<PAGE> 1
[MULTI-FLEX LOGO]
- --------------------------------------------------------------------------------
ANNUAL REPORT
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
NATIONWIDE(R)
MULTI-FLEX
VARIABLE ACCOUNT
[NATIONWIDE LOGO]
NATIONWIDE IS ON YOUR SIDE
COLUMBUS, OHIO
APO-724-AB (12/99)
<PAGE> 2
[NATIONWIDE LOGO]
NATIONWIDE LIFE INSURANCE COMPANY
ONE NATIONWIDE PLAZA, COLUMBUS, OHIO 43215-2220
[PRESIDENT'S PHOTO]
PRESIDENT'S MESSAGE
We at Nationwide Life Insurance Company are pleased to bring you
the 1999 annual report of the Nationwide Multi-Flex Variable
Account.
During 1999 equity investments extended their spirited advance
to a fifth consecutive year. The S&P 500 was the laggard of the
major indices with a year-over-year change of a respectable
19.53%. The NASDAQ topped the list at over 85% with the other
indices falling into line nearer the lower end of the range.
Fixed earnings investments did not fare as well in the current
environment of rising interest rates.
The U.S. economy remains strong, inflation remains docile and
the available labor pool is incessantly tight. Against this
good-news-bad-news backdrop, the Federal Reserve is increasingly
concerned that recent productivity gains will subside and ignite
wage inflation. To date, the Fed has hiked short-term interest
rates a quarter percentage point on four occasions since last
June. Prospectively, they may well become more aggressive in
their preemptive efforts to dampen economic growth and avoid a
new round of inflation.
We believe some caution may be warranted at this juncture.
Certain market sectors are well extended and may inevitably
retreat to less lofty valuation levels. However, we remain
bullish for the long-term prospects of financial assets. Your
variable insurance contract provides an excellent resource to
help you achieve your long-term retirement savings and financial
planning objectives.
We appreciate your trust in our company and in our investment
products, and we welcome and encourage your feedback.
/s/Joseph J. Gasper
Joseph J. Gasper, President
February 10, 2000
3
<PAGE> 3
- --------------------------------------------------------------------------------
NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY
DECEMBER 31, 1999
<TABLE>
<CAPTION>
ASSETS:
Investments at market value:
<S> <C>
AIM VI - Capital Appreciation Fund (AIMCapAp)
79,654 shares (cost $2,059,173) ................................................................ $ 2,834,091
AIM VI - International Equity Fund (AIMIntEq)
10,759 shares (cost $241,078) .................................................................. 315,119
American Century VP - American Century VP Advantage (ACVPAdv)
1,302,581 shares (cost $7,946,442) ............................................................. 9,378,583
American Century VP - American Century VP Balanced (ACVPBal)
4,742 shares (cost $34,508) .................................................................... 36,943
American Century VP - American Century VP Capital Appreciation (ACVPCapAp)
2,248,902 shares (cost $22,912,422) ............................................................ 33,373,698
American Century VP - American Century VP Income & Growth (ACVPIncGr)
1,142,984 shares (cost $7,600,648) ............................................................. 9,143,871
The Dreyfus Socially Responsible Growth Fund, Inc. (DrySRGro)
1,528,115 shares (cost $41,351,853) ............................................................ 59,703,455
Dreyfus Stock Index Fund (DryStkIx)
3,202,309 shares (cost $82,025,353) ............................................................ 123,128,790
Dreyfus VIF - Capital Appreciation Portfolio (DryCapAp)
311,008 shares (cost $11,211,504) .............................................................. 12,399,870
Dreyfus VIF - Quality Bond Portfolio (DryQualBd)
580,383 shares (cost $6,726,250) ............................................................... 6,320,366
Dreyfus VIF - Small Cap Portfolio (DrySmCap)
1,247,931 shares (cost $67,376,709) ............................................................ 82,787,741
Fidelity VIP - Equity-Income Portfolio (FidVIPEI)
5,345,503 shares (cost $108,739,033) ........................................................... 137,432,884
Fidelity VIP - High Income Portfolio (FidVIPHI)
2,219,122 shares (cost $26,942,979) ............................................................ 25,098,269
Janus AS - Janus Aspen International Growth Portfolio (JanASIntGr)
381,985 shares (cost $9,253,592) ............................................................... 14,771,357
Nationwide SAT - Capital Appreciation Fund (NSATCapAp)
1,957,893 shares (cost $37,775,858) ............................................................ 50,337,441
Nationwide SAT - Government Bond Fund (NSATGvtBd)
6,810,793 shares (cost $75,473,425) ............................................................ 73,488,452
</TABLE>
4
<PAGE> 4
<TABLE>
<CAPTION>
<S> <C>
Nationwide SAT - High Income Bond Fund (NSATHIncBd)
37,199 shares (cost $370,653) .................................................................. 354,133
Nationwide SAT - Money Market Fund (NSATMyMkt)
35,526,533 shares (cost $35,526,533) ........................................................... 35,526,533
Nationwide SAT - Total Return Fund (NSATTotRe)
21,833,706 shares (cost $270,913,449) .......................................................... 410,692,009
Neuberger &Berman AMT - Balanced Portfolio (NBAMTBal)
2,335,297 shares (cost $36,028,279) ............................................................ 48,784,345
Strong Opportunity Fund II, Inc. (StOpp2)
1,327,573 shares (cost $27,287,423) ............................................................ 34,503,626
Templeton VPS - Templeton International Fund - Class I (TemIntFd)
1,818,977 shares (cost $34,058,942) ............................................................ 40,472,243
-------------
Total investments ........................................................................... 1,210,883,819
Accounts receivable .................................................................................. 26,493
-------------
Total assets ................................................................................ 1,210,910,312
ACCOUNTS PAYABLE ........................................................................................ 1,649
-------------
CONTRACT OWNERS' EQUITY (NOTE 4) ........................................................................ $ 1,210,908,663
=============
</TABLE>
See accompanying notes to financial statements.
5
<PAGE> 5
NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
Total AIMCapAp
------------------------------ ------------------------------
1999 1998 1999 1998
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 18,158,930 20,842,641 1,748 1,303
Mortality, expense and administration
charges (note 2)............................. (16,307,075) (16,314,807) (21,544) (6,208)
-------------- -------------- -------------- --------------
Net investment activity...................... 1,851,855 4,527,834 (19,796) (4,905)
-------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold.......... 293,370,782 270,437,065 179,274 43,627
Cost of mutual fund shares sold................ (191,191,387) (162,114,095) (149,815) (39,795)
-------------- -------------- -------------- --------------
Realized gain (loss) on investments.......... 102,179,395 108,322,970 29,459 3,832
Change in unrealized gain (loss) on investment. (6,769,371) (2,435,061) 696,998 77,316
-------------- -------------- -------------- --------------
Net gain (loss) on investments............... 95,410,024 105,887,909 726,457 81,148
-------------- -------------- -------------- --------------
Reinvested capital gains....................... 34,832,101 45,381,013 54,532 23,090
-------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations......... 132,093,980 155,796,756 761,193 99,333
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners.............................. 120,515,358 171,010,136 511,618 454,482
Transfers between funds........................ - - 892,099 374,739
Redemptions.................................... (297,316,112) (285,564,514) (228,058) (51,115)
Annuity benefits............................... (120,625) (113,703) - -
Annual contract maintenance charge (note 2).... (1,877,502) (1,959,464) (3,883) (633)
Contingent deferred sales charges (note 2)..... (1,127,839) (944,022) (1,060) (200)
Adjustments to maintain reserves............... 23,947 5,561 22 3
-------------- -------------- -------------- --------------
Net equity transactions.................... (179,902,773) (117,566,006) 1,170,738 777,276
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY............ (47,808,793) 38,230,750 1,931,931 876,609
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD...... 1,258,717,456 1,220,486,706 902,179 25,570
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD............ $1,210,908,663 1,258,717,456 2,834,110 902,179
============== ============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
AIMIntEq ACVPAdv
------------------------------- ------------------------------
1999 1998 1999 1998
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 1,705 1,210 285,155 216,901
Mortality, expense and administration
charges (note 2)............................. (1,998) (891) (128,070) (124,133)
------------- -------------- -------------- --------------
Net investment activity...................... (293) 319 157,085 92,768
------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold.......... 120,932 25,294 3,410,634 1,825,984
Cost of mutual fund shares sold................ (117,864) (24,275) (2,779,524) (1,514,576)
------------- -------------- -------------- --------------
Realized gain (loss) on investments.......... 3,068 1,019 631,110 311,408
Change in unrealized gain (loss) on investment. 76,717 (2,795) (253,879) 252,847
------------- -------------- -------------- --------------
Net gain (loss) on investments............... 79,785 (1,776) 377,231 564,255
------------- -------------- -------------- --------------
Reinvested capital gains....................... 7,154 - 676,891 816,147
------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations......... 86,646 (1,457) 1,211,207 1,473,170
------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners.............................. 55,483 46,314 527,093 572,977
Transfers between funds........................ 62,728 93,540 (158,687) (351,854)
Redemptions.................................... (28,106) (5,180) (2,733,749) (1,112,420)
Annuity benefits............................... - - (33) (23)
Annual contract maintenance charge (note 2).... (389) (171) (13,901) (15,231)
Contingent deferred sales charges (note 2)..... (99) (39) (10,734) (13,255)
Adjustments to maintain reserves............... (1) (4) (514) 77
------------- -------------- -------------- --------------
Net equity transactions.................... 89,616 134,460 (2,390,525) (919,729)
------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY............ 176,262 133,003 (1,179,318) 553,441
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD...... 138,862 5,859 10,557,958 10,004,517
------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD............ $ 315,124 138,862 9,378,640 10,557,958
============= ============== ============== ==============
</TABLE>
6
<PAGE> 6
NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, CONTINUED
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
ACVPBal ACVPCapAp
------------------------------ ------------------------------
1999 1998 1999 1998
------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ - - - -
Mortality, expense and administration
charges (note 2)............................. (136) - (324,124) (347,914)
-------------- -------------- -------------- --------------
Net investment activity...................... (136) - (324,124) (347,914)
-------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold.......... 5,894 - 5,727,111 7,431,160
Cost of mutual fund shares sold................ (5,837) - (5,336,111) (7,063,514)
-------------- -------------- -------------- --------------
Realized gain (loss) on investments.......... 57 - 391,000 367,646
Change in unrealized gain (loss) on investments 2,435 - 13,035,532 (2,548,105)
-------------- -------------- -------------- --------------
Net gain (loss) on investments............... 2,492 - 13,426,532 (2,180,459)
-------------- -------------- -------------- --------------
Reinvested capital gains....................... - - - 1,515,406
-------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations.......... 2,356 - 13,102,408 (1,012,967)
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners.............................. 2,678 - 1,595,991 2,220,641
Transfers between funds........................ 32,131 - (86,820) (5,465,509)
Redemptions.................................... (218) - (5,570,815) (3,562,186)
Annuity benefits............................... - - (1,178) (190)
Annual contract maintenance charge (note 2).... (4) - (42,619) (50,076)
Contingent deferred sales charges (note 2)..... - - (35,760) (49,503)
Adjustments to maintain reserves............... (105) - 1,122 513
-------------- -------------- -------------- --------------
Net equity transactions.................... 34,482 - (4,140,079) (6,906,310)
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY............ 36,838 - 8,962,329 (7,919,277)
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD...... - - 24,412,586 32,331,863
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD............ $ 36,838 - 33,374,915 24,412,586
============== ============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
ACVPincGr DrySRGro
----------------------------- -------------------------------
1999 1998 1999 1998
------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 1,352 22,466 7,382 59,690
Mortality, expense and administration
charges (note 2)............................. (98,210) (28,528) (631,876) (377,408)
------------- -------------- -------------- --------------
Net investment activity...................... (96,858) (6,062) (624,494) (317,718)
------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold.......... 1,123,559 247,808 3,100,004 863,412
Cost of mutual fund shares sold................ (869,591) (230,017) (1,584,556) (500,142)
------------- -------------- -------------- --------------
Realized gain (loss) on investments.......... 253,968 17,791 1,515,448 363,270
Change in unrealized gain (loss) on investments 1,030,375 511,807 9,757,561 5,900,793
------------- -------------- -------------- --------------
Net gain (loss) on investments............... 1,284,343 529,598 11,273,009 6,264,063
------------- -------------- -------------- --------------
Reinvested capital gains....................... - 2,123 1,987,299 1,386,849
------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations.......... 1,187,485 525,659 12,635,814 7,333,194
------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners.............................. 1,893,883 1,844,875 9,211,026 10,576,613
Transfers between funds........................ 3,055,413 2,112,196 7,352,558 1,465,431
Redemptions.................................... (1,417,049) (254,487) (7,614,810) (1,776,381)
Annuity benefits............................... (7) - - -
Annual contract maintenance charge (note 2).... (13,402) (2,425) (109,640) (83,289)
Contingent deferred sales charges (note 2)..... (5,041) (342) (50,310) (18,094)
Adjustments to maintain reserves............... (253) 259 716 428
------------- -------------- -------------- --------------
Net equity transactions.................... 3,513,544 3,700,076 8,789,540 10,164,708
------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY............ 4,701,029 4,225,735 21,425,354 17,497,902
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD...... 4,442,594 216,859 38,278,833 20,780,931
------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD............ $ 9,143,623 4,442,594 59,704,187 38,278,833
============= ============== ============== ==============
</TABLE>
(Continued)
7
<PAGE> 7
NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, CONTINUED
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
DryStkIx DryCapAp
------------------------------ -----------------------------
1999 1998 1999 1998
-------------- -------------- -------------- --------------
INVESTMENT ACTIVITY:
<S> <C> <C> <C> <C>
Reinvested dividends .......................... $ 1,195,594 990,158 68,824 29,273
Mortality, expense and administration
charges (note 2)............................. (1,430,698) (955,725) (140,066) (28,062)
-------------- -------------- -------------- --------------
Net investment activity...................... (235,104) 34,433 (71,242) 1,211
-------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold.......... 8,345,485 1,666,853 3,218,125 232,731
Cost of mutual fund shares sold................ (3,069,769) (804,459) (2,795,528) (209,881)
-------------- -------------- -------------- --------------
Realized gain (loss) on investments.......... 5,275,716 862,394 422,597 22,850
Change in unrealized gain (loss) on investments 13,147,714 16,211,739 682,319 506,293
-------------- -------------- -------------- --------------
Net gain (loss) on investments............... 18,423,430 17,074,133 1,104,916 529,143
-------------- -------------- -------------- --------------
Reinvested capital gains....................... 1,028,743 182,250 46,040 186
-------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations.......... 19,217,069 17,290,816 1,079,714 530,540
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners.............................. 17,217,670 19,460,169 2,953,159 2,080,221
Transfers between funds........................ 10,982,972 7,196,900 4,252,360 3,450,453
Redemptions.................................... (16,562,657) (5,731,400) (1,682,937) (261,044)
Annuity benefits............................... (2,981) (2,559) - -
Annual contract maintenance charge (note 2).... (191,925) (145,678) (18,960) (2,389)
Contingent deferred sales charges (note 2)..... (100,434) (62,149) (13,131) (1,172)
Adjustments to maintain reserves............... 586 2,514 57 (137)
-------------- -------------- -------------- --------------
Net equity transactions.................... 11,343,231 20,717,797 5,490,548 5,265,932
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY............ 30,560,300 38,008,613 6,570,262 5,796,472
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD...... 92,569,778 54,561,165 5,829,653 33,181
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD............ $123,130,078 92,569,778 12,399,915 5,829,653
============== ============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
DryQualBd DrySmCap
------------------------------- ------------------------------
1999 1998 1999 1998
-------------- -------------- -------------- --------------
INVESTMENT ACTIVITY:
<S> <C> <C> <C> <C>
Reinvested dividends .......................... $ 365,296 336,884 53,163 252
Mortality, expense and administration
charges (note 2)............................. (85,777) (76,197) (969,857) (883,862)
------------- -------------- -------------- --------------
Net investment activity...................... 279,519 260,687 (916,694) (883,610)
------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold.......... 1,328,426 794,218 10,343,781 2,151,154
Cost of mutual fund shares sold................ (1,361,891) (762,578) (7,873,839) (1,434,829)
------------- -------------- -------------- --------------
Realized gain (loss) on investments.......... (33,465) 31,640 2,469,942 716,325
Change in unrealized gain (loss) on investments (319,758) (184,062) 13,237,934 (4,434,714)
------------- -------------- -------------- --------------
Net gain (loss) on investments............... (353,223) (152,422) 15,707,876 (3,718,389)
------------- -------------- -------------- --------------
Reinvested capital gains....................... - 103,635 - 1,336,663
------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations.......... (73,704) 211,900 14,791,182 (3,265,336)
------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners.............................. 1,343,499 2,019,788 15,052,033 23,152,760
Transfers between funds........................ (990,983) 517,074 (9,094,926) (3,926,582)
Redemptions.................................... (724,772) (643,999) (10,915,476) (5,065,492)
Annuity benefits............................... - - - -
Annual contract maintenance charge (note 2).... (14,217) (14,669) (207,487) (220,760)
Contingent deferred sales charges (note 2)..... (6,266) (7,839) (96,408) (64,756)
Adjustments to maintain reserves............... (181) 113 701 (511)
------------- -------------- -------------- --------------
Net equity transactions.................... (392,920) 1,870,468 (5,261,563) 13,874,659
------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY............ (466,624) 2,082,368 9,529,619 10,609,323
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD...... 6,786,814 4,704,446 73,258,807 62,649,484
------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD............ $6,320,190 6,786,814 82,788,426 73,258,807
============= ============== ============== ==============
</TABLE>
8
<PAGE> 8
NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, CONTINUED
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
FidVIPEI FidVIPHI
------------------------------- ------------------------------
1999 1998 1999 1998
--------------- -------------- ------------- --------------
INVESTMENT ACTIVITY:
<S> <C> <C> <C> <C>
Reinvested dividends ............................. $ 2,194,168 1,767,643 2,309,949 1,423,227
Mortality, expense and administration
charges (note 2)................................ (1,930,270) (1,811,344) (334,326) (303,847)
-------------- -------------- -------------- --------------
Net investment activity......................... 263,898 (43,701) 1,975,623 1,119,380
-------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold............. 22,292,242 6,079,485 4,354,783 487,817
Cost of mutual fund shares sold................... (13,073,844) (3,887,729) (4,531,558) (433,912)
-------------- -------------- -------------- --------------
Realized gain (loss) on investments............. 9,218,398 2,191,756 (176,775) 53,905
Change in unrealized gain (loss) on investments... (7,069,937) 4,573,114 (220,283) (3,585,376)
-------------- -------------- -------------- --------------
Net gain (loss) on investments.................. 2,148,461 6,764,870 (397,058) (3,531,471)
-------------- -------------- -------------- --------------
Reinvested capital gains.......................... 4,850,267 6,290,729 86,353 904,342
-------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations............ 7,262,626 13,011,898 1,664,918 (1,507,749)
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners................................. 16,218,966 23,845,625 5,214,131 8,511,396
Transfers between funds........................... (9,309,653) 279,782 (2,997,810) 506,824
Redemptions....................................... (24,177,752) (13,156,692) (3,898,211) (1,543,731)
Annuity benefits.................................. (1,945) (1,823) - -
Annual contract maintenance charge (note 2)....... (226,584) (238,894) (60,728) (62,035)
Contingent deferred sales charges (note 2)........ (180,119) (141,165) (30,842) (17,150)
Adjustments to maintain reserves.................. 798 409 223 (47)
-------------- -------------- -------------- --------------
Net equity transactions....................... (17,676,289) 10,587,242 (1,773,237) 7,395,257
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY............... (10,413,663) 23,599,140 (108,319) 5,887,508
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD 147,846,675 124,247,535 25,206,813 19,319,305
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD............... $ 137,433,012 147,846,675 25,098,494 25,206,813
============== ============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
JanASIntGr NSATCapAp
------------------------------ ------------------------------
1999 1998 1999 1998
-------------- -------------- -------------- -------------
INVESTMENT ACTIVITY:
<S> <C> <C> <C> <C>
Reinvested dividends ............................. 15,443 22,540 362,218 520,711
Mortality, expense and administration
charges (note 2)................................ $ (86,183) (22,121) (783,096) (871,653)
------------- -------------- -------------- --------------
Net investment activity......................... (70,740) 419 (420,878) (350,942)
------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold............. 573,381 260,312 20,466,124 27,191,128
Cost of mutual fund shares sold................... (471,570) (262,817) (8,263,983) (12,328,964)
------------- -------------- -------------- --------------
Realized gain (loss) on investments............. 101,811 (2,505) 12,202,141 14,862,164
Change in unrealized gain (loss) on investments... 5,520,283 (2,299) (13,202,257) (11,772)
------------- -------------- -------------- --------------
Net gain (loss) on investments.................. 5,622,094 (4,804) (1,000,116) 14,850,392
------------- -------------- -------------- --------------
Reinvested capital gains.......................... - 3,054 3,336,082 1,743,763
------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations............ 5,551,354 (1,331) 1,915,088 16,243,213
------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners................................. 2,062,705 1,682,674 3,283,685 4,344,587
Transfers between funds........................... 4,482,193 2,201,050 4,181,155 1,551,729
Redemptions....................................... (1,059,008) (155,078) (21,374,802) (27,248,088)
Annuity benefits.................................. - - (6,442) (5,545)
Annual contract maintenance charge (note 2)....... (12,999) (2,187) (58,224) (69,163)
Contingent deferred sales charges (note 2)........ (8,045) (787) (27,899) (37,866)
Adjustments to maintain reserves.................. 448 12 366 829
------------- -------------- -------------- --------------
Net equity transactions....................... 5,465,294 3,725,684 (14,002,161) (21,463,517)
------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY............... 11,016,648 3,724,353 (12,087,073) (5,220,304)
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD 3,755,155 30,802 62,424,782 67,645,086
------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD............... $ 14,771,803 3,755,155 50,337,709 62,424,782
============= ============== ============== ==============
</TABLE>
(Continued)
9
<PAGE> 9
NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, CONTINUED
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
NSATGvtBd NSATHIncBd
------------------------------- ------------------------------
1999 1998 1999 1998
--------------- -------------- -------------- --------------
INVESTMENT ACTIVITY:
<S> <C> <C> <C> <C>
Reinvested dividends ............................ $ 4,728,402 5,973,305 28,889 12,442
Mortality, expense and administration
charges (note 2)............................... (1,197,314) (1,492,699) (4,505) (2,277)
-------------- -------------- -------------- --------------
Net investment activity........................ 3,531,088 4,480,606 24,384 10,165
-------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold............ 32,891,196 30,298,498 354,458 232,973
Cost of mutual fund shares sold.................. (33,623,472) (29,393,218) (354,414) (238,033)
-------------- -------------- -------------- --------------
Realized gain (loss) on investments............ (732,276) 905,280 44 (5,060)
Change in unrealized gain (loss) on investments (6,432,465) 2,221,884 (20,305) 3,767
-------------- -------------- -------------- --------------
Net gain (loss) on investments................. (7,164,741) 3,127,164 (20,261) (1,293)
-------------- -------------- -------------- --------------
Reinvested capital gains......................... 143,792 515,384 176 -
-------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations............ (3,489,861) 8,123,154 4,299 8,872
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners................................ 4,249,902 6,311,434 113,296 231,833
Transfers between funds.......................... (5,526,811) 2,143,077 9,538 61,586
Redemptions...................................... (28,900,434) (31,796,007) (62,026) (14,158)
Annuity benefits................................. (13,882) (18,715) - -
Annual contract maintenance charge (note 2)...... (117,010) (143,045) (912) (230)
Contingent deferred sales charges (note 2)....... (79,560) (91,476) (672) (128)
Adjustments to maintain reserves................. 3,519 (2,276) (2) (8)
-------------- -------------- -------------- --------------
Net equity transactions...................... (30,384,276) (23,597,008) 59,222 278,895
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY.............. (33,874,137) (15,473,854) 63,521 287,767
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD 107,365,814 122,839,668 290,615 2,848
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD.............. $ 73,491,677 107,365,814 354,136 290,615
============== ============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
NSATMyMkt NSATTotRe
------------------------------ ------------------------------
1999 1998 1999 1998
------------ -------------- -------------- --------------
INVESTMENT ACTIVITY:
<S> <C> <C> <C> <C>
Reinvested dividends ............................ $ 1,784,450 2,073,211 3,065,692 5,590,811
Mortality, expense and administration
charges (note 2)............................... (493,484) (527,889) (6,248,692) (7,193,698)
------------- -------------- -------------- --------------
Net investment activity........................ 1,290,966 1,545,322 (3,183,000) (1,602,887)
------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold............ 24,626,159 27,802,187 135,044,092 155,161,671
Cost of mutual fund shares sold.................. (24,626,159) (27,802,187) (67,006,380) (68,662,100)
------------- -------------- -------------- --------------
Realized gain (loss) on investments............ - - 68,037,712 86,499,571
Change in unrealized gain (loss) on investments - - (53,970,645) (18,444,180)
------------- -------------- -------------- --------------
Net gain (loss) on investments................. - - 14,067,067 68,055,391
------------- -------------- -------------- --------------
Reinvested capital gains......................... - - 15,439,049 19,993,831
------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations............ 1,290,966 1,545,322 26,323,116 86,446,335
------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners................................ 2,629,089 9,331,757 21,912,256 32,910,520
Transfers between funds.......................... 8,370,815 (720,419) (10,866,530) (7,086,137)
Redemptions...................................... (15,360,742) (13,718,112) (137,661,912) (170,647,039)
Annuity benefits................................. (3,092) (4,505) (90,848) (80,283)
Annual contract maintenance charge (note 2)...... (46,595) (53,369) (541,134) (657,048)
Contingent deferred sales charges (note 2)....... (42,148) (61,733) (305,720) (272,491)
Adjustments to maintain reserves................. (340) 3,489 15,225 37
------------- -------------- -------------- --------------
Net equity transactions...................... (4,453,013) (5,222,892) (127,538,663) (145,832,441)
------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY.............. (3,162,047) (3,677,570) (101,215,547) (59,386,106)
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD 38,688,503 42,366,073 511,922,904 571,309,010
------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD.............. $ 35,526,456 38,688,503 410,707,357 511,922,904
============= ============== ============== ==============
</TABLE>
10
<PAGE> 10
NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, CONTINUED
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
NBAMTBal StOpp2
------------------------------ ------------------------------
1999 1998 1999 1998
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .............................. $ 728,530 1,016,529 - 52,459
Mortality, expense and administration
charges (note 2)................................. (556,057) (569,585) (363,188) (248,876)
-------------- -------------- -------------- --------------
Net investment activity.......................... 172,473 446,944 (363,188) (196,417)
-------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold.............. 9,446,870 4,701,654 1,787,702 569,604
Cost of mutual fund shares sold.................... (8,628,993) (4,516,095) (1,380,657) (457,623)
-------------- -------------- -------------- --------------
Realized gain (loss) on investments.............. 817,877 185,559 407,045 111,981
Change in unrealized gain (loss) on investments.... 9,965,004 (3,399,106) 5,338,403 46,665
-------------- -------------- -------------- --------------
Net gain (loss) on investments................... 10,782,881 (3,213,547) 5,745,448 158,646
-------------- -------------- -------------- --------------
Reinvested capital gains........................... 1,079,303 7,139,906 2,758,314 2,115,597
-------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations.............. 12,034,657 4,373,303 8,140,574 2,077,826
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners.................................. 2,666,834 4,215,700 5,512,092 7,498,780
Transfers between funds............................ (2,097,348) (1,509,657) 1,479,431 495,807
Redemptions........................................ (8,836,839) (4,853,908) (3,895,650) (1,150,570)
Annuity benefits................................... (217) (60) - -
Annual contract maintenance charge (note 2)........ (61,972) (65,141) (64,423) (51,449)
Contingent deferred sales charges (note 2)......... (63,429) (61,893) (28,046) (10,724)
Adjustments to maintain reserves................... 409 72 577 83
-------------- -------------- -------------- --------------
Net equity transactions........................ (8,392,562) (2,274,887) 3,003,981 6,781,927
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY................ 3,642,095 2,098,416 11,144,555 8,859,753
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD 45,142,869 43,044,453 23,359,647 14,499,894
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD................ $ 48,784,964 45,142,869 34,504,202 23,359,647
============== ============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
TemIntFd
------------------------------
1999 1998
------------- ---------------
<S> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .............................. $ 960,970 731,626
Mortality, expense and administration
charges (note 2)................................. (477,604) (441,890)
------------- --------------
Net investment activity.......................... 483,366 289,736
------------- --------------
Proceeds from mutual fund shares sold.............. 4,630,550 2,369,495
Cost of mutual fund shares sold.................... (3,286,032) (1,547,351)
------------- --------------
Realized gain (loss) on investments.............. 1,344,518 822,144
Change in unrealized gain (loss) on investments.... 2,228,883 (128,877)
------------- --------------
Net gain (loss) on investments................... 3,573,401 693,267
------------- --------------
Reinvested capital gains........................... 3,338,106 1,308,058
------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations.............. 7,394,873 2,291,061
------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners.................................. 6,288,269 9,696,990
Transfers between funds............................ (4,023,825) (3,390,030)
Redemptions........................................ (4,610,089) (2,817,427)
Annuity benefits................................... - -
Annual contract maintenance charge (note 2)........ (70,494) (81,582)
Contingent deferred sales charges (note 2)......... (42,116) (31,260)
Adjustments to maintain reserves................... 574 (294)
------------- --------------
Net equity transactions........................ (2,457,681) 3,376,397
------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY................ 4,937,192 5,667,458
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD 35,535,615 29,868,157
------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD................ $ 40,472,807 35,535,615
============= ==============
</TABLE>
See accompanying notes to financial statements.
11
<PAGE> 11
NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(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)*
12
<PAGE> 12
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 December 31, 1999, contract owners have invested in all of the above
funds. The contract owners' equity is affected by the investment
results of each fund, equity transactions by contract owners and
certain contract expenses (see note 2). The accompanying financial
statements include only contract owners' purchase payments pertaining
to the variable portions of their contracts and exclude any purchase
payments for fixed dollar benefits, the latter being included in the
accounts of the Company.
A contract owner may choose from among a number of different underlying
mutual fund options. The underlying mutual fund options are not
available to the general public directly. The underlying mutual funds
are available as investment options in variable life insurance policies
or variable annuity contracts issued by life insurance companies or, in
some cases, through participation in certain qualified pension or
retirement plans.
Some of the underlying mutual funds have been established by investment
advisers which manage publicly traded mutual funds having similar names
and investment objectives. While some of the underlying mutual funds
may be similar to, and may in fact be modeled after, publicly traded
mutual funds, the underlying mutual funds are not otherwise directly
related to any publicly traded mutual fund. Consequently, the
investment performance of publicly traded mutual funds and any
corresponding underlying mutual funds may differ substantially.
(c) Security Valuation, Transactions and Related Investment Income
The market value of the underlying mutual funds is based on the closing
net asset value per share at December 31, 1999. The cost of investments
sold is determined on 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)
13
<PAGE> 13
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.
14
<PAGE> 14
(4) COMPONENTS OF CONTRACT OWNERS' EQUITY
The following is a summary of contract owners' equity at December 31, 1999,
in both the accumulation and payout phases.
Contract owners' equity represented by:
<TABLE>
<CAPTION>
ANNUAL
Contracts in accumulation phase: UNITS UNIT VALUE RETURN(b)
-------- --------- ---------
<S> <C> <C> <C> <C>
AIM VI - Capital Appreciation Fund:
Tax qualified 172,142 $ 15.964823 $ 2,748,217 43%
Non-tax qualified 5,380 15.964823 85,891 43%
AIM VI - International Equity Fund:
Tax qualified 18,086 17.293870 312,777 53%
Non-tax qualified 135 17.293870 2,335 53%
American Century VP - American Century
VP Advantage:
Tax qualified 335,356 20.506237 6,876,890 13%
Non-tax qualified 121,988 20.506237 2,501,515 13%
American Century VP - American Century
VP Balanced:
Tax qualified 1,669 10.579044 17,656 6%(a)
Non-tax qualified 1,813 10.579044 19,180 6%(a)
American Century VP - American Century
VP Capital Appreciation:
Tax qualified 1,039,334 23.256156 24,170,914 62%
Non-tax qualified 395,130 23.256156 9,189,205 62%
American Century VP - American Century
VP Income & Growth:
Tax qualified 576,734 15.175314 8,752,120 16%
Non-tax qualified 25,799 15.175314 391,508 16%
The Dreyfus Socially Responsible
Growth Fund, Inc.:
Tax qualified 1,718,535 33.157285 56,981,955 28%
Non-tax qualified 82,100 33.157285 2,722,213 28%
Dreyfus Stock Index Fund:
Tax qualified 3,233,417 33.009632 106,733,905 19%
Non-tax qualified 496,349 33.009632 16,384,298 19%
Dreyfus VIF - Capital Appreciation Portfolio:
Tax qualified 814,540 14.484129 11,797,902 10%
Non-tax qualified 41,563 14.484129 602,004 10%
Dreyfus VIF - Quality Bond Portfolio:
Tax qualified 501,628 11.873090 5,955,874 (1)%
Non-tax qualified 30,684 11.873090 364,314 (1)%
Dreyfus VIF - Small Cap Portfolio:
Tax qualified 3,949,521 20.350320 80,374,016 22%
Non-tax qualified 118,642 20.350320 2,414,403 22%
Fidelity VIP - Equity-Income Portfolio:
Tax qualified 4,882,606 23.766053 116,040,273 5%
Non-tax qualified 899,955 23.766053 21,388,378 5%
Fidelity VIP - High Income Portfolio:
Tax qualified 1,552,373 15.519485 24,092,029 7%
Non-tax qualified 64,851 15.519485 1,006,454 7%
</TABLE>
(Continued)
15
<PAGE> 15
NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS, CONTINUED
<TABLE>
<CAPTION>
ANNUAL
UNITS UNIT VALUE RETURN(b)
-------- --------- ---------
<S> <C> <C> <C> <C>
Janus AS - Janus Aspen
International Growth Portfolio:
Tax qualified 684,662 20.718419 14,185,114 80%
Non-tax qualified 28,317 20.718419 586,683 80%
Nationwide SAT - Capital Appreciation Fund:
Tax qualified 1,154,090 31.511115 36,366,663 3%
Non-tax qualified 441,558 31.511115 13,913,985 3%
Nationwide SAT - Government Bond Fund:
Tax qualified 1,576,867 33.746688 53,214,039 (4)%
Non-tax qualified 597,758 33.759140 20,179,796 (4)%
Nationwide SAT - High Income Bond Fund:
Tax qualified 31,261 10.855151 339,343 2%
Non-tax qualified 1,363 10.855151 14,796 2%
Nationwide SAT - Money Market Fund:
Tax qualified 1,219,198 22.709765 27,687,700 3%
Non-tax qualified 316,915 24.674569 7,819,741 3%
Nationwide SAT - Total Return Fund:
Tax qualified 3,167,075 97.698445 309,418,303 6%
Non-tax qualified 1,062,496 94.888344 100,818,486 6%
Neuberger &Berman AMT -
Balanced Portfolio:
Tax qualified 1,420,544 26.782503 38,045,724 32%
Non-tax qualified 400,892 26.782503 10,736,891 32%
Strong Opportunity Fund II, Inc.:
Tax qualified 1,462,966 22.530007 32,960,634 33%
Non-tax qualified 68,512 22.530007 1,543,576 33%
Templeton VPS - Templeton International Fund:
Tax qualified 1,910,109 20.538218 39,230,235 22%
Non-tax qualified 60,501 20.538218 1,242,583 22%
========= =========
Reserves for annuity contracts in payout phase:
Tax qualified 418,884
Non-tax qualified 259,261
---------------
$ 1,210,908,663
===============
</TABLE>
(a) Non-annualized. The return was computed for the period 5/03/99 (effective
date) through 12/31/99 for American Century VP - Balanced.
(b) The annual return does not include contract charges satisfied by
surrendering units.
- --------------------------------------------------------------------------------
16
<PAGE> 16
INDEPENDENT AUDITORS' REPORT
The Board of Directors of Nationwide Life Insurance Company and Contract Owners
of Nationwide Multi-Flex Variable Account:
We have audited the accompanying statement of assets, liabilities and
contract owners' equity of Nationwide Multi-Flex Variable Account (comprised of
the sub-accounts listed in note 1(b)) (collectively, "the Account") as of
December 31, 1999, and the related statements of operations and changes in
contract owners' equity for each of the years in the two year period then ended.
These financial statements are the responsibility of the Account's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 1999, by correspondence with
the transfer agents of the underlying mutual funds. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the Account as of December
31, 1999, and the results of its operations and its changes in contract owners'
equity for each of the years in the two year period then ended in conformity
with generally accepted accounting principles.
KPMG LLP
Columbus, Ohio
February 18, 2000
- --------------------------------------------------------------------------------
17
<PAGE> 17
[THIS PAGE LEFT BLANK INTENTIONALLY]
18
<PAGE> 18
[THIS PAGE LEFT BLANK INTENTIONALLY]
19
<PAGE> 19
NATIONWIDE LIFE INSURANCE COMPANY Bulk Rate
HOME OFFICE: ONE NATIONWIDE PLAZA - COLUMBUS, OHIO 43215-2220 U.S. Postage
PAID
Columbus, Ohio
Permit No. 521
Nationwide(R) is a registered federal service mark of Nationwide Mutual
Insurance Company
<PAGE> 20
<TABLE>
<CAPTION>
NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, CONTINUED
YEARS ENDED DECEMBER 31, 1999 AND 1998
ACVPBal ACVPCapAp
--------------------- --------------------------
1999 1998 1999 1998
----------- -------- ----------- -----------
<S> <C> <C> <C> <C>
Investment activity:
Reinvested dividends .......................... $ -- -- -- --
Mortality, expense and administration
charges (note 2) ............................ (136) -- (324,124) (347,914)
----------- -------- ----------- -----------
Net investment activity ..................... (136) -- (324,124) (347,914)
----------- -------- ----------- -----------
Proceeds from mutual fund shares sold ......... 5,894 -- 5,727,111 7,431,160
Cost of mutual fund shares sold ............... (5,837) -- (5,336,111) (7,063,514)
----------- -------- ----------- -----------
Realized gain (loss) on investments ......... 57 -- 391,000 367,646
Change in unrealized gain (loss) on investments 2,435 -- 13,035,532 (2,548,105)
----------- -------- ----------- -----------
Net gain (loss) on investments .............. 2,492 -- 13,426,532 (2,180,459)
----------- -------- ----------- -----------
Reinvested capital gains ...................... -- -- -- 1,515,406
----------- -------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 2,356 -- 13,102,408 (1,012,967)
----------- -------- ----------- -----------
Equity transactions:
Purchase payments received from
contract owners ............................. 2,678 -- 1,595,991 2,220,641
Transfers between funds ....................... 32,131 -- (86,820) (5,465,509)
Redemptions ................................... (218) -- (5,570,815) (3,562,186)
Annuity benefits .............................. -- -- (1,178) (190)
Annual contract maintenance charge (note 2) ... (4) -- (42,619) (50,076)
Contingent deferred sales charges (note 2) .... -- -- (35,760) (49,503)
Adjustments to maintain reserves .............. (105) -- 1,122 513
----------- -------- ----------- -----------
Net equity transactions ................... 34,482 -- (4,140,079) (6,906,310)
----------- -------- ----------- -----------
Net change in contract owners' equity ........... 36,838 -- 8,962,329 (7,919,277)
Contract owners' equity beginning of period ..... -- -- 24,412,586 32,331,863
----------- -------- ----------- -----------
Contract owners' equity end of period ........... $ 36,838 -- 33,374,915 24,412,586
=========== ======== =========== ===========
<CAPTION>
ACVPIncGr DrySRGro
-------------------------- --------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Investment activity:
Reinvested dividends .......................... $ 1,352 22,466 7,382 59,690
Mortality, expense and administration
charges (note 2) ............................ (98,210) (28,528) (631,876) (377,408)
----------- ----------- ----------- -----------
Net investment activity ..................... (96,858) (6,062) (624,494) (317,718)
----------- ----------- ----------- -----------
Proceeds from mutual fund shares sold ......... 1,123,559 247,808 3,100,004 863,412
Cost of mutual fund shares sold ............... (869,591) (230,017) (1,584,556) (500,142)
----------- ----------- ----------- -----------
Realized gain (loss) on investments ......... 253,968 17,791 1,515,448 363,270
Change in unrealized gain (loss) on investments 1,030,375 511,807 9,757,561 5,900,793
----------- ----------- ----------- -----------
Net gain (loss) on investments .............. 1,284,343 529,598 11,273,009 6,264,063
----------- ----------- ----------- -----------
Reinvested capital gains ...................... -- 2,123 1,987,299 1,386,849
----------- ----------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 1,187,485 525,659 12,635,814 7,333,194
----------- ----------- ----------- -----------
Equity transactions:
Purchase payments received from
contract owners ............................. 1,893,883 1,844,875 9,211,026 10,576,613
Transfers between funds ....................... 3,055,413 2,112,196 7,352,558 1,465,431
Redemptions ................................... (1,417,049) (254,487) (7,614,810) (1,776,381)
Annuity benefits .............................. (7) -- -- --
Annual contract maintenance charge (note 2) ... (13,402) (2,425) (109,640) (83,289)
Contingent deferred sales charges (note 2) .... (5,041) (342) (50,310) (18,094)
Adjustments to maintain reserves .............. (253) 259 716 428
----------- ----------- ----------- -----------
Net equity transactions ................... 3,513,544 3,700,076 8,789,540 10,164,708
----------- ----------- ----------- -----------
Net change in contract owners' equity ........... 4,701,029 4,225,735 21,425,354 17,497,902
Contract owners' equity beginning of period ..... 4,442,594 216,859 38,278,833 20,780,931
----------- ----------- ----------- -----------
Contract owners' equity end of period ........... $9,143,623 4,442,594 59,704,187 38,278,833
=========== =========== =========== ===========
</TABLE>
(Continued)
7
<PAGE> 21
<TABLE>
<CAPTION>
NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, CONTINUED
YEARS ENDED DECEMBER 31, 1999 AND 1998
DryStkIx DryCapAp
---------------------------- -------------------------
1999 1998 1999 1998
------------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ 1,195,594 990,158 68,824 29,273
Mortality, expense and administration
charges (note 2) ............................. (1,430,698) (955,725) (140,066) (28,062)
------------- ----------- ----------- ----------
Net investment activity ...................... (235,104) 34,433 (71,242) 1,211
------------- ----------- ----------- ----------
Proceeds from mutual fund shares sold ........... 8,345,485 1,666,853 3,218,125 232,731
Cost of mutual fund shares sold ................. (3,069,769) (804,459) (2,795,528) (209,881)
------------- ----------- ----------- ----------
Realized gain (loss) on investments .......... 5,275,716 862,394 422,597 22,850
Change in unrealized gain (loss) on investments . 13,147,714 16,211,739 682,319 506,293
------------- ----------- ----------- ----------
Net gain (loss) on investments ............... 18,423,430 17,074,133 1,104,916 529,143
------------- ----------- ----------- ----------
Reinvested capital gains ........................ 1,028,743 182,250 46,040 186
------------- ----------- ----------- ----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 19,217,069 17,290,816 1,079,714 530,540
------------- ----------- ----------- ----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 17,217,670 19,460,169 2,953,159 2,080,221
Transfers between funds ......................... 10,982,972 7,196,900 4,252,360 3,450,453
Redemptions ..................................... (16,562,657) (5,731,400) (1,682,937) (261,044)
Annuity benefits ................................ (2,981) (2,559) -- --
Annual contract maintenance charge (note 2) ..... (191,925) (145,678) (18,960) (2,389)
Contingent deferred sales charges (note 2) ...... (100,434) (62,149) (13,131) (1,172)
Adjustments to maintain reserves ................ 586 2,514 57 (137)
------------- ----------- ----------- ----------
Net equity transactions .................... 11,343,231 20,717,797 5,490,548 5,265,932
------------- ----------- ----------- ----------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............. 30,560,300 38,008,613 6,570,262 5,796,472
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ....... 92,569,778 54,561,165 5,829,653 33,181
------------- ----------- ----------- ----------
CONTRACT OWNERS' EQUITY END OF PERIOD ............. $ 123,130,078 92,569,778 12,399,915 5,829,653
============= =========== =========== ==========
<CAPTION>
DryQualBd DrySmCap
------------------------ --------------------------
1999 1998 1999 1998
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ 365,296 336,884 53,163 252
Mortality, expense and administration
charges (note 2) ............................. (85,777) (76,197) (969,857) (883,862)
---------- ---------- ----------- -----------
Net investment activity ...................... 279,519 260,687 (916,694) (883,610)
---------- ---------- ----------- -----------
Proceeds from mutual fund shares sold ........... 1,328,426 794,218 10,343,781 2,151,154
Cost of mutual fund shares sold ................. (1,361,891) (762,578) (7,873,839) (1,434,829)
---------- ---------- ----------- -----------
Realized gain (loss) on investments .......... (33,465) 31,640 2,469,942 716,325
Change in unrealized gain (loss) on investments . (319,758) (184,062) 13,237,934 (4,434,714)
---------- ---------- ----------- -----------
Net gain (loss) on investments ............... (353,223) (152,422) 15,707,876 (3,718,389)
---------- ---------- ----------- -----------
Reinvested capital gains ........................ -- 103,635 -- 1,336,663
---------- ---------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ (73,704) 211,900 14,791,182 (3,265,336)
---------- ---------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 1,343,499 2,019,788 15,052,033 23,152,760
Transfers between funds ......................... (990,983) 517,074 (9,094,926) (3,926,582)
Redemptions ..................................... (724,772) (643,999) (10,915,476) (5,065,492)
Annuity benefits ................................ -- -- -- --
Annual contract maintenance charge (note 2) ..... (14,217) (14,669) (207,487) (220,760)
Contingent deferred sales charges (note 2) ...... (6,266) (7,839) (96,408) (64,756)
Adjustments to maintain reserves ................ (181) 113 701 (511)
---------- ---------- ----------- -----------
Net equity transactions .................... (392,920) 1,870,468 (5,261,563) 13,874,659
---------- ---------- ----------- -----------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............. (466,624) 2,082,368 9,529,619 10,609,323
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ....... 6,786,814 4,704,446 73,258,807 62,649,484
---------- ---------- ----------- -----------
CONTRACT OWNERS' EQUITY END OF PERIOD ............. $6,320,190 6,786,814 82,788,426 73,258,807
========== ========== =========== ===========
</TABLE>
8
<PAGE> 22
<TABLE>
<CAPTION>
NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, CONTINUED
YEARS ENDED DECEMBER 31, 1999 AND 1998
FidVIPEI FidVIPHI
----------------------------- --------------------------
1999 1998 1999 1998
------------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ 2,194,168 1,767,643 2,309,949 1,423,227
Mortality, expense and administration
charges (note 2) ............................. (1,930,270) (1,811,344) (334,326) (303,847)
------------- ------------ ----------- -----------
Net investment activity ...................... 263,898 (43,701) 1,975,623 1,119,380
------------- ------------ ----------- -----------
Proceeds from mutual fund shares sold ........... 22,292,242 6,079,485 4,354,783 487,817
Cost of mutual fund shares sold ................. (13,073,844) (3,887,729) (4,531,558) (433,912)
------------- ------------ ----------- -----------
Realized gain (loss) on investments .......... 9,218,398 2,191,756 (176,775) 53,905
Change in unrealized gain (loss) on investments . (7,069,937) 4,573,114 (220,283) (3,585,376)
------------- ------------ ----------- -----------
Net gain (loss) on investments ............... 2,148,461 6,764,870 (397,058) (3,531,471)
------------- ------------ ----------- -----------
Reinvested capital gains ........................ 4,850,267 6,290,729 86,353 904,342
------------- ------------ ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 7,262,626 13,011,898 1,664,918 (1,507,749)
------------- ------------ ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 16,218,966 23,845,625 5,214,131 8,511,396
Transfers between funds ......................... (9,309,653) 279,782 (2,997,810) 506,824
Redemptions ..................................... (24,177,752) (13,156,692) (3,898,211) (1,543,731)
Annuity benefits ................................ (1,945) (1,823) -- --
Annual contract maintenance charge (note 2) ..... (226,584) (238,894) (60,728) (62,035)
Contingent deferred sales charges (note 2) ...... (180,119) (141,165) (30,842) (17,150)
Adjustments to maintain reserves ................ 798 409 223 (47)
------------- ------------ ----------- -----------
Net equity transactions .................... (17,676,289) 10,587,242 (1,773,237) 7,395,257
------------- ------------ ----------- -----------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............. (10,413,663) 23,599,140 (108,319) 5,887,508
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ....... 147,846,675 124,247,535 25,206,813 19,319,305
------------- ------------ ----------- -----------
CONTRACT OWNERS' EQUITY END OF PERIOD ............. $ 137,433,012 147,846,675 25,098,494 25,206,813
============= ============ =========== ===========
<CAPTION>
JanASIntGr NSATCapAp
------------------------- --------------------------
1999 1998 1999 1998
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ 15,443 22,540 362,218 520,711
Mortality, expense and administration
charges (note 2) ............................. (86,183) (22,121) (783,096) (871,653)
----------- ---------- ----------- -----------
Net investment activity ...................... (70,740) 419 (420,878) (350,942)
----------- ---------- ----------- -----------
Proceeds from mutual fund shares sold ........... 573,381 260,312 20,466,124 27,191,128
Cost of mutual fund shares sold ................. (471,570) (262,817) (8,263,983) (12,328,964)
----------- ---------- ----------- -----------
Realized gain (loss) on investments .......... 101,811 (2,505) 12,202,141 14,862,164
Change in unrealized gain (loss) on investments . 5,520,283 (2,299) (13,202,257) (11,772)
----------- ---------- ----------- -----------
Net gain (loss) on investments ............... 5,622,094 (4,804) (1,000,116) 14,850,392
----------- ---------- ----------- -----------
Reinvested capital gains ........................ -- 3,054 3,336,082 1,743,763
----------- ---------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 5,551,354 (1,331) 1,915,088 16,243,213
----------- ---------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 2,062,705 1,682,674 3,283,685 4,344,587
Transfers between funds ......................... 4,482,193 2,201,050 4,181,155 1,551,729
Redemptions ..................................... (1,059,008) (155,078) (21,374,802) (27,248,088)
Annuity benefits ................................ -- -- (6,442) (5,545)
Annual contract maintenance charge (note 2) ..... (12,999) (2,187) (58,224) (69,163)
Contingent deferred sales charges (note 2) ...... (8,045) (787) (27,899) (37,866)
Adjustments to maintain reserves ................ 448 12 366 829
----------- ---------- ----------- -----------
Net equity transactions .................... 5,465,294 3,725,684 (14,002,161) (21,463,517)
----------- ---------- ----------- -----------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............. 11,016,648 3,724,353 (12,087,073) (5,220,304)
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ....... 3,755,155 30,802 62,424,782 67,645,086
----------- ---------- ----------- -----------
CONTRACT OWNERS' EQUITY END OF PERIOD ............. $14,771,803 3,755,155 50,337,709 62,424,782
=========== ========== =========== ===========
</TABLE>
(Continued)
9
<PAGE> 23
<TABLE>
<CAPTION>
NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, CONTINUED
YEARS ENDED DECEMBER 31, 1999 AND 1998
NSATGvtBd NSATHIncBd
----------------------------- --------------------
1999 1998 1999 1998
------------- ------------ -------- --------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ 4,728,402 5,973,305 28,889 12,442
Mortality, expense and administration
charges (note 2) ............................. (1,197,314) (1,492,699) (4,505) (2,277)
------------- ------------ -------- --------
Net investment activity ...................... 3,531,088 4,480,606 24,384 10,165
------------- ------------ -------- --------
Proceeds from mutual fund shares sold ........... 32,891,196 30,298,498 354,458 232,973
Cost of mutual fund shares sold ................. (33,623,472) (29,393,218) (354,414) (238,033)
------------- ------------ -------- --------
Realized gain (loss) on investments .......... (732,276) 905,280 44 (5,060)
Change in unrealized gain (loss) on investments . (6,432,465) 2,221,884 (20,305) 3,767
------------- ------------ -------- --------
Net gain (loss) on investments ............... (7,164,741) 3,127,164 (20,261) (1,293)
------------- ------------ -------- --------
Reinvested capital gains ........................ 143,792 515,384 176 --
------------- ------------ -------- --------
Net increase (decrease) in contract owners'
equity resulting from operations ........ (3,489,861) 8,123,154 4,299 8,872
------------- ------------ -------- --------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 4,249,902 6,311,434 113,296 231,833
Transfers between funds ......................... (5,526,811) 2,143,077 9,538 61,586
Redemptions ..................................... (28,900,434) (31,796,007) (62,026) (14,158)
Annuity benefits ................................ (13,882) (18,715) -- --
Annual contract maintenance charge (note 2) ..... (117,010) (143,045) (912) (230)
Contingent deferred sales charges (note 2) ...... (79,560) (91,476) (672) (128)
Adjustments to maintain reserves ................ 3,519 (2,276) (2) (8)
------------- ------------ -------- --------
Net equity transactions .................... (30,384,276) (23,597,008) 59,222 278,895
------------- ------------ -------- --------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............. (33,874,137) (15,473,854) 63,521 287,767
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ....... 107,365,814 122,839,668 290,615 2,848
------------- ------------ -------- --------
CONTRACT OWNERS' EQUITY END OF PERIOD ............. $ 73,491,677 107,365,814 354,136 290,615
============= ============ ======== ========
NSATMyMkt NSATTotRe
-------------------------- ----------------------------
1999 1998 1999 1998
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ 1,784,450 2,073,211 3,065,692 5,590,811
Mortality, expense and administration
charges (note 2) ............................. (493,484) (527,889) (6,248,692) (7,193,698)
----------- ----------- ------------ ------------
Net investment activity ...................... 1,290,966 1,545,322 (3,183,000) (1,602,887)
----------- ----------- ------------ ------------
Proceeds from mutual fund shares sold ........... 24,626,159 27,802,187 135,044,092 155,161,671
Cost of mutual fund shares sold ................. (24,626,159) (27,802,187) (67,006,380) (68,662,100)
----------- ----------- ------------ ------------
Realized gain (loss) on investments .......... -- -- 68,037,712 86,499,571
Change in unrealized gain (loss) on investments . -- -- (53,970,645) (18,444,180)
----------- ----------- ------------ ------------
Net gain (loss) on investments ............... -- -- 14,067,067 68,055,391
----------- ----------- ------------ ------------
Reinvested capital gains ........................ -- -- 15,439,049 19,993,831
----------- ----------- ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 1,290,966 1,545,322 26,323,116 86,446,335
----------- ----------- ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 2,629,089 9,331,757 21,912,256 32,910,520
Transfers between funds ......................... 8,370,815 (720,419) (10,866,530) (7,086,137)
Redemptions ..................................... (15,360,742) (13,718,112) (137,661,912) (170,647,039)
Annuity benefits ................................ (3,092) (4,505) (90,848) (80,283)
Annual contract maintenance charge (note 2) ..... (46,595) (53,369) (541,134) (657,048)
Contingent deferred sales charges (note 2) ...... (42,148) (61,733) (305,720) (272,491)
Adjustments to maintain reserves ................ (340) 3,489 15,225 37
----------- ----------- ------------ ------------
Net equity transactions .................... (4,453,013) (5,222,892) (127,538,663) (145,832,441)
----------- ----------- ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............. (3,162,047) (3,677,570) (101,215,547) (59,386,106)
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ....... 38,688,503 42,366,073 511,922,904 571,309,010
----------- ----------- ------------ ------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............. $35,526,456 38,688,503 410,707,357 511,922,904
=========== =========== ============ ============
</TABLE>
10
<PAGE> 24
<TABLE>
<CAPTION>
NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, CONTINUED
YEARS ENDED DECEMBER 31, 1999 AND 1998
NBAMTBal StOpp2
--------------------------- --------------------------
1999 1998 1999 1998
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ 728,530 1,016,529 -- 52,459
Mortality, expense and administration
charges (note 2) ............................. (556,057) (569,585) (363,188) (248,876)
------------ ----------- ----------- -----------
Net investment activity ...................... 172,473 446,944 (363,188) (196,417)
------------ ----------- ----------- -----------
Proceeds from mutual fund shares sold ........... 9,446,870 4,701,654 1,787,702 569,604
Cost of mutual fund shares sold ................. (8,628,993) (4,516,095) (1,380,657) (457,623)
------------ ----------- ----------- -----------
Realized gain (loss) on investments .......... 817,877 185,559 407,045 111,981
Change in unrealized gain (loss) on investments . 9,965,004 (3,399,106) 5,338,403 46,665
------------ ----------- ----------- -----------
Net gain (loss) on investments ............... 10,782,881 (3,213,547) 5,745,448 158,646
------------ ----------- ----------- -----------
Reinvested capital gains ........................ 1,079,303 7,139,906 2,758,314 2,115,597
------------ ----------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 12,034,657 4,373,303 8,140,574 2,077,826
------------ ----------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 2,666,834 4,215,700 5,512,092 7,498,780
Transfers between funds ......................... (2,097,348) (1,509,657) 1,479,431 495,807
Redemptions ..................................... (8,836,839) (4,853,908) (3,895,650) (1,150,570)
Annuity benefits ................................ (217) (60) -- --
Annual contract maintenance charge (note 2) ..... (61,972) (65,141) (64,423) (51,449)
Contingent deferred sales charges (note 2) ...... (63,429) (61,893) (28,046) (10,724)
Adjustments to maintain reserves ................ 409 72 577 83
------------ ----------- ----------- -----------
Net equity transactions .................... (8,392,562) (2,274,887) 3,003,981 6,781,927
------------ ----------- ----------- -----------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............. 3,642,095 2,098,416 11,144,555 8,859,753
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ....... 45,142,869 43,044,453 23,359,647 14,499,894
------------ ----------- ----------- -----------
CONTRACT OWNERS' EQUITY END OF PERIOD ............. $ 48,784,964 45,142,869 34,504,202 23,359,647
============ =========== =========== ===========
<CAPTION>
TemIntFd
--------------------------
1999 1998
----------- -----------
<S> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ 960,970 731,626
Mortality, expense and administration
charges (note 2) ............................. (477,604) (441,890)
----------- -----------
Net investment activity ...................... 483,366 289,736
----------- -----------
Proceeds from mutual fund shares sold ........... 4,630,550 2,369,495
Cost of mutual fund shares sold ................. (3,286,032) (1,547,351)
----------- -----------
Realized gain (loss) on investments .......... 1,344,518 822,144
Change in unrealized gain (loss) on investments . 2,228,883 (128,877)
----------- -----------
Net gain (loss) on investments ............... 3,573,401 693,267
----------- -----------
Reinvested capital gains ........................ 3,338,106 1,308,058
----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 7,394,873 2,291,061
----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 6,288,269 9,696,990
Transfers between funds ......................... (4,023,825) (3,390,030)
Redemptions ..................................... (4,610,089) (2,817,427)
Annuity benefits ................................ -- --
Annual contract maintenance charge (note 2) ..... (70,494) (81,582)
Contingent deferred sales charges (note 2) ...... (42,116) (31,260)
Adjustments to maintain reserves ................ 574 (294)
----------- -----------
Net equity transactions .................... (2,457,681) 3,376,397
----------- -----------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............. 4,937,192 5,667,458
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ....... 35,535,615 29,868,157
----------- -----------
CONTRACT OWNERS' EQUITY END OF PERIOD ............. $40,472,807 35,535,615
=========== ===========
</TABLE>
11
See accompanying notes to financial statements.
<PAGE> 25
- --------------------------------------------------------------------------------
NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31,1999 AND 1998
(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)(*)
12
<PAGE> 26
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 December 31, 1999, contract owners have invested in all of the above
funds. The contract owners' equity is affected by the investment results of
each fund, equity transactions by contract owners and certain contract
expenses (see note 2).The accompanying financial statements include only
contract owners' purchase payments pertaining to the variable portions of
their contracts and exclude any purchase payments for fixed dollar benefits,
the latter being included in the accounts of the Company.
A contract owner may choose from among a number of different underlying
mutual fund options. The underlying mutual fund options are not available to
the general public directly. The underlying mutual funds are available as
investment options in variable life insurance policies or variable annuity
contracts issued by life insurance companies or, in some cases, through
participation in certain qualified pension or retirement plans.
Some of the underlying mutual funds have been established by investment
advisers which manage publicly traded mutual funds having similar names and
investment objectives. While some of the underlying mutual funds may be
similar to, and may in fact be modeled after, publicly traded mutual funds,
the underlying mutual funds are not otherwise directly related to any
publicly traded mutual fund. Consequently, the investment performance of
publicly traded mutual funds and any corresponding underlying mutual funds
may differ substantially.
(c) Security Valuation, Transactions and Related Investment Income
The market value of the underlying mutual funds is based on the closing net
asset value per share at December 31, 1999. The cost of investments sold is
determined on 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)
13
<PAGE> 27
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, share- holder
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.
14
<PAGE> 28
(4) COMPONENTS OF CONTRACT OWNERS' EQUITY
The following is a summary of contract owners' equity at December 31, 1999,
in both the accumulation and payout phases.
Contract owners' equity represented by:
<TABLE>
<CAPTION>
Annual
Contracts in accumulation phase: Units Unit Value Return(b)
------- -------------- ---------
<S> <C> <C> <C> <C>
AIM VI - Capital Appreciation Fund:
Tax qualified ............................................. 172,142 $ 15.964823 $ 2,748,217 43%
Non-tax qualified ......................................... 5,380 15.964823 85,891 43%
AIM VI - International Equity Fund:
Tax qualified ............................................. 18,086 17.293870 312,777 53%
Non-tax qualified ......................................... 135 17.293870 2,335 53%
American Century VP - American Century
VP Advantage:
Tax qualified ............................................. 335,356 20.506237 6,876,890 13%
Non-tax qualified ......................................... 121,988 20.506237 2,501,515 13%
American Century VP - American Century
VP Balanced:
Tax qualified ............................................. 1,669 10.579044 17,656 6%(a)
Non-tax qualified ......................................... 1,813 10.579044 19,180 6%(a)
American Century VP - American Century
VP Capital Appreciation:
Tax qualified ............................................. 1,039,334 23.256156 24,170,914 62%
Non-tax qualified ......................................... 395,130 23.256156 9,189,205 62%
American Century VP - American Century
VP Income & Growth:
Tax qualified ............................................. 576,734 15.175314 8,752,120 16%
Non-tax qualified ......................................... 25,799 15.175314 391,508 16%
The Dreyfus Socially Responsible
Growth Fund, Inc.:
Tax qualified ............................................. 1,718,535 33.157285 56,981,955 28%
Non-tax qualified ......................................... 82,100 33.157285 2,722,213 28%
Dreyfus Stock Index Fund:
Tax qualified ............................................. 3,233,417 33.009632 106,733,905 19%
Non-tax qualified ......................................... 496,349 33.009632 16,384,298 19%
Dreyfus VIF - Capital Appreciation Portfolio:
Tax qualified ............................................. 814,540 14.484129 11,797,902 10%
Non-tax qualified ......................................... 41,563 14.484129 602,004 10%
Dreyfus VIF - Quality Bond Portfolio:
Tax qualified ............................................. 501,628 11.873090 5,955,874 (1)%
Non-tax qualified ......................................... 30,684 11.873090 364,314 (1)%
Dreyfus VIF - Small Cap Portfolio:
Tax qualified ............................................. 3,949,521 20.350320 80,374,016 22%
Non-tax qualified ......................................... 118,642 20.350320 2,414,403 22%
Fidelity VIP - Equity-Income Portfolio:
Tax qualified ............................................. 4,882,606 23.766053 116,040,273 5%
Non-tax qualified ......................................... 899,955 23.766053 21,388,378 5%
Fidelity VIP - High Income Portfolio:
Tax qualified ............................................. 1,552,373 15.519485 24,092,029 7%
Non-tax qualified ......................................... 64,851 15.519485 1,006,454 7%
</TABLE>
(Continued)
15
<PAGE> 29
NATIONWIDE MULTI-FLEX VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS, CONTINUED
<TABLE>
<CAPTION>
ANNUAL
UNITS UNIT VALUE RETURN(b)
----- ---------- ---------
<S> <C> <C> <C> <C>
Janus AS - Janus Aspen
International Growth Portfolio:
Tax qualified ............................................. 684,662 20.718419 14,185,114 80%
Non-tax qualified ......................................... 28,317 20.718419 586,683 80%
Nationwide SAT - Capital Appreciation Fund:
Tax qualified ............................................. 1,154,090 31.511115 36,366,663 3%
Non-tax qualified ......................................... 441,558 31.511115 13,913,985 3%
Nationwide SAT - Government Bond Fund:
Tax qualified ............................................. 1,576,867 33.746688 53,214,039 (4)%
Non-tax qualified ......................................... 597,758 33.759140 20,179,796 (4)%
Nationwide SAT - High Income Bond Fund:
Tax qualified ............................................. 31,261 10.855151 339,343 2%
Non-tax qualified ......................................... 1,363 10.855151 14,796 2%
Nationwide SAT - Money Market Fund:
Tax qualified ............................................. 1,219,198 22.709765 27,687,700 3%
Non-tax qualified ......................................... 316,915 24.674569 7,819,741 3%
Nationwide SAT - Total Return Fund:
Tax qualified ............................................. 3,167,075 97.698445 309,418,303 6%
Non-tax qualified ......................................... 1,062,496 94.888344 100,818,486 6%
Neuberger &Berman AMT -
Balanced Portfolio:
Tax qualified ............................................. 1,420,544 26.782503 38,045,724 32%
Non-tax qualified ......................................... 400,892 26.782503 10,736,891 32%
Strong Opportunity Fund II, Inc.:
Tax qualified ............................................. 1,462,966 22.530007 32,960,634 33%
Non-tax qualified ......................................... 68,512 22.530007 1,543,576 33%
Templeton VPS - Templeton International Fund:
Tax qualified ............................................. 1,910,109 20.538218 39,230,235 22%
Non-tax qualified ......................................... 60,501 20.538218 1,242,583 22%
=========== ==========
Reserves for annuity contracts in payout phase:
Tax qualified ............................................. 418,884
Non-tax qualified ......................................... 259,261
-------------
$ 1,210,908,663
=============
</TABLE>
(a) Non-annualized. The return was computed for the period 5/03/99 (effective
date) through 12/31/99 for American Century VP - Balanced.
(b) The annual return does not include contract charges satisfied by
surrendering units.
- --------------------------------------------------------------------------------
16
<PAGE> 30
INDEPENDENT AUDITORS'REPORT
The Board of Directors of Nationwide Life Insurance Company and Contract Owners
of Nationwide Multi-Flex Variable Account:
We have audited the accompanying statement of assets, liabilities and
contract owners' equity of Nationwide Multi-Flex Variable Account (comprised of
the sub-accounts listed in note 1(b)) (collectively, "the Account") as of
December 31, 1999, and the related statements of operations and changes in
contract owners' equity for each of the years in the two year period then
ended. These financial statements are the responsibility of the Account's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of December 31, 1999, by
correspondence with the transfer agents of the underlying mutual funds. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the Account as of December
31, 1999, and the results of its operations and its changes in contract owners'
equity for each of the years in the two year period then ended in conformity
with generally accepted accounting principles.
KPMG LLP
Columbus, Ohio
February 18, 2000
- --------------------------------------------------------------------------------
17
<PAGE> 31
[THIS PAGE LEFT BLANK INTENTIONALLY]
18
<PAGE> 32
[THIS PAGE LEFT BLANK INTENTIONALLY]
19
<PAGE> 33
NATIONWIDE LIFE INSURANCE COMPANY Bulk Rate
HOME OFFICE: ONE NATIONWIDE PLAZA - COLUMBUS, OHIO 43215-2220 U.S. Postage
PAID
Columbus, Ohio
Permit No. 521
Nationwide(R) is a registered federal service mark of Nationwide Mutual
Insurance Company
