total Return Series 8.10% 11.04% 11.65% 11/30/1989 MFS/Sun Life Massachusetts Investors Trust Series (7.23%) 14.86% 13.71% 10/31/1991 MFS/Sun Life New Discovery Series (6.97%) -- 18.90% 5/6/1998 MFS/Sun Life Massachusetts Investors Growth Stock Series (12.95%) -- 14.13% 5/6/1998 Sun Capital Money Market Fund (1.93%) -- 0.61% 12/14/1998 Sun Capital Investment Grade Bond Fund 1.76% -- (0.25%) 12/14/1998 Sun Capital Real Estate Fund 22.33% -- 7.75% 12/14/1998 SC Select Equity Fund (16.20%) -- 2.75% 9/13/1999 SC Blue Chip Mid Cap Fund 16.15% -- 33.89% 9/13/1999 SC Investors Foundation Fund (12.81%) -- (3.37%) 9/13/1999 SC Davis Venture Value Fund -- -- (8.01%) 7/17/2000 SC Davis Financial Fund -- -- 5.69% 7/17/2000 SC Value Equity Portfolio ( 3 ) -- -- 5.67% 7/17/2000 SC Value Mid Cap Portfolio -- -- (3.54%) 7/17/2000 SC Value Small Cap Portfolio ( 3 ) -- -- 13.98% 7/17/2000 SC Value Managed Portfolio ( 3 ) -- -- 6.10% 7/17/2000
-6-
1 YEAR 5 YEAR 10 YEAR FUTURITY 1.40% PERIOD PERIOD OR LIFE ( 1 ) INCEPTION DATE ----- ------ ------ ------------- -------------- AIM V.I. Capital Appreciation Fund (17.43%) -- 10.89% 2/18/1998 AIM V.I. Growth Fund (26.21%) -- 7.86% 2/17/1998 AIM V.I. Growth and Income Fund (20.77%) -- 6.62% 3/26/1998 AIM V.I. International Equity Fund (31.64%) -- 5.13% 2/17/1998 Alger American Growth Portfolio (20.97%) -- 11.05% 3/26/1998 Alger American Income and Growth Portfolio (8.58%) -- 17.25% 3/26/1998 Alger American Small Capitalization Portfolio (32.37%) -- (0.17%) 3/26/1998 Goldman Sachs V.I.T. CORE-sm Large Cap Growth Fund (28.04%) -- 2.07% 3/11/1998 Goldman Sachs V.I.T. CORE-sm Small Cap Equity Fund (5.82%) -- (0.67%) 2/18/1998 Goldman Sachs V.I.T. CORE-sm U.S. Equity Fund (16.24%) -- 5.59% 2/17/1998 Goldman Sachs V.I.T. Growth and Income Fund (11.72%) -- (5.41%) 2/18/1998 Goldman Sachs V.I.T. International Equity Fund (19.52%) -- 3.57% 3/16/1998 J.P. Morgan U.S. Disciplined Equity Portfolio ( 2 ) (17.49%) -- 1.70% 3/26/1998 J.P. Morgan International Opportunities Portfolio ( 2 ) (21.95%) -- (0.92%) 3/26/1998 J.P. Morgan Small Company Portfolio ( 2 ) (17.81%) -- (0.69%) 3/26/1998 Lord Abbett Growth and Income Portfolio 7.05% -- 8.64% 3/26/1998 MFS/Sun Life Capital Appreciation Series (18.12%) 15.23% 16.81% 11/30/1989 MFS/Sun Life Emerging Growth Series (24.96%) 19.82% 22.27% 5/1/1995 MFS/Sun Life High Yield Series (13.56%) 2.50% 9.66% 11/30/1989 MFS/Sun Life Utilities Series (0.90%) 19.19% 16.68% 11/16/1993 MFS/Sun Life Government Securities Series 3.73% 3.24% 5.79% 11/30/1989 MFS/Sun Life Total Return Series 7.99% 10.93% 11.54% 11/30/1989 MFS/Sun Life Massachusetts Investors Trust Series (7.33%) 14.74% 13.60% 10/31/1991 MFS/Sun Life New Discovery Series (7.07%) -- 18.78% 5/6/1998 MFS/Sun Life Massachusetts Investors Growth Stock Series (13.04%) -- 14.01% 5/6/1998 Sun Capital Money Market Fund (2.03%) -- 0.51% 12/14/1998 Sun Capital Investment Grade Bond Fund 1.66% -- (0.35%) 12/14/1998 Sun Capital Real Estate Fund 22.20% -- 7.63% 12/14/1998 SC Select Equity Fund (16.29%) -- 2.65% 9/13/1999 SC Blue Chip Mid Cap Fund 16.03% -- 33.75% 9/13/1999 SC Investors Foundation Fund (12.90%) -- (3.46%) 9/13/1999 SC Davis Venture Value Fund -- -- (8.05%) 7/17/2000 SC Davis Financial Fund -- -- 5.64% 7/17/2000 SC Value Equity Portfolio ( 3 ) -- -- 5.62% 7/17/2000 SC Value Mid Cap Portfolio -- -- (3.58%) 7/17/2000 SC Value Small Cap Portfolio ( 3 ) -- -- 13.93% 7/17/2000 SC Value Managed Portfolio ( 3 ) -- -- 6.05% 7/17/2000
-7-
1 YEAR 5 YEAR 10 YEAR FUTURITY 1.55% PERIOD PERIOD OR LIFE ( 1 ) INCEPTION DATE ----- ------ ------ ------------- -------------- AIM V.I. Capital Appreciation Fund (17.55%) -- 10.71% 2/18/1998 AIM V.I. Growth Fund (26.32%) -- 7.69% 2/17/1998 AIM V.I. Growth and Income Fund (20.89%) -- 6.45% 3/26/1998 AIM V.I. International Equity Fund (31.74%) -- 4.96% 2/17/1998 Alger American Growth Portfolio (21.09%) -- 10.88% 3/26/1998 Alger American Income and Growth Portfolio (8.72%) -- 17.07% 3/26/1998 Alger American Small Capitalization Portfolio (32.47%) -- (0.32%) 3/26/1998 Goldman Sachs V.I.T. CORE-sm Large Cap Growth Fund (28.14%) -- 1.92% 3/11/1998 Goldman Sachs V.I.T. CORE-sm Small Cap Equity Fund (5.96%) -- (0.82%) 2/18/1998 Goldman Sachs V.I.T. CORE-sm U.S. Equity Fund (16.37%) -- 5.42% 2/17/1998 Goldman Sachs V.I.T. Growth and Income Fund (11.85%) -- (5.55%) 2/18/1998 Goldman Sachs V.I.T. International Equity Fund (19.64%) -- 3.40% 3/16/1998 J.P. Morgan U.S. Disciplined Equity Portfolio (2) (17.62%) -- 1.55% 3/26/1998 J.P. Morgan International Opportunities Portfolio (2) (22.06%) -- (1.06%) 3/26/1998 J.P. Morgan Small Company Portfolio (2) (17.93%) -- (0.84%) 3/26/1998 Lord Abbett Growth and Income Portfolio 6.89% -- 8.46% 3/26/1998 MFS/Sun Life Capital Appreciation Series (18.24%) 15.05% 16.63% 11/30/1989 MFS/Sun Life Emerging Growth Series (25.08%) 19.64% 22.08% 5/1/1995 MFS/Sun Life High Yield Series (13.69%) 2.33% 9.49% 11/30/1989 MFS/Sun Life Utilities Series (1.05%) 19.00% 16.50% 11/16/1993 MFS/Sun Life Government Securities Series 3.57% 3.07% 5.63% 11/30/1989 MFS/Sun Life Total Return Series 7.82% 10.75% 11.37% 11/30/1989 MFS/Sun Life Massachusetts Investors Trust Series (7.47%) 14.56% 13.42% 10/31/1991 MFS/Sun Life New Discovery Series (7.20%) -- 18.59% 5/6/1998 MFS/Sun Life Massachusetts Investors Growth Stock Series (13.17%) -- 13.83% 5/6/1998 Sun Capital Money Market Fund (2.18%) -- 0.36% 12/14/1998 Sun Capital Investment Grade Bond Fund 1.51% -- (0.50%) 12/14/1998 Sun Capital Real Estate Fund 22.01% -- 7.46% 12/14/1998 SC Select Equity Fund (16.41%) -- 2.50% 9/13/1999 SC Blue Chip Mid Cap Fund 15.85% -- 33.55% 9/13/1999 SC Investors Foundation Fund (13.03%) -- (3.61%) 9/13/1999 SC Davis Venture Value Fund -- -- (8.12%) 7/17/2000 SC Davis Financial Fund -- -- 5.57% 7/17/2000 SC Value Equity Portfolio (3) -- -- 5.55% 7/17/2000 SC Value Mid Cap Portfolio -- -- (3.65%) 7/17/2000 SC Value Small Cap Portfolio (3) -- -- 13.84% 7/17/2000 SC Value Managed Portfolio (3) -- -- 5.98% 7/17/2000
(1) From commencement of investment operations. (2) From January 3, 1995 (commencement of operations) to December 31, 1996, Chubb Investment Advisory Corporation ("Chubb Investment Advisory"), a wholly owned subsidiary of Chubb Life Insurance Company of America, served as each of these Fund's investment manager, and Morgan Guaranty Trust Company of New York, an affiliate of J.P. Morgan Investment Management Inc. ("J.P. Morgan") served as such Fund's sub-investment adviser. Effective January 1, 1997, J.P. Morgan began serving as each Fund's investment adviser. (3) On September 16, 1994, an investment company then called Quest for Value Accumulation Trust (the "Old Trust") was effectively divided into two investment funds, the Old Trust and the OCC Accumulation Trust, at which time the OCC Accumulation Trust commenced operations. The total net assets for each of the Equity, Managed and Small Cap Portfolios immediately after the transaction were $86,789,755, $682,601,380, and $139,812,573, respectively, with respect to the Old Trust, and for each of the Equity, Managed and Small Cap Portfolios, $3,764,598, $51,345,102, and $8,129,274, respectively, with respect to the OCC Accumulation Trust. The Equity, Managed and Small Cap Portfolios commenced operations on August 1, 1998. For the period prior to September 16, 1994, the performance figures above for each of the Equity, Managed, and Small Cap Portfolios reflect the performance of the corresponding Portfolios of the Old Trust. The length of the period and the last day of each period used in the above table are set out in the table heading and in the footnotes above. The Average Annual Total Return for each period was determined by finding the average annual compounded rate of return over each period that would equate the initial amount invested to the ending redeemable value for that period, in accordance with the following formula: -8- n P(l + T) = ERV Where: P = a hypothetical initial Purchase Payment of $1,000 T = average annual total return for the period n = number of years ERV = redeemable value (as of the end of the period) of a hypothetical $1,000 Purchase Payment made at the beginning of the 1-year, 5-year, or 10-year period (or fractional portion thereof) The formula assumes that: 1) all recurring fees have been deducted from the Participant's Account; 2) all applicable non-recurring Contract charges are deducted at the end of the period, and 3) there will be a full surrender at the end of the period. The annual Account Fee will be allocated among the Sub-Accounts so that each Sub-Account's allocated portion of the Account Fee is proportional to the percentage of the number of Individual Contracts and Certificates that have amounts allocated to that Sub-Account. Because the impact of Account Fees on a particular Contract may differ from those assumed in the computation due to differences between actual allocations and the assumed ones, the total return that would have been experienced by an actual Contract over these same time periods may have been different from that shown above. NON-STANDARDIZED INVESTMENT PERFORMANCE: The Variable Account may illustrate its results over various periods and compare its results to indices and other variable annuities in sales materials including advertisements, brochures and sports. Such results may be computed on a "cumulative" and/or "annualized" basis. "Cumulative" quotations are arrived at by calculating the change in the Accumulation Unit value of a Sub-Account between the first and last day of the base period being measured, and expressing the difference as a percentage of the Accumulation Unit value at the beginning of the base period. "Annualized" quotations (described in the following table as "Compound Growth Rate") are calculated by applying a formula which determines the level rate of return which, if earned over the entire base period, would produce the cumulative return. -9-
NON-STANDARDIZED INVESTMENT PERFORMANCE* $10,000 invested in this Fund under a ...would have grown to this amount Futurity III Contract, this many years ago... on December 31, 2000
1.00% M&E ----------
AIM V.I. CAPITAL APPRECIATION FUND AIM V.I. GROWTH FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $8,821.00 -11.79% -11.79% 1 12/31/99 - 12/31/00 $ 7,872.00 -21.28% -21.28% 2 12/31/98 - 12/31/00 $12,630.00 26.30% 12.38% 2 12/31/98 - 12/31/00 $10,541.00 5.41% 2.67% 3 12/31/97 - 12/31/00 $14,919.00 49.19% 14.27% 3 12/31/97 - 12/31/00 $13,998.00 39.98% 11.86% 4 12/31/96 - 12/31/00 $16,767.00 67.67% 13.79% 4 12/31/96 - 12/31/00 $17,583.00 75.83% 15.15% 5 12/31/95 - 12/31/00 $19,518.00 95.18% 14.31% 5 12/31/95 - 12/31/00 $20,557.00 105.57% 15.50% Life 05/05/93 - 12/31/00 $31,594.00 215.94% 16.21% Life 05/05/93 - 12/31/00 $29,123.00 191.23% 14.98% AIM V.I. GROWTH AND INCOME FUND AIM V.I. INTERNATIONAL EQUITY FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $ 8,460.00 -15.40% -15.40% 1 12/31/99 - 12/31/00 $7,287.00 -27.13% -27.13% 2 12/31/98 - 12/31/00 $11,245.00 12.45% 6.04% 2 12/31/98 - 12/31/00 $11,186.00 11.86% 5.76% 3 12/31/97 - 12/31/00 $14,216.00 42.16% 12.44% 3 12/31/97 - 12/31/00 $12,791.00 27.91% 8.55% 4 12/31/96 - 12/31/00 $17,696.00 76.96% 15.34% 4 12/31/96 - 12/31/00 $13,544.00 35.44% 7.88% 5 12/31/95 - 12/31/00 $21,014.00 110.14% 16.01% 5 12/31/95 - 12/31/00 $16,098.00 60.98% 9.99% Life 05/02/94 - 12/31/00 $27,668.00 176.68% 16.49% Life 05/05/93 - 12/31/00 $21,504.00 115.04% 10.52% ALGER AMERICAN GROWTH PORTFOLIO ALGER AMERICAN INCOME AND GROWTH PORTFOLIO Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $8,438.00 -15.62% -15.62% 1 12/31/99 - 12/31/00 $ 9,775.00 -2.25% -2.25% 2 12/31/98 - 12/31/00 $11,174.00 11.74% 5.71% 2 12/31/98 - 12/31/00 $13,788.00 37.88% 17.42% 3 12/31/97 - 12/31/00 $16,387.00 63.87% 17.90% 3 12/31/97 - 12/31/00 $18,077.00 80.77% 21.82% 4 12/31/96 - 12/31/00 $20,406.00 104.06% 19.52% 4 12/31/96 - 12/31/00 $24,399.00 143.99% 24.98% 5 12/31/95 - 12/31/00 $22,902.00 129.02% 18.03% 5 12/31/95 - 12/31/00 $28,913.00 189.13% 23.66% 10 12/31/90 - 12/31/00 $58,299.00 482.99% 19.28% 10 12/31/90 - 12/31/00 $50,516.00 405.16% 17.58% Life 01/09/89 - 12/31/00 $73,893.00 638.93% 18.18% Life 11/15/88 - 12/31/00 $53,781.00 437.81% 14.88% ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO GOLDMAN SACHS VIT CORE-SM LARGE CAP GROWTH FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $7,208.00 -27.92% -27.92% 1 12/31/99 - 12/31/00 $ 7,675.00 -23.25% -23.25% 2 12/31/98 - 12/31/00 $10,235.00 2.35% 1.17% 2 12/31/98 - 12/31/00 $10,291.00 2.91% 1.44% 3 12/31/97 - 12/31/00 $11,708.00 17.08% 5.40% 4 12/31/96 - 12/31/00 $12,914.00 29.14% 6.60% 5 12/31/95 - 12/31/00 $13,321.00 33.21% 5.90% 10 12/31/90 - 12/31/00 $32,351.00 223.51% 12.46% Life 09/21/88 - 12/31/00 $54,683.00 446.83% 14.84% Life 02/13/98 - 12/31/00 $11,923.00 19.23% 6.30% * For periods of less than one year, the growth rates listed are not annualized.
-10-
NON-STANDARDIZED INVESTMENT PERFORMANCE* $10,000 invested in this Fund under a ...would have grown to this amount Futurity III Contract, this many years ago... on December 31, 2000
GOLDMAN SACHS VIT CORE-SM SMALL CAP EQUITY FUND GOLDMAN SACHS VIT CORE-SM U.S. EQUITY FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $10,074.00 0.74% 0.74% 1 12/31/99 - 12/31/00 $8,949.00 -10.51% -10.51% 2 12/31/98 - 12/31/00 $11,724.00 17.24% 8.28% 2 12/31/98 - 12/31/00 $11,014.00 10.14% 4.95% Life 02/13/98 - 12/31/00 $10,531.00 5.31% 1.81% Life 02/13/98 - 12/31/00 $12,514.00 25.14% 8.10% GOLDMAN SACHS VIT GROWTH AND INCOME FUND GOLDMAN SACHS VIT INTERNATIONAL EQUITY FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $9,437.00 -5.63% -5.63% 1 12/31/99 - 12/31/00 $ 8,595.00 -14.05% -14.05% 2 12/31/98 - 12/31/00 $9,849.00 -1.51% -0.76% 2 12/31/98 - 12/31/00 $11,221.00 12.21% 5.93% Life 01/12/98 - 12/31/00 $10,289.00 2.89% 0.96% Life 01/12/98 - 12/31/00 $13,345.00 33.45% 10.21% J.P. MORGAN INTERNATIONAL OPPORTUNITIES PORTFOLIO J.P. MORGAN SMALL COMPANY PORTFOLIO Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $8,333.00 -16.67% -16.67% 1 12/31/99 - 12/31/00 $ 8,780.00 -12.20% -12.20% 2 12/31/98 - 12/31/00 $11,275.00 12.75% 6.18% 2 12/31/98 - 12/31/00 $12,552.00 25.52% 12.04% 3 12/31/97 - 12/31/00 $11,692.00 16.92% 5.35% 3 12/31/97 - 12/31/00 $11,743.00 17.43% 5.50% 4 12/31/96 - 12/31/00 $12,206.00 22.06% 5.11% 4 12/31/96 - 12/31/00 $14,244.00 42.44% 9.25% 5 12/31/95 - 12/31/00 $13,674.00 36.74% 6.46% 5 12/31/95 - 12/31/00 $17,175.00 71.75% 11.42% Life 01/03/95 - 12/31/00 $15,216.00 52.16% 7.26% Life 01/03/95 - 12/31/00 $22,599.00 125.99% 14.58% J.P. MORGAN U.S. DISCIPLINED EQUITY PORTFOLIO LORD ABBETT GROWTH AND INCOME PORTFOLIO Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $8,814.00 -11.86% -11.86% 1 12/31/99 - 12/31/00 $11,463.00 14.63% 14.63% 2 12/31/98 - 12/31/00 $10,345.00 3.45% 1.71% 2 12/31/98 - 12/31/00 $13,250.00 32.50% 15.11% 3 12/31/97 - 12/31/00 $12,629.00 26.29% 8.09% 3 12/31/97 - 12/31/00 $14,809.00 48.09% 13.98% 4 12/31/96 - 12/31/00 $15,944.00 59.44% 12.37% 4 12/31/96 - 12/31/00 $18,279.00 82.79% 16.28% 5 12/31/95 - 12/31/00 $19,143.00 91.43% 13.87% 5 12/31/95 - 12/31/00 $21,607.00 116.07% 16.66% 10 12/31/90 - 12/31/00 $46,238.00 362.38% 16.55% Life 01/03/95 - 12/31/00 $25,359.00 153.59% 16.80% Life 12/11/89 - 12/31/00 $47,089.00 370.89% 15.05% MFS / SUN LIFE CAPITAL APPRECIATION SERIES Number Cumulative Compound of Growth Growth Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $8,771.00 -12.29% -12.29% 2 12/31/98 - 12/31/00 $11,518.00 15.18% 7.32% 3 12/31/97 - 12/31/00 $14,678.00 46.78% 13.65% 4 12/31/96 - 12/31/00 $17,895.00 78.95% 15.66% 5 12/31/95 - 12/31/00 $21,523.00 115.23% 16.57% 10 12/31/90 - 12/31/00 $50,178.00 401.78% 17.50% Life 06/12/85 - 12/31/00 $89,971.00 799.71% 15.17%
* For periods of less than one year, the growth rates listed are not annualized. -11-
NON-STANDARDIZED INVESTMENT PERFORMANCE* $10,000 invested in this Fund under a ...would have grown to this amount Futurity III Contract, this many years ago... on December 31, 2000
MFS / SUN LIFE EMERGING GROWTH SERIES MFS / SUN LIFE GOVERNMENT SECURITIES SERIES Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $ 8,011.00 -19.89% -19.89% 1 12/31/99 - 12/31/00 $11,102.00 11.02% 11.02% 2 12/31/98 - 12/31/00 $13,944.00 39.44% 18.08% 2 12/31/98 - 12/31/00 $10,786.00 7.86% 3.86% 3 12/31/97 - 12/31/00 $18,485.00 84.85% 22.73% 3 12/31/97 - 12/31/00 $11,609.00 16.09% 5.10% 4 12/31/96 - 12/31/00 $22,316.00 123.16% 22.22% 4 12/31/96 - 12/31/00 $12,497.00 24.97% 5.73% 5 12/31/95 - 12/31/00 $25,883.00 158.83% 20.95% 5 12/31/95 - 12/31/00 $12,576.00 25.76% 4.69% 10 12/31/90 - 12/31/00 $18,518.00 85.18% 6.36% Life 05/01/95 - 12/31/00 $32,605.00 226.05% 23.18% Life 06/12/85 - 12/31/00 $29,072.00 190.72% 7.10% MFS / SUN LIFE HIGH YIELD SERIES MFS / SUN LIFE MASSACHUSETTS INVESTORS GROWTH STOCK SERIES Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $ 9,230.00 -7.70% -7.70% 1 12/31/99 - 12/31/00 $9,295.00 -7.05% -7.05% 2 12/31/98 - 12/31/00 $ 9,772.00 -2.28% -1.15% 2 12/31/98 - 12/31/00 $12,495.00 24.95% 11.78% 3 12/31/97 - 12/31/00 $ 9,731.00 -2.69% -0.90% 4 12/31/96 - 12/31/00 $10,911.00 9.11% 2.20% 5 12/31/95 - 12/31/00 $12,112.00 21.12% 3.91% 10 12/31/90 - 12/31/00 $26,324.00 163.24% 10.16% Life 06/12/85 - 12/31/00 $29,253.00 192.53% 7.15% Life 05/06/98 - 12/31/00 $14,983.00 49.83% 16.45% MFS / SUN LIFE MASSACHUSETTS INVESTORS TRUST SERIES MFS / SUN LIFE NEW DISCOVERY SERIES Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $ 9,911.00 -0.89% -0.89% 1 12/31/99 - 12/31/00 $ 9,939.00 -0.61% -0.61% 2 12/31/98 - 12/31/00 $10,518.00 5.18% 2.56% 2 12/31/98 - 12/31/00 $15,766.00 57.66% 25.56% 3 12/31/97 - 12/31/00 $12,898.00 28.98% 8.85% 4 12/31/96 - 12/31/00 $16,849.00 68.49% 13.93% 5 12/31/95 - 12/31/00 $20,921.00 109.21% 15.91% 10 12/31/90 - 12/31/00 $42,418.00 324.18% 15.55% Life 11/14/86 - 12/31/00 $56,244.00 462.44% 13.00% Life 05/06/98 - 12/31/00 $16,635.00 66.35% 21.13%
* For periods of less than one year, the growth rates listed are not annualized. -12-
NON-STANDARDIZED INVESTMENT PERFORMANCE* $10,000 invested in this Fund under a ...would have grown to this amount Futurity III Contract, this many years ago... on December 31, 2000
MFS / SUN LIFE TOTAL RETURN SERIES MFS / SUN LIFE UTILITIES SERIES Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $11,564.00 15.64% 15.64% 1 12/31/99 - 12/31/00 $10,593.00 5.93% 5.93% 2 12/31/98 - 12/31/00 $11,776.00 17.76% 8.52% 2 12/31/98 - 12/31/00 $13,773.00 37.73% 17.36% 3 12/31/97 - 12/31/00 $13,025.00 30.25% 9.21% 3 12/31/97 - 12/31/00 $16,030.00 60.30% 17.03% 4 12/31/96 - 12/31/00 $15,731.00 57.31% 11.99% 4 12/31/96 - 12/31/00 $21,064.00 110.64% 20.47% 5 12/31/95 - 12/31/00 $17,771.00 77.71% 12.19% 5 12/31/95 - 12/31/00 $25,103.00 151.03% 20.21% 10 12/31/90 - 12/31/00 $31,368.00 213.68% 12.11% Life 05/11/88 - 12/31/00 $38,990.00 289.90% 11.36% Life 11/16/93 - 12/31/00 $30,987.00 209.87% 17.21% SC VALUE EQUITY PORTFOLIO SC VALUE MANAGED PORTFOLIO Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate Life 07/17/00 - 12/31/00 $11,284.00 12.84% 12.84% Life 07/17/00 - 12/31/00 $11,330.00 13.30% 13.30% SC VALUE MID CAP PORTFOLIO SC VALUE SMALL CAP PORTFOLIO Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate Life 07/17/00 - 12/31/00 $10,293.00 2.93% 2.93% Life 07/17/00 - 12/31/00 $12,134.00 21.34% 21.34% SUN CAPITAL INVESTMENT GRADE BOND FUND SUN CAPITAL MONEY MARKET FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $10,881.00 8.81% 8.81% 1 12/31/99 - 12/31/00 $10,483.00 4.83% 4.83% 2 12/31/98 - 12/31/00 $10,712.00 7.12% 3.50% 2 12/31/98 - 12/31/00 $10,864.00 8.64% 4.23% Life 12/07/98 - 12/31/00 $10,709.00 7.09% 3.37% Life 12/07/98 - 12/31/00 $10,889.00 8.89% 4.21%
* For periods of less than one year, the growth rates listed are not annualized. -13-
NON-STANDARDIZED INVESTMENT PERFORMANCE* $10,000 invested in this Fund under a ...would have grown to this amount Futurity III Contract, this many years ago... on December 31, 2000
SUN CAPITAL REAL ESTATE FUND SC BLUE CHIP MID CAP FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $12,991.00 29.91% 29.91% 1 12/31/99 - 12/31/00 $12,372.00 23.72% 23.72% 2 12/31/98 - 12/31/00 $12,363.00 23.63% 11.19% Life 12/07/98 - 12/31/00 $12,270.00 22.70% 10.41% Life 09/01/99 - 12/31/00 $15,662.00 56.62% 40.07% SC INVESTORS FOUNDATION FUND SC SELECT EQUITY FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $9,310.00 -6.90% -6.90% 1 12/31/99 - 12/31/00 $8,944.00 -10.56% -10.56% Life 09/01/99 - 12/31/00 $10,410.00 4.10% 3.06% Life 09/01/99 - 12/31/00 $11,268.00 12.68% 9.38% SC DAVIS VENTURE VALUE FUND SC DAVIS FINANCIAL FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate Life 07/17/00 - 12/31/00 $9,811.00 -1.89% -1.89% Life 07/17/00 - 12/31/00 $11,286.00 12.86% 12.86%
* For periods of less than one year, the growth rates listed are not annualized. -14-
NON-STANDARDIZED INVESTMENT PERFORMANCE* $10,000 invested in this Fund under a ...would have grown to this amount Futurity III Contract, this many years ago... on December 31, 2000
1.15% M&E ----------
AIM V.I. CAPITAL APPRECIATION FUND AIM V.I. GROWTH FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $8,807.00 -11.93% -11.93% 1 12/31/99 - 12/31/00 $ 7,860.00 -21.40% -21.40% 2 12/31/98 - 12/31/00 $12,592.00 25.92% 12.21% 2 12/31/98 - 12/31/00 $10,509.00 5.09% 2.51% 3 12/31/97 - 12/31/00 $14,852.00 48.52% 14.09% 3 12/31/97 - 12/31/00 $13,935.00 39.35% 11.70% 4 12/31/96 - 12/31/00 $16,667.00 66.67% 13.62% 4 12/31/96 - 12/31/00 $17,479.00 74.79% 14.98% 5 12/31/95 - 12/31/00 $19,372.00 93.72% 14.14% 5 12/31/95 - 12/31/00 $20,404.00 104.04% 15.33% Life 05/05/93 - 12/31/00 $31,233.00 212.33% 16.04% Life 05/05/93 - 12/31/00 $28,791.00 187.91% 14.81% AIM V.I. GROWTH AND INCOME FUND AIM V.I. INTERNATIONAL EQUITY FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $8,447.00 -15.53% -15.53% 1 12/31/99 - 12/31/00 $ 7,276.00 -27.24% -27.24% 2 12/31/98 - 12/31/00 $11,211.00 12.11% 5.88% 2 12/31/98 - 12/31/00 $11,153.00 11.53% 5.61% 3 12/31/97 - 12/31/00 $14,152.00 41.52% 12.27% 3 12/31/97 - 12/31/00 $12,734.00 27.34% 8.39% 4 12/31/96 - 12/31/00 $17,590.00 75.90% 15.16% 4 12/31/96 - 12/31/00 $13,462.00 34.62% 7.72% 5 12/31/95 - 12/31/00 $20,857.00 108.57% 15.84% 5 12/31/95 - 12/31/00 $15,977.00 59.77% 9.82% Life 05/02/94 - 12/31/00 $27,393.00 173.93% 16.32% Life 05/05/93 - 12/31/00 $21,257.00 112.57% 10.35% ALGER AMERICAN GROWTH PORTFOLIO ALGER AMERICAN INCOME AND GROWTH PORTFOLIO Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $8,425.00 -15.75% -15.75% 1 12/31/99 - 12/31/00 $9,761.00 -2.39% -2.39% 2 12/31/98 - 12/31/00 $11,141.00 11.41% 5.55% 2 12/31/98 - 12/31/00 $13,747.00 37.47% 17.25% 3 12/31/97 - 12/31/00 $16,313.00 63.13% 17.72% 3 12/31/97 - 12/31/00 $17,996.00 79.96% 21.64% 4 12/31/96 - 12/31/00 $20,285.00 102.85% 19.34% 4 12/31/96 - 12/31/00 $24,253.00 142.53% 24.79% 5 12/31/95 - 12/31/00 $22,731.00 127.31% 17.85% 5 12/31/95 - 12/31/00 $28,698.00 186.98% 23.47% 10 12/31/90 - 12/31/00 $57,433.00 474.33% 19.10% 10 12/31/90 - 12/31/00 $49,764.00 397.64% 17.41% Life 01/09/89 - 12/31/00 $72,579.00 625.79% 18.00% Life 11/15/88 - 12/31/00 $52,810.00 428.10% 14.71%
* For periods of less than one year, the growth rates listed are not annualized. -15-
NON-STANDARDIZED INVESTMENT PERFORMANCE* $10,000 invested in this Fund under a ...would have grown to this amount Futurity III Contract, this many years ago... on December 31, 2000
ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO GOLDMAN SACHS VIT CORE-SM LARGE CAP GROWTH FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $7,197.00 -28.03% -28.03% 1 12/31/99 - 12/31/00 $ 7,664.00 -23.36% -23.36% 2 12/31/98 - 12/31/00 $10,205.00 2.05% 1.02% 2 12/31/98 - 12/31/00 $10,260.00 2.60% 1.29% 3 12/31/97 - 12/31/00 $11,656.00 16.56% 5.24% 4 12/31/96 - 12/31/00 $12,837.00 28.37% 6.44% 5 12/31/95 - 12/31/00 $13,220.00 32.20% 5.74% 10 12/31/90 - 12/31/00 $31,868.00 218.68% 12.29% Life 09/21/88 - 12/31/00 $53,684.00 436.84% 14.67% Life 02/13/98 - 12/31/00 $11,871.00 18.71% 6.14% GOLDMAN SACHS VIT CORE-SM SMALL CAP EQUITY FUND GOLDMAN SACHS VIT CORE-SM U.S. EQUITY FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $10,059.00 0.59% 0.59% 1 12/31/99 - 12/31/00 $ 8,935.00 -10.65% -10.65% 2 12/31/98 - 12/31/00 $11,689.00 16.89% 8.12% 2 12/31/98 - 12/31/00 $10,980.00 9.80% 4.79% Life 02/13/98 - 12/31/00 $10,485.00 4.85% 1.66% Life 02/13/98 - 12/31/00 $12,459.00 24.59% 7.93% GOLDMAN SACHS VIT GROWTH AND INCOME FUND GOLDMAN SACHS VIT INTERNATIONAL EQUITY FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $9,423.00 -5.77% -5.77% 1 12/31/99 - 12/31/00 $ 8,582.00 -14.18% -14.18% 2 12/31/98 - 12/31/00 $9,820.00 -1.80% -0.90% 2 12/31/98 - 12/31/00 $11,187.00 11.87% 5.77% Life 01/12/98 - 12/31/00 $10,243.00 2.43% 0.81% Life 01/12/98 - 12/31/00 $13,285.00 32.85% 10.05%
* For periods of less than one year, the growth rates listed are not annualized. -16-
NON-STANDARDIZED INVESTMENT PERFORMANCE* $10,000 invested in this Fund under a ...would have grown to this amount Futurity III Contract, this many years ago... on December 31, 2000
J.P. MORGAN INTERNATIONAL OPPORTUNITIES PORTFOLIO J.P. MORGAN SMALL COMPANY PORTFOLIO Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $8,320.00 -16.80% -16.80% 1 12/31/99 - 12/31/00 $ 8,767.00 -12.33% -12.33% 2 12/31/98 - 12/31/00 $11,241.00 12.41% 6.02% 2 12/31/98 - 12/31/00 $12,515.00 25.15% 11.87% 3 12/31/97 - 12/31/00 $11,640.00 16.40% 5.19% 3 12/31/97 - 12/31/00 $11,690.00 16.90% 5.34% 4 12/31/96 - 12/31/00 $12,132.00 21.32% 4.95% 4 12/31/96 - 12/31/00 $14,158.00 41.58% 9.08% 5 12/31/95 - 12/31/00 $13,571.00 35.71% 6.30% 5 12/31/95 - 12/31/00 $17,046.00 70.46% 11.26% Life 01/03/95 - 12/31/00 $15,078.00 50.78% 7.09% Life 01/03/95 - 12/31/00 $22,395.00 123.95% 14.40% J.P. MORGAN U.S. DISCIPLINED EQUITY PORTFOLIO LORD ABBETT GROWTH AND INCOME PORTFOLIO Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $8,800.00 -12.00% -12.00% 1 12/31/99 - 12/31/00 $11,446.00 14.46% 14.46% 2 12/31/98 - 12/31/00 $10,314.00 3.14% 1.56% 2 12/31/98 - 12/31/00 $13,210.00 32.10% 14.93% 3 12/31/97 - 12/31/00 $12,572.00 25.72% 7.93% 3 12/31/97 - 12/31/00 $14,742.00 47.42% 13.81% 4 12/31/96 - 12/31/00 $15,847.00 58.47% 12.20% 4 12/31/96 - 12/31/00 $18,169.00 81.69% 16.10% 5 12/31/95 - 12/31/00 $18,998.00 89.98% 13.70% 5 12/31/95 - 12/31/00 $21,444.00 114.44% 16.48% 10 12/31/90 - 12/31/00 $45,543.00 355.43% 16.37% Life 01/03/95 - 12/31/00 $25,130.00 151.30% 16.62% Life 12/11/89 - 12/31/00 $46,306.00 363.06% 14.87% MFS / SUN LIFE CAPITAL APPRECIATION SERIES MFS / SUN LIFE EMERGING GROWTH SERIES Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $8,757.00 -12.43% -12.43% 1 12/31/99 - 12/31/00 $ 7,999.00 -20.01% -20.01% 2 12/31/98 - 12/31/00 $11,484.00 14.84% 7.16% 2 12/31/98 - 12/31/00 $13,902.00 39.02% 17.91% 3 12/31/97 - 12/31/00 $14,612.00 46.12% 13.48% 3 12/31/97 - 12/31/00 $18,403.00 84.03% 22.55% 4 12/31/96 - 12/31/00 $17,788.00 77.88% 15.49% 4 12/31/96 - 12/31/00 $22,183.00 121.83% 22.04% 5 12/31/95 - 12/31/00 $21,361.00 113.61% 16.39% 5 12/31/95 - 12/31/00 $25,689.00 156.89% 20.77% 10 12/31/90 - 12/31/00 $49,426.00 394.26% 17.33% Life 06/12/85 - 12/31/00 $87,883.00 778.83% 15.00% Life 05/01/95 - 12/31/00 $32,328.00 223.28% 23.00%
* For periods of less than one year, the growth rates listed are not annualized. -17-
NON-STANDARDIZED INVESTMENT PERFORMANCE* $10,000 invested in this Fund under a ...would have grown to this amount Futurity III Contract, this many years ago... on December 31, 2000
MFS / SUN LIFE GOVERNMENT SECURITIES SERIES MFS / SUN LIFE HIGH YIELD SERIES Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $11,086.00 10.86% 10.86% 1 12/31/99 - 12/31/00 $ 9,216.00 -7.84% -7.84% 2 12/31/98 - 12/31/00 $10,754.00 7.54% 3.70% 2 12/31/98 - 12/31/00 $ 9,742.00 -2.58% -1.30% 3 12/31/97 - 12/31/00 $11,556.00 15.56% 4.94% 3 12/31/97 - 12/31/00 $ 9,687.00 -3.13% -1.05% 4 12/31/96 - 12/31/00 $12,421.00 24.21% 5.57% 4 12/31/96 - 12/31/00 $10,845.00 8.45% 2.05% 5 12/31/95 - 12/31/00 $12,481.00 24.81% 4.53% 5 12/31/95 - 12/31/00 $12,020.00 20.20% 3.75% 10 12/31/90 - 12/31/00 $18,239.00 82.39% 6.19% 10 12/31/90 - 12/31/00 $25,928.00 159.28% 10.00% Life 06/12/85 - 12/31/00 $28,395.00 183.95% 6.94% Life 06/12/85 - 12/31/00 $28,572.00 185.72% 6.98% MFS / SUN LIFE MASSACHUSETTS INVESTORS GROWTH STOCK SERIES MFS / SUN LIFE MASSACHUSETTS INVESTORS TRUST SERIES Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $9,281.00 -7.19% -7.19% 1 12/31/99 - 12/31/00 $ 9,896.00 -1.04% -1.04% 2 12/31/98 - 12/31/00 $12,457.00 24.57% 11.61% 2 12/31/98 - 12/31/00 $10,486.00 4.86% 2.40% 3 12/31/97 - 12/31/00 $12,839.00 28.39% 8.69% 4 12/31/96 - 12/31/00 $16,748.00 67.48% 13.76% 5 12/31/95 - 12/31/00 $20,763.00 107.63% 15.73% 10 12/31/90 - 12/31/00 $41,781.00 317.81% 15.37% Life 05/06/98 - 12/31/00 $14,924.00 49.24% 16.28% Life 11/14/86 - 12/31/00 $55,054.00 450.54% 12.83% MFS / SUN LIFE NEW DISCOVERY SERIES MFS / SUN LIFE TOTAL RETURN SERIES Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $9,924.00 -0.76% -0.76% 1 12/31/99 - 12/31/00 $11,547.00 15.47% 15.47% 2 12/31/98 - 12/31/00 $15,719.00 57.19% 25.38% 2 12/31/98 - 12/31/00 $11,741.00 17.41% 8.36% 3 12/31/97 - 12/31/00 $12,966.00 29.66% 9.04% 4 12/31/96 - 12/31/00 $15,636.00 56.36% 11.82% 5 12/31/95 - 12/31/00 $17,637.00 76.37% 12.02% 10 12/31/90 - 12/31/00 $30,896.00 208.96% 11.94% Life 05/06/98 - 12/31/00 $16,569.00 65.69% 20.95% Life 05/11/88 - 12/31/00 $38,251.00 282.51% 11.20% MFS / SUN LIFE UTILITIES SERIES SC VALUE EQUITY PORTFOLIO Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $10,577.00 5.77% 5.77% 2 12/31/98 - 12/31/00 $13,732.00 37.32% 17.18% 3 12/31/97 - 12/31/00 $15,958.00 59.58% 16.86% 4 12/31/96 - 12/31/00 $20,938.00 109.38% 20.29% 5 12/31/95 - 12/31/00 $24,914.00 149.14% 20.03% Life 11/16/93 - 12/31/00 $30,655.00 206.55% 17.03% Life 07/17/00 - 12/31/00 $11,276.00 12.76% 12.76% SC VALUE MANAGED PORTFOLIO Number Cumulative Compound of Growth Growth Years Periods Amount Rate Rate Life 07/17/00 - 12/31/00 $11,323.00 13.23% 13.23%
* For periods of less than one year, the growth rates listed are not annualized. -18-
NON-STANDARDIZED INVESTMENT PERFORMANCE* $10,000 invested in this Fund under a ...would have grown to this amount Futurity III Contract, this many years ago... on December 31, 2000
SC VALUE MID CAP PORTFOLIO SC VALUE SMALL CAP PORTFOLIO Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate Life 07/17/00 - 12/31/00 $10,286.00 2.86% 2.86% Life 07/17/00 - 12/31/00 $12,126.00 21.26% 21.26% SUN CAPITAL INVESTMENT GRADE BOND FUND SUN CAPITAL MONEY MARKET FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $10,865.00 8.65% 8.65% 1 12/31/99 - 12/31/00 $10,467.00 4.67% 4.67% 2 12/31/98 - 12/31/00 $10,680.00 6.80% 3.34% 2 12/31/98 - 12/31/00 $10,831.00 8.31% 4.07% Life 12/07/98 - 12/31/00 $10,675.00 6.75% 3.21% Life 12/07/98 - 12/31/00 $10,855.00 8.55% 4.05% SUN CAPITAL REAL ESTATE FUND SC BLUE CHIP MID CAP FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $12,972.00 29.72% 29.72% 1 12/31/99 - 12/31/00 $12,353.00 23.53% 23.53% 2 12/31/98 - 12/31/00 $12,326.00 23.26% 11.02% Life 12/07/98 - 12/31/00 $12,232.00 22.32% 10.24% Life 09/01/99 - 12/31/00 $15,631.00 56.31% 39.86% SC INVESTORS FOUNDATION FUND SC SELECT EQUITY FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $9,296.00 -7.04% -7.04% 1 12/31/99 - 12/31/00 $8,931.00 -10.69% -10.69% Life 09/01/99 - 12/31/00 $10,389.00 3.89% 2.91% Life 09/01/99 - 12/31/00 $11,246.00 12.46% 9.22% SC DAVIS VENTURE VALUE FUND SC DAVIS FINANCIAL FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate Life 07/17/00 - 12/31/00 $9,804.00 -1.96% -1.96% Life 07/17/00 - 12/31/00 $11,279.00 12.79% 12.79%
* For periods of less than one year, the growth rates listed are not annualized. -19-
NON-STANDARDIZED INVESTMENT PERFORMANCE* $10,000 invested in this Fund under a ...would have grown to this amount Futurity III Contract, this many years ago... on December 31, 2000
1.25% M&E --------- AIM V.I. CAPITAL APPRECIATION FUND AIM V.I. GROWTH FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99-12/31/00 $8,799.00 -12.01% -12.01% 1 12/31/99-12/31/00 $7,853.00 -21.47% -21.47% 2 12/31/98-12/31/00 $12,567.00 25.67% 12.10% 2 12/31/98-12/31/00 $10,488.00 4.88% 2.41% 3 12/31/97-12/31/00 $14,808.00 48.08% 13.98% 3 12/31/97-12/31/00 $13,894.00 38.94% 11.59% 4 12/31/96-12/31/00 $16,600.00 66.00% 13.51% 4 12/31/96-12/31/00 $17,409.00 74.09% 14.87% 5 12/31/95-12/31/00 $19,276.00 92.76% 14.03% 5 12/31/95-12/31/00 $20,303.00 103.03% 15.22% Life 05/05/93-12/31/00 $30,995.00 209.95% 15.92% Life 05/05/93-12/31/00 $28,571.00 185.71% 14.69% AIM V.I. GROWTH AND INCOME FUND AIM V.I. INTERNATIONAL EQUITY FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99-12/31/00 $8,438.00 -15.62% -15.62% 1 12/31/99-12/31/00 $7,268.00 -27.32% -27.32% 2 12/31/98-12/31/00 $11,189.00 11.89% 5.78% 2 12/31/98-12/31/00 $11,130.00 11.30% 5.50% 3 12/31/97-12/31/00 $14,110.00 41.10% 12.16% 3 12/31/97-12/31/00 $12,696.00 26.96% 8.28% 4 12/31/96-12/31/00 $17,520.00 75.20% 15.05% 4 12/31/96-12/31/00 $13,408.00 34.08% 7.61% 5 12/31/95-12/31/00 $20,754.00 107.54% 15.72% 5 12/31/95-12/31/00 $15,897.00 58.97% 9.71% Life 05/02/94-12/31/00 $27,211.00 172.11% 16.20% Life 05/05/93-12/31/00 $21,095.00 110.95% 10.24% ALGER AMERICAN GROWTH PORTFOLIO ALGER AMERICAN INCOME AND GROWTH PORTFOLIO Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99-12/31/00 $8,417.00 -15.83% -15.83% 1 12/31/99-12/31/00 $9,751.00 -2.49% -2.49% 2 12/31/98-12/31/00 $11,119.00 11.19% 5.45% 2 12/31/98-12/31/00 $13,719.00 37.19% 17.13% 3 12/31/97-12/31/00 $16,265.00 62.65% 17.60% 3 12/31/97-12/31/00 $17,942.00 79.42% 21.51% 4 12/31/96-12/31/00 $20,204.00 102.04% 19.22% 4 12/31/96-12/31/00 $24,157.00 141.57% 24.67% 5 12/31/95-12/31/00 $22,618.00 126.18% 17.73% 5 12/31/95-12/31/00 $28,556.00 185.56% 23.35% 10 12/31/90-12/31/00 $56,863.00 468.63% 18.98% 10 12/31/90-12/31/00 $49,270.00 392.70% 17.29% Life 01/09/89-12/31/00 $71,717.00 617.17% 17.88% Life 11/15/88-12/31/00 $52,173.00 421.73% 14.60% ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO GOLDMAN SACHS VIT CORE-SM LARGE CAP GROWTH FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99-12/31/00 $7,190.00 -28.10% -28.10% 1 12/31/99-12/31/00 $ 7,656.00 -23.44% -23.44% 2 12/31/98-12/31/00 $10,184.00 1.84% 0.92% 2 12/31/98-12/31/00 $10,240.00 2.40% 1.19% 3 12/31/97-12/31/00 $11,621.00 16.21% 5.14% 4 12/31/96-12/31/00 $12,785.00 27.85% 6.33% 5 12/31/95-12/31/00 $13,154.00 31.54% 5.64% 10 12/31/90-12/31/00 $31,550.00 215.50% 12.18% Life 09/21/88-12/31/00 $53,028.00 430.28% 14.56% Life 02/13/98-12/31/00 $11,837.00 18.37% 6.03%
* For periods of less than one year, the growth rates listed are not annualized. -20-
NON-STANDARDIZED INVESTMENT PERFORMANCE* $10,000 invested in this Fund under a ...would have grown to this amount Futurity III Contract, this many years ago... on December 31, 2000
GOLDMAN SACHS VIT CORE-SM SMALL CAP EQUITY FUND GOLDMAN SACHS VIT CORE-SM U.S. EQUITY FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99-12/31/00 $10,049.00 0.49% 0.49% 1 12/31/99-12/31/00 $ 8,926.00 -10.74% -10.74% 2 12/31/98-12/31/00 $11,666.00 16.66% 8.01% 2 12/31/98-12/31/00 $10,958.00 9.58% 4.68% Life 02/13/98-12/31/00 $10,455.00 4.55% 1.56% Life 02/13/98-12/31/00 $12,423.00 24.23% 7.83% GOLDMAN SACHS VIT GROWTH AND INCOME FUND GOLDMAN SACHS VIT INTERNATIONAL EQUITY FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99-12/31/00 $ 9,413.00 -5.87% -5.87% 1 12/31/99-12/31/00 $ 8,574.00 -14.26% -14.26% 2 12/31/98-12/31/00 $ 9,800.00 -2.00% -1.01% 2 12/31/98-12/31/00 $11,165.00 11.65% 5.66% Life 01/12/98-12/31/00 $10,212.00 2.12% 0.71% Life 01/12/98-12/31/00 $13,246.00 32.46% 9.94% J.P. MORGAN INTERNATIONAL OPPORTUNITIES PORTFOLIO J.P. MORGAN SMALL COMPANY PORTFOLIO Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99-12/31/00 $ 8,312.00 -16.88% -16.88% 1 12/31/99-12/31/00 $ 8,758.00 -12.42% -12.42% 2 12/31/98-12/31/00 $11,219.00 12.19% 5.92% 2 12/31/98-12/31/00 $12,490.00 24.90% 11.76% 3 12/31/97-12/31/00 $11,604.00 16.04% 5.08% 3 12/31/97-12/31/00 $11,655.00 16.55% 5.24% 4 12/31/96-12/31/00 $12,084.00 20.84% 4.85% 4 12/31/96-12/31/00 $14,101.00 41.01% 8.97% 5 12/31/95-12/31/00 $13,503.00 35.03% 6.19% 5 12/31/95-12/31/00 $16,960.00 69.60% 11.14% Life 01/03/95-12/31/00 $14,987.00 49.87% 6.99% Life 01/03/95-12/31/00 $22,261.00 122.61% 14.29% J.P. MORGAN U.S. DISCIPLINED EQUITY PORTFOLIO LORD ABBETT GROWTH AND INCOME PORTFOLIO Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99-12/31/00 $ 8,792.00 -12.08% -12.08% 1 12/31/99-12/31/00 $11,434.00 14.34% 14.34% 2 12/31/98-12/31/00 $10,293.00 2.93% 1.45% 2 12/31/98-12/31/00 $13,184.00 31.84% 14.82% 3 12/31/97-12/31/00 $12,534.00 25.34% 7.82% 3 12/31/97-12/31/00 $14,698.00 46.98% 13.70% 4 12/31/96-12/31/00 $15,784.00 57.84% 12.09% 4 12/31/96-12/31/00 $18,096.00 80.96% 15.98% 5 12/31/95-12/31/00 $18,902.00 89.02% 13.58% 5 12/31/95-12/31/00 $21,336.00 113.36% 16.37% 10 12/31/90-12/31/00 $45,085.00 350.85% 16.25% Life 01/03/95-12/31/00 $24,979.00 149.79% 16.51% Life 12/11/89-12/31/00 $45,792.00 357.92% 14.76% MFS/SUN LIFE CAPITAL APPRECIATION SERIES MFS/SUN LIFE EMERGING GROWTH SERIES Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99-12/31/00 $ 8,749.00 -12.51% -12.51% 1 12/31/99-12/31/00 $ 7,991.00 -20.09% -20.09% 2 12/31/98-12/31/00 $11,461.00 14.61% 7.06% 2 12/31/98-12/31/00 $13,875.00 38.75% 17.79% 3 12/31/97-12/31/00 $14,568.00 45.68% 13.36% 3 12/31/97-12/31/00 $18,348.00 83.48% 22.42% 4 12/31/96-12/31/00 $17,717.00 77.17% 15.37% 4 12/31/96-12/31/00 $22,094.00 120.94% 21.92% 5 12/31/95-12/31/00 $21,254.00 112.54% 16.28% 5 12/31/95-12/31/00 $25,560.00 155.60% 20.65% 10 12/31/90-12/31/00 $48,932.00 389.32% 17.21% Life 06/12/85-12/31/00 $86,519.00 765.19% 14.88% Life 05/01/95-12/31/00 $32,144.00 221.44% 22.87%
* For periods of less than one year, the growth rates listed are not annualized. -21-
NON-STANDARDIZED INVESTMENT PERFORMANCE* $10,000 invested in this Fund under a ...would have grown to this amount Futurity III Contract, this many years ago... on December 31, 2000
MFS/SUN LIFE GOVERNMENT SECURITIES SERIES MFS/SUN LIFE HIGH YIELD SERIES Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99-12/31/00 $11,075.00 10.75% 10.75% 1 12/31/99-12/31/00 $ 9,207.00 -7.93% -7.93% 2 12/31/98-12/31/00 $10,732.00 7.32% 3.60% 2 12/31/98-12/31/00 $9,723.00 -2.77% -1.39% 3 12/31/97-12/31/00 $11,521.00 15.21% 4.83% 3 12/31/97-12/31/00 $9,658.00 -3.42% -1.15% 4 12/31/96-12/31/00 $12,371.00 23.71% 5.46% 4 12/31/96-12/31/00 $10,801.00 8.01% 1.95% 5 12/31/95-12/31/00 $12,418.00 24.18% 4.43% 5 12/31/95-12/31/00 $11,960.00 19.60% 3.64% 10 12/31/90-12/31/00 $18,056.00 80.56% 6.09% 10 12/31/90-12/31/00 $25,668.00 156.68% 9.89% Life 06/12/85-12/31/00 $27,953.00 179.53% 6.83% Life 06/12/85-12/31/00 $28,127.00 181.27% 6.88% MFS/SUN LIFE MASSACHUSETTS INVESTORS GROWTH STOCK SERIES MFS/SUN LIFE MASSACHUSETTS INVESTORS TRUST SERIES Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99-12/31/00 $ 9,271.00 -7.29% -7.29% 1 12/31/99-12/31/00 $ 9,886.00 -1.14% -1.14% 2 12/31/98-12/31/00 $12,432.00 24.32% 11.50% 2 12/31/98-12/31/00 $10,465.00 4.65% 2.30% 3 12/31/97-12/31/00 $12,801.00 28.01% 8.58% 4 12/31/96-12/31/00 $16,680.00 66.80% 13.64% 5 12/31/95-12/31/00 $20,658.00 106.58% 15.62% 10 12/31/90-12/31/00 $41,361.00 313.61% 15.25% Life 05/06/98-12/31/00 $14,884.00 48.84% 16.16% Life 11/14/86-12/31/00 $54,275.00 442.75% 12.72% MFS/SUN LIFE NEW DISCOVERY SERIES MFS/SUN LIFE TOTAL RETURN SERIES Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99-12/31/00 $ 9,914.00 -0.86% -0.86% 1 12/31/99-12/31/00 $11,535.00 15.35% 15.35% 2 12/31/98-12/31/00 $15,688.00 56.88% 25.25% 2 12/31/98-12/31/00 $11,717.00 17.17% 8.25% 3 12/31/97-12/31/00 $12,927.00 29.27% 8.93% 4 12/31/96-12/31/00 $15,573.00 55.73% 11.71% 5 12/31/95-12/31/00 $17,548.00 75.48% 11.90% 10 12/31/90-12/31/00 $30,586.00 205.86% 11.83% Life 05/06/98-12/31/00 $16,525.00 65.25% 20.83% Life 05/11/88-12/31/00 $37,766.00 277.66% 11.08% MFS/SUN LIFE UTILITIES SERIES SC VALUE EQUITY PORTFOLIO Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99-12/31/00 $10,566.00 5.66% 5.66% 2 12/31/98-12/31/00 $13,704.00 37.04% 17.06% 3 12/31/97-12/31/00 $15,910.00 59.10% 16.74% 4 12/31/96-12/31/00 $20,854.00 108.54% 20.17% 5 12/31/95-12/31/00 $24,789.00 147.89% 19.91% Life 11/16/93-12/31/00 $30,436.00 204.36% 16.91% Life 07/17/00-12/31/00 $11,271.00 12.71% 12.71%
* For periods of less than one year, the growth rates listed are not annualized. -22-
NON-STANDARDIZED INVESTMENT PERFORMANCE* $10,000 invested in this Fund under a ...would have grown to this amount Futurity III Contract, this many years ago... on December 31, 2000
SC VALUE MANAGED PORTFOLIO SC VALUE MID CAP PORTFOLIO Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate Life 07/17/00-12/31/00 $11,318.00 13.18% 13.18% Life 07/17/00-12/31/00 $10,281.00 2.81% 2.81% SC VALUE SMALL CAP PORTFOLIO SUN CAPITAL INVESTMENT GRADE BOND FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99-12/31/00 $10,854.00 8.54% 8.54% 2 12/31/98-12/31/00 $10,658.00 6.58% 3.24% Life 07/17/00-12/31/00 $12,120.00 21.20% 21.20% Life 12/07/98-12/31/00 $10,653.00 6.53% 3.11% SUN CAPITAL MONEY MARKET FUND SUN CAPITAL REAL ESTATE FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99-12/31/00 $10,457.00 4.57% 4.57% 1 12/31/99-12/31/00 $12,959.00 29.59% 29.59% 2 12/31/98-12/31/00 $10,810.00 8.10% 3.97% 2 12/31/98-12/31/00 $12,301.00 23.01% 10.91% Life 12/07/98-12/31/00 $10,833.00 8.33% 3.95% Life 12/07/98-12/31/00 $12,206.00 22.06% 10.13% SC BLUE CHIP MID CAP FUND SC INVESTORS FOUNDATION FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99-12/31/00 $12,341.00 23.41% 23.41% 1 12/31/99-12/31/00 $ 9,287.00 -7.13% -7.13% Life 09/01/99-12/31/00 $15,611.00 56.11% 39.72% Life 09/01/99-12/31/00 $10,375.00 3.75% 2.80% SC SELECT EQUITY FUND SC DAVIS VENTURE VALUE FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99-12/31/00 $ 8,922.00 -10.78% -10.78% Life 09/01/99-12/31/00 $11,231.00 12.31% 9.11% Life 07/17/00-12/31/00 $9,800.00 -2.00% -2.00% SC DAVIS FINANCIAL FUND Number Cumulative Compound of Growth Growth Years Periods Amount Rate Rate Life 07/17/00-12/31/00 $11,274.00 12.74% 12.74%
* For periods of less than one year, the growth rates listed are not annualized. -23-
NON-STANDARDIZED INVESTMENT PERFORMANCE* $10,000 invested in this Fund under a ...would have grown to this amount Futurity III Contract, this many years ago... on December 31, 2000
1.30% M&E ---------
AIM V.I. CAPITAL APPRECIATION FUND AIM V.I. GROWTH FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $ 8,794.00 -12.06% -12.06% 1 12/31/99 - 12/31/00 $ 7,849.00 -21.51% -21.51% 2 12/31/98 - 12/31/00 $12,555.00 25.55% 12.05% 2 12/31/98 - 12/31/00 $10,478.00 4.78% 2.36% 3 12/31/97 - 12/31/00 $14,786.00 47.86% 13.92% 3 12/31/97 - 12/31/00 $13,873.00 38.73% 11.53% 4 12/31/96 - 12/31/00 $16,567.00 65.67% 13.45% 4 12/31/96 - 12/31/00 $17,374.00 73.74% 14.81% 5 12/31/95 - 12/31/00 $19,228.00 92.28% 13.97% 5 12/31/95 - 12/31/00 $20,252.00 102.52% 15.16% Life 05/05/93 - 12/31/00 $30,877.00 208.77% 15.86% Life 05/05/93 - 12/31/00 $28,462.00 184.62% 14.64%
AIM V.I. GROWTH AND INCOME FUND AIM V.I. INTERNATIONAL EQUITY FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $ 8,434.0 -15.66% -15.66% 1 12/31/99 - 12/31/00 $ 7,265.00 -27.35% -27.35% 2 12/31/98 - 12/31/00 $11,177.00 11.77% 5.72% 2 12/31/98 - 12/31/00 $11,119.00 11.19% 5.45% 3 12/31/97 - 12/31/00 $14,089.00 40.89% 12.11% 3 12/31/97 - 12/31/00 $12,677.00 26.77% 8.23% 4 12/31/96 - 12/31/00 $17,485.00 74.85% 14.99% 4 12/31/96 - 12/31/00 $13,381.00 33.81% 7.55% 5 12/31/95 - 12/31/00 $20,702.00 107.02% 15.67% 5 12/31/95 - 12/31/00 $15,857.00 58.57% 9.66% Life 05/02/94 - 12/31/00 $27,120.00 171.20% 16.15% Life 05/05/93 - 12/31/00 $21,014.00 110.14% 10.18%
ALGER AMERICAN GROWTH PORTFOLIO ALGER AMERICAN INCOME AND GROWTH PORTFOLIO Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $ 8,413.00 -15.87% -15.87% 1 12/31/99 - 12/31/00 $9,746.00 -2.54% -2.54% 2 12/31/98 - 12/31/00 $11,108.00 11.08% 5.39% 2 12/31/98 - 12/31/00 $13,706.00 37.06% 17.07% 3 12/31/97 - 12/31/00 $16,241.00 62.41% 17.55% 3 12/31/97 - 12/31/00 $17,915.00 79.15% 21.45% 4 12/31/96 - 12/31/00 $20,164.00 101.64% 19.16% 4 12/31/96 - 12/31/00 $24,109.00 141.09% 24.61% 5 12/31/95 - 12/31/00 $22,561.00 125.61% 17.67% 5 12/31/95 - 12/31/00 $28,484.00 184.84% 23.29% 10 12/31/90 - 12/31/00 $56,580.00 465.80% 18.92% 10 12/31/90 - 12/31/00 $49,024.00 390.24% 17.23% Life 01/09/89 - 12/31/00 $71,288.00 612.88% 17.82% Life 11/15/88 - 12/31/00 $51,857.00 418.57% 14.54%
* For periods of less than one year, the growth rates listed are not annualized. -24-
NON-STANDARDIZED INVESTMENT PERFORMANCE* $10,000 invested in this Fund under a ...would have grown to this amount Futurity III Contract, this many years ago... on December 31, 2000
ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO GOLDMAN SACHS VIT CORE-SM LARGE CAP GROWTH FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $ 7,186.00 -28.14% -28.14% 1 12/31/99 - 12/31/00 $ 7,652.00 -23.48% -23.48% 2 12/31/98 - 12/31/00 $10,174.00 1.74% 0.87% 2 12/31/98 - 12/31/00 $10,230.00 2.30% 1.14% 3 12/31/97 - 12/31/00 $11,603.00 16.03% 5.08% 4 12/31/96 - 12/31/00 $12,760.00 27.60% 6.28% 5 12/31/95 - 12/31/00 $13,121.00 31.21% 5.58% 10 12/31/90 - 12/31/00 $31,392.00 213.92% 12.12% Life 09/21/88 - 12/31/00 $52,703.00 427.03% 14.50% Life 02/13/98 - 12/31/00 $11,820.00 18.20% 5.98% GOLDMAN SACHS VIT CORE-SM SMALL CAP EQUITY FUND GOLDMAN SACHS VIT CORE-SM U.S. EQUITY FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $10,044.00 0.44% 0.44% 1 12/31/99 - 12/31/00 $ 8,922.00 -10.78% -10.78% 2 12/31/98 - 12/31/00 $11,654.00 16.54% 7.95% 2 12/31/98 - 12/31/00 $10,947.00 9.47% 4.63% Life 02/13/98 - 12/31/00 $10,440.00 4.40% 1.51% Life 02/13/98 - 12/31/00 $12,405.00 24.05% 7.77% GOLDMAN SACHS VIT GROWTH AND INCOME FUND GOLDMAN SACHS VIT INTERNATIONAL EQUITY FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $ 9,408.00 -5.92% -5.92% 1 12/31/99 - 12/31/00 $ 8,569.00 -14.31% -14.31% 2 12/31/98 - 12/31/00 $ 9,790.00 -2.10% -1.06% 2 12/31/98 - 12/31/00 $11,154.00 11.54% 5.61% Life 01/12/98 - 12/31/00 $10,197.00 1.97% 0.66% Life 01/12/98 - 12/31/00 $13,226.00 32.26% 9.88%
* For periods of less than one year, the growth rates listed are not annualized. -25-
NON-STANDARDIZED INVESTMENT PERFORMANCE* $10,000 invested in this Fund under a ...would have grown to this amount Futurity III Contract, this many years ago... on December 31, 2000
J.P. MORGAN INTERNATIONAL OPPORTUNITIES PORTFOLIO J.P. MORGAN SMALL COMPANY PORTFOLIO Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $ 8,308.00 -16.92% -16.92% 1 12/31/99 - 12/31/00 $ 8,753.00 -12.47% -12.47% 2 12/31/98 - 12/31/00 $11,208.00 12.08% 5.87% 2 12/31/98 - 12/31/00 $12,477.00 24.77% 11.70% 3 12/31/97 - 12/31/00 $11,587.00 15.87% 5.03% 3 12/31/97 - 12/31/00 $11,638.00 16.38% 5.19% 4 12/31/96 - 12/31/00 $12,059.00 20.59% 4.79% 4 12/31/96 - 12/31/00 $14,073.00 40.73% 8.92% 5 12/31/95 - 12/31/00 $13,469.00 34.69% 6.14% 5 12/31/95 - 12/31/00 $16,917.00 69.17% 11.09% Life 01/03/95 - 12/31/00 $14,942.00 49.42% 6.93% Life 01/03/95 - 12/31/00 $22,194.00 121.94% 14.23% J.P. MORGAN U.S. DISCIPLINED EQUITY PORTFOLIO LORD ABBETT GROWTH AND INCOME PORTFOLIO Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $ 8,787.00 -12.13% -12.13% 1 12/31/99 - 12/31/00 $11,428.00 14.28% 14.28% 2 12/31/98 - 12/31/00 $10,283.00 2.83% 1.41% 2 12/31/98 - 12/31/00 $13,170.00 31.70% 14.76% 3 12/31/97 - 12/31/00 $12,515.00 25.15% 7.76% 3 12/31/97 - 12/31/00 $14,676.00 46.76% 13.64% 4 12/31/96 - 12/31/00 $15,752.00 57.52% 12.03% 4 12/31/96 - 12/31/00 $18,059.00 80.59% 15.92% 5 12/31/95 - 12/31/00 $18,855.00 88.55% 13.52% 5 12/31/95 - 12/31/00 $21,282.00 112.82% 16.31% 10 12/31/90 - 12/31/00 $44,857.00 348.57% 16.19% Life 01/03/95 - 12/31/00 $24,903.00 149.03% 16.45% Life 12/11/89 - 12/31/00 $45,537.00 355.37% 14.70% MFS/SUN LIFE CAPITAL APPRECIATION SERIES MFS/SUN LIFE EMERGING GROWTH SERIES Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $ 8,744.00 -12.56% -12.56% 1 12/31/99 - 12/31/00 $ 7,987.00 -20.13% -20.13% 2 12/31/98 - 12/31/00 $11,449.00 14.49% 7.00% 2 12/31/98 - 12/31/00 $13,861.00 38.61% 17.73% 3 12/31/97 - 12/31/00 $14,546.00 45.46% 13.30% 3 12/31/97 - 12/31/00 $18,320.00 83.20% 22.36% 4 12/31/96 - 12/31/00 $17,681.00 76.81% 15.31% 4 12/31/96 - 12/31/00 $22,050.00 120.50% 21.86% 5 12/31/95 - 12/31/00 $21,200.00 112.00% 16.22% 5 12/31/95 - 12/31/00 $25,496.00 154.96% 20.59% 10 12/31/90 - 12/31/00 $48,686.00 386.86% 17.15% Life 06/12/85 - 12/31/00 $85,843.00 758.43% 14.82% Life 05/01/95 - 12/31/00 $32,053.00 220.53% 22.81%
* For periods of less than one year, the growth rates listed are not annualized. -26-
NON-STANDARDIZED INVESTMENT PERFORMANCE* $10,000 invested in this Fund under a ...would have grown to this amount Futurity III Contract, this many years ago... on December 31, 2000
MFS/SUN LIFE GOVERNMENT SECURITIES SERIES MFS/SUN LIFE HIGH YIELD SERIES Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $11,069.00 10.69% 10.69% 1 12/31/99 - 12/31/00 $ 9,202.00 -7.98% -7.98% 2 12/31/98 - 12/31/00 $10,721.00 7.21% 3.54% 2 12/31/98 - 12/31/00 $ 9,713.00 -2.87% -1.45% 3 12/31/97 - 12/31/00 $11,504.00 15.04% 4.78% 3 12/31/97 - 12/31/00 $ 9,643.00 -3.57% -1.20% 4 12/31/96 - 12/31/00 $12,346.00 23.46% 5.41% 4 12/31/96 - 12/31/00 $10,779.00 7.79% 1.89% 5 12/31/95 - 12/31/00 $12,386.00 23.86% 4.37% 5 12/31/95 - 12/31/00 $11,929.00 19.29% 3.59% 10 12/31/90 - 12/31/00 $17,965.00 79.65% 6.03% 10 12/31/90 - 12/31/00 $25,539.00 155.39% 9.83% Life 06/12/85 - 12/31/00 $27,734.00 177.34% 6.78% Life 06/12/85 - 12/31/00 $27,907.00 179.07% 6.82% MFS/SUN LIFE MASSACHUSETTS INVESTORS GROWTH STOCK SERIES MFS/SUN LIFE MASSACHUSETTS INVESTORS TRUST SERIES Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $ 9,267.00 -7.33% -7.33% 1 12/31/99 - 12/31/00 $ 9,881.00 -1.19% -1.19% 2 12/31/98 - 12/31/00 $12,420.00 24.20% 11.45% 2 12/31/98 - 12/31/00 $10,454.00 4.54% 2.24% 3 12/31/97 - 12/31/00 $12,781.00 27.81% 8.52% 4 12/31/96 - 12/31/00 $16,646.00 66.46% 13.59% 5 12/31/95 - 12/31/00 $20,606.00 106.06% 15.56% 10 12/31/90 - 12/31/00 $41,153.00 311.53% 15.20% Life 05/06/98 - 12/31/00 $14,864.00 48.64% 16.10% Life 11/14/86 - 12/31/00 $53,889.00 438.89% 12.66% MFS/SUN LIFE NEW DISCOVERY SERIES MFS/SUN LIFE TOTAL RETURN SERIES Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $ 9,909.00 -0.91% -0.91% 1 12/31/99 - 12/31/00 $11,530.00 15.30% 15.30% 2 12/31/98 - 12/31/00 $15,672.00 56.72% 25.19% 2 12/31/98 - 12/31/00 $11,705.00 17.05% 8.19% 3 12/31/97 - 12/31/00 $12,907.00 29.07% 8.88% 4 12/31/96 - 12/31/00 $15,542.00 55.42% 11.65% 5 12/31/95 - 12/31/00 $17,503.00 75.03% 11.85% 10 12/31/90 - 12/31/00 $30,432.00 204.32% 11.77% Life 05/06/98 - 12/31/00 $16,503.00 65.03% 20.77% Life 05/11/88 - 12/31/00 $37,526.00 275.26% 11.03%
* For periods of less than one year, the growth rates listed are not annualized. -27-
NON-STANDARDIZED INVESTMENT PERFORMANCE* $10,000 invested in this Fund under a ...would have grown to this amount Futurity III Contract, this many years ago... on December 31, 2000
MFS/SUN LIFE UTILITIES SERIES SUN CAPITAL VALUE EQUITY PORTFOLIO Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $10,561.00 5.61% 5.61% 2 12/31/98 - 12/31/00 $13,691.00 36.91% 17.01% 3 12/31/97 - 12/31/00 $15,886.00 58.86% 16.68% 4 12/31/96 - 12/31/00 $20,812.00 108.12% 20.11% 5 12/31/95 - 12/31/00 $24,727.00 147.27% 19.85% Life 11/16/93 - 12/31/00 $30,327.00 203.27% 16.85% Life 07/17/00 - 12/31/00 $11,269.00 12.69% 12.69% SUN CAPITAL VALUE MANAGED PORTFOLIO SUN CAPITAL VALUE MID CAP PORTFOLIO Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate Life 07/17/00 - 12/31/00 $11,315.00 13.15% 13.15% Life 07/17/00 - 12/31/00 $10,278.00 2.78% 2.78% SUN CAPITAL VALUE SMALL CAP PORTFOLIO SUN CAPITAL INVESTMENT GRADE BOND FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $10,849.00 8.49% 8.49% 2 12/31/98 - 12/31/00 $10,648.00 6.48% 3.19% Life 07/17/00 - 12/31/00 $12,118.00 21.18% 21.18% Life 12/07/98 - 12/31/00 $10,642.00 6.42% 3.06% SUN CAPITAL MONEY MARKET FUND SUN CAPITAL REAL ESTATE FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $10,451.00 4.51% 4.51% 1 12/31/99 - 12/31/00 $12,953.00 29.53% 29.53% 2 12/31/98 - 12/31/00 $10,799.00 7.99% 3.92% 2 12/31/98 - 12/31/00 $12,289.00 22.89% 10.86% Life 12/07/98 - 12/31/00 $10,821.00 8.21% 3.89% Life 12/07/98 - 12/31/00 $12,194.00 21.94% 10.08%
* For periods of less than one year, the growth rates listed are not annualized. -28-
NON-STANDARDIZED INVESTMENT PERFORMANCE* $10,000 invested in this Fund under a ...would have grown to this amount Futurity III Contract, this many years ago... on December 31, 2000
SUN CAPITAL BLUE CHIP MID CAP FUND SUN CAPITAL FOUNDATION FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $12,335.00 23.35% 23.35% 1 12/31/99 - 12/31/00 $9,282.00 -7.18% -7.18% Life 09/01/99 - 12/31/00 $15,601.00 56.01% 39.66% Life 09/01/99 - 12/31/00 $10,369.0 3.69% 2.76% SUN CAPITAL SELECT EQUITY FUND SUN CAPITAL DAVIS VENTURE VALUE FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $ 8,917.00 -10.83% -10.83% Life 09/01/99 - 12/31/00 $11,224.00 12.24% 9.06% Life 07/17/00 - 12/31/00 $9,798.00 -2.02% -2.02% SUN CAPITAL DAVIS FINANCIAL FUND Number Cumulative Compound of Years Periods Amount Growth Rate Growth Rate Life 07/17/00 - 12/31/00 $11,271.00 12.71% 12.71%
* For periods of less than one year, the growth rates listed are not annualized. -29-
NON-STANDARDIZED INVESTMENT PERFORMANCE* $10,000 invested in this Fund under a ...would have grown to this amount Futurity III Contract, this many years ago... on December 31, 2000
1.40% M&E ---------
AIM V.I. CAPITAL APPRECIATION FUND AIM V.I. GROWTH FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99-12/31/00 $ 8,785.00 -12.15% -12.15% 1 12/31/99-12/31/00 $ 7,841.00 -21.59% -21.59% 2 12/31/98-12/31/00 $12,530.00 25.30% 11.94% 2 12/31/98-12/31/00 $10,457.00 4.57% 2.26% 3 12/31/97-12/31/00 $14,741.00 47.41% 13.81% 3 12/31/97-12/31/00 $13,831.00 38.31% 11.42% 4 12/31/96-12/31/00 $16,501.00 65.01% 13.34% 4 12/31/96-12/31/00 $17,305.00 73.05% 14.69% 5 12/31/95-12/31/00 $19,131.00 91.31% 13.85% 5 12/31/95-12/31/00 $20,151.00 101.51% 15.04% Life 05/05/93-12/31/00 $30,641.00 206.41% 15.75% Life 05/05/93-12/31/00 $28,245.00 182.45% 14.52% AIM V.I. GROWTH AND INCOME FUND AIM V.I. INTERNATIONAL EQUITY FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99-12/31/00 $ 8,426.00 -15.74% -15.74% 1 12/31/99-12/31/00 $ 7,257.00 -27.43% -27.43% 2 12/31/98-12/31/00 $11,155.00 11.55% 5.62% 2 12/31/98-12/31/00 $11,097.00 10.97% 5.34% 3 12/31/97-12/31/00 $14,047.00 40.47% 11.99% 3 12/31/97-12/31/00 $12,638.00 26.38% 8.12% 4 12/31/96-12/31/00 $17,415.00 74.15% 14.88% 4 12/31/96-12/31/00 $13,328.00 33.28% 7.45% 5 12/31/95-12/31/00 $20,598.00 105.98% 15.55% 5 12/31/95-12/31/00 $15,778.00 57.78% 9.55% Life 05/02/94-12/31/00 $26,940.00 169.40% 16.03% Life 05/05/93-12/31/00 $20,853.00 108.53% 10.07% ALGER AMERICAN GROWTH PORTFOLIO ALGER AMERICAN INCOME AND GROWTH PORTFOLIO Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99-12/31/00 $ 8,404.00 -15.96% -15.96% 1 12/31/99-12/31/00 $ 9,736.00 -2.64% -2.64% 2 12/31/98-12/31/00 $11,085.00 10.85% 5.29% 2 12/31/98-12/31/00 $13,678.00 36.78% 16.95% 3 12/31/97-12/31/00 $16,192.00 61.92% 17.43% 3 12/31/97-12/31/00 $17,862.00 78.62% 21.33% 4 12/31/96-12/31/00 $20,083.00 100.83% 19.04% 4 12/31/96-12/31/00 $24,013.00 140.13% 24.48% 5 12/31/95-12/31/00 $22,449.00 124.49% 17.55% 5 12/31/95-12/31/00 $28,342.00 183.42% 23.16% 10 12/31/90-12/31/00 $56,016.00 460.16% 18.80% 10 12/31/90-12/31/00 $48,535.00 385.35% 17.11% Life 01/09/89-12/31/00 $70,438.00 604.38% 17.71% Life 11/15/88-12/31/00 $51,229.00 412.29% 14.42%
* For periods of less than one year, the growth rates listed are not annualized. -30-
NON-STANDARDIZED INVESTMENT PERFORMANCE* $10,000 invested in this Fund under a ...would have grown to this amount Futurity III Contract, this many years ago... on December 31, 2000
ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO GOLDMAN SACHS VIT CORE-SM LARGE CAP GROWTH FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99-12/31/00 $ 7,179.00 -28.21% -28.21% 1 12/31/99-12/31/00 $ 7,645.00 -23.55% -23.55% 2 12/31/98-12/31/00 $10,154.00 1.54% 0.77% 2 12/31/98-12/31/00 $10,209.00 2.09% 1.04% 3 12/31/97-12/31/00 $11,568.00 15.68% 4.98% 4 12/31/96-12/31/00 $12,708.00 27.08% 6.17% 5 12/31/95-12/31/00 $13,055.00 30.55% 5.48% 10 12/31/90-12/31/00 $31,078.00 210.78% 12.01% Life 09/21/88-12/31/00 $52,057.00 420.57% 14.38% Life 02/13/98-12/31/00 $11,786.00 17.86% 5.87% GOLDMAN SACHS VIT CORE-SM SMALL CAP EQUITY FUND GOLDMAN SACHS VIT CORE-SM U.S. EQUITY FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99-12/31/00 $10,034.00 0.34% 0.34% 1 12/31/99-12/31/00 $ 8,913.00 -10.87% -10.87% 2 12/31/98-12/31/00 $11,631.00 16.31% 7.85% 2 12/31/98-12/31/00 $10,925.00 9.25% 4.52% Life 02/13/98-12/31/00 $10,409.00 4.09% 1.40% Life 02/13/98-12/31/00 $12,369.00 23.69% 7.66% GOLDMAN SACHS VIT GROWTH AND INCOME FUND GOLDMAN SACHS VIT INTERNATIONAL EQUITY FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99- 12/31/00 $ 9,399.00 -6.01% -6.01% 1 12/31/99-12/31/00 $ 8,561.00 -14.39% -14.39% 2 12/31/98-12/31/00 $ 9,770.00 -2.30% -1.16% 2 12/31/98-12/31/00 $11,131.00 11.31% 5.50% Life 01/12/98-12/31/00 $10,167.00 1.67% 0.56% Life 01/12/98-12/31/00 $13,186.00 31.86% 9.77%
* For periods of less than one year, the growth rates listed are not annualized. -31-
NON-STANDARDIZED INVESTMENT PERFORMANCE* $10,000 invested in this Fund under a ...would have grown to this amount Futurity III Contract, this many years ago... on December 31, 2000
J.P. MORGAN INTERNATIONAL OPPORTUNITIES PORTFOLIO J.P. MORGAN SMALL COMPANY PORTFOLIO Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99-12/31/00 $ 8,299.00 -17.01% -17.01% 1 12/31/99-12/31/00 $ 8,745.00 -12.55% -12.55% 2 12/31/98-12/31/00 $11,185.00 11.85% 5.76% 2 12/31/98-12/31/00 $12,452.00 24.52% 11.59% 3 12/31/97-12/31/00 $11,552.00 15.52% 4.93% 3 12/31/97-12/31/00 $11,603.00 16.03% 5.08% 4 12/31/96-12/31/00 $12,011.00 20.11% 4.69% 4 12/31/96-12/31/00 $14,016.00 40.16% 8.81% 5 12/31/95-12/31/00 $13,401.00 34.01% 6.03% 5 12/31/95-12/31/00 $16,832.00 68.32% 10.98% Life 01/03/95-12/31/00 $14,852.00 48.52% 6.82% Life 01/03/95-12/31/00 $22,060.00 120.60% 14.12% J.P. MORGAN U.S. DISCIPLINED EQUITY PORTFOLIO LORD ABBETT GROWTH AND INCOME PORTFOLIO Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99-12/31/00 $ 8,778.00 -12.22% -12.22% 1 12/31/99-12/31/00 $11,417.00 14.17% 14.17% 2 12/31/98-12/31/00 $10,262.00 2.62% 1.30% 2 12/31/98-12/31/00 $13,144.00 31.44% 14.65% 3 12/31/97-12/31/00 $12,477.00 24.77% 7.66% 3 12/31/97-12/31/00 $14,631.00 46.31% 13.52% 4 12/31/96-12/31/00 $15,688.00 56.88% 11.92% 4 12/31/96-12/31/00 $17,986.00 79.86% 15.81% 5 12/31/95-12/31/00 $18,759.00 87.59% 13.41% 5 12/31/95-12/31/00 $21,174.00 111.74% 16.19% 10 12/31/90-12/31/00 $44,405.00 344.05% 16.08% Life 01/03/95-12/31/00 $24,753.00 147.53% 16.33% Life 12/11/89-12/31/00 $45,029.00 350.29% 14.58% MFS / SUN LIFE CAPITAL APPRECIATION SERIES MFS / SUN LIFE EMERGING GROWTH SERIES Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99-12/31/00 $ 8,735.00 -12.65% -12.65% 1 12/31/99-12/31/00 $ 7,979.00 -20.21% -20.21% 2 12/31/98-12/31/00 $11,426.00 14.26% 6.89% 2 12/31/98-12/31/00 $13,834.00 38.34% 17.62% 3 12/31/97-12/31/00 $14,503.00 45.03% 13.19% 3 12/31/97-12/31/00 $18,265.00 82.65% 22.24% 4 12/31/96-12/31/00 $17,610.00 76.10% 15.20% 4 12/31/96-12/31/00 $21,962.00 119.62% 21.74% 5 12/31/95-12/31/00 $21,094.00 110.94% 16.10% 5 12/31/95-12/31/00 $25,368.00 153.68% 20.46% 10 12/31/90-12/31/00 $48,197.00 381.97% 17.03% Life 06/12/85-12/31/00 $84,504.00 745.04% 14.71% Life 05/01/95-12/31/00 $31,870.00 218.70% 22.69%
* For periods of less than one year, the growth rates listed are not annualized. -32-
NON-STANDARDIZED INVESTMENT PERFORMANCE* $10,000 invested in this Fund under a ...would have grown to this amount Futurity III Contract, this many years ago... on December 31, 2000
MFS / SUN LIFE GOVERNMENT SECURITIES SERIES MFS / SUN LIFE HIGH YIELD SERIES Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99-12/31/00 $11,058.00 10.58% 10.58% 1 12/31/99-12/31/00 $ 9,193.00 -8.07% -8.07% 2 12/31/98-12/31/00 $10,699.00 6.99% 3.44% 2 12/31/98-12/31/00 $ 9,693.00 -3.07% -1.55% 3 12/31/97-12/31/00 $11,469.00 14.69% 4.67% 3 12/31/97-12/31/00 $ 9,614.00 -3.86% -1.30% 4 12/31/96-12/31/00 $12,296.00 22.96% 5.30% 4 12/31/96-12/31/00 $10,736.00 7.36% 1.79% 5 12/31/95-12/31/00 $12,324.00 23.24% 4.27% 5 12/31/95-12/31/00 $11,869.00 18.69% 3.49% 10 12/31/90-12/31/00 $17,784.00 77.84% 5.93% 10 12/31/90-12/31/00 $25,282.00 152.82% 9.72% Life 06/12/85-12/31/00 $27,301.00 173.01% 6.67% Life 06/12/85-12/31/00 $27,471.00 174.71% 6.71% MFS / SUN LIFE MASSACHUSETTS INVESTORS GROWTH STOCK SERIES MFS / SUN LIFE MASSACHUSETTS INVESTORS TRUST SERIES Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99-12/31/00 $ 9,257.00 -7.43% -7.43% 1 12/31/99-12/31/00 $ 9,871.00 -1.29% -1.29% 2 12/31/98-12/31/00 $12,395.00 23.95% 11.33% 2 12/31/98-12/31/00 $10,433.00 4.33% 2.14% 3 12/31/97-12/31/00 $12,742.00 27.42% 8.41% 4 12/31/96-12/31/00 $16,579.00 65.79% 13.47% 5 12/31/95-12/31/00 $20,501.00 105.01% 15.44% 10 12/31/90-12/31/00 $40,738.00 307.38% 15.08% 05/06/98-12/31/00 $14,825.00 48.25% 15.99% Life 11/14/86-12/31/00 $53,124.00 431.24% 12.55% MFS / SUN LIFE NEW DISCOVERY SERIES MFS / SUN LIFE TOTAL RETURN SERIES Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99-12/31/00 $ 9,899.00 -1.01% -1.01% 1 12/31/99-12/31/00 $11,518.00 15.18% 15.18% 2 12/31/98-12/31/00 $15,641.00 56.41% 25.06% 2 12/31/98-12/31/00 $11,681.00 16.81% 8.08% 3 12/31/97-12/31/00 $12,868.00 28.68% 8.77% 4 12/31/96-12/31/00 $15,479.00 54.79% 11.54% 5 12/31/95-12/31/00 $17,415.00 74.15% 11.73% 10 12/31/90-12/31/00 $30,125.00 201.25% 11.66% Life 05/06/98-12/31/00 $16,460.00 64.60% 20.65% Life 05/11/88-12/31/00 $37,049.00 270.49% 10.92%
* For periods of less than one year, the growth rates listed are not annualized. -33-
NON-STANDARDIZED INVESTMENT PERFORMANCE* $10,000 invested in this Fund under a ...would have grown to this amount Futurity III Contract, this many years ago... on December 31, 2000
MFS / SUN LIFE UTILITIES SERIES SUN CAPITAL VALUE EQUITY PORTFOLIO Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99-12/31/00 $10,550.00 5.50% 5.50% 2 12/31/98-12/31/00 $13,663.00 36.63% 16.89% 3 12/31/97-12/31/00 $15,838.00 58.38% 16.56% 4 12/31/96-12/31/00 $20,729.00 107.29% 19.99% 5 12/31/95-12/31/00 $24,602.00 146.02% 19.73% Life 11/16/93-12/31/00 $30,109.00 201.09% 16.74% Life 07/17/00-12/31/00 $11,263.00 12.63% 12.63% SUN CAPITAL VALUE MANAGED PORTFOLIO SUN CAPITAL VALUE MID CAP PORTFOLIO Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate Life 07/17/00-12/31/00 $11,310.00 13.10% 13.10% Life 07/17/00-12/31/00 $10,274.00 2.74% 2.74% SUN CAPITAL VALUE SMALL CAP PORTFOLIO SUN CAPITAL INVESTMENT GRADE BOND FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99-12/31/00 $10,838.00 8.38% 8.38% 2 12/31/98-12/31/00 $10,626.00 6.26% 3.08% Life 07/17/00-12/31/00 $12,112.00 21.12% 21.12% Life 12/07/98-12/31/00 $10,620.00 6.20% 2.95% SUN CAPITAL MONEY MARKET FUND SUN CAPITAL REAL ESTATE FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99-12/31/00 $10,441.00 4.41% 4.41% 1 12/31/99-12/31/00 $12,940.00 29.40% 29.40% 2 12/31/98-12/31/00 $10,777.00 7.77% 3.81% 2 12/31/98-12/31/00 $12,264.00 22.64% 10.74% Life 12/07/98-12/31/00 $10,799.00 7.99% 3.79% Life 12/07/98-12/31/00 $12,168.00 21.68% 9.96%
* For periods of less than one year, the growth rates listed are not annualized. -34-
NON-STANDARDIZED INVESTMENT PERFORMANCE* $10,000 invested in this Fund under a ...would have grown to this amount Futurity III Contract, this many years ago... on December 31, 2000
SUN CAPITAL BLUE CHIP MID CAP FUND SUN CAPITAL FOUNDATION FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99-12/31/00 $12,323.00 23.23% 23.23% 1 12/31/99-12/31/00 $ 9,273.00 -7.27% -7.27% Life 09/01/99-12/31/00 $15,580.00 55.80% 39.52% Life 09/01/99-12/31/00 $10,355.00 3.55% 2.65% SUN CAPITAL SELECT EQUITY FUND SUN CAPITAL DAVIS VENTURE VALUE FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99-12/31/00 $ 8,908.00 -10.92% -10.92% Life 09/01/99-12/31/00 $11,209.00 12.09% 8.95% Life 07/17/00-12/31/00 $ 9,793.00 -2.07% -2.07% SUN CAPITAL DAVIS FINANCIAL FUND Number Cumulative Compound of Growth Growth Years Periods Amount Rate Rate Life 07/17/00-12/31/00 $11,266.00 12.66% 12.66%
* For periods of less than one year, the growth rates listed are not annualized. -35-
NON-STANDARDIZED INVESTMENT PERFORMANCE* $10,000 invested in this Fund under a ...would have grown to this amount Futurity III Contract, this many years ago... on December 31, 2000
1.55% M&E ---------
AIM V.I. CAPITAL APPRECIATION FUND AIM V.I. GROWTH FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $ 8,772.00 -12.28% -12.28% 1 12/31/99 - 12/31/00 $ 7,829.00 -21.71% -21.71% 2 12/31/98 - 12/31/00 $12,492.00 24.92% 11.77% 2 12/31/98 - 12/31/00 $10,426.00 4.26% 2.11% 3 12/31/97 - 12/31/00 $14,675.00 46.75% 13.64% 3 12/31/97 - 12/31/00 $13,769.00 37.69% 11.25% 4 12/31/96 - 12/31/00 $16,402.00 64.02% 13.17% 4 12/31/96 - 12/31/00 $17,202.00 72.02% 14.52% 5 12/31/95 - 12/31/00 $18,988.00 89.88% 13.68% 5 12/31/95 - 12/31/00 $20,000.00 100.00% 14.87% Life 05/05/93 - 12/31/00 $30,290.00 202.90% 15.57% Life 05/05/93 - 12/31/00 $27,921.00 179.21% 14.35% AIM V.I. GROWTH AND INCOME FUND AIM V.I. INTERNATIONAL EQUITY FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $ 8,413.00 -15.87% -15.87% 1 12/31/99 - 12/31/00 $ 7,246.00 -27.54% -27.54% 2 12/31/98 - 12/31/00 $11,122.00 11.22% 5.46% 2 12/31/98 - 12/31/00 $11,064.00 10.64% 5.19% 3 12/31/97 - 12/31/00 $13,984.00 39.84% 11.83% 3 12/31/97 - 12/31/00 $12,581.00 25.81% 7.95% 4 12/31/96 - 12/31/00 $17,311.00 73.11% 14.70% 4 12/31/96 - 12/31/00 $13,247.00 32.47% 7.28% 5 12/31/95 - 12/31/00 $20,444.00 104.44% 15.38% 5 12/31/95 - 12/31/00 $15,659.00 56.59% 9.38% Life 05/02/94 - 12/31/00 $26,672.00 166.72% 15.86% Life 05/05/93 - 12/31/00 $20,613.00 106.13% 9.91% ALGER AMERICAN GROWTH PORTFOLIO ALGER AMERICAN INCOME AND GROWTH PORTFOLIO Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $ 8,391.00 -16.09% -16.09% 1 12/31/99 - 12/31/00 $ 9,721.00 -2.79% -2.79% 2 12/31/98 - 12/31/00 $11,052.00 10.52% 5.13% 2 12/31/98 - 12/31/00 $13,638.00 36.38% 16.78% 3 12/31/97 - 12/31/00 $16,119.00 61.19% 17.25% 3 12/31/97 - 12/31/00 $17,782.00 77.82% 21.15% 4 12/31/96 - 12/31/00 $19,964.00 99.64% 18.87% 4 12/31/96 - 12/31/00 $23,870.00 138.70% 24.30% 5 12/31/95 - 12/31/00 $22,281.00 122.81% 17.38% 5 12/31/95 - 12/31/00 $28,131.00 181.31% 22.98% 10 12/31/90 - 12/31/00 $55,182.00 451.82% 18.63% 10 12/31/90 - 12/31/00 $47,810.00 378.10% 16.94% Life 01/09/89 - 12/31/00 $69,182.00 591.82% 17.53% Life 11/15/88 - 12/31/00 $50,302.00 403.02% 14.25%
* For periods of less than one year, the growth rates listed are not annualized. -36-
NON-STANDARDIZED INVESTMENT PERFORMANCE* $10,000 invested in this Fund under a ...would have grown to this amount Futurity III Contract, this many years ago... on December 31, 2000
ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO GOLDMAN SACHS VIT CORE-SM LARGE CAP GROWTH FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $ 7,168.00 -28.32% -28.32% 1 12/31/99 - 12/31/00 $ 7,633.00 -23.67% -23.67% 2 12/31/98 - 12/31/00 $10,123.00 1.23% 0.61% 2 12/31/98 - 12/31/00 $10,178.00 1.78% 0.89% 3 12/31/97 - 12/31/00 $11,516.00 15.16% 4.82% 4 12/31/96 - 12/31/00 $12,632.00 26.32% 6.02% 5 12/31/95 - 12/31/00 $12,956.00 29.56% 5.32% 10 12/31/90 - 12/31/00 $30,613.00 206.13% 11.84% Life 09/21/88 - 12/31/00 $51,103.00 411.03% 14.21% Life 02/13/98 - 12/31/00 $11,735.00 17.35% 5.71% GOLDMAN SACHS VIT CORE-SM SMALL CAP EQUITY FUND GOLDMAN SACHS VIT CORE-SM- U.S. EQUITY FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $10,019.00 0.19% 0.19% 1 12/31/99 - 12/31/00 $ 8,899.00 -11.01% -11.01% 2 12/31/98 - 12/31/00 $11,596.00 15.96% 7.68% 2 12/31/98 - 12/31/00 $10,892.00 8.92% 4.36% Life 02/13/98 - 12/31/00 $10,364.00 3.64% 1.25% Life 02/13/98 - 12/31/00 $12,315.00 23.15% 7.50% GOLDMAN SACHS VIT GROWTH AND INCOME FUND GOLDMAN SACHS VIT INTERNATIONAL EQUITY FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $ 9,385.00 -6.15% -6.15% 1 12/31/99 - 12/31/00 $ 8,548.00 -14.52% -14.52% 2 12/31/98 - 12/31/00 $ 9,741.00 -2.59% -1.30% 2 12/31/98 - 12/31/00 $11,098.00 10.98% 5.35% Life 01/12/98 - 12/31/00 $10,121.00 1.21% 0.41% Life 01/12/98 - 12/31/00 $13,127.00 31.27% 9.60%
* For periods of less than one year, the growth rates listed are not annualized. -37-
NON-STANDARDIZED INVESTMENT PERFORMANCE* $10,000 invested in this Fund under a ...would have grown to this amount Futurity III Contract, this many years ago... on December 31, 2000
J.P. MORGAN INTERNATIONAL OPPORTUNITIES PORTFOLIO J.P. MORGAN SMALL COMPANY PORTFOLIO Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $ 8,287.00 -17.13% -17.13% 1 12/31/99 - 12/31/00 $ 8,731.00 -12.69% -12.69% 2 12/31/98 - 12/31/00 $11,152.00 11.52% 5.60% 2 12/31/98 - 12/31/00 $12,415.00 24.15% 11.42% 3 12/31/97 - 12/31/00 $11,500.00 15.00% 4.77% 3 12/31/97 - 12/31/00 $11,550.00 15.50% 4.92% 4 12/31/96 - 12/31/00 $11,938.00 19.38% 4.53% 4 12/31/96 - 12/31/00 $13,932.00 39.32% 8.64% 5 12/31/95 - 12/31/00 $13,299.00 32.99% 5.87% 5 12/31/95 - 12/31/00 $16,705.00 67.05% 10.81% Life 01/03/95 - 12/31/00 $14,717.00 47.17% 6.66% Life 01/03/95 - 12/31/00 $21,860.00 118.60% 13.94% J.P. MORGAN U.S. DISCIPLINED EQUITY PORTFOLIO LORD ABBETT GROWTH AND INCOME PORTFOLIO Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $ 8,765.00 -12.35% -12.35% 1 12/31/99 - 12/31/00 $11,400.00 14.00% 14.00% 2 12/31/98 - 12/31/00 $10,231.00 2.31% 1.15% 2 12/31/98 - 12/31/00 $13,104.00 31.04% 14.47% 3 12/31/97 - 12/31/00 $12,421.00 24.21% 7.49% 3 12/31/97 - 12/31/00 $14,565.00 45.65% 13.35% 4 12/31/96 - 12/31/00 $15,593.00 55.93% 11.75% 4 12/31/96 - 12/31/00 $17,878.00 78.78% 15.63% 5 12/31/95 - 12/31/00 $18,617.00 86.17% 13.24% 5 12/31/95 - 12/31/00 $21,014.00 110.14% 16.01% 10 12/31/90 - 12/31/00 $43,735.00 337.35% 15.90% Life 01/03/95 - 12/31/00 $24,528.00 145.28% 16.15% Life 12/11/89 - 12/31/00 $44,278.00 342.78% 14.41% MFS/SUN LIFE CAPITAL APPRECIATION SERIES MFS/SUN LIFE EMERGING GROWTH SERIES Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $ 8,722.00 -12.78% -12.78% 1 12/31/99 - 12/31/00 $ 7,967.00 -20.33% -20.33% 2 12/31/98 - 12/31/00 $11,392.00 13.92% 6.73% 2 12/31/98 - 12/31/00 $13,792.00 37.92% 17.44% 3 12/31/97 - 12/31/00 $14,437.00 44.37% 13.02% 3 12/31/97 - 12/31/00 $18,183.00 81.83% 22.05% 4 12/31/96 - 12/31/00 $17,504.00 75.04% 15.02% 4 12/31/96 - 12/31/00 $21,830.00 118.30% 21.55% 5 12/31/95 - 12/31/00 $20,935.00 109.35% 15.92% 5 12/31/95 - 12/31/00 $25,177.00 151.77% 20.28% 10 12/31/90 - 12/31/00 $47,473.00 374.73% 16.85% Life 06/12/85 - 12/31/00 $82,538.00 725.38% 14.53% Life 05/01/95 - 12/31/00 $31,599.00 215.99% 22.50%
* For periods of less than one year, the growth rates listed are not annualized. -38-
NON-STANDARDIZED INVESTMENT PERFORMANCE* $10,000 invested in this Fund under a ...would have grown to this amount Futurity III Contract, this many years ago... on December 31, 2000
MFS/SUN LIFE GOVERNMENT SECURITIES SERIES MFS/SUN LIFE HIGH YIELD SERIES Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $11,041.00 10.41% 10.41% 1 12/31/99 - 12/31/00 $ 9,179.00 -8.21% -8.21% 2 12/31/98 - 12/31/00 $10,667.00 6.67% 3.28% 2 12/31/98 - 12/31/00 $ 9,664.00 -3.36% -1.69% 3 12/31/97 - 12/31/00 $11,417.00 14.17% 4.52% 3 12/31/97 - 12/31/00 $ 9,570.00 -4.30% -1.45% 4 12/31/96 - 12/31/00 $12,221.00 22.21% 5.14% 4 12/31/96 - 12/31/00 $10,671.00 6.71% 1.64% 5 12/31/95 - 12/31/00 $12,230.00 22.30% 4.11% 5 12/31/95 - 12/31/00 $11,779.00 17.79% 3.33% 10 12/31/90 - 12/31/00 $17,515.00 75.15% 5.76% 10 12/31/90 - 12/31/00 $24,902.00 149.02% 9.55% Life 06/12/85 - 12/31/00 $26,664.00 166.64% 6.51% Life 06/12/85 - 12/31/00 $26,830.00 168.30% 6.55% MFS/SUN LIFE MASSACHUSETTS INVESTORS GROWTH STOCK SERIES MFS/SUN LIFE MASSACHUSETTS INVESTORS TRUST SERIES Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $ 9,243.00 -7.57% -7.57% 1 12/31/99 - 12/31/00 $ 9,856.00 -1.44% -1.44% 2 12/31/98 - 12/31/00 $12,358.00 23.58% 11.17% 2 12/31/98 - 12/31/00 $10,402.00 4.02% 1.99% 3 12/31/97 - 12/31/00 $12,685.00 26.85% 8.25% 4 12/31/96 - 12/31/00 $16,479.00 64.79% 13.30% 5 12/31/95 - 12/31/00 $20,346.00 103.46% 15.26% 10 12/31/90 - 12/31/00 $40,125.00 301.25% 14.91% Life 05/06/98 - 12/31/00 $14,766.00 47.66% 15.81% Life 11/14/86 - 12/31/00 $51,997.00 419.97% 12.38% MFS/SUN LIFE NEW DISCOVERY SERIES MFS/SUN LIFE TOTAL RETURN SERIES Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $ 9,885.00 -1.15% -1.15% 1 12/31/99 - 12/31/00 $11,501.00 15.01% 15.01% 2 12/31/98 - 12/31/00 $15,595.00 55.95% 24.88% 2 12/31/98 - 12/31/00 $11,646.00 16.46% 7.92% 3 12/31/97 - 12/31/00 $12,809.00 28.09% 8.60% 4 12/31/96 - 12/31/00 $15,385.00 53.85% 11.37% 5 12/31/95 - 12/31/00 $17,282.00 72.82% 11.56% 10 12/31/90 - 12/31/00 $29,671.00 196.71% 11.49% Life 05/06/98 - 12/31/00 $16,394.00 63.94% 20.47% Life 05/11/88 - 12/31/00 $36,345.00 263.45% 10.75%
* For periods of less than one year, the growth rates listed are not annualized. -39-
NON-STANDARDIZED INVESTMENT PERFORMANCE* $10,000 invested in this Fund under a ...would have grown to this amount Futurity III Contract, this many years ago... on December 31, 2000
MFS/SUN LIFE UTILITIES SERIES SUN CAPITAL VALUE EQUITY PORTFOLIO Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $10,534.00 5.34% 5.34% 2 12/31/98 - 12/31/00 $13,622.00 36.22% 16.71% 3 12/31/97 - 12/31/00 $15,767.00 57.67% 16.39% 4 12/31/96 - 12/31/00 $20,604.00 106.04% 19.81% 5 12/31/95 - 12/31/00 $24,417.00 144.17% 19.55% Life 11/16/93 - 12/31/00 $29,786.00 197.86% 16.56% Life 07/17/00 - 12/31/00 $11,256.00 12.56% 12.56% SUN CAPITAL VALUE MANAGED PORTFOLIO SUN CAPITAL VALUE MID CAP PORTFOLIO Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate Life 07/17/00 - 12/31/00 $11,302.00 13.02% 13.02% Life 07/17/00 - 12/31/00 $10,267.00 2.67% 2.67% SUN CAPITAL VALUE SMALL CAP PORTFOLIO SUN CAPITAL INVESTMENT GRADE BOND FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $10,821.00 8.21% 8.21% 2 12/31/98 - 12/31/00 $10,594.00 5.94% 2.93% Life 07/17/00 - 12/31/00 $12,104.00 21.04% 21.04% Life 12/07/98 - 12/31/00 $10,586.00 5.86% 2.80% SUN CAPITAL MONEY MARKET FUND SUN CAPITAL REAL ESTATE FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $10,425.00 4.25% 4.25% 1 12/31/99 - 12/31/00 $12,920.00 29.20% 29.20% 2 12/31/98 - 12/31/00 $10,744.00 7.44% 3.65% 2 12/31/98 - 12/31/00 $12,227.00 22.27% 10.58% Life 12/07/98 - 12/31/00 $10,765.00 7.65% 3.63% Life 12/07/98 - 12/31/00 $12,131.00 21.31% 9.80%
* For periods of less than one year, the growth rates listed are not annualized. -40-
NON-STANDARDIZED INVESTMENT PERFORMANCE* $10,000 invested in this Fund under a ...would have grown to this amount Futurity III Contract, this many years ago... on December 31, 2000
SUN CAPITAL BLUE CHIP MID CAP FUND SUN CAPITAL FOUNDATION FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $12,304.00 23.04% 23.04% 1 12/31/99 - 12/31/00 $ 9,259.00 -7.41% -7.41% Life 09/01/99 - 12/31/00 $15,550.00 55.50% 39.31% Life 09/01/99 - 12/31/00 $10,334.0 3.34% 2.50% SUN CAPITAL SELECT EQUITY FUND SUN CAPITAL DAVIS VENTURE VALUE FUND Number Cumulative Compound Number Cumulative Compound of Growth Growth of Growth Growth Years Periods Amount Rate Rate Years Periods Amount Rate Rate 1 12/31/99 - 12/31/00 $ 8,895.00 -11.05% -11.05% Life 09/01/99 - 12/31/00 $11,187.00 11.87% 8.79% Life 07/17/00 - 12/31/00 $9,787.00 -2.13% -2.13% SUN CAPITAL DAVIS FINANCIAL FUND Number Cumulative Compound of Years Periods Amount Growth Rate Growth Rate Life 07/17/00 - 12/31/00 $11,258.00 12.58% 12.58%
* For periods of less than one year, the growth rates listed are not annualized. -41- ADVERTISING AND SALES LITERATURE As set forth in the Prospectus, the Company may refer to the following organizations (and others) in its marketing materials: A.M. BEST'S RATING SYSTEM is designed to evaluate the various factors affecting the overall performance of an insurance company in order to provide an opinion as to an insurance company's relative financial strength and ability to meet its contractual obligations. The procedure includes both a quantitative and qualitative review of each company. DUFF & PHELPS CREDIT RATING Company's Insurance Company Claims Paying Ability Rating is an independent evaluation by a nationally accredited rating organization of an insurance company's ability to meet its future obligations under the contracts and products it sells. The rating takes into account both quantitative and qualitative factors. LIPPER VARIABLE INSURANCE PRODUCTS PERFORMANCE ANALYSIS SERVICE is a publisher of statistical data covering the investment company industry in the United States and overseas. Lipper is recognized as the leading source of data on open-end and closed-end funds. Lipper currently tracks the performance of over 5,000 investment companies and publishes numerous specialized reports, including reports on performance and portfolio analysis, fee and expense analysis. STANDARD & POOR'S insurance claims-paying ability rating is an opinion of an operating insurance company's financial capacity to meet obligations of its insurance policies in accordance with their terms. VARDS (Variable Annuity Research Data Service) provides a comprehensive guide to variable annuity contract features and historical fund performance. The service also provides a readily understandable analysis of the comparative characteristics and market performance of funds inclusive in variable contracts. MOODY'S Investors Services, Inc.'s insurance claims-paying rating is a system of rating an insurance company's financial strength, market leadership, and ability to meet financial obligations. The purpose of Moody's ratings is to provide investors with a simple system of gradation by which the relative quality of insurance companies may be noted. STANDARD & POOR'S INDEX - broad-based measurement of changes in stock-market conditions based on the average performance of 500 widely held common stocks; commonly known as the Standard & Poor's 500 (S&P 500). The selection of stocks, their relative weightings to reflect differences in the number of outstanding shares, and publication of the index itself are services of Standard & Poor's Corporation, a financial advisory, securities rating, and publishing firm. The index tracks 400 industrial company stocks, 20 transportation stocks, 40 financial company stocks, and 40 public utilities. -42- NASDAQ-OTC Price Index - this index is based on the National Association of Securities Dealers Automated Quotations (NASDAQ) and represents all domestic over-the-counter stocks except those traded on exchanges and those having only one market maker, a total of some 3,500 stocks. It is market valueweighted and was introduced with a base of 100.00 on February 5, 1971. DOW JONES INDUSTRIAL AVERAGE (DJIA) - price-weighted average of 30 actively traded blue chip stocks, primarily industrials, but including American Express Company and American Telephone and Telegraph Company. Prepared and Published by Dow Jones & Company, it is the oldest and most widely quoted of all the market indicators. The average is quoted in points, not dollars. MORNINGSTAR, Inc. is an independent financial publisher offering comprehensive statistical and analytical coverage of open-end and closed-end funds and variable annuities. This coverage for mutual funds includes, among other information, performance analysis rankings, risk rankings (e.g. aggressive, moderate or conservative), and "style box" matrices. Style box matrices display, for equity funds, the investment philosophy and size of the companies in which the fund invests and, for fixed-income funds, interest rate sensitivity and credit quality of the investment instruments. IBBOTSON ASSOCIATES, Inc. is a consulting firm that provides a variety of historical data, including total return, capital appreciation and income, on the stock market as well as other investment asset classes, and inflation. This information will be used primarily for comparative purposes and to illustrate general financial planning principles. In its advertisements and other sales literature for the Variable Account and the Series Fund, the Company intends to illustrate the advantages of the Contracts in a number of ways: DOLLAR-COST AVERAGING ILLUSTRATIONS. These illustrations will generally discuss the price-leveling effect of making regular investments in the same Sub-Accounts over a period of time, to take advantage of the trends in market prices of the portfolio securities purchased by those Sub-Accounts. SYSTEMATIC WITHDRAWAL PROGRAM. A service provided by the Company, through which a Participant may take any distribution allowed by Internal Revenue Code Section 401 (a) (9) in the case of Qualified Contracts, or permitted under Internal Revenue Code Section 72 in the case of Non-Qualified Contracts, by way of a series of partial withdrawals. Withdrawals under this program may be fully or partially includible in income and may be subject to a 10% penalty tax. Consult your tax advisor. THE COMPANY'S AND THE FUNDS' CUSTOMERS. Sales literature for the Variable Account and the Funds may refer to the number of clients which they serve. THE COMPANY'S ASSETS, SIZE. The Company may discuss its general financial condition (see, for example, the references to Standard & Poor's, Duff & Phelps and A.M. Best Company above); it may refer to its assets; it may also discuss its -43- relative size and/or ranking among companies in the industry or among any sub-classification of those companies, based upon recognized evaluation criteria. For example, at December 31, 1998, the Company was the 36th largest U.S. life insurance company based upon overall assets. COMPOUND INTEREST ILLUSTRATIONS. These will emphasize several advantages of the variable annuity contract. For example, but not by way of limitation, the literature may emphasize the potential savings through tax deferral; the potential advantage of the Variable Account over the Fixed Account; and the compounding effect when a participant makes regular deposits to his or her account. The Company may use hypothetical illustrations of the benefits of tax deferral, including but not limited to the following chart: The chart below assumes an initial investment of $10,000 which remains fully invested for the entire time period, an 8% annual return, and a 33% combined federal and state income tax rate. It compares how three different investments might fare over 10, 20, and 30 years. The first example illustrates an investment in a non-tax-deferred account and assumes that taxes are paid annually out of that account. The second example illustrates how the same investment would grow in a tax-deferred investment, such as an annuity. And the third example illustrates the net value of the tax-deferred investment after paying taxes on the full account value.
-------------------------------------------------------------------------------- 10 YEARS 20 YEARS 30 YEARS -------------------------------------------------------------------------------- Non-Tax-Deferred Account $16,856 $28,413 $ 47,893 -------------------------------------------------------------------------------- Tax-Deferred Account $21,589 $46,610 $100,627 -------------------------------------------------------------------------------- Tax-Deferred Account After $17,765 $34,528 $ 70,720 -------------------------------------------------------------------------------- Paying Taxes --------------------------------------------------------------------------------
THIS ILLUSTRATION IS HYPOTHETICAL AND DOES NOT REPRESENT THE PROJECTED PERFORMANCE OF THE CONTRACTS OR ANY OF ITS INVESTMENT OPTIONS. THE ILLUSTRATION DOES NOT REFLECT THE DEDUCTION OF ANY CHARGES OR FEES RELATED TO PORTFOLIO MANAGEMENT, MORTALITY AND EXPENSE, OR ACCOUNT ADMINISTRATION. TAXES ON EARNINGS WITHIN AN ANNUITY ARE DUE UPON WITHDRAWAL. WITHDRAWALS MAY ALSO BE SUBJECT TO SURRENDER CHARGES AND, IF MADE PRIOR TO AGE 59 1/2, A 10% FEDERAL PENALTY TAX. -44- TAX-DEFERRED ACCUMULATION In general, individuals who own annuity contracts are not taxed on increases in the value of their annuity contracts until some form of distribution is made under the contract. As a result, the annuity contract would benefit from tax deferral during the contract's accumulation phase; this would have the effect of permitting an investment in an annuity contract to grow more rapidly that a comparable investment under which increases in value are taxed on a current basis. In reports or other communications to you or in advertising or sales materials, we may also describe the effects of tax-deferred compounding on the Variable Account's investment returns. We may illustrate these effects in charts or graphs and from time to time may include comparisons of returns under the Contracts or in general on a tax-deferred basis, with the returns on a taxable basis. Different tax rates may be assumed. Any such illustrative chart or graph would show accumulations on an initial investment or Purchase Payment, assuming a given amount (including the applicable interest credit), hypothetical gross annual returns compounded annually, and a stated rate of return. The values shown for the taxable investment would not include any deduction for management fees or other expenses, but would assume the annual deduction of federal and state taxes from investment returns. The values shown for the Contracts in a chart would reflect the deduction of Contract expenses, such as the mortality and expense risk charge, the 0.15% administrative charge, and the annual Account Fee. In addition, the values shown would assume that the Participant has not surrendered his or her Contract or made any partial surrenders until the end of the period shown. The chart would assume a full surrender at the end of the period shown and the payment of federal and state taxes, at a rate of not more than 33%, on the amount in excess of the Purchase Payments. In developing illustrative tax deferral charts, we will observe these general principles: - The assumed rate of earnings will be realistic. - The illustrative chart will accurately depict the effect of all fees and charges or provide a narrative that prominently discloses all fees and charges under the Contract. - Charts comparing accumulation values for tax-deferred and non-tax- deferred investments will depict the implications of any surrender. - A narrative accompanying the chart will prominently disclose that there may be a 10% tax penalty on a surrender by a Participant who has not reached age 59 1/2 at the time of surrender. The rates of return illustrated in any chart would be hypothetical and are not an estimate or guaranty of performance. Actual tax returns may vary for among Participants. -45- CALCULATIONS EXAMPLE OF VARIABLE ACCUMULATION UNIT VALUE CALCULATION Suppose the net asset value of a Fund share at the end of the current valuation period is $18.38; at the end of the immediately preceding valuation period was $18.32; the Valuation Period is one day; and no dividends or distributions caused Fund shares to go "ex-dividend" during the current Valuation Period. $18.38 divided by $18.32 is 1.00327511. Subtracting the one day risk factor for mortality and expense risks and the administrative expense charge of .00004280 (the daily equivalent of the current maximum charge of 1.55% on an annual basis) gives a net investment factor of 1.00323231. If the value of the variable accumulation unit for the immediately preceding valuation period had been 14.5645672, the value for the current valuation period would be 14.6116444 (14.5645672 X 1.00323231). EXAMPLE OF VARIABLE ANNUITY UNIT CALCULATION Suppose the circumstances of the first example exist, and the value of an annuity unit for the immediately preceding valuation period had been 12.3456789. If the first variable annuity payment is determined by using an annuity payment based on an assumed interest rate of 3% per year, the value of the annuity unit for the current valuation period would be 12.3456789 (12.3456789 X 1.00323648 (the Net Investment Factor) (based on the daily equivalent of maximum annuity phase charge of 1.40% on an annual basis) X 0.99991902). 0.99991902 is the factor, for a one day Valuation Period, that neutralizes the assumed interest rate of 3% per year used to establish the Annuity Payment Rates found in certain Contracts. EXAMPLE OF VARIABLE ANNUITY PAYMENT CALCULATION Suppose that a Participant Account is credited with 8,765.4321 variable accumulation units of a particular Sub-Account but is not credited with any fixed accumulation units; that the variable accumulation unit value and the annuity unit value for the particular Sub-Account for the valuation period which ends immediately preceding the annuity commencement date are 14.5645672 and 12.3456789 respectively; that the annuity payment rate for the age and option elected is $6.78 per $1,000; and that the annuity unit value on the day prior to the second variable annuity payment date is 12.3846153. The first variable annuity payment would be $865.57 (8,765.4321 X 14.5645672 X 6.78 divided by 1,000). The number of annuity units credited would be 70.1112 ($865.57 divided by 12.3456789) and the second variable annuity payment would be $868.30 (70.1112 X 12.3846153). DISTRIBUTION OF THE CONTRACTS We offer the Contracts on a continuous basis. The Contracts are sold by licensed insurance agents in those states where the Contracts may be lawfully sold. Such agents will be registered representatives of broker-dealers registered under the Securities Exchange Act of 1934 who are members of the National Association of Securities Dealers, Inc. and who have entered into distribution agreements with the Company and the general distributor and principal underwriter of the Contracts, Clarendon Insurance Agency, Inc. ("Clarendon"), One Sun Life Executive Park, Wellesley Hills, Massachusetts 02481. Clarendon is a wholly-owned subsidiary of the Company. Clarendon is registered with the SEC under the Securities Exchange Act of 1934 as broker-dealer and is a member of the National Association of Securities Dealers, Inc. Clarendon also acts as the general distributor of certain other annuity contracts issued by the Company and its wholly-owned subsidiary, Sun Life Insurance and Annuity Company of New York, and variable life insurance contracts issued by the Company. Commissions and other distribution compensation will be paid by the Company to the selling agents and will not be more than 6.50% of Purchase Payments. In addition, after the first Account Year, broker-dealers who have entered into distribution agreements with the Company may receive an annual renewal commission of no more than 0.50% of the Participant's Account Value. In addition to commissions, the Company may, from time to time, pay or allow additional promotional incentives, in the form of cash or other compensation. The Company reserves the right to offer these additional incentives only to certain -46- broker-dealers that sell or are expected to sell during specified time periods certain minimum amounts of the Contracts or Certificates or other contracts offered by the Company. Promotional incentives may change at any time. Commissions will not be paid with respect to Participant Accounts established for the personal account of employees of the Company or any of its affiliates, or of persons engaged in the distribution of the Contracts, or of immediate family members of such employees or persons. In addition, commissions may be waived or reduced in connection with certain transactions described in the Prospectus under the heading "Waivers; Reduced Charges; Credits; Bonus Guaranteed Interest Rates." DESIGNATION AND CHANGE OF BENEFICIARY The Beneficiary designation in the Application will remain in effect until changed. Subject to the rights of an irrevocably designated Beneficiary, you may change or revoke the designation of Beneficiary by filing the change or revocation with us in the form we require. The change or revocation will not be binding on us until we receive it. When we receive it, the change or revocation will be effective as of the date on which it was signed, but the change or revocation will be without prejudice to us on account of any payment we make or any action we take before receiving the change or revocation. Please refer to the terms of your particular retirement plan and any applicable legislation for any restrictions on the beneficiary designation. CUSTODIAN We are the Custodian of the assets of the Variable Account. We will purchase Fund shares at net asset value in connection with amounts allocated to the Sub-Accounts in accordance with your instructions, and we will redeem Fund shares at net asset value for the purpose of meeting the contractual obligations of the Variable Account, paying charges relative to the Variable Account or making adjustments for annuity reserves held in the Variable Account. FINANCIAL STATEMENTS The Financial Statements of Sun Life Assurance Company of Cananda (U.S.) and of Sun Life of Canada (U.S.) Variable Account F for the year ended December 31, 2000 included in this Statement of Additional Information have been audited by, Deloitte & Touche LLP independent auditors, as stated in their report appearing herein, and are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. -47- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF CONDITION -- December 31, 2000
ASSETS: Shares Cost Value Investments in: ---------- -------------- -------------- AIM Variable Insurance Fund, Inc. V.I. Capital Appreciation Fund (AIM1).............................. 1,439,695 $ 51,794,257 $ 44,400,200 V.I. Growth Fund (AIM2)............. 2,350,900 72,875,207 58,349,349 V.I. Growth and Income Fund (AIM3).............................. 2,433,793 72,258,079 63,741,026 V.I. International Equity Fund (AIM4).............................. 2,800,533 69,234,188 56,346,731 The Alger American Fund Growth Portfolio (AL1).............. 1,785,019 101,540,903 84,377,844 Income and Growth Portfolio (AL2)... 3,958,234 57,568,865 52,486,179 Small Capitalization Portfolio (AL3)............................... 699,048 24,451,035 16,420,640 Goldman Sachs Variable Insurance Trust VIT(sm) CORE Large Cap Growth Fund (GS1)............................... 2,278,432 31,893,392 25,062,751 VIT(sm) CORE Small Cap Equity Fund (GS2)............................... 574,559 5,951,099 5,975,418 VIT(sm) CORE US Equity Fund (GS3)... 1,731,619 22,929,611 21,610,604 Growth and Income Fund (GS4)........ 770,632 8,329,500 7,968,339 International Equity Fund (GS5)..... 896,365 12,129,934 10,559,176 J.P. Morgan Series Trust II U.S. Disciplined Equity Portfolio (JP1)............................... 1,447,785 24,216,998 21,571,993 International Opportunities Portfolio (JP2)..................... 780,628 9,872,333 8,860,127 Small Company Portfolio (JP3)....... 435,089 6,752,698 6,256,583 Lord Abbett Series Fund, Inc. Growth and Income Portfolio (LA1)... 1,961,586 44,068,435 49,922,363 MFS/Sun Life Series Trust Capital Appreciation Series (CAS)... 849,541 40,007,057 35,297,224 Emerging Growth Series (EGS)........ 2,660,742 90,736,303 77,999,168 High Yield Series (HYS)............. 3,449,516 28,775,048 26,312,594 Money Market (MMS).................. 5,997,481 5,997,481 5,997,481 Utilities Series (UTS).............. 2,652,567 49,789,169 50,601,928 Government Securities Series (GSS)............................... 1,862,993 23,232,006 24,422,562 Total Return Series (TRS)........... 772,902 14,198,799 15,222,153 Massachusetts Investors Trust Series (MIT)............................... 898,590 32,208,557 31,561,109 New Discovery Series (NWD).......... 1,694,410 29,161,513 27,083,594 Massachusetts Investors Growth Stock Series (MIS)........................ 3,381,051 53,375,192 49,044,318 OCC Accumulation Trust Equity Portfolio (OP1).............. 680,927 21,920,447 24,574,655 Mid Cap Portfolio (OP2)............. 1,167,119 14,490,037 15,195,886 Small Cap Portfolio (OP3)........... 319,639 8,571,467 10,308,369 Managed Portfolio (OP4)............. 88,314 3,618,794 3,815,153 Salomon Brothers Variable Series Funds, Inc. Variable Capital Fund (SB1)......... 33,759 415,860 509,766 Variable Investors Fund (SB2)....... 47,265 570,629 642,325 Variable Strategic Bond Fund (SB3)............................... 491,308 4,899,375 4,790,257 Variable Total Return Fund (SB4).... 432,471 4,588,399 4,627,437 Sun Capital Advisers Trust Money Market Fund (SCA1)............ 38,219,658 38,219,658 38,219,658 Investment Grade Bond Fund (SCA2)... 3,051,354 28,621,639 29,301,552 Real Estate Fund (SCA3)............. 955,395 10,182,889 10,746,921 Select Equity Fund (SCA4)........... 1,035,273 13,018,244 11,360,321 Blue Chip Mid Cap Fund (SCA5)....... 2,345,548 34,436,594 32,672,766 Investors Foundation Fund (SCA6).... 251,005 2,755,102 2,439,971 Davis Venture Value Fund (SCA7)..... 1,082,386 10,493,547 10,639,691 Davis Financial Fund (SCA8)......... 217,392 2,288,206 2,460,986 Value Equity Fund (SCA9)............ 27,623 294,915 311,914 Value Mid Cap Fund (SCA)............ 588,184 5,862,617 6,054,954 Value Small Cap Fund (SCB).......... 296,328 3,146,541 3,535,159 Value Managed Fund (SCC)............ 10,637 111,609 120,149 Credit Suisse Institutional Emerging Markets Portolio (CS1)..... 225,539 2,954,156 2,104,276 International Equity Portfolio (CS2)............................... 144,459 2,062,211 1,550,044 Post-Venture Capital Portfolio (CS3)............................... 69,954 1,306,591 952,778 Small Company Growth Portfolio (CS4)............................... 203,348 4,908,602 3,391,848 -------------- -------------- $1,203,085,788 $1,097,778,290 ============== LIABILITY: Payable to sponsor.................................................. (55,318) -------------- Net assets.................................................... $1,097,722,972 ==============
See notes to financial statements -48- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF CONDITION -- December 31, 2000 -- continued
Applicable to Owners of Deferred Variable Annuity Contracts Reserve for ------------------------------------------------- Variable Units Unit Value Value Annuities Total ---------------- ---------------- ------------- ------------- ------------- NET ASSETS APPLICABLE TO CONTRACT OWNERS FUTURITY CONTRACTS: AIM Variable Insurance Fund, Inc. V.I. Capital Appreciation Fund...... 323,566 $14.1147 $ 4,566,886 $ 17,147 $ 4,584,033 V.I. Growth Fund.................... 563,444 13.0788 7,368,963 11,750 7,380,713 V.I. Growth and Income Fund......... 731,377 12.6026 9,216,871 10,501 9,227,372 V.I. International Equity Fund...... 517,861 12.2053 6,320,274 11,822 6,332,096 The Alger American Fund Growth Portfolio.................... 674,890 14.0201 9,461,818 15,721 9,477,539 Income and Growth Portfolio......... 436,526 16.1991 7,070,854 -- 7,070,854 Small Capitalization Portfolio...... 199,588 10.5502 2,105,662 -- 2,105,662 Goldman Sachs Variable Insurance Trust VIT-SM- CORE Large-Cap Growth Fund............................... 443,344 11.2320 4,979,273 39,786 5,019,059 VIT-SM- CORE Small Cap Equity Fund............................... 162,736 10.4070 1,692,423 21,053 1,713,476 VIT-SM- CORE US Equity Fund......... 475,664 12.3549 5,876,510 1,492 5,878,002 Growth and Income Fund.............. 315,802 9.0392 2,854,492 -- 2,854,492 International Equity Fund........... 71,063 11.6938 830,968 12,241 843,209 J.P. Morgan Series Trust II U.S. Disciplined Equity Portfolio... 517,380 11.1129 5,748,000 13,551 5,761,551 International Opportunities Portfolio.......................... 87,839 10.3374 907,914 15,856 923,770 Small Company Portfolio............. 48,750 10.4061 506,903 -- 506,903 Lord Abbett Series Fund, Inc. Growth and Income Portfolio......... 639,759 13.2532 8,478,094 -- 8,478,094 MFS/Sun Life Series Trust Capital Appreciation Series......... 597,093 12.9992 7,761,555 15,169 7,776,724 Emerging Growth Series.............. 692,959 16.8486 11,675,179 37,950 11,713,129 High Yield Series................... 467,681 9.3641 4,379,275 26,398 4,405,673 Money Market........................ 539,256 11.1246 5,997,481 -- 5,997,481 Utilities Series.................... 756,858 14.1833 10,734,675 38,739 10,773,414 Government Securities Series........ 485,303 11.3197 5,493,851 39,762 5,533,613 OCC Accumulation Trust Equity Portfolio.................... 615,342 11.5835 7,128,049 1,454 7,129,503 Mid Cap Portfolio................... 313,356 14.4520 4,528,373 19,269 4,547,642 Small Cap Portfolio................. 224,362 11.3656 2,549,926 17,142 2,567,068 Salomon Brothers Variable Series Funds, Inc. Variable Capital Fund............... 33,486 15.2248 509,766 -- 509,766 Variable Investors Fund............. 50,200 12.7964 642,325 -- 642,325 Variable Strategic Bond Fund........ 432,976 10.9937 4,759,307 29,743 4,789,050 Variable Total Return Fund.......... 429,550 10.7353 4,610,954 15,687 4,626,641 Credit Suisse Institutional Emerging Markets Portfolio.......... 41,504 8.8847 368,503 12,463 380,966 International Equity Portfolio...... 46,899 10.0288 470,107 -- 470,107 Post-Venture Capital Portfolio...... 26,874 11.8989 319,781 17,181 336,962 Small Company Growth Portfolio...... 79,238 11.9134 943,968 -- 943,968 ------------ -------- ------------ $150,858,980 $441,877 $151,300,857 ------------ -------- ------------
See notes to financial statements -49- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF CONDITION -- December 31, 2000 -- continued
Applicable to Owners of Deferred Variable Annuity Contracts Reserve for ------------------------------------------------- Variable Units Unit Value Value Annuities Total ---------------- ---------------- ------------- ------------- ------------- FUTURITY II CONTRACTS: AIM Variable Insurance Fund, Inc. V.I. Capital Appreciation Fund...... 1,012,264 $14.1533 $ 14,327,042 $ 26,476 $ 14,353,518 V.I. Growth Fund.................... 2,364,773 11.8439 28,008,272 73,016 28,081,288 V.I. Growth and Income Fund......... 2,523,813 12.3404 31,145,299 45,109 31,190,408 V.I. International Equity Fund...... 2,182,559 11.7102 25,558,057 111,778 25,669,835 The Alger American Fund Growth Portfolio.................... 3,285,605 12.4108 40,777,402 72,348 40,849,750 Income and Growth Portfolio......... 1,689,012 15.0789 25,468,248 120,864 25,589,112 Small Capitalization Portfolio...... 609,369 11.5319 7,027,347 44,836 7,072,183 Goldman Sachs Variable Insurance Trust VIT-SM- CORE Large Cap Growth Fund............................... 1,103,943 11.2359 12,403,861 59,148 12,463,009 VIT-SM- CORE Small Cap Equity Fund............................... 196,193 12.6369 2,479,274 -- 2,479,274 VIT-SM- CORE US Equity Fund......... 948,020 11.8371 11,221,511 64,512 11,286,023 Growth and Income Fund.............. 312,510 10.1238 3,163,788 -- 3,163,788 International Equity Fund........... 363,268 11.7963 4,285,180 37,952 4,323,132 J.P. Morgan Series Trust II U.S. Disciplined Equity Portfolio... 1,023,702 10.9897 11,250,256 24,375 11,274,631 International Opportunities Portfolio.......................... 369,882 11.7482 4,344,529 11,428 4,355,957 Small Company Portfolio............. 204,338 13.5120 2,760,899 6,378 2,767,277 Lord Abbett Series Fund, Inc. Growth and Income Portfolio......... 1,808,298 13.9246 25,179,488 2,743 25,182,231 MFS/Sun Life Series Trust Capital Appreciation Series......... 1,155,804 12.7064 14,685,733 56,669 14,742,402 Emerging Growth Series.............. 2,187,292 15.5898 34,093,787 65,909 34,159,696 High Yield Series................... 1,315,170 9.6747 12,722,891 73,109 12,796,000 Utilities Series.................... 1,524,307 14.3854 21,927,559 145,306 22,072,865 Government Securities Series........ 1,227,270 10.6482 13,065,445 70,947 13,136,392 Total Return Series................. 695,493 11.2309 7,811,121 84,463 7,895,584 Massachusetts Investors Trust Series............................. 1,675,934 10.1975 17,089,787 15,979 17,105,766 New Discovery Series................ 671,408 15.6390 10,499,850 10,274 10,510,124 Massachusetts Investors Growth Stock Series............................. 1,995,550 11.8375 23,621,757 68,280 23,690,037 OCC Accumulation Trust Equity Portfolio.................... 1,389,035 11.5916 16,101,368 15,655 16,117,023 Mid Cap Portfolio................... 398,444 15.8056 6,297,535 42,294 6,339,829 Small Cap Portfolio................. 477,890 14.2449 6,807,383 24,921 6,832,304 Managed Portfolio................... 275,375 11.7996 3,249,326 -- 3,249,326 Sun Capital Advisers Trust Money Market Fund................... 1,359,991 10.7901 14,687,843 46,483 14,734,326 Investment Grade Bond Fund.......... 1,552,524 10.6022 16,456,228 322,552 16,778,780 Real Estate Fund.................... 372,502 12.3623 4,606,356 10,022 4,616,378 Select Equity Fund.................. 339,267 11.0466 3,747,704 9,490 3,757,194 Blue Chip Mid Cap Fund.............. 840,530 15.3237 12,879,722 29,113 12,908,835 Investors Foundation Fund........... 139,813 10.1949 1,425,335 15,593 1,440,928 Davis Venture Value Fund............ 46,250 9.7933 453,434 -- 453,434 Davis Financial Fund................ 61,506 11.2658 694,633 -- 694,633 Credit Suisse Institutional Emerging Markets Portfolio.......... 133,103 12.6672 1,686,092 9,669 1,695,761 International Equity Portfolio...... 89,465 11.4643 1,025,667 1,287 1,026,954 Post-Venture Capital Portfolio...... 40,978 14.5020 594,275 5,912 600,187 Small Company Growth Portfolio...... 160,078 14.9354 2,390,847 4,391 2,395,238 ------------ ---------- ------------ $498,022,131 $1,829,281 $499,851,412 ------------ ---------- ------------
See notes to financial statements -50- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF CONDITION -- December 31, 2000 -- continued
Applicable to Owners of Deferred Variable Annuity Contracts Reserve for ------------------------------------------------- Variable Units Unit Value Value Annuities Total ---------------- ---------------- ------------- ------------- ------------- FUTURITY FOCUS CONTRACTS: AIM Variable Insurance Fund, Inc. V.I. Capital Appreciation Fund...... 65,636 $12.8428 $ 842,948 $ -- $ 842,948 V.I. Growth Fund.................... 109,938 9.9612 1,095,127 -- 1,095,127 V.I. Growth and Income Fund......... 127,601 10.4350 1,331,510 57,361 1,388,871 V.I. International Equity Fund...... 107,328 11.2494 1,207,367 -- 1,207,367 The Alger American Fund Growth Portfolio.................... 120,147 10.0894 1,212,208 56,374 1,268,582 Income and Growth Portfolio......... 100,057 12.9887 1,299,596 -- 1,299,596 Small Capitalization Portfolio...... 49,303 10.3598 510,777 -- 510,777 Goldman Sachs Variable Insurance Trust VIT-SM- CORE Large Cap Growth Fund............................... 19,354 9.6654 187,057 -- 187,057 VIT-SM- CORE Small Cap Equity Fund............................... 10,209 12.6867 129,523 -- 129,523 VIT-SM- CORE US Equity Fund......... 36,643 10.2536 375,727 -- 375,727 Growth and Income Fund.............. 33,518 9.6232 322,546 -- 322,546 International Equity Fund........... 47,320 11.0210 521,512 -- 521,512 J.P. Morgan Series Trust II U.S. Disciplined Equity Portfolio... 23,980 9.9928 239,629 52,148 291,777 International Opportunities Portfolio.......................... 44,907 10.7779 483,827 -- 483,827 Small Company Portfolio............. 9,987 13.3571 133,396 -- 133,396 Lord Abbett Series Fund, Inc. Growth and Income Portfolio......... 99,109 12.7488 1,263,504 -- 1,263,504 MFS/Sun Life Series Trust Capital Appreciation Series......... 57,721 11.4675 661,909 -- 661,909 Emerging Growth Series.............. 100,707 13.4516 1,355,479 74,531 1,430,010 High Yield Series................... 76,769 9.3774 719,867 -- 719,867 Utilities Series.................... 72,990 13.6861 999,884 -- 999,884 Government Securities Series........ 49,055 10.8700 533,250 -- 533,250 Total Return Series................. 48,739 11.2795 549,678 -- 549,678 Massachusetts Investors Trust Series............................. 119,777 10.2417 1,226,575 -- 1,226,575 New Discovery Series................ 35,143 15.7067 551,962 -- 551,962 Massachusetts Investors Growth Stock Series............................. 114,348 11.8887 1,359,774 66,210 1,425,984 OCC Accumulation Trust Equity Portfolio.................... 54,602 11.0611 603,946 -- 603,946 Mid Cap Portfolio................... 20,586 15.6254 321,654 -- 321,654 Small Cap Portfolio................. 14,301 15.2655 218,311 -- 218,311 Managed Portfolio................... 7,734 11.1965 86,592 -- 86,592 Sun Capital Advisers Trust Money Market Fund................... 118,427 10.7567 1,273,773 -- 1,273,773 Investment Grade Bond Fund.......... 119,290 10.6573 1,270,957 -- 1,270,957 Real Estate Fund.................... 10,164 13.2008 134,147 -- 134,147 Select Equity Fund.................. 10,071 11.0848 111,646 -- 111,646 Blue Chip Mid Cap Fund.............. 41,853 15.3767 643,593 -- 643,593 Investors Foundation Fund........... 6,739 10.2301 68,936 -- 68,936 Davis Venture Value Fund............ 919 9.8051 9,032 -- 9,032 Davis Financial Fund................ 1,214 11.2793 13,717 -- 13,717 Credit Suisse Institutional Emerging Markets Portfolio.......... 2,172 12.4705 27,081 -- 27,081 International Equity Portfolio...... 4,808 11.0200 52,968 -- 52,968 Post-Venture Capital Portfolio...... 1,030 12.8872 13,269 -- 13,269 Small Company Growth Portfolio...... 3,664 14.3265 52,500 -- 52,500 ----------- -------- ----------- $24,016,754 $306,624 $24,323,378 ----------- -------- -----------
See notes to financial statements -51- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF CONDITION -- December 31, 2000 -- continued
Applicable to Owners of Deferred Variable Annuity Contracts Reserve for ------------------------------------------------- Variable Units Unit Value Value Annuities Total ---------------- ---------------- ------------- ------------- ------------- FUTURITY ACCOLADE CONTRACTS: AIM Variable Insurance Fund, Inc. V.I. Capital Appreciation Fund -- Level 1............................ 364,264 $12.0693 $ 4,396,401 $ -- $ 4,396,401 V.I. Capital Appreciation Fund -- Level 2............................ 550,010 12.0562 6,631,051 -- 6,631,051 V.I. Capital Appreciation Fund -- Level 3............................ 442,625 12.0476 5,332,552 -- 5,332,552 V.I. Capital Appreciation Fund -- Level 4............................ 104,182 12.0345 1,254,091 -- 1,254,091 V.I. Growth Fund -- Level 1......... 374,178 9.8906 3,700,836 -- 3,700,836 V.I. Growth Fund -- Level 2......... 581,508 9.8799 5,745,229 -- 5,745,229 V.I. Growth Fund -- Level 3......... 455,997 9.8728 4,501,959 -- 4,501,959 V.I. Growth Fund -- Level 4......... 131,424 9.8621 1,296,174 -- 1,296,174 V.I. Growth and Income Fund -- Level 1.................................. 329,965 10.7150 3,535,575 -- 3,535,575 V.I. Growth and Income Fund -- Level 2.................................. 428,759 10.7035 4,589,199 -- 4,589,199 V.I. Growth and Income Fund -- Level 3.................................. 332,258 10.6958 3,553,756 -- 3,553,756 V.I. Growth and Income Fund -- Level 4.................................. 134,929 10.6842 1,441,821 -- 1,441,821 V.I. International Equity Fund -- Level 1............................ 517,391 10.0395 5,194,322 -- 5,194,322 V.I. International Equity Fund -- Level 2............................ 636,071 10.0286 6,378,901 -- 6,378,901 V.I. International Equity Fund -- Level 3............................ 456,696 10.0214 4,576,718 -- 4,576,718 V.I. International Equity Fund -- Level 4............................ 80,488 10.0105 809,039 -- 809,039 The Alger American Fund Growth Portfolio -- Level 1......... 529,124 10.4940 5,552,634 -- 5,552,634 Growth Portfolio -- Level 2......... 734,515 10.4827 7,699,683 -- 7,699,683 Growth Portfolio -- Level 3......... 332,438 10.4751 3,482,331 -- 3,482,331 Growth Portfolio -- Level 4......... 172,900 10.4638 1,806,544 -- 1,806,544 Income and Growth Portfolio -- Level 1.................................. 312,754 13.5887 4,249,902 -- 4,249,902 Income and Growth Portfolio -- Level 2.................................. 327,313 13.5740 4,442,948 -- 4,442,948 Income and Growth Portfolio -- Level 3.................................. 293,926 13.5643 3,986,879 -- 3,986,879 Income and Growth Portfolio -- Level 4.................................. 35,295 13.5496 477,861 -- 477,861 Small Capitalization Portfolio -- Level 1............................ 139,481 9.6050 1,339,711 -- 1,339,711 Small Capitalization Portfolio -- Level 2............................ 302,011 9.5946 2,897,682 -- 2,897,682 Small Capitalization Portfolio -- Level 3............................ 104,834 9.5877 1,005,117 -- 1,005,117 Small Capitalization Portfolio -- Level 4............................ 30,840 9.5773 291,774 -- 291,774 Goldman Sachs Variable Insurance Trust VIT-SM- CORE Large Cap Growth Fund -- Level 1.................... 149,477 9.6377 1,440,609 -- 1,440,609 VIT-SM- CORE Large Cap Growth Fund -- Level 2.................... 226,264 9.6273 2,178,304 -- 2,178,304 VIT-SM- CORE Large Cap Growth Fund -- Level 3.................... 171,187 9.6203 1,646,877 -- 1,646,877 VIT-SM- CORE Large Cap Growth Fund -- Level 4.................... 63,547 9.6099 610,780 -- 610,780 VIT-SM- CORE Small Cap Equity Fund -- Level 1.................... 30,176 12.0710 364,256 -- 364,256 VIT-SM- CORE Small Cap Equity Fund -- Level 2.................... 43,518 12.0580 524,738 -- 524,738 VIT-SM- CORE Small Cap Equity Fund -- Level 3.................... 23,117 12.0493 278,545 -- 278,545 VIT-SM- CORE Small Cap Equity Fund -- Level 4.................... 5,949 12.0363 71,542 -- 71,542 VIT-SM- CORE US Equity Fund -- Level 1.................................. 100,989 10.4871 1,059,089 -- 1,059,089 VIT-SM- CORE US Equity Fund -- Level 2.................................. 140,443 10.4758 1,471,253 -- 1,471,253 VIT-SM- CORE US Equity Fund -- Level 3.................................. 36,117 10.4683 378,086 -- 378,086 VIT-SM- CORE US Equity Fund -- Level 4.................................. 7,859 10.4570 82,172 -- 82,172 Growth and Income Fund -- Level 1... 73,454 10.5260 773,176 -- 773,176 Growth and Income Fund -- Level 2... 42,564 10.5147 447,547 -- 447,547 Growth and Income Fund -- Level 3... 19,239 10.5071 202,141 -- 202,141 Growth and Income Fund -- Level 4... 2,360 10.4957 24,773 -- 24,773 International Equity Fund -- Level 1.................................. 130,514 10.3510 1,350,949 -- 1,350,949
See notes to financial statements -52- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF CONDITION -- December 31, 2000 -- continued
Applicable to Owners of Deferred Variable Annuity Contracts Reserve for ------------------------------------------------- Variable Units Unit Value Value Annuities Total ---------------- ---------------- ------------- ------------- ------------- FUTURITY ACCOLADE CONTRACTS: -- continued Goldman Sachs Variable Insurance Trust -- continued International Equity Fund -- Level 2.................................. 129,144 $10.3398 $ 1,335,318 $ -- $ 1,335,318 International Equity Fund -- Level 3.................................. 69,665 10.3323 719,803 -- 719,803 International Equity Fund -- Level 4.................................. 15,002 10.3211 154,760 -- 154,760 J.P. Morgan Series Trust II U.S. Disciplined Equity Portfolio -- Level 1............... 83,819 10.1173 848,025 -- 848,025 U.S. Disciplined Equity Portfolio -- Level 2............... 106,686 10.1064 1,078,208 -- 1,078,208 U.S. Disciplined Equity Portfolio -- Level 3............... 25,548 10.0994 258,017 -- 258,017 U.S. Disciplined Equity Portfolio -- Level 4............... 88,970 10.0882 897,552 -- 897,552 International Opportunities Portfolio -- Level 1............... 76,078 9.7611 742,616 -- 742,616 International Opportunities Portfolio -- Level 2............... 108,428 9.7506 1,057,233 -- 1,057,233 International Opportunities Portfolio -- Level 3............... 56,808 9.7436 553,514 -- 553,514 International Opportunities Portfolio -- Level 4............... 6,326 9.7330 62,021 -- 62,021 Small Company Portfolio -- Level 1.................................. 57,006 11.9838 683,153 -- 683,153 Small Company Portfolio -- Level 2.................................. 84,735 11.9709 1,014,349 -- 1,014,349 Small Company Portfolio -- Level 3.................................. 24,022 11.9623 287,355 -- 287,355 Small Company Portfolio -- Level 4.................................. 3,823 11.9493 45,719 -- 45,719 Lord Abbett Series Fund, Inc. Growth and Income Portfolio -- Level 1.................................. 245,260 13.0268 3,194,953 -- 3,194,953 Growth and Income Portfolio -- Level 2.................................. 284,240 13.0128 3,698,761 -- 3,698,761 Growth and Income Portfolio -- Level 3.................................. 222,884 13.0035 2,898,257 -- 2,898,257 Growth and Income Portfolio -- Level 4.................................. 52,597 12.9894 682,977 -- 682,977 MFS/Sun Life Series Trust Capital Appreciation Series -- Level 1.................................. 238,596 11.7367 2,800,322 -- 2,800,322 Capital Appreciation Series -- Level 2.................................. 194,014 11.7240 2,274,627 -- 2,274,627 Capital Appreciation Series -- Level 3.................................. 169,686 11.7156 1,987,967 -- 1,987,967 Capital Appreciation Series -- Level 4.................................. 100,298 11.7029 1,173,725 -- 1,173,725 Emerging Growth Series -- Level 1... 522,988 12.6513 6,616,493 -- 6,616,493 Emerging Growth Series -- Level 2... 771,453 12.6377 9,749,359 -- 9,749,359 Emerging Growth Series -- Level 3... 325,836 12.6286 4,114,840 -- 4,114,840 Emerging Growth Series -- Level 4... 101,507 12.6149 1,282,564 -- 1,282,564 High Yield Series -- Level 1........ 265,229 9.4527 2,507,139 -- 2,507,139 High Yield Series -- Level 2........ 284,517 9.4425 2,686,561 -- 2,686,561 High Yield Series -- Level 3........ 127,183 9.4357 1,200,061 -- 1,200,061 High Yield Series -- Level 4........ 20,629 9.4255 194,448 -- 194,448 Utilities Series -- Level 1......... 301,219 12.6848 3,820,908 -- 3,820,908 Utilities Series -- Level 2......... 392,655 12.6711 4,975,382 -- 4,975,382 Utilities Series -- Level 3......... 190,233 12.6620 2,408,733 -- 2,408,733 Utilities Series -- Level 4......... 92,707 12.6483 1,171,429 -- 1,171,429 Government Securities Series -- Level 1............................ 160,555 11.0472 1,773,673 -- 1,773,673 Government Securities Series -- Level 2............................ 134,222 11.0352 1,481,171 -- 1,481,171 Government Securities Series -- Level 3............................ 67,329 11.0273 742,458 -- 742,458 Government Securities Series -- Level 4............................ 23,747 11.0153 261,699 -- 261,699 Total Return Series -- Level 1...... 194,480 12.0376 2,341,071 -- 2,341,071 Total Return Series -- Level 2...... 172,612 12.0246 2,075,586 -- 2,075,586 Total Return Series -- Level 3...... 65,962 12.0160 792,592 -- 792,592 Total Return Series -- Level 4...... 3,383 12.0030 40,516 -- 40,516
See notes to financial statements -53- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF CONDITION -- December 31, 2000 -- continued
Applicable to Owners of Deferred Variable Annuity Contracts Reserve for ------------------------------------------------- Variable Units Unit Value Value Annuities Total ---------------- ---------------- ------------- ------------- ------------- FUTURITY ACCOLADE CONTRACTS: -- continued MFS/Sun Life Series Trust -- continued Massachusetts Investors Trust Series -- Level 1.................. 245,729 $11.2581 $ 2,766,445 $ -- $ 2,766,445 Massachusetts Investors Trust Series -- Level 2.................. 350,699 11.2460 3,943,945 -- 3,943,945 Massachusetts Investors Trust Series -- Level 3.................. 217,156 11.2379 2,440,374 -- 2,440,374 Massachusetts Investors Trust Series -- Level 4.................. 28,221 11.2257 316,779 -- 316,779 New Discovery Series -- Level 1..... 212,082 15.6900 3,327,561 -- 3,327,561 New Discovery Series -- Level 2..... 280,751 15.6730 4,400,221 -- 4,400,221 New Discovery Series -- Level 3..... 140,805 15.6618 2,205,248 -- 2,205,248 New Discovery Series -- Level 4..... 29,127 15.6448 455,752 -- 455,752 Massachusetts Investors Growth Stock Series -- Level 1.................. 370,902 12.1245 4,496,253 -- 4,496,253 Massachusetts Investors Growth Stock Series -- Level 2.................. 567,284 12.1094 6,869,480 -- 6,869,480 Massachusetts Investors Growth Stock Series -- Level 3.................. 341,676 12.1007 4,134,518 -- 4,134,518 Massachusetts Investors Growth Stock Series -- Level 4.................. 52,190 12.0876 630,294 -- 630,294 OCC Accumulation Trust Equity Portfolio -- Level 1......... 27,408 11.6056 318,085 -- 318,085 Equity Portfolio -- Level 2......... 6,988 11.5931 81,015 -- 81,015 Equity Portfolio -- Level 3......... 20,021 11.5848 231,943 -- 231,943 Equity Portfolio -- Level 4......... 7,891 11.5722 93,216 -- 93,216 Mid Cap Portfolio -- Level 1........ 94,315 15.5854 1,469,935 -- 1,469,935 Mid Cap Portfolio -- Level 2........ 100,792 15.5686 1,569,192 -- 1,569,192 Mid Cap Portfolio -- Level 3........ 54,596 15.5574 849,366 -- 849,366 Mid Cap Portfolio -- Level 4........ 6,218 15.5406 96,615 -- 96,615 Small Cap Portfolio -- Level 1...... 9,783 14.9981 146,730 -- 146,730 Small Cap Portfolio -- Level 2...... 27,009 14.9819 404,644 -- 404,644 Small Cap Portfolio -- Level 3...... 2,008 14.9712 30,059 -- 30,059 Small Cap Portfolio -- Level 4...... 7,179 14.9550 107,959 -- 107,959 Managed Portfolio -- Level 1........ 25,564 11.4485 292,666 -- 292,666 Managed Portfolio -- Level 2........ 13,806 11.4362 157,890 -- 157,890 Managed Portfolio -- Level 3........ 2,510 11.4279 28,679 -- 28,679 Sun Capital Advisers Trust Money Market Fund -- Level 1........ 801,538 10.5161 8,429,043 -- 8,429,043 Money Market Fund -- Level 2........ 533,464 10.5047 5,603,900 -- 5,603,900 Money Market Fund -- Level 3........ 373,023 10.4972 3,915,202 -- 3,915,202 Investment Grade Bond Fund -- Level 1.................................. 268,500 10.8554 2,914,662 -- 2,914,662 Investment Grade Bond Fund -- Level 2.................................. 253,362 10.8437 2,747,372 -- 2,747,372 Investment Grade Bond Fund -- Level 3.................................. 225,602 10.8358 2,444,592 -- 2,444,592 Investment Grade Bond Fund -- Level 4.................................. 43,542 10.8241 472,393 -- 472,393 Real Estate Fund -- Level 1......... 103,314 13.3219 1,376,345 -- 1,376,345 Real Estate Fund -- Level 2......... 45,667 13.3076 607,718 -- 607,718 Real Estate Fund -- Level 3......... 147,600 13.2980 1,962,781 -- 1,962,781 Real Estate Fund -- Level 4......... 9,310 13.2836 124,888 -- 124,888 Select Equity Fund -- Level 1....... 110,471 12.0538 1,331,605 -- 1,331,605 Select Equity Fund -- Level 2....... 139,242 12.0408 1,676,590 -- 1,676,590 Select Equity Fund -- Level 3....... 121,646 12.0322 1,463,664 -- 1,463,664 Select Equity Fund -- Level 4....... 67,223 12.0191 810,288 -- 810,288 Blue Chip Mid Cap Fund -- Level 1... 243,919 16.2722 3,969,090 -- 3,969,090 Blue Chip Mid Cap Fund -- Level 2... 287,334 16.2546 4,670,502 -- 4,670,502 Blue Chip Mid Cap Fund -- Level 3... 186,213 16.2429 3,024,648 -- 3,024,648
See notes to financial statements -54- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF CONDITION -- December 31, 2000 -- continued
Applicable to Owners of Deferred Variable Annuity Contracts Reserve for ------------------------------------------------- Variable Units Unit Value Value Annuities Total ---------------- ---------------- ------------- ------------- ------------- FUTURITY ACCOLADE CONTRACTS: -- continued Sun Capital Advisers Trust -- continued Blue Chip Mid Cap Fund -- Level 4... 46,440 $16.2254 $ 753,999 $ -- $ 753,999 Investors Foundation Fund -- Level 1.................................. 4,159 11.0327 45,885 -- 45,885 Investors Foundation Fund -- Level 2.................................. 30,675 11.0208 338,064 -- 338,064 Investors Foundation Fund -- Level 3.................................. 24,313 11.0129 267,756 -- 267,756 Investors Foundation Fund -- Level 4.................................. 207 11.0010 2,288 -- 2,288 Davis Venture Value Fund -- Level 1.................................. 130,722 9.7910 1,279,900 -- 1,279,900 Davis Venture Value Fund -- Level 2.................................. 124,165 9.7843 1,214,870 -- 1,214,870 Davis Venture Value Fund -- Level 3.................................. 163,236 9.7798 1,596,413 -- 1,596,413 Davis Venture Value Fund -- Level 4.................................. 19,626 9.7731 194,845 -- 194,845 Davis Financial Fund -- Level 1..... 12,214 11.2632 137,568 -- 137,568 Davis Financial Fund -- Level 2..... 20,424 11.2555 229,882 -- 229,882 Davis Financial Fund -- Level 3..... 11,953 11.2503 134,471 -- 134,471 Davis Financial Fund -- Level 4..... 23,603 11.2426 265,247 -- 265,247 Value Equity Fund -- Level 1........ 728 11.2609 8,194 -- 8,194 Value Equity Fund -- Level 2........ 2,013 11.2532 22,650 -- 22,650 Value Equity Fund -- Level 3........ 2,629 11.2480 29,571 -- 29,571 Value Equity Fund -- Level 4........ 3,293 11.2403 37,021 -- 37,021 Value Mid Cap Fund -- Level 1....... 137,558 10.2714 1,412,922 -- 1,412,922 Value Mid Cap Fund -- Level 2....... 87,394 10.2644 897,048 -- 897,048 Value Mid Cap Fund -- Level 3....... 59,692 10.2597 612,414 -- 612,414 Value Mid Cap Fund -- Level 4....... 18,407 10.2526 192,675 -- 192,675 Value Small Cap Fund -- Level 1..... 96,343 12.1093 1,166,644 -- 1,166,644 Value Small Cap Fund -- Level 2..... 33,739 12.1010 408,277 -- 408,277 Value Small Cap Fund -- Level 3..... 34,600 12.0955 418,504 -- 418,504 Value Small Cap Fund -- Level 4..... 9,272 12.0871 111,894 -- 111,894 Value Managed Fund -- Level 2....... 747 11.2990 8,443 -- 8,443 ------------ ---------- ------------ 292,959,034 $ -- $292,959,034 ------------ ---------- ------------
See notes to financial statements -55- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF CONDITION -- December 31, 2000 -- continued
Applicable to Owners of Deferred Variable Annuity Contracts Reserve for ------------------------------------------------- Variable Units Unit Value Value Annuities Total ---------------- ---------------- ------------- ------------- ------------- FUTURITY FOCUS II CONTRACTS: AIM Variable Insurance Fund, Inc. V.I. Capital Appreciation Fund -- Level 3............................ 19,033 $ 7.6079 $ 144,803 $ -- $ 144,803 V.I. Capital Appreciation Fund -- Level 4............................ 20,467 7.6026 155,605 -- 155,605 V.I. Capital Appreciation Fund -- Level 5............................ 49,461 7.5991 375,862 -- 375,862 V.I. Capital Appreciation Fund -- Level 6............................ 651 7.5939 4,955 -- 4,955 V.I. Growth Fund -- Level 3......... 23,682 6.9901 165,540 -- 165,540 V.I. Growth Fund -- Level 4......... 39,136 6.9853 273,379 -- 273,379 V.I. Growth Fund -- Level 5......... 30,284 6.9821 211,442 -- 211,442 V.I. Growth Fund -- Level 6......... 2,647 6.9773 18,471 -- 18,471 V.I. Growth and Income Fund -- Level 3.................................. 34,921 7.8513 274,174 -- 274,174 V.I. Growth and Income Fund -- Level 4.................................. 21,067 7.8458 165,286 -- 165,286 V.I. Growth and Income Fund -- Level 5.................................. 19,046 7.8422 149,365 -- 149,365 V.I. Growth and Income Fund -- Level 6.................................. 623 7.8368 4,887 -- 4,887 V.I. International Equity Fund -- Level 3............................ 35,001 7.8344 274,213 -- 274,213 V.I. International Equity Fund -- Level 4............................ 39,366 7.8290 308,194 -- 308,194 V.I. International Equity Fund -- Level 5............................ 33,055 7.8254 258,670 -- 258,670 V.I. International Equity Fund -- Level 6............................ 962 7.8200 7,528 -- 7,528 The Alger American Fund Growth Portfolio -- Level 3......... 4,172 7.7494 32,331 -- 32,331 Growth Portfolio -- Level 4......... 7,657 7.7441 59,297 -- 59,297 Growth Portfolio -- Level 5......... 16,582 7.7405 128,356 -- 128,356 Growth Portfolio -- Level 6......... 1,264 7.7352 9,776 -- 9,776 Income and Growth Portfolio -- Level 3.................................. 43,701 8.8845 388,264 -- 388,264 Income and Growth Portfolio -- Level 4.................................. 23,272 8.8784 206,615 -- 206,615 Income and Growth Portfolio -- Level 5.................................. 12,709 8.8743 112,780 -- 112,780 Income and Growth Portfolio -- Level 6.................................. 284 8.8682 2,522 -- 2,522 Small Capitalization Portfolio -- Level 3............................ 639 6.9693 4,455 -- 4,455 Small Capitalization Portfolio -- Level 4............................ 4,184 6.9645 29,146 -- 29,146 Small Capitalization Portfolio -- Level 5............................ 5,985 6.9613 41,664 -- 41,664 Goldman Sachs Variable Insurance Trust VIT-SM- CORE Large Cap Growth Fund -- Level 3.................... 1,316 7.0776 9,302 -- 9,302 VIT-SM- CORE Large Cap Growth Fund -- Level 4.................... 973 7.0628 6,872 -- 6,872 VIT-SM- CORE Large Cap Growth Fund -- Level 5.................... 1,615 7.0595 11,402 -- 11,402 VIT-SM- CORE Small Cap Equity Fund -- Level 3.................... 942 9.2950 8,757 -- 8,757 VIT-SM- CORE Small Cap Equity Fund -- Level 4.................... 2,231 9.2886 20,722 -- 20,722 VIT-SM- CORE Small Cap Equity Fund -- Level 5.................... 632 9.2843 5,867 -- 5,867 VIT-SM- CORE US Equity Fund -- Level 3.................................. 1,227 8.7067 10,686 -- 10,686 VIT-SM- CORE US Equity Fund -- Level 4.................................. 1,690 8.7008 14,707 -- 14,707 Growth and Income Fund -- Level 3... 5,495 9.0788 49,890 -- 49,890 Growth and Income Fund -- Level 4... 931 9.0726 8,447 -- 8,447 International Equity Fund -- Level 3.................................. 3,059 8.6083 26,329 -- 26,329 International Equity Fund -- Level 4.................................. 7,107 8.6024 61,138 -- 61,138 International Equity Fund -- Level 5.................................. 6,111 8.5984 52,547 -- 52,547 International Equity Fund -- Level 6.................................. 299 8.5925 2,573 -- 2,573 J.P. Morgan Series Trust II U.S. Disciplined Equity Portfolio -- Level 5............... 5,189 8.5881 44,565 -- 44,565 U.S. Disciplined Equity Portfolio -- Level 6............... 5,271 8.5822 45,236 -- 45,236 International Opportunities Portfolio -- Level 3............... 3,573 8.5625 30,595 -- 30,595
See notes to financial statements -56- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF CONDITION -- December 31, 2000 -- continued
Applicable to Owners of Deferred Variable Annuity Contracts Reserve for ------------------------------------------------- Variable Units Unit Value Value Annuities Total ---------------- ---------------- ------------- ------------- ------------- FUTURITY FOCUS II CONTRACTS: -- continued J.P. Morgan Series Trust II -- continued International Opportunities Portfolio -- Level 4............... 746 $ 8.5566 $ 6,383 $ -- $ 6,383 Small Company Portfolio -- Level 3.................................. 8,958 8.5188 76,312 -- 76,312 Small Company Portfolio -- Level 5.................................. 520 8.5090 4,429 -- 4,429 Lord Abbett Series Fund, Inc. Growth and Income Portfolio -- Level 3.................................. 1,348 11.4115 15,382 -- 15,382 Growth and Income Portfolio -- Level 4.................................. 7,187 11.4037 81,954 -- 81,954 Growth and Income Portfolio -- Level 5.................................. 10,161 11.3985 115,814 -- 115,814 Growth and Income Portfolio -- Level 6.................................. 1,126 11.3906 12,829 -- 12,829 MFS/Sun Life Series Trust Capital Appreciation Series -- Level 3.................................. 4,444 7.7635 34,498 -- 34,498 Capital Appreciation Series -- Level 4.................................. 8,012 7.7582 62,158 -- 62,158 Capital Appreciation Series -- Level 5.................................. 31,397 7.7546 243,471 -- 243,471 Capital Appreciation Series -- Level 6.................................. 638 7.7493 4,939 -- 4,939 Emerging Growth Series -- Level 3... 12,704 7.7576 98,550 -- 98,550 Emerging Growth Series -- Level 4... 39,716 7.7523 307,889 -- 307,889 Emerging Growth Series -- Level 5... 26,653 7.7487 206,527 -- 206,527 Emerging Growth Series -- Level 6... 3,923 7.7434 30,401 -- 30,401 High Yield Series -- Level 3........ 13,536 9.1867 124,352 -- 124,352 High Yield Series -- Level 4........ 11,258 9.1804 103,351 -- 103,351 High Yield Series -- Level 5........ 10,690 9.1762 98,062 -- 98,062 Utilities Series -- Level 3......... 17,805 9.6808 172,364 -- 172,364 Utilities Series -- Level 4......... 19,589 9.6741 189,504 -- 189,504 Utilities Series -- Level 5......... 6,770 9.6697 65,464 -- 65,464 Utilities Series -- Level 6......... 3,284 9.6630 31,651 -- 31,651 Government Securities Series -- Level 3............................ 9,542 10.6914 102,016 -- 102,016 Government Securities Series -- Level 4............................ 564 10.6841 6,025 -- 6,025 Government Securities Series -- Level 5............................ 236 10.6792 2,501 -- 2,501 Total Return Series -- Level 3...... 3,383 11.1577 37,743 -- 37,743 Total Return Series -- Level 4...... 5,632 11.1500 62,796 -- 62,796 Total Return Series -- Level 5...... 3,645 11.1449 40,632 -- 40,632 Massachusetts Investors Trust Series -- Level 3.................. 15,447 9.5839 148,044 -- 148,044 Massachusetts Investors Trust Series -- Level 4.................. 7,517 9.5773 71,997 -- 71,997 Massachusetts Investors Trust Series -- Level 5.................. 1,955 9.5729 18,718 -- 18,718 Massachusetts Investors Trust Series -- Level 6.................. 1,307 9.5663 12,514 -- 12,514 New Discovery Series -- Level 3..... 17,598 8.5828 151,038 -- 151,038 New Discovery Series -- Level 4..... 21,078 8.5769 180,784 -- 180,784 New Discovery Series -- Level 5..... 16,271 8.5729 139,490 -- 139,490 New Discovery Series -- Level 6..... 312 8.5670 2,674 -- 2,674 Massachusetts Investors Growth Stock Series -- Level 3.................. 21,599 8.5642 184,982 -- 184,982 Massachusetts Investors Growth Stock Series -- Level 4.................. 26,970 8.5583 230,814 -- 230,814 Massachusetts Investors Growth Stock Series -- Level 5.................. 23,606 8.5544 201,933 -- 201,933 Massachusetts Investors Growth Stock Series -- Level 6.................. 5,907 8.5485 50,544 -- 50,544 Sun Capital Advisers Trust Money Market Fund -- Level 3........ 15,253 10.2123 155,772 -- 155,772 Money Market Fund -- Level 4........ 3,343 10.2052 34,111 -- 34,111 Money Market Fund -- Level 5........ 16,375 10.2006 167,034 -- 167,034
See notes to financial statements -57- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF CONDITION -- December 31, 2000 -- continued
Applicable to Owners of Deferred Variable Annuity Contracts Reserve for ------------------------------------------------- Variable Units Unit Value Value Annuities Total ---------------- ---------------- ------------- ------------- ------------- FUTURITY FOCUS II CONTRACTS: -- continued Sun Capital Advisers Trust -- continued Money Market Fund -- Level 6........ 32,607 $10.1935 $ 332,324 $ -- $ 332,324 Investment Grade Bond Fund -- Level 3.................................. 21,076 10.5639 222,646 -- 222,646 Investment Grade Bond Fund -- Level 4.................................. 21,444 10.5567 226,381 -- 226,381 Investment Grade Bond Fund -- Level 5.................................. 18,283 10.5518 192,773 -- 192,773 Real Estate Fund -- Level 3......... 8,477 10.7214 90,888 -- 90,888 Real Estate Fund -- Level 4......... 9,628 10.7140 103,150 -- 103,150 Real Estate Fund -- Level 5......... 8,288 10.7091 88,780 -- 88,780 Select Equity Fund -- Level 3....... 9,821 8.0702 79,257 -- 79,257 Select Equity Fund -- Level 4....... 32,247 8.0647 260,061 -- 260,061 Select Equity Fund -- Level 5....... 12,071 8.0610 97,306 -- 97,306 Blue Chip Mid Cap Fund -- Level 3... 22,357 9.5809 214,204 -- 214,204 Blue Chip Mid Cap Fund -- Level 4... 40,675 9.5743 389,441 -- 389,441 Blue Chip Mid Cap Fund -- Level 5... 24,375 9.5700 233,266 -- 233,266 Blue Chip Mid Cap Fund -- Level 6... 765 9.5634 7,248 -- 7,248 Investors Foundation Fund -- Level 3.................................. 1,049 8.8555 9,286 -- 9,286 Investors Foundation Fund -- Level 4.................................. 1,039 8.8494 9,194 -- 9,194 Investors Foundation Fund -- Level 5.................................. 1,932 8.8454 17,083 -- 17,083 Davis Venture Value Fund -- Level 3.................................. 33,676 9.7933 329,802 -- 329,802 Davis Venture Value Fund -- Level 4.................................. 39,604 9.7865 387,587 -- 387,587 Davis Venture Value Fund -- Level 5.................................. 23,923 9.7821 234,003 -- 234,003 Davis Financial Fund -- Level 3..... 2,364 11.2658 26,632 -- 26,632 Davis Financial Fund -- Level 4..... 7,278 11.2580 81,941 -- 81,941 Davis Financial Fund -- Level 5..... 9,874 11.2529 111,086 -- 111,086 Value Equity Fund -- Level 3........ 3,867 11.2635 43,570 -- 43,570 Value Mid Cap Fund -- Level 3....... 9,962 10.2738 102,348 -- 102,348 Value Mid Cap Fund -- Level 4....... 8,874 10.2667 91,104 -- 91,104 Value Mid Cap Fund -- Level 5....... 20,978 10.2620 215,290 -- 215,290 Value Small Cap Fund -- Level 3..... 3,866 12.1121 46,829 -- 46,829 Value Small Cap Fund -- Level 4..... 4,740 12.1038 57,368 -- 57,368 Value Small Cap Fund -- Level 5..... 3,067 12.0982 37,093 -- 37,093 Value Managed Fund -- Level 3....... 680 11.3098 7,687 -- 7,687 Value Managed Fund -- Level 5....... 729 11.2968 8,241 -- 8,241 ----------- ---------- ----------- $12,659,530 $ -- $12,659,530 ----------- ---------- -----------
See notes to financial statements -58- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF CONDITION -- December 31, 2000 -- continued
Applicable to Owners of Deferred Variable Annuity Contracts Reserve for ------------------------------------------------- Variable Units Unit Value Value Annuities Total ---------------- ---------------- ------------- ------------- ------------- FUTURITY III CONTRACTS: AIM Variable Insurance Fund, Inc. V.I. Capital Appreciation Fund -- Level 2............................ 155,830 $ 7.6166 $ 1,186,898 $ -- $ 1,186,898 V.I. Capital Appreciation Fund -- Level 3............................ 24,807 7.6131 188,859 -- 188,859 V.I. Capital Appreciation Fund -- Level 4............................ 233,890 7.6114 1,780,224 -- 1,780,224 V.I. Capital Appreciation Fund -- Level 5............................ 333,237 7.6079 2,535,225 -- 2,535,225 V.I. Capital Appreciation Fund -- Level 6............................ 77,754 7.6026 591,126 -- 591,126 V.I. Growth Fund -- Level 1......... 3,421 7.0030 23,958 -- 23,958 V.I. Growth Fund -- Level 2......... 150,681 6.9982 1,054,488 -- 1,054,488 V.I. Growth Fund -- Level 4......... 251,183 6.9934 1,756,608 -- 1,756,608 V.I. Growth Fund -- Level 5......... 346,581 6.9901 2,422,649 -- 2,422,649 V.I. Growth Fund -- Level 6......... 80,277 6.9853 560,754 -- 560,754 V.I. Growth and Income Fund -- Level 2.................................. 84,096 7.8603 661,016 -- 661,016 V.I. Growth and Income Fund -- Level 3.................................. 158,631 7.8567 1,246,313 -- 1,246,313 V.I. Growth and Income Fund -- Level 4.................................. 306,521 7.8549 2,407,682 -- 2,407,682 V.I. Growth and Income Fund -- Level 5.................................. 428,310 7.8513 3,362,769 -- 3,362,769 V.I. Growth and Income Fund -- Level 6.................................. 69,526 7.8458 545,507 -- 545,507 V.I. International Equity Fund -- Level 1............................ 5,182 7.8488 40,671 -- 40,671 V.I. International Equity Fund -- Level 2............................ 134,233 7.8434 1,052,838 -- 1,052,838 V.I. International Equity Fund -- Level 3............................ 31,548 7.8398 247,327 -- 247,327 V.I. International Equity Fund -- Level 4............................ 123,197 7.8380 965,616 -- 965,616 V.I. International Equity Fund -- Level 5............................ 292,546 7.8344 2,291,922 -- 2,291,922 V.I. International Equity Fund -- Level 6............................ 87,945 7.8290 688,539 -- 688,539 The Alger American Fund Growth Portfolio -- Level 2......... 130,516 7.7583 1,012,586 -- 1,012,586 Growth Portfolio -- Level 3......... 442,368 7.7547 3,430,447 -- 3,430,447 Growth Portfolio -- Level 4......... 244,731 7.7530 1,897,396 -- 1,897,396 Growth Portfolio -- Level 5......... 845,891 7.7494 6,555,153 -- 6,555,153 Growth Portfolio -- Level 6......... 134,394 7.7441 1,040,794 -- 1,040,794 Income and Growth Portfolio -- Level 1.................................. 2,786 8.9008 24,805 -- 24,805 Income and Growth Portfolio -- Level 2.................................. 86,979 8.8947 773,649 -- 773,649 Income and Growth Portfolio -- Level 3.................................. 17,005 8.8906 151,188 -- 151,188 Income and Growth Portfolio -- Level 4.................................. 159,859 8.8886 1,420,915 -- 1,420,915 Income and Growth Portfolio -- Level 5.................................. 185,362 8.8845 1,646,851 -- 1,646,851 Income and Growth Portfolio -- Level 6.................................. 61,918 8.8784 549,742 -- 549,742 Small Capitalization Portfolio -- Level 2............................ 34,526 6.9773 240,898 -- 240,898 Small Capitalization Portfolio -- Level 3............................ 9,377 6.9741 65,394 -- 65,394 Small Capitalization Portfolio -- Level 4............................ 38,386 6.9725 267,648 -- 267,648 Small Capitalization Portfolio -- Level 5............................ 63,433 6.9693 442,082 -- 442,082 Small Capitalization Portfolio -- Level 6............................ 15,209 6.9645 105,935 -- 105,935 Goldman Sachs Variable Insurance Trust VIT-SM- CORE Large Cap Growth Fund -- Level 2.................... 49,638 7.0758 351,227 -- 351,227 VIT-SM- CORE Large Cap Growth Fund -- Level 4.................... 67,670 7.0709 478,485 -- 478,485 VIT-SM- CORE Large Cap Growth Fund -- Level 5.................... 75,161 7.0676 531,207 -- 531,207 VIT-SM- CORE Large Cap Growth Fund -- Level 6.................... 17,796 7.0628 125,683 -- 125,683 VIT-SM- CORE Small Cap Equity Fund -- Level 2.................... 9,427 9.3056 87,723 -- 87,723 VIT-SM- CORE Small Cap Equity Fund -- Level 3.................... 12,386 9.3014 115,208 -- 115,208 VIT-SM- CORE Small Cap Equity Fund -- Level 4.................... 3,948 9.2992 36,710 -- 36,710 VIT-SM- CORE Small Cap Equity Fund -- Level 5.................... 12,019 9.2950 111,713 -- 111,713
See notes to financial statements -59- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF CONDITION -- December 31, 2000 -- continued
Applicable to Owners of Deferred Variable Annuity Contracts Reserve for ------------------------------------------------- Variable Units Unit Value Value Annuities Total ---------------- ---------------- ------------- ------------- ------------- FUTURITY III CONTRACTS: -- continued Goldman Sachs Variable Insurance Trust -- continued VIT-SM- CORE Small Cap Equity Fund -- Level 6.................... 2,665 $ 9.2886 $ 24,745 $ -- $ 24,745 VIT-SM- CORE US Equity Fund -- Level 2.................................. 7,290 8.7167 63,547 -- 63,547 VIT-SM- CORE US Equity Fund -- Level 3.................................. 17,483 8.7127 152,329 -- 152,329 VIT-SM- CORE US Equity Fund -- Level 4.................................. 26,035 8.7107 226,786 -- 226,786 VIT-SM- CORE US Equity Fund -- Level 5.................................. 59,730 8.7067 520,051 -- 520,051 VIT-SM- CORE US Equity Fund -- Level 6.................................. 9,775 8.7008 85,054 -- 85,054 Growth and Income Fund -- Level 2... 3,407 9.0892 30,968 -- 30,968 Growth and Income Fund -- Level 4... 1,375 9.0830 12,490 -- 12,490 Growth and Income Fund -- Level 5... 7,846 9.0788 71,237 -- 71,237 Growth and Income Fund -- Level 6... 754 9.0726 6,844 -- 6,844 International Equity Fund -- Level 2.................................. 19,327 8.6182 166,563 -- 166,563 International Equity Fund -- Level 3.................................. 31,040 8.6142 267,388 -- 267,388 International Equity Fund -- Level 4.................................. 38,546 8.6123 331,969 -- 331,969 International Equity Fund -- Level 5.................................. 31,258 8.6083 269,078 -- 269,078 International Equity Fund -- Level 6.................................. 15,344 8.6024 131,992 -- 131,992 J.P. Morgan Series Trust II U.S. Disciplined Equity Portfolio -- Level 2............... 13,403 8.6078 115,373 -- 115,373 U.S. Disciplined Equity Portfolio -- Level 3............... 15,284 8.6039 131,505 -- 131,505 U.S. Disciplined Equity Portfolio -- Level 4............... 39,198 8.6019 337,180 -- 337,180 U.S. Disciplined Equity Portfolio -- Level 5............... 53,641 8.5979 461,205 -- 461,205 U.S. Disciplined Equity Portfolio -- Level 6............... 2,420 8.5920 20,791 -- 20,791 International Opportunities Portfolio -- Level 2............... 8,732 8.5723 74,856 -- 74,856 International Opportunities Portfolio -- Level 3............... 13,244 8.5684 113,479 -- 113,479 International Opportunities Portfolio -- Level 4............... 25,338 8.5664 217,059 -- 217,059 International Opportunities Portfolio -- Level 5............... 26,166 8.5625 224,049 -- 224,049 International Opportunities Portfolio -- Level 6............... 1,673 8.5566 14,076 -- 14,076 Small Company Portfolio -- Level 2.................................. 21,708 8.5285 185,137 -- 185,137 Small Company Portfolio -- Level 3.................................. 13,334 8.5246 113,671 -- 113,671 Small Company Portfolio -- Level 4.................................. 16,703 8.5227 142,356 -- 142,356 Small Company Portfolio -- Level 5.................................. 20,851 8.5188 177,627 -- 177,627 Small Company Portfolio -- Level 6.................................. 13,957 8.5129 118,835 -- 118,835 Lord Abbett Series Fund, Inc. Growth and Income Portfolio -- Level 2.................................. 52,400 11.4245 598,651 -- 598,651 Growth and Income Portfolio -- Level 3.................................. 23,743 11.4193 271,127 -- 271,127 Growth and Income Portfolio -- Level 4.................................. 55,535 11.4167 634,031 -- 634,031 Growth and Income Portfolio -- Level 5.................................. 125,200 11.4115 1,428,717 -- 1,428,717 Growth and Income Portfolio -- Level 6.................................. 116,974 11.4037 1,333,976 -- 1,333,976 MFS/Sun Life Series Trust Capital Appreciation Series -- Level 2.................................. 77,731 7.7724 604,160 -- 604,160 Capital Appreciation Series -- Level 3.................................. 31,811 7.7689 247,134 -- 247,134 Capital Appreciation Series -- Level 4.................................. 137,695 7.7671 1,069,488 -- 1,069,488 Capital Appreciation Series -- Level 5.................................. 111,529 7.7635 865,856 -- 865,856 Capital Appreciation Series -- Level 6.................................. 91,422 7.7582 709,274 -- 709,274 Emerging Growth Series -- Level 2... 172,848 7.7666 1,342,431 -- 1,342,431 Emerging Growth Series -- Level 3... 46,626 7.7630 361,960 -- 361,960 Emerging Growth Series -- Level 4... 260,438 7.7612 2,021,310 -- 2,021,310 Emerging Growth Series -- Level 5... 439,010 7.7576 3,405,684 -- 3,405,684
See notes to financial statements -60- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF CONDITION -- December 31, 2000 -- continued
Applicable to Owners of Deferred Variable Annuity Contracts Reserve for ------------------------------------------------- Variable Units Unit Value Value Annuities Total ---------------- ---------------- ------------- ------------- ------------- FUTURITY III CONTRACTS: -- continued MFS/Sun Life Series Trust -- continued Emerging Growth Series -- Level 6... 142,901 $ 7.7523 $ 1,108,030 $ -- $ 1,108,030 High Yield Series -- Level 2........ 31,852 9.1972 292,947 -- 292,947 High Yield Series -- Level 4........ 44,961 9.1909 413,230 -- 413,230 High Yield Series -- Level 5........ 67,901 9.1867 623,783 -- 623,783 High Yield Series -- Level 6........ 15,842 9.1804 145,330 -- 145,330 Utilities Series -- Level 2......... 86,311 9.6919 836,512 -- 836,512 Utilities Series -- Level 3......... 23,829 9.6874 230,843 -- 230,843 Utilities Series -- Level 4......... 125,061 9.6852 1,211,243 -- 1,211,243 Utilities Series -- Level 5......... 144,204 9.6808 1,396,010 -- 1,396,010 Utilities Series -- Level 6......... 23,830 9.6741 229,860 -- 229,860 Government Securities Series -- Level 2............................ 30,960 10.7037 331,384 -- 331,384 Government Securities Series -- Level 4............................ 18,410 10.6963 196,922 -- 196,922 Government Securities Series -- Level 5............................ 28,193 10.6914 301,429 -- 301,429 Government Securities Series -- Level 6............................ 1,703 10.6841 18,109 -- 18,109 Total Return Series -- Level 2...... 29,963 11.1705 334,696 -- 334,696 Total Return Series -- Level 4...... 27,987 11.1628 312,415 -- 312,415 Total Return Series -- Level 5...... 58,375 11.1577 651,333 -- 651,333 Total Return Series -- Level 6...... 4,270 11.1500 47,665 -- 47,665 Massachusetts Investors Trust Series -- Level 2.................. 72,001 9.5949 690,837 -- 690,837 Massachusetts Investors Trust Series -- Level 4.................. 75,067 9.5883 719,765 -- 719,765 Massachusetts Investors Trust Series -- Level 5.................. 146,370 9.5839 1,402,794 -- 1,402,794 Massachusetts Investors Trust Series -- Level 6.................. 68,760 9.5773 658,516 -- 658,516 New Discovery Series -- Level 1..... 3,013 8.5985 25,908 -- 25,908 New Discovery Series -- Level 2..... 108,572 8.5926 932,919 -- 932,919 New Discovery Series -- Level 3..... 74,514 8.5887 639,974 -- 639,974 New Discovery Series -- Level 4..... 119,748 8.5867 1,028,245 -- 1,028,245 New Discovery Series -- Level 5..... 178,251 8.5828 1,529,887 -- 1,529,887 New Discovery Series -- Level 6..... 113,259 8.5769 971,416 -- 971,416 Massachusetts Investors Growth Stock Series -- Level 1.................. 2,827 8.5799 24,258 -- 24,258 Massachusetts Investors Growth Stock Series -- Level 2.................. 129,303 8.5740 1,108,649 -- 1,108,649 Massachusetts Investors Growth Stock Series -- Level 3.................. 41,225 8.5701 353,307 -- 353,307 Massachusetts Investors Growth Stock Series -- Level 4.................. 161,937 8.5681 1,387,500 -- 1,387,500 Massachusetts Investors Growth Stock Series -- Level 5.................. 309,307 8.5642 2,648,969 -- 2,648,969 Massachusetts Investors Growth Stock Series -- Level 6.................. 181,314 8.5583 1,551,774 -- 1,551,774 Sun Capital Advisers Trust Money Market Fund -- Level 2........ 157,296 10.2240 1,608,184 -- 1,608,184 Money Market Fund -- Level 4........ 27,989 10.2169 285,959 -- 285,959 Money Market Fund -- Level 5........ 145,304 10.2123 1,483,884 -- 1,483,884 Money Market Fund -- Level 6........ 15,319 10.2052 156,408 -- 156,408 Investment Grade Bond Fund -- Level 2.................................. 24,924 10.5760 263,600 -- 263,600 Investment Grade Bond Fund -- Level 4.................................. 74,085 10.5688 782,985 -- 782,985 Investment Grade Bond Fund -- Level 5.................................. 74,451 10.5639 786,496 -- 786,496 Investment Grade Bond Fund -- Level 6.................................. 18,259 10.5567 192,295 -- 192,295 Real Estate Fund -- Level 2......... 58,623 10.7336 629,238 -- 629,238 Real Estate Fund -- Level 4......... 46,344 10.7263 497,102 -- 497,102
See notes to financial statements -61- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF CONDITION -- December 31, 2000 -- continued
Applicable to Owners of Deferred Variable Annuity Contracts Reserve for ------------------------------------------------- Variable Units Unit Value Value Annuities Total ---------------- ---------------- ------------- ------------- ------------- FUTURITY III CONTRACTS: -- continued Sun Capital Advisers Trust -- continued Real Estate Fund -- Level 5......... 40,664 $10.7214 $ 435,976 $ -- $ 435,976 Real Estate Fund -- Level 6......... 6,825 10.7140 73,095 -- 73,095 Select Equity Fund -- Level 2....... 36,473 8.0795 294,683 -- 294,68 Select Equity Fund -- Level 4....... 39,843 8.0740 321,689 -- 321,689 Select Equity Fund -- Level 5....... 126,576 8.0702 1,021,498 -- 1,021,498 Select Equity Fund -- Level 6....... 16,622 8.0647 134,152 -- 134,152 Blue Chip Mid Cap Fund -- Level 1... 2,643 9.5985 25,364 -- 25,364 Blue Chip Mid Cap Fund -- Level 2... 173,017 9.5919 1,659,569 -- 1,659,569 Blue Chip Mid Cap Fund -- Level 3... 31,687 9.5875 303,803 -- 303,803 Blue Chip Mid Cap Fund -- Level 4... 165,502 9.5853 1,586,396 -- 1,586,396 Blue Chip Mid Cap Fund -- Level 5... 203,101 9.5809 1,945,903 -- 1,945,903 Blue Chip Mid Cap Fund -- Level 6... 32,311 9.5744 309,155 -- 309,155 Investors Foundation Fund -- Level 2.................................. 356 8.8657 3,153 -- 3,153 Investors Foundation Fund -- Level 4.................................. 15,627 8.8596 138,448 -- 138,448 Investors Foundation Fund -- Level 5.................................. 11,148 8.8555 98,759 -- 98,759 Davis Venture Value Fund -- Level 2.................................. 101,048 9.8045 990,726 -- 990,726 Davis Venture Value Fund -- Level 3.................................. 28,266 9.8000 277,010 -- 277,010 Davis Venture Value Fund -- Level 4.................................. 86,152 9.7978 844,098 -- 844,098 Davis Venture Value Fund -- Level 5.................................. 200,187 9.7933 1,960,485 -- 1,960,485 Davis Venture Value Fund -- Level 6.................................. 87,552 9.7865 857,459 -- 857,459 Davis Financial Fund -- Level 2..... 9,476 11.2787 106,882 -- 106,882 Davis Financial Fund -- Level 4..... 41,572 11.2709 468,559 -- 468,559 Davis Financial Fund -- Level 5..... 8,334 11.2658 93,887 -- 93,887 Davis Financial Fund -- Level 6..... 6,827 11.2580 76,851 -- 76,851 Value Equity Fund -- Level 2........ 2,611 11.2764 29,441 -- 29,441 Value Equity Fund -- Level 4........ 3,087 11.2687 34,784 -- 34,784 Value Equity Fund -- Level 5........ 8,870 11.2635 99,905 -- 99,905 Value Equity Fund -- Level 6........ 61 11.2558 680 -- 680 Value Mid Cap Fund -- Level 2....... 59,661 10.2856 613,644 -- 613,644 Value Mid Cap Fund -- Level 3....... 11,156 10.2809 114,696 -- 114,696 Value Mid Cap Fund -- Level 4....... 47,213 10.2785 485,283 -- 485,283 Value Mid Cap Fund -- Level 5....... 99,042 10.2738 1,017,531 -- 1,017,531 Value Mid Cap Fund -- Level 6....... 28,275 10.2667 290,441 -- 290,441 Value Small Cap Fund -- Level 2..... 27,336 12.1260 331,477 -- 331,477 Value Small Cap Fund -- Level 3..... 9,948 12.1204 120,569 -- 120,569 Value Small Cap Fund -- Level 4..... 30,580 12.1177 370,555 -- 370,555 Value Small Cap Fund -- Level 5..... 30,730 12.1121 372,199 -- 372,199 Value Small Cap Fund -- Level 6..... 7,205 12.1038 87,313 -- 87,313 Value Managed Fund -- Level 2....... 3,151 11.3227 35,682 -- 35,682 Value Managed Fund -- Level 4....... 712 11.3149 8,060 -- 8,060 Value Managed Fund -- Level 5....... 3,796 11.3098 42,918 -- 42,918 ------------ ---------- ------------ $115,901,855 $ -- $115,901,855 ------------ ---------- ------------
See notes to financial statements -62- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF CONDITION -- December 31, 2000 -- continued
Applicable to Owners of Deferred Variable Annuity Contracts Reserve for -------------------------------------------------- Variable Units Unit Value Value Annuities Total ---------------- ---------------- -------------- ------------- -------------- FUTURITY SELECT FOUR CONTRACTS: AIM Variable Insurance Fund, Inc. V.I. Capital Appreciation Fund -- Level 3............................ 1,548 $ 8.2406 $ 12,756 $ -- $ 12,756 V.I. Capital Appreciation Fund -- Level 4............................ 499 8.2388 4,110 -- 4,110 V.I. Capital Appreciation Fund -- Level 5............................ 2,794 8.2376 22,845 -- 22,845 V.I. Growth Fund -- Level 4......... 1,561 8.3206 12,990 -- 12,990 V.I. Growth Fund -- Level 5......... 5,276 8.3194 43,896 -- 43,896 V.I. International Equity Fund -- Level 3............................ 62 9.3013 581 -- 581 V.I. International Equity Fund -- Level 4............................ 1,415 9.2992 13,161 -- 13,161 V.I. International Equity Fund -- Level 5............................ 2,234 9.2979 20,545 -- 20,545 The Alger American Fund Growth Portfolio -- Level 4......... 1,463 8.8792 12,992 -- 12,992 Growth Portfolio -- Level 5......... 6,668 8.8778 59,200 -- 59,200 Income and Growth Portfolio -- Level 4.................................. 1,883 9.6225 18,115 -- 18,115 Income and Growth Portfolio -- Level 5.................................. 7,161 9.6211 68,896 -- 68,896 Goldman Sachs Variable Insurance Trust VIT-SM- CORE US Equity Fund -- Level 4.................................. 621 9.1626 5,691 -- 5,691 J.P. Morgan Series Trust II U.S. Disciplined Equity Portfolio -- Level 4............... 619 9.2492 5,726 -- 5,726 Lord Abbett Series Fund, Inc. Growth and Income Portfolio -- Level 3.................................. 1,199 10.7271 12,858 -- 12,858 Growth and Income Portfolio -- Level 4.................................. 1,125 10.7247 12,063 -- 12,063 Growth and Income Portfolio -- Level 5.................................. 577 10.7231 6,184 -- 6,184 MFS/Sun Life Series Trust Capital Appreciation Series -- Level 4.................................. 298 8.7666 2,610 -- 2,610 Capital Appreciation Series -- Level 5.................................. 3,830 8.7653 33,569 -- 33,569 Emerging Growth Series -- Level 3... 2,202 8.7734 19,317 -- 19,317 Emerging Growth Series -- Level 4... 1,517 8.7715 13,305 -- 13,305 Emerging Growth Series -- Level 5... 1,663 8.7702 14,589 -- 14,589 High Yield Series -- Level 3........ 30 9.7207 293 -- 293 Utilities Series -- Level 3......... 5 9.8941 48 -- 48 Utilities Series -- Level 4......... 1,226 9.8920 12,130 -- 12,130 Government Securities Series -- Level 3............................ 19 10.3706 199 -- 199 Total Return Series -- Level 3...... 1,238 10.3812 12,852 -- 12,852 Total Return Series -- Level 4...... 1,162 10.3789 12,059 -- 12,059 Total Return Series -- Level 5...... 1,327 10.3774 13,780 -- 13,780 Massachusetts Investors Trust Series -- Level 3.................. 2,638 9.7203 25,640 -- 25,640 Massachusetts Investors Trust Series -- Level 4.................. 1,239 9.7182 12,039 -- 12,039 New Discovery Series -- Level 3..... 17 9.1695 153 -- 153 New Discovery Series -- Level 4..... 387 9.1675 3,551 -- 3,551 New Discovery Series -- Level 5..... 2,903 9.1661 26,617 -- 26,617 Massachusetts Investors Growth Stock Series -- Level 3.................. 2,859 8.9598 25,613 -- 25,613 Massachusetts Investors Growth Stock Series -- Level 4.................. 292 8.9578 2,612 -- 2,612 Massachusetts Investors Growth Stock Series -- Level 5.................. 4,219 8.9565 37,782 -- 37,782 Sun Capital Advisers Trust Money Market Fund -- Level 3........ 5 10.0704 50 -- 50 Money Market Fund -- Level 4........ 3,906 10.0682 39,328 -- 39,328 Investment Grade Bond Fund -- Level 3.................................. 47 10.3171 490 -- 490 Real Estate Fund -- Level 3......... 18 10.9602 198 -- 198
See notes to financial statements -63- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF CONDITION -- December 31, 2000 -- continued
Applicable to Owners of Deferred Variable Annuity Contracts Reserve for -------------------------------------------------- Variable Units Unit Value Value Annuities Total ---------------- ---------------- -------------- ------------- -------------- FUTURITY SELECT FOUR CONTRACTS: -- continued Sun Capital Advisers Trust -- continued Real Estate Fund -- Level 5......... 557 $10.9602 $ 6,033 $ -- $ 6,033 Select Equity Fund -- Level 3....... 46 9.2166 420 -- 420 Blue Chip Mid Cap Fund -- Level 3... 37 9.4357 352 -- 352 Blue Chip Mid Cap Fund -- Level 4... 380 9.4336 3,581 -- 3,581 Blue Chip Mid Cap Fund -- Level 5... 2,580 9.4322 23,746 -- 23,746 Davis Venture Value Fund -- Level 3.................................. 50 10.0170 500 -- 500 Davis Financial Fund -- Level 3..... 1,915 10.2519 19,630 -- 19,630 Value Equity Fund -- Level 5........ 585 10.4260 6,098 -- 6,098 Value Mid Cap Fund -- Level 3....... 30 10.0899 299 -- 299 Value Mid Cap Fund -- Level 5....... 918 10.0862 9,259 -- 9,259 Value Small Cap Fund -- Level 3..... 14 10.9529 154 -- 154 Value Small Cap Fund -- Level 5..... 574 10.9489 6,283 -- 6,283 Value Managed Fund -- Level 5....... 874 10.4400 9,118 -- 9,118 -------------- ---------- -------------- $ 726,906 $ -- $ 726,906 -------------- ---------- -------------- $1,095,145,190 $2,577,782 $1,097,722,972 ============== ========== ==============
See notes to financial statements -64- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF OPERATIONS -- Year Ended December 31, 2000
AIM1 AIM2 AIM3 AIM4 AL1 AL2 Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account ------------ ------------- ------------ ------------ ------------ ------------ INCOME AND EXPENSES: Dividend income and capital gain distributions received............... $ 1,165,108 $ 1,845,448 $ 1,912,959 $ 3,530,156 $ 7,653,747 $ 7,411,967 Mortality and expense risk charges.... (338,871) (593,786) (630,941) (523,264) (819,551) (485,612) Distribution and administrative expense charges...................... (40,664) (71,254) (75,713) (62,792) (98,346) (58,273) ----------- ------------ ------------ ------------ ------------ ----------- Net investment income (loss)...... $ 785,573 $ 1,180,408 $ 1,206,305 $ 2,944,100 $ 6,735,850 $ 6,868,082 ----------- ------------ ------------ ------------ ------------ ----------- REALIZED AND UNREALIZED GAINS (LOSSES): Realized gains (losses) on investment transactions: Proceeds from sales................. $ 2,740,411 $ 9,146,355 $ 7,639,832 $ 11,961,416 $ 8,816,209 $ 6,256,427 Cost of investments sold............ (2,066,778) (7,678,530) (6,103,045) (11,290,831) (8,296,898) (5,823,886) ----------- ------------ ------------ ------------ ------------ ----------- Net realized gains (losses)....... $ 673,633 $ 1,467,825 $ 1,536,787 $ 670,585 $ 519,311 $ 432,541 ----------- ------------ ------------ ------------ ------------ ----------- Net unrealized appreciation (depreciation) on investments: End of year......................... $(7,394,057) $(14,525,858) $ (8,517,053) $(12,887,457) $(17,163,059) $(5,082,686) Beginning of year................... 2,116,193 3,612,127 5,299,791 5,154,135 5,013,031 4,539,984 ----------- ------------ ------------ ------------ ------------ ----------- Change in unrealized appreciation (depreciation)................... $(9,510,250) $(18,137,985) $(13,816,844) $(18,041,592) $(22,176,090) $(9,622,670) ----------- ------------ ------------ ------------ ------------ ----------- Realized and unrealized gains (losses)........................... $(8,836,617) $(16,670,160) $(12,280,057) $(17,371,007) $(21,656,779) $(9,190,129) ----------- ------------ ------------ ------------ ------------ ----------- INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS............................. $(8,051,044) $(15,489,752) $(11,073,752) $(14,426,907) $(14,920,929) $(2,322,047) =========== ============ ============ ============ ============ =========== AL3 GS1 GS2 GS3 GS4 GS5 Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account ------------ ------------- ------------ ------------ ------------ ------------ INCOME AND EXPENSES: Dividend income and capital gain distributions received............... $ 4,576,056 $ 2,466,965 $ 195,347 $ 256,236 $ 29,438 $ 621,918 Mortality and expense risk charges.... (172,302) (294,824) (44,617) (257,199) (84,734) (90,058) Distribution and administrative expense charges...................... (20,676) (35,379) (5,354) (30,864) (10,168) (10,807) ----------- ------------ ------------ ------------ ------------ ----------- Net investment income (loss)...... $ 4,383,078 $ 2,136,762 $ 145,376 $ (31,827) $ (65,464) $ 521,053 ----------- ------------ ------------ ------------ ------------ ----------- REALIZED AND UNREALIZED GAINS (LOSSES): Realized gains (losses) on investment transactions: Proceeds from sales................. $ 2,938,665 $ 2,540,473 $ 560,959 $ 8,605,510 $ 1,152,029 $ 1,370,816 Cost of investments sold............ (3,414,010) (2,072,058) (493,009) (7,792,687) (1,148,644) (1,356,746) ----------- ------------ ------------ ------------ ------------ ----------- Net realized gains (losses)....... $ (475,345) $ 468,415 $ 67,950 $ 812,823 $ 3,385 $ 14,070 ----------- ------------ ------------ ------------ ------------ ----------- Net unrealized appreciation (depreciation) on investments: End of year......................... $(8,030,395) $ (6,830,641) $ 24,319 $ (1,319,007) $ (361,161) $(1,570,758) Beginning of year................... 1,429,504 3,084,374 257,249 1,966,987 60,122 277,370 ----------- ------------ ------------ ------------ ------------ ----------- Change in unrealized appreciation (depreciation)................... $(9,459,899) $ (9,915,015) $ (232,930) $ (3,285,994) $ (421,283) $(1,848,128) ----------- ------------ ------------ ------------ ------------ ----------- Realized and unrealized gains (losses)........................... $(9,935,244) $ (9,446,600) $ (164,980) $ (2,473,171) $ (417,898) $(1,834,058) ----------- ------------ ------------ ------------ ------------ ----------- INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS............................. $(5,552,166) $ (7,309,838) $ (19,604) $ (2,504,998) $ (483,362) $(1,313,005) =========== ============ ============ ============ ============ ===========
See notes to financial statements -65- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF OPERATIONS -- Year Ended December 31, 2000 -- continued
JP1 JP2 JP3 LA1 CAS EGS Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account ------------ ------------- ------------ ------------ ------------ ------------ INCOME AND EXPENSES: Dividend income and capital gain distributions received............... $ 680,749 $ 204,337 $ 120,711 $ 376,537 $ 2,485,281 $ 5,103,953 Mortality and expense risk charges.... (250,680) (80,269) (64,264) (417,793) (311,035) (796,159) Distribution and administrative expense charges...................... (30,082) (9,632) (7,712) (50,135) (37,324) (95,539) ----------- ------------ ----------- ----------- ----------- ------------ Net investment income (loss)...... $ 399,987 $ 114,436 $ 48,735 $ (91,391) $ 2,136,922 $ 4,212,255 ----------- ------------ ----------- ----------- ----------- ------------ REALIZED AND UNREALIZED GAINS (LOSSES): Realized gains (losses) on investment transactions: Proceeds from sales................. $ 3,430,106 $ 1,749,550 $ 4,039,562 $ 6,886,921 $ 2,631,504 $ 25,395,793 Cost of investments sold............ (3,383,329) (1,656,765) (3,938,816) (6,767,983) (2,470,327) (24,026,587) ----------- ------------ ----------- ----------- ----------- ------------ Net realized gains (losses)....... $ 46,777 $ 92,785 $ 100,746 $ 118,938 $ 161,177 $ 1,369,206 ----------- ------------ ----------- ----------- ----------- ------------ Net unrealized appreciation (depreciation) on investments: End of year......................... $(2,645,005) $ (1,012,206) $ (496,115) $ 5,853,928 $(4,709,833) $(12,737,135) Beginning of year................... 413,908 440,742 335,738 (168,245) 2,858,363 11,182,046 ----------- ------------ ----------- ----------- ----------- ------------ Change in unrealized appreciation (depreciation)................... $(3,058,913) $ (1,452,948) $ (831,853) $ 6,022,173 $(7,568,196) $(23,919,181) ----------- ------------ ----------- ----------- ----------- ------------ Realized and unrealized gains (losses)........................... $(3,012,136) $ (1,360,163) $ (731,107) $ 6,141,111 $(7,407,019) $(22,549,975) ----------- ------------ ----------- ----------- ----------- ------------ INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS............................. $(2,612,149) $ (1,245,727) $ (682,372) $ 6,049,720 $(5,270,097) $(18,337,720) =========== ============ =========== =========== =========== ============ HYS MMS UTS GSS TRS MIT Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account ------------ ------------- ------------ ------------ ------------ ------------ INCOME AND EXPENSES: Dividend income and capital gain distributions received............... $ 1,381,172 $ 374,697 $ 2,858,667 $ 1,166,819 $ 647,856 $ 1,170,740 Mortality and expense risk charges.... (217,134) (80,411) (438,134) (245,839) (100,786) (248,903) Distribution and administrative expense charges...................... (26,056) (9,649) (52,576) (29,501) (12,094) (29,868) ----------- ------------ ----------- ----------- ----------- ------------ Net investment income (loss)...... $ 1,137,982 $ 284,637 $ 2,367,957 $ 891,479 $ 534,976 $ 891,969 ----------- ------------ ----------- ----------- ----------- ------------ REALIZED AND UNREALIZED GAINS (LOSSES): Realized gains (losses) on investment transactions: Proceeds from sales................. $ 7,422,306 $ 10,336,262 $ 4,217,961 $ 9,726,136 $ 918,959 $ 1,762,089 Cost of investments sold............ (7,755,426) (10,336,262) (3,663,950) (9,960,138) (929,302) (1,805,045) ----------- ------------ ----------- ----------- ----------- ------------ Net realized gains (losses)....... $ (333,120) $ -- $ 554,011 $ (234,002) $ (10,343) $ (42,956) ----------- ------------ ----------- ----------- ----------- ------------ Net unrealized appreciation (depreciation) on investments: End of year......................... $(2,462,454) $ -- $ 812,759 $ 1,190,556 $ 1,023,354 $ (647,448) Beginning of year................... 37,632 -- 2,724,754 (256,823) 21,849 386,232 ----------- ------------ ----------- ----------- ----------- ------------ Change in unrealized appreciation (depreciation)................... $(2,500,086) $ -- $(1,911,995) $ 1,447,379 $ 1,001,505 $ (1,033,680) ----------- ------------ ----------- ----------- ----------- ------------ Realized and unrealized gains (losses)........................... $(2,833,206) $ -- $(1,357,984) $ 1,213,377 $ 991,162 $ (1,076,636) ----------- ------------ ----------- ----------- ----------- ------------ INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS............................. $(1,695,224) $ 284,637 $ 1,009,973 $ 2,104,856 $ 1,526,138 $ (184,667) =========== ============ =========== =========== =========== ============
See notes to financial statements -66- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF OPERATIONS -- Year Ended December 31, 2000 -- continued
NWD MIS OP1 OP2 OP3 OP4 Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account ------------ ------------- ------------ ------------ ------------ ------------ INCOME AND EXPENSES: Dividend income and capital gain distributions received............... $ 608,314 $ 838,904 $ 1,222,161 $ 1,415,333 $ 10,813 $ 260,821 Mortality and expense risk charges.... (188,838) (366,814) (231,315) (125,439) (55,839) (41,321) Distribution and administrative expense charges...................... (22,661) (44,018) (27,758) (15,053) (6,701) (4,959) ----------- ----------- ----------- ----------- ------------ ----------- Net investment income (loss)...... $ 396,815 $ 428,072 $ 963,088 $ 1,274,841 $ (51,727) $ 214,541 ----------- ----------- ----------- ----------- ------------ ----------- REALIZED AND UNREALIZED GAINS (LOSSES): Realized gains (losses) on investment transactions: Proceeds from sales................. $ 4,929,890 $ 2,716,073 $ 7,961,799 $ 3,671,584 $ 3,865,395 $ 741,755 Cost of investments sold.......... (4,714,470) (2,403,685) (8,704,003) (2,923,628) (3,539,059) (823,803) ----------- ----------- ----------- ----------- ------------ ----------- Net realized gains (losses)....... $ 215,420 $ 312,388 $ (742,204) $ 747,956 $ 326,336 $ (82,048) ----------- ----------- ----------- ----------- ------------ ----------- Net unrealized appreciation (depreciation) on investments: End of year......................... $(2,077,919) $(4,330,874) $ 2,654,208 $ 705,849 $ 1,736,902 $ 196,359 Beginning of year................... 457,940 1,220,338 (115,746) 589,498 (15,639) (2,013) ----------- ----------- ----------- ----------- ------------ ----------- Change in unrealized appreciation (depreciation)................... $(2,535,859) $(5,551,212) $ 2,769,954 $ 116,351 $ 1,752,541 $ 198,372 ----------- ----------- ----------- ----------- ------------ ----------- Realized and unrealized gains (losses)........................... $(2,320,439) $(5,238,824) $ 2,027,750 $ 864,307 $ 2,078,877 $ 116,324 ----------- ----------- ----------- ----------- ------------ ----------- INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS............................. $(1,923,624) $(4,810,752) $ 2,990,838 $ 2,139,148 $ 2,027,150 $ 330,865 =========== =========== =========== =========== ============ =========== SB1 SB2 SB3 SB4 SCA1 SCA2 Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account ------------ ------------- ------------ ------------ ------------ ------------ INCOME AND EXPENSES: Dividend income and capital gain distributions received............... $ 32,637 $ 22,883 $ 284,343 $ 141,421 $ 1,289,634 $ 1,295,128 Mortality and expense risk charges.... (5,554) (7,551) (74,279) (58,164) (282,718) (242,903) Distribution and administrative expense charges...................... (666) (906) (8,914) (6,980) (33,926) (29,148) ----------- ----------- ----------- ----------- ------------ ----------- Net investment income (loss)...... $ 26,417 $ 14,426 $ 201,150 $ 76,277 $ 972,990 $ 1,023,077 ----------- ----------- ----------- ----------- ------------ ----------- REALIZED AND UNREALIZED GAINS (LOSSES): Realized gains (losses) on investment transactions: Proceeds from sales................. $ 52,758 $ 226,796 $ 3,113,784 $ 3,016,338 $ 55,950,788 $ 6,800,294 Cost of investments sold............ (39,065) (184,706) (3,190,831) (3,018,911) (55,950,788) (6,837,741) ----------- ----------- ----------- ----------- ------------ ----------- Net realized gains (losses)....... $ 13,693 $ 42,090 $ (77,047) $ (2,573) $ -- $ (37,447) ----------- ----------- ----------- ----------- ------------ ----------- Net unrealized appreciation (depreciation) on investments: End of year......................... $ 93,906 $ 71,696 $ (109,118) $ 39,038 $ -- $ 679,913 Beginning of year................... 68,433 52,807 (311,911) (145,524) -- (167,137) ----------- ----------- ----------- ----------- ------------ ----------- Change in unrealized appreciation (depreciation)................... $ 25,473 $ 18,889 $ 202,793 $ 184,562 $ -- $ 847,050 ----------- ----------- ----------- ----------- ------------ ----------- Realized and unrealized gains (losses)........................... $ 39,166 $ 60,979 $ 125,746 $ 181,989 $ -- $ 809,603 ----------- ----------- ----------- ----------- ------------ ----------- INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS............................. $ 65,583 $ 75,405 $ 326,896 $ 258,266 $ 972,990 $ 1,832,680 =========== =========== =========== =========== ============ ===========
See notes to financial statements -67- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF OPERATIONS -- Year Ended December 31, 2000 -- continued
SCA3 SCA4 SCA5 SCA6 SCA7(a) SCA8(a) Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account ------------ ------------- ------------ ------------ ------------ ------------ INCOME AND EXPENSES: Dividend income and capital gain distributions received............... $ 433,865 $ 415,976 $ 2,650,372 $ 177,381 $ 27,348 $ 3,775 Mortality and expense risk charges.... (51,224) (74,180) (184,426) (20,223) (29,790) (5,288) Distribution and administrative expense charges...................... (6,147) (8,902) (22,131) (2,427) (3,575) (635) ----------- ----------- ----------- --------- ----------- --------- Net investment income (loss)...... $ 376,494 $ 332,894 $ 2,443,815 $ 154,731 $ (6,017) $ (2,148) ----------- ----------- ----------- --------- ----------- --------- REALIZED AND UNREALIZED GAINS (LOSSES): Realized gains (losses) on investment transactions: Proceeds from sales................. $ 1,330,761 $ 517,975 $ 4,174,930 $ 465,030 $ 447,503 $ 123,128 Cost of investments sold............ (1,185,052) (440,419) (3,191,554) (412,796) (476,133) (124,878) ----------- ----------- ----------- --------- ----------- --------- Net realized gains (losses)....... $ 145,709 $ 77,556 $ 983,376 $ 52,234 $ (28,630) $ (1,750) ----------- ----------- ----------- --------- ----------- --------- Net unrealized appreciation (depreciation) on investments: End of year......................... $ 564,032 $(1,657,923) $(1,763,828) $(315,131) $ 146,144 $ 172,780 Beginning of year................... (70,481) 217,754 437,614 53,913 -- -- ----------- ----------- ----------- --------- ----------- --------- Change in unrealized appreciation (depreciation)................... $ 634,513 $(1,875,677) $(2,201,442) $(369,044) $ 146,144 $ 172,780 ----------- ----------- ----------- --------- ----------- --------- Realized and unrealized gains (losses)........................... $ 780,222 $(1,798,121) $(1,218,066) $(316,810) $ 117,514 $ 171,030 ----------- ----------- ----------- --------- ----------- --------- INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS............................. $ 1,156,716 $(1,465,227) $ 1,225,749 $(162,079) $ 111,497 $ 168,882 =========== =========== =========== ========= =========== ========= SCA9(a) SCA(a) SCB(a) SCC(a) CS1 Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account ------------ ------------- ------------ ------------ ------------ INCOME AND EXPENSES: Dividend income and capital gain distributions received............... $ 1,021 $ 25,023 $ 69,511 $ 897 $ 81,522 Mortality and expense risk charges.... (567) (18,284) (9,771) (299) (46,801) Distribution and administrative expense charges...................... (68) (2,194) (1,173) (36) (5,616) --------------------------------------------------------------------- Net investment income (loss)...... $ 386 $ 4,545 $ 58,567 $ 562 $ 29,105 --------------------------------------------------------------------- REALIZED AND UNREALIZED GAINS (LOSSES): Realized gains (losses) on investment transactions: Proceeds from sales................. $ 7,366 $ 463,008 $ 126,758 $ 6,339 $ 3,682,016 Cost of investments sold............ (7,130) (477,352) (114,777) (6,105) (4,078,512) --------------------------------------------------------------------- Net realized gains (losses)....... $ 236 $ (14,344) $ 11,981 $ 234 $ (396,496) --------------------------------------------------------------------- Net unrealized appreciation (depreciation) on investments: End of year......................... $ 16,999 $ 192,337 $ 388,618 $ 8,540 $ (849,880) Beginning of year................... -- -- -- -- 334,249 --------------------------------------------------------------------- Change in unrealized appreciation (depreciation)................... $ 16,999 $ 192,337 $ 388,618 $ 8,540 $(1,184,129) --------------------------------------------------------------------- Realized and unrealized gains (losses)........................... $ 17,235 $ 177,993 $ 400,599 $ 8,774 $(1,580,625) --------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS............................. $ 17,621 $ 182,538 $ 459,166 $ 9,336 $(1,551,520) =====================================================================
(a) For the period July 17, 2000 (commencement of operations) through December 31, 2000. See notes to financial statements -68- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENT OF OPERATIONS -- Year Ended December 31, 2000 -- continued
CS2 CS3 CS4 Sub-Account Sub-Account Sub-Account ------------ ------------- ------------ INCOME AND EXPENSES: Dividend income and capital gain distributions received............... $ 206,111 $ 121,599 $ 754,874 Mortality and expense risk charges.... (21,684) (20,131) (52,964) Distribution and administrative expense charges...................... (2,602) (2,416) (6,356) ---------- ----------- ----------- Net investment income (loss)...... $ 181,825 $ 99,052 $ 695,554 ---------- ----------- ----------- REALIZED AND UNREALIZED GAINS (LOSSES): Realized gains (losses) on investment transactions: Proceeds from sales................. $1,009,421 $ 1,373,515 $ 4,417,966 Cost of investments sold............ (977,920) (1,222,726) (3,915,712) ---------- ----------- ----------- Net realized gains (losses)....... $ 31,501 $ 150,789 $ 502,254 ---------- ----------- ----------- Net unrealized appreciation (depreciation) on investments: End of year......................... $ (512,167) $ (353,813) $(1,516,754) Beginning of year................... 283,627 202,317 1,104,711 ---------- ----------- ----------- Change in unrealized appreciation (depreciation).................... $ (795,794) $ (556,130) $(2,621,465) ---------- ----------- ----------- Realized and unrealized gains (losses)........................... $ (764,293) $ (405,341) $(2,119,211) ---------- ----------- ----------- INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS............................. $ (582,468) $ (306,289) $(1,423,657) ========== =========== ===========
See notes to financial statements -69- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENTS OF CHANGES IN NET ASSETS
AIM1 AIM2 AIM3 Sub-Account Sub-Account Sub-Account ---------------------------- ---------------------------- ---------------------------- Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ------------- ------------- ------------- ------------- ------------- ------------- OPERATIONS: Net investment income (loss)......... $ 785,573 $ 163,990 $ 1,180,408 $ 663,433 $ 1,206,305 $ 64,741 Net realized gains (losses).......... 673,633 82,737 1,467,825 133,152 1,536,787 468,336 Net unrealized gains (losses)........ (9,510,250) 1,987,730 (18,137,985) 3,381,331 (13,816,844) 4,897,906 ----------- ---------- ------------ ----------- ------------ ----------- Increase (Decrease) in net assets from operations................. $(8,051,044) $2,234,457 $(15,489,752) $ 4,177,916 $(11,073,752) $ 5,430,983 ----------- ---------- ------------ ----------- ------------ ----------- PARTICIPANT TRANSACTIONS: Accumulation activity: Purchase payments received......... $31,058,303 $3,190,508 $ 36,661,995 $ 8,313,278 $ 28,663,612 $ 8,663,899 Net transfers between Sub-Accounts and Fixed Account................. 13,604,340 2,389,362 15,625,077 9,156,077 18,297,743 13,693,105 Withdrawals, surrenders, annuitizations and contract charges........................... (1,314,057) (291,401) (2,368,765) (396,819) (3,198,291) (634,386) ----------- ---------- ------------ ----------- ------------ ----------- Net accumulation activity........ $43,348,586 $5,288,469 $ 49,918,307 $17,072,536 $ 43,763,064 $21,722,618 ----------- ---------- ------------ ----------- ------------ ----------- Annuitization activity: Annuitizations..................... $ 8,612 $ 21,703 $ 28,010 $ 88,023 $ 61,885 $ 68,415 Annuity payments................... (3,302) (947) (12,664) (2,232) (8,018) (645) Adjustments to annuity reserve..... (766) (1,572) (2,695) (1,153) (301) 3,276 ----------- ---------- ------------ ----------- ------------ ----------- Net annuitization activity....... $ 4,544 $ 19,184 $ 12,651 $ 84,638 $ 53,566 $ 71,046 ----------- ---------- ------------ ----------- ------------ ----------- Increase (Decrease) in net assets from participant transactions....... $43,353,130 $5,307,653 $ 49,930,958 $17,157,174 $ 43,816,630 $21,793,664 ----------- ---------- ------------ ----------- ------------ ----------- Increase (Decrease) in net assets............................ $35,302,086 $7,542,110 $ 34,441,206 $21,335,090 $ 32,742,878 $27,224,647 NET ASSETS: Beginning of year.................... 9,095,776 1,553,666 23,904,295 2,569,205 31,001,123 3,776,476 ----------- ---------- ------------ ----------- ------------ ----------- End of year.......................... $44,397,862 $9,095,776 $ 58,345,501 $23,904,295 $ 63,744,001 $31,001,123 =========== ========== ============ =========== ============ ===========
See notes to financial statements -70- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENTS OF CHANGES IN NET ASSETS -- continued
AIM4 AL1 AL2 Sub-Account Sub-Account Sub-Account ---------------------------- ---------------------------- ---------------------------- Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ------------- ------------- ------------- ------------- ------------- ------------- OPERATIONS: Net investment income (loss)......... $ 2,944,100 $ 511,149 $ 6,735,850 $ 811,033 $ 6,868,082 $ 199,713 Net realized gains (losses).......... 670,585 532,235 519,311 600,520 432,541 359,230 Net unrealized gains (losses)........ (18,041,592) 5,018,327 (22,176,090) 4,516,739 (9,622,670) 4,268,060 ------------ ----------- ------------ ----------- ----------- ----------- Increase (Decrease) in net assets from operations................. $(14,426,907) $ 6,061,711 $(14,920,929) $ 5,928,292 $(2,322,047) $ 4,827,003 ------------ ----------- ------------ ----------- ----------- ----------- PARTICIPANT TRANSACTIONS: Accumulation activity: Purchase payments received......... $ 36,176,954 $ 4,140,973 $ 37,234,493 $12,748,856 $24,769,595 $ 5,097,716 Net transfers between Sub-Accounts and Fixed Account................. 17,668,359 7,199,126 28,139,390 16,707,964 12,270,564 8,333,556 Withdrawals, surrenders, annuitizations and contract charges........................... (2,566,294) (465,245) (4,213,160) (1,047,363) (2,085,951) (821,155) ------------ ----------- ------------ ----------- ----------- ----------- Net accumulation activity........ $ 51,279,019 $10,874,854 $ 61,160,723 $28,409,457 $34,954,208 $12,610,117 ------------ ----------- ------------ ----------- ----------- ----------- Annuitization activity: Annuitizations..................... $ 84,341 $ 87,014 $ 86,548 $ 85,342 $ 12,751 $ 99,349 Annuity payments................... (18,946) (5,593) (9,785) (1,306) (16,952) (6,928) Adjustments to annuity reserve..... (6,829) (1,819) (5,278) 2,825 (3,492) (1,193) ------------ ----------- ------------ ----------- ----------- ----------- Net annuitization activity....... $ 58,566 $ 79,602 $ 71,485 $ 86,861 $ (7,693) $ 91,228 ------------ ----------- ------------ ----------- ----------- ----------- Increase (Decrease) in net assets from participant transactions....... $ 51,337,585 $10,954,456 $ 61,232,208 $28,496,318 $34,946,515 $12,701,345 ------------ ----------- ------------ ----------- ----------- ----------- Increase (Decrease) in net assets............................ $ 36,910,678 $17,016,167 $ 46,311,279 $34,424,610 $32,624,468 $17,528,348 NET ASSETS: Beginning of year.................... 19,427,405 2,411,238 38,064,112 3,639,502 19,857,026 2,328,678 ------------ ----------- ------------ ----------- ----------- ----------- End of year.......................... $ 56,338,083 $19,427,405 $ 84,375,391 $38,064,112 $52,481,494 $19,857,026 ============ =========== ============ =========== =========== ===========
See notes to financial statements -71- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENTS OF CHANGES IN NET ASSETS -- continued
AL3 GS1 GS2 Sub-Account Sub-Account Sub-Account ---------------------------- ---------------------------- ---------------------------- Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ------------- ------------- ------------- ------------- ------------- ------------- OPERATIONS: Net investment income (loss)......... $ 4,383,078 $ 180,135 $ 2,136,762 $ (86,434) $ 145,376 $ (7,437) Net realized gains (losses).......... (475,345) 26,998 468,415 119,138 67,950 (6,104) Net unrealized gains (losses)........ (9,459,899) 1,333,109 (9,915,015) 2,855,021 (232,930) 247,190 ----------- ---------- ----------- ----------- ---------- ---------- Increase (Decrease) in net assets from operations................. $(5,552,166) $1,540,242 $(7,309,838) $ 2,887,725 $ (19,604) $ 233,649 ----------- ---------- ----------- ----------- ---------- ---------- PARTICIPANT TRANSACTIONS: Accumulation activity: Purchase payments received......... $11,075,818 $2,088,417 $10,836,352 $ 4,819,708 $2,227,941 $ 314,158 Net transfers between Sub-Accounts and Fixed Account................. 4,974,408 2,244,048 7,318,315 5,800,687 2,112,089 981,739 Withdrawals, surrenders, annuitizations and contract charges........................... (700,045) (126,620) (1,379,531) (346,821) (141,632) (33,270) ----------- ---------- ----------- ----------- ---------- ---------- Net accumulation activity.......... $15,350,181 $4,205,845 $16,775,136 $10,273,574 $4,198,398 $1,262,627 ----------- ---------- ----------- ----------- ---------- ---------- Annuitization activity: Annuitizations..................... $ 19,389 $ 59,038 $ 33,683 $ 93,264 $ -- $ 19,466 Annuity payments................... (7,303) (542) (14,186) (5,717) (1,044) (750) Adjustments to annuity reserve..... (578) 66 (384) (2,494) (312) (2,307) ----------- ---------- ----------- ----------- ---------- ---------- Net annuitization activity....... $ 11,508 $ 58,562 $ 19,113 $ 85,053 $ (1,356) $ 16,409 ----------- ---------- ----------- ----------- ---------- ---------- Increase (Decrease) in net assets from participant transactions....... $15,361,689 $4,264,407 $16,794,249 $10,358,627 $4,197,042 $1,279,036 ----------- ---------- ----------- ----------- ---------- ---------- Increase (Decrease) in net assets............................ $ 9,809,523 $5,804,649 $ 9,484,411 $13,246,352 $4,177,438 $1,512,685 NET ASSETS: Beginning of year.................... 6,610,605 805,956 15,575,462 2,329,110 1,795,361 282,676 ----------- ---------- ----------- ----------- ---------- ---------- End of year.......................... $16,420,128 $6,610,605 $25,059,873 $15,575,462 $5,972,799 $1,795,361 =========== ========== =========== =========== ========== ==========
See notes to financial statements -72- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENTS OF CHANGES IN NET ASSETS -- continued
GS3 GS4 GS5 Sub-Account Sub-Account Sub-Account ---------------------------- ---------------------------- ---------------------------- Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ------------- ------------- ------------- ------------- ------------- ------------- OPERATIONS: Net investment income (loss)......... $ (31,827) $ 126,862 $ (65,464) $ 8,970 $ 521,053 $ 183,291 Net realized gains (losses).......... 812,823 363,935 3,385 (49,105) 14,070 84,670 Net unrealized gains (losses)........ (3,285,994) 1,670,034 (421,283) 132,039 (1,848,128) 260,708 ----------- ----------- ---------- ---------- ----------- ---------- Increase (Decrease) in net assets from operations................. $(2,504,998) $ 2,160,831 $ (483,362) $ 91,904 $(1,313,005) $ 528,669 ----------- ----------- ---------- ---------- ----------- ---------- PARTICIPANT TRANSACTIONS: Accumulation activity: Purchase payments received......... $ 7,558,859 $ 4,503,362 $2,094,249 $1,294,500 $ 7,281,280 $ 840,435 Net transfers between Sub-Accounts and Fixed Account................. 121,089 8,595,492 1,481,766 2,400,908 2,123,452 1,051,801 Withdrawals, surrenders, annuitizations and contract charges........................... (1,614,921) (498,099) (557,171) (203,335) (292,254) (37,988) ----------- ----------- ---------- ---------- ----------- ---------- Net accumulation activity........ $ 6,065,027 $12,600,755 $3,018,844 $3,492,073 $ 9,112,478 $1,854,248 ----------- ----------- ---------- ---------- ----------- ---------- Annuitization activity: Annuitizations..................... $ 43,880 $ 37,472 $ -- $ -- $ 34,296 $ 20,676 Annuity payments................... (9,650) (2,065) -- -- (2,659) (911) Adjustments to annuity reserve..... (1,358) (43) -- -- (242) (674) ----------- ----------- ---------- ---------- ----------- ---------- Net annuitization activity....... $ 32,872 $ 35,364 $ -- $ -- $ 31,395 $ 19,091 ----------- ----------- ---------- ---------- ----------- ---------- Increase (Decrease) in net assets from participant transactions....... $ 6,097,899 $12,636,119 $3,018,844 $3,492,073 $ 9,143,873 $1,873,339 ----------- ----------- ---------- ---------- ----------- ---------- Increase (Decrease) in net assets............................ $ 3,592,901 $14,796,950 $2,535,482 $3,583,977 $ 7,830,868 $2,402,008 NET ASSETS: Beginning of year.................... 18,016,302 3,219,352 5,432,857 1,848,880 2,727,392 325,384 ----------- ----------- ---------- ---------- ----------- ---------- End of year.......................... $21,609,203 $18,016,302 $7,968,339 $5,432,857 $10,558,260 $2,727,392 =========== =========== ========== ========== =========== ==========
See notes to financial statements -73- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENTS OF CHANGES IN NET ASSETS -- continued
JP1 JP2 JP3 Sub-Account Sub-Account Sub-Account ---------------------------- ---------------------------- ---------------------------- Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ------------- ------------- ------------- ------------- ------------- ------------- OPERATIONS: Net investment income (loss)......... $ 399,987 $ 915,926 $ 114,436 $ 93,716 $ 48,735 $ 19,756 Net realized gains (losses).......... 46,777 171,441 92,785 86,971 100,746 172 Net unrealized gains (losses)........ (3,058,913) 340,247 (1,452,948) 433,370 (831,853) 336,978 ----------- ----------- ----------- ---------- ---------- ---------- Increase (Decrease) in net assets from operations................. $(2,612,149) $ 1,427,614 $(1,245,727) $ 614,057 $ (682,372) $ 356,906 ----------- ----------- ----------- ---------- ---------- ---------- PARTICIPANT TRANSACTIONS: Accumulation activity: Purchase payments received......... $ 6,209,282 $ 4,908,483 $ 4,926,786 $1,032,722 $4,533,517 $ 556,222 Net transfers between Sub-Accounts and Fixed Account................. 3,569,440 6,352,530 2,730,587 1,243,965 1,184,183 412,896 Withdrawals, surrenders, annuitizations and contract charges........................... (1,007,666) (556,977) (858,767) (95,728) (283,409) (18,773) ----------- ----------- ----------- ---------- ---------- ---------- Net accumulation activity........ $ 8,771,056 $10,704,036 $ 6,798,606 $2,180,959 $5,434,291 $ 950,345 ----------- ----------- ----------- ---------- ---------- ---------- Annuitization activity: Annuitizations..................... $ 24,627 $ 77,078 $ 11,637 $ 18,651 $ 8,065 $ -- Annuity payments................... (5,081) (1,035) (2,628) (844) (1,022) -- Adjustments to annuity reserve..... (801) 150 8 (700) (64) -- ----------- ----------- ----------- ---------- ---------- ---------- Net annuitization activity....... $ 18,745 $ 76,193 $ 9,017 $ 17,107 $ 6,979 $ -- ----------- ----------- ----------- ---------- ---------- ---------- Increase (Decrease) in net assets from participant transactions....... $ 8,789,801 $10,780,229 $ 6,807,623 $2,198,066 $5,441,270 $ 950,345 ----------- ----------- ----------- ---------- ---------- ---------- Increase (Decrease) in net assets............................ $ 6,177,652 $12,207,843 $ 5,561,896 $2,812,123 $4,758,898 $1,307,251 NET ASSETS: Beginning of year.................... 15,393,690 3,185,847 3,297,539 485,416 1,497,621 190,370 ----------- ----------- ----------- ---------- ---------- ---------- End of year.......................... $21,571,342 $15,393,690 $ 8,859,435 $3,297,539 $6,256,519 $1,497,621 =========== =========== =========== ========== ========== ==========
See notes to financial statements -74- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENTS OF CHANGES IN NET ASSETS -- continued
LA1 CAS EGS Sub-Account Sub-Account Sub-Account ---------------------------- ---------------------------- ---------------------------- Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ------------- ------------- ------------- ------------- ------------- ------------- OPERATIONS: Net investment income (loss)......... $ (91,391) $ 1,474,587 $ 2,136,922 $ 692,778 $ 4,212,255 $ (32,594) Net realized gains (losses).......... 118,938 174,451 161,177 224,872 1,369,206 649,409 Net unrealized gains (losses)........ 6,022,173 (189,406) (7,568,196) 2,228,558 (23,919,181) 10,404,765 ----------- ----------- ----------- ----------- ------------ ----------- Increase (Decrease) in net assets from operations................. $ 6,049,720 $ 1,459,632 $(5,270,097) $ 3,146,208 $(18,337,720) $11,021,580 ----------- ----------- ----------- ----------- ------------ ----------- PARTICIPANT TRANSACTIONS: Accumulation activity: Purchase payments received......... $15,511,439 $ 6,119,781 $15,702,930 $ 3,621,357 $ 48,823,812 $ 7,852,516 Net transfers between Sub-Accounts and Fixed Account................. 10,110,590 10,627,992 11,269,256 3,950,702 20,631,668 8,176,327 Withdrawals, surrenders, annuitizations and contract charges........................... (2,720,289) (621,174) (1,425,528) (385,338) (4,288,255) (925,614) ----------- ----------- ----------- ----------- ------------ ----------- Net accumulation activity........ $22,901,740 $16,126,599 $25,546,658 $ 7,186,721 $ 65,167,225 $15,103,229 ----------- ----------- ----------- ----------- ------------ ----------- Annuitization activity: Annuitizations..................... $ 2,748 $ -- $ 25,215 $ 53,269 $ 65,385 $ 126,228 Annuity payments................... (354) -- (6,907) (3,083) (20,025) (3,973) Adjustments to annuity reserve..... -- -- (528) (1,863) (12,774) 9,690 ----------- ----------- ----------- ----------- ------------ ----------- Net annuitization activity....... $ 2,394 $ -- $ 17,780 $ 48,323 $ 32,586 $ 131,945 ----------- ----------- ----------- ----------- ------------ ----------- Increase (Decrease) in net assets from participant transactions....... $22,904,134 $16,126,599 $25,564,438 $ 7,235,044 $ 65,199,811 $15,235,174 ----------- ----------- ----------- ----------- ------------ ----------- Increase (Decrease) in net assets............................ $28,953,854 $17,586,231 $20,294,341 $10,381,252 $ 46,862,091 $26,256,754 NET ASSETS: Beginning of year.................... 20,968,509 3,382,278 15,000,492 4,619,240 31,133,993 4,877,239 ----------- ----------- ----------- ----------- ------------ ----------- End of year.......................... $49,922,363 $20,968,509 $35,294,833 $15,000,492 $ 77,996,084 $31,133,993 =========== =========== =========== =========== ============ ===========
See notes to financial statements -75- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENTS OF CHANGES IN NET ASSETS -- continued
HYS MMS UTS Sub-Account Sub-Account Sub-Account ---------------------------- ---------------------------- ---------------------------- Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ------------- ------------- ------------- ------------- ------------- ------------- OPERATIONS: Net investment income (loss)......... $ 1,137,982 $ 277,362 $ 284,637 $ 177,344 $ 2,367,957 $ 624,780 Net realized gains (losses).......... (333,120) (99,067) -- -- 554,011 155,348 Net unrealized gains (losses)........ (2,500,086) 40,424 -- -- (1,911,995) 2,521,304 ----------- ----------- ----------- ---------- ----------- ----------- Increase (Decrease) in net assets from operations................. $(1,695,224) $ 218,719 $ 284,637 $ 177,344 $ 1,009,973 $ 3,301,432 ----------- ----------- ----------- ---------- ----------- ----------- PARTICIPANT TRANSACTIONS: Accumulation activity: Purchase payments received......... $ 9,374,979 $ 3,074,357 $ 41,667 $ 308,389 $20,151,056 $ 4,077,024 Net transfers between Sub-Accounts and Fixed Account................. 7,367,950 7,484,053 34,423 4,197,928 12,322,768 9,168,485 Withdrawals, surrenders, annuitizations and contract charges........................... (1,270,403) (462,273) (1,421,442) (1,455,384) (1,704,218) (781,083) ----------- ----------- ----------- ---------- ----------- ----------- Net accumulation activity........ $15,472,526 $10,096,137 $(1,345,352) $3,050,933 $30,769,606 $12,464,426 ----------- ----------- ----------- ---------- ----------- ----------- Annuitization activity: Annuitizations..................... $ 39,001 $ 80,858 $ -- $ -- $ 2,470 $ 179,007 Annuity payments................... (9,322) (4,094) -- -- (19,395) (3,339) Adjustments to annuity reserve..... (1,149) (348) -- -- (2,599) (1,085) ----------- ----------- ----------- ---------- ----------- ----------- Net annuitization activity....... $ 28,530 $ 76,416 $ -- $ -- $ (19,524) $ 174,583 ----------- ----------- ----------- ---------- ----------- ----------- Increase (Decrease) in net assets from participant transactions....... $15,501,056 $10,172,553 $(1,345,352) $3,050,933 $30,750,082 $12,639,009 ----------- ----------- ----------- ---------- ----------- ----------- Increase (Decrease) in net assets............................ $13,805,832 $10,391,272 $(1,060,715) $3,228,277 $31,760,055 $15,940,441 NET ASSETS: Beginning of year.................... 12,505,265 2,113,993 7,058,196 3,829,919 18,838,189 2,897,748 ----------- ----------- ----------- ---------- ----------- ----------- End of year.......................... $26,311,097 $12,505,265 $ 5,997,481 $7,058,196 $50,598,244 $18,838,189 =========== =========== =========== ========== =========== ===========
See notes to financial statements -76- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENTS OF CHANGES IN NET ASSETS -- continued
GSS TRS MIT Sub-Account Sub-Account Sub-Account ---------------------------- ---------------------------- ---------------------------- Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, 2000 1999 2000 1999(a) 2000 1999(a) ------------- ------------- ------------- ------------- ------------- ------------- OPERATIONS: Net investment income (loss)......... $ 891,479 $ 154,206 $ 534,976 $ (7,791) $ 891,969 $ (21,203) Net realized gains (losses).......... (234,002) (71,213) (10,343) (4,728) (42,956) (3,740) Net unrealized gains (losses)........ 1,447,379 (269,914) 1,001,505 21,849 (1,033,680) 386,232 ----------- ----------- ----------- ---------- ----------- ---------- Increase (Decrease) in net assets from operations................. $ 2,104,856 $ (186,921) $ 1,526,138 $ 9,330 $ (184,667) $ 361,289 ----------- ----------- ----------- ---------- ----------- ---------- PARTICIPANT TRANSACTIONS: Accumulation activity: Purchase payments received......... $ 7,012,278 $ 3,214,716 $ 7,518,367 $1,944,130 $16,376,271 $3,992,136 Net transfers between Sub-Accounts and Fixed Account................. 1,930,713 10,679,042 3,909,033 749,019 8,459,298 3,540,232 Withdrawals, surrenders, annuitizations and contract charges........................... (1,540,703) (493,591) (390,889) (116,117) (928,927) (70,811) ----------- ----------- ----------- ---------- ----------- ---------- Net accumulation activity........ $ 7,402,288 $13,400,167 $11,036,511 $2,577,032 $23,906,642 $7,461,557 ----------- ----------- ----------- ---------- ----------- ---------- Annuitization activity: Annuitizations..................... $ 48,400 $ 26,994 $ 2,525 $ 79,374 $ 14,843 $ 4,029 Annuity payments................... (10,980) (4,351) (8,757) -- (2,403) (181) Adjustments to annuity reserve..... (712) (534) (1,172) 17 (179) (182) ----------- ----------- ----------- ---------- ----------- ---------- Net annuitization activity....... $ 36,708 $ 22,109 $ (7,404) $ 79,391 $ 12,261 $ 3,666 ----------- ----------- ----------- ---------- ----------- ---------- Increase (Decrease) in net assets from participant transactions....... $ 7,438,996 $13,422,276 $11,029,107 $2,656,423 $23,918,903 $7,465,223 ----------- ----------- ----------- ---------- ----------- ---------- Increase (Decrease) in net assets............................ $ 9,543,852 $13,235,355 $12,555,245 $2,665,753 $23,734,236 $7,826,512 NET ASSETS: Beginning of year.................... 14,876,989 1,641,634 2,665,753 -- 7,826,512 -- ----------- ----------- ----------- ---------- ----------- ---------- End of year.......................... $24,420,841 $14,876,989 $15,220,998 $2,665,753 $31,560,748 $7,826,512 =========== =========== =========== ========== =========== ==========
(a) For the period May 17, 1999 (commencement of operations) through December 31, 1999. See notes to financial statements -77- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENTS OF CHANGES IN NET ASSETS -- continued
NWD MIS OP1 Sub-Account Sub-Account Sub-Account ---------------------------- ---------------------------- ---------------------------- Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, 2000 1999(a) 2000 1999(a) 2000 1999 ------------- ------------- ------------- ------------- ------------- ------------- OPERATIONS: Net investment income (loss)......... $ 396,815 $ (6,392) $ 428,072 $ (20,396) $ 963,088 $ 147,083 Net realized gains (losses).......... 215,420 25,497 312,388 30,718 (742,204) 49,711 Net unrealized gains (losses)........ (2,535,859) 457,940 (5,551,212) 1,220,338 2,769,954 (317,549) ----------- ---------- ----------- ----------- ----------- ----------- Increase (Decrease) in net assets from operations................. $(1,923,624) $ 477,045 $(4,810,752) $ 1,230,660 $ 2,990,838 $ (120,755) ----------- ---------- ----------- ----------- ----------- ----------- PARTICIPANT TRANSACTIONS: Accumlation activity: Purchase payments received......... $18,552,634 $ 720,822 $31,327,517 $ 4,452,860 $ 3,774,159 $ 2,729,165 Net transfers between Sub-Accounts and Fixed Account................. 9,115,142 782,394 15,851,128 2,713,276 6,822,619 6,567,188 Withdrawals, surrenders, annuitizations and contract charges........................... (645,011) (6,830) (1,655,830) (187,257) (1,489,630) (574,346) ----------- ---------- ----------- ----------- ----------- ----------- Net accumulation activity........ $27,022,765 $1,496,386 $45,522,815 $ 6,978,879 $ 9,107,148 $ 8,722,007 ----------- ---------- ----------- ----------- ----------- ----------- Annuitization activity: Annuitizations..................... $ 12,096 $ -- $ 2,596 $ 133,744 $ 6,518 $ 11,643 Annuity payments................... (1,074) -- (13,291) (333) (1,714) (586) Adjustments to annuity reserve..... (70) -- 6,812 4,173 (172) 248 ----------- ---------- ----------- ----------- ----------- ----------- Net annuitization activity....... $ 10,952 $ -- $ (3,883) $ 137,584 $ 4,632 $ 11,305 ----------- ---------- ----------- ----------- ----------- ----------- Increase (Decrease) in net assets from participant transactions....... $27,033,717 $1,496,386 $45,518,932 $ 7,116,463 $ 9,111,780 $ 8,733,312 ----------- ---------- ----------- ----------- ----------- ----------- Increase (Decrease) in net assets............................ $25,110,093 $1,973,431 $40,708,180 $ 8,347,123 $12,102,618 $ 8,612,557 NET ASSETS: Beginning of year.................... 1,973,431 -- 8,347,123 -- 12,472,113 3,859,556 ----------- ---------- ----------- ----------- ----------- ----------- End of year.......................... $27,083,524 $1,973,431 $49,055,303 $ 8,347,123 $24,574,731 $12,472,113 =========== ========== =========== =========== =========== ===========
(a) For the period May 17, 1999 (commencement of operations) through December 31, 1999. See notes to financial statements -78- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENTS OF CHANGES IN NET ASSETS -- continued
OP2 OP3 OP4 Sub-Account Sub-Account Sub-Account ---------------------------- ---------------------------- ---------------------------- Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ------------- ------------- ------------- ------------- ------------- ------------- OPERATIONS: Net investment income (loss)......... $ 1,274,841 $ 63,482 $ (51,727) $ (18,870) $ 214,541 $ (7,226) Net realized gains (losses).......... 747,956 15,513 326,336 34,433 (82,048) 1,938 Net unrealized gains (losses)........ 116,351 547,534 1,752,541 (44,591) 198,372 (2,067) ----------- ---------- ----------- ---------- ---------- ---------- Increase (Decrease) in net assets from operations................. $ 2,139,148 $ 626,529 $ 2,027,150 $ (29,028) $ 330,865 $ (7,355) ----------- ---------- ----------- ---------- ---------- ---------- PARTICIPANT TRANSACTIONS: Accumulation activity: Purchase payments received......... $ 5,258,529 $1,550,529 $ 1,132,415 $ 485,930 $ 595,244 $1,632,027 Net transfers between Sub-Accounts and Fixed Account................. 4,416,129 1,198,601 4,690,015 1,779,308 589,937 883,782 Withdrawals, surrenders, annuitizations and contract charges........................... (808,921) (132,625) (377,547) (129,696) (178,513) (31,887) ----------- ---------- ----------- ---------- ---------- ---------- Net accumulation activity........ $ 8,865,737 $2,616,505 $ 5,444,883 $2,135,542 $1,006,668 $2,483,922 ----------- ---------- ----------- ---------- ---------- ---------- Annuitization activity: Annuitizations..................... $ 7,730 $ 42,401 $ 5,045 $ 11,596 $ -- $ -- Annuity payments................... (5,582) (2,165) (1,705) (845) -- -- Adjustments to annuity reserve..... (986) (667) (209) (1,085) -- -- ----------- ---------- ----------- ---------- ---------- ---------- Net annuitization activity....... $ 1,162 $ 39,569 $ 3,131 $ 9,666 $ -- $ -- ----------- ---------- ----------- ---------- ---------- ---------- Increase (Decrease) in net assets from participant transactions....... $ 8,866,899 $2,656,074 $ 5,448,014 $2,145,208 $1,006,668 $2,483,922 ----------- ---------- ----------- ---------- ---------- ---------- Increase (Decrease) in net assets............................ $11,006,047 $3,282,603 $ 7,475,164 $2,116,180 $1,337,533 $2,476,567 NET ASSETS: Beginning of year.................... 4,188,186 905,583 2,831,911 715,731 2,477,620 1,053 ----------- ---------- ----------- ---------- ---------- ---------- End of year.......................... $15,194,233 $4,188,186 $10,307,075 $2,831,911 $3,815,153 $2,477,620 =========== ========== =========== ========== ========== ==========
See notes to financial statements -79- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENTS OF CHANGES IN NET ASSETS -- continued
SB1 SB2 SB3 Sub-Account Sub-Account Sub-Account ---------------------------- ---------------------------- ---------------------------- Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ------------- ------------- ------------- ------------- ------------- ------------- OPERATIONS: Net investment income (loss)......... $ 26,417 $ 8,032 $ 14,426 $ (4,606) $ 201,150 $ 265,621 Net realized gains (losses).......... 13,693 8,199 42,090 21,954 (77,047) (42,967) Net unrealized gains (losses)........ 25,473 45,162 18,889 33,353 202,793 (245,059) --------- --------- --------- --------- ----------- ---------- Increase (Decrease) in net assets from operations................. $ 65,583 $ 61,393 $ 75,405 $ 50,701 $ 326,896 $ (22,405) --------- --------- --------- --------- ----------- ---------- PARTICIPANT TRANSACTIONS: Accumulation activity: Purchase payments received......... $ 15,380 $ 21,563 $ 7,060 $ 119,751 $ 192,923 $ 186,390 Net transfers between Sub-Accounts and Fixed Account................. 43,755 101,209 59,157 188,767 (1,959,527) 4,084,937 Withdrawals, surrenders, annuitizations and contract charges........................... (1,893) (28,493) (160,332) (28,268) (542,788) (416,075) --------- --------- --------- --------- ----------- ---------- Net accumulation activity........ $ 57,242 $ 94,279 $ (94,115) $ 280,250 $(2,309,392) $3,855,252 --------- --------- --------- --------- ----------- ---------- Annuitization activity: Annuitizations..................... $ -- $ -- $ -- $ -- $ -- $ 30,708 Annuity payments -- -- -- -- (1,383) (1,119) Adjustments to annuity reserve..... -- -- -- -- (443) (764) --------- --------- --------- --------- ----------- ---------- Net annuitization activity....... $ -- $ -- $ -- $ -- $ (1,826) $ 28,825 --------- --------- --------- --------- ----------- ---------- Increase (Decrease) in net assets from participant transactions....... $ 57,242 $ 94,279 $ (94,115) $ 280,250 $(2,311,218) $3,884,077 --------- --------- --------- --------- ----------- ---------- Increase (Decrease) in net assets............................ $ 122,825 $ 155,672 $ (18,710) $ 330,951 $(1,984,322) $3,861,672 NET ASSETS: Beginning of year.................... 386,941 231,269 661,035 330,084 6,773,372 2,911,700 --------- --------- --------- --------- ----------- ---------- End of year.......................... $ 509,766 $ 386,941 $ 642,325 $ 661,035 $ 4,789,050 $6,773,372 ========= ========= ========= ========= =========== ==========
See notes to financial statements -80- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENTS OF CHANGES IN NET ASSETS -- continued
SB4 SCA1 SCA2 Sub-Account Sub-Account Sub-Account ---------------------------- ---------------------------- ---------------------------- Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ------------- ------------- ------------- ------------- ------------- ------------- OPERATIONS: Net investment income (loss)......... $ 76,277 $ 87,064 $ 972,990 $ 121,386 $ 1,023,077 $ 142,200 Net realized gains (losses).......... (2,573) 29,816 -- -- (37,447) (27,836) Net unrealized gains (losses)........ 184,562 (209,993) -- -- 847,050 (167,158) ----------- ---------- ------------ ----------- ----------- ---------- Increase (Decrease) in net assets from operations................. $ 258,266 $ (93,113) $ 972,990 $ 121,386 $ 1,832,680 $ (52,794) ----------- ---------- ------------ ----------- ----------- ---------- PARTICIPANT TRANSACTIONS: Accumulation activity: Purchase payments received......... $ 54,695 $ 31,408 $ 45,016,484 $ 9,316,611 $13,890,703 $2,424,622 Net transfers between Sub-Accounts and Fixed Account................. (1,594,513) 4,100,758 (15,599,348) 2,207,048 6,947,581 5,953,092 Withdrawals, surrenders, annuitizations and contract charges........................... (736,675) (391,898) (3,563,787) (299,102) (1,635,930) (374,597) ----------- ---------- ------------ ----------- ----------- ---------- Net accumulation activity........ $(2,276,493) $3,740,268 $ 25,853,349 $11,224,557 $19,202,354 $8,003,117 ----------- ---------- ------------ ----------- ----------- ---------- Annuitization activity: Annuitizations..................... $ -- $ 16,929 $ 48,025 $ -- $ 85,012 $ 278,695 Annuity payments................... (951) (401) (2,652) -- (54,705) (10,840) Adjustments to annuity reserve..... (163) (633) (360) -- (10,405) 5,275 ----------- ---------- ------------ ----------- ----------- ---------- Net annuitization activity....... $ (1,114) $ 15,895 $ 45,013 $ -- $ 19,902 $ 273,130 ----------- ---------- ------------ ----------- ----------- ---------- Increase (Decrease) in net assets from participant transactions....... $(2,277,607) $3,756,163 $ 25,898,362 $11,224,557 $19,222,256 $8,276,247 ----------- ---------- ------------ ----------- ----------- ---------- Increase (Decrease) in net assets............................ $(2,019,341) $3,663,050 $ 26,871,352 $11,345,943 $21,054,936 $8,223,453 NET ASSETS: Beginning of year.................... 6,645,982 2,982,932 11,347,946 2,003 8,241,486 18,033 ----------- ---------- ------------ ----------- ----------- ---------- End of year.......................... $ 4,626,641 $6,645,982 $ 38,219,298 $11,347,946 $29,296,422 $8,241,486 =========== ========== ============ =========== =========== ==========
See notes to financial statements -81- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENTS OF CHANGES IN NET ASSETS -- continued
SCA3 SCA4 SCA5 Sub-Account Sub-Account Sub-Account ---------------------------- ---------------------------- ---------------------------- Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, 2000 1999 2000 1999(b) 2000 1999(b) ------------- ------------- ------------- ------------- ------------- ------------- OPERATIONS: Net investment income (loss)......... $ 376,494 $ 61,844 $ 332,894 $ (3,062) $ 2,443,815 $ 78,405 Net realized gains (losses).......... 145,709 (2,410) 77,556 5,981 983,376 3,631 Net unrealized gains (losses)........ 634,513 (70,578) (1,875,677) 217,754 (2,201,442) 437,614 ----------- ---------- ----------- ---------- ----------- ---------- Increase (Decrease) in net assets from operations................. $ 1,156,716 $ (11,144) $(1,465,227) $ 220,673 $ 1,225,749 $ 519,650 ----------- ---------- ----------- ---------- ----------- ---------- PARTCIPANT TRANSACTIONS: Accumulation activity: Purchase payments received......... $ 5,229,041 $ 407,264 $ 7,075,330 $ 278,857 $17,658,818 $ 398,676 Net transfers between Sub-Accounts and Fixed Account................. 3,338,950 942,992 4,600,703 863,821 11,652,016 2,064,556 Withdrawals, surrenders, annuitizations and contract charges........................... (297,116) (35,618) (208,011) (16,360) (855,413) (16,795) ----------- ---------- ----------- ---------- ----------- ---------- Net accumulation activity........ $ 8,270,875 $1,314,638 $11,468,022 $1,126,318 $28,455,421 $2,446,437 ----------- ---------- ----------- ---------- ----------- ---------- Annuitization activity: Annuitizations..................... $ 6,522 $ 3,427 $ 11,083 $ -- $ 28,344 $ -- Annuity payments................... (993) (216) (548) -- (2,835) -- Adjustments to annuity reserve..... (7,420) 7,216 (268) -- (71) -- ----------- ---------- ----------- ---------- ----------- ---------- Net annuitization activity....... $ (1,891) $ 10,427 $ 10,267 $ -- $ 25,438 $ -- ----------- ---------- ----------- ---------- ----------- ---------- Increase (Decrease) in net assets from participant transactions....... $ 8,268,984 $1,325,065 $11,478,289 $1,126,318 $28,480,859 $2,446,437 ----------- ---------- ----------- ---------- ----------- ---------- Increase (Decrease) in net assets............................ $ 9,425,700 $1,313,921 $10,013,062 $1,346,991 $29,706,608 $2,966,087 NET ASSETS: Beginning of year.................... 1,321,017 7,096 1,346,991 -- 2,966,087 -- ----------- ---------- ----------- ---------- ----------- ---------- End of year.......................... $10,746,717 $1,321,017 $11,360,053 $1,346,991 $32,672,695 $2,966,087 =========== ========== =========== ========== =========== ==========
(b) For the period September 13, 1999 (commencement of operations) through December 31, 1999. See notes to financial statements -82- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENTS OF CHANGES IN NET ASSETS -- continued
SCA6 SCA7 SCA8 SCA9 SCA Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account ---------------------------- ------------- ------------- ------------- ------------- Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, 2000 1999(b) 2000(c) 2000(c) 2000(c) 2000(c) ------------- ------------- ------------- ------------- ------------- ------------- OPERATIONS: Net investment income (loss)......... $ 154,731 $ (405) $ (6,017) $ (2,148) $ 386 $ 4,545 Net realized gains (losses).......... 52,234 897 (28,630) (1,750) 236 (14,344) Net unrealized gains (losses)........ (369,044) 53,913 146,144 172,780 16,999 192,337 ---------- --------- ----------- ---------- --------- ---------- Increase (Decrease) in net assets from operations................. $ (162,079) $ 54,405 $ 111,497 $ 168,882 $ 17,621 $ 182,538 ---------- --------- ----------- ---------- --------- ---------- PARTICIPANT TRANSACTIONS: Accumulation activity: Purchase payments received......... $1,369,989 $ 41,486 $ 7,416,698 $1,339,374 $ 253,573 $3,629,640 Net transfers between Sub-Accounts and Fixed Account................. 848,724 406,855 3,165,118 989,209 43,923 2,276,395 Withdrawals, surrenders, annuitizations and contract charges........................... (133,128) (1,944) (63,091) (36,479) (3,203) (33,619) ---------- --------- ----------- ---------- --------- ---------- Net accumulation activity........ $2,085,585 $ 446,397 $10,518,725 $2,292,104 $ 294,293 $5,872,416 ---------- --------- ----------- ---------- --------- ---------- Annuitization activity: Annuitizations..................... $ 17,422 $ -- $ 9,727 $ -- $ -- $ -- Annuity payments................... (1,759) -- (258) -- -- -- Adjustments to annuity reserve..... (5,547) 5,356 (9,527) -- -- -- ---------- --------- ----------- ---------- --------- ---------- Net annuitization activity....... $ 10,116 $ 5,356 $ (58) $ -- $ -- $ -- ---------- --------- ----------- ---------- --------- ---------- Increase (Decrease) in net assets from participant transactions....... $2,095,701 $ 451,753 $10,518,667 $2,292,104 $ 294,293 $5,872,416 ---------- --------- ----------- ---------- --------- ---------- Increase (Decrease) in net assets............................ $1,933,622 $ 506,158 $10,630,164 $2,460,986 $ 311,914 $6,054,954 NET ASSETS: Beginning of year.................... 506,158 -- -- -- -- -- ---------- --------- ----------- ---------- --------- ---------- End of year.......................... $2,439,780 $ 506,158 $10,630,164 $2,460,986 $ 311,914 $6,054,954 ========== ========= =========== ========== ========= ==========
(b) For the period September 13, 1999 (commencement of operations) through December 31, 1999. (c) For the period July 17, 2000 (commencement of operations) through December 31, 2000. See notes to financial statements -83- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENTS OF CHANGES IN NET ASSETS -- continued
SCB SCC CS1 CS2 Sub-Account Sub-Account Sub-Account Sub-Account ------------- ------------- ---------------------------- ---------------------------- Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, 2000)(c) 2000(c) 2000 1999 2000 1999 ------------- ------------- ------------- ------------- ------------- ------------- OPERATIONS: Net investment income (loss)......... $ 58,567 $ 562 $ 29,105 $ 74,390 $ 181,825 $ 1,885 Net realized gains (losses).......... 11,981 234 (396,496) 82,122 31,501 126,813 Net unrealized gains (losses)........ 388,618 8,540 (1,184,129) 337,601 (795,794) 285,485 ---------- --------- ----------- ---------- ---------- ---------- Increase (Decrease) in net assets from operations................. $ 459,166 $ 9,336 $(1,551,520) $ 494,113 $ (582,468) $ 414,183 ---------- --------- ----------- ---------- ---------- ---------- PARTICIPANT TRANSACTIONS: Accumulation activity: Purchase payments received......... $1,609,526 $ 99,296 $ 1,268,928 $ 444,605 $ 242,397 $ 260,046 Net transfers between Sub-Accounts and Fixed Account................. 1,487,413 14,721 332,198 1,127,692 1,112,791 446,267 Withdrawals, surrenders, annuitizations and contract charges........................... (20,946) (3,204) (167,172) (34,519) (433,135) (77,459) ---------- --------- ----------- ---------- ---------- ---------- Net accumulation activity........ $3,075,993 $ 110,813 $ 1,433,954 $1,537,778 $ 922,053 $ 628,854 ---------- --------- ----------- ---------- ---------- ---------- Annuitization activity: Annuitizations..................... $ -- $ -- $ 10,997 $ 17,475 $ 1,912 $ -- Annuity payments................... -- -- (2,423) (925) (142) -- Adjustments to annuity reserve..... -- -- 10,031 (10,499) (15) -- ---------- --------- ----------- ---------- ---------- ---------- Net annuitization activity....... $ -- $ -- $ 18,605 $ 6,051 $ 1,755 $ -- ---------- --------- ----------- ---------- ---------- ---------- Increase (Decrease) in net assets from participant transactions....... $3,075,993 $ 110,813 $ 1,452,559 $1,543,829 $ 923,808 $ 628,854 ---------- --------- ----------- ---------- ---------- ---------- Increase (Decrease) in net assets............................ $3,535,159 $ 120,149 $ (98,961) $2,037,942 $ 341,340 $1,043,037 NET ASSETS: Beginning of year.................... -- -- 2,202,769 164,827 1,208,689 165,652 ---------- --------- ----------- ---------- ---------- ---------- End of year.......................... $3,535,159 $ 120,149 $ 2,103,808 $2,202,769 $1,550,029 $1,208,689 ========== ========= =========== ========== ========== ==========
(c) For the period July 17, 2000 (commencement of operations) through December 31, 2000. See notes to financial statements -84- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F STATEMENTS OF CHANGES IN NET ASSETS -- continued
CS3 CS4 Sub-Account Sub-Account ---------------------------- ---------------------------- Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, 2000 1999 2000 1999 ------------- ------------- ------------- ------------- OPERATIONS: Net investment income (loss).......... $ 99,052 $ (3,389) $ 695,554 $ 83,413 Net realized gains (losses)........... 150,789 6,481 502,254 57,255 Net unrealized gains (losses)......... (556,130) 194,879 (2,621,465) 1,075,180 --------- --------- ----------- ---------- Increase (Decrease) in net assets from operations.................. $(306,289) $ 197,971 $(1,423,657) $1,215,848 --------- --------- ----------- ---------- PARTICIPANT TRANSACTIONS: Accumulation activity: Purchase payments received.......... $ 171,127 $ 118,924 $ 1,036,028 $ 528,621 Net transfers between Sub-Accounts and Fixed Account.................. 397,621 322,835 322,289 1,685,706 Withdrawals, surrenders, annuitizations and contract charges............... (69,054) (36,788) (292,820) (56,865) --------- --------- ----------- ---------- Net accumulation activity......... $ 499,694 $ 404,971 $ 1,065,497 $2,157,462 --------- --------- ----------- ---------- Annuitization activity: Annuitizations...................... $ 3,388 $ 18,900 $ 5,762 $ -- Annuity payments.................... (2,010) (794) (345) -- Adjustments to annuity reserve...... 5,529 (7,889) (142) -- --------- --------- ----------- ---------- Net annuitization activity........ $ 6,907 $ 10,217 $ 5,275 $ -- --------- --------- ----------- ---------- Increase (Decrease) in net assets from participant transactions............. $ 506,601 $ 415,188 $ 1,070,772 $2,157,462 --------- --------- ----------- ---------- Increase (Decrease) in net assets... $ 200,312 $ 613,159 $ (352,885) $3,373,310 NET ASSETS: Beginning of year..................... 750,106 136,947 3,744,591 371,281 --------- --------- ----------- ---------- End of year........................... $ 950,418 $ 750,106 $ 3,391,706 $3,744,591 ========= ========= =========== ==========
See notes to financial statements -85- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR 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") is a separate account of Sun Life Assurance Company of Canada (U.S.), (the "Sponsor"), and was established on July 13, 1989 as a funding vehicle for the variable portion of Futurity contracts, Futurity II contracts, Futurity Focus contracts, Futurity Accolade contracts, Futurity Focus II contracts, Futurity III contracts and Futurity Select Four contracts (collectively, the "Contracts") and certain other group and individual 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 is invested in shares of a single corresponding investment portfolio of certain registered open-end mutual funds. With respect to the Futurity contracts, the Funds are: AIM Variable Insurance Fund, Inc., the Alger American Fund, Goldman Sachs Variable Insurance Trust, J.P. Morgan Series Trust II, Lord Abbett Series Fund, Inc., MFS/ Sun Life Series Trust, OCC Accumulation Trust, Salomon Brothers Variable Series Funds, Inc. and Credit Suisse Institutional (formerly Warburg Pincus Trust). With respect to the Futurity II contracts, the Funds are: AIM Variable Insurance Fund, Inc., the Alger American Fund, Goldman Sachs Variable Insurance Trust, J.P. Morgan Series Trust II, Lord Abbett Series Fund, Inc., MFS/Sun Life Series Trust, OCC Accumulation Trust, Sun Capital Advisers Trust and Credit Suisse Institutional (formerly Warburg Pincus Trust). With respect to the Futurity Focus contracts, the Funds are: AIM Variable Insurance Funds, Inc., the Alger American Fund, Goldman Sachs Variable Insurance Trust, J.P. Morgan Series Trust II, Lord Abbett Series Fund, Inc., MFS/Sun Life Series Trust, OCC Accumulation Trust, Sun Capital Advisers Trust and Credit Suisse Institutional (formerly Warburg Pincus Trust). With respect to the Futurity Accolade contracts, the Funds are: AIM Variable Insurance Funds, Inc., the Alger American Fund, Goldman Sachs Variable Insurance Trust, J.P. Morgan Series Trust II, Lord Abbett Series Fund, Inc., MFS/Sun Life Series Trust, OCC Accumulation Trust and Sun Capital Advisers Trust. With respects to the Futurity Focus II contracts, Futurity III contracts and Futurity Select Four contracts , the Funds are: AIM Variable Insurance Fund, Inc., the Alger American Fund, Goldman Sachs Variable Insurance Trust, J.P. Morgan Series Trust II, Lord Abbett Series Fund, Inc., MFS/Sun Life Series Trust and Sun Capital Advisers Trust (collectively, "the Funds"). Massachusetts Financial Services Company, an affiliate of the Sponsor, is the investment adviser to MFS/Sun Life Series Trust. Sun Capital Advisers Inc., an affiliate of the Sponsor, is the investment adviser to Sun Capital Advisers Trust. (2) SIGNIFICANT ACCOUNTING POLICIES GENERAL The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Sponsor's 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. -86- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F NOTES TO FINANCIAL STATEMENTS -- continued (2) SIGNIFICANT ACCOUNTING POLICIES -- continued INVESTMENT VALUATIONS Investments in shares of the Funds are recorded at their net asset value. Realized gains and losses on sales of shares of the Funds are determined on the identified cost basis. Dividend income and capital gain distributions received by the Sub-Accounts are reinvested in additional Fund shares and are recognized on the ex-dividend date. Exchanges between Sub-Accounts requested by contract 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 taxable and, therefore, no provision has been made for federal income taxes. (3) CONTRACT CHARGES A mortality and expense risk charge based on the value of the Sub-Accounts included in the Variable Account is deducted from the Variable Account at the end of each valuation period for the mortality and expense risks assumed by the Sponsor. The deductions are transferred periodically to the Sponsor. Currently, the deduction is at an effective annual rate as follows:
Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 -------- -------- -------- -------- -------- -------- Futurity contracts.......................................... 1.25% -- -- -- -- -- Futurity II contracts....................................... 1.25% -- -- -- -- -- Futurity Focus contracts.................................... 1.00% -- -- -- -- -- Futurity Accolade contracts................................. 1.30% 1.45% 1.55% 1.70% -- -- Futurity Focus II contracts................................. 1.00% 1.15% 1.25% 1.40% 1.50% 1.65% Futurity III contracts...................................... .85% 1.00% 1.10% 1.15% 1.25% 1.40% Futurity Select Four contracts.............................. .95% 1.10% 1.20% 1.35% 1.45% 1.60%
-87- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F NOTES TO FINANCIAL STATEMENTS -- continued (3) CONTRACT CHARGES -- continued Each year on the account anniversary, an account administration fee ("Account Fee") equal to the lesser of $30 in the case of Futurity contracts, $35 in the case of Futurity II contracts, Futurity Accolade contracts and Futurity III contracts and $50 in the case of Futurity Focus contracts, Futurity Focus II contracts and Futurity Select Four contracts or 2% of the participant's account value in Account Years one through five (thereafter, the Account Fee may be changed annually, but it may not exceed the lesser of $50 or 2% of the participant's account value) 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. As reimbursement for administrative expenses attributable to contracts which exceed the revenues received from the Account Fees, 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. The Sponsor does not deduct a sales charge from purchase payments. However, a withdrawal charge (contingent deferred sales charge) of up to 8% of certain amounts withdrawn, when applicable, may be deducted to cover certain expenses relating to the sale of the Futurity, Futurity II, Futurity Focus, Futurity Accolade, Futurity Focus II and Futurity Select Four Contracts, including commissions paid to sales personnel, the costs of preparation of sales literature, and other promotional costs and acquisition expenses. (4) ANNUITY RESERVES Annuity reserves are calculated using the 1983a Individual Annuitant Mortality Table and an assumed interest rate of 3% per year for Futurity, Futurity II, Futurity Focus and Futurity Accolade products and the 2000 Individual Annuitant Mortality Table A and an assumed interest rate of 3% per year for Futurity Focus II, Futurity III and Futurity Select Four products. Required adjustments to the reserves are accomplished by transfers to or from the Sponsor. -88- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F NOTES TO FINANCIAL STATEMENTS -- continued (5) UNIT ACTIVITY FROM PARTICIPANT TRANSACTIONS
Units Transferred Between Units Outstanding Sub-Accounts and Fixed Beginning of Year Units Purchased Accumulation Account ----------------------------- ----------------------------- ----------------------------- Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ------------- ------------- ------------- ------------- ------------- ------------- FUTURITY CONTRACTS: AIM1................. 227,735 141,292 8,489 37,449 111,001 68,417 AIM2................. 442,430 204,502 5,446 28,920 153,308 219,720 AIM3................. 799,385 332,662 7,803 43,138 (12,559) 451,578 AIM4................. 458,813 216,812 13,916 22,277 87,956 238,494 AL1.................. 755,329 285,990 8,665 96,119 (31,717) 424,506 AL2.................. 434,832 194,995 3,074 37,009 33,589 249,731 AL3.................. 182,220 77,472 366 12,426 24,750 96,080 GS1.................. 423,081 210,952 14,526 34,405 42,782 194,122 GS2.................. 80,363 31,476 31 556 85,316 51,143 GS3.................. 575,303 282,488 18,929 25,986 (48,165) 289,621 GS4.................. 301,072 199,770 19,737 10,206 32,013 109,158 GS5.................. 62,975 30,394 509 2,948 10,375 31,634 JP1.................. 568,955 293,787 16,814 83,392 (33,312) 220,364 JP2.................. 105,324 52,419 1,055 9,614 (11,502) 50,228 JP3.................. 41,135 22,655 1,384 8,150 12,118 11,780 LA1.................. 681,170 333,805 10,728 61,424 34,469 328,125 CAS.................. 490,436 403,733 5,680 35,843 138,102 74,342 EGS.................. 644,429 397,132 13,640 60,135 114,453 231,410 HYS.................. 581,114 217,924 9,259 27,858 (72,998) 363,603 MMS.................. 663,091 371,404 3,825 29,531 3,095 399,896 UTS.................. 762,245 278,221 8,900 49,525 28,889 482,058 GSS.................. 635,712 150,350 15,669 31,435 (120,128) 482,313 OP1.................. 770,005 363,748 21,991 45,042 (129,797) 407,891 OP2.................. 208,499 93,160 18,749 19,463 114,185 104,339 OP3.................. 235,529 86,567 2,269 11,061 (4,570) 152,550 SB1.................. 29,639 21,329 1,164 1,994 2,811 8,915 SB2.................. 58,715 32,282 588 11,451 4,368 17,512 SB3.................. 649,260 277,473 18,348 17,918 (183,414) 394,310 SB4.................. 657,323 293,921 5,329 4,406 (160,912) 398,605 CS1.................. 68,070 22,480 509 9,591 (21,037) 37,994 CS2.................. 52,931 18,253 19 5,461 10,694 36,942 CS3.................. 21,318 14,715 46 4,811 8,400 5,081 CS4.................. 153,457 41,843 607 2,953 (65,210) 114,098 Units Withdrawn, Units Outstanding Surrendered, and Annuitized End of Year ----------------------------- ----------------------------- Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, 2000 1999 2000 1999 ------------- ------------- ------------- ------------- FUTURITY CONTRACTS: AIM1................. (23,659) (19,423) 323,566 227,735 AIM2................. (37,740) (10,712) 563,444 442,430 AIM3................. (63,252) (27,993) 731,377 799,385 AIM4................. (42,824) (18,770) 517,861 458,813 AL1.................. (57,387) (51,286) 674,890 755,329 AL2.................. (34,969) (46,903) 436,526 434,832 AL3.................. (7,748) (3,758) 199,588 182,220 GS1.................. (37,045) (16,398) 443,344 423,081 GS2.................. (2,974) (2,812) 162,736 80,363 GS3.................. (70,403) (22,792) 475,664 575,303 GS4.................. (37,020) (18,062) 315,802 301,072 GS5.................. (2,796) (2,001) 71,063 62,975 JP1.................. (35,077) (28,588) 517,380 568,955 JP2.................. (7,038) (6,937) 87,839 105,324 JP3.................. (5,887) (1,450) 48,750 41,135 LA1.................. (86,608) (42,184) 639,759 681,170 CAS.................. (37,125) (23,482) 597,093 490,436 EGS.................. (79,563) (44,248) 692,959 644,429 HYS.................. (49,694) (28,271) 467,681 581,114 MMS.................. (130,755) (137,740) 539,256 663,091 UTS.................. (43,176) (47,559) 756,858 762,245 GSS.................. (45,950) (28,386) 485,303 635,712 OP1.................. (46,857) (46,676) 615,342 770,005 OP2.................. (28,077) (8,463) 313,356 208,499 OP3.................. (8,866) (14,649) 224,362 235,529 SB1.................. (128) (2,599) 33,486 29,639 SB2.................. (13,471) (2,530) 50,200 58,715 SB3.................. (51,218) (40,441) 432,976 649,260 SB4.................. (72,190) (39,609) 429,550 657,323 CS1.................. (6,038) (1,995) 41,504 68,070 CS2.................. (16,745) (7,725) 46,899 52,931 CS3.................. (2,890) (3,289) 26,874 21,318 CS4.................. (9,616) (5,437) 79,238 153,457
-89- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR 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
Units Transferred Between Units Outstanding Sub-Accounts and Fixed Beginning of Year Units Purchased Accumulation Account ----------------------------- ----------------------------- ----------------------------- Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ------------- ------------- ------------- ------------- ------------- ------------- FUTURITY II CONTRACTS: AIM1................. 299,649 100 325,562 181,039 419,029 123,465 AIM2................. 997,502 1,049 650,441 538,285 798,659 482,701 AIM3................. 1,213,444 1,704 498,095 573,115 942,101 656,563 AIM4................. 659,564 2,553 633,468 277,892 985,180 405,813 AL1.................. 1,620,151 2,044 735,821 798,097 1,117,452 841,456 AL2.................. 755,933 1,785 447,529 330,958 556,469 441,029 AL3.................. 221,946 100 193,715 134,245 224,668 93,499 GS1.................. 610,853 786 188,856 340,043 358,085 282,453 GS2.................. 71,821 100 48,614 26,340 80,871 46,936 GS3.................. 714,634 2,341 248,186 322,630 27,940 417,400 GS4.................. 202,285 100 48,825 78,401 78,358 126,524 GS5.................. 119,879 578 141,902 58,284 115,211 62,982 JP1.................. 625,004 474 194,941 315,983 246,181 321,619 JP2.................. 118,543 100 105,655 57,728 184,396 63,482 JP3.................. 57,635 100 80,203 39,434 73,916 18,564 LA1.................. 982,146 1,763 268,994 389,191 676,017 607,156 CAS.................. 500,296 2,367 209,319 251,500 491,508 255,332 EGS.................. 804,467 3,662 699,417 455,194 794,145 370,763 HYS.................. 554,000 729 159,538 199,927 661,073 365,635 UTS.................. 552,461 821 395,763 237,960 632,921 334,919 GSS.................. 807,566 1,027 177,842 236,734 326,815 591,096 TRS (a).............. 211,045 -- 190,114 145,867 319,325 76,462 MIT (a).............. 629,184 -- 438,091 274,552 670,537 361,529 NWD (a).............. 99,212 -- 285,208 31,539 311,865 67,961 MIS (a).............. 554,180 -- 637,658 314,530 904,961 250,304 OP1.................. 388,617 1,517 137,068 196,083 937,955 198,204 OP2.................. 108,852 150 110,320 95,779 205,341 17,112 OP3.................. 88,598 100 45,717 36,287 368,233 54,017 OP4.................. 196,817 100 34,992 120,357 55,964 78,975 SCA1................. 699,550 200 783,675 516,555 156,923 220,638 SCA2................. 768,145 1,806 267,755 212,361 621,718 603,561 SCA3................. 131,848 705 45,643 40,953 208,058 98,307 SCA4 (b)............. 96,820 -- 90,923 14,166 159,588 84,139 SCA5 (b)............. 217,115 -- 172,265 17,823 483,900 202,111 SCA6 (b)............. 43,869 -- 34,739 3,004 70,707 41,050 SCA7 (c)............. -- -- 24,270 -- 23,298 -- SCA8 (c)............. -- -- 3,935 -- 58,676 -- CS1.................. 67,177 100 71,296 24,172 816 44,318 CS2.................. 29,939 100 14,645 17,409 47,671 12,438 CS3.................. 22,526 100 8,200 5,483 11,245 17,472 CS4.................. 79,878 100 51,645 41,639 37,441 39,443 Units Withdrawn, Units Outstanding Surrendered, and Annuitized End of Year ----------------------------- ----------------------------- Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, 2000 1999 2000 1999 ------------- ------------- ------------- ------------- FUTURITY II CONTRACTS AIM1................. (31,976) (4,955) 1,012,264 299,649 AIM2................. (81,829) (24,533) 2,364,773 997,502 AIM3................. (129,827) (17,938) 2,523,813 1,213,444 AIM4................. (95,653) (26,694) 2,182,559 659,564 AL1.................. (187,819) (21,446) 3,285,605 1,620,151 AL2.................. (70,919) (17,839) 1,689,012 755,933 AL3.................. (30,960) (5,898) 609,369 221,946 GS1.................. (53,851) (12,429) 1,103,943 610,853 GS2.................. (5,113) (1,555) 196,193 71,821 GS3.................. (42,740) (27,737) 948,020 714,634 GS4.................. (16,958) (2,740) 312,510 202,285 GS5.................. (13,724) (1,965) 363,268 119,879 JP1.................. (42,424) (13,072) 1,023,702 625,004 JP2.................. (38,712) (2,767) 369,882 118,543 JP3.................. (7,416) (463) 204,338 57,635 LA1.................. (118,859) (15,964) 1,808,298 982,146 CAS.................. (45,319) (8,903) 1,155,804 500,296 EGS.................. (110,737) (25,152) 2,187,292 804,467 HYS.................. (59,441) (12,291) 1,315,170 554,000 UTS.................. (56,838) (21,239) 1,524,307 552,461 GSS.................. (84,953) (21,291) 1,227,270 807,566 TRS (a).............. (24,991) (11,284) 695,493 211,045 MIT (a).............. (61,878) (6,897) 1,675,934 629,184 NWD (a).............. (24,877) (288) 671,408 99,212 MIS (a).............. (101,249) (10,654) 1,995,550 554,180 OP1.................. (74,605) (7,187) 1,389,035 388,617 OP2.................. (26,069) (4,189) 398,444 108,852 OP3.................. (24,658) (1,806) 477,890 88,598 OP4.................. (12,398) (2,615) 275,375 196,817 SCA1................. (280,157) (37,843) 1,359,991 699,550 SCA2................. (105,094) (49,583) 1,552,524 768,145 SCA3................. (13,047) (8,117) 372,502 131,848 SCA4 (b)............. (8,064) (1,485) 339,267 96,820 SCA5 (b)............. (32,750) (2,819) 840,530 217,115 SCA6 (b)............. (9,502) (185) 139,813 43,869 SCA7 (c)............. (1,318) -- 46,250 -- SCA8 (c)............. (1,105) -- 61,506 -- CS1.................. (6,186) (1,413) 133,103 67,177 CS2.................. (2,790) (8) 89,465 29,939 CS3.................. (993) (529) 40,978 22,526 CS4.................. (8,886) (1,304) 160,078 79,878
(a) For the period May 17, 1999 (commencement of operations) through December 31, 1999. (b) For the period September 13, 1999 (commencement of operations) through December 31, 1999. (c) For the period July 17, 2000 (commencement of operations) through December 31, 2000. -90- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR 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
Units Transferred Between Units Outstanding Sub-Accounts and Fixed Beginning of Year Units Purchased Accumulation Account ----------------------------- ----------------------------- ----------------------------- Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ------------- ------------- ------------- ------------- ------------- ------------- FUTURITY FOCUS CONTRACTS: AIM1 (a)............. 13,617 -- 52,911 13,472 4,571 181 AIM2 (a)............. 35,873 -- 82,605 34,933 2,360 1,199 AIM3 (a)............. 54,107 -- 79,759 60,253 (185) 2,227 AIM4 (a)............. 25,337 -- 73,760 26,210 19,048 (398) AL1 (a).............. 38,842 -- 79,097 44,079 9,553 2,632 AL2 (a).............. 32,436 -- 59,128 34,264 13,157 (404) AL3 (a).............. 9,175 -- 35,221 9,602 6,745 (382) GS1 (a).............. 4,085 -- 13,751 4,016 2,541 76 GS2 (a).............. 1,112 -- 9,495 1,112 (61) -- GS3 (a).............. 20,598 -- 14,187 20,053 4,676 950 GS4 (a).............. 29,257 -- 3,328 29,333 2,024 -- GS5 (a).............. 8,621 -- 37,306 7,451 4,252 1,193 JP1 (a).............. 18,690 -- 15,946 24,288 (7,984) 676 JP2 (a).............. 12,234 -- 30,817 12,279 22,246 29 JP3 (a).............. 2,709 -- 8,171 2,178 1,026 541 LA1 (b).............. 40,278 -- 67,338 38,221 (3,216) 3,486 CAS (a).............. 23,051 -- 29,001 21,046 9,715 2,087 EGS (a).............. 41,308 -- 61,070 46,092 5,001 1,755 HYS (a).............. 21,929 -- 42,591 25,654 15,512 1,092 UTS (a).............. 20,685 -- 49,434 21,976 6,480 121 GSS (a).............. 42,930 -- 25,921 48,404 (17,094) (5,086) TRS (b).............. 8,841 -- 32,274 8,393 8,050 489 MIT (b).............. 74,478 -- 42,780 74,974 7,003 1,759 NWD (b).............. 7,128 -- 27,889 7,662 1,739 (525) MIS (b).............. 29,925 -- 72,653 34,173 14,638 1,363 OP1 (a).............. 7,388 -- 40,802 10,772 13,715 (3,121) OP2 (a).............. 6,976 -- 16,914 10,112 (2,572) (2,840) OP3 (a).............. 3,882 -- 5,715 3,882 5,445 -- OP4 (a).............. 5,669 -- 4,504 4,578 324 1,122 SCA1 (a)............. 41,528 -- 226,012 252,106 (126,759) 9,073 SCA2 (a)............. 34,584 -- 120,843 34,864 (11,131) 796 SCA3 (a)............. 2,642 -- 6,272 2,727 4,646 289 SCA4 (c)............. 1,940 -- 8,968 319 1,384 1,839 SCA5 (c)............. 2,350 -- 33,825 100 7,478 2,630 SCA6 (c)............. 1,253 -- 3,214 578 4,192 675 SCA7 (d)............. -- -- 100 -- 919 -- SCA8 (d)............. -- -- 100 -- 1,214 -- CS1 (a).............. 1,472 -- -- 989 852 483 CS2 (a).............. 861 -- 1,426 100 19,798 761 CS3 (a).............. 100 -- 596 100 593 -- CS4 (a).............. 194 -- 3,507 123 135 71 Units Withdrawn, Units Outstanding Surrendered, and Annuitized End of Year ----------------------------- ----------------------------- Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, 2000 1999 2000 1999 ------------- ------------- ------------- ------------- FUTURITY FOCUS CONTRACTS: AIM1 (a)............. (5,463) (36) 65,636 13,617 AIM2 (a)............. (10,900) (259) 109,938 35,873 AIM3 (a)............. (6,080) (8,373) 127,601 54,107 AIM4 (a)............. (10,817) (475) 107,328 25,337 AL1 (a).............. (7,345) (7,869) 120,147 38,842 AL2 (a).............. (4,664) (1,424) 100,057 32,436 AL3 (a).............. (1,838) (45) 49,303 9,175 GS1 (a).............. (1,023) (7) 19,354 4,085 GS2 (a).............. (337) -- 10,209 1,112 GS3 (a).............. (2,818) (405) 36,643 20,598 GS4 (a).............. (1,091) (76) 33,518 29,257 GS5 (a).............. (2,859) (23) 47,320 8,621 JP1 (a).............. (2,672) (6,274) 23,980 18,690 JP2 (a).............. (20,390) (74) 44,907 12,234 JP3 (a).............. (1,919) (10) 9,987 2,709 LA1 (b).............. (5,291) (1,429) 99,109 40,278 CAS (a).............. (4,046) (82) 57,721 23,051 EGS (a).............. (6,672) (6,539) 100,707 41,308 HYS (a).............. (3,263) (4,817) 76,769 21,929 UTS (a).............. (3,609) (1,412) 72,990 20,685 GSS (a).............. (2,702) (388) 49,055 42,930 TRS (b).............. (426) (41) 48,739 8,841 MIT (b).............. (4,484) (2,255) 119,777 74,478 NWD (b).............. (1,613) (9) 35,143 7,128 MIS (b).............. (2,868) (5,611) 114,348 29,925 OP1 (a).............. (7,303) (263) 54,602 7,388 OP2 (a).............. (732) (296) 20,586 6,976 OP3 (a).............. (741) -- 14,301 3,882 OP4 (a).............. (2,763) (31) 7,734 5,669 SCA1 (a)............. (22,354) (219,651) 118,427 41,528 SCA2 (a)............. (25,006) (1,076) 119,290 34,584 SCA3 (a)............. (3,396) (374) 10,164 2,642 SCA4 (c)............. (2,221) (218) 10,071 1,940 SCA5 (c)............. (1,800) (380) 41,853 2,350 SCA6 (c)............. (1,920) -- 6,739 1,253 SCA7 (d)............. (100) -- 919 -- SCA8 (d)............. (100) -- 1,214 -- CS1 (a).............. (152) -- 2,172 1,472 CS2 (a).............. (17,277) -- 4,808 861 CS3 (a).............. (259) -- 1,030 100 CS4 (a).............. (172) -- 3,664 194
(a) For the period May 15, 1999 (commencement of operations) through December 31, 1999. (b) For the period May 17, 1999 (commencement of operations) through December 31, 1999. (c) For the period September 13, 1999 (commencement of operations) through December 31, 1999. (d) For the period July 17, 2000 (commencement of operations) through December 31, 2000. -91- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR 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
Units Transferred Between Units Outstanding Sub-Accounts and Fixed Beginning of Year Units Purchased Accumulation Account ----------------------------- ----------------------------- ----------------------------- Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ------------- ------------- ------------- ------------- ------------- ------------- FUTURITY ACCOLADE CONTRACTS: AIM1 - Lvl 1 (a)..... 27,793 -- 384,905 28,060 (41,629) (36) AIM1 - Lvl 2 (b)..... -- -- 370,328 -- 194,121 -- AIM1 - Lvl 3 (b)..... -- -- 447,558 -- 3,892 -- AIM1 - Lvl 4 (b)..... -- -- 52,208 -- 52,272 -- AIM2 - Lvl 1 (a)..... 71,866 -- 498,034 71,949 (182,933) 184 AIM2 - Lvl 2 (b)..... -- -- 382,186 -- 208,132 -- AIM2 - Lvl 3 (b)..... -- -- 460,124 -- 3,685 -- AIM2 - Lvl 4 (b)..... -- -- 132,342 -- 6,212 -- AIM3 - Lvl 1 (a)..... 41,234 -- 461,456 41,491 (163,898) 64 AIM3 - Lvl 2 (b)..... -- -- 177,373 -- 262,332 -- AIM3 - Lvl 3 (b)..... -- -- 316,038 -- 23,698 -- AIM3 - Lvl 4 (b)..... -- -- 138,295 -- 3,956 -- AIM4 - Lvl 1 (a)..... 40,021 -- 687,396 40,241 (184,631) (216) AIM4 - Lvl 2 (b)..... -- -- 425,530 -- 230,625 -- AIM4 - Lvl 3 (b)..... -- -- 433,543 -- 25,592 -- AIM4 - Lvl 4 (b)..... -- -- 75,964 -- 5,011 -- AL1 - Lvl 1 (a)...... 77,992 -- 616,352 78,117 (155,985) 248 AL1 - Lvl 2 (b)...... -- -- 404,623 -- 347,868 -- AL1 - Lvl 3 (b)...... -- -- 291,051 -- 47,170 -- AL1 - Lvl 4 (b)...... -- -- 169,010 -- 5,533 -- AL2 - Lvl 1 (a)...... 25,358 -- 320,967 25,632 (20,799) 82 AL2 - Lvl 2 (b)...... -- -- 208,371 -- 127,872 -- AL2 - Lvl 3 (b)...... -- -- 278,686 -- 17,972 -- AL2 - Lvl 4 (b)...... -- -- 27,130 -- 8,366 -- AL3 - Lvl 1 (a)...... 12,969 -- 213,864 12,969 (80,683) 7 AL3 - Lvl 2 (b)...... -- -- 183,429 -- 124,559 -- AL3 - Lvl 3 (b)...... -- -- 89,777 -- 17,026 -- AL3 - Lvl 4 (b)...... -- -- 26,419 -- 4,723 -- GS1 - Lvl 1 (a)...... 17,289 -- 193,553 17,566 (58,585) (22) GS1 - Lvl 2 (b)...... -- -- 148,660 -- 80,821 -- GS1 - Lvl 3 (b)...... -- -- 165,022 -- 8,952 -- GS1 - Lvl 4 (b)...... -- -- 11,093 -- 52,709 -- GS2 - Lvl 1 (a)...... 1,775 -- 39,050 1,535 (8,288) 244 GS2 - Lvl 2 (b)...... -- -- 24,322 -- 19,929 -- GS2 - Lvl 3 (b)...... -- -- 21,574 -- 1,558 -- GS2 - Lvl 4 (b)...... -- -- 4,276 -- 1,673 -- GS3 - Lvl 1 (a)...... 23,427 -- 158,688 23,176 (74,744) 253 GS3 - Lvl 2 (b)...... -- -- 61,628 -- 80,676 -- GS3 - Lvl 3 (b)...... -- -- 35,238 -- 1,146 -- GS3 - Lvl 4 (b)...... -- -- 5,318 -- 2,541 -- GS4 - Lvl 1 (a)...... 5,354 -- 63,907 5,354 5,242 -- GS4 - Lvl 2 (b)...... -- -- 25,748 -- 17,777 -- GS4 - Lvl 3 (b)...... -- -- 18,983 -- 316 -- GS4 - Lvl 4 (b)...... -- -- 737 -- 1,623 -- GS5 - Lvl 1 (a)...... 6,582 -- 153,971 6,485 (27,589) 236 GS5 - Lvl 2 (b)...... -- -- 82,089 -- 48,390 -- GS5 - Lvl 3 (b)...... -- -- 70,078 -- 54 -- GS5 - Lvl 4 (b)...... -- -- 14,422 -- 634 -- Units Withdrawn, Units Outstanding Surrendered, and Annuitized End of Year ----------------------------- ----------------------------- Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, 2000 1999 2000 1999 ------------- ------------- ------------- ------------- FUTURITY ACCOLADE CONTRACTS: AIM1 - Lvl 1 (a)..... (6,805) (231) 364,264 27,793 AIM1 - Lvl 2 (b)..... (14,439) -- 550,010 -- AIM1 - Lvl 3 (b)..... (8,825) -- 442,625 -- AIM1 - Lvl 4 (b)..... (298) -- 104,182 -- AIM2 - Lvl 1 (a)..... (12,789) (267) 374,178 71,866 AIM2 - Lvl 2 (b)..... (8,810) -- 581,508 -- AIM2 - Lvl 3 (b)..... (7,812) -- 455,997 -- AIM2 - Lvl 4 (b)..... (7,130) -- 131,424 -- AIM3 - Lvl 1 (a)..... (8,827) (321) 329,965 41,234 AIM3 - Lvl 2 (b)..... (10,946) -- 428,759 -- AIM3 - Lvl 3 (b)..... (7,478) -- 332,258 -- AIM3 - Lvl 4 (b)..... (7,322) -- 134,929 -- AIM4 - Lvl 1 (a)..... (25,395) (4) 517,391 40,021 AIM4 - Lvl 2 (b)..... (20,084) -- 636,071 -- AIM4 - Lvl 3 (b)..... (2,439) -- 456,696 -- AIM4 - Lvl 4 (b)..... (487) -- 80,488 -- AL1 - Lvl 1 (a)...... (9,235) (373) 529,124 77,992 AL1 - Lvl 2 (b)...... (17,976) -- 734,515 -- AL1 - Lvl 3 (b)...... (5,783) -- 332,438 -- AL1 - Lvl 4 (b)...... (1,643) -- 172,900 -- AL2 - Lvl 1 (a)...... (12,772) (356) 312,754 25,358 AL2 - Lvl 2 (b)...... (8,930) -- 327,313 -- AL2 - Lvl 3 (b)...... (2,732) -- 293,926 -- AL2 - Lvl 4 (b)...... (201) -- 35,295 -- AL3 - Lvl 1 (a)...... (6,669) (7) 139,481 12,969 AL3 - Lvl 2 (b)...... (5,977) -- 302,011 -- AL3 - Lvl 3 (b)...... (1,969) -- 104,834 -- AL3 - Lvl 4 (b)...... (302) -- 30,840 -- GS1 - Lvl 1 (a)...... (2,780) (255) 149,477 17,289 GS1 - Lvl 2 (b)...... (3,217) -- 226,264 -- GS1 - Lvl 3 (b)...... (2,787) -- 171,187 -- GS1 - Lvl 4 (b)...... (255) -- 63,547 -- GS2 - Lvl 1 (a)...... (2,361) (4) 30,176 1,775 GS2 - Lvl 2 (b)...... (733) -- 43,518 -- GS2 - Lvl 3 (b)...... (15) -- 23,117 -- GS2 - Lvl 4 (b)...... -- -- 5,949 -- GS3 - Lvl 1 (a)...... (6,382) (2) 100,989 23,427 GS3 - Lvl 2 (b)...... (1,861) -- 140,443 -- GS3 - Lvl 3 (b)...... (267) -- 36,117 -- GS3 - Lvl 4 (b)...... -- -- 7,859 -- GS4 - Lvl 1 (a)...... (1,049) -- 73,454 5,354 GS4 - Lvl 2 (b)...... (961) -- 42,564 -- GS4 - Lvl 3 (b)...... (60) -- 19,239 -- GS4 - Lvl 4 (b)...... -- -- 2,360 -- GS5 - Lvl 1 (a)...... (2,450) (139) 130,514 6,582 GS5 - Lvl 2 (b)...... (1,335) -- 129,144 -- GS5 - Lvl 3 (b)...... (467) -- 69,665 -- GS5 - Lvl 4 (b)...... (54) -- 15,002 --
(a) For the period October 15, 1999 (commencement of operations) through December 31, 1999. (b) For the period April 17, 2000 (commencement of operations) through December 31, 2000. -92- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR 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
Units Transferred Between Units Outstanding Sub-Accounts and Fixed Beginning of Year Units Purchased Accumulation Account ----------------------------- ----------------------------- ----------------------------- Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ------------- ------------- ------------- ------------- ------------- ------------- FUTURITY ACCOLADE CONTRACTS -- CONTINUED: JP1 - Lvl 1 (a)...... 6,455 -- 122,654 6,364 (44,441) 91 JP1 - Lvl 2 (b)...... -- -- 45,596 -- 63,599 -- JP1 - Lvl 3 (b)...... -- -- 20,600 -- 5,028 -- JP1 - Lvl 4 (b)...... -- -- 33,821 -- 55,786 -- JP2 - Lvl 1 (a)...... 10,730 -- 115,636 10,762 (48,808) (25) JP2 - Lvl 2 (b)...... -- -- 54,796 -- 55,339 -- JP2 - Lvl 3 (b)...... -- -- 54,589 -- 2,947 -- JP2 - Lvl 4 (b)...... -- -- 3,432 -- 2,974 -- JP3 - Lvl 1 (a)...... 5,598 -- 91,043 228 (32,205) 5,370 JP3 - Lvl 2 (b)...... -- -- 69,594 -- 15,587 -- JP3 - Lvl 3 (b)...... -- -- 21,960 -- 2,062 -- JP3 - Lvl 4 (b)...... -- -- 3,388 -- 462 -- LA1 - Lvl 1 (a)...... 55,559 -- 305,748 55,648 (107,560) 333 LA1 - Lvl 2 (b)...... -- -- 152,102 -- 135,337 -- LA1 - Lvl 3 (b)...... -- -- 169,888 -- 54,674 -- LA1 - Lvl 4 (b)...... -- -- 54,625 -- (1,393) -- CAS - Lvl 1 (a)...... 4,427 -- 230,290 4,427 6,298 -- CAS - Lvl 2 (b)...... -- -- 138,395 -- 64,670 -- CAS - Lvl 3 (b)...... -- -- 166,218 -- 6,385 -- CAS - Lvl 4 (b)...... -- -- 106,422 -- 367 -- EGS - Lvl 1 (a)...... 58,261 -- 580,856 54,055 (104,531) 4,868 EGS - Lvl 2 (b)...... -- -- 605,300 -- 194,132 -- EGS - Lvl 3 (b)...... -- -- 309,716 -- 19,143 -- EGS - Lvl 4 (b)...... -- -- 100,057 -- 1,975 -- HYS - Lvl 1 (a)...... 44,229 -- 252,559 44,529 (22,666) 279 HYS - Lvl 2 (b)...... -- -- 241,958 -- 45,044 -- HYS - Lvl 3 (b)...... -- -- 79,320 -- 48,290 -- HYS - Lvl 4 (b)...... -- -- 16,658 -- 4,084 -- UTS - Lvl 1 (a)...... 49,859 -- 295,382 49,738 (33,921) 573 UTS - Lvl 2 (b)...... -- -- 234,454 -- 168,281 -- UTS - Lvl 3 (b)...... -- -- 182,839 -- 8,462 -- UTS - Lvl 4 (b)...... -- -- 98,944 -- 300 -- GSS - Lvl 1 (a)...... 11,012 -- 166,085 10,569 (2,153) 448 GSS - Lvl 2 (b)...... -- -- 142,834 -- (3,346) -- GSS - Lvl 3 (b)...... -- -- 77,655 -- (9,690) -- GSS - Lvl 4 (b)...... -- -- 15,993 -- 7,757 -- TRS - Lvl 1 (a)...... 42,271 -- 202,930 42,576 (41,654) 259 TRS - Lvl 2 (b)...... -- -- 124,774 -- 49,685 -- TRS - Lvl 3 (b)...... -- -- 44,887 -- 22,237 -- TRS - Lvl 4 (b)...... -- -- 3,383 -- -- -- MIT - Lvl 1 (a)...... 48,386 -- 349,038 48,217 (146,064) 174 MIT - Lvl 2 (b)...... -- -- 169,697 -- 188,478 -- MIT - Lvl 3 (b)...... -- -- 184,679 -- 39,184 -- MIT - Lvl 4 (b)...... -- -- 25,345 -- 3,215 -- NWD - Lvl 1 (a)...... 18,482 -- 205,952 18,756 (3,907) (74) NWD - Lvl 2 (b)...... -- -- 149,393 -- 133,704 -- NWD - Lvl 3 (b)...... -- -- 123,306 -- 18,193 -- NWD - Lvl 4 (b)...... -- -- 26,348 -- 2,915 -- Units Withdrawn, Units Outstanding Surrendered, and Annuitized End of Year ----------------------------- ----------------------------- Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, 2000 1999 2000 1999 ------------- ------------- ------------- ------------- FUTURITY ACCOLADE CONTRACTS: JP1 - Lvl 1 (a)...... (849) -- 83,819 6,455 JP1 - Lvl 2 (b)...... (2,509) -- 106,686 -- JP1 - Lvl 3 (b)...... (80) -- 25,548 -- JP1 - Lvl 4 (b)...... (637) -- 88,970 -- JP2 - Lvl 1 (a)...... (1,480) (7) 76,078 10,730 JP2 - Lvl 2 (b)...... (1,707) -- 108,428 -- JP2 - Lvl 3 (b)...... (728) -- 56,808 -- JP2 - Lvl 4 (b)...... (80) -- 6,326 -- JP3 - Lvl 1 (a)...... (7,430) -- 57,006 5,598 JP3 - Lvl 2 (b)...... (446) -- 84,735 -- JP3 - Lvl 3 (b)...... -- -- 24,022 -- JP3 - Lvl 4 (b)...... (27) -- 3,823 -- LA1 - Lvl 1 (a)...... (8,487) (422) 245,260 55,559 LA1 - Lvl 2 (b)...... (3,199) -- 284,240 -- LA1 - Lvl 3 (b)...... (1,678) -- 222,884 -- LA1 - Lvl 4 (b)...... (635) -- 52,597 -- CAS - Lvl 1 (a)...... (2,419) -- 238,596 4,427 CAS - Lvl 2 (b)...... (9,051) -- 194,014 -- CAS - Lvl 3 (b)...... (2,917) -- 169,686 -- CAS - Lvl 4 (b)...... (6,491) -- 100,298 -- EGS - Lvl 1 (a)...... (11,598) (662) 522,988 58,261 EGS - Lvl 2 (b)...... (27,979) -- 771,453 -- EGS - Lvl 3 (b)...... (3,023) -- 325,836 -- EGS - Lvl 4 (b)...... (525) -- 101,507 -- HYS - Lvl 1 (a)...... (8,893) (579) 265,229 44,229 HYS - Lvl 2 (b)...... (2,485) -- 284,517 -- HYS - Lvl 3 (b)...... (427) -- 127,183 -- HYS - Lvl 4 (b)...... (113) -- 20,629 -- UTS - Lvl 1 (a)...... (10,101) (452) 301,219 49,859 UTS - Lvl 2 (b)...... (10,080) -- 392,655 -- UTS - Lvl 3 (b)...... (1,068) -- 190,233 -- UTS - Lvl 4 (b)...... (6,537) -- 92,707 -- GSS - Lvl 1 (a)...... (14,389) (5) 160,555 11,012 GSS - Lvl 2 (b)...... (5,266) -- 134,222 -- GSS - Lvl 3 (b)...... (636) -- 67,329 -- GSS - Lvl 4 (b)...... (3) -- 23,747 -- TRS - Lvl 1 (a)...... (9,067) (564) 194,480 42,271 TRS - Lvl 2 (b)...... (1,847) -- 172,612 -- TRS - Lvl 3 (b)...... (1,162) -- 65,962 -- TRS - Lvl 4 (b)...... -- -- 3,383 -- MIT - Lvl 1 (a)...... (5,631) (5) 245,729 48,386 MIT - Lvl 2 (b)...... (7,476) -- 350,699 -- MIT - Lvl 3 (b)...... (6,707) -- 217,156 -- MIT - Lvl 4 (b)...... (339) -- 28,221 -- NWD - Lvl 1 (a)...... (8,445) (200) 212,082 18,482 NWD - Lvl 2 (b)...... (2,346) -- 280,751 -- NWD - Lvl 3 (b)...... (694) -- 140,805 -- NWD - Lvl 4 (b)...... (136) -- 29,127 --
(a) For the period October 15, 1999 (commencement of operations) through December 31, 1999. (b) For the period April 17, 2000 (commencement of operations) through December 31, 2000. -93- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR 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
Units Transferred Between Units Outstanding Sub-Accounts and Fixed Beginning of Year Units Purchased Accumulation Account ----------------------------- ----------------------------- ----------------------------- Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ------------- ------------- ------------- ------------- ------------- ------------- FUTURITY ACCOLADE CONTRACTS -- CONTINUED: MIS - Lvl 1 (a)...... 55,773 -- 413,749 55,995 (93,809) 35 MIS - Lvl 2 (b)...... -- -- 322,027 -- 250,763 -- MIS - Lvl 3 (b)...... -- -- 347,555 -- 5,446 -- MIS - Lvl 4 (b)...... -- -- 43,711 -- 8,950 -- OP1 - Lvl 1 (a)...... 102 -- 81,175 102 (42,385) -- OP1 - Lvl 2 (b)...... -- -- 34,362 -- (24,335) -- OP1 - Lvl 3 (b)...... -- -- 46,662 -- (26,275) -- OP1 - Lvl 4 (b)...... -- -- 7,314 -- 577 -- OP2 - Lvl 1 (a)...... 19,070 -- 109,979 19,553 (32,483) (99) OP2 - Lvl 2 (b)...... -- -- 67,316 -- 34,041 -- OP2 - Lvl 3 (b)...... -- -- 45,014 -- 9,676 -- OP2 - Lvl 4 (b)...... -- -- 2,685 -- 3,617 -- OP3 - Lvl 1 (a)...... 102 -- 8,848 102 979 -- OP3 - Lvl 2 (b)...... -- -- 26,626 -- 405 -- OP3 - Lvl 3 (b)...... -- -- 2,342 -- (334) -- OP3 - Lvl 4 (b)...... -- -- 5,736 -- 1,518 -- OP4 - Lvl 1 (a)...... 25,785 -- 6,604 25,960 (5,242) 158 OP4 - Lvl 2 (b)...... -- -- 8,190 -- 5,616 -- OP4 - Lvl 3 (b)...... -- -- 2,510 -- -- -- SCA1 - Lvl 1 (a)..... 366,623 -- 1,884,546 380,262 (1,389,897) (13,639) SCA1 - Lvl 2 (b)..... -- -- 582,961 -- (35,608) -- SCA1 - Lvl 3 (b)..... -- -- 462,823 -- (80,601) -- SCA1 - Lvl 4 (b)..... -- -- 36,390 -- (33,178) -- SCA2 - Lvl 1 (a)..... 11,553 -- 336,348 11,119 (65,866) 434 SCA2 - Lvl 2 (b)..... -- -- 162,031 -- 104,484 -- SCA2 - Lvl 3 (b)..... -- -- 202,687 -- 26,196 -- SCA2 - Lvl 4 (b)..... -- -- 47,938 -- (3,798) -- SCA3 - Lvl 1 (a)..... 2,281 -- 77,499 2,115 27,885 166 SCA3 - Lvl 2 (b)..... -- -- 33,412 -- 16,405 -- SCA3 - Lvl 3 (b)..... -- -- 151,124 -- (3,380) -- SCA3 - Lvl 4 (b)..... -- -- 5,264 -- 4,057 -- SCA4 - Lvl 1 (a)..... 9,027 -- 100,921 9,040 1,749 (13) SCA4 - Lvl 2 (b)..... -- -- 66,927 -- 75,614 -- SCA4 - Lvl 3 (b)..... -- -- 96,626 -- 25,755 -- SCA4 - Lvl 4 (b)..... -- -- 18,870 -- 48,551 -- SCA5 - Lvl 1 (a)..... 17,878 -- 225,066 17,605 15,443 277 SCA5 - Lvl 2 (b)..... -- -- 173,246 -- 117,103 -- SCA5 - Lvl 3 (b)..... -- -- 162,796 -- 24,185 -- SCA5 - Lvl 4 (b)..... -- -- 34,228 -- 12,463 -- SCA6 - Lvl 1 (a)..... 394 -- 10,717 410 (6,699) (16) SCA6 - Lvl 2 (b)..... -- -- 23,062 -- 7,741 -- SCA6 - Lvl 3 (b)..... -- -- 24,998 -- (485) -- SCA6 - Lvl 4 (b)..... -- -- -- -- 207 -- SCA7 - Lvl 1 (c)..... -- -- 62,467 -- 69,244 -- SCA7 - Lvl 2 (c)..... -- -- 49,885 -- 76,279 -- SCA7 - Lvl 3 (c)..... -- -- 134,176 -- 29,644 -- SCA7 - Lvl 4 (c)..... -- -- 18,209 -- 1,423 -- Units Withdrawn, Units Outstanding Surrendered, and Annuitized End of Year ----------------------------- ----------------------------- Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, 2000 1999 2000 1999 ------------- ------------- ------------- ------------- FUTURITY ACCOLADE CONTRACTS: MIS - Lvl 1 (a)...... (4,811) (257) 370,902 55,773 MIS - Lvl 2 (b)...... (5,506) -- 567,284 -- MIS - Lvl 3 (b)...... (11,325) -- 341,676 -- MIS - Lvl 4 (b)...... (471) -- 52,190 -- OP1 - Lvl 1 (a)...... (11,484) -- 27,408 102 OP1 - Lvl 2 (b)...... (3,039) -- 6,988 -- OP1 - Lvl 3 (b)...... (366) -- 20,021 -- OP1 - Lvl 4 (b)...... -- -- 7,891 -- OP2 - Lvl 1 (a)...... (2,251) (384) 94,315 19,070 OP2 - Lvl 2 (b)...... (565) -- 100,792 -- OP2 - Lvl 3 (b)...... (94) -- 54,596 -- OP2 - Lvl 4 (b)...... (84) -- 6,218 -- OP3 - Lvl 1 (a)...... (146) -- 9,783 102 OP3 - Lvl 2 (b)...... (22) -- 27,009 -- OP3 - Lvl 3 (b)...... -- -- 2,008 -- OP3 - Lvl 4 (b)...... (75) -- 7,179 -- OP4 - Lvl 1 (a)...... (1,583) (333) 25,564 25,785 OP4 - Lvl 2 (b)...... -- -- 13,806 -- OP4 - Lvl 3 (b)...... -- -- 2,510 -- SCA1 - Lvl 1 (a)..... (59,734) -- 801,538 366,623 SCA1 - Lvl 2 (b)..... (13,889) -- 533,464 -- SCA1 - Lvl 3 (b)..... (9,199) -- 373,023 -- SCA1 - Lvl 4 (b)..... (3,212) -- -- -- SCA2 - Lvl 1 (a)..... (13,535) -- 268,500 11,553 SCA2 - Lvl 2 (b)..... (13,153) -- 253,362 -- SCA2 - Lvl 3 (b)..... (3,281) -- 225,602 -- SCA2 - Lvl 4 (b)..... (598) -- 43,542 -- SCA3 - Lvl 1 (a)..... (4,351) -- 103,314 2,281 SCA3 - Lvl 2 (b)..... (4,150) -- 45,667 -- SCA3 - Lvl 3 (b)..... (144) -- 147,600 -- SCA3 - Lvl 4 (b)..... (11) -- 9,310 -- SCA4 - Lvl 1 (a)..... (1,226) -- 110,471 9,027 SCA4 - Lvl 2 (b)..... (3,299) -- 139,242 -- SCA4 - Lvl 3 (b)..... (735) -- 121,646 -- SCA4 - Lvl 4 (b)..... (198) -- 67,223 -- SCA5 - Lvl 1 (a)..... (14,468) (4) 243,919 17,878 SCA5 - Lvl 2 (b)..... (3,015) -- 287,334 -- SCA5 - Lvl 3 (b)..... (768) -- 186,213 -- SCA5 - Lvl 4 (b)..... (251) -- 46,440 -- SCA6 - Lvl 1 (a)..... (253) -- 4,159 394 SCA6 - Lvl 2 (b)..... (128) -- 30,675 -- SCA6 - Lvl 3 (b)..... (200) -- 24,313 -- SCA6 - Lvl 4 (b)..... -- -- 207 -- SCA7 - Lvl 1 (c)..... (989) -- 130,722 -- SCA7 - Lvl 2 (c)..... (1,999) -- 124,165 -- SCA7 - Lvl 3 (c)..... (584) -- 163,236 -- SCA7 - Lvl 4 (c)..... (6) -- 19,626 --
(a) For the period October 15, 1999 (commencement of operations) through December 31, 1999. (b) For the period April 17, 2000 (commencement of operations) through December 31, 2000. (c) For the period July 17, 2000 (commencement of operations) through December 31, 2000. -94- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR 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
Units Transferred Between Units Outstanding Sub-Accounts and Fixed Beginning of Year Units Purchased Accumulation Account ----------------------------- ----------------------------- ----------------------------- Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ------------- ------------- ------------- ------------- ------------- ------------- FUTURITY ACCOLADE CONTRACTS -- CONTINUED: SCA8 - Lvl 1 (c)..... -- -- 122 -- 12,228 -- SCA8 - Lvl 2 (c)..... -- -- 2,422 -- 18,958 -- SCA8 - Lvl 3 (c)..... -- -- 11,621 -- 445 -- SCA8 - Lvl 4 (c)..... -- -- 23,603 -- -- -- SCA9 - Lvl 1 (c)..... -- -- 828 -- -- -- SCA9 - Lvl 2 (c)..... -- -- 2,234 -- (221) -- SCA9 - Lvl 3 (c)..... -- -- 1,994 -- 635 -- SCA9 - Lvl 4 (c)..... -- -- -- -- 3,293 -- SCA - Lvl 1 (c)...... -- -- 67,792 -- 70,821 -- SCA - Lvl 2 (c)...... -- -- 33,056 -- 54,559 -- SCA - Lvl 3 (c)...... -- -- 42,738 -- 17,177 -- SCA - Lvl 4 (c)...... -- -- 15,043 -- 3,398 -- SCB - Lvl 1 (c)...... -- -- 19,504 -- 77,332 -- SCB - Lvl 2 (c)...... -- -- 11,025 -- 22,818 -- SCB - Lvl 3 (c)...... -- -- 25,839 -- 8,904 -- SCB - Lvl 4 (c)...... -- -- 6,428 -- 2,854 -- SCC - Lvl 1 (c)...... -- -- 100 -- -- -- SCC - Lvl 2 (c)...... -- -- 747 -- -- -- Units Withdrawn, Units Outstanding Surrendered, and Annuitized End of Year ----------------------------- ----------------------------- Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, 2000 1999 2000 1999 ------------- ------------- ------------- ------------- FUTURITY ACCOLADE CONTRACTS: SCA8 - Lvl 1 (c)..... (136) -- 12,214 -- SCA8 - Lvl 2 (c)..... (956) -- 20,424 -- SCA8 - Lvl 3 (c)..... (113) -- 11,953 -- SCA8 - Lvl 4 (c)..... -- -- 23,603 -- SCA9 - Lvl 1 (c)..... (100) -- 728 -- SCA9 - Lvl 2 (c)..... -- -- 2,013 -- SCA9 - Lvl 3 (c)..... -- -- 2,629 -- SCA9 - Lvl 4 (c)..... -- -- 3,293 -- SCA - Lvl 1 (c)...... (1,055) -- 137,558 -- SCA - Lvl 2 (c)...... (221) -- 87,394 -- SCA - Lvl 3 (c)...... (223) -- 59,692 -- SCA - Lvl 4 (c)...... (34) -- 18,407 -- SCB - Lvl 1 (c)...... (493) -- 96,343 -- SCB - Lvl 2 (c)...... (104) -- 33,739 -- SCB - Lvl 3 (c)...... (143) -- 34,600 -- SCB - Lvl 4 (c)...... (10) -- 9,272 -- SCC - Lvl 1 (c)...... (100) -- -- -- SCC - Lvl 2 (c)...... -- -- 747 --
(c) For the period July 17, 2000 (commencement of operations) through December 31, 2000. -95- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR 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
Units Transferred Between Units Outstanding Sub-Accounts and Fixed Beginning of Year Units Purchased Accumulation Account ----------------------------- ----------------------------- ----------------------------- Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ------------- ------------- ------------- ------------- ------------- ------------- FUTURITY FOCUS II CONTRACTS (A): AIM1 - Lvl 3......... -- -- 13,231 -- 5,995 -- AIM1 - Lvl 4......... -- -- 20,497 -- -- -- AIM1 - Lvl 5......... -- -- 48,607 -- 1,054 -- AIM1 - Lvl 6......... -- -- 667 -- -- -- AIM2 - Lvl 3......... -- -- 19,899 -- 4,096 -- AIM2 - Lvl 4......... -- -- 39,399 -- 31 -- AIM2 - Lvl 5......... -- -- 29,739 -- 599 -- AIM2 - Lvl 6......... -- -- 1,965 -- 700 -- AIM3 - Lvl 3......... -- -- 35,057 -- -- -- AIM3 - Lvl 4......... -- -- 21,121 -- 29 -- AIM3 - Lvl 5......... -- -- 19,004 -- 94 -- AIM3 - Lvl 6......... -- -- -- -- 623 -- AIM4 - Lvl 3......... -- -- 36,125 -- (819) -- AIM4 - Lvl 4......... -- -- 40,383 -- (707) -- AIM4 - Lvl 5......... -- -- 31,119 -- 2,019 -- AIM4 - Lvl 6......... -- -- 327 -- 643 -- AL1 - Lvl 3.......... -- -- 5,675 -- (1,373) -- AL1 - Lvl 4.......... -- -- 7,714 -- -- -- AL1 - Lvl 5.......... -- -- 16,548 -- 51 -- AL1 - Lvl 6.......... -- -- 651 -- 629 -- AL2 - Lvl 3.......... -- -- 40,416 -- 3,445 -- AL2 - Lvl 4.......... -- -- 23,492 -- (220) -- AL2 - Lvl 5.......... -- -- 12,820 -- (111) -- AL2 - Lvl 6.......... -- -- -- -- 284 -- AL3 - Lvl 3.......... -- -- 689 -- 50 -- AL3 - Lvl 4.......... -- -- 4,184 -- -- -- AL3 - Lvl 5.......... -- -- 5,985 -- -- -- GS1 - Lvl 3.......... -- -- 100 -- 1,316 -- GS1 - Lvl 4.......... -- -- 973 -- -- -- GS1 - Lvl 5.......... -- -- 1,587 -- 28 -- GS2 - Lvl 3.......... -- -- 1,042 -- -- -- GS2 - Lvl 4.......... -- -- 2,329 -- -- -- GS2 - Lvl 5.......... -- -- 632 -- -- -- GS3 - Lvl 3.......... -- -- 645 -- 682 -- GS3 - Lvl 4.......... -- -- 1,690 -- -- -- GS4 - Lvl 3.......... -- -- 5,595 -- -- -- GS4 - Lvl 4.......... -- -- 931 -- -- -- GS5 - Lvl 3.......... -- -- 3,159 -- -- -- GS5 - Lvl 4.......... -- -- 7,162 -- -- -- GS5 - Lvl 5.......... -- -- 6,111 -- -- -- GS5 - Lvl 6.......... -- -- -- -- 299 -- JP1 - Lvl 3.......... -- -- 100 -- -- -- JP1 - Lvl 5.......... -- -- 5,189 -- -- -- JP1 - Lvl 6.......... -- -- 4,985 -- 286 -- JP2 - Lvl 3.......... -- -- 4,413 -- (740) -- JP2 - Lvl 4.......... -- -- 746 -- -- -- Units Withdrawn, Units Outstanding Surrendered, and Annuitized End of Year ----------------------------- ----------------------------- Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, 2000 1999 2000 1999 ------------- ------------- ------------- ------------- FUTURITY FOCUS II CONTRACTS: AIM1 - Lvl 3......... (193) -- 19,033 -- AIM1 - Lvl 4......... (30) -- 20,467 -- AIM1 - Lvl 5......... (200) -- 49,461 -- AIM1 - Lvl 6......... (16) -- 651 -- AIM2 - Lvl 3......... (313) -- 23,682 -- AIM2 - Lvl 4......... (294) -- 39,136 -- AIM2 - Lvl 5......... (54) -- 30,284 -- AIM2 - Lvl 6......... (18) -- 2,647 -- AIM3 - Lvl 3......... (136) -- 34,921 -- AIM3 - Lvl 4......... (83) -- 21,067 -- AIM3 - Lvl 5......... (52) -- 19,046 -- AIM3 - Lvl 6......... -- -- 623 -- AIM4 - Lvl 3......... (305) -- 35,001 -- AIM4 - Lvl 4......... (310) -- 39,366 -- AIM4 - Lvl 5......... (83) -- 33,055 -- AIM4 - Lvl 6......... (8) -- 962 -- AL1 - Lvl 3.......... (130) -- 4,172 -- AL1 - Lvl 4.......... (57) -- 7,657 -- AL1 - Lvl 5.......... (17) -- 16,582 -- AL1 - Lvl 6.......... (16) -- 1,264 -- AL2 - Lvl 3.......... (160) -- 43,701 -- AL2 - Lvl 4.......... -- -- 23,272 -- AL2 - Lvl 5.......... -- -- 12,709 -- AL2 - Lvl 6.......... -- -- 284 -- AL3 - Lvl 3.......... (100) -- 639 -- AL3 - Lvl 4.......... -- -- 4,184 -- AL3 - Lvl 5.......... -- -- 5,985 -- GS1 - Lvl 3.......... (100) -- 1,316 -- GS1 - Lvl 4.......... -- -- 973 -- GS1 - Lvl 5.......... -- -- 1,615 -- GS2 - Lvl 3.......... (100) -- 942 -- GS2 - Lvl 4.......... (98) -- 2,231 -- GS2 - Lvl 5.......... -- -- 632 -- GS3 - Lvl 3.......... (100) -- 1,227 -- GS3 - Lvl 4.......... -- -- 1,690 -- GS4 - Lvl 3.......... (100) -- 5,495 -- GS4 - Lvl 4.......... -- -- 931 -- GS5 - Lvl 3.......... (100) -- 3,059 -- GS5 - Lvl 4.......... (55) -- 7,107 -- GS5 - Lvl 5.......... -- -- 6,111 -- GS5 - Lvl 6.......... -- -- 299 -- JP1 - Lvl 3.......... (100) -- -- -- JP1 - Lvl 5.......... -- -- 5,189 -- JP1 - Lvl 6.......... -- -- 5,271 -- JP2 - Lvl 3.......... (100) -- 3,573 -- JP2 - Lvl 4.......... -- -- 746 --
(a) For the period July 17, 2000 (commencement of operations) through December 31, 2000. -96- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR 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
Units Transferred Between Units Outstanding Sub-Accounts and Fixed Beginning of Year Units Purchased Accumulation Account ----------------------------- ----------------------------- ----------------------------- Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ------------- ------------- ------------- ------------- ------------- ------------- FUTURITY FOCUS II CONTRACTS (A) -- CONTINUED: JP3 - Lvl 3.......... -- -- 9,909 -- (709) -- JP3 - Lvl 5.......... -- -- 520 -- -- -- LA1 - Lvl 3.......... -- -- 1,496 -- -- -- LA1 - Lvl 4.......... -- -- 7,187 -- -- -- LA1 - Lvl 5.......... -- -- 10,263 -- 46 -- LA1 - Lvl 6.......... -- -- 658 -- 474 -- CAS - Lvl 3.......... -- -- 4,557 -- -- -- CAS - Lvl 4.......... -- -- 8,100 -- (3) -- CAS - Lvl 5.......... -- -- 31,175 -- 275 -- CAS - Lvl 6.......... -- -- 654 -- -- -- EGS - Lvl 3.......... -- -- 12,383 -- 434 -- EGS - Lvl 4.......... -- -- 39,135 -- 744 -- EGS - Lvl 5.......... -- -- 25,929 -- 775 -- EGS - Lvl 6.......... -- -- 334 -- 3,597 -- HYS - Lvl 3.......... -- -- 11,243 -- 2,393 -- HYS - Lvl 4.......... -- -- 10,260 -- 1,151 -- HYS - Lvl 5.......... -- -- 8,247 -- 2,496 -- UTS - Lvl 3.......... -- -- 17,215 -- 847 -- UTS - Lvl 4.......... -- -- 19,933 -- (299) -- UTS - Lvl 5.......... -- -- 6,913 -- (143) -- UTS - Lvl 6.......... -- -- 273 -- 3,018 -- GSS - Lvl 3.......... -- -- 9,481 -- 161 -- GSS - Lvl 4.......... -- -- 564 -- -- -- GSS - Lvl 5.......... -- -- -- -- 236 -- TRS - Lvl 3.......... -- -- 3,675 -- 41 -- TRS - Lvl 4.......... -- -- 5,660 -- (22) -- TRS - Lvl 5.......... -- -- 3,599 -- 46 -- MIT - Lvl 3.......... -- -- 15,566 -- -- -- MIT - Lvl 4.......... -- -- 7,535 -- (18) -- MIT - Lvl 5.......... -- -- 1,955 -- -- -- MIT - Lvl 6.......... -- -- 804 -- 523 -- NWD - Lvl 3.......... -- -- 13,847 -- 3,935 -- NWD - Lvl 4.......... -- -- 20,622 -- 594 -- NWD - Lvl 5.......... -- -- 15,228 -- 1,101 -- NWD - Lvl 6.......... -- -- 320 -- -- -- MIS - Lvl 3.......... -- -- 22,321 -- (103) -- MIS - Lvl 4.......... -- -- 26,888 -- 163 -- MIS - Lvl 5.......... -- -- 23,656 -- -- -- MIS - Lvl 6.......... -- -- 894 -- 5,035 -- SCA 1 - Lvl 3........ -- -- 46,550 -- (31,148) -- SCA 1 - Lvl 4........ -- -- 4,762 -- (1,387) -- SCA 1 - Lvl 5........ -- -- 27,600 -- (1,068) -- SCA 1 - Lvl 6........ -- -- 14,882 -- 17,725 -- SCA 2 - Lvl 3........ -- -- 22,166 -- (949) -- SCA 2 - Lvl 4........ -- -- 22,835 -- (1,195) -- SCA 2 - Lvl 5........ -- -- 17,562 -- 764 -- Units Withdrawn, Units Outstanding Surrendered, and Annuitized End of Year ----------------------------- ----------------------------- Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, 2000 1999 2000 1999 ------------- ------------- ------------- ------------- FUTURITY FOCUS II CONTRACTS: JP3 - Lvl 3.......... (242) -- 8,958 -- JP3 - Lvl 5.......... -- -- 520 -- LA1 - Lvl 3.......... (148) -- 1,348 -- LA1 - Lvl 4.......... -- -- 7,187 -- LA1 - Lvl 5.......... (148) -- 10,161 -- LA1 - Lvl 6.......... (6) -- 1,126 -- CAS - Lvl 3.......... (113) -- 4,444 -- CAS - Lvl 4.......... (85) -- 8,012 -- CAS - Lvl 5.......... (53) -- 31,397 -- CAS - Lvl 6.......... (16) -- 638 -- EGS - Lvl 3.......... (113) -- 12,704 -- EGS - Lvl 4.......... (163) -- 39,716 -- EGS - Lvl 5.......... (51) -- 26,653 -- EGS - Lvl 6.......... (8) -- 3,923 -- HYS - Lvl 3.......... (100) -- 13,536 -- HYS - Lvl 4.......... (153) -- 11,258 -- HYS - Lvl 5.......... (53) -- 10,690 -- UTS - Lvl 3.......... (257) -- 17,805 -- UTS - Lvl 4.......... (45) -- 19,589 -- UTS - Lvl 5.......... -- -- 6,770 -- UTS - Lvl 6.......... (7) -- 3,284 -- GSS - Lvl 3.......... (100) -- 9,542 -- GSS - Lvl 4.......... -- -- 564 -- GSS - Lvl 5.......... -- -- 236 -- TRS - Lvl 3.......... (333) -- 3,383 -- TRS - Lvl 4.......... (6) -- 5,632 -- TRS - Lvl 5.......... -- -- 3,645 -- MIT - Lvl 3.......... (119) -- 15,447 -- MIT - Lvl 4.......... -- -- 7,517 -- MIT - Lvl 5.......... -- -- 1,955 -- MIT - Lvl 6.......... (20) -- 1,307 -- NWD - Lvl 3.......... (184) -- 17,598 -- NWD - Lvl 4.......... (138) -- 21,078 -- NWD - Lvl 5.......... (58) -- 16,271 -- NWD - Lvl 6.......... (8) -- 312 -- MIS - Lvl 3.......... (619) -- 21,599 -- MIS - Lvl 4.......... (81) -- 26,970 -- MIS - Lvl 5.......... (50) -- 23,606 -- MIS - Lvl 6.......... (22) -- 5,907 -- SCA 1 - Lvl 3........ (149) -- 15,253 -- SCA 1 - Lvl 4........ (32) -- 3,343 -- SCA 1 - Lvl 5........ (10,157) -- 16,375 -- SCA 1 - Lvl 6........ -- -- 32,607 -- SCA 2 - Lvl 3........ (141) -- 21,076 -- SCA 2 - Lvl 4........ (196) -- 21,444 -- SCA 2 - Lvl 5........ (43) -- 18,283 --
(a) For the period July 17, 2000 (commencement of operations) through December 31, 2000. -97- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR 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
Units Transferred Between Units Outstanding Sub-Accounts and Fixed Beginning of Year Units Purchased Accumulation Account ----------------------------- ----------------------------- ----------------------------- Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ------------- ------------- ------------- ------------- ------------- ------------- FUTURITY FOCUS II CONTRACTS (A) -- CONTINUED: SCA 3 - Lvl 3........ -- -- 8,689 -- 23 -- SCA 3 - Lvl 4........ -- -- 9,968 -- (290) -- SCA 3 - Lvl 5........ -- -- 8,005 -- 294 -- SCA4 - Lvl 3......... -- -- 9,918 -- 3 -- SCA4 - Lvl 4......... -- -- 31,977 -- 585 -- SCA4 - Lvl 5......... -- -- 10,645 -- 1,452 -- SCA5 - Lvl 3......... -- -- 16,538 -- 6,022 -- SCA5 - Lvl 4......... -- -- 37,099 -- 3,878 -- SCA5 - Lvl 5......... -- -- 22,017 -- 2,388 -- SCA5 - Lvl 6......... -- -- 772 -- -- -- SCA6 - Lvl 3......... -- -- 1,186 -- -- -- SCA6 - Lvl 4......... -- -- 1,034 -- 5 -- SCA6 - Lvl 5......... -- -- 1,932 -- -- -- SCA7 - Lvl 3......... -- -- 34,387 -- (258) -- SCA7 - Lvl 4......... -- -- 39,992 -- (67) -- SCA7 - Lvl 5......... -- -- 23,033 -- 955 -- SCA8 - Lvl 3......... -- -- 3,076 -- (601) -- SCA8 - Lvl 4......... -- -- 7,305 -- -- -- SCA8 - Lvl 5......... -- -- 10,375 -- (472) -- SCA9 - Lvl 3......... -- -- 3,943 -- 24 -- SCA - Lvl 3.......... -- -- 9,762 -- 318 -- SCA - Lvl 4.......... -- -- 9,141 -- (211) -- SCA - Lvl 5.......... -- -- 20,201 -- 788 -- SCB - Lvl 3.......... -- -- 4,096 -- (130) -- SCB - Lvl 4.......... -- -- 5,283 -- (496) -- SCB - Lvl 5.......... -- -- 2,917 -- 160 -- SCC - Lvl 3.......... -- -- 780 -- -- -- SCC - Lvl 5.......... -- -- 806 -- (77) -- Units Withdrawn, Units Outstanding Surrendered, and Annuitized End of Year ----------------------------- ----------------------------- Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, 2000 1999 2000 1999 ------------- ------------- ------------- ------------- FUTURITY FOCUS II CONTRACTS: SCA 3 - Lvl 3........ (235) -- 8,477 -- SCA 3 - Lvl 4........ (50) -- 9,628 -- SCA 3 - Lvl 5........ (11) -- 8,288 -- SCA4 - Lvl 3......... (100) -- 9,821 -- SCA4 - Lvl 4......... (315) -- 32,247 -- SCA4 - Lvl 5......... (26) -- 12,071 -- SCA5 - Lvl 3......... (203) -- 22,357 -- SCA5 - Lvl 4......... (302) -- 40,675 -- SCA5 - Lvl 5......... (30) -- 24,375 -- SCA5 - Lvl 6......... (7) -- 765 -- SCA6 - Lvl 3......... (137) -- 1,049 -- SCA6 - Lvl 4......... -- -- 1,039 -- SCA6 - Lvl 5......... -- -- 1,932 -- SCA7 - Lvl 3......... (453) -- 33,676 -- SCA7 - Lvl 4......... (321) -- 39,604 -- SCA7 - Lvl 5......... (65) -- 23,923 -- SCA8 - Lvl 3......... (111) -- 2,364 -- SCA8 - Lvl 4......... (27) -- 7,278 -- SCA8 - Lvl 5......... (29) -- 9,874 -- SCA9 - Lvl 3......... (100) -- 3,867 -- SCA - Lvl 3.......... (118) -- 9,962 -- SCA - Lvl 4.......... (56) -- 8,874 -- SCA - Lvl 5.......... (11) -- 20,978 -- SCB - Lvl 3.......... (100) -- 3,866 -- SCB - Lvl 4.......... (47) -- 4,740 -- SCB - Lvl 5.......... (10) -- 3,067 -- SCC - Lvl 3.......... (100) -- 680 -- SCC - Lvl 5.......... -- -- 729 --
(a) For the period July 17, 2000 (commencement of operations) through December 31, 2000. -98- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR 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
Units Transferred Between Units Outstanding Sub-Accounts and Fixed Beginning of Year Units Purchased Accumulation Account ----------------------------- ----------------------------- ----------------------------- Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ------------- ------------- ------------- ------------- ------------- ------------- FUTURITY III CONTRACTS (A): AIM1 - Lvl 2......... -- -- 139,136 -- 17,112 -- AIM1 - Lvl 3......... -- -- 24,807 -- -- -- AIM1 - Lvl 4......... -- -- 188,367 -- 46,063 -- AIM1 - Lvl 5......... -- -- 257,610 -- 76,553 -- AIM1 - Lvl 6......... -- -- 45,942 -- 32,257 -- AIM2 - Lvl 1......... -- -- 19,850 -- 3,421 -- AIM2 - Lvl 2......... -- -- 132,768 -- 18,787 -- AIM2 - Lvl 4......... -- -- 232,740 -- 19,789 -- AIM2 - Lvl 5......... -- -- 270,204 -- 77,160 -- AIM2 - Lvl 6......... -- -- 70,123 -- 10,344 -- AIM3 - Lvl 2......... -- -- 72,276 -- 12,178 -- AIM3 - Lvl 3......... -- -- 21,359 -- 137,272 -- AIM3 - Lvl 4......... -- -- 274,910 -- 33,042 -- AIM3 - Lvl 5......... -- -- 236,062 -- 193,488 -- AIM3 - Lvl 6......... -- -- 63,783 -- 5,877 -- AIM4 - Lvl 1......... -- -- 9,930 -- 5,182 -- AIM4 - Lvl 2......... -- -- 108,419 -- 26,935 -- AIM4 - Lvl 3......... -- -- 31,548 -- -- -- AIM4 - Lvl 4......... -- -- 112,504 -- 12,122 -- AIM4 - Lvl 5......... -- -- 238,031 -- 55,332 -- AIM4 - Lvl 6......... -- -- 86,817 -- 1,321 -- AL1 - Lvl 2.......... -- -- 100,958 -- 30,433 -- AL1 - Lvl 3.......... -- -- 17,275 -- 425,093 -- AL1 - Lvl 4.......... -- -- 193,413 -- 52,553 -- AL1 - Lvl 5.......... -- -- 293,614 -- 554,194 -- AL1 - Lvl 6.......... -- -- 108,607 -- 26,368 -- AL2 - Lvl 1.......... -- -- -- -- 2,786 -- AL2 - Lvl 2.......... -- -- 74,151 -- 14,349 -- AL2 - Lvl 3.......... -- -- 17,005 -- -- -- AL2 - Lvl 4.......... -- -- 153,425 -- 7,316 -- AL2 - Lvl 5.......... -- -- 130,009 -- 56,070 -- AL2 - Lvl 6.......... -- -- 50,101 -- 11,830 -- AL3 - Lvl 1.......... -- -- 10,642 -- -- -- AL3 - Lvl 2.......... -- -- 21,312 -- 13,505 -- AL3 - Lvl 3.......... -- -- 9,377 -- -- -- AL3 - Lvl 4.......... -- -- 27,080 -- 11,420 -- AL3 - Lvl 5.......... -- -- 47,449 -- 16,357 -- AL3 - Lvl 6.......... -- -- 13,814 -- 1,423 -- GS1 - Lvl 1.......... -- -- 19,927 -- -- -- GS1 - Lvl 2.......... -- -- 30,457 -- 19,656 -- GS1 - Lvl 4.......... -- -- 52,552 -- 15,876 -- GS1 - Lvl 5.......... -- -- 60,330 -- 14,854 -- GS1 - Lvl 6.......... -- -- 10,118 -- 7,678 -- Units Withdrawn, Units Outstanding Surrendered, and Annuitized End of Year ----------------------------- ----------------------------- Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, 2000 1999 2000 1999 ------------- ------------- ------------- ------------- FUTURITY III CONTRACTS: AIM1 - Lvl 2......... (418) -- 155,830 -- AIM1 - Lvl 3......... -- -- 24,807 -- AIM1 - Lvl 4......... (540) -- 233,890 -- AIM1 - Lvl 5......... (926) -- 333,237 -- AIM1 - Lvl 6......... (445) -- 77,754 -- AIM2 - Lvl 1......... (19,850) -- 3,421 -- AIM2 - Lvl 2......... (874) -- 150,681 -- AIM2 - Lvl 4......... (1,346) -- 251,183 -- AIM2 - Lvl 5......... (783) -- 346,581 -- AIM2 - Lvl 6......... (190) -- 80,277 -- AIM3 - Lvl 2......... (358) -- 84,096 -- AIM3 - Lvl 3......... -- -- 158,631 -- AIM3 - Lvl 4......... (1,431) -- 306,521 -- AIM3 - Lvl 5......... (1,240) -- 428,310 -- AIM3 - Lvl 6......... (134) -- 69,526 -- AIM4 - Lvl 1......... (9,930) -- 5,182 -- AIM4 - Lvl 2......... (1,121) -- 134,233 -- AIM4 - Lvl 3......... -- -- 31,548 -- AIM4 - Lvl 4......... (1,429) -- 123,197 -- AIM4 - Lvl 5......... (817) -- 292,546 -- AIM4 - Lvl 6......... (193) -- 87,945 -- AL1 - Lvl 2.......... (875) -- 130,516 -- AL1 - Lvl 3.......... -- -- 442,368 -- AL1 - Lvl 4.......... (1,235) -- 244,731 -- AL1 - Lvl 5.......... (1,917) -- 845,891 -- AL1 - Lvl 6.......... (581) -- 134,394 -- AL2 - Lvl 1.......... -- -- 2,786 -- AL2 - Lvl 2.......... (1,521) -- 86,979 -- AL2 - Lvl 3.......... -- -- 17,005 -- AL2 - Lvl 4.......... (882) -- 159,859 -- AL2 - Lvl 5.......... (717) -- 185,362 -- AL2 - Lvl 6.......... (13) -- 61,918 -- AL3 - Lvl 1.......... (10,642) -- -- -- AL3 - Lvl 2.......... (291) -- 34,526 -- AL3 - Lvl 3.......... -- -- 9,377 -- AL3 - Lvl 4.......... (114) -- 38,386 -- AL3 - Lvl 5.......... (373) -- 63,433 -- AL3 - Lvl 6.......... (28) -- 15,209 -- GS1 - Lvl 1.......... (19,927) -- -- -- GS1 - Lvl 2.......... (475) -- 49,638 -- GS1 - Lvl 4.......... (758) -- 67,670 -- GS1 - Lvl 5.......... (23) -- 75,161 -- GS1 - Lvl 6.......... -- -- 17,796 --
(a) For the period July 17, 2000 (commencement of operations) through December 31, 2000. -99- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR 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
Units Transferred Between Units Outstanding Sub-Accounts and Fixed Beginning of Year Units Purchased Accumulation Account ----------------------------- ----------------------------- ----------------------------- Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ------------- ------------- ------------- ------------- ------------- ------------- FUTURITY III CONTRACTS (A) -- CONTINUED: GS2 - Lvl 1.......... -- -- 9,381 -- -- -- GS2 - Lvl 2.......... -- -- 8,810 -- 717 -- GS2 - Lvl 3.......... -- -- 12,386 -- -- -- GS2 - Lvl 4.......... -- -- 3,206 -- 742 -- GS2 - Lvl 5.......... -- -- 11,194 -- 957 -- GS2 - Lvl 6.......... -- -- 2,160 -- 505 -- GS3 - Lvl 1.......... -- -- 18,430 -- -- -- GS3 - Lvl 2.......... -- -- 7,144 -- 246 -- GS3 - Lvl 3.......... -- -- 17,483 -- -- -- GS3 - Lvl 4.......... -- -- 20,652 -- 5,680 -- GS3 - Lvl 5.......... -- -- 52,298 -- 7,737 -- GS3 - Lvl 6.......... -- -- 3,632 -- 6,171 -- GS4 - Lvl 2.......... -- -- 3,197 -- 310 -- GS4 - Lvl 4.......... -- -- 641 -- 734 -- GS4 - Lvl 5.......... -- -- 4,481 -- 3,365 -- GS4 - Lvl 6.......... -- -- 621 -- 133 -- GS5 - Lvl 1.......... -- -- 9,804 -- -- -- GS5 - Lvl 2.......... -- -- 16,545 -- 2,948 -- GS5 - Lvl 3.......... -- -- 31,040 -- -- -- GS5 - Lvl 4.......... -- -- 36,123 -- 2,474 -- GS5 - Lvl 5.......... -- -- 17,934 -- 13,324 -- GS5 - Lvl 6.......... -- -- 13,789 -- 1,636 -- JP1 - Lvl 2.......... -- -- 9,897 -- 3,611 -- JP1 - Lvl 3.......... -- -- 15,284 -- -- -- JP1 - Lvl 4.......... -- -- 24,711 -- 14,729 -- JP1 - Lvl 5.......... -- -- 47,956 -- 5,962 -- JP1 - Lvl 6.......... -- -- 1,084 -- 1,336 -- JP2 - Lvl 2.......... -- -- 8,131 -- 729 -- JP2 - Lvl 3.......... -- -- 13,244 -- -- -- JP2 - Lvl 4.......... -- -- 20,927 -- 4,442 -- JP2 - Lvl 5.......... -- -- 24,659 -- 1,782 -- JP2 - Lvl 6.......... -- -- 745 -- 928 -- JP3 - Lvl 2.......... -- -- 19,798 -- 2,066 -- JP3 - Lvl 3.......... -- -- 13,334 -- -- -- JP3 - Lvl 4.......... -- -- 12,316 -- 4,420 -- JP3 - Lvl 5.......... -- -- 16,174 -- 4,683 -- JP3 - Lvl 6.......... -- -- 12,650 -- 1,309 -- LA1 - Lvl 2.......... -- -- 39,489 -- 14,475 -- LA1 - Lvl 3.......... -- -- 23,743 -- -- -- LA1 - Lvl 4.......... -- -- 42,837 -- 12,792 -- LA1 - Lvl 5.......... -- -- 100,824 -- 24,757 -- LA1 - Lvl 6.......... -- -- 114,195 -- 2,828 -- Units Withdrawn, Units Outstanding Surrendered, and Annuitized End of Year ----------------------------- ----------------------------- Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, 2000 1999 2000 1999 ------------- ------------- ------------- ------------- FUTURITY III CONTRACTS: GS2 - Lvl 1.......... (9,381) -- -- -- GS2 - Lvl 2.......... (100) -- 9,427 -- GS2 - Lvl 3.......... -- -- 12,386 -- GS2 - Lvl 4.......... -- -- 3,948 -- GS2 - Lvl 5.......... (132) -- 12,019 -- GS2 - Lvl 6.......... -- -- 2,665 -- GS3 - Lvl 1.......... (18,430) -- -- -- GS3 - Lvl 2.......... (100) -- 7,290 -- GS3 - Lvl 3.......... -- -- 17,483 -- GS3 - Lvl 4.......... (297) -- 26,035 -- GS3 - Lvl 5.......... (305) -- 59,730 -- GS3 - Lvl 6.......... (28) -- 9,775 -- GS4 - Lvl 2.......... (100) -- 3,407 -- GS4 - Lvl 4.......... -- -- 1,375 -- GS4 - Lvl 5.......... -- -- 7,846 -- GS4 - Lvl 6.......... -- -- 754 -- GS5 - Lvl 1.......... (9,804) -- -- -- GS5 - Lvl 2.......... (166) -- 19,327 -- GS5 - Lvl 3.......... -- -- 31,040 -- GS5 - Lvl 4.......... (51) -- 38,546 -- GS5 - Lvl 5.......... -- -- 31,258 -- GS5 - Lvl 6.......... (81) -- 15,344 -- JP1 - Lvl 2.......... (105) -- 13,403 -- JP1 - Lvl 3.......... -- -- 15,284 -- JP1 - Lvl 4.......... (242) -- 39,198 -- JP1 - Lvl 5.......... (277) -- 53,641 -- JP1 - Lvl 6.......... -- -- 2,420 -- JP2 - Lvl 2.......... (128) -- 8,732 -- JP2 - Lvl 3.......... -- -- 13,244 -- JP2 - Lvl 4.......... (31) -- 25,338 -- JP2 - Lvl 5.......... (275) -- 26,166 -- JP2 - Lvl 6.......... -- -- 1,673 -- JP3 - Lvl 2.......... (156) -- 21,708 -- JP3 - Lvl 3.......... -- -- 13,334 -- JP3 - Lvl 4.......... (33) -- 16,703 -- JP3 - Lvl 5.......... (6) -- 20,851 -- JP3 - Lvl 6.......... (2) -- 13,957 -- LA1 - Lvl 2.......... (1,564) -- 52,400 -- LA1 - Lvl 3.......... -- -- 23,743 -- LA1 - Lvl 4.......... (94) -- 55,535 -- LA1 - Lvl 5.......... (381) -- 125,200 -- LA1 - Lvl 6.......... (49) -- 116,974 --
(a) For the period July 17, 2000 (commencement of operations) through December 31, 2000. -100- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR 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
Units Transferred Between Units Outstanding Sub-Accounts and Fixed Beginning of Year Units Purchased Accumulation Account ----------------------------- ----------------------------- ----------------------------- Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ------------- ------------- ------------- ------------- ------------- ------------- FUTURITY III CONTRACTS (A) -- CONTINUED: CAS - Lvl 2.......... -- -- 64,841 -- 14,632 -- CAS - Lvl 3.......... -- -- -- -- 31,811 -- CAS - Lvl 4.......... -- -- 93,138 -- 45,388 -- CAS - Lvl 5.......... -- -- 123,297 -- (10,808) -- CAS - Lvl 6.......... -- -- 74,358 -- 17,132 -- EGS - Lvl 1.......... -- -- 19,048 -- -- -- EGS - Lvl 2.......... -- -- 290,535 -- (117,225) -- EGS - Lvl 3.......... -- -- 14,035 -- 32,591 -- EGS - Lvl 4.......... -- -- 228,880 -- 34,075 -- EGS - Lvl 5.......... -- -- 393,956 -- 46,870 -- EGS - Lvl 6.......... -- -- 121,145 -- 22,175 -- HYS - Lvl 2.......... -- -- 16,362 -- 16,063 -- HYS - Lvl 4.......... -- -- 20,686 -- 24,699 -- HYS - Lvl 5.......... -- -- 47,498 -- 20,575 -- HYS - Lvl 6.......... -- -- 11,877 -- 3,965 -- UTS - Lvl 2.......... -- -- 73,814 -- 13,177 -- UTS - Lvl 3.......... -- -- 23,829 -- -- -- UTS - Lvl 4.......... -- -- 105,207 -- 20,979 -- UTS - Lvl 5.......... -- -- 99,541 -- 45,338 -- UTS - Lvl 6.......... -- -- 13,296 -- 10,564 -- GSS - Lvl 2.......... -- -- 22,741 -- 8,530 -- GSS - Lvl 4.......... -- -- 18,196 -- 375 -- GSS - Lvl 5.......... -- -- 13,472 -- 14,815 -- GSS - Lvl 6.......... -- -- 1,451 -- 252 -- TRS - Lvl 2.......... -- -- 25,010 -- 5,339 -- TRS - Lvl 4.......... -- -- 20,873 -- 7,277 -- TRS - Lvl 5.......... -- -- 48,083 -- 11,012 -- TRS - Lvl 6.......... -- -- 3,774 -- 522 -- MIT - Lvl 2.......... -- -- 53,390 -- 20,118 -- MIT - Lvl 4.......... -- -- 66,459 -- 9,134 -- MIT - Lvl 5.......... -- -- 125,666 -- 21,414 -- MIT - Lvl 6.......... -- -- 61,982 -- 7,013 -- NWD - Lvl 1.......... -- -- 9,725 -- 3,013 -- NWD - Lvl 2.......... -- -- 82,955 -- 26,375 -- NWD - Lvl 3.......... -- -- 44,059 -- 30,455 -- NWD - Lvl 4.......... -- -- 98,962 -- 21,416 -- NWD - Lvl 5.......... -- -- 165,703 -- 13,499 -- NWD - Lvl 6.......... -- -- 96,686 -- 16,660 -- MIS - Lvl 1.......... -- -- -- -- 2,827 -- MIS - Lvl 2.......... -- -- 95,804 -- 33,811 -- MIS - Lvl 3.......... -- -- 12,738 -- 28,487 -- MIS - Lvl 4.......... -- -- 131,724 -- 31,405 -- MIS - Lvl 5.......... -- -- 274,128 -- 36,101 -- MIS - Lvl 6.......... -- -- 159,869 -- 21,837 -- Units Withdrawn, Units Outstanding Surrendered, and Annuitized End of Year ----------------------------- ----------------------------- Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, 2000 1999 2000 1999 ------------- ------------- ------------- ------------- FUTURITY III CONTRACTS: CAS - Lvl 2.......... (1,742) -- 77,731 -- CAS - Lvl 3.......... -- -- 31,811 -- CAS - Lvl 4.......... (831) -- 137,695 -- CAS - Lvl 5.......... (960) -- 111,529 -- CAS - Lvl 6.......... (68) -- 91,422 -- EGS - Lvl 1.......... (19,048) -- -- -- EGS - Lvl 2.......... (462) -- 172,848 -- EGS - Lvl 3.......... -- -- 46,626 -- EGS - Lvl 4.......... (2,517) -- 260,438 -- EGS - Lvl 5.......... (1,816) -- 439,010 -- EGS - Lvl 6.......... (419) -- 142,901 -- HYS - Lvl 2.......... (573) -- 31,852 -- HYS - Lvl 4.......... (424) -- 44,961 -- HYS - Lvl 5.......... (172) -- 67,901 -- HYS - Lvl 6.......... -- -- 15,842 -- UTS - Lvl 2.......... (680) -- 86,311 -- UTS - Lvl 3.......... -- -- 23,829 -- UTS - Lvl 4.......... (1,125) -- 125,061 -- UTS - Lvl 5.......... (675) -- 144,204 -- UTS - Lvl 6.......... (30) -- 23,830 -- GSS - Lvl 2.......... (311) -- 30,960 -- GSS - Lvl 4.......... (161) -- 18,410 -- GSS - Lvl 5.......... (94) -- 28,193 -- GSS - Lvl 6.......... -- -- 1,703 -- TRS - Lvl 2.......... (386) -- 29,963 -- TRS - Lvl 4.......... (163) -- 27,987 -- TRS - Lvl 5.......... (720) -- 58,375 -- TRS - Lvl 6.......... (26) -- 4,270 -- MIT - Lvl 2.......... (1,507) -- 72,001 -- MIT - Lvl 4.......... (526) -- 75,067 -- MIT - Lvl 5.......... (710) -- 146,370 -- MIT - Lvl 6.......... (235) -- 68,760 -- NWD - Lvl 1.......... (9,725) -- 3,013 -- NWD - Lvl 2.......... (758) -- 108,572 -- NWD - Lvl 3.......... -- -- 74,514 -- NWD - Lvl 4.......... (630) -- 119,748 -- NWD - Lvl 5.......... (951) -- 178,251 -- NWD - Lvl 6.......... (87) -- 113,259 -- MIS - Lvl 1.......... -- -- 2,827 -- MIS - Lvl 2.......... (312) -- 129,303 -- MIS - Lvl 3.......... -- -- 41,225 -- MIS - Lvl 4.......... (1,192) -- 161,937 -- MIS - Lvl 5.......... (922) -- 309,307 -- MIS - Lvl 6.......... (392) -- 181,314 --
(a) For the period July 17, 2000 (commencement of operations) through December 31, 2000. -101- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR 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
Units Transferred Between Units Outstanding Sub-Accounts and Fixed Beginning of Year Units Purchased Accumulation Account ----------------------------- ----------------------------- ----------------------------- Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ------------- ------------- ------------- ------------- ------------- ------------- FUTURITY III CONTRACTS (A) -- CONTINUED: SCA 1 - Lvl 2........ -- -- 128,885 -- 28,600 -- SCA 1 - Lvl 4........ -- -- 56,083 -- (27,940) -- SCA 1 - Lvl 5........ -- -- 160,781 -- (15,424) -- SCA 1 - Lvl 6........ -- -- 9,028 -- 6,688 -- SCA 2 - Lvl 2........ -- -- 15,565 -- 9,844 -- SCA 2 - Lvl 4........ -- -- 56,256 -- 18,793 -- SCA 2 - Lvl 5........ -- -- 74,221 -- 772 -- SCA 2 - Lvl 6........ -- -- 14,972 -- 3,324 -- SCA 3 - Lvl 2........ -- -- 57,484 -- 1,667 -- SCA 3 - Lvl 4........ -- -- 15,791 -- 30,947 -- SCA 3 - Lvl 5........ -- -- 32,142 -- 8,722 -- SCA 3 - Lvl 6........ -- -- 5,368 -- 1,457 -- SCA4 - Lvl 2......... -- -- 24,392 -- 12,571 -- SCA4 - Lvl 4......... -- -- 20,425 -- 20,100 -- SCA4 - Lvl 5......... -- -- 106,029 -- 21,355 -- SCA4 - Lvl 6......... -- -- 16,738 -- (113) -- SCA5 - Lvl 1......... -- -- 17,879 -- 2,643 -- SCA5 - Lvl 2......... -- -- 136,308 -- 37,953 -- SCA5 - Lvl 3......... -- -- 31,687 -- -- -- SCA5 - Lvl 4......... -- -- 104,942 -- 61,626 -- SCA5 - Lvl 5......... -- -- 164,682 -- 39,314 -- SCA5 - Lvl 6......... -- -- 14,555 -- 18,090 -- SCA6 - Lvl 2......... -- -- 100 -- 358 -- SCA6 - Lvl 4......... -- -- 14,980 -- 1,028 -- SCA6 - Lvl 5......... -- -- 8,564 -- 2,712 -- SCA7 - Lvl 1......... -- -- 18,160 -- -- -- SCA7 - Lvl 2......... -- -- 73,734 -- 27,938 -- SCA7 - Lvl 3......... -- -- -- -- 28,266 -- SCA7 - Lvl 4......... -- -- 59,644 -- 27,230 -- SCA7 - Lvl 5......... -- -- 153,122 -- 47,734 -- SCA7 - Lvl 6......... -- -- 67,229 -- 20,378 -- SCA8 - Lvl 2......... -- -- 8,235 -- 1,370 -- SCA8 - Lvl 4......... -- -- 43,652 -- (1,421) -- SCA8 - Lvl 5......... -- -- 7,680 -- 694 -- SCA8 - Lvl 6......... -- -- 3,021 -- 3,821 -- SCA9 - Lvl 2......... -- -- 2,711 -- -- -- SCA9 - Lvl 4......... -- -- 2,952 -- 148 -- SCA9 - Lvl 5......... -- -- 8,870 -- -- -- SCA9 - Lvl 6......... -- -- -- -- 61 -- SCA - Lvl 2.......... -- -- 47,874 -- 12,459 -- SCA - Lvl 3.......... -- -- 11,156 -- -- -- SCA - Lvl 4.......... -- -- 22,843 -- 24,820 -- SCA - Lvl 5.......... -- -- 62,433 -- 37,241 -- SCA - Lvl 6.......... -- -- 22,863 -- 5,415 -- Units Withdrawn, Units Outstanding Surrendered, and Annuitized End of Year ----------------------------- ----------------------------- Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, 2000 1999 2000 1999 ------------- ------------- ------------- ------------- FUTURITY III CONTRACTS: SCA 1 - Lvl 2........ (189) -- 157,296 -- SCA 1 - Lvl 4........ (154) -- 27,989 -- SCA 1 - Lvl 5........ (53) -- 145,304 -- SCA 1 - Lvl 6........ (397) -- 15,319 -- SCA 2 - Lvl 2........ (485) -- 24,924 -- SCA 2 - Lvl 4........ (964) -- 74,085 -- SCA 2 - Lvl 5........ (542) -- 74,451 -- SCA 2 - Lvl 6........ (37) -- 18,259 -- SCA 3 - Lvl 2........ (528) -- 58,623 -- SCA 3 - Lvl 4........ (394) -- 46,344 -- SCA 3 - Lvl 5........ (200) -- 40,664 -- SCA 3 - Lvl 6........ -- -- 6,825 -- SCA4 - Lvl 2......... (490) -- 36,473 -- SCA4 - Lvl 4......... (682) -- 39,843 -- SCA4 - Lvl 5......... (808) -- 126,576 -- SCA4 - Lvl 6......... (3) -- 16,622 -- SCA5 - Lvl 1......... (17,879) -- 2,643 -- SCA5 - Lvl 2......... (1,244) -- 173,017 -- SCA5 - Lvl 3......... -- -- 31,687 -- SCA5 - Lvl 4......... (1,066) -- 165,502 -- SCA5 - Lvl 5......... (895) -- 203,101 -- SCA5 - Lvl 6......... (334) -- 32,311 -- SCA6 - Lvl 2......... (102) -- 356 -- SCA6 - Lvl 4......... (381) -- 15,627 -- SCA6 - Lvl 5......... (128) -- 11,148 -- SCA7 - Lvl 1......... (18,160) -- -- -- SCA7 - Lvl 2......... (624) -- 101,048 -- SCA7 - Lvl 3......... -- -- 28,266 -- SCA7 - Lvl 4......... (722) -- 86,152 -- SCA7 - Lvl 5......... (669) -- 200,187 -- SCA7 - Lvl 6......... (55) -- 87,552 -- SCA8 - Lvl 2......... (129) -- 9,476 -- SCA8 - Lvl 4......... (659) -- 41,572 -- SCA8 - Lvl 5......... (40) -- 8,334 -- SCA8 - Lvl 6......... (15) -- 6,827 -- SCA9 - Lvl 2......... (100) -- 2,611 -- SCA9 - Lvl 4......... (13) -- 3,087 -- SCA9 - Lvl 5......... -- -- 8,870 -- SCA9 - Lvl 6......... -- -- 61 -- SCA - Lvl 2.......... (672) -- 59,661 -- SCA - Lvl 3.......... -- -- 11,156 -- SCA - Lvl 4.......... (450) -- 47,213 -- SCA - Lvl 5.......... (632) -- 99,042 -- SCA - Lvl 6.......... (3) -- 28,275 --
(a) For the period July 17, 2000 (commencement of operations) through December 31, 2000. -102- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR 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
Units Transferred Between Units Outstanding Sub-Accounts and Fixed Beginning of Year Units Purchased Accumulation Account ----------------------------- ----------------------------- ----------------------------- Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ------------- ------------- ------------- ------------- ------------- ------------- FUTURITY III CONTRACTS (A) -- CONTINUED: SCB - Lvl 2.......... -- -- 25,248 -- 2,416 -- SCB - Lvl 3.......... -- -- 9,948 -- -- -- SCB - Lvl 4.......... -- -- 9,298 -- 21,760 -- SCB - Lvl 5.......... -- -- 24,830 -- 6,078 -- SCB - Lvl 6.......... -- -- 5,415 -- 1,812 -- SCC - Lvl 2.......... -- -- 2,304 -- 958 -- SCC - Lvl 4.......... -- -- 246 -- 466 -- SCC - Lvl 5.......... -- -- 3,796 -- -- -- Units Withdrawn, Units Outstanding Surrendered, and Annuitized End of Year ----------------------------- ----------------------------- Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, 2000 1999 2000 1999 ------------- ------------- ------------- ------------- FUTURITY III CONTRACTS: SCB - Lvl 2.......... (328) -- 27,336 -- SCB - Lvl 3.......... -- -- 9,948 -- SCB - Lvl 4.......... (478) -- 30,580 -- SCB - Lvl 5.......... (178) -- 30,730 -- SCB - Lvl 6.......... (22) -- 7,205 -- SCC - Lvl 2.......... (111) -- 3,151 -- SCC - Lvl 4.......... -- -- 712 -- SCC - Lvl 5.......... -- -- 3,796 --
(a) For the period July 17, 2000 (commencement of operations) through December 31, 2000. -103- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR 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
Units Transferred Between Units Outstanding Sub-Accounts and Fixed Beginning of Year Units Purchased Accumulation Account ----------------------------- ----------------------------- ----------------------------- Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ------------- ------------- ------------- ------------- ------------- ------------- FUTURITY SELECT FOUR CONTRACTS (A): AIM1 - Lvl 3......... -- -- 1,548 -- -- -- AIM1 - Lvl 4......... -- -- 1,497 -- (998) -- AIM1 - Lvl 5......... -- -- -- -- 2,794 -- AIM2 - Lvl 4......... -- -- 1,561 -- -- -- AIM2 - Lvl 5......... -- -- 5,276 -- -- -- AIM4 - Lvl 3......... -- -- 60 -- 2 -- AIM4 - Lvl 4......... -- -- 1,415 -- -- -- AIM4 - Lvl 5......... -- -- 969 -- 1,265 -- AL1 - Lvl 4.......... -- -- 1,463 -- -- -- AL1 - Lvl 5.......... -- -- 4,725 -- 1,943 -- AL2 - Lvl 4.......... -- -- 3,035 -- (1,152) -- AL2 - Lvl 5.......... -- -- 7,161 -- -- -- GS3 - Lvl 4.......... -- -- 610 -- 15 -- JP1 - Lvl 4.......... -- -- 606 -- 17 -- LA1 - Lvl 3.......... -- -- 1,199 -- -- -- LA1 - Lvl 4.......... -- -- 1,125 -- -- -- LA1 - Lvl 5.......... -- -- 577 -- -- -- CAS - Lvl 4.......... -- -- 718 -- (420) -- CAS - Lvl 5.......... -- -- 3,830 -- -- -- EGS - Lvl 3.......... -- -- 2,200 -- 2 -- EGS - Lvl 4.......... -- -- 1,716 -- (191) -- EGS - Lvl 5.......... -- -- 1,663 -- -- -- HYS - Lvl 3.......... -- -- 20 -- 10 -- UTS - Lvl 3.......... -- -- 5 -- -- -- UTS - Lvl 4.......... -- -- 1,226 -- -- -- GSS - Lvl 3.......... -- -- 20 -- (1) -- TRS - Lvl 3.......... -- -- 1,238 -- -- -- TRS - Lvl 4.......... -- -- 1,162 -- -- -- TRS - Lvl 5.......... -- -- 1,327 -- -- -- MIT - Lvl 3.......... -- -- 2,638 -- -- -- MIT - Lvl 4.......... -- -- 1,239 -- -- -- NWD - Lvl 3.......... -- -- 15 -- 2 -- NWD - Lvl 4.......... -- -- 1,068 -- (681) -- NWD - Lvl 5.......... -- -- 1,558 -- 1,345 -- MIS - Lvl 3.......... -- -- 2,859 -- -- -- MIS - Lvl 4.......... -- -- 700 -- (408) -- MIS - Lvl 5.......... -- -- 1,634 -- 2,585 -- SCA1 - Lvl 3......... -- -- 15 -- (10) -- SCA1 - Lvl 4......... -- -- -- -- 3,906 -- SCA2 - Lvl 3......... -- -- 55 -- (8) -- SCA3 - Lvl 3......... -- -- 20 -- (2) -- SCA3 - Lvl 5......... -- -- 557 -- -- -- SCA4 - Lvl 3......... -- -- 45 -- 1 -- SCA5 - Lvl 3......... -- -- 30 -- 7 -- SCA5 - Lvl 4......... -- -- 1,055 -- (675) -- SCA5 - Lvl 5......... -- -- -- -- 2,580 -- Units Withdrawn, Units Outstanding Surrendered, and Annuitized End of Year ----------------------------- ----------------------------- Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, 2000 1999 2000 1999 ------------- ------------- ------------- ------------- FUTURITY SELECT FOUR CONTRACTS: AIM1 - Lvl 3......... -- -- 1,548 -- AIM1 - Lvl 4......... -- -- 499 -- AIM1 - Lvl 5......... -- -- 2,794 -- AIM2 - Lvl 4......... -- -- 1,561 -- AIM2 - Lvl 5......... -- -- 5,276 -- AIM4 - Lvl 3......... -- -- 62 -- AIM4 - Lvl 4......... -- -- 1,415 -- AIM4 - Lvl 5......... -- -- 2,234 -- AL1 - Lvl 4.......... -- -- 1,463 -- AL1 - Lvl 5.......... -- -- 6,668 -- AL2 - Lvl 4.......... -- -- 1,883 -- AL2 - Lvl 5.......... -- -- 7,161 -- GS3 - Lvl 4.......... (4) -- 621 -- JP1 - Lvl 4.......... (4) -- 619 -- LA1 - Lvl 3.......... -- -- 1,199 -- LA1 - Lvl 4.......... -- -- 1,125 -- LA1 - Lvl 5.......... -- -- 577 -- CAS - Lvl 4.......... -- -- 298 -- CAS - Lvl 5.......... -- -- 3,830 -- EGS - Lvl 3.......... -- -- 2,202 -- EGS - Lvl 4.......... (8) -- 1,517 -- EGS - Lvl 5.......... -- -- 1,663 -- HYS - Lvl 3.......... -- -- 30 -- UTS - Lvl 3.......... -- -- 5 -- UTS - Lvl 4.......... -- -- 1,226 -- GSS - Lvl 3.......... -- -- 19 -- TRS - Lvl 3.......... -- -- 1,238 -- TRS - Lvl 4.......... -- -- 1,162 -- TRS - Lvl 5.......... -- -- 1,327 -- MIT - Lvl 3.......... -- -- 2,638 -- MIT - Lvl 4.......... -- -- 1,239 -- NWD - Lvl 3.......... -- -- 17 -- NWD - Lvl 4.......... -- -- 387 -- NWD - Lvl 5.......... -- -- 2,903 -- MIS - Lvl 3.......... -- -- 2,859 -- MIS - Lvl 4.......... -- -- 292 -- MIS - Lvl 5.......... -- -- 4,219 -- SCA1 - Lvl 3......... -- -- 5 -- SCA1 - Lvl 4......... -- -- 3,906 -- SCA2 - Lvl 3......... -- -- 47 -- SCA3 - Lvl 3......... -- -- 18 -- SCA3 - Lvl 5......... -- -- 557 -- SCA4 - Lvl 3......... -- -- 46 -- SCA5 - Lvl 3......... -- -- 37 -- SCA5 - Lvl 4......... -- -- 380 -- SCA5 - Lvl 5......... -- -- 2,580 --
(a) For the period July 17, 2000 (commencement of operations) through December 31, 2000. -104- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR 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
Units Transferred Between Units Outstanding Sub-Accounts and Fixed Beginning of Year Units Purchased Accumulation Account ----------------------------- ----------------------------- ----------------------------- Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, 2000 1999 2000 1999 2000 1999 ------------- ------------- ------------- ------------- ------------- ------------- FUTURITY SELECT FOUR CONTRACTS (A) -- CONTINUED: SCA7 - Lvl 3......... -- -- 50 -- -- -- SCA8 - Lvl 3......... -- -- 1,915 -- -- -- SCA9 - Lvl 5......... -- -- 585 -- -- -- SCA - Lvl 3.......... -- -- 30 -- -- -- SCA - Lvl 5.......... -- -- 918 -- -- -- SCB - Lvl 3.......... -- -- 15 -- (1) -- SCB - Lvl 5.......... -- -- 574 -- -- -- SCC - Lvl 5.......... -- -- 874 -- -- -- Units Withdrawn, Units Outstanding Surrendered, and Annuitized End of Year ----------------------------- ----------------------------- Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, 2000 1999 2000 1999 ------------- ------------- ------------- ------------- FUTURITY SELECT FOUR CONTRACTS: SCA7 - Lvl 3......... -- -- 50 -- SCA8 - Lvl 3......... -- -- 1,915 -- SCA9 - Lvl 5......... -- -- 585 -- SCA - Lvl 3.......... -- -- 30 -- SCA - Lvl 5.......... -- -- 918 -- SCB - Lvl 3.......... -- -- 14 -- SCB - Lvl 5.......... -- -- 574 -- SCC - Lvl 5.......... -- -- 874 --
(a) For the period July 17, 2000 (commencement of operations) through December 31, 2000. -105- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F NOTES TO FINANCIAL STATEMENTS -- continued (6) INVESTMENT PURCHASES AND SALES The following table shows the aggregate cost of shares purchased and proceeds from the sales of shares for each Sub-Account for the year ended December 31, 2000:
Purchases Sales ------------- ----------- AIM Variable Insurance Fund, Inc. V.I. Capital Appreciation Fund............................ $ 46,879,880 $ 2,740,411 V.I. Growth Fund.......................................... 60,260,416 9,146,355 V.I. Growth and Income Fund............................... 52,663,068 7,639,832 V.I. International Equity Fund............................ 66,249,930 11,961,416 The Alger American Fund Growth Portfolio.......................................... 76,789,545 8,816,209 Income and Growth Portfolio............................... 48,074,516 6,256,427 Small Capitalization Portfolio............................ 22,684,010 2,938,665 Goldman Sachs Variable Insurance Trust VITSM CORE Large Cap Growth Fund.......................... 21,471,868 2,540,473 VITSM CORE Small Cap Equity Fund.......................... 4,903,689 560,959 VITSM CORE US Equity Fund................................. 14,672,940 8,605,510 Growth and Income Fund.................................... 4,105,409 1,152,029 International Equity Fund................................. 11,035,984 1,370,816 J.P. Morgan Series Trust II Equity Portfolio.......................................... 12,620,695 3,430,106 International Opportunities Portfolio..................... 8,671,601 1,749,550 Small Company Portfolio................................... 9,529,631 4,039,562 Lord Abbett Series Fund, Inc. Growth and Income Portfolio............................... 29,699,664 6,886,921 MFS/Sun Life Series Trust Capital Appreciation Series............................... 30,333,392 2,631,504 Emerging Growth Series.................................... 94,820,633 25,395,793 High Yield Series......................................... 24,062,493 7,422,306 Money Market.............................................. 9,275,547 10,336,262 Utilities Series.......................................... 37,338,599 4,217,961 Government Securities Series.............................. 18,057,323 9,726,136 Total Return Series....................................... 12,484,214 918,959 Massachusetts Investors Trust Series...................... 26,573,140 1,762,089 New Discovery Series...................................... 32,360,492 4,929,890 Massachusetts Investors Growth Stock Series............... 48,656,265 2,716,073 OCC Accumulation Trust Equity Portfolio.......................................... 18,036,839 7,961,799 Mid Cap Portfolio......................................... 13,814,310 3,671,584 Small Cap Portfolio....................................... 9,261,891 3,865,395 Managed Portfolio......................................... 1,962,964 741,755 Salomon Brothers Variable Series Funds, Inc. Variable Capital Fund..................................... 136,417 52,758 Variable Investors Fund................................... 147,107 226,796 Variable Strategic Bond Fund.............................. 1,004,159 3,113,784 Variable Total Return Fund................................ 815,171 3,016,338
-106- FUTURITY, FUTURITY II, FUTURITY FOCUS, FUTURITY ACCOLADE, FUTURITY FOCUS II, FUTURITY III AND FUTURITY SELECT FOUR SUB-ACCOUNTS INCLUDED IN SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F NOTES TO FINANCIAL STATEMENTS -- continued (6) INVESTMENT PURCHASES AND SALES -- continued
Purchases Sales ------------- ----------- Sun Capital Advisers Trust Sun Capital Money Market Fund............................. $ 82,822,500 $55,950,788 Sun Capital Investment Grade Bond Fund.................... 27,056,032 6,800,294 Sun Capital Real Estate Fund.............................. 9,983,659 1,330,761 Sun Capital Select Equity Fund............................ 12,329,426 517,975 Sun Capital Blue Chip Mid Cap Fund........................ 35,099,675 4,174,930 Sun Capital Investors Foundation Fund..................... 2,721,009 465,030 Sun Capital Davis Venture Value Fund...................... 10,969,680 447,503 Sun Capital Davis Financial Fund.......................... 2,413,084 123,128 Sun Capital Value Equity Fund............................. 302,045 7,366 Sun Capital Value Mid Cap Fund............................ 6,339,969 463,008 Sun Capital Value Small Cap Fund.......................... 3,261,318 126,758 Sun Capital Value Managed Fund............................ 117,714 6,339 Credit Suisse Institutional Emerging Markets Portolio................................. 5,153,649 3,682,016 International Equity Portfolio............................ 2,115,069 1,009,421 Post-Venture Capital Portfolio............................ 1,973,639 1,373,515 Small Company Growth Portfolio............................ 6,184,434 4,417,966
-107- INDEPENDENT AUDITORS' REPORT To the Participants in Futurity, Futurity II, Futurity Focus, Futurity Accolade, Futurity Focus II, Futurity III and Futurity Select Four and the Board of Directors of Sun Life Assurance Company of Canada (U.S.): We have audited the accompanying statement of condition of AIM V.I. Capital Appreciation Sub-Account, AIM V.I. Growth Sub-Account, AIM V.I. Growth and Income Sub-Account, AIM V.I. International Equity Sub-Account, the Alger American Growth Sub-Account, the Alger American Income and Growth Sub-Account, the Alger American Small Capitalization Sub-Account, Goldman Sachs VIT(SM) CORE Large Cap Growth Sub-Account, Goldman Sachs VIT(SM) CORE Small Cap Equity Sub-Account, Goldman Sachs VIT(SM) CORE U.S. Equity Sub-Account, Goldman Sachs Growth and Income Sub-Account, Goldman Sachs International Equity Sub-Account, J.P. Morgan U.S. Disciplined Equity Sub-Account, J.P. Morgan International Opportunities Sub-Account, J.P. Morgan Small Company Sub-Account, Lord Abbett Growth and Income Sub-Account, MFS/Sun Life Capital Appreciation Sub-Account, MFS/Sun Life Emerging Growth Sub-Account, MFS/Sun Life High Yield Sub-Account, MFS/Sun Life Money Market Sub-Account, MFS/Sun Life Utilities Sub-Account, MFS/Sun Life Government Securities Sub-Account, MFS/Sun Life Total Return Sub-Account, MFS/Sun Life Massachusetts Investors Trust Sub-Account, MFS/Sun Life New Discovery Sub-Account, MFS/Sun Life Massachusetts Investors Growth Stock Sub-Account, OCC Accumulation Equity Sub-Account, OCC Accumulation Mid Cap Sub-Account, OCC Accumulation Small Cap Sub-Account, OCC Accumulation Managed Sub-Account, Salomon Brothers Variable Capital Sub-Account, Salomon Brothers Variable Investors Sub-Account, Salomon Brothers Variable Strategic Bond Sub-Account, Salomon Brothers Variable Total Return Sub-Account, Sun Capital Advisers Trust Money Market Sub-Account, Sun Capital Advisers Trust Investment Grade Bond Sub-Account, Sun Capital Advisers Trust Real Estate Sub-Account, Sun Capital Advisers Trust Select Equity Sub-Account, Sun Capital Advisers Trust Blue Chip Mid Cap Sub-Account, Sun Capital Advisers Trust Investors Foundation Sub-Account, Sun Capital Advisers Trust Davis Venture Value Fund Sub-Account, Sun Capital Advisers Trust Davis Financial Sub-Account, Sun Capital Advisers Trust Value Equity Sub-Account, Sun Capital Advisers Trust Value Mid Cap Sub-Account, Sun Capital Advisers Trust Value Small Cap Sub-Account, Sun Capital Advisers Trust Value Managed Sub-Account, Credit Suisse Institutional Emerging Markets Sub-Account, Credit Suisse Institutional International Equity Sub-Account, Credit Suisse Institutional Post-Venture Capital Sub-Account and Credit Suisse Institutional Small Company Growth Sub-Account of Sun Life of Canada (U.S.) Variable Account F, (the "Sub-Accounts") as of December 31, 2000, the related statement of operations for the year then ended and the statements of changes in net assets for the years ended December 31, 2000 and 1999. 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 auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities held at December 31, 2000 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 December 31, 2000, the results of their operations and the changes in their net assets for the respective stated periods in conformity with accounting principles generally accepted in the United States of America. DELOITTE & TOUCHE LLP Boston, Massachusetts February 9, 2001 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) CONSOLIDATED STATEMENTS OF INCOME (in millions) For the years ended December 31, 2000, 1999 and 1998
2000 1999 1998 --------------- --------------- --------------- Revenues Premiums and annuity considerations $ 44.8 $ 45.1 $ 203.3 Net investment income 287.7 365.0 455.9 Net realized investment gains (losses) (19.9) 2.3 8.4 Fee and other income 297.8 217.5 179.1 --------------- --------------- --------------- Total revenues 610.4 629.9 846.7 --------------- --------------- --------------- Benefits and expenses Policyowner benefits 338.3 334.9 588.1 Other operating expenses 164.9 101.1 100.0 Amortization of deferred policy acquisition costs 123.8 67.8 88.8 --------------- --------------- --------------- Total benefits and expenses 627.0 503.8 776.9 --------------- --------------- --------------- Income (loss) from operations (16.6) 126.1 69.8 Interest expense 44.7 43.3 44.9 --------------- --------------- --------------- Income (loss) before income tax expense and discontinued operations (61.3) 82.8 24.9 --------------- --------------- --------------- Income tax expense (benefit): Federal (61.7) 28.8 10.9 State (2.1) 0.3 (0.1) --------------- --------------- --------------- Income tax expense (benefit) (63.8) 29.1 10.8 --------------- --------------- --------------- Net income from continuing operations 2.5 53.7 14.1 Net loss on disposal of subsidiaries, after tax - (12.3) - Discontinued operations - 1.0 0.1 --------------- --------------- --------------- Net income $ 2.5 $ 42.4 $ 14.2 =============== =============== ===============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL STATEMENTS. F-1 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) CONSOLIDATED BALANCE SHEETS (in millions except per share data) December 31, 2000 and 1999
ASSETS 2000 1999 ---------------- ---------------- Investments Available-for-sale fixed maturities at fair value (amortized cost of $2,454.5 and $2,685.4 in 2000 and 1999, respectively) $ 2,501.4 $ 2,677.3 Trading fixed maturities at fair value (amortized cost of $635.5 and $1.0 in 2000 and 1999, respectively) 648.2 1.0 Held-to-maturity fixed maturities at amortized cost 600.0 - Short-term investments 112.1 177.2 Mortgage loans 846.4 931.4 Real estate 77.7 95.1 Policy loans 41.5 40.7 Other invested assets 74.6 67.9 ---------------- ---------------- Total investments 4,901.9 3,990.6 Cash and cash equivalents 390.0 550.3 Accrued investment income 64.9 50.5 Deferred policy acquisition costs 762.0 686.3 Outstanding premiums 3.0 2.7 Other assets 61.7 81.2 Separate account assets 17,874.2 16,123.3 ---------------- ---------------- Total assets $ 24,057.7 $ 21,484.9 ================ ================ LIABILITIES Future contract and policy benefits $ 714.7 $ 729.3 Contractholder deposit funds and other policy liabilities 3,313.0 3,144.8 Unearned revenue 4.5 7.1 Accrued expenses and taxes 52.7 98.8 Deferred federal income taxes 41.4 77.7 Long-term debt payable to affiliates 565.0 565.0 Partnership Capital Securities 607.8 - Other liabilities 123.2 67.7 Separate account liabilities 17,874.2 16,123.3 ---------------- ---------------- Total liabilities 23,296.5 20,813.7 ---------------- ---------------- Commitments and contingencies - Note 15 STOCKHOLDER'S EQUITY Common stock, $1,000 par value - 10,000 shares authorized; 6,437 and 5,900 shares issued and outstanding in 2000 and 1999, respectively $ 6.4 $ 5.9 Additional paid-in capital 264.9 199.4 Accumulated other comprehensive income 38.6 7.1 Retained earnings 451.3 458.8 ---------------- ---------------- Total stockholder's equity 761.2 671.2 ---------------- ---------------- Total liabilities and stockholder's equity $ 24,057.7 $ 21,484.9 ================ ================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL STATEMENTS. F-2 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in millions) For the years ended December 31, 2000, 1999, and 1998
2000 1999 1998 Net income $ 2.5 $ 42.4 $ 14.2 ------------- ------------- ------------- Other comprehensive income Net unrealized holding gains (losses) on available-for-sale securities, net of tax 31.4 (68.6) (4.3) Other 0.1 (0.2) - ------------- ------------- -------------- 31.5 (68.8) (4.3) ------------- ------------- -------------- Comprehensive income $ 34.0 $ (26.4) $ 9.9 ============= ============= ==============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL STATEMENTS. F-3 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY (in millions) For the years ended December 31, 2000, 1999, and 1998
ACCUMULATED ADDITIONAL OTHER TOTAL COMMON STOCK PAID-IN COMPREHENSIVE RETAINED STOCKHOLDER'S CAPITAL INCOME EARNINGS EQUITY --------------- --------------- ----------------- -------------- ---------------- Balance at December 31, 1997 $ 5.9 $ 199.4 $ 80.2 $ 532.2 $ 817.7 Net income 14.2 14.2 Other comprehensive income (4.3) (4.3) Dividends to stockholder (50.0) (50.0) --------------- --------------- ----------------- -------------- ---------------- Balance at December 31, 1998 5.9 199.4 75.9 496.4 777.6 Net income 42.4 42.4 Other comprehensive income (68.8) (68.8) Dividends to stockholder (80.0) (80.0) --------------- --------------- ----------------- -------------- ---------------- Balance at December 31, 1999 5.9 199.4 7.1 458.8 671.2 Net income 2.5 2.5 Other comprehensive income 31.5 31.5 Common shares issued 0.5 0.5 Additional paid-in-capital 65.5 65.5 Dividends to stockholder (10.0) (10.0) --------------- --------------- ----------------- -------------- ---------------- Balance at December 31, 2000 $ 6.4 $ 264.9 $ 38.6 $ 451.3 $ 761.2 =============== =============== ================= ============== ================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL STATEMENTS. F-4 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) For the years ended December 31, 2000, 1999 and 1998
2000 1999 1998 ---------------- ---------------- ------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income from continuing operations $ 2.5 $ 53.7 $ 14.1 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of discount and premiums (0.8) (0.5) 0.2 Depreciation and amortization 2.8 3.7 2.2 Net realized (gains) losses on investments 19.9 (2.3) (8.4) Net unrealized gains on trading fixed maturities (12.7) - - Interest credited to contractholder deposits 195.5 216.4 238.7 Deferred federal income taxes (53.1) 14.5 (8.6) Cash dividends from subsidiaries - 19.3 - Changes in assets and liabilities: Deferred acquisition costs (83.0) (88.4) 208.7 Accrued investment income (5.7) 11.4 31.1 Other assets 15.0 (75.3) 78.5 Future contract and policy benefits (14.5) (7.5) (1,124.0) Other, net 38.7 72.3 896.6 ---------------- ---------------- ------------- Net cash provided by operating activities 104.6 217.3 329.1 ---------------- ---------------- ------------- CASH FLOWS FROM INVESTING ACTIVITIES: Sales, maturities and repayments of: Available-for-sale fixed maturities 1,001.9 1,240.9 1,665.6 Trading fixed maturities 186.9 - - Subsidiaries - 57.5 0.6 Other invested assets - - 0.9 Mortgage loans 208.5 385.7 316.9 Real estate 36.0 2.8 6.0 Purchases of: Available-for-sale fixed maturities (738.3) (615.2) (1,346.7) Trading fixed maturities (821.3) - - Equity securities - - (0.2) Other invested assets (2.2) (7.4) (11.4) Mortgage loans (121.9) (344.9) (123.0) Real estate (15.0) (1.6) (1.1) Changes in other investing activities, net 2.8 3.1 (14.4) Net change in policy loans (0.8) 1.9 (1.6) Net change in short-term investments 34.9 155.9 (38.2) ---------------- ---------------- ------------- Net cash provided by (used in) investing activities (228.5) 878.7 453.4 ---------------- ---------------- ------------- CASH FLOWS FROM FINANCING ACTIVITIES: Deposits to contractholder deposit funds 1,962.3 1,536.8 910.8 Withdrawals from contractholder deposit funds (1,988.7) (2,267.2) (1,803.2) Repayment of long-term debt and borrowed funds - - (110.1) Dividends paid to stockholder (10.0) (80.0) (50.0) ---------------- ---------------- ------------- Net cash provided by (used in) financing activities (36.4) (810.4) (1,052.5) ---------------- ---------------- ------------- Net change in cash and cash equivalents (160.3) 285.6 (270.0) Cash and cash equivalents, beginning of year 550.3 264.7 534.7 ---------------- ---------------- ------------- Cash and cash equivalents, end of year $ 390.0 $ 550.3 $ 264.7 ================ ================ ============= SUPPLEMENTAL CASH FLOW INFORMATION Interest paid $ 43.3 $ 43.3 $ 40.5 Income taxes paid 63.7 5.5 50.6
NON-CASH TRANSACTION On December 21, 2000, the Company's parent, Sun Life of Canada (U.S.) Holdings, Inc., transferred its 100% ownership in Sun Life of Canada (U.S.) Holdings General Partner, Inc. to the Company in exchange for 537 shares of the Company's common stock totaling $537,000 plus $65,520,000 of additional paid in capital. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL STATEMENTS F-5 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES GENERAL Sun Life Assurance Company of Canada (U.S.) (the "Company") was incorporated in 1970 as a life insurance company domiciled in the state of Delaware. As of December 31, 2000, the Company was licensed in 48 states and certain other territories. Effective January 31, 2001, the Company became authorized to do business in 49 states. In addition, the Company's wholly-owned insurance subsidiary, Sun Life Insurance and Annuity Company of New York, is licensed in New York. The Company and its subsidiaries are engaged in the sale of individual and group variable life insurance, individual fixed and variable annuities, group fixed and variable annuities, group pension contracts, guaranteed investment contracts, group life and disability insurance, and other asset management services. The Company is a wholly-owned subsidiary of Sun Life of Canada (U.S.) Holdings, Inc., which is an indirect wholly-owned subsidiary of Sun Life Assurance Company of Canada. Sun Life Assurance Company of Canada is a life insurance company domiciled in Canada which reorganized from a mutual life insurance company to a stock life insurance company on March 22, 2000. As a result of the demutualization, a new holding company, Sun Life Financial Services of Canada Inc. ("SLC"), is now the ultimate parent of Sun Life Assurance Company of Canada and the Company. BASIS OF PRESENTATION The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for stockholder-owned life insurance companies. For the year ended December 31, 1999, the Company filed its Annual Report on Form 10-K using audited statutory financial statements prepared in accordance with accounting practices prescribed or permitted by the Insurance Department of the State of Delaware, which is a comprehensive basis of accounting other than GAAP. During 2000 the Company changed its basis of accounting to GAAP and has restated the financial statements for the prior years ended December 31, 1999 and 1998 to conform with GAAP. See Note 13 for a reconciliation of statutory surplus to GAAP equity and statutory net income to GAAP net income. The consolidated financial statements include the accounts of the Company and its subsidiaries. The Company owns all of the outstanding shares of Sun Life Insurance and Annuity Company of New York, Sun Life of Canada (U.S.) Distributors, Inc., Sun Life Financial Services Limited, Sun Benefit Services Company, Inc., Sun Capital Advisers, Inc., Sun Life Finance Corporation, Sun Financial Group Advisers, Inc., Sun Life of Canada (U.S.) SPE 97-1, Inc., Sun Life of Canada (U.S.) Holdings General Partner, Inc., and Clarendon Insurance Agency, Inc. The results are also consolidated with Sun Life of Canada Funding, LLC, which is owned by a trust sponsored by the Company and Sun Life of Canada (U.S.) Limited Partnership I, for which Sun Life of Canada (U.S.) Holdings General Partner, Inc. is the sole general partner. All significant intercompany transactions have been eliminated in consolidation. F-6 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): Sun Life Insurance and Annuity Company of New York is engaged in the sale of individual fixed and variable annuity contracts and group life and disability insurance contracts in its state of domicile, New York. Sun Life of Canada (U.S.) Distributors, Inc. is a registered investment adviser and broker-dealer. Sun Life Financial Services Limited serves as the marketing administrator for the distribution of the offshore products of Sun Life Assurance Company of Canada (Bermuda), an affiliate. Sun Capital Advisers, Inc. is a registered investment adviser. Sun Life of Canada (U.S.) SPE 97-1 was organized for the purpose of engaging in activities incidental to securitizing mortgage loans. Sun Life of Canada (U.S.) Holdings General Partner, Inc. is the sole general partner of Sun Life of Canada (U.S.) Limited Partnership I. Clarendon Insurance Agency, Inc. is a registered broker-dealer that acts as the general distributor of certain annuity and life insurance contracts issued by the Company and its affiliates. Sun Benefit Services Company, Inc., Sun Life Finance Corporation and Sun Financial Group Advisers, Inc. are currently inactive. Sun Life of Canada Funding, LLC. was organized for the purpose of engaging in activities incidental to establishing the new guaranteed investment products of the Company. Sun Life of Canada (U.S.) Limited Partnership I was established to purchase subordinated debentures issued by the Company's parent, Sun Life of Canada (U.S.) Holdings, Inc., and to issue Partnership Capital Securities to an affiliated business trust, Sun Life of Canada (U.S.) Capital Trust I. In June 2000, the Company sold Sun Life Information Services Ireland, Limited to Sun Life Assurance Company of Canada. Sun Life Information Services Ireland, Limited provides information systems development services to Sun Life Assurance Company of Canada and its subsidiaries. During 1999, the Company sold two of its subsidiaries, Massachusetts Casualty Insurance Company ("MCIC") (sold February 1999) and New London Trust F.S.B. ("NLT") (sold October 1999). MCIC is a life insurance company that issues only individual disability income policies. NLT is a federally chartered savings bank, which grants commercial, residential real estate and installment loans. The results of operations of MCIC and NLT are reported as discontinued operations. USE OF ESTIMATES The preparation of financial statements in conformity with GAAP 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 amount of revenues and expenses during the reporting period. The most significant estimates are those used in determining deferred policy acquisition costs, investment allowances and the liabilities for future policyholder benefits. Actual results could differ from those estimates. RECLASSIFICATIONS Certain amounts in the prior years' financial statements have been reclassified to conform to the 2000 presentation. FINANCIAL INSTRUMENTS In the normal course of business, the Company enters into transactions involving various types of financial instruments, including cash and cash equivalents, investments such as fixed maturities, mortgage loans and equity securities, off balance sheet financial instruments, debt, loan commitments and financial guarantees. These instruments involve credit risk and also may be subject to risk of loss due to interest rate fluctuation. The Company evaluates and monitors each financial instrument individually and, when appropriate, obtains collateral or other security to minimize losses. Financial instruments are more fully described in Note 6. F-7 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): CASH AND CASH EQUIVALENTS Cash and cash equivalents primarily include cash, commercial paper, money market investments, and short-term bank participations. All such investments have maturities of three months or less and are considered cash equivalents for purposes of reporting cash flows. INVESTMENTS The Company accounts for its investments in accordance with Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities." At the time of purchase, fixed maturity securities are classified based on intent, as held-to-maturity, trading, or available-for-sale. In order for the security to be classified as held-to- maturity, the Company must have positive intent and ability to hold the securities to maturity. Securities held-to-maturity are stated at cost adjusted for amortization of premiums, and accretion of discounts. Securities that are bought and held principally for the purpose of selling them in the near term are classified as trading. Securities that do not meet this criterion are classified as available-for-sale. Available-for- sale securities are carried at aggregate fair value with changes in unrealized gains or losses reported net of policyholder related amounts and of deferred income taxes in a separate component of other comprehensive income. Trading securities are carried at aggregate fair value with changes in unrealized gains or losses reported as a component of net investment income. Fair values for publicly traded securities are obtained from external market quotations. For privately placed fixed maturities, fair values are estimated by taking into account prices for publicly traded securities of similar credit risk, maturities repayment and liquidity characteristics. All security transactions are recorded on a trade date basis. The Company's accounting policy for impairment requires recognition of an other than temporary impairment charge on a security if it is determined that the Company is unable to recover all amounts due under the contractual obligations of the security. In addition, for securities expected to be sold, an other than temporary impairment charge is recognized if the Company does not expect the fair value of a security to recover to cost or amortized cost prior to the expected date of sale. Once an impairment charge has been recorded, the Company then continues to review the other than temporarily impaired securities for additional impairment, if necessary. Mortgage loans are stated at unpaid principal balances, net of provisions for estimated losses. Mortgage loans acquired at a premium or discount are carried at amortized values net of provisions for estimated losses. Mortgage loans, which include primarily commercial first mortgages, are diversified by property type and geographic area throughout the United States. Mortgage loans are collateralized by the related properties and generally are no more than 75% of the properties' value at the time that the original loan is made. F-8 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): A loan is recognized as impaired when it is probable that the principal or interest is not collectible in accordance with the contractual terms of the loan. Measurement of impairment is based on the present value of expected future cash flows discounted at the loan's effective interest rate, or at the loan's observable market price. A specific valuation allowance is established if the fair value of the impaired loan is less than the recorded amount. Loans are also charged against the allowance when determined to be uncollectible. The allowance is based on a continuing review of the loan portfolio, past loss experience and current economic conditions, which may affect the borrower's ability to pay. While management believes that it uses the best information available to establish the allowance, future adjustments to the allowance may become necessary if economic conditions differ from the assumptions used in making the evaluation. Real estate investments are held for the production of income or held-for- sale. Real estate investments held for the production of income are carried at the lower of cost adjusted for accumulated depreciation or fair value. Depreciation of buildings and improvements is calculated using the straight-line method over the estimated useful life of the property, generally 40 to 50 years. Real estate investments held-for-sale are primarily acquired through foreclosure of mortgage loans. The cost of real estate that has been acquired through foreclosure is the estimated fair value less estimated costs to dispose at the time of foreclosure. Real estate investments are diversified by property type and geographic area throughout the United States. Policy loans are carried at the amount of outstanding principal balance not in excess of net cash surrender values of the related insurance policies. Other invested assets consist primarily of leveraged leases and tax credit partnerships. The Company uses derivative financial instruments including swaps and options as a means of hedging exposure to interest rate, currency and equity price risk. Investment income is recognized on an accrual basis. Realized gains and losses on the sales of investments are recognized in operations at the date of sale and are determined using the specific cost identification method. When an impairment of a specific investment or a group of investments is determined to be other than temporary, a realized investment loss is recorded. Changes in the provision for estimated losses on mortgage loans and real estate are included in net realized investment gains and losses. Interest income on loans is recorded on the accrual basis. Loans are placed in a non-accrual status when management believes that the borrower's financial condition, after giving consideration to economic and business conditions and collection efforts, is such that collection of principal and interest is doubtful. When a loan is placed in non-accrual status, all interest previously accrued is reversed against current period interest income. Interest accruals are resumed on such loans only when they are brought fully current with respect to principal and interest, have performed on a sustained basis for a reasonable period of time, and when, in the judgment of management, the loans are estimated to be fully collectible as to both principal and interest. F-9 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): DEFERRED POLICY ACQUISITION COSTS Acquisition costs consist of commissions, underwriting and other costs, which vary with and are primarily related to the production of new business. Acquisition costs related to investment-type contracts, primarily deferred annuity and guaranteed investment contracts, and universal and variable life products are deferred and amortized with interest in proportion to the present value of estimated gross profits to be realized over the estimated lives of the contracts. Estimated gross profits are composed of net investment income, net realized investment gains and losses, life and variable annuity fees, surrender charges and direct variable administrative expenses. This amortization is reviewed annually and adjusted retrospectively when the Company revises its estimate of current or future gross profits to be realized from this group of products, including realized and unrealized gains and losses from investments. Acquisition costs related to fixed annuities and other life insurance products are deferred and amortized; generally in proportion to the ratio of annual revenue to the estimated total revenues over the contract periods based upon the same assumptions used in estimating the liability for future policy benefits. Deferred acquisition costs for each life product are reviewed to determine if they are recoverable from future income, including investment income. If such costs are determined to be unrecoverable, they are expensed at the time of determination. Although realization of deferred policy acquisition costs is not assured, the Company believes it is more likely than not that all of these costs will be realized. The amount of deferred policy acquisition costs considered realizable, however, could be reduced in the near term if the estimates of gross profits or total revenues discussed above are reduced. The amount of amortization of deferred policy acquisition costs could be revised in the near term if any of the estimates discussed above are revised. OTHER ASSETS Property, equipment, leasehold improvements and capitalized software costs which are included in other assets are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are provided using the straight-line or accelerated method over the estimated useful lives of the related assets, which generally range from 3 to 30 years. Amortization of leasehold improvements is provided using the straight-line method over the lesser of the term of the leases or the estimated useful life of the improvements. Reinsurance receivables from reinsurance ceded are also included in other assets. F-10 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): POLICY LIABILITIES AND ACCRUALS Future policy benefits are liabilities for life, health and annuity products. Such liabilities are established in amounts adequate to meet the estimated future obligations of policies in force. Future policy benefits for individual life insurance and annuity policies are computed using interest rates ranging from 4.5% to 5.5% for life insurance and 6.0% to 11.3% for annuities. The liabilities associated with traditional life insurance, annuity and disability insurance products are computed using the net level premium method based on assumptions about future investment yields, mortality, morbidity and persistency. The assumptions used are based upon both the Company and its affiliates' experience and industry standards. Estimated liabilities are established for group life and health policies that contain experience-rating provisions. Contractholder deposit funds consist of policy values that accrue to the holders of universal life-type contracts and investment-related products such as deferred annuities and guaranteed investment contracts. The liabilities are determined using the retrospective deposit method and consist of net deposits and investment earnings less administrative charges. The liability is before the deduction of any applicable surrender charges. Other policy liabilities include liabilities for policy and contract claims. These amounts consist of the estimated amount payable for claims reported but not yet settled and an estimate of claims incurred but not reported. The amount reported is based upon historical experience, adjusted for trends and current circumstances. Management believes that the recorded liability is sufficient to provide for the associated claims adjustment expenses. Revisions of these estimates are included in operations in the year such refinements are made. REVENUE AND EXPENSES Premiums for traditional individual life and annuity products are considered revenue when due. Premiums related to group life and group disability insurance are recognized as revenue pro-rata over the contract period. The unexpired portion of these premiums is recorded as unearned premiums. Revenue from universal life-type products and investment-related products includes charges for cost of insurance (mortality), initiation and administration of the policy and surrender charges. Revenue is recognized when the charges are assessed except that any portion of an assessment that relates to services to be provided in future years is deferred and recognized over the period during which the services are provided. Benefits and expenses, other than deferred policy acquisition costs, related to traditional life, annuity, and disability contracts, including group policies, are recognized when incurred in a manner designed to match them with related premium revenue and spread income recognition over expected policy lives. For universal life-type and investment-type contracts, benefits include interest credited to policyholders' accounts and death benefits in excess of account values, which are recognized as incurred. F-11 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): INCOME TAXES The Company and its subsidiaries participate in a consolidated federal income tax return with Sun Life Assurance Company of Canada - U.S. Operations Holdings, Inc. and other affiliates. Deferred income taxes are generally recognized when assets and liabilities have different values for financial statement and tax reporting purposes, and for other temporary taxable and deductible differences as defined by Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes". These differences result primarily from policy reserves, policy acquisition expenses and unrealized gains or losses on investments, and are generally not chargeable with liabilities that arise from any other business of the Company. SEPARATE ACCOUNTS The Company has established separate accounts applicable to various classes of contracts providing for variable benefits. Separate account assets are subject to general account claims only to the extent the value of such assets exceeds the separate account liabilities. Contracts for which funds are invested in separate accounts include variable life insurance and individual and group qualified and non-qualified variable annuity contracts. Assets and liabilities of the separate accounts, representing net deposits and accumulated net investment earnings less fees, held primarily for the benefit of contractholders, are shown as separate captions in the financial statements. Assets held in the separate accounts are carried at market value and the investment risk of such securities is retained by the contractholder. NEW ACCOUNTING PRONOUNCEMENTS In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities", which establishes accounting and reporting standards for derivative instruments. SFAS No. 133 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities including fair value hedges and cash flow hedges. All derivatives, whether designated in hedging relationships or not, will be required to be recorded on the balance sheet at fair value. For a derivative that does not qualify as a hedge, changes in fair value will be recognized in earnings. In June 1999, the FASB issued SFAS No. 137, "Accounting for Derivative Instruments and Hedging Activities -- Deferral of the Effective Date of FASB Statement No. 133." SFAS No. 137 delays the effective date of SFAS No. 133 for all fiscal quarters until fiscal years beginning after June 15, 2000. In June 2000, the FASB issued SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities", which amended SFAS No. 133. SFAS No. 138 amended SFAS No. 133 so that for interest rate hedges, a company may designate as the hedged risk, the risk of changes only in a benchmark interest rate. Also, credit risk is newly defined as the company-specific spread over the benchmark interest rate and may be hedged separately from, or in combination with, the benchmark interest rate. F-12 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): Initial application of SFAS No. 133, as amended, for the Company will begin January 1, 2001. The Company estimates that at January 1, 2001, it will record $8,600,000 as a cumulative transition adjustment that will increase earnings relating to derivatives not designated as hedges prior to adoption of SFAS 133. On January 1, 1999, the Company adopted AICPA SOP 98-1, "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use." This SOP provides guidance for determining whether costs of software developed or obtained for internal use should be capitalized or expensed as incurred. In the past, the Company has expensed such costs as they were incurred. The adoption of SOP 98-1, resulted in an increase in pre-tax income of $6,232,000 for the year ended December 31, 1999. In July 2000, the Emerging Issues Task Force (EITF) reached consensus on Issue No. 99-20, "Recognition of Interest Income and Impairment on Certain Investments". This pronouncement requires investors in certain asset-backed securities to record changes in their estimated yield on a prospective basis and to evaluate these securities for an other-than-temporary decline in value. This consensus is effective for financial statements with fiscal quarters beginning after December 15, 2000. While the Company is currently in the process of quantifying the impact of EITF No. 99-20, the consensus provisions are not expected to have a material impact on the Company's financial condition or results of operations. In September 2000, the FASB issued SFAS 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities" which replaces SFAS No. 125, "Accounting for Transfers and Services of Financial Assets and Extinguishment of Liabilities". This standard revises the methods for accounting for securitizations and other transfers of financial assets and collateral as outlined in SFAS No. 125, and requires certain additional disclosures. For transfers and servicing of financial assets and Extinguishment of liabilities, this standard will be effective for the Company's June 30, 2001 unaudited financial statements. However, for disclosures regarding securitizations and collateral, as well as recognition and reclassification of collateral, this standard will be effective for the Company's December 31, 2000 financial statements. The Company is currently evaluating the financial statement impact of the adoption of this standard, however, it does not expect the adoption of this standard to have a material effect on its financial position or results of operations. F-13 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 2. SIGNIFICANT TRANSACTIONS WITH AFFILIATES Effective October 1, 1998, the Company terminated a reinsurance agreement with Sun Life Assurance Company of Canada resulting in a decrease in income from operations to the Company of approximately $64,000,000 in 1998. On February 11, 1999, two notes previously issued to the Company by Massachusetts Financial Services Company ("MFS"), an affiliate, were combined into a new note with a February 11, 2000 maturity date. The original notes were each issued for $110,000,000. One note was issued on February 11, 1998 at an interest rate of 6.0% and a due date of February 11, 1999. The other note was issued on December 22, 1998 at an interest rate of 5.55% and a due date of February 11, 1999. These two notes and an additional $10,000,000 were combined into a new note of $230,000,000 with a floating interest rate based on the six-month LIBOR rate plus 25 basis points. The $230,000,000 note was repaid to the Company on December 21,1999. On December 31, 1998, the Company had an additional $20,000,000 investment in notes issued by MFS, scheduled to mature in 2000. These notes were repaid to the Company on December 21, 1999. On January 14, 2000, the Company purchased $200,000,000 of notes from MFS. On November 1, 2000, MFS repaid $100,000,000 of these notes. On February 5, 1999, the Company sold MCIC to an unaffiliated company. The net proceeds of this sale were $33,965,000. The Company realized a loss of $25,465,000 net of a $14,482,000 tax benefit. On October 29, 1999, the Company sold NLT to an unaffiliated company for $30,254,000. The Company realized a gain of $13,170,000 after taxes of $10,186,000. On December 22, 1999, the Company acquired twenty-eight mortgages from Sun Life Assurance Company of Canada for a total cost of $118,092,000. On June 27, 2000, the Company sold Sun Life Information Services Ireland, Limited to Sun Life Assurance Company of Canada. The Company realized a pretax gain of $451,000 on the sale. On December 21, 2000, the Company's parent, Sun Life of Canada (U.S.) Holdings, Inc., transferred its ownership in all 200 shares issued and outstanding of Sun Life of Canada (U.S.) Holdings General Partner, Inc. to the Company in exchange for 537 shares of the Company's common stock totaling $537,000 plus $65,520,000 of additional paid in capital. As a result of the acquisition of Sun Life of Canada (U.S.) Holdings General Partner, Inc. on December 21, 2000, and its ownership interest in Sun Life of Canada (U.S.) Limited Partnership I, the Company became the owner of a $600,000,000 8.526% subordinated debenture due May 6, 2027 issued by the Company's parent, Sun Life of Canada (U.S.) Holdings, Inc. The Company also assumed the liability of the partnership capital securities issued to Sun Life of Canada (U.S.) Capital Trust I, a Delaware business Trust sponsored by the Company's parent. Partnership capital securities issued of $600,010,000 accrue interest at 8.526% and have no scheduled maturity date. These partnership capital securities, which represent the limited partner interest of Sun Life (U.S.) Limited Partnership I, may be redeemed on or after May 6, 2027. The Company is accounting for the acquisition of Sun Life of Canada (U.S.) General Partner, Inc. using the purchase method of accounting. The attached proforma statements of income for the years ended December 31, 2000 and 1999 illustrate the Company's results of operations as if the acquisition of Sun Life of Canada (U.S.) Holdings General Partner, Inc. took place at the beginning of the year, respectively. F-14
Proforma Proforma 2000 1999 --------------- -------------- Revenues Premiums and annuity considerations $ 44.8 $ 45.1 Net investment income 338.8 419.8 Net realized investment gains (losses) (19.9) 2.3 Fee and other income 297.9 217.5 --------------- -------------- Total revenues 661.6 684.7 --------------- -------------- Benefits and expenses Policyowner benefits 338.3 334.9 Other operating expenses 164.9 101.1 Amortization of deferred policy acquisition costs 123.8 67.8 --------------- -------------- Total benefits and expenses 627.0 503.8 --------------- -------------- Income (loss) from operations 34.6 180.9 Interest expense 94.5 94.5 --------------- -------------- Income (loss) before income tax expense and discontinued operations (59.9) 86.4 --------------- -------------- Income tax expense (benefit): Federal (61.7) 30.0 State (2.1) 0.4 --------------- -------------- Income tax expense (benefit) (63.8) 30.4 --------------- -------------- Net income from continuing operations 3.9 56.0 Net loss on disposal of subsidiaries, after tax - (12.3) Discontinued operations - 1.0 --------------- -------------- Net income $ 3.9 $ 44.7 =============== ==============
F-15 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 2. SIGNIFICANT TRANSACTIONS WITH AFFILIATES (CONTINUED) Dividends in the amounts of $10,000,000, $80,000,000, and $50,000,000, were declared and paid by the Company to its parent, Sun Life of Canada (U.S.) Holdings, Inc. during 2000, 1999, and 1998, respectively. The Company and its subsidiaries have management services agreements with Sun Life Assurance Company of Canada which provide that Sun Life Assurance Company of Canada will furnish, as requested, personnel as well as certain services and facilities on a cost-reimbursement basis. Expenses under these agreements amounted to approximately $31,857,416 in 2000, $30,745,000 in 1999, and $17,381,000 in 1998. As more fully described in Note 7, the Company has been involved in several reinsurance transactions with Sun Life Assurance Company of Canada. The Company has accrued $4,259,000 for unpaid interest on surplus notes at December 31, 2000 and 1999, respectively. The Company expensed $43,266,000, $43,266,000, and $44,903,000 for interest on surplus notes and notes payable for the years ended December 31, 2000, 1999 and 1998, respectively. On December 21, 2000, the Company's parent, Sun Life of Canada (U.S.) Holdings, Inc., transferred its $350,000,000 Sun Life Assurance Company of Canada subordinated note to Sun Canada Financial Co., an affiliate, in the form of additional capitalization. On the same day, Sun Canada Financial Co. transferred its ownership in the Company's surplus notes totaling $315,000,000 to Sun Life of Canada (U.S.) Holdings, Inc. in the form of a dividend. As a result, the Company had $565,000,000 of surplus notes issued to its parent, Sun Life of Canada (U.S.) Holdings Inc., as of December 31, 2000. The following table lists the details of the surplus notes outstanding (in 000's):
MATURITY PRINCIPAL RATE ---------------------------------- Sun Life of Canada (U.S.) Holdings, Inc. 12/15/07 $150,000 6.625% Sun Life of Canada (U.S.) Holdings, Inc. 12/15/15 150,000 7.250% Sun Life of Canada (U.S.) Holdings, Inc. 12/15/15 7,500 6.125% Sun Life of Canada (U.S.) Holdings, Inc. 12/15/07 7,500 5.750% Sun Life of Canada (U.S.) Holdings, Inc. 11/06/27 250,000 8.625% ------------ Total $565,000 ============
F-16 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 3. INVESTMENTS FIXED MATURITIES The amortized cost and fair value of fixed maturities were as follows (in 000's):
DECEMBER 31, 2000 GROSS GROSS ESTIMATED AMORTIZED UNREALIZED UNREALIZED FAIR COST GAINS LOSSES VALUE -------------------------------------------------------- Available-for-sale fixed maturities: United States treasury securities, U.S. Government and agency securities $ 183,733 $ 8,286 $ (68) $ 191,951 States, provinces and political subdivisions 22,515 653 - 23,168 Mortgage-backed securities 123,113 2,132 (317) 124,928 Public utilities 286,744 12,805 (5,914) 293,635 Transportation 245,675 13,406 (3,821) 255,260 Finance 299,440 8,141 (5,761) 301,820 Corporate 1,293,302 52,597 (35,271) 1,310,628 ------------------------------------------------------------ Total available-for-sale fixed maturities $ 2,454,522 $ 98,020 $ (51,152) $ 2,501,390 ============================================================ Trading fixed maturities: United States treasury securities, U.S. Government and agency securities $ 500 $ 1 $ - $ 501 Mortgage-backed securities 18,281 556 (156) 18,681 Public utilities 30,918 1,293 (243) 31,968 Transportation 97,900 3,218 (266) 100,852 Finance 159,250 5,470 (348) 164,372 Corporate 328,662 9,116 (5,975) 331,803 ------------------------------------------------------------ Total trading fixed securities $ 635,511 $ 19,654 $ (6,988) $ 648,177 ============================================================ Held-to-maturity fixed maturities: Sun Life of Canada (U.S.) Holdings, Inc., 8.526% subordinated debt, due 2027 $ 600,000 $ - $ (53,888) $ 546,112 ------------------------------------------------------------ Total held-to-maturity fixed maturities $ 600,000 $ - $ (53,888) $ 546,112 ============================================================ DECEMBER 31, 1999 GROSS GROSS ESTIMATED AMORTIZED UNREALIZED UNREALIZED FAIR COST GAINS LOSSES VALUE --------------------------------------------------------- Available-for-sale fixed maturities: United States treasury securities, U.S. Government and agency securities $ 107,272 $ 2,104 $ (3,191) $ 106,185 States, provinces and political subdivisions 32,593 15 (161) 32,447 Mortgage-backed securities 98,903 1,225 (541) 99,587 Public utilities 360,672 7,954 (9,780) 358,846 Transportation 327,544 8,585 (4,258) 331,871 Finance 281,303 4,632 (6,935) 279,000 Corporate 1,477,105 22,851 (30,556) 1,469,400 ------------------------------------------------------------ Total available-for-sale fixed maturities $ 2,685,392 $ 47,366 $ (55,422) $ 2,677,336 ============================================================ Trading fixed maturities: United States treasury securities, U.S. Government and agency securities $ 1,000 $ 2 $ - $ 1,002 ------------------------------------------------------------ Total trading fixed securities $ 1,000 $ 2 $ - $ 1,002 ============================================================
F-17 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 3. INVESTMENTS (CONTINUED) The amortized cost and estimated fair value by maturity periods for fixed maturity investments are shown below (in 000's). Actual maturities may differ from contractual maturities on mortgage-backed securities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties, or the Company may have the right to put or sell the obligations back to the issuers.
DECEMBER 31, 2000 AMORTIZED ESTIMATED COST FAIR VALUE ------------------------------------- Maturities of available-for-sale fixed securities: Due in one year or less $ 190,837 $ 187,267 Due after one year through five years 949,281 959,260 Due after five years through ten years 537,068 563,360 Due after ten years 777,336 791,503 ------------------------------------- $ 2,454,522 $ 2,501,390 ===================================== Maturities of trading fixed securities: Due in one year or less $ 500 $ 501 Due after one year through five years 186,541 190,300 Due after five years through ten years 266,573 270,476 Due after ten years 181,897 186,900 ------------------------------------- $ 635,511 $ 648,177 ===================================== Maturities of held-to-maturity securities: Due after ten years $ 600,000 $ 546,112 =====================================
Gross gains of $9,056,000, $12,496,000 and $25,752,000 and gross losses of $24,018,000, $7,646,000, and $1,439,000 were realized on the voluntary sale of fixed maturities for the years ended December 31, 2000, 1999, and 1998, respectively. Fixed maturities with an amortized cost of approximately $2,991,000 and $3,009,000 at December 31, 2000 and 1999 respectively, were on deposit with Federal and State governmental authorities as required by law. No fixed maturities have been pledged to collateralize various liabilities at December 31, 2000 and 1999, respectively. F-18 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 3. INVESTMENTS (CONTINUED) As of December 31, 2000 and 1999, 98% and 94%, respectively, of the Company's fixed maturities were investment grade. Investment grade securities are those that are rated "BBB" or better by nationally recognized rating agencies. During 2000, the Company incurred realized losses totalling $14,956,000 for other than temporary impairment of value of some of its fixed maturities after determining that not all of the year 2000 unrealized losses are temporary in nature. Also in 2000, the Company stopped accruing income on its holdings of an issuer that declared bankruptcy. $243,000 of interest income on these holdings was not accrued. All of the Company's securities were income producing for the years ended December 31, 1999 and 1998. MORTGAGE LOANS AND REAL ESTATE The Company invests in commercial first mortgage loans and real estate throughout the United States. Investments are diversified by property type and geographic area. Mortgage loans are collateralized by the related properties and generally are no more than 75% of the properties' value at the time that the original loan is made. Real estate investments classified as held-for-sale have been obtained primarily through foreclosure. The carrying value of mortgage loans and real estate investments net of applicable reserves and accumulated depreciation on real estate were as follows (in 000's):
DECEMBER 31, 2000 1999 --------------------------------------- Total mortgage loans $ 846,439 $ 931,351 ======================================= Real estate: Held-for-sale 7,483 7,804 Held for production of income 70,239 87,290 --------------------------------------- Total real estate $ 77,722 $ 95,094 =======================================
Accumulated depreciation on real estate was $14,879,000 and $18,529,000 at December 31, 2000 and 1999, respectively. F-19 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 3. INVESTMENTS (CONTINUED): The Company monitors the condition of the mortgage loans in its portfolio. In those cases where mortgages have been restructured, mortgage loans' values are impaired or mortgage loans' values are impaired but they are performing, appropriate allowances for losses have been made. The Company has restructured mortgage loans, impaired mortgage loans and impaired but performing mortgage loans totaling $18,165,000 and $33,577,000 at December 31, 2000 and 1999, respectively, against which there are allowances for losses of $4,675,000 and $7,750,000, respectively. During 2000, non-cash investing activities included real estate acquired through foreclosure of mortgage loans, which had a fair value of $1,500,000. The investment valuation allowances, which have been deducted in arriving at investment carrying values as presented in the consolidated balance sheets, were as follows (in 000's):
BALANCE AT BALANCE AT JANUARY 1, ADDITIONS SUBTRACTIONS DECEMBER 31, --------------------------------------------------------------- 2000 Mortgage loans $ 7,750 $ 3,837 $ (6,912) $ 4,675 Real estate 1,723 - (1,723) - 1999 Mortgage loans $ 6,600 $ 4,045 $ (2,895) $ 7,750 Real estate 1,250 1,379 (906) 1,723
Mortgage loans and real estate investments comprise the following property types and geographic regions (in 000's):
DECEMBER 31, 2000 1999 ------------------------------- Property Type: Office building $ 328,976 $ 357,466 Residential 47,805 58,546 Retail 379,326 433,970 Industrial/warehouse 153,580 156,204 Other 19,149 29,732 Valuation allowances (4,675) (9,473) ------------------------------- Total $ 924,161 $ 1,026,445 ===============================
F-20 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 3. INVESTMENTS (CONTINUED):
DECEMBER 31, 2000 1999 ------------------------------- Geographic region: Arizona $ 19,809 $ 16,155 California 87,607 117,355 Colorado 8,636 13,019 Connecticut 38,401 25,229 Delaware 15,131 15,919 Florida 36,179 43,718 Georgia 46,895 52,178 Indiana 13,496 19,174 Kentucky 14,941 12,225 Maryland 20,849 10,826 Massachusetts 98,377 99,661 Michigan 45,948 69,545 Nevada 5,308 5,532 New Jersey 16,653 18,806 New York 69,529 65,107 North Carolina 11,009 10,111 Ohio 35,966 43,947 Pennsylvania 132,615 159,328 Tennessee 12,889 13,385 Texas 22,380 17,924 Utah 11,171 11,583 Virginia 20,911 21,731 Washington 60,560 68,657 All other 83,576 104,803 Valuation allowances (4,675) (9,473) ------------------------------- Total $ 924,161 $ 1,026,445 ===============================
F-21 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 3. INVESTMENTS (CONTINUED): At December 31, 2000, scheduled mortgage loan maturities were as follows (000's): 2001 $ 81,373 2002 53,711 2003 31,245 2004 50,392 2005 89,651 Thereafter 540,067 ------------------- Total $ 846,439 ===================
Actual maturities could differ from contractual maturities because borrowers may have the right to prepay obligations with or without prepayment penalties and loans may be refinanced. The Company has made commitments of mortgage loans on real estate and other loans into the future. The outstanding commitments for these mortgages amount to $45,119,000 and $15,911,000 at December 31, 2000 and 1999, respectively. During 2000, the Company sold commercial mortgage loans in a securitization transaction. In the transaction, the Company retained servicing responsibilities, a Class B and a Class I interest only certificate. The Class B certificate is a subordinated interest. The Company receives annual servicing fees, before expenses, of 0.1 percent of the outstanding balance and rights to future cash flows arising after the investors in the securitization trust have received the return for which they contracted. The investors in the securitization trust have no recourse to the Company's other assets for failure of debtors to pay when due. The value of the Company's retained interest is subject to credit, and interest rate risk on the transferred financial assets. The Company recognized a pretax gain of $763,000 on the securitization transaction. Key economic assumptions used in measuring the retained interests at the date of securitization resulting from securitizations completed during the year were as follows:
CLASS B CLASS I Prepayment speed 0 0 Weighted average life in years 7.25 4.54 Expected credit losses 0 0 Residual cash flows discount rate 7.798 8.844 Treasury rate interpolated for average life 4.97 4.96 Spread over treasuries 2.83% 3.88% Duration in years 5.201 3.611
F-22 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 3. INVESTMENTS (CONTINUED): Key economic assumptions and the sensitivity of the current fair value of cash flows in those assumptions are as follows (in 000's):
COMMERCIAL MORTGAGES CLASS B CLASS I ---------- ---------- Carrying amount of retained interests $ 2,737 $ 1,634 Fair value of retained interests 2,875 1,716 Weighted average life in years 7.254 4.543 EXPECTED CREDIT LOSSES Impact on fair value of .025% of adverse change 4 36 Impact on fair value of .05% of adverse change 8 73 RESIDUAL CASH FLOWS DISCOUNT RATE Impact on fair value of .5% of adverse change 75 31 Impact on fair value of 1% of adverse change 150 62
The total principal amount of the commercial mortgage loans was $32,035,000 at December 31, 2000, none of which were 60 days or more past due. There were no net credit losses incurred relating to the commercial mortgage loans at the date of the securitization and at December 31, 2000. SECURITIES LENDING The Company has a securities lending program operated on its behalf by the Company's primary custodian, Chase Manhattan of New York. The custodian has indemnified the Company against losses arising from this program. There were no securities out on loan at December 31, 2000 and 1999, respectively. The Company requires collateral at 102% of the value of securities loaned. As of December 31, 2000 and 1999, the Company had received no collateral for securities on loan. The income resulting from this program was $48,000, $37,000 and $135,000 for the years ended December 31, 2000, 1999 and 1998, respectively. LEVERAGED LEASES The Company is a lessor in a leverage lease agreement entered into on October 21, 1994, under which equipment having an estimated economic life of 25-40 years was leased for a term of 9.78 years. The Company's equity investment represented 22.9% of the purchase price of the equipment. The balance of the purchase price was furnished by third-party long-term debt financing, collateralized by the equipment and non-recourse to the Company. At the end of the lease term, the master Lessee may exercise a fixed price purchase option to purchase the equipment. The Company's net investment in leveraged leases is composed of the following elements (in 000's): F-23 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 3. INVESTMENTS (CONTINUED):
YEAR ENDED DECEMBER 31, 2000 1999 --------------- --------------- Lease contracts receivable $ 57,623 $ 69,766 Less: non-recourse debt (57,607) (69,749) --------------- --------------- Net Receivable 16 17 Estimated residual value of leased assets 41,150 41,150 Less: unearned and deferred income (6,718) (7,808) --------------- --------------- Investment in leverage lease 34,448 33,359 Less: fees (88) (113) --------------- --------------- Net investment in leverage leases $ 34,360 $ 33,246 =============== ===============
DERIVATIVES The Company uses derivative financial instruments for risk management purposes to hedge against specific interest rate risk, to alter investment rate exposures arising from mismatches between assets and liabilities, and to minimize the Company's exposure to fluctuations in interest rates, foreign currency exchange rates and general market conditions. The derivative financial instruments used by the Company include swaps and options. The Company does not hold or issue any derivative instruments for trading purposes. SWAPS Swap agreements are contracts with other parties to exchange at specified intervals, the difference between fixed and floating rate interest amounts based upon a notional principal amount. No cash is exchanged at the outset of the contract and no principal payments are made by either party. A single net payment is usually made by one counter-party at each interest payment date. The Company enters into interest rate swap agreements to hedge against exposure to interest rate fluctuations. Because the underlying principal is not exchanged, the Company's maximum exposure to counterparty credit risk is the difference in payments exchanged. The net payable/receivable is recognized over the life of the swap contract as an adjustment to net investment income. In 2000, the Company launched a new guaranteed investment contract program. The purpose of the program was to increase market place and interest for these products. Each deal is highly individualized but typically involves the issuance of foreign currency denominated contracts backed by cross currency swaps or equity linked cross currency swaps. The combination of these swaps with interest rate swaps allows the Company to lock in U.S. dollar fixed rate payments for the life of the note. The net increase (decrease) in net investment income related to interest rate swaps was $166,000, ($2,513,000) and ($1,686,000) for the years ended December 31, 2000, 1999 and 1998, respectively. The Company did not employ hedge accounting treatment in 2000, 1999 and 1998. As a result, the unrealized gains and losses were realized immediately in those years and the deferred balances as of the year ended December 31, 1997 were realized during 1998. F-24 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 3. INVESTMENTS (CONTINUED): The Company recognized gross realized gains on swaps of $3,924,000, $4,735,000, and $6,568,000 in 2000, 1999, and 1998, respectively, as well as gross realized losses of $1,156,000, $1,789,000, and $20,538,000 during 2000, 1999, and 1998, respectively. The Company's primary risks associated with these transactions are exposure to potential credit loss in the event of non-performance by counter-parties and market risk. The Company regularly assesses the strength of the counter-parties and generally enters into transactions with counter-parties rated "A" or better by nationally recognized ratings agencies. Management believes that the risk of incurring losses related to credit risk is remote. As of December 31, 2000 and 1999, the Company's derivatives had no significant concentration of credit risk. The Company does not require collateral or other security to support derivative financial instruments with credit risk. OPTIONS Options are legal contracts that give the contractholder the right to buy or sell a specific amount of the underlying interest at a strike price upon exercise of the option. Cash is exchanged to purchase the option and through the exercise date, the holder can elect to exercise the option or allow it to expire. The Company also utilizes options to hedge against stock market exposure inherent in the mortality and expense risk charges and guaranteed minimum death benefit features of the Company's variable annuities. The Company's underlying notional or principal amounts associated with open derivatives positions were as follows (in 000's):
OUTSTANDING AT DECEMBER 31, 2000 --------------------------------- NOTIONAL PRINCIPAL UNREALIZED GAIN AMOUNTS (LOSS) Interest rate swaps $1,308,496 $ (40,432) Currency swaps 370,554 1,839 Equity swaps 162,576 (16,883) --------------------------------- Total $1,841,626 $ (55,476) ================================= OUTSTANDING AT DECEMBER 31, 1999 --------------------------------- NOTIONAL PRINCIPAL UNREALIZED GAIN AMOUNTS (LOSS) Interest rate swaps $ 368,000 $ 9,522 Currency swaps 1,700 295 --------------------------------- Total $ 369,700 $ 9,817 =================================
At December 31, 2000, the unrealized gains (losses) on derivatives are included with other liabilities on the financial statements. The unrealized gains (losses) on derivatives are included with other assets at December 31, 1999. F-25 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 4. NET REALIZED INVESTMENT GAINS AND LOSSES Net realized investment gains (losses) consisted of the following (in 000's):
2000 1999 1998 --------------------------------------------- Fixed maturities $ (14,962) $ 4,846 $ 24,268 Mortgage and other loans 2,057 1,981 36 Real estate 5,211 (742) 499 Derivative instruments 2,768 2,945 (13,970) Short term investments (22) 4 24 Write-down of fixed maturities (14,956) (6,689) (2,481) --------------------------------------------- Total $ (19,904) $ 2,345 $ 8,376 =============================================
5. NET INVESTMENT INCOME Net investment income consisted of the following (in 000's):
2000 1999 1998 --------------------------------------------- Fixed maturities $ 265,608 $ 254,390 $ 295,167 Equity securities - (33) 37 Mortgage and other loans 77,807 90,638 103,804 Real estate 8,868 6,829 7,844 Policy loans 3,047 3,172 2,934 Derivatives (66,773) 17,671 (11,880) Income on funds withheld under reinsurance - - 67,045 Other 4,664 (1,416) (817) --------------------------------------------- Gross investment income 293,221 371,251 464,134 Less: Investment expenses 5,510 6,273 8,277 --------------------------------------------- Net investment income $ 287,711 $ 364,978 $ 455,857 =============================================
F-26 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 6. FAIR VALUE OF FINANCIAL INSTRUMENTS SFAS 107 "Disclosure about Fair Value of Financial Instruments" excludes certain insurance liabilities and other non-financial instruments from its disclosure requirements. The fair value amounts presented herein do not include the expected interest margin (interest earnings over interest credited) to be earned in the future on investment-type products or other intangible items. Accordingly, the aggregate fair value amounts presented herein do not necessarily represent the underlying value of the Company; likewise, care should be exercised in deriving conclusions about the Company's business or financial condition based on the fair value information presented herein. The following table presents the carrying amounts and estimated fair values of the Company's financial instruments at December 31, 2000 and 1999 (in 000's):
DECEMBER 31, 2000 DECEMBER 31, 1999 CARRYING ESTIMATED CARRYING ESTIMATED AMOUNT FAIR VALUE AMOUNT FAIR VALUE ------------------------------------------------------------------------ Financial assets: Cash and cash equivalents $ 390,049 $ 390,049 $ 550,265 $ 550,265 Fixed maturities 3,749,567 3,695,679 2,678,340 2,678,340 Short-term investments 112,077 112,077 177,213 177,213 Mortgages 846,439 886,384 931,351 933,725 Derivatives (55,476) (55,476) 9,817 9,817 Policy loans 41,459 41,459 40,660 40,660 Other invested assets 74,551 74,551 67,938 67,938 Financial liabilities: Guaranteed investment contracts $ 1,002,865 $ 998,544 $ 677,265 $ 665,830 Contractholder deposit funds 2,129,758 2,090,197 2,279,413 2,213,896 Fixed annuity contracts 102,637 98,337 112,794 105,845 Interest sensitive life insurance 114,198 116,900 116,999 119,659 Long-term debt 565,000 510,962 565,000 529,212 Partnership capital securities 607,826 553,938 - -
F-27 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 6. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED): The fair values of cash and cash equivalents are estimated to be cost plus accrued interest which approximates fair value. The fair values of short-term bonds are estimated to be the amortized cost. The fair values of publicly traded fixed maturities are based upon market prices or dealer quotes. For privately placed fixed maturities, fair values are estimated by taking into account prices for publicly traded securities of similar credit risk, maturity, repayment and liquidity characteristics. The fair values of mortgage and other loans are estimated by discounting future cash flows using current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Policy loans are stated at unpaid principal balances, which approximate fair value. The fair values of the Company's general account insurance reserves and contractholder deposits under investment-type contracts (insurance, annuity and pension contracts that do not involve mortality or morbidity risks) are estimated using discounted cash flow analyses or surrender values based on interest rates currently being offered for similar contracts with maturities consistent with those remaining for all contracts being valued. Those contracts that are deemed to have short-term guarantees have a carrying amount equal to the estimated market value. The fair values of other deposits with future maturity dates are estimated using discounted cash flows. The fair value of notes payable and other borrowings are estimated using discounted cash flow analyses based upon the Company's current incremental borrowing rates for similar types of borrowings. The carrying amount of all other assets is assumed to approximate fair value. 7. REINSURANCE INDIVIDUAL INSURANCE The Company had several agreements with Sun Life Assurance Company of Canada, which provided that Sun Life Assurance Company of Canada would reinsure the mortality risk and certain ancillary benefits under various individual life insurance contracts sold by the Company. Under these agreements, basic death benefits and supplementary benefits were reinsured on a yearly renewable term basis and coinsurance basis, respectively. The effective dates of these agreements were June 1, 1982, November 1, 1986, and January 1, 1987. These agreements were terminated on December 31, 2000. Effective January 1, 1991, the Company entered into an agreement with Sun Life Assurance Company of Canada under which certain individual life insurance contracts issued by Sun Life Assurance Company of Canada were reinsured by the Company on a 90% coinsurance basis. Also effective January 1, 1991, the Company entered into an agreement with Sun Life Assurance Company of Canada which provides that Sun Life Assurance Company of Canada will reinsure the mortality risks in excess of $500,000 per policy for the individual life insurance contracts assumed by the Company in the reinsurance agreement described above. Such death benefits are reinsured on a yearly renewable term basis. These two agreements were terminated effective October 1, 1998. F-28 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 7. REINSURANCE (CONTINUED): The Company had an agreement with an unrelated company which provided reinsurance of a small block of individual life insurance contracts on a modified coinsurance basis. This agreement was terminated on December 31, 2000. The Company has agreements with Sun Life Assurance Company of Canada and with other unrelated companies which provide for reinsurance of certain mortality risks associated with the individual and corporate owned life insurance (COLI) contracts. These amounts are reinsured on a yearly renewable term basis. GROUP INSURANCE The Company has an agreement with Sun Life Assurance Company of Canada whereby Sun Life Assurance Company of Canada reinsures the mortality risks of the group life insurance contracts. Under this agreement, certain death benefits are reinsured on a yearly renewable term basis. The Company has an agreement with an unrelated company whereby the unrelated company reinsures the morbidity risks of the group long-term disability contracts. Under this agreement, certain long-term disability benefits are reinsured on a yearly renewable term basis. The effects of reinsurance were as follows (in 000's):
FOR THE YEARS ENDED DECEMBER 31, 2000 1999 1998 ---------------------------------------------------- Insurance premiums: Direct $ 51,058 $ 54,662 $ 58,940 Assumed - - 159,787 Ceded 6,255 9,595 15,414 ---------------------------------------------------- Net premiums $ 44,803 $ 45,067 $ 203,313 ==================================================== Insurance and other individual policy benefits and claims: Direct $ 346,411 $ 342,284 $ 352,968 Assumed - - 248,664 Ceded 8,077 7,433 13,523 ---------------------------------------------------- Net policy benefits and claims $ 338,334 $ 334,851 $ 588,109 ====================================================
The Company is contingently liable for the portion of the policies reinsured under each of its existing reinsurance agreements in the event the reinsurance companies are unable to pay their portion of any reinsured claim. Management believes that any liability from this contingency is unlikely. However, to limit the possibility of such losses, the Company evaluates the financial condition of its reinsurers and monitors concentration of credit risk. F-29 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 8. RETIREMENT PLANS: PENSION PLAN The Company and its subsidiaries participate with Sun Life Assurance Company of Canada in a non-contributory defined benefit pension plan covering essentially all employees. Benefits under all plans are based on years of service and employees' average compensation. The Company's funding policies for the pension plans are to contribute amounts which at least satisfy the minimum amount required by the Employee Retirement Income Security Act of 1974 ("ERISA"); currently the plans are fully funded. Most pension plan assets consist of separate accounts of Sun Life Assurance Company of Canada or other insurance company contracts. The following table sets forth the change in the pension plan's projected benefit obligations and assets, as well as the plan's funded status at December 31, 2000, 1999, and 1998 (in 000's):
YEAR ENDED DECEMBER 31, ---------------------------------------------------------- 2000 1999 1998 ---------------------------------------------------------- CHANGE IN PROJECTED BENEFIT OBLIGATION: Projected benefit obligation at beginning of $ 99,520 $ 110,792 $ 79,684 year Service cost 5,242 5,632 4,506 Interest cost 7,399 6,952 6,452 Actuarial loss (gain) 579 (21,480) 21,975 Benefits paid (3,065) (2,376) (1,825) ---------------------------------------------------------- Projected benefit obligation at end of year $ 109,675 $ 99,520 $ 110,792 ========================================================== CHANGE IN FAIR VALUE OF PLAN ASSETS: Fair value of plan assets at beginning of year $ 158,271 $ 151,575 $ 136,610 Actual return on plan assets 8,218 9,072 16,790 Benefits paid (3,285) (2,376) (1,825) ---------------------------------------------------------- Fair value of plan assets at end of year $ 163,204 $ 158,271 $ 151,575 ========================================================== Funded status $ 53,529 $ 58,752 $ 40,783 Unrecognized net actuarial loss (12,620) (20,071) (2,113) Unrecognized transition obligation (20,561) (22,617) (24,674) Unrecognized prior service cost 6,501 7,081 7,661 ---------------------------------------------------------- Prepaid benefit cost $ 26,849 $ 23,145 $ 21,657 ==========================================================
F-30 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 8. RETIREMENT PLANS (CONTINUED): The following table sets forth the components of the net periodic pension cost for the years ended December 31, 2000, 1999, and 1998 (in 000's).
YEAR ENDED DECEMBER 31, 2000 1999 1998 ----------------------------------------------------- COMPONENTS OF NET PERIODIC BENEFIT COST: Service cost $ 5,242 $ 5,632 $ 4,506 Interest cost 7,399 6,952 6,452 Expected return on plan assets (13,723) (12,041) (10,172) Amortization of transition obligation asset (2,056) (2,056) (2,056) Amortization of prior service cost 580 580 580 Recognized net actuarial gain (1,146) (554) (677) ----------------------------------------------------- Net periodic benefit cost $ (3,704) $ (1,487) $ (1,367) ===================================================== The Company's share of net periodic benefit cost $ 805 $ 736 $ 586 =====================================================
The projected benefit obligations were based on calculations that utilize certain assumptions. The assumed weighted average discount rate was 7.5% for the years ended December 31, 2000 and 1999. The expected return on plan assets for 2000 and 1999 was 8.75% and the assumed rate of compensation increase for both 2000 and 1999 was 4.50%. The Company and certain subsidiaries also participate with Sun Life Assurance Company of Canada and certain affiliates in a 401(k) savings plan for which substantially all employees are eligible. Under the various plans the Company matches, up to specified amounts, employees' contributions to the plan. The Company's contributions were $354,000, $284,000, and $231,000 for the years ended December 31, 2000, 1999, and 1998, respectively. OTHER POST-RETIREMENT BENEFIT PLANS In addition to pension benefits, the Company and certain subsidiaries provide certain health, dental, and life insurance benefits ("postretirement benefits") for retired employees and dependents. Substantially all employees of the participating companies may become eligible for these benefits if they reach normal retirement age while working for the Company, or retire early upon satisfying an alternate age plus service condition. Life insurance benefits are generally set at a fixed amount. The following table sets forth the change in other postretirement benefit plans' obligations and assets, as well as the plans' funded status at December 31, 2000 and 1999 (in 000's). F-31 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 8. RETIREMENT PLANS (CONTINUED):
YEAR ENDED DECEMBER 31, 2000 1999 1998 ----------------------------------------------------- CHANGE IN BENEFIT OBLIGATION: Benefit obligation at beginning of year $ 12,217 $ 10,419 $ 9,845 Service cost 529 413 240 Interest cost 1,139 845 673 Actuarial loss 3,665 1,048 308 Benefits paid (465) (508) (647) ----------------------------------------------------- Benefit obligation at end of year $ 17,085 $ 12,217 $ 10,419 ===================================================== CHANGE IN FAIR VALUE OF PLAN ASSETS: Fair value of plan assets at beginning of year $ - $ - $ - Employer contributions 465 508 647 Benefits paid (465) (508) (647) ----------------------------------------------------- Fair value of plan assets at end of year $ - $ - $ - ===================================================== Funded Status $ (17,085) $ (12,217) $ (10,419) Unrecognized net actuarial loss 4,914 1,469 586 Unrecognized transition obligation 95 140 185 ----------------------------------------------------- Prepaid (accrued) benefit cost $ (12,076) $ (10,608) $ (9,648) =====================================================
F-32 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 8. RETIREMENT PLANS (CONTINUED): The following table sets forth the components of the net periodic postretirement benefit costs for the years ended December 31, 2000, 1999, and 1998 (in 000's).
2000 1999 1998 ---------------------------------------------------------- COMPONENTS OF NET PERIODIC BENEFIT COST Service cost $ 529 $ 413 $ 240 Interest cost 1,139 845 673 Amortization of transition obligation(asset) 45 45 45 Recognized net actuarial loss (gain) 219 164 (20) ---------------------------------------------------------- Net periodic benefit cost $ 1,932 $ 1,467 $ 938 ========================================================== The Company's share of net periodic benefit cost $ 219 $ 185 $ 95 ==========================================================
In order to measure the postretirement benefit obligation at December 31, 2000 the Company assumed a 10.9% annual rate of increase in the per capita cost of covered health care benefits (5.5% for dental benefits). These rates were assumed to decrease gradually to 5.0% for 2006 and remain at that level thereafter. Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. For example, increasing the health care cost trend rate assumptions by one percentage point in each year would increase the accumulated postretirement benefit obligation at December 31, 2000 by $3.4 million, and the aggregate of the service and interest cost components of net periodic postretirement benefit expense for 2000 by $405 thousand. Conversely, decreasing assumed rates by one percentage point in each year would decrease the accumulated postretirement benefit obligation at December 31, 2000 by $2.8 million, and the aggregate of the service and interest cost components of net periodic postretirement benefit expense for 2000 by $320 thousand. The assumed weighted average discount rate used in determining the postretirement benefit obligation for both 2000 and 1999 was 7.50%. F-33 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 9. FEDERAL INCOME TAXES The Company and its subsidiaries file a consolidated federal income tax return with Sun Life Assurance Company of Canada - U.S. Operations Holdings, Inc. as previously described in Note 1. Federal income taxes are calculated as if the Company was filing a separate federal income tax return. A summary of the components of federal income tax expense (benefit) in the consolidated statements of income for the years ended December 31, 2000, 1999 and 1998 was as follows (in 000's):
2000 1999 1998 ----------- ------------- ------------- Federal income tax expense (benefit): Current $ (8,536) $ 18,570 $ 19,476 Deferred (53,145) 10,210 (8,551) ---------- ------------ ------------ Total $ (61,681) $ 28,780 $ 10,925 ========== ============ ============
Federal income taxes attributable to the consolidated operations are different from the amounts determined by multiplying income before federal income taxes by the expected federal income tax rate of 35%. The Company's effective rate differs from the federal income tax rate as follows:
2000 1999 1998 ----------- ------------- ------------- Expected federal income tax expense $ (21,455) $ 28,969 $ 9,405 Low income housing credit (5,805) (6,348) (4,446) Additional tax provision (35,897) 6,851 5,423 Other 1,476 (692) 543 ---------- ------------ ------------ Federal income tax expense $ (61,681) $ 28,780 $ 10,925 ========== ============ ============
The deferred income tax (asset) liability represents the tax effects of temporary differences between the carrying amounts of assets and liabilities used for financial reporting purposes and the amounts used for income tax purposes. The components of the Company's deferred tax (assets) and liabilities as of December 31, 2000 and 1999 were as follows (in 000's):
2000 1999 ----------------- ----------------- Deferred tax assets: Actuarial liabilities $ 177,709 $ 136,560 Other 845 943 ----------------- ----------------- Total deferred tax assets $ 178,554 $ 137,503 Deferred tax liabilities: Deferred policy acquisition costs (189,447) (193,238) Investments, net (30,513) (21,940) ----------------- ----------------- Total deferred tax liabilities $ (219,960) $ (215,178) ----------------- ----------------- Net deferred tax liabilities $ (41,406) $ (77,675) ================= =================
F-34 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 9. FEDERAL INCOME TAXES (CONTINUED) The Company makes payments under the tax sharing agreements as if it were filing as a separate company. The Company's federal income tax returns are routinely audited by the Internal Revenue Service ("IRS"), and provisions are made in the consolidated financial statements in anticipation of the results of these audits. The Company is currently under audit by the IRS for the years 1994 and 1995. In the Company's opinion, adequate tax liabilities have been established for all years and any adjustments that might be required for the years under audit will not have a material effect on the Company's financial statements. However, the amounts of these tax liabilities could be revised in the future if estimates of the Company's ultimate liability are revised. 10. LIABILITY FOR UNPAID CLAIMS AND CLAIMS ADJUSTMENT EXPENSES Activity in the liability for unpaid claims and claims adjustment expenses related to the group life and group disability products is summarized below (in 000's):
2000 1999 --------------------------------------- Balance at January 1 $ 17,755 $ 15,002 Less reinsurance recoverables (4,036) (3,232) --------------------------------------- Net balance at January 1 13,719 11,770 --------------------------------------- Incurred related to: Current year 10,670 12,187 Prior years (14) (1,487) --------------------------------------- Total incurred 10,656 10,700 --------------------------------------- Paid losses related to: Current year (5,473) (6,755) Prior years (3,395) (1,996) --------------------------------------- Total paid (8,868) (8,751) --------------------------------------- Net balance at December 31 20,574 17,755 Plus reinsurance recoverables (5,067) (4,036) --------------------------------------- Balance at December 31 $ 15,507 $ 13,719 =======================================
The Company regularly updates its estimates of liabilities for unpaid claims and claims adjustment expenses as new information becomes available and further events occur which may impact the resolution of unsettled claims for its individual and group disability lines of business. Changes in prior estimates are recorded in results of operations in the year such changes are determined to be needed. F-35 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 11. DEFERRED POLICY ACQUISITION COSTS The following illustrates the changes to the deferred policy acquisition costs (in 000's):
2000 1999 ----------------- ---------------- Balance at January 1 $ 686,278 $ 523,872 Acquisition costs deferred 206,869 156,228 Amortized to expense during the year (123,832) (67,815) Adjustment for unrealized investment gains (losses) during the year (7,327) 73,993 ----------------- ---------------- Balance at December 31 $ 761,988 $ 686,278 ================= ================
12. SEGMENT INFORMATION The Company offers financial products and services such as fixed and variable annuities, guaranteed investment contracts, retirement plan services, and life insurance on an individual and group basis, as well as disability insurance on a group basis. Within these areas, the Company conducts business principally in three operating segments and maintains a corporate segment to provide for the capital needs of the three operating segments and to engage in other financing related activities. Net investment income is allocated based on segmented assets by line of business. The Individual Protection segment markets and administers a variety of life insurance products sold to individuals and corporate owners of life insurance. The products include whole life, universal life and variable life products. The Group Protection segment markets and administers group life and long-term disability insurance to small and mid-size employers in the State of New York. The Wealth Management segment markets and administers individual and group variable annuity products, individual and group fixed annuity products which include market value adjusted annuities, and other retirement benefit products. The Company began offering guaranteed investment contracts to unrelated third parties in overseas markets during the second quarter of 2000. These contracts may contain any of a number of features including variable or fixed interest rates and equity index options and may be denominated in foreign currencies. The Company uses derivative instruments to manage the risks inherent in the contract options. The Corporate segment includes the unallocated capital of the Company, its debt financing, and items not otherwise attributable to the other segments. Management evaluates the results of the operating segments on an after-tax basis. The Company does not materially depend on one or a few customers, brokers or agents. F-36 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 12. SEGMENT INFORMATION (CONTINUED) The following amounts pertain to the various business segments (in 000's):
YEAR ENDED DECEMBER 31, 2000 PRETAX TOTAL TOTAL INCOME NET OPERATING TOTAL REVENUES EXPENDITURES (LOSS) INCOME (LOSS) ASSETS -------------- ----------------- ------------ ----------------- ---------------- Individual Protection $ 44,206 $ 44,477 $ (271) $ (176) $ 1,242,549 Group Protection 17,194 15,350 1,844 1,199 30,514 Wealth Management 533,517 556,864 (23,347) (6,911) 22,094,736 Corporate 15,552 55,025 (39,473) 8,419 689,869 -------------- ----------------- ------------ ----------------- ---------------- Total $ 610,469 $ 671,716 $ (61,247) $ 2,531 $ 24,057,668 ============== ================= ============ ================= ================
YEAR ENDED DECEMBER 31, 1999 Individual Protection $ 17,625 $ 18,001 $ (376) $ 198 $ 302,100 Group Protection 16,415 15,541 874 568 27,286 Wealth Management 563,836 460,788 103,048 73,002 20,911,529 Corporate 31,996 52,731 (20,735) (20,036) 243,998 -------------- ----------------- ------------ ----------------- ---------------- Total $ 629,872 $ 547,061 $ 82,811 $ 53,732 $ 21,484,913 ============== ================= ============ ================= ================
YEAR ENDED DECEMBER 31, 1998 Individual Protection $ 232,193 $ 300,478 $ (68,285) $ (45,186) $ 365,397 Group Protection 15,259 13,023 2,236 1,433 23,297 Wealth Management 560,643 457,483 103,160 74,662 17,572,436 Corporate 38,600 50,838 (12,238) (16,803) 287,132 -------------- ----------------- ------------ ----------------- ---------------- Total $ 846,695 $ 821,822 $ 24,873 $ 14,106 $ 18,248,262 ============== ================= ============ ================= ================
13. REGULATORY FINANCIAL INFORMATION The insurance subsidiaries are required to file annual statements with state regulatory authorities prepared on an accounting basis prescribed or permitted by such authorities (statutory basis). Statutory surplus differs from shareholder's equity reported in accordance with GAAP for stock life insurance companies primarily because policy acquisition costs are expensed when incurred, reserves are based on different assumptions, investments are valued differently, post-retirement benefit costs are based on different assumptions and reflect a different method of adoption, and income tax expense reflects only taxes paid or currently payable. F-37 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 13. REGULATORY FINANCIAL INFORMATION (CONTINUED): The following information reconciles statutory net income and statutory surplus with net income and equity on a GAAP basis (in 000's):
YEAR ENDED DECEMBER 31, 2000 1999 1998 -------------- -------------- ---------------- Statutory net income $ (236) $ 90,358 $ 125,401 Adjustments to GAAP for life insurance companies: Statutory interest maintenance reserve 4,341 3,956 2,925 Investment income and realized gains (losses) (90,373) 13,803 (4,532) Policyowner premiums and benefits (36,572) (135,416) (178,973) Deferred policy acquisition costs 83,037 88,413 60,527 Deferred income taxes 45,358 (13,615) 8,886 Other, net (3,024) (5,057) - -------------- -------------- ---------------- GAAP net income $ 2,531 $ 42,442 $ 14,234 ============== ============== ================
DECEMBER 31, 2000 DECEMBER 31, 1999 ----------------------- ----------------------- Statutory capital stock and surplus $ 940,335 $ 886,342 Adjustments to GAAP for life insurance companies: Valuation of investments (37,011) 3,697 Deferred policy acquisition costs 761,988 686,278 Future policy benefits and Contractholder deposit funds (388,946) (350,181) Deferred income taxes (41,406) (77,675) Statutory interest maintenance reserve 39,979 42,325 Statutory asset valuation reserve 45,376 45,281 Surplus notes (565,000) (565,000) Other, net 5,848 178 ----------------------- ----------------------- GAAP equity $ 761,163 $ 671,245 ======================= =======================
The NAIC has codified statutory accounting practices, which are expected to constitute the only source of prescribed statutory accounting practices effective January 1, 2001. The codification has resulted in changes to many of the prescribed accounting practices that insurance companies use to prepare their statutory financial statements. The effect of the changes to accounting practices as a result of codification in 2001 is estimated to be an increase in the Company's statutory surplus of $24 million, primarily from the establishment of deferred tax assets. F-38 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 14. DIVIDEND RESTRICTIONS The Company and its insurance subsidiary's ability to pay dividends are subject to certain restrictions. Delaware and New York have enacted laws governing the payment of dividends to stockholders by insurers. These laws affect the dividend paying ability of the Company and Sun Life Insurance and Annuity Company of New York. Pursuant to Delaware's statute, the maximum amount of dividends and other distributions that an insurer may pay in any twelve-month period, without prior approval of the Delaware Commissioner of Insurance, is limited to the greater of (i) 10% of its statutory surplus as of the preceding December 31, or (ii) the individual company's statutory net gain from operations for the preceding calendar year (if such insurer is a life company), or its net income (not including realized capital gains) for the preceding calendar year (if such insurer is not a life company). Any dividends to be paid by an insurer, whether or not in excess of the aforementioned threshold, from a source other than statutory surplus, would also require the prior approval of the Delaware Commissioner of Insurance. Dividends in the amounts of $10,000,000, $80,000,000 and $50,000,000 were declared and paid by the Company to its parent, Sun Life of Canada (U.S.) Holdings, Inc. during 2000, 1999, and 1998. These dividends were approved by the Board of Directors. On September 20, 2000, New York insurance law was amended to permit a domestic stock life insurance company to distribute a dividend to its shareholders, without notice to the Superintendent of Insurance of the State of New York, where the aggregate amount of such dividend in any calendar year does not exceed the lesser of: (1) ten percent of its surplus to policyholders as of the immediately preceding calendar year; or (2) its net gain from operations for the immediately preceding calendar year, not including realized capital gains. Under the previous law, domestic stock life insurers were prohibited from distributing any dividends to shareholders unless the insurer filed a notice of its intention to declare a dividend and its amount with the Superintendent at least 30 days in advance of the proposed declaration, and such proposed distribution was not disapproved by the Superintendent. Dividends in the amount of $4,700,000, $6,500,000, and $3,000,000 were declared and paid during 2000, 1999, and 1998, respectively, by the Sun Life Insurance and Annuity Company of New York to the Company. These dividends were approved by the Board of Directors and the State of New York Insurance Department. F-39 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 15. COMMITMENTS AND CONTINGENCIES REGULATORY AND INDUSTRY DEVELOPMENTS Unfavorable economic conditions may contribute to an increase in the number of insurance companies that are under regulatory supervision. This may result in an increase in mandatory assessments by state guaranty funds, or voluntary payments by solvent insurance companies to cover losses to policyholders of insolvent or rehabilitated companies. Mandatory assessments, which are subject to statutory limits, can be partially recovered through a reduction in future premium taxes in some states. The Company is not able to reasonably estimate the potential effect on it of any such future assessments. Under insurance guaranty fund laws in each state, the District of Columbia and Puerto Rico, insurers licensed to do business can be assessed by state insurance guaranty associations for certain obligations of insolvent insurance companies to policyholders and claimants. Recent regulatory actions against certain large life insurers encountering financial difficulty have prompted various state insurance guaranty associations to begin assessing life insurance companies for the deemed losses. Most of these laws do provide, however, that an assessment may be excused or deferred if it would threaten an insurer's solvency and further provide annual limits on such assessments. Part of the assessments paid by the Company and its subsidiaries pursuant to these laws may be used as credits for a portion of the associated premium taxes. The Company incurred guaranty fund assessments of approximately $4,000,000, $3,500,000, and $3,500,000 in 2000, 1999 and 1998, respectively. LITIGATION The Company is involved in pending and threatened litigation in the normal course of its business in which claims for monetary and punitive damages have been asserted. Although there can be no assurance, management, at the present time, does not anticipate that the ultimate liability arising from such pending and threatened litigation will have a material effect on the financial condition or operating results of the Company. LINES OF CREDIT The Company has syndicated two lines of credit each in the amount of $250 million. There are 14 banks in the syndicate of lenders, which is led by Chase Bank, New York. The banks have committed to lend funds of up to $500 million when requested by the Company at prevailing rates determined in accordance with the line of credit agreements. One line of credit terminates October, 2001, the other in October, 2003. As of December 31, 2000, no amounts have been borrowed. LEASE COMMITMENTS The Company leases various facilities and equipment under operating leases with terms of up to 25 years. As of December 31, 2000, minimum future lease payments under such leases are as follows (in 000's): 2001 $4,090,800 2002 4,144,350 2003 3,090,600 2004 2,575,500 Thereafter - ------------ Total $13,901,250 ============
Total rental expense for the years ended December 31, 2000, 1999 and 1998 was $4,582,913, $4,656,000, and $4,139,000, respectively. F-40 SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2000, 1999 and 1998 16. DISCONTINUED OPERATIONS During 1999, the Company discontinued its individual disability segment and its banking and trust segment. These segments were composed of MCIC and NLT, which were both sold during 1999 to separate, unaffiliated parties. Net proceeds on the sale of MCIC were approximately $33,965,000 and the Company realized a net loss after taxes of $25,465,000. Net proceeds on the sale of NLT were approximately $30,000,000; the Company realized a net gain after taxes of $13,170,000. Immediately before the sale date of NLT, the Company received a $19 million dividend distribution from NLT. There were no results from discontinued operations in 2000. Income from discontinued operations for the years ended December 31, 1999 and 1998 were as follows (in 000's):
1999 1998 ------------------- ------------------ Revenue $ 22,667 $ 104,225 Expenses 21,430 104,593 Provision for income taxes 203 (445) ------------------- ------------------ Income from discontinued operations $ 1,034 $ 77 =================== ==================
F-41 INDEPENDENT AUDITORS' REPORT To the Board of Directors and Stockholder of Sun Life Assurance Company of Canada (U.S.): We have audited the accompanying consolidated balance sheets of Sun Life Assurance Company of Canada (U.S.) and its subsidiaries (the "Company") as of December 31, 2000 and 1999, and the related consolidated statements of income, stockholder's equity, comprehensive income and of cash flows for each of the three years in the period ended December 31, 2000. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Sun Life Assurance Company of Canada (U.S.) and its subsidiaries as of December 31, 2000 and 1999, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2000 in conformity with accounting principles generally accepted in the United States of America. Deloitte & Touche LLP Boston, Massachusetts February 7, 2001 F-42 PART C OTHER INFORMATION Item 24. FINANCIAL STATEMENTS AND EXHIBITS (a) The following Financial Statements are included in the Registration Statement: A. Condensed Financial Information - Accumulation Unit Values (Part A) B. Financial Statements of the Depositor (Part B) 1. Consolidated Statements of Income, Years Ended December 31, 2000, 1999 and 1998; 2. Consolidated Balance Sheets, December 31, 2000 and 1999, 3. Consolidated Statements of Comprehensive Income, Years Ended December 31, 2000, 1999 and 1998; 4. Consolidated Statements of Stockholder's Equity, Years Ended December 31, 2000, 1999 and 1998; 5. Consolidated Statements of Cash Flows, Years Ended December 31, 2000, 1999 and 1998; 6. Notes to Consolidated Financial Statements; and 7. Independent Auditors' Report. C. Financial Statements of the Registrant (Part B) 1. Statement of Condition, December 31, 2000; 2. Statement of Operations, Year Ended December 31, 2000; 3. Statements of Changes in Net Assets, Years Ended December 31, 2000 and December 31, 1999; 4. Notes to Financial Statements; and 5. Independent Auditors' Report. (b) The following Exhibits are incorporated in the Registration Statement by reference unless otherwise indicated: (1) Resolution of Board of Directors of the depositor dated December 3, 1985 authorizing the establishment of the Registrant (Incorporated herein by reference to Exhibit 1 to the Registration Statement of the Registrant on Form N-4, File No. 333-37907, filed on October 14, 1997); (2) Not Applicable; (3)(a) Distribution Agreement between the Depositor, Massachusetts Financial Services Company and Clarendon Insurance Agency, Inc. (Incorporated herein by reference to Exhibit 3(a) to Pre-Effective Amendment No. 1 to the Registration Statement of the Registrant on Form N-4, File No. 333-37907, filed on January 16, 1998); (b)(i) Specimen Sales Operations and General Agent Agreement (Incorporated herein by reference to Exhibit 3(b)(i) to Pre-Effective Amendment No. 1 to the Registration Statement of the Registrant on Form N-4, File No. 333-37907, filed on January 16, 1998); (b)(ii) Specimen Broker-Dealer Supervisory and Service Agreement (Incorporated herein by reference to Exhibit 3(b)(ii) to Pre-Effective Amendment No. 1 to the Registration Statement of the Registrant on Form N-4, File No. 333-37907, filed on January 16, 1998); and (b)(iii) Specimen Registered Representatives Agent Agreement (Incorporated herein by reference to Exhibit 3(b)(iii) to Pre-Effective Amendment No. 1 to the Registration Statement of the Registrant on Form N-4, File No. 333-37907, filed on January 16, 1998); (4)(a) Form of Flexible Payment Combination Fixed/Variable Group Annuity Contract (Filed as Exhibit 4(a) to Pre-Effective Amendment No. 1 to the Registration Statement on Form N-4, File 333-30844, filed on June 9, 2000.); (b) Form of Certificate to be issued in connection with Contract filed as Exhibit 4(a) (Filed as Exhibit 4(a) to Pre-Effective Amendment No. 1 to the Registration Statement on Form N-4, File 333-30844, filed on June 9, 2000.); (c) Form of Flexible Payment Combination Fixed/Variable Individual Annuity Contract (Filed as Exhibit 4(a) to Pre-Effective Amendment No. 1 to the Registration Statement on Form N-4, File 333-30844, filed on June 9, 2000.); (d) Form of Revised Specification Page to be issued in connection with Certificate, filed as Exhibit 4(b); (e) Form of Revised Specification Page to be issued in connection with Individual Annuity Contract, filed as Exhibit 4(c); (5)(a) Form of Application to be used with Contracts filed as Exhibits 4(a) and 4(c) (Filed as Exhibit 4(a) to Pre-Effective Amendment No. 1 to the Registration Statement on Form N-4, File 333-30844, filed on June 9, 2000.); (b) Form of Application to be used with Certificate filed as Exhibit 4(b) (Filed as Exhibit 4(a) to Pre-Effective Amendment No. 1 to the Registration Statement on Form N-4, File 333-30844, filed on June 9, 2000.); (c) Form of Revised Application to be used with Certificate, filed as Exhibit 4(b) and Contract, filed as Exhibit 4(c); (6)(a) Certificate of Incorporation and By-laws of the Depositor (Incorporated herein by reference to Exhibits 3(a) and 3(b), respectively, to the Registration Statement of the Depositor on Form S-1, File No. 333-37907, filed on October 14, 1997); (b) By-Laws of the Depositor, as amended effective as of January 1, 2000 (Filed as Exhibit 4(a) to Pre-Effective Amendment No. 1 to the Registration Statement on Form N-4, File 333-30844, filed on June 9, 2000.); (7) Not Applicable; (8)(a) Form of Participation Agreement by and between The Alger American Fund, the Depositor, and Fred Alger and Company, Incorporated (Filed as Exhibit 8(a) to Post-Effective Amendment No. 13 to the Registration Statement of the Registrant on Form N-4, File No. 33-41628, filed April 26, 1999); (b)(i) Form of Participation Agreement dated February 17, 1998 by and between Goldman Sachs Variable, Insurance Trust, Goldman Sachs & Co. and the Depositor (Filed as Exhibit 8(b)(i) to Post-Effective Amendment No. 13 to the Registration Statement of the Registrant on Form N-4, File No. 33-41628, filed April 26, 1999); (ii) Form of Amendment No. 1 dated December 14, 1998 to Participation Agreement filed as Exhibit 8(b)(i) (Filed as Exhibit 8(b)(ii) to Post-Effective Amendment No. 13 to Registrant's Registration Statement on Form N-4, File No. 33-41628, filed April 26, 1999); (iii) Form of Amendment No. 2 dated as of March 15, 1999 to Participation Agreement filed as Exhibit 8(b)(i) (Filed as Exhibit 8(b)(iii) to Post-Effective Amendment No. 13 to Registrant's Registration Statement on Form N-4, File No. 33-41628, filed April 26, 1999); (c) Form of Fund Participation Agreement between the Depositor and J.P. Morgan Services Trust II (Filed as Exhibit 8(c) to Post-Effective Amendment No. 13 to Registrant's Registration Statement on Form N-4, File No. 33-41628, filed April 26, 1999); (d) Form of Participation Agreement dated February 17, 1998 by and among MFS/Sun Life Services Trust, the Depositor and Massachusetts Financial Services Company (Filed as Exhibit 8(d) to Post-Effective Amendment No. 13 to Registrant's Registration Statement on Form N-4, File No. 33-41628, filed April 26, 1999); (e) Form of Participation Agreement dated February 17, 1998 by and among OCC Accumulation Trust, the Depositor and OCC Distributors (Filed as Exhibit 8(e) to Post-Effective Amendment No. 13 to Registrant's Registration Statement on Form N-4, File No. 33-41628, filed April 26, 1999); (f) Form of Participation Agreement dated February, 1998 by and among the Depositor, Warburg Pincus Trust, Warburg Pincus Asset Management, Inc. and Counsellors Securities, Inc. (Filed as Exhibit 8(f) to Post-Effective Amendment No. 13 to Registrant's Registration Statement on Form N-4, File No. 33-41628, filed April 26, 1999); (g) Form of Participation Agreement dated February 17, 1998 by and among the Depositor, AIM Variable Insurance Funds, Inc., AIM Distributors, Inc., and Clarendon Insurance Agency, Inc. (Filed as Exhibit 8(g) to Post-Effective Amendment No. 1 to Registrant's Registration Statement on Form N-4, File No. 333-82957, filed on February 3, 2000); (h) Form of Participation Agreement dated August 18, 1999 by and among the Depositor, Sun Capital Advisers Trust and Sun Capital Advisers, Inc. (Filed as Exhibit 8(h) to Post-Effective Amendment No. 1 to Registrant's Registration Statement on Form N-4, File No. 333-82957, filed on February 3, 2000); (i) Form of Participation Agreement dated as of February 17, 1998 by and among the Depositor, Salomon Brothers Variable Series Funds Inc., and Salomon Brothers Asset Management Inc. (Incorporated by reference from Exhibit 8(i) to Pre-Effective Amendment No. 1 to the Registration Statement on Form N-4, File No. 333-41438 filed September 25, 2000); (9) Opinion of Counsel as to the legality of the securities being registered and Consent to its use (Filed as Exhibit 9 to the Registration Statement on Form N-4, File No. 333-30844, filed on February 23, 2000); (10)(a) Consent of Independent Auditors* (b) Representation of Counsel pursuant to Rule 485(b)* (11) Financial Statement Schedules I and VI (Incorporated herein by reference to the Depositor's Form 10-K Annual Report for the fiscal year ended December 31, 1999, filed on March 22, 2000); (12) Not Applicable; (13) Schedule for Computation of Performance Quotations (Incorporated by reference to Exhibit 13 to Post-Effective Amendment No. 10 to the Registration Statement of the Registrant on Form N-4, File No. 33-41628, filed on April 29, 1998); (14) Not Applicable; (15) Powers of Attorney (Incorporated by reference from Exhibit 15 to Post-Effective Amendment No. 3 to the Registration Statement on Form N-4, File No. 333-30844, filed on February 9, 2001); (16) Organizational Chart (Incorporated by reference to Exhibit 16 to Post-Effective Amendment No. 3 to the Registration Statement of the Registrant on Form N-4, File No. 333-30844, filed on February 9, 2001.) * Filed herewith Item 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR Name and Principal Positions and Offices Business Address with Depositor ---------------- -------------- Donald A. Stewart Chairman and Director 150 King Street West Toronto, Ontario Canada M5H 1J9 C. James Prieur Vice Chairman and Director One Sun Life Executive Park Wellesley Hills, MA 02481 James A. McNulty, III President and Director One Sun Life Executive Park Wellesley Hills, MA 02481 David D. Horn Director Strong Road New Vineyard, ME 04956 Angus A. MacNaughton Director Genstar Investment Corporation 555 California Street, Suite 4850 San Francisco, CA 94104 S. Caesar Raboy Director 220 Boylston Street Boston, MA 02110 William W. Stinson Director Canadian Pacific Limited 1800 Bankers Hall, East Tower 855 - 2nd Street S.W. Calgary, Alberta Canada T2P 4ZH James C. Baillie Director Torys Suite 300, Maritime Life Tower Toronto, Ontario M5K 1N2 Name and Principal Positions and Offices Business Address with Depositor ---------------- -------------- James M.A. Anderson Vice President, Investments One Sun Life Executive Park Wellesley Hills, MA 02481 Peter F. Demuth Vice President and Chief Counsel One Sun Life Executive Park and Assistant Secretary Wellesley Hills, MA 02481 Ronald J. Fernandes Vice President, Retirement One Copley Place Products and Services Boston, MA 02116 Ellen B. King Senior Counsel and Secretary One Sun Life Executive Park Wellesley Hills, MA 02481 Davey S. Scoon Vice President, Finance and One Sun Life Executive Park Treasurer Wellesley Hills, MA 02481 Robert P. Vrolyk Vice President and One Sun Life Executive Park Actuary Wellesley Hills, MA 02481 Item 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR REGISTRANT No person is directly or indirectly controlled by the Registrant. The Registrant is a separate account of Sun Life Assurance Company of Canada (U.S.), a wholly-owned subsidiary of Sun Life of Canada (U.S.) Holdings, Inc., a wholly-owned subsidiary of Sun Life Assurance Company of Canada - U.S. Operations Holdings, Inc., which is in turn a wholly-owned subsidiary of Sun Life Assurance Company of Canada. The organization chart of Sun Life Assurance Company of Canada is filed as Exhibit 16 to Post-Effective Amendment No. 3 to the Registration Statement on Form N-4, File No. 333-30844, filed February 9, 2001. None of the companies listed in such Exhibit 16 is a subsidiary of the Registrant; therefore, the only financial statements being filed are those of Sun Life Assurance Company of Canada (U.S.). Item 27. NUMBER OF CONTRACT OWNERS As of March 29, 2001, there were 5,349 qualified and 8,724 non-qualified Contracts issued and outstanding. Item 28. INDEMNIFICATION Pursuant to Section 145 of the Delaware Corporation Law, Article 8 of the By-laws of Sun Life Assurance Company of Canada (U.S.), as amended effective as of January 1, 2000 (a copy of which is filed herewith), provides for the indemnification of directors, officers and employees of Sun Life Assurance Company of Canada (U.S.). Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of Sun Life Assurance Company of Canada (U.S.) pursuant to the certificate of incorporation, by-laws, or otherwise, Sun Life (U.S.) has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by Sun Life (U.S.) of expenses incurred or paid by a director, officer, controlling person of Sun Life (U.S.) in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, Sun Life (U.S.) will submit to a court of appropriate jurisdiction the question whether such indemnification by them is against public policy as expressed in the Act, unless in the opinion of their counsel the matter has been settled by controlling precedent, and will be governed by the final adjudication of such issue. Item 29. PRINCIPAL UNDERWRITERS (a) Clarendon Insurance Agency, Inc., a wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.), acts as general distributor for the Registrant, Sun Life of Canada (U.S.) Variable Accounts C, D, E, G, H and I, Sun Life (N.Y.) Variable Accounts A, B and C, and Money Market Variable Account, High Yield Variable Account, Capital Appreciation Variable Account, Government Securities Variable Account, World Governments Variable Account, Total Return Variable Account, and Managed Sectors Variable Account.
Name and Principal Positions and Offices Business Address* with Underwriter ---------------- ---------------- William Franca..................... Managing Principal Davey S. Scoon..................... Treasurer and Director James M.A. Anderson................ Director Ronald J. Fernandes................ Director James A. McNulty, III.............. Director George E. Maden.................... Secretary and Clerk William T. Evers................... Assistant Secretary and Clerk Maura A. Murphy.................... Assistant Secretary and Clerk Cynthia M. Orcutt.................. Vice President Norton A. Goss, II................. Assistant Vice President Stephen J. Yarina.................. Tax Officer
------------- * The principal business address of all directors and officers of the principal underwriter except Messrs. Fernandes, Goss and Franca is One Sun Life Executive Park, Wellesley Hills, Massachusetts 02481. The principal business address of Messrs. Fernandes, Goss and Franca is One Copley Place, Boston, Massachusetts 02116. (a) Inapplicable. Item 30. LOCATION OF ACCOUNTS AND RECORDS Accounts, books and other documents required to be maintained by Section 31(a) of the Investment Company Act of 1940 and the Rules promulgated thereunder are maintained, in whole or in part, by Sun Life Assurance Company of Canada (U.S.) at its offices at One Sun Life Executive Park, Wellesley Hills, Massachusetts 02481, and One Copley Place, Boston, Massachusetts 02116, or at the offices of Clarendon Insurance Agency, Inc., at One Sun Life Executive Park, Wellesley Hills, Massachusetts 02481. Item 31. MANAGEMENT SERVICES Not Applicable. Item 32. UNDERTAKINGS The Registrant hereby undertakes: (a) To file a post-effective amendment to this Registration Statement as frequently as is necessary to ensure that the audited financial statements in the Registration Statement are never more than 16 months old for so long as payments under the variable annuity Contracts may be accepted; (b) To include either (1) as part of any application to purchase a Contract offered by the prospectus, a space that an Applicant can check to request a Statement of Additional Information, or (2) a post card or simiilar written communication affixed to or included in the prospectus that the Applicant can remove to send for a Statement of Additional Information; (c) To deliver any Statement of Additional Information and any financial statements required to be made available under SEC Form N-4 promptly upon written or oral request. (d) Representation with respect to Section 26(e)of the Investment Company Act of 1940: Sun Life Assurance Company of Canada (U.S.) represents that the fees and charges deducted under the Contracts, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by the insurance company. The Registrant is relying on the no-action letter issued by the Division of Investment Management of the Securities and Exchange Commission to American Council of Life Insurance, Ref. No. IP-6-88, dated November 28, 1988, the requirements for which have been complied with by the Registrant. SIGNATURES As required by the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all of the requirements of Securities Act Rule 485(b) for effectiveness of this Post-Effective Amendment No. 4 to the Registration Statement and has caused this Post-Effective Amendment to be signed on its behalf, in the Town of Wellesley Hills, and Commonwealth of Massachusetts on this 23rd day of April 2001. SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (Registrant) SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) (Depositor) By: /s/ JAMES A. McNULTY, III ---------------------------- James A. McNulty, III President Attest: /s/ EDWARD M. SHEA -------------------------- Edward M. Shea Assistant Vice President and Senior Counsel As required by the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities with the Depositor, Sun Life Assurance Company of Canada (U.S.), and on the dates indicated.
SIGNATURE TITLE DATE ------------------------------------- ------------------------------------ -------------- /s/ JAMES A. McNULTY, III President and Director April 23, 2001 ------------------------------------- (Principal Executive Officer) James A. McNulty, III /s/ DAVEY S. SCOON Vice President, Finance April 23, 2001 ------------------------------------- and Treasurer Davey S. Scoon (Principal Financial and Accounting Officer)
/s/ SANDRA M. DADALT Attorney-in-Fact for: April 23, 2001 -------------------------------- Donald A. Stewart, Chairman and Director Sandra M. DaDalt C. James Prieur, Vice Chairman and Director David D. Horn, Director Angus A. McNaughton, Director S. Caesar Raboy, Director William W. Stinson, Director James C. Baillie, Director
EXHIBIT INDEX 4(d) Form of Revised Specification Page - Certificate 4(e) Form of Revised Specification Page - Contract 5(c) Form of Revised Application - Certificate (10)(a) Consent of Independent Auditors - (b) Representation of Counsel -