SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)

OF THE SECURITIES EXCHANGE ACT 0F 1934

 

 

 

For the Quarterly Period Ended March 31, 2002
Commission File Numbers: 2-99959, 33-29851, 33-31711, 33-41858, 33-43008, 33-58853 and 333-11699

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(Exact name of registrant as specified in its charter)

 

Delaware
04-2461439
(State or other jurisdiction of incorporation or organization)
(IRS Employer I.D. No.)
 
 

 

One Sun Life Executive Park,
Wellesley Hills, MA
02481
(Address of Principal Executive Offices)
(Zip Code)

Registrant's telephone number, including area code 
(781) 237-6030

 

NONE

Former name, former address, and former fiscal year, if changed since last report.

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

(1) Yes |X|
  No |_|
(2) Yes |X|
  No |_|
 

Registrant has no voting stock outstanding held by non-affiliates.

Registrant has 6,437 shares of common stock outstanding on May 15, 2002, all of which are owned by Sun Life of Canada (U.S.) Holdings, Inc.

 <PAGE>

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A WHOLLY-OWNED SUBSIDIARY OF

SUN LIFE OF CANADA (U.S.) HOLDINGS, INC.)

INDEX

 

 

 
PAGE
 
NUMBER
PART I: Financial Information

Item 1: Unaudited Financial Statements:

 
Consolidated Statements of Income (Unaudited)-Three Months Ended March 31, 2002 
 
 
and March 31, 2001
3
 
 
 
 
Consolidated Balance Sheets - March 31, 2002 (Unaudited) and December 31, 2001 (Audited) 
4
 
 
 
 
Consolidated Statements of Comprehensive Income (Unaudited)-Three Months Ended
 
 
March 31, 2002 and March 31, 
5
 
 
 
 
Consolidated Statements of Stockholder's Equity (Unaudited)-Three Months Ended
 
 
March 31, 2002 and March 31, 2001 
6
 
 
 
 
Consolidated Statements of Cash Flows (Unaudited)-Three Months Ended
 
 
March 31, 2002 and March 31,2001 
7-8
 
 
 
 
Notes to Unaudited Consolidated Financial Statements 
9
Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations 
16-25
 
 
Item 3. Quantitative and Qualitative Disclosures About Market Risk 
25-28
 

PART II: Other Information

Item 4: Submission of Matters to a Vote of Security Holders 
29 
 
Item 6: Exhibits and Reports on Form 8-K 
29
 

 

2

<PAGE> **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 three months ended March 31, 2002 and 2001

 **Unaudited
 **2002
 **2001
 
 
 
 
Revenues
 
 
 
 
 
 
 
Premiums and annuity considerations
$               12 
 
$              9 
Net investment income
57 
 
76 
Net realized investment gains (losses)
9 
 
14 
Fee and other income
87 
 
63 
 
 
 
 
Total revenues
165 
 
162 
 
 
 
 
Benefits and Expenses
 
 
 
 
 
 
 
Policyowner benefits
76 
 
81 
Other operating expenses
48 
 
34 
Amortization of deferred policy acquisition costs
34 
 
53 
 
 
 
 
Total benefits and expenses
158 
 
168 
 
 
 
 
Income (loss) from operations
7 
 
(6)
 
 
 
 
Interest expense
24 
 
24 
 
 
 
 
Loss before income tax benefit and
 
 
 
   cumulative effect of change in accounting principle
(17)
 
(30)
 
 
 
 
Income tax benefit
(8)
 
(13)
 
 
 
 
Net loss before cumulative effect of change
 
 
 
   in accounting principle
(9)
 
(17)
 
 
 
 
Cumulative effect of change in accounting
 
 
 
   principle, net of taxes
-
 
5 
 
 
 
 
Net loss
$               (9)
 
$            (12)
 

 

 

 

 

 
*The accompanying notes are an integral part of the consolidated financial statements.

3

<PAGE>
**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)

**Unaudited**ASSETS**March 31, 2002**December 31, 2001
Investments
Fixed maturities available-for-sale at fair value (amortized cost
  of $2,014 and $2,040 in 2002 and 2001, respectively)
$
2,054
$
2,098
Trading fixed maturities at fair value (amortized cost of $1,029
   and $1,020 in 2002 and 2001, respectively)
1,033 
1,041
Subordinated note from affiliate held-to-maturity (fair value of $621
  and $620 in 2002 and 2001, respectively)
600 
600
Short-term investments
65 
103
Mortgage loans
855 
915
Real estate
83 
84
Policy loans
42 
43
Other invested assets
66 
67
Total investments
4,798 
4,951
Cash and cash equivalents
259 
180
Accrued investment income
76 
64
Deferred policy acquisition costs
758
766
Outstanding premiums
2
4
Other assets
183 
112
Separate account assets
16,197 
16,233**Total assets
$
22,273 
$
22,310**LIABILITIES
Future contract and policy benefits
$
686
$
691
Contractholder deposit funds and other policy liabilities
3,180
3,146
Unearned revenue
11
12
Accrued expenses and taxes
20
116
Deferred federal income taxes
145
99
Long-term debt payable to affiliates
565
565
Partnership capital securities
621
608
Other liabilities
136
108
Separate account liabilities
16,197
16,233
Total liabilities
21,561
21,578**STOCKHOLDER'S EQUITY
Common stock, $1,000 par value - 10,000 shares authorized;
6,437 shares issued and outstanding
6
6
Additional paid-in capital
265
265
Accumulated other comprehensive income
27
38
Retained earnings
414
423
Total stockholder's equity
712
732
Total liabilities and stockholder's equity
$
22,273***********************