<PAGE> 1
'98
Nationwide(R) Variable Account - II
June 30, 1998
[LOGO - THE BEST OF AMERICA]
SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
[LOGO]
Nationwide Life Insurance Company
Home Office: Columbus, Ohio
APO-725-Y-(6/98)
<PAGE> 2
[LOGO]
NATIONWIDE LIFE INSURANCE COMPANY
ONE NATIONWIDE PLAZA, COLUMBUS, OHIO 43215-2220
[PHOTO]
PRESIDENT'S MESSAGE
We at Nationwide Life Insurance Company are pleased to present the 1998
semi-annual report of the Nationwide Variable Account-II.
The bull market continued its run in the first half of 1998. Most of the gains
came in the first quarter with more modest returns or small losses for the
second half of the period. At this writing, a market correction that began in
the second quarter continues to provide a good deal of day-to-day volatility.
Much of the capriciousness of the market is due to uncertainty about the
economic outcome in Asia. However, we think the correction will be of limited
magnitude and duration and will provide a healthy respite before further market
advances.
We believe that existing economic and market fundamentals provide an ongoing
favorable environment for financial assets. Interest rates remain low; inflation
is nearly nonexistent; corporate earnings, albeit slowing, remain positive, and
U.S. economic growth appears to be on a modest but sustainable track.
Against this backdrop, we believe our variable insurance products continue to
provide the versatile investment vehicle you need to respond to changing market
conditions. We are committed to the continual evaluation of our products and
services to ensure that we remain responsive to your long-term financial
planning and retirement-savings needs.
/s/ Joseph J. Gasper
Joseph J. Gasper, President
August 17, 1998
3
<PAGE> 3
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY
JUNE 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS:
<S> <C>
Investments at market value:
American Century VP - American Century VP Balanced (ACVPBal)
26,274,476 shares (cost $192,490,553) ................................. $ 216,501,678
American Century VP - American Century VP Capital Appreciation (ACVPCapAp)
31,250,059 shares (cost $318,765,484) ................................. 290,625,551
American Century VP - American Century VP Income & Growth (ACVPIncGr)
1,648,605 shares (cost $10,242,440) ................................... 10,402,695
American Century VP - American Century VP International (ACVPInt)
40,080,945 shares (cost $297,974,981) ................................. 322,250,794
American Century VP - American Century VP Value (ACVPValue)
12,065,769 shares (cost $84,102,161) .................................. 82,047,226
American VI Series - Growth Fund (AVISGro)
558,470 shares (cost $20,462,162) ..................................... 29,436,974
American VI Series - High-Yield Bond Fund (AVISHiYld)
220,478 shares (cost $3,162,440) ...................................... 3,245,442
American VI Series - U.S. Government/AAA-Rated Securities Fund (AVISGvt)
388,083 shares (cost $4,341,199) ...................................... 4,327,124
The Dreyfus Socially Responsible Growth Fund, Inc. (DrySRGro)
8,263,911 shares (cost $212,710,819) .................................. 244,281,196
Dreyfus Stock Index Fund (DryStkIx)
48,224,919 shares (cost $1,174,760,307) ............................... 1,447,712,068
Dreyfus VIF - Capital Appreciation Portfolio (DryCapAp)
3,013,330 shares (cost $96,069,496) ................................... 101,458,823
Dreyfus VIF - Growth and Income Portfolio (DryGrInc)
3,374,190 shares (cost $72,976,137) ................................... 73,084,949
Fidelity VIP - Equity-Income Portfolio (FidVIPEI)
113,901,636 shares (cost $2,146,216,147) .............................. 2,866,904,169
Fidelity VIP - Growth Portfolio (FidVIPGr)
61,461,521 shares (cost $1,922,393,362) ............................... 2,355,205,470
Fidelity VIP - High Income Portfolio (FidVIPHI)
68,015,623 shares (cost $849,843,462) ................................. 859,037,321
Fidelity VIP - Overseas Portfolio (FidVIPOv)
31,479,580 shares (cost $601,977,413) ................................. 649,108,945
Fidelity VIP-II - Asset Manager Portfolio (FidVIPAM)
66,344,236 shares (cost $992,073,725) ................................. 1,144,438,074
</TABLE>
4
<PAGE> 4
<TABLE>
<S> <C>
Fidelity VIP-II - Contrafund Portfolio (FidVIPCon)
48,243,196 shares (cost $812,208,171) ................................. 1,058,938,154
Fidelity VIP-III - Growth Opportunities Portfolio (FidVIPGrOp)
5,660,138 shares (cost $109,765,331) .................................. 115,693,223
Morgan Stanley - Emerging Markets Debt Portfolio (MSEmMkt)
1,118,840 shares (cost $11,187,449) ................................... 10,405,214
Nationwide SAT - Capital Appreciation Fund (NSATCapAp)
20,999,088 shares (cost $420,579,945) ................................. 528,967,032
Nationwide SAT - Government Bond Fund (NSATGvtBd)
27,597,435 shares (cost $310,279,302) ................................. 317,370,503
Nationwide SAT - Money Market Fund (NSATMyMkt)
856,074,130 shares (cost $856,074,130) ................................ 856,074,130
Nationwide SAT - Small Cap Value Fund (NSATSmCapV)
532,547 shares (cost $5,464,176) ...................................... 5,426,650
Nationwide SAT - Small Company Fund (NSATSmCo)
18,042,341 shares (cost $297,942,635) ................................. 303,472,172
Nationwide SAT - Total Return Fund (NSATTotRe)
65,894,643 shares (cost $867,441,161) ................................. 1,232,229,828
Neuberger &Berman AMT - Growth Portfolio (NBAMTGro)
19,849,922 shares (cost $514,797,087) ................................. 522,449,946
Neuberger & Berman AMT - Guardian Portfolio (NBAMTGuard)
2,031,490 shares (cost $29,550,393) ................................... 29,192,510
Neuberger &Berman AMT - Limited Maturity Bond Portfolio (NBAMTLMat)
13,373,663 shares (cost $184,985,544) ................................. 181,480,602
Neuberger &Berman AMT - Partners Portfolio (NBAMTPart)
43,720,476 shares (cost $812,553,628) ................................. 841,619,154
Oppenheimer VAF - Bond Fund (OppBdFd)
25,644,333 shares (cost $299,973,314) ................................. 307,475,550
Oppenheimer VAF - Global Securities Fund (OppGlSec)
25,980,599 shares (cost $480,316,695) ................................. 563,779,004
Oppenheimer VAF - Growth Fund (OppGro)
1,189,426 shares (cost $39,607,197) ................................... 41,166,030
Oppenheimer VAF - Multiple Strategies Fund (OppMult)
21,202,561 shares (cost $314,371,953) ................................. 362,987,845
Strong Opportunity Fund II, Inc. (StOpp2)
39,414,707 shares (cost $732,769,962) ................................. 856,875,733
Strong VIF - Strong Discovery Fund II (StDisc2)
14,895,585 shares (cost $171,506,918) ................................. 190,216,621
Strong VIF - Strong International Stock Fund II (StIntStk2)
4,774,394 shares (cost $51,636,722) ................................... 47,027,783
</TABLE>
(Continued)
5
<PAGE> 5
<TABLE>
<S> <C>
Van Eck WIT - Worldwide Bond Fund (VEWrldBd)
8,464,352 shares (cost $92,703,622) ................................. 95,308,608
Van Eck WIT - Worldwide Emerging Markets Fund (VEWrldEMkt)
5,565,848 shares (cost $66,628,973) ................................. 46,474,829
Van Eck WIT - Worldwide Hard Assets Fund (VEWrldHAs)
8,083,068 shares (cost $120,435,508) ................................ 93,359,441
Van Kampen American Capital LIT -
Morgan Stanley Real Estate Securities Portfolio (MSRESec)
14,536,732 shares (cost $226,044,479) ............................... 215,289,000
Warburg Pincus Trust - International Equity Portfolio (WPIntEq)
23,968,680 shares (cost $282,091,630) ............................... 284,747,915
Warburg Pincus Trust - Post Venture Capital Portfolio (WPPVenCap)
1,687,701 shares (cost $20,798,942) ................................. 21,130,020
Warburg Pincus Trust - Small Company Growth Portfolio (WPSmCoGr)
21,291,046 shares (cost $340,811,292) ............................... 367,696,369
----------------
Total investments ................................................. 20,196,922,365
Accounts receivable ..................................................... --
----------------
Total assets ...................................................... 20,196,922,365
ACCOUNTS PAYABLE ........................................................... 1,849,083
----------------
CONTRACT OWNERS' EQUITY (NOTE 4) ........................................... $ 20,195,073,282
================
</TABLE>
See accompanying notes to financial statements.
6
<PAGE> 6
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
TOTAL ACVPBAL
-------------------------------------- ----------------------------------
1998 1997 1998 1997
---------------- ---------------- ------------ ----------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 253,341,101 223,385,318 3,098,368 1,574,816
Mortality, expense and administration
charges (note 2):
BOA ....................................... (72,825,762) (54,220,253) (650,306) (504,743)
BOA Vision ................................ (56,294,722) (39,309,232) (551,933) (428,390)
BOA Enterprise ............................ (93,329) (58,817) (815) (633)
---------------- ---------------- ------------ ----------------
Net investment activity ..................... 124,127,288 129,797,016 1,895,314 641,050
---------------- ---------------- ------------ ----------------
Proceeds from mutual fund shares sold ......... 4,147,720,751 2,927,284,709 8,590,626 4,913,164
Cost of mutual fund shares sold ............... (3,697,334,825) (2,736,782,976) (6,553,087) (3,816,621)
---------------- ---------------- ------------ ----------------
Realized gain (loss) on investments ......... 450,385,926 190,501,733 2,037,539 1,096,543
Change in unrealized gain (loss) on investments 232,401,682 694,245,135 491,824 3,442,109
---------------- ---------------- ------------ ----------------
Net gain (loss) on investments .............. 682,787,608 884,746,868 2,529,363 4,538,652
---------------- ---------------- ------------ ----------------
Reinvested capital gains ...................... 1,093,474,941 487,732,532 19,212,723 6,097,662
---------------- ---------------- ------------ ----------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 1,900,389,837 1,502,276,416 23,637,400 11,277,364
---------------- ---------------- ------------ ----------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ............................. 1,310,371,181 1,897,466,276 11,800,162 16,597,903
Transfers between funds ....................... -- -- 20,024,530 (2,309,283)
Redemptions ................................... (849,043,344) (569,502,117) (7,532,310) (4,839,111)
Annuity benefits .............................. (903,526) (473,681) (1,335) (1,159)
Annual contract maintenance charge (note 2) ... (4,274,386) (3,820,475) (40,220) (36,549)
Contingent deferred sales charges (note 2) .... (11,050,734) (9,118,478) (120,155) (86,275)
Adjustments to maintain reserves .............. (217,173) (38,674) 1,094 (242)
---------------- ---------------- ------------ ----------------
Net equity transactions ................... 444,882,018 1,314,512,851 24,131,766 9,325,284
---------------- ---------------- ------------ ----------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... 2,345,271,855 2,816,789,267 47,769,166 20,602,648
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 17,849,801,427 12,929,349,155 168,733,832 131,737,211
---------------- ---------------- ------------ ----------------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... $ 20,195,073,282 15,746,138,422 216,502,998 152,339,859
================ ================ ============ ================
<CAPTION>
ACVPCAPAP ACVPINCGR
-------------------------------------- ----------------------------------
1998 1997 1998 1997
---------------- ---------------- ---------------- ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... -- -- -- --
Mortality, expense and administration
charges (note 2):
BOA ....................................... (1,608,272) (1,995,234) (9,919) --
BOA Vision ................................ (478,438) (593,554) (4,921) --
BOA Enterprise ............................ (685) (850) (18) --
---------------- ---------------- ---------------- ------------
Net investment activity ..................... (2,087,395) (2,589,638) (14,858) --
---------------- ---------------- ---------------- ------------
Proceeds from mutual fund shares sold ......... 75,788,914 132,199,693 10,484,127 --
Cost of mutual fund shares sold ............... (85,986,816) (141,315,609) (10,520,048) --
---------------- ---------------- ---------------- ------------
Realized gain (loss) on investments ......... (10,197,904) (9,115,916) (35,921) --
Change in unrealized gain (loss) on investments (1,561,206) (15,530,347) 160,255 --
---------------- ---------------- ---------------- ------------
Net gain (loss) on investments .............. (11,759,110) (24,646,263) 124,334 --
---------------- ---------------- ---------------- ------------
Reinvested capital gains ...................... 15,700,848 8,369,061 -- --
---------------- ---------------- ---------------- ------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 1,854,343 (18,866,840) 109,476 --
---------------- ---------------- ---------------- ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ............................. 14,082,567 28,066,543 534,036 --
Transfers between funds ....................... (44,700,789) (67,133,409) 9,792,053 --
Redemptions ................................... (20,162,465) (21,003,477) (31,960) --
Annuity benefits .............................. (28,713) (24,369) -- --
Annual contract maintenance charge (note 2) ... (140,642) (188,160) (433) --
Contingent deferred sales charges (note 2) .... (249,534) (367,323) (477) --
Adjustments to maintain reserves .............. (6,683) (1,609) (16) --
---------------- ---------------- ---------------- ------------
Net equity transactions ................... (51,206,259) (60,651,804) 10,293,203 --
---------------- ---------------- ---------------- ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... (49,351,916) (79,518,644) 10,402,679 --
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 339,991,098 452,299,206 -- --
---------------- ---------------- ---------------- ------------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... 290,639,182 372,780,562 10,402,679 --
================ ================ ================ ============
</TABLE>
7
<PAGE> 7
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
ACVPINT ACVPVALUE
--------------------------------- ---------------------------------
1998 1997 1998 1997
-------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 1,241,910 1,256,182 491,657 77,961
Mortality, expense and administration
charges (note 2):
BOA ....................................... (764,982) (387,490) (222,249) (48,574)
BOA Vision ................................ (883,590) (447,570) (316,022) (69,069)
BOA Enterprise ............................ (972) (492) (595) (130)
------------- ------------- ------------- -------------
Net investment activity ..................... (407,634) 420,630 (47,209) (39,812)
------------- ------------- ------------- -------------
Proceeds from mutual fund shares sold ......... 118,795,827 47,377,430 24,731,350 4,852,523
Cost of mutual fund shares sold ............... (100,938,867) (40,134,895) (23,255,567) (4,674,211)
------------- ------------- ------------- -------------
Realized gain (loss) on investments ......... 17,856,960 7,242,535 1,475,783 178,312
Change in unrealized gain (loss) on investments 18,518,546 12,171,899 (3,719,654) 2,461,089
------------- ------------- ------------- -------------
Net gain (loss) on investments .............. 36,375,506 19,414,434 (2,243,871) 2,639,401
------------- ------------- ------------- -------------
Reinvested capital gains ...................... 12,749,123 2,422,638 5,869,944 151,154
------------- ------------- ------------- -------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 48,716,995 22,257,702 3,578,864 2,750,743
------------- ------------- ------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ............................. 13,554,935 18,498,355 9,835,014 8,201,258
Transfers between funds ....................... 87,855,437 49,947,328 3,627,127 19,256,034
Redemptions ................................... (9,101,590) (3,119,802) (3,343,829) (303,166)
Annuity benefits .............................. (5,268) (321) (1,508) --
Annual contract maintenance charge (note 2) ... (37,563) (23,109) (10,428) (2,374)
Contingent deferred sales charges (note 2) .... (108,237) (52,622) (58,620) (3,189)
Adjustments to maintain reserves .............. (32,509) 2,321 (25,891) (235)
------------- ------------- ------------- -------------
Net equity transactions ................... 92,125,205 65,252,150 10,021,865 27,148,328
------------- ------------- ------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... 140,842,200 87,509,852 13,600,729 29,899,071
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 181,376,626 88,792,296 68,407,922 1,072,583
------------- ------------- ------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... $ 322,218,826 176,302,148 82,008,651 30,971,654
============= ============= ============= =============
<CAPTION>
AVISGRO AVISHIYLD
-------------------------------- -------------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... 47,312 90,226 131,272 122,873
Mortality, expense and administration
charges (note 2):
BOA ....................................... (183,514) (154,220) (21,388) (18,561)
BOA Vision ................................ -- -- -- --
BOA Enterprise ............................ -- -- -- --
------------- ------------- ------------- -------------
Net investment activity ..................... (136,202) (63,994) 109,884 104,312
------------- ------------- ------------- -------------
Proceeds from mutual fund shares sold ......... 2,731,913 2,714,208 443,728 430,736
Cost of mutual fund shares sold ............... (1,503,444) (1,384,388) (407,097) (384,470)
------------- ------------- ------------- -------------
Realized gain (loss) on investments ......... 1,228,469 1,329,820 36,631 46,266
Change in unrealized gain (loss) on investments 3,231,627 1,509,000 (23,009) (6,478)
------------- ------------- ------------- -------------
Net gain (loss) on investments .............. 4,460,096 2,838,820 13,622 39,788
------------- ------------- ------------- -------------
Reinvested capital gains ...................... -- -- -- --
------------- ------------- ------------- -------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 4,323,894 2,774,826 123,506 144,100
------------- ------------- ------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ............................. 312,678 353,771 93,773 39,751
Transfers between funds ....................... (258,711) (587,856) 192,111 (106,709)
Redemptions ................................... (1,446,633) (1,158,349) (351,209) (240,620)
Annuity benefits .............................. (221) (461) (1,980) (615)
Annual contract maintenance charge (note 2) ... (6,741) (7,427) (1,093) (1,282)
Contingent deferred sales charges (note 2) .... (6,231) (3,930) (2,939) (512)
Adjustments to maintain reserves .............. 108 48 (2,694) (9)
------------- ------------- ------------- -------------
Net equity transactions ................... (1,405,751) (1,404,204) (74,031) (309,996)
------------- ------------- ------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... 2,918,143 1,370,622 49,475 (165,896)
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 26,518,943 23,447,300 3,193,216 2,971,112
------------- ------------- ------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... 29,437,086 24,817,922 3,242,691 2,805,216
============= ============= ============= =============
</TABLE>
8
<PAGE> 8
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
AVISGVT DRYSRGRO
--------------------------------- ----------------------------------
1998 1997 1998 1997
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 142,175 201,119 -- --
Mortality, expense and administration
charges (note 2):
BOA ....................................... (31,272) (37,325) (693,083) (359,256)
BOA Vision ................................ -- -- (694,517) (360,000)
BOA Enterprise ............................ -- -- (1,285) (666)
-------------- -------------- -------------- --------------
Net investment activity ..................... 110,903 163,794 (1,388,885) (719,922)
-------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold ......... 1,389,899 926,038 68,861,675 41,579,219
Cost of mutual fund shares sold ............... (1,488,451) (957,512) (54,091,401) (36,558,291)
-------------- -------------- -------------- --------------
Realized gain (loss) on investments ......... (98,552) (31,474) 14,770,274 5,020,928
Change in unrealized gain (loss) on investments 124,054 (31,198) 18,409,814 11,798,651
-------------- -------------- -------------- --------------
Net gain (loss) on investments .............. 25,502 (62,672) 33,180,088 16,819,579
-------------- -------------- -------------- --------------
Reinvested capital gains ...................... -- -- -- --
-------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 136,405 101,122 31,791,203 16,099,657
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ............................. 92,358 79,560 19,863,181 24,723,419
Transfers between funds ....................... (320,168) (127,254) 18,615,537 18,420,183
Redemptions ................................... (665,756) (689,333) (7,302,510) (10,359,262)
Annuity benefits .............................. (1,383) (264) (2,573) (2,019)
Annual contract maintenance charge (note 2) ... (2,256) (2,871) (56,132) (32,919)
Contingent deferred sales charges (note 2) .... (3,034) (2,142) (111,403) (302,367)
Adjustments to maintain reserves .............. (1,934) (7) (202) (13,443)
-------------- -------------- -------------- --------------
Net equity transactions ................... (902,173) (742,311) 31,005,898 32,433,592
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... (765,768) (641,189) 62,797,101 48,533,249
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 5,090,894 6,125,969 181,485,180 81,334,310
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... $ 4,325,126 5,484,780 244,282,281 129,867,559
============== ============== ============== ==============
<CAPTION>
DRYSTKIX DRYCAPAP
---------------------------------- ------------------------------------
1998 1997 1998 1997
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... 9,004,652 5,579,082 4,487 --
Mortality, expense and administration
charges (note 2):
BOA ....................................... (3,732,666) (1,782,329) (139,296) --
BOA Vision ................................ (5,073,072) (2,422,367) (161,835) --
BOA Enterprise ............................ (7,717) (3,685) (292) --
-------------- -------------- -------------- --------------
Net investment activity ..................... 191,197 1,370,701 (296,936) --
-------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold ......... 195,014,855 55,130,925 15,408,575 --
Cost of mutual fund shares sold ............... (126,455,346) (43,848,370) (13,437,419) --
-------------- -------------- -------------- --------------
Realized gain (loss) on investments ......... 68,559,509 11,282,555 1,971,156 --
Change in unrealized gain (loss) on investments 125,320,954 101,775,573 5,325,947 --
-------------- -------------- -------------- --------------
Net gain (loss) on investments .............. 193,880,463 113,058,128 7,297,103 --
-------------- -------------- -------------- --------------
Reinvested capital gains ...................... 2,150,159 -- 14,955 --
-------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 196,221,819 114,428,829 7,015,122 --
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ............................. 127,515,406 146,746,857 6,061,478 --
Transfers between funds ....................... 74,477,347 142,232,719 80,089,278 --
Redemptions ................................... (45,748,814) (17,432,019) (1,724,843) --
Annuity benefits .............................. (112,324) (2,229) -- --
Annual contract maintenance charge (note 2) ... (220,761) (114,666) (6,726) --
Contingent deferred sales charges (note 2) .... (677,050) (320,808) (21,483) --
Adjustments to maintain reserves .............. (19,286) (73,761) (1,819) --
-------------- -------------- -------------- --------------
Net equity transactions ................... 155,214,518 271,036,093 84,395,885 --
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... 351,436,337 385,464,922 91,411,007 --
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 1,096,238,216 455,762,151 10,047,888 --
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... 1,447,674,553 841,227,073 101,458,895 --
============== ============== ============== ==============
</TABLE>
9
<PAGE> 9
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
DRYGRINC FIDVIPEI
---------------------------------- ----------------------------------
1998 1997 1998 1997
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 323,763 175,664 36,741,162 31,564,284
Mortality, expense and administration
charges (note 2):
BOA ....................................... (167,049) (34,892) (10,712,723) (7,647,924)
BOA Vision ................................ (291,655) (60,920) (8,027,553) (5,730,953)
BOA Enterprise ............................ (1,757) (367) (7,077) (5,052)
-------------- -------------- -------------- --------------
Net investment activity ..................... (136,698) 79,485 17,993,809 18,180,355
-------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold ......... 16,786,688 3,312,329 126,817,292 45,270,329
Cost of mutual fund shares sold ............... (14,944,734) (3,305,730) (78,868,247) (32,259,863)
-------------- -------------- -------------- --------------
Realized gain (loss) on investments ......... 1,841,954 6,599 47,949,045 13,010,466
Change in unrealized gain (loss) on investments 216,165 1,443,802 59,918,225 108,525,662
-------------- -------------- -------------- --------------
Net gain (loss) on investments .............. 2,058,119 1,450,401 107,867,270 121,536,128
-------------- -------------- -------------- --------------
Reinvested capital gains ...................... 1,182,628 129,850 130,755,312 158,698,207
-------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 3,104,049 1,659,736 256,616,391 298,414,690
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ............................. 13,334,891 12,938,364 154,062,520 197,938,860
Transfers between funds ....................... 3,090,870 15,593,127 (27,958,257) 3,745,022
Redemptions ................................... (2,023,969) (281,854) (73,074,387) (70,538,990)
Annuity benefits .............................. -- -- (134,521) (73,352)
Annual contract maintenance charge (note 2) ... (11,942) (2,367) (586,563) (521,726)
Contingent deferred sales charges (note 2) .... (37,007) (6,542) (1,411,722) (1,029,538)
Adjustments to maintain reserves .............. (1,965) 252 (29,860) (4,798)
-------------- -------------- -------------- --------------
Net equity transactions ................... 14,350,878 28,240,980 13,742,964 126,980,081
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... 17,454,927 29,900,716 270,359,355 425,394,771
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 55,629,567 208,237 2,596,523,771 1,851,157,378
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... $ 73,084,494 30,108,953 2,866,883,126 2,276,552,149
============== ============== ============== ==============
<CAPTION>
FIDVIPGR FIDVIPHI
---------------------------------- ----------------------------------
1998 1997 1998 1997
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... 10,166,752 11,151,243 62,256,993 47,561,883
Mortality, expense and administration
charges (note 2):
BOA ....................................... (9,599,825) (7,610,841) (2,925,158) (2,161,163)
BOA Vision ................................ (4,732,502) (3,751,977) (3,089,060) (2,282,257)
BOA Enterprise ............................ (6,153) (4,878) (2,570) (1,899)
-------------- -------------- -------------- --------------
Net investment activity ..................... (4,171,728) (216,453) 56,240,205 43,116,564
-------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold ......... 201,708,740 199,208,156 157,086,198 191,807,790
Cost of mutual fund shares sold ............... (128,255,788) (135,496,319) (145,729,859) (191,722,158)
-------------- -------------- -------------- --------------
Realized gain (loss) on investments ......... 73,452,952 63,711,837 11,356,339 85,632
Change in unrealized gain (loss) on investments 26,018,613 97,848,782 (72,127,907) (4,900,727)
-------------- -------------- -------------- --------------
Net gain (loss) on investments .............. 99,471,565 161,560,619 (60,771,568) (4,815,095)
-------------- -------------- -------------- --------------
Reinvested capital gains ...................... 265,940,840 49,915,087 39,559,131 5,878,435
-------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 361,240,677 211,259,253 35,027,768 44,179,904
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ............................. 101,685,493 136,587,470 51,352,801 76,486,836
Transfers between funds ....................... (9,862,648) (85,372,570) (12,682,764) (46,145,355)
Redemptions ................................... (41,835,430) (23,476,643)
Annuity benefits .............................. (112,474) (56,174) (26,557) (13,265)
Annual contract maintenance charge (note 2) ... (620,563) (599,285) (139,679) (132,242)
Contingent deferred sales charges (note 2) .... (1,237,780) (1,276,147) (490,653) (357,333)
Adjustments to maintain reserves .............. 8,268 (29,567) (6,108) 2,660
-------------- -------------- -------------- --------------
Net equity transactions ................... (823,936) (21,285,263) (3,828,390) 6,364,658
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... 360,416,741 189,973,990 31,199,378 50,544,562
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 1,994,796,761 1,662,797,746 827,837,454 654,534,143
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... 2,355,213,502 1,852,771,736 859,036,832 705,078,705
============== ============== ============== ==============
</TABLE>
10
<PAGE> 10
<TABLE>
<CAPTION>
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1998 AND 1997
(UNAUDITED)
FIDVIPOV FIDVIPAM
---------------------------------- ----------------------------------
1998 1997 1998 1997
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 11,424,188 9,616,272 34,225,218 32,069,538
Mortality, expense and administration
charges (note 2):
BOA ....................................... (3,046,856) (2,772,179) (5,370,672) (4,531,249)
BOA Vision ................................ (1,167,358) (1,062,120) (2,102,846) (1,774,177)
BOA Enterprise ............................ (464) (422) (1,071) (904)
-------------- -------------- -------------- --------------
Net investment activity ..................... 7,209,510 5,781,551 26,750,629 25,763,208
-------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold ......... 218,974,841 117,549,833 45,636,033 31,706,648
Cost of mutual fund shares sold ............... (188,346,824) (99,968,189) (36,152,009) (26,238,261)
-------------- -------------- -------------- --------------
Realized gain (loss) on investments ......... 30,628,017 17,581,644 9,484,024 5,468,387
Change in unrealized gain (loss) on investments 16,880,888 26,604,470 (46,622,683) (15,504,891)
-------------- -------------- -------------- --------------
Net gain (loss) on investments .............. 47,508,905 44,186,114 (37,138,659) (10,036,504)
-------------- -------------- -------------- --------------
Reinvested capital gains ...................... 33,671,290 38,173,687 102,675,653 80,445,621
-------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 88,389,705 88,141,352 92,287,623 96,172,325
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ............................. 20,229,608 30,805,648 48,762,142 58,277,866
Transfers between funds ....................... (12,780,304) (655,737) (18,517,640) (31,892,139)
Redemptions ................................... (31,470,503) (21,217,928) (57,534,196) (38,642,863)
Annuity benefits .............................. (65,664) (42,796) (87,522) (60,239)
Annual contract maintenance charge (note 2) ... (173,771) (188,968) (326,426) (344,888)
Contingent deferred sales charges (note 2) .... (378,230) (330,066) (746,761) (651,326)
Adjustments to maintain reserves .............. (3,085) 13,658 (10,659) 7,336
-------------- -------------- -------------- --------------
Net equity transactions ................... (24,641,949) 8,383,811 (28,461,062) (13,306,253)
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... 63,747,756 96,525,163 63,826,561 82,866,072
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 585,358,058 562,589,941 1,080,601,131 926,404,131
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... 649,105,814 659,115,104 1,144,427,692 1,009,270,203
============== ============== ============== ==============
<CAPTION>
FIDVIPCON FIDVIPGROP
----------------------------------- ------------------------------
1998 1997 1998 1997
-------------- -------------- -------------- ----------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... 6,336,699 4,746,178 757,412 --
Mortality, expense and administration
charges (note 2):
BOA ....................................... (2,911,050) (1,794,049) (259,476) --
BOA Vision ................................ (3,702,966) (2,282,099) (335,457) --
BOA Enterprise ............................ (2,697) (1,662) (539) --
-------------- -------------- -------------- ----------
Net investment activity ..................... (280,014) 668,368 161,940 --
-------------- -------------- -------------- ----------
Proceeds from mutual fund shares sold ......... 68,652,622 43,206,313 16,255,006 --
Cost of mutual fund shares sold ............... (45,027,636) (36,032,570) (14,950,932) --
-------------- -------------- -------------- ----------
Realized gain (loss) on investments ......... 23,624,986 7,173,743 1,304,074 --
Change in unrealized gain (loss) on investments 74,666,240 45,991,237 4,095,258 --
-------------- -------------- -------------- ----------
Net gain (loss) on investments .............. 98,291,226 53,164,980 5,399,332 --
-------------- -------------- -------------- ----------
Reinvested capital gains ...................... 46,619,997 12,543,472 2,632,909 --
-------------- -------------- -------------- ----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 144,631,209 66,376,820 8,194,181 --
-------------- -------------- -------------- ----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ............................. 68,494,623 111,082,925 20,544,272 --
Transfers between funds ....................... (20,797,205) 20,894,767 41,995,241 --
Redemptions ................................... (30,880,679) (13,948,060) (2,661,376) --
Annuity benefits .............................. (9,174) (4,531) -- --
Annual contract maintenance charge (note 2) ... (189,743) (124,221) (11,359) --
Contingent deferred sales charges (note 2) .... (500,214) (255,758) (23,728) --
Adjustments to maintain reserves .............. (7,576) 14,818 (1,289) --
-------------- -------------- -------------- ----------
Net equity transactions ................... 16,110,032 117,659,940 59,841,761 --
-------------- -------------- -------------- ----------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... 160,741,241 184,036,760 68,035,942 --
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 898,176,376 527,666,759 47,657,224 --
-------------- -------------- -------------- ----------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... $1,058,917,617 711,703,519 115,693,166 --
============== ============== ============== ==========
</TABLE>
11
<PAGE> 11
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
MSEMMKT NSATCAPAP
------------------------------- --------------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ -- -- 2,147,228 1,108,257
Mortality, expense and administration
charges (note 2):
BOA ....................................... (30,698) -- (1,665,100) (653,788)
BOA Vision ................................ (34,834) -- (1,444,644) (567,228)
BOA Enterprise ............................ (91) -- (8,421) (3,306)
-------------- -------- -------------- --------------
Net investment activity ..................... (65,623) -- (970,937) (116,065)
-------------- -------- -------------- --------------
Proceeds from mutual fund shares sold ......... 12,131,618 -- 48,204,741 15,772,488
Cost of mutual fund shares sold ............... (11,951,972) -- (30,117,070)
-------------- -------- -------------- --------------
Realized gain (loss) on investments ......... 179,646 -- 18,087,671 2,503,772
Change in unrealized gain (loss) on investments (647,489) -- 58,809,868 32,543,809
-------------- -------- -------------- --------------
Net gain (loss) on investments .............. (467,843) -- 76,897,539 35,047,581
-------------- -------- -------------- --------------
Reinvested capital gains ...................... -- -- -- --
-------------- -------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ (533,466) -- 75,926,602 34,931,516
-------------- -------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ............................. 970,358 -- 43,519,033 31,900,252
Transfers between funds ....................... 2,259,468 -- 63,443,682
Redemptions ................................... (433,935) -- (17,238,317)
Annuity benefits .............................. -- -- (3,744) (87)
Annual contract maintenance charge (note 2) ... (1,071) -- (87,745) (42,312)
Contingent deferred sales charges (note 2) .... (6,773) -- (217,785) (95,798)
Adjustments to maintain reserves .............. 3,730 -- 19,839 2,666
-------------- -------- -------------- --------------
Net equity transactions ................... 2,791,777 -- 89,434,963 74,474,584
-------------- -------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... 2,258,311 -- 165,361,565 109,406,100
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 8,146,810 -- 363,605,489 139,089,426
-------------- -------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD .......... $ 10,405,121 -- 528,967,054 248,495,526
============== ======== ============== ==============
<CAPTION>
NSATGVTBD NSATMYMKT
--------------------------------- -----------------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... 8,975,341 8,551,828 22,143,936 22,458,970
Mortality, expense and administration
charges (note 2):
BOA ....................................... (1,378,254) (1,203,126) (3,214,953) (3,363,183)
BOA Vision ................................ (684,227) (597,286) (2,504,258) (2,619,720)
BOA Enterprise ............................ (1,343) (1,172) (3,465) (3,625)
-------------- -------------- -------------- --------------
Net investment activity ..................... 6,911,517 6,750,244 16,421,260 16,472,442
-------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold ......... 60,679,769 52,615,122 1,484,819,800 1,119,473,887
Cost of mutual fund shares sold ............... (13,268,716) (53,243,983) (1,484,819,800) (1,119,473,887)
-------------- -------------- -------------- --------------
Realized gain (loss) on investments ......... 4,287,581 (628,861) -- --
Change in unrealized gain (loss) on investments (1,274,119) (516,340) -- --
-------------- -------------- -------------- --------------
Net gain (loss) on investments .............. 3,013,462 (1,145,201) -- --
-------------- -------------- -------------- --------------
Reinvested capital gains ...................... -- -- -- --
-------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 9,924,979 5,605,043 16,421,260 16,472,442
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ............................. 16,842,041 20,036,023 152,025,923 348,077,117
Transfers between funds ....................... 48,101,586 10,026,757 (26,104,609) (63,365,080)
Redemptions ................................... (5,391,723) (18,559,417) (88,757,206) (87,156,157)
Annuity benefits .............................. (12,497) (11,602) (17,716) (15,130)
Annual contract maintenance charge (note 2) ... (80,302) (90,912) (160,142) (188,994)
Contingent deferred sales charges (note 2) .... (210,798) (284,764) (1,118,076) (1,269,769)
Adjustments to maintain reserves .............. (11,858) 1,103 (20,794) (8,757)
-------------- -------------- -------------- --------------
Net equity transactions ................... 7,750,047 (25,014,178) (1,413,091) 40,579,033
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... 17,675,026 (19,409,135) 15,008,169 57,051,475
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 299,681,912 281,791,284 839,446,496 809,469,728
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD .......... 317,356,938 262,382,149 854,454,665 866,521,203
============== ============== ============== ==============
</TABLE>
12
<PAGE> 12
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
NSATSMCAPV NSATSMCO
------------------------------- ----------------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ -- -- -- --
Mortality, expense and administration
charges (note 2):
BOA ....................................... (3,412) -- (921,830) (518,766)
BOA Vision ................................ (2,478) -- (1,099,383) (618,684)
BOA Enterprise ............................ (18) -- (4,881) (2,747)
-------------- -------------- -------------- --------------
Net investment activity ..................... (5,908) -- (2,026,094) (1,140,197)
-------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold ......... 6,223,530 -- 132,047,603 42,336,598
Cost of mutual fund shares sold ............... (6,296,508) -- (109,947,843) (40,149,161)
-------------- -------------- -------------- --------------
Realized gain (loss) on investments ......... (72,978) -- 22,099,760 2,187,437
Change in unrealized gain (loss) on investments (37,526) -- (4,600,996) 15,538,135
-------------- -------------- -------------- --------------
Net gain (loss) on investments .............. (110,504) -- 17,498,764 17,725,572
-------------- -------------- -------------- --------------
Reinvested capital gains ...................... -- -- -- --
-------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ (116,412) -- 15,472,670 16,585,375
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ............................. 167,770 -- 23,526,278 34,093,477
Transfers between funds ....................... 5,478,839 -- (15,739,063) 7,917,806
Redemptions ................................... (101,373) -- (10,134,672) (5,415,948)
Annuity benefits .............................. -- -- (7,540) (183)
Annual contract maintenance charge (note 2) ... (109) -- (57,792) (34,592)
Contingent deferred sales charges (note 2) .... (2,064) -- (137,970) (87,556)
Adjustments to maintain reserves .............. (17) -- (2,129) 5,221
-------------- -------------- -------------- --------------
Net equity transactions ................... 5,543,046 -- (2,552,888) 36,478,225
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... 5,426,634 -- 12,919,782 53,063,600
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... -- -- 290,550,224 158,512,836
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... $ 5,426,634 -- 303,470,006 211,576,436
============== ============== ============== ==============
<CAPTION>
NSATTOTRE NBAMTGRO
------------------------------- --------------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... 6,368,682 6,251,397 -- --
Mortality, expense and administration
charges (note 2):
BOA ....................................... (4,473,032) (2,622,177) (2,369,715) (1,975,271)
BOA Vision ................................ (3,237,715) (1,898,010) (834,939) (695,962)
BOA Enterprise ............................ (20,901) (12,253) (1,307) (1,089)
-------------- -------------- -------------- --------------
Net investment activity ..................... (1,362,966) 1,718,957 (3,205,961) (2,672,322)
-------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold ......... 27,953,959 19,512,964 120,406,852 89,442,785
Cost of mutual fund shares sold ............... (13,323,108) (75,082,965)
-------------- -------------- -------------- --------------
Realized gain (loss) on investments ......... 13,737,450 6,189,856 6,467,315 14,359,820
Change in unrealized gain (loss) on investments 135,574,768 112,904,783 (60,188,248) 16,708,565
-------------- -------------- -------------- --------------
Net gain (loss) on investments .............. 149,312,218 119,094,639 (53,720,933) 31,068,385
-------------- -------------- -------------- --------------
Reinvested capital gains ...................... -- -- 124,274,598 32,577,604
-------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 147,949,252 120,813,596 67,347,704 60,973,667
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ............................. 89,681,344 112,624,294 16,777,782 23,630,565
Transfers between funds ....................... 10,886,852 42,240,681 (14,431,585) 217,760
Redemptions ................................... (21,834,111) (24,294,610) (19,574,464)
Annuity benefits .............................. (96,407) (67,682) (40,385) (23,739)
Annual contract maintenance charge (note 2) ... (263,644) (195,808) (145,581) (148,344)
Contingent deferred sales charges (note 2) .... (583,024) (319,769) (258,060) (264,218)
Adjustments to maintain reserves .............. 24,570 10,036 (8,760) 1,595
-------------- -------------- -------------- --------------
Net equity transactions ................... 49,139,102 132,457,641 (22,401,199) 3,839,155
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... 197,088,354 253,271,237 44,946,505 64,812,822
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 1,035,147,551 582,959,358 477,494,040 375,781,424
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... 1,232,235,905 836,230,595 522,440,545 440,594,246
============== ============== ============== ==============
</TABLE>
13
<PAGE> 13
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
NBAMTGUARD NBAMTLMAT
------------------------- -----------------------------
1998 1997 1998 1997
------------ -------- ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ -- -- 11,658,274 11,734,100
Mortality, expense and administration
charges (note 2):
BOA ....................................... (13,610) -- (725,803) (778,328)
BOA Vision ................................ (42,513) -- (514,138) (551,345)
BOA Enterprise ............................ (21) -- (451) (484)
------------ -------- ------------ ------------
Net investment activity ..................... (56,144) -- 10,417,882 10,403,943
------------ -------- ------------ ------------
Proceeds from mutual fund shares sold ......... 1,124,661 -- 27,530,038 31,542,591
Cost of mutual fund shares sold ............... (1,166,532) -- (28,037,204) (32,221,162)
------------ -------- ------------ ------------
Realized gain (loss) on investments ......... (41,871) -- (507,166) (678,571)
Change in unrealized gain (loss) on investments (357,883) -- (6,577,711) (5,260,364)
------------ -------- ------------ ------------
Net gain (loss) on investments .............. (399,754) -- (7,084,877) (5,938,935)
------------ -------- ------------ ------------
Reinvested capital gains ...................... -- -- -- --
------------ -------- ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ (455,898) -- 3,333,005 4,465,008
------------ -------- ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ............................. 383,686 -- 13,293,975 38,108,381
Transfers between funds ....................... 29,531,145 -- (11,199,400) (42,262,531)
Redemptions ................................... (262,732) -- (12,244,793) (8,683,033)
Annuity benefits .............................. -- -- (7,751) (7,556)
Annual contract maintenance charge (note 2) ... (624) -- (33,202) (37,088)
Contingent deferred sales charges (note 2) .... (3,068) -- (111,457) (119,730)
Adjustments to maintain reserves .............. (100) -- 45 251
------------ -------- ------------ ------------
Net equity transactions ................... 29,648,307 -- (10,302,583) (13,001,306)
------------ -------- ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... 29,192,409 -- (6,969,578) (8,536,298)
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... -- -- 188,450,178 203,772,070
------------ -------- ------------ ------------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... $ 29,192,409 -- 181,480,600 195,235,772
============ ======== ============ ============
<CAPTION>
NBAMTPART OPPBDFD
----------------------------- -----------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... 3,116,604 1,231,708 4,888,363 7,115,979
Mortality, expense and administration
charges (note 2):
BOA ....................................... (2,498,541) (1,338,579) (924,022) (677,807)
BOA Vision ................................ (3,225,984) (1,728,303) (1,090,273) (799,759)
BOA Enterprise ............................ (5,469) (2,930) (951) (697)
------------ ------------ ------------ ------------
Net investment activity ..................... (2,613,390) (1,838,104) 2,873,117 5,637,716
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold ......... 124,191,440 122,827,255 37,901,793 12,056,637
Cost of mutual fund shares sold ............... (98,023,788) (100,788,770) (35,006,289) (12,246,361)
------------ ------------ ------------ ------------
Realized gain (loss) on investments ......... 26,167,652 22,048,485 2,895,504 (189,724)
Change in unrealized gain (loss) on investments (79,282,377) 26,328,169 (654,044) (1,266,858)
------------ ------------ ------------ ------------
Net gain (loss) on investments .............. (53,114,725) 48,376,654 2,241,460 (1,456,582)
------------ ------------ ------------ ------------
Reinvested capital gains ...................... 98,173,016 18,968,301 4,423,968 738,909
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 42,444,901 65,506,851 9,538,545 4,920,043
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ............................. 71,012,596 81,700,489 22,076,862 28,138,560
Transfers between funds ....................... (20,152,842) 88,267,780 (2,641,675) (4,069,956)
Redemptions ................................... (28,346,780) (13,810,788) (12,199,727) (7,799,554)
Annuity benefits .............................. (6,044) (128) (41,597) (39,043)
Annual contract maintenance charge (note 2) ... (130,960) (76,574) (50,020) (49,229)
Contingent deferred sales charges (note 2) .... (391,118) (187,351) (173,434) (141,210)
Adjustments to maintain reserves .............. 256 (6,922) (1,247) (4,125)
------------ ------------ ------------ ------------
Net equity transactions ................... 21,985,108 155,886,506 6,969,162 16,035,443
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... 64,430,009 221,393,357 16,507,707 20,955,486
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 777,189,563 354,011,224 290,966,291 215,102,822
------------ ------------ ------------ ------------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... $841,619,572 575,404,581 307,473,998 236,058,308
============ ============ ============ ============
</TABLE>
14
<PAGE> 14
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
OPPGISEC OPPGRO
--------------------------- ---------------------------
1998 1997 1998 1997
------------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 10,856,886 4,353,191 188,351 --
Mortality, expense and administration
charges (note 2):
BOA ....................................... (1,804,398) (1,219,806) (102,797) --
BOA Vision ................................ (1,836,779) (1,241,695) (91,138) --
BOA Enterprise ............................ (962) (650) (284) --
------------- ------------- ------------- -------
Net investment activity ..................... 7,214,747 1,891,040 (5,868) --
------------- ------------- ------------- -------
Proceeds from mutual fund shares sold ......... 59,938,116 35,655,404 6,921,199 --
Cost of mutual fund shares sold ............... (40,682,858) (31,902,449) (6,683,106) --
------------- ------------- ------------- -------
Realized gain (loss) on investments ......... 19,255,258 3,752,955 238,093 --
Change in unrealized gain (loss) on investments (10,214,150) 47,080,839 1,708,886 --
------------- ------------- ------------- -------
Net gain (loss) on investments .............. 9,041,108 50,833,794 1,946,979 --
------------- ------------- ------------- -------
Reinvested capital gains ...................... 40,867,407 -- 2,272,563 --
------------- ------------- ------------- -------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 57,123,262 52,724,834 4,213,674 --
------------- ------------- ------------- -------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ............................. 31,758,518 44,770,193 8,643,848 --
Transfers between funds ....................... 4,686,767 38,737,683 12,910,039 --
Redemptions ................................... (18,731,010) (10,613,688) (776,512) --
Annuity benefits .............................. (8,763) (2,509) (788) --
Annual contract maintenance charge (note 2) ... (107,412) (93,281) (4,247) --
Contingent deferred sales charges (note 2) .... (267,859) (183,471) (8,494) --
Adjustments to maintain reserves .............. 2,106 38,864 (1,719) --
------------- ------------- ------------- -------
Net equity transactions ................... 17,332,347 72,653,791 20,762,127 --
------------- ------------- ------------- -------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... 74,455,609 125,378,625 24,975,801 --
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 489,322,679 306,611,895 16,190,114 --
------------- ------------- ------------- -------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... $ 563,778,288 431,990,520 41,165,915 --
============= ============= ============= =======
<CAPTION>
OPPMULT STOPP2
--------------------------- -----------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... 3,212,145 5,025,792 275,073 1,753,718
Mortality, expense and administration
charges (note 2):
BOA ....................................... (1,270,217) (912,927) (3,503,823) (2,594,918)
BOA Vision ................................ (1,125,718) (809,073) (2,014,302) (1,491,784)
BOA Enterprise ............................ (1,258) (904) (2,704) (2,003)
------------ ------------- ------------- -------------
Net investment activity ..................... 814,952 3,302,888 (5,245,756) (2,334,987)
------------ ------------- ------------- -------------
Proceeds from mutual fund shares sold ......... 10,856,307 3,247,753 83,757,828 81,547,853
Cost of mutual fund shares sold ............... (7,837,962) (2,562,485) (53,875,976) (63,267,112)
------------ ------------- ------------- -------------
Realized gain (loss) on investments ......... 3,018,345 685,268 29,881,852 18,280,741
Change in unrealized gain (loss) on investments (673,378) 8,254,080 (29,228,918) (12,478,431)
------------ ------------- ------------- -------------
Net gain (loss) on investments .............. 2,344,967 8,939,348 652,934 5,802,310
------------ ------------- ------------- -------------
Reinvested capital gains ...................... 18,630,439 9,159,579 101,358,207 57,079,292
------------ ------------- ------------- -------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 21,790,358 21,401,815 96,765,385 60,546,615
------------ ------------- ------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ............................. 23,403,887 35,577,311 35,730,746 47,518,414
Transfers between funds ....................... (6,362,589) 5,041,160 (10,308,522) (23,658,128)
Redemptions ................................... (16,522,311) (9,990,640) (28,921,115) (18,178,591)
Annuity benefits .............................. (15,347) (2,594) (24,176) (6,790)
Annual contract maintenance charge (note 2) ... (76,041) (69,326) (197,185) (179,768)
Contingent deferred sales charges (note 2) .... (202,593) (142,556) (397,012) (298,603)
Adjustments to maintain reserves .............. (9,862) 1,653 8,185 (16,937)
------------ ------------- ------------- -------------
Net equity transactions ................... 215,144 30,415,008 (4,109,079) 5,179,597
------------ ------------- ------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... 22,005,502 51,816,823 92,656,306 65,726,212
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 340,972,204 237,388,771 764,227,770 602,429,220
------------ ------------- ------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... $362,977,706 289,205,594 856,884,076 668,155,432
============ ============= ============= =============
</TABLE>
15
<PAGE> 15
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
STDISC2 STINTSTK2
--------------------------------- -----------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ -- -- 530,498 1,173,377
Mortality, expense and administration
charges (note 2):
BOA ....................................... (781,617) (740,069) (146,258) (211,284)
BOA Vision ................................ (508,056) (481,050) (191,882) (277,193)
BOA Enterprise ............................ (294) (278) (185) (267)
------------- ------------- ------------- -------------
Net investment activity ..................... (1,289,967) (1,221,397) 192,173 684,633
------------- ------------- ------------- -------------
Proceeds from mutual fund shares sold ......... 46,665,592 59,182,039 20,333,342 19,502,270
Cost of mutual fund shares sold ............... (40,771,871) (69,473,719) (22,524,186) (19,263,660)
------------- ------------- ------------- -------------
Realized gain (loss) on investments ......... 5,893,721 (10,291,680) (2,190,844) 238,610
Change in unrealized gain (loss) on investments 5,783,102 18,060,432 5,184,345 2,908,648
------------- ------------- ------------- -------------
Net gain (loss) on investments .............. 11,676,823 7,768,752 2,993,501 3,147,258
------------- ------------- ------------- -------------
Reinvested capital gains ...................... 2,856,579 -- -- 1,762,973
------------- ------------- ------------- -------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 13,243,435 6,547,355 3,185,674 5,594,864
------------- ------------- ------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ............................. 8,162,317 12,576,957 2,716,958 9,546,930
Transfers between funds ....................... (18,778,298) (32,928,867) (6,535,651) (4,843,431)
Redemptions ................................... (7,500,752) (5,553,617) (2,007,256) (2,418,262)
Annuity benefits .............................. (4,989) (4,178) (2,347) (301)
Annual contract maintenance charge (note 2) ... (53,133) (57,926) (9,688) (13,198)
Contingent deferred sales charges (note 2) .... (118,796) (106,823) (33,050) (39,801)
Adjustments to maintain reserves .............. (7,281) 1,577 (4,864) 6,023
------------- ------------- ------------- -------------
Net equity transactions ................... (18,300,932) (26,072,877) (5,875,898) 2,237,960
------------- ------------- ------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... (5,057,497) (19,525,522) (2,690,224) 7,832,824
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 195,266,423 208,719,472 49,718,321 69,828,900
------------- ------------- ------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... $ 190,208,926 189,193,950 47,028,097 77,661,724
============= ============= ============= =============
<CAPTION>
VEWRLDBD VEWRLDEMKT
--------------------------- -------------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... 874,183 3,428,399 606,759 154,979
Mortality, expense and administration
charges (note 2):
BOA ....................................... (380,834) (398,353) (215,894) (237,314)
BOA Vision ................................ (259,631) (271,574) (232,693) (255,780)
BOA Enterprise ............................ (101) (106) (467) (513)
------------- ------------- ------------- -------------
Net investment activity ..................... 233,617 2,758,366 157,705 (338,628)
------------- ------------- ------------- -------------
Proceeds from mutual fund shares sold ......... 17,480,822 15,455,271 48,944,375 19,396,054
Cost of mutual fund shares sold ............... (16,206,221) (68,879,745) (17,470,513)
------------- ------------- ------------- -------------
Realized gain (loss) on investments ......... 82,852 (750,950) (19,935,370) 1,925,541
Change in unrealized gain (loss) on investments 2,215,510 (3,712,901) 4,262,247 10,987,529
------------- ------------- ------------- -------------
Net gain (loss) on investments .............. 2,298,362 (4,463,851) (15,673,123) 12,913,070
------------- ------------- ------------- -------------
Reinvested capital gains ...................... -- -- 539,341 --
------------- ------------- ------------- -------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 2,531,979 (1,705,485) (14,976,077) 12,574,442
------------- ------------- ------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ............................. 3,372,107 7,580,856 5,659,239 18,381,249
Transfers between funds ....................... (1,481,831) (12,976,172) (18,747,855) 81,183,104
Redemptions ................................... (6,292,171) (4,176,191) (3,174,552) (3,263,398)
Annuity benefits .............................. (5,739) (5,583) (1,882) --
Annual contract maintenance charge (note 2) ... (20,805) (25,506) (14,703) (14,374)
Contingent deferred sales charges (note 2) .... (55,858) (56,222) (45,362) (40,595)
Adjustments to maintain reserves .............. (2,989) 2,837 12,786 (2,314)
------------- ------------- ------------- -------------
Net equity transactions ................... (4,487,286) (9,655,981) (16,312,329) 96,243,672
------------- ------------- ------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... (1,955,307) (11,361,466) (31,288,406) 108,818,114
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 97,264,864 109,247,607 77,776,313 12,180,233
------------- ------------- ------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... 95,309,557 97,886,141 46,487,907 120,998,347
============= ============= ============= =============
</TABLE>
16
<PAGE> 16
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
VEWRLDHAS MSRESEC
------------------------------- -------------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 711,661 2,942,339 393,097 313,963
Mortality, expense and administration
charges (note 2):
BOA ....................................... (482,321) (635,853) (769,496) (583,759)
BOA Vision ................................ (261,589) (344,857) (863,330) (654,944)
BOA Enterprise ............................ (496) (654) (1,359) (1,031)
------------- ------------- ------------- -------------
Net investment activity ..................... (32,745) 1,960,975 (1,241,088) (925,771)
------------- ------------- ------------- -------------
Proceeds from mutual fund shares sold ......... 57,468,176 97,493,184 55,400,128 47,737,092
Cost of mutual fund shares sold ............... (69,323,681) (98,910,886) (49,387,335) (37,756,421)
------------- ------------- ------------- -------------
Realized gain (loss) on investments ......... (11,855,505) (1,417,702) 6,012,793 9,980,671
Change in unrealized gain (loss) on investments (21,882,300) (6,576,640) (22,459,894) 432,243
------------- ------------- ------------- -------------
Net gain (loss) on investments .............. (33,737,805) (7,994,342) (16,447,101) 10,412,914
------------- ------------- ------------- -------------
Reinvested capital gains ...................... 17,475,241 3,986,394 3,868,070 634,606
------------- ------------- ------------- -------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ (16,295,309) (2,046,973) (13,820,119) 10,121,749
------------- ------------- ------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ............................. 3,859,730 10,015,899 15,377,243 39,174,929
Transfers between funds ....................... (16,545,723) (10,556,477) (46,026,010) 12,202,131
Redemptions ................................... (4,750,419) (5,534,083) (8,772,346) (4,636,004)
Annuity benefits .............................. (2,187) (2,331) (2,897) --
Annual contract maintenance charge (note 2) ... (31,268) (42,800) (39,873) (28,759)
Contingent deferred sales charges (note 2) .... (59,311) (88,770) (102,222) (62,560)
Adjustments to maintain reserves .............. (71,638) (10,541) (4,508) 14,152
------------- ------------- ------------- -------------
Net equity transactions ................... (17,600,816) (6,219,103) (39,570,613) 46,663,889
------------- ------------- ------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... (33,896,125) (8,266,076) (53,390,732) 56,785,638
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 127,190,392 151,820,758 268,677,705 150,233,923
------------- ------------- ------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... $ 93,294,267 143,554,682 215,286,973 207,019,561
============= ============= ============= =============
<CAPTION>
WPINTEQ WPPVENCAP
------------------------------- --------------------------------
1998 1997 1998 1997
------------- ---------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... -- -- -- --
Mortality, expense and administration
charges (note 2):
BOA ....................................... (840,510) (832,945) (64,309) (58,424)
BOA Vision ................................ (1,151,747) (1,414,381) (60,040) (54,546)
BOA Enterprise ............................ (729) (722) (216) (196)
------------- ------------- ------------- -------------
Net investment activity ..................... (1,992,986) (1,975,048) (124,565) (113,166)
------------- ------------- ------------- -------------
Proceeds from mutual fund shares sold ......... 109,278,040 41,864,545 31,925,665 11,234,339
Cost of mutual fund shares sold ............... (107,139,977) (38,836,403) (30,207,975) (11,505,714)
------------- ------------- ------------- -------------
Realized gain (loss) on investments ......... 2,138,063 3,028,142 1,717,690 (271,375)
Change in unrealized gain (loss) on investments 34,758,926 39,653,878 575,939 713,051
------------- ------------- ------------- -------------
Net gain (loss) on investments .............. 36,896,989 42,682,020 2,293,629 441,676
------------- ------------- ------------- -------------
Reinvested capital gains ...................... -- -- -- --
------------- ------------- ------------- -------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 34,904,003 40,706,972 2,169,064 328,510
------------- ------------- ------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ............................. 15,406,815 39,025,892 1,675,659 4,016,237
Transfers between funds ....................... (42,413,480) 4,657,264 3,736,868 7,044,625
Redemptions ................................... (9,741,464) (7,393,064) (1,115,131) (1,270,233)
Annuity benefits .............................. (5,711) (2,028) -- --
Annual contract maintenance charge (note 2) ... (48,425) (51,338) (3,726) (2,658)
Contingent deferred sales charges (note 2) .... (132,161) (120,964) (11,515) (16,644)
Adjustments to maintain reserves .............. 2,818 7,716 (130) 167
------------- ------------- ------------- -------------
Net equity transactions ................... (36,931,608) 36,123,478 4,282,025 9,771,494
------------- ------------- ------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... (2,027,605) 76,830,450 6,451,089 10,100,004
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 286,776,025 264,866,519 14,678,793 9,448,612
------------- ------------- ------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... $ 284,748,420 341,696,969 21,129,882 19,548,616
============= ============= ============= =============
</TABLE>
17
<PAGE> 17
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
WPSMCOGR
--------------------------------
1998 1997
------------- ----------------
<S> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ...................................... $ -- --
Mortality, expense and administration
charges (note 2):
BOA ................................................... (1,194,562) (823,547)
BOA Vision ............................................ (1,368,706) (943,605)
BOA Enterprise ........................................ (2,248) (1,550)
------------- -------------
Net investment activity ................................. (2,565,516) (1,768,702)
------------- -------------
Proceeds from mutual fund shares sold ..................... 141,376,448 67,203,244
Cost of mutual fund shares sold ........................... 115,793,369) (71,741,823)
------------- -------------
Realized gain (loss) on investments ..................... 25,583,079 (4,538,579)
Change in unrealized gain (loss) on investments (7,716,827) 14,343,875
------------- -------------
Net gain (loss) on investments .......................... 17,866,252 9,805,296
------------- -------------
Reinvested capital gains .................................. -- --
------------- -------------
Net increase (decrease) in contract owners'
equity resulting from operations .................... 15,300,736 8,036,594
------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ......................................... 22,114,528 43,546,865
Transfers between funds ................................... (40,111,858) 4,889,000
Redemptions ............................................... (12,709,338) (7,923,287)
Annuity benefits .......................................... (3,802) (423)
Annual contract maintenance charge (note 2) ............... (73,647) (54,634)
Contingent deferred sales charges (note 2) ................ (217,616) (145,426)
Adjustments to maintain reserves .......................... (1,506) (361)
------------- -------------
Net equity transactions ............................... (31,003,239) 40,311,734
------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ....................... (15,702,503) 48,348,328
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ................. 383,397,113 257,182,600
------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD ....................... $ 367,694,610 305,530,928
============= =============
</TABLE>
See accompanying notes to financial statements.
18
<PAGE> 18
NATIONWIDE VARIABLE ACCOUNT-II
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998 AND 1997
(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 Income & Growth
(ACVPIncGr) 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)
Portfolios of the Dreyfus Variable Investment Fund (Dreyfus VIF);
Dreyfus VIF - Capital Appreciation Portfolio (DryCapAp) Dreyfus VIF
- Growth and Income Portfolio (DryGrInc)
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)
19
<PAGE> 19
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)
Portfolio of the Fidelity Variable Insurance Products Fund III
(Fidelity VIP-III);
Fidelity VIP-III - Growth Opportunities Portfolio (FidVIPGrOp)
Portfolio of the Morgan Stanley Universal Funds, Inc. (Morgan Stanley);
Morgan Stanley - Emerging Markets Debt Portfolio (MSEmMkt)
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 Cap Value Fund (NSATSmCapV)
Nationwide SAT - Small Company Fund (NSATSmCo)
Nationwide SAT - Total Return Fund (NSATTotRe)
Portfolios of the Neuberger & Berman Advisers Management Trust
(Neuberger & Berman AMT);
Neuberger & Berman AMT - Growth Portfolio (NBAMTGro)
Neuberger & Berman AMT - Guardian Portfolio (NBAMTGuard)
Neuberger & Berman AMT - Limited Maturity Bond Portfolio (NBAMTLMat)
Neuberger & Berman AMT - Partners Portfolio (NBAMTPart)
Funds of the Oppenheimer Variable Account Funds (Oppenheimer VAF);
Oppenheimer VAF - Bond Fund (OppBdFd)
Oppenheimer VAF - Global Securities Fund (OppGlSec)
Oppenheimer VAF - Growth Fund (OppGro)
Oppenheimer VAF - Multiple Strategies Fund (OppMult)
Strong Opportunity Fund II, Inc. (StOpp2)
(formerly Strong Special Fund II, Inc.)
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 WIT);
Van Eck WIT - Worldwide Bond Fund (VEWrldBd)
Van Eck WIT - Worldwide Emerging Markets Fund (VEWrldEMkt)
Van Eck WIT - Worldwide Hard Assets Fund (VEWrldHAs)
(formerly Van Eck WIT - Gold and Natural Resources Fund)
Portfolio of the Van Kampen American Capital Life Investment Trust
(Van Kampen American Capital LIT);
Van Kampen American Capital LIT - Morgan Stanley Real Estate
Securities Portfolio (MSRESec)
(formerly Van Kampen American Capital LIT - Real Estate Securities
Fund)
Portfolios of the Warburg Pincus Trust;
Warburg Pincus Trust - International Equity Portfolio (WPIntEq)
Warburg Pincus Trust - Post Venture Capital Portfolio (WPPVenCap)
Warburg Pincus Trust - Small Company Growth Portfolio (WPSmCoGr)
At June 30, 1998, 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.
20
<PAGE> 20
(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, 1998. The cost of investments sold
is determined on the specific identification basis. Investment
transactions are accounted for on the trade date (date the order to buy
or sell is executed) and dividend income is recorded on the ex-dividend
date.
(d)Federal Income Taxes
Operations of the Account form a part of, and are taxed with, operations
of the Company which is taxed as a life insurance company under the
Internal Revenue Code.
The Company does not provide for income taxes within the Account. Taxes
are the responsibility of the contract owner upon termination or
withdrawal.
(e)Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally
accepted accounting principles may require management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities, if any,
at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from those estimates.
(2) 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%.
(3) RELATED PARTY TRANSACTIONS
The Company performs various services on behalf of the Mutual Fund Companies
in which the Account invests and may receive fees for the services
performed. These services include, among other things, shareholder
communications, preparation, postage, fund transfer agency and various other
record keeping and customer service functions. These fees are paid to an
affiliate of the Company.
21
<PAGE> 21
(4) COMPONENTS OF CONTRACT OWNERS' EQUITY
The following is a summary of contract owners' equity at June 30, 1998, for
each series, in both the accumulation and payout phases.
<TABLE>
<CAPTION>
PERIOD
Contract owners' equity represented by: UNITS UNIT VALUE RETURN
--------- ----------- -------
<S> <C> <C> <C> <C>
Contracts in accumulation phase:
The BEST OF AMERICA(R) contracts:
American Century VP -
American Century VP Balanced:
Tax qualified ....................... 3,505,947 $18.575584 $ 65,125,013 14%
Non-tax qualified ................... 3,104,041 18.575584 57,659,374 14%
American Century VP -
American Century VP Capital
Appreciation:
Tax qualified ....................... 6,321,433 22.659719 143,241,895 0%
Non-tax qualified ................... 3,652,482 22.659719 82,764,216 0%
American Century VP - American Century
VP Income & Growth:
Tax qualified ....................... 227,099 10.090428 2,291,526 1%(a)
Non-tax qualified ................... 412,232 10.090428 4,159,597 1%(a)
American Century VP -
American Century VP International:
Tax qualified ....................... 5,149,061 17.122323 88,163,886 24%
Non-tax qualified ................... 4,261,886 17.122323 72,973,389 24%
American Century VP -
American Century VP Value:
Tax qualified ....................... 1,425,927 13.280359 18,936,822 5%
Non-tax qualified ................... 1,248,175 13.280359 16,576,212 5%
American VI Series - Growth Fund:
Tax qualified ....................... 406,915 36.656953 14,916,264 17%
Non-tax qualified ................... 395,993 36.656953 14,515,897 17%
American VI Series -
High-Yield Bond Fund:
Tax qualified ....................... 75,035 26.686010 2,002,385 4%
Non-tax qualified ................... 44,233 26.686010 1,180,402 4%
American VI Series - U.S. Government/
AAA-Rated Securities Fund:
Tax qualified ....................... 127,873 20.276945 2,592,874 3%
Non-tax qualified ................... 83,345 20.276945 1,689,982 3%
The Dreyfus Socially Responsible
Growth Fund, Inc.:
Tax qualified ....................... 3,210,672 25.402227 81,558,219 18%
Non-tax qualified ................... 1,832,336 25.402227 46,545,415 18%
Dreyfus Stock Index Fund:
Tax qualified ....................... 14,370,809 25.233975 362,632,635 17%
Non-tax qualified ................... 10,589,227 25.233975 267,208,289 17%
Dreyfus VIF -
Capital Appreciation Portfolio:
Tax qualified ....................... 2,160,230 12.225394 26,409,663 20%
Non-tax qualified ................... 1,707,614 12.225394 20,876,254 20%
Dreyfus VIF - Growth and Income Portfolio:
Tax qualified ....................... 1,271,442 12.119449 15,409,176 6%
Non-tax qualified ................... 948,417 12.119449 11,494,291 6%
</TABLE>
22
<PAGE> 22
<TABLE>
<S> <C> <C> <C> <C>
Fidelity VIP - Equity-Income Portfolio:
Tax qualified .......................... 24,066,507 38.939799 937,144,945 10%
Non-tax qualified ...................... 18,841,611 38.939799 733,688,545 10%
Fidelity VIP - Growth Portfolio:
Tax qualified .......................... 17,283,295 55.531882 959,773,899 18%
Non-tax qualified ...................... 11,350,823 55.531882 630,332,563 18%
Fidelity VIP - High Income Portfolio:
Tax qualified .......................... 6,781,638 29.691103 201,354,312 4%
Non-tax qualified ...................... 7,228,351 29.691103 214,617,714 4%
Fidelity VIP - Overseas Portfolio:
Tax qualified .......................... 12,117,223 21.023415 254,745,408 15%
Non-tax qualified ...................... 10,283,113 21.023415 216,186,152 15%
Fidelity VIP-II - Asset Manager Portfolio:
Tax qualified .......................... 19,746,877 26.406332 521,442,590 9%
Non-tax qualified ...................... 11,749,485 26.406332 310,260,802 9%
Fidelity VIP-II - Contrafund Portfolio:
Tax qualified .......................... 14,493,700 18.837020 273,018,117 16%
Non-tax qualified ...................... 11,027,259 18.837020 207,720,698 16%
Fidelity VIP-III -
Growth Opportunities Portfolio:
Tax qualified .......................... 2,348,173 12.091497 28,392,927 11%
Non-tax qualified ...................... 1,903,225 12.091497 23,012,839 11%
Morgan Stanley -
Emerging Markets Debt Portfolio:
Tax qualified .......................... 262,136 9.374025 2,457,269 (4)%
Non-tax qualified ...................... 309,958 9.374025 2,905,554 (4)%
Nationwide SAT -
Capital Appreciation Fund:
Tax qualified .......................... 5,209,357 28.283511 147,338,906 19%
Non-tax qualified ...................... 4,988,122 28.283511 141,081,603 19%
Nationwide SAT -
Government Bond Fund:
Tax qualified .......................... 3,608,454 33.883416 122,266,748 3%
Non-tax qualified ...................... 2,723,681 33.793915 92,043,844 3%
Nationwide SAT - Money Market Fund:
Tax qualified .......................... 10,660,323 23.444634 249,927,371 2%
Non-tax qualified ...................... 11,045,783 23.444634 258,964,340 2%
Nationwide SAT - Small Cap Value Fund:
Tax qualified .......................... 154,119 9.218525 1,420,750 (8)%(a)
Non-tax qualified ...................... 203,680 9.218525 1,877,629 (8)%(a)
Nationwide SAT - Small Company Fund:
Tax qualified .......................... 4,970,648 16.891077 83,959,598 5%
Non-tax qualified ...................... 3,454,950 16.891077 58,357,826 5%
Nationwide SAT - Total Return Fund:
Tax qualified .......................... 4,493,929 91.343631 410,491,792 14%
Non-tax qualified ...................... 3,469,770 88.991481 308,779,971 14%
Neuberger & Berman AMT - Growth Portfolio:
Tax qualified .......................... 5,060,285 43.539336 220,321,449 15%
Non-tax qualified ...................... 3,846,342 43.539336 167,467,177 15%
Neuberger & Berman AMT -
Guardian Portfolio:
Tax qualified .......................... 422,355 9.701671 4,097,549 (3)%(a)
Non-tax qualified ...................... 389,059 9.701671 3,774,522 (3)%(a)
</TABLE>
23
(Continued)
<PAGE> 23
<TABLE>
<S> <C> <C> <C> <C>
Neuberger & Berman AMT -
Limited Maturity Bond Portfolio:
Tax qualified ......................... 3,184,776 18.015959 57,376,794 2%
Non-tax qualified ..................... 2,803,584 18.015959 50,509,254 2%
Neuberger & Berman AMT - Partners Portfolio:
Tax qualified ......................... 8,742,603 23.536090 205,766,691 5%
Non-tax qualified ..................... 7,562,332 23.536090 177,987,727 5%
Oppenheimer VAF - Bond Fund:
Tax qualified ......................... 4,086,541 19.327858 78,984,084 3%
Non-tax qualified ..................... 3,409,318 19.327858 65,894,814 3%
Oppenheimer VAF -
Global Securities Fund:
Tax qualified ......................... 9,937,021 17.868823 177,562,869 11%
Non-tax qualified ..................... 6,168,757 17.868823 110,228,427 11%
Oppenheimer VAF - Growth Fund:
Tax qualified ......................... 1,068,074 12.125254 12,950,669 16%
Non-tax qualified ..................... 788,380 12.125254 9,559,308 16%
Oppenheimer VAF -
Multiple Strategies Fund:
Tax qualified ......................... 5,067,521 22.214470 112,572,293 6%
Non-tax qualified ..................... 3,758,916 22.214470 83,502,327 6%
Strong Opportunity Fund II, Inc.:
Tax qualified ......................... 11,309,191 29.402278 332,515,978 13%
Non-tax qualified ..................... 7,686,717 29.402278 226,006,990 13%
Strong VIF - Strong Discovery Fund II:
Tax qualified ......................... 3,497,615 18.971782 66,355,989 7%
Non-tax qualified ..................... 2,790,153 18.971782 52,934,174 7%
Strong VIF -
Strong International Stock Fund II:
Tax qualified ......................... 1,200,914 10.092358 12,120,054 6%
Non-tax qualified ..................... 911,221 10.092358 9,196,369 6%
Van Eck WIT - Worldwide Bond Fund:
Tax qualified ......................... 1,890,162 15.160072 28.654,992 3%
Non-tax qualified ..................... 1,815,391 15.160072 27,521,458 3%
Van Eck WIT -
Worldwide Emerging Markets Fund:
Tax qualified ......................... 2,008,850 6.748047 13,555,814 (23)%
Non-tax qualified ..................... 1,515,395 6.748047 10,225,957 (23)%
Van Eck WIT -
Worldwide Hard Assets Fund:
Tax qualified ......................... 2,196,949 13.576651 29,827,210 (14)%
Non-tax qualified ..................... 2,385,402 13.576651 32,385,770 (14)%
Van Kampen American Capital LIT -
Morgan Stanley Real Estate
Securities Portfolio:
Tax qualified ......................... 3,012,414 16.918595 50,965,812 (5)%
Non-tax qualified ..................... 3,077,383 16.918595 52,064,997 (5)%
Warburg Pincus Trust -
International Equity Portfolio:
Tax qualified ......................... 5,524,168 12.561666 69,392,753 13%
Non-tax qualified ..................... 4,589,827 12.561666 57,655,874 13%
Warburg Pincus Trust -
Post Venture Capital Portfolio:
Tax qualified ......................... 450,840 12.787222 5,764,991 12%
Non-tax qualified ..................... 385,679 12.787222 4,931,763 12%
</TABLE>
24
<PAGE> 24
<TABLE>
<S> <C> <C> <C> <C>
Warburg Pincus Trust -
Small Company Growth Portfolio:
Tax qualified ......................... 5,862,974 16.607109 97,367,048 4%
Non-tax qualified ..................... 4,967,479 16.607109 82,495,465 4%
The BEST OF AMERICA(R)
Nationwide Insurance
Enterprise Annuity contracts:
American Century VP -
American Century VP Balanced:
Tax qualified ......................... 9,914 14.883564 147,556 14%
Non-tax qualified ..................... 5,375 14.883564 79,999 14%
American Century VP -
American Century VP Capital Appreciation:
Tax qualified ......................... 5,900 9.042311 53,350 0%
Non-tax qualified ..................... 12,269 9.042311 110,940 0%
American Century VP - American
Century VP Income & Growth:
Tax qualified ......................... 976 10.098826 9,856 1%(a)
Non-tax qualified ..................... 810 10.098826 8,180 1%(a)
American Century VP -
American Century VP International:
Tax qualified ......................... 3,827 17.262336 66,063 25%
Non-tax qualified ..................... 12,202 17.262336 210,635 25%
American Century VP -
American Century VP Value:
Tax qualified ......................... 969 13.382533 12,968 5%
Non-tax qualified ..................... 10,506 13.382533 140,597 5%
The Dreyfus Socially Responsible
Growth Fund, Inc.:
Tax qualified ......................... 8,508 18.663072 158,785 18%
Non-tax qualified ..................... 12,867 18.663072 240,138 18%
Dreyfus Stock Index Fund:
Tax qualified ......................... 65,259 19.843924 1,294,995 17%
Non-tax qualified ..................... 47,634 19.843924 945,245 17%
Dreyfus VIF -
Capital Appreciation Portfolio:
Tax qualified ......................... 2,732 12.284853 33,562 20%
Non-tax qualified ..................... 7,333 12.284853 90,085 20%
Dreyfus VIF - Growth and Income Portfolio:
Tax qualified ......................... 22,808 12.212711 278,548 6%
Non-tax qualified ..................... 14,135 12.212711 172,627 6%
Fidelity VIP - Equity-Income Portfolio:
Tax qualified ......................... 64,294 17.017957 1,094,153 10%
Non-tax qualified ..................... 50,757 17.017957 863,780 10%
Fidelity VIP - Growth Portfolio:
Tax qualified ......................... 56,493 15.947729 900,935 19%
Non-tax qualified ..................... 52,833 15.947729 842,566 19%
Fidelity VIP - High Income Portfolio:
Tax qualified ......................... 23,071 13.996277 322,908 4%
Non-tax qualified ..................... 20,946 13.996277 293,166 4%
Fidelity VIP - Overseas Portfolio:
Tax qualified ......................... 2,903 15.050047 43,690 15%
Non-tax qualified ..................... 3,428 15.050047 51,592 15%
</TABLE>
25
(Continued)
<PAGE> 25
<TABLE>
<S> <C> <C> <C> <C>
Fidelity VIP-II - Asset Manager Portfolio:
Tax qualified .......................... 9,791 15.601254 152,752 9%
Non-tax qualified ...................... 9,820 15.601254 153,204 9%
Fidelity VIP-II - Contrafund Portfolio:
Tax qualified .......................... 21,316 17.587754 374,901 16%
Non-tax qualified ...................... 20,577 17.587754 361,903 16%
Fidelity VIP-III -
Growth Opportunities Portfolio:
Tax qualified .......................... 1,065 12.150329 12,940 11%
Non-tax qualified ...................... 11,770 12.150329 143,009 11%
Morgan Stanley -
Emerging Markets Debt Portfolio:
Tax qualified .......................... 1,004 9.419704 9,457 (4)%
Non-tax qualified ...................... 1,214 9.419704 11,436 (4)%
Nationwide SAT -
Capital Appreciation Fund:
Tax qualified .......................... 79,497 21.345545 1,696,907 19%
Non-tax qualified ...................... 57,030 21.345545 1,217,336 19%
Nationwide SAT -
Government Bond Fund:
Tax qualified .......................... 21,418 11.871410 254,262 4%
Non-tax qualified ...................... 10,741 11.871410 127,511 4%
Nationwide SAT - Money Market Fund:
Tax qualified .......................... 39,650 11.214565 444,658 2%
Non-tax qualified ...................... 37,603 11.214565 421,701 2%
Nationwide SAT - Small Cap Value Fund:
Tax qualified .......................... 641 9.226212 5,914 (8)%(a)
Non-tax qualified ...................... 1,159 9.226212 10,693 (8)%(a)
Nationwide SAT - Small Company Fund:
Tax qualified .......................... 21,887 17.107225 374,426 6%
Non-tax qualified ...................... 43,584 17.107225 745,601 6%
Nationwide SAT - Total Return Fund:
Tax qualified .......................... 169,800 18.627093 3,162,880 14%
Non-tax qualified ...................... 140,513 18.627093 2,617,349 14%
Neuberger & Berman AMT - Growth Portfolio:
Tax qualified .......................... 8,381 15.914838 133,382 15%
Non-tax qualified ...................... 13,592 15.914838 216,314 15%
Neuberger & Berman AMT -
Guardian Portfolio:
Tax qualified .......................... 54 9.709745 524 (3)%(a)
Non-tax qualified ...................... 1,882 9.709745 18,274 (3)%(a)
Neuberger & Berman AMT -
Limited Maturity Bond Portfolio:
Tax qualified .......................... 3,966 11.387438 45,163 2%
Non-tax qualified ...................... 4,560 11.387438 51,927 2%
Neuberger & Berman AMT - Partners Portfolio:
Tax qualified .......................... 31,400 18.670149 586,243 6%
Non-tax qualified ...................... 48,269 18.670149 901,189 6%
Oppenheimer VAF - Bond Fund:
Tax qualified .......................... 16,477 11.998882 197,706 4%
Non-tax qualified ...................... 4,511 11.998882 54,127 4%
</TABLE>
26
<PAGE> 26
<TABLE>
<S> <C> <C> <C> <C>
Oppenheimer VAF -
Global Securities Fund:
Tax qualified 6,872 15.997143 109,932 12%
Non-tax qualified 5,529 15.997143 88,448 12%
Oppenheimer VAF - Growth Fund:
Tax qualified 7,312 12.184267 89,091 17%
Non-tax qualified 2,190 12.184267 26,684 17%
Oppenheimer VAF -
Multiple Strategies Fund:
Tax qualified 13,427 14.640650 196,580 7%
Non-tax qualified 10,193 14.640650 149,232 7%
Strong Opportunity Fund II, Inc.:
Tax qualified 23,284 17.445363 406,198 13%
Non-tax qualified 20,404 17.445363 355,955 13%
Strong VIF - Strong Discovery Fund II:
Tax qualified 1,177 12.405857 14,602 7%
Non-tax qualified 3,408 12.405857 42,279 7%
Strong VIF -
Strong International Stock Fund II:
Tax qualified 3,160 10.170842 32,140 6%
Non-tax qualified 710 10.170842 7,221 6%
Van Eck WIT - Worldwide Bond Fund:
Tax qualified 2,242 10.758273 24,120 3%
Non-tax qualified 1,038 10.758273 11,167 3%
Van Eck WIT -
Worldwide Emerging Markets Fund:
Tax qualified 7,019 6.800073 47,730 (23)%
Non-tax qualified 5,242 6.800073 35,646 (23)%
Van Eck WIT -
Worldwide Hard Assets Fund:
Tax qualified 1,311 10.905983 14,298 (14)%
Non-tax qualified 9,073 10.905983 98,950 (14)%
Van Kampen American Capital LIT -
Morgan Stanley Real Estate
Securities Portfolio:
Tax qualified 5,119 16.866973 86,342 (5)%
Non-tax qualified 13,091 16.866973 220,806 (5)%
Warburg Pincus Trust -
International Equity Portfolio:
Tax qualified 7,626 12.365993 94,303 13%
Non-tax qualified 4,575 12.365993 56,574 13%
Warburg Pincus Trust -
Post Venture Capital Portfolio:
Tax qualified 1,394 12.885647 17,963 13%
Non-tax qualified 4,178 12.885647 53,836 13%
Warburg Pincus Trust -
Small Company Growth Portfolio:
Tax qualified 13,831 15.093024 208,752 4%
Non-tax qualified 24,336 15.093024 367,304 4%
The BEST OF AMERICA(R) America's Vision
Annuity(SM) contracts:
American Century VP -
American Century VP Balanced:
Tax qualified 2,250,794 17.095543 38,478,546 14%
Non-tax qualified 3,217,451 17.095543 55,004,072 14%
</TABLE>
27
(Continued)
<PAGE> 27
<TABLE>
<S> <C> <C> <C> <C>
American Century VP -
American Century VP Capital Appreciation:
Tax qualified .......................... 2,249,974 11.531448 25,945,458 0%
Non-tax qualified ...................... 3,312,702 11.531448 38,200,251 0%
American Century VP - American
Century VP Income & Growth:
Tax qualified .......................... 151,228 10.088745 1,525,701 1%(a)
Non-tax qualified ...................... 238,664 10.088745 2,407,820 1%(a)
American Century VP -
American Century VP International:
Tax qualified .......................... 4,079,990 17.054570 69,582,475 24%
Non-tax qualified ...................... 5,343,983 17.054570 91,139,332 24%
American Century VP -
American Century VP Value:
Tax qualified .......................... 1,636,047 13.259948 21,693,898 5%
Non-tax qualified ...................... 1,858,844 13.259948 24,648,175 5%
The Dreyfus Socially Responsible
Growth Fund, Inc.:
Tax qualified .......................... 2,187,668 23.955547 52,406,784 18%
Non-tax qualified ...................... 2,644,851 23.955547 63,358,852 18%
Dreyfus Stock Index Fund:
Tax qualified .......................... 13,602,499 25.040799 340,617,443 17%
Non-tax qualified ...................... 18,932,991 25.040799 474,097,222 17%
Dreyfus VIF -
Capital Appreciation Portfolio:
Tax qualified .......................... 1,893,952 12.213488 23,131,760 20%
Non-tax qualified ...................... 2,531,428 12.213488 30,917,566 20%
Dreyfus VIF - Growth and Income Portfolio:
Tax qualified .......................... 1,631,928 12.100816 19,747,660 6%
Non-tax qualified ...................... 2,147,145 12.100816 25,982,207 6%
Fidelity VIP - Equity-Income Portfolio:
Tax qualified .......................... 22,569,869 22.391689 505,377,487 10%
Non-tax qualified ...................... 30,684,400 22.391689 687,075,542 10%
Fidelity VIP - Growth Portfolio:
Tax qualified .......................... 14,345,325 21.921954 314,477,555 18%
Non-tax qualified ...................... 20,394,821 21.921954 447,094,328 18%
Fidelity VIP - High Income Portfolio:
Tax qualified .......................... 11,214,984 15.892055 178,229,143 4%
Non-tax qualified ...................... 16,603,786 15.892055 263,868,280 4%
Fidelity VIP - Overseas Portfolio:
Tax qualified .......................... 4,288,740 16.109290 69,088,556 15%
Non-tax qualified ...................... 6,726,778 16.109290 108,363,618 15%
Fidelity VIP-II - Asset Manager Portfolio:
Tax qualified .......................... 8,455,026 16.102743 136,149,111 9%
Non-tax qualified ...................... 10,891,082 16.102743 175,376,294 9%
Fidelity VIP-II - Contrafund Portfolio:
Tax qualified .......................... 13,107,901 18.780003 246,166,420 16%
Non-tax qualified ...................... 17,629,329 18.780003 331,078,852 16%
Fidelity VIP-III -
Growth Opportunities Portfolio:
Tax qualified .......................... 2,162,008 12.079725 26,116,462 11%
Non-tax qualified ...................... 3,147,009 12.079725 38,015,003 11%
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C>
Morgan Stanley -
Emerging Markets Debt Portfolio:
Tax qualified ......................... 151,150 9.364882 1,415,502 (4)%
Non-tax qualified ..................... 385,046 9.364882 3,605,910 (4)%
Nationwide SAT -
Capital Appreciation Fund:
Tax qualified ......................... 4,170,575 25.025229 104,369,594 18%
Non-tax qualified ..................... 5,321,370 25.025229 133,168,503 18%
Nationwide SAT -
Government Bond Fund:
Tax qualified ......................... 3,766,711 12.756243 48,049,081 3%
Non-tax qualified ..................... 4,274,461 12.756243 54,526,063 3%
Nationwide SAT - Money Market Fund:
Tax qualified ......................... 11,573,963 11.710680 135,538,977 2%
Non-tax qualified ..................... 17,841,857 11.710680 208,940,278 2%
Nationwide SAT - Small Cap Value Fund:
Tax qualified ......................... 84,667 9.216983 780,374 (8)%(a)
Non-tax qualified ..................... 144,438 9.216983 1,331,283 (8)%(a)
Nationwide SAT - Small Company Fund:
Tax qualified ......................... 4,198,526 16.845178 70,724,918 5%
Non-tax qualified ..................... 5,296,894 16.845178 89,227,122 5%
Nationwide SAT - Total Return Fund:
Tax qualified ......................... 10,300,979 22.367465 230,406,787 14%
Non-tax qualified ..................... 12,311,711 22.367465 275,381,765 14%
Neuberger & Berman AMT - Growth Portfolio:
Tax qualified ......................... 2,656,481 19.314139 51,307,643 15%
Non-tax qualified ..................... 4,264,560 19.314139 82,366,305 15%
Neuberger & Berman AMT -
Guardian Portfolio:
Tax qualified ......................... 1,147,042 9.700053 11,126,368 (3)%(a)
Non-tax qualified ..................... 1,048,981 9.700053 10,175,171 (3)%(a)
Neuberger & Berman AMT -
Limited Maturity Bond Portfolio:
Tax qualified ......................... 2,452,660 11.883177 29,145,393 2%
Non-tax qualified ..................... 3,729,430 11.883177 44,317,477 2%
Neuberger & Berman AMT - Partners Portfolio:
Tax qualified ......................... 8,122,246 23.443018 190,409,959 5%
Non-tax qualified ..................... 11,342,018 23.443018 265,891,132 5%
Oppenheimer VAF - Bond Fund:
Tax qualified ......................... 5,404,865 12.900095 69,723,272 3%
Non-tax qualified ..................... 7,165,105 12.900095 92,430,535 3%
Oppenheimer VAF -
Global Securities Fund:
Tax qualified ......................... 7,349,326 16.368154 120,294 11%
Non-tax qualified ..................... 9,492,739 16.368154 155,378 11%
Oppenheimer VAF - Growth Fund:
Tax qualified ......................... 584,066 12.113445 7,075,051 16%
Non-tax qualified ..................... 944,827 12.113445 11,445,110 16%
Oppenheimer VAF -
Multiple Strategies Fund:
Tax qualified ......................... 4,620,870 16.465411 76,084,524 6%
Non-tax qualified ..................... 5,479,046 16.465411 90,214,744 6%
</TABLE>
29
(Continued)
<PAGE> 29
<TABLE>
<S> <C> <C> <C> <C>
Strong Opportunity Fund II, Inc.:
Tax qualified 5,838,527 21.563405 125,898,522 13%
Non-tax qualified 7,935,426 21.563405 171,114,805 13%
Strong VIF -
Strong Discovery Fund II:
Tax qualified 1,851,898 15.679159 29,036,203 7%
Non-tax qualified 2,662,540 15.679159 41,746,388 7%
Strong VIF -
Strong International Stock Fund II:
Tax qualified 1,044,480 10.064899 10,512,586 6%
Non-tax qualified 1,502,066 10.064899 15,118,143 6%
Van Eck WIT - Worldwide Bond Fund:
Tax qualified 1,395,553 12.020515 16,775,266 3%
Non-tax qualified 1,852,663 12.020515 22,269,963 3%
Van Eck WIT -
Worldwide Emerging Markets Fund:
Tax qualified 1,428,088 6.737661 9,621,973 (23)%
Non-tax qualified 1,925,822 6.737661 12,975,536 (23)%
Van Eck WIT -
Worldwide Hard Assets Fund:
Tax qualified 966,974 11.122876 10,755,532 (14)%
Non-tax qualified 1,816,530 11.122876 20,205,038 (14)%
Van Kampen American Capital LIT -
Morgan Stanley Real Estate
Securities Portfolio:
Tax qualified 3,807,890 16.867392 64,229,173 (6)%
Non-tax qualified 2,827,596 16.867392 47,694,170 (6)%
Warburg Pincus Trust -
International Equity Portfolio:
Tax qualified 4,814,888 12.523655 60,299,996 12%
Non-tax qualified 7,758,044 12.523655 97,159,067 12%
Warburg Pincus Trust -
Post Venture Capital Portfolio:
Tax qualified 359,699 12.767561 4,592,479 12%
Non-tax qualified 451,837 12.767561 5,768,856 12%
Warburg Pincus Trust -
Small Company Growth Portfolio:
Tax qualified 4,429,035 16.556821 73,330,740 4%
Non-tax qualified 6,875,894 16.556821 113,842,946 4%
========= ===========
Reserves for annuity contracts in payout phase:
Tax qualified 3,760,126
Non-tax qualified 7,340,985
---------------
$20,195,073,282
===============
</TABLE>
(a) This investment option was not being utilized for the entire period.
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NATIONWIDE LIFE INSURANCE COMPANY
HOME OFFICE: ONE NATIONWIDE PLAZA o COLUMBUS, OHIO 43215-2220
Nationwide(R) is a registered federal service mark of Nationwide Mutual
Insurance Company
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PAID
Columbus, Ohio
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