20 Washington Avenue South o Minneapolis, Minnesota 55401
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NORTHWESTERN NATIONAL LIFE INSURANCE COMPANY
MFS/NWNL VARIABLE ACCOUNT
SEMI-ANNUAL REPORT
FOR THE PERIOD ENDED
JUNE 30, 1996
(UNAUDITED)
This report has been prepared to provide information to owners of MFS/NWNL
Variable Account Contracts. If it is used for any other purpose, it must be
accompanied or preceded by a current MFS/NWNL Variable Account Prospectus which
discloses any charges and other important information about the Account,
together with the current Prospectuses for the underlying Funds.
<PAGE>
MFS/NWNL VARIABLE ACCOUNT
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996
(In Thousands, Except Share and Unit Data)
(UNAUDITED)
<TABLE>
<CAPTION>
MASSACHUSETTS
MASSACHUSETTS INVESTORS MFS(R)
MFS(R) MFS(R) INVESTORS GROWTH STOCK RESEARCH
ASSETS: MONEY MARKET BOND FUND TRUST FUND FUND
- ------- FUND (CLASS A) (CLASS A) (CLASS A) (CLASS A)
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Investments in mutual funds at market value:
MFS(R) Money Market Fund
2,276,578 shares (cost $2,277)......... $2,277
MFS(R) Bond Fund- Class A
109,920 shares (cost $1,481)........... $1,409
Massachusetts Investors Trust- Class A
112,271 shares (cost $1,393)........... $1,566
Massachusetts Investors Growth Stock Fund- Class A
110,898 shares (cost $1,226)........... $1,338
MFS(R) Research Fund- Class A
93,315 shares (cost $1,243)............ $1,662
MFS(R) Total Return Fund- Class A
227,364 shares (cost $2,977)...........
MFS(R) Growth Opportunities Fund- Class A
377,493 shares (cost $4,202)...........
MFS(R) High Income Fund- Class A
680,211 shares (cost $3,378)...........
MFS(R) World Governments Fund- Class A
58,861 shares (cost $673)..............
MFS(R) Emerging Growth Fund- Class A
82,400 shares (cost $1,742)............
----------- ----------- ----------- ----------- -----------
Total Assets................................ $2,277 $1,409 $1,566 $1,338 $1,662
====== ====== ====== ====== ======
LIABILITIES AND
CONTRACT OWNERS' EQUITY:
- ------------------------
Due to Northwestern National Life
Insurance Company for accrued contract
charges and reserve transfers. .......... $3 $2 $1 $1 $2
Contract Owners' Equity..................... 2,274 1,407 1,565 1,337 1,660
----------- ----------- ----------- ----------- -----------
Total Liabilities and Contract Owners' Equity $2,277 $1,409 $1,566 $1,338 $1,662
====== ====== ====== ====== ======
Units Outstanding:................ 92,872.996 31,680.622 24,237.070 24,916.614 26,368.489
Net Asset Value per Unit:
Tax Qualified.............. $24.487908 $43.833017 $63.757030 $53.666220 $62.930994
Non-Tax Qualified.......... $24.531144 $42.979190 $62.151078 $52.447550 $66.171218
</TABLE>
The accompanying notes are an integral part of the financial statements.
i
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES, CONTINUED
(UNAUDITED)
<TABLE>
<CAPTION>
MFS(R) MFS(R) MFS(R) MFS(R) MFS(R)
TOTAL GROWTH HIGH WORLD EMERGING
RETURN OPPORTUNITIES INCOME GOVERNMENTS GROWTH
ASSETS: FUND FUND FUND FUND FUND
- ------- (CLASS A) (CLASS A) (CLASS A) (CLASS A) (CLASS A) TOTAL
----------- ----------- ----------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Investments in mutual funds at market value:
MFS(R) Money Market Fund
2,276,578 shares (cost $2,277)......... $ 2,277
MFS(R) Bond Fund- Class A
109,920 shares (cost $1,481)........... 1,409
Massachusetts Investors Trust- Class A
112,271 shares (cost $1,393)........... 1,566
Massachusetts Investors Growth Stock Fund- Class A
110,898 shares (cost $1,226)........... 1,338
MFS(R) Research Fund- Class A
93,315 shares (cost $1,243)............ 1,662
MFS(R) Total Return Fund- Class A
227,364 shares (cost $2,977)........... $3,363 3,363
MFS(R) Growth Opportunities Fund- Class A
377,493 shares (cost $4,202)........... $5,082 5,082
MFS(R) High Income Fund- Class A
680,211 shares (cost $3,378)........... $3,510 3,510
MFS(R) World Governments Fund- Class A
58,861 shares (cost $673).............. $621 621
MFS(R) Emerging Growth Fund- Class A
82,400 shares (cost $1,742)............ $2,511 2,511
----------- ----------- ----------- ----------- ----------- -----------
Total Assets................................ $3,363 $5,082 $3,510 $621 $2,511 $23,339
====== ====== ====== ==== ====== =======
LIABILITIES AND
CONTRACT OWNERS' EQUITY:
- ------------------------
Due to Northwestern National Life
Insurance Company for accrued contract
charges and reserve transfers. .......... $4 $5 $3 $1 $3 $25
Contract Owners' Equity..................... 3,359 5,077 3,507 620 2,508 23,314
----------- ----------- ----------- ----------- ----------- -----------
Total Liabilities and Contract Owners' Equity $3,363 $5,082 $3,510 $621 $2,511 $23,339
====== ====== ====== ==== ====== =======
Units Outstanding:................ 55,656.344 89,370.316 70,942.409 12,562.058 44,498.757 473,105.675
Net Asset Value per Unit:
Tax Qualified.............. $60.350101 $55.845068 $49.384436 $47.127120 $56.364758
Non-Tax Qualified.......... $60.511512 $50.862312 $49.858523 $47.157189 $56.364758
</TABLE>
The accompanying notes are an integral part of the financial statements.
ii
<PAGE>
MFS/NWNL VARIABLE ACCOUNT STATEMENT OF OPERATIONS
AND CHANGES IN CONTRACT OWNERS' EQUITY
(In Thousands of Dollars)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED YEAR ENDED
ENDED DECENBER 31, DECEMBER 31,
JUNE 30, 1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Net investment income:
Reinvested dividend income..................................... $354 $ 960 $844
Reinvested capital gains....................................... - 1,107 751
Administrative expenses........................................ (168) (350) (365)
----------- ----------- -----------
Net investment income and capital gains................. 186 1,717 1,230
----------- ----------- -----------
Realized and unrealized gains (losses):
Net realized gains on redemption of fund shares............... 310 388 268
Increase (decrease) in unrealized appreciation
of investments............................................ 1,063 2,731 (2,242)
----------- ----------- -----------
Net realized and unrealized gains (losses)................ 1,373 3,119 (1,974)
----------- ----------- -----------
Net additions (reductions) from operations............. 1,559 4,836 (744)
----------- ----------- -----------
Contract Owners' transactions:
Net purchase payments......................................... 197 339 492
Surrenders.................................................... (1,985) (4,519) (3,049)
Annuity payments.............................................. (98) (283) (54)
Transfers (from) to required reserves......................... (1) - (18)
----------- ----------- -----------
Net reductions for Contract Owners' transactions.......... (1,887) (4,463) (2,629)
----------- ----------- -----------
Net (reductions) additions for the period.............. (328) 373 (3,373)
Contract Owners' Equity, beginning of the year...................... 23,642 23,269 26,642
----------- ----------- -----------
Contract Owners' Equity, end of the period.......................... $23,314 $23,642 $23,269
======= ======= =======
</TABLE>
The accompanying notes are integral part of the financial statements.
iii
<PAGE>
MFS/NWNL VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
ORGANIZATION AND CONTRACTS:
MFS/NWNL Variable Account (the "Account") is a separate account of
Northwestern National Life Insurance Company ("NWNL"), a wholly owned
subsidiary of ReliaStar Financial Corp. (formerly The NWNL Companies, Inc.).
The Account is registered as a unit investment trust under the Investment
Company Act of 1940.
Purchase payments received under the contracts are allocated to Sub-Accounts
of the Account, each of which invested in one of the following Funds during
the period.
MFS(R) Money Market Fund (Class A)
MFS(R) Bond Fund (Class A)
Massachusetts Investors Trust (Class A)
Massachusetts Investors Growth Stock Fund (Class A)
MFS(R) Research Fund (Class A)
MFS(R) Total Return Fund (Class A)
MFS(R) Growth Opportunities Fund (Class A)
MFS(R) High Income Fund (Class A)
MFS(R) World Governments Fund (Class A)
MFS(R) Emerging Growth Fund (Class A)
SECURITIES VALUATION TRANSACTIONS:
The market value of investments in the Sub-Accounts is based on the closing
net asset values of the Fund shares held at the end of the period. Investment
transactions are accounted for on the trade date (date the order to purchase
or redeem is executed) and dividend income and capital gain distributions are
recorded on the ex-dividend date. Net realized gains and losses on
redemptions of shares of the Funds are determined on the basis of specific
identification of Fund share costs.
VARIABLE ANNUITY RESERVES:
The amount of the reserves for contracts in the distribution period is
determined by actuarial assumptions which meet statutory requirements. Gains
or losses resulting from actual mortality experience, the full responsibility
for which is assumed by NWNL, are offset by transfers to or from NWNL.
2. FEDERAL INCOME TAXES:
The MFS/NWNL Variable Account has not provided for income taxes because in
1981 the Internal Revenue Service issued Revenue Ruling 81-225, which holds,
in part, that for certain types of variable annuity contracts, the Contract
Owner is considered the owner of the underlying mutual fund shares for
federal income tax purposes and any earnings and/or gains from the shares are
included in the gross income of the Contract Owner. The Ruling requires that
all long-term realized gains or losses on nontax qualified accounts be
reported to the Contract Owners.
3. CONTRACT CHARGES:
No deduction is made for a sales charge from the purchase payments made for
the contracts. However, on certain surrenders, NWNL will deduct from the
contract value a surrender charge as set forth in the contract.
Charges by NWNL on the contracts include: (a) an annual administrative charge
of $30 from each contract on the anniversary date or at the time of surrender
if other than the anniversary date and (b) a charge for mortality and expense
risk assumed by NWNL equal to an annual rate of 0.9% and 0.4%, respectively,
of each participant's account. NWNL bears the risk of adverse mortality
experience and any costs for sales and administrative services and expenses
which exceed the periodic charge.
Various states and other governmental units levy a premium tax on annuity
contracts issued by insurance companies. If the owner of a contract lives in
a state which levies such a tax, NWNL may deduct the amount of the tax from
the purchase payments received or the value of the contract at annuitization.
iv
<PAGE>
MFS/NWNL VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(UNAUDITED)
4. INVESTMENTS:
The net realized gains (losses) on redemptions of fund shares for the six
months ended June 30, 1996 and the years ended December 31, 1995 and 1994
were as follows, (in thousands):
<TABLE>
<CAPTION>
TOTAL MFS(R) MONEY MARKET FUND
----------------------------------------- ----------------------------------------
SIX MONTHS YEAR ENDED YEAR ENDED SIX MONTHS YEAR ENDED YEAR ENDED
ENDED DEC. 31, DEC. 31, ENDED DEC. 31, DEC. 31,
JUNE 30, 1996 1995 1994 JUNE 30, 1996 1995 1994
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Proceeds from redemptions... $4,831 $6,671 $12,719 $1,583 $2,050 $4,904
Cost........................ 4,521 6,283 12,451 1,583 2,050 4,904
------------ ------------ ------------ ------------ ------------ ------------
Net realized gains (losses) on
redemptions of fund shares $310 $ 388 $ 268 $- $ - $ -
==== ======= ========= ====== ===== ========
<CAPTION>
MASSACHUSETTS INVESTORS
GROWTH STOCK FUND MFS(R) RESEARCH FUND
(CLASS A) (CLASS A)
------------------------------------------ -----------------------------------------
SIX MONTHS YEAR ENDED YEAR ENDED SIX MONTHS YEAR ENDED YEAR ENDED
ENDED DEC. 31, DEC. 31, ENDED DEC. 31, DEC. 31,
JUNE 30, 1996 1995 1994 JUNE 30, 1996 1995 1994
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Proceeds from redemptions... $226 $290 $226 $186 $503 $273
Cost........................ 197 244 201 129 395 214
------------ ------------ ------------ ------------ ------------ ------------
Net realized gains (losses) on
redemptions of fund shares $29 $ 46 $ 25 $57 $108 $ 59
=== ===== ===== === ==== =====
<CAPTION>
MFS(R) WORLD
MFS(R) HIGH INCOME FUND GOVERNMENTS FUND
(CLASS A) (CLASS A)
--------------------------------------------- ---------------------------------------------
SIX MONTHS YEAR ENDED YEAR ENDED SIX MONTHS YEAR ENDED YEAR ENDED
ENDED DEC. 31, DEC. 31, ENDED DEC. 31, DEC. 31,
JUNE 30, 1996 1995 1994 JUNE 30, 1996 1995 1994
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Proceeds from redemptions... $1,380 $913 $4,304 $59 $220 $354
Cost........................ 1,331 959 4,196 63 227 379
------------ ------------ ------------ ------------ ------------ ------------
Net realized gains (losses) on
redemptions of fund shares $49 ($46) $ 108 ($4) ($7) ($25)
=== ==== ======= === === ====
</TABLE>
The accompanying notes are integral part of the financial statements.
v
<PAGE>
MFS/NWNL VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(UNAUDITED)
<TABLE>
<CAPTION>
MFS(R) BOND FUND MASSACHUSETTS INVESTORS TRUST
(CLASS A) (CLASS A)
----------------------------------------- ----------------------------------------
SIX MONTHS YEAR ENDED YEAR ENDED SIX MONTHS YEAR ENDED YEAR ENDED
ENDED DEC. 31, DEC. 31, ENDED DEC. 31, DEC. 31,
JUNE 30, 1996 1995 1994 JUNE 30, 1996 1995 1994
------------ ------------ ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Proceeds from redemptions... $224 $276 $682 $84 $190 $157
Cost........................ 234 292 705 88 220 182
------------ ------------ ------------ ----------- ------------ -----------
Net realized gains (losses) on
redemptions of fund shares ($10) ($16) ($23) ($4) ($30) ($25)
==== ==== ==== === ==== ====
<CAPTION>
MFS(R) GROWTH
MFS(R) TOTAL RETURN FUND OPPORTUNITIES FUND
(CLASS A) (CLASS A)
---------------------------------------------- --------------------------------------------
SIX MONTHS YEAR ENDED YEAR ENDED SIX MONTHS YEAR ENDED YEAR ENDED
ENDED DEC. 31, DEC. 31, ENDED DEC. 31, DEC. 31,
JUNE 30, 1996 1995 1994 JUNE 30, 1996 1995 1994
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Proceeds from redemptions... $563 $1,025 $1,031 $370 $924 $586
Cost........................ 457 844 901 332 790 557
------------ ------------ ------------ ------------ ------------ ------------
Net realized gains (losses) on
redemptions of fund shares $106 $181 $130 $38 $134 $29
==== ==== ==== === ==== ===
</TABLE>
MFS(R) EMERGING
GROWTH FUND
(CLASS A)
------------------------------------------
SIX MONTHS YEAR ENDED YEAR ENDED
ENDED DEC. 31, DEC. 31,
JUNE 30, 1996 1995 1994
------------ ------------ ------------
Proceeds from redemptions... $156 $280 $202
Cost........................ 107 262 212
------------ ------------ ------------
Net realized gains (losses) on
redemptions of fund shares $49 $ 18 ($10)
=== ====== ====
The accompanying notes are integral part of the financial statements.
vi
<PAGE>
MFS/NWNL VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(UNAUDITED)
5. CONTRACT OWNERS' TRANSACTIONS:
Unit transactions in each Sub-Account during the six months ended June
30, 1996 and the years ended December 31, 1995 and 1994 were as follows:
<TABLE>
<CAPTION>
MFS(R) BOND
MFS(R) MONEY FUND
MARKET FUND (CLASS A)
---------------------------------------- ------------------------------------
SIX MONTHS YEAR ENDED YEAR ENDED SIX MONTHS YEAR ENDED YEAR ENDED
ENDED DEC. 31, DEC. 31, ENDED DEC. 31, DEC. 31,
JUNE 30, 1996 1995 1994 JUNE 30, 1996 1995 1994
----------- ---------- ---------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Units outstanding, beginning of the year 112,836.517 167,242.251 175,814.541 35,793,566 40,693.896 50,303.756
Units purchased.................... 957.748 2,492.450 3,150.590 200.372 446.925 550.518
Units redeemed..................... (21,946.709) (60,956.726) (41,227.550) (4,738.572) (5,794.078) (4,984.507)
Units transferred between Sub-Accounts 1,025.440 4,058.542 29,504.670 425.256 446.823 (5,175.871)
---------- ---------- ---------- ---------- ---------- ----------
Units outstanding, end of the period 92,872.996 112,836.517 167,242.251 31,680.622 35,793.566 40,693.896
========== =========== =========== ========== ========== ==========
<CAPTION>
MFS(R) GROWTH
MFS(R) TOTAL OPPORTUNITIES
RETURN FUND FUND
(CLASS A) (CLASS A)
----------------------------------- ------------------------------------
SIX MONTHS YEAR ENDED YEAR ENDED SIX MONTHS YEAR ENDED YEAR ENDED
ENDED DEC. 31, DEC. 31, ENDED DEC. 31, DEC. 31,
JUNE 30, 1996 1995 1994 JUNE 30, 1996 1995 1994
----------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Units outstanding, beginning of the year 62,014.906 81,547.990 89,906.122 94,889.785 111,725.962 120,705.939
Units purchased.................... 725.893 1,366.667 2,564.594 544.537 1,166.607 1,677.949
Units redeemed..................... (5,617.107) (15,678.477) (13,630.791) (5,419.716) (18,109.828) (9,521.122)
Units transferred between Sub-Accounts (1,467.348) (5,221.274) 2,708.065 (644.290) 107.044 (1,136.804)
---------- ---------- ---------- ---------- ---------- ------------
Units outstanding, end of the period 55,656.344 62,014.906 81,547.990 89,370.316 94,889.785 111,725.962
========== ========== ========== ========== ========== ============
</TABLE>
The accompanying notes are integral part of the financial statements.
vii
<PAGE>
MFS/NWNL VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(UNAUDITED)
<TABLE>
<CAPTION>
MASSACHUSETTS
MASSACHUSETTS INVESTORS GROWTH
INVESTORS TRUST STOCK FUND
(CLASS A) (CLASS A)
------------------------------------ ---------------------------------------
SIX MONTHS YEAR ENDED YEAR ENDED SIX MONTHS YEAR ENDED YEAR ENDED
ENDED DEC. 31, DEC. 31, ENDED DEC. 31, DEC. 31,
JUNE 30, 1996 1995 1994 JUNE 30, 1996 1995 1994
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Units outstanding, beginning of the year 23,606.537 24,462.931 26,534.206 24,462.862 34,032.392 37,169.634
Units purchased.................... 384.031 697.792 764.201 311.761 695.880 837.386
Units redeemed..................... (551.515) (2,385.827) (1,997.585) (3,212.119) (5,171.989) (4,276.482)
Units transferred between Sub-Accounts 798.017 831.641 (837.891) (645.890) (1,093.421) 301.854
---------- ---------- ---------- ---------- ---------- ----------
Units outstanding, end of the period 24,237.070 23,606.537 24,462.931 24,916.614 28,462.862 34,032.392
========== ========== ========== ========== ========== ==========
MFS(R) WORLD
MFS(R) HIGH GOVERNMENTS
INCOME FUND FUND
(CLASS A) (CLASS A)
--------------------------------------- --------------------------------------
SIX MONTHS YEAR ENDED YEAR ENDED SIX MONTHS YEAR ENDED YEAR ENDED
ENDED DEC. 31, DEC. 31, ENDED DEC. 31, DEC. 31,
JUNE 30, 1996 1995 1994 JUNE 30, 1996 1995 1994
---------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Units outstanding, beginning of the year 83,394.363 95,772.845 120,857.156 13,675.919 15,677.993 20,279.064
Units purchased.................... 190.164 343.909 1,627.949 19.524 128.349 254.406
Units redeemed..................... (6,358.343) (16,544.601) (21,586.502) (872.974) (1,615.579) (2,420.053)
Units transferred between Sub-Accounts (6,283.775) 3,822.210 (5,125.758) (260.411) (514.844) (2,435.424)
---------- ---------- ---------- ---------- ---------- ----------
Units outstanding, end of the period 70,942.409 83,394.363 95,772.845 12,562.058 13,675.919 15,677.993
========== ========== ========== ========== ========== ==========
</TABLE>
The accompanying notes are integral part of the financial statements.
viii
<PAGE>
MFS/NWNL VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(UNAUDITED)
<TABLE>
<CAPTION>
MFS(R) RESEARCH
FUND
(CLASS A)
---------------------------------------
SIX MONTHS YEAR ENDED YEAR ENDED
ENDED DEC. 31, DEC. 31,
JUNE 30, 1996 1995 1994
------------- ---------- ----------
<S> <C> <C> <C>
Units outstanding, beginning of the year 27,105.758 35,069.784 32,935.954
Units purchased.................... 266.601 345.673 439.089
Units redeemed..................... (1,548.280) (6,975.455) (3,194.020)
Units transferred between Sub-Accounts 544.410 (1,334.244) 4,888.761
--------- ---------- ----------
Units outstanding, end of the period 26,368.489 27,105.758 35,069.784
========= ========== ==========
<CAPTION>
MFS(R) EMERGING
GROWTH
FUND
(CLASS A)
-----------------------------------------
SIX MONTHS YEAR ENDED YEAR ENDED
ENDED DEC. 31, DEC. 31,
JUNE 30, 1996 1995 1994
------------- ---------- ----------
<S> <C> <C> <C>
Units outstanding, beginning of the year 39,184.416 39,191.298 34,652.403
Units purchased.................... 540.318 1,016.229 1,145.168
Units redeemed..................... (1,319.070) (1,275.193) (2,853.696)
Units transferred between Sub-Accounts 6,093.093 252.082 6,247.423
---------- ---------- ----------
Units outstanding, end of the period 44,498.757 39,184.416 39,191.298
========== ========== ==========
</TABLE>
The accompanying notes are integral part of the financial statements.
viii
<PAGE>
MFS/NWNL VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(UNAUDITED)
6. STATEMENT OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY.
Operations and changes in Contract Owners' equity for the six months
ended June 30, 1996 were as follows, (in thousands):
<TABLE>
<CAPTION>
MASSACHUSETTS
MASSACHUSETTS INVESTORS
MFS(R) MFS(R) INVESTORS GROWTH STOCK
MONEY MARKET BOND FUND TRUST FUND
TOTAL FUND (CLASS A) (CLASS A) (CLASS A)
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net investment income:
Reinvested dividend income............ $354 $63 $55 $11 $-
Reinvested capital gains.............. - - - - -
Administrative expenses............... (168) (22) (11) (7) (11)
----------- ----------- ----------- ----------- -----------
Net investment income and capital gains (losses) 186 41 44 4 (11)
----------- ----------- ----------- ----------- -----------
Realized and unrealized gains (losses):
Net realized gains (losses) on redemptions
of fund shares................... 310 - (10) (4) 29
Increase in unrealized appreciation
of investments.................... 1,063 - (89) 138 149
----------- ----------- ----------- ----------- -----------
Net realized and unrealized gains (losses) 1,373 - (99) 134 178
----------- ----------- ----------- ----------- -----------
Net additions (reductions) from operations 1,559 41 (55) 138 167
----------- ----------- ----------- ----------- -----------
Contract Owners' transactions:
Net purchase payments................. 197 23 9 23 16
Surrenders............................ (1,985) (493) (208) (33) (168)
Transfers between Sub-Accounts........ - 20 18 49 (32)
Annuity payments..................... (98) (35) (2) (1) -
Transfers from required reserves...... (1) - - - -
----------- ----------- ----------- ----------- -----------
Net (reductions) additions for
Contract Owners' transactions.. (1,887) (485) (183) 38 (184)
----------- ----------- ----------- ----------- -----------
Net (reductions) additions for the period (328) (444) (238) 176 (17)
Contract Owners' Equity, beginning of the year 23,642 2,718 1,645 1,389 1,354
----------- ----------- ----------- ----------- -----------
Contract Owners' Equity, end of the period.. $23,314 $2,274 $1,407 $1,565 $1,337
======= ====== ====== ====== ======
</TABLE>
The accompanying notes are integral part of the financial statements.
ix
<PAGE>
MFS/NWNL VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(UNAUDITED)
<TABLE>
<CAPTION>
MFS(R) MFS(R)
MFS(R) MFS(R) GROWTH MFS(R) WORLDWIDE MFS(R)
RESEARCH TOTAL RETURN OPPORTUNITIES HIGH INCOME GOVERNMENTS EMERGING
FUND FUND FUND FUND FUND GROWTH FUND
(CLASS A) (CLASS A) (CLASS A) (CLASS A) (CLASS A) (CLASS A)
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net investment income:
Reinvested dividend income............ $- $73 $- $152 $- $-
Reinvested capital gains.............. - - - - - -
Administrative expenses............... (11) (25) (37) (24) (4) (16)
----------- ----------- ---------- ---------- ---------- ---------
Net investment income and capital gains (losses) (11) 48 (37) 128 (4) (16)
----------- ----------- ---------- ---------- ---------- ---------
Realized and unrealized gains (losses):
Net realized gains (losses) on redemptions
of fund shares................... 57 106 38 49 (4) 49
Increase in unrealized appreciation
of investments.................... 149 (13) 564 (55) (3) 223
----------- ----------- ---------- ---------- ---------- ---------
Net realized and unrealized gains (losses) 206 93 602 (6) (7) 272
----------- ----------- ---------- ---------- ---------- ---------
Net additions (reductions) from operations 195 141 565 122 (11) 256
----------- ----------- ---------- ---------- ---------- ---------
Contract Owners' transactions:
Net purchase payments................. 15 43 29 9 1 29
Surrenders............................ (71) (332) (272) (296) (41) (71)
Transfers between Sub-Accounts........ 34 (87) (32) (303) (12) 345
Annuity payments..................... (21) - (24) (13) (2) -
Transfers from required reserves...... - - (1) - - -
----------- ----------- ---------- ---------- ---------- ---------
Net (reductions) additions for
Contract Owners' transactions.. (43) (376) (300) (603) (54) 303
----------- ----------- ---------- ---------- ---------- ---------
Net (reductions) additions for the period 152 (235) 265 (481) (65) 559
Contract Owners' Equity, beginning of the year 1,508 3,594 4,812 3,988 685 1,949
----------- ----------- ---------- ---------- ---------- ---------
Contract Owners' Equity, end of the period.. $1,660 $3,359 $5,077 $3,507 $620 $2,508
====== ====== ====== ====== ==== ======
</TABLE>
The accompanying notes are integral part of the financial statements.
x
<PAGE>
MFS/NWNL VARIABLE ACCOUNT
[LOGO] 20 Washington Avenue South
Minneapolis, Minnesota 55401
(612) 372-5507
38776i
(Select I)
