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[LOGO - NATIONWIDE MULTI-FLEX ANNUITY]
- -------------------------------------------------------------------------------
Semi-Annual Report
June 30, 1997
- -------------------------------------------------------------------------------
Nationwide(R) [LOGO] NATIONWIDE
Multi-Flex INSURANCE
Variable Account Nationwide is on your side
Columbus, Ohio
APO-724-W(6/97)
<PAGE> 2
[LOGO]
NATIONWIDE LIFE INSURANCE COMPANY
ONE NATIONWIDE PLAZA, COLUMBUS, OHIO 43215-2220
[PHOTO]
PRESIDENT'S MESSAGE
We are pleased to present the 1997 semi-annual report of the Nationwide
Multi-Flex Variable Account.
Our Enterprise Vision statement states: "We exist to serve our customers."
Everything we do is focused on you, our customer, and on your needs.
We recognize that your expectations have changed and your standards for value
and service are higher than ever before. You are being asked to take more
responsibility for your own financial future, as employers and government
programs provide fewer guarantees.
We know that you expect service and products customized to fit your needs -
including financial advice - and you expect to receive service at any time,
anywhere and any way you choose.
We are responding to your changing needs and expectations with innovative
product offerings, continuing investment in the training and professional
development of our people, and our investment in technology to enable us to
serve you faster, better and more cost effectively.
Equity investments produced solid gains for the first half of 1997 with the Dow
Jones Industrial Average breaking the 8,000 mark on July 16. The U.S. economy,
in its seventh year of expansion, is growing vigorously and corporate profits
are better than anticipated.
Interest rates and inflation are still at very low levels. However, the risk of
a temporary spike remains as the Federal Reserve might be forced to raise
interest rates in order to keep our economy on an inflation-free growth path.
Even such policy actions are not expected to end the prosperous times which we
now enjoy. In the long run, equity valuations will reflect these excellent
economic conditions.
Thank you for giving Nationwide Life Insurance Company the opportunity to meet
your investment needs.
/s/ Joseph J. Gasper
Joseph J. Gasper, President
3
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NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS:
Investments at market value:
<S> <C>
American Century VP - American Century VP Advantage (ACVPAdv)
1.651,476 shares (cost $9,254,189) .................................... $ 10,305,207
American Century VP - American Century VP Capital Appreciation (ACVPCapAp)
3,739,000 shares (cost $35,733,799) ................................... 36,118,741
The Dreyfus Socially Responsible Growth Fund, Inc. (DrySRGro)
569,973 shares (cost $11,390,409) ..................................... 13,320,270
Dreyfus Stock Index Fund (DryStkIx)
1,586,786 shares (cost $29,034,362) ................................... 38,447,819
Dreyfus VIF - Quality Bond Portfolio (DryQualBd)
280,422 shares (cost $3,197,279) ...................................... 3,227,658
Dreyfus VIF - Small Cap Portfolio (DrySmCap)
839,199 shares (cost $40,595,613) ..................................... 47,162,981
Fidelity VIP - Equity-Income Portfolio (FidVIPEI)
4,673,547 shares (cost $82,227,450) ................................... 103,098,452
Fidelity VIP - High Income Portfolio (FidVIPHI)
1,063,360 shares (cost $12,587,252) ................................... 13,217,559
Nationwide SAT - Capital Appreciation Fund (NSATCapAp)
3,081,813 shares (cost $38,296,335) ................................... 60,280,253
Nationwide SAT - Government Bond Fund (NSATGvtBd)
11,108,967 shares (cost $124,095,636) ................................. 122,198,637
Nationwide SAT - Money Market Fund (NSATMyMkt)
45,292,957 shares (cost $45,292,957) .................................. 45,292,957
Nationwide SAT - Total Return Fund (NSATTotRe)
33,878,741 shares (cost $336,563,081) ................................. 532,235,023
Neuberger &Berman - Balanced Portfolio (NBAMTBal)
2,453,452 shares (cost $37,222,236) ................................... 40,678,238
Strong Special Fund II, Inc. (StSpec2)
495,721 shares (cost $8,977,569) ...................................... 9,517,852
Templeton VPS - Templeton International Fund (TemIntFd)
1,169,218 shares (cost $19,005,402) ................................... 23,688,362
--------------
Total investments .................................................. 1,098,790,009
Accounts receivable ......................................................... 53,002
--------------
Total assets ....................................................... 1,098,843,011
ACCOUNTS PAYABLE ............................................................... 11,605
--------------
CONTRACT OWNERS' EQUITY ........................................................ $1,098,831,406
==============
</TABLE>
4
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<TABLE>
<CAPTION>
Contract owners' equity represented by:
Contracts in accumulation phase: UNITS UNIT VALUE
-------- ----------
<S> <C> <C> <C>
American Century VP - American Century VP Advantage:
Tax qualified ................................... 477,733 $14.895913 $7,116,269
Non-tax qualified ............................... 187,085 14.895913 2,786,802
Initial Funding by Depositor .................... 25,000 16.085686 402,142
American Century VP - American Century VP
Capital Appreciation:
Tax qualified ................................... 1,697,439 14.897166 25,287,031
Non-tax qualified ............................... 727,073 14.897166 10,831,327
The Dreyfus Socially Responsible Growth Fund, Inc.:
Tax qualified ................................... 678,031 18.437926 12,501,485
Non-tax qualified ............................... 44,410 18.437926 818,828
Dreyfus Stock Index Fund:
Tax qualified ................................... 1,506,773 19.981826 30,108,076
Non-tax qualified ............................... 417,381 19.981826 8,340,035
Dreyfus VIF - Quality Bond Portfolio:
Tax qualified ................................... 273,997 10.896071 2,985,491
Non-tax qualified ............................... 22,236 10.896071 242,285
Dreyfus VIF - Small Cap Portfolio:
Tax qualified ................................... 2,731,454 16.345238 44,646,266
Non-tax qualified ............................... 153,975 16.345238 2,516,758
Fidelity VIP - Equity-Income Portfolio:
Tax qualified ................................... 4,282,627 18.798061 80,505,084
Non-tax qualified ............................... 1,201,515 18.798061 22,586,152
Fidelity VIP - High Income Portfolio:
Tax qualified ................................... 882,295 14.185575 12,515,862
Non-tax qualified ............................... 49,468 14.185575 701,732
Nationwide SAT - Capital Appreciation Fund:
Tax qualified ................................... 2,007,957 21.578999 43,329,702
Non-tax qualified ............................... 783,197 21.578999 16,900,607
Nationwide SAT - Government Bond Fund:
Tax qualified ................................... 2,758,975 30.746290 84,828,245
Non-tax qualified ............................... 1,211,013 30.757627 37,247,886
Nationwide SAT - Money Market Fund:
Tax qualified ................................... 1,608,237 20.711249 33,308,597
Non-tax qualified ............................... 533,053 22.503145 11,995,369
Nationwide SAT - Total Return Fund:
Tax qualified ................................... 5,151,548 73.759455 379,975,373
Non-tax qualified ............................... 2,119,321 71.637923 151,823,755
Neuberger &Berman - Balanced Portfolio:
Tax qualified ................................... 1,709,409 17.204573 29,409,652
Non-tax qualified ............................... 654,986 17.204573 11,268,754
Strong Special Fund II, Inc.:
Tax qualified ................................... 657,489 13.432988 8,832,042
Non-tax qualified ............................... 51,056 13.432988 685,835
Templeton VPS - Templeton International Fund:
Tax qualified ................................... 1,417,696 15.765086 22,350,099
Non-tax qualified ............................... 84,894 15.765086 1,338,361
========== =========
Reserves for annuity contracts in payout phase:
Tax qualified ................................... 376,825
Non-tax qualified ............................... 268,679
--------------
$1,098,831,406
==============
</TABLE>
See accompanying notes to financial statements.
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5
<PAGE> 5
<TABLE>
<CAPTION>
NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
TOTAL ACVPADV
---------------------------------- ---------------------------
1997 1996 1997 1996
--------------- ---------- ------- -------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ......................... $ 13,217,687 11,314,291 158,735 162,218
Mortality, expense and administration
charges (note 2) ........................... (6,482,430) (5,300,168) (63,801) (62,124)
--------------- ---------- ------- -------
Net investment activity .................... 6,735,257 6,014,123 94,934 100,094
--------------- ---------- ------- -------
Proceeds from mutual fund shares sold ........ 50,134,226 35,397,943 930,364 392,813
Cost of mutual fund shares sold .............. (40,911,238) (30,821,926) (789,051) (336,728)
--------------- ---------- ------- -------
Realized gain (loss) on investments ........ 9,222,988 4,576,017 141,313 56,085
Change in unrealized gain (loss) on investments 100,814,722 14,769,068 (186,614) (313,340)
--------------- ---------- ------- -------
Net gain (loss) on investments ............. 110,037,710 19,345,085 (45,301) (257,255)
--------------- ---------- ------- -------
Reinvested capital gains ..................... 11,056,889 13,026,605 548,350 463,335
--------------- ---------- ------- -------
Net increase (decrease) in contract owners'
equity resulting from operations ....... 127,829,856 38,385,813 597,983 306,174
--------------- ---------- ------- -------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds .... 79,012,562 66,301,994 (328,739) 237,757
Redemptions .................................. (46,813,776) (38,613,230) (318,241) (286,229)
Annuity benefits ............................. (46,579) (44,463) -- --
Annual contract maintenance charge (note 2) .. (923,052) (789,156) (9,121) (9,843)
Contingent deferred sales charges (note 2) ... (415,541) (420,429) (5,570) (6,434)
Adjustments to maintain reserves ............. 5,454 17,791 (13) 362
--------------- ---------- ---------- ----------
Net equity transactions .................. 30,819,068 26,452,507 (661,684) (64,387)
--------------- ---------- ---------- ----------
NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 158,648,924 64,838,320 (63,701) 241,787
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .... 940,182,482 776,087,797 10,368,913 9,774,065
--------------- ---------- ---------- ----------
CONTRACT OWNERS' EQUITY END OF PERIOD .......... $ 1,098,831,406 840,926,117 10,305,212 10,015,852
=============== =========== ========== ==========
<CAPTION>
ACVPCAPAP DRYSRGRO
----------------------------- ------------------------
1997 1996 1997 1996
-------- -------- ------- ------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ......................... -- -- -- --
Mortality, expense and administration
charges (note 2) ........................... (248,441) (321,130) (64,489) (14,419)
----------- ---------- --------- -------
Net investment activity .................... (248,441) (321,130) (64,489) (14,419)
----------- ---------- --------- -------
Proceeds from mutual fund shares sold ........ 7,138,099 1,522,428 253,595 38,766
Cost of mutual fund shares sold .............. (6,122,953) (1,022,113) (156,945) (28,068)
----------- ---------- --------- -------
Realized gain (loss) on investments ........ 1,015,146 500,315 96,650 10,698
Change in unrealized gain (loss) on investments (3,498,702) (5,312,030) 1,457,911 151,011
----------- ---------- --------- -------
Net gain (loss) on investments ............. $(2,483,556) (4,811,715) 1,554,561 161,709
----------- ---------- --------- -------
Reinvested capital gains ..................... 818,434 5,470,200 -- --
----------- ---------- --------- -------
Net increase (decrease) in contract owners'
equity resulting from operations ....... (1,913,563) 337,355 1,490,072 147,290
----------- ---------- --------- -------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds .... (4,308,319) 2,643,336 5,132,179 1,686,541
Redemptions .................................. (2,424,373) (1,763,758) (147,875) (45,120)
Annuity benefits ............................. -- -- -- --
Annual contract maintenance charge (note 2) .. (41,911) (50,272) (14,138) (3,087)
Contingent deferred sales charges (note 2) ... (45,658) (49,728) (1,724) (423)
Adjustments to maintain reserves ............. (186) 2,783 307 605
----------- ---------- ---------- ---------
Net equity transactions .................. (6,820,447) 782,361 4,968,749 1,638,516
----------- ---------- ---------- ---------
NET CHANGE IN CONTRACT OWNERS' EQUITY .......... (8,734,010) 1,119,716 6,458,821 1,785,806
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .... 44,852,368 48,417,739 6,861,492 1,364,377
----------- ---------- ---------- ---------
CONTRACT OWNERS' EQUITY END OF PERIOD .......... 36,118,358 49,537,455 13,320,313 3,150,183
========== ========== ========== =========
</TABLE>
6
<PAGE> 6
<TABLE>
<CAPTION>
NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
DRYSTKIX DRYQUALBD
------------------------------ ---------------------------
1997 1996 1997 1996
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................. $ 260,101 137,853 69,386 12,499
Mortality, expense and administration
charges (note 2)..................... (192,525) (79,256) (17,646) (3,440)
-------------- -------------- -------------- --------------
Net investment activity.............. 67,576 58,597 51,740 9,059
-------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold.. 236,622 25,796 168,946 11,206
Cost of mutual fund shares sold........ (171,587) (21,171) (174,243) (11,420)
-------------- -------------- -------------- --------------
Realized gain (loss) on investments.. 65,035 4,625 (5,297) (214)
Change in unrealized gain (loss) on investments 5,314,092 982,884 16,227 (14,459)
-------------- -------------- -------------- --------------
Net gain (loss) on investments....... 5,379,127 987,509 10,930 (14,673)
-------------- -------------- -------------- --------------
Reinvested capital gains............... - - - -
-------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations. 5,446,703 1,046,106 62,670 (5,614)
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds 11,676,117 4,383,829 882,812 990,426
Redemptions............................ (624,904) (370,443) (23,624) (844)
Annuity benefits....................... - - - -
Annual contract maintenance charge (note 2) (32,428) (15,204) (5,502) (133)
Contingent deferred sales charges (note 2) (8,573) (7,390) (421) -
Adjustments to maintain reserves....... 259 911 (2) 26
-------------- -------------- -------------- --------------
Net equity transactions............ 11,010,471 3,991,703 853,263 989,475
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY.... 16,457,174 5,037,809 915,933 983,861
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD 21,990,935 9,663,261 2,311,843 103,118
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD.... $ 38,448,109 14,701,070 3,227,776 1,086,979
============== ============== ============== ==============
<CAPTION>
DRYSMCAP FIDVIPEI
------------------------------ ------------------------------
1997 1996 1997 1996
------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................. - - 1,376,653 81,351
Mortality, expense and administration
charges (note 2)..................... (246,039) (93,480) (577,457) (376,826)
------------- -------------- -------------- --------------
Net investment activity.............. (246,039) (93,480) 799,196 (295,475)
------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold.. 69,890 - 291,488 48,343
Cost of mutual fund shares sold........ (49,324) - (225,562) (38,599)
------------- -------------- -------------- --------------
Realized gain (loss) on investments.. 20,566 - 65,926 9,744
Change in unrealized gain (loss) on investments 3,498,983 1,417,109 5,547,741 696,128
------------- -------------- -------------- --------------
Net gain (loss) on investments....... 3,519,549 1,417,109 5,613,667 705,872
------------- -------------- -------------- --------------
Reinvested capital gains............... - - 6,921,505 2,332,075
------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations. 3,273,510 1,323,629 13,334,368 2,742,472
------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds 12,244,776 8,162,826 13,536,019 12,362,262
Redemptions............................ (644,943) (243,231) (2,090,687) (1,294,546)
Annuity benefits....................... - - (132) -
Annual contract maintenance charge (note 2) (74,059) (30,777) (103,424) (69,036)
Contingent deferred sales charges (note 2) (10,238) (2,196) (34,420) (29,521)
Adjustments to maintain reserves....... 39 1,057 348 2,365
------------- -------------- -------------- --------------
Net equity transactions............ 11,515,575 7,887,679 11,307,704 10,971,524
------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY.... 14,789,085 9,211,308 24,642,072 13,713,996
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD 32,373,939 10,164,187 78,456,637 50,567,365
------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD.... 47,163,024 19,375,495 103,098,709 64,281,361
============= ============== ============== ==============
</TABLE>
7
<PAGE> 7
<TABLE>
<CAPTION>
NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
FIDVIPHI NSATCAPAP
------------------------------ ------------------------------
1997 1996 1997 1996
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................. $ 662,094 228,296 296,159 325,898
Mortality, expense and administration
charges (note 2)..................... (68,902) (24,564) (345,137) (253,870)
-------------- -------------- -------------- --------------
Net investment activity.............. 593,192 203,732 (48,978) 72,028
-------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold.. 167,045 40,009 2,146,369 3,136,530
Cost of mutual fund shares sold........ (151,951) (36,699) (1,268,762) (2,250,171)
-------------- -------------- -------------- --------------
Realized gain (loss) on investments.. 15,094 3,310 877,607 886,359
Change in unrealized gain (loss) on investments 72,075 (22,197) 9,140,255 2,499,605
-------------- -------------- -------------- --------------
Net gain (loss) on investments....... 87,169 (18,887) 10,017,862 3,385,964
-------------- -------------- -------------- --------------
Reinvested capital gains............... 81,832 44,667 - -
-------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations. 762,193 229,512 9,968,884 3,457,992
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds 3,965,260 2,312,020 4,294,316 4,602,377
Redemptions............................ (171,449) (56,825) (2,241,463) (2,818,433)
Annuity benefits....................... - - (2,000) (1,728)
Annual contract maintenance charge (note 2) (17,401) (7,236) (37,191) (34,284)
Contingent deferred sales charges (note 2) (2,903) (621) (17,360) (20,949)
Adjustments to maintain reserves....... 15 50 337 2,786
-------------- -------------- -------------- --------------
Net equity transactions............ 3,773,522 2,247,388 1,996,639 1,729,769
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY.... 4,535,715 2,476,900 11,965,523 5,187,761
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD 8,681,879 2,614,740 48,315,224 35,443,279
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD.... $ 13,217,594 5,091,640 60,280,747 40,631,040
============== ============== ============== ==============
<CAPTION>
NSATGVTBD NSATMYMKT
------------------------------ ------------------------------
1997 1996 1997 1996
------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................. 3,845,937 4,240,897 1,134,778 1,092,768
Mortality, expense and administration
charges (note 2)..................... (809,660) (899,918) (293,386) (287,163)
------------- -------------- -------------- --------------
Net investment activity.............. 3,036,277 3,340,979 841,392 805,605
------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold.. 11,629,642 9,430,896 11,152,191 9,685,698
Cost of mutual fund shares sold........ (12,137,193) (9,458,627) (11,152,191) (9,685,698)
------------- -------------- -------------- --------------
Realized gain (loss) on investments.. (507,551) (27,731) - -
Change in unrealized gain (loss) on investments 96,074 (6,608,573) - -
------------- -------------- -------------- --------------
Net gain (loss) on investments....... (411,477) (6,636,304) - -
------------- -------------- -------------- --------------
Reinvested capital gains............... - - - -
------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations. 2,624,800 (3,295,325) 841,392 805,605
------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds (2,117,727) (70,817) 2,591,248 326,182
Redemptions............................ (8,284,360) (7,326,728) (4,211,467) (4,131,939)
Annuity benefits....................... (9,078) (9,557) (2,326) (2,989)
Annual contract maintenance charge (note 2) (97,517) (113,531) (40,806) (45,428)
Contingent deferred sales charges (note 2) (71,579) (89,156) (30,669) (24,581)
Adjustments to maintain reserves....... (316) (627) 97 186
------------- -------------- -------------- --------------
Net equity transactions............ (10,580,577) (7,610,416) (1,693,923) (3,878,569)
------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY.... (7,955,777) (10,905,741) (852,531) (3,072,964)
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD 130,153,978 144,382,588 46,180,606 45,907,424
------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD.... 122,198,201 133,476,847 45,328,075 42,834,460
============= ============== ============== ==============
</TABLE>
8
<PAGE> 8
<TABLE>
<CAPTION>
NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
NSATTOTRE NBAMTBAL
------------------------------ ---------------------------
1997 1996 1997 1996
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................. $ 4,219,008 4,081,966 704,341 838,838
Mortality, expense and administration
charges (note 2)..................... (3,130,288) (2,586,417) (254,382) (242,042)
-------------- -------------- -------------- --------------
Net investment activity.............. 1,088,720 1,495,549 449,959 596,796
-------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold.. 13,151,379 10,275,187 2,535,921 717,537
Cost of mutual fund shares sold........ (6,007,184) (7,260,793) (2,308,639) (608,413)
-------------- -------------- -------------- --------------
Realized gain (loss) on investments.. 7,144,195 3,014,394 227,282 109,124
Change in unrealized gain (loss) on investments 75,743,872 25,169,493 1,458,387 (4,516,808)
-------------- -------------- -------------- --------------
Net gain (loss) on investments....... 82,888,067 28,183,887 1,685,669 (4,407,684)
-------------- -------------- -------------- --------------
Reinvested capital gains............... - - 1,807,809 4,664,756
-------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations. 83,976,787 29,679,436 3,943,437 853,868
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds 21,905,408 22,004,059 80,506 2,124,031
Redemptions............................ (23,469,985) (19,036,282) (1,700,486) (1,149,727)
Annuity benefits....................... (33,043) (30,189) - -
Annual contract maintenance charge (note 2) (378,849) (361,832) (36,361) (35,190)
Contingent deferred sales charges (note 2) (147,426) (158,270) (32,287) (29,971)
Adjustments to maintain reserves....... 5,602 6,243 246 657
-------------- -------------- -------------- --------------
Net equity transactions............ (2,118,293) 2,423,729 (1,688,382) 909,800
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY.... 81,858,494 32,103,165 2,255,055 1,763,668
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD 450,382,051 375,569,036 38,423,351 35,799,867
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD.... $ 532,240,545 407,672,201 40,678,406 37,563,535
============== ============== ============== ==============
<CAPTION>
STSPEC2 TEMINTFD
------------------------------ ------------------------------
1997 1996 1997 1996
------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................. 23,587 3,750 466,908 107,957
Mortality, expense and administration
charges (note 2)..................... (47,661) (4,349) (122,616) (51,170)
------------- -------------- -------------- --------------
Net investment activity.............. (24,074) (599) 344,292 56,787
------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold.. 22,434 40,881 240,241 31,853
Cost of mutual fund shares sold........ (22,076) (37,801) (173,577) (25,625)
------------- -------------- -------------- --------------
Realized gain (loss) on investments.. 358 3,080 66,664 6,228
Change in unrealized gain (loss) on investment 131,314 (10,739) 2,023,107 650,984
------------- -------------- -------------- --------------
Net gain (loss) on investments....... 131,672 (7,659) 2,089,771 657,212
------------- -------------- -------------- --------------
Reinvested capital gains............... 691,280 20,084 187,679 31,488
------------- -------------- -------------- --------------
Net increase (decrease) in contract owners
equity resulting from operations. 798,878 11,826 2,621,742 745,487
------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds 3,421,212 1,346,020 6,037,494 3,191,145
Redemptions............................ (98,635) (3,562) (361,284) (85,563)
Annuity benefits....................... - - - -
Annual contract maintenance charge (note 2) (11,550) (297) (22,794) (13,006)
Contingent deferred sales charges (note 2) (2,470) (71) (4,243) (1,118)
Adjustments to maintain reserves....... (246) 56 (1,033) 331
------------- -------------- -------------- --------------
Net equity transactions............ 3,308,311 1,342,146 5,648,140 3,091,789
------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY.... 4,107,189 1,353,972 8,269,882 3,837,276
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD 5,410,688 165,334 15,418,578 6,151,417
------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD.... 9,517,877 1,519,306 23,688,460 9,988,693
============= ============== ============== ==============
</TABLE>
See accompanying notes to financial statements.
9
<PAGE> 9
NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997 AND 1996
(UNAUDITED)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Organization and Nature of Operations
The Nationwide Multi-Flex Variable Account (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. On August 21, 1991, the Company (the
Depositor) transferred to the Account 50,000 shares of the American
Century VP - American Century VP Advantage fund for which the Account
was credited with 25,000 accumulation units. The value of the
accumulation units purchased by the Company on August 21, 1991 was
$250,000.
The Company offers tax qualified and non-tax qualified Individual
Deferred Variable Annuity Contracts through the Account. The primary
distributions for the contracts is through Company Agents and an
affiliated sales organization; however, other distributors may be
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 payout phase
may invest in any of the following:
Portfolios of the American Century Variable Portfolios, Inc.
(American Century VP)(formerly TCI Portfolios, Inc.);
American Century VP - American Century VP Advantage (ACVPAdv)
(formerly TCI Portfolios - TCI Advantage)
American Century VP - American Century VP Capital Appreciation
(ACVPCapAp) (formerly TCI Portfolios - TCI Growth)
The Dreyfus Socially Responsible Growth Fund, Inc. (DrySRGro)*
Dreyfus Stock Index Fund (DryStkIx)
Portfolios of the Dreyfus Variable Investment Fund (Dreyfus VIF);
Dreyfus VIF - Quality Bond Portfolio (DryQualBd)*
Dreyfus VIF - Small Cap Portfolio (DrySmCap)*
Portfolios of the Fidelity Variable Insurance Products Fund
(Fidelity VIP);
Fidelity VIP - Equity-Income Portfolio (FidVIPEI)
Fidelity VIP - High Income Portfolio (FidVIPHI)*
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 - Total Return Fund (NSATTotRe)
Portfolio of the Neuberger & Berman Advisers Management Trust
(Neuberger & Berman);
Neuberger & Berman - Balanced Portfolio (NBAMTBal)
Strong Special Fund II, Inc. (StSpec2)*
Portfolio of the Templeton Variable Products Series Fund
(Templeton VPS);
Templeton VPS - Templeton International Fund (TemIntFd)*
At June 30, 1997, contract owners have invested in all of the above funds.
The contract owners' equity is
* This fund is only available for contracts issued to plans established under
the NEA Valuebuilder Annuity.
10
<PAGE> 10
affected by the investment results of each fund, equity transactions
by contract owners and certain contract expenses (see note 2). The
accompanying financial statements include only contract owners'
purchase payments pertaining to the variable portions of their
contracts and exclude any purchase payments for fixed dollar benefits,
the latter being included in the accounts of the Company.
(c) Security Valuation, Transactions and Related Investment Income
The market value of the underlying mutual funds is based on the closing
net asset value per share at June 30, 1997. The cost of investments
sold is determined on a specific identification basis. Investment
transactions are accounted for on the trade date (date the order to buy
or sell is executed) and dividend income is recorded on the ex-dividend
date.
(d) Federal Income Taxes
Operations of the Account form a part of, and are taxed with,
operations of the Company which is taxed as a life insurance company
under the Internal Revenue Code.
The Company does not provide for income taxes within the Account. Taxes
are the responsibility of the contract owner upon termination or
withdrawal.
(e) Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally
accepted accounting principles may require management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities, if
any, at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
(f) Reclassifications
Certain 1996 amounts have been reclassified to conform with the current
year presentation.
(2) EXPENSES
The Company does not deduct a sales charge from purchase payments received
from the contract owners. However, if any part of the contract value of
such contracts is surrendered, the Company will, with certain exceptions,
deduct from a contract owner's contract value a contingent deferred sales
charge. For contracts issued prior to February 1, 1989, 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
February 1, 1989, the Company will deduct a contingent deferred sales
charge not to exceed 7% of the lesser of purchase payments or the amount
surrendered, such charge declining 1% per year, to 0%, after the purchase
payment has been held in the contract for 84 months. No sales charges are
deducted on redemptions used to purchase units in the fixed investment
options of the Company.
The following contract charges are deducted by the Company: (a) an annual
contract maintenance charge of $30, with certain exceptions, which is
satisfied by surrendering units; and (b) for contracts issued prior to
February 1, 1989, a charge for mortality and expense risk assessed through
the daily unit value calculation equal to an annual rate of 0.80% and
0.50%, respectively; for contracts issued on or after February 1, 1989, 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. No charges were deducted from the
initial funding, or from earnings thereon.
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<PAGE> 11
<TABLE>
<S> <C>
NATIONWIDE LIFE INSURANCE COMPANY | Bulk Rate |
HOME OFFICE: ONE NATIONWIDE PLAZA * COLUMBUS, OHIO 43215-2220 | U.S. Postage |
| PAID |
| Columbus, Ohio |
| Permit No. 521 |
</TABLE>
Nationwide(R) is a registered federal service mark of
Nationwide Mutual Insurance Company
