<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995 Commission file numbers 2-64683,
2-94234 and 2-89905.
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY
----------------------------------------------------
(Exact name of Registrant as specified in its Charter)
Wisconsin 39-0509570
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
720 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
---------------------------------------- -----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 414/271-1444
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
------------------- -------------------------
None None
---- ----
Securities registered pursuant to Section 12(g) of the Act:
None
----
"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 ."
------ -----
"State the aggregate market value of the voting stock held by
non-affiliates of the registrant. The aggregate market value shall be computed
by reference to the price at which the stock was sold or the average bid and
asked prices of such stock, as of a specified date within 60 days prior to the
date of filing. (See definition of affiliate in Rule 405.)"
Not Applicable
--------------
"Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date."
None
"DOCUMENTS INCORPORATED BY REFERENCE"
None
----
This Form 10-K report contains 66 pages.
The Exhibit Index is located on page 46.
<PAGE> 2
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
PART I
------
Item 1. Business
- ------------------
(a) General development of business.
There have been no material changes or developments
since the beginning of the fiscal year in the
business done or intended to be done by the
registrant and its subsidiaries.
(b) Financial information about industry segments.
The registrant is a mutual life insurance company
whose principal product is life insurance. The
registrant also sells annuity contracts, including
variable annuity contracts.
(c) Description of business.
The Registrant is the seventh largest life insurance
company in the United States with total assets in
excess of $54 billion on December 31, 1995.
The registrant's principal products are life
insurance contracts distributed by approximately
5,600 full-time producing agents. Sales of life
insurance contracts as a percentage of total sales
is as follows:
<TABLE>
<S> <C>
1995 81.22%
1994 80.60%
1993 82.44%
1992 81.44%
1991 81.11%
1990 82.64%
1989 83.12%
1988 84.18%
</TABLE>
As of December 31 1995, the registrant had 3,344
employees.
(d) Not applicable.
Item 2. Properties
- --------------------
The principal properties used in the business are located at
720 East Wisconsin Avenue and 818 East Mason Avenue,
Milwaukee, Wisconsin. The properties, which house the
registrant's home office, include approximately three and
one-half square blocks improved with three office buildings
and a parking structure. Title to land and buildings is held
in fee.
Item 3 is on page 3.
2
<PAGE> 3
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
Item 3. Legal Proceedings
- --------------------------
The Northwestern Mutual Life Insurance Company is engaged in
litigation of various kinds, which in its judgement is not of
material importance in relation to its total assets. The
litigation includes various administrative or judicial
proceedings, relating to investments of the Registrant,
arising under Federal, State or local provisions that have
been enacted or adopted regulating the discharge of materials
into the environment or primarily for the purpose of
protecting the environment. The Registrant believes that
these proceedings, singularly and in the aggregate, are not
material. In addition, NML Variable Annuity Accounts A and C
are not engaged in any litigation which is considered material
to their total assets.
Item 4. Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
(a) Not applicable. The Registrant is a mutual life
insurance company and has no stockholders as such.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
Item 5 is on page 4.
3
<PAGE> 4
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
PART II
-------
Item 5. Market for the Registrant's Common Stock and Related Stockholder
Matters
- -------------------------------------------------------------------------
(a) Not applicable. The Registrant is a mutual life
insurance company and has no equity securities or
stockholders as such.
(b) Not applicable.
(c) Not applicable.
Item 6 is on page 5.
4
<PAGE> 5
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
Item 6. Selected Financial Data 5
- --------------------------------
Results of Operations for NML Variable Annuity Account A for each of
the five years ending December 31, follows:
<TABLE>
<CAPTION>
1995 1994 1993
----------- ------------ -----------
<S> <C> <C> <C>
Investment Income
Dividend Income from Northwestern Mutual Series Fund,
Inc. Index 500 Stock Portfolio . . . . . . . . . . . . . . $ 522,842 $ 2,155,181 $ 256,688
Dividend Income from Northwestern Mutual Series Fund,
Inc. Growth Stock Portfolio . . . . . . . . . . . . . . . . 128,854 18,971## NA
Dividend Income from Northwestern Mutual Series Fund,
Inc. Growth and Income Stock Portfolio . . . . . . . . . . 465,091 53,075## NA
Dividend Income from Northwestern Mutual Series Fund,
Inc. Aggressive Growth Stock Portfolio . . . . . . . . . . 256,787 248,438 359,370
Dividend Income from Northwestern Mutual Series Fund,
Inc. International Equity Portfolio . . . . . . . . . . . . 217,966 853,704 97,043#
Dividend Income from Northwestern Mutual Series Fund,
Inc. Select Bond Portfolio . . . . . . . . . . . . . . . . 652,667 2,990,731 1,423,472
Dividend Income from Northwestern Mutual Series Fund,
Inc. High Yield Bond Portfolio . . . . . . . . . . . . . . 199,805 68,840## NA
Dividend Income from Northwestern Mutual Series Fund,
Inc. Money Market Portfolio . . . . . . . . . . . . . . . . 1,119,254 708,559 520,596
Dividend Income from Northwestern Mutual Series Fund,
Inc. Balanced Portfolio . . . . . . . . . . . . . . . . . . 8,146,698 33,071,685 13,161,961
Dividend Income from Northwestern Mutual Capital
Appreciation Stock Fund, Inc. . . . . . . . . . . . . . . . NA NA 976,621**
---------- ------------ -----------
Total Income . . . . . . . . . . . . . . . . . . . . . . . 11,709,964 40,169,184 16,795,751
Annuity Rate and Expense Guarantees . . . . . . . . . . . . 5,072,064 4,466,142 4,074,129
----------- ------------ -----------
Net Investment Income . . . . . . . . . . . . . . . . . . . $ 6,637,900 $ 35,703,042 $12,721,622
=========== ============ ===========
Realized and Unrealized Gain (Loss) on Investments
Realized Gain on Investments . . . . . . . . . . . . . . . . $13,141,169 $ 1,687,702 $ 2,347,432
Unrealized Appreciation (Depreciation) of Investments
During the Year . . . . . . . . . . . . . . . . . . . . . . 76,916,515 (39,969,923) 14,612,044
----------- ------------ -----------
Net Gain (Loss) on Investments . . . . . . . . . . . . . . $90,057,684 $(38,282,221) $16,959,476
=========== ============ ===========
<CAPTION>
1992 1991
---------- ----------
<S> <C> <C>
Investment Income
Dividend Income from Northwestern Mutual Series Fund,
Inc. Index 500 Stock Portfolio . . . . . . . . . . . . . . $ 191,946 $ 99,756
Dividend Income from Northwestern Mutual Series Fund,
Inc. Growth Stock Portfolio . . . . . . . . . . . . . . . . NA NA
Dividend Income from Northwestern Mutual Series Fund,
Inc. Growth and Income Stock Portfolio . . . . . . . . . . NA NA
Dividend Income from Northwestern Mutual Series Fund,
Inc. Aggressive Growth Stock Portfolio . . . . . . . . . . 52,183 86,814
Dividend Income from Northwestern Mutual Series Fund,
Inc. International Equity Portfolio . . . . . . . . . . . . NA NA
Dividend Income from Northwestern Mutual Series Fund,
Inc. Select Bond Portfolio . . . . . . . . . . . . . . . . 1,251,161 1,076,427
Dividend Income from Northwestern Mutual Series Fund,
Inc. High Yield Bond Portfolio . . . . . . . . . . . . . . NA NA
Dividend Income from Northwestern Mutual Series Fund,
Inc. Money Market Portfolio . . . . . . . . . . . . . . . . 620,178 1,290,608
Dividend Income from Northwestern Mutual Series Fund,
Inc. Balanced Portfolio . . . . . . . . . . . . . . . . . . 9,729,580 10,349,670
Dividend Income from Northwestern Mutual Capital
Appreciation Stock Fund, Inc. . . . . . . . . . . . . . . . 714,398 925,808
---------- -----------
Total Income . . . . . . . . . . . . . . . . . . . . . . . 12,559,446 13,829,083
Annuity Rate and Expense Guarantees . . . . . . . . . . . . 3,496,742 2,992,492
---------- -----------
Net Investment Income . . . . . . . . . . . . . . . . . . . $9,062,704 $10,836,591
========== ===========
Realized and Unrealized Gain (Loss) on Investments
Realized Gain on Investments . . . . . . . . . . . . . . . . $ 858,030 $ 1,722,815
Unrealized Appreciation (Depreciation) of Investments
During the Year . . . . . . . . . . . . . . . . . . . . . . 2,977,783 38,016,119
----------- -----------
Net Gain (Loss) on Investments . . . . . . . . . . . . . . $3,835,813 $39,738,934
========== ===========
</TABLE>
** Represents operations through April 29, 1993.
# Commenced operations on April 30, 1993.
## Commenced operations on May 3, 1994.
See Notes to Financial Statements on page 22-23.
<PAGE> 6
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
Item 6. (continued) 6
- --------------------
Changes in Equity for NML Variable Annuity Account A for each of
the five years ending December 31, follows:
<TABLE>
<CAPTION>
1995 1994 1993
----------- ------------ ------------
<S> <C> <C> <C>
From Investment Activities
Net Investment Income . . . . . . . . . . . . . . . . . . . $ 6,637,900 $ 35,703,042 $ 12,721,622
Net Realized Gain on Investments . . . . . . . . . . . . . . 13,141,169 1,687,702 2,347,432
Net Change in Unrealized Appreciation (Depreciation) of
Investments . . . . . . . . . . . . . . . . . . . . . . . 76,916,515 (39,969,923) 14,612,044
------------ ------------ ------------
Increase (Decrease) in Equity Derived from
Investment Activities . . . . . . . . . . . . . . . 96,695,584 (2,579,179) 29,681,098
------------ ------------ ------------
From Equity Transactions
Contract Owners' Net Payments . . . . . . . . . . . . . . . 49,124,853 52,262,816 51,044,522
Annuity Payments . . . . . . . . . . . . . . . . . . . . . . (610,983) (603,158) (522,956)
Surrenders and Other (Net) . . . . . . . . . . . . . . . . . (62,309,189) (33,008,630) (33,141,406)
------------- ------------ ------------
Increase (Decrease) in Equity Derived from Equity
Transactions . . . . . . . . . . . . . . . . . . . (13,795,319) 18,651,028 17,380,160
------------- ------------ ------------
Net Increase (Decrease) in Equity . . . . . . . . . . . . . . . . 82,900,265 16,071,849 47,061,258
Equity, Beginning of Year . . . . . . . . . . . . . . . . . . . . 386,921,162 370,849,313 323,788,055
------------ ------------ ------------
Equity, End of Year . . . . . . . . . . . . . . . . . . . . . . . $469,821,427 $386,921,162 $370,849,313
============ ============ ============
<CAPTION>
1992 1991
------------- -------------
<S> <C> <C>
From Investment Activities
Net Investment Income . . . . . . . . . . . . . . . . . . . $ 9,062,704 $ 10,836,591
Net Realized Gain on Investments . . . . . . . . . . . . . . 858,030 1,722,815
Net Change in Unrealized Appreciation (Depreciation) of
Investments . . . . . . . . . . . . . . . . . . . . . . . 2,977,783 38,016,119
------------ ------------
Increase (Decrease) in Equity Derived from
Investment Activities . . . . . . . . . . . . . . . 12,898,517 50,575,525
------------ ------------
From Equity Transactions
Contract Owners' Net Payments . . . . . . . . . . . . . . . 48,215,264 34,673,259
Annuity Payments . . . . . . . . . . . . . . . . . . . . . . (497,390) (465,807)
Surrenders and Other (Net) . . . . . . . . . . . . . . . . . (27,934,737) (33,085,215)
------------ ------------
Increase (Decrease) in Equity Derived from Equity
Transactions . . . . . . . . . . . . . . . . . . . 19,783,137 1,122,237
------------ ------------
Net Increase (Decrease) in Equity . . . . . . . . . . . . . . . . 32,681,654 51,697,762
Equity, Beginning of Year . . . . . . . . . . . . . . . . . . . . 291,106,401 239,408,639
------------ ------------
Equity, End of Year . . . . . . . . . . . . . . . . . . . . . . . $323,788,055 $291,106,401
============ ============
</TABLE>
See Notes to Financial Statements on page 22-23.
<PAGE> 7
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
Item 6. (continued) 7
- --------------------
Total Assets of NML Variable Annuity Account A for each of the
five following years at December 31, follows:
<TABLE>
<CAPTION>
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
Assets
Investments at Market Value:
Northwestern Mutual Series Fund, Inc. Index 500 Stock
Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . $ 62,391,687 $ 43,545,408 $ 43,534,827
Northwestern Mutual Series Fund, Inc. Growth Stock
Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . 4,284,669 1,397,703## NA
Northwestern Mutual Series Fund, Inc. Growth and Income
Stock Portfolio . . . . . . . . . . . . . . . . . . . . . . 7,891,655 3,282,764## NA
Northwestern Mutual Series Fund, Inc. Aggressive Growth
Stock Portfolio . . . . . . . . . . . . . . . . . . . . . . 56,491,009 36,256,480 22,946,546
Northwestern Mutual Series Fund, Inc. International
Equity Portfolio . . . . . . . . . . . . . . . . . . . . . 31,789,148 28,832,978 11,844,559#
Northwestern Mutual Series Fund, Inc. Select Bond
Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . 25,742,752 22,258,901 24,004,669
Northwestern Mutual Series Fund, Inc. High Yield Bond
Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . 2,060,076 1,242,382## NA
Northwestern Mutual Series Fund, Inc. Money Market
Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . 21,556,895 20,120,832 17,036,899
Northwestern Mutual Series Fund, Inc. Balanced Portfolio . . 257,867,967 230,871,659 252,635,446
Northwestern Mutual Capital Appreciation Stock Fund, Inc. . NA NA 0**
Due from NML Insurance Company . . . . . . . . . . . . . . . . . 491,572 179,152 182,546
Due from Sale of Fund Shares . . . . . . . . . . . . . . . . . . 78,037 319,392 418,356
------------ ------------ ------------
Total Assets . . . . . . . . . . . . . . . . . . . . $470,645,467 $388,307,651 $372,603,848
============ ============ ============
<CAPTION>
1992 1991
------------ -------------
<S> <C> <C>
Assets
Investments at Market Value:
Northwestern Mutual Series Fund, Inc. Index 500 Stock
Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,067,703 $ 3,362,231
Northwestern Mutual Series Fund, Inc. Growth Stock
Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . NA NA
Northwestern Mutual Series Fund, Inc. Growth and Income
Stock Portfolio . . . . . . . . . . . . . . . . . . . . . . NA NA
Northwestern Mutual Series Fund, Inc. Aggressive Growth
Stock Portfolio . . . . . . . . . . . . . . . . . . . . . . 13,743,522 5,435,234
Northwestern Mutual Series Fund, Inc. International
Equity Portfolio . . . . . . . . . . . . . . . . . . . . . NA NA
Northwestern Mutual Series Fund, Inc. Select Bond
Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . 20,752,581 17,826,526
Northwestern Mutual Series Fund, Inc. High Yield Bond
Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . NA NA
Northwestern Mutual Series Fund, Inc. Money Market
Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . 19,413,335 20,895,404
Northwestern Mutual Series Fund, Inc. Balanced Portfolio . . 233,054,698 213,724,828
Northwestern Mutual Capital Appreciation Stock Fund, Inc. . 30,340,518 30,707,321
Due from NML Insurance Company . . . . . . . . . . . . . . . . . 142,654 134,661
Due from Sale of Fund Shares . . . . . . . . . . . . . . . . . . 243,505 182,113
------------ ------------
Total Assets . . . . . . . . . . . . . . . . . . . . $324,758,516 $292,268,318
============ ============
</TABLE>
** Capital Appreciation Stock Fund was merged into Index 500 Stock Fund on
April 30, 1993.
# Commenced operations on April 30, 1993.
## Commenced operations on May 3, 1994.
See Notes to Financial Statements on page 22-23.
<PAGE> 8
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
Item 6. (continued) 8
- --------------------
Results of Operations for NML Variable Annuity Account C for each
of the five years ending December 31, follows:
<TABLE>
<CAPTION>
1995 1994 1993
---------- ----------- ----------
<S> <C> <C> <C>
Investment Income
Dividend Income from Northwestern Mutual Series Fund,
Inc. Index 500 Stock Portfolio . . . . . . . . . . . . . . $ 544,553 $ 2,226,240 $ 260,710
Dividend Income from Northwestern Mutual Series Fund,
Inc. Growth Stock Portfolio . . . . . . . . . . . . . . . . 59,271 4,518## NA
Dividend Income from Northwestern Mutual Series Fund,
Inc. Growth and Income Stock Portfolio . . . . . . . . . . 276,923 19,233## NA
Dividend Income from Northwestern Mutual Series Fund,
Inc. Aggressive Growth Stock Portfolio . . . . . . . . . . 242,583 232,345 342,725
Dividend Income from Northwestern Mutual Series Fund,
Inc. International Equity Portfolio . . . . . . . . . . . . 190,138 703,931 26,336#
Dividend Income from Northwestern Mutual Series Fund,
Inc. Select Bond Portfolio . . . . . . . . . . . . . . . . 395,357 1,874,182 813,051
Dividend Income from Northwestern Mutual Series Fund,
Inc. High Yield Bond Portfolio . . . . . . . . . . . . . . 55,220 11,456## NA
Dividend Income from Northwestern Mutual Series Fund,
Inc. Money Market Portfolio . . . . . . . . . . . . . . . . 494,253 443,639 269,586
Dividend Income from Northwestern Mutual Series Fund,
Inc. Balanced Portfolio . . . . . . . . . . . . . . . . . . 4,212,478 17,046,665 6,769,160
Dividend Income from Northwestern Mutual Capital
Appreciation Stock Fund, Inc. . . . . . . . . . . . . . . . NA NA 1,078,208**
----------- ----------- -----------
Total Income . . . . . . . . . . . . . . . . . . . . 6,470,776 22,562,209 9,559,776
Annuity Rate and Expense Guarantees . . . . . . . . . . . . 856,764 509,648 235,930
----------- ----------- -----------
Net Investment Income . . . . . . . . . . . . . . . . . . . $ 5,614,012 $ 22,052,561 $ 9,323,846
=========== ============ ===========
Realized and Unrealized Gain (Loss) on Investments
Realized Gain on Investments . . . . . . . . . . . . . . . . 9,884,364 $ 5,949,795 $ 3,670,743
Unrealized Appreciation (Depreciation) of Investments
During the Year . . . . . . . . . . . . . . . . . . . . . . 53,407,857 (27,055,878) 7,227,689
----------- ----------- -----------
Net Gain (Loss) on Investments . . . . . . . . . . . . . . . $63,292,221 $(21,106,083) $10,898,432
=========== ============ ===========
<CAPTION>
1992 1991
--------- ---------
<S> <C> <C>
Investment Income
Dividend Income from Northwestern Mutual Series Fund,
Inc. Index 500 Stock Portfolio . . . . . . . . . . . . . . $ 125,787 $ 16,591
Dividend Income from Northwestern Mutual Series Fund,
Inc. Growth Stock Portfolio . . . . . . . . . . . . . . . . NA NA
Dividend Income from Northwestern Mutual Series Fund,
Inc. Growth and Income Stock Portfolio . . . . . . . . . . NA NA
Dividend Income from Northwestern Mutual Series Fund,
Inc. Aggressive Growth Stock Portfolio . . . . . . . . . . 38,628 10,134
Dividend Income from Northwestern Mutual Series Fund,
Inc. International Equity Portfolio . . . . . . . . . . . . NA NA
Dividend Income from Northwestern Mutual Series Fund,
Inc. Select Bond Portfolio . . . . . . . . . . . . . . . . 670,892 530,129
Dividend Income from Northwestern Mutual Series Fund,
Inc. High Yield Bond Portfolio . . . . . . . . . . . . . . NA NA
Dividend Income from Northwestern Mutual Series Fund,
Inc. Money Market Portfolio . . . . . . . . . . . . . . . . 315,038 553,425
Dividend Income from Northwestern Mutual Series Fund,
Inc. Balanced Portfolio . . . . . . . . . . . . . . . . . . 4,909,056 5,208,899
Dividend Income from Northwestern Mutual Capital
Appreciation Stock Fund, Inc. . . . . . . . . . . . . . . . 760,962 909,722
----------- -----------
Total Income . . . . . . . . . . . . . . . . . . . . 6,820,363 7,228,900
Annuity Rate and Expense Guarantees . . . . . . . . . . . . 80,714 34,990
---------- -----------
Net Investment Income . . . . . . . . . . . . . . . . . . . $6,739,649 $ 7,193,910
========== ===========
Realized and Unrealized Gain (Loss) on Investments
Realized Gain on Investments . . . . . . . . . . . . . . . . $ 855,374 $(363,362)
Unrealized Appreciation (Depreciation) of Investments
During the Year . . . . . . . . . . . . . . . . . . . . . . 1,645,252 23,238,209
---------- -----------
Net Gain (Loss) on Investments . . . . . . . . . . . . . . . $2,500,626 $22,874,847
========== ===========
</TABLE>
** Represents operations through April 29, 1993.
# Commenced operations on April 30, 1993.
## Commenced operations on May 3, 1994.
See Notes to Financial Statements on page 31-32.
<PAGE> 9
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
Item 6. (continued) 9
- --------------------
Changes in Equity for NML Variable Annuity Account C for each of
the five years ending December 31, follows:
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
----------- ------------ ------------ ----------- -------------
<S> <C> <C> <C> <C> <C>
From Investment Activities
Net Investment Income . . . . . . . . . . . . $ 5,614,012 $ 22,052,561 $ 9,323,846 $ 6,739,649 $ 7,193,910
Net Realized Gain (Loss) on Investments . . . 9,884,364 5,949,795 3,670,743 855,374 (363,362)
Net Change in Unrealized Appreciation
(Depreciation) of Investments . . . . . . . 53,407,857 (27,055,878) 7,227,689 1,645,252 23,238,209
------------ ------------ ------------ ------------ ------------
Increase in Equity Derived from
Investment Activities . . . . . . . 68,906,233 946,478 20,222,278 9,240,275 30,068,757
------------ ------------ ------------ ------------ ------------
From Equity Transactions
Contract Owners' Net Payments . . . . . . . . 59,390,267 48,709,729 39,748,661 40,797,216 20,909,006
Surrenders and Other (Net) . . . . . . . . . . 60,872,729 (26,720,946) (22,334,176) (22,756,886) (16,825,018)
------------ ------------ ----------- ----------- ------------
Increase in Equity Derived from
Equity Transactions . . . . . . . . . (1,482,462) 21,988,783 17,414,485 18,040,330 4,083,988
------------- ------------ ---------- ---------- ------------
Net Increase in Equity . . . . . . . . . . . . 67,423,771 22,935,261 37,636,763 27,280,605 34,152,745
Equity, Beginning of Year . . . . . . . . . . . 250,382,267 227,447,006 189,810,243 162,529,638 128,376,893
------------ ------------ ------------ ------------ ------------
Equity, End of Year . . . . . . . . . . . . . . $317,806,038 $250,382,267 $227,447,006 $189,810,243 $162,529,638
============ ============ ============ ============ ============
</TABLE>
See Notes to Financial Statements on page 31-32.
<PAGE> 10
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
Item 6. (continued) 10
- --------------------
Total Assets of NML Variable Annuity Account C for each of the
five following years at December 31, follows:
<TABLE>
<CAPTION>
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
Assets
Investments at Market Value:
Northwestern Mutual Series Fund, Inc. Index 500 Stock
Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . $ 64,560,752 $ 45,552,429 $ 45,850,766
Northwestern Mutual Series Fund, Inc. Growth Stock
Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . 2,084,697 329,792## NA
Northwestern Mutual Series Fund, Inc. Growth and Income
Stock Portfolio . . . . . . . . . . . . . . . . . . . . . . 4,888,505 1,159,187## NA
Northwestern Mutual Series Fund, Inc. Aggressive Growth
Stock Portfolio . . . . . . . . . . . . . . . . . . . . . . 57,421,016 33,266,862 21,836,950
Northwestern Mutual Series Fund, Inc. International
Equity Portfolio . . . . . . . . . . . . . . . . . . . . . 30,039,223 24,647,586 3,183,126#
Northwestern Mutual Series Fund, Inc. Select Bond
Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . 16,281,140 14,262,125 15,071,860
Northwestern Mutual Series Fund, Inc. High Yield Bond
Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . 736,774 201,656## NA
Northwestern Mutual Series Fund, Inc. Money Market
Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . 9,324,692 11,510,121 9,930,082
Northwestern Mutual Series Fund, Inc. Balanced Portfolio . . 132,469,239 119,452,509 131,574,218
Northwestern Mutual Capital Appreciation Stock Fund, Inc. . NA NA 0**
Due from NML Insurance Company . . . . . . . . . . . . . . . . 808,493 279,107 35,475
Due from Sale of Fund Shares . . . . . . . . . . . . . . . . . 36 79,226 145,027
------------ ------------ ------------
Total Assets . . . . . . . . . . . . . . . . . . . $318,614,567 $250,740,600 $227,627,504
============ ============ ============
<CAPTION>
1992 1991
----------- -------------
<S> <C> <C>
Assets
Investments at Market Value:
Northwestern Mutual Series Fund, Inc. Index 500 Stock
Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,456,402 $ 539,852
Northwestern Mutual Series Fund, Inc. Growth Stock
Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . NA NA
Northwestern Mutual Series Fund, Inc. Growth and Income
Stock Portfolio . . . . . . . . . . . . . . . . . . . . . . NA NA
Northwestern Mutual Series Fund, Inc. Aggressive Growth
Stock Portfolio . . . . . . . . . . . . . . . . . . . . . . 10,964,260 634,028
Northwestern Mutual Series Fund, Inc. International
Equity Portfolio . . . . . . . . . . . . . . . . . . . . . NA NA
Northwestern Mutual Series Fund, Inc. Select Bond
Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . 11,641,722 9,515,803
Northwestern Mutual Series Fund, Inc. High Yield Bond
Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . NA NA
Northwestern Mutual Series Fund, Inc. Money Market
Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . 9,242,596 10,571,328
Northwestern Mutual Series Fund, Inc. Balanced Portfolio . . 118,944,619 108,009,222
Northwestern Mutual Capital Appreciation Stock Fund, Inc. . $33,555,890 $ 33,259,405
Due from NML Insurance Company . . . . . . . . . . . . . . . . 23,303 72,757
Due from Sale of Fund Shares . . . . . . . . . . . . . . . . . 32,679 224,529
------------ ------------
Total Assets . . . . . . . . . . . . . . . . . . . $189,861,471 $162,826,924
============ ============
</TABLE>
** Capital Appreciation Stock Fund was merged into Index 500 Stock Fund on
April 30, 1993.
# Commenced operations on April 30, 1993.
## Commenced operations on May 3, 1994.
See Notes to Financial Statements on page 31-32.
Item 7 is on page 11.
<PAGE> 11
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
- ------------------------------------------------------------------------
(a) Liquidity
---------
The assets of the Northwestern Mutual Life Insurance
Company Variable Annuity Accounts A and C are invested
solely in shares of Northwestern Mutual Series Fund, Inc.
Index 500 Stock Portfolio, Northwestern Mutual Series Fund,
Inc. Aggressive Growth Stock Portfolio, Northwestern Mutual
Series Fund, Inc. International Equity Portfolio,
Northwestern Mutual Series Fund, Inc. Select Bond
Portfolio, Northwestern Mutual Series Fund, Inc. Money
Market Portfolio, Northwestern Mutual Series Fund, Inc.
Balanced Portfolio, Northwestern Mutual Series Fund, Inc.
Growth Stock Portfolio, Northwestern Mutual Series Fund,
Inc. Growth and Income Stock Portfolio, and Northwestern
Mutual Series Fund, Inc. High Yield Bond Portfolio (the
"Funds"). The Funds are open-end investment companies
registered under the Investment Act of 1940. In order to
pay annuity benefits and expenses, the Accounts redeem
shares in these Funds. The registrant's liquidity is not
expected to change in a material way.
(b) Capital Resources
-----------------
All payments from contract owners of NML Variable Annuity
Accounts A and C are invested in shares of the Funds. The
capital resources of NML Variable Annuity Accounts A and C
are the equity in the respective Accounts. This consists
of payments from the contract owners, plus unrealized and
realized appreciation on the investment of these payments,
plus investment income received from the Funds, minus
payment of annuity benefits and expenses.
(c) Results of Operations
---------------------
NML Variable Annuity Account A
------------------------------
Accumulation Unit Values Contracts Issued Prior to December 17,
1981:
<TABLE>
<CAPTION>
Division 12/31/95 % of Change 12/31/94 % of Change 12/31/93
-------- -------- ----------- -------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Index 500
Stock . . . . . . $2.042204 36.23% $1.499054 0.44% $1.492479
Growth Stock . . 1.310823 29.85% 1.009479 NA NA
Growth and Income
Stock . . . . . . 1.298065 30.15% 0.997398 NA NA
Aggressive
Growth Stock . . 2.813200 38.26% 2.034747 4.62 1.944869
International
Equity . . . . . 1.398467 13.72% 1.229716 -0.84 1.240162
Select Bond . . . 6.519655 18.21% 5.515295 -3.56 5.718625
High Yield Bond . 1.188188 15.91% 1.025095 NA NA
Money
Market . . . . . 2.311989 5.04% 2.201139 3.28 2.131174
Balanced . . . . 4.600659 25.45% 3.667322 -0.76 3.695395
</TABLE>
11
<PAGE> 12
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
Item 7. (Continued)
- --------------------
Accumulation Unit Values
Contracts Issued On or After December 17, 1981 and before March
31, 1995:
<TABLE>
<CAPTION>
Division 12/31/95 % of Change 12/31/94 % of Change 12/31/93
-------- -------- ----------- -------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Index 500
Stock . . . . . . $1.991330 35.56% $1.469006 -0.06% $1.469874
Growth Stock . . 1.299976 29.20% 1.006136 0.72# NA
Growth and Income
Stock . . . . . . 1.287355 29.50% 0.994105 -0.49# NA
Aggressive
Growth Stock . . 2.743106 37.57% 1.993956 4.10 1.915415
International
Equity . . . . . 1.379966 13.16% 1.219510 -1.34 1.236014
Select Bond . . . 6.077689 17.62% 5.167101 -4.04 5.384388
High Yield Bond . 1.178371 15.33% 1.021705 2.17# NA
Money
Market . . . . . 2.155845 4.51% 2.062740 2.77 2.007152
Balanced . . . . 4.289623 24.83% 3.436463 -1.25 3.480091
</TABLE>
Accumulation Unit Values
Contracts Issued On or After March 31, 1995:
Front Load Version
<TABLE>
<CAPTION>
Division 12/31/95 % of Change 3/31/95
-------- -------- ----------- -------
<S> <C> <C> <C>
Index 500
Stock . . . . . . . . . . . . $1.249114 24.91% $1.000000
Growth Stock . . . . . . . . 1.208718 20.87% 1.000000
Growth and Income Stock . . . 1.196596 19.66% 1.000000
Aggressive
Growth Stock . . . . . . . . 1.305186 30.52% 1.000000
International Equity . . . . 1.140398 14.04% 1.000000
Select Bond . . . . . . . . . 1.128765 12.88% 1.000000
High Yield Bond . . . . . . . 1.111614 11.16% 1.000000
Money Market . . . . . . . . 1.040089 4.01% 1.000000
Balanced . . . . . . . . . . 1.180953 18.10% 1.000000
</TABLE>
# Growth Stock, Growth and Income Stock, and High Yield Bond
Divisions began operations on May 3, 1994. The percentage
change in unit value reflects performance from May 3, 1994.
12
<PAGE> 13
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
Accumulation Unit Values
Contracts Issued On or After March 31, 1995:
Back Load Version
<TABLE>
<CAPTION>
Division 12/31/95 % of Change 3/31/95
-------- -------- ----------- -------
<S> <C> <C> <C>
Index 500 Stock . . . . . . . $1.991330 24.12% $1.604306
Growth Stock . . . . . . . . 1.299976 20.11% 1.082329
Growth and Income Stock . . . 1.287355 18.91% 1.082672
Aggressive
Growth Stock . . . . . . . . 2.743106 29.69% 2.115045
International Equity . . . . 1.379966 13.32% 1.217764
Select Bond . . . . . . . . . 6.077689 12.16% 5.418578
High Yield Bond . . . . . . . 1.178371 10.46% 1.066782
Money Market . . . . . . . . 2.155845 3.35% 2.085911
Balanced . . . . . . . . . . 4.289623 17.35% 3.655399
</TABLE>
<TABLE>
<CAPTION>
Equity:
12/31/95 12/31/94 12/31/93
------------ ------------ -------------
<S> <C> <C>
$469,821,427 $386,921,162 $370,849,313
</TABLE>
The change in equity for each period is largely derived from
investment activities within the Account: A $29,681,098
increase for the year ended December 31, 1993, a $2,579,179
decrease for the year ended December 31, 1994, and a $96,695,584
increase for the year ended December 31, 1995. Net
contributions (surrenders)from contract owners amounted to
$17,380,160 for the year ended December 31, 1993, $18,651,028
for the year ended December 31, 1994, and $(13,795,319) for the
year ended December 31, 1995.
NML Variable Annuity Account C
------------------------------
Accumulation Unit Values
Contracts Issued Prior to December 17, 1981 or between April 30,
1984 and December 31, 1991:
<TABLE>
<CAPTION>
Division 12/31/95 % of Change 12/31/94 % of Change 12/31/93
-------- -------- ----------- -------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Index 500
Stock . . . . . . $22.104982 37.25% $16.105431 1.19% $15.915672
Growth Stock . . 13.271899 30.82% 10.144941 NA NA
Growth and Income
Stock . . . . . . 13.142782 31.12% 10.023581 NA NA
Aggressive
Growth Stock . . 27.648691 39.29% 19.849331 5.40 18.831519
International
Equity . . . . . 1.426613 14.57% 1.245144 -0.10 1.246391
Select Bond . . . 74.222515 19.10% 62.322013 -2.83 64.139096
High Yield Bond . 12.030416 16.78% 10.301956 NA NA
Money Market . . 24.705630 5.82% 23.346279 4.06 22.436170
Balanced . . . . 51.855817 26.39% 41.028821 -0.02 41.035637
</TABLE>
13
<PAGE> 14
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
Item 7. (Continued)
- --------------------
Accumulation Unit Values
Contracts Issued On or After December 17, 1981 or before May 1,
1984:
<TABLE>
<CAPTION>
Division 12/31/95 % of Change 12/31/94 % of Change 12/31/93
-------- -------- ----------- -------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Index 500
Stock . . . . . . $21.564611 36.57% $15.790165 0.69% $15.682112
Growth Stock . . 13.162242 30.17% 10.111365 NA NA
Growth and Income
Stock . . . . . . 13.034162 30.47% 9.990409 NA NA
Aggressive
Growth Stock . . 26.975930 38.60% 19.463084 4.88 18.557389
International
Equity . . . . . 1.407741 14.00% 1.234814 -0.60 1.242224
Select Bond . . . 69.192181 18.50% 58.388451 -3.32 60.391333
High Yield Bond . 11.931003 16.20% 10.267863 NA NA
Money
Market . . . . . 23.069838 5.30% 21.909448 3.54 21.160586
Balanced . . . . 48.364840 25.76% 38.457844 -0.51 38.656514
</TABLE>
Accumulation Unit Values
Contracts Issued After December 31, 1991 - Front Load Version:
<TABLE>
<CAPTION>
Division 12/31/95 % of Change 12/31/94 % of Change 12/31/93
-------- -------- ----------- -------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Index 500
Stock . . . . . . $1.588496 36.37% $1.164877 0.54% $1.158630
Growth Stock . . 1.312966 29.98% 1.010139 1.12# NA
Growth and Income
Stock . . . . . . 1.300190 30.27% 0.998049 -0.09# NA
Aggressive
Growth Stock . . 1.776871 38.39% 1.283916 4.72 1.225992
International
Equity . . . . . 1.402156 13.83% 1.231747 -0.74 1.240984
Select Bond . . . 1.334934 18.33% 1.128176 -3.46 1.168610
High Yield Bond . 1.190149 16.02% 1.025776 2.58# NA
Money
Market . . . . . 1.139693 5.14% 1.083976 3.38 1.048486
Balanced . . . . 1.419325 25.57% 1.130270 -0.66 1.137808
</TABLE>
# Growth Stock, Growth and Income Stock, and High Yield Bond
Divisions began operations on May 3, 1994. The percentage
change in unit value reflects performance from May 3, 1994.
14
<PAGE> 15
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
Item 7. (Continued)
- --------------------
Accumulation Unit Values
Contracts Issued After December 31, 1991 - Simplified Load
Version:
<TABLE>
<CAPTION>
Division 12/31/95 % of Change 12/31/94 % of Change 12/31/93
-------- -------- ----------- -------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Index 500
Stock . . . . . . $2.031929 35.56% $1.498956 -0.06% $1.499839
Growth Stock . . 1.299976 29.20% 1.006136 0.72# NA
Growth and Income
Stock . . . . . . 1.287355 29.50% 0.994105 -0.49# NA
Aggressive
Growth Stock . . 2.753170 37.57% 2.001269 4.10 1.922432
International
Equity . . . . . 1.379966 13.16% 1.219510 -1.34 1.236014
Select Bond . . . 6.136911 17.62% 5.217451 -4.04 5.436859
High Yield Bond . 1.178371 15.33% 1.021705 2.17# NA
Money
Market . . . . . 2.160533 4.51% 2.067227 2.77 2.011515
Balanced . . . . 4.310821 24.83% 3.453452 -1.25 3.497296
</TABLE>
# Growth Stock, Growth and Income Stock, and High Yield Bond
Divisions began operations on May 3, 1994. The percentage
change in unit value reflects performance from May 3, 1994.
<TABLE>
<CAPTION>
Equity:
12/31/95 12/31/94 12/31/93
------------ ------------- -------------
<S> <C> <C>
$317,806,038 $250,382,267 $227,447,006
</TABLE>
The change in equity for each period is largely derived
from investment activities within the Account: A $20,222,278
increase for the year ended December 31, 1993, a $946,478
increase for the year ended December 31, 1994, and a
$68,906,233 increase for the year ended December 31, 1995.
Net contributions (surrenders) from contract owners amounted
to $17,414,485 for the year ended December 31, 1993,
$21,988,786 for the year ended December 31, 1994, and
$(1,482,462) for the year ended December 31, 1995.
Item 8 is on page 16.
15
<PAGE> 16
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
Item 8. Financial Statements and Supplementary Data
- ----------------------------------------------------
NML VARIABLE ANNUITY ACCOUNT A
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
December 31
-----------------------------------------
Assets 1995 1994
----------------- -----------------
<S> <C> <C>
Investments at market value:
Northwestern Mutual Series Fund, Inc.
Index 500 Stock
1995: 36,232,106 shares (cost $43,680,571) . . . . . . . . $ 62,391,687
1994: 34,368,909 shares (cost $38,780,500) . . . . . . . . $ 43,545,408
Growth Stock
1995: 3,392,454 shares (cost $3,733,506) . . . . . . . . . 4,284,669
1994: 1,399,102 shares (cost $1,416,993) . . . . . . . . . 1,397,703#
Growth and Income Stock
1995: 6,516,643 shares (cost $7,030,408) . . . . . . . . . 7,891,655
1994: 3,336,143 shares (cost $3,370,077) . . . . . . . . . 3,282,764#
Aggressive Growth Stock
1995: 20,408,602 shares (cost $38,233,857) . . . . . . . . 56,491,009
1994: 18,137,309 shares (cost $31,258,735) . . . . . . . . 36,256,480
International Equity
1995: 23,460,626 shares (cost $28,902,664) . . . . . . . . 31,789,148
1994: 24,209,050 shares (cost $29,098,682) . . . . . . . . 28,832,978
Select Bond
1995: 20,963,153 shares (cost $24,227,622) . . . . . . . . 25,742,752
1994: 21,018,792 shares (cost $24,040,140) . . . . . . . . 22,258,901
High Yield Bond
1995: 2,007,871 shares (cost $2,071,600) . . . . . . . . . 2,060,076
1994: 1,279,487 shares (cost $1,296,099) . . . . . . . . . 1,242,382#
Money Market
1995: 21,556,895 shares (cost $21,556,895) . . . . . . . . 21,556,895
1994: 20,120,832 shares (cost $20,120,832) . . . . . . . . 20,120,832
Balanced
1995: 160,765,565 shares (cost $209,057,927) . . . . . . . 257,867,967
1994: 175,835,231 shares (cost $223,762,756) . . . . . . . 230,871,659
------------ -------------
470,075,858 387,809,107
Due from Sales of Fund Shares . . . . . . . . . . . . . . . . . . . . . 78,037 319,392
Due from Northwestern Mutual Life Insurance Company . . . . . . . . . . 491,572 179,152
------------ -------------
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . $470,645,467 $ 388,307,651
============ =============
Liabilities
Due to Participants . . . . . . . . . . . . . . . . . . . . . . . . . . $ 254,431 $ 887,944
Due to Northwestern Mutual Life Insurance Company . . . . . . . . . . . 78,037 319,392
Due from Purchase of Fund Shares . . . . . . . . . . . . . . . . . . . . 491,572 179,153
------------ -------------
Total Liabilities . . . . . . . . . . . . . . . . . . . . . $ 824,040 $ 1,386,489
============ =============
</TABLE>
# Growth Stock, Growth and Income Stock, and High Yield Bond Portfolios began
operations on May 3, 1994.
The Accompanying Notes are an Integral Part of the Financial Statements.
16
<PAGE> 17
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
Item 8. (Continued)
- --------------------
NML VARIABLE ANNUITY ACCOUNT A
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
December 31
--------------------------------------
Equity 1995 1994
-------------- --------------
<S> <C> <C>
Contracts Issued Prior to December 17, 1981:
Index 500 Stock Division
1995: 10,111,615 Accumulation Units @ 2.042204 . . . . . . . . $20,649,980
1994: 10,735,943 Accumulation Units @ 1.499054 . . . . . . . . $16,093,758
Annuity Reserves . . . . . . . . . . . . . . . . . . . . . . . . 1,273,520 968,816
------------ ------------
21,923,500 17,062,574
------------ ------------
Growth Stock Division
1995: 1,782 Accumulation Units @ 1.310823 . . . . . . . . . . . 2,336
1994: NA . . . . . . . . . . . . . . . . . . . . . . . . . . .
Annuity Reserves . . . . . . . . . . . . . . . . . . . . . . . . 0
------------
2,336
------------
Growth and Income Stock Division
1995: 9,498 Accumulation Units @ 1.298065 . . . . . . . . . . . 12,329
1994: NA . . . . . . . . . . . . . . . . . . . . . . . . . . .
Annuity Reserves: . . . . . . . . . . . . . . . . . . . . . . . 29,486
------------
41,815
------------
Aggressive Growth Stock Division
1995: 861,229 Accumulation Units @ 2.813200 . . . . . . . . . . 2,422,811
1994: 805,409 Accumulation Units @ 2.034747 . . . . . . . . . . 1,638,804
Annuity Reserves . . . . . . . . . . . . . . . . . . . . . . . . 74,993 62,282
------------ ------------
2,497,804 1,701,086
------------ ------------
International Equity Division
1995: 1,166,796 Accumulation Units @ 1.398467 . . . . . . . . . 1,631,726
1994: 1,529,309 Accumulation Units @ 1.229716 . . . . . . . . . 1,880,616
Annuity Reserves . . . . . . . . . . . . . . . . . . . . . . . . 2,889 138,516
------------ -----------
1,634,615 2,019,132
------------ -----------
Select Bond Division
1995: 1,172,420 Accumulation Units @ 6.519655 . . . . . . . . . 7,643,772
1994: 1,266,751 Accumulation Units @ 5.515295 . . . . . . . . . 6,986,505
Annuity Reserves . . . . . . . . . . . . . . . . . . . . . . . . 244,850 91,757
------------ ------------
7,888,622 7,078,262
------------ ------------
High Yield Bond Division
1995: 0 Accumulation Units @ 1.188188 . . . . . . . . . . . . . 0
1994: NA . . . . . . . . . . . . . . . . . . . . . . . . . . .
0
------------
Annuity Reserves . . . . . . . . . . . . . . . . . . . . . . . . 0
------------
Money Market Division
1995: 1,264,988 Accumulation Units @ 2.311989 . . . . . . . . . 2,924,637
1994: 1,020,911 Accumulation Units @ 2.201139 . . . . . . . . . 2,247,166
Annuity Reserves . . . . . . . . . . . . . . . . . . . . . . . . 63,276 65,330
------------ ------------
2,987,913 2,312,496
------------ ------------
Balanced Division
1995: 5,651,599 Accumulation Units @ 4.600659 . . . . . . . . . 26,001,081
1994: 6,525,821 Accumulation Units @ 3.667322 . . . . . . . . . 23,932,287
Annuity Reserves . . . . . . . . . . . . . . . . . . . . . . . . 1,442,962 1,106,121
------------ ------------
27,444,043 25,038,408
------------ ------------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
17
<PAGE> 18
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
Item 8. (Continued)
- --------------------
NML VARIABLE ANNUITY ACCOUNT A
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
December 31
--------------------------------------
Equity (Cont'd.) 1995 1994
-------------- --------------
<S> <C> <C>
Contracts Issued On or After December 17, 1981 and Before March 31,
1995:
Index 500 Stock Division
1995: 18,961,291 Accumulation Units @ 1.991330 . . . . . . . . $37,758,187
1994: 17,624,809 Accumulation Units @ 1.469006 . . . . . . . . $25,890,950
Annuity Reserves . . . . . . . . . . . . . . . . . . . . . . . . 1,340,376 408,085
----------- -----------
39,098,563 26,299,035
----------- -----------
Growth Stock Division
1995: 2,970,905 Accumulation Units @ 1.299976 . . . . . . . . . 3,862,105
1994: 1,311,686 Accumulation Units @ 1.006136 . . . . . . . . . 1,319,734#
Annuity Reserves . . . . . . . . . . . . . . . . . . . . . . . . 0 0
----------- -----------
3,862,105 1,319,734
----------- -----------
Growth and Income Stock Division
1995: 5,605,215 Accumulation Units @ 1.287355 . . . . . . . . . 7,215,902
1994: 3,129,287 Accumulation Units @ 0.994105 . . . . . . . . 3,110,840#
Annuity Reserves: . . . . . . . . . . . . . . . . . . . . . . . 160,662 135,766
----------- -----------
7,376,564 3,246,606
----------- -----------
Aggressive Growth Stock Division
1995: 19,083,707 Accumulation Units @ 2.743106 . . . . . . . . 52,348,631
1994: 17,290,856 Accumulation Units @ 1.993956 . . . . . . . . 34,477,207
Annuity Reserves . . . . . . . . . . . . . . . . . . . . . . . . 167,625 131,188
----------- -----------
52,516,256 34,608,395
----------- -----------
International Equity Division
1995: 21,338,268 Accumulation Units @ 1.379966 . . . . . . . . 29,446,084
1994: 21,538,113 Accumulation Units @ $1.219510 . . . . . . . . 26,265,944
Annuity Reserves . . . . . . . . . . . . . . . . . . . . . . . . 153,834 367,271
----------- -----------
29,599,918 26,633,215
----------- -----------
Select Bond Division
1995: 2,778,441 Accumulation Units @ 6.077689 . . . . . . . . . 16,886,499
1994: 2,923,557 Accumulation Units @ 5.167101 . . . . . . . . . 15,106,314
Annuity Reserves . . . . . . . . . . . . . . . . . . . . . . . . 597,617 74,325
----------- -----------
17,484,116 15,180,639
----------- -----------
High Yield Bond Division
1995: 1,609,770 Accumulation Units @ 1.178371 . . . . . . . . . 1,896,907
1995: 1,215,989 Accumulation Units @ 1.021705 . . . . . . . . . 1,242,382#
Annuity Reserves . . . . . . . . . . . . . . . . . . . . . . . . 0 0
----------- -----------
1,896,907 1,242,382
----------- -----------
Money Market Division
1995: 7,896,022 Accumulation Units @ 2.155845 . . . . . . . . . 17,022,599
1994: 8,608,326 Accumulation Units @ 2.062740 . . . . . . . . . 17,756,738
Annuity Reserves . . . . . . . . . . . . . . . . . . . . . . . . 387,730 51,598
----------- -----------
17,410,329 17,808,336
----------- -----------
Balanced Division
1995: 52,575,295 Accumulation Units @ 4.289623 . . . . . . . . 225,528,193
1994: 59,200,252 Accumulation Units @ 3.436463 . . . . . . . . 203,439,477
Annuity Reserves . . . . . . . . . . . . . . . . . . . . . . . . 2,924,538 1,931,385
----------- -----------
228,452,731 205,370,862
----------- -----------
</TABLE>
# Growth Stock, Growth and Income Stock, and High Yield Bond Divisions began
operations on May 3, 1994.
The Accompanying Notes are an Integral Part of the Financial Statements.
18
<PAGE> 19
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
Item 8. (Continued)
- --------------------
NML VARIABLE ANNUITY ACCOUNT A
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
December 31
Equity (Cont'd.) 1995
--------------
<S> <C>
Contracts Issued On or After March 31, 1995 - Back Load Version:
Index 500 Stock Division
1995: 471,752 Accumulation Units @ 1.991330 . . . . . . . . . . $939,414
Annuity Reserves . . . . . . . . . . . . . . . . . . . . . . . . 0
----------
939,414
----------
Growth Stock Division
1995: 227,218 Accumulation Units @ 1.299976 . . . . . . . . . . 295,378
Annuity Reserves . . . . . . . . . . . . . . . . . . . . . . . . 0
----------
295,378
----------
Growth and Income Stock Division
1995: 310,321 Accumulation Units @ 1.287355 . . . . . . . . . . 399,493
Annuity Reserves: . . . . . . . . . . . . . . . . . . . . . . . 0
----------
399,493
----------
Aggressive Growth Stock Division
1995: 407,729 Accumulation Units @ 2.743106 . . . . . . . . . . 1,118,443
Annuity Reserves . . . . . . . . . . . . . . . . . . . . . . . . 0
----------
1,118,443
----------
International Equity Division
1995: 374,986 Accumulation Units @ 1.379966 . . . . . . . . . . 517,469
Annuity Reserves . . . . . . . . . . . . . . . . . . . . . . . . 0
----------
517,469
----------
Select Bond Division
1995: 50,828 Accumulation Units @ 6.077689 . . . . . . . . . . 308,917
Annuity Reserves . . . . . . . . . . . . . . . . . . . . . . . . 0
----------
308,917
----------
High Yield Bond Division
1995: 138,470 Accumulation Units @ 1.178371 . . . . . . . . . . 163,170
Annuity Reserves . . . . . . . . . . . . . . . . . . . . . . . . 0
----------
163,170
----------
Money Market Division
1995: 379,473 Accumulation Units @ 2.155845 . . . . . . . . . . 818,085
Annuity Reserves . . . . . . . . . . . . . . . . . . . . . . . . 0
----------
818,085
----------
Balanced Division
1995: 372,457 Accumulation Units @ 4.289623 . . . . . . . . . . 1,597,701
Annuity Reserves . . . . . . . . . . . . . . . . . . . . . . . . 0
----------
1,597,701
----------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
19
<PAGE> 20
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
Item 8. (Continued)
- --------------------
NML VARIABLE ANNUITY ACCOUNT A
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
December 31
--------------
Equity (Cont'd.) 1995
--------------
<S> <C>
Contracts Issued On or After March 31, 1995 - Front Load Version:
Index 500 Stock Division
1995: 278,235 Accumulation Units @ 1.249114 . . . . . . . . . . $347,547
Annuity Reserves . . . . . . . . . . . . . . . . . . . . . . . . 0
------------
347,547
------------
Growth Stock Division
1995: 103,292 Accumulation Units @ 1.208718 . . . . . . . . . . 124,851
Annuity Reserves . . . . . . . . . . . . . . . . . . . . . . . . 0
------------
124,851
------------
Growth and Income Stock Division
1995: 114,414 Accumulation Units @ 1.196596 . . . . . . . . . . 136,908
Annuity Reserves: . . . . . . . . . . . . . . . . . . . . . . . 0
------------
136,908
------------
Aggressive Growth Stock Division
1995: 255,895 Accumulation Units @ 1.305186 . . . . . . . . . . 333,991
Annuity Reserves . . . . . . . . . . . . . . . . . . . . . . . . 0
------------
333,991
------------
International Equity Division
1995: 32,573 Accumulation Units @ 1.140398 . . . . . . . . . . 37,146
Annuity Reserves . . . . . . . . . . . . . . . . . . . . . . . . 0
------------
37,146
------------
Select Bond Division
1995: 26,732 Accumulation Units @ 1.128765 . . . . . . . . . . 30,174
Annuity Reserves . . . . . . . . . . . . . . . . . . . . . . . . 0
------------
30,174
------------
High Yield Bond Division
1995: 0 Accumulation Units @ 1.111614 . . . . . . . . . . . . . 0
Annuity Reserves . . . . . . . . . . . . . . . . . . . . . . . . 0
------------
0
------------
Money Market Division
1995: 327,441 Accumulation Units @ 1.040089 . . . . . . . . . . 340,569
Annuity Reserves . . . . . . . . . . . . . . . . . . . . . . . . 0
------------
340,569
------------
Balanced Division
1995: 164,303 Accumulation Units @ 1.180953 . . . . . . . . . . 194,034
Annuity Reserves . . . . . . . . . . . . . . . . . . . . . . . . 0
------------
194,034
------------
Total Equity . . . . . . . . . . . . . . . . . . . . . . . . 469,821,427
------------
Total Liabilities and Equity . . . . . . . . . . . . . . . . 470,645,467
============
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
20
<PAGE> 21
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
Item 8. (continued)
- --------------------
NML VARIABLE ANNUITY ACCOUNT A
COMBINED STATEMENT OF OPERATIONS AND CHANGES IN EQUITY
For the Years Ended December 31
<TABLE>
<CAPTION>
1995 1994 1993
-------------- -------------- --------------
<S> <C> <C> <C>
Investment Income
Dividend Income . . . . . . . . . . . . . . . . . . . . . . . . $ 11,709,964 $ 40,169,184 $ 16,795,751
Annuity Rate and Expense Guarantees . . . . . . . . . . . . . . 5,072,064 4,466,142 4,074,129
------------ ------------ ------------
Net Investment Income . . . . . . . . . . . . . . . . . . . . . 6,637,900 35,703,042 12,721,622
------------ ------------ ------------
Realized and Unrealized Gain on Investments
Net Realized Gain on Investments . . . . . . . . . . . . . . . . 13,141,169 1,687,702 2,347,432
Unrealized Appreciation (Depreciation) During the Year . . . . . 76,916,515 (39,969,923) 14,612,044
------------ ----------- ------------
Net Gain (Loss) on Investments . . . . . . . . . . . . . . . . . 90,057,684 (38,282,221) 16,959,476
------------ ----------- ------------
Increase (Decrease) in Equity Derived from Investment
Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96,695,584 ( 2,579,179) 29,681,098
------------ ----------- ------------
Equity Transactions
Contract Owners' Net Payments . . . . . . . . . . . . . . . . . 49,124,853 52,262,816 51,044,522
Annuity Payments . . . . . . . . . . . . . . . . . . . . . . . . (610,983) (603,158) (522,956)
Surrenders and Other (Net) . . . . . . . . . . . . . . . . . . . (62,309,189) (33,008,630) (33,141,406)
------------- ----------- -----------
Increase (Decrease) in Equity Derived from Equity Transactions . . . . (13,795,319) 18,651,028 17,380,160
------------- ------------ ------------
Net Increase in Equity . . . . . . . . . . . . . . . . . . . . . . . 82,900,265 16,071,849 47,061,258
Equity, Beginning of Year . . . . . . . . . . . . . . . . . . . . . . 386,921,162 370,849,313 323,788,055
------------ ------------ ------------
Equity, End of Year . . . . . . . . . . . . . . . . . . . . . . . . . $469,821,427 $386,921,162 $370,849,313
============ ============ ============
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
21
<PAGE> 22
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
Item 8. (continued)
- --------------------
NML VARIABLE ANNUITY ACCOUNT A
NOTES TO FINANCIAL STATEMENTS
Note 1--NML Variable Annuity Account A (the "Account") is a segregated asset
account of The Northwestern Mutual Life Insurance Company ("Northwestern Mutual
Life") used to fund variable annuity contracts ("contracts") for HR-10 and
corporate pension and profit-sharing plans which qualify for special tax
treatment under the Internal Revenue Code. Beginning March 31, 1995, two
versions of the contract are offered: Front Load contracts with a sales charge
up to 4% of purchase payments and Back Load contracts with a withdrawal charge
of 0-8%.
Note 2--The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. Principal
accounting policies are summarized below.
Note 3--All assets of each Division of the Account are invested in shares of
the corresponding Portfolio of Northwestern Mutual Series Fund, Inc. (the
"Fund"). The shares are valued at the Fund's offering and redemption price per
share.
On May 3, 1994, five new portfolios commenced operations in the Fund:
Aggressive Growth Stock Portfolio (formerly Northwestern Mutual Aggressive
Growth Stock Fund, Inc.), International Equity Portfolio (formerly Northwestern
Mutual International Equity Fund, Inc.), Growth Stock Portfolio, Growth and
Income Stock Portfolio and High Yield Bond Portfolio. Additionally, on May 3,
1994, the assets of Northwestern Mutual Life's Variable Annuity funds were
merged into the respective portfolio of the Fund in a tax-free exchange of
shares.
The Fund is an open-end investment company registered under the Investment
Company Act of 1940.
Note 4--Annuity reserves are based on published annuity tables with age
adjustment and benefit payments which reflect actual investment experience.
For variable payment plans issued prior to January 1, 1974, annuity reserves
are based on the 1955 American Annuity Table with assumed interest rates of 3%,
3 1/2% or 5%. For variable payment plans issued on or after January 1, 1974
and before January 1, 1985, annuity reserves are based on the 1971 Individual
Annuity Table with assumed interest rates of 3 1/2% or 5%. For variable
payment plans issued on or after January 1, 1985, annuity reserves are based on
the 1983 Table a with assumed interest rates of 3 1/2% or 5%.
Note 5--Dividend income from the Fund is recorded on the record date of the
dividends. Transactions in Fund shares are accounted for on the trade date.
The basis for determining cost on sale of Fund shares is identified cost.
Purchases and sales of Fund shares for the years ended December 31 by each
Division are shown below:
<TABLE>
<CAPTION>
Purchases 1995 1994 1993
--------- ---- ---- ----
<S> <C> <C> <C>
Index 500 Stock Division $ 7,998,931 $ 7,554,309 $ 6,134,062
Growth Stock Division 2,702,664 1,651,267 NA
Growth & Income Stock Division 4,147,264 3,579,504 NA
Aggressive Growth Division 10,658,292 14,415,626 7,893,190
International Equity Division 4,305,567 19,932,991 11,153,221
Select Bond Division 3,837,930 5,853,201 6,544,510
High Yield Bond Division 1,411,373 1,328,717 NA
Money Market Division 14,421,123 12,836,216 6,403,121
Balanced Division 14,258,034 42,118,207 29,474,025
Capital Appreciation Stock Division NA NA 2,003,721
Sales
-----
Index 500 Stock Division 5,165,148 5,927,056 3,570,219
Growth Stock Division 427,690 236,591 NA
Growth & Income Stock Division 576,160 214,192 NA
Aggressive Growth Division 5,672,013 2,578,041 1,772,409
International Equity Division 5,324,662 1,723,339 638,412
Select Bond Division 3,928,823 3,922,478 4,086,328
High Yield Bond Division 673,375 32,399 NA
Money Market Division 12,987,931 9,752,283 8,779,557
Balanced Division 36,790,058 30,795,275 19,075,952
Capital Appreciation Stock Division NA NA 1,011,862
</TABLE>
22
<PAGE> 23
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
Item 8. (continued)
- --------------------
NML VARIABLE ANNUITY ACCOUNT A
NOTES TO FINANCIAL STATEMENTS
Note 6--On April 30, 1993, Northwestern Mutual Capital Appreciation Stock Fund
was merged into the Northwestern Mutual Index 500 Stock Fund in a tax-free
exchange of fund shares. 21,689,286 shares of Northwestern Mutual Capital
Appreciation Stock Fund, Inc. were exchanged for 22,749,651 shares of
Northwestern Mutual Index 500 Stock Fund, Inc. The shares exchanged were
valued at $30,719,638 for each Division.
Note 7--A deduction for annuity rate and expense guarantees is determined daily
and paid to Northwestern Mutual Life as compensation for assuming the risk that
annuity payments will continue for longer periods than anticipated because the
annuitants as a group live longer than expected, and the risk that the charges
made by Northwestern Mutual Life may be insufficient to cover the actual costs
incurred in connection with the contracts.
For contracts issued on or after March 31, 1995, for the Front Load version and
the Back Load version, the deduction for annuity rate and expense guarantees is
determined daily at annual rates of 4/10 of 1% and 1 1/4%, respectively, of the
net assets of each Division attributable to these contracts and is paid to
Northwestern Mutual Life. For these contracts, the rates may be increased or
decreased by the Board of Trustees of Northwestern Mutual Life not to exceed
3/4 of 1% and 1 1/2%, respectively.
For contracts issued on or after December 17, 1981 and before March 31, 1995,
the deduction is at an annual rate of 1 1/4% of the net assets of each Division
attributable to these contracts. For these contracts, the rate may be
increased or decreased by the Board of Trustees of Northwestern Mutual Life not
to exceed a 1 1/2% annual rate.
For contracts issued prior to December 17, 1981, the deduction is at an annual
rate of 3/4 of 1% of the net assets of each Division attributable to these
contracts. For these contracts, the rate may be increased or decreased by the
Board of Trustees of Northwestern Mutual Life not to exceed a 1% annual rate.
Beginning in 1995, Northwestern Mutual Life paid a dividend to certain
contracts. The dividend was reinvested in the Account and has been reflected
as a Contract Owners' Net Payment in the accompanying financial statements.
Note 8--Northwestern Mutual Life is taxed as a "life insurance company" under
the Internal Revenue Code and the operations of the Account form a part of and
are taxed with those of Northwestern Mutual Life. Under current law, no
federal income taxes are payable with respect to the Account. Accordingly, no
provision for any such liability has been made.
23
<PAGE> 24
Price Waterhouse LLP Letterhead
REPORT OF INDEPENDENT ACCOUNTANTS
To The Northwestern Mutual Life Insurance Company and
Contract Owners of NML Variable Annuity Account A
In our opinion, the statements appearing on pages 16 through 23 present fairly,
in all material respects, the financial position of NML Variable Annuity
Account A at December 31, 1995 and 1994, and the results of its operations and
the changes in its equity for each of the three years in the period ended
December 31, 1995, in conformity with generally accepted accounting principles.
These financial statements are the responsibility of The Northwestern Mutual
Life Insurance Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.
Price Waterhouse LLP
Milwaukee, Wisconsin
January 24, 1996
24
<PAGE> 25
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
Item 8. (continued) Financial Statements and Supplementary Data
- --------------------------------------------------------------------
NML VARIABLE ANNUITY ACCOUNT C
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
December 31
------------------------------------
1995 1994
------------ ------------
<S> <C> <C>
Assets
Investments at market value:
Northwestern Mutual Series Fund, Inc.
Index 500 Stock
1995: 37,491,726 shares (cost $46,641,879) . . . . . . . . $64,560,752
1994: 35,952,983 shares (cost $41,897,373) . . . . . . . . $45,552,429
Growth Stock
1995: 1,650,591 shares (cost $1,947,392) . . . . . . . . . 2,084,697
1994: 330,122 shares (cost $332,520) . . . . . . . . . . . 329,792 #
Growth and Income Stock
1995: 4,036,751 shares (cost $4,620,194) . . . . . . . . . 4,888,505
1994: 1,178,036 shares (cost $1,173,282) . . . . . . . . . 1,159,187 #
Aggressive Growth Stock
1995: 20,744,587 shares (cost $40,636,758) . . . . . . . . 57,421,016
1994: 16,641,752 shares (cost $28,898,872) . . . . . . . . 33,266,862
International Equity
1995: 22,169,169 shares (cost $27,851,615) . . . . . . . . 30,039,223
1994: 20,694,866 shares (cost $25,740,804) . . . . . . . . 24,647,586
Select Bond
1995: 13,258,257 shares (cost $15,437,346) . . . . . . . . 16,281,140
1994: 13,467,540 shares (cost $15,681,682) . . . . . . . . 14,262,125
High Yield Bond
1995: 718,103 shares (cost $760,109) . . . . . . . . . . . 736,774
1994: 207,679 shares (cost $211,313) . . . . . . . . . . . 201,656 #
Money Market
1995: 9,324,692 shares (cost $9,324,692) . . . . . . . . . 9,324,692
1994: 11,510,121 shares (cost $11,510,121) . . . . . . . . 11,510,121
Balanced
1995: 82,586,808 shares (cost $113,566,515) . . . . . . . . 132,469,239
1994: 90,976,778 shares (cost $121,324,620) . . . . . . . . 119,452,509
------------ -----------
317,806,039 250,382,267
Due from Sales of Fund Shares . . . . . . . . . . . . . . . . . . . . . 36 79,226
Due from Northwestern Mutual Life Insurance Company . . . . . . . . . . 808,493 279,107
------------ ------------
Total Assets . . . . . . . . . . . . . . . . . . . . . $318,614,568 $250,740,600
============ ============
Liabilities
Due to Northwestern Mutual Life Insurance Company . . . . . . . . . . . $ 36 $ 79,226
Due on Purchase of Fund Shares . . . . . . . . . . . . . . . . . . . . . 808,493 279,107
------------ ------------
Total Liabilities . . . . . . . . . . . . . . . . . . . $ 808,529 $ 358,333
============ ============
</TABLE>
# Growth Stock, Growth and Income Stock, and High Yield Bond Portfolios began
operations on May 3, 1994.
The Accompanying Notes are an Integral Part of the Financial Statements.
25
<PAGE> 26
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
Item 8. (continued)
- --------------------
NML VARIABLE ANNUITY ACCOUNT C
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
December 31
------------------------------------
Equity 1995 1994
------------ ------------
<S> <C> <C>
Contracts Issued Before December 17, 1981 or Between April 30, 1984 and
December 31, 1991:
Index 500 Stock Division
1995: 2,232,985 Accumulation Units @ 22.104982 . . . . . . . . $49,360,095
1994: 2,284,637 Accumulation Units @ 16.105431 . . . . . . . . $36,795,066
Growth Stock Division
1995: 63,881 Accumulation Units @ 13.271899 . . . . . . . . . . 847,822
1994: NA . . . . . . . . . . . . . . . . . . . . . . . . . . .
Growth and Income Stock Division
1995: 117,004 Accumulation Units @ 13.142782 . . . . . . . . . 1,537,752
1994: NA . . . . . . . . . . . . . . . . . . . . . . . . . . .
Aggressive Growth Stock Division
1995: 1,397,886 Accumulation Units @ 27.648691 . . . . . . . . 38,649,707
1994: 1,239,328 Accumulation Units @ 19.849331 . . . . . . . . 24,599,840
International Equity Division
1995: 14,747,735 Accumulation Units @ 1.426613 . . . . . . . . 21,039,310
1994: 15,153,296 Accumulation Units @ 1.245144 . . . . . . . . 18,868,036
Select Bond Division
1995: 124,163 Accumulation Units @ 74.222515 . . . . . . . . . 9,215,714
1994: 150,232 Accumulation Units @ 62.322013 . . . . . . . . . 9,362,736
High Yield Bond Division
1995: 21,583 Accumulation Units @ 12.030416 . . . . . . . . . . 259,657
1994: NA . . . . . . . . . . . . . . . . . . . . . . . . . . .
Money Market Division
1995: 62,209 Accumulation Units @ 24.705630 . . . . . . . . . . 1,536,924
1994: 200,510 Accumulation Units @ 23.346279 . . . . . . . . . 4,681,165
Balanced Division
1995: 1,889,324 Accumulation Units @ 51.855817 . . . . . . . . 97,972,463
1994: 2,327,834 Accumulation Units @ 41.028821 . . . . . . . . 95,508,274
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
26
<PAGE> 27
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
Item 8. (continued)
- --------------------
NML VARIABLE ANNUITY ACCOUNT C
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
December 31
------------------------------------
Equity (Cont'd.) 1995 1994
------------ ------------
<S> <C> <C>
Contracts Issued On or After December 17, 1981 and Before May 1, 1984:
Index 500 Stock Division
1995: 49,450 Accumulation Units @ 21.564611 . . . . . . . . . . $1,066,361
1994: 39,104 Accumulation Units @ 15.790165 . . . . . . . . . . $617,454
Aggressive Growth Stock Division
1995: 5,527 Accumulation Units @ 26.975930 . . . . . . . . . . 149,103
1994: 5,528 Accumulation Units @ 19.463084 . . . . . . . . . . 107,594
International Equity Division
1995: 497,710 Accumulation Units @ 1.407741 . . . . . . . . . . 700,647
1994: 500,818 Accumulation Units @ 1.234814 . . . . . . . . . . 618,417
Select Bond Division
1995: 7,287 Accumulation Units @ 69.192181 . . . . . . . . . . 504,224
1994: 6,665 Accumulation Units @ 58.388451 . . . . . . . . . . 389,131
Money Market Division
1995: 14,478 Accumulation Units @ 23.069838 . . . . . . . . . . 334,015
1994: 10,677 Accumulation Units @ 21.909448 . . . . . . . . . . 233,928
Balanced Division
1995: 113,109 Accumulation Units @ 48.364840 . . . . . . . . . 5,470,492
1994: 130,727 Accumulation Units @ 38.457844 . . . . . . . . . 5,027,464
Annuity Reserves . . . . . . . . . . . . . . . . . . . . . . . . 405,494 343,378
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
27
<PAGE> 28
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
Item 8. (continued)
- --------------------
NML VARIABLE ANNUITY ACCOUNT C
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
December 31
------------------------------------
1995 1994
------------ ------------
<S> <C> <C>
Equity (cont'd)
Contracts Issued On or After December 31, 1991 Front Load Version:
Index 500 Stock Division
1995: 2,399,586 Accumulation Units @ 1.588496 . . . . . . . . . $3,811,733
1994: 1,918,074 Accumulation Units @ 1.164877 . . . . . . . . . $2,234,320
Growth Stock Division
1995: 361,207 Accumulation Units @ 1.312966 . . . . . . . . . . 474,252
1994: 149,268 Accumulation Units @ 1.010139 . . . . . . . . . . 150,781#
Growth and Income Stock Division
1995: 861,211 Accumulation Units @ 1.300190 . . . . . . . . . . 1,119,738
1994: 418,974 Accumulation Units @ 0.998049 . . . . . . . . . . 418,156#
Aggressive Growth Stock Division
1995: 2,242,402 Accumulation Units @ 1.776871 . . . . . . . . . 3,984,459
1994: 1,206,187 Accumulation Units @ 1.283916 . . . . . . . . . 1,548,643
International Equity Division
1995: 2,009,228 Accumulation Units @ 1.402156 . . . . . . . . . 2,817,251
1994: 1,453,091 Accumulation Units @ 1.231747 . . . . . . . . . 1,789,840
Select Bond Division
1995: 1,800,898 Accumulation Units @ 1.334934 . . . . . . . . . 2,404,080
1994: 1,668,091 Accumulation Units @ 1.128176 . . . . . . . . . 1,881,900
High Yield Bond Division
1995: 90,184 Accumulation Units @ 1.190149 . . . . . . . . . . 107,332
1994: 47,321 Accumulation Units @ 1.025776 . . . . . . . . . . 48,541#
Money Market Division
1995: 2,956,017 Accumulation Units @ 1.139693 . . . . . . . . . 3,368,952
1994: 3,313,061 Accumulation Units @ 1.083976 . . . . . . . . . 3,591,279
Balanced Division
1995: 5,275,308 Accumulation Units @ 1.419325 . . . . . . . . . 7,487,377
1994: 3,879,218 Accumulation Units @ 1.130270 . . . . . . . . . 4,384,564
</TABLE>
# Growth Stock, Growth and Income Stock, and High Yield Bond Divisions
began operations on May 3, 1994.
The Accompanying Notes are an Integral Part of the Financial Statements.
28
<PAGE> 29
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
Item 8. (continued)
- --------------------
NML VARIABLE ANNUITY ACCOUNT C
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
December 31
------------------------------------
1995 1994
------------ ------------
<S> <C> <C>
Equity (cont'd)
Contracts Issued On or After December 31, 1991 Simplified Load Version:
Index 500 Stock Division
1995: 5,080,179 Accumulation Units @ 2.031929 . . . . . . . . . $10,322,562
1994: 3,939,802 Accumulation Units @ 1.498956 . . . . . . . . . $5,905,590
Growth Stock Division
1995: 586,644 Accumulation Units @ 1.299976 . . . . . . . . . . 762,622
1994: 177,918 Accumulation Units @ 1.006136 . . . . . . . . . . 179,010#
Growth and Income Stock Division
1995: 1,733,022 Accumulation Units @ 1.287355 . . . . . . . . . 2,231,015
1994: 745,425 Accumulation Units @ 0.994105 . . . . . . . . . . 741,031#
Aggressive Growth Stock Division
1995: 5,316,689 Accumulation Units @ 2.753170 . . . . . . . . . 14,637,748
1994: 3,503,170 Accumulation Units @ 2.001269 . . . . . . . . . 7,010,785
International Equity Division
1995: 3,972,573 Accumulation Units @ 1.379966 . . . . . . . . . 5,482,016
1994: 2,764,466 Accumulation Units @ 1.219510 . . . . . . . . . 3,371,293
Select Bond Division
1995: 677,396 Accumulation Units @ 6.136911 . . . . . . . . . . 4,157,122
1994: 503,763 Accumulation Units @ 5.217451 . . . . . . . . . . 2,628,358
High Yield Bond Division
1995: 313,810 Accumulation Units @ 1.178371 . . . . . . . . . . 369,785
1994: 149,862 Accumulation Units @ 1.021705 . . . . . . . . . . 153,115#
Money Market Division
1995: 1,890,645 Accumulation Units @ 2.160533 . . . . . . . . . 4,084,801
1994: 1,453,033 Accumulation Units @ 2.067227 . . . . . . . . . 3,003,750
Balanced Division
1995: 4,902,410 Accumulation Units @ 4.310821 . . . . . . . . . 21,133,413
1994: 4,108,593 Accumulation Units @ 3.453452 . . . . . . . . . 14,188,828
------------ ------------
Total Equity . . . . . . . . . . . . . . . . . . . . . $317,806,038 $250,382,267
------------ ------------
Total Liabilities and Equity . . . . . . . . . . . . . $318,614,567 $250,740,600
============ ============
</TABLE>
# Growth Stock, Growth and Income Stock, and High Yield Bond Divisions
began operations on May 3, 1994.
The Accompanying Notes are an Integral Part of the Financial Statements.
29
<PAGE> 30
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
Item 8. (continued)
- --------------------
NML VARIABLE ANNUITY ACCOUNT C
COMBINED STATEMENT OF OPERATIONS AND CHANGES IN EQUITY
For the Years Ended December 31
<TABLE>
<CAPTION>
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
Investment Income
Dividend Income . . . . . . . . . . . . . . . . . . . . . . . . $ 6,470,776 $22,562,209 $ 9,559,776
Annuity Rate and Expense Guarantees . . . . . . . . . . . . . . 856,764 509,648 235,930
------------ ------------ ------------
Net Investment Income . . . . . . . . . . . . . . . . . . . . . 5,614,012 22,052,561 9,323,846
------------ ------------ ------------
Realized and Unrealized Gain (Loss) on Investments
Net Realized Gain (Loss) on Investments . . . . . . . . . . . . 9,884,364 5,949,795 3,670,743
Unrealized Appreciation (Depreciation) During the Year . . . . . 53,407,857 (27,055,878) 7,227,689
------------ ------------ ------------
Net Gain (Loss) on Investments . . . . . . . . . . . . . . . . . 63,292,221 (21,106,083) 10,898,432
------------ ------------ ------------
Increase in Equity Derived from Investment Activity . . . . . . . . . 68,906,233 946,478 20,222,278
------------ ------------ ------------
Equity Transactions
Contract Owners' Net Payments . . . . . . . . . . . . . . . . . 59,390,267 48,709,729 39,748,661
Surrenders and Other (Net) . . . . . . . . . . . . . . . . . . . (60,872,729) (26,720,946) (22,334,176)
------------ ------------ ------------
Increase (Decrease) in Equity Derived from Equity Transactions . . . (1,482,462) 21,988,783 17,414,485
------------ ------------ ------------
Net Increase in Equity . . . . . . . . . . . . . . . . . . . . . . . 67,423,771 22,935,261 37,636,763
Equity, Beginning of Year . . . . . . . . . . . . . . . . . . . . . . 250,382,267 227,447,006 189,810,243
------------ ------------ ------------
Equity, End of Year . . . . . . . . . . . . . . . . . . . . . . . . . $317,806,038 $250,382,267 $227,447,006
============ ============ ============
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
30
<PAGE> 31
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
Item 8. (continued)
- --------------------
NML VARIABLE ANNUITY ACCOUNT C
NOTES TO FINANCIAL STATEMENTS
Note 1--NML Variable Annuity Account C (the "Account") is a segregated asset
account of The Northwestern Mutual Life Insurance Company ("Northwestern Mutual
Life" or "Sponsor") used to fund variable annuity contracts ("contracts") for
HR-10 and corporate pension and profit- sharing plans which qualify for special
tax treatment under the Internal Revenue Code. Beginning December 31, 1991,
two versions of the contract are offered: Front Load contracts with a sales
charge up to 4.5% of purchase payments and Simplified Load contracts with an
installation fee of $750.
Note 2--The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. Principal
accounting policies are summarized below.
Note 3--All assets of each Division of the Account are invested in shares of
the corresponding Portfolio of Northwestern Mutual Series Fund, Inc. (the
"Fund"). The shares are valued at the Fund's offering and redemption price per
share.
On May 3, 1994, five new portfolios commenced operations in the Fund:
Aggressive Growth Stock Portfolio (formerly Northwestern Mutual Aggressive
Growth Stock Fund,Inc.), International Equity Portfolio (formerly Northwestern
Mutual International Equity Fund, Inc.), Growth Stock Portfolio, Growth and
Income Stock Portfolio and High Yield Bond Portfolio. Additionally, on May 3,
1994, the assets of Northwestern Mutual Life's Variable Annuity funds were
merged into the respective portfolio of the Fund in a tax-free exchange of
shares.
The Fund is an open-end investment company registered under the Investment
Company Act of 1940.
Note 4--Annuity reserves are based on published annuity tables with age
adjustment and benefit payments which reflect actual investment experience.
Annuity reserves are based on the 1983 Table a with assumed interest rates of
3 1/2% or 5%.
Note 5--Dividend income from the Fund is recorded on the record date of the
dividends. Transactions in Fund shares are accounted for on the trade date.
The basis for determining cost on sale of Fund shares is identified cost.
Purchases and sales of Fund shares for the years ended December 31 by each
Division are shown below:
<TABLE>
<CAPTION>
Purchases 1995 1994 1993
- --------- ---- ---- ----
<S> <C> <C> <C>
Index 500 Stock Division $ 9,719,794 $ 8,659,996 $ 8,132,392
Growth Stock Division 1,794,866 356,487 NA
Growth & Income Stock Division 3,709,640 1,282,402 NA
Aggressive Growth Division 15,956,497 12,289,757 9,865,453
International Equity Division 6,724,373 23,854,689 3,261,907
Select Bond Division 4,302,192 5,219,278 5,594,498
High Yield Bond Division 632,095 303,059 NA
Money Market Division 10,821,340 11,074,834 6,175,684
Balanced Division 17,257,735 31,432,161 24,388,391
Capital Appreciation Stock Division NA NA 2,415,405
Sales
- -----
Index 500 Stock Division 7,360,855 7,244,819 $ 4,442,482
Growth Stock Division 213,213 24,577 NA
Growth & Income Stock Division 310,894 108,587 NA
Aggressive Growth Division 6,866,522 2,229,844 1,795,174
International Equity Division 4,899,939 1,132,149 420,640
Select Bond Division 4,475,998 3,718,654 2,558,763
High Yield Bond Division 87,219 91,658 NA
Money Market Division 13,008,176 9,494,795 5,488,198
Balanced Division 29,565,575 26,386,243 16,478,266
Capital Appreciation Stock Division NA NA 1,907,126
</TABLE>
31
<PAGE> 32
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
Item 8. (continued)
- --------------------
NML VARIABLE ANNUITY ACCOUNT C
NOTES TO FINANCIAL STATEMENTS
Note 6--On April 30, 1993, Northwestern Mutual Capital Appreciation Stock Fund
was merged into the Northwestern Mutual Index 500 Stock Fund in a tax-free
exchange of fund shares. 23,586,477 shares of Northwestern Mutual Capital
Appreciation Stock Fund, Inc. were exchanged for 24,739,593 shares of
Northwestern Mutual Index 500 Stock Fund, Inc. The shares exchanged were
valued at $33,406,725 for each Division.
Note 7--A deduction for annuity rate and expense guarantees is determined daily
and paid to Northwestern Mutual Life as compensation for assuming the risk that
annuity payments will continue for longer periods than anticipated because the
annuitants as a group live longer than expected and the risk that the charges
made by Northwestern Mutual Life may be insufficient to cover the actual costs
incurred in connection with the contracts.
Generally, for contracts issued on or after December 31, 1991, for the
Front Load Version and the Simplified Load Version, the deduction for annuity
rate and expense guarantees is determined daily at annual rates of 6.5/10 of 1%
and 1 1/4%, respectively, of the net assets of each Division attributable to
these contracts and is paid to Northwestern Mutual Life. For these contracts,
the rates may be increased or decreased by the Board of Trustees of
Northwestern Mutual Life not to exceed 1% and 1 1/2% annual rates,
respectively.
Generally, the deduction for contracts issued before December 17, 1981 or
between April 30, 1984 and December 31, 1991 as provided for in the contracts
has been waived by the Board of Trustees of Northwestern Mutual Life. For
these contracts, the rate may be determined by the Board of Trustees of
Northwestern Mutual Life not to exceed a 1/4 of 1% annual rate.
For contracts issued on or after December 17, 1981, and before May 1, 1984, the
deduction is determined daily at an annual rate of 1/2 of 1% of the net assets
of each Division attributable to these contracts and is paid to Northwestern
Mutual Life. For these contracts, the rate may be increased or decreased by
the Board of Trustees of Northwestern Mutual Life not to exceed a 3/4 of 1%
annual rate.
Note 8--Northwestern Mutual Life is taxed as a "life insurance company" under
the Internal Revenue Code and the operations of the Account form a part of and
are taxed with those of Northwestern Mutual Life. Under current law, no
federal income taxes are payable with respect to the Account. Accordingly, no
provision for any such liability has been made.
Item 9 is on page 34.
32
<PAGE> 33
[PRICE WATERHOUSE LLP LOGO]
REPORT OF INDEPENDENT ACCOUNTANTS
To The Northwestern Mutual Life Insurance Company and
Contract Owners of NML Variable Annuity Account C
In our opinion, the statements appearing on pages 25 through 32 present
fairly, in all material respects, the financial position of NML Variable
Annuity Account C at December 31, 1995 and 1994, and the results of its
operations and the changes in its equity for each of the three years in the
period ended December 31, 1995, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of The
Northwestern Mutual Life Insurance Company's management; our responsibility is
to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with generally
accepted auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Milwaukee, Wisconsin
January 24, 1996
33
<PAGE> 34
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
Item 9. Disagreements on Accounting and Financial Disclosure
- -------------------------------------------------------------
Not applicable.
Item 10 is on page 35.
34
<PAGE> 35
The Northwestern Mutual Life Insurance Company 35
----------------------------------------------
Form 10-K
---------
PART III
--------
Item 10. Directors and Executive Officers of the Registrant
- ------------------------------------------------------------
(a) The following information as of March 1, 1996 is provided
with respect to each director, including persons chosen to
become directors, of the Registrant. The Registrant uses
the title of Trustee to denote the directors.
<TABLE>
<CAPTION>
YEAR EXPIRATION OF TERM
TRUSTEE AGE ELECTED OF OFFICE OTHER POSITIONS PRESENTLY HELD WITH REGISTRANT
------- --- ------- ------------------- -----------------------------------------------
<S> <C> <C> <C> <C>
R. Quintus Anderson 65 1984 May 1999 Chairman, Audit Committee
Edward E. Barr 59 1991 May 1999 Member, Human Resources Committee
Gordon T. Beaham, III 64 1988 May 1997 Member, Audit Committee
Frank H. Bertsch 70 1979 May 1998 Member, Insurance Product and Marketing Committee
Robert C. Buchanan 55 1991 May 1999 Member, Executive and Finance Committees
Robert E. Carlson 60 1989 May 1998 Executive Vice President; Member, Executive Committee
George A. Dickerman 57 1994 May 1996 (1) Member, Insurance Product and Marketing Committee
Thomas I. Dolan 68 1986 May 1996 (1) Member, Human Resources Committee
Pierre S. DuPont 61 1985 May 1998 Member, Insurance Product and Marketing Committee
James D. Ericson 60 1989 May 1996 (1) President and C.E.O.; Member, Human Resources
and Insurance Product & Marketing Committees; Chairman,
Executive and Finance Committees
J. E. Gallegos 60 1985 May 1996 (1) Member, Audit Committee
Patricia Albjerg Graham 61 1980 May 1996 (1) Member, Human Resources Committee
Richard H. Holton 69 1972 May 1996 * Member, Insurance Product and Marketing Committee
Stephen F. Keller 57 1984 May 1999 Member, Audit Committee
J. Thomas Lewis 59 1978 May 1998 Chairman, Human Resources Committee
Fred G. Luber 70 1983 May 1997 * Member, Executive and Finance Committees
</TABLE>
(1) Candidate proposed for re-election by the Board of Trustees for
the election to be held at the May 1996 meeting of policyholders.
If re-elected, these Trustees' terms will expire in May of 2000.
* Retiring on May 22, 1996.
<PAGE> 36
The Northwestern Mutual Life Insurance Company 36
----------------------------------------------
Form 10-K
---------
<TABLE>
<CAPTION>
YEAR EXPIRATION OF TERM
TRUSTEE AGE ELECTED OF OFFICE OTHER POSITIONS PRESENTLY HELD WITH REGISTRANT
------- --- ------- ------------------- ----------------------------------------------
<S> <C> <C> <C> <C>
Daniel F. McKeithan, Jr. 60 1988 May 1999 Member, Executive, Finance, and Human Resources
Committees
Guy A. Osborn 60 1994 May 1997 Member, Executive and Finance Committees
Donald J. Schuenke 67 1980 May 1998 Member, Executive and Finance and Committees
H. Mason Sizemore, Jr. 54 1993 May 1999 Member, Insurance Product and Marketing Committee
Harold B. Smith 62 1973 May 1996 (1) Member, Insurance Product & Marketing Committee
Sherwood H. Smith, Jr. 59 1992 May 1998 Chairman, Insurance Product & Marketing Committee
John E. Steuri 56 1994 May 1999 Member, Human Resources Committee
John J. Stollenwerk 56 1993 May 1997 Member, Executive and Finance Committees
Barry L. Williams 51 1987 May 1997 Member, Human Resources Committee
Kathryn D. Wriston 57 1986 May 1997 Member, Audit Committee
</TABLE>
(1) Candidate proposed for re-election by the Board of Trustees for the
election to be held at the May 1996 meeting of policyholders. If
re-elected, these Trustees' terms will expire in May of 2000.
<PAGE> 37
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
Item 10. (continued)
- ---------------------
(b) The following information as of March 1, 1996 is
provided with respect to each Executive Officer of the
Registrant.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
James D. Ericson 60 President and Chief Executive Officer, Trustee
Robert E. Carlson 60 Executive Vice President (Agencies and Marketing), Trustee
Peter W. Bruce 50 Executive Vice President (Operations and Administration)
Frederic H. Sweet 52 Senior Vice President (Government Relations)
Dennis Tamcsin 57 Senior Vice President (Agencies)
James W. Ehrenstrom 59 Senior Vice President
Walt J. Wojcik 56 Senior Vice President (Information Systems)
Edward J. Zore 50 Executive Vice President (Finance and Investments)
Mason G. Ross 52 Senior Vice President (Securities)
Richard L. Hall 50 Senior Vice President (Marketing)
John M. Bremer 48 Senior Vice President, General Counsel and Secretary
Mark G. Doll 46 Senior Vice President (Public Markets)
William C. Koenig 48 Senior Vice President and Chief Actuary
Gary E. Long 51 Vice President and Controller
Deborah A. Beck 48 Senior Vice President (Insurance Operations)
Donald L. Mellish 57 Vice President (Field Financial Services)
Barbara F. Piehler 45 Vice President (Policyowner Services)
James F. Reiskytl 58 Vice President (Tax and Financial Planning)
Leonard F. Stecklein 49 Vice President (Agency Services)
Virgil L. Renne, Jr. 44 Vice President (Employer Product Marketing)
Martha M. Valerio 49 Vice President (Corporate Development)
W. Ward White 56 Vice President (Communications)
Thomas E. Dyer 50 Vice President (New Business)
Steven T. Catlett 46 Vice President (Corporate Services)
Gregory C. Oberland 38 Vice President (Policy Benefits)
Meridee J. Maynard 40 Vice President (Compliance and Sales Practices)
Susan A. Lueger 42 Vice President (Human Resources)
William H. Beckley 48 Vice President (Agencies)
Ralph A. Pelton 64 Vice President (Real Estate)
</TABLE>
All of the Executive Officers, except Susan A. Lueger, have
been associated with the Registrant, although not
necessarily in their present positions, for more than five
years.
Susan A. Lueger has been Vice President of NML since May,
1994; Vice President of Human Resources at Wisconsin
Electric Power Company 1992-1994; prior thereto with WEPC
in the following positions: Assistant Vice President-Human
Resources 1/92 to 11/92; Director-Human Resources 5/91 to
1/92; Manager-Compensation & Benefits Division 7/90 to
5/91; Project Specialist-Employment and Training Division
2/88 to 7/90.
37
<PAGE> 38
The Northwestern Mutual Life Insurance Company 38
----------------------------------------------
Form 10-K
---------
Item 10. (continued)
- ---------------------
Term of office for all Executive Officers is one year expiring
May 31, 1996.
(c) Not applicable
(d) No one of the Executive Officers or Trustees is related to any
other to the best of our knowledge.
(e) Business experience and directorships of Trustees are as follows:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
TRUSTEE DURING PAST FIVE YEARS DIRECTORSHIPS
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
R. Quintus Anderson Chairman, The Aarque Companies, Jamestown, New York. Cold Metal Products Company, Inc.
Oneida, Ltd.
Edward E. Barr President and Chief Executive Officer, Sun Chemical First Union Corporation
Corporation, Fort Lee, New Jersey. United Water Resources
Gordon T. Beaham, III Chairman and President, Faultless Starch/Bon Ami Company,
Kansas City, Missouri, since 1987. Prior thereto,
President and Chief Executive Officer.
Frank H. Bertsch Chairman of the Executive Committee, Flexsteel Industries, Cy Care Systems, Inc.
Inc., Dubuque, Iowa, since July 1990. Prior thereto, Flexsteel Industries, Inc.
Chairman and Chief Executive Officer.
Robert C. Buchanan President and Chief Executive Officer, Fox Valley Brady, W. H., Company
Corporation, Appleton, Wisconsin. Firstar Corporation
Robert E. Carlson Executive Vice President of NML since 1987. Senior Vice
President 1982-1987. Prior thereto, Vice President-
Research, Life Insurance Marketing and Research
Association, Farmington, Connecticut.
George A. Dickerman President, Spalding Sports Worldwide, Chicopee, Bay Banks Inc.
Massachusetts, since 1981.
Thomas I. Dolan Retired Chairman, A. O. Smith Corp., Milwaukee, Wisconsin, A. O. Smith Corporation
since 1992. Chairman, 1989-1992; Chairman and Chief
Executive Officer 1984-1989; prior thereto President.
Pierre S. Du Pont Attorney, Richards, Layton & Finger, Wilmington, Delaware, Louisiana-Pacific Corporation
since 1985; prior thereto, Governor of Delaware. Pet Incorporated
Whitman Corporation
</TABLE>
<PAGE> 39
The Northwestern Mutual Life Insurance Company 39
----------------------------------------------
Form 10-K
---------
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
TRUSTEE DURING PAST FIVE YEARS DIRECTORSHIPS
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
James D. Ericson President and Chief Executive Officer of NML since 10-1-93. MGIC Investment Corporation
President and Chief Operating Officer 1991-1993. President
1990-1991; Executive Vice President 1987-1990; prior
thereto, Senior Vice President-Investments 1980-1987.
J. E. Gallegos Attorney, Gallegos Law Firm, Santa Fe, New Mexico since
1988; prior thereto, Chairman of the Board, Enviromed Inc.,
Santa Fe, New Mexico, since 1987; prior thereto, President,
Jones, Gallegos, Snead & Wertheim, P.A., Santa Fe, New
Mexico.
Patricia Albjerg Graham President, Spencer Foundation, Chicago, Illinois, since
1991; and Professor of the History of American Education,
Harvard University, Cambridge, Massachusetts, since 1974.
Dean of the Graduate School of Education at Harvard 1982-
1991.
Richard H. Holton Professor Emeritus, Haas School of Business, University of
California, Berkeley, California, since 1991. Prior
thereto, Professor (1975-1991).
Stephen F. Keller Chairman, The Santa Anita Companies, since 1993. Chairman, Santa Anita Realty Enterprises, Inc.
Santa Anita Realty Enterprises; and President, Santa Anita Santa Anita Operating Company
Operating Company, Arcadia, California, 1992-1993.
President and C.O.O., The Santa Anita Companies, Arcadia,
California, 7/91 to 1/92. Attorney, Fulbright & Jaworski,
Los Angeles, California, 1/91 to 7/91. Attorney, Seidler,
Amdec Securities, Inc., Los Angeles, California 1987-1991.
Prior thereto, Attorney, Lillick McHose & Charles, Los
Angeles, California.
J. Thomas Lewis Attorney, Monroe & Lemann, New Orleans, Louisiana.
Fred G. Luber Chairman of the Board, Super Steel Products Corp.,
Milwaukee, Wisconsin, since 1993. Prior thereto, Chairman
and Chief Executive Officer.
Daniel F. McKeithan, Jr. President, Tamarack Petroleum Co. Inc., Milwaukee, Firstar Corporation
Wisconsin, since 1982. Marcus Corporation
WICOR Corporation
Guy A. Osborn Chairman and Chief Executive Officer, Universal Foods Firstar Corporation
Corp., Milwaukee, Wisconsin, since 1990. Prior thereto, Firstar Bank Milwaukee
Chief Executive Officer 1988-1990. Fleming Cos.
Universal Foods Corporation
WICOR
Wisconsin Gas Company
</TABLE>
<PAGE> 40
The Northwestern Mutual Life Insurance Company 40
----------------------------------------------
Form 10-K
---------
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
TRUSTEE DURING PAST FIVE YEARS DIRECTORSHIPS
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Donald J. Schuenke Retired Chairman of NML since 2-1-94. Chairman of the A. O. Smith Corporation
Board of NML 10-1-93 to 1-31-94. Chairman and Chief Badger Meter, Inc.
Executive Officer 1990-1993. President and Chief Executive Federal Home Loan Mortgage
Officer 1983-1990; President and Chief Operating Officer Corporation (Freddie Mac)
1981-1983; President 1980-1981; prior thereto, Senior Vice Northern Telecom, Ltd.
President-Investments.
H. Mason Sizemore, Jr. President and Chief Operating Officer, The Seattle Times,
Seattle, WA since 1985.
Harold B. Smith Chairman, Executive Committee, Illinois Tool Works Inc., Grainger, W. W., Inc.
Glenview, Illinois since 1982; Vice Chairman, 1981; prior Illinois Tool Works Inc.
thereto, President. Northern Trust Corporation
Sherwood H. Smith, Jr. Chairman and Chief Executive Officer, Carolina Power & Carolina Power & Light Co.
Light Company, Raleigh, North Carolina, since 9/92. Prior Northern Telecom Ltd.
thereto, Chairman/President and CEO 1980-1992; President Springs Industries, Inc.
and CEO 1979-1980; President 1976-1979. Wachovia Corporation
John E. Steuri Chairman and CEO *ALLTEL Information Services, Inc., Little Alltel Corporation
Rock, Arkansas, since 1989. National Computer Systems
John J. Stollenwerk President and Owner, Allen-Edmonds Shoe Corporation, Port Badger Meter, Inc.
Washington, WI since 1980. Eastbay Corporation
Firstar Bank Milwaukee N.A.
Koss Corporation
Barry L. Williams President and Chief Executive Officer, Williams Pacific American President Companies
Ventures, Inc., San Francisco, California, since 1/1993. Pacific Gas & Electric
Prior thereto: President 1987-1992; President and Chief Simpson Manufacturing Company
Executive Officer, C. N. Flagg Power, Inc., Meriden, Tenera L.P.
Connecticut 1988-1992. Prior thereto, Managing Principal,
Bechtel Investments, Inc. and Sequoia Investments, Inc.,
San Francisco, California.
Kathryn D. Wriston Director of various corporations. Santa Fe Energy Resources
Stanley Works, The
</TABLE>
* Note: Prior to 2/15/95, this company was known as Systematics Information
Services, Inc.
<PAGE> 41
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
Item 10. (continued)
(f) To the best of the Registrant's
knowledge, none of the Registrant's
Executive Officers or Trustees have been
involved in any of the items required to
be reported in response to Item 401(f)
of Regulation S-K.
(g) Not applicable.
Item 11 is on page 42.
41
<PAGE> 42
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
Item 11. Executive Compensation
- ---------------------------------
Not applicable. NML Variable Annuity Accounts A and C have no
directors or executive officers, the Executive Officers and Trustees of The
Northwestern Mutual Life Insurance Company spend no substantial portion of
their time on matters relating to NML Variable Annuity Accounts A and C, and
the amounts of compensation received by the Executive Officers and Trustees of
The Northwestern Mutual Life Insurance Company have no bearing on the values
associated with variable annuity contracts issued in connection with
Northwestern Mutual Variable Annuity Accounts A and C.
42
<PAGE> 43
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
Item 12. Security Ownership of Certain Beneficial Owners and Management
- ------------------------------------------------------------------------
(a) Not applicable. The Registrant is a mutual life insurance
company and has no stockholders as such.
(b) Not applicable.
(c) Not applicable.
Item 13 is on page 44.
43
<PAGE> 44
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
Item 13. Certain Relationships and Related Transactions
- ---------------------------------------------------------------
(a) (1) The Registrant's second-tier subsidiary, Northwestern
Mutual Investment Services, Inc.("NMIS"), serves as
the investment adviser to Northwestern Mutual Series
Fund, Inc. (the "Fund"), a series company registered
as an open-end management company under the
Investment Company Act of 1940 and consisting of nine
portfolios; and the Registrant is a party to an
investment advisory agreement with each of these
portfolios: the Index 500 Stock Portfolio, the
Select Bond Portfolio, the Money Market Portfolio,
the Balanced Portfolio, the Growth and Income Stock
Portfolio, the Growth Stock Portfolio, the Aggressive
Growth Stock Portfolio, the High Yield Bond Portfolio
and the International Equity Portfolio. The
investment advisory agreements with each portfolio
were renewed during the fiscal year. Various
Trustees and Officers of the Registrant serve as
directors and officers of the Fund and may be deemed
to have a direct or indirect material interest in the
existence of the investment advisory agreements.
(2) Various Trustees and Officers of the Registrant have
securities accounts with Robert W. Baird and Co.
Incorporated ("Baird") and effected transactions
through such accounts during the fiscal year. Baird
is a regional broker-dealer firm and a member of the
New York Stock Exchange. Baird is a majority-owned
indirect subsidiary of the Registrant.
44
<PAGE> 45
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
Item 13. (continued)
- ---------------------
(b) The Registrant, during 1995, retained the law firm of Monroe &
Lemann, of which J. Thomas Lewis, a Trustee of the Registrant,
is a member. The firm was retained to perform certain legal
services for the Registrant.
(c) Loans are made to Trustees and Officers in accordance with the
provisions of insurance policies which they may own. Such
loans are made in the ordinary course of business and are
administered solely according to the terms of the policy.
(d) Not applicable. The Registrant was not organized within the
past five years.
Item 14 is on page 46.
45
<PAGE> 46
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
<TABLE>
<CAPTION>
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K Page
- -------- ---------------------------------------------------------------- ----
<S> <C>
(a) Financial Statements and Exhibits 16
(1) NML Variable Annuity Account A (in Part II, Item 8)
Statement of Assets and Liabilities,
December 31, 1995 and 1994
Combined Statement of Operations and Changes in Equity,
for years ended December 31, 1995, 1994 and 1993
Notes to Financial Statements
Report of Independent Accountants
(2) NML Variable Annuity Account C (in Part II, Item 8) 25
Statement of Assets and Liabilities,
December 31, 1995 and 1994
Combined Statement of Operations and Changes in Equity,
for years ended December 31, 1995, 1994 and 1993
Notes to Financial Statements
Report of Independent Accountants
(3) The Northwestern Mutual Life Insurance Company 47
Attached are:
Report of Independent Accountants
Consolidated Statement of Financial Position,
December 31, 1995 and 1994
Consolidated Summary of Operations, for years ended
December 31, 1995, 1994 and 1993
Consolidated Statement of General Contingency Reserve,
for years ended December 31, 1995, 1994 and 1993
Consolidated Statement of Cash Flows, for years ended
December 31, 1995, 1994 and 1993
Notes to Consolidated Financial Statements
(b) No reports on Form 8-K have been filed during the last quarter
of the year ended December 31, 1995.
(c) Compensation amounts deferred in 1995 are included as Exhibit I. 60
Financial Statements of majority owned subsidiaries of
the Registrant not consolidated have been omitted because,
considered in the aggregate as a single subsidiary, they
do not constitute a significant subsidiary.
(d) Not applicable.
</TABLE>
46
<PAGE> 47
THE NORTHWESTERN MUTUAL LIFE
- ----------------------------
INSURANCE COMPANY
- -----------------
CONSOLIDATED FINANCIAL STATEMENTS
- ---------------------------------
DECEMBER 31, 1995, 1994 AND 1993
- --------------------------------
<PAGE> 48
REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
To the Board of Trustees and Policyowners of
The Northwestern Mutual Life Insurance Company
In our opinion, the accompanying consolidated statement of financial position
and the related consolidated summary of operations, statement of general
contingency reserve and statement of cash flows present fairly, in all material
respects, the financial position of The Northwestern Mutual Life Insurance
Company and its subsidiary at December 31, 1995 and 1994, and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1995, in conformity with generally accepted accounting
principles (practices prescribed or permitted by insurance regulatory
authorities - see Note 1). These financial statements are the responsibility
of the Company's management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our audits of
these statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
Price Waterhouse LLP
January 24, 1996
<PAGE> 49
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY
----------------------------------------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
--------------------------------------------
(In millions)
<TABLE>
<CAPTION>
ASSETS
------
December 31,
--------------------------------
1995 1994
------------- -------------
<S> <C> <C>
Bonds
United States Government $ 3,282 $ 3,501
Industrial and other 22,236 19,232
------------- -------------
25,518 22,733
------------- -------------
Stocks
Common 2,894 2,192
Unconsolidated subsidiaries 531 504
Preferred 546 511
------------- -------------
3,971 3,207
------------- -------------
Mortgage loans 8,429 7,099
Real estate
Investment 1,294 1,072
Home office 135 141
------------- -------------
1,429 1,213
------------- -------------
Loans on policies 6,476 6,144
Other investments 1,341 1,301
Cash and temporary investments 544 803
Due and accrued investment
income 721 650
------------- -------------
Total invested assets 48,429 43,150
------------- -------------
Separate account business 5,000 3,806
Other assets 1,447 1,156
------------- -------------
Total Assets $ 54,876 $ 48,112
============= =============
<CAPTION>
LIABILITIES AND RESERVES
- --------------------------
<S> <C> <C>
Liability for policy benefits
Insurance and annuity reserves $ 39,545 $ 36,124
Policy benefits left
for future payments 972 866
Premium deposits 427 419
Policy benefits in
process of payment 137 138
Policyowner dividends
payable 2,115 1,950
------------- -------------
43,196 39,497
------------- -------------
Other liabilities
Interest maintenance reserve 281 11
Income taxes 895 561
Miscellaneous 1,336 822
------------- -------------
2,512 1,394
------------- -------------
Separate account business 5,000 3,806
------------- -------------
Asset valuation reserve 1,382 1,190
------------- -------------
Total liabilities and
asset valuation reserve 52,090 45,887
------------- -------------
General contingency reserve 2,786 2,225
------------- -------------
Total Liabilities and
Contingency Reserves $ 54,876 $ 48,112
============= =============
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE> 50
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY
----------------------------------------------
CONSOLIDATED SUMMARY OF OPERATIONS
----------------------------------
(In millions)
<TABLE>
<CAPTION>
For the year ended
December 31,
---------------------------------------------
1995 1994 1993
---------- ---------- -----------
<S> <C> <C> <C>
Income
Premiums $ 6,196 $ 5,743 $ 5,295
Net investment income 3,673 3,106 2,913
Policy benefits left with Company
and other income 733 636 570
---------- ---------- -----------
Total income 10,602 9,485 8,778
---------- ---------- -----------
Disposition of income
Costs
Agents' compensation 508 492 487
Other insurance costs 398 334 361
Premium and other taxes or assessments 120 120 116
---------- ---------- -----------
1,026 946 964
---------- ---------- -----------
Benefits to policyowners and beneficiaries
Death benefits 655 609 526
Matured endowments 48 54 44
Annuity benefits 92 94 85
Disability benefits 174 151 126
Surrender benefits 1,375 904 837
Payments from policy benefits
left with Company 590 568 498
Net transfers to separate accounts 236 344 302
Net additions to policy reserves 3,506 3,313 3,078
---------- ---------- -----------
6,676 6,037 5,496
---------- ---------- -----------
Total disposition of income 7,702 6,983 6,460
---------- ---------- -----------
Savings from operations before
income taxes and dividends 2,900 2,502 2,318
Income tax expense 467 281 208
---------- ---------- -----------
Savings from operations before dividends 2,433 2,221 2,110
Policyowner dividends 2,111 1,942 1,780
---------- ---------- -----------
Net savings from operations 322 279 330
Net realized capital gains, less tax
expense of $98, $85 and $82, respectively 137 119 180
---------- ---------- -----------
Contribution to general contingency
reserve from operations $ 459 $ 398 $ 510
========== ========== ===========
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE> 51
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY
----------------------------------------------
CONSOLIDATED STATEMENT OF GENERAL CONTINGENCY RESERVE
-----------------------------------------------------
(In millions)
<TABLE>
<CAPTION>
For the year ended
December 31,
---------------------------------------------
1995 1994 1993
---------- ---------- -----------
<S> <C> <C> <C>
Beginning of year balance $ 2,225 $ 2,030 $ 1,850
Contribution to general contingency
reserve from operations 459 398 510
Net unrealized capital gains (losses) 373 (242) (89)
Change in asset valuation reserve (192) 37 (157)
Other - net (79) 2 (84)
---------- ---------- -----------
End of year balance $ 2,786 $ 2,225 $ 2,030
========== ========== ===========
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE> 52
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY
----------------------------------------------
CONSOLIDATED STATEMENT OF CASH FLOWS
------------------------------------
(In millions)
<TABLE>
<CAPTION>
For the year ended
December 31,
---------------------------------------------
1995 1994 1993
---------- ---------- -----------
<S> <C> <C> <C>
Cash flows from operating activities
Insurance premiums, annuities and other
considerations $ 6,864 $ 6,299 $ 5,777
Net investment income received 3,480 3,013 2,813
Net loans on policies (331) (297) (143)
Benefits paid to policyholders and
beneficiaries (2,939) (2,357) (2,116)
Net transfers to separate accounts (236) (344) (302)
Policyowner dividends paid (1,945) (1,777) (1,759)
Expenses and taxes (1,279) (1,033) (1,135)
Other - net 381 89 (81)
---------- ---------- -----------
Net cash provided by operating
activities 3,995 3,593 3,054
Cash flows from investing activities
Proceeds from investments sold or matured
Bonds 25,317 27,096 20,221
Stocks 2,465 1,469 1,122
Mortgage loans 431 512 394
Real estate 48 164 43
Other invested assets 149 213 132
Capital gain (tax) benefit (85) 28 (124)
---------- ---------- -----------
28,325 29,482 21,788
Cost of investments acquired
Bonds 27,596 29,674 22,393
Stocks 2,562 1,606 1,288
Mortgage loans 1,883 1,356 970
Real estate 202 6 46
Other invested assets 336 413 152
---------- ---------- -----------
32,579 33,055 24,849
Net cash used in investing activities (4,254) (3,573) (3,061)
---------- ---------- -----------
Net (decrease) increase in cash and
temporary investments (259) 20 (7)
Cash and temporary investments, beginning
of year 803 783 790
---------- ---------- -----------
Cash and temporary investments, end of year $ 544 $ 803 $ 783
========== ========== ===========
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE> 53
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY
----------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
DECEMBER 31, 1995, 1994 AND 1993
--------------------------------
NOTE 1 - PRINCIPAL ACCOUNTING POLICIES
- --------------------------------------
The accompanying consolidated financial statements include the accounts of The
Northwestern Mutual Life Insurance Company (the "Company") and its wholly-owned
life insurance subsidiary. The Company offers life, annuity and disability
income products to the personal, business, estate and tax-qualified markets.
The consolidated financial statements have been prepared using accounting
policies prescribed or permitted by the Insurance Departments of the states in
which the Company and its subsidiary are domiciled. These policies are
considered generally accepted accounting principles for mutual life insurance
companies. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
In April 1993, the Financial Accounting Standards Board issued Interpretation
No. 40, "Applicability of Generally Accepted Accounting Principles to Mutual
Life Insurance and Other Enterprises," which establishes a different definition
of generally accepted accounting principles for mutual life insurance
companies. Under the Interpretation, financial statements of mutual life
insurance companies for periods beginning after December 15, 1995 which are
prepared on the basis of statutory accounting will no longer be characterized
as in conformity with generally accepted accounting principles.
In order to continue to present financial statements in accordance with
generally accepted accounting principles for general purpose distribution in
1996, the Company is considering presenting its financial statements in
accordance with the requirements of the Interpretation. Management believes
that financial statements prepared on this basis would result in an increase to
its general contingency reserve. The effects of this change in accounting
basis would be reported retroactively through restatement beginning with the
earliest year presented.
Investments
- -----------
The Company's investments are valued on the following bases:
<TABLE>
<S> <C>
Bonds - Amortized cost using the interest method; loan-backed and structured securities are
amortized using estimated prepayment rates and the prospective adjustment method.
Common Stocks - Market value
Preferred Stocks - Cost
Unconsolidated Subsidiaries - Equity in subsidiaries' net assets
Mortgage Loans - Amortized cost
Investment Real Estate - Lower of cost, less depreciation and encumbrances, or estimated net realizable value
Home Office Real Estate - Cost, less depreciation
Loans on Policies - Cost
Other Investments - Joint Ventures - Lower of equity in or market value of ventures' net assets
</TABLE>
Separate Account Business
- -------------------------
This business consists of annuities funded by specific assets held in separate
accounts. The assets in these accounts are carried at market value. The
policy values reflect the investment performance of the respective accounts.
Insurance, Annuity and Disability Income Reserves
- -------------------------------------------------
Life insurance reserves on substantially all policies issued since 1978 are
based on the Commissioner's Reserve Valuation Method with interest rates
ranging from 3-1/2% to 5-1/2%. Other policy reserves are based primarily on
the net level premium method employing various mortality tables at interest
rates ranging from 2% to 4-1/2%.
Deferred annuity reserves on policies issued since 1985 are valued using the
Commissioner's Annuity Reserve Valuation Method with interest rates ranging
from 3-1/2% to 6-1/4%. Other deferred annuity reserves are based on the
contract value. Immediate annuity reserves are present values of expected
benefit payments at interest rates ranging from 3-1/2% to 7-1/2%.
Active life reserves for disability income ("DI") policies issued since 1987
are primarily based on the two-year preliminary term method using a 4% interest
rate and the 1985 Commissioner's Individual Disability Table A ("CIDA") for
morbidity. Previous DI business used the net level premium method, using a 3%
or 4% interest rate and the 1964 Commissioner's Disability Table for morbidity.
Disabled life reserves for DI policies are based on the present values of
expected benefit payments using primarily the 1985 CIDA (modified for Company
experience in first two years of disability) with interest rates ranging from
3% to 5 1/2%.
Use of these actuarial tables and methods involves estimation of future
mortality and morbidity based on past experience. Actual future experience
could differ from these estimates.
Interest Maintenance Reserve
- ----------------------------
The Company is required to maintain an interest maintenance reserve ("IMR").
The IMR establishes a reserve for realized gains and losses, net of tax,
resulting from changes in interest rates on short and long-term fixed income
investments. Net realized gains and losses charged to the IMR are amortized
into investment income over the approximate remaining life of the investment
sold.
Asset Valuation Reserve
- -----------------------
<PAGE> 54
- 2 -
The Company is also required to maintain an asset valuation reserve ("AVR").
The AVR establishes a reserve for certain invested assets held by the Company.
In the aggregate, AVR was 82% and 84% of the allowable maximum at December 31,
1995 and 1994, respectively.
Premium Income
- --------------
Life insurance premiums are recognized as income at the beginning of each
policy year.
Reinsurance
- -----------
In the normal course of business, the Company seeks to limit its exposure to
loss on any single insured and to recover a portion of benefits paid by ceding
business to other insurance enterprises or reinsurers under excess coverage and
co-insurance contracts. As of December 31, 1995 and 1994, total life insurance
inforce approximated $380 billion and $347 billion, respectively, of which
approximately $113 billion and $104 billion, respectively, comprised
principally of term insurance, had been ceded to various reinsurers. The
Company retains a maximum of $10 million of coverage per individual life.
Operating Costs
- ---------------
Operating costs, including costs of acquiring new policies, are charged to
operations as incurred.
Income Taxes
- ------------
Provisions for income taxes are based on current income tax returns without
recognition of deferred taxes due to timing differences. The portion of the
federal income tax based on mutual life insurance company equity is reflected
as a component of income tax expense, including related adjustments for prior
years.
The Company files a consolidated life-nonlife federal income tax return.
Federal income tax returns for years through 1988 are closed as to further
assessment of taxes. Adequate provision has been made in the financial
statements for any additional taxes which may become due with respect to the
open years.
The Company's effective tax rate on savings from operations before income tax
expense (after dividends) in 1995, 1994 and 1993 was approximately 60%, 50% and
39%, respectively. Two significant factors cause the Company's effective rate
to exceed the federal corporate rate of 35%. First, the Company pays a tax
that is assessed only on mutual life insurance companies, which is an amount
that purports to equate a portion of policyholder dividends with nondeductible
dividends paid to shareholders of stock companies. Second, the Company must
capitalize and amortize (as opposed to immediately deducting) an amount deemed
to represent the cost of acquiring new business ("DAC tax").
Policyowner Dividends
- ---------------------
Dividends payable in the following year on participating policies are charged
to current operations. All life insurance policies issued by the Company are
participating.
NOTE 2 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
- --------------------------------------------------------------
The following summarizes the bases used by the Company in estimating its fair
value disclosures for financial instruments:
Bonds and preferred stocks - Fair values are based upon quoted market
prices, if available. For securities not actively traded, fair values
are estimated using independent pricing services or internally
developed pricing models.
Mortgage loans - Fair values are derived by discounting the future
estimated cash flows using current interest rates for debt securities
with similar credit risk and maturities, or utilizing net realizable
values.
Loans on policies - The carrying amount reported in the statement of
financial position approximates fair value since loans on policies
reduce the amount payable at death or at surrender of the contract.
Cash and temporary investments and due and accrued investment income -
The carrying amounts reported in the statement of financial position
approximate fair value.
Annuity reserves (without mortality/morbidity features) - Fair values
are derived by discounting the future estimated cash flows using
current interest rates with similar maturities.
Other deposit liabilities - The carrying amounts reported in the
statement of financial position approximate fair value.
NOTE 3 - INVESTMENTS
- --------------------
Net Investment Income
- ---------------------
The Company's net investment income for the years ended December 31, 1995, 1994
and 1993 consists of the following:
<TABLE>
<CAPTION>
1995 1994 1993
--------- --------- ----------
(In millions)
<S> <C> <C> <C>
Interest, dividends, rents, equity
in unconsolidated subsidiaries'
earnings and joint venture income $ 3,952 $ 3,395 $ 3,215
Less: Investment expenses and
depreciation (279) (289) (302)
--------- --------- ----------
</TABLE>
<PAGE> 55
- 3 -
<TABLE>
<S> <C> <C> <C>
Net investment income $ 3,673 $ 3,106 $ 2,913
========= ========= ==========
</TABLE>
Realized Gains and Losses
- -------------------------
During 1995, 1994 and 1993, the Company, in its normal course of business, sold
certain invested assets realizing gains and losses before transfer to the IMR
and capital gains tax from such sales as follows:
<TABLE>
<CAPTION>
For the year ended For the year ended For the year ended
December 31, 1995 December 31, 1994 December 31, 1993
---------------------------- ------------------------------ -------------------------------
Net Net Net
Realized Realized Realized
Realized Realized Gains Realized Realized Gains Realized Realized Gains
Gains Losses (Losses) Gains Losses (Losses) Gains Losses (Losses)
-------- -------- -------- --------- -------- --------- --------- -------- ---------
(In millions)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Bonds $ 576 $ (130) $ 446 $ 171 $ (535) $ (364) $ 438 $ (133) $ 305
Stocks 574 (429) 145 499 (291) 208 297 (36) 261
Mortgage loans 2 (32) (30) - (37) (37) 1 (12) (11)
Real estate 14 (3) 11 16 (7) 9 13 (2) 11
Other invested assets 188 (95) 93 110 (98) 12 100 (54) 46
-------- -------- -------- -------- ------- -------- -------- ------- --------
$ 1,354 $ (689) $ 665 $ 796 $ (968) $ (172) $ 849 $ (237) $ 612
======== ======== ======== ======== ======= ======== ======== ======= ========
</TABLE>
Debt Securities
- ---------------
Debt securities consist of all bonds, fixed maturity preferred stocks and short
term fixed income investments.
The statement values, which principally represent amortized cost, and estimated
market values of the Company's debt securities at December 31, 1995 and 1994
are as follows:
<TABLE>
<CAPTION>
December 31, 1995 Reconciliation to Estimated Market Value
- ----------------- -------------------------------------------------
Gross Gross Estimated
Statement Unrealized Unrealized Market
Value Appreciation Depreciation Value
---------- --------------- -------------- --------------
(In millions)
<S> <C> <C> <C> <C>
US Government and
political obligations $ 3,267 $ 296 $ (1) $ 3,562
Mortgage-backed
securities 6,734 336 (12) 7,058
Corporate and other
debt securities 15,999 1,250 (47) 17,202
---------- --------------- -------------- --------------
26,000 1,882 (60) 27,822
Preferred stocks 108 3 (2) 109
---------- --------------- -------------- --------------
Total $ 26,108 $ 1,885 $ (62) $ 27,931
========== =============== ============== ==============
December 31, 1994 Reconciliation to Estimated Market Value
- ----------------- -------------------------------------------------
Gross Gross Estimated
Statement Unrealized Unrealized Market
Value Appreciation Depreciation Value
---------- --------------- -------------- --------------
(In millions)
US Government and
political obligations $ 3,334 $ 61 $ (41) $ 3,354
Mortgage-backed
securities 5,652 53 (321) 5,384
Corporate and other
debt securities 14,488 203 (515) 14,176
---------- --------------- -------------- --------------
23,474 317 (877) 22,914
Preferred stocks 71 1 (7) 65
---------- --------------- -------------- --------------
Total $ 23,545 $ 318 $ (884) $ 22,979
========== =============== ============== ==============
</TABLE>
<PAGE> 56
- 4 -
The amortized cost and estimated market value of debt securities at December
31, 1995 and 1994, by contractual maturity, are shown below. Expected
maturities may differ from contractual maturities because borrowers may have
the right to call or prepay obligations with or without call or prepayment
penalties.
<TABLE>
<CAPTION>
December 31, 1995 December 31, 1994
------------------------------ -----------------------------
Estimated Estimated
Statement Market Statement Market
Value Value Value Value
------------- ----------- ------------ ------------
(In millions)
<S> <C> <C> <C> <C>
Due in one year or less $ 977 $ 979 $ 1,102 $ 1,100
Due after one year
through five years 3,658 3,879 4,491 4,444
Due after five years
through ten years 6,879 7,347 5,787 5,711
Due after ten years 7,860 8,668 6,513 6,340
------------- ----------- ------------ ------------
19,374 20,873 17,893 17,595
Mortgage-backed securities 6,734 7,058 5,652 5,384
------------- ----------- ------------ ------------
$ 26,108 $ 27,931 $ 23,545 $ 22,979
============= =========== ============ ============
</TABLE>
The fair value of perpetual preferred stocks as of December 31, 1995 and 1994
approximates $578 million and $440 million, respectively, compared to the
statement values of $439 million and $440 million, respectively.
<PAGE> 57
- 5 -
Mortgage Loans
- --------------
As of December 31, 1995 and 1994, the mortgage loan portfolio was distributed
as follows:
<TABLE>
<CAPTION>
December 31, 1995 December 31, 1994
---------------------------- ------------------------------
% of % of
Geographic Location Statement Value Total Statement Value Total
------------------- ------------------ ------- ------------------ --------
(In millions) (In millions)
<S> <C> <C> <C> <C>
Middle Atlantic $ 945 11.2% $ 738 10.4%
South Atlantic 2,346 27.8 1,943 27.4
North Central 1,560 18.5 1,289 18.2
South Central 1,018 12.1 921 13.0
Pacific Northwest 454 5.4 355 5.0
Pacific 1,803 21.4 1,531 21.5
Canada 303 3.6 322 4.5
---------- ------- --------- --------
$ 8,429 100.0% $ 7,099 100.0%
========== ======= ========= ========
Property Type
-------------
Retail $ 2,897 34.4% $ 2,475 34.9%
Office Building 2,677 31.8 2,176 30.6
Residential 1,804 21.4 1,526 21.5
Commercial 792 9.4 745 10.5
Other 259 3.0 177 2.5
---------- ------- --------- --------
$ 8,429 100.0% $ 7,099 100.0%
========== ======= ========= ========
</TABLE>
The fair value of mortgage loans as of December 31, 1995 and 1994 approximates
$8,983 million and $6,879 million, respectively. Decreases in current interest
rates were a major reason for the increase in fair value relative to statement
value in 1995.
Affiliates
- ----------
The Company has a 19.87% investment in MGIC Investment Corporation ("MGIC"), an
affiliate. At December 31, 1995, the Company's investment in MGIC (11.7
million shares) exceeded the statement value by $420 million.
In July 1995, the Company entered into a forward contract with a brokerage firm
to deliver 4.4 million to 5.4 million shares of MGIC (or cash) in August 1998
for a price determined by the market value of the MGIC shares at that time in
exchange for a fixed cash payment of $247 million ($48 per share). The
Company's objective in entering into the forward contract is to hedge against
depreciation in the value of its MGIC holdings during the contract period below
the initial spot price of $48, while partially participating in appreciation,
if any, during the forward contract's duration.
Real Estate
- -----------
For real estate and joint venture properties acquired subsequent to December
1990, the Company calculates depreciation using the straight-line method in
accordance with guidelines established by the National Association of Insurance
Commissioners. For properties acquired prior to December 1990, the Company
calculates depreciation using either the straight-line method or the
constant-yield method. Home office real estate is depreciated using the
straight-line method.
At December 31, 1995 and 1994, investment real estate includes $175 million and
$146 million, respectively, of real estate acquired through foreclosure. In
1995, the Company recorded writedowns of $8 million and $28 million for the
excess of carrying value over fair value of certain real estate investments and
mortgage loans, respectively. Valuation allowances for real estate and
mortgage loans with fair values that are less than statement values are
adequately covered by normal AVR reserves and by a $90 million special
investment reserve established by the Company for real estate, mortgage loans
and other invested assets.
Derivative Financial Instruments
- --------------------------------
The Company's current utilization of derivative financial instruments is
limited. Most of the Company's derivative transactions are used to reduce or
modify risks of volatility related to currency or interest rate movements.
These hedging strategies use forwards, futures and swaps. At December 31, 1995
and 1994, the Company held foreign currency forward contracts with a notional
value of $889 million and $605 million, respectively, as a partial hedge
against foreign currency exposure of foreign denominated investments. Changes
in the market value of these contracts offset currency gains and losses on the
hedged investments. The capital gains or losses are unrealized before contract
settlement and realized on settlement. These currency hedges and the MGIC
forward contract described above represent most of the
<PAGE> 58
- 6 -
Company's derivative positions. The effect of derivative transactions is not
significant to the Company's results from operations or financial position.
NOTE 4 - ANNUITIES AND OTHER DEPOSIT LIABILITIES
- ------------------------------------------------
The fair value of annuities and other deposit liabilities as of December 31,
1995 and 1994 are as follows:
<TABLE>
<CAPTION>
December 31, 1995 December 31, 1994
---------------------------- -------------------------------
Statement Fair Statement Fair
Value Value Value Value
--------------- --------- ---------------- ----------
(In millions)
<S> <C> <C> <C> <C>
Annuities $ 2,631 $ 2,437 $ 2,474 $ 2,203
Other deposit liabilities 783 783 727 727
</TABLE>
NOTE 5 - BENEFIT PLANS
- ----------------------
The Company maintains non-contributory defined benefit retirement plans for all
eligible employees and agents as well as a 401(k) plan for eligible employees
and a non-contributory defined contribution plan for all full-time agents.
These plans are funded currently and plan assets of $1,152 million at December
31, 1995 are primarily included in the separate accounts of the Company. In
1995, the Company made a contribution of $13 million to the employee retirement
plan; as of January 1, 1995, the most recent actuarial valuation date
available, the defined benefit plans were fully funded.
In addition to pension benefits, the Company provides certain health care and
life insurance benefits ("postretirement benefits") for retired employees.
Substantially all employees may become eligible for these benefits if they
reach retirement age while working for the Company.
Postretirement benefit expenses, which includes the expected cost of
postretirement benefits for newly eligible and vested employees and interest
costs, were $7 million, $7 million and $9 million for the years ended December
31, 1995, 1994 and 1993, respectively. At December 31, 1995 and 1994, the
unfunded postretirement benefit obligation for retirees and other fully
eligible or vested employees was $49 million and $47 million, respectively.
The estimated postretirement benefit obligation for active non-vested employees
was $46 million and $44 million at December 31, 1995 and 1994, respectively.
The discount rate used to determine the postretirement benefit obligation was
7% and the health care cost trend rate was 12% in 1995, declining by 1% per
year to an ultimate rate of 5% over 7 years. If the health care cost trend
rate assumptions were increased by 1%, the postretirement benefit obligation as
of December 31, 1995 would be increased by $6 million.
At December 31, 1995 and 1994, plan assets attributable to postretirement
health care benefits totaled $31 million and $25 million, respectively.
NOTE 6 - REINSURANCE
- --------------------
The amounts shown in the accompanying consolidated financial statements are net
of reinsurance activity. The effect of reinsurance on premiums and benefits
for the years ended December 31, 1995, 1994 and 1993 are as follows (in
millions):
<TABLE>
<CAPTION>
1995 1994 1993
----------- ----------- ----------
<S> <C> <C> <C>
Direct premiums $ 6,452 $ 5,977 $ 5,508
Reinsurance ceded (256) (234) (213)
---------- ---------- ----------
Net premiums $ 6,196 $ 5,743 $ 5,295
========== ========== ==========
Benefits to policyholders and beneficiaries $ 6,818 $ 6,178 $ 5,600
Reinsurance recoveries (142) (141) (104)
---------- ---------- ----------
Net benefits to policyholders and beneficiaries $ 6,676 $ 6,037 $ 5,496
========== ========== ==========
</TABLE>
In addition, during 1995, 1994 and 1993, the Company received credits of $67
million, $63 million and $59 million, respectively, from reinsurers
representing reimbursements of commissions and other expenses. These credits
are included in other income in the consolidated summary of operations.
Reinsurance contracts do not relieve the Company from its obligations to
policyholders. Failure of reinsurers to honor their obligations could result
in losses to the Company; consequently, allowances are established for amounts
deemed uncollectible. The Company evaluates the financial condition of its
reinsurers and monitors concentrations of credit risk arising from similar
geographic regions, activities, or economic characteristics of the reinsurers
to minimize its exposure to significant losses from reinsurer insolvencies.
NOTE 7 - CONTINGENCIES
- ----------------------
In the normal course of business, the Company enters into transactions to
reduce its exposure to fluctuations in interest rates and market volatility.
These instruments may involve credit risk and may also be subject to risk of
loss due to interest rate fluctuations.
<PAGE> 59
- 7 -
The Company has guaranteed certain obligations of its affiliates. These
guarantees totaled approximately $126 million and $83 million at December 31,
1995 and 1994, respectively, and are generally supported by the underlying net
asset values of the affiliates.
The Company is engaged in various legal actions in the normal course of its
investment and insurance operations. In the opinion of management, any losses
resulting from such actions would not have a material effect on the Company's
financial condition.
<PAGE> 60
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
EXHIBIT I
Reference is made to a form of deferred compensation agreement filed as Exhibit
B-2 with Form 10-K for 1970 and The Northwestern Mutual Employee Savings Plan
filed as Exhibit II for 1985. Pursuant to such contracts the following amounts
were deferred in 1995:
<TABLE>
Executive Officers
------------------
<S> <C>
James D. Ericson 218,740
Robert E. Carlson 169,740
Walt J. Wojcik 171,915
Mason G. Ross 70,400
Frederic H. Sweet 19,080
James F. Reiskytl 21,900
Richard L. Hall 31,590
Madonna M. Hostetter 14,640
Gary E. Long 53,202
Donald L. Mellish 104,563
Deborah A. Beck 37,740
Edward J. Zore 74,740
Dennis Tamcsin 50,740
Peter W. Bruce 53,740
Mark G. Doll 50,240
John M. Bremer 94,740
James W. Ehrenstrom 63,650
William C. Koenig 18,360
Leonard F. Stecklein 76,740
Martha M. Valerio 82,628
Virgil Renne, Jr. 16,900
W. Ward White 56,650
Barbara F. Piehler 79,110
Casey J. Sylla 14,191
Thomas E. Dyer 37,380
Steven T. Catlett 13,399
Gregory C. Oberland 13,740
Susan A. Lueger 32,105
Ralph A. Pelton 154,688
Meridee J. Maynard 62,402
William H. Beckley 4,568
Trustees
--------
Stephen F. Keller 37,500
R. Quintus Anderson 41,500
Jake E. Gallegos 40,000
Patricia Albjerg Graham 40,750
Richard H. Holton 40,000
Robert C. Buchanan 34,900
Edward E. Barr 34,500
Sherwood H. Smith, Jr. 40,750
John J. Stollenwerk 69,400
Herman M. Sizemore 40,000
George A. Dickerman 40,000
John E. Steuri 41,000
$2,464,521
==========
</TABLE>
60
<PAGE> 61
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY
(Registrant)
By James D. Ericson
---------------------------------------------
James D. Ericson
President and Chief Executive Officer
By Gary E. Long
---------------------------------------------
Gary E. Long
Vice President and Controller
Date: March 20, 1996
--------------
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Title
-----
<S> <C>
James D. Ericson Trustee, President and Chief Executive Officer
--------------------------------------------------
James D. Ericson
</TABLE>
Dated March 20, 1996
61
<PAGE> 62
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
SIGNATURES (continued)
<TABLE>
<S> <C> <C>
R. QUINTUS ANDERSON* Trustee
- ------------------------------------------
R. Quintus Anderson
EDWARD E. BARR Trustee
- ------------------------------------------
Edward E. Barr
GORDON T. BEAHAM, III* Trustee
- ------------------------------------------
Gordon T. Beaham, III
FRANK H. BERTSCH* Trustee
- ------------------------------------------
Frank H. Bertsch
ROBERT C. BUCHANAN* Trustee
- ------------------------------------------
Robert C. Buchanan
ROBERT E. CARLSON* Trustee
- ------------------------------------------
Robert E. Carlson
GEORGE A. DICKERMAN* Trustee
- ------------------------------------------
George A. Dickerman
THOMAS I. DOLAN* Trustee
- ------------------------------------------
Thomas I. Dolan
PIERRE S. DU PONT, IV* Trustee Dated March 20, 1996
- ------------------------------------------
Pierre S. Du Pont, IV
JAMES D. ERICSON* Trustee
- ------------------------------------------
James D. Ericson
J. E. GALLEGOS* Trustee
- ------------------------------------------
J. E. Gallegos
PATRICIA ALBJERG GRAHAM* Trustee
- ------------------------------------------
Patricia Albjerg Graham
</TABLE>
62
<PAGE> 63
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
SIGNATURES (continued)
<TABLE>
<S> <C> <C>
RICHARD H. HOLTON* Trustee
- ------------------------------------------
Richard H. Holton
STEPHEN F. KELLER* Trustee
- ------------------------------------------
Stephen F. Keller
J. THOMAS LEWIS* Trustee
- ------------------------------------------
J. Thomas Lewis
FRED G. LUBER* Trustee
- ------------------------------------------
Fred G. Luber
DANIEL F. McKEITHAN, JR.* Trustee
- ------------------------------------------
Daniel F. McKeithan, Jr.
GUY A. OSBORN Trustee
- ------------------------------------------
Guy A. Osborn
DONALD J. SCHUENKE* Trustee Dated March 20, 1996
- ------------------------------------------
Donald J. Schuenke
H. MASON SIZEMORE, JR. Trustee
- ------------------------------------------
H. Mason Sizemore, Jr.
HAROLD B. SMITH* Trustee
- ------------------------------------------
Harold B. Smith
SHERWOOD H. SMITH, JR.* Trustee
- ------------------------------------------
Sherwood H. Smith, Jr.
JOHN J. STOLLENWERK* Trustee
- ------------------------------------------
John J. Stollenwerk
BARRY L. WILLIAMS* Trustee
- ------------------------------------------
Barry L. Williams
KATHRYN D. WRISTON* Trustee
- ------------------------------------------
Kathryn D. Wriston
*By JAMES D. ERICSON*
--------------------------------------
James D. Ericson, Attorney in fact,
pursuant to the Power of Attorney
attached hereto
</TABLE>
63
<PAGE> 1
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
POWER OF ATTORNEY
The undersigned Trustees of THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY
hereby constitute and appoint James D. Ericson and Robert E. Carlson, or
either of them, their true and lawful attorneys and agents to sign the names of
the undersigned Trustees to (1) the registration statement or statements to be
filed under the Securities Act of 1933 and to any instrument or document filed
as part thereof or in connection therewith or in any way related thereto, and
any and all amendments thereto in connection with variable contracts issued or
sold by The Northwestern Mutual Life Insurance Company or any separate account
credited therein and (2) the Form 10-K Annual Report or Reports of The
Northwestern Mutual Life Insurance Company and/or its separate accounts for its
or their fiscal year ended December 31, 1995 to be filed under the Securities
Exchange Act of 1934 and to any instrument or document filed as part thereof or
in connection therewith or in any way related thereto, and any and all
amendments thereto. "Variable contracts" as used herein means any contracts
providing for benefits or values which may vary according to the investment
experience of any separate account maintained by The Northwestern Mutual Life
Insurance Company, including variable annuity contracts and variable life
insurance policies. Each of the undersigned hereby ratifies and confirms all
that said attorneys and agents shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, each of the undersigned has subscribed these presents
this 26th day of July, 1995.
R. QUINTUS ANDERSON Trustee
-----------------------------------------------------------
R. Quintus Anderson
Trustee
-----------------------------------------------------------
Edward E. Barr
GORDON T. BEAHAM III Trustee
-----------------------------------------------------------
Gordon T. Beaham III
FRANK H. BERTSCH Trustee
-----------------------------------------------------------
Frank H. Bertsch
ROBERT C. BUCHANAN Trustee
-----------------------------------------------------------
Robert C. Buchanan
64
<PAGE> 2
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
-----------------------------------------------------------
Robert E. Carlson
GEORGE A. DICKERMAN Trustee
-----------------------------------------------------------
George A. Dickerman
THOMAS I. DOLAN Trustee
-----------------------------------------------------------
Thomas I. Dolan
PIERRE S. du PONT IV Trustee
-----------------------------------------------------------
Pierre S. du Pont IV
JAMES D. ERICSON Trustee
-----------------------------------------------------------
James D. Ericson
J. E. GALLEGOS Trustee
-----------------------------------------------------------
J. E. Gallegos
PATRICIA ALBJERG GRAHAM Trustee
-----------------------------------------------------------
Patricia Albjerg Graham
RICHARD H. HOLTON Trustee
-----------------------------------------------------------
Richard H. Holton
STEPHEN F. KELLER Trustee
-----------------------------------------------------------
Stephen F. Keller
J. THOMAS LEWIS Trustee
-----------------------------------------------------------
J. Thomas Lewis
FRED G. LUBER Trustee
-----------------------------------------------------------
Fred G. Luber
65
<PAGE> 3
The Northwestern Mutual Life Insurance Company
----------------------------------------------
Form 10-K
---------
DANIEL F. McKEITHAN, JR. Trustee
-----------------------------------------------------------
Daniel F. McKeithan, Jr.
GUY A. OSBORN Trustee
-----------------------------------------------------------
Guy A. Osborn
DONALD J. SCHUENKE Trustee
-----------------------------------------------------------
Donald J. Schuenke
H. MASON SIZEMORE, JR. Trustee
-----------------------------------------------------------
H. Mason Sizemore, Jr.
HAROLD B. SMITH Trustee
-----------------------------------------------------------
Harold B. Smith
SHERWOOD H. SMITH, JR. Trustee
-----------------------------------------------------------
Sherwood H. Smith, Jr.
JOHN E. STEURI Trustee
-----------------------------------------------------------
John E. Steuri
JOHN J. STOLLENWERK Trustee
-----------------------------------------------------------
John J. Stollenwerk
BARRY L. WILLIAMS Trustee
-----------------------------------------------------------
Barry L. Williams
KATHRYN D. WRISTON Trustee
-----------------------------------------------------------
Kathryn D. Wriston
66
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Northwestern
Mutual Life Variable Annuity Account A, December 31, 1995 Financial Statements
and is qualified in its entirety by reference to such 10K filing.
</LEGEND>
<SERIES>
<NUMBER> 01
<NAME> ACCOUNT A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 378,495,050
<INVESTMENTS-AT-VALUE> 470,075,858
<RECEIVABLES> 569,609
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 470,645,467
<PAYABLE-FOR-SECURITIES> 491,572
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 332,468
<TOTAL-LIABILITIES> 824,040
<SENIOR-EQUITY> 469,821,427
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 157,094,960
<SHARES-COMMON-PRIOR> 154,727,019
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 469,821,427
<DIVIDEND-INCOME> 11,709,964
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 5,072,064
<NET-INVESTMENT-INCOME> 6,637,900
<REALIZED-GAINS-CURRENT> 13,141,169
<APPREC-INCREASE-CURRENT> 76,916,515
<NET-CHANGE-FROM-OPS> 96,695,584
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Northwestern
Mutual Life Variable Annuity Account C, December 31, 1995 Financial Statements
and is qualified in its entirety by reference to such 10K filing.
</LEGEND>
<SERIES>
<NUMBER> 02
<NAME> ACCOUNT C
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 260,786,501
<INVESTMENTS-AT-VALUE> 317,806,036
<RECEIVABLES> 808,529
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 318,614,567
<PAYABLE-FOR-SECURITIES> 808,493
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 36
<TOTAL-LIABILITIES> 808,529
<SENIOR-EQUITY> 317,806,038
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 63,813,740
<SHARES-COMMON-PRIOR> 53,448,673
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 317,806,038
<DIVIDEND-INCOME> 6,470,776
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 856,764
<NET-INVESTMENT-INCOME> 5,614,012
<REALIZED-GAINS-CURRENT> 9,884,364
<APPREC-INCREASE-CURRENT> 53,407,857
<NET-CHANGE-FROM-OPS> 68,906,233
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
