SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)

OF THE SECURITIES EXCHANGE ACT 0F 1934

 

 

 

For the Quarterly Period Ended March 31, 2003
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.

 Yes  |X|
  No |_|
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [x]

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the last practicable date.

Registrant has 6,437 shares of common stock outstanding on May 15, 2003, all of which are owned by Sun Life of Canada (U.S.) Holdings, Inc.
**THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS H (1) (a) AND (b)  OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT PERMITTED BY GENERAL INSTRUCTION H.**
**SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A WHOLLY-OWNED SUBSIDIARY OF

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

QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED MARCH 31, 2003****TABLE OF CONTENTS

 
 
Page**PART I - Financial Information**
Item 1: Financial Statements:
 
Consolidated Statements of Income (Unaudited) - Three Months Ended March 31, 2003   
and March 31, 2002
3    
Consolidated Balance Sheets - March 31, 2003 (Unaudited) and December 31, 2002 (Audited) 
4    
Consolidated Statements of Comprehensive Income (Unaudited) - Three Months Ended  
March 31, 2003 and March 31, 2002 
5    
Consolidated Statements of Stockholder's Equity (Unaudited) - Three Months Ended  
March 31, 2003 and March 31, 2002 
6    
Consolidated Statements of Cash Flows (Unaudited) - Three Months Ended  
March 31, 2003 and March 31,2002 
7-8    
Notes to Unaudited Consolidated Financial Statements 
9-15
Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations        
16-31  
Item 3: Quantitative and Qualitative Disclosures About Market Risk      
32-34  
Item 4: Controls and Procedures      
34
 
**PART II - Other Information**
Item 1: Legal Proceedings
35  
Item 2: Changes in Securities and Use of Proceeds
35  
Item 3: Defaults Upon Senior Securities
35  
Item 4: Submission of Matters to a Vote of Security Holders 
35  
Item 5: Other Information
35
 
Item 6: Exhibits and Reports on Form 8-K 
35-36
2

**PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

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 thousands)

For the three months ended March 31, 
 **Unaudited **2003 **2002    
Revenues       
Premiums and annuity considerations
$         9,483 
$       11,929
Net investment income
86,723 
90,268
Net realized investment gains (losses)
3,233 
(7,752)
Derivative income (loss)
35,050 
(16,859)
Fee and other income
65,074 
87,330    
Total revenues
199,563 
164,916    
Benefits and Expenses       
Policyowner benefits
79,549 
75,575
Other operating expenses
29,606 
47,831
Amortization of deferred policy acquisition costs
44,522 
34,587    
Total benefits and expenses
153,677 
157,993    
Income from operations
45,886 
6,923    
Interest expense
24,748 
23,607    
Income (loss) before income tax  expense (benefit)
21,138 
(16,684)    
Income tax expense (benefit)
4,328 
(7,941)        
Net income (loss)
$     16,810 
$     (8,743)
 

 

 

 

 

 

 

 

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

3
**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 thousands except per share data)
**Unaudited**ASSETS**March 31, 2003**December 31, 2002
Investments

Fixed maturities available-for-sale at fair value (amortized cost
  of $2,262,801 and $2,104,081 in 2003 and 2002, respectively)
$
2,373,523
$
2,211,836
Trading fixed maturities at fair value (amortized cost of $1,362,974
   and $1,354,969 in 2003 and 2002, respectively)
1,420,389
1,404,825
Subordinated note from affiliate held-to-maturity (fair value of*********************