The Energy Exascale Earth System Model (E3SM) is a new coupled climate model sponsored by the US Department of Energy. Here we present E3SM global simulations using active ocean and sea ice and driven by the CORE-II inter-annual atmospheric forcing data set. The E3SM ocean and sea-ice components are MPAS-Ocean and MPAS-Seaice, which use the Model for Prediction Across Scales (MPAS) framework and run on unstructured horizontal meshes. For this study, grid cells vary from 30 to 60 km for the low resolution mesh and 6 to 18 km at high resolution. The vertical grid is a structured z-star coordinate and uses 60 and 100 layers for low and high resolution, respectively. The lower resolution simulation was run for five core cycles (300 years) with little drift in sea surface temperature or heat content. The meridional heat transport is within observational variability, while the meridional overturning circulation at 26.5N is low compared to observations. The largest temperature biases occur in the Labrador sea and western boundary currents, and the mixed layer is deeper than observations at high latitudes in the winter months. Sea-ice extent, volume and concentration agree well with observations. At high resolution, the sea surface height compares well with satellite observations in mean and variability, but is overly energetic in regions with strong currents.