<PAGE> 1
'99
Nationwide(R) Variable Account - II
December 31, 1999
ANNUAL REPORT
[The BEST of AMERICA(R) LOGO]
APO-725-AB (12/99)
[NATIONWIDE LOGO]
Nationwide Life Insurance Company
Home Office: Columbus, Ohio
<PAGE> 2
[NATIONWIDE LOGO]
NATIONWIDE LIFE INSURANCE COMPANY
ONE NATIONWIDE PLAZA, COLUMBUS, OHIO 43215-2220
[Joseph J. Gasper's Photo]
PRESIDENT'S MESSAGE
We at Nationwide Life Insurance Company are pleased to bring you the 1999 annual
report of the Nationwide Variable Account-II.
During 1999 equity investments extended their spirited advance to a fifth
consecutive year. The S&P 500 was the laggard of the major indices with a
year-over-year change of a respectable 19.53%. The NASDAQ topped the list at
over 85% with the other indices falling into line nearer the lower end of the
range. Fixed earnings investments did not fare as well in the current
environment of rising interest rates.
The U.S. economy remains strong, inflation remains docile and the available
labor pool is incessantly tight. Against this good-news-bad-news backdrop, the
Federal Reserve is increasingly concerned that recent productivity gains will
subside and ignite wage inflation. To date, the Fed has hiked short-term
interest rates a quarter percentage point on four occasions since last June.
Prospectively, they may well become more aggressive in their preemptive efforts
to dampen economic growth and avoid a new round of inflation.
We believe some caution may be warranted at this juncture. Certain market
sectors are well extended and may inevitably retreat to less lofty valuation
levels. However, we remain bullish for the long-term prospects of financial
assets. Your variable insurance contract provides an excellent resource to help
you achieve your long-term retirement savings and financial planning objectives.
We appreciate your trust in our company and in our investment products, and we
welcome and encourage your feedback.
/s/ Joseph J. Gasper
Joseph J. Gasper, President
February 10, 2000
3
<PAGE> 3
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY
DECEMBER 31, 1999
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments at market value:
American Century VP - American Century VP Balanced (ACVPBal)
26,517,451 shares (cost $203,012,429) ................................. $ 206,570,943
American Century VP - American Century VP Capital Appreciation (ACVPCapAp)
25,531,233 shares (cost $257,782,686) ................................. 378,883,491
American Century VP - American Century VP Income & Growth (ACVPIncGr)
10,481,242 shares (cost $72,832,174) .................................. 83,849,932
American Century VP - American Century VP International (ACVPInt)
35,557,792 shares (cost $300,254,654) ................................. 444,472,405
American Century VP - American Century VP Value (ACVPValue)
9,800,232 shares (cost $65,218,525) ................................... 58,311,380
American VI Series - Growth Fund (AVISGro)
588,857 shares (cost $28,265,492) ..................................... 41,585,085
American VI Series - High-Yield Bond Fund (AVISHiYld)
167,855 shares (cost $2,363,818) ...................................... 2,140,150
American VI Series - U.S. Government/AAA-Rated Securities Fund (AVISGvt)
334,165 shares (cost $3,709,267) ...................................... 3,528,783
The Dreyfus Socially Responsible Growth Fund, Inc. (DrySRGro)
10,062,911 shares (cost $321,637,405) ................................. 393,157,920
Dreyfus Stock Index Fund (DryStkIx)
54,265,154 shares (cost $1,607,798,501) ............................... 2,086,495,180
Dreyfus VIF - Capital Appreciation Portfolio (DryCapAp)
5,051,148 shares (cost $179,139,745) .................................. 201,389,281
Dreyfus VIF - Growth and Income Portfolio (DryGrInc)
3,436,183 shares (cost $75,512,595) ................................... 87,553,939
Fidelity VIP - Equity-Income Portfolio (FidVIPEI)
94,615,255 shares (cost $1,966,633,300) ............................... 2,432,558,217
Fidelity VIP - Growth Portfolio (FidVIPGr)
70,151,723 shares (cost $2,693,298,095) ............................... 3,853,434,164
Fidelity VIP - High Income Portfolio (FidVIPHI)
54,938,432 shares (cost $614,074,627) ................................. 621,353,663
Fidelity VIP - Overseas Portfolio (FidVIPOv)
25,608,205 shares (cost $569,897,842) ................................. 702,689,149
Fidelity VIP-II - Asset Manager Portfolio (FidVIPAM)
56,949,751 shares (cost $871,251,534) ................................. 1,063,251,853
</TABLE>
4
<PAGE> 4
<TABLE>
<CAPTION>
<S> <C>
Fidelity VIP-II - Contrafund Portfolio (FidVIPCon)
52,409,042 shares (cost $1,044,025,114) ............................... 1,527,723,575
Fidelity VIP-III - Growth Opportunities Portfolio (FidVIPGrOp)
7,926,756 shares (cost $170,432,448) .................................. 183,504,409
Morgan Stanley - Emerging Markets Debt Portfolio (MSEmMkt)
1,380,116 shares (cost $9,883,090) .................................... 9,536,603
Nationwide SAT - Capital Appreciation Fund (NSATCapAp)
21,855,788 shares (cost $533,266,623) ................................. 561,912,316
Nationwide SAT - Government Bond Fund (NSATGvtBd)
33,292,536 shares (cost $388,374,978) ................................. 359,226,461
Nationwide SAT - Money Market Fund (NSATMyMkt)
1,298,853,387 shares (cost $1,298,853,387) ............................ 1,298,853,387
Nationwide SAT - Small Cap Value Fund (NSATSmCapV)
5,321,261 shares (cost $54,307,371) ................................... 51,722,659
Nationwide SAT - Small Company Fund (NSATSmCo)
14,582,177 shares (cost $247,275,422) ................................. 322,557,764
Nationwide SAT - Total Return Fund (NSATTotRe)
61,878,351 shares (cost $924,410,869) ................................. 1,163,931,779
Neuberger & Berman AMT - Growth Portfolio (NBAMTGro)
15,851,800 shares (cost $403,834,149) ................................. 590,796,571
Neuberger & Berman AMT - Guardian Portfolio (NBAMTGuard)
3,011,862 shares (cost $44,957,196) ................................... 47,738,007
Neuberger & Berman AMT - Limited Maturity Bond Portfolio (NBAMTLMat)
10,607,255 shares (cost $144,390,447) ................................. 140,440,056
Neuberger & Berman AMT - Partners Portfolio (NBAMTPart)
26,519,028 shares (cost $520,546,325) ................................. 520,833,703
Oppenheimer VAF - Bond Fund (OppBdFd)
25,043,315 shares (cost $296,820,680) ................................. 288,498,994
Oppenheimer VAF - Global Securities Fund (OppGlSec)
24,351,608 shares (cost $543,361,311) ................................. 813,587,219
Oppenheimer VAF - Growth Fund (OppGro)
4,188,830 shares (cost $169,188,101) .................................. 208,771,299
Oppenheimer VAF - Multiple Strategies Fund (OppMult)
17,160,682 shares (cost $265,269,878) ................................. 299,625,505
Strong Opportunity Fund II, Inc. (StOpp2)
35,429,099 shares (cost $720,720,106) ................................. 920,802,283
Strong VIF - Strong Discovery Fund II (StDisc2)
11,861,402 shares (cost $134,640,216) ................................. 134,982,756
Strong VIF - Strong International Stock Fund II (StIntStk2)
6,121,471 shares (cost $78,062,849) ................................... 100,208,475
</TABLE>
(Continued)
5
<PAGE> 5
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY, CONTINUED
<TABLE>
<CAPTION>
<S> <C>
Van Eck WIT - Worldwide Bond Fund (VEWrldBd)
6,257,276 shares (cost $70,902,338) ................................... 66,890,284
Van Eck WIT - Worldwide Emerging Markets Fund (VEWrldEMkt)
10,672,737 shares (cost $117,765,886) ................................. 152,193,223
Van Eck WIT - Worldwide Hard Assets Fund (VEWrldHAs)
5,766,023 shares (cost $61,210,818) ................................... 63,195,616
Van Kampen LIT -
Morgan Stanley Real Estate Securities Portfolio (MSRESec)
8,167,735 shares (cost $118,427,684) .................................. 101,034,884
Warburg Pincus Trust - International Equity Portfolio (WPIntEq)
17,125,482 shares (cost $209,566,651) ................................. 285,995,544
Warburg Pincus Trust - Post Venture Capital Portfolio (WPPVenCap)
3,029,501 shares (cost $46,029,445) ................................... 58,348,183
Warburg Pincus Trust - Small Company Growth Portfolio (WPSmCoGr)
18,327,947 shares (cost $323,130,982) ................................. 480,192,205
---------------
Total investments .................................................. 23,414,329,296
Accounts receivable ......................................................... 1,017,765
---------------
Total assets ....................................................... 23,415,347,061
ACCOUNTS PAYABLE ............................................................... 2,145
---------------
CONTRACT OWNERS' EQUITY (NOTE 4) ............................................... $23,415,344,916
===============
</TABLE>
See accompanying notes to financial statements.
6
<PAGE> 6
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
Total ACVPBal
------------------------------------ ---------------------------------
1999 1998 1999 1998
---------------- -------------- ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ 351,733,257 315,567,353 3,991,181 3,098,368
Mortality, expense and administration
charges (note 2):
BOA ........................................ (159,704,457) (145,540,567) (1,415,598) (1,354,760)
BOA Vision ................................. (130,265,551) (114,290,967) (1,381,790) (1,180,401)
BOA Enterprise ............................. (270,943) (199,407) (2,854) (2,018)
---------------- -------------- ----------- -----------
Net investment activity ...................... 61,492,306 55,536,412 1,190,939 561,189
---------------- -------------- ----------- -----------
Proceeds from mutual fund shares sold ........... 12,341,621,630 9,502,638,819 38,472,902 48,804,378
Cost of mutual fund shares sold ................. (10,997,380,217) (8,727,995,326) (36,411,406) (37,362,868)
---------------- -------------- ----------- -----------
Realized gain (loss) on investments .......... 1,344,241,413 774,643,493 2,061,496 11,441,510
Change in unrealized gain (loss) on investments . 1,709,941,913 440,618,096 (14,059,807) (5,900,979)
---------------- -------------- ----------- -----------
Net gain (loss) on investments ............... 3,054,183,326 1,215,261,589 (11,998,311) 5,540,531
---------------- -------------- ----------- -----------
Reinvested capital gains ........................ 890,110,382 1,177,995,583 27,539,149 19,212,723
---------------- -------------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 4,005,786,014 2,448,793,584 16,731,777 25,314,443
---------------- -------------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 1,492,378,564 2,214,889,447 15,664,882 22,317,530
Transfers between funds ......................... -- -- (11,222,326) 8,865,047
Redemptions ..................................... (2,712,438,299) (1,806,663,808) (22,586,889) (16,523,412)
Annuity benefits ................................ (2,862,882) (1,988,285) (20,482) (9,922)
Annual contract maintenance charge (note 2) ..... (8,399,835) (8,003,092) (77,891) (76,599)
Contingent deferred sales charges (note 2) ...... (32,704,996) (23,748,555) (291,236) (246,178)
Adjustments to maintain reserves ................ 911,942 (406,310) (340) (1,729)
---------------- -------------- ----------- -----------
Net equity transactions .................... (1,263,115,506) 374,079,397 (18,534,282) 14,324,737
---------------- -------------- ----------- -----------
Net change in contract owners' equity ............. 2,742,670,508 2,822,872,981 (1,802,505) 39,639,180
Contract owners' equity beginning of period ....... 20,672,674,408 17,849,801,427 208,373,013 168,733,833
---------------- -------------- ----------- -----------
Contract owners' equity end of period ............. $ 23,415,344,916 20,672,674,408 206,570,508 208,373,013
================ ============== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
ACVPCapAp ACVPIncGr
---------------------------------- ------------------------------
1999 1998 1999 1998
------------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ -- -- 11,166 181,416
Mortality, expense and administration
charges (note 2):
BOA ........................................ (2,597,354) (2,818,233) (469,581) (95,126)
BOA Vision ................................. (902,035) (857,721) (412,151) (75,918)
BOA Enterprise ............................. (1,598) (1,256) (537) (117)
----------- ----------- ---------- ----------
Net investment activity ...................... (3,500,987) (3,677,210) (871,103) 10,255
----------- ----------- ---------- ----------
Proceeds from mutual fund shares sold ........... 149,920,318 114,736,720 22,834,351 25,325,017
Cost of mutual fund shares sold ................. (150,460,860) (136,788,804) (18,770,040) (26,300,565)
----------- ----------- ---------- ----------
Realized gain (loss) on investments .......... (540,542) (22,052,084) 4,064,311 (975,548)
Change in unrealized gain (loss) on investments . 147,944,253 (264,722) 7,240,752 3,777,007
----------- ----------- ---------- ----------
Net gain (loss) on investments ............... 147,403,711 (22,316,806) 11,305,063 2,801,459
----------- ----------- ---------- ----------
Reinvested capital gains ........................ -- 15,700,848 -- --
----------- ----------- ---------- ----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 143,902,724 (10,293,168) 10,433,960 2,811,714
----------- ----------- ---------- ----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 15,321,810 23,389,103 11,461,943 2,843,288
Transfers between funds ......................... 10,543,287 (66,469,516) 30,819,145 34,214,351
Redemptions ..................................... (41,284,239) (34,901,415) (7,460,786) (1,148,357)
Annuity benefits ................................ (48,809) (44,914) -- --
Annual contract maintenance charge (note 2) ..... (188,703) (233,324) (17,447) (4,110)
Contingent deferred sales charges (note 2) ...... (395,615) (447,727) (100,849) (9,116)
Adjustments to maintain reserves ................ 10,726 65,167 (6,972) 6,300
----------- ----------- ---------- ----------
Net equity transactions .................... (16,041,543) (78,642,626) 34,695,034 35,902,356
----------- ----------- ---------- ----------
Net change in contract owners' equity ............. 127,861,181 (88,935,794) 45,128,994 38,714,070
Contract owners' equity beginning of period ....... 251,055,304 339,991,098 38,714,070 --
----------- ----------- ---------- ----------
Contract owners' equity end of period ............. 378,916,485 251,055,304 83,843,064 38,714,070
=========== =========== ========== ==========
</TABLE>
(Continued)
7
<PAGE> 7
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, Continued
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
ACVPInt ACVPValue
------------------------------------ ---------------------------------
1999 1998 1999 1998
--------------- ------------- -------------- -----------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ -- 1,241,910 591,931 491,657
Mortality, expense and administration
charges (note 2):
BOA ........................................ (2,019,902) (1,733,033) (425,310) (427,970)
BOA Vision ................................. (2,239,092) (1,962,632) (558,488) (588,525)
BOA Enterprise ............................. (2,538) (2,034) (1,236) (1,181)
---------------- ----------- ---------- ----------
Net investment activity ...................... (4,261,532) (2,455,789) (393,103) (526,019)
---------------- ----------- ---------- ----------
Proceeds from mutual fund shares sold ........... 366,068,306 361,873,253 82,656,091 49,075,920
Cost of mutual fund shares sold ................. (325,718,086) (348,435,933) (86,789,734) (49,213,498)
---------------- ----------- ---------- ----------
Realized gain (loss) on investments .......... 40,350,220 13,437,320 (4,133,643) (137,578)
Change in unrealized gain (loss) on investments . 134,123,037 4,337,447 (5,054,394) (3,517,470)
---------------- ----------- ---------- ----------
Net gain (loss) on investments ............... 174,473,257 17,774,767 (9,188,037) (3,655,048)
---------------- ----------- ---------- ----------
Reinvested capital gains ........................ -- 12,749,123 5,607,994 5,869,944
---------------- ----------- ---------- ----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 170,211,725 28,068,101 (3,973,146) 1,688,877
---------------- ----------- ---------- ----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 17,432,902 27,075,201 6,230,196 15,060,446
Transfers between funds ......................... (423,845) 76,963,986 (4,726,693) (9,597,717)
Redemptions ..................................... (34,126,117) (21,143,253) (7,852,378) (6,581,279)
Annuity benefits ................................ (33,416) (13,625) (27,070) (21,465)
Annual contract maintenance charge (note 2) ..... (86,416) (79,895) (22,403) (19,679)
Contingent deferred sales charges (note 2) ...... (455,988) (250,396) (124,598) (100,776)
Adjustments to maintain reserves ................ 316 (18,968) 5,851 (51,138)
---------------- ----------- ---------- ----------
Net equity transactions .................... (17,692,564) 82,533,050 (6,517,095) (1,311,608)
---------------- ----------- ---------- ----------
Net change in contract owners' equity ............. 152,519,161 110,601,151 (10,490,241) 377,269
Contract owners' equity beginning of period ....... 291,977,777 181,376,626 68,785,191 68,407,922
---------------- ----------- ---------- ----------
Contract owners' equity end of period ............. $ 444,496,938 291,977,777 58,294,950 68,785,191
================ =========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
AVISGro AVISHiYld
------------------------------- ------------------------------
1999 1998 1999 1998
----------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ 62,599 104,724 228,188 252,109
Mortality, expense and administration
charges (note 2):
BOA ........................................ (449,681) (365,360) (31,460) (39,297)
BOA Vision ................................. -- -- -- --
BOA Enterprise ............................. -- -- -- --
---------- ---------- --------- ---------
Net investment activity ...................... (387,082) (260,636) 196,728 212,812
---------- ---------- --------- ---------
Proceeds from mutual fund shares sold ........... 7,836,561 7,115,941 952,888 1,134,719
Cost of mutual fund shares sold ................. (3,890,307) (3,771,756) (1,018,592) (1,075,993)
---------- ---------- --------- ---------
Realized gain (loss) on investments .......... 3,946,254 3,344,185 (65,704) 58,726
Change in unrealized gain (loss) on investments . 6,534,190 1,042,218 (26,416) (303,262)
---------- ---------- --------- ---------
Net gain (loss) on investments ............... 10,480,444 4,386,403 (92,120) (244,536)
---------- ---------- --------- ---------
Reinvested capital gains ........................ 5,600,035 4,170,092 -- 36,591
---------- ---------- --------- ---------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 15,693,397 8,295,859 104,608 4,867
---------- ---------- --------- ---------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 476,394 511,282 58,162 116,063
Transfers between funds ......................... 98,674 (964,009) (48,450) (107,348)
Redemptions ..................................... (5,784,308) (3,204,144) (591,479) (566,909)
Annuity benefits ................................ (608) (444) (6,533) (5,289)
Annual contract maintenance charge (note 2) ..... (14,293) (14,895) (1,519) (1,991)
Contingent deferred sales charges (note 2) ...... (17,393) (9,981) (1,150) (3,772)
Adjustments to maintain reserves ................ 1,323 578 181 (2,332)
---------- ---------- --------- ---------
Net equity transactions .................... (5,240,211) (3,681,613) (590,788) (571,578)
---------- ---------- --------- ---------
Net change in contract owners' equity ............. 10,453,186 4,614,246 (486,180) (566,711)
Contract owners' equity beginning of period ....... 31,133,189 26,518,943 2,626,505 3,193,216
---------- ---------- --------- ---------
Contract owners' equity end of period ............. 41,586,375 31,133,189 2,140,325 2,626,505
========== ========== ========= =========
</TABLE>
8
<PAGE> 8
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, Continued
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
AVISGvt DrySRGro
------------------------------------ -------------------------------
1999 1998 1999 1998
----------------- ------------- ----------- ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ 247,063 270,372 48,647 409,775
Mortality, expense and administration
charges (note 2):
BOA ........................................ (53,194) (60,816) (2,295,017) (1,451,837)
BOA Vision ................................. -- -- (2,053,668) (1,439,799)
BOA Enterprise ............................. -- -- (4,989) (2,748)
---------------- --------- ----------- -----------
Net investment activity ...................... 193,869 209,556 (4,305,027) (2,484,609)
---------------- --------- ----------- -----------
Proceeds from mutual fund shares sold ........... 1,067,555 1,748,263 121,610,454 143,677,649
Cost of mutual fund shares sold ................. (1,086,104) (1,871,313) (91,860,747) (117,379,825)
---------------- --------- ----------- -----------
Realized gain (loss) on investments .......... (18,549) (123,050) 29,749,707 26,297,824
Change in unrealized gain (loss) on investments . (252,264) 209,910 43,395,270 14,964,682
---------------- --------- ----------- -----------
Net gain (loss) on investments ............... (270,813) 86,860 73,144,977 41,262,506
---------------- --------- ----------- -----------
Reinvested capital gains ........................ -- -- 13,095,806 9,504,871
---------------- --------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ (76,944) 296,416 81,935,756 48,282,768
---------------- --------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 172,875 143,640 36,723,685 34,640,924
Transfers between funds ......................... (177,069) (143,468) 39,965,200 17,779,620
Redemptions ..................................... (859,084) (894,059) (30,265,730) (16,450,256)
Annuity benefits ................................ (4,989) (3,938) (9,832) (5,152)
Annual contract maintenance charge (note 2) ..... (3,011) (3,913) (155,033) (112,389)
Contingent deferred sales charges (note 2) ...... (3,094) (3,582) (415,490) (243,228)
Adjustments to maintain reserves ................ 48 (1,962) 33,290 1,747
---------------- --------- ----------- -----------
Net equity transactions .................... (874,324) (907,282) 45,876,090 35,611,266
---------------- --------- ----------- -----------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............. (951,268) (610,866) 127,811,846 83,894,034
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ....... 4,480,028 5,090,894 265,379,214 181,485,180
---------------- --------- ----------- -----------
CONTRACT OWNERS' EQUITY END OF PERIOD ............. $ 3,528,760 4,480,028 393,191,060 265,379,214
================ ========= =========== ===========
</TABLE>
<TABLE>
<CAPTION>
DryStkIx DryCapAp
-------------------------------- ---------------------------------
1999 1998 1999 1998
------------ ----------- ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ 20,893,189 18,675,816 1,131,796 862,672
Mortality, expense and administration
charges (note 2):
BOA ........................................ (11,506,073) (7,978,285) (1,310,764) (524,245)
BOA Vision ................................. (14,765,173) (10,844,564) (1,389,587) (571,382)
BOA Enterprise ............................. (26,133) (17,348) (2,909) (873)
------------- ------------- ----------- -----------
Net investment activity ...................... (5,404,190) (164,381) (1,571,464) (233,828)
------------- ------------- ----------- -----------
Proceeds from mutual fund shares sold ........... 471,289,199 443,376,469 86,945,557 74,053,794
Cost of mutual fund shares sold ................. (303,007,098) (301,499,093) (76,828,049) (68,960,812)
------------- ------------- ----------- -----------
Realized gain (loss) on investments .......... 168,282,101 141,877,376 10,117,508 5,092,982
Change in unrealized gain (loss) on investments . 151,537,337 179,528,535 8,792,210 13,393,944
------------- ------------- ----------- -----------
Net gain (loss) on investments ............... 319,819,438 321,405,911 18,909,718 18,486,926
------------- ------------- ----------- -----------
Reinvested capital gains ........................ 18,032,609 3,418,338 755,817 14,955
---------------- --------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 332,447,857 324,659,868 18,094,071 18,268,053
---------------- --------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 171,990,917 214,991,310 22,276,022 15,138,079
Transfers between funds ......................... 49,562,572 190,453,913 18,125,447 130,801,206
Redemptions ..................................... (186,725,313) (101,442,520) (23,965,643) (6,949,302)
Annuity benefits ................................ (229,153) (151,728) (4,604) --
Annual contract maintenance charge (note 2) ..... (630,539) (444,587) (56,458) (22,248)
Contingent deferred sales charges (note 2) ...... (2,694,935) (1,522,122) (280,455) (81,927)
Adjustments to maintain reserves ................ 59,782 (10,118) 3,538 (907)
------------- ------------- ----------- -----------
Net equity transactions .................... 31,333,331 301,874,148 16,097,847 138,884,901
------------- ------------- ----------- -----------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............. 363,781,188 626,534,016 34,191,918 157,152,954
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ....... 1,722,772,232 1,096,238,216 167,200,842 10,047,888
------------- ------------- ----------- -----------
CONTRACT OWNERS' EQUITY END OF PERIOD ............. 2,086,553,420 1,722,772,232 201,392,760 167,200,842
============= ============= =========== ===========
</TABLE>
9
(Continued)
<PAGE> 9
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, Continued
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
DryGrInc FidVIPEI
-------------------------------------- --------------------------------
1999 1998 1999 1998
----------------- --------------- ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ 504,180 691,042 39,615,425 36,741,162
Mortality, expense and administration
charges (note 2):
BOA ........................................ (423,226) (350,592) (19,653,096) (20,689,256)
BOA Vision ................................. (670,388) (598,700) (16,003,298) (15,778,209)
BOA Enterprise ............................. (3,320) (3,387) (14,945) (15,123)
---------------- ---------- ------------- -------------
Net investment activity ...................... (592,754) (261,637) 3,944,086 258,574
---------------- ---------- ------------- -------------
Proceeds from mutual fund shares sold ........... 19,190,372 30,513,353 560,148,724 360,627,004
Cost of mutual fund shares sold ................. (17,767,135) (28,500,253) (339,913,087) (227,981,252)
---------------- ---------- ------------- -------------
Realized gain (loss) on investments .......... 1,423,237 2,013,100 220,235,637 132,645,752
Change in unrealized gain (loss) on investments . 8,259,646 3,889,051 (183,694,303) (11,150,576)
---------------- ---------- ------------- -------------
Net gain (loss) on investments ............... 9,682,883 5,902,151 36,541,334 121,495,176
---------------- ---------- ------------- -------------
Reinvested capital gains ........................ 2,649,264 1,182,628 87,570,939 130,755,312
---------------- ---------- ------------- -------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 11,739,393 6,823,142 128,056,359 252,509,062
---------------- ---------- ------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 10,108,825 20,276,212 133,956,568 244,737,638
Transfers between funds ......................... (7,158,428) 2,527,467 (257,984,591) (147,382,926)
Redemptions ..................................... (7,431,820) (4,679,160) (285,072,997) (223,884,295)
Annuity benefits ................................ (283) -- (355,833) (277,211)
Annual contract maintenance charge (note 2) ..... (35,834) (24,697) (1,004,069) (1,076,592)
Contingent deferred sales charges (note 2) ...... (139,243) (79,324) (3,142,474) (2,878,268)
Adjustments to maintain reserves ................ (542) (1,898) (83,996) (72,439)
---------------- ---------- ------------- -------------
Net equity transactions .................... (4,657,325) 18,018,600 (413,687,392) (130,834,093)
---------------- ---------- ------------- -------------
Net change in contract owners' equity ............. 7,082,068 24,841,742 (285,631,033) 121,674,969
Contract owners' equity beginning of period ....... 80,471,309 55,629,567 2,718,198,740 2,596,523,771
---------------- ---------- ------------- -------------
Contract owners' equity end of period ............. $ 87,553,377 80,471,309 2,432,567,707 2,718,198,740
================ ========== ============= =============
</TABLE>
<TABLE>
<CAPTION>
FidVIPGr FidVIPHI
----------------------------------- --------------------------------
1999 1998 1999 1998
------------- --------------- ------------- ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ 5,073,051 10,166,752 69,916,879 62,256,993
Mortality, expense and administration
charges (note 2):
BOA ........................................ (28,030,230) (20,216,127) (4,316,966) (5,314,746)
BOA Vision ................................. (15,387,759) (10,214,372) (5,133,252) (5,818,593)
BOA Enterprise ............................. (25,431) (14,330) (4,126) (5,086)
------------- ------------- ----------- -----------
Net investment activity ...................... (38,370,369) (20,278,077) 60,462,535 51,118,568
------------- ------------- ----------- -----------
Proceeds from mutual fund shares sold ........... 852,659,180 582,531,833 496,639,090 423,878,325
Cost of mutual fund shares sold ................. (546,357,146) (421,522,045) (562,909,611) (424,592,843)
------------- ------------- ----------- -----------
Realized gain (loss) on investments .......... 306,302,034 161,009,788 (66,270,521) (714,518)
Change in unrealized gain (loss) on investments . 422,649,010 330,693,565 53,535,570 (127,578,300)
------------- ------------- ----------- -----------
Net gain (loss) on investments ............... 728,951,044 491,703,353 (12,734,951) (128,292,818)
------------- ------------- ----------- -----------
Reinvested capital gains ........................ 318,968,052 265,940,840 2,613,715 39,559,131
------------- ------------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 1,009,548,727 737,366,116 50,341,299 (37,615,119)
------------- ------------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 192,599,641 181,501,856 35,505,524 84,716,749
Transfers between funds ......................... 287,973,979 58,879,586 (102,694,090) (63,945,106)
Redemptions ..................................... (404,893,606) (194,431,314) (90,093,350) (79,994,258)
Annuity benefits ................................ (529,423) (254,430) (76,714) (64,108)
Annual contract maintenance charge (note 2) ..... (1,369,566) (1,169,401) (206,545) (250,706)
Contingent deferred sales charges (note 2) ...... (4,094,967) (2,499,712) (1,174,747) (968,813)
Adjustments to maintain reserves ................ 525,987 (85,859) 42,255 34,738
------------- ------------- ----------- -----------
Net equity transactions .................... 70,212,045 41,940,726 (158,697,667) (60,471,504)
------------- ------------- ----------- -----------
Net change in contract owners' equity ............. 1,079,760,772 779,306,842 (108,356,368) (98,086,623)
Contract owners' equity beginning of period ....... 2,774,103,603 1,994,796,761 729,750,831 827,837,454
------------- ------------- ----------- -----------
Contract owners' equity end of period ............. 3,853,864,375 2,774,103,603 621,394,463 729,750,831
============= ============= =========== ===========
</TABLE>
10
<PAGE> 10
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, Continued
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
FidVIPOv FidVIPAM
----------------------------------- --------------------------------
1999 1998 1999 1998
--------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ 8,607,336 11,424,188 37,279,047 34,225,218
Mortality, expense and administration
charges (note 2):
BOA ........................................ (5,467,394) (5,767,471) (10,182,511) (10,568,738)
BOA Vision ................................. (2,354,358) (2,267,521) (4,364,687) (4,231,809)
BOA Enterprise ............................. (732) (762) (3,508) (2,407)
---------------- ----------- ------------- -------------
Net investment activity ...................... 784,852 3,388,434 22,728,341 19,422,264
---------------- ----------- ------------- -------------
Proceeds from mutual fund shares sold ........... 1,023,966,842 448,515,931 194,447,515 111,473,351
Cost of mutual fund shares sold ................. (935,496,853) (408,495,774) (161,974,315) (90,494,053)
---------------- ----------- ------------- -------------
Realized gain (loss) on investments .......... 88,469,989 40,020,157 32,473,200 20,979,298
Change in unrealized gain (loss) on investments . 113,547,668 (11,007,004) (3,889,803) (3,096,910)
---------------- ----------- ------------- -------------
Net gain (loss) on investments ............... 202,017,657 29,013,153 28,583,397 17,882,388
---------------- ----------- ------------- -------------
Reinvested capital gains ........................ 13,882,800 33,671,290 47,220,126 102,675,653
---------------- ----------- ------------- -------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 216,685,309 66,072,877 98,531,864 139,980,305
---------------- ----------- ------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 24,533,268 35,783,097 52,275,799 83,198,673
Transfers between funds ......................... (42,115,481) (47,526,193) (73,018,699) (45,694,699)
Redemptions ..................................... (74,075,264) (59,779,420) (150,918,856) (117,229,468)
Annuity benefits ................................ (144,693) (122,919) (255,336) (210,178)
Annual contract maintenance charge (note 2) ..... (271,726) (315,146) (524,651) (577,324)
Contingent deferred sales charges (note 2) ...... (696,469) (694,542) (1,398,199) (1,488,964)
Adjustments to maintain reserves ................ (24,739) (2,419) (97,914) (21,188)
---------------- ----------- ------------- -------------
Net equity transactions .................... (92,795,104) (72,657,542) (173,937,856) (82,023,148)
---------------- ----------- ------------- -------------
Net change in contract owners' equity ............. 123,890,205 (6,584,665) (75,405,992) 57,957,157
Contract owners' equity beginning of period ....... 578,773,393 585,358,058 1,138,558,288 1,080,601,131
---------------- ----------- ------------- -------------
Contract owners' equity end of period ............. $ 702,663,598 578,773,393 1,063,152,296 1,138,558,288
================ =========== ============= =============
</TABLE>
<TABLE>
<CAPTION>
FidVIPCon FidVIPGrOp
---------------------------------- --------------------------------
1999 1998 1999 1998
------------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ 6,098,599 6,336,699 1,703,363 757,412
Mortality, expense and administration
charges (note 2):
BOA ........................................ (8,351,102) (6,038,275) (1,031,792) (623,486)
BOA Vision ................................. (10,086,258) (7,641,255) (1,475,219) (837,609)
BOA Enterprise ............................. (8,285) (5,816) (1,798) (1,084)
------------- ------------- ----------- -----------
Net investment activity ...................... (12,347,046) (7,348,647) (805,446) (704,767)
------------- ------------- ----------- -----------
Proceeds from mutual fund shares sold ........... 241,199,932 156,614,980 73,752,840 46,907,717
Cost of mutual fund shares sold ................. (138,225,602) (103,037,324) (64,334,468) (43,276,275)
------------- ------------- ----------- -----------
Realized gain (loss) on investments .......... 102,974,330 53,577,656 9,418,372 3,631,442
Change in unrealized gain (loss) on investments . 146,364,701 165,270,018 (6,734,513) 17,973,839
------------- ------------- ----------- -----------
Net gain (loss) on investments ............... 249,339,031 218,847,674 2,683,859 21,605,281
------------- ------------- ----------- -----------
Reinvested capital gains ........................ 44,723,057 46,619,997 3,184,549 2,632,909
------------- ------------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 281,715,042 258,119,024 5,062,962 23,533,423
------------- ------------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 103,519,454 117,785,191 26,824,322 34,421,791
Transfers between funds ......................... 42,356,473 21,712,329 11,054,415 61,633,353
Redemptions ..................................... (122,041,395) (69,506,982) (17,960,167) (8,308,180)
Annuity benefits ................................ (168,876) (85,161) (80) (8,900)
Annual contract maintenance charge (note 2) ..... (454,566) (362,629) (54,925) (28,889)
Contingent deferred sales charges (note 2) ...... (1,734,705) (1,098,841) (249,977) (90,979)
Adjustments to maintain reserves ................ 86,354 (190,380) 31,463 20,282
------------- ------------- ----------- -----------
Net equity transactions .................... 21,562,739 68,253,527 19,645,051 87,638,478
------------- ------------- ----------- -----------
Net change in contract owners' equity ............. 303,277,781 326,372,551 24,708,013 111,171,901
Contract owners' equity beginning of period ....... 1,224,548,927 898,176,376 158,829,125 47,657,224
------------- ------------- ----------- -----------
Contract owners' equity end of period ............. 1,527,826,708 1,224,548,927 183,537,138 158,829,125
============= ============= =========== ===========
</TABLE>
(Continued)
11
<PAGE> 11
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, Continued
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
MSEmMkt NSATCapAp
------------------------------------ --------------------------------
1999 1998 1999 1998
--------------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ 1,115,328 896,541 3,931,360 4,224,848
Mortality, expense and administration
charges (note 2):
BOA ........................................ (63,720) (58,296) (4,673,658) (3,700,716)
BOA Vision ................................. (64,832) (62,351) (3,991,780) (3,266,685)
BOA Enterprise ............................. (12) (123) (36,891) (21,628)
---------------- --------- ----------- -----------
Net investment activity ...................... 986,764 775,771 (4,770,969) (2,764,181)
---------------- --------- ----------- -----------
Proceeds from mutual fund shares sold ........... 45,299,165 34,386,517 233,986,467 133,708,074
Cost of mutual fund shares sold ................. (44,338,363) (37,579,962) (165,049,540) (90,629,019)
---------------- --------- ----------- -----------
Realized gain (loss) on investments .......... 960,802 (3,193,445) 68,936,927 43,079,055
Change in unrealized gain (loss) on investments . 377,131 (588,871) (84,072,383) 63,140,856
---------------- --------- ----------- -----------
Net gain (loss) on investments ............... 1,337,933 (3,782,316) (15,135,456) 106,219,911
---------------- --------- ----------- -----------
Reinvested capital gains ........................ -- -- 37,362,531 19,370,613
---------------- --------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 2,324,697 (3,006,545) 17,456,106 122,826,343
---------------- --------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 726,818 1,603,596 55,980,590 79,993,702
Transfers between funds ......................... (1,247,781) 2,595,520 (141,379,849) 176,934,765
Redemptions ..................................... (981,714) (600,107) (67,256,237) (44,265,008)
Annuity benefits ................................ -- -- (47,322) (8,859)
Annual contract maintenance charge (note 2) ..... (3,172) (2,449) (268,219) (187,439)
Contingent deferred sales charges (note 2) ...... (14,051) (8,579) (900,522) (603,195)
Adjustments to maintain reserves ................ 120 3,560 85,260 31,933
---------------- --------- ----------- -----------
Net equity transactions .................... (1,519,780) 3,591,541 (153,786,299) 211,895,899
---------------- --------- ----------- -----------
Net change in contract owners' equity ............. 804,917 584,996 (136,330,193) 334,722,242
Contract owners' equity beginning of period ....... 8,731,806 8,146,810 698,327,731 363,605,489
---------------- --------- ----------- -----------
Contract owners' equity end of period ............. $ 9,536,723 8,731,806 561,997,538 698,327,731
================ ========= =========== ===========
</TABLE>
<TABLE>
<CAPTION>
NSATGvtBd NSATMyMkt
---------------------------------- ----------------------------------
1999 1998 1999 1998
------------- -------------- ------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ 21,528,908 20,283,271 55,163,202 49,803,790
Mortality, expense and administration
charges (note 2):
BOA ........................................ (3,133,918) (3,112,323) (8,376,797) (7,311,860)
BOA Vision ................................. (2,334,737) (1,819,228) (7,343,223) (5,795,865)
BOA Enterprise ............................. (6,773) (4,150) (18,398) (7,805)
----------- ----------- ------------- -----------
Net investment activity ...................... 16,053,480 15,347,570 39,424,784 36,688,260
----------- ----------- ------------- -----------
Proceeds from mutual fund shares sold ........... 152,880,585 207,789,615 3,925,072,177 3,220,375,906
Cost of mutual fund shares sold ................. (154,445,541) (193,984,368) (3,925,072,178) (3,220,375,906)
----------- ----------- ------------- -----------
Realized gain (loss) on investments .......... (1,564,956) 13,805,247 (1) --
Change in unrealized gain (loss) on investments . (30,662,357) (6,851,480) -- --
----------- ----------- ------------- -----------
Net gain (loss) on investments ............... (32,227,313) 6,953,767 (1) --
----------- ----------- ------------- -----------
Reinvested capital gains ........................ 692,643 2,132,513 -- --
----------- ----------- ------------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ (15,481,190) 24,433,850 39,424,783 36,688,260
----------- ----------- ------------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 38,828,964 39,548,416 163,808,405 264,092,504
Transfers between funds ......................... (43,986,399) 121,987,540 528,119,178 69,584,573
Redemptions ..................................... (61,218,569) (43,099,055) (397,696,244) (235,028,324)
Annuity benefits ................................ (54,129) (24,316) (25,861) (33,165)
Annual contract maintenance charge (note 2) ..... (155,958) (162,551) (379,402) (329,944)
Contingent deferred sales charges (note 2) ...... (580,850) (471,441) (5,693,000) (3,229,365)
Adjustments to maintain reserves ................ (6,144) (20,225) 187,648 124,919
----------- ----------- ------------- -----------
Net equity transactions .................... (67,173,085) 117,758,368 288,320,724 95,181,198
----------- ----------- ------------- -----------
Net change in contract owners' equity ............. (82,654,275) 142,192,218 327,745,507 131,869,458
Contract owners' equity beginning of period ....... 441,874,130 299,681,912 971,315,955 839,446,497
----------- ----------- ------------- -----------
Contract owners' equity end of period ............. 359,219,855 441,874,130 1,299,061,462 971,315,955
=========== =========== ============= ===========
</TABLE>
12
<PAGE> 12
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, Continued
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
NSATSmCapV NSATSmCo
------------------------------------- ---------------------------------
1999 1998 1999 1998
---------------- --------------- ------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ -- -- -- --
Mortality, expense and administration
charges (note 2):
BOA ........................................ (290,153) (31,885) (1,517,642) (1,700,513)
BOA Vision ................................. (268,350) (35,054) (1,856,910) (2,059,122)
BOA Enterprise ............................. (623) (83) (7,577) (8,482)
-------------- ---------- ----------- -----------
Net investment activity ...................... (559,126) (67,022) (3,382,129) (3,768,117)
-------------- ---------- ----------- -----------
Proceeds from mutual fund shares sold ........... 155,811,318 43,832,595 244,386,183 261,860,480
Cost of mutual fund shares sold ................. (152,202,720) (42,411,426) (229,277,666) (254,018,492)
-------------- ---------- ----------- -----------
Realized gain (loss) on investments .......... 3,608,598 1,421,169 15,108,517 7,841,988
Change in unrealized gain (loss) on investments . (3,160,159) 575,447 67,364,769 (2,212,959)
-------------- ---------- ----------- -----------
Net gain (loss) on investments ............... 448,439 1,996,616 82,473,286 5,629,029
-------------- ---------- ----------- -----------
Reinvested capital gains ........................ 7,696,539 -- 12,517,580 --
-------------- ---------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 7,585,852 1,929,594 91,608,737 1,860,912
-------------- ---------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 3,297,722 859,632 17,388,922 36,933,858
Transfers between funds ......................... 33,216,028 11,542,676 (41,108,002) (26,891,714)
Redemptions ..................................... (5,913,163) (691,704) (26,263,962) (20,592,877)
Annuity benefits ................................ -- -- (34,022) (24,125)
Annual contract maintenance charge (note 2) ..... (10,940) (1,173) (98,855) (105,259)
Contingent deferred sales charges (note 2) ...... (83,345) (8,593) (353,868) (293,623)
Adjustments to maintain reserves ................ 149 87 3,543 (19,321)
-------------- ---------- ----------- -----------
Net equity transactions .................... 30,506,451 11,700,925 (50,466,244) (10,993,061)
-------------- ---------- ----------- -----------
Net change in contract owners' equity ............. 38,092,303 13,630,519 41,142,493 (9,132,149)
Contract owners' equity beginning of period ....... 13,630,519 -- 281,418,074 290,550,223
-------------- ---------- ----------- -----------
Contract owners' equity end of period ............. $ 51,722,822 13,630,519 322,560,567 281,418,074
============== ========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
NSATTotRe NBAMTGro
--------------------------------- ------------------------------------
1999 1998 1999 1998
-------------- ------------- --------------- ----------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ 7,868,622 12,035,844 -- --
Mortality, expense and administration
charges (note 2):
BOA ........................................ (9,209,895) (8,914,235) (4,216,248) (4,492,337)
BOA Vision ................................. (7,172,161) (6,595,435) (1,483,794) (1,605,250)
BOA Enterprise ............................. (56,882) (44,307) (2,934) (2,546)
------------- ------------- ----------- -----------
Net investment activity ...................... (8,570,316) (3,518,133) (5,702,976) (6,100,133)
------------- ------------- ----------- -----------
Proceeds from mutual fund shares sold ........... 218,186,595 98,753,814 291,447,611 232,023,189
Cost of mutual fund shares sold ................. (115,795,523) (54,160,507) (300,669,747) (234,618,122)
------------- ------------- ----------- -----------
Realized gain (loss) on investments .......... 102,391,072 44,593,307 (9,222,136) (2,594,933)
Change in unrealized gain (loss) on investments . (71,821,569) 82,128,581 174,435,551 (55,314,235)
------------- ------------- ----------- -----------
Net gain (loss) on investments ............... 30,569,503 126,721,888 165,213,415 (57,909,168)
------------- ------------- ----------- -----------
Reinvested capital gains ........................ 43,408,692 48,037,783 23,683,476 124,274,598
------------- ------------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 65,407,879 171,241,538 183,193,915 60,265,297
------------- ------------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 83,859,132 144,141,140 17,172,088 28,776,863
Transfers between funds ......................... (90,426,844) (18,161,876) (33,256,054) (34,982,287)
Redemptions ..................................... (124,297,518) (98,751,498) (59,895,170) (46,230,014)
Annuity benefits ................................ (252,159) (194,097) (104,449) (83,808)
Annual contract maintenance charge (note 2) ..... (572,602) (517,264) (225,587) (257,911)
Contingent deferred sales charges (note 2) ...... (1,497,675) (1,246,430) (514,810) (499,129)
Adjustments to maintain reserves ................ 46,343 49,874 16,613 (42,003)
------------- ------------- ----------- -----------
Net equity transactions .................... (133,141,323) 25,319,849 (76,807,369) (53,318,289)
------------- ------------- ----------- -----------
Net change in contract owners' equity ............. (67,733,444) 196,561,387 106,386,546 6,947,008
Contract owners' equity beginning of period ....... 1,231,708,938 1,035,147,551 484,441,048 477,494,040
------------- ------------- ----------- -----------
Contract owners' equity end of period ............. 1,163,975,494 1,231,708,938 590,827,594 484,441,048
============= ============= =========== ===========
</TABLE>
(Continued)
13
<PAGE> 13
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, Continued
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
NBAMTGuard NBAMTLMat
------------------------------------- --------------------------------
1999 1998 1999 1998
--------------- ---------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ 165,509 -- 9,460,320 11,658,274
Mortality, expense and administration
charges (note 2):
BOA ........................................ (317,782) (101,891) (1,237,911) (1,461,067)
BOA Vision ................................. (390,204) (175,876) (878,556) (1,044,829)
BOA Enterprise ............................. (1,086) (340) (700) (942)
---------------- ---------- ----------- -----------
Net investment activity ...................... (543,563) (278,107) 7,343,153 9,151,436
---------------- ---------- ----------- -----------
Proceeds from mutual fund shares sold ........... 38,047,247 27,174,222 51,883,477 67,231,619
Cost of mutual fund shares sold ................. (34,135,139) (30,893,655) (53,710,296) (69,328,641)
---------------- ---------- ----------- -----------
Realized gain (loss) on investments .......... 3,912,108 (3,719,433) (1,826,819) (2,097,022)
Change in unrealized gain (loss) on investments . 1,558,246 1,222,564 (5,412,296) (1,610,865)
---------------- ---------- ----------- -----------
Net gain (loss) on investments ............... 5,470,354 (2,496,869) (7,239,115) (3,707,887)
---------------- ---------- ----------- -----------
Reinvested capital gains ........................ -- -- -- --
---------------- ---------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 4,926,791 (2,774,976) 104,038 5,443,549
---------------- ---------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 6,652,796 2,669,820 9,041,909 23,144,819
Transfers between funds ......................... 7,127,420 40,976,322 (23,713,726) (13,621,857)
Redemptions ..................................... (8,699,070) (2,970,574) (23,363,372) (24,447,184)
Annuity benefits ................................ -- -- (49,054) (19,554)
Annual contract maintenance charge (note 2) ..... (14,896) (4,885) (52,172) (61,292)
Contingent deferred sales charges (note 2) ...... (115,042) (35,504) (212,723) (209,330)
Adjustments to maintain reserves ................ 183 (191) (6,783) 5,646
---------------- ---------- ----------- -----------
Net equity transactions .................... 4,951,391 40,634,988 (38,355,921) (15,208,752)
---------------- ---------- ----------- -----------
Net change in contract owners' equity ............. 9,878,182 37,860,012 (38,251,883) (9,765,203)
Contract owners' equity beginning of period ....... 37,860,012 -- 178,684,975 188,450,178
---------------- ---------- ----------- -----------
Contract owners' equity end of period ............. $ 47,738,194 37,860,012 140,433,092 178,684,975
================ ========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
NBAMTPart OppBdFd
---------------------------------- ---------------------------------
1999 1998 1999 1998
------------- -------------- ------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ 7,337,748 3,116,604 15,414,869 4,888,363
Mortality, expense and administration
charges (note 2):
BOA ........................................ (3,341,574) (4,534,910) (1,934,416) (1,946,480)
BOA Vision ................................. (4,626,485) (5,859,017) (2,370,252) (2,306,525)
BOA Enterprise ............................. (7,538) (9,661) (3,480) (2,200)
----------- ----------- ----------- -----------
Net investment activity ...................... (637,849) (7,286,984) 11,106,721 633,158
----------- ----------- ----------- -----------
Proceeds from mutual fund shares sold ........... 239,904,147 323,653,191 76,868,485 72,961,916
Cost of mutual fund shares sold ................. (222,571,480) (285,611,423) (76,262,770) (68,091,867)
----------- ----------- ----------- -----------
Realized gain (loss) on investments .......... 17,332,667 38,041,768 605,715 4,870,049
Change in unrealized gain (loss) on investments . 4,613,141 (112,673,667) (22,578,962) 6,100,995
----------- ----------- ----------- -----------
Net gain (loss) on investments ............... 21,945,808 (74,631,899) (21,973,247) 10,971,044
----------- ----------- ----------- -----------
Reinvested capital gains ........................ 12,761,301 98,173,016 1,480,371 4,423,968
----------- ----------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 34,069,260 16,254,133 (9,386,155) 16,028,170
----------- ----------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 35,843,727 106,356,098 22,252,034 38,178,922
Transfers between funds ......................... (159,119,927) (179,019,279) (24,451,635) 20,835,559
Redemptions ..................................... (53,932,839) (54,732,674) (37,766,569) (27,001,741)
Annuity benefits ................................ (28,192) (14,950) (54,720) (62,643)
Annual contract maintenance charge (note 2) ..... (212,817) (238,809) (93,232) (96,177)
Contingent deferred sales charges (note 2) ...... (793,907) (785,338) (487,790) (362,728)
Adjustments to maintain reserves ................ (6,839) (732) (50,476) 1,178
----------- ----------- ----------- -----------
Net equity transactions .................... (178,250,794) (128,435,684) (40,652,388) 31,492,370
----------- ----------- ----------- -----------
Net change in contract owners' equity ............. (144,181,534) (112,181,551) (50,038,543) 47,520,540
Contract owners' equity beginning of period ....... 665,008,012 777,189,563 338,486,831 290,966,291
----------- ----------- ----------- -----------
Contract owners' equity end of period ............. 520,826,478 665,008,012 288,448,288 338,486,831
=========== =========== =========== ===========
</TABLE>
14
<PAGE> 14
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, Continued
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
OppGISec OppGro
------------------------------------ -------------------------------
1999 1998 1999 1998
--------------- -------------- -------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ 6,228,265 10,856,886 374,223 188,351
Mortality, expense and administration
charges (note 2):
BOA ........................................ (3,866,796) (3,496,341) (966,386) (275,168)
BOA Vision ................................. (4,038,563) (3,604,162) (879,203) (239,248)
BOA Enterprise ............................. (2,009) (1,733) (2,309) (731)
---------------- ----------- ----------- ----------
Net investment activity ...................... (1,679,103) 3,754,650 (1,473,675) (326,796)
---------------- ----------- ----------- ----------
Proceeds from mutual fund shares sold ........... 230,947,138 125,576,767 109,609,431 17,011,520
Cost of mutual fund shares sold ................. (158,158,040) (88,844,140) (95,003,738) (17,085,617)
---------------- ----------- ----------- ----------
Realized gain (loss) on investments .......... 72,789,098 36,732,627 14,605,693 (74,097)
Change in unrealized gain (loss) on investments . 197,811,280 (21,261,831) 33,668,784 6,064,468
---------------- ----------- ----------- ----------
Net gain (loss) on investments ............... 270,600,378 15,470,796 48,274,477 5,990,371
---------------- ----------- ----------- ----------
Reinvested capital gains ........................ 17,453,216 40,867,407 4,110,735 2,272,563
---------------- ----------- ----------- ----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 286,374,491 60,092,853 50,911,537 7,936,138
---------------- ----------- ----------- ----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 30,974,273 51,559,320 19,405,784 16,030,396
Transfers between funds ......................... 13,489,169 (20,304,286) 93,474,901 26,102,066
Redemptions ..................................... (58,376,318) (37,751,898) (18,328,101) (2,687,765)
Annuity benefits ................................ (66,897) (42,320) (9,494) (3,335)
Annual contract maintenance charge (note 2) ..... (194,429) (192,525) (53,674) (13,027)
Contingent deferred sales charges (note 2) ...... (756,679) (520,846) (198,997) (30,325)
Adjustments to maintain reserves ................ 118,199 (20,237) (4,108) 31,362
---------------- ----------- ----------- ----------
Net equity transactions .................... (14,812,682) (7,272,792) 94,286,311 39,429,372
---------------- ----------- ----------- ----------
Net change in contract owners' equity ............. 271,561,809 52,820,061 145,197,848 47,365,510
Contract owners' equity beginning of period ....... 542,142,739 489,322,678 63,555,624 16,190,114
---------------- ----------- ----------- ----------
Contract owners' equity end of period ............. $ 813,704,548 542,142,739 208,753,472 63,555,624
================ =========== =========== ==========
</TABLE>
<TABLE>
<CAPTION>
OppMult StOpp2
---------------------------------- ---------------------------------
1999 1998 1999 1998
------------- ------------ ------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ 10,981,914 3,212,145 -- 1,848,130
Mortality, expense and administration
charges (note 2):
BOA ........................................ (2,175,410) (2,450,308) (7,048,982) (6,768,918)
BOA Vision ................................. (2,039,541) (2,206,025) (4,034,285) (3,890,877)
BOA Enterprise ............................. (2,810) (2,886) (5,749) (5,469)
----------- ----------- ----------- -----------
Net investment activity ...................... 6,764,153 (1,447,074) (11,089,016) (8,817,134)
----------- ----------- ----------- -----------
Proceeds from mutual fund shares sold ........... 69,845,512 41,801,113 228,074,545 193,720,998
Cost of mutual fund shares sold ................. (56,383,590) (33,330,835) (174,655,731) (137,667,518)
----------- ----------- ----------- -----------
Realized gain (loss) on investments .......... 13,461,922 8,470,278 53,418,814 56,053,480
Change in unrealized gain (loss) on investments . (5,740,060) (9,193,583) 109,728,017 (62,980,528)
----------- ----------- ----------- -----------
Net gain (loss) on investments ............... 7,721,862 (723,305) 163,146,831 (6,927,048)
----------- ----------- ----------- -----------
Reinvested capital gains ........................ 15,885,380 18,630,439 85,940,550 101,358,207
----------- ----------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 30,371,395 16,460,060 237,998,365 85,614,025
----------- ----------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 15,845,234 36,934,558 37,535,540 61,374,281
Transfers between funds ......................... (42,513,072) (27,844,235) (45,347,859) (62,713,711)
Redemptions ..................................... (36,045,246) (33,380,272) (94,240,143) (60,899,142)
Annuity benefits ................................ (60,336) (41,603) (65,711) (63,802)
Annual contract maintenance charge (note 2) ..... (123,285) (137,253) (342,464) (360,713)
Contingent deferred sales charges (note 2) ...... (375,497) (425,530) (1,055,468) (814,460)
Adjustments to maintain reserves ................ 3,973 (12,023) 13,722 3,809
----------- ----------- ----------- -----------
Net equity transactions .................... (63,268,229) (24,906,358) (103,502,383) (63,473,738)
----------- ----------- ----------- -----------
Net change in contract owners' equity ............. (32,896,834) (8,446,298) 134,495,982 22,140,287
Contract owners' equity beginning of period ....... 332,525,906 340,972,204 786,368,057 764,227,770
----------- ----------- ----------- -----------
Contract owners' equity end of period ............. 299,629,072 332,525,906 920,864,039 786,368,057
=========== =========== =========== ===========
</TABLE>
15
<PAGE> 15
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENTS OF CHANGES IN
CONTRACT OWNERS'EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, Continued
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
StDisc2 StIntStk2
------------------------------------ ---------------------------------
1999 1998 1999 1998
---------------- -------------- --------------- ----------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ -- -- 138,546 531,928
Mortality, expense and administration
charges (note 2):
BOA ........................................ (1,105,188) (1,451,734) (274,456) (263,007)
BOA Vision ................................. (708,796) (935,260) (343,406) (348,046)
BOA Enterprise ............................. (374) (477) (460) (326)
---------------- ---------------- ---------------- ----------------
Net investment activity ...................... (1,814,358) (2,387,471) (479,776) (79,451)
---------------- ---------------- ---------------- ----------------
Proceeds from mutual fund shares sold ........... 77,903,728 81,516,149 145,476,420 52,143,627
Cost of mutual fund shares sold ................. (83,032,990) (73,384,284) (130,387,481) (61,140,929)
---------------- ---------------- ---------------- ----------------
Realized gain (loss) on investments .......... (5,129,262) 8,131,865 15,088,939 (8,997,302)
Change in unrealized gain (loss) on investments . (13,708,257) 1,124,195 25,244,195 6,694,716
---------------- ---------------- ---------------- ----------------
Net gain (loss) on investments ............... (18,837,519) 9,256,060 40,333,134 (2,302,586)
---------------- ---------------- ---------------- ----------------
Reinvested capital gains ........................ 20,481,549 2,856,579 -- --
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ (170,328) 9,725,168 39,853,358 (2,382,037)
---------------- ---------------- ---------------- ----------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 7,639,379 13,493,166 2,463,219 4,412,210
Transfers between funds ......................... (30,800,199) (28,949,271) 25,990,469 (10,811,583)
Redemptions ..................................... (16,279,030) (14,296,989) (5,279,553) (3,576,372)
Annuity benefits ................................ (11,538) (10,191) (5,184) (4,776)
Annual contract maintenance charge (note 2) ..... (69,659) (92,275) (16,210) (17,559)
Contingent deferred sales charges (note 2) ...... (220,909) (225,995) (74,931) (55,830)
Adjustments to maintain reserves ................ (8) (15,647) 3,770 (5,143)
---------------- ---------------- ---------------- ----------------
Net equity transactions .................... (39,741,964) (30,097,202) 23,081,580 (10,059,053)
---------------- ---------------- ---------------- ----------------
NET CHANGE IN CONTRACT OWNERS'EQUITY .............. (39,912,292) (20,372,034) 62,934,938 (12,441,090)
CONTRACT OWNERS'EQUITY BEGINNING OF PERIOD ........ 174,894,389 195,266,423 37,277,231 49,718,321
---------------- ---------------- ---------------- ----------------
CONTRACT OWNERS'EQUITY END OF PERIOD .............. $ 134,982,097 174,894,389 100,212,169 37,277,231
================ ================ ================ ================
</TABLE>
<TABLE>
<CAPTION>
VEWrldBd VEWrldEMkt
------------------------------- ---------------------------------
1999 1998 1999 1998
------------ ----------- ------------- -----------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ 3,808,176 874,183 -- 606,759
Mortality, expense and administration
charges (note 2):
BOA ........................................ (619,697) (780,003) (561,374) (339,625)
BOA Vision ................................. (479,059) (569,654) (476,399) (355,352)
BOA Enterprise ............................. (161) (230) (1,380) (728)
---------------- ---------------- ---------------- ----------------
Net investment activity ...................... 2,709,259 (475,704) (1,039,153) (88,946)
---------------- ---------------- ---------------- ----------------
Proceeds from mutual fund shares sold ........... 76,447,420 69,501,826 215,014,766 93,885,231
Cost of mutual fund shares sold ................. (78,440,054) (64,533,774) (184,370,544) (142,305,956)
---------------- ---------------- ---------------- ----------------
Realized gain (loss) on investments .......... (1,992,634) 4,968,052 30,644,222 (48,420,725)
Change in unrealized gain (loss) on investments . (10,749,478) 6,347,948 31,567,954 27,275,773
---------------- ---------------- ---------------- ----------------
Net gain (loss) on investments ............... (12,742,112) 11,316,000 62,212,176 (21,144,952)
---------------- ---------------- ---------------- ----------------
Reinvested capital gains ........................ 1,701,526 -- -- 539,341
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ (8,331,327) 10,840,296 61,173,023 (20,694,557)
---------------- ---------------- ---------------- ----------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 3,783,861 5,953,441 4,868,337 8,718,923
Transfers between funds ......................... (14,694,471) (2,334,954) 62,522,529 (25,081,916)
Redemptions ..................................... (13,131,006) (12,034,561) (11,272,856) (5,537,310)
Annuity benefits ................................ (15,952) (11,719) (2,076) (2,591)
Annual contract maintenance charge (note 2) ..... (32,133) (39,304) (30,204) (24,163)
Contingent deferred sales charges (note 2) ...... (134,638) (134,345) (126,235) (76,401)
Adjustments to maintain reserves ................ (1,769) (57,710) 56,153 (41,405)
---------------- ---------------- ---------------- ----------------
Net equity transactions .................... (24,226,108) (8,659,152) 56,015,648 (22,044,863)
---------------- ---------------- ---------------- ----------------
NET CHANGE IN CONTRACT OWNERS'EQUITY .............. (32,557,435) 2,181,144 117,188,671 (42,739,420)
CONTRACT OWNERS'EQUITY BEGINNING OF PERIOD ........ 99,446,008 97,264,864 35,036,893 77,776,313
---------------- ---------------- ---------------- ----------------
CONTRACT OWNERS'EQUITY END OF PERIOD .............. 66,888,573 99,446,008 152,225,564 35,036,893
================ ================ ================ ================
</TABLE>
16
<PAGE> 16
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENTS OF CHANGES IN
CONTRACT OWNERS'EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, Continued
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
VEWrldHAs MSRESec
------------------------------------ --------------------------------
1999 1998 1999 1998
--------------- --------------- ------------ -----------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ 987,982 711,661 8,729,269 393,097
Mortality, expense and administration
charges (note 2):
BOA ........................................ (594,433) (800,231) (774,460) (1,314,258)
BOA Vision ................................. (342,876) (438,740) (936,460) (1,509,947)
BOA Enterprise ............................. (792) (892) (1,814) (2,421)
---------------- ---------------- ---------------- ----------------
Net investment activity ...................... 49,881 (528,202) 7,016,535 (2,433,529)
---------------- ---------------- ---------------- ----------------
Proceeds from mutual fund shares sold ........... 144,918,510 110,716,383 82,657,939 109,606,337
Cost of mutual fund shares sold ................. (146,155,124) (157,079,801) (100,253,658) (107,603,836)
---------------- ---------------- ---------------- ----------------
Realized gain (loss) on investments .......... (1,236,614) (46,363,418) (17,595,719) 2,002,501
Change in unrealized gain (loss) on investments . 12,197,845 (5,019,280) 4,955,891 (34,053,106)
---------------- ---------------- ---------------- ----------------
Net gain (loss) on investments ............... 10,961,231 (51,382,698) (12,639,828) (32,050,605)
---------------- ---------------- ---------------- ----------------
Reinvested capital gains ........................ -- 17,475,241 -- 3,868,070
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 11,011,112 (34,435,659) (5,623,293) (30,616,064)
---------------- ---------------- ---------------- ----------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 3,038,705 6,023,164 6,177,588 22,405,804
Transfers between funds ......................... (3,908,212) (25,954,967) (45,033,593) (84,189,451)
Redemptions ..................................... (10,586,825) (8,770,856) (13,814,114) (16,396,178)
Annuity benefits ................................ (9,477) (8,819) (6,095) (23,453)
Annual contract maintenance charge (note 2) ..... (38,579) (51,034) (43,795) (65,816)
Contingent deferred sales charges (note 2) ...... (130,954) (112,511) (188,244) (213,235)
Adjustments to maintain reserves ................ 5,697 (61,663) (65,345) (13,239)
---------------- ---------------- ---------------- ----------------
Net equity transactions .................... (11,629,645) (28,936,686) (52,973,598) (78,495,568)
---------------- ---------------- ---------------- ----------------
NET CHANGE IN CONTRACT OWNERS'EQUITY .............. (618,533) (63,372,345) (58,596,891) (109,111,632)
CONTRACT OWNERS'EQUITY BEGINNING OF PERIOD ........ 63,818,047 127,190,392 159,566,073 268,677,705
---------------- ---------------- ---------------- ----------------
CONTRACT OWNERS'EQUITY END OF PERIOD .............. $ 63,199,514 63,818,047 100,969,182 159,566,073
================ ================ ================ ================
</TABLE>
<TABLE>
<CAPTION>
WPIntEq WPPVenCap
---------------------------------- ---------------------------------
1999 1998 1999 1998
-------------- ------------ ------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ 2,495,376 1,248,393 -- --
Mortality, expense and administration
charges (note 2):
BOA ........................................ (1,261,922) (1,543,369) (169,484) (124,501)
BOA Vision ................................. (1,728,970) (2,099,581) (191,698) (121,909)
BOA Enterprise ............................. (687) (1,148) (371) (383)
---------------- ---------------- ---------------- ----------------
Net investment activity ...................... (496,203) (2,395,705) (361,553) (246,793)
---------------- ---------------- ---------------- ----------------
Proceeds from mutual fund shares sold ........... 219,304,970 175,012,080 69,208,671 41,505,314
Cost of mutual fund shares sold ................. (212,188,702) (175,381,602) (64,722,902) (41,036,519)
---------------- ---------------- ---------------- ----------------
Realized gain (loss) on investments .......... 7,116,268 (369,522) 4,485,769 468,795
Change in unrealized gain (loss) on investments . 92,169,127 16,362,407 11,911,468 652,131
---------------- ---------------- ---------------- ----------------
Net gain (loss) on investments ............... 99,285,395 15,992,885 16,397,237 1,120,926
---------------- ---------------- ---------------- ----------------
Reinvested capital gains ........................ -- -- -- --
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 98,789,192 13,597,180 16,035,684 874,133
---------------- ---------------- ---------------- ----------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 11,104,931 24,541,336 1,290,625 2,630,810
Transfers between funds ......................... (29,145,536) (77,448,000) 21,079,024 5,896,486
Redemptions ..................................... (22,034,224) (19,392,829) (2,211,372) (1,865,017)
Annuity benefits ................................ (24,154) (14,068) -- --
Annual contract maintenance charge (note 2) ..... (69,965) (86,940) (7,942) (6,719)
Contingent deferred sales charges (note 2) ...... (320,609) (269,510) (23,526) (22,616)
Adjustments to maintain reserves ................ (28,755) (7,444) 510 (184)
---------------- ---------------- ---------------- ----------------
Net equity transactions .................... (40,518,312) (72,677,455) 20,127,319 6,632,760
---------------- ---------------- ---------------- ----------------
NET CHANGE IN CONTRACT OWNERS'EQUITY .............. 58,270,880 (59,080,275) 36,163,003 7,506,893
CONTRACT OWNERS'EQUITY BEGINNING OF PERIOD ........ 227,695,750 286,776,025 22,185,686 14,678,793
---------------- ---------------- ---------------- ----------------
CONTRACT OWNERS'EQUITY END OF PERIOD .............. 285,966,630 227,695,750 58,348,689 22,185,686
================ ================ ================ ================
</TABLE>
(Continued)
17
<PAGE> 17
NATIONWIDE VARIABLE ACCOUNT-II
STATEMENTS OF CHANGES IN
CONTRACT OWNERS'EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, Continued
YEARS ENDED DECEMBER 31,1999 AND 1998
<TABLE>
<CAPTION>
WPSmCoGr
---------------------------------
1999 1998
-------------- --------------
<S> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ -- --
Mortality, expense and administration
charges (note 2):
BOA ........................................ (1,941,904) (2,148,938)
BOA Vision ................................. (2,107,808) (2,437,919)
BOA Enterprise ............................. (4,194) (4,146)
------------- -----------
Net investment activity ...................... (4,053,906) (4,591,003)
Proceeds from mutual fund shares sold ........... 186,780,446 234,905,719
Cost of mutual fund shares sold ................. (177,277,460) (206,336,848)
------------- -----------
Realized gain (loss) on investments .......... 9,502,986 28,568,871
Change in unrealized gain (loss) on investments . 160,031,891 (37,572,573)
------------- -----------
Net gain (loss) on investments ............... 169,534,877 (9,003,702)
------------- -----------
Reinvested capital gains ........................ 13,490,381 --
------------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 178,971,352 (13,594,705)
------------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 16,264,792 35,864,595
Transfers between funds ......................... (5,815,079) (60,145,996)
Redemptions ..................................... (29,565,663) (24,045,876)
Annuity benefits ................................ (19,326) (16,707)
Annual contract maintenance charge (note 2) ..... (114,049) (131,597)
Contingent deferred sales charges (note 2) ...... (439,142) (375,448)
Adjustments to maintain reserves ................ (46,325) (8,986)
------------- -----------
Net equity transactions .................... (19,734,792) (48,860,015)
------------- -----------
NET CHANGE IN CONTRACT OWNERS'EQUITY .............. 159,236,560 (62,454,720)
CONTRACT OWNERS'EQUITY BEGINNING OF PERIOD ........ 320,942,393 383,397,113
------------- -----------
CONTRACT OWNERS'EQUITY END OF PERIOD .............. $ 480,178,953 320,942,393
============= ===========
</TABLE>
See accompanying notes to financial statements.
18
<PAGE> 18
NATIONWIDE VARIABLE ACCOUNT-II
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(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);
American Century VP - American Century VP Balanced (ACVPBal)
American Century VP - American Century VP Capital Appreciation
(ACVPCapAp)
American Century VP - American Century VP Income & Growth
(ACVPIncGr)
American Century VP - American Century VP International
(ACVPInt)
American Century VP - American Century VP Value (ACVPValue)
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)
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)
(Continued)
19
<PAGE> 19
NATIONWIDE VARIABLE ACCOUNT-II
NOTES TO FINANCIAL STATEMENTS, CONTINUED
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)
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)
Portfolio of the Van Kampen Life Investment Trust
(Van Kampen LIT);
Van Kampen LIT - Morgan Stanley Real Estate Securities
Portfolio (MSRESec)
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 December 31, 1999, 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.
A contract owner may choose from among a number of different underlying
mutual fund options. The underlying mutual fund options are not
available to the general public directly. The underlying mutual funds
are available as investment options in variable life insurance policies
or variable annuity contracts issued by life insurance companies or, in
some cases, through participation in certain qualified pension or
retirement plans.
Some of the underlying mutual funds have been established by investment
advisers which manage publicly traded mutual funds having similar names
and investment objectives. While some of the underlying mutual funds
may be similar to, and may in fact be modeled after, publicly traded
mutual funds, the underlying mutual funds are not otherwise directly
related to any publicly traded mutual fund. Consequently, the
investment performance of publicly traded mutual funds and any
corresponding underlying mutual funds may differ substantially.
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 December 31, 1999. The cost of investments
sold is determined on the specific identification basis. Investment
transactions are accounted for on the trade date (date the order to buy
or sell is executed) and dividend income is recorded on the ex-dividend
date.
(d) Federal Income Taxes
Operations of the Account form a part of, and are taxed with,
operations of the Company which is taxed as a life insurance company
under the Internal Revenue Code.
The Company does not provide for income taxes within the Account. Taxes
are the responsibility of the contract owner upon termination or
withdrawal.
(e) Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally
accepted accounting principles may require management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities, if
any, at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
(f) Calculation of Annuity Reserves
Annuity reserves are computed for contracts in the variable payout
stage according to industry standard mortality tables. The assumed
investment return is 3.5 percent unless the annuitant elects otherwise,
in which case the rate may vary from 3.5 percent to 7 percent, as
regulated by the laws of the respective states. The mortality risk is
fully borne by the Company and may result in additional amounts being
transferred into the Account by the Company to cover greater longevity
of annuitants than expected. Conversely, if reserves exceed amounts
required, transfers may be made to the Company.
(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 up
to $30, dependent on contract type and issue date, 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 AnnuitySM
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.
(Continued)
21
<PAGE> 21
NATIONWIDE VARIABLE ACCOUNT-II
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(4) COMPONENTS OF CONTRACT OWNERS' EQUITY
The following is a summary of contract owners' equity at December 31, 1999,
for each series, in both the accumulation and payout phases.
<TABLE>
<CAPTION>
ANNUAL
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 ........................ 2,993,387 $20.288854 $60,732,392 9%
Non-tax qualified .................... 2,262,657 20.288854 45,906,718 9%
American Century VP -
American Century VP Capital Appreciation:
Tax qualified ........................ 4,817,273 35.454211 170,792,613 62%
Non-tax qualified .................... 3,045,420 35.454211 107,972,963 62%
American Century VP -
American Century VP Income & Growth:
Tax qualified ........................ 1,943,758 12.610627 24,512,007 16%
Non-tax qualified .................... 1,542,249 12.610627 19,448,727 16%
American Century VP -
American Century VP International:
Tax qualified ........................ 4,788,991 26.102697 125,005,581 62%
Non-tax qualified .................... 3,629,927 26.102697 94,750,885 62%
American Century VP -
American Century VP Value:
Tax qualified ........................ 1,174,368 12.777944 15,006,009 (2)%
Non-tax qualified .................... 817,538 12.777944 10,446,455 (2)%
American VI Series - Growth Fund:
Tax qualified ........................ 329,837 65.428997 21,580,904 56%
Non-tax qualified .................... 305,636 65.428997 19,997,457 56%
American VI Series -
High-Yield Bond Fund:
Tax qualified ........................ 52,930 26.601827 1,408,035 4%
Non-tax qualified .................... 25,649 26.601827 682,310 4%
American VI Series - U.S. Government/
AAA-Rated Securities Fund:
Tax qualified ........................ 107,804 20.644287 2,225,537 (2)%
Non-tax qualified .................... 61,401 20.644287 1,267,580 (2)%
The Dreyfus Socially Responsible
Growth Fund, Inc.:
Tax qualified ........................ 4,030,454 35.410022 142,718,465 28%
Non-tax qualified .................... 1,978,560 35.410022 70,060,853 28%
Dreyfus Stock Index Fund:
Tax qualified ........................ 17,799,123 32.559249 579,526,078 19%
Non-tax qualified .................... 11,325,336 32.559249 368,744,435 19%
Dreyfus VIF -
Capital Appreciation Portfolio:
Tax qualified ........................ 3,922,324 14.410358 56,522,093 10%
Non-tax qualified .................... 3,038,562 14.410358 43,786,766 10%
Dreyfus VIF -
Growth and Income Portfolio:
Tax qualified ........................ 1,570,276 14.584456 22,901,621 15%
Non-tax qualified .................... 868,629 14.584456 12,668,481 15%
</TABLE>
22
<PAGE> 22
<TABLE>
<CAPTION>
ANNUAL
UNITS UNIT VALUE RETURN*
----- ---------- -------
<S> <C> <C> <C> <C>
Fidelity VIP - Equity-Income Portfolio:
Tax qualified ......................... 19,571,229 41.001029 802,440,528 5%
Non-tax qualified ..................... 13,729,592 41.001029 562,927,400 5%
Fidelity VIP - Growth Portfolio:
Tax qualified ......................... 17,654,023 87.627336 1,546,975,005 36%
Non-tax qualified ..................... 10,898,528 87.627336 955,008,975 36%
Fidelity VIP - High Income Portfolio:
Tax qualified ......................... 5,005,619 28.744305 143,883,039 7%
Non-tax qualified ..................... 4,973,296 28.744305 142,953,937 7%
Fidelity VIP - Overseas Portfolio:
Tax qualified ......................... 9,748,843 28.588402 278,703,843 41%
Non-tax qualified ..................... 7,678,932 28.588402 219,528,395 41%
Fidelity VIP-II - Asset Manager Portfolio:
Tax qualified ......................... 15,977,617 30.281181 483,821,112 10%
Non-tax qualified ..................... 8,956,320 30.281181 271,207,947 10%
Fidelity VIP-II - Contrafund Portfolio:
Tax qualified ......................... 17,065,996 25.553458 436,095,212 23%
Non-tax qualified ..................... 11,175,042 25.553458 285,560,966 23%
Fidelity VIP-III -
Growth Opportunities Portfolio:
Tax qualified ......................... 3,449,404 13.838158 47,733,398 3%
Non-tax qualified ..................... 2,173,640 13.838158 30,079,174 3%
Morgan Stanley -
Emerging Markets Debt Portfolio:
Tax qualified ......................... 288,028 8.855527 2,550,640 28%
Non-tax qualified ..................... 248,251 8.855527 2,198,393 28%
Nationwide SAT -
Capital Appreciation Fund:
Tax qualified ......................... 5,806,110 31.511115 182,957,000 3%
Non-tax qualified ..................... 4,182,646 31.511115 131,799,839 3%
Nationwide SAT -
Government Bond Fund:
Tax qualified ......................... 3,473,447 33.975979 118,013,762 (4)%
Non-tax qualified ..................... 2,665,502 33.886230 90,323,814 (4)%
Nationwide SAT - Money Market Fund:
Tax qualified ......................... 14,904,403 24.724254 368,500,245 3%
Non-tax qualified ..................... 13,973,502 24.724254 345,484,413 3%
Nationwide SAT - Small Cap Value Fund:
Tax qualified ......................... 1,353,503 10.761293 14,565,442 26%
Non-tax qualified ..................... 1,205,250 10.761293 12,970,048 26%
Nationwide SAT - Small Company Fund:
Tax qualified ......................... 4,271,874 22.704085 96,988,990 42%
Non-tax qualified ..................... 2,440,861 22.704085 55,417,516 42%
Nationwide SAT - Total Return Fund:
Tax qualified ......................... 4,059,346 98.542231 400,017,011 6%
Non-tax qualified ..................... 2,763,449 96.004702 265,304,098 6%
Neuberger & Berman AMT -
Growth Portfolio:
Tax qualified ......................... 4,044,236 64.133277 259,370,108 48%
Non-tax qualified ..................... 2,742,557 64.133277 175,889,168 48%
Neuberger & Berman AMT -
Guardian Portfolio:
Tax qualified ......................... 1,353,607 10.529949 14,253,413 13%
Non-tax qualified ..................... 853,290 10.529949 8,985,100 13%
</TABLE>
(Continued)
23
<PAGE> 23
<TABLE>
NATIONWIDE VARIABLE ACCOUNT-II
NOTES TO FINANCIAL STATEMENTS, CONTINUED
<CAPTION>
ANNUAL
UNITS UNIT VALUE RETURN*
----- ---------- -------
<S> <C> <C> <C> <C>
Neuberger & Berman AMT -
Limited Maturity Bond Portfolio:
Tax qualified ..................... 2,335,659 18.256157 42,640,157 0%
Non-tax qualified ................. 2,158,879 18.256157 39,412,834 0%
Neuberger & Berman AMT -
Partners Portfolio:
Tax qualified ..................... 5,884,748 24.366392 143,390,077 6%
Non-tax qualified ................. 3,370,801 24.366392 82,134,259 6%
Oppenheimer VAF - Bond Fund:
Tax qualified ..................... 3,880,174 19.177103 74,410,496 (3)%
Non-tax qualified ................. 3,059,336 19.177103 58,669,202 (3)%
Oppenheimer VAF -
Global Securities Fund:
Tax qualified ..................... 9,268,259 28.241523 261,749,750 56%
Non-tax qualified ................. 5,359,593 28.241523 151,363,069 56%
Oppenheimer VAF - Growth Fund:
Tax qualified ..................... 3,453,476 17.844166 61,624,399 40%
Non-tax qualified ................. 2,323,662 17.844166 41,463,810 40%
Oppenheimer VAF -
Multiple Strategies Fund:
Tax qualified ..................... 3,877,701 24.251858 94,041,454 10%
Non-tax qualified ................. 2,651,955 24.251858 64,314,836 10%
Strong Opportunity Fund II, Inc.:
Tax qualified ..................... 9,527,297 38.936728 370,961,772 33%
Non-tax qualified ................. 5,774,365 38.936728 224,834,879 33%
Strong VIF - Strong Discovery Fund II:
Tax qualified ..................... 2,501,155 19.472227 48,703,058 4%
Non-tax qualified ................. 1,756,743 19.472227 34,207,698 4%
Strong VIF -
Strong International Stock Fund II:
Tax qualified ..................... 1,564,106 16.513647 25,829,094 85%
Non-tax qualified ................. 1,447,666 16.513647 23,906,245 85%
Van Eck WIT - Worldwide Bond Fund:
Tax qualified ..................... 1,308,320 14.942949 19,550,159 (9)%
Non-tax qualified ................. 1,204,939 14.942949 18,005,342 (9)%
Van Eck WIT -
Worldwide Emerging Markets Fund:
Tax qualified ..................... 4,194,956 11.300054 47,403,229 98%
Non-tax qualified ................. 3,528,130 11.300054 39,868,060 98%
Van Eck WIT -
Worldwide Hard Assets Fund:
Tax qualified ..................... 1,664,942 12.830391 21,361,857 19%
Non-tax qualified ................. 1,580,973 12.830391 20,284,502 19%
Van Kampen LIT - Morgan Stanley
Real Estate Securities Portfolio:
Tax qualified ..................... 1,634,204 14.892896 24,338,030 (5)%
Non-tax qualified ................. 1,515,882 14.892896 22,575,873 (5)%
Warburg Pincus Trust -
International Equity Portfolio:
Tax qualified ..................... 4,185,969 17.579480 73,587,158 51%
Non-tax qualified ................. 3,074,281 17.579480 54,044,261 51%
</TABLE>
24
<PAGE> 24
<TABLE>
<CAPTION>
ANNUAL
UNITS UNIT VALUE RETURN*
----- ---------- -------
<S> <C> <C> <C> <C>
Warburg Pincus Trust -
Post Venture Capital Portfolio:
Tax qualified ......................... 731,811 19.288213 14,115,326 61%
Non-tax qualified ..................... 644,703 19.288213 12,435,169 61%
Warburg Pincus Trust -
Small Company Growth Portfolio:
Tax qualified ......................... 5,376,375 25.523630 137,224,606 67%
Non-tax qualified ..................... 3,969,098 25.523630 101,305,789 67%
The BEST OF AMERICA(R)Nationwide Insurance
Enterprise Annuity contracts:
American Century VP -
American Century VP Balanced:
Tax qualified ........................ 14,335 16.380267 234,811 9%
Non-tax qualified .................... 7,824 16.380267 128,159 9%
American Century VP -
American Century VP Capital Appreciation:
Tax qualified ........................ 8,735 14.255724 124,524 63%
Non-tax qualified .................... 11,822 14.255724 168,531 63%
American Century VP -
American Century VP Income & Growth:
Tax qualified ........................ 1,026 12.717310 13,048 17%
Non-tax qualified .................... 4,483 12.717310 57,012 17%
American Century VP -
American Century VP International:
Tax qualified ........................ 4,359 26.516535 115,586 63%
Non-tax qualified .................... 13,690 26.516535 363,011 63%
American Century VP -
American Century VP Value:
Tax qualified ........................ 1,152 12.974490 14,947 (2)%
Non-tax qualified .................... 9,794 12.974490 127,072 (2)%
The Dreyfus Socially Responsible
Growth Fund, Inc.:
Tax qualified ........................ 22,160 26.214069 580,904 29%
Non-tax qualified .................... 22,246 26.214069 583,158 29%
Dreyfus Stock Index Fund:
Tax qualified ........................ 74,500 25.799667 1,922,075 20%
Non-tax qualified .................... 68,798 25.799667 1,774,965 20%
Dreyfus VIF -
Capital Appreciation Portfolio:
Tax qualified ........................ 12,082 14.590853 176,287 11%
Non-tax qualified .................... 18,270 14.590853 266,575 11%
Dreyfus VIF - Growth and Income Portfolio:
Tax qualified ........................ 16,572 14.808738 245,410 16%
Non-tax qualified .................... 14,293 14.808738 211,661 16%
Fidelity VIP - Equity-Income Portfolio:
Tax qualified ........................ 43,344 18.055454 782,596 5%
Non-tax qualified .................... 51,700 18.055454 933,467 5%
Fidelity VIP - Growth Portfolio:
Tax qualified ........................ 82,625 25.356659 2,095,094 36%
Non-tax qualified .................... 81,025 25.356659 2,054,523 36%
Fidelity VIP - High Income Portfolio:
Tax qualified ........................ 14,864 13.653329 202,943 7%
Non-tax qualified .................... 17,568 13.653329 239,862 7%
</TABLE>
(Continued)
25
<PAGE> 25
<TABLE>
<CAPTION>
ANNUAL
UNITS UNIT VALUE RETURN*
----- ---------- -------
<S> <C> <C> <C> <C>
Fidelity VIP - Overseas Portfolio:
Tax qualified ................................. 2,104 20.621533 43,388 41%
Non-tax qualified ............................. 7,979 20.621533 164,539 41%
Fidelity VIP-II - Asset Manager Portfolio:
Tax qualified ................................. 12,271 18.026981 221,209 10%
Non-tax qualified ............................. 13,357 18.026981 240,786 10%
Fidelity VIP-II - Contrafund Portfolio:
Tax qualified ................................. 23,709 24.040622 569,979 23%
Non-tax qualified ............................. 34,729 24.040622 834,907 23%
Fidelity VIP-III -
Growth Opportunities Portfolio:
Tax qualified ................................. 7,053 14.011528 98,823 3%
Non-tax qualified ............................. 9,281 14.011528 130,041 3%
Morgan Stanley -
Emerging Markets Debt Portfolio:
Tax qualified ................................. 50 8.966597 448 28%
Non-tax qualified ............................. 133 8.966597 1,193 28%
Nationwide SAT -
Capital Appreciation Fund:
Tax qualified ................................. 104,816 23.962791 2,511,684 3%
Non-tax qualified ............................. 88,233 23.962791 2,114,309 3%
Nationwide SAT -
Government Bond Fund:
Tax qualified ................................. 29,229 11.994653 350,592 (3)%
Non-tax qualified ............................. 14,829 11.994653 177,869 (3)%
Nationwide SAT - Money Market Fund:
Tax qualified ................................. 134,873 11.916889 1,607,267 4%
Non-tax qualified ............................. 126,746 11.916889 1,510,418 4%
Nationwide SAT - Small Cap Value Fund:
Tax qualified ................................. 2,089 10.852397 22,671 27%
Non-tax qualified ............................. 7,843 10.852397 85,115 27%
Nationwide SAT - Small Company Fund:
Tax qualified ................................. 19,469 23.169876 451,094 43%
Non-tax qualified ............................. 39,060 23.169876 905,015 43%
Nationwide SAT - Total Return Fund:
Tax qualified ................................. 177,942 20.248322 3,603,027 6%
Non-tax qualified ............................. 167,513 20.248322 3,391,857 6%
Neuberger & Berman AMT -
Growth Portfolio:
Tax qualified ................................. 9,923 23.621161 234,393 49%
Non-tax qualified ............................. 13,920 23.621161 328,807 49%
Neuberger & Berman AMT -
Guardian Portfolio:
Tax qualified ................................. 2,542 10.619078 26,994 14%
Non-tax qualified ............................. 5,246 10.619078 55,708 14%
Neuberger & Berman AMT -
Limited Maturity Bond Portfolio:
Tax qualified ................................. 2,305 11.627287 26,801 1%
Non-tax qualified ............................. 2,858 11.627287 33,231 1%
Neuberger & Berman AMT -
Partners Portfolio:
Tax qualified ................................. 22,673 19.476219 441,584 7%
Non-tax qualified ............................. 22,752 19.476219 443,123 7%
</TABLE>
26
<PAGE> 26
<TABLE>
<CAPTION>
ANNUAL
UNITS UNIT VALUE RETURN*
----- ---------- -------
<S> <C> <C> <C> <C>
Oppenheimer VAF - Bond Fund:
Tax qualified ................................. 5,049 11.996138 60,569 (2)%
Non-tax qualified ............................. 17,880 11.996138 214,491 (2)%
Oppenheimer VAF -
Global Securities Fund:
Tax qualified ................................. 8,666 25.475921 220,774 57%
Non-tax qualified ............................. 6,769 25.475921 172,447 57%
Oppenheimer VAF - Growth Fund:
Tax qualified ................................. 19,261 18.067674 348,001 41%
Non-tax qualified ............................. 10,498 18.067674 189,674 41%
Oppenheimer VAF -
Multiple Strategies Fund:
Tax qualified ................................. 9,461 16.105297 152,372 11%
Non-tax qualified ............................. 10,611 16.105297 170,893 11%
Strong Opportunity Fund II, Inc.:
Tax qualified ................................. 18,413 23.278533 428,628 34%
Non-tax qualified ............................. 17,006 23.278533 395,875 34%
Strong VIF - Strong Discovery Fund II:
Tax qualified ................................. 998 12.830259 12,805 4%
Non-tax qualified ............................. 3,667 12.830259 47,049 4%
Strong VIF -
Strong International Stock Fund II:
Tax qualified ................................. 6,332 16.768723 106,180 86%
Non-tax qualified ............................. 826 16.768723 13,851 86%
Van Eck WIT - Worldwide Bond Fund:
Tax qualified ................................. 2 10.685109 21 (9)%
Non-tax qualified ............................. 850 10.685109 9,082 (9)%
Van Eck WIT -
Worldwide Emerging Markets Fund:
Tax qualified ................................. 13,903 11.473874 159,521 99%
Non-tax qualified ............................. 6,958 11.473874 79,835 99%
Van Eck WIT -
Worldwide Hard Assets Fund:
Tax qualified ................................. 897 10.385200 9,316 20%
Non-tax qualified ............................. 8,208 10.385200 85,242 20%
Van Kampen LIT - Morgan Stanley
Real Estate Securities Portfolio:
Tax qualified ................................. 3,220 14.960757 48,174 (4)%
Non-tax qualified ............................. 9,782 14.960757 146,346 (4)%
Warburg Pincus Trust -
International Equity Portfolio:
Tax qualified ................................. 3,864 17.437474 67,378 52%
Non-tax qualified ............................. 3,159 17.437474 55,085 52%
Warburg Pincus Trust -
Post Venture Capital Portfolio:
Tax qualified ................................. 595 19.584772 11,653 62%
Non-tax qualified ............................. 2,315 19.584772 45,339 62%
Warburg Pincus Trust -
Small Company Growth Portfolio:
Tax qualified ................................. 8,591 23.373394 200,801 68%
Non-tax qualified ............................. 24,173 23.373394 565,005 68%
</TABLE>
27
(Continued)
<PAGE> 27
NATIONWIDE VARIABLE ACCOUNT-II
NOTES TO FINANCIAL STATEMENTS, CONTINUED
<TABLE>
<CAPTION>
ANNUAL
UNITS UNIT VALUE RETURN*
----- ---------- -------
<S> <C> <C> <C> <C>
The BEST OF AMERICA(R) America's Vision
Annuity(SM) contracts:
American Century VP -
American Century VP Balanced:
Tax qualified .............................. 2,229,877 18.643877 41,573,553 9%
Non-tax qualified .......................... 3,104,126 18.643877 57,872,943 9%
American Century VP -
American Century VP Capital Appreciation:
Tax qualified .............................. 2,124,515 18.015046 38,273,235 62%
Non-tax qualified .......................... 3,403,398 18.015046 61,312,372 62%
American Century VP -
American Century VP Income & Growth:
Tax qualified .............................. 1,671,694 12.589315 21,045,482 16%
Non-tax qualified .......................... 1,490,691 12.589315 18,766,779 16%
American Century VP -
American Century VP International:
Tax qualified .............................. 3,535,992 25.959887 91,793,953 62%
Non-tax qualified .......................... 5,086,548 25.959887 132,046,211 62%
American Century VP -
American Century VP Value:
Tax qualified .............................. 1,129,610 12.738880 14,389,966 (2)%
Non-tax qualified .......................... 1,432,698 12.738880 18,250,968 (2)%
The Dreyfus Socially Responsible
Growth Fund, Inc.:
Tax qualified .............................. 2,307,767 33.342555 76,946,848 28%
Non-tax qualified .......................... 3,065,919 33.342555 102,225,573 28%
Dreyfus Stock Index Fund:
Tax qualified .............................. 14,668,287 32.260809 473,210,805 19%
Non-tax qualified .......................... 20,456,946 32.260809 659,957,660 19%
Dreyfus VIF -
Capital Appreciation Portfolio:
Tax qualified .............................. 2,795,489 14.374409 40,183,502 10%
Non-tax qualified .......................... 4,202,770 14.374409 60,412,335 10%
Dreyfus VIF - Growth and Income Portfolio:
Tax qualified .............................. 1,464,304 14.539855 21,290,768 15%
Non-tax qualified .......................... 2,079,004 14.539855 30,228,417 15%
Fidelity VIP - Equity-Income Portfolio:
Tax qualified .............................. 18,744,521 23.541057 441,265,837 5%
Non-tax qualified .......................... 26,435,673 23.541057 622,323,685 5%
Fidelity VIP - Growth Portfolio:
Tax qualified .............................. 16,102,523 34.539423 556,171,853 36%
Non-tax qualified .......................... 22,795,122 34.539423 787,330,361 36%
Fidelity VIP - High Income Portfolio:
Tax qualified .............................. 8,271,114 15.361833 127,059,472 7%
Non-tax qualified .......................... 13,454,975 15.361833 206,693,079 7%
Fidelity VIP - Overseas Portfolio:
Tax qualified .............................. 3,667,413 21.872670 80,216,114 41%
Non-tax qualified .......................... 5,639,452 21.872670 123,349,873 41%
Fidelity VIP-II - Asset Manager Portfolio:
Tax qualified .............................. 7,152,076 18.437523 131,866,566 10%
Non-tax qualified .......................... 9,494,041 18.437523 175,046,599 10%
</TABLE>
28
<PAGE> 28
<TABLE>
<CAPTION>
ANNUAL
UNITS UNIT VALUE RETURN*
----- ---------- -------
<S> <C> <C> <C> <C>
Fidelity VIP-II - Contrafund Portfolio:
Tax qualified ................................. 13,246,393 25.437333 336,952,910 23%
Non-tax qualified ............................. 18,358,303 25.437333 466,986,267 23%
Fidelity VIP-III -
Growth Opportunities Portfolio:
Tax qualified ................................. 3,074,953 13.803637 42,445,535 3%
Non-tax qualified ............................. 4,552,923 13.803637 62,846,896 3%
Morgan Stanley -
Emerging Markets Debt Portfolio:
Tax qualified ................................. 153,956 8.833418 1,359,958 28%
Non-tax qualified ............................. 387,856 8.833418 3,426,094 28%
Nationwide SAT -
Capital Appreciation Fund:
Tax qualified ................................. 3,732,455 27.838556 103,906,158 3%
Non-tax qualified ............................. 4,968,186 27.838556 138,307,124 3%
Nationwide SAT -
Government Bond Fund:
Tax qualified ................................. 4,980,532 12.771602 63,609,372 (4)%
Non-tax qualified ............................. 6,771,077 12.771602 86,477,501 (4)%
Nationwide SAT - Money Market Fund:
Tax qualified ................................. 19,142,838 12.331041 236,051,120 3%
Non-tax qualified ............................. 28,039,121 12.331041 345,751,551 3%
Nationwide SAT - Small Cap Value Fund:
Tax qualified ................................. 967,163 10.743114 10,390,342 26%
Non-tax qualified ............................. 1,274,231 10.743114 13,689,209 26%
Nationwide SAT - Small Company Fund:
Tax qualified ................................. 3,356,307 22.607920 75,879,120 42%
Non-tax qualified ............................. 4,099,453 22.607920 92,680,105 42%
Nationwide SAT - Total Return Fund:
Tax qualified ................................. 9,240,684 24.093443 222,639,893 5%
Non-tax qualified ............................. 11,092,594 24.093443 267,258,781 5%
Neuberger & Berman AMT -
Growth Portfolio:
Tax qualified ................................. 2,191,851 28.406340 62,262,465 48%
Non-tax qualified ............................. 3,249,330 28.406340 92,301,573 48%
Neuberger & Berman AMT -
Guardian Portfolio:
Tax qualified ................................. 1,174,502 10.512151 12,346,542 13%
Non-tax qualified ............................. 1,148,237 10.512151 12,070,441 13%
Neuberger & Berman AMT -
Limited Maturity Bond Portfolio:
Tax qualified ................................. 1,753,284 12.023258 21,080,186 0%
Non-tax qualified ............................. 3,083,884 12.023258 37,078,333 0%
Neuberger & Berman AMT -
Partners Portfolio:
Tax qualified ................................. 4,926,644 24.233053 119,387,625 6%
Non-tax qualified ............................. 7,215,015 24.233053 174,841,841 6%
Oppenheimer VAF - Bond Fund:
Tax qualified ................................. 4,920,397 12.779991 62,882,629 (3)%
Non-tax qualified ............................. 7,205,678 12.779991 92,088,500 (3)%
Oppenheimer VAF -
Global Securities Fund:
Tax qualified ................................. 6,498,893 25.830374 167,868,837 56%
Non-tax qualified ............................. 8,973,439 25.830374 231,787,285 56%
</TABLE>
(Continued)
29
<PAGE> 29
<TABLE>
NATIONWIDE VARIABLE ACCOUNT-II
NOTES TO FINANCIAL STATEMENTS, CONTINUED
<CAPTION>
ANNUAL
UNITS UNIT VALUE RETURN*
----- ---------- -------
<S> <C> <C> <C> <C>
Oppenheimer VAF - Growth Fund:
Tax qualified .............................. 2,671,309 17.799664 47,548,403 40%
Non-tax qualified .......................... 3,228,130 17.799664 57,459,629 40%
Oppenheimer VAF -
Multiple Strategies Fund:
Tax qualified .............................. 3,468,280 17.948145 62,249,192 10%
Non-tax qualified .......................... 4,370,474 17.948145 78,441,901 10%
Strong Opportunity Fund II, Inc.:
Tax qualified .............................. 4,869,488 28.512432 138,840,945 33%
Non-tax qualified .......................... 6,478,747 28.512432 184,724,833 33%
Strong VIF - Strong Discovery Fund II:
Tax qualified .............................. 1,328,451 16.068225 21,345,850 4%
Non-tax qualified .......................... 1,902,709 16.068225 30,573,156 4%
Strong VIF -
Strong International Stock Fund II:
Tax qualified .............................. 1,261,581 16.443689 20,745,046 85%
Non-tax qualified .......................... 1,797,088 16.443689 29,550,756 85%
Van Eck WIT - Worldwide Bond Fund:
Tax qualified .............................. 914,353 11.830291 10,817,062 (9)%
Non-tax qualified .......................... 1,558,403 11.830291 18,436,361 (9)%
Van Eck WIT -
Worldwide Emerging Markets Fund:
Tax qualified .............................. 2,477,889 11.265493 27,914,641 97%
Non-tax qualified .......................... 3,263,317 11.265493 36,762,875 97%
Van Eck WIT -
Worldwide Hard Assets Fund:
Tax qualified .............................. 716,194 10.495465 7,516,789 19%
Non-tax qualified .......................... 1,323,974 10.495465 13,895,723 19%
Van Kampen LIT - Morgan Stanley
Real Estate Securities Portfolio:
Tax qualified .............................. 2,198,091 14.825198 32,587,134 (5)%
Non-tax qualified .......................... 1,432,926 14.825198 21,243,412 (5)%
Warburg Pincus Trust -
International Equity Portfolio:
Tax qualified .............................. 3,168,692 17.499626 55,450,925 51%
Non-tax qualified .......................... 5,861,047 17.499626 102,566,130 51%
Warburg Pincus Trust -
Post Venture Capital Portfolio:
Tax qualified .............................. 776,179 19.229243 14,925,335 61%
Non-tax qualified .......................... 874,495 19.229243 16,815,877 61%
Warburg Pincus Trust -
Small Company Growth Portfolio:
Tax qualified .............................. 3,631,606 25.407601 92,270,396 67%
Non-tax qualified .......................... 5,844,172 25.407601 148,486,390 67%
=========== ===========
Reserves for annuity contracts in payout phase:
Tax qualified .............................. 4,788,357
Non-tax qualified .......................... 12,639,950
---------------
$23,415,344,916
===============
</TABLE>
* The annual return does not include contract charges satisfied by
surrendering units.
30
<PAGE> 30
Independent Auditors' Report
----------------------------
The Board of Directors of Nationwide Life Insurance Company and Contract Owners
of Nationwide Variable Account-II:
We have audited the accompanying statement of assets, liabilities and
contract owners' equity of Nationwide Variable Account-II (comprised of the
sub-accounts listed in note 1(b)) (collectively, "the Account") as of December
31, 1999, and the related statements of operations and changes in contract
owners' equity for each of the years in the two year period then ended. These
financial statements are the responsibility of the Account's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 1999, by correspondence with
the transfer agents of the underlying mutual funds. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the Account as of December
31, 1999, and the results of its operations and its changes in contract owners'
equity for each of the years in the two year period then ended in conformity
with generally accepted accounting principles.
KPMG LLP
Columbus, Ohio
February 18, 2000
31
<PAGE> 31
NATIONWIDE LIFE INSURANCE COMPANY
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