<PAGE> 1
'97
Nationwide(R) Variable Account - II
June 30, 1997
[THE BEST
OF AMERICA LOGO]
SEMI-ANNUAL REPORT
[NATIONWIDE LOGO]
Nationwide Life Insurance Company
Home Office: Columbus, Ohio
APO-725-W (6/97)
<PAGE> 2
[NATIONWIDE LOGO]
NATIONWIDE LIFE INSURANCE COMPANY
ONE NATIONWIDE PLAZA, COLUMBUS, OHIO 43215-2220
[PHOTO OF JOSEPH J. GASPER]
PRESIDENT'S MESSAGE
We are pleased to present the 1997 semi-annual report of the Nationwide Variable
Account-II.
Our Enterprise Vision statement states: "We exist to serve our customers."
Everything we do is focused on you, our customer, and on your needs.
We recognize that your expectations have changed and your standards for value
and service are higher than ever before. You are being asked to take more
responsibility for your own financial future, as employers and government
programs provide fewer guarantees.
We know that you expect service and products customized to fit your needs -
including financial advice - and you expect to receive service at any time,
anywhere and any way you choose.
We are responding to your changing needs and expectations with innovative
product offerings, continuing investment in the training and professional
development of our people, and our investment in technology to enable us to
serve you faster, better and more cost effectively.
Equity investments produced solid gains for the first half of 1997 with the Dow
Jones Industrial Average breaking the 8,000 mark on July 16. The U.S. economy,
in its seventh year of expansion, is growing vigorously and corporate profits
are better than anticipated.
Interest rates and inflation are still at very low levels. However, the risk of
a temporary spike remains as the Federal Reserve might be forced to raise
interest rates in order to keep our economy on an inflation-free growth path.
Even such policy actions are not expected to end the prosperous times which we
now enjoy. In the long run, equity valuations will reflect these excellent
economic conditions.
Thank you for giving Nationwide Life Insurance Company the opportunity to meet
your investment needs.
/s/ Joseph J. Gasper
Joseph J. Gasper, President
3
<PAGE> 3
================================================================================
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS:
<S> <C>
Investments at market value:
American Century VP - American Century VP Balanced (ACVPBal)
19,656,766 shares (cost $130,903,281) ...................................... $ 152,339,934
American Century VP - American Century VP Capital Appreciation (ACVPCapAp)
38,590,674 shares (cost $417,440,737) ...................................... 372,785,914
American Century VP - American Century VP International (ACVPInt)
25,737,473 shares (cost $156,907,608) ...................................... 176,301,687
American Century VP - American Century VP Value (ACVPValue)
4,971,378 shares (cost $28,511,965) ........................................ 30,971,685
American VI Series - Growth Fund (AVISGro)
556,455 shares (cost $17,586,835) .......................................... 24,817,902
American VI Series - High-Yield Bond Fund (AVISHiYld)
192,276 shares (cost $2,672,808) ........................................... 2,805,309
American VI Series - U.S. Government/AAA-Rated Securities Fund (AVISGvt)
505,979 shares (cost $5,795,132) ........................................... 5,484,809
The Dreyfus Socially Responsible Growth Fund, Inc. (DrySRGro)
5,556,995 shares (cost $117,313,247) ....................................... 129,866,962
Dreyfus Stock Index Fund (DryStkIx)
34,720,834 shares (cost $705,152,335) ...................................... 841,285,800
Dreyfus VIF - Growth and Income Portfolio (DryGroInc)
1,437,184 shares (cost $28,665,452) ........................................ 30,108,998
Fidelity VIP - Equity-Income Portfolio (FidVIPEI)
103,197,938 shares (cost $1,813,471,340) ................................... 2,276,546,502
Fidelity VIP - Growth Portfolio (FidVIPGr)
54,174,691 shares (cost $1,534,942,995) .................................... 1,852,774,428
Fidelity VIP - High Income Portfolio (FidVIPHI)
56,723,719 shares (cost $673,944,926) ...................................... 705,075,822
Fidelity VIP - Overseas Portfolio (FidVIPOv)
32,890,078 shares (cost $567,353,794) ...................................... 659,117,168
Fidelity VIP-II - Asset Manager Portfolio (FidVIPAM)
60,798,912 shares (cost $887,542,907) ...................................... 1,009,261,935
Fidelity VIP-II - Contrafund Portfolio (FidVIPCon)
39,693,409 shares (cost $608,947,145) ...................................... 711,702,819
Nationwide SAT - Capital Appreciation Fund (NSATCapAp)
12,704,122 shares (cost $207,320,362) ...................................... 248,492,617
Nationwide SAT - Government Bond Fund (NSATGvtBd)
23,852,905 shares (cost $259,504,241) ...................................... 262,381,950
Nationwide SAT - Money Market Fund (NSATMyMkt)
853,058,593 shares (cost $853,058,593) ..................................... 853,058,593
</TABLE>
4
<PAGE> 4
<TABLE>
<CAPTION>
<S> <C>
Nationwide SAT - Small Company Fund (NSATSmCo)
13,956,382 shares (cost $190,729,013) ...................................... 211,578,745
Nationwide SAT - Total Return Fund (NSATTotRe)
53,228,755 shares (cost $633,491,957) ...................................... 836,223,742
Neuberger & Berman - Growth Portfolio (NBAMTGro)
15,882,944 shares (cost $403,660,516) ...................................... 440,592,855
Neuberger & Berman - Limited Maturity Bond Portfolio (NBAMTLMat)
14,334,477 shares (cost $199,395,493) ...................................... 195,235,575
Neuberger & Berman - Partners Portfolio (NBAMTPart)
31,667,762 shares (cost $512,043,115) ...................................... 575,403,239
Oppenheimer - Bond Fund (OppBdFd)
20,438,411 shares (cost $234,669,724) ...................................... 236,063,651
Oppenheimer - Global Securities Fund (OppGlSec)
21,311,579 shares (cost $351,498,127) ...................................... 432,625,054
Oppenheimer - Multiple Strategies Fund (OppMult)
17,929,612 shares (cost $254,365,076) ...................................... 289,204,648
Strong Special Fund II, Inc. (StSpec2)
34,800,123 shares (cost $580,707,328) ...................................... 668,162,360
Strong VIF - Strong Discovery Fund II (StDisc2)
16,802,330 shares (cost $193,854,387) ...................................... 189,194,239
Strong VIF - Strong International Stock Fund II (StIntStk2)
6,632,110 shares (cost $74,564,293) ........................................ 77,662,008
Van Eck - Worldwide Bond Fund (VEWrldBd)
9,199,539 shares (cost $101,518,180) ....................................... 97,883,091
Van Eck - Worldwide Emerging Markets Fund (VEWrldEMkt)
7,913,490 shares (cost $109,913,438) ....................................... 120,997,258
Van Eck - Worldwide Hard Assets Fund (VEWrldHAs)
9,006,807 shares (cost $144,918,421) ....................................... 143,568,507
Van Kampen American Capital LIT - Real Estate Securities Fund (VKACRESec)
13,211,167 shares (cost $186,841,095) ...................................... 207,018,988
Warburg Pincus - International Equity Portfolio (WPIntEq)
25,886,048 shares (cost $299,353,901) ...................................... 341,695,833
Warburg Pincus - Post Venture Capital Portfolio (WPPVenCap)
1,937,486 shares (cost $18,684,696) ........................................ 19,549,233
Warburg Pincus - Small Company Growth Portfolio (WPSmCoGr)
20,898,317 shares (cost $289,581,718) ...................................... 305,533,393
--------------
Total investments ....................................................... 15,733,373,253
Accounts receivable .............................................................. 13,474,226
--------------
Total assets ............................................................ 15,746,847,479
ACCOUNTS PAYABLE .................................................................... 709,057
--------------
CONTRACT OWNERS' EQUITY (NOTE 3) ....................................................$15,746,138,422
</TABLE>
See accompanying notes to financial statements.
================================================================================
5
<PAGE> 5
<TABLE>
<CAPTION>
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
TOTAL ACVPBal
----------------------------------- ------------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 223,385,318 161,149,647 1,574,816 1,305,655
Mortality, expense and administration
charges (note 2) ............................. (93,588,302) (66,340,140) (933,766) (671,968)
--------------- --------------- --------------- ---------------
Net investment activity ...................... 129,797,016 94,809,507 641,050 633,687
--------------- --------------- --------------- ---------------
Proceeds from mutual fund shares sold .......... 2,927,284,709 1,967,876,246 4,913,164 4,050,730
Cost of mutual fund shares sold ................ (2,736,782,976) (1,758,291,868) (3,816,621) (3,239,418)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments .......... 190,501,733 209,584,378 1,096,543 811,312
Change in unrealized gain (loss) on investments 694,245,135 (130,563,043) 3,442,109 203,925
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 884,746,868 79,021,335 4,538,652 1,015,237
--------------- --------------- --------------- ---------------
Reinvested capital gains ....................... 487,732,532 334,756,520 6,097,662 2,876,129
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 1,502,276,416 508,587,362 11,277,364 4,525,053
--------------- --------------- --------------- ---------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 1,897,466,276 1,972,163,955 14,288,620 22,874,044
Redemptions .................................... (569,502,117) (281,918,535) (4,839,111) (2,325,520)
Annuity benefits ............................... (473,681) (358,015) (1,159) (8,445)
Annual contract maintenance charge (note 2) .... (3,820,475) (3,122,452) (36,549) (29,705)
Contingent deferred sales charges (note 2) ..... (9,118,478) (4,582,242) (86,275) (53,256)
Adjustments to maintain reserves ............... (38,674) 421,277 (242) 8,592
--------------- --------------- --------------- ---------------
Net equity transactions .................... 1,314,512,851 1,682,603,988 9,325,284 20,465,710
--------------- --------------- --------------- ---------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 2,816,789,267 2,191,191,350 20,602,648 24,990,763
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 12,929,349,155 8,834,896,021 131,737,211 89,344,738
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... $15,746,138,422 11,026,087,371 152,339,859 114,335,501
=============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
ACVPCapAp ACVPint
----------------------------------- ------------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... -- -- 1,256,182 1,109,222
Mortality, expense and administration
charges (note 2) ............................. (2,589,638) (3,344,575) (835,552) (426,591)
--------------- --------------- --------------- ---------------
Net investment activity ...................... (2,589,638) (3,344,575) 420,630 682,631
--------------- --------------- --------------- ---------------
Proceeds from mutual fund shares sold .......... 132,199,693 101,704,458 47,377,430 15,297,946
Cost of mutual fund shares sold ................ (141,315,609) (73,604,163) (40,134,895) (13,325,729)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments .......... (9,115,916) 28,100,295 7,242,535 1,972,217
Change in unrealized gain (loss) on investments (15,530,347) (77,430,972) 12,171,899 1,058,825
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... (24,646,263) (49,330,677) 19,414,434 3,031,042
--------------- --------------- --------------- ---------------
Reinvested capital gains ....................... 8,369,061 55,904,041 2,422,638 369,741
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... (18,866,840) 3,228,789 22,257,702 4,083,414
--------------- --------------- --------------- ---------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... (39,066,866) 24,014,892 68,445,683 20,175,356
Redemptions .................................... (21,003,477) (15,237,087) (3,119,802) (988,276)
Annuity benefits ............................... (24,369) (24,291) (321) --
Annual contract maintenance charge (note 2) .... (188,160) (225,131) (23,109) (12,801)
Contingent deferred sales charges (note 2) ..... (367,323) (270,869) (52,622) (14,519)
Adjustments to maintain reserves ............... (1,609) 2,922 2,321 3,650
--------------- --------------- --------------- ---------------
Net equity transactions .................... (60,651,804) 8,260,436 65,252,150 19,163,410
--------------- --------------- --------------- ---------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (79,518,644) 11,489,225 87,509,852 23,246,824
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 452,299,206 498,147,770 88,792,296 49,115,326
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ 372,780,562 509,636,995 176,302,148 72,362,150
=============== =============== =============== ===============
</TABLE>
6
<PAGE> 6
<TABLE>
<CAPTION>
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
ACVPValue AVISGro
----------------------------------- ------------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... $ 77,961 -- 90,226 82,869
Mortality, expense and administration
charges (note 2) ............................. (117,773) -- (154,220) (154,644)
--------------- --------------- --------------- ---------------
Net investment activity ...................... (39,812) -- (63,994) (71,775)
--------------- --------------- --------------- ---------------
Proceeds from mutual fund shares sold .......... 4,852,523 -- 2,714,208 2,002,035
Cost of mutual fund shares sold ................ (4,674,211) -- (1,384,388) (1,099,201)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments .......... 178,312 -- 1,329,820 902,834
Change in unrealized gain (loss) on investments 2,461,089 -- 1,509,000 67,377
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 2,639,401 -- 2,838,820 970,211
--------------- --------------- --------------- ---------------
Reinvested capital gains ....................... 151,154 -- -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 2,750,743 -- 2,774,826 898,436
--------------- --------------- --------------- ---------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 27,457,292 -- (234,085) (144,245)
Redemptions .................................... (303,166) -- (1,158,349) (1,372,978)
Annuity benefits ............................... -- -- (461) (430)
Annual contract maintenance charge (note 2) .... (2,374) -- (7,427) (8,378)
Contingent deferred sales charges (note 2) ..... (3,189) -- (3,930) (8,556)
Adjustments to maintain reserves ............... (235) -- 48 415
--------------- --------------- --------------- ---------------
Net equity transactions .................... 27,148,328 -- (1,404,204) (1,534,172)
--------------- --------------- --------------- ---------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 29,899,071 -- 1,370,622 (635,736)
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 1,072,583 -- 23,447,300 23,585,128
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 30,971,654 -- 24,817,922 22,949,392
=============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
AVISHiYld AVISGvt
----------------------------------- ------------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... 122,873 129,959 201,119 264,674
Mortality, expense and administration
charges (note 2) ............................. (18,561) (18,714) (37,325) (53,988)
--------------- --------------- --------------- ---------------
Net investment activity ...................... 104,312 111,245 163,794 210,686
--------------- --------------- --------------- ---------------
Proceeds from mutual fund shares sold .......... 430,736 441,545 926,038 2,981,727
Cost of mutual fund shares sold ................ (384,470) (430,537) (957,512) (2,853,971)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments .......... 46,266 11,008 (31,474) 127,756
Change in unrealized gain (loss) on investments (6,478) (26,414) (31,198) (556,800)
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 39,788 (15,406) (62,672) (429,044)
--------------- --------------- --------------- ---------------
Reinvested capital gains ....................... -- -- -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 144,100 95,839 101,122 (218,358)
--------------- --------------- --------------- ---------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... (66,958) 71,714 (47,694) (325,058)
Redemptions .................................... (240,620) (219,189) (689,333) (2,552,409)
Annuity benefits ............................... (615) (576) (264) (105)
Annual contract maintenance charge (note 2) .... (1,282) (1,376) (2,871) (3,733)
Contingent deferred sales charges (note 2) ..... (512) (640) (2,142) (1,792)
Adjustments to maintain reserves ............... (9) (52) (7) (6)
--------------- --------------- --------------- ---------------
Net equity transactions .................... (309,996) (150,119) (742,311) (2,883,103)
--------------- --------------- --------------- ---------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (165,896) (54,280) (641,189) (3,101,461)
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 2,971,112 2,911,553 6,125,969 10,016,226
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ 2,805,216 2,857,273 5,484,780 6,914,765
=============== =============== =============== ===============
</TABLE>
7
<PAGE> 7
<TABLE>
<CAPTION>
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
DrySRGro DryStkix
----------------------------------- ------------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... $ -- -- 5,579,082 2,238,880
Mortality, expense and administration
charges (note 2) ............................. (719,922) (246,057) (4,208,381) (1,286,407)
--------------- --------------- --------------- ---------------
Net investment activity ...................... (719,922) (246,057) 1,370,701 952,473
--------------- --------------- --------------- ---------------
Proceeds from mutual fund shares sold .......... 41,579,219 26,487,053 55,130,925 33,584,564
Cost of mutual fund shares sold ................ (36,558,291) (22,026,005) (43,848,370) (25,565,538)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments .......... 5,020,928 4,461,048 11,282,555 8,019,026
Change in unrealized gain (loss) on investments 11,798,651 (2,317,126) 101,775,573 6,586,901
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 16,819,579 2,143,922 113,058,128 14,605,927
--------------- --------------- --------------- ---------------
Reinvested capital gains ....................... -- -- -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 16,099,657 1,897,865 114,428,829 15,558,400
--------------- --------------- --------------- ---------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 43,143,602 17,883,671 288,979,576 95,450,460
Redemptions .................................... (10,359,262) (664,484) (17,432,019) (3,701,337)
Annuity benefits ............................... (2,019) (1,197) (2,229) --
Annual contract maintenance charge (note 2) .... (32,919) (12,726) (114,666) (35,154)
Contingent deferred sales charges (note 2) ..... (302,367) (14,630) (320,808) (77,323)
Adjustments to maintain reserves ............... (13,443) 2,558 (73,761) 16,964
--------------- --------------- --------------- ---------------
Net equity transactions .................... 32,433,592 17,193,192 271,036,093 91,653,610
--------------- --------------- --------------- ---------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 48,533,249 19,091,057 385,464,922 107,212,010
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 81,334,310 22,223,853 455,762,151 139,020,032
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 129,867,559 41,314,910 841,227,073 246,232,042
=============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
DryGroinc FidVIPEI
----------------------------------- ------------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... 175,664 -- 31,564,284 2,196,188
Mortality, expense and administration
charges (note 2) ............................. (96,179) -- (13,383,929) (10,092,157)
--------------- --------------- --------------- ---------------
Net investment activity ...................... 79,485 -- 18,180,355 (7,895,969)
--------------- --------------- --------------- ---------------
Proceeds from mutual fund shares sold .......... 3,312,329 -- 45,270,329 79,293,308
Cost of mutual fund shares sold ................ (3,305,730) -- (32,259,863) (51,860,719)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments .......... 6,599 -- 13,010,466 27,432,589
Change in unrealized gain (loss) on investments 1,443,802 -- 108,525,662 (10,271,440)
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 1,450,401 -- 121,536,128 17,161,149
--------------- --------------- --------------- ---------------
Reinvested capital gains ....................... 129,850 -- 158,698,207 62,957,378
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 1,659,736 -- 298,414,690 72,222,558
--------------- --------------- --------------- ---------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 28,531,491 -- 201,683,882 214,466,508
Redemptions .................................... (281,854) -- (73,074,387) (34,635,021)
Annuity benefits ............................... -- -- (73,352) (40,416)
Annual contract maintenance charge (note 2) .... (2,367) -- (521,726) (430,142)
Contingent deferred sales charges (note 2) ..... (6,542) -- (1,029,538) (554,640)
Adjustments to maintain reserves ............... 252 -- (4,798) 59,571
--------------- --------------- --------------- ---------------
Net equity transactions .................... 28,240,980 -- 126,980,081 178,865,860
--------------- --------------- --------------- ---------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 29,900,716 -- 425,394,771 251,088,418
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 208,237 -- 1,851,157,378 1,366,872,379
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ 30,108,953 -- 2,276,552,149 1,617,960,797
=============== =============== =============== ===============
</TABLE>
8
<PAGE> 8
<TABLE>
<CAPTION>
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
FidVIPGr FidVIPHI
----------------------------------- ------------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... $ 11,151,243 3,402,849 47,561,883 33,785,879
Mortality, expense and administration
charges (note 2) ............................. (11,367,696) (9,124,630) (4,445,319) (2,903,655)
--------------- --------------- --------------- ---------------
Net investment activity ...................... (216,453) (5,721,781) 43,116,564 30,882,224
--------------- --------------- --------------- ---------------
Proceeds from mutual fund shares sold .......... 199,208,156 157,982,887 191,807,790 160,362,906
Cost of mutual fund shares sold ................ (135,496,319) (123,802,048) (191,722,158) (147,928,683)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments .......... 63,711,837 34,180,839 85,632 12,434,223
Change in unrealized gain (loss) on investments 97,848,782 10,821,380 (4,900,727) (21,887,601)
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 161,560,619 45,002,219 (4,815,095) (9,453,378)
--------------- --------------- --------------- ---------------
Reinvested capital gains ....................... 49,915,087 85,921,939 5,878,435 6,610,281
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 211,259,253 125,202,377 44,179,904 28,039,127
--------------- --------------- --------------- ---------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 51,214,900 226,277,678 30,341,481 24,047,366
Redemptions .................................... (70,538,990) (32,714,264) (23,476,643) (11,777,572)
Annuity benefits ............................... (56,174) (30,366) (13,265) (9,213)
Annual contract maintenance charge (note 2) .... (599,285) (494,364) (132,242) (106,556)
Contingent deferred sales charges (note 2) ..... (1,276,147) (564,155) (357,333) (205,126)
Adjustments to maintain reserves ............... (29,567) 105,427 2,660 7,858
--------------- --------------- --------------- ---------------
Net equity transactions .................... (21,285,263) 192,579,956 6,364,658 11,956,757
--------------- --------------- --------------- ---------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 189,973,990 317,782,333 50,544,562 39,995,884
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 1,662,797,746 1,216,373,261 654,534,143 429,282,501
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 1,852,771,736 1,534,155,594 705,078,705 469,278,385
=============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
FidVIPOv FidVIPAM
----------------------------------- ------------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... 9,616,272 6,275,770 32,069,538 30,292,892
Mortality, expense and administration
charges (note 2) ............................. (3,834,721) (3,603,367) (6,306,330) (5,682,963)
---------------- --------------- -------------- ---------------
Net investment activity ...................... 5,781,551 2,672,403 25,763,208 24,609,929
---------------- --------------- -------------- ---------------
Proceeds from mutual fund shares sold .......... 117,549,833 105,603,818 31,706,648 29,078,172
Cost of mutual fund shares sold ................ (99,968,189) (98,710,350) (26,238,261) (24,218,936)
---------------- --------------- -------------- ---------------
Realized gain (loss) on investments .......... 17,581,644 6,893,468 5,468,387 4,859,236
Change in unrealized gain (loss) on investments 26,604,470 18,611,912 (15,504,891) (11,726,205)
---------------- --------------- -------------- ---------------
Net gain (loss) on investments ............... 44,186,114 25,505,380 (10,036,504) (6,866,969)
---------------- --------------- -------------- ---------------
Reinvested capital gains ....................... 38,173,687 6,903,347 80,445,621 24,978,350
---------------- --------------- -------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 88,141,352 35,081,130 96,172,325 42,721,310
---------------- --------------- -------------- ---------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 30,149,911 37,104,405 26,385,727 17,908,236
Redemptions .................................... (21,217,928) (13,420,695) (38,642,863) (22,320,219)
Annuity benefits ............................... (42,796) (27,200) (60,239) (48,559)
Annual contract maintenance charge (note 2) .... (188,968) (195,483) (344,888) (365,122)
Contingent deferred sales charges (note 2) ..... (330,066) (254,259) (651,326) (469,913)
Adjustments to maintain reserves ............... 13,658 (321) 7,336 407
---------------- --------------- -------------- ---------------
Net equity transactions .................... 8,383,811 23,206,447 (13,306,253) (5,295,170)
---------------- --------------- -------------- ---------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 96,525,163 58,287,577 82,866,072 37,426,140
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 562,589,941 513,223,366 926,404,131 838,984,448
---------------- --------------- -------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ 659,115,104 571,510,943 1,009,270,203 876,410,588
================ =============== ============== ===============
</TABLE>
9
<PAGE> 9
<TABLE>
<CAPTION>
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
FIDVIPCon NSATCapAp
----------------------------------- ------------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... $ 4,746,178 -- 1,108,257 525,113
Mortality, expense and administration
charges (note 2) ............................. (4,077,810) (1,432,101) (1,224,322) (391,309
--------------- --------------- --------------- ---------------
Net investment activity ...................... 668,368 (1,432,101) (116,065) 133,804
--------------- --------------- --------------- ---------------
Proceeds from mutual fund shares sold .......... 43,206,313 9,830,502 15,772,488 50,440,875
Cost of mutual fund shares sold ................ (36,032,570) (8,806,944) (13,268,716) (43,955,983
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments .......... 7,173,743 1,023,558 2,503,772 6,484,892
Change in unrealized gain (loss) on investments 45,991,237 14,192,217 32,543,809 (2,752,086
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 53,164,980 15,215,775 35,047,581 3,732,806
--------------- --------------- --------------- ---------------
Reinvested capital gains ....................... 12,543,472 1,453,926 -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 66,376,820 15,237,600 34,931,516 3,866,610
--------------- --------------- --------------- ---------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 131,977,692 160,432,040 80,001,838 26,223,946
Redemptions .................................... (13,948,060) (3,397,095) (5,391,723) (1,441,963
Annuity benefits ............................... (4,531) (293) (87) --
Annual contract maintenance charge (note 2) .... (124,221) (31,579) (42,312) (19,780
Contingent deferred sales charges (note 2) ..... (255,758) (54,520) (95,798) (24,434
Adjustments to maintain reserves ............... 14,818 17,145 2,666 625
--------------- --------------- --------------- ---------------
Net equity transactions .................... 117,659,940 156,965,698 74,474,584 24,738,394
--------------- --------------- --------------- ---------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 184,036,760 172,203,298 109,406,100 28,605,004
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 527,666,759 120,657,258 139,089,426 32,962,614
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 711,703,519 292,860,556 248,495,526 61,567,618
=============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
NSATGvtBd NSATMyMkt
----------------------------------- ------------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... 8,551,828 8,024,506 22,458,970 17,435,703
Mortality, expense and administration
charges (note 2) ............................. (1,801,584) (1,691,784) (5,986,528) (4,717,463)
---------------- --------------- --------------- ---------------
Net investment activity ...................... 6,750,244 6,332,722 16,472,442 12,718,240
---------------- --------------- --------------- ---------------
Proceeds from mutual fund shares sold .......... 52,615,122 21,980,890 1,119,473,887 625,249,258
Cost of mutual fund shares sold ................ (53,243,983) (22,041,026) (625,249,258)
---------------- --------------- --------------- ---------------
Realized gain (loss) on investments .......... (628,861) (60,136) -- --
Change in unrealized gain (loss) on investments (516,340) (12,192,160) -- --
---------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... (1,145,201) (12,252,296) -- --
---------------- --------------- --------------- ---------------
Reinvested capital gains ....................... -- -- -- --
---------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 5,605,043 (5,919,574) 16,472,442 12,718,240
---------------- --------------- --------------- ---------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... (6,068,586) 17,251,459 129,217,840 239,312,693
Redemptions .................................... (18,559,417) (10,844,050) (87,156,157) (47,176,088)
Annuity benefits ............................... (11,602) (13,445) (15,130) (9,814)
Annual contract maintenance charge (note 2) .... (90,912) (96,233) (188,994) (161,929)
Contingent deferred sales charges (note 2) ..... (284,764) (164,175) (1,269,769) (610,506)
Adjustments to maintain reserves ............... 1,103 730 (8,757) 62,008
---------------- --------------- --------------- ---------------
Net equity transactions .................... (25,014,178) 6,134,286 40,579,033 191,416,364
---------------- --------------- --------------- ---------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (19,409,135) 214,712 57,051,475 204,134,604
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 281,791,284 259,470,672 809,469,728 643,661,377
---------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ 262,382,149 259,685,384 866,521,203 847,795,981
================ =============== =============== ===============
</TABLE>
10
<PAGE> 10
3
<TABLE>
<CAPTION>
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
NSATSmCo NSATTotRe
----------------------------------- ------------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... $ -- 99,640 6,251,397 4,212,498
Mortality, expense and administration
charges (note 2) ............................. (1,140,197) (277,521) (4,532,440) (2,600,330)
--------------- --------------- --------------- ---------------
Net investment activity ...................... (1,140,197) (177,881) 1,718,957 1,612,168
--------------- --------------- --------------- ---------------
Proceeds from mutual fund shares sold .......... 42,336,598 26,518,112 19,512,964 12,997,046
Cost of mutual fund shares sold ................ (40,149,161) (22,910,256) (13,323,108) (9,838,039)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments .......... 2,187,437 3,607,856 6,189,856 3,159,007
Change in unrealized gain (loss) on investments 15,538,135 1,971,750 112,904,783 23,844,213
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 17,725,572 5,579,606 119,094,639 27,003,220
--------------- --------------- --------------- ---------------
Reinvested capital gains ....................... -- -- -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 16,585,375 5,401,725 120,813,596 28,615,388
--------------- --------------- --------------- ---------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 42,011,283 58,654,064 154,864,975 75,037,014
Redemptions .................................... (5,415,948) (1,125,166) (21,834,111) (11,951,855)
Annuity benefits ............................... (183) -- (67,682) (73,615)
Annual contract maintenance charge (note 2) .... (34,592) (6,425) (195,808) (132,761)
Contingent deferred sales charges (note 2) ..... (87,556) (22,409) (319,769) (145,098)
Adjustments to maintain reserves ............... 5,221 705 10,036 19,015
--------------- --------------- --------------- ---------------
Net equity transactions .................... 36,478,225 57,500,769 132,457,641 62,752,700
--------------- --------------- --------------- ---------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 53,063,600 62,902,494 253,271,237 91,368,088
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 158,512,836 12,582,993 582,959,358 347,276,095
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 211,576,436 75,485,487 836,230,595 438,644,183
=============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
NBAMTGro NBAMTLMat
----------------------------------- ------------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... -- 140,538 11,734,100 16,264,359
Mortality, expense and administration
charges (note 2) ............................. (2,672,322) (2,587,209) (1,330,157) (1,295,401)
---------------- --------------- --------------- ---------------
Net investment activity ...................... (2,672,322) (2,446,671) 10,403,943 14,968,958
---------------- --------------- --------------- ---------------
Proceeds from mutual fund shares sold .......... 89,442,785 83,660,381 31,542,591 19,917,536
Cost of mutual fund shares sold ................ (75,082,965) (75,233,279) (32,221,162) (20,777,909)
---------------- --------------- --------------- ---------------
Realized gain (loss) on investments .......... 14,359,820 8,427,102 (678,571) (860,373)
Change in unrealized gain (loss) on investments 16,708,565 (20,716,872) (5,260,364) (14,804,703)
---------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 31,068,385 (12,289,770) (5,938,935) (15,665,076)
---------------- --------------- --------------- ---------------
Reinvested capital gains ....................... 32,577,604 32,885,958 -- --
---------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 60,973,667 18,149,517 4,465,008 (696,118)
---------------- --------------- --------------- ---------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 23,848,325 27,327,026 (4,154,150) 17,370,435
Redemptions .................................... (19,574,464) (9,358,879) (8,683,033) (5,178,006)
Annuity benefits ............................... (23,739) (27,032) (7,556) (7,129)
Annual contract maintenance charge (note 2) .... (148,344) (146,060) (37,088) (37,905)
Contingent deferred sales charges (note 2) ..... (264,218) (145,860) (119,730) (77,185)
Adjustments to maintain reserves ............... 1,595 (18,453) 251 2,101
---------------- --------------- --------------- ---------------
Net equity transactions .................... 3,839,155 17,630,742 (13,001,306) 12,072,311
---------------- --------------- --------------- ---------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 64,812,822 35,780,259 (8,536,298) 11,376,193
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 375,781,424 364,378,101 203,772,070 187,206,866
---------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ 440,594,246 400,158,360 195,235,772 198,583,059
================ =============== =============== ===============
</TABLE>
11
<PAGE> 11
<TABLE>
<CAPTION>
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
NBAMTPart OppBdFd
----------------------------------- ------------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... $ 1,231,708 353,111 7,115,979 5,318,120
Mortality, expense and administration
charges (note 2) ............................. (3,069,812) (1,007,294) (1,478,263) (1,089,426)
--------------- --------------- --------------- ---------------
Net investment activity ...................... (1,838,104) (654,183) 5,637,716 4,228,694
--------------- --------------- --------------- ---------------
Proceeds from mutual fund shares sold .......... 122,827,255 24,559,191 12,056,637 8,430,173
Cost of mutual fund shares sold ................ (100,778,770) (19,115,258) (12,246,361) (8,088,019)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments .......... 22,048,485 5,443,933 (189,724) 342,154
Change in unrealized gain (loss) on investments 26,328,169 4,253,467 (1,266,858) (6,156,577)
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 48,376,654 9,697,400 (1,456,582) (5,814,423)
--------------- --------------- --------------- ---------------
Reinvested capital gains ....................... 18,968,301 4,413,881 738,909 96,121
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 65,506,851 13,457,098 4,920,043 (1,489,608)
--------------- --------------- --------------- ---------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 169,968,269 95,791,594 24,068,604 31,151,684
Redemptions .................................... (13,810,788) (3,684,812) (7,799,554) (5,193,084)
Annuity benefits ............................... (128) -- (39,043) (13,777)
Annual contract maintenance charge (note 2) .... (76,574) (28,739) (49,229) (42,772)
Contingent deferred sales charges (note 2) ..... (187,351) (61,306) (141,210) (84,627)
Adjustments to maintain reserves ............... (6,922) 11,127 (4,125) 1,295
--------------- --------------- --------------- ---------------
Net equity transactions .................... 155,886,506 92,027,864 16,035,443 25,818,719
--------------- --------------- --------------- ---------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 221,393,357 105,484,962 20,955,486 24,329,111
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 354,011,224 96,601,560 215,102,822 151,604,388
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 575,404,581 202,086,522 236,058,308 175,933,499
=============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
OppGISec OppMult
----------------------------------- ------------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... 4,353,191 -- 5,025,792 5,092,688
Mortality, expense and administration
charges (note 2) ............................. (2,462,151) (1,512,973) (1,722,904) (1,218,197)
---------------- --------------- --------------- ---------------
Net investment activity ...................... 1,891,040 (1,512,973) 3,302,888 3,874,491
---------------- --------------- --------------- ---------------
Proceeds from mutual fund shares sold .......... 35,655,404 10,032,140 3,247,753 4,583,840
Cost of mutual fund shares sold ................ (31,902,449) (9,963,706) (2,562,485) (3,749,688)
---------------- --------------- --------------- ---------------
Realized gain (loss) on investments .......... 3,752,955 68,434 685,268 834,152
Change in unrealized gain (loss) on investments 47,080,839 17,402,059 8,254,080 690,253
---------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 50,833,794 17,470,493 8,939,348 1,524,405
---------------- --------------- --------------- ---------------
Reinvested capital gains ....................... -- -- 9,159,579 4,206,935
---------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 52,724,834 15,957,520 21,401,815 9,605,831
---------------- --------------- --------------- ---------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 83,507,876 44,413,984 40,618,471 21,350,577
Redemptions .................................... (10,613,688) (5,133,486) (9,990,640) (3,739,584)
Annuity benefits ............................... (2,509) (1,124) (2,594) (1,739)
Annual contract maintenance charge (note 2) .... (93,281) (75,763) (69,326) (59,774)
Contingent deferred sales charges (note 2) ..... (183,471) (109,863) (142,556) (64,471)
Adjustments to maintain reserves ............... 38,864 7,195 1,653 4,757
---------------- --------------- --------------- ---------------
Net equity transactions .................... 72,653,791 39,100,943 30,415,008 17,489,766
---------------- --------------- --------------- ---------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 125,378,625 55,058,463 51,816,823 27,095,597
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 306,611,895 196,664,259 237,388,771 168,448,128
---------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ 431,990,520 251,722,722 289,205,594 195,543,725
================ =============== =============== ===============
</TABLE>
12
<PAGE> 12
<TABLE>
<CAPTION>
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
StSpec2 StDisc2
----------------------------------- ------------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... $ 1,753,718 2,240,907 -- 15,855,376
Mortality, expense and administration
charges (note 2) ............................. (4,088,705) (3,315,014) (1,221,397) (1,464,909)
--------------- --------------- --------------- ---------------
Net investment activity ...................... (2,334,987) (1,074,107) (1,221,397) 14,390,467
--------------- --------------- --------------- ---------------
Proceeds from mutual fund shares sold .......... 81,547,853 42,959,028 59,182,039 62,566,083
Cost of mutual fund shares sold ................ (63,267,112) (35,346,116) (69,473,719) (53,504,159)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments .......... 18,280,741 7,612,912 (10,291,680) 9,061,924
Change in unrealized gain (loss) on investments (12,478,431) 4,468,514 18,060,432 (55,267,461)
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 5,802,310 12,081,426 7,768,752 (46,205,537)
--------------- --------------- --------------- ---------------
Reinvested capital gains ....................... 57,079,292 18,522,999 -- 25,127,953
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 60,546,615 29,530,318 6,547,355 (6,687,117)
--------------- --------------- --------------- ---------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 23,860,286 74,280,928 (20,351,910) 45,162
Redemptions .................................... (18,178,591) (10,045,271) (5,553,617) (4,585,171)
Annuity benefits ............................... (6,790) (10,606) (4,178) (2,597)
Annual contract maintenance charge (note 2) .... (179,768) (160,278) (57,926) (64,142)
Contingent deferred sales charges (note 2) ..... (298,603) (174,981) (106,823) (78,607)
Adjustments to maintain reserves ............... (16,937) 8,709 1,577 2,809
--------------- --------------- --------------- ---------------
Net equity transactions .................... 5,179,597 63,898,501 (26,072,877) (4,682,546)
--------------- --------------- --------------- ---------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 65,726,212 93,428,819 (19,525,522) (11,369,663)
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 602,429,220 434,406,724 208,719,472 228,524,518
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 668,155,432 527,835,543 189,193,950 217,154,855
=============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
StintStk2 VeWrldBd
----------------------------------- ------------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... 1,173,377 96,085 3,428,399 2,839,207
Mortality, expense and administration
charges (note 2) ............................. (488,744) (154,925) (670,033) (681,316)
---------------- --------------- --------------- ---------------
Net investment activity ...................... 684,633 (58,840) 2,758,366 2,157,891
---------------- --------------- --------------- ---------------
Proceeds from mutual fund shares sold .......... 19,502,270 11,173,385 15,455,271 13,960,874
Cost of mutual fund shares sold ................ (19,263,660) (10,677,368) (16,206,221) (13,041,105)
---------------- --------------- --------------- ---------------
Realized gain (loss) on investments .......... 238,610 496,017 (750,950) 919,769
Change in unrealized gain (loss) on investments 2,908,648 2,019,840 (3,712,901) (5,999,323)
---------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 3,147,258 2,515,857 (4,463,851) (5,079,554)
---------------- --------------- --------------- ---------------
Reinvested capital gains ....................... 1,762,973 -- -- --
---------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 5,594,864 2,457,017 (1,705,485) (2,921,663)
---------------- --------------- --------------- ---------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 4,703,499 41,620,047 (5,395,316) 1,659,231
Redemptions .................................... (2,418,262) (518,543) (4,176,191) (4,203,676)
Annuity benefits ............................... (301) -- (5,583) (5,053)
Annual contract maintenance charge (note 2) .... (13,198) (3,888) (25,506) (29,814)
Contingent deferred sales charges (note 2) ..... (39,801) (14,060) (56,222) (53,167)
Adjustments to maintain reserves ............... 6,023 2,449 2,837 4,077
---------------- --------------- --------------- ---------------
Net equity transactions .................... 2,237,960 41,086,005 (9,655,981) (2,628,402)
---------------- --------------- --------------- ---------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 7,832,824 43,543,022 (11,361,466) (5,550,065)
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 69,828,900 2,495,446 109,247,607 106,117,099
---------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ 77,661,724 46,038,468 97,886,141 100,567,034
================ =============== =============== ===============
</TABLE>
13
<PAGE> 13
<TABLE>
<CAPTION>
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
VEWrldEMkt VEWrldHAs
----------------------------------- ------------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... $ 154,979 -- 2,942,339 1,557,689
Mortality, expense and administration
charges (note 2) ............................. (493,607) -- (981,364) (1,020,614)
--------------- --------------- --------------- ---------------
Net investment activity ...................... (338,628) -- 1,960,975 537,075
--------------- --------------- --------------- ---------------
Proceeds from mutual fund shares sold .......... 19,396,054 -- 97,493,184 127,495,454
Cost of mutual fund shares sold ................ (17,470,513) -- (98,910,886) (108,892,907)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments .......... 1,925,541 -- (1,417,702) 18,602,547
Change in unrealized gain (loss) on investments 10,987,529 -- (6,576,640) (9,520,051)
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 12,913,070 -- (7,994,342) 9,082,496
--------------- --------------- --------------- ---------------
Reinvested capital gains ....................... -- -- 3,986,394 1,527,541
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 12,574,442 -- (2,046,973) 11,147,112
--------------- --------------- --------------- ---------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 99,564,353 -- (540,578) 10,603,463
Redemptions .................................... (3,263,398) -- (5,534,083) (4,053,297)
Annuity benefits ............................... -- -- (2,331) (952)
Annual contract maintenance charge (note 2) .... (14,374) -- (42,800) (47,277)
Contingent deferred sales charges (note 2) ..... (40,595) -- (88,770) (70,806)
Adjustments to maintain reserves ............... (2,314) -- (10,541) 47,425
--------------- --------------- --------------- ---------------
Net equity transactions .................... 96,243,672 -- (6,219,103) 6,478,556
--------------- --------------- --------------- ---------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 108,818,114 -- (8,266,076) 17,625,668
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 12,180,233 -- 151,820,758 119,249,014
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 120,998,347 -- 143,554,682 136,874,682
=============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
VKACRESec WPIntEq
----------------------------------- ------------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... 313,963 9,270 -- --
Mortality, expense and administration
charges (note 2) ............................. (1,239,734) (96,092) (1,975,048) (1,096,502)
--------------- --------------- --------------- ---------------
Net investment activity ...................... (925,771) (86,822) (1,975,048) (1,096,502)
--------------- --------------- --------------- ---------------
Proceeds from mutual fund shares sold .......... 47,737,092 4,519,383 41,864,545 37,101,591
Cost of mutual fund shares sold ................ (37,756,421) (4,217,262) (38,836,403) (34,162,277)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments .......... 9,980,671 302,121 3,028,142 2,939,314
Change in unrealized gain (loss) on investments 432,243 1,135,896 39,653,878 9,701,470
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 10,412,914 1,438,017 42,682,020 12,640,784
--------------- --------------- --------------- ---------------
Reinvested capital gains ....................... 634,606 -- -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 10,121,749 1,351,195 40,706,972 11,544,282
--------------- --------------- --------------- ---------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 51,377,060 18,894,609 43,683,156 164,600,916
Redemptions .................................... (4,636,004) (233,264) (7,393,064) (3,751,124)
Annuity benefits ............................... -- -- (2,028) (20)
Annual contract maintenance charge (note 2) .... (28,759) (1,943) (51,338) (27,108)
Contingent deferred sales charges (note 2) ..... (62,560) (4,633) (120,964) (60,752)
Adjustments to maintain reserves ............... 14,152 185 7,716 21,922
--------------- --------------- --------------- ---------------
Net equity transactions .................... 46,663,889 18,654,954 36,123,478 160,783,834
--------------- --------------- --------------- ---------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 56,785,638 20,006,149 76,830,450 172,328,116
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 150,233,923 7,239,545 264,866,519 62,566,726
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ 207,019,561 27,245,694 341,696,969 234,894,842
=============== =============== =============== ===============
</TABLE>
14
<PAGE> 14
<TABLE>
<CAPTION>
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
WPPVenCap WPSmCoGr
----------------------------------- ------------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... $ -- -- -- --
Mortality, expense and administration
charges (note 2) ............................. (113,166) -- (1,768,702) (1,080,044)
--------------- --------------- --------------- ---------------
Net investment activity ...................... (113,166) -- (1,768,702) (1,080,044)
--------------- --------------- --------------- ---------------
Proceeds from mutual fund shares sold .......... 11,234,339 -- 67,203,244 51,029,355
Cost of mutual fund shares sold ................ (11,505,714) -- (71,741,823) (40,056,011)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments .......... (271,375) -- (4,538,579) 10,973,344
Change in unrealized gain (loss) on investments 713,051 -- 14,343,875 4,032,749
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 441,676 -- 9,805,296 15,006,093
--------------- --------------- --------------- ---------------
Reinvested capital gains ....................... -- -- -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 328,510 -- 8,036,594 13,926,049
--------------- --------------- --------------- ---------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 11,060,862 -- 48,435,865 146,338,056
Redemptions .................................... (1,270,233) -- (7,923,287) (4,375,070)
Annuity benefits ............................... -- -- (423) (21)
Annual contract maintenance charge (note 2) .... (2,658) -- (54,634) (27,611)
Contingent deferred sales charges (note 2) ..... (16,644) -- (145,426) (71,104)
Adjustments to maintain reserves ............... 167 -- (361) 17,466
--------------- --------------- --------------- ---------------
Net equity transactions .................... 9,771,494 -- 40,311,734 141,881,716
--------------- --------------- --------------- ---------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 10,100,004 -- 48,348,328 155,807,765
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 9,448,612 -- 257,182,600 93,682,057
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 19,548,616 -- 305,530,928 249,489,822
=============== =============== =============== ===============
</TABLE>
See accompanying notes to financial statements.
15
<PAGE> 15
NATIONWIDE VARIABLE ACCOUNT-II
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997 AND 1996
(UNAUDITED)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Organization and Nature of Operations
The Nationwide Variable Account-II (the Account) was established
pursuant to a resolution of the Board of Directors of Nationwide Life
Insurance Company (the Company) on October 7, 1981. The Account has
been registered as a unit investment trust under the Investment Company
Act of 1940.
The Company offers tax qualified and non-tax qualified Individual
Deferred Variable Annuity Contracts, and Individual Modified Single
Premium Deferred Variable Annuity Contracts through the Account. The
primary distribution for the contracts is through the brokerage
community; however, other distributors are utilized.
(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 expenses.
With certain exceptions, contract owners in either the accumulation or
the payout phase may invest in the following:
Portfolios of the American Century Variable Portfolios, Inc.
(American Century VP)
(formerly TCI Portfolios, Inc.);
American Century VP - American Century VP Balanced
(ACVPBal) (formerly TCI Portfolios - TCI Balanced)
American Century VP - American Century VP Capital
Appreciation (ACVPCapAp) (formerly TCI Portfolios - TCI
Growth)
American Century VP - American Century VP International
(ACVPInt) (formerly TCI Portfolios - TCI International)
American Century VP - American Century VP Value (ACVPValue)
(formerly TCI Portfolios - TCI Value)
Funds of the American Variable Insurance Series (American VI
Series) (available only for contracts issued on or after May 1,
1987 and before September 1, 1989);
American VISeries - Growth Fund (AVISGro)
American VISeries - High-Yield Bond Fund (AVISHiYld)
American VISeries - U.S. Government/AAA-Rated Securities Fund
(AVISGvt)
The Dreyfus Socially Responsible Growth Fund, Inc. (DrySRGro)
Dreyfus Stock Index Fund (DryStkIx)
Portfolio of the Dreyfus Variable Investment Fund (Dreyfus VIF);
Dreyfus VIF - Growth andIncome Portfolio (DryGroInc)
Portfolios of the Fidelity Variable Insurance Products Fund
(Fidelity VIP);
Fidelity VIP - Equity-Income Portfolio (FidVIPEI)
Fidelity VIP - Growth Portfolio (FidVIPGr)
Fidelity VIP - High Income Portfolio (FidVIPHI)
Fidelity VIP - Overseas Portfolio (FidVIPOv)
Portfolios of the Fidelity Variable Insurance Products Fund II
(Fidelity VIP-II);
Fidelity VIP-II - Asset Manager Portfolio (FidVIPAM)
Fidelity VIP-II - Contrafund Portfolio (FidVIPCon)
16
<PAGE> 16
Funds of the Nationwide Separate Account Trust (Nationwide SAT)
(managed for a fee by an affiliated investment advisor);
Nationwide SAT - Capital Appreciation Fund (NSATCapAp)
Nationwide SAT - Government Bond Fund (NSATGvtBd)
Nationwide SAT - Money Market Fund (NSATMyMkt)
Nationwide SAT - Small Company Fund (NSATSmCo)
Nationwide SAT - Total Return Fund (NSATTotRe)
Portfolios of the Neuberger & Berman Advisers Management Trust
(Neuberger & Berman);
Neuberger & Berman - Growth Portfolio (NBAMTGro)
Neuberger & Berman - Limited Maturity Bond Portfolio
(NBAMTLMat)
Neuberger & Berman - Partners Portfolio (NBAMTPart)
Funds of the Oppenheimer Variable Account Funds (Oppenheimer);
Oppenheimer - Bond Fund (OppBdFd)
Oppenheimer - Global Securities Fund (OppGlSec)
Oppenheimer - Multiple Strategies Fund (OppMult)
Strong Special Fund II, Inc. (StSpec2)
Funds of the Strong Variable Insurance Funds, Inc. (Strong VIF);
Strong VIF - Strong Discovery Fund II (StDisc2) Strong VIF -
Strong International Stock Fund II (StIntStk2)
Funds of the Van Eck Worldwide Insurance Trust (Van Eck);
Van Eck - Worldwide Bond Fund (VEWrldBd)
Van Eck - Worldwide Emerging Markets Fund (VEWrldEMkt)
Van Eck - Worldwide Hard Assets Fund (VEWrldHAs)
(formerly Van Eck - Gold and Natural Resources Fund)
Fund of the Van Kampen American Capital Life Investment Trust
(Van Kampen American Capital LIT);
Van Kampen American Capital LIT - Real Estate Securities Fund
(VKACRESec)
Portfolios of the Warburg Pincus Trust (Warburg Pincus);
Warburg Pincus - International Equity Portfolio (WPIntEq)
Warburg Pincus - Post Venture Capital Portfolio (WPPVenCap)
Warburg Pincus - Small Company Growth Portfolio (WPSmCoGr)
At June 30, 1997, 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 June 30, 1997. 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.
17
<PAGE> 17
(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 1996 amounts have been reclassified to conform with the current
year presentation.
(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 December 15, 1988, 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
December 15, 1988, 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) for The
BEST OF AMERICA(R) contracts, an annual contract maintenance charge of $30,
with certain exceptions, which is satisfied by surrendering units; and (b)
for The BEST OF AMERICA(R) contracts issued prior to December 15, 1988, 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
The BEST OF AMERICA(R) contracts issued on or after December 15, 1988, 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; for The BEST OF AMERICA(R)
America's Vision Annuity(SM) contracts, 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 0.15%,
respectively; and for The BEST OF AMERICA(R) Nationwide Insurance
Enterprise Annuity contracts, a mortality risk charge assessed through the
daily unit value calculation equal to an annual rate of 0.80%.
18
<PAGE> 18
(3) COMPONENTS OF CONTRACT OWNERS' EQUITY
The following is a summary of contract owners' equity at June 30, 1997, for
each series, in both the accumulation and payout phases.
<TABLE>
<CAPTION>
Contract owners' equity represented by: UNITS UNIT VALUE
--------- -----------
Contracts in accumulation phase:
The BEST OF AMERICA(R) contracts:
<S> <C> <C> <C>
American Century VP - American Century VP Balanced:
Tax qualified ...................................... 3,267,103 $ 15.475095 $ 50,558,729
Non-tax qualified .................................. 2,550,320 15.475095 39,466,444
American Century VP - American Century VP
Capital Appreciation:
Tax qualified ...................................... 8,062,030 22.710833 183,095,417
Non-tax qualified .................................. 5,052,144 22.710833 114,738,399
American Century VP - American Century VP
International:
Tax qualified ...................................... 3,503,691 13.864598 48,577,267
Non-tax qualified .................................. 3,058,018 13.864598 42,398,190
American Century VP - American Century VP Value:
Tax qualified ...................................... 722,246 11.421931 8,249,444
Non-tax qualified .................................. 643,134 11.421931 7,345,832
American VI Series - Growth Fund:
Tax qualified ...................................... 459,785 27.475248 12,632,707
Non-tax qualified .................................. 443,344 27.475248 12,180,986
American VI Series - High-Yield Bond Fund:
Tax qualified ...................................... 69,254 24.377961 1,688,271
Non-tax qualified .................................. 45,431 24.377961 1,107,515
American VI Series - U.S. Government/AAA-Rated
Securities Fund:
Tax qualified ...................................... 165,258 18.740727 3,097,055
Non-tax qualified .................................. 127,129 18.740727 2,382,490
The Dreyfus Socially Responsible Growth Fund, Inc.:
Tax qualified ...................................... 2,278,219 19.690605 44,859,510
Non-tax qualified .................................. 1,461,413 19.690605 28,776,106
Dreyfus Stock Index Fund:
Tax qualified ...................................... 11,046,678 19.709209 217,721,285
Non-tax qualified .................................. 9,194,751 19.709209 181,221,269
Dreyfus VIF - Growth andIncome Portfolio:
Tax qualified ...................................... 603,463 10.837804 6,540,214
Non-tax qualified .................................. 556,876 10.837804 6,035,313
Fidelity VIP - Equity-Income Portfolio:
Tax qualified ...................................... 23,926,102 32.430285 775,930,307
Non-tax qualified .................................. 19,803,535 32.430285 642,234,284
Fidelity VIP - Growth Portfolio:
Tax qualified ...................................... 17,596,555 43.537363 766,107,603
Non-tax qualified .................................. 12,503,960 43.537363 544,389,445
Fidelity VIP - High Income Portfolio:
Tax qualified ...................................... 6,834,628 26.273693 179,570,918
Non-tax qualified .................................. 7,774,078 26.273693 204,253,739
</TABLE>
19
<PAGE> 19
<TABLE>
<S> <C> <C> <C>
Fidelity VIP - Overseas Portfolio:
Tax qualified ...................................... 13,767,584 19.172925 263,964,855
Non-tax qualified .................................. 12,409,378 19.172925 237,924,074
Fidelity VIP-II - Asset Manager Portfolio:
Tax qualified ...................................... 20,977,485 22.564157 473,339,265
Non-tax qualified .................................. 12,957,714 22.564157 292,379,893
Fidelity VIP-II - Contrafund Portfolio:
Tax qualified ...................................... 12,274,952 14.700769 180,451,234
Non-tax qualified .................................. 10,642,262 14.700769 156,449,435
Nationwide SAT - Capital Appreciation Fund:
Tax qualified ...................................... 3,172,145 21.578999 68,451,714
Non-tax qualified .................................. 3,541,810 21.578999 76,428,714
Nationwide SAT - Government Bond Fund:
Tax qualified ...................................... 3,499,416 30.955175 108,325,035
Non-tax qualified .................................. 2,672,624 30.873422 82,513,049
Nationwide SAT - Money Market Fund:
Tax qualified ...................................... 9,791,335 22.548454 220,779,467
Non-tax qualified .................................. 10,959,291 22.548454 247,115,069
Nationwide SAT - Small Company Fund:
Tax qualified ...................................... 3,837,488 14.998894 57,558,076
Non-tax qualified .................................. 3,209,811 14.998894 48,143,615
Nationwide SAT - Total Return Fund:
Tax qualified ...................................... 4,002,867 74.396492 297,799,263
Non-tax qualified .................................. 3,376,196 72.480749 244,709,215
Neuberger & Berman - Growth Portfolio:
Tax qualified ...................................... 5,620,311 34.643700 194,708,368
Non-tax qualified .................................. 4,288,036 34.643700 148,553,433
Neuberger & Berman - Limited Maturity Bond Portfolio:
Tax qualified ...................................... 3,467,568 17.177027 59,562,509
Non-tax qualified .................................. 3,107,023 17.177027 53,369,418
Neuberger & Berman - Partners Portfolio:
Tax qualified ...................................... 7,079,505 19.847939 140,513,583
Non-tax qualified .................................. 7,061,078 19.847939 140,147,845
Oppenheimer - Bond Fund:
Tax qualified ...................................... 3,757,703 17.741823 66,668,502
Non-tax qualified .................................. 3,150,269 17.741823 55,891,515
Oppenheimer - Global Securities Fund:
Tax qualified ...................................... 9,156,132 15.306110 140,144,764
Non-tax qualified .................................. 6,331,102 15.306110 96,904,544
Oppenheimer - Multiple Strategies Fund:
Tax qualified ...................................... 4,971,165 19.569644 97,283,929
Non-tax qualified .................................. 3,883,414 19.569644 75,997,029
Strong Special Fund II, Inc.:
Tax qualified ...................................... 11,064,323 23.215127 256,859,664
Non-tax qualified .................................. 8,251,876 23.215127 191,568,349
Strong VIF - Strong Discovery Fund II:
Tax qualified ...................................... 3,967,379 16.707875 66,286,472
Non-tax qualified .................................. 3,280,024 16.707875 54,802,231
Strong VIF - Strong International Fund II:
Tax qualified ...................................... 1,680,213 12.027054 20,208,012
Non-tax qualified .................................. 1,524,727 12.027054 18,337,974
</TABLE>
20
<PAGE> 20
<TABLE>
<S> <C> <C> <C>
Van Eck - Worldwide Bond Fund:
Tax qualified ................................... 2,319,382 14.383103 33,359,910
Non-tax qualified ............................... 2,194,513 14.383103 31,563,907
Van Eck - Worldwide Emerging Markets Fund:
Tax qualified ................................... 2,810,017 12.302649 34,570,653
Non-tax qualified ............................... 2,821,964 12.302649 34,717,633
Van Eck - Worldwide Hard Assets Fund:
Tax qualified ................................... 2,879,250 16.094327 46,339,591
Non-tax qualified ............................... 3,147,805 16.094327 50,661,803
Van Kampen American Capital LIT - Real Estate
Securities Fund:
Tax qualified ................................... 3,294,763 15.800344 52,058,389
Non-tax qualified ............................... 3,592,271 15.800344 56,759,118
Warburg Pincus - International Equity Portfolio:
Tax qualified ................................... 6,220,621 13.220122 82,237,369
Non-tax qualified ............................... 6,037,181 13.220122 79,812,269
Warburg Pincus - Post Venture Capital Portfolio:
Tax qualified ................................... 503,518 10.439440 5,256,446
Non-tax qualified ............................... 349,822 10.439440 3,651,946
Warburg Pincus - Small Company Growth Portfolio:
Tax qualified ................................... 5,530,012 14.243959 78,769,264
Non-tax qualified ............................... 5,104,467 14.243959 72,707,819
The BEST OF AMERICA(R) Nationwide Insurance
Enterprise Annuity contracts:
American Century VP - American Century VP Balanced:
Tax qualified ................................... 7,230 12.336874 89,196
Non-tax qualified ............................... 1,439 12.336874 17,753
American Century VP - American Century VP
Capital Appreciation:
Tax qualified ................................... 8,340 9.017004 75,202
Non-tax qualified ............................... 14,725 9.017004 132,775
American Century VP - American Century VP
International:
Tax qualified ................................... 741 13.907583 10,306
Non-tax qualified ............................... 10.192 13.907583 141,746
American Century VP - American Century VP Value:
Tax qualified ................................... 385 11.451823 4,409
Non-tax qualified ............................... 7,613 11.451823 87,183
The Dreyfus Socially Responsible Growth Fund, Inc.:
Tax qualified ................................... 3,418 14.393886 49,198
Non-tax qualified ............................... 7,083 14.393886 101,952
Dreyfus Stock Index Fund:
Tax qualified ................................... 33,903 15.421234 522,826
Non-tax qualified ............................... 33,070 15.421234 509,980
Dreyfus VIF - Growth andIncome Portfolio:
Tax qualified ................................... 2,531 10.866180 27,502
Non-tax qualified ............................... 5,364 10.866180 58,286
Fidelity VIP - Equity-Income Portfolio:
Tax qualified ................................... 41,940 14.101714 591,426
Non-tax qualified ............................... 32,767 14.101714 462,071
</TABLE>
21
<PAGE> 21
<TABLE>
<S> <C> <C> <C>
Fidelity VIP - Growth Portfolio:
Tax qualified ........................................ 45,033 12.440166 560,218
Non-tax qualified .................................... 33,950 12.440166 422,344
Fidelity VIP - High Income Portfolio:
Tax qualified ........................................ 17,784 12.322922 219,151
Non-tax qualified .................................... 16,427 12.322922 202,429
Fidelity VIP - Overseas Portfolio:
Tax qualified ........................................ 718 13.656180 9,805
Non-tax qualified .................................... 3,074 13.656180 41,979
Fidelity VIP-II - Asset Manager Portfolio:
Tax qualified ........................................ 7,345 13.264098 97,425
Non-tax qualified .................................... 2,738 13.264098 36,317
Fidelity VIP-II - Contrafund Portfolio:
Tax qualified ........................................ 15,222 13.656686 207,882
Non-tax qualified .................................... 18,346 13.656686 250,546
Nationwide SAT - Capital Appreciation Fund:
Tax qualified ........................................ 21,288 16.203653 344,943
Non-tax qualified .................................... 23,378 16.203653 378,809
Nationwide SAT - Government Bond Fund:
Tax qualified ........................................ 11,690 10.790830 126,145
Non-tax qualified .................................... 4,838 10.790830 52,206
Nationwide SAT - Money Market Fund:
Tax qualified ........................................ 69,666 10.731521 747,622
Non-tax qualified .................................... 73,603 10.731521 789,872
Nationwide SAT - Small Company Fund:
Tax qualified ........................................ 20,823 15.114274 314,725
Non-tax qualified .................................... 40,118 15.114274 606,354
Nationwide SAT - Total Return Fund:
Tax qualified ........................................ 84,179 15.094769 1,270,663
Non-tax qualified .................................... 111,961 15.094769 1,690,025
Neuberger & Berman - Growth Portfolio:
Tax qualified ........................................ 7,348 12.599437 92,581
Non-tax qualified .................................... 9,400 12.599437 118,435
Neuberger & Berman - Limited Maturity Bond Portfolio:
Tax qualified ........................................ 1,591 10.802443 17,187
Non-tax qualified .................................... 3,061 10.802443 33,066
Neuberger & Berman - Partners Portfolio:
Tax qualified ........................................ 16,788 15.665204 262,987
Non-tax qualified .................................... 29,378 15.665204 460,212
Oppenheimer - Bond Fund:
Tax qualified ........................................ 6,838 10.958752 74,936
Non-tax qualified .................................... 2,153 10.958752 23,594
Oppenheimer - Global Securities Fund:
Tax qualified ........................................ 3,086 13.633830 42,074
Non-tax qualified .................................... 5,131 13.633830 69,955
Oppenheimer - Multiple Strategies Fund:
Tax qualified ........................................ 5,198 12.832574 66,704
Non-tax qualified .................................... 3,900 12.832574 50,047
Strong Special Fund II, Inc.:
Tax qualified ........................................ 12,352 13.704936 169,283
Non-tax qualified .................................... 8,841 13.704936 121,165
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<S> <C> <C> <C>
Strong VIF - Strong Discovery Fund II:
Tax qualified ...................................... 957 10.870410 10,403
Non-tax qualified .................................. 4,002 10.870410 43,503
Strong VIF - Strong International Fund II:
Tax qualified ...................................... 3,577 12.059440 43,137
Non-tax qualified .................................. 2,067 12.059440 24,927
Van Eck - Worldwide Bond Fund:
Tax qualified ...................................... 604 10.155463 6,134
Non-tax qualified .................................. 1,048 10.155463 10,643
Van Eck - Worldwide Emerging Markets Fund:
Tax qualified ...................................... 5,670 12.334830 69,938
Non-tax qualified .................................. 6,375 12.334830 78,635
Van Eck - Worldwide Hard Assets Fund:
Tax qualified ...................................... 1,590 12.863163 20,452
Non-tax qualified .................................. 8,914 12.863163 114,662
Van Kampen American Capital LIT - Real Estate
Securities Fund:
Tax qualified ...................................... 4,627 15.672736 72,518
Non-tax qualified .................................. 14,129 15.672736 221,440
Warburg Pincus - International Equity Portfolio:
Tax qualified ...................................... 9,038 12.948577 117,029
Non-tax qualified .................................. 6,061 12.948577 78,481
Warburg Pincus - Post Venture Capital Portfolio:
Tax qualified ...................................... 408 10.466793 4,270
Non-tax qualified .................................. 2,565 10.466793 26,847
Warburg Pincus - Small Company Growth Portfolio:
Tax qualified ...................................... 10,897 12.880087 140,354
Non-tax qualified .................................. 22,830 12.880087 294,052
The BEST OF AMERICA(R) America's Vision
Annuity(SM) contracts:
American Century VP - American Century VP Balanced:
Tax qualified ...................................... 1,801,890 14.256525 25,688,690
Non-tax qualified .................................. 2,560,903 14.256525 36,509,578
American Century VP - American Century VP
Capital Appreciation:
Tax qualified ...................................... 2,565,144 11.569198 29,676,659
Non-tax qualified .................................. 3,870,534 11.569198 44,778,974
American Century VP - American Century VP
International:
Tax qualified ...................................... 2,613,045 13.823733 36,122,036
Non-tax qualified .................................. 3,547,717 13.823733 49,042,693
American Century VP - American Century VP Value:
Tax qualified ...................................... 676,825 11.415945 7,726,597
Non-tax qualified .................................. 662,073 11.415945 7,558,189
The Dreyfus Socially Responsible Growth Fund, Inc.:
Tax qualified ...................................... 1,239,595 18.588021 23,041,618
Non-tax qualified .................................. 1,776,624 18.588021 33,023,924
Dreyfus Stock Index Fund:
Tax qualified ...................................... 9,178,902 19.578136 179,705,792
Non-tax qualified .................................. 13,345,152 19.578136 261,273,201
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<S> <C> <C> <C>
Dreyfus VIF - Growth andIncome Portfolio:
Tax qualified ...................................... 715,767 10.832117 7,753,272
Non-tax qualified .................................. 894,965 10.832117 9,694,366
Fidelity VIP - Equity-Income Portfolio:
Tax qualified ...................................... 19,431,111 18.667405 362,728,419
Non-tax qualified .................................. 26,450,521 18.667405 493,762,588
Fidelity VIP - Growth Portfolio:
Tax qualified ...................................... 13,034,160 17.204371 224,244,524
Non-tax qualified .................................. 18,376,016 17.204371 316,147,797
Fidelity VIP - High Income Portfolio:
Tax qualified ...................................... 9,186,613 14.077158 129,321,403
Non-tax qualified .................................. 13,592,545 14.077158 191,344,404
Fidelity VIP - Overseas Portfolio:
Tax qualified ...................................... 4,280,876 14.706245 62,955,611
Non-tax qualified .................................. 6,377,992 14.706245 93,796,313
Fidelity VIP-II - Asset Manager Portfolio:
Tax qualified ...................................... 7,721,652 13.773708 106,355,780
Non-tax qualified .................................. 9,900,012 13.773708 136,359,874
Fidelity VIP-II - Contrafund Portfolio:
Tax qualified ...................................... 10,714,115 14.671125 157,188,120
Non-tax qualified .................................. 14,795,470 14.671125 217,066,190
Nationwide SAT - Capital Appreciation Fund:
Tax qualified ...................................... 2,349,228 19.112424 44,899,442
Non-tax qualified .................................. 3,033,981 19.112424 57,986,731
Nationwide SAT - Government Bond Fund:
Tax qualified ...................................... 2,903,576 11.665657 33,872,122
Non-tax qualified .................................. 3,206,016 11.665657 37,400,283
Nationwide SAT - Money Market Fund:
Tax qualified ...................................... 14,126,425 11.274460 159,267,814
Non-tax qualified .................................. 21,073,348 11.274460 237,590,619
Nationwide SAT - Small Company Fund:
Tax qualified ...................................... 2,834,088 14.973308 42,435,673
Non-tax qualified .................................. 4,175,059 14.973308 62,514,444
Nationwide SAT - Total Return Fund:
Tax qualified ...................................... 7,081,678 18.236057 129,141,884
Non-tax qualified .................................. 8,800,422 18.236057 160,484,997
Neuberger & Berman - Growth Portfolio:
Tax qualified ...................................... 2,434,380 15.383603 37,449,535
Non-tax qualified .................................. 3,853,964 15.383603 59,287,852
Neuberger & Berman - Limited Maturity Bond Portfolio:
Tax qualified ...................................... 2,786,542 11.341307 31,603,028
Non-tax qualified .................................. 4,461,993 11.341307 50,604,832
Neuberger & Berman - Partners Portfolio:
Tax qualified ...................................... 6,008,323 19.789481 118,901,594
Non-tax qualified .................................. 8,848,940 19.789481 175,115,930
Oppenheimer - Bond Fund:
Tax qualified ...................................... 4,197,380 11.853524 49,753,745
Non-tax qualified .................................. 5,352,445 11.853524 63,445,335
Oppenheimer - Global Securities Fund:
Tax qualified ...................................... 5,921,497 14.034875 83,107,470
Non-tax qualified .................................. 7,958,210 14.034875 111,692,483
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<S> <C> <C> <C>
Oppenheimer - Multiple Strategies Fund:
Tax qualified ...................................... 3,518,045 14.519764 51,081,183
Non-tax qualified .................................. 4,454,264 14.519764 64,674,862
Strong Special Fund II, Inc.:
Tax qualified ...................................... 5,517,656 17.043053 94,037,704
Non-tax qualified .................................. 7,336,302 17.043053 125,032,984
Strong VIF - Strong Discovery Fund II:
Tax qualified ...................................... 2,015,633 13.822161 27,860,404
Non-tax qualified .................................. 2,902,194 13.822161 40,114,593
Strong VIF - Strong International Fund II:
Tax qualified ...................................... 1,346,392 12.006515 16,165,476
Non-tax qualified .................................. 1,905,124 12.006515 22,873,900
Van Eck - Worldwide Bond Fund:
Tax qualified ...................................... 1,207,101 11.416013 13,780,281
Non-tax qualified .................................. 1,673,500 11.416013 19,104,698
Van Eck - Worldwide Emerging Markets Fund:
Tax qualified ...................................... 1,830,820 12.296201 22,512,131
Non-tax qualified .................................. 2,362,466 12.296201 29,049,357
Van Eck - Worldwide Hard Assets Fund:
Tax qualified ...................................... 1,321,895 13.198903 17,447,564
Non-tax qualified .................................. 2,194,043 13.198903 28,958,961
Van Kampen American Capital LIT - Real Estate
Securities Fund:
Tax qualified ...................................... 2,699,828 15.768497 42,572,230
Non-tax qualified .................................. 3,509,267 15.768497 55,335,866
Warburg Pincus - International Equity Portfolio:
Tax qualified ...................................... 5,418,379 13.193484 71,487,297
Non-tax qualified .................................. 8,179,552 13.193484 107,916,788
Warburg Pincus - Post Venture Capital Portfolio:
Tax qualified ...................................... 504,096 10.433962 5,259,719
Non-tax qualified .................................. 512,690 10.433962 5,349,388
Warburg Pincus - Small Company Growth Portfolio:
Tax qualified ...................................... 4,303,663 14.215222 61,177,525
Non-tax qualified .................................. 6,499,724 14.215222 92,395,020
========== ==========
Reserves for annuity contracts in payout phase:
Tax qualified ...................................... 2,764,066
Non-tax qualified .................................. 3,768,108
----------------
$ 15,746,138,422
================
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================================================================================
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<CAPTION>
<S> <C>
NATIONWIDE LIFE INSURANCE COMPANY ----------------
HOME OFFICE: ONE NATIONWIDE PLAZA o COLUMBUS, OHIO 43215-2220 Bulk Rate
U.S. Postage
PAID
Columbus, Ohio
Permit No. 521
----------------
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Nationwide(R) is a registered federal service mark of Nationwide Mutual
Insurance Company
