<PAGE> 1
[LOGO]
NATIONWIDE(R)
VARIABLE
ACCOUNT
ANNUAL REPORT
TO
CONTRACT OWNERS
DECEMBER 31, 1996
NATIONWIDE LIFE INSURANCE COMPANY
HOME OFFICE: COLUMBUS, OHIO
APO-717-V (12/96)
<PAGE> 2
[LOGO]
NATIONWIDE LIFE INSURANCE COMPANY
ONE NATIONWIDE PLAZA, COLUMBUS, OHIO 43215-2220
[PHOTO]
PRESIDENT'S MESSAGE
On behalf of Nationwide Life Insurance Company, we are
pleased to bring you the 1996 annual report of the Nationwide
Variable Account.
The U.S. economy is enjoying the rewards of a stable
political system and a globally competitive business sector.
These good times will last, although not all years will show the
stellar performance of the last two years. 1997 may be the year
in which normalcy will return.
The economic expansion has lasted six years already, and all
resources are more or less fully employed. The job market in
particular is showing some strains, and wages are rising a
bit faster than before. Also, the competitive pressures from
abroad are increasing due to a sharp rise in the exchange
value of our currency. Business will be hard pressed under
those conditions to continue showing above-average profit
increases. For the economy as a whole, inflation has hit the
low point in this business cycle and will slowly but surely
be a more important variable for monetary policy.
In the last few years, and especially in 1996, our economy
expanded faster than the natural rate of growth. This cannot
continue without creating bottlenecks that in turn induce
price increases. Either the economy will slow under its own
weight or the Federal Reserve will have to step in. Some
indicators point to a softening of business activity. But
whether this is enough will be a close call.
Again, the long-term trend is very positive for the U.S.,
its business activity, and its financial markets. However,
1997 might turn out to have some more surprises than anticipated
right now.
/s/ JOSEPH J. GASPER
---------------------------
Joseph J. Gasper, President
3
<PAGE> 3
NATIONWIDE VARIABLE ACCOUNT
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY
DECEMBER 31, 1996
<TABLE>
<CAPTION>
Assets:
<S> <C>
Investments at market value:
American Century: Benham Short-Term Government Fund (ACBenSTGvt)
352,166 shares (cost $3,329,420) $ 3,327,970
American Century: Income & Growth Fund (ACIncGro)
9,549 shares (cost $201,878) 192,507
American Century: Twentieth Century Growth Fund (ACTCGro)
443,122 shares (cost $9,134,062) 9,695,503
American Century: Twentieth Century International Growth Fund (ACTCIntlGr)
62,812 shares (cost $508,980) 499,981
American Century: Twentieth Century Ultra Fund (ACTCUltra)
260,938 shares (cost $6,797,299) 7,329,751
Delaware Group Delchester High-Yield Bond Fund, Inc. --
Delchester Fund Institutional Class (DeHYBd)
151,175 shares (cost $941,293) 958,452
Dreyfus A Bonds Plus, Inc. (DryABds)
128,688 shares (cost $1,853,340) 1,854,392
Dreyfus S&P 500 Index Fund (Dry500Ix)
147,661 shares (cost $3,174,622) 3,281,018
The Dreyfus Third Century Fund, Inc. (Dry3dCen)
37,828 shares (cost $338,693) 333,646
The Evergreen Total Return Fund -- Class Y (EvTotRet)
42,997 shares (cost $839,111) 917,131
Federated Investment Series Funds, Inc. -- Federated Bond Fund -- Class F (FedBdFd)
10,243 shares (cost $100,765) 99,873
Fidelity Advisor Equity-Income Fund -- Class T (FAEqInc)
31,182 shares (cost $656,849) 683,504
Fidelity Advisor Growth Opportunities Fund -- Class T (FAGrOpp)
60,241 shares (cost $2,078,053) 2,126,506
Fidelity Advisor High Yield Fund -- Class T (FAHiYld)
65,372 shares (cost $791,211) 797,539
Fidelity Advisor Income & Growth Fund -- Class T (FAIncGr)
1,824 shares (cost $29,613) 29,871
Fidelity Asset Manager(TM) (FidAsMgr)
184,830 shares (cost $2,829,942) 3,044,154
Fidelity Capital & Income Fund (FidCapInc)
132,273 shares (cost $1,191,344) 1,238,072
Fidelity Equity-Income Fund (FidEqInc)
333,029 shares (cost $11,426,729) 14,263,635
Fidelity Magellan(R) Fund (FidMgln)
144,985 shares (cost $11,657,388) 11,693,067
Fidelity Puritan(R) Fund (FidPurtn)
451,817 shares (cost $7,460,394) 7,789,321
</TABLE>
4
<PAGE> 4
<TABLE>
<S> <C>
Fidelity VIP -- High Income Portfolio (FidVIPHI)
21,554 shares (cost $242,137) 269,853
Janus Fund (JanFund)
65,811 shares (cost $1,679,627) 1,609,086
Janus Twenty Fund (Jan20Fd)
123,753 shares (cost $3,576,224) 3,399,499
Janus Worldwide Fund (JanWrldwde)
13,815 shares (cost $488,922) 465,425
MFS(R) World Governments Fund -- Class A (MFSWdGvt)
92,422 shares (cost $1,061,998) 1,044,368
Nationwide(R) Bond Fund (NWBdFd)
174,036 shares (cost $1,645,444) 1,616,791
Nationwide(R) Fund (NWFund)
123,198 shares (cost $2,028,689) 2,488,606
Nationwide(R) Growth Fund (NWGroFd)
276,926 shares (cost $3,089,203) 3,683,114
Nationwide(R) Money Market Fund (NWMyMkt)
7,642,255 shares (cost $7,642,255) 7,642,255
Nationwide(R) U.S. Government Income Fund (NWUSGvt)
6,582 shares (cost $65,768) 65,816
Neuberger & Berman Guardian Fund (NBGuard)
203,903 shares (cost $4,851,586) 5,226,045
Neuberger & Berman Limited Maturity Bond Fund (NBLtdMat)
82,284 shares (cost $820,121) 821,194
Neuberger & Berman Partners Fund (NBPartFd)
164,590 shares (cost $3,903,279) 4,146,017
Oppenheimer Global Fund -- Class A (OppGlob)
105,470 shares (cost $3,788,490) 4,116,503
Phoenix Balanced Fund Series -- Class A (PhxBalFd)
33,488 shares (cost $563,195) 532,116
Strong Total Return Fund, Inc. (StTotRet)
39,285 shares (cost $1,130,346) 1,069,724
Templeton Foreign Fund -- Class I (TemForFd)
332,378 shares (cost $3,231,735) 3,443,435
Warburg Pincus Emerging Growth Fund -- Common Shares (WPEmGro)
89,232 shares (cost $2,900,286) 2,964,301
------------
Total investments 114,760,041
Accounts receivable 33,220
------------
Total assets 114,793,261
Accounts payable 4,844
------------
Contract owners' equity (note 4) $114,788,417
============
</TABLE>
See accompanying notes to financial statements.
5
<PAGE> 5
NATIONWIDE VARIABLE ACCOUNT
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Investment activity:
Reinvested capital gains and dividends $ 8,358,915 5,403,676 4,476,720
Mortality, expense and administration charges (note 2) (1,250,216) (828,380) (666,881)
------------ ----------- -----------
Net investment activity 7,108,699 4,575,296 3,809,839
------------ ----------- -----------
Proceeds from mutual fund shares sold 32,882,395 19,494,999 19,343,653
Cost of mutual fund shares sold (30,480,861) (19,182,917) (18,215,058)
------------ ----------- -----------
Realized gain (loss) on investments 2,401,534 312,082 1,128,595
Change in unrealized gain (loss) on investments 2,414,112 6,984,871 (5,977,389)
------------ ----------- -----------
Net gain (loss) on investments 4,815,646 7,296,953 (4,848,794)
------------ ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations 11,924,345 11,872,249 (1,038,955)
------------ ----------- -----------
Equity transactions:
Purchase payments received from contract owners 36,936,853 21,817,759 16,078,025
Redemptions (11,033,070) (11,831,829) (5,989,583)
Annuity benefits (22,282) (18,792) (19,197)
Annual contract maintenance charge (note 2) (82,641) (70,366) (68,239)
Contingent deferred sales charges (note 2) (162,303) (43,999) (50,816)
Adjustments to maintain reserves 1,139 5,498 1,593
------------ ----------- -----------
Net equity transactions 25,637,696 9,858,271 9,951,783
------------ ----------- -----------
Net change in contract owners' equity 37,562,041 21,730,520 8,912,828
Contract owners' equity beginning of period 77,226,376 55,495,856 46,583,028
------------ ----------- -----------
Contract owners' equity end of period $114,788,417 77,226,376 55,495,856
============ =========== ===========
</TABLE>
See accompanying notes to financial statements.
6
<PAGE> 6
NATIONWIDE VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996, 1995 AND 1994
(1) Summary of Significant Accounting Policies
(a) Organization and Nature of Operations
The Nationwide Variable Account (the Account) was established
pursuant to a resolution of the Board of Directors of Nationwide Life
Insurance Company (the Company) on March 3, 1976. The Account has
been registered as a unit investment trust under the Investment
Company Act of 1940.
The Company offers Individual Deferred Variable Annuity Contracts
through the Account. As of December 25, 1982, only tax qualified
contracts are issued. The primary distribution for the contract is
through the Company for Individual Retirement Account rollovers;
however, other distributors may be utiized.
(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 contract charges.
With certain exceptions, contract owners in either the
accumulation or the payout phase may invest in the following:
American Century: Benham Short-Term Government Fund (ACBenSTGvt)
(formerly Twentieth Century Investors, Inc. -- U.S. Governments
Short-Term (TCUSGvt))
American Century: Income & Growth Fund (ACIncGro)
American Century: Twentieth Century Growth Fund (ACTCGro)
(formerly Twentieth Century Investors, Inc. -- Growth Investors
(TCGroInv))
American Century: Twentieth Century International Growth Fund
(ACTCIntlGr) (formerly Twentieth Century World Investors, Inc. --
International Equity (TCIntlEq))
American Century: Twentieth Century Ultra Fund (ACTCUltra)
(formerly Twentieth Century Investors, Inc. -- Ultra Investors
(TCUltra))
Delaware Group Delchester High-Yield Bond Fund, Inc. -- Delchester
Fund Institutional Class (DeHYBd)
Dreyfus A Bonds Plus, Inc. (DryABds)
Dreyfus S&P 500 Index Fund (Dry500Ix) (formerly Peoples Index Fund(R),
Inc. (PeoIxFd))
The Dreyfus Third Century Fund, Inc. (Dry3dCen)
The Evergreen Total Return Fund -- Class Y (EvTotRet)
Federated Investment Series Funds, Inc. -- Federated Bond Fund --
Class F (FedBdFd)
Fidelity Advisor Equity-Income Fund -- Class T (FAEqInc)
Fidelity Advisor Growth Opportunities Fund -- Class T (FAGrOpp)
Fidelity Advisor High Yield Fund - Class T (FAHiYld)
Fidelity Advisor Income & Growth Fund -- Class T (FAIncGr)
Fidelity Asset Manager(TM) (FidAsMgr)
Fidelity Capital & Income Fund (FidCapInc)
(not available for additional purchase payments or exchanges after
May 1, 1991)
Fidelity Equity-Income Fund (FidEqInc)
Fidelity Magellan(R) Fund (FidMgln)
7
<PAGE> 7
Fidelity Puritan(R) Fund (FidPurtn)
Portfolio of the Fidelity Variable Insurance Products Fund
(Fidelity VIP);
Fidelity VIP - High Income Portfolio (FidVIPHI)
(not available for additional purchase payments or exchanges after
December 1, 1993)
Janus Fund (JanFund)
Janus Twenty Fund (Jan20Fd)
Janus Worldwide Fund (JanWrldwde)
MFS(R) World Governments Fund -- Class A (MFSWdGvt)
Nationwide(R) Bond Fund (NWBdFd) (managed for a fee by an affiliated
investment advisor)
Nationwide(R) Fund (NWFund) (managed for a fee by an affiliated
investment advisor)
Nationwide(R) Growth Fund (NWGroFd) (managed for a fee by an
affiliated investment advisor)
Nationwide(R) Money Market Fund (NWMyMkt) (managed for a fee by an
affiliated investment advisor)
Nationwide(R) U.S. Government Income Fund (NWUSGvt)
(managed for a fee by an affiliated investment advisor)
Neuberger & Berman Guardian Fund (NBGuard)
Neuberger & Berman Limited Maturity Bond Fund (NBLtdMat)
Neuberger & Berman Partners Fund (NBPartFd)
Oppenheimer Global Fund -- Class A (OppGlob)
Phoenix Balanced Fund Series -- Class A (PhxBalFd)
Strong Total Return Fund, Inc. (StTotRet)
Templeton Foreign Fund -- Class I (TemForFd)
Warburg Pincus Emerging Growth Fund -- Common Shares (WPEmGro)
At December 31, 1996, contract owners have invested in all of the
above funds. 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, 1996. 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.
(f) Reclassifications
Certain 1995 and 1994 amounts have been reclassified to conform with
the current year presentation.
8
<PAGE> 8
(2) Expenses
The Company does not deduct a sales charge from purchase payments received
from the contract owners. However, if any part of the contract value of
such contracts is surrendered, the Company will, with certain exceptions,
deduct from a contract owner's contract value a contingent deferred
sales charge. For contracts issued prior to January 1, 1993, the
contingent deferred sales charge will be equal to 5% of the lesser of
the total of all purchase payments made within 96 months prior to the
date of the request for surrender or the amount surrendered. For
contracts issued on or after January 1, 1993, the Company will deduct a
contingent deferred sales charge not to exceed 7% of the lesser of
purchase payments or the amount surrendered, such charge declining 1% per
year, to 0%, after the purchase payment has been held in the contract for
84 months. No sales charges are deducted on redemptions used to
purchase units in the fixed investment options of the Company.
The following contract charges are deducted by the Company: (a) an
annual contract maintenance charge of $30, with certain exceptions,
which is satisfied by surrendering units; and (b) for contracts issued
prior to January 1, 1993, a charge for mortality and expense risk assessed
through the daily unit value calculation equal to an annual rate of
0.80% and 0.50%, respectively; for contracts issued on or after January
1, 1993, a mortality risk charge, an expense risk charge and an
administration charge assessed through the daily unit value calculation
equal to an annual rate of 0.80%, 0.45% and 0.05%, respectively.
(3) Schedule I
Schedule I presents the components of the change in the unit values,
which are the basis for contract owners' equity. This schedule is
presented in the following format:
* Beginning unit value - Jan. 1
* Reinvested capital gains and dividends
(This amount reflects the increase in the unit value due to
capital gains and dividend distributions from the underlying
mutual funds.)
* Unrealized gain (loss)
(This amount reflects the increase (decrease) in the unit
value resulting from the market appreciation (depreciation) of
the underlying mutual funds.)
* Contract charges
(This amount reflects the decrease in the unit value due to the
mortality risk charge, expense risk charge and administration
charge discussed in note 2.)
* Ending unit value - Dec. 31
* Percentage increase (decrease) in unit value.
For contracts in the payout phase, an assumed investment return of
3.5%, used in the calculation of the annuity benefit payment amount,
results in a corresponding reduction in the components of the unit
values as shown in Schedule I.
9
<PAGE> 9
(4) Components of Contract owners's equity
The following is a summary of contract owners' equity at December 31,
1996, for each series, in both the accumulation and payout phases.
<TABLE>
<CAPTION>
Contract owners' equity represented by: Units Unit Value
------- ----------
<S> <C> <C> <C>
Contracts in accumulation phase:
American Century: Benham Short-Term Government Fund:
Tax qualified 157,941 $21.012508 $3,318,737
American Century: Income & Growth Fund:
Tax qualified 18,133 10.551440 191,329
American Century: Twentieth Century Growth Fund:
Tax qualified 186,518 51.389039 9,584,981
American Century: Twentieth Century International
Growth Fund:
Tax qualified 37,683 13.268469 499,996
American Century: Twentieth Century Ultra Fund:
Tax qualified 530,842 13.807925 7,329,827
Delaware Group Delchester High-Yield Bond Fund, Inc. --
Delchester Fund Institutional Class:
Tax qualified 70,363 13.618147 958,214
Dreyfus A Bonds Plus, Inc.:
Tax qualified 169,248 10.958199 1,854,653
Dreyfus S&P 500 Index Fund:
Tax qualified 187,389 17.509385 3,281,066
The Dreyfus Third Century Fund, Inc.:
Tax qualified 21,194 15.742432 333,645
The Evergreen Total Return Fund -- Class Y:
Tax qualified 65,357 14.032960 917,152
Federated Investment Series Funds, Inc. --
Federated Bond Fund - Class F:
Tax qualified 9,873 10.117861 99,894
Fidelity Advisor Equity-Income Fund -- Class T:
Tax qualified 59,163 11.552736 683,495
Fidelity Advisor Growth Opportunities Fund -- Class T:
Tax qualified 177,245 11.997760 2,126,543
Fidelity Advisor High Yield Fund -- Class T:
Tax qualified 70,939 11.241941 797,492
Fidelity Advisor Income & Growth Fund -- Class T:
Tax qualified 2,740 10.890814 29,841
Fidelity Asset Manager(TM):
Tax qualified 244,667 12.442308 3,044,222
Fidelity Capital & Income Fund:
Tax qualified 29,770 41.287772 1,229,137
Fidelity Equity-Income Fund:
Tax qualified 257,747 55.285184 14,249,590
Fidelity Magellan(R) Fund:
Tax qualified 656,562 17.810611 11,693,770
Fidelity Puritan(R) Fund:
Tax qualified 475,617 16.377974 7,789,643
</TABLE>
10
<PAGE> 10
<TABLE>
<S> <C> <C> <C>
Fidelity VIP -- High Income Portfolio:
Tax qualified 12,382 21.793257 269,844
Janus Fund:
Tax qualified 133,123 12.087447 1,609,117
Janus Twenty Fund:
Tax qualified 230,288 14.762398 3,399,603
Janus Worldwide Fund:
Tax qualified 45,099 10.317427 465,306
MFS(R) World Governments Fund -- Class A:
Tax qualified 28,013 36.879814 1,033,114
Nationwide(R) Bond Fund:
Tax qualified 42,476 37.842928 1,607,416
Non-tax qualified 194 37.680696 7,310
Nationwide(R) Fund:
Tax qualified 34,681 70.764576 2,454,186
Non-tax qualified 314 73.708492 23,144
Nationwide(R) Growth Fund:
Tax qualified 48,441 75.405663 3,652,726
Non-tax qualified 230 79.618909 18,312
Nationwide(R) Money Market Fund:
Tax qualified -- Pre 12/25/82 49,431 24.656210 1,218,781
Tax qualified 327,248 19.580907 6,407,813
Non-tax qualified 1,317 24.812035 32,677
Nationwide(R) U.S. Government Income Fund:
Tax qualified 6,372 10.324818 65,790
Neuberger & Berman Guardian Fund:
Tax qualified 357,346 14.625126 5,226,230
Neuberger & Berman Limited Maturity Bond Fund:
Tax qualified 74,163 11.068501 820,873
Neuberger & Berman Partners Fund:
Tax qualified 222,551 18.631249 4,146,403
Oppenheimer Global Fund -- Class A:
Tax qualified 228,413 18.022572 4,116,590
Phoenix Balanced Fund Series -- Class A:
Tax qualified 43,659 12.187868 532,110
Strong Total Return Fund, Inc.:
Tax qualified 63,801 16.766964 1,069,749
Templeton Foreign Fund -- Class I:
Tax qualified 266,447 12.923758 3,443,497
Warburg Pincus Emerging Growth Fund --
Common Shares:
Tax qualified 250,912 11.814248 2,964,337
======= =========
Reserves for annuity contracts in payout phase:
Tax qualified 190,262
------------
$114,788,417
============
</TABLE>
See accompanying notes to financial statements.
11
<PAGE> 11
SCHEDULE I
NATIONWIDE VARIABLE ACCOUNT
TAX QUALIFIED
SCHEDULES OF CHANGES IN UNIT VALUE
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
ACBenSTGvt ACIncGro ACTCGro ACTCIntlGr ACTCUltra
----------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C>
1996
Beginning unit
value - Jan. 1 $20.449954 10.000000 45.274141 11.748911 12.289075
- ----------------------------------------------------------------------------------------------------
Reinvested capital
gains and
dividends 1.108203 .745798 .989050 1.366595 .784229
- ----------------------------------------------------------------------------------------------------
Unrealized gain (loss) (.274998) (.171142) 5.759350 .314097 .906054
- ----------------------------------------------------------------------------------------------------
Contract charges (.270651) (.023216) (.633502) (.161134) (.171433)
- ----------------------------------------------------------------------------------------------------
Ending unit value -
Dec. 31 $21.012508 10.551440 51.389039 13.268469 13.807925
- ----------------------------------------------------------------------------------------------------
Percentage increase
(decrease) in unit
value*(a) 3% 6%(b) 14% 13% 12%
====================================================================================================
1995
Beginning unit
value - Jan. 1 $18.748399 ** 38.113717 10.000000 9.043121
- ----------------------------------------------------------------------------------------------------
Reinvested capital
gains and
dividends 1.086234 6.277505 .010869 .581551
- ----------------------------------------------------------------------------------------------------
Unrealized gain (loss) .873119 1.457594 1.867440 2.805900
- ----------------------------------------------------------------------------------------------------
Contract charges (.257798) (.574675) (.129398) (.141497)
- ----------------------------------------------------------------------------------------------------
Ending unit value -
Dec. 31 $20.449954 45.274141 11.748911 12.289075
- ----------------------------------------------------------------------------------------------------
Percentage increase
(decrease) in unit
value*(a) 9% 19% 17%(b) 36%
====================================================================================================
1994
Beginning unit
value - Jan. 1 $19.087872 ** 39.197771 ** 9.505758
- ----------------------------------------------------------------------------------------------------
Reinvested capital
gains and
dividends .888205 5.656730 .283163
- ----------------------------------------------------------------------------------------------------
Unrealized gain (loss) (.981660) (6.232359) (.626504)
- ----------------------------------------------------------------------------------------------------
Contract charges (.246018) (.508425) (.119296)
- ----------------------------------------------------------------------------------------------------
Ending unit value -
Dec. 31 $18.748399 38.113717 9.043121
- ----------------------------------------------------------------------------------------------------
Percentage increase
(decrease) in unit
value*(a) (2)% (3)% (5)%
=====================================================================================================
</TABLE>
<TABLE>
<CAPTION>
DeHYBd DryABds Dry500Ix Dry3dCen EvTotRet
-------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C>
1996
Beginning unit
value - Jan. 1 12.257125 10.819193 14.505515 12.829548 12.594984
- ----------------------------------------------------------------------------------------------------
Reinvested capital
gains and
dividends 1.289054 .647812 .780714 2.175909 .700093
- ----------------------------------------------------------------------------------------------------
Unrealized gain (loss) .240682 (.368674) 2.430685 .924520 .909855
- ----------------------------------------------------------------------------------------------------
Contract charges (.168714) (.140132) (.207529) (.187545) (.171972)
- ----------------------------------------------------------------------------------------------------
Ending unit value -
Dec. 31 13.618147 10.958199 17.509385 15.742432 14.032960
- ----------------------------------------------------------------------------------------------------
Percentage increase
(decrease) in unit
value*(a) 11% 1% 21% 23% 11%
====================================================================================================
1995
Beginning unit
value - Jan. 1 10.867271 9.110600 10.749166 9.570659 10.301799
- ----------------------------------------------------------------------------------------------------
Reinvested capital
gains and
dividends 1.215468 .658102 .397253 .897413 .668749
- ----------------------------------------------------------------------------------------------------
Unrealized gain (loss) .327407 1.181188 3.524795 2.507797 1.773798
- ----------------------------------------------------------------------------------------------------
Contract charges (.153021) (.130697) (.165699) (.146321) (.149362)
- ----------------------------------------------------------------------------------------------------
Ending unit value -
Dec. 31 12.257125 10.819193 14.505515 12.829548 12.594984
- ----------------------------------------------------------------------------------------------------
Percentage increase
(decrease) in unit
value*(a) 13% 19% 35% 34% 22%
====================================================================================================
1994
Beginning unit
value - Jan. 1 11.511092 10.000000 10.819026 10.477293 11.153183
- ----------------------------------------------------------------------------------------------------
Reinvested capital
gains and
dividends 1.272604 .673864 1.169814 1.340681 .771284
- ----------------------------------------------------------------------------------------------------
Unrealized gain (loss) (1.770117) (1.452714) (1.099729) (2.117415) (1.484673)
- ----------------------------------------------------------------------------------------------------
Contract charges (.146308) (.110550) (.139945) (.129900) (.137995)
- ----------------------------------------------------------------------------------------------------
Ending unit value -
Dec. 31 10.867271 9.110600 10.749166 9.570659 10.301799
- ----------------------------------------------------------------------------------------------------
Percentage increase
(decrease) in unit
value*(a) (6)% (9)%(b) (1)% (9)% (8)%
=====================================================================================================
</TABLE>
*An annualized rate of return cannot be determined as:
(a) Contract charges do not include the annual contract maintenance charge
discussed in note 2; and
(b) This investment option was not being utilized
for the entire year indicated.
**This investment option was not being utilized or was not available.
12
<PAGE> 12
SCHEDULE I, CONTINUED
NATIONWIDE VARIABLE ACCOUNT
TAX QUALIFIED
SCHEDULES OF CHANGES IN UNIT VALUE
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
FedBdFd FAEqInc FAGrOpp FAHiYld FAIncGr
---------- --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C>
1996
Beginning unit
value - Jan. 1 $10.000000 10.213719 10.325686 10.057673 10.177458
- -------------------------------------------------------------------------------------------------------
Reinvested capital
gains and
dividends .119423 .480953 .638324 1.033892 .403927
- -------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .020151 .998707 1.176512 .290378 .443422
- -------------------------------------------------------------------------------------------------------
Contract charges (.021713) (.140643) (.142762) (.140002) (.133993)
- -------------------------------------------------------------------------------------------------------
Ending unit value -
Dec. 31 $10.117861 11.552736 11.997760 11.241941 10.890814
- -------------------------------------------------------------------------------------------------------
Percentage increase
(decrease) in unit
value*(a) 1%(b) 13% 16% 12% 7%
=======================================================================================================
1995
Beginning unit
value - Jan. 1 ** ** ** ** **
- -------------------------------------------------------------------------------------------------------
Reinvested capital
gains and
dividends
- -------------------------------------------------------------------------------------------------------
Unrealized gain (loss)
- -------------------------------------------------------------------------------------------------------
Contract charges
- -------------------------------------------------------------------------------------------------------
Ending unit value -
Dec. 31
- -------------------------------------------------------------------------------------------------------
Percentage increase
(decrease) in unit
value*(a)
=======================================================================================================
1994
Beginning unit
value - Jan. 1 ** ** ** ** **
- -------------------------------------------------------------------------------------------------------
Reinvested capital
gains and
dividends
- -------------------------------------------------------------------------------------------------------
Unrealized gain (loss)
- -------------------------------------------------------------------------------------------------------
Contract charges
- -------------------------------------------------------------------------------------------------------
Ending unit value -
Dec. 31
- -------------------------------------------------------------------------------------------------------
Percentage increase
(decrease) in unit
value*(a)
=======================================================================================================
</TABLE>
<TABLE>
<CAPTION>
FidAsMgr FidCapInc FidEqInc FidMgIn FidPurtn
---------- --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C>
1996
Beginning unit
value - Jan. 1 11.183603 37.550944 46.285491 16.158074 14.410892
- -------------------------------------------------------------------------------------------------------
Reinvested capital
gains and
dividends .974182 3.350435 3.536178 2.629260 1.859609
- -------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .437258 .903646 6.122667 (.758693) .307268
- -------------------------------------------------------------------------------------------------------
Contract charges (.152735) (.517253) (.659152) (.218030) (.199795)
- -------------------------------------------------------------------------------------------------------
Ending unit value -
Dec. 31 12.442308 41.287772 55.285184 17.810611 16.377974
- -------------------------------------------------------------------------------------------------------
Percentage increase
(decrease) in unit
value*(a) 11% 10% 19% 10% 14%
- -------------------------------------------------------------------------------------------------------
1995
Beginning unit
value - Jan. 1 $9.589367 32.589111 35.576037 11.964387 12.020413
- -------------------------------------------------------------------------------------------------------
Reinvested capital
gains and
dividends .319835 3.427571 2.721500 .938243 .761762
- -------------------------------------------------------------------------------------------------------
Unrealized gain (loss) 1.408821 2.006467 8.520244 3.445891 1.800691
- -------------------------------------------------------------------------------------------------------
Contract charges (.134420) (.472205) (.532290) (.190447) (.171974)
- -------------------------------------------------------------------------------------------------------
Ending unit value -
Dec. 31 $11.183603 37.550944 46.285491 16.158074 14.410892
- -------------------------------------------------------------------------------------------------------
Percentage increase
(decrease) in unit
value*(a) 17% 15% 30% 35% 20%
- -------------------------------------------------------------------------------------------------------
1994
Beginning unit
value - Jan. 1 $10.415849 34.612981 35.955883 12.346838 11.972512
- -------------------------------------------------------------------------------------------------------
Reinvested capital
gains and
dividends .386944 2.899199 3.474735 .480494 .964375
- -------------------------------------------------------------------------------------------------------
Unrealized gain (loss) (1.082752) (4.479225) (3.384084) (.704119) (.757623)
- -------------------------------------------------------------------------------------------------------
Contract charges (.130674) (.443844) (.470497) (.158826) (.158851)
- -------------------------------------------------------------------------------------------------------
Ending unit value -
Dec. 31 $9.589367 32.589111 35.576037 11.964387 12.020413
- -------------------------------------------------------------------------------------------------------
Percentage increase
(decrease) in unit
value*(a) (8)% (6)% (1)% (3)% 0%
=======================================================================================================
</TABLE>
*An annualized rate of return cannot be determined as:
(a) Contract charges do not include the annual contract maintenance
charge discussed in note 2; and
(b) This investment option was not being utilized for the entire
year indicated.
**This investment option was not being utilized or was not available.
13
<PAGE> 13
SCHEDULE I, CONTINUED
NATIONWIDE VARIABLE ACCOUNT
TAX QUALIFIED
SCHEDULES OF CHANGES IN UNIT VALUE
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
FidVIPHI JanFund Jan20Fd JanWrldwde MFSWdGvt
--------- -------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C>
1996
Beginning unit
value - Jan. 1 $19.364421 10.239338 11.699046 10.000000 35.454983
- -------------------------------------------------------------------------------------------------------
Reinvested capital
gains and
dividends 1.765562 1.372042 2.474450 .631391 .996797
- -------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .933745 .623531 .763449 (.292087) .893467
- -------------------------------------------------------------------------------------------------------
Contract charges (.270471) (.147464) (.174547) (.021877) (.465433)
- -------------------------------------------------------------------------------------------------------
Ending unit value -
Dec. 31 $21.793257 12.087447 14.762398 10.317427 36.879814
- -------------------------------------------------------------------------------------------------------
Percentage increase
(decrease) in unit
value*(a) 13% 18% 26% 3%(b) 4%
=======================================================================================================
1995
Beginning unit
value - Jan. 1 $16.267014 ** 8.701036 ** 31.104159
- -------------------------------------------------------------------------------------------------------
Reinvested capital
gains and
dividends 1.177771 1.991385 4.432437
- -------------------------------------------------------------------------------------------------------
Unrealized gain (loss) 2.155057 1.142737 .359301
- -------------------------------------------------------------------------------------------------------
Contract charges (.235421) (.136112) (.440914)
- -------------------------------------------------------------------------------------------------------
Ending unit value -
Dec. 31 $19.364421 11.699046 35.454983
- -------------------------------------------------------------------------------------------------------
Percentage increase
(decrease) in unit
value*(a) 19% 34% 14%
=======================================================================================================
1994
Beginning unit
value - Jan. 1 $16.739460 ** 9.451097 ** 33.728667
- -------------------------------------------------------------------------------------------------------
Reinvested capital
gains and
dividends 1.533862 .025710 1.658769
- -------------------------------------------------------------------------------------------------------
Unrealized gain (loss) (1.790091) (.657508) (3.874555)
- -------------------------------------------------------------------------------------------------------
Contract charges (.216217) (.118263) (.408722)
- -------------------------------------------------------------------------------------------------------
Ending unit value -
Dec. 31 $16.267014 8.701036 31.104159
- -------------------------------------------------------------------------------------------------------
Percentage increase
(decrease) in unit
value*(a) (3)% (8)% (8)%
=======================================================================================================
</TABLE>
<TABLE>
<CAPTION>
NWMyMkt
NWBdFd NWFund NWGroFd Pre 12/25/82 NWMyMkt
--------- -------- -------- ------------ ----------
<S> <C> <C> <C> <C> <C>
1996
Beginning unit
value - Jan. 1 37.782872 57.857937 65.471148 23.797066 18.898613
- -------------------------------------------------------------------------------------------------------
Reinvested capital
gains and
dividends 2.420301 5.294223 5.745821 1.177631 .935221
- -------------------------------------------------------------------------------------------------------
Unrealized gain (loss) (1.877444) 8.447372 5.102552 .000000 .000000
- -------------------------------------------------------------------------------------------------------
Contract charges (.482801) (.834956) (.913858) (.318487) (.252927)
- -------------------------------------------------------------------------------------------------------
Ending unit value -
Dec. 31 37.842928 70.764576 75.405663 24.656210 19.580907
- -------------------------------------------------------------------------------------------------------
Percentage increase
(decrease) in unit
value*(a) 0% 22% 15% 4% 4%
=======================================================================================================
1995
Beginning unit
value - Jan. 1 30.832258 45.095466 51.535806 22.850271 18.146709
- -------------------------------------------------------------------------------------------------------
Reinvested capital
gains and
dividends 2.340919 3.894595 6.923629 1.251864 .994176
- -------------------------------------------------------------------------------------------------------
Unrealized gain (loss) 5.062302 9.527720 7.791689 .000000 .000000
- -------------------------------------------------------------------------------------------------------
Contract charges (.452607) (.659844) (.779976) (.305069) (.242272)
- -------------------------------------------------------------------------------------------------------
Ending unit value -
Dec. 31 37.782872 57.857937 65.471148 23.797066 18.898613
- -------------------------------------------------------------------------------------------------------
Percentage increase
(decrease) in unit
value*(a) 23% 28% 27% 4% 4%
=======================================================================================================
1994
Beginning unit
value - Jan. 1 33.991130 45.422888 51.458079 22.315407 17.721943
- -------------------------------------------------------------------------------------------------------
Reinvested capital
gains and
dividends 2.317590 4.420863 1.956402 .829315 .658609
- -------------------------------------------------------------------------------------------------------
Unrealized gain (loss) (5.061696) (4.160340) (1.208860) .000000 .000000
- -------------------------------------------------------------------------------------------------------
Contract charges (.414766) (.587945) (.669815) (.294451) (.233843)
- -------------------------------------------------------------------------------------------------------
Ending unit value -
Dec. 31 30.832258 45.095466 51.535806 22.850271 18.146709
- -------------------------------------------------------------------------------------------------------
Percentage increase
(decrease) in unit
value*(a) (9)% (1)% 0% 2% 2%
=======================================================================================================
</TABLE>
*An annualized rate of return cannot be determined as:
(a) Contract charges do not include the annual contract maintenance
charge discussed in note 2; and
(b) This investment option was not being utilized for the entire
year indicated.
**This investment option was not being utilized or was not available.
14
<PAGE> 14
SCHEDULE I, CONTINUED
NATIONWIDE VARIABLE ACCOUNT
TAX QUALIFIED
SCHEDULES OF CHANGES IN UNIT VALUE
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
NWUSGvt NBGuard NBLtdMat NBPartFd OppGlob
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
1996
Beginning unit
value - Jan. 1 $10.124709 12.571028 10.735070 14.924653 15.538850
- ----------------------------------------------------------------------------------------------------------
Reinvested capital
gains and
dividends .584669 .818924 .652728 1.883265 .840380
- ----------------------------------------------------------------------------------------------------------
Unrealized gain (loss) (.252576) 1.409253 (.177361) 2.039177 1.862683
- ----------------------------------------------------------------------------------------------------------
Contract charges (.131984) (.174079) (.141936) (.215846) (.219341)
- ----------------------------------------------------------------------------------------------------------
Ending unit value -
Dec. 31 $10.324818 14.625126 11.068501 18.631249 18.022572
- ----------------------------------------------------------------------------------------------------------
Percentage increase
(decrease) in unit
value*(a) 2% 16% 3% 25% 16%
==========================================================================================================
1995
Beginning unit
value - Jan. 1 ** $9.640402 9.833352 11.183371 13.503390
- ----------------------------------------------------------------------------------------------------------
Reinvested capital
gains and
dividends .546753 .635595 1.728556 .955752
- ----------------------------------------------------------------------------------------------------------
Unrealized gain (loss) 2.533695 .401069 2.184589 1.269343
- ----------------------------------------------------------------------------------------------------------
Contract charges (.149822) (.134946) (.171863) (.189635)
- ----------------------------------------------------------------------------------------------------------
Ending unit value -
Dec. 31 $12.571028 10.735070 14.924653 15.538850
- ----------------------------------------------------------------------------------------------------------
Percentage increase
(decrease) in unit
value*(a) 30% 9% 33% 15%
==========================================================================================================
1994
Beginning unit
value - Jan. 1 ** $10.000000 9.995028 11.548721 14.119303
- ----------------------------------------------------------------------------------------------------------
Reinvested capital
gains and
dividends .249418 .555641 .945341 1.418589
- ----------------------------------------------------------------------------------------------------------
Unrealized gain (loss) (.492915) (.588488) (1.162325) (1.850696)
- ----------------------------------------------------------------------------------------------------------
Contract charges (.116101) (.128829) (.148366) (.183806)
- ----------------------------------------------------------------------------------------------------------
Ending unit value -
Dec. 31 $ 9.640402 9.833352 11.183371 13.503390
- ----------------------------------------------------------------------------------------------------------
Percentage increase
(decrease) in unit
value*(a) (4)%(b) (2)% (3)% (4)%
==========================================================================================================
</TABLE>
<TABLE>
<CAPTION>
PhxBalFd StTotRet TemForFd WPEmGro
-------- -------- -------- --------
<S> <C> <C> <C> <C>
1996
Beginning unit
value - Jan. 1 11.373217 14.893186 11.097523 10.895016
- ------------------------------------------------------------------------------------------
Reinvested capital
gains and
dividends 1.602292 2.715211 .541519 .024787
- ------------------------------------------------------------------------------------------
Unrealized gain (loss) (.635106) (.634729) 1.440934 1.044888
- ------------------------------------------------------------------------------------------
Contract charges (.152535) (.206704) (.156218) (.150443)
- ------------------------------------------------------------------------------------------
Ending unit value -
Dec. 31 12.187868 16.766964 12.923758 11.814248
- ------------------------------------------------------------------------------------------
Percentage increase
(decrease) in unit
value*(a) 7% 13% 16% 8%
==========================================================================================
1995
Beginning unit
value - Jan. 1 9.338434 11.881033 10.000000 **
- ------------------------------------------------------------------------------------------
Reinvested capital
gains and
dividends .913359 .793239 .700873
- ------------------------------------------------------------------------------------------
Unrealized gain (loss) 1.255938 2.394151 .523675
- ------------------------------------------------------------------------------------------
Contract charges (.134514) (.175237) (.127025)
- ------------------------------------------------------------------------------------------
Ending unit value -
Dec. 31 11.373217 14.893186 11.097523
- -------------------------------------------------------------------------------------------
Percentage increase
(decrease) in unit
value*(a) 22% 25% 11%(b)
===========================================================================================
1994
Beginning unit
value - Jan. 1 10.000000 12.205201 ** **
- -------------------------------------------------------------------------------------------
Reinvested capital
gains and
dividends .295350 .172665
- -------------------------------------------------------------------------------------------
Unrealized gain (loss) (.843207) (.340340)
- -------------------------------------------------------------------------------------------
Contract charges (.113709) (.156493)
- -------------------------------------------------------------------------------------------
Ending unit value -
Dec. 31 9.338434 11.881033
- -------------------------------------------------------------------------------------------
Percentage increase
(decrease) in unit
value*(a) (7)%(b) (3)%
===========================================================================================
</TABLE>
*An annualized rate of return cannot be determined as:
(a) Contract charges do not include the annual contract maintenance
charge discussed in note 2; and
(b) This investment option was not being utilized for the entire
year indicated.
**This investment option was not being utilized or was not available.
15
<PAGE> 15
SCHEDULE I, CONTINUED
NATIONWIDE VARIABLE ACCOUNT
NON-TAX QUALIFIED
SCHEDULES OF CHANGES IN UNIT VALUE
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
NWBdFd NWFund NWGroFd NWMyMkt
---------- --------- --------- ---------
<S> <C> <C> <C> <C>
1996
Beginning unit value - Jan. 1 $37.620900 60.264917 69.129314 23.947460
- ---------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains and dividends 2.409921 5.514472 6.066865 1.185080
- ---------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) (1.869397) 8.798796 5.387662 .000000
- ---------------------------------------------------------------------------------------------------------------------------
Contract charges (.480728) (.869693) (.964932) (.320505)
- ---------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $37.680696 73.708492 79.618909 24.812035
- ---------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 0% 22% 15% 4%
===========================================================================================================================
1995
Beginning unit value - Jan. 1 $30.700082 46.971513 54.415339 22.994681
- ---------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains and dividends 2.330893 4.056617 7.310483 1.259777
- ---------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) 5.040599 9.924079 8.227039 .000000
- ---------------------------------------------------------------------------------------------------------------------------
Contract charges (.450674) (.687292) (.823547) (.306998)
- ---------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $37.620900 60.264917 69.129314 23.947460
- ---------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 23% 28% 27% 4%
===========================================================================================================================
1994
Beginning unit value - Jan. 1 $33.845410 47.312558 54.333269 22.456439
- ---------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains and dividends 2.307668 4.604779 2.065716 .834547
- ---------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) (5.040000) (4.333421) (1.276404) .000000
- ---------------------------------------------------------------------------------------------------------------------------
Contract charges (.412996) (.612403) (.707242) (.296305)
- ---------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $30.700082 46.971513 54.415339 22.994681
- ---------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (9)% (1)% 0% 2%
===========================================================================================================================
</TABLE>
*An annualized rate of return cannot be determined as contract charges do not
include the annual contract maintenance charge discussed in note 2.
See note 3.
16
<PAGE> 16
Independent Auditors' Report
----------------------------
The Board of Directors of Nationwide Life Insurance Company and
Contract Owners of Nationwide Variable Account:
We have audited the accompanying statement of assets, liabilities and
contract owners' equity of Nationwide Variable Account as of December 31, 1996,
and the related statements of operations and changes in contract owners'
equity and schedules of changes in unit value for each of the years in the
three year period then ended. These financial statements and schedules of
changes in unit value are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements and
schedules of changes in unit value based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
schedules of changes in unit value 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, 1996, 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 audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and schedules of changes in
unit value referred to above present fairly, in all material respects, the
financial position of Nationwide Variable Account as of December 31, 1996,
and the results of its operations and its changes in contract owners'
equity and the schedules of changes in unit value for each of the years in
the three year period then ended in conformity with generally accepted
accounting principles.
KPMG Peat Marwick LLP
Columbus, Ohio
February 7, 1997
17
<PAGE> 17
[THIS PAGE LEFT BLANK INTENTIONALLY]
18
<PAGE> 18
[THIS PAGE LEFT BLANK INTENTIONALLY]
19
<PAGE> 19
NATIONWIDE LIFE INSURANCE COMPANY
HOME OFFICE: ONE NATIONWIDE PLAZA * COLUMBUS, OHIO 43215-2220
Nationwide(R) is a registered federal service mark of Nationwide
Mutual Insurance Company
--------------
Bulk Rate
U.S. Postage
PAID
Columbus, Ohio
Permit No. 521
--------------
