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NACo
[National Association of Counties Logo]
NACo VARIABLE
ACCOUNT
[LOGO]
Annual Report
to
Participants and Retired Participants
December 31, 1999
NATIONWIDE LIFE INSURANCE COMPANY
HOME OFFICE: COLUMBUS, OHIO
APO-2278-R (12/99) [NATIONWIDE LOGO]
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[NATIONWIDE LOGO]
NATIONWIDE LIFE INSURANCE COMPANY
ONE NATIONWIDE PLAZA, COLUMBUS, OHIO 43215-2220
[PHOTO]
PRESIDENT'S MESSAGE
We at Nationwide Life Insurance Company are pleased to bring you the 1999 annual
report of the NACo 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
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CONTENTS
Statement of Assets, Liabilities and Contract Owners' Equity .............4
Statements of Operations .................................................7
Statements of Changes in Contract Owners' Equity .........................7
Notes to Financial Statements ...........................................21
Independent Auditors' Report ............................................39
3
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================================================================================
NACo VARIABLE ACCOUNT
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY
December 31, 1999
<TABLE>
<CAPTION>
Assets:
Investments at market value:
<S> <C> <C>
American Century: Income & Growth Fund (ACIncGro)
327,908 shares (cost $10,035,374) ................................................................. $ 11,165,271
American Century: Twentieth Century Growth Fund (ACTCGro)
5,237,248 shares (cost $118,688,077) .............................................................. 169,058,369
American Century: Twentieth Century International Discovery Fund
(ACTCIntDis) 860,837 shares (cost $13,733,472).................................................... 14,771,961
American Century: Twentieth Century Ultra Fund, Inc. (ACTCUltra)
11,536,275 shares (cost $359,586,142) ............................................................. 528,130,674
The Bond Fund of AmericaSM, Inc. (BdFdAm)
1,336,676 shares (cost $18,321,658) ............................................................... 17,350,054
Brown Capital Management - Small Company Fund (BrnCapSmCo)
17,398 shares (cost $451,080) ..................................................................... 499,311
Dreyfus Appreciation Fund, Inc. (DryApp)
112,258 shares (cost $4,894,398) .................................................................. 5,133,536
Dreyfus Premier Midcap Stock - Class A (DryPreMCap)
26,939 shares (cost $442,651) ..................................................................... 485,983
The Dreyfus Third Century Fund, Inc. (Dry3dCen)
6,821,850 shares (cost $71,028,724) ............................................................... 99,257,922
Evergreen Income and Growth Fund - Class Y (EvIncGro)
139,498 shares (cost $2,839,391) .................................................................. 3,121,958
Federated Investment Series Fund, Inc. -
Federated Bond Fund - Class F (FedBdFd)
68,649 shares (cost $620,427) ..................................................................... 619,218
Federated U.S. Government Securities Fund: 2-5 Years -
Institutional shares (FedUSGvt)
1,067,372 shares (cost $11,418,196) ............................................................... 11,047,299
Fidelity Advisor Growth Opportunities Fund - Class A (FAGrOppA)
52,029 shares (cost $2,579,667) ................................................................... 2,401,661
Fidelity Advisor High Yield Fund - Class T (FAHiYld)
92,669 shares (cost $1,050,420) ................................................................... 1,053,650
Fidelity Capital & Income Fund (FidCapInc)
272,398 shares (cost $2,471,759) .................................................................. 2,530,580
Fidelity Contrafund (FidContr)
10,272,213 shares (cost $475,808,705) ............................................................. 616,538,251
Fidelity Equity-Income Fund (FidEqInc)
7,249,331 shares (cost $302,312,986) .............................................................. 387,694,230
Fidelity Magellan(R)Fund (FidMgln)
1,790,739 shares (cost $169,929,993) .............................................................. 244,668,721
Fidelity OTC Portfolio (FidOTC)
2,231,997 shares (cost $103,539,104) .............................................................. 151,708,846
</TABLE>
4
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<TABLE>
<CAPTION>
<S> <C> <C>
Fidelity Puritan(R) Fund (FidPurtn)
2,457,388 shares (cost $45,838,681) ............................................................... 46,764,093
INVESCO Dynamics Fund, Inc. (InvDynam)
1,235,300 shares (cost $26,311,702) ............................................................... 31,944,860
INVESCO Total Return Fund (InvTotRet)
40,561 shares (cost $1,283,988) ................................................................... 1,174,643
The Investment Company of America(R)(InvCoAm)
3,633,045 shares (cost $94,489,767) ............................................................... 117,928,625
MAS Funds - Fixed Income Portfolio (MASFIP)
491,085 shares (cost $5,782,229) .................................................................. 5,347,920
Massachusetts Investors Growth Stock Fund - Class A (MFSGrStk)
1,152,714 shares (cost $14,414,835) ............................................................... 23,434,670
MFS(R)Growth Opportunities Fund - Class A (MFSGrOpp)
1,214,157 shares (cost $15,597,079) ............................................................... 23,153,980
MFS(R)High Income Fund - Class A (MFSHiInc)
3,399,270 shares (cost $17,379,866) ............................................................... 16,962,358
Morgan Stanley Institutional Fund, Inc. -
Equity Growth Portfolio - Class B (MSIEqGroB)
64,286 shares (cost $1,452,773) ................................................................... 1,600,720
NAAT - The Aggressive Portfolio (NAATAggr)
339,690 shares (cost $3,857,956) .................................................................. 4,765,847
NAAT - The Conservative Portfolio (NAATCons)
147,609 shares (cost $1,595,839) .................................................................. 1,613,362
NAAT - The Moderate Portfolio (NAATMod)
346,302 shares (cost $3,897,803) .................................................................. 4,456,903
NAAT - The Moderately Aggressive Portfolio (NAATModAgg)
375,878 shares (cost $4,254,933) .................................................................. 5,006,699
NAAT - The Moderately Conservative Portfolio (NAATModCon)
148,133 shares (cost $1,672,252) .................................................................. 1,777,601
Nationwide(R) Fund - Class D (NWFund)
6,780,029 shares (cost $183,437,918) .............................................................. 203,400,863
Nationwide(R) Growth Fund - Class D (NWGroFd)
524,480 shares (cost $6,930,999) .................................................................. 9,136,441
Nationwide(R)Money Market Fund (NWMyMkt)
94,350,161 shares (cost $94,350,161) .............................................................. 94,350,161
Nationwide(R) S&P 500 Index Fund - Class Y (NWIndxFdY)
644,314 shares (cost $7,601,951) .................................................................. 8,266,553
Nationwide(R) Separate Account Trust - Income Fund (NSATInc)
8,006 shares (cost $78,092) ....................................................................... 76,857
Nationwide(R) Separate Account Trust - Small Company Fund (NSATSmCo)
262,616 shares (cost $4,514,677) .................................................................. 5,809,076
Neuberger & Berman Equity Funds (R)- Guardian Fund (NBGuard)
1,991,499 shares (cost $48,520,175) ............................................................... 36,842,740
Neuberger & Berman Equity Trust (R)- Partners Trust (NBPartTr)
10,703 shares (cost $203,818) ..................................................................... 192,440
Prestige Balanced Fund - Class Y (PrBalY)
61,843 shares (cost $681,557) ..................................................................... 693,880
Prestige International Fund - Class Y (PrIntY)
27,851 shares (cost $306,910) ..................................................................... 351,475
</TABLE>
(Continued)
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<TABLE>
<CAPTION>
NACo VARIABLE ACCOUNT
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY, CONTINUED
<S> <C> <C>
Prestige Large Cap Growth Fund - Class Y (PrLgCapGrY)
160,043 shares (cost $2,093,597) .................................................................. 2,469,457
Prestige Large Cap Value Fund - Class Y (PrLgCpValY)
50,016 shares (cost $545,652) ..................................................................... 498,662
Prestige Small Cap Fund - Class Y (PrSmCapY)
64,488 shares (cost $711,855) ..................................................................... 823,506
Oppenheimer Global Fund - Class A (OppGlob)
67,729 shares (cost $3,800,795) ................................................................... 4,236,454
Putnam Investors Fund - Class A (PutInvFd)
9,059,511 shares (cost $112,433,642) .............................................................. 173,489,632
Putnam Voyager Fund - Class A (PutVoyFd)
14,938,988 shares (cost $277,404,396) ............................................................. 462,511,081
SEI Index Funds - S&P 500 Index Portfolio (SEI500lx)
4,293,871 shares (cost $145,660,479) .............................................................. 195,371,131
Seligman Growth Fund, Inc. - Class A (SelGroFd)
2,243,519 shares (cost $15,138,303) ............................................................... 19,339,134
Short-Term Investments Trust - Treasury Portfolio -
Institutional Class (AIMTreas)
10,600,232 shares (cost $10,600,232) .............................................................. 10,600,232
T. Rowe Price International Funds, Inc. -
International Stock Fund(R) (TRIntStk)
2,295,778 shares (cost $37,100,072) ............................................................... 43,688,649
Templeton Foreign Fund - Class I (TemForFd)
5,130,396 shares (cost $51,029,491) ............................................................... 57,563,043
Warburg Pincus Emerging Growth Fund - Common Shares (WPEmGro)
19,842 shares (cost $962,346) ..................................................................... 989,304
-------------
Total investments .............................................................................. 3,883,870,547
Accounts receivable ..................................................................................... 93,361
-------------
Total assets ................................................................................... 3,883,963,908
Accounts payable ........................................................................................... 18,314
-------------
Contract owners' equity (note 4) ...........................................................................$ 3,883,945,594
=============
</TABLE>
See accompanying notes to financial statements.
6
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<TABLE>
<CAPTION>
NACo VARIABLE ACCOUNT
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY
STATEMENTS OF OPERATIONS
Years Ended December 31,1999 and 1998
Total ACIncGro
---------------------------------- ----------------------------------
1999 1998 1999 1998
--------------- --------------- --------------- ---------------
Investment activity:
<S> <C> <C> <C> <C>
Reinvested dividends ................... $ 26,546,750 22,484,700 79,286 444
Mortality and expense charges (note 2) . -- (3,554,254) -- --
Administration charges (note 2):
Tier I ......................... -- (1,559,810) -- --
Tier II ........................ -- (515,929) -- --
Tier III ....................... -- (265,349) -- --
Tier IV ........................ -- (97,218) -- --
Tier V ......................... -- (147,275) -- --
Variable account fee (notes 2 and 5) ... (24,765,341) (13,305,516) (39,403) (81)
--------------- --------------- --------------- ---------------
Net investment activity ............. 1,781,409 3,039,349 39,883 363
Proceeds from mutual fund shares sold .. 523,300,317 392,315,249 596,336 26,345
Cost of mutual fund shares sold ........ (437,839,290) (333,148,949) (571,759) (27,018)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments .... 85,461,027 59,166,300 24,577 (673)
Change in unrealized gain (loss)
on investments ...................... 396,438,611 270,062,812 1,127,920 1,976
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ...... 481,899,638 329,229,112 1,152,497 1,303
--------------- --------------- --------------- ---------------
Reinvested capital gains ............... 282,934,864 171,173,889 8,847 5,502
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract
owners' equity resulting from
operations ..................... 766,615,911 503,442,350 1,201,227 7,168
--------------- --------------- --------------- ---------------
Equity transactions:
Purchase payments received from
contract owners ..................... 544,310,028 514,486,655 4,466,796 37,805
Transfers between funds ................ -- -- 5,774,285 180,005
Redemptions ............................ (212,060,207) (203,846,704) (501,303) (708)
Adjustments to maintain reserves ....... 179,831 23,483 (8) --
--------------- --------------- --------------- ---------------
Net equity transactions ........... 332,429,652 310,663,434 9,739,770 217,102
Net change in contract owners' equity .... 1,099,045,563 814,105,784 10,940,997 224,270
Contract owners' equity beginning
of year ................................ 2,784,900,031 1,970,794,247 224,270 --
--------------- --------------- --------------- ---------------
Contract owners' equity end of year ...... $ 3,883,945,594 2,784,900,031 11,165,267 224,270
=============== =============== =============== ===============
<CAPTION>
ACTCGro ACTCIntDis
---------------------------------- ----------------------------------
1999 1998 1999 1998
--------------- --------------- --------------- ---------------
Investment activity:
<S> <C> <C> <C> <C>
Reinvested dividends ................... $ -- -- -- --
Mortality and expense charges (note 2) . -- (179,957) -- --
Administration charges (note 2):
Tier I ......................... -- (70,783) -- --
Tier II ........................ -- (32,079) -- --
Tier III ....................... -- (13,379) -- --
Tier IV ........................ -- (6,026) -- --
Tier V ......................... -- (7,154) -- --
Variable account fee (notes 2 and 5) ... (1,127,812) (641,402) (20,653) (135)
--------------- --------------- --------------- ---------------
Net investment activity ............. (1,127,812) (950,780) (20,653) (135)
Proceeds from mutual fund shares sold .. 7,116,475 9,205,534 47,628,795 2,273,724
Cost of mutual fund shares sold ........ (5,315,417) (7,522,277) (44,335,389) (2,261,430)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments .... 1,801,058 1,683,257 3,293,406 12,294
Change in unrealized gain (loss)
on investments ...................... 23,069,667 12,866,693 1,031,800 6,690
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ...... 24,870,725 14,549,950 4,325,206 18,984
--------------- --------------- --------------- ---------------
Reinvested capital gains ............... 19,148,648 21,486,036 729,314 3,509
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract
owners' equity resulting from
operations ..................... 42,891,561 35,085,206 5,033,867 22,358
--------------- --------------- --------------- ---------------
Equity transactions:
Purchase payments received from
contract owners ..................... 5,630,899 5,994,480 1,668,676 2,225
Transfers between funds ................ (2,485,298) (4,507,553) 7,551,114 664,695
Redemptions ............................ (7,868,891) (8,736,631) (249,277) --
Adjustments to maintain reserves ....... 34,064 13,926 78,434 (6)
--------------- --------------- --------------- ---------------
Net equity transactions ........... (4,689,226) (7,235,778) 9,048,947 666,914
Net change in contract owners' equity .... 38,202,335 27,849,428 14,082,814 689,272
Contract owners' equity beginning
of year ................................ 130,887,729 103,038,301 689,272 --
--------------- --------------- --------------- ---------------
Contract owners' equity end of year ...... $ 169,090,064 130,887,729 14,772,086 689,272
=============== =============== =============== ===============
</TABLE>
(Continued)
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<TABLE>
<CAPTION>
NACo VARIABLE ACCOUNT
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, Continued
STATEMENTS OF OPERATIONS, Continued
Years Ended December 31,1999 and 1998
ACTCUltra BdFdAm
----------------------------- --------------------------
1999 1998 1999 1998
------------- ------------ ----------- -----------
Investment activity:
<S> <C> <C> <C> <C>
Reinvested dividends ................... $ -- -- 1,242,830 1,142,666
Mortality and expense charges (note 2) . -- (392,873) -- (26,239)
Administration charges (note 2):
Tier I ......................... -- (166,590) -- (11,627)
Tier II ........................ -- (57,840) -- (4,000)
Tier III ....................... -- (26,042) -- (2,008)
Tier IV ........................ -- (11,622) -- (734)
Tier V ......................... -- (18,904) -- (941)
Variable account fee (notes 2 and 5) ... (3,202,805) (1,538,264) (144,668) (97,237)
------------- ------------ ----------- -----------
Net investment activity ............. (3,202,805) (2,212,135) 1,098,162 999,880
Proceeds from mutual fund shares sold .. 26,699,409 28,751,606 5,028,641 6,087,628
Cost of mutual fund shares sold ........ (15,747,781) (18,930,198) (5,220,887) (6,005,142)
------------- ------------ ----------- -----------
Realized gain (loss) on investments .... 10,951,628 9,821,408 (192,246) 82,486
Change in unrealized gain (loss)
on investments ...................... 125,102,740 41,854,943 (655,033) (569,892)
------------- ------------ ----------- -----------
Net gain (loss) on investments ...... 136,054,368 51,676,351 (847,279) (487,406)
------------- ------------ ----------- -----------
Reinvested capital gains ............... 15,366,761 28,290,273 -- 175,242
------------- ------------ ----------- -----------
Net increase (decrease) in contract
owners' equity resulting from
operations ..................... 148,218,324 77,754,489 250,883 687,716
------------- ------------ ----------- -----------
Equity transactions:
Purchase payments received from
contract owners ..................... 72,944,856 63,214,714 1,955,027 2,990,754
Transfers between funds ................ (2,041,171) (3,939,620) (2,177,331) 1,549,434
Redemptions ............................ (25,431,572) (21,108,615) (1,125,943) (1,649,497)
Adjustments to maintain reserves ....... 9,140 18,989 (266) (1,180)
------------- ------------ ----------- -----------
Net equity transactions ........... 45,481,253 38,185,468 (1,348,513) 2,889,511
Net change in contract owners' equity .... 193,699,577 115,939,957 (1,097,630) 3,577,227
Contract owners' equity beginning
of year ................................ 334,432,418 218,492,461 18,447,060 14,869,833
------------- ------------ ----------- -----------
Contract owners' equity end of year ....... $ 528,131,995 334,432,418 17,349,430 18,447,060
============= ============ =========== ===========
<CAPTION>
BrnCapSmCo DryApp
------------------- ----------------------
1999 1998 1999 1998
-------- -------- ---------- --------
Investment activity:
<S> <C> <C> <C> <C>
Reinvested dividends ................... $ -- - 25,354 1,129
Mortality and expense charges (note 2) . -- - -- --
Administration charges (note 2):
Tier I ......................... -- - -- --
Tier II ........................ -- - -- --
Tier III ....................... -- - -- --
Tier IV ........................ -- - -- --
Tier V ......................... -- - -- --
Variable account fee (notes 2 and 5) ... (333) - (20,046) (82)
-------- -------- ---------- --------
Net investment activity ............. (333) - 5,308 1,047
Proceeds from mutual fund shares sold .. 207,941 - 624,261 15,886
Cost of mutual fund shares sold ........ (211,353) - (595,895) (16,044)
-------- -------- ---------- --------
Realized gain (loss) on investments .... (3,412) - 28,366 (158)
Change in unrealized gain (loss)
on investments ...................... 48,230 - 233,919 5,218
-------- -------- ---------- --------
Net gain (loss) on investments ...... 44,818 - 262,285 5,060
-------- - ---------- --------
Reinvested capital gains ............... 27,315 - 33,450 333
-------- -------- ---------- --------
Net increase (decrease) in contract
owners' equity resulting from
operations ..................... 71,800 - 301,043 6,440
-------- -------- ---------- --------
Equity transactions:
Purchase payments received from
contract owners ..................... 46,448 - 3,085,983 8,602
Transfers between funds ................ 383,838 - 1,836,194 231,592
Redemptions ............................ (2,777) - (335,556) (712)
Adjustments to maintain reserves ....... (37) - (20) 62
-------- -------- ---------- --------
Net equity transactions ........... 427,472 - 4,586,601 239,544
Net change in contract owners' equity .... 499,272 - 4,887,644 245,984
Contract owners' equity beginning
of year ................................ -- - 245,984 --
-------- -------- ---------- --------
Contract owners' equity end of year ...... $499,272 - 5,133,628 245,984
======== ======== ========== ========
</TABLE>
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<TABLE>
<CAPTION>
NACo VARIABLE ACCOUNT
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, Continued
STATEMENTS OF OPERATIONS, Continued
Years Ended December 31,1999 and 1998
DryPreMCap Dry3dCen
-------------------- --------------------------
1999 1998 1999 1998
--------- ------- ----------- -----------
<S> <C> <C> <C> <C>
Investment activity:
Reinvested dividends ................... $ -- -- -- --
Mortality and expense charges (note 2) . -- -- -- (94,256)
Administration charges (note 2):
Tier I ......................... -- -- -- (40,950)
Tier II ........................ -- -- -- (14,527)
Tier III ....................... -- -- -- (5,212)
Tier IV ........................ -- -- -- (3,161)
Tier V ......................... -- -- -- (4,202)
Variable account fee (notes 2 and 5) ... (1,898) (1) (497,195) (326,513)
Net investment activity ............. (1,898) (1) (497,195) (488,821)
Proceeds from mutual fund shares sold .. 709,972 629 4,010,352 4,950,188
Cost of mutual fund shares sold ........ (695,225) (624) (2,536,557) (3,505,619)
--------- ------- ----------- -----------
Realized gain (loss) on investments .... 14,747 5 1,473,795 1,444,569
Change in unrealized gain (loss)
on investments ...................... 42,817 516 12,837,989 7,872,216
--------- ------- ----------- -----------
Net gain (loss) on investments ...... 57,564 521 14,311,784 9,316,785
--------- ------- ----------- -----------
Reinvested capital gains ............... 11,891 -- 8,333,008 7,036,470
--------- ------- ----------- -----------
Net increase (decrease) in contract
owners' equity resulting from
operations ..................... 67,557 520 22,147,597 15,864,434
--------- ------- ----------- -----------
Equity transactions:
Purchase payments received from
contract owners ..................... 273,453 4,062 12,071,965 11,631,807
Transfers between funds ................ 140,050 34,143 (1,520,857) (2,330,389)
Redemptions ............................ (33,802) -- (5,601,111) (5,586,763)
Adjustments to maintain reserves ....... (11) -- 7,090 2,387
--------- ------- ----------- -----------
Net equity transactions ........... 379,690 38,205 4,957,087 3,717,042
Net change in contract owners' equity .... 447,247 38,725 27,104,684 19,581,476
Contract owners' equity beginning
of year ................................ 38,725 -- 72,154,189 52,572,713
--------- ------- ----------- -----------
Contract owners' equity end of year ...... $ 485,972 38,725 99,258,873 72,154,189
========= ======= =========== ===========
<CAPTION>
EvIncGro FedBdFd
------------------------ ----------------------
1999 1998 1999 1998
---------- ---------- ---------- --------
<S> <C> <C> <C> <C>
Investment activity:
Reinvested dividends ................... $ 154,336 155,447 40,648 351
Mortality and expense charges (note 2) . -- (6,617) -- --
Administration charges (note 2):
Tier I ......................... -- (2,761) -- --
Tier II ........................ -- (830) -- --
Tier III ....................... -- (380) -- --
Tier IV ........................ -- (272) -- --
Tier V ......................... -- (359) -- --
Variable account fee (notes 2 and 5) ... (24,881) (18,456) (3,582) (39)
Net investment activity ............. 129,455 125,772 37,066 312
Proceeds from mutual fund shares sold .. 693,805 881,407 3,828,161 2,020
Cost of mutual fund shares sold ........ (626,974) (748,521) (3,880,638) (2,007)
---------- ---------- ---------- --------
Realized gain (loss) on investments .... 66,831 132,886 (52,477) 13
Change in unrealized gain (loss)
on investments ...................... 204,223 (596,560) (3,007) 1,798
---------- ---------- ---------- --------
Net gain (loss) on investments ...... 271,054 (463,674) (55,484) 1,811
---------- ---------- ---------- --------
Reinvested capital gains ............... 54,449 306,142 -- --
---------- ---------- ---------- --------
Net increase (decrease) in contract
owners' equity resulting from
operations ..................... 454,958 (31,760) (18,418) 2,123
---------- ---------- ---------- --------
Equity transactions:
Purchase payments received from
contract owners ..................... 120,351 148,998 182,281 2,112
Transfers between funds ................ (540,995) (441,510) 289,084 268,603
Redemptions ............................ (184,560) (446,480) (106,567) --
Adjustments to maintain reserves ....... 69 (8) (18) (1)
---------- ---------- ---------- --------
Net equity transactions ........... (605,135) (739,000) 364,780 270,714
Net change in contract owners' equity .... (150,177) (770,760) 346,362 272,837
Contract owners' equity beginning
of year ................................ 3,272,145 4,042,905 272,837 --
---------- ---------- ---------- --------
Contract owners' equity end of year ...... $3,121,968 3,272,145 619,199 272,837
========== ========== ========== ========
</TABLE>
(Continued)
9
<PAGE> 10
<TABLE>
<CAPTION>
NACo VARIABLE ACCOUNT
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, Continued
STATEMENTS OF OPERATIONS, Continued
Years Ended December 31,1999 and 1998
FedUSGvt FAGrOppA
---------------------------- ----------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
Investment activity:
<S> <C> <C> <C> <C>
Reinvested dividends ................... $ 536,759 332,531 22,694 359
Mortality and expense charges (note 2) . -- (7,646) -- --
Administration charges (note 2):
Tier I ......................... -- (3,257) -- --
Tier II ........................ -- (1,064) -- --
Tier III ....................... -- (399) -- --
Tier IV ........................ -- (291) -- --
Tier V ......................... -- (392) -- --
Variable account fee (notes 2 and 5) ... (90,999) (40,914) (9,180) (9)
------------ ------------ ------------ ------------
Net investment activity ............. 445,760 278,568 13,514 350
Proceeds from mutual fund shares sold .. 8,705,464 8,151,240 300,254 44
Cost of mutual fund shares sold ........ (8,894,755) (8,018,807) (295,240) (47)
------------ ------------ ------------ ------------
Realized gain (loss) on investments .... (189,291) 132,433 5,014 (3)
Change in unrealized gain (loss)
on investments ...................... (407,684) 3,827 (179,430) 1,423
------------ ------------ ------------ ------------
Net gain (loss) on investments ...... (596,975) 136,260 (174,416) 1,420
------------ ------------ ------------ ------------
Reinvested capital gains ............... -- -- 219,142 1,268
------------ ------------ ------------ ------------
Net increase (decrease) in contract
owners' equity resulting from
operations ..................... (151,215) 414,828 58,240 3,038
------------ ------------ ------------ ------------
Equity transactions:
Purchase payments received from
contract owners ..................... 2,043,150 1,472,004 1,607,253 35,636
Transfers between funds ................ (119,229) 4,957,619 790,645 48,957
Redemptions ............................ (1,361,890) (506,258) (142,109) --
Adjustments to maintain reserves ....... 583 (132) (27) 2
------------ ------------ ------------ ------------
Net equity transactions ........... 562,614 5,923,233 2,255,762 84,595
Net change in contract owners' equity .... 411,399 6,338,061 2,314,002 87,633
Contract owners' equity beginning
of year ................................ 10,635,768 4,297,707 87,633 --
------------ ------------ ------------ ------------
Contract owners' equity end of year ...... $ 11,047,167 10,635,768 2,401,635 87,633
============ ============ ============ ============
FAHiYld FidCapInc
---------------------------- ----------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
Investment activity:
<S> <C> <C> <C> <C>
Reinvested dividends ................... $ 56,076 1,437 213,942 246,552
Mortality and expense charges (note 2) . -- -- -- (4,504)
Administration charges (note 2):
Tier I ......................... -- -- -- (1,630)
Tier II ........................ -- -- -- (466)
Tier III ....................... -- -- -- (651)
Tier IV ........................ -- -- -- (216)
Tier V ......................... -- -- -- (146)
Variable account fee (notes 2 and 5) ... (4,343) (4) (19,794) (13,938)
------------ ------------ ------------ ------------
Net investment activity ............. 51,733 1,433 194,148 225,001
Proceeds from mutual fund shares sold .. 9,225,774 -- 330,023 270,209
Cost of mutual fund shares sold ........ (9,223,148) -- (237,631) (184,125)
------------ ------------ ------------ ------------
Realized gain (loss) on investments .... 2,626 -- 92,392 86,084
Change in unrealized gain (loss)
on investments ...................... 3,933 (703) (90,807) (271,370)
------------ ------------ ------------ ------------
Net gain (loss) on investments ...... 6,559 (703) 1,585 (185,286)
------------ ------------ ------------ ------------
Reinvested capital gains ............... -- -- 102,346 67,370
------------ ------------ ------------ ------------
Net increase (decrease) in contract
owners' equity resulting from
operations ..................... 58,292 730 298,079 107,085
------------ ------------ ------------ ------------
Equity transactions:
Purchase payments received from
contract owners ..................... 290,515 40,397 (229) --
Transfers between funds ................ 699,340 21,397 (171,135) (164,193)
Redemptions ............................ (57,008) -- (112,538) (84,204)
Adjustments to maintain reserves ....... (107) (10) (1,709) (323)
------------ ------------ ------------ ------------
Net equity transactions ........... 932,740 61,784 (285,611) (248,720)
Net change in contract owners' equity .... 991,032 62,514 12,468 (141,635)
Contract owners' equity beginning
of year ................................ 62,514 -- 2,516,385 2,658,020
------------ ------------ ------------ ------------
Contract owners' equity end of year ...... $ 1,053,546 62,514 2,528,853 2,516,385
============ ============ ============ ============
</TABLE>
10
<PAGE> 11
<TABLE>
<CAPTION>
NACo VARIABLE ACCOUNT
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, Continued
STATEMENTS OF OPERATIONS, Continued
Years Ended December 31,1999 and 1998
FidContr FidEqInc
------------------------------ ------------------------------
1999 1998 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Investment activity:
Reinvested dividends ................... $ 2,454,061 2,236,508 5,536,617 5,838,731
Mortality and expense charges (note 2) . -- (567,716) -- (623,980)
Administration charges (note 2):
Tier I ......................... -- (257,062) -- (255,098)
Tier II ........................ -- (84,899) -- (88,544)
Tier III ....................... -- (40,425) -- (58,706)
Tier IV ........................ -- (16,521) -- (13,364)
Tier V ......................... -- (20,187) -- (29,581)
Variable account fee (notes 2 and 5) ... (4,246,797) (2,165,720) (3,150,562) (2,091,065)
------------- ------------- ------------- -------------
Net investment activity ............. (1,792,736) (916,022) 2,386,055 2,678,393
Proceeds from mutual fund shares sold .. 11,653,668 15,434,546 38,397,876 26,824,126
Cost of mutual fund shares sold ........ (6,089,703) (9,424,899) (16,376,645) (11,951,004)
------------- ------------- ------------- -------------
Realized gain (loss) on investments .... 5,563,965 6,009,647 22,021,231 14,873,122
Change in unrealized gain (loss)
on investments ...................... 23,497,302 66,478,467 (35,317,697) 6,919,838
------------- ------------- ------------- -------------
Net gain (loss) on investments ...... 29,061,267 72,488,114 (13,296,466) 21,792,960
------------- ------------- ------------- -------------
Reinvested capital gains ............... 89,253,904 31,423,956 34,520,178 16,288,417
------------- ------------- ------------- -------------
Net increase (decrease) in contract
owners' equity resulting from
operations ..................... 116,522,435 102,996,048 23,609,767 40,759,770
------------- ------------- ------------- -------------
Equity transactions:
Purchase payments received from
contract owners ..................... 82,805,250 79,879,267 39,142,310 52,962,098
Transfers between funds ................ (9,183,736) (17,451,214) (41,041,314) (28,286,291)
Redemptions ............................ (30,247,831) (29,789,009) (25,500,837) (27,397,650)
Adjustments to maintain reserves ....... 11,674 12,693 25,353 29,492
------------- ------------- ------------- -------------
Net equity transactions ........... 43,385,357 32,651,737 (27,374,488) (2,692,351)
Net change in contract owners' equity .... 159,907,792 135,647,785 (3,764,721) 38,067,419
Contract owners' equity beginning
of year ................................ 456,635,655 320,987,870 391,476,242 353,408,823
------------- ------------- ------------- -------------
Contract owners' equity end of year ...... $ 616,543,447 456,635,655 387,711,521 391,476,242
============= ============= ============= =============
<CAPTION>
FidMgIn FidOTC
------------------------------ ------------------------------
1999 1998 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Investment activity:
Reinvested dividends ................... $ 1,216,009 930,422 -- --
Mortality and expense charges (note 2) . -- (222,583) -- (56,312)
Administration charges (note 2):
Tier I ......................... -- (105,291) -- (23,953)
Tier II ........................ -- (32,343) -- (7,847)
Tier III ....................... -- (16,644) -- (3,832)
Tier IV ........................ -- (5,847) -- (1,682)
Tier V ......................... -- (6,842) -- (2,788)
Variable account fee (notes 2 and 5) ... (1,704,233) (847,662) (604,568) (210,461)
------------- ------------- ------------- -------------
Net investment activity ............. (488,224) (306,790) (604,568) (306,875)
Proceeds from mutual fund shares sold .. 7,167,833 9,672,893 10,613,809 15,450,608
Cost of mutual fund shares sold ........ (3,782,036) (6,581,476) (6,697,393) (13,562,267)
------------- ------------- ------------- -------------
Realized gain (loss) on investments .... 3,385,797 3,091,417 3,916,416 1,888,341
Change in unrealized gain (loss)
on investments ...................... 22,537,167 32,004,034 39,741,704 8,846,107
------------- ------------- ------------- -------------
Net gain (loss) on investments ...... 25,922,964 35,095,451 43,658,120 10,734,448
------------- ------------- ------------- -------------
Reinvested capital gains ............... 18,323,094 7,068,356 9,273,940 2,313,154
------------- ------------- ------------- -------------
Net increase (decrease) in contract
owners' equity resulting from
operations ..................... 43,757,834 41,857,017 52,327,492 12,740,727
------------- ------------- ------------- -------------
Equity transactions:
Purchase payments received from
contract owners ..................... 31,113,784 25,865,178 19,026,005 10,449,632
Transfers between funds ................ 6,095,136 (3,113,052) 38,990,782 (3,408,227)
Redemptions ............................ (12,342,741) (12,944,049) (5,924,138) (3,999,975)
Adjustments to maintain reserves ....... 6,235 (71,487) 3,219 966
------------- ------------- ------------- -------------
Net equity transactions ........... 24,872,414 9,736,590 52,095,868 3,042,396
Net change in contract owners' equity .... 68,630,248 51,593,607 104,423,360 15,783,123
Contract owners' equity beginning
of year ................................ 176,040,685 124,447,078 47,287,448 31,504,325
------------- ------------- ------------- -------------
Contract owners' equity end of year ...... $ 244,670,933 176,040,685 151,710,808 47,287,448
============= ============= ============= =============
</TABLE>
(Continued)
11
<PAGE> 12
<TABLE>
<CAPTION>
NACo VARIABLE ACCOUNT
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, Continued
STATEMENTS OF OPERATIONS, Continued
Years Ended December 31,1999 and 1998
FidPurtn InvDynam
---------------------------- ----------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Investment activity:
Reinvested dividends ................... $ 1,491,733 1,252,746 -- --
Mortality and expense charges (note 2) . -- (56,845) -- --
Administration charges (note 2):
Tier I ......................... -- (27,997) -- --
Tier II ........................ -- (8,254) -- --
Tier III ....................... -- (3,757) -- --
Tier IV ........................ -- (1,311) -- --
Tier V ......................... -- (1,765) -- --
Variable account fee (notes 2 and 5) ... (390,268) (221,557) (44,068) (95)
------------ ------------ ------------ ------------
Net investment activity ............. 1,101,465 931,260 (44,068) (95)
Proceeds from mutual fund shares sold .. 4,628,657 2,131,440 10,736,763 1,301,233
Cost of mutual fund shares sold ........ (3,737,817) (1,598,513) (10,048,155) (1,266,821)
------------ ------------ ------------ ------------
Realized gain (loss) on investments .... 890,840 532,927 688,608 34,412
Change in unrealized gain (loss)
on investments ...................... (3,391,079) 1,030,514 5,616,157 17,001
------------ ------------ ------------ ------------
Net gain (loss) on investments ...... (2,500,239) 1,563,441 6,304,765 51,413
------------ ------------ ------------ ------------
Reinvested capital gains ............... 2,286,159 2,946,910 1,099,118 2,534
------------ ------------ ------------ ------------
Net increase (decrease) in contract
owners' equity resulting from
operations ..................... 887,385 5,441,611 7,359,815 53,852
------------ ------------ ------------ ------------
Equity transactions:
Purchase payments received from
contract owners ..................... 8,533,678 9,462,437 6,238,534 10,168
Transfers between funds ................ (2,979,275) 103,927 18,726,120 327,335
Redemptions ............................ (3,507,673) (2,850,985) (763,887) (5,593)
Adjustments to maintain reserves ....... 756 (192) (2,309) (2)
------------ ------------ ------------ ------------
Net equity transactions ........... 2,047,486 6,715,187 24,198,458 331,908
Net change in contract owners' equity .... 2,934,871 12,156,798 31,558,273 385,760
Contract owners' equity beginning
of year ................................ 43,829,300 31,672,502 385,760 --
------------ ------------ ------------ ------------
Contract owners' equity end of year ...... $ 46,764,171 43,829,300 31,944,033 385,760
============ ============ ============ ============
<CAPTION>
InvTotRet InvCoAm
---------------------------- ----------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Investment activity:
Reinvested dividends ................... $ 23,552 18 1,635,831 1,361,576
Mortality and expense charges (note 2) . -- -- -- (127,492)
Administration charges (note 2):
Tier I ......................... -- -- -- (61,970)
Tier II ........................ -- -- -- (20,869)
Tier III ....................... -- -- -- (8,660)
Tier IV ........................ -- -- -- (2,452)
Tier V ......................... -- -- -- (3,596)
Variable account fee (notes 2 and 5) ... (5,189) (6) (877,592) (480,021)
------------ ------------ ------------ ------------
Net investment activity ............. 18,363 12 758,239 656,516
Proceeds from mutual fund shares sold .. 577,480 902 3,456,134 5,236,900
Cost of mutual fund shares sold ........ (575,369) (922) (2,002,594) (3,162,290)
------------ ------------ ------------ ------------
Realized gain (loss) on investments .... 2,111 (20) 1,453,540 2,074,610
Change in unrealized gain (loss)
on investments ...................... (109,718) 372 3,149,675 5,634,104
------------ ------------ ------------ ------------
Net gain (loss) on investments ...... (107,607) 352 4,603,215 7,708,714
------------ ------------ ------------ ------------
Reinvested capital gains ............... 42,694 169 10,017,728 8,097,523
------------ ------------ ------------ ------------
Net increase (decrease) in contract
owners' equity resulting from
operations ..................... (46,550) 533 15,379,182 16,462,753
------------ ------------ ------------ ------------
Equity transactions:
Purchase payments received from
contract owners ..................... 596,853 7,759 14,401,863 14,349,438
Transfers between funds ................ 622,840 18,364 173,915 (404,166)
Redemptions ............................ (25,158) -- (6,531,962) (8,056,668)
Adjustments to maintain reserves ....... (70) 3 3,307 1,469
------------ ------------ ------------ ------------
Net equity transactions ........... 1,194,465 26,126 8,047,123 5,890,073
Net change in contract owners' equity .... 1,147,915 26,659 23,426,305 22,352,826
Contract owners' equity beginning
of year ................................ 26,659 -- 94,504,873 72,152,047
------------ ------------ ------------ ------------
Contract owners' equity end of year ...... $ 1,174,574 26,659 117,931,178 94,504,873
============ ============ ============ ============
</TABLE>
12
<PAGE> 13
<TABLE>
<CAPTION>
NACo VARIABLE ACCOUNT
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, Continued
STATEMENTS OF OPERATIONS, Continued
Years Ended December 31,1999 and 1998
MASFIP MFSGrStk
-------------------------- --------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Investment activity:
Reinvested dividends ................... $ 385,496 271,659 -- 5,594
Mortality and expense charges (note 2) . -- (5,072) -- (23,366)
Administration charges (note 2):
Tier I ......................... -- (2,754) -- (9,627)
Tier II ........................ -- (559) -- (3,392)
Tier III ....................... -- (163) -- (2,067)
Tier IV ........................ -- (129) -- (592)
Tier V ......................... -- (216) -- (1,051)
Variable account fee (notes 2 and 5) ... (47,703) (26,138) (149,912) (83,926)
----------- ----------- ----------- -----------
Net investment activity ............. 337,793 236,628 (149,912) (118,427)
Proceeds from mutual fund shares sold .. 2,629,141 1,963,455 1,234,577 1,175,245
Cost of mutual fund shares sold ........ (2,790,986) (1,950,478) (767,050) (920,701)
----------- ----------- ----------- -----------
Realized gain (loss) on investments .... (161,845) 12,977 467,527 254,544
Change in unrealized gain (loss)
on investments ...................... (265,945) (162,941) 4,409,901 3,371,434
----------- ----------- ----------- -----------
Net gain (loss) on investments ...... (427,790) (149,964) 4,877,428 3,625,978
----------- ----------- ----------- -----------
Reinvested capital gains ............... -- 144,946 1,718,393 1,391,598
----------- ----------- ----------- -----------
Net increase (decrease) in contract
owners' equity resulting from
operations ..................... (89,997) 231,610 6,445,909 4,899,149
----------- ----------- ----------- -----------
Equity transactions:
Purchase payments received from
contract owners ..................... 966,791 1,773,192 1,169,203 1,282,347
Transfers between funds ................ (881,490) 1,608,708 (670,476) (398,976)
Redemptions ............................ (653,714) (303,932) (994,772) (1,113,949)
Adjustments to maintain reserves ....... 398 644 615 331
----------- ----------- ----------- -----------
Net equity transactions ........... (568,015) 3,078,612 (495,430) (230,247)
Net change in contract owners 'equity .... (658,012) 3,310,222 5,950,479 4,668,902
Contract owners' equity beginning
of year ................................ 6,005,900 2,695,678 17,484,415 12,815,513
----------- ----------- ----------- -----------
Contract owners' equity end of year ...... $ 5,347,888 6,005,900 23,434,894 17,484,415
=========== =========== =========== ===========
<CAPTION>
MFSGrOpp MFSHiInc
-------------------------- --------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Investment activity:
Reinvested dividends ................... -- -- 1,668,293 1,505,064
Mortality and expense charges (note 2) . -- (28,712) -- (27,020)
Administration charges (note 2):
Tier I ......................... -- (12,308) -- (11,010)
Tier II ........................ -- (4,337) -- (3,623)
Tier III ....................... -- (2,562) -- (2,066)
Tier IV ........................ -- (769) -- (722)
Tier V ......................... -- (1,026) -- (1,503)
Variable account fee (notes 2 and 5) ... $ (155,377) (98,246) (144,126) (98,576)
----------- ----------- ----------- -----------
Net investment activity ............. (155,377) (147,960) 1,524,167 1,360,544
Proceeds from mutual fund shares sold .. 1,927,230 1,304,849 13,511,879 10,536,849
Cost of mutual fund shares sold ........ (1,294,574) (897,706) (14,762,009) (10,475,518)
----------- ----------- ----------- -----------
Realized gain (loss) on investments .... 632,656 407,143 (1,250,130) 61,331
Change in unrealized gain (loss)
on investments ...................... 3,066,321 1,993,542 839,491 (1,449,403)
----------- ----------- ----------- -----------
Net gain (loss) on investments ...... 3,698,977 2,400,685 (410,639) (1,388,072)
----------- ----------- ----------- -----------
Reinvested capital gains ............... 2,084,199 2,047,635 -- --
----------- ----------- ----------- -----------
Net increase (decrease) in contract
owners' equity resulting from
operations ..................... 5,627,799 4,300,360 1,113,528 (27,528)
----------- ----------- ----------- -----------
Equity transactions:
Purchase payments received from
contract owners ..................... 228,670 247,604 2,254,254 4,666,502
Transfers between funds ................ (555,154) (265,357) (3,961,948) 1,600,902
Redemptions ............................ (1,371,884) (1,018,457) (1,330,787) (1,732,097)
Adjustments to maintain reserves ....... 7,068 152 (1,799) (6,328)
----------- ----------- ----------- -----------
Net equity transactions ........... (1,691,300) (1,036,058) (3,040,280) 4,528,979
Net change in contract owners' equity .... 3,936,499 3,264,302 (1,926,752) 4,501,451
Contract owners' equity beginning
of year ................................ 19,223,547 15,959,245 18,888,749 14,387,298
----------- ----------- ----------- -----------
Contract owners' equity end of year ...... $23,160,046 19,223,547 16,961,997 18,888,749
=========== =========== =========== ===========
</TABLE>
(Continued)
13
<PAGE> 14
NACo VARIABLE ACCOUNT
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, Continued
STATEMENTS OF OPERATIONS, Continued
Years Ended December 31,1999 and 1998
<TABLE>
<CAPTION>
MSIEqGroB NAATAggr
-------------------------- --------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Investment activity:
Reinvested dividends ................... $ 34 17 1,828 205
Mortality and expense charges (note 2) . -- -- -- (473)
Administration charges (note 2):
Tier I ......................... -- -- -- (175)
Tier II ........................ -- -- -- (97)
Tier III ....................... -- -- -- (7)
Tier IV ........................ -- -- -- (6)
Tier V ......................... -- -- -- (39)
Variable account fee (notes 2 and 5) ... (3,644) (6) (14,688) (7,076)
----------- ----------- ----------- -----------
Net investment activity ............. (3,610) 11 (12,860) (7,668)
Proceeds from mutual fund shares sold .. 455,884 748 755,809 320,989
Cost of mutual fund shares sold ........ (415,751) (742) (717,368) (312,762)
----------- ----------- ----------- -----------
Realized gain (loss) on investments .... 40,133 6 38,441 8,227
Change in unrealized gain (loss)
on investments ...................... 147,635 311 729,945 177,946
----------- ----------- ----------- -----------
Net gain (loss) on investments ...... 187,768 317 768,386 186,173
----------- ----------- ----------- -----------
Reinvested capital gains ............... 89,414 555 102,825 --
----------- ----------- ----------- -----------
Net increase (decrease) in contract
owners' equity resulting from
operations ..................... 273,572 883 858,351 178,505
----------- ----------- ----------- -----------
Equity transactions:
Purchase payments received from
contract owners ..................... 623,872 2,067 2,255,196 1,743,904
Transfers between funds ................ 711,190 24,165 (650,259) 636,159
Redemptions ............................ (35,017) -- (198,781) (61,114)
Adjustments to maintain reserves ....... (193) 10 305 3,646
----------- ----------- ----------- -----------
Net equity transactions ........... 1,299,852 26,242 1,406,461 2,322,595
Net change in contract owners' equity .... 1,573,424 27,125 2,264,812 2,501,100
Contract owners' equity beginning
of year ................................ 27,125 -- 2,501,100 --
----------- ----------- ----------- -----------
Contract owners' equity end of year ...... $ 1,600,549 27,125 4,765,912 2,501,100
=========== =========== =========== ===========
<CAPTION>
NAATCons NAATMod
-------------------------- --------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Investment activity:
Reinvested dividends ................... $ 45,727 2,928 39,602 7,009
Mortality and expense charges (note 2) . -- (21) -- (144)
Administration charges (note 2):
Tier I ......................... -- (2) -- (89)
Tier II ........................ -- (1) -- (22)
Tier III ....................... -- -- -- (2)
Tier IV ........................ -- -- -- (1)
Tier V ......................... -- (5) -- (3)
Variable account fee (notes 2 and 5) ... (7,478) (1,737) (18,117) (5,378)
----------- ----------- ----------- -----------
Net investment activity ............. 38,249 1,162 21,485 1,370
Proceeds from mutual fund shares sold .. 1,387,770 507,051 614,197 223,358
Cost of mutual fund shares sold ........ (1,347,433) (505,316) (581,873) (231,762)
----------- ----------- ----------- -----------
Realized gain (loss) on investments .... 40,337 1,735 32,324 (8,404)
Change in unrealized gain (loss)
on investments ...................... (27,984) 45,507 411,811 147,289
----------- ----------- ----------- -----------
Net gain (loss) on investments ...... 12,353 47,242 444,135 138,885
----------- ----------- ----------- -----------
Reinvested capital gains ............... 13,965 -- 45,894 --
----------- ----------- ----------- -----------
Net increase (decrease) in contract
owners' equity resulting from
operations ..................... 64,567 48,404 511,514 140,255
----------- ----------- ----------- -----------
Equity transactions:
Purchase payments received from
contract owners ..................... 656,632 305,707 1,931,773 1,468,718
Transfers between funds ................ 135,732 694,651 41,219 740,919
Redemptions ............................ (233,525) (58,899) (213,076) (164,560)
Adjustments to maintain reserves ....... 99 (26) 78 69
----------- ----------- ----------- -----------
Net equity transactions ........... 558,938 941,433 1,759,994 2,045,146
Net change in contract owners' equity .... 623,505 989,837 2,271,508 2,185,401
Contract owners' equity beginning
of year ................................ 989,837 -- 2,185,401 --
----------- ----------- ----------- -----------
Contract owners' equity end of year ...... $ 1,613,342 989,837 4,456,909 2,185,401
=========== =========== =========== ===========
</TABLE>
14
<PAGE> 15
NACo VARIABLE ACCOUNT
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, Continued
STATEMENTS OF OPERATIONS, Continued
Years Ended December 31,1999 and 1998
<TABLE>
<CAPTION>
NAATModAgg NAATModCon
---------------------------- ----------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Investment activity:
Reinvested dividends ................... $ 26,343 6,488 29,889 6,383
Mortality and expense charges (note 2) . -- (519) -- (80)
Administration charges (note 2):
Tier I ......................... -- (353) -- (32)
Tier II ........................ -- (42) -- (22)
Tier III ....................... -- (31) -- (7)
Tier IV ........................ -- (1) -- --
Tier V ......................... -- (6) -- (1)
Variable account fee (notes 2 and 5) ... (16,958) (6,720) (8,036) (3,025)
------------ ------------ ------------ ------------
Net investment activity ............. 9,385 (1,184) 21,853 3,216
Proceeds from mutual fund shares sold .. 464,206 269,868 947,020 521,818
Cost of mutual fund shares sold ........ (436,124) (272,261) (892,360) (530,663)
------------ ------------ ------------ ------------
Realized gain (loss) on investments .... 28,082 (2,393) 54,660 (8,845)
Change in unrealized gain (loss)
on investments ...................... 611,898 139,867 49,372 55,977
------------ ------------ ------------ ------------
Net gain (loss) on investments ...... 639,980 137,474 104,032 47,132
------------ ------------ ------------ ------------
Reinvested capital gains ............... 74,776 -- 17,005 --
------------ ------------ ------------ ------------
Net increase (decrease) in contract
owners' equity resulting from
operations ..................... 724,141 136,290 142,890 50,348
------------ ------------ ------------ ------------
Equity transactions:
Purchase payments received from
contract owners ..................... 2,199,590 1,713,467 640,598 388,620
Transfers between funds ................ (77,702) 560,385 196,994 570,000
Redemptions ............................ (145,030) (104,241) (182,747) (29,257)
Adjustments to maintain reserves ....... 236 49 124 42
------------ ------------ ------------ ------------
Net equity transactions ........... 1,977,094 2,169,660 654,969 929,405
Net change in contract owners' equity .... 2,701,235 2,305,950 797,859 979,753
Contract owners' equity beginning
of year ................................ 2,305,950 -- 979,753 --
------------ ------------ ------------ ------------
Contract owners' equity end of year ...... $ 5,007,185 2,305,950 1,777,612 979,753
============ ============ ============ ============
<CAPTION>
NWFund NWGroFd
---------------------------- ----------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Investment activity:
Reinvested dividends ................... $ 1,583,187 1,347,907 15,858 10,180
Mortality and expense charges (note 2) . -- (181,761) -- (13,561)
Administration charges (note 2):
Tier I ......................... -- (81,359) -- (5,900)
Tier II ........................ -- (24,501) -- (2,556)
Tier III ....................... -- (13,841) -- (869)
Tier IV ........................ -- (5,294) -- (216)
Tier V ......................... -- (7,330) -- (547)
Variable account fee (notes 2 and 5) ... (1,279,088) (809,923) (69,781) (45,450)
------------ ------------ ------------ ------------
Net investment activity ............. 304,099 223,898 (53,923) (58,919)
Proceeds from mutual fund shares sold .. 17,490,609 7,999,054 974,804 954,882
Cost of mutual fund shares sold ........ (8,676,908) (4,247,844) (561,068) (616,307)
------------ ------------ ------------ ------------
Realized gain (loss) on investments .... 8,813,701 3,751,210 413,736 338,575
Change in unrealized gain (loss)
on investments ...................... (23,742,471) 22,649,562 (197,730) 942,443
------------ ------------ ------------ ------------
Net gain (loss) on investments ...... (14,928,770) 26,400,772 216,006 1,281,018
------------ ------------ ------------ ------------
Reinvested capital gains ............... 12,958,953 7,747,144 1,117,169 443,703
------------ ------------ ------------ ------------
Net increase (decrease) in contract
owners' equity resulting from
operations ..................... (1,665,718) 34,371,814 1,279,252 1,665,802
------------ ------------ ------------ ------------
Equity transactions:
Purchase payments received from
contract owners ..................... 56,931,486 52,495,182 321,897 344,800
Transfers between funds ................ (30,043,076) 33,595,689 (282,597) (524,581)
Redemptions ............................ (16,329,316) (15,086,070) (786,142) (551,408)
Adjustments to maintain reserves ....... 12,870 12,173 241 93
------------ ------------ ------------ ------------
Net equity transactions ........... 10,571,964 71,016,974 (746,601) (731,096)
Net change in contract owners' equity .... 8,906,246 105,388,788 532,651 934,706
Contract owners' equity beginning
of year ................................ 194,495,092 89,106,304 8,603,832 7,669,126
------------ ------------ ------------ ------------
Contract owners' equity end of year ...... $203,401,338 194,495,092 9,136,483 8,603,832
============ ============ ============ ============
</TABLE>
(Continued)
15
<PAGE> 16
NACo VARIABLE ACCOUNT
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, Continued
STATEMENTS OF OPERATIONS, Continued
Years Ended December 31,1999 and 1998
<TABLE>
<CAPTION>
NWMyMkt NWIndxFdY
---------------------------- ----------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Investment activity:
Reinvested dividends ................... $ 3,276,959 2,595,204 38,415 775
Mortality and expense charges (note 2) . -- (81,562) -- --
Administration charges (note 2):
Tier I ......................... -- (30,154) -- --
Tier II ........................ -- (9,901) -- --
Tier III ....................... -- (5,455) -- --
Tier IV ........................ -- (3,463) -- --
Tier V ......................... -- (5,380) -- --
Variable account fee (notes 2 and 5) ... (401,097) (276,482) (27,057) (144)
------------ ------------ ------------ ------------
Net investment activity ............. 2,875,862 2,182,807 11,358 631
Proceeds from mutual fund shares sold .. 85,409,232 64,733,660 3,945,891 203,591
Cost of mutual fund shares sold ........ (85,409,232) (64,733,660) (3,711,433) (200,931)
------------ ------------ ------------ ------------
Realized gain (loss) on investments .... -- -- 234,458 2,660
Change in unrealized gain (loss)
on investments ...................... -- -- 655,789 8,813
------------ ------------ ------------ ------------
Net gain (loss) on investments ...... -- -- 890,247 11,473
------------ ------------ ------------ ------------
Reinvested capital gains ............... -- -- 12,833 --
------------ ------------ ------------ ------------
Net increase (decrease) in contract
owners' equity resulting from
operations ..................... 2,875,862 2,182,807 914,438 12,104
------------ ------------ ------------ ------------
Equity transactions:
Purchase payments received from
contract owners ..................... 8,997,309 8,935,086 4,732,299 20,822
Transfers between funds ................ 29,856,570 15,995,607 2,592,634 281,573
Redemptions ............................ (8,784,569) (10,347,103) (287,309) (10)
Adjustments to maintain reserves ....... 15,383 4,712 (21) (1)
------------ ------------ ------------ ------------
Net equity transactions ........... 30,084,693 14,588,302 7,037,603 302,384
Net change in contract owners' equity .... 32,960,555 16,771,109 7,952,041 314,488
Contract owners' equity beginning
of year ................................ 61,394,874 44,623,765 314,488 --
------------ ------------ ------------ ------------
Contract owners' equity end of year ...... $ 94,355,429 61,394,874 8,266,529 314,488
============ ============ ============ ============
<CAPTION>
NSATInc NSATSmCo
----------------------- ----------------------------
1999 1998 1999 1998
------------ --------- ------------ ------------
<S> <C> <C> <C> <C>
Investment activity:
Reinvested dividends ................... $ 1,016 - -- --
Mortality and expense charges (note 2) . -- - -- (1,123)
Administration charges (note 2):
Tier I ......................... -- - -- (449)
Tier II ........................ -- - -- (280)
Tier III ....................... -- - -- (45)
Tier IV ........................ -- - -- (26)
Tier V ......................... -- - -- (41)
Variable account fee (notes 2 and 5) ... (125) - (24,011) (10,968)
------------ --------- ------------ ------------
Net investment activity ............. 891 - (24,011) (12,932)
Proceeds from mutual fund shares sold .. 17,396 - 2,975,466 4,312,495
Cost of mutual fund shares sold ........ (17,523) - (2,539,664) (4,520,280)
------------ --------- ------------ ------------
Realized gain (loss) on investments .... (127) - 435,802 (207,785)
Change in unrealized gain (loss)
on investments ...................... (1,234) - 1,023,121 271,278
------------ --------- ------------ ------------
Net gain (loss) on investments ...... (1,361) - 1,458,923 63,493
------------ --------- ------------ ------------
Reinvested capital gains ............... -- - 223,101 --
------------ --------- ------------ ------------
Net increase (decrease) in contract
owners' equity resulting from
operations ..................... (470) - 1,658,013 50,561
------------ --------- ------------ ------------
Equity transactions:
Purchase payments received from
contract owners ..................... 57,179 - 1,632,522 1,991,575
Transfers between funds ................ 31,744 - (412,557) 1,247,455
Redemptions ............................ (11,596) - (248,800) (111,457)
Adjustments to maintain reserves ....... (47) - 1,018 762
------------ --------- ------------ ------------
Net equity transactions ........... 77,280 - 972,183 3,128,335
Net change in contract owners' equity .... 76,810 - 2,630,196 3,178,896
Contract owners' equity beginning
of year ................................ -- - 3,178,896 --
------------ --------- ------------ ------------
Contract owners' equity end of year ...... $ 76,810 - 5,809,092 3,178,896
============ ========= ============ ============
</TABLE>
16
<PAGE> 17
NACo VARIABLE ACCOUNT
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, Continued
STATEMENTS OF OPERATIONS, Continued
Years Ended December 31,1999 and 1998
<TABLE>
<CAPTION>
NBGuard NBPartTr
---------------------------- ----------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Investment activity:
Reinvested dividends ................... $ 293,138 226,684 1,776 --
Mortality and expense charges (note 2) . -- (71,447) -- --
Administration charges (note 2):
Tier I ......................... -- (30,092) -- --
Tier II ........................ -- (10,176) -- --
Tier III ....................... -- (4,330) -- --
Tier IV ........................ -- (2,006) -- --
Tier V ......................... -- (3,918) -- --
Variable account fee (notes 2 and 5) ... (294,361) (216,169) (1,126) (40)
------------ ------------ ------------ ------------
Net investment activity ............. (1,223) (111,454) 650 (40)
Proceeds from mutual fund shares sold .. 7,561,425 8,180,376 299,539 22,832
Cost of mutual fund shares sold ........ (7,902,981) (7,161,975) (290,368) (23,331)
------------ ------------ ------------ ------------
Realized gain (loss) on investments .... (341,556) 1,018,401 9,171 (499)
Change in unrealized gain (loss)
on investments ...................... (5,263,063) (6,007,812) (11,074) (304)
------------ ------------ ------------ ------------
Net gain (loss) on investments ...... (5,604,619) (4,989,411) (1,903) (803)
------------ ------------ ------------ ------------
Reinvested capital gains ............... 8,385,434 5,801,836 11,681 1,489
------------ ------------ ------------ ------------
Net increase (decrease) in contract
owners' equity resulting from
operations ..................... 2,779,592 700,971 10,428 646
------------ ------------ ------------ ------------
Equity transactions:
Purchase payments received from
contract owners ..................... 7,600,357 12,761,883 92,804 2,516
Transfers between funds ................ (9,809,292) (10,226,488) 44,497 46,543
Redemptions ............................ (2,780,586) (4,244,239) (5,016) (11)
Adjustments to maintain reserves ....... 1,093 586 (30) 34
------------ ------------ ------------ ------------
Net equity transactions ........... (4,988,428) (1,708,258) 132,255 49,082
Net change in contract owners' equity .... (2,208,836) (1,007,287) 142,683 49,728
Contract owners' equity beginning
of year ................................ 39,051,746 40,059,033 49,728 --
------------ ------------ ------------ ------------
Contract owners' equity end of year ...... $ 36,842,910 39,051,746 192,411 49,728
============ ============ ============ ============
<CAPTION>
PrBalY PrIntY
---------------------------- ----------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Investment activity:
Reinvested dividends ................... 12,608 237 1,377 --
Mortality and expense charges (note 2) . -- -- -- --
Administration charges (note 2):
Tier I ......................... -- -- -- --
Tier II ........................ -- -- -- --
Tier III ....................... -- -- -- --
Tier IV ........................ -- -- -- --
Tier V ......................... -- -- -- --
Variable account fee (notes 2 and 5) ... $ (2,544) (51) (1,161) (1)
------------ ------------ ------------ ------------
Net investment activity ............. 10,064 186 216 (1)
Proceeds from mutual fund shares sold .. 155,370 1,152 97,352 5,631
Cost of mutual fund shares sold ........ (146,954) (1,165) (93,961) (5,607)
------------ ------------ ------------ ------------
Realized gain (loss) on investments .... 8,416 (13) 3,391 24
Change in unrealized gain (loss)
on investments ...................... 10,761 1,562 44,514 51
------------ ------------ ------------ ------------
Net gain (loss) on investments ...... 19,177 1,549 47,905 75
------------ ------------ ------------ ------------
Reinvested capital gains ............... 11,885 -- 2,912 --
------------ ------------ ------------ ------------
Net increase (decrease) in contract
owners' equity resulting from
operations ..................... 41,126 1,735 51,033 74
------------ ------------ ------------ ------------
Equity transactions:
Purchase payments received from
contract owners ..................... 338,487 1,222 164,295 1,775
Transfers between funds ................ 258,120 68,896 134,239 23,003
Redemptions ............................ (15,706) -- (22,941) (10)
Adjustments to maintain reserves ....... (8) -- (14) 8
------------ ------------ ------------ ------------
Net equity transactions ........... 580,893 70,118 275,579 24,776
Net change in contract owners' equity .... 622,019 71,853 326,612 24,850
Contract owners' equity beginning
of year ................................ 71,853 -- 24,850 --
------------ ------------ ------------ ------------
Contract owners' equity end of year ...... $ 693,872 71,853 351,462 24,850
============ ============ ============ ============
</TABLE>
(Continued)
17
<PAGE> 18
NACo VARIABLE ACCOUNT
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, Continued
STATEMENTS OF OPERATIONS, Continued
Years Ended December 31,1999 and 1998
<TABLE>
<CAPTION>
PrLgCapGrY PrLgCpValY
-------------------------- --------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Investment activity:
Reinvested dividends ................... $ -- -- 2,314 9
Mortality and expense charges (note 2) . -- -- -- --
Administration charges (note 2):
Tier I ......................... -- -- -- --
Tier II ........................ -- -- -- --
Tier III ....................... -- -- -- --
Tier IV ........................ -- -- -- --
Tier V ......................... -- -- -- --
Variable account fee (notes 2 and 5) ... (4,278) (20) (1,385) (1)
----------- ----------- ----------- -----------
Net investment activity ............. (4,278) (20) 929 8
Proceeds from mutual fund shares sold .. 165,811 791 368,146 --
Cost of mutual fund shares sold ........ (146,040) (780) (348,884) --
----------- ----------- ----------- -----------
Realized gain (loss) on investments .... 19,771 11 19,262 --
Change in unrealized gain (loss)
on investments ...................... 373,062 2,799 (47,325) 336
----------- ----------- ----------- -----------
Net gain (loss) on investments ...... 392,833 2,810 (28,063) 336
----------- ----------- ----------- -----------
Reinvested capital gains ............... 29,828 -- 1,857 --
----------- ----------- ----------- -----------
Net increase (decrease) in contract
owners' equity resulting from
operations ..................... 418,383 2,790 (25,277) 344
----------- ----------- ----------- -----------
Equity transactions:
Purchase payments received from
contract owners ..................... 1,251,518 3,245 341,541 2,581
Transfers between funds ................ 766,588 76,348 153,612 35,362
Redemptions ............................ (49,414) -- (9,498) --
Adjustments to maintain reserves ....... 300 1 (4) (2)
----------- ----------- ----------- -----------
Net equity transactions ........... 1,968,992 79,594 485,651 37,941
Net change in contract owners' equity .... 2,387,375 82,384 460,374 38,285
Contract owners' equity beginning
of year ................................ 82,384 -- 38,285 --
----------- ----------- ----------- -----------
Contract owners' equity end of year ...... $ 2,469,759 82,384 498,659 38,285
=========== =========== =========== ===========
<CAPTION>
PrSmCapY OppGlob
-------------------------- --------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Investment activity:
Reinvested dividends ................... $ 813 20 19,606 2
Mortality and expense charges (note 2) . -- -- -- --
Administration charges (note 2):
Tier I ......................... -- -- -- --
Tier II ........................ -- -- -- --
Tier III ....................... -- -- -- --
Tier IV ........................ -- -- -- --
Tier V ......................... -- -- -- --
Variable account fee (notes 2 and 5) ... (2,430) (8) (6,322) (5)
----------- ----------- ----------- -----------
Net investment activity ............. (1,617) 12 13,284 (3)
Proceeds from mutual fund shares sold .. 245,712 18,993 3,497,183 43,412
Cost of mutual fund shares sold ........ (237,932) (18,520) (3,188,553) (43,036)
----------- ----------- ----------- -----------
Realized gain (loss) on investments .... 7,780 473 308,630 376
Change in unrealized gain (loss)
on investments ...................... 109,939 1,713 435,420 240
----------- ----------- ----------- -----------
Net gain (loss) on investments ...... 117,719 2,186 744,050 616
----------- ----------- ----------- -----------
Reinvested capital gains ............... 6,257 -- 225,701 16
----------- ----------- ----------- -----------
Net increase (decrease) in contract
owners' equity resulting from
operations ..................... 122,359 2,198 983,035 629
----------- ----------- ----------- -----------
Equity transactions:
Purchase payments received from
contract owners ..................... 380,003 5,868 665,551 457
Transfers between funds ................ 257,358 66,889 2,609,843 11,799
Redemptions ............................ (11,989) -- (34,860) --
Adjustments to maintain reserves ....... (130) 807 (8,867) --
----------- ----------- ----------- -----------
Net equity transactions ........... 625,242 73,564 3,231,667 12,256
Net change in contract owners' equity .... 747,601 75,762 4,214,702 12,885
Contract owners' equity beginning
of year ................................ 75,762 -- 12,885 --
----------- ----------- ----------- -----------
Contract owners' equity end of year ...... $ 823,363 75,762 4,227,587 12,885
=========== =========== =========== ===========
</TABLE>
18
<PAGE> 19
NACo VARIABLE ACCOUNT
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, Continued
STATEMENTS OF OPERATIONS, Continued
Years Ended December 31,1999 and 1998
<TABLE>
<CAPTION>
PutInvFd PutVoyFd
------------------------------ ------------------------------
1999 1998 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Investment activity:
Reinvested dividends ................... $ -- -- -- --
Mortality and expense charges (note 2) . -- (115,931) -- (360,379)
Administration charges (note 2):
Tier I ......................... -- (58,129) -- (166,907)
Tier II ........................ -- (13,427) -- (51,949)
Tier III ....................... -- (8,862) -- (23,873)
Tier IV ........................ -- (2,260) -- (10,379)
Tier V ......................... -- (4,242) -- (13,276)
Variable account fee (notes 2 and 5) ... (1,158,952) (541,453) (2,640,091) (1,329,097)
------------- ------------- ------------- -------------
Net investment activity ............. (1,158,952) (744,304) (2,640,091) (1,955,860)
Proceeds from mutual fund shares sold .. 15,099,135 10,353,759 11,593,200 9,123,281
Cost of mutual fund shares sold ........ (7,452,216) (6,878,135) (5,527,484) (4,595,683)
------------- ------------- ------------- -------------
Realized gain (loss) on investments .... 7,646,919 3,475,624 6,065,716 4,527,598
Change in unrealized gain (loss)
on investments ...................... 31,186,349 20,401,849 116,878,810 28,840,575
------------- ------------- ------------- -------------
Net gain (loss) on investments ...... 38,833,268 23,877,473 122,944,526 33,368,173
------------- ------------- ------------- -------------
Reinvested capital gains ............... 1,154,607 3,061,748 40,028,816 18,635,623
------------- ------------- ------------- -------------
Net increase (decrease) in contract
owners' equity resulting from
operations ..................... 38,828,923 26,194,917 160,333,251 50,047,936
------------- ------------- ------------- -------------
Equity transactions:
Purchase payments received from
contract owners ..................... 26,679,984 25,610,793 49,976,641 54,734,164
Transfers between funds ................ (4,431,547) 17,906,156 (6,529,541) (9,047,899)
Redemptions ............................ (10,759,047) (6,468,507) (19,686,207) (17,706,573)
Adjustments to maintain reserves ....... 3,049 2,712 13,236 (5,847)
------------- ------------- ------------- -------------
Net equity transactions ........... 11,492,439 37,051,154 23,774,129 27,973,845
Net change in contract owners' equity .... 50,321,362 63,246,071 184,107,380 78,021,781
Contract owners' equity beginning
of year ................................ 123,169,328 59,923,257 278,412,506 200,390,725
------------- ------------- ------------- -------------
Contract owners' equity end of year ...... $ 173,490,690 123,169,328 462,519,886 278,412,506
============= ============= ============= =============
<CAPTION>
SEI500Ix SelGroFd
------------------------------ ------------------------------
1999 1998 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Investment activity:
Reinvested dividends ................... $ 2,140,352 1,115,872 -- 19,069
Mortality and expense charges (note 2) . -- (118,601) -- (17,703)
Administration charges (note 2):
Tier I ......................... -- (54,008) -- (7,977)
Tier II ........................ -- (14,709) -- (2,228)
Tier III ....................... -- (9,909) -- (1,141)
Tier IV ........................ -- (3,207) -- (500)
Tier V ......................... -- (4,702) -- (871)
Variable account fee (notes 2 and 5) ... (1,295,145) (559,451) (126,036) (65,691)
------------- ------------- ------------- -------------
Net investment activity ............. 845,207 351,285 (126,036) (77,042)
Proceeds from mutual fund shares sold .. 7,656,976 8,951,655 1,769,612 2,458,366
Cost of mutual fund shares sold ........ (4,574,101) (6,238,921) (1,193,918) (1,726,231)
------------- ------------- ------------- -------------
Realized gain (loss) on investments .... 3,082,875 2,712,734 575,694 732,135
Change in unrealized gain (loss)
on investments ...................... 24,729,121 17,933,741 1,975,698 1,539,014
------------- ------------- ------------- -------------
Net gain (loss) on investments ...... 27,811,996 20,646,475 2,551,392 2,271,149
------------- ------------- ------------- -------------
Reinvested capital gains ............... 1,300,894 1,080,072 1,914,709 1,235,654
------------- ------------- ------------- -------------
Net increase (decrease) in contract
owners' equity resulting from
operations ..................... 29,958,097 22,077,832 4,340,065 3,429,761
------------- ------------- ------------- -------------
Equity transactions:
Purchase payments received from
contract owners ..................... 46,461,584 42,935,941 2,109,342 1,956,041
Transfers between funds ................ 4,892,197 13,539,167 (351,642) 185,492
Redemptions ............................ (11,652,311) (10,807,421) (899,596) (1,137,875)
Adjustments to maintain reserves ....... 5,320 7,989 (18) 593
------------- ------------- ------------- -------------
Net equity transactions ........... 39,706,790 45,675,676 858,086 1,004,251
Net change in contract owners' equity .... 69,664,887 67,753,508 5,198,151 4,434,012
Contract owners' equity beginning
of year ................................ 125,708,542 57,955,034 14,140,971 9,706,959
------------- ------------- ------------- -------------
Contract owners' equity end of year ...... $ 195,373,429 125,708,542 19,339,122 14,140,971
============= ============= ============= =============
</TABLE>
(Continued)
19
<PAGE> 20
NACo VARIABLE ACCOUNT
STATEMENTS OF CHANGES IN
CONTRACT owners' equity, Continued
STATEMENTS OF OPERATIONS, Continued
Years Ended December 31,1999 and 1998
<TABLE>
<CAPTION>
AIMTreas TRIntStk
---------------------------- ----------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Investment activity:
Reinvested dividends ................... $ 392,579 262,395 282,280 473,012
Mortality and expense charges (note 2) . -- (7,334) -- (49,478)
Administration charges (note 2):
Tier I ......................... -- (2,250) -- (20,181)
Tier II ........................ -- (591) -- (6,757)
Tier III ....................... -- (618) -- (3,664)
Tier IV ........................ -- (880) -- (1,371)
Tier V ......................... -- (260) -- (2,722)
Variable account fee (notes 2 and 5) ... (61,649) (27,489) (272,582) (167,284)
------------ ------------ ------------ ------------
Net investment activity ............. 330,930 222,973 9,698 221,555
Proceeds from mutual fund shares sold .. 60,710,144 46,105,295 50,140,732 62,175,381
Cost of mutual fund shares sold ........ (60,710,144) (46,105,295) (45,641,069) (62,694,538)
------------ ------------ ------------ ------------
Realized gain (loss) on investments .... -- -- 4,499,663 (519,157)
Change in unrealized gain (loss)
on investments ...................... -- -- 4,796,699 4,166,469
------------ ------------ ------------ ------------
Net gain (loss) on investments ...... -- -- 9,296,362 3,647,312
------------ ------------ ------------ ------------
Reinvested capital gains ............... 758 -- 1,975,961 752,519
------------ ------------ ------------ ------------
Net increase (decrease) in contract
owners' equity resulting from
operations ..................... 331,688 222,973 11,282,021 4,621,386
------------ ------------ ------------ ------------
Equity transactions:
Purchase payments received from
contract owners ..................... 809,318 969,868 5,807,566 7,432,534
Transfers between funds ................ 4,486,143 4,082,704 (4,582,998) (4,653,084)
Redemptions ............................ (1,197,853) (3,214,916) (2,258,002) (2,634,045)
Adjustments to maintain reserves ....... (52,248) (977) 822 (2,418)
------------ ------------ ------------ ------------
Net equity transactions ........... 4,045,360 1,836,679 (1,032,612) 142,987
Net change in contract owners' equity .... 4,377,048 2,059,652 10,249,409 4,764,373
Contract owners' equity beginning
of year ................................ 6,222,259 4,162,607 33,439,363 28,674,990
------------ ------------ ------------ ------------
Contract owners' equity end of year ...... $ 10,599,307 6,222,259 43,688,772 33,439,363
============ ============ ============ ============
<CAPTION>
TemForFd WPEmGro
---------------------------- ----------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Investment activity:
Reinvested dividends ................... $ 1,557,532 1,127,070 -- --
Mortality and expense charges (note 2) . -- (82,947) -- --
Administration charges (note 2):
Tier I ......................... -- (37,085) -- --
Tier II ........................ -- (13,197) -- --
Tier III ....................... -- (5,742) -- --
Tier IV ........................ -- (1,897) -- --
Tier V ......................... -- (3,279) -- --
Variable account fee (notes 2 and 5) ... (296,367) (231,294) (2,845) (5)
------------ ------------ ------------ ------------
Net investment activity ............. 1,261,165 751,629 (2,845) (5)
Proceeds from mutual fund shares sold .. 24,294,781 13,169,841 1,966,205 7,464
Cost of mutual fund shares sold ........ (25,937,851) (12,461,664) (1,827,117) (7,086)
------------ ------------ ------------ ------------
Realized gain (loss) on investments .... (1,643,070) 708,177 139,088 378
Change in unrealized gain (loss)
on investments ...................... 15,393,167 (7,117,392) 25,825 1,134
------------ ------------ ------------ ------------
Net gain (loss) on investments ...... 13,750,097 (6,409,215) 164,913 1,512
------------ ------------ ------------ ------------
Reinvested capital gains ............... 469,240 3,316,187 103,811 --
------------ ------------ ------------ ------------
Net increase (decrease) in contract
owners' equity resulting from
operations ..................... 15,480,502 (2,341,399) 265,879 1,507
------------ ------------ ------------ ------------
Equity transactions:
Purchase payments received from
contract owners ..................... 7,467,413 12,117,782 318,652 819
Transfers between funds ................ (4,161,776) (12,861,305) 420,373 19,262
Redemptions ............................ (2,873,818) (3,786,740) (37,167) (16)
Adjustments to maintain reserves ....... 5,659 (2,974) (46) (5)
------------ ------------ ------------ ------------
Net equity transactions ........... 437,478 (4,533,237) 701,812 20,060
Net change in contract owners' equity .... 15,917,980 (6,874,636) 967,691 21,567
Contract owners' equity beginning
of year ................................ 41,645,492 48,520,128 21,567 --
------------ ------------ ------------ ------------
Contract owners' equity end of year ...... $ 57,563,472 41,645,492 989,258 21,567
============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
20
<PAGE> 21
NACo VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 1999 and 1998
(1) Summary of Significant Accounting Policies
(a) Organization and Nature of Operations
NACo Variable Account (NACoVA) was established pursuant to a resolution
of the Board of Directors of Nationwide Life Insurance Company (the
Company) on September 7, 1988, and has been registered as a unit
investment trust under the Investment Company Act of 1940. The NACoVA
was introduced for exclusive use by Member Counties for deferred
compensation Plans adopted under the National Association of Counties
(NACo) Program.
The Company offers group flexible fund retirement contracts through the
NACoVA. The primary distribution for the contracts is through an
affiliated sales organization.
(b) The Contracts
The Group Flexible Retirement Contracts (the Contract) are offered for
purchase in connection with deferred compensation Plans adopted by
Member Counties under the NACo Program. Participants in the contracts
may invest in any of the following fund sub-accounts:
American Century: Income & Growth Fund (ACIncGro)
American Century: Twentieth Century Growth Fund (ACTCGro)
(not available for contracts issued on or after May 1, 1997)
American Century: Twentieth Century International Discovery Fund
(ACTCIntDis)
American Century: Twentieth Century Ultra Fund, Inc. (ACTCUltra)
The Bond Fund of AmericaSM, Inc. (BdFdAm)
(only available for certain contracts issued beginning
July 1, 1994)
Brown Capital Management - Small Company Fund (BrnCapSmCo)
Dreyfus Appreciation Fund, Inc. (DryApp)
Dreyfus Premier Midcap Stock - Class A (DryPreMCap)
The Dreyfus Third Century Fund, Inc. (Dry3dCen)
Evergreen Income and Growth Fund - Class Y (EvIncGro)
(not available for contracts issued on or after October 1, 1993)
Federated Investment Series Fund, Inc. - Federated Bond Fund -
Class F (FedBdFd)
Federated U.S. Government Securities Fund: 2-5 Years -
Institutional Shares (FedUSGvt)
Fidelity Advisor Growth Opportunities Fund - Class A (FAGrOppA)
Fidelity Advisor High Yield Fund - Class T (FAHiYld)
Fidelity Capital & Income Fund (FidCapInc)
(not available for contracts issued on or after January 1, 1987)
Fidelity Contrafund (FidContr) (not available for contracts
issued on or after June 30, 1998)
Fidelity Equity-Income Fund (FidEqInc)
Fidelity Magellan(R) Fund (FidMgln) (not available for contracts
issued on or after October 1, 1997)
Fidelity OTC Portfolio (FidOTC)
Fidelity Puritan(R) Fund (FidPurtn)
INVESCO Dynamics Fund, Inc. (InvDynam)
INVESCO Total Return Fund (InvTotRet)
21
<PAGE> 22
NACo VARIABLE ACCOUNT
NOTEES TO FINANCIAL STATEMENTS, Continued
The Investment Company of America(R) (InvCoAm)
(only available for certain contracts issued beginning
July 1, 1994)
MAS Funds - Fixed Income Portfolio (MASFIP)
Massachusetts Investors Growth Stock Fund - Class A (MFSGrStk)
(not available for contracts issued on or after May 1, 1997)
MFS(R) Growth Opportunities Fund - Class A (MFSGrOpp)
(not available for contracts issued on or after October 1, 1993)
MFS(R) High Income Fund - Class A (MFSHiInc)
Morgan Stanley Institutional Fund, Inc. - Equity Growth Portfolio
- Class B (MSIEqGroB)
Portfolios of the Nationwide Asset Allocation Trust (NAAT)
(managed for a fee by an affiliated investment advisor)
NAAT - The Aggressive Portfolio (NAATAggr)
NAAT - The Conservative Portfolio (NAATCons)
NAAT - The Moderate Portfolio (NAATMod)
NAAT - The Moderately Aggressive Portfolio (NAATModAgg)
NAAT - The Moderately Conservative Portfolio (NAATModCon)
Nationwide(R) Mutual Funds
(managed for a fee by an affiliated investment advisor)
Nationwide(R) Fund - Class D (NWFund)
Nationwide(R) Growth Fund - Class D (NWGroFd)
(not available for contracts issued on or after
October 1, 1993)
Nationwide(R) Money Market Fund (NWMyMkt)
Nationwide(R) S&P 500 Index Fund - Class Y (NWIndxFdY)
Prestige Balanced Fund - Class Y (PrBalY)
Prestige International Fund - Class Y (PrIntY)
Prestige Large Cap Growth Fund - Class Y (PrLgCapGrY)
Prestige Large Cap Value Fund - Class Y (PrLgCpValY)
Prestige Small Cap Fund - Class Y (PrSmCapY)
Nationwide(R) Separate Account Trust - Income Fund (NSATInc)
(managed for a fee by an affiliated investment advisor)
Nationwide(R) Separate Account Trust - Small Company Fund
(NSATSmCo) (managed for a fee by an affiliated investment
advisor)
Neuberger & Berman Equity Funds(R) - Guardian Fund (NBGuard)
Neuberger & Berman Equity Trust(R) - Partners Trust (NBPartTr)
Oppenheimer Global Fund - Class A (OppGlob)
Putnam Investors Fund - Class A (PutInvFd)
Putnam Voyager Fund - Class A (PutVoyFd)
SEI Index Funds - S&P 500 Index Portfolio (SEI500Ix)
Seligman Growth Fund, Inc. - Class A (SelGroFd)
Short-Term Investments Trust - Treasury Portfolio -
Institutional Class (AIMTreas)
T. Rowe Price International Funds, Inc. - International Stock
Fund(R) (TRIntStk)
Templeton Foreign Fund - Class I (TemForFd)
Warburg Pincus Emerging Growth Fund - Common Shares (WPEmGro)
All of the above funds were being utilized as of December 31, 1999.
22
<PAGE> 23
The contract owners' equity is affected by the investment results of
each fund, equity transactions by contract owners and certain expenses
(see note 2). The accompanying financial statements include only
contract owners' purchase payments pertaining to the variable portions
of their contracts and exclude any purchase payments for fixed dollar
benefits, the latter being included in the accounts of the Company.
(c) Security Valuation, Transactions and Related Investment Income
The market value of the underlying mutual funds is based on the closing
net asset value per share at December 31, 1999. The cost of investments
sold is determined on the specific identification basis. Investment
transactions are accounted for on the trade date (date the order to buy
or sell is executed) and dividend income is recorded on the ex-dividend
date.
(d) Federal Income Taxes
Operations of the NACoVA 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 assets in this account are held pursuant to
contracts with entities which are exempt from federal income tax.
Because of this exemption, no taxes need be provided for investment
income or realized and unrealized capital gains. Annuity payouts and
withdrawal payments are taxable as wages when received by the
participants.
(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) Annuity Payout Reserves
Annuity reserves are computed for contracts in the variable payout
stage according to industry standard mortality tables. The assumed
investment return is 3.5 percent unless the annuitant elects otherwise,
in which case the rate may vary from 3.5 percent to 7 percent, as
regulated by the laws of the respective states. The mortality risk is
fully borne by the Company and may result in additional amounts being
transferred into the Account by the Company to cover greater longevity
of annuitants than expected. Conversely, if reserves exceed amounts
required, transfers may be made to the Company.
(2) Expenses
No deduction for a sales charge is made from the purchase payments for
these contracts. However, if an owner terminates the contract and directs
the Company to withdraw all or part of the contract value held in the
Account for less than sixteen (16) years, the Company will, with certain
exceptions, assess a contingent deferred sales charge by deducting an
amount from each participant's account. This charge will be equal to not
more than 4% in the first year, declining to 1% in the fifteenth year, of
the lesser of all purchase payments made on behalf of a participant prior
to the date of withdrawal, or the amount withdrawn. No sales charges are
deducted on redemptions used to purchase units in the fixed investment
options of the Company. Sales charges may be reduced or eliminated upon
negotiated conversion of the contracts to other investment programs offered
by the Company or its affiliates.
23
<PAGE> 24
NACo VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS, CONTINUED
Prior to May 1, 1998 the following charges were deducted by the Company: a
mortality risk charge, an expense risk charge and an administration charge
which are assessed through the daily unit value calculation. The morality
risk charge and the expense risk charge are equal to an annual rate of
0.10% and 0.40% respectively. The administration charge was based upon the
aggregate balance of assets held under the Contract by each Member County,
as follows:
Expense Administration
Tier Assets (Millions) Charge
--------- -------------- ------------
I Up to $10 .45%
II Over $10 to $25 .40%
III Over $25 to $50 .30%
IV Over $50 to $150 .20%
V Over $150 .15%
The administration charge was determined using the December 31 asset
balance and became effective on the following May 1.
Beginning May 1, 1998 under the terms of the Contracts, the Company assumes
various risks and incurs administrative expenses associated with the
issuance of the Contracts. For the Company's contractual promise to accept
these risks and expenses, the Contracts provide for the deduction of a
Variable Account Fee, which is calculated as a percentage of assets and is
deducted on each valuation date from amounts held in the Account. On an
annual basis, the maximum Variable Account Fee is 0.95% of the average
account value.
As with all other charges, this fee is subject to negotiation and may vary
from one contract to another reflecting the unique characteristics of
different contracts when considered as a whole. In negotiating the amount
of the fee, the Company may consider factors which may reduce expenses
incurred by the Company. These factors might include, but are not limited
to: (1) the size of the contract; (2) the number of eligible employees; (3)
the number of contract participants; (4) demographics of contract
participants; (5) general economic conditions; (6) the varying costs
associated with the inclusion of underlying mutual fund options; (7) the
type of contract issued (for example, whether the contract is issued as an
allocated contract or unallocated contract); (8) costs associated with
distribution of the contract; and (9) any other factors which the Company
deems relevant (see summary of variable account fees at Note 5).
Contract owners may negotiate an exchange privilege with the Company. The
exchange privilege provides for transfers of units among the various
investment options for each participant's account. The number of transfers
allowed, and any administrative charges associated therewith, are subject
to negotiation between the contract owner and the Company.
(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.
24
<PAGE> 25
(4) Components of contract owners' equity
The following is a summary of contract owners' equity at December 31, 1999.
<TABLE>
<CAPTION>
Asset Annual
Charge Units Unit Value Amount Return(b)
------- ---------- ---------- ------------ --------
<S> <C> <C> <C> <C> <C>
American Century: Income &
Growth Fund ............................. 0.80% 3,764,884 $ 1.284360 $ 4,835,466 17%
0.70% 1,505,535 1.285813 1,935,836 17%
0.55% 1,348,025 1.287995 1,736,249 17%
0.40% 665,280 1.290181 858,332 17%
0.25% 240,890 1.292371 311,319 18%
0.15% 1,150,122 1.293832 1,488,065 18%
American Century:
Twentieth Century Growth Fund ........... 0.95% 5,707,048 10.560508 60,269,326 33%
0.90% 3,347,303 10.579885 35,414,081 33%
0.80% 2,936,941 10.618746 31,186,630 34%
0.65% 1,320,330 10.671975 14,090,529 34%
0.60% 78,744 10.603876 834,992 34%
0.50% 348,206 10.616300 3,696,659 34%
0.40% 2,202,427 10.714474 23,597,847 34%
American Century: Twentieth Century
International Discovery Fund ............ 0.80% 2,162,693 2.028049 4,386,047 87%
0.70% 1,190,455 2.030338 2,417,026 87%
0.55% 989,006 2.033777 2,011,418 88%
0.40% 640,107 2.037221 1,304,039 88%
0.25% 148,209 2.040671 302,446 88%
0.15% 2,129,791 2.042975 4,351,110 88%
American Century:
Twentieth Century Ultra Fund ............ 0.95% 65,151,483 3.245463 211,446,727 40%
0.90% 30,085,075 3.251418 97,819,154 40%
0.80% 24,412,865 3.263360 79,667,967 40%
0.65% 11,013,444 3.279718 36,120,991 41%
0.60% 1,424,061 3.258789 4,640,714 41%
0.50% 3,817,930 3.262606 12,456,401 41%
0.40% 26,111,703 3.292778 85,980,041 41%
The Bond Fund Of America(SM), Inc. ......... 0.95% 2,893,175 2.461916 7,122,754 1%
0.90% 1,583,478 2.466496 3,905,642 1%
0.80% 845,978 2.475675 2,094,367 1%
0.65% 596,763 2.488240 1,484,890 2%
0.60% 28,883 2.472263 71,406 2%
0.50% 142,109 2.475221 351,751 2%
0.40% 928,066 2.498335 2,318,620 2%
Brown Capital Management -
Small Company Fund ...................... 0.80% 260,522 1.334542 347,678 33%(a)
0.70% 32,466 1.335232 43,350 34%(a)
0.55% 25,458 1.336268 34,019 34%(a)
0.40% 15,085 1.337304 20,173 34%(a)
0.25% 1 1.338341 1 34%(a)
0.15% 40,366 1.339033 54,051 34%(a)
Dreyfus Appreciation Fund, Inc. ............ 0.80% 1,675,249 1.178335 1,974,005 9%
0.70% 891,896 1.179669 1,052,142 9%
0.55% 490,711 1.181672 579,859 9%
0.40% 388,056 1.183678 459,333 10%
0.25% 29,313 1.185687 34,756 10%
0.15% 870,689 1.187029 1,033,533 10%
</TABLE>
(continued)
25
<PAGE> 26
NACo VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS, CONTINUED
<TABLE>
<CAPTION>
Asset Annual
Charge Units Unit Value Amount Return(b)
------- ---------- ---------- ------------ --------
<S> <C> <C> <C> <C> <C>
Dreyfus Premier Midcap Stock -
Class A ................................. 0.80% 189,449 1.243793 235,635 10%
0.70% 66,860 1.245200 83,254 10%
0.55% 24,267 1.247314 30,269 10%
0.40% 23,734 1.249431 29,654 10%
0.30% 2 1.250844 3 10%
0.15% 85,523 1.252967 107,157 10%
The Dreyfus Third Century Fund, Inc. ....... 0.80% 6,853,289 5.904491 40,465,183 29%
0.70% 3,581,927 5.926178 21,227,137 29%
0.55% 2,380,281 5.899679 14,042,894 29%
0.40% 1,240,608 5.910051 7,332,057 30%
0.25% 304,659 5.920440 1,803,715 30%
0.15% 2,405,418 5.981450 14,387,887 30%
Evergreen Income and Growth
Fund - Class Y .......................... 0.95% 449,769 2.744107 1,234,214 15%
0.90% 236,494 2.749144 650,156 15%
0.80% 121,424 2.759246 335,039 15%
0.65% 103,645 2.773083 287,416 16%
0.60% 1,466 2.755385 4,039 16%
0.50% 10,371 2.758615 28,610 16%
0.40% 209,219 2.784137 582,494 16%
Federated Investment Series
Funds, Inc. - Federated Bond
Fund - Class F .......................... 0.80% 391,834 0.986932 386,714 3%
0.70% 114,902 0.988049 113,529 3%
0.55% 40,682 0.989728 40,264 3%
0.40% 6,385 0.991409 6,330 3%
0.25% 6,374 0.993094 6,330 3%
0.15% 66,416 0.994218 66,032 2%
Federated U.S. Government
Securities Fund: 2-5 Years -
Institutional Shares .................... 0.95% 3,148,641 1.373628 4,325,061 1%
0.90% 1,609,939 1.376174 2,215,556 1%
0.80% 966,135 1.381277 1,334,500 1%
0.65% 605,238 1.388259 840,227 1%
0.60% 69,872 1.379708 96,403 1%
0.50% 268,509 1.381446 370,931 1%
0.40% 1,337,680 1.393823 1,864,489 1%
Fidelity Advisor Growth Opportunities
Fund - Class A .......................... 0.80% 1,065,003 1.124760 1,197,873 3%
0.70% 279,072 1.126033 314,244 3%
0.55% 445,084 1.127945 502,030 4%
0.40% 169,301 1.129860 191,286 4%
0.25% 6,258 1.131779 7,083 4%
0.15% 166,910 1.133060 189,119 4%
Fidelity Advisor High Yield Fund -
Class T ................................. 0.80% 288,717 1.144516 330,441 7%
0.70% 218,567 1.145866 250,448 8%
0.55% 222,740 1.147891 255,681 8%
0.40% 99,159 1.149917 114,025 8%
0.25% 475 1.151943 547 8%
0.15% 88,793 1.153294 102,404 8%
</TABLE>
26
<PAGE> 27
NACo VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS, Continued
<TABLE>
<CAPTION>
Asset Annual
Charge Units Unit Value Amount Return(b)
------- ---------- ---------- ------------ --------
<S> <C> <C> <C> <C> <C>
Fidelity Capital & Income Fund ............. 0.95% 157,277 5.414988 851,653 12%
0.90% 63,602 5.425025 345,042 12%
0.80% 54,447 5.445140 296,472 12%
0.65% 121,306 5.472662 663,867 12%
0.60% 10 5.438956 54 13%
0.50% 15,652 5.445808 85,238 13%
0.40% 52,147 5.494599 286,527 13%
Fidelity Contrafund ........................ 0.95% 84,298,429 3.124830 263,418,260 24%
0.90% 40,184,712 3.130565 125,800,853 24%
0.80% 28,730,584 3.142065 90,273,362 24%
0.65% 12,905,080 3.157817 40,751,881 24%
0.60% 2,269,071 3.137664 7,119,582 24%
0.50% 4,921,532 3.141341 15,460,210 24%
0.40% 23,252,402 3.170395 73,719,299 25%
Fidelity Equity-Income Fund ................ 0.95% 18,191,499 8.164209 148,519,200 6%
0.90% 10,324,567 8.179193 84,446,626 6%
0.80% 6,514,414 8.209245 53,478,421 6%
0.65% 4,029,550 8.250412 33,245,448 6%
0.60% 292,888 8.197774 2,401,030 7%
0.50% 1,097,064 8.207390 9,004,032 7%
0.40% 6,835,046 8.283304 56,616,764 7%
Fidelity Magellan(R)Fund ................... 0.95% 36,026,007 2.935682 105,760,900 23%
0.90% 16,600,165 2.941068 48,822,214 23%
0.80% 12,975,760 2.951871 38,302,770 23%
0.65% 5,649,149 2.966668 16,759,150 23%
0.60% 885,057 2.947739 2,608,917 23%
0.50% 1,981,615 2.951194 5,848,130 23%
0.40% 8,920,260 2.978484 26,568,852 24%
Fidelity OTC Portfolio ..................... 0.95% 12,343,613 4.348555 53,676,880 71%
0.90% 6,382,037 4.356533 27,803,555 71%
0.80% 4,962,923 4.372532 21,700,540 71%
0.65% 2,949,108 4.394446 12,959,696 71%
0.60% 267,530 4.366394 1,168,141 71%
0.50% 551,902 4.371504 2,412,642 72%
0.40% 7,250,642 4.411934 31,989,354 72%
Fidelity Puritan(R)Fund .................... 0.95% 11,531,186 1.878662 21,663,201 2%
0.90% 5,616,280 1.882110 10,570,457 2%
0.80% 3,553,477 1.889025 6,712,607 2%
0.65% 1,302,794 1.898498 2,473,352 2%
0.60% 220,190 1.886386 415,363 2%
0.50% 434,568 1.888599 820,725 2%
0.40% 2,155,469 1.906066 4,108,466 2%
INVESCO Dynamics Fund, Inc. ................ 0.80% 5,368,795 1.998173 10,727,781 70%
0.70% 2,683,126 2.000430 5,367,406 71%
0.55% 2,158,406 2.003821 4,325,059 71%
0.40% 1,566,514 2.007217 3,144,334 71%
0.25% 361,646 2.010619 727,132 71%
0.15% 3,801,659 2.012890 7,652,321 72%
</TABLE>
(continued)
27
<PAGE> 28
NACo VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS, CONTINUED
<TABLE>
<CAPTION>
Asset Annual
Charge Units Unit Value Amount Return(b)
------- ---------- ---------- ------------ --------
<S> <C> <C> <C> <C> <C>
INVESCO Total Return Fund .................. 0.80% 515,739 1.001721 516,627 2%
0.70% 139,419 1.002855 139,817 2%
0.55% 124,380 1.004559 124,947 2%
0.40% 158,067 1.006265 159,057 2%
0.25% 594 1.007975 599 2%
0.15% 231,417 1.009116 233,527 2%
The Investment Company
of America(R) ........................... 0.95% 16,605,220 3.201730 53,165,431 15%
0.90% 8,076,180 3.207605 25,905,195 16%
0.80% 5,292,541 3.219387 17,038,738 16%
0.65% 2,061,483 3.235527 6,669,984 16%
0.60% 214,097 3.214887 688,298 16%
0.50% 772,247 3.218656 2,485,597 16%
0.40% 3,687,311 3.248420 11,977,935 16%
MAS Funds - Fixed Income Portfolio ......... 0.95% 1,710,525 1.391983 2,381,022 2%
0.90% 761,207 1.394539 1,061,533 2%
0.80% 471,750 1.399665 660,292 1%
0.65% 302,278 1.406687 425,211 1%
0.60% 43,773 1.397708 61,182 1%
0.50% 35,380 1.399348 49,509 1%
0.40% 502,118 1.412296 709,139 1%
Massachusetts Investors Growth
Stock Fund - Class A .................... 0.95% 291,339 30.435351 8,867,005 37%
0.90% 148,153 30.491188 4,517,361 38%
0.80% 130,090 30.603169 3,981,166 38%
0.65% 65,612 30.756553 2,017,999 38%
0.60% 2,844 30.560318 86,914 38%
0.50% 11,080 30.596117 339,005 38%
0.40% 117,408 30.879021 3,625,444 38%
MFS(R)Growth Opportunities Fund -
Class A ................................. 0.95% 620,939 15.172145 9,420,977 32%
0.90% 336,193 15.199990 5,110,130 32%
0.80% 184,281 15.255834 2,811,360 32%
0.65% 176,097 15.332326 2,699,977 32%
0.60% 10,104 15.234453 153,929 32%
0.50% 17,247 15.252302 263,056 32%
0.40% 175,440 15.393394 2,700,617 32%
MFS(R)High Income Fund - Class A ............ 0.95% 1,154,155 6.542182 7,550,692 6%
0.90% 530,540 6.554308 3,477,323 6%
0.80% 274,998 6.578610 1,809,105 6%
0.65% 217,273 6.611862 1,436,579 6%
0.60% 13,293 6.571139 87,350 6%
0.50% 32,140 6.579417 211,462 6%
0.40% 359,951 6.638365 2,389,486 7%
Morgan Stanley Institutional
Fund, Inc. - Equity Growth
Portfolio - Class B ..................... 0.80% 393,751 1.530130 602,490 38%
0.70% 189,694 1.531860 290,585 38%
0.55% 120,451 1.534459 184,827 39%
0.40% 89,552 1.537062 137,647 39%
0.25% 31,522 1.539669 48,533 39%
0.15% 218,285 1.541410 336,467 39%
</TABLE>
28
<PAGE> 29
NACo VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS, CONTINUED
<TABLE>
<CAPTION>
Asset Annual
Charge Units Unit Value Amount Return(b)
------- ---------- ---------- ------------ --------
<S> <C> <C> <C> <C> <C>
NAAT - The Aggressive Portfolio ............ 0.70% 1,421,322 1.421032 2,019,744 23%
0.60% 468,988 1.419952 665,940 23%
0.45% 267,677 1.422449 380,757 24%
0.25% 353,524 1.425785 504,049 24%
0.10% 4,175 1.428292 5,963 24%
0.00% 827,625 1.437196 1,189,459 24%
NAAT - The Conservative Portfolio .......... 0.70% 551,322 1.144210 630,828 3%
0.60% 158,183 1.143342 180,857 3%
0.45% 475,616 1.145355 544,749 3%
0.25% 81,415 1.148044 93,468 4%
0.10% 7,541 1.150064 8,673 4%
0.00% 133,739 1.157231 154,767 4%
NAAT - The Moderate Portfolio .............. 0.70% 2,040,355 1.307445 2,667,652 14%
0.60% 501,161 1.306453 654,743 14%
0.45% 192,070 1.308751 251,372 14%
0.25% 144,588 1.311822 189,674 15%
0.10% 19,122 1.314130 25,129 15%
0.00% 505,429 1.322320 668,339 15%
NAAT - The Moderately Aggressive
Portfolio ............................... 0.70% 1,865,891 1.355141 2,528,545 19%
0.60% 542,336 1.354111 734,383 19%
0.45% 268,877 1.356493 364,730 19%
0.25% 467,219 1.359675 635,266 19%
0.10% 28,922 1.362067 39,394 19%
0.00% 514,292 1.370557 704,867 19%
NAAT - The Moderately Conservative
Portfolio ............................... 0.70% 714,817 1.234169 882,205 9%
0.60% 341,251 1.233233 420,842 9%
0.45% 149,629 1.235402 184,852 9%
0.25% 50,892 1.238302 63,020 10%
0.15% 11,257 1.240481 13,964 10%
0.00% 170,427 1.248211 212,729 10%
Nationwide(R)Fund - Class D ................ 0.95% 2,020 26.409607 53,347 1%
0.80% 3,639,165 26.555267 96,638,998 1%
0.70% 1,451,429 26.652820 38,684,676 1%
0.55% 987,329 26.533779 26,197,569 1%
0.40% 524,819 26.580493 13,949,948 1%
0.25% 94,899 26.627289 2,526,903 0%
0.15% 942,318 26.901637 25,349,897 0%
Nationwide(R)Growth Fund - Class D ......... 0.95% 608,149 5.459300 3,320,068 16%
0.90% 418,385 5.469318 2,288,281 16%
0.80% 267,313 5.489411 1,467,391 16%
0.65% 87,937 5.516934 485,143 16%
0.60% 11,832 5.481731 64,860 16%
0.50% 22,141 5.488156 121,513 16%
0.40% 250,812 5.538916 1,389,227 16%
Nationwide(R)Money Market Fund ............. 0.80% 9,606,399 3.259610 31,313,114 4%
0.70% 4,804,733 3.271683 15,719,563 4%
0.55% 4,615,246 3.257959 15,036,282 4%
0.40% 3,933,354 3.289218 12,937,659 4%
0.25% 1,148,857 3.270268 3,757,070 4%
0.15% 4,761,747 3.274374 15,591,741 5%
</TABLE>
(continued)
29
<PAGE> 30
NACo VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS, CONTINUED
<TABLE>
<CAPTION>
Asset Annual
Charge Units Unit Value Amount Return(b)
------- ---------- ---------- ------------ --------
<S> <C> <C> <C> <C> <C>
Nationwide(R)S&P 500 Index Fund -
Class Y ................................. 0.80% 2,766,474 1.299566 3,595,216 19%
0.70% 1,260,851 1.301036 1,640,413 19%
0.55% 990,021 1.303244 1,290,239 19%
0.40% 337,529 1.305455 440,629 19%
0.25% 61,214 1.307671 80,048 19%
0.15% 931,890 1.309150 1,219,984 20%
Nationwide(R)SAT - Income Fund ............. 0.80% 10,893 1.005518 10,953 1%(a)
0.70% 35,556 1.006039 35,771 1%(a)
0.55% 27,725 1.006821 27,914 1%(a)
0.40% 342 1.007603 345 1%(a)
0.25% 173 1.008386 174 1%(a)
0.15% 1,638 1.008908 1,653 1%(a)
Nationwide(R)SAT -
Small Company Fund ...................... 0.80% 1,760,003 1.376614 2,422,845 43%
0.70% 885,218 1.379587 1,221,235 43%
0.55% 599,934 1.378605 827,072 43%
0.40% 609,880 1.386578 845,646 43%
0.25% 19,107 1.383455 26,434 44%
0.15% 336,343 1.385075 465,860 44%
Neuberger & Berman Equity Funds(R)-
Guardian Fund ........................... 0.95% 8,085,725 1.858329 15,025,937 7%
0.90% 3,862,738 1.861741 7,191,418 7%
0.80% 2,782,043 1.868582 5,198,475 8%
0.65% 1,247,986 1.877955 2,343,662 8%
0.60% 84,823 1.865967 158,277 8%
0.50% 155,894 1.868155 291,234 8%
0.40% 3,518,487 1.885443 6,633,907 8%
Neuberger & Berman Equity Trust(R)-
Partners Trust .......................... 0.80% 82,850 1.113054 92,217 7%
0.70% 29,128 1.114314 32,458 7%
0.55% 15,285 1.116206 17,061 7%
0.40% 33,245 1.118102 37,171 7%
0.25% 112 1.120001 125 7%
0.15% 11,932 1.121268 13,379 8%
Prestige Balanced Fund -
Class Y ................................. 0.70% 289,882 1.151398 333,770 9%
0.60% 120,626 1.152701 139,046 9%
0.45% 64,569 1.154658 74,555 9%
0.25% 110,352 1.157273 127,707 9%
0.10% 729 1.159238 845 9%
0.00% 15,466 1.160549 17,949 9%
Prestige International Fund -
Class Y ................................. 0.70% 120,441 1.316225 158,527 21%
0.60% 53,042 1.317714 69,894 21%
0.45% 31,972 1.319950 42,201 21%
0.25% 38,590 1.322937 51,052 21%
0.10% 18,596 1.325181 24,643 21%
0.00% 3,878 1.326680 5,145 21%
</TABLE>
30
<PAGE> 31
NACo VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS, CONTINUED
<TABLE>
<CAPTION>
Asset Annual
Charge Units Unit Value Amount Return(b)
------- ---------- ---------- ------------ --------
<S> <C> <C> <C> <C> <C>
Prestige Large Cap Growth Fund -
Class Y ................................. 0.70% 592,875 1.525781 904,597 34%
0.60% 260,721 1.527506 398,253 34%
0.45% 213,341 1.530097 326,432 34%
0.25% 84,791 1.533558 130,032 34%
0.10% 2 1.536159 3 35%
0.00% 461,957 1.537896 710,442 35%
Prestige Large Cap Value Fund -
Class Y ................................. 0.70% 184,328 0.993783 183,182 5%
0.60% 72,468 0.994908 72,099 5%
0.45% 54,869 0.996598 54,682 5%
0.25% 90,414 0.998856 90,311 5%
0.10% 2 1.000552 2 5%
0.00% 98,218 1.001685 98,383 5%
Prestige Small Cap Fund -
Class Y ................................. 0.70% 370,694 1.285935 476,688 18%
0.60% 75,172 1.287390 96,776 18%
0.45% 33,279 1.289575 42,916 18%
0.25% 76,601 1.292494 99,006 18%
0.10% 2,697 1.294687 3,492 19%
0.00% 80,612 1.296152 104,485 19%
Oppenheimer Global Fund -
Class A ................................. 0.80% 772,544 1.739511 1,343,849 57%
0.70% 526,744 1.741477 917,313 57%
0.55% 335,264 1.744429 584,844 58%
0.40% 121,171 1.747386 211,733 58%
0.25% 59,495 1.750348 104,137 58%
0.15% 608,170 1.752325 1,065,711 58%
Putnam Investors Fund - Class A ............ 0.95% 2,614,963 31.341504 81,956,873 29%
0.90% 1,097,069 31.399010 34,446,881 29%
0.80% 574,562 31.514335 18,106,939 29%
0.65% 344,475 31.672308 10,910,318 29%
0.60% 47,678 31.470234 1,500,438 29%
0.50% 63,483 31.507110 2,000,166 29%
0.40% 772,650 31.798454 24,569,075 30%
Putnam Voyager Fund - Class A .............. 0.95% 28,160,360 7.292508 205,359,651 55%
0.90% 12,706,716 7.305890 92,833,869 55%
0.80% 8,329,118 7.332728 61,075,157 55%
0.65% 4,498,006 7.369487 33,147,997 55%
0.60% 567,839 7.322438 4,157,966 55%
0.50% 1,195,483 7.331012 8,764,100 55%
0.40% 7,728,408 7.398826 57,181,146 56%
SEI Index Funds -
S&P 500 Index Portfolio ................. 0.95% 37,302,650 2.284919 85,233,534 20%
0.90% 15,887,411 2.289108 36,368,000 20%
0.80% 11,667,253 2.297509 26,805,619 20%
0.65% 6,630,666 2.309019 15,310,334 20%
0.60% 842,011 2.294307 1,931,832 20%
0.50% 905,209 2.296996 2,079,261 20%
0.40% 11,925,048 2.318217 27,644,849 20%
</TABLE>
(continued)
31
<PAGE> 32
NACo VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS, CONTINUED
<TABLE>
<CAPTION>
Asset Annual
Charge Units Unit Value Amount Return(b)
------- ---------- ---------- ------------ --------
<S> <C> <C> <C> <C> <C>
Seligman Growth Fund, Inc. -
Class A ................................. 0.95% 363,615 21.680777 7,883,456 29%
0.90% 196,213 21.720557 4,261,856 29%
0.80% 95,801 21.800337 2,088,494 29%
0.65% 64,846 21.909617 1,420,751 29%
0.60% 6,797 21.769825 147,970 29%
0.50% 13,411 21.795334 292,297 30%
0.40% 147,489 21.996878 3,244,298 30%
Short-Term Investments Trust -
Treasury Portfolio -
Institutional Class ..................... 0.95% 3,245,459 1.327776 4,309,243 4%
0.90% 1,054,742 1.330237 1,403,057 4%
0.80% 840,048 1.335169 1,121,606 4%
0.65% 886,018 1.341918 1,188,964 4%
0.60% 38,201 1.333653 50,947 4%
0.50% 97,670 1.335333 130,422 4%
0.40% 1,777,684 1.347297 2,395,068 5%
T. Rowe Price International Funds,
Inc. - International Stock Fund(R) ...... 0.95% 9,450,213 1.839019 17,379,121 33%
0.90% 4,231,419 1.842393 7,795,937 33%
0.80% 3,274,763 1.849161 6,055,564 34%
0.65% 1,470,871 1.858432 2,733,514 34%
0.60% 175,403 1.846569 323,894 34%
0.50% 558,351 1.848732 1,032,241 34%
0.40% 4,485,126 1.865834 8,368,501 34%
Templeton Foreign Fund - Class I ........... 0.80% 13,904,517 1.677518 23,325,078 38%
0.70% 7,963,049 1.683681 13,407,234 38%
0.55% 5,358,056 1.676147 8,980,889 38%
0.40% 2,182,090 1.679093 3,663,932 39%
0.25% 644,504 1.682045 1,084,085 39%
0.15% 4,179,286 1.699394 7,102,254 39%
Warburg Pincus Emerging Growth
Fund Common Shares ...................... 0.80% 216,315 1.603948 346,958 41%
0.70% 92,452 1.605761 148,456 41%
0.55% 106,549 1.608485 171,382 41%
0.40% 76,822 1.611214 123,777 41%
0.25% 8,825 1.613947 14,243 41%
0.15% 114,151 1.615771 184,442 42%
======= ======== ---------------
Total Contract Owners' Equity $ 3,883,945,594
===============
<FN>
(a) These investment options were not being utilized for the entire year. Accordingly, the annual return was
computed for such period as the investment option was utilized. These investment options became available to
the Account on October 1, 1999.
(b) The annual return does not include contract charges satisfied by surrendering units.
</TABLE>
32
<PAGE> 33
NACo VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS, CONTINUED
<TABLE>
<CAPTION>
(5) Variable account fees
The following is a summary of variable account fees for the year ended December 31, 1999.
Percentage TOTAL ACIncGro ACTCGro ACTCIntDis ACTCUltra BdFdAm BrnCapSmCo
- ------------ ----------- --------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
0.95% ..................$10,890,030 -- 491,265 -- 1,549,183 69,900 --
0.90% .................. 4,841,447 -- 259,161 -- 664,056 35,946 --
0.80% .................. 4,613,599 21,423 205,291 8,235 487,482 17,747 162
0.70% .................. 652,245 8,513 -- 4,575 -- -- 84
0.65% .................. 1,294,722 -- 77,076 -- 181,377 10,345 --
0.60% .................. 57,788 -- 1,278 -- 6,725 121 --
0.55% .................. 339,905 6,121 -- 3,182 -- -- 56
0.50% .................. 298,119 -- 15,485 -- 47,338 1,874 --
0.45% .................. 8,019 -- -- -- -- -- --
0.40% .................. 1,644,990 1,589 77,961 2,822 265,281 8,735 19
0.30% .................. 5,336 21 295 -- 1,363 -- --
0.25% .................. 23,710 459 -- 305 -- -- --
0.15% .................. 95,348 1,277 -- 1,534 -- -- 12
0.10% .................. 83 -- -- -- -- -- --
---------- ---------- ----------- ----------- ----------- --------- ---------
Total variable
account fees ......... $24,765,341 39,403 1,127,812 20,653 3,202,805 144,668 333
=========== ========== =========== =========== =========== ========= =========
<CAPTION>
Percentage DryApp DryPreMCap Dry3dCen
- ------------ ----------- ----------- -----------
<S> <C> <C> <C>
0.95% .................. $ -- -- --
0.90% .................. -- -- --
0.80% .................. 9,826 1,127 269,449
0.70% .................. 5,547 453 118,330
0.65% .................. -- -- --
0.60% .................. -- -- --
0.55% .................. 2,325 101 63,960
0.50% .................. -- -- --
0.45% .................. -- -- --
0.40% .................. 1,134 55 23,287
0.30% .................. 14 -- 211
0.25% .................. 92 -- 4,008
0.15% .................. 1,108 162 17,950
0.10% .................. -- -- --
--------- --------- ---------
Total variable
account fees ......... $ 20,046 1,898 497,195
========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
Percentage EvIncGro FedBdFd FedUSGvt FAGrOppA FAHiYld FidCapInc FidContr
- ------------ ----------- ----------- ----------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
0.95% ................ $ 11,951 -- 44,313 -- -- $ 8,339 2,134,753
0.90% ................ 6,035 -- 21,003 -- -- 3,010 939,017
0.80% ................ 2,546 2,619 11,593 4,958 1,516 2,351 617,471
0.70% ................ -- 183 -- 1,744 1,095 -- --
0.65% ................ 1,830 -- 5,590 -- -- 4,555 224,209
0.60% ................ 7 -- 163 -- -- -- 11,065
0.55% ................ -- 546 -- 1,856 1,518 -- --
0.50% ................ 234 -- 1,464 -- -- 416 68,444
0.45% ................ -- -- -- -- -- -- --
0.40% ................ 2,278 134 6,873 483 80 1,123 251,838
0.30% ................ -- -- -- 2 -- -- --
0.25% ................ -- 22 -- 10 -- -- --
0.15% ................ -- 78 -- 127 134 -- --
0.10% ................ -- -- -- -- -- -- --
--------- ---------- --------- --------- --------- --------- ---------
Total variable
account fees ........ $ 24,881 3,582 90,999 9,180 4,343 $ 19,794 4,246,797
========= ========== ========= ========= ========= ========= =========
<CAPTION>
Percentage FidEqInc FidMgIn FidOTC
- ------------ ----------- ----------- -----------
<S> <C> <C> <C>
0.95% ................ $ 1,456,461 864,499 281,904
0.90% ................ 752,426 366,006 123,670
0.80% ................ 430,578 261,002 91,383
0.70% ................ -- -- --
0.65% ................ 224,300 92,687 38,167
0.60% ................ 4,054 4,144 1,540
0.55% ................ -- -- --
0.50% ................ 48,471 25,714 7,257
0.45% ................ -- -- --
0.40% ................ 234,272 90,181 60,647
0.30% ................ -- -- --
0.25% ................ -- -- --
0.15% ................ -- -- --
0.10% ................ -- -- --
--------- --------- ---------
Total variable
account fees ........ $3,150,562 1,704,233 604,568
========= ========= =======
</TABLE>
33
<PAGE> 34
<TABLE>
<CAPTION>
NACo VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS, Continued
Percentage FidPurtn InvDynam InvTotRet InvCoAm MASFIP MFSGrStk MFSGrOpp MFSHiInc MSIEqGroB NAATAggr
- ------------ ----------- -------- --------- ------- ------ ------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0.95% .......... $203,497 -- -- 458,333 25,095 69,134 73,917 75,640 -- --
0.90% .......... 93,004 -- -- 201,863 11,446 32,146 37,605 30,842 -- --
0.80% .......... 54,858 20,326 3,542 122,618 4,692 24,802 18,637 15,592 2,223 --
0.70% .......... -- 10,064 501 -- -- -- -- -- 539 9,765
0.65% .......... 15,732 -- -- 39,381 2,802 10,395 14,173 9,619 -- --
0.60% .......... 707 -- -- 1,105 105 127 223 148 -- 2,945
0.55% .......... -- 6,420 486 -- -- -- -- -- 460 --
0.50% .......... 5,020 -- -- 12,319 250 1,743 1,650 1,334 -- --
0.45% .......... -- -- -- -- -- -- -- -- -- 1,303
0.40% .......... 17,450 3,817 483 41,973 3,313 11,565 9,172 10,951 219 --
0.30% .......... -- 2 -- -- -- -- -- -- -- --
0.25% .......... -- 418 -- -- -- -- -- -- 17 673
0.15% .......... -- 3,021 177 -- -- -- -- -- 186 --
0.10% .......... -- -- -- -- -- -- -- -- -- 2
----------- ------ ----- ------- ------ ------- ------- ------- ----- ------
Total variable
account fees ..... $ 390,268 44,068 5,189 877,592 47,703 149,912 155,377 144,126 3,644 14,688
=========== ====== ===== ======= ====== ======= ======= ======= ===== ======
<CAPTION>
Percentage NAATCons NAATMod NAATModAgg NAATModCon NWFund NWGroFd NWMyMkt NWIndxFdY NSATInc NSATSmCo
- ------------ ----------- -------- ---------- ---------- ------ ------- ------- --------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0.95% .......... $ -- -- -- -- 298 31,105 -- -- -- --
0.90% .......... -- -- -- -- -- 18,886 -- -- -- --
0.80% .......... -- -- -- -- 759,547 11,013 194,617 14,338 38 12,792
0.70% .......... 3,453 14,185 11,968 5,592 269,976 -- 86,357 7,005 52 4,988
0.65% .......... -- -- -- -- -- 2,865 -- -- -- --
0.60% .......... 952 2,644 2,848 1,539 -- 104 -- -- -- --
0.55% .......... -- -- -- -- 145,305 -- 56,705 3,411 34 3,378
0.50% .......... -- -- -- -- -- 674 -- -- -- --
0.45% .......... 2,762 1,071 1,075 753 -- -- -- -- -- --
0.40% .......... -- -- -- -- 55,076 5,120 38,884 938 -- 2,310
0.30% .......... -- -- -- -- 1,102 14 564 -- -- 4
0.25% .......... 304 186 1,036 152 6,946 -- 6,012 251 -- 79
0.15% .......... -- -- -- -- 40,838 -- 17,958 1,114 1 460
0.10% .......... 7 31 31 -- -- -- -- -- -- --
- ------------ ----------- -------- -------- -------- --------- ------- ------- -------- ------ -------
Total variable
account fees .....$ 7,478 18,117 16,958 8,036 1,279,088 69,781 401,097 27,057 125 24,011
=========== ======== ======== ======== ========= ======= ======== ======== ====== ======
</TABLE>
34
<PAGE> 35
<TABLE>
<CAPTION>
NACo VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS, Continued
Percentage NBGuard NBPartTr PrBalY PrIntY PrLgCapGrY PrLgCpValY PrSmCapY OppGlob PutInvFd PutVoyFd
---------- ------- -------- ------ ------ ---------- ---------- -------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0.95% ......... $ 143,904 -- -- -- -- -- -- -- 637,729 1,380,052
0.90% ......... 64,716 -- -- -- -- -- -- -- 244,016 564,931
0.80% ......... 40,323 402 -- -- -- -- -- 2,658 125,149 347,694
0.70% ......... -- 262 1,566 651 2,400 726 1,755 2,104 -- --
0.65% ......... 15,915 -- -- -- -- -- -- -- 58,812 151,395
0.60% ......... 261 -- 581 348 1,296 429 417 -- 2,297 5,697
0.55% ......... -- 403 -- -- -- -- -- 951 -- --
0.50% ......... 2,083 -- -- -- -- -- -- -- 8,363 30,969
0.45% ......... -- -- 213 107 432 146 157 -- -- --
0.40% ......... 27,159 54 -- -- -- -- -- 226 81,771 158,543
0.30% ......... -- -- -- -- -- -- -- 1 815 810
0.25% ......... -- -- 184 45 150 83 100 28 -- --
0.15% ......... -- 5 -- -- -- -- -- 354 -- --
0.10% ......... -- -- -- 10 -- 1 1 -- -- --
-------- -------- -------- ------ --------- --------- -------- ------ --------- --------
Total variable
account fees ... $ 294,361 1,126 2,544 1,161 4,278 1,385 2,430 6,322 1,158,952 2,640,091
========= ======== ======== ====== ========= ========= ======== ======= ========= =========
<CAPTION>
Percentage SEI500Ix SelGroFd AIMTreas TRIntStk TemForFd WPEmGro
- ---------- -------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
0.95% ......... $ 658,477 60,995 27,845 131,441 -- --
0.90% ......... 273,304 30,690 12,214 55,454 -- --
0.80% ......... 176,277 14,505 5,846 37,885 155,115 1,351
0.70% ......... -- -- -- -- 77,099 713
0.65% ......... 80,995 7,320 9,595 15,587 -- --
0.60% ......... 3,114 226 100 478 -- --
0.55% ......... -- -- -- -- 42,231 456
0.50% ......... 10,553 1,342 558 4,564 -- --
0.45% ......... -- -- -- -- -- --
0.40% ......... 92,425 10,958 5,491 27,173 10,890 237
0.30% ......... -- -- -- -- 118 --
0.25% ......... -- -- -- -- 2,135 15
0.15% ......... -- -- -- -- 8,779 73
0.10% ......... -- -- -- -- -- --
-------- -------- -------- -------- -------- -------
Total variable
account fees ... $1,295,145 126,036 61,649 272,582 296,367 2,845
========== ======== ======== ======== ======== =======
</TABLE>
(Continued)
35
<PAGE> 36
<TABLE>
<CAPTION>
NACo VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS, Continued
The following is a summary of variable account fees for the period May 1, 1998 to December 31, 1998.
Percentage TOTAL ACIncGro ACTCGro ACTCIntDis ACTCUltra BdFdAm DryApp DryPreMCap Dry3dCen EvIncGro
- ---------- ----- --------- -------- ---------- --------- ------ ------ ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0.95% .........$ 6,585,520 -- 291,751 -- 759,586 48,961 -- -- 140,954 9,437
0.90% ......... 2,627,146 -- 140,063 -- 302,906 23,071 -- -- 57,233 4,039
0.80% ......... 1,994,050 39 108,208 59 218,855 10,944 30 1 63,645 1,495
0.70% ......... 692,150 26 35,014 25 72,777 4,882 32 -- 28,547 1,025
0.65% ......... 961,637 -- 45,760 -- 124,179 6,454 -- -- 22,436 1,793
0.60% ......... 763 -- -- -- -- -- -- -- -- --
0.55% ......... 37,994 14 -- 1 4,718 -- 9 -- 6,650 --
0.50% ......... 41,007 -- 1,755 -- -- 423 -- -- -- 50
0.45% ......... 54,298 -- -- -- 53,860 -- -- -- -- --
0.40% ......... 282,706 -- 18,239 47 -- 2,502 2 -- 2,530 617
0.30% ......... 7,558 -- 612 -- 1,383 -- -- -- 215 --
0.25% ......... 2,468 -- -- -- -- -- -- -- 472 --
0.20% ......... 18,215 2 -- 3 -- -- 9 -- 3,831 --
0.15% ......... 4 -- -- -- -- -- -- -- -- --
---------- --------- -------- --------- --------- ------ -------- --------- ------- ------
Total variable
account fees ...$13,305,516 81 641,402 135 1,538,264 97,237 82 1 326,513 18,456
=========== ========= ======== ========= ========= ====== ======== ========= ======= ======
<CAPTION>
Percentage FedBdFd FedUSGvt FAGrOppA FAHiYld FidCapInc FidContr FidEqInc FidMgIn FidOTC FidPurtn
- ---------- ------- -------- -------- ------- --------- -------- -------- ------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0.95% .........$ -- 19,714 -- -- 6,051 1,125,435 978,414 451,976 103,690 113,951
0.90% ......... -- 8,478 -- -- 1,794 444,624 425,805 162,898 39,859 51,253
0.80% ......... 23 5,953 3 -- 2,081 298,523 312,268 129,279 30,080 30,852
0.70% ......... 1 1,704 -- -- 2,390 102,142 122,006 34,728 10,397 8,562
0.65% ......... -- 3,102 -- -- 1,369 129,942 187,833 48,548 19,507 10,664
0.60% ......... -- -- -- -- -- -- -- -- -- --
0.55% ......... -- -- 2 1 -- -- -- -- -- --
0.50% ......... -- 240 -- -- 50 10,615 10,019 3,626 867 1,237
0.45% ......... -- -- -- -- -- -- -- -- -- --
0.40% ......... 13 1,723 -- -- 203 54,439 54,720 16,607 6,061 5,038
0.30% ......... -- -- -- -- -- -- -- -- -- --
0.25% ......... -- -- -- -- -- -- -- -- -- --
0.20% ......... 2 -- 4 3 -- -- -- -- -- --
0.15% ......... -- -- -- -- -- -- -- -- -- --
---------- -------- -------- ------- -------- --------- -------- -------- ------ --------
Total variable
account fees ...$ 39 40,914 9 4 13,938 2,165,720 2,091,065 847,662 210,461 221,557
========== ======== ======== ======== ======== ========= ========= ======== ======= ========
</TABLE>
36
<PAGE> 37
<TABLE>
<CAPTION>
NACo VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS, Continued
Percentage InvDynam InvTotRet InvCoAm MASFIP MFSGrStk MFSGrOpp MFSHiInc MSIEqGroB NAATAggr NAATCons
- ---------- -------- --------- ------- ------ -------- -------- -------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0.95% ......... $ -- -- 261,313 14,823 39,089 45,624 50,190 -- 2,542 709
0.90% ......... -- -- 102,917 5,931 17,056 23,186 19,064 -- 1,134 224
0.80% ......... 15 3 64,000 2,164 14,382 14,053 12,776 2 565 74
0.70% ......... 3 1 17,363 678 2,997 4,916 3,950 -- 913 416
0.65% ......... -- -- 22,042 1,540 8,276 8,810 9,234 -- 1,495 107
0.60% ......... -- -- -- -- -- -- -- -- 244 83
0.55% ......... 3 1 -- -- -- -- -- -- -- --
0.50% ......... -- -- 2,190 93 305 451 411 -- -- --
0.45% ......... -- -- -- -- -- -- -- -- 132 93
0.40% ......... 74 -- 10,196 909 1,821 1,206 2,951 4 -- --
0.30% ......... -- -- -- -- -- -- -- -- -- --
0.25% ......... -- -- -- -- -- -- -- -- 51 --
0.20% ......... -- 1 -- -- -- -- -- -- -- 31
0.15% ......... -- -- -- -- -- -- -- -- -- --
------- --------- ------- ------ ------- ------- ------- ------- ------ -----
Total variable
account fees ... $ 95 6 480,021 26,138 83,926 98,246 98,576 6 7,076 1,737
======= ========= ======= ====== ======= ======= ======= ======= ====== =====
<CAPTION>
Percentage NAATMod NAATModAgg NAATModCon NWFund NWGroFd NWMyMkt NWIndxFdY NSATSmCo NBGuard NBPartTr
- ---------- ------- ---------- ---------- ------ ------- ------- --------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0.95% ......... $ 2,960 3,575 1,364 352,279 20,220 99,303 -- 3,959 105,386 --
0.90% ......... 458 536 310 133,584 11,298 49,646 -- 2,442 42,598 --
0.80% ......... 317 623 613 175,591 6,348 50,606 68 2,154 30,545 --
0.70% ......... 1,163 1,052 375 63,159 3,461 24,629 58 1,044 8,382 36
0.65% ......... 210 654 176 49,597 2,479 34,448 -- 636 20,994 --
0.60% ......... 190 128 112 -- -- -- -- -- -- --
0.55% ......... -- -- -- 16,710 -- 4,921 -- 309 -- 1
0.50% ......... -- -- -- -- 92 -- -- -- 772 --
0.45% ......... 73 101 37 -- -- -- -- -- -- --
0.40% ......... -- -- -- 6,433 1,423 9,983 7 347 7,492 3
0.30% ......... -- -- -- 1,673 129 363 -- 7 -- --
0.25% ......... 6 47 38 922 -- 658 8 25 -- --
0.20% ......... -- 1 -- 9,975 -- 1,925 3 45 -- --
0.15% ......... 1 3 -- -- -- -- -- -- -- --
------- --------- -------- -------- ------- ------- --------- ------- ------- --------
Total variable
account fees ... $ 5,378 6,720 3,025 809,923 45,450 276,482 144 10,968 216,169 40
======= ========= ======== ======== ======= ======= ======== ====== ======= =======
</TABLE>
(Continued)
37
<PAGE> 38
<TABLE>
<CAPTION>
NACo VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS, Continued
Percentage PrBalY PrIntY PrLgCapGrY PrLgCpValY PrSmCapY OppGlob PutInvFd PutVoyFd SEI500Ix SelGroFd
- ---------- ------ ------ ---------- ---------- -------- ------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0.95% ......... $ -- -- -- -- -- -- 299,060 715,316 291,873 32,833
0.90% ......... -- -- -- -- -- -- 99,102 254,919 108,987 14,122
0.80% ......... -- -- -- -- -- 5 70,035 173,289 80,858 8,033
0.70% ......... 51 1 19 -- 1 -- 18,059 60,859 21,698 2,478
0.65% ......... -- -- -- -- -- -- 38,689 87,003 34,323 5,845
0.60% ......... -- -- -- -- 6 -- -- -- -- --
0.55% ......... -- -- -- -- -- -- -- -- -- --
0.50% ......... -- -- -- -- -- -- 895 3,233 2,270 249
0.45% ......... -- -- 1 1 -- -- -- -- -- --
0.40% ......... -- -- -- -- -- -- 14,344 32,851 19,442 2,131
0.30% ......... -- -- -- -- -- -- 1,269 1,627 -- --
0.25% ......... -- -- -- -- 1 -- -- -- -- --
0.20% ......... -- -- -- -- -- -- -- -- -- --
0.15% ......... -- -- -- -- -- -- -- -- -- --
------ ------ -------- ------ --------- ------ -------- -------- -------- --------
Total variable
account fees ... $ 51 1 20 1 8 5 541,453 1,329,097 559,451 65,691
====== ====== ======== ======= ========= ====== ======== ========= ======== ========
<CAPTION>
Percentage AIMTreas TRIntStk TemForFd WPEmGro
- ---------- -------- -------- -------- -------
<S> <C> <C> <C> <C>
0.95% ......... $12,180 80,016 100,986 --
0.90% ......... 5,583 30,625 41,401 --
0.80% ......... 2,162 23,257 49,172 2
0.70% ......... 3,559 8,452 18,118 1
0.65% ......... 2,505 18,120 12,867 --
0.60% ......... -- -- -- --
0.55% ......... -- -- 4,652 2
0.50% ......... 81 1,083 -- --
0.45% ......... -- -- -- --
0.40% ......... 1,419 5,731 1,198 --
0.30% ......... -- -- 280 --
0.25% ......... -- -- 240 --
0.20% ......... -- -- 2,380 --
0.15% ......... -- -- -- --
------- ------- ------- -------
Total variable
account fees ... $27,489 167,284 231,294 5
======= ======= ======= =======
</TABLE>
38
<PAGE> 39
Independent Auditors' Report
---------------------------
The Board of Directors of Nationwide Life Insurance Company and Contract Owners
of NACo Variable Account:
We have audited the accompanying statement of assets, liabilities and
contract owners' equity of NACo 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 include 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
39
<PAGE> 40
<TABLE>
<S> <C>
NATIONWIDE LIFE INSURANCE COMPANY
HOME OFFICE: ONE NATIONWIDE PLAZA - COLUMBUS, OHIO 43215-2220 Bulk Rate
U.S.Postage
PAID
Columbus, Ohio
Permit No.521
</TABLE>
Nationwide(R) is a registered federal service mark of Nationwide Mutual
Insurance Company
