<PAGE> 1
Nationwide (R) VL
Separate Account-D
December 31, 1999
[The BEST of AMERICA(R) LOGO]
America's FUTURE Life Series(SM)
'99
ANNUAL REPORT
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[NATIONWIDE LOGO]
Nationwide Life and Annuity Insurance Company
Home Office: Columbus, Ohio
VLOB-0233-A (12/99)
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[NATIONWIDE LOGO]
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY
ONE NATIONWIDE PLAZA, COLUMBUS, OHIO 43215-2220
[PHOTO]
PRESIDENT'S MESSAGE
We at Nationwide Life and Annuity Insurance Company are pleased to bring you
the 1999 annual report of the Nationwide VL Separate Account-D.
During 1999 equity investments extended their spirited advance to a fifth
consecutive year. The S&P 500 was the laggard of the major indices with a
year-over-year change of a respectable 19.53%.The NASDAQ topped the list at over
85% with the other indices falling into line nearer the lower end of the range.
Fixed earnings investments did not fare as well in the current environment of
rising interest rates.
The U.S. economy remains strong, inflation remains docile and the available
labor pool is incessantly tight. Against this good-news-bad-news backdrop, the
Federal Reserve is increasingly concerned that recent productivity gains will
subside and ignite wage inflation. To date, the Fed has hiked short-term
interest rates a quarter percentage point on four occasions since last June.
Prospectively, they may well become more aggressive in their preemptive efforts
to dampen economic growth and avoid a new round of inflation.
We believe some caution may be warranted at this juncture. Certain market
sectors are well extended and may inevitably retreat to less lofty valuation
levels. However, we remain bullish for the long-term prospects of financial
assets. Your variable insurance contract provides an excellent resource to help
you achieve your long-term retirement savings and financial planning objectives.
We appreciate your trust in our company and in our investment products, and we
welcome and encourage your feedback.
/s/ Joseph J. Gasper
Joseph J. Gasper, President
February 10, 2000
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NATIONWIDE VL SEPARATE ACCOUNT-D
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY
December 31, 1999
<TABLE>
<CAPTION>
ASSETS:
Investments at market value:
<S> <C> <C>
Dreyfus VIF - Quality Bond Portfolio
51,979 shares (cost $571,634) ........................................................ $ 566,051
Fidelity VIP - Overseas Portfolio: Service Class
18,250 shares (cost $390,795) ........................................................ 499,689
INVESCO VIF - Blue Chip Growth Portfolio
30,020 shares (cost $457,560) ........................................................ 553,861
INVESCO VIF - Dynamics Portfolio
5,684 shares (cost $84,442) .......................................................... 107,429
INVESCO VIF - Equity Income Portfolio
27,199 shares (cost $564,013) ........................................................ 571,452
INVESCO VIF - Total Return Portfolio
23,701 shares (cost $394,166) ........................................................ 369,254
Nationwide SAT - Capital Appreciation Fund
27,197 shares (cost $764,188) ........................................................ 699,228
Nationwide SAT - High Income Bond Fund
56,779 shares (cost $560,585) ........................................................ 540,534
Nationwide SAT - Money Market Fund
7,945 shares (cost $7,945) ........................................................... 7,945
Nationwide SAT - Strategic Value Fund
35,973 shares (cost $364,622) ........................................................ 338,507
------------
Total investments ................................................................. 4,253,950
Accounts receivable ....................................................................... 630
------------
Total assets ...................................................................... 4,254,580
Accounts payable ............................................................................. -
------------
Contract owners' equity (note 5) ............................................................. $ 4,254,580
============
</TABLE>
See accompanying notes to financial statements.
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NATIONWIDE VL SEPARATE ACCOUNT-D
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY
STATEMENTS OF OPERATIONS
FOR THE PERIOD MAY 19, 1999 (COMMENCEMENT OF OPERATIONS) THROUGH
DECEMBER 31, 1999
<TABLE>
<CAPTION>
INVESCO VIF
Dreyfus VIF Fidelity VIP Blue Chip
Quality Bond Overseas Growth
Total Portfolio Portfolio Portfolio
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ 62,096 16,312 -- --
Mortality and expense risk charges (note 3) ..... (9,788) (1,426) (1,057) (1,203)
----------- ----------- ----------- -----------
Net investment income ........................ 52,308 14,886 (1,057) (1,203)
----------- ----------- ----------- -----------
Proceeds from mutual fund shares sold ........... 4,134,210 10,936 9,416 14,651
Cost of mutual fund shares sold ................. (4,141,413) (11,035) (8,550) (14,300)
----------- ----------- ----------- -----------
Realized gain (loss) on investments .......... (7,203) (99) 866 351
Change in unrealized gain (loss) on investments . 94,003 (5,582) 108,896 96,302
----------- ----------- ----------- -----------
Net gain (loss) on investments ............... 86,800 (5,681) 109,762 96,653
----------- ----------- ----------- -----------
Reinvested capital gains ........................ 62,728 -- -- 7,456
----------- ----------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 201,836 9,205 108,705 102,906
----------- ----------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 4,183,303 16,014 28,236 80,446
Transfers between funds ......................... -- 552,682 373,054 386,851
Redemptions to pay cost of insurance
charges and administration charges
(notes 2b and 2c) ............................ (130,559) (11,846) (10,308) (16,345)
----------- ----------- ----------- -----------
Net equity transactions .................... 4,052,744 556,850 390,982 450,952
----------- ----------- ----------- -----------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............. 4,254,580 566,055 499,687 553,858
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ....... -- -- -- --
----------- ----------- ----------- -----------
CONTRACT OWNERS' EQUITY END OF PERIOD ............. $ 4,254,580 566,055 499,687 553,858
=========== =========== =========== ===========
<CAPTION>
INVESCO VIF
INVESCO VIF Equity INVESCO VIF INVESCO VIF
Dynamics Income High Yield Total Return
Portfolio Portfolio Portfolio Portfolio
------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ 25 6,728 1 8,567
Mortality and expense risk charges (note 3) ..... (187) (1,313) (79) (66)
----------- ----------- ----------- -----------
Net investment income ........................ (162) 5,415 (78) 8,501
----------- ----------- ----------- -----------
Proceeds from mutual fund shares sold ........... 7,473 22,974 373,497 4,835
Cost of mutual fund shares sold ................. (7,300) (23,054) (380,462) (5,074)
----------- ----------- ----------- -----------
Realized gain (loss) on investments .......... 173 (80) (6,965) (239)
Change in unrealized gain (loss) on investments . 22,986 7,438 (1) (24,912)
----------- ----------- ----------- -----------
Net gain (loss) on investments ............... 23,159 7,358 (6,966) (25,151)
----------- ----------- ----------- -----------
Reinvested capital gains ........................ -- 3,011 -- 1,429
----------- ----------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 22,997 15,784 (7,044) (15,221)
----------- ----------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 74,006 171,665 7,086 20,798
Transfers between funds ......................... 19,104 410,200 -- 373,054
Redemptions to pay cost of insurance
charges and administration charges
(notes 2b and 2c) ............................ (8,684) (26,200) (42) (10,150)
----------- ----------- ----------- -----------
Net equity transactions .................... 84,426 555,665 7,044 383,702
----------- ----------- ----------- -----------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............. 107,423 571,449 -- 368,481
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ....... -- -- -- --
----------- ----------- ----------- -----------
CONTRACT OWNERS' EQUITY END OF PERIOD ............. 107,423 571,449 -- 368,481
=========== =========== =========== ===========
</TABLE>
(Continued)
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NATIONWIDE VL SEPARATE ACCOUNT-D
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, Continued
FOR THE PERIOD MAY 19, 1999 (COMMENCEMENT OF OPERATIONS) THROUGH
DECEMBER 31, 1999
<TABLE>
<CAPTION>
Nationwide SAT
Capital Nationwide SAT Nationwide SAT Nationwide SAT
Appreciation High Income Money Market Strategic Value
Fund Bond Fund Fund Fund
--------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ 2,465 23,636 3,026 1,336
Mortality and expense risk charges (note 3) ..... (1,765) (1,350) (498) (844)
--------- -------- ---------- --------
Net investment income ........................ 700 22,286 2,528 492
--------- -------- ---------- --------
Proceeds from mutual fund shares sold ........... 14,707 11,196 3,657,504 7,021
Cost of mutual fund shares sold ................. (15,130) (11,489) (3,657,504) (7,515)
--------- -------- ---------- --------
Realized gain (loss) on investments .......... (423) (293) -- (494)
Change in unrealized gain (loss) on investments . (64,959) (20,050) -- (26,115)
--------- -------- ---------- --------
Net gain (loss) on investments ............... (65,382) (20,343) -- (26,609)
--------- -------- ---------- --------
Reinvested capital gains ........................ 45,603 -- -- 5,229
--------- -------- ---------- --------
Net increase (decrease) in contract owners'
equity resulting from operations ........ (19,079) 1,943 2,528 (20,888)
--------- -------- ---------- --------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. -- -- 3,785,052 --
Transfers between funds ......................... 731,250 548,437 (3,760,255) 365,623
Redemptions to pay cost of insurance
charges and administration charges
(notes 2b and 2c) ............................ (12,954) (9,853) (17,945) (6,232)
--------- -------- ---------- --------
Net equity transactions .................... 718,296 538,584 6,852 359,391
--------- -------- ---------- --------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............. 699,217 540,527 9,380 338,503
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ....... -- -- -- --
--------- -------- ---------- --------
CONTRACT OWNERS' EQUITY END OF PERIOD ............. $ 699,217 540,527 9,380 338,503
========= ======== ========== ========
</TABLE>
See accompanying notes to financial statements.
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NATIONWIDE VL SEPARATE ACCOUNT-D
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Organization and Nature of Operations
The Nationwide VL Separate Account-D (the Account) was established
pursuant to a resolution of the Board of Directors of Nationwide Life
and Annuity Insurance Company (the Company) on May 22, 1998. The
Account has been registered as a unit investment trust under the
Investment Company Act of 1940.
The Company offers Corporate Flexible Premium Variable Life Insurance
Policies through the Account.
(b) The Contracts
Only contracts without a front-end sales charge, but with a contingent
deferred sales charge and certain other fees are offered for
purchase. See note 2 for a discussion of policy charges, and note 3 for
asset charges.
Contract owners may invest in the following:
Portfolio of the Dreyfus Variable Investment Fund (Dreyfus VIF);
Dreyfus VIF - Quality Bond Portfolio
Portfolio of the Fidelity Variable Insurance Products Fund
(Fidelity VIP); Fidelity VIP - Overseas Portfolio: Service Class
Goldman Sachs Variable Insurance Trust - Global Income Fund
Portfolio of the INVESCO Variable Investment Fund (INVESCO VIF);
INVESCO VIF - Blue Chip Growth Portfolio
INVESCO VIF - Dynamics Portfolio
INVESCO VIF - Equity Income Portfolio
INVESCO VIF - Health Sciences Portfolio
INVESCO VIF - High Yield Portfolio
INVESCO VIF - Realty Portfolio
INVESCO VIF - Small Company Growth Portfolio
INVESCO VIF - Technology Portfolio
INVESCO VIF - Total Return Portfolio
INVESCO VIF - Utilities Portfolio
Funds of the Nationwide Separate Account Trust (Nationwide SAT)
(managed for a fee by an affiliated investment advisor);
Nationwide SAT - Balanced Fund
Nationwide SAT - Capital Appreciation Fund
Nationwide SAT - Equity Income Fund
Nationwide SAT - Global Equity Fund
Nationwide SAT - Government Bond Fund
Nationwide SAT - High Income Bond Fund
Nationwide SAT - Money Market Fund
Nationwide SAT - Multi-Sector Bond Fund
Nationwide SAT - Select Advisers Mid Cap Fund
Nationwide SAT - Select Advisers Small Cap Growth Fund
Nationwide SAT - Small Cap Value Fund
Nationwide SAT - Small Company Fund
Nationwide SAT - Strategic Growth Fund
Nationwide SAT - Strategic Value Fund
Nationwide SAT - Total Return Fund
(Continued)
Salomon Brothers Investors Fund
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NATIONWIDE VL SEPARATE ACCOUNT-D
NOTES TO FINANCIAL STATEMENTS, CONTINUED
At December 31, 1999, contract owners have invested in all of the above
funds except for Goldman Sachs Variable Insurance Trust - Global Income
Fund, INVESCO VIF - Health Sciences Portfolio, INVESCO VIF - Realty
Portfolio, INVESCO VIF - Small Company Growth Portfolio, INVESCO VIF -
Technology Portfolio, INVESCO VIF - Utilities Portfolio, Nationwide SAT
- Balanced Fund, Nationwide SAT - Equity Income Fund, Nationwide SAT -
Global Equity Fund, Nationwide SAT - Government Bond Fund, Nationwide
SAT - Multi-Sector Bond Fund, Nationwide SAT - Select Advisers Mid Cap
Fund, Nationwide SAT - Select Advisers Small Cap Growth Fund,
Nationwide SAT - Small Cap Value Fund, Nationwide SAT - Small Company
Fund, Nationwide SAT - Strategic Growth Fund, Nationwide SAT - Total
Return Fund and Salomon Brothers Investors Fund. The contract owners'
equity is affected by the investment results of each fund, equity
transactions by contract owners and certain contract expenses (see note
2).
The accompanying financial statements include only contract owners'
purchase payments pertaining to the variable portions of their
contracts and exclude any purchase payments for fixed dollar benefits,
the latter being included in the accounts of the Company.
(c) Security Valuation, Transactions and Related Investment Income
The market value of the underlying mutual funds is based on the closing
net asset value per share at December 31, 1999. The cost of investments
sold is determined on the specific identification basis. Investment
transactions are accounted for on the trade date (date the order to buy
or sell is executed) and dividend income is recorded on the ex-dividend
date.
(d) Federal Income Taxes
Operations of the Account form a part of, and are taxed with,
operations of the Company which is taxed as a life insurance company
under the Internal Revenue Code.
The Company does not provide for income taxes within the Account. Taxes
are the responsibility of the contract owner upon termination or
withdrawal.
(e) Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally
accepted accounting principles may require management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities, if
any, 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.
(2) Policy Charges
(a) Deductions from Premium
The Company deducts a charge for state premium taxes not to exceed
3.5% of all premiums received to cover the payment of these premium
taxes. Additionally, the Company deducts a front-end sales load of up
to 5.5% from each premium payment received.
(b) Cost of Insurance
A cost of insurance charge is assessed monthly against each contract
by liquidating units. The amount of the charge is based upon age,
sex, rate class and net amount at risk (death benefit less total
contract value).
(c) Administrative Charges
The Company currently deducts a monthly administrative charge of $5 in
all policy years. This charge is subject to change but will not exceed
$10 per policy year.
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(3) Asset Charges
The Company deducts a charge from the contract to cover mortality and
expense risk charges related to operations, and to recover policy
maintenance charges. This charge is guaranteed not to exceed an annual
effective rate of .75%. The annual rate is currently .60% during the first
through fourth policy years, .40% during the fifth through twentieth policy
years, and .25% thereafter. This charge is assessed against each contract
through the daily unit value calculation.
(4) Related Party Transactions
The Company performs various services on behalf of the Mutual Fund
Companies in which the Account invests and may receive fees for the
services performed. These services include, among other things, share-
holder communications, preparation, postage, fund transfer agency and
various other record keeping and customer service functions. These fees are
paid to an affiliate of the Company.
(continued)
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NATIONWIDE VL SEPARATE ACCOUNT-D
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(5) COMPONENTS OF CONTRACT OWNERS' EQUITY
The following is a summary of contract owners' equity at December 31, 1999:
<TABLE>
<CAPTION>
PERIOD
Contract owners' equity represented by: UNITS UNIT VALUE RETURN(b)
----- ---------- ---------
<S> <C> <C> <C> <C>
Dreyfus Variable Investment Fund -
Quality Bond Portfolio..................... 56,693 $ 9.984562 $ 566,055 0%(a)
Fidelity VIP -
Overseas Service Class Shares.............. 36,657 13.631426 499,687 36%(a)
INVESCO VIF - Blue Chip Growth Portfolio..... 43,491 12.735013 553,858 27%(a)
INVESCO VIF - Dynamics Portfolio............. 7,042 15.254583 107,423 53%(a)
INVESCO VIF - Equity Income Portfolio........ 50,378 11.343231 571,449 13%(a)
INVESCO VIF - Total Return Portfolio......... 38,648 9.534274 368,481 (5)%(a)
Nationwide SAT -
Capital Appreciation Fund.................. 67,426 10.370136 699,217 4%(a)
Nationwide SAT - High Income Bond Fund....... 52,850 10.227564 540,527 2%(a)
Nationwide SAT - Money Market Fund........... 900 10.421897 9,380 4%(a)
Nationwide SAT - Strategic Value Fund........ 35,095 9.645322 338,503 (4)%(a)
====== ======== -----------
$ 4,254,580
===========
<FN>
(a) Non-annualized. The return was computed for the period 1/05/99 (effective date) through 12/31/99.
(b) The annual return does not include contract charges satisfied by surrendering units.
</TABLE>
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Independent Auditors' Report
---------------------------
The Board of Directors of Nationwide Life and Annuity Insurance Company and
Contract Owners of Nationwide VL Separate Account-D:
We have audited the accompanying statement of assets, liabilities and
contract owners' equity of Nationwide VL Separate Account-D (comprised of the
sub-accounts listed in note 1(b)) (collectively, "the Account") as of December
31, 1999, and the related statement of operations and changes in contract
owners' equity for the period May 19, 1999 (commencement of operations) through
December 31, 1999. These financial statements are the responsibility of the
Account's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of December 31, 1999, by
correspondence with the transfer agents of the underlying mutual funds. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the Account as of December
31, 1999, and the results of its operations and its changes in contract owners'
equity for the period May 19, 1999 (commencement of operations) through December
31, 1999, in conformity with generally accepted accounting principles.
KPMG LLP
Columbus, Ohio
February 18, 2000
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<TABLE>
<CAPTION>
<S> <C>
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY
HOME OFFICE: ONE NATIONWIDE PLAZA - COLUMBUS, OHIO 43215-2220 Bulk Rate
U.S. Postage
PAID
Columbus, Ohio
Permit No. 521
</TABLE>
Nationwide(R) is a registered federal service mark of Nationwide Mutual
Insurance Company
