Using an idealized general circulation model, we explore the influence of orography and land-sea heating contrasts on the development of Annular Modes (AM) under perpetual January conditions. In the troposphere, model experiments with different stationary wave forcing all show an internally induced AM, but with significantly different amplitudes. Only the combined forcing of orography and land-sea heating contrast leads to a localization of the AM similar to the North Atlantic Oscillation, and additionally, to a stratospheric AM and its downward propagation. A tropospheric feedback mechanism between the anomalies of zonal-mean wind and stationary waves applies in the simulation with the combined forcing only, where the coupling of orographically and thermally forced waves reproduces the observed stationary waves, and where the simulated diabatic heating supports the feedback mechanism. In contrast, transient forcing dominates the variability in the experiments without orography, comparable to the Southern AM.