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[NATIONWIDE MULTI-FLEX ANNUITY - LOGO]
--------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
JUNE 30, 2000
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NATIONWIDE(R)
MULTI-FLEX [NATIONWIDE LOGO]
VARIABLE ACCOUNT
NATIONWIDE IS ON YOUR SIDE
COLUMBUS, OHIO
APO-724-AC (06/00)
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[NATIONWIDE LOGO]
NATIONWIDE LIFE INSURANCE COMPANY
ONE NATIONWIDE PLAZA, COLUMBUS, OHIO 43215-2220
[PHOTO OF PRESIDENT]
PRESIDENT'S MESSAGE
We at Nationwide Life Insurance Company are pleased to bring you the 2000
semi-annual report of the Nationwide Multi-Flex Variable Account.
During the first half of 2000 fixed income and equity markets took a hiatus from
their recent advances. It appears the Federal Reserve's interest rate hikers are
accomplishing the intended purpose. Recent economic statistics show some
moderation in the areas of home and vehicles sales because of the higher
interest costs. And, there are other favorable indications that the Fed may yet
"glide" the economy to a soft landing. Inflation remains low. Sustained
increases in worker productivity continue to dampen pricing pressures of an
increasingly tight labor pool. Corporate profitability growth remains viable. An
improving global economy bodes well for U.S. exporting businesses. While all
this provides a positive backdrop, we expect the markets will continue jittery
and volatile during the second half of the year as uncertainty over further Fed
actions persists. However, we believe patient investors in financial assets will
be amply rewarded when we move beyond this temporary respite.
Nationwide Life was a forerunner in the variable annuity and variable life
insurance business. We continue to develop new and innovative investment
products to better meet your financial planning and retirement needs. And, we
are equally committed to providing you, our valued customer, the exceptional
level of customer service you expect and deserve.
/s/ Joseph J. Gasper
Joseph J. Gasper, President
August 16, 2000
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[THIS PAGE LEFT BLANK INTENTIONALLY]
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HOW TO READ THE SEMI-ANNUAL REPORT
This semi-annual report is a presentation of the variable account as a whole and
only describes the underlying contracts and products of the variable account in
general terms. Please note the variable account may have more than one variable
product available. Such products may have different underlying mutual funds
available than those available in your contract. Therefore, not all funds listed
in this report may be available in your contract. Please refer to your most
recent account statement for specific information about your investment in the
Nationwide Multi-flex Variable Account. Rules and regulations of the United
States Securities and Exchange Commission and recognized conventions of
Generally Accepted Accounting Principals prescribe the format and content of
this report.
We also invite you to call our service center at 1-800-848-6331 if you have
questions about your account, or you may access your account using our voice
response unit. And, please visit our web-site at www.nwservicecenter.com for
additional information about your contract and to learn more about other
products and services offered by Nationwide Financial.
The Annual Report has four major financial sections:
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNER'S EQUITY
This statement begins on page 6 and lists all of the underlying mutual funds of
the variable account, the number of shares owned, the amount paid for the shares
and their market value as of the close of business on June 30, 2000. The mutual
funds are listed in alphabetical order. The market value of the assets changes
as the underlying mutual funds change in value. As contract owners make exchange
transactions between the funds, the number of shares increases or decreases
accordingly. When money is deposited or withdrawn by a contract owner, shares
are correspondingly purchased or redeemed. The total market value of the funds
is equal to the TOTAL INVESTMENTS of the variable account.
ACCOUNTS RECEIVABLE, if applicable, represents an asset of the variable account
for money market fund shares purchased by contract owners and reinvested
dividend shares added to contract owners' accounts, but not yet added to Total
investments. Total investments plus Accounts receivable equal TOTAL ASSETS of
the variable account.
ACCOUNTS PAYABLE, if applicable, is a liability of the variable account for
money market fund shares redeemed by contract owners' but not yet deducted from
Total investments.
Total assets minus Accounts payable equals CONTRACT OWNERS' EQUITY. A summary of
Contract Owners' Equity by funds series may be found on page 17. This summary
also includes investment return for the reporting period for each fund series.
STATEMENTS OF OPERATIONS AND STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY
These statements begin on page 8 and present the financial activity of each
underlying mutual fund sub-account of the variable account, for the periods
indicated.
The INVESTMENT ACTIVITY section shows income to the variable account for
reinvested dividends and capital gain distributions paid by the underlying
mutual funds. Also shown are the mortality, expense and administration charges
which are assessed through the daily unit value calculation and which represent
an expense to the variable account and its contract owners. This section also
shows the realized gain or loss as mutual fund shares are sold, and the change
in unrealized gain or loss, which represents the changes in market value of the
underlying fund shares.
The EQUITY TRANSACTIONS section illustrates the receipt of purchase payments, as
new contracts are sold or additional payments made to existing contracts. Also
presented are deductions from the variable account when the contract owners
withdraw money.
The sum of the above two sections represents the NET CHANGE IN CONTRACT OWNERS'
EQUITY which when added to the beginning Contract owners' equity equals Contract
owners' equity at the end of the reporting period.
Notes to Financial Statements, beginning on page 14, provide further disclosures
about the variable account and its underlying contract provisions.
5
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NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY
JUNE 30, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS:
Investments at market value:
<S> <C>
AIM VI - Capital Appreciation Fund (AIMCapAp)
168,363 shares (cost $5,468,665) .................................................................... $ 6,483,659
AIM VI - International Equity Fund (AIMIntEq)
30,810 shares (cost $872,667) ....................................................................... 804,447
American Century VP - American Century VP Advantage (ACVPAdv)
1,389,593 shares (cost $8,588,754) .................................................................. 8,393,143
American Century VP - American Century VP Balanced (ACVPBal)
14,690 shares (cost $110,980) ....................................................................... 111,053
American Century VP - American Century VP Capital Appreciation (ACVPCapAp)
2,236,448 shares (cost $25,105,001) ................................................................. 37,997,253
American Century VP - American Century VP Income & Growth (ACVPIncGr)
1,168,122 shares (cost $7,946,731) .................................................................. 8,959,493
The Dreyfus Socially Responsible Growth Fund, Inc. (DrySRGro)
1,168,460 shares (cost $45,808,259) ................................................................. 65,075,875
Dreyfus Stock Index Fund (DryStkIx)
3,015,374 shares (cost $81,144,834) ................................................................. 114,644,524
Dreyfus VIF - Appreciation Portfolio (DryCapAp)
301,011 shares (cost $11,514,138) ................................................................... 12,335,445
Dreyfus VIF - Quality Bond Portfolio (DryQualBd)
572,027 shares (cost $6,606,169) .................................................................... 6,286,572
Dreyfus VIF - Small Cap Portfolio (DrySmCap)
1,244,666 shares (cost $67,960,839) ................................................................. 94,656,878
Fidelity VIP - Equity-Income Portfolio (FidVIPEI)
5,045,579 shares (cost $107,513,719) ................................................................ 115,594,226
Fidelity VIP - High Income Portfolio (FidVIPHI)
2,284,503 shares (cost $27,376,125) ................................................................. 22,936,407
Janus AS - Janus Aspen International Growth Portfolio (JanASIntGr)
628,586 shares (cost $19,847,840) ................................................................... 24,948,566
Nationwide SAT - Capital Appreciation Fund (NSATCapAp)
1,508,738 shares (cost $31,913,748) ................................................................. 39,015,964
Nationwide SAT - Government Bond Fund (NSATGvtBd)
5,652,766 shares (cost $62,351,456) ................................................................. 61,558,617
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
Nationwide SAT - High Income Bond Fund (NSATHIncBd)
32,862 shares (cost $320,594) ....................................................................... 293,125
Nationwide SAT - Money Market Fund (NSATMyMkt)
28,677,713 shares (cost $28,677,713) ................................................................ 28,677,713
Nationwide SAT - Total Return Fund (NSATTotRe)
17,862,793 shares (cost $231,195,534) ............................................................... 346,359,553
Neuberger Berman AMT - Balanced Portfolio (NBAMTBal)
2,468,863 shares (cost $40,793,766) ................................................................. 49,303,189
Strong Opportunity Fund II, Inc. (StOpp2)
1,412,675 shares (cost $29,851,872) ................................................................. 38,212,862
Templeton VPS - Templeton International Fund - Class I (TemIntFd)
2,018,359 shares (cost $38,255,663) ................................................................. 38,974,517
--------------
Total investments ................................................................................ 1,121,623,080
Accounts receivable ....................................................................................... 1,109
--------------
Total assets ..................................................................................... 1,121,624,189
ACCOUNTS PAYABLE ............................................................................................. 665,106
--------------
CONTRACT OWNERS' EQUITY (NOTE 4) ............................................................................. $1,120,959,083
==============
</TABLE>
See accompanying notes to financial statements.
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NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY
---------------------------
STATEMENTS OF OPERATIONS
---------------------------
SIX MONTH PERIODS ENDED JUNE 30, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
Total AIMCapAp
----------------------------------- -----------------------------------
2000 1999 2000 1999
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ 10,470,834 12,864,586 - -
Mortality, expense and administration
charges (note 2) ............................. (7,503,445) (8,232,771) (31,689) (8,657)
--------------- --------------- --------------- ---------------
Net investment activity ...................... 2,967,389 4,631,815 (31,689) (8,657)
--------------- --------------- --------------- ---------------
Proceeds from mutual fund shares sold ........... 179,537,232 127,853,175 352,020 103,129
Cost of mutual fund shares sold ................. (120,812,870) (84,544,417) (232,457) (87,027)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments .......... 58,724,362 43,308,758 119,563 16,102
Change in unrealized gain (loss) on investments . (56,629,701) 48,140,277 240,075 133,695
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 2,094,661 91,449,035 359,638 149,797
--------------- --------------- --------------- ---------------
Reinvested capital gains ........................ 22,362,205 13,473,338 - -
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 27,424,255 109,554,188 327,949 141,140
--------------- --------------- --------------- ---------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 50,912,709 68,051,262 469,908 254,340
Transfers between funds ......................... - - 3,021,283 570,423
Redemptions ..................................... (166,352,576) (129,390,855) (162,980) (131,761)
Annuity benefits ................................ (69,016) (67,293) - -
Annual contract maintenance charge (note 2) ..... (911,177) (1,017,289) (3,959) (1,740)
Contingent deferred sales charges (note 2) ...... (1,031,499) (532,043) (2,657) (426)
Adjustments to maintain reserves ................ 77,724 (495,521) 89 (9)
--------------- --------------- --------------- ---------------
Net equity transactions .................... (117,373,835) (63,451,738) 3,321,684 690,827
--------------- --------------- --------------- ---------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............. (89,949,580) 46,102,450 3,649,633 831,967
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ....... 1,210,908,663 1,258,717,456 2,834,110 902,179
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............. $ 1,120,959,083 1,304,819,906 6,483,743 1,734,146
=============== =============== =============== ===============
<CAPTION>
AIMIntEq ACVPAdv
----------------------------------- -----------------------------------
2000 1999 2000 1999
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ - - 250,043 285,155
Mortality, expense and administration
charges (note 2) ............................. $ (4,805) (906) (58,209) (64,886)
--------------- --------------- --------------- ---------------
Net investment activity ...................... (4,805) (906) 191,834 220,269
--------------- --------------- --------------- ---------------
Proceeds from mutual fund shares sold ........... 223,035 76,101 1,487,454 1,709,815
Cost of mutual fund shares sold ................. (166,849) (80,479) (1,314,243) (1,366,372)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments .......... 56,186 (4,378) 173,211 343,443
Change in unrealized gain (loss) on investments . (142,262) 10,993 (1,627,752) (930,541)
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... (86,076) 6,615 (1,454,541) (587,098)
--------------- --------------- --------------- ---------------
Reinvested capital gains ........................ - - 1,558,701 676,891
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ (90,881) 5,709 295,994 310,062
--------------- --------------- --------------- ---------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 76,884 30,459 227,782 309,724
Transfers between funds ......................... 546,713 (29,116) 30,753 (12,549)
Redemptions ..................................... (42,097) (12,149) (1,524,871) (734,734)
Annuity benefits ................................ - - (18) (17)
Annual contract maintenance charge (note 2) ..... (547) (149) (6,366) (7,305)
Contingent deferred sales charges (note 2) ...... (751) (69) (8,965) (5,199)
Adjustments to maintain reserves ................ 21 6 (2,311) (509,134)
--------------- --------------- --------------- ---------------
Net equity transactions .................... 580,223 (11,018) (1,283,996) (959,214)
--------------- --------------- --------------- ---------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............. 489,342 (5,309) (988,002) (649,152)
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ....... 315,124 138,862 9,378,640 10,557,958
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............. $ 804,466 133,553 8,390,638 9,908,806
=============== =============== =============== ===============
</TABLE>
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NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, CONTINUED
------------------------------------
STATEMENTS OF OPERATIONS, CONTINUED
------------------------------------
SIX MONTH PERIODS ENDED JUNE 30, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
ACVPBal ACVPCapAp
------------------- --------------------------
2000 1999 2000 1999
----------- ----- ---------- ----------
<S> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ 1,879 - - -
Mortality, expense and administration
charges (note 2) ............................. (548) - (239,150) (155,774)
----------- ----- ---------- ----------
Net investment activity ...................... 1,331 - (239,150) (155,774)
----------- ----- ---------- ----------
Proceeds from mutual fund shares sold ........... 68,621 - 5,388,346 3,277,720
Cost of mutual fund shares sold ................. (67,658) - (3,125,827) (3,221,652)
----------- ----- ---------- ----------
Realized gain (loss) on investments .......... 963 - 2,262,519 56,068
Change in unrealized gain (loss) on investments . (2,361) - 2,430,976 3,538,294
----------- ----- ---------- ----------
Net gain (loss) on investments ............... (1,398) - 4,693,495 3,594,362
----------- ----- ---------- ----------
Reinvested capital gains ........................ 1,183 - 1,087,162 -
----------- ----- ---------- ----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 1,116 - 5,541,507 3,438,588
----------- ----- ---------- ----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 16,428 - 1,069,977 782,062
Transfers between funds ......................... 58,682 - 4,767,868 (1,170,473)
Redemptions ..................................... (1,929) - (6,716,466) (2,555,252)
Annuity benefits ................................ - - (1,072) (559)
Annual contract maintenance charge (note 2) ..... (78) - (26,713) (23,023)
Contingent deferred sales charges (note 2) ...... - - (29,752) (19,130)
Adjustments to maintain reserves ................ 277 - 1,498 644
----------- ----- ---------- ----------
Net equity transactions .................... 73,380 - (934,660) (2,985,731)
----------- ----- ---------- ----------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............. 74,496 - 4,606,847 452,857
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ....... 36,838 - 33,374,915 24,412,586
----------- ----- ---------- ----------
CONTRACT OWNERS' EQUITY END OF PERIOD ............. $ 111,334 - 37,981,762 24,865,443
=========== ===== ========== ==========
<CAPTION>
ACVPIncGr DrySRGro
--------------------------- ---------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ 48,831 1,352 9,345 -
Mortality, expense and administration
charges (note 2) ............................. (57,795) (42,439) (397,232) (287,590)
----------- ----------- ----------- -----------
Net investment activity ...................... (8,964) (41,087) (387,887) (287,590)
----------- ----------- ----------- -----------
Proceeds from mutual fund shares sold ........... 834,786 313,607 1,561,225 839,149
Cost of mutual fund shares sold ................. (677,147) (236,040) (748,641) (441,801)
----------- ----------- ----------- -----------
Realized gain (loss) on investments .......... 157,639 77,567 812,584 397,348
Change in unrealized gain (loss) on investments . (530,460) 565,365 916,015 4,940,561
----------- ----------- ----------- -----------
Net gain (loss) on investments ............... (372,821) 642,932 1,728,599 5,337,909
----------- ----------- ----------- -----------
Reinvested capital gains ........................ - - - -
----------- ----------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ (381,785) 601,845 1,340,712 5,050,319
----------- ----------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 817,804 988,829 4,468,904 4,759,641
Transfers between funds ......................... (156,667) 2,719,662 2,640,289 4,869,897
Redemptions ..................................... (446,321) (620,997) (2,968,841) (2,699,143)
Annuity benefits ................................ - - - -
Annual contract maintenance charge (note 2) ..... (7,104) (6,265) (52,472) (48,259)
Contingent deferred sales charges (note 2) ...... (10,025) (1,732) (56,990) (17,937)
Adjustments to maintain reserves ................ 138 (239) 1,499 479
----------- ----------- ----------- -----------
Net equity transactions .................... 197,825 3,079,258 4,032,389 6,864,678
----------- ----------- ----------- -----------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............. (183,960) 3,681,103 5,373,101 11,914,997
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ....... 9,143,623 4,442,594 59,704,187 38,278,833
----------- ----------- ----------- -----------
CONTRACT OWNERS' EQUITY END OF PERIOD ............. $ 8,959,663 8,123,697 65,077,288 50,193,830
=========== =========== =========== ===========
</TABLE>
(Continued)
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NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, CONTINUED
-----------------------------------------
STATEMENTS OF OPERATIONS, CONTINUED
-----------------------------------------
SIX MONTH PERIODS ENDED JUNE 30, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
DryStkIx DryCapAp
------------------------------- -------------------------------
2000 1999 2000 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ 547,327 589,105 695 536
Mortality, expense and administration
charges (note 2) ............................. (758,448) (674,383) (84,093) (61,432)
------------- ------------- ------------- -------------
Net investment activity ...................... (211,121) (85,278) (83,398) (60,896)
------------- ------------- ------------- -------------
Proceeds from mutual fund shares sold ........... 10,451,314 1,640,570 4,900,054 520,090
Cost of mutual fund shares sold ................. (4,398,189) (635,284) (4,276,329) (437,306)
------------- ------------- ------------- -------------
Realized gain (loss) on investments .......... 6,053,125 1,005,286 623,725 82,784
Change in unrealized gain (loss) on investments . (7,603,747) 9,864,408 (367,059) 612,654
------------- ------------- ------------- -------------
Net gain (loss) on investments ............... (1,550,622) 10,869,694 256,666 695,438
------------- ------------- ------------- -------------
Reinvested capital gains ........................ 129,054 456,307 - -
------------- ------------- ------------- -------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ (1,632,689) 11,240,723 173,268 634,542
------------- ------------- ------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 7,612,451 9,352,834 1,316,050 1,504,761
Transfers between funds ......................... (1,873,437) 8,549,495 (794,693) 4,518,776
Redemptions ..................................... (12,372,933) (7,010,101) (731,813) (643,361)
Annuity benefits ................................ (3,111) (2,981) - -
Annual contract maintenance charge (note 2) ..... (92,187) (91,344) (10,368) (7,790)
Contingent deferred sales charges (note 2) ...... (137,992) (42,551) (16,920) (3,742)
Adjustments to maintain reserves ................ 6,367 1,188 336 82
------------- ------------- ------------- -------------
Net equity transactions .................... (6,860,842) 10,756,540 (237,408) 5,368,726
------------- ------------- ------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............. (8,493,531) 21,997,263 (64,140) 6,003,268
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ....... 123,130,078 92,569,778 12,399,915 5,829,653
------------- ------------- ------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............. $ 114,636,547 114,567,041 12,335,775 11,832,921
============= ============= ============= =============
<CAPTION>
DryQualBd DrySmCap
------------------------------- -------------------------------
2000 1999 2000 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ 155,785 148,955 56,106 53,163
Mortality, expense and administration
charges (note 2) ............................. (40,220) (43,344) (574,145) (476,754)
------------- ------------- ------------- -------------
Net investment activity ...................... 115,565 105,611 (518,039) (423,591)
------------- ------------- ------------- -------------
Proceeds from mutual fund shares sold ........... 622,657 624,270 2,407,870 5,620,089
Cost of mutual fund shares sold ................. (651,865) (624,049) (1,594,682) (4,190,779)
------------- ------------- ------------- -------------
Realized gain (loss) on investments .......... (29,208) 221 813,188 1,429,310
Change in unrealized gain (loss) on investments . 86,286 (243,956) 11,285,007 7,188,984
------------- ------------- ------------- -------------
Net gain (loss) on investments ............... 57,078 (243,735) 12,098,195 8,618,294
------------- ------------- ------------- -------------
Reinvested capital gains ........................ - - - -
------------- ------------- ------------- -------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 172,643 (138,124) 11,580,156 8,194,703
------------- ------------- ------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 517,176 792,426 6,275,378 8,570,389
Transfers between funds ......................... (386,750) (524,015) (620,207) (6,548,656)
Redemptions ..................................... (324,381) (347,289) (5,167,588) (4,826,577)
Annuity benefits ................................ - - - -
Annual contract maintenance charge (note 2) ..... (6,238) (7,607) (98,784) (103,105)
Contingent deferred sales charges (note 2) ...... (6,064) (2,683) (100,652) (47,509)
Adjustments to maintain reserves ................ 107 (83) 1,643 732
------------- ------------- ------------- -------------
Net equity transactions .................... (206,150) (89,251) 289,790 (2,954,726)
------------- ------------- ------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............. (33,507) (227,375) 11,869,946 5,239,977
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ....... 6,320,190 6,786,814 82,788,426 73,258,807
------------- ------------- ------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............. $ 6,286,683 6,559,439 94,658,372 78,498,784
============= ============= ============= =============
</TABLE>
10
<PAGE> 10
NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, CONTINUED
-------------------------------------
STATEMENTS OF OPERATIONS, CONTINUED
-------------------------------------
SIX MONTH PERIODS ENDED JUNE 30, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
FidVIPEI FidVIPHI
------------------------------- -------------------------------
2000 1999 2000 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ 2,213,531 2,194,168 1,641,805 2,309,949
Mortality, expense and administration
charges (note 2) ............................. (796,744) (976,446) (154,840) (168,713)
------------- ------------- ------------- -------------
Net investment activity ...................... 1,416,787 1,217,722 1,486,965 2,141,236
------------- ------------- ------------- -------------
Proceeds from mutual fund shares sold ........... 18,393,572 10,785,307 1,587,792 2,264,840
Cost of mutual fund shares sold ................. (12,244,189) (6,490,109) (1,825,858) (2,347,136)
------------- ------------- ------------- -------------
Realized gain (loss) on investments .......... 6,149,383 4,295,198 (238,066) (82,296)
Change in unrealized gain (loss) on investments . (20,613,344) 6,765,788 (2,595,009) (334,107)
------------- ------------- ------------- -------------
Net gain (loss) on investments ............... (14,463,961) 11,060,986 (2,833,075) (416,403)
------------- ------------- ------------- -------------
Reinvested capital gains ........................ 8,339,351 4,850,267 - 86,353
------------- ------------- ------------- -------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ (4,707,823) 17,128,975 (1,346,110) 1,811,186
------------- ------------- ------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 6,376,940 9,415,274 1,998,354 2,988,835
Transfers between funds ......................... (8,353,880) (6,285,099) (1,533,532) (2,065,965)
Redemptions ..................................... (14,918,180) (10,833,064) (1,229,527) (1,740,248)
Annuity benefits ................................ (1,165) (966) - -
Annual contract maintenance charge (note 2) ..... (96,741) (121,694) (24,165) (30,542)
Contingent deferred sales charges (note 2) ...... (143,809) (88,599) (27,054) (12,396)
Adjustments to maintain reserves ................ 4,856 1,360 (218) 82
------------- ------------- ------------- -------------
Net equity transactions .................... (17,131,979) (7,912,788) (816,142) (860,234)
------------- ------------- ------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............. (21,839,802) 9,216,187 (2,162,252) 950,952
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ....... 137,433,012 147,846,675 25,098,494 25,206,813
------------- ------------- ------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............. $ 115,593,210 157,062,862 22,936,242 26,157,765
============= ============= ============= =============
<CAPTION>
JanASIntGr NSATCapAp
----------------- ------------- -------------------------------
2000 1999 2000 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ 62,753 15,443 75,003 171,742
Mortality, expense and administration
charges (note 2) ............................. (148,588) (31,920) (279,506) (403,612)
------------- ------------- ------------- -------------
Net investment activity ...................... (85,835) (16,477) (204,503) (231,870)
------------- ------------- ------------- -------------
Proceeds from mutual fund shares sold ........... 1,200,421 198,797 12,056,242 7,766,184
Cost of mutual fund shares sold ................. (666,763) (182,133) (6,867,789) (3,088,826)
------------- ------------- ------------- -------------
Realized gain (loss) on investments .......... 533,658 16,664 5,188,453 4,677,358
Change in unrealized gain (loss) on investments . (417,039) 451,421 (5,459,367) 2,182,493
------------- ------------- ------------- -------------
Net gain (loss) on investments ............... 116,619 468,085 (270,914) 6,859,851
------------- ------------- ------------- -------------
Reinvested capital gains ........................ - - - -
------------- ------------- ------------- -------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 30,784 451,608 (475,417) 6,627,981
------------- ------------- ------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 1,810,407 1,056,578 776,668 1,989,176
Transfers between funds ......................... 9,689,292 1,191,062 1,235,681 2,616,032
Redemptions ..................................... (1,317,574) (396,059) (12,865,463) (8,606,946)
Annuity benefits ................................ - - (3,119) (3,166)
Annual contract maintenance charge (note 2) ..... (13,086) (4,360) (31,737) (36,422)
Contingent deferred sales charges (note 2) ...... (23,165) (3,360) (24,317) (13,924)
Adjustments to maintain reserves ................ 368 41 10,092 455
------------- ------------- ------------- -------------
Net equity transactions .................... 10,146,242 1,843,902 (10,902,195) (4,054,795)
------------- ------------- ------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............. 10,177,026 2,295,510 (11,377,612) 2,573,186
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ....... 14,771,803 3,755,155 50,337,709 62,424,782
------------- ------------- ------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............. $ 24,948,829 6,050,665 38,960,097 64,997,968
============= ============= ============= =============
</TABLE>
(Continued)
11
<PAGE> 11
NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, CONTINUED
----------------------------------------
STATEMENTS OF OPERATIONS, CONTINUED
----------------------------------------
SIX MONTH PERIODS ENDED JUNE 30, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
NSATGvtBd NSATHIncBd
----------------------------- ------------------------
2000 1999 2000 1999
------------ ---------- ------- -------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ 1,941,252 2,573,381 14,992 13,454
Mortality, expense and administration
charges (note 2) ............................. (440,447) (645,845) (2,069) (2,205)
------------ ------------ ------------ ------------
Net investment activity ...................... 1,500,805 1,927,536 12,923 11,249
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold ........... 14,817,954 14,666,986 81,383 182,845
Cost of mutual fund shares sold ................. (15,354,538) (14,604,962) (90,972) (176,189)
------------ ------------ ------------ ------------
Realized gain (loss) on investments .......... (536,584) 62,024 (9,589) 6,656
Change in unrealized gain (loss) on investments . 1,192,134 (4,832,451) (10,949) (12,681)
------------ ------------ ------------ ------------
Net gain (loss) on investments ............... 655,550 (4,770,427) (20,538) (6,025)
------------ ------------ ------------ ------------
Reinvested capital gains ........................ - - - 176
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 2,156,355 (2,842,891) (7,615) 5,400
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 1,437,747 2,681,739 33,478 73,751
Transfers between funds ......................... (2,195,795) (2,730,113) (68,126) 16,403
Redemptions ..................................... (13,309,774) (12,692,793) (18,038) (30,934)
Annuity benefits ................................ (6,205) (7,598) - -
Annual contract maintenance charge (note 2) ..... (52,909) (69,876) (340) (436)
Contingent deferred sales charges (note 2) ...... (62,728) (41,825) (372) (14)
Adjustments to maintain reserves ................ 3,308 (228) 4 1
------------ ------------ ------------ ------------
Net equity transactions .................... (14,186,356) (12,860,694) (53,394) 58,771
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............. (12,030,001) (15,703,585) (61,009) 64,171
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ....... 73,491,677 107,365,814 354,136 290,615
------------ ------------ ------------ ------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............. $ 61,461,676 91,662,229 293,127 354,786
============ ============ ============ ============
<CAPTION>
NSATMyMkt NSATTotRe
----------------------------- -----------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ 868,505 885,766 962,128 1,932,917
Mortality, expense and administration
charges (note 2) ............................. (203,882) (252,822) (2,410,070) (3,258,543)
------------ ------------ ------------ ------------
Net investment activity ...................... 664,623 632,944 (1,447,942) (1,325,626)
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold ........... 17,557,540 12,230,079 75,746,144 57,530,908
Cost of mutual fund shares sold ................. (17,557,540) (12,230,079) (41,514,984) (27,891,046)
------------ ------------ ------------ ------------
Realized gain (loss) on investments .......... - - 34,231,160 29,639,862
Change in unrealized gain (loss) on investments . - - (24,614,541) 19,365,724
------------ ------------ ------------ ------------
Net gain (loss) on investments ............... - - 9,616,619 49,005,586
------------ ------------ ------------ ------------
Reinvested capital gains ........................ - - - 227,621
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 664,623 632,944 8,168,677 47,907,581
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 904,009 1,162,331 8,028,966 13,291,912
Transfers between funds ......................... (1,015,681) 4,438,164 (7,998,151) (5,759,718)
Redemptions ..................................... (7,365,048) (7,472,706) (72,533,941) (60,472,695)
Annuity benefits ................................ (1,127) (1,967) (53,052) (49,935)
Annual contract maintenance charge (note 2) ..... (24,803) (29,730) (269,250) (333,077)
Contingent deferred sales charges (note 2) ...... (29,743) (25,141) (224,885) (138,412)
Adjustments to maintain reserves ................ 675 (217) 63,329 8,473
------------ ------------ ------------ ------------
Net equity transactions .................... (7,531,718) (1,929,266) (72,986,984) (53,453,452)
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............. (6,867,095) (1,296,322) (64,818,307) (5,545,871)
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ....... 35,526,456 38,688,503 410,707,357 511,922,904
------------ ------------ ------------ ------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............. $ 28,659,361 37,392,181 345,889,050 506,377,033
============ ============ ============ ============
</TABLE>
12
<PAGE> 12
NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, CONTINUED
----------------------------------------
STATEMENTS OF OPERATIONS, CONTINUED
----------------------------------------
SIX MONTH PERIODS ENDED JUNE 30, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
NBAMTBal StOpp2
----------------------------- ---------------------------
2000 1999 2000 1999
------------ ---------- ---------- ----------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ 840,811 728,530 - -
Mortality, expense and administration
charges (note 2) ............................. (328,989) (278,908) (240,912) (165,843)
------------ ------------ ------------ ------------
Net investment activity ...................... 511,822 449,622 (240,912) (165,843)
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold ........... 6,771,144 3,858,510 777,203 1,052,082
Cost of mutual fund shares sold ................. (5,198,835) (3,576,706) (485,612) (844,756)
------------ ------------ ------------ ------------
Realized gain (loss) on investments .......... 1,572,309 281,804 291,591 207,326
Change in unrealized gain (loss) on investments . (4,246,642) (1,224,853) 1,144,786 1,688,185
------------ ------------ ------------ ------------
Net gain (loss) on investments ............... (2,674,333) (943,049) 1,436,377 1,895,511
------------ ------------ ------------ ------------
Reinvested capital gains ........................ 6,658,313 1,079,303 - 2,758,314
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 4,495,802 585,876 1,195,465 4,487,982
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 1,340,392 1,510,329 2,741,607 2,919,862
Transfers between funds ......................... 3,115,375 (1,190,923) 1,535,455 (245,566)
Redemptions ..................................... (8,336,171) (3,526,802) (1,699,795) (1,927,458)
Annuity benefits ................................ (147) (106) - -
Annual contract maintenance charge (note 2) ..... (33,550) (32,539) (31,840) (30,222)
Contingent deferred sales charges (note 2) ...... (48,452) (30,681) (32,347) (16,627)
Adjustments to maintain reserves ................ (15,652) 161 846 421
------------ ------------ ------------ ------------
Net equity transactions .................... (3,978,205) (3,270,561) 2,513,926 700,410
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............. 517,597 (2,684,685) 3,709,391 5,188,392
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ....... 48,784,964 45,142,869 34,504,202 23,359,647
------------ ------------ ------------ ------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............. $ 49,302,561 42,458,184 38,213,593 28,548,039
============ ============ ============ ============
<CAPTION>
TemIntFd
-----------------------------
2000 1999
------------ ------------
<S> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ 780,043 960,970
Mortality, expense and administration
charges (note 2) ............................. (251,064) (231,749)
------------ ------------
Net investment activity ...................... 528,979 729,221
------------ ------------
Proceeds from mutual fund shares sold ........... 2,250,455 2,592,097
Cost of mutual fund shares sold ................. (1,751,903) (1,791,686)
------------ ------------
Realized gain (loss) on investments .......... 498,552 800,411
Change in unrealized gain (loss) on investments . (5,694,448) (1,589,699)
------------ ------------
Net gain (loss) on investments ............... (5,195,896) (789,288)
------------ ------------
Reinvested capital gains ........................ 4,588,441 3,338,106
------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ (78,476) 3,278,039
------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 2,595,399 3,616,009
Transfers between funds ......................... (1,644,472) (2,927,718)
Redemptions ..................................... (2,298,845) (2,109,787)
Annuity benefits ................................ - -
Annual contract maintenance charge (note 2) ..... (27,940) (31,802)
Contingent deferred sales charges (note 2) ...... (43,859) (20,086)
Adjustments to maintain reserves ................ 452 264
------------ ------------
Net equity transactions .................... (1,419,265) (1,473,120)
------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............. (1,497,741) 1,804,919
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ....... 40,472,807 35,535,615
------------ ------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............. $ 38,975,066 37,340,534
============ ============
</TABLE>
See accompanying notes to financial statements.
13
<PAGE> 13
NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
(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.
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:
Funds of the AIM Variable Insurance Funds, Inc. (AIM VI);
AIM VI - Capital Appreciation Fund (AIMCapAp)*
AIM VI - International Equity Fund (AIMIntEq)*
Portfolios of the American Century Variable Portfolios, Inc.
(American Century VP);
American Century VP - American Century VP Advantage
(ACVPAdv)*
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)*
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 - 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)*
Portfolio of the Janus Aspen Series (Janus AS);
Janus AS - Janus Aspen International Growth Portfolio
(JanASIntGr)*
Funds of the Nationwide Separate Account Trust (Nationwide
SAT) (managed for a fee by an affiliated investment
advisor);
Nationwide SAT - Capital Appreciation Fund (NSATCapAp)
(not available to contracts established under NEA
Valuebuilder)
Nationwide SAT - Government Bond Fund (NSATGvtBd)
Nationwide SAT - High Income Bond Fund (NSATHIncBd)*
Nationwide SAT - Money Market Fund (NSATMyMkt)
Nationwide SAT - Total Return Fund (NSATTotRe)
Portfolio of the Neuberger Berman Advisers Management Trust
(Neuberger Berman AMT);
Neuberger Berman AMT - Balanced Portfolio (NBAMTBal)*
14
<PAGE> 14
Strong Opportunity Fund II, Inc. (StOpp2)*
Portfolio of the Templeton Variable Products Series Fund
(Templeton VPS); Templeton VPS -
Templeton International Fund - Class I (TemIntFd)*
At June 30, 2000, 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.
(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, 2000. 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) 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.
(Continued)
15
<PAGE> 15
NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(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 up to $30, dependent upon contract type and
issue date, 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; for NEA
Valuebuilder Annuity contracts issued before November 3, 1997, or in states
which have not approved the applicable contract modifications, a mortality
and expense risk charge and an administrative charge assessed through the
daily unit value calculation equal to a annual rate of 1.25% and .05%,
respectively; for NEA Valuebuilder Annuity contracts issued on or after the
later of November 3, 1997, or the date on which state insurance authorities
approve corresponding contract modifications, an actuarial risk charge
assessed through the daily unit value calculation equal to an annual rate
of 1.30%.
(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.
*This fund is only available for contracts issued to Plans established under the
NEA Valuebuilder Annuity.
16
<PAGE> 16
(4) COMPONENTS OF CONTRACT OWNERS' EQUITY
The following is a summary of contract owners' equity at June 30, 2000, in
both the accumulation and payout phases.
Contract owners' equity represented by:
<TABLE>
<CAPTION>
PERIOD
Contracts in accumulation phase: UNITS UNIT VALUE RETURN*
-------- --------- ---------
<S> <C> <C> <C> <C>
AIM VI - Capital Appreciation Fund:
Tax qualified............................... 367,697 $ 17.167451 $ 6,312,420 8%
Non-tax qualified........................... 9,979 17.167451 171,314 8%
AIM VI - International Equity Fund:
Tax qualified............................... 52,147 15.316137 798,691 (11)%
Non-tax qualified........................... 377 15.316137 5,774 (11)%
American Century VP - American Century
VP Advantage:
Tax qualified............................... 301,585 21.214730 6,398,044 3%
Non-tax qualified........................... 93,925 21.214730 1,992,594 3%
American Century VP - American Century
VP Balanced:
Tax qualified............................... 9,987 10.639973 106,261 1%
Non-tax qualified........................... 454 10.639973 4,831 1%
American Century VP - American Century
VP Capital Appreciation:
Tax qualified............................... 1,060,907 27.124399 28,776,465 17%
Non-tax qualified........................... 338,129 27.124399 9,171,546 17%
American Century VP - American Century
VP Income & Growth:
Tax qualified............................... 595,373 14.537853 8,655,445 (4)%
Non-tax qualified........................... 20,926 14.537853 304,219 (4)%
The Dreyfus Socially Responsible
Growth Fund, Inc.:
Tax qualified............................... 1,843,029 33.782253 62,261,672 2%
Non-tax qualified........................... 83,346 33.782253 2,815,616 2%
Dreyfus Stock Index Fund:
Tax qualified............................... 3,119,870 32.615212 101,755,221 (1)%
Non-tax qualified........................... 394,681 32.615212 12,872,604 (1)%
Dreyfus VIF - Appreciation Portfolio:
Tax qualified............................... 798,397 14.791683 11,809,635 2%
Non-tax qualified........................... 35,570 14.791683 526,140 2%
Dreyfus VIF - Quality Bond Portfolio:
Tax qualified............................... 486,422 12.210856 5,939,629 3%
Non-tax qualified........................... 28,421 12.210856 347,045 3%
Dreyfus VIF - Small Cap Portfolio:
Tax qualified............................... 3,971,847 23.191947 92,114,865 14%
Non-tax qualified........................... 109,672 23.191947 2,543,507 14%
Fidelity VIP - Equity-Income Portfolio:
Tax qualified............................... 4,366,001 22.981645 100,337,885 (3)%
Non-tax qualified........................... 662,612 22.981645 15,227,914 (3)%
Fidelity VIP - High Income Portfolio:
Tax qualified............................... 1,503,166 14.671648 22,053,922 (5)%
Non-tax qualified........................... 60,138 14.671648 882,324 (5)%
</TABLE>
(Continued)
17
<PAGE> 17
NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS, CONTINUED
<TABLE>
<CAPTION>
PERIOD
UNITS UNIT VALUE RETURN*
-------- --------- ---------
<S> <C> <C> <C> <C>
Janus AS - Janus Aspen
International Growth Portfolio:
Tax qualified............................... 1,125,188 21.180756 23,832,332 2%
Non-tax qualified........................... 52,713 21.180756 1,116,501 2%
Nationwide SAT - Capital Appreciation Fund:
Tax qualified............................... 892,791 31.543238 28,161,519 0%
Non-tax qualified........................... 340,617 31.543238 10,744,163 0%
Nationwide SAT - Government Bond Fund:
Tax qualified............................... 1,295,812 34.879444 45,197,202 3%
Non-tax qualified........................... 463,409 34.892329 16,169,419 3%
Nationwide SAT - High Income Bond Fund:
Tax qualified............................... 26,517 10.623098 281,693 (2)%
Non-tax qualified........................... 1,077 10.623098 11,441 (2)%
Nationwide SAT - Money Market Fund:
Tax qualified............................... 948,864 23.198381 22,012,109 2%
Non-tax qualified........................... 262,981 25.205457 6,628,556 2%
Nationwide SAT - Total Return Fund:
Tax qualified............................... 2,610,425 100.328103 261,898,988 3%
Non-tax qualified........................... 855,983 97.442368 83,409,010 3%
Neuberger Berman AMT -
Balanced Portfolio:
Tax qualified............................... 1,371,704 29.352154 40,262,467 10%
Non-tax qualified........................... 307,900 29.352154 9,037,528 10%
Strong Opportunity Fund II, Inc.:
Tax qualified............................... 1,572,348 23.296864 36,630,778 3%
Non-tax qualified........................... 67,941 23.296864 1,582,812 3%
Templeton VPS - Templeton International Fund:
Tax qualified............................... 1,843,724 20.522060 37,837,015 0%
Non-tax qualified........................... 55,455 20.522060 1,138,051 0%
========= =========
Reserves for annuity contracts in payout phase:
Tax qualified............................... 459,578
Non-tax qualified........................... 362,338
---------------
$ 1,120,959,083
===============
</TABLE>
* The period return does not include contract charges satisfied by surrendering
units.
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Bulk Rate
U.S. Postage
PAID
Columbus, Ohio
Permit No. 521
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NATIONWIDE LIFE INSURANCE COMPANY
HOME OFFICE: ONE NATIONWIDE PLAZA - COLUMBUS, OHIO 43215-2220
Nationwide(R) is a registered federal service mark of Nationwide Mutual
Insurance Company
