20 Washington Avenue South o Minneapolis, Minnesota 55401
NORTHWESTERN NATIONAL LIFE INSURANCE COMPANY
MFS/NWNL VARIABLE ACCOUNT
ANNUAL REPORT
FOR THE YEAR ENDED
DECEMBER 31, 1995
[LOGO]
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>
INDEPENDENT AUDITORS' REPORT
Board of Directors
Northwestern National Life Insurance
Company and Contract Owners of
MFS/NWNL Variable Account:
We have audited the accompanying statement of assets and liabilities of
MFS/NWNL Variable Account as of December 31, 1995 and the related combined
statements of operations and changes in Contract Owners' equity for each of the
three years in the period ended December 31, 1995. These financial statements
are the responsibility of the management of Northwestern National Life Insurance
Company. Our responsibility is to express an opinion on these financial
statements based on our audits.
We have conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures include
confirmation of the securities owned as of December 31, 1995, by correspondence
with the Account custodians. 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, the financial statements referred to above present fairly, in
all material respects, the financial position of MFS/NWNL Variable Account as of
December 31, 1995, and the results of its operations and changes in Contract
Owners' equity for each of the three years in the period ended December 31,
1995, in conformity with generally accepted accounting principles.
Deloitte & Touche LLP
Minneapolis, Minnesota
February 2, 1996
i
<PAGE>
MFS/NWNL VARIABLE ACCOUNT
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1995
(In Thousands, Except Share and Unit Data)
<TABLE>
<CAPTION>
MASSACHUSETTS
MASSACHUSETTS INVESTORS MFS(R)
MFS(R) MFS(R) INVESTORS GROWTH STOCK RESEARCH
MONEY MARKET BOND FUND TRUST FUND FUND
ASSETS: 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
2,720,961 shares (cost $2,721)......... $2,721
MFS(R) Bond Fund- Class A
120,449 shares (cost $1,631)........... $1,648
Massachusetts Investors Trust- Class A
109,399 shares (cost $1,355)........... $1,390
Massachusetts Investors Growth Stock Fund- Class A
127,504 shares (cost $1,392)........... $1,355
MFS(R) Research Fund- Class A
96,542 shares (cost $1,240)............ $1,510
MFS(R) Total Return Fund- Class A
249,715 shares (cost $3,199)...........
MFS(R) Growth Opportunities Fund- Class A
403,389 shares (cost $4,501)...........
MFS(R) High Income Fund- Class A
770,685 shares (cost $3,805)...........
MFS(R) World Governments Fund- Class A
62,188 shares (cost $734)..............
MFS(R) Emerging Growth Fund- Class A
73,023 shares (cost $1,405)............
----------- ----------- ----------- ----------- -----------
Total Assets................................ $2,721 $1,648 $1,390 $1,355 $1,510
====== ====== ====== ====== ======
LIABILITIES AND
CONTRACT OWNERS' EQUITY:
Due to Northwestern National Life
Insurance Company for accrued contract
charges and reserve transfers. .......... $3 $3 $1 $1 $2
Contract Owners' Equity..................... 2,718 1,645 1,389 1,354 1,508
----------- ----------- ----------- ----------- -----------
Total Liabilities and Contract Owners' Equity $2,721 $1,648 $1,390 $1,355 $1,510
====== ====== ====== ====== ======
Units Outstanding:................ 112,836.517 35,793.566 23,606.537 28,462.862 27,105.758
Net Asset Value per Unit:
Tax Qualified.............. $24.089226 $45.397825 $58.043826 $47.572288 $55.624290
Non-Tax Qualified.......... $24.131759 $44.513521 $56.581787 $46.492000 $58.488303
</TABLE>
The accompanying notes are an integral part of the financial statements.
ii
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES, CONTINUED
<TABLE>
<CAPTION>
MFS(R) MFS(R) MFS(R) MFS(R) MFS(R)
TOTAL GROWTH HIGH WORLD EMERGING
RETURN OPPORTUNITIES INCOME GOVERNMENTS GROWTH
FUND FUND FUND FUND FUND
ASSETS: (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
2,720,961 shares (cost $2,721)......... $ 2,721
MFS(R) Bond Fund- Class A
120,449 shares (cost $1,631)........... 1,648
Massachusetts Investors Trust- Class A
109,399 shares (cost $1,355)........... 1,390
Massachusetts Investors Growth Stock Fund-
Class A
127,504 shares (cost $1,392)........... 1,355
MFS(R) Research Fund- Class A
96,542 shares (cost $1,240)............ 1,510
MFS(R) Total Return Fund- Class A
249,715 shares (cost $3,199)........... $3,598 3,598
MFS(R) Growth Opportunities Fund- Class A
403,389 shares (cost $4,501)........... $4,817 4,817
MFS(R) High Income Fund- Class A
770,685 shares (cost $3,805)........... $3,992 3,992
MFS(R) World Governments Fund- Class A
62,188 shares (cost $734).............. $685 685
MFS(R) Emerging Growth Fund- Class A
73,023 shares (cost $1,405)............ $1,951 1,951
---------- ----------- ----------- ----------- ----------- -----------
Total Assets................................ $3,598 $4,817 $3,992 $685 $1,951 $23,667
====== ====== ====== ==== ====== =======
LIABILITIES AND
CONTRACT OWNERS' EQUITY:
Due to Northwestern National Life
Insurance Company for accrued contract
charges and reserve transfers. .......... $4 $5 $4 $- $2 $25
Contract Owners' Equity..................... 3,594 4,812 3,988 685 1,949 23,642
---------- ----------- ----------- ----------- ----------- -----------
Total Liabilities and Contract $3,598 $4,817 $3,992 $685 $1,951 $23,667
====== ====== ====== ==== ====== =======
Owners' Equity
Units Outstanding:................ 62,014.906 94,889.785 83,394.363 13,675.919 39,184.416 520,964.629
Net Asset Value per Unit:
Tax Qualified.............. $57.956980 $49.862122 $47.782748 $47.869578 $49.732075
Non-Tax Qualified.......... $58.111989 $45.413197 $48.241464 $47.900110 $49.732075
</TABLE>
The accompanying notes are an integral part of the financial statements.
iii
<PAGE>
MFS/NWNL VARIABLE ACCOUNT STATEMENT OF OPERATIONS
AND CHANGES IN CONTRACT OWNERS' EQUITY
(In Thousands of Dollars)
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECENBER 31, DECEMBER 31,
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Net investment income:
Reinvested dividend income..................................... $ 960 $844 $1,289
Reinvested capital gains....................................... 1,107 751 1,347
Administrative expenses........................................ (350) (365) (407)
----------- ----------- -----------
Net investment income and capital gains................. 1,717 1,230 2,229
----------- ----------- -----------
Realized and unrealized gains (losses):
Net realized gains on redemption of fund shares............... 388 268 774
Increase (decrease) in unrealized appreciation
of investments............................................ 2,731 (2,242) 209
----------- ----------- -----------
Net realized and unrealized gains (losses)................ 3,119 (1,974) 983
----------- ----------- -----------
Net additions (reductions) from operations............. 4,836 (744) 3,212
----------- ----------- -----------
Contract Owners' transactions:
Net purchase payments......................................... 339 492 661
Surrenders.................................................... (4,519) (3,049) (4,598)
Annuity payments.............................................. (283) (54) (24)
Transfers (from) to required reserves......................... - (18) 2
----------- ----------- -----------
Net reductions for Contract Owners' transactions.......... (4,463) (2,629) (3,959)
----------- ----------- -----------
Net additions (reductions) for the year................ 373 (3,373) (747)
Contract Owners' Equity, beginning of the year...................... 23,269 26,642 27,389
----------- ----------- -----------
Contract Owners' Equity, end of the year............................ $23,642 $23,269 $26,642
======= ======= =======
</TABLE>
The accompanying notes are integral part of the financial statements.
iv
<PAGE>
MFS/NWNL VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
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 year.
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 year. 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.
v
<PAGE>
MFS/NWNL VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS, CONTINUED
4. INVESTMENTS:
The net realized gains (losses) on redemptions of fund shares for the years
ended December 31, 1995, 1994 and 1993 were as follows, (in thousands):
<TABLE>
<CAPTION>
TOTAL MFS(R) MONEY MARKET FUND
------------------------------------------- ---------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1995 1994 1993 1995 1994 1993
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Proceeds from redemptions... $6,671 $12,719 $9,252 $2,050 $4,904 $3,004
Cost........................ 6,283 12,451 8,478 2,050 4,904 3,004
------------ ------------ ------------ ------------ ------------ ------------
Net realized gains (losses) on
redemptions of fund shares $ 388 $ 268 $ 774 $ - $ - $ -
======= ========= ======= ========= ========= =========
<CAPTION>
MASSACHUSETTS INVESTORS
GROWTH STOCK FUND MFS(R) RESEARCH FUND
(CLASS A) (CLASS A)
------------------------------------------- --------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1995 1994 1993 1995 1994 1993
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Proceeds from redemptions... $290 $226 $442 $503 $273 $104
Cost........................ 244 201 301 395 214 76
------------ ------------ ------------ ------------ ------------ ------------
Net realized gains (losses) on
redemptions of fund shares $ 46 $ 25 $141 $108 $ 59 $ 28
===== ===== ==== ==== ===== =====
<CAPTION>
MFS(R) WORLD
MFS(R) HIGH INCOME FUND GOVERNMENTS FUND
(CLASS A) (CLASS A)
------------------------------------------- --------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1995 1994 1993 1995 1994 1993
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Proceeds from redemptions... $913 $4,304 $1,803 $220 $354 $124
Cost........................ 959 4,196 1,536 227 379 111
------------ ------------ ------------ ------------ ------------ ------------
Net realized gains (losses) on
redemptions of fund shares ($46) $ 108 $ 267 ($7) ($25) $ 13
==== ======= ======= === ==== =====
</TABLE>
vi
<PAGE>
MFS/NWNL VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS, CONTINUED
<TABLE>
<CAPTION>
MFS(R) BOND FUND MASSACHUSETTS INVESTORS TRUST
(CLASS A) (CLASS A)
------------------------------------------- --------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1995 1994 1993 1995 1994 1993
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Proceeds from redemptions... $276 $682 $382 $190 $157 $207
Cost........................ 292 705 335 220 182 220
------------ ------------ ------------ ------------ ----------- ------------
Net realized gains (losses) on
redemptions of fund shares ($16) ($23) $ 47 ($30) ($25) ($13)
==== ==== ===== ==== ==== ====
</TABLE>
<TABLE>
<CAPTION>
MFS(R) GROWTH
MFS(R) TOTAL RETURN FUND OPPORTUNITIES FUND
(CLASS A) (CLASS A)
------------------------------------------- -----------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1995 1994 1993 1995 1994 1993
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Proceeds from redemptions... $1,025 $1,031 $1,300 $924 $586 $1,201
Cost........................ 844 901 1,081 790 557 1,111
------------ ------------ ------------ ------------ ------------ ------------
Net realized gains (losses) on
redemptions of fund shares $181 $130 $219 $134 $29 $90
==== ==== ==== ==== === ===
</TABLE>
MFS(R) EMERGING
GROWTH FUND
(CLASS A)
------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED
DEC. 31, DEC. 31, DEC. 31,
1995 1994 1993
------------ ------------ ------------
Proceeds from redemptions... $280 $202 $685
Cost........................ 262 212 703
------------ ------------ ------------
Net realized gains (losses) on
redemptions of fund shares $ 18 ($10) ($18)
====== ==== ====
vii
<PAGE>
MFS/NWNL VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS, CONTINUED
5. CONTRACT OWNERS' TRANSACTIONS:
Unit transactions in each Sub-Account during the years ended December 31,
1995, 1994 and 1993 were as follows:
<TABLE>
<CAPTION>
MFS(R) BOND
MFS(R) MONEY FUND
MARKET FUND (CLASS A)
-------------------------------------- -------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1995 1994 1993 1995 1994 1993
----------- ---------- ---------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Units outstanding, beginning of the year 167,242.251 175,814.541 249,359.321 40,693.896 50,303.756 50,761.189
Units purchased.................... 2,492.450 3,150.590 4,421.159 446.925 550.518 471.219
Units redeemed..................... (60,956.726) (41,227.550) (68,847.244) (5,794.078) (4,984.507) (3,803.303)
Units transferred between Sub-Accounts 4,058.542 29,504.670 (9,118.695) 446.823 (5,175.871) 2,874.651
---------- ---------- ---------- ---------- ---------- ----------
Units outstanding, end of the year. 112,836.517 167,242.251 175,814.541 35,793.566 40,693.896 50,303.756
=========== =========== =========== ========== ========== ==========
<CAPTION>
MFS(R) GROWTH
MFS(R) TOTAL OPPORTUNITIES
RETURN FUND FUND
(CLASS A) (CLASS A)
------------------------------------- ------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1995 1994 1993 1995 1994 1993
----------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Units outstanding, beginning of the year 81,547.990 89,906.122 101,079.955 111,725.962 120,705.939 143,744.403
Units purchased.................... 1,366.667 2,564.594 4,026.884 1,166.607 1,677.949 1,916.269
Units redeemed..................... (15,678.477) (13,630.791) (21,200.524) (18,109.828) (9,521.122) (16,522.653)
Units transferred between Sub-Accounts (5,221.274) 2,708.065 5,999.807 107.044 (1,136.804) (8,432.080)
---------- ---------- ---------- ---------- ---------- ----------
Units outstanding, end of the year. 62,014.906 81,547.990 89,906.122 94,889.785 111,725.962 120,705.939
========== ========== ========== ========== =========== ===========
</TABLE>
viii
<PAGE>
MFS/NWNL VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS, CONTINUED
<TABLE>
<CAPTION>
MASSACHUSETTS
MASSACHUSETTS INVESTORS GROWTH
INVESTORS TRUST STOCK FUND
(CLASS A) (CLASS A)
------------------------------------- -------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1995 1994 1993 1995 1994 1993
----------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Units outstanding, beginning of the year 24,462.931 26,534.206 28,801.024 34,032.392 37,169.634 46,078.868
Units purchased.................... 697.792 764.201 2,229.713 695.880 837.386 1,317.191
Units redeemed..................... (2,385.827) (1,997.585) (2,354.560) (5,171.989) (4,276.482) (7,653.972)
Units transferred between Sub-Accounts 831.641 (837.891) (2,141.971) (1,093.421) 301.854 (2,572.453)
---------- ---------- ---------- ---------- ---------- ----------
Units outstanding, end of the year. 23,606.537 24,462.931 26,534.206 28,462.862 34,032.392 37,169.634
========== ========== ========== ========== ========== ==========
<CAPTION>
MFS(R) WORLD
MFS(R) HIGH GOVERNMENTS
INCOME FUND FUND
(CLASS A) (CLASS A)
------------------------------------- -------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1995 1994 1993 1995 1994 1993
----------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Units outstanding, beginning of the year 95,772.845 120,857.156 134,205.074 15,677.993 20,279.064 17,835.352
Units purchased.................... 343.909 1,627.949 1,824.158 128.349 254.406 302.815
Units redeemed..................... (16,544.601) (21,586.502) (17,638.627) (1,615.579) (2,420.053) (846.695)
Units transferred between Sub-Accounts 3,822.210 (5,125.758) 2,466.551 (514.844) (2,435.424) 2,987.592
---------- ---------- ---------- ---------- ---------- ----------
Units outstanding, end of the year. 83,394.363 95,772.845 120,857.156 13,675.919 15,677.993 20,279.064
========== ========== =========== ========== ========== ==========
</TABLE>
ix
<PAGE>
MFS/NWNL VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS, CONTINUED
<TABLE>
<CAPTION>
MFS(R) RESEARCH
FUND
(CLASS A)
-------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED
DEC. 31, DEC. 31, DEC. 31,
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Units outstanding, beginning of the year 35,069.784 32,935.954 33,965.652
Units purchased.................... 345.673 439.089 612.508
Units redeemed..................... (6,975.455) (3,194.020) (2,167.924)
Units transferred between Sub-Accounts (1,334.244) 4,888.761 525.718
---------- ---------- ----------
Units outstanding, end of the year. 27,105.758 35,069.784 32,935.954
========== ========== ==========
<CAPTION>
MFS(R) EMERGING
GROWTH
FUND
(CLASS A)
-------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED
DEC. 31, DEC. 31, DEC. 31,
1995 1994 1993
----------- ---------- ----------
<S> <C> <C> <C>
Units outstanding, beginning of the year 39,191.298 34,652.403 36,879.705
Units purchased.................... 1,016.229 1,145.168 1,297.358
Units redeemed..................... (1,275.193) (2,853.696) (8,941.467)
Units transferred between Sub-Accounts 252.082 6,247.423 5,416.807
---------- ---------- ----------
Units outstanding, end of the year. 39,184.416 39,191.298 34,652.403
========== ========== ==========
</TABLE>
ix
<PAGE>
MFS/NWNL VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS, CONTINUED
6. STATEMENT OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY.
Operations and changes in Contract Owners' equity for the year ended
December 31, 1995 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............ $960 $175 $118 $25 -
Reinvested capital gains.............. 1,107 - - 104 179
Administrative expenses............... (350) (60) (24) (18) (19)
----------- ----------- ----------- ----------- -----------
Net investment income and capital gains 1,717 115 94 111 160
----------- ----------- ----------- ----------- -----------
Realized and unrealized gains (losses):
Net realized gains (losses) on redemptions
of fund shares................... 388 - (16) (30) 46
Increase in unrealized appreciation
of investments.................... 2,731 - 207 296 105
----------- ----------- ----------- ----------- -----------
Net realized and unrealized gains. 3,119 - 191 266 151
----------- ----------- ----------- ----------- -----------
Net additions from operations 4,836 115 285 377 311
----------- ----------- ----------- ----------- -----------
Contract Owners' transactions:
Net purchase payments................. 339 59 18 36 26
Surrenders............................ (4,519) (1,336) (159) (117) (220)
Transfers between Sub-Accounts........ - 92 20 47 (42)
Annuity payments..................... (283) (90) (79) (2) -
Transfers from required reserves...... - - - - -
----------- ----------- ----------- ----------- -----------
Net (reductions) additions for
Contract Owners' transactions.. (4,463) (1,275) (200) (36) (236)
----------- ----------- ----------- ----------- -----------
Net additions (reductions) for 373 (1,160) 85 341 75
the year
Contract Owners' Equity, beginning of the year 23,269 3,878 1,560 1,048 1,279
----------- ----------- ----------- ----------- -----------
Contract Owners' Equity, end of the year.... $23,642 $2,718 $1,645 $1,389 $1,354
======= ====== ====== ====== ======
</TABLE>
x
<PAGE>
MFS/NWNL VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS, CONTINUED
<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............ $5 $201 $- $350 $86 $-
Reinvested capital gains.............. 88 131 605 - - -
Administrative expenses............... (21) (52) (67) (55) (10) (24)
----------- ----------- ----------- ----------- ----------- -----------
Net investment income and capital gains 72 280 538 295 76 (24)
----------- ----------- ----------- ----------- ----------- -----------
Realized and unrealized gains (losses):
Net realized gains (losses) on redemptions
of fund shares................... 108 181 134 (46) (7) 18
Increase in unrealized appreciation
of investments.................... 264 353 622 338 23 523
----------- ----------- ----------- ----------- ----------- -----------
Net realized and unrealized gains. 372 534 756 292 16 541
----------- ----------- ----------- ----------- ----------- -----------
Net additions from operations 444 814 1,294 587 92 517
----------- ----------- ----------- ----------- ----------- -----------
Contract Owners' transactions:
Net purchase payments................. 16 70 48 17 7 42
Surrenders............................ (341) (696) (790) (736) (73) (51)
Transfers between Sub-Accounts........ (37) (265) 5 163 (25) 42
Annuity payments..................... - (100) (9) - (3) -
Transfers from required reserves...... - - 1 (1) - -
----------- ----------- ----------- ----------- ----------- -----------
Net (reductions) additions for
Contract Owners' transactions.. (362) (991) (745) (557) (94) 33
----------- ----------- ----------- ----------- ----------- -----------
Net additions (reductions) for the year 82 (177) 549 30 (2) 550
Contract Owners' Equity, beginning of the year 1,426 3,771 4,263 3,958 687 1,399
----------- ----------- ----------- ----------- ----------- -----------
Contract Owners' Equity, end of the year.... $1,508 $3,594 $4,812 $3,988 $685 $1,949
====== ====== ====== ====== ==== ======
</TABLE>
xi
<PAGE>
MFS/NWNL VARIABLE ACCOUNT
[LOGO] 20 Washington Avenue South
Minneapolis, Minnesota 55401
(612) 372-5507
38500i
(Select I)
