<PAGE> 1
As filed with the Securities and Exchange Commission.
'33 Act Registration No. 2-51911
'40 Act Registration No. 811-2804
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933
Post-Effective Amendment No. 41 [x]
and
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
Amendment No. 42
NATIONWIDE DC VARIABLE ACCOUNT
(Exact Name of Registrant)
NATIONWIDE LIFE INSURANCE COMPANY
(Name of Depositor)
ONE NATIONWIDE PLAZA, COLUMBUS, OHIO 43215
(Address of Depositor's Principal Executive Offices) (Zip Code)
Depositor's Telephone Number, including Area Code: (614) 249-7111
DENNIS W. CLICK, SECRETARY, ONE NATIONWIDE PLAZA, COLUMBUS, OHIO 43215
(Name and Address of Agent for Service)
This Post-Effective Amendment amends the Registration Statement in respect of
the Prospectus, Statement of Additional Information, and the Financial
Statements.
It is proposed that this filing will become effective (check appropriate
space):
______________ immediately upon filing pursuant to paragraph (b) of Rule 485
______X_______ on January 1, 1998, pursuant to paragraph (b) of Rule 485
______________ 60 days after filing pursuant to paragraph (a)(1) of Rule 485
______________ on (date), pursuant to paragraph (a)(1) of Rule 485
1 of 177
<PAGE> 2
NATIONWIDE DC VARIABLE ACCOUNT
REFERENCE TO ITEMS REQUIRED BY FORM N-4
N-4 ITEM PAGE
Part A INFORMATION REQUIRED IN A PROSPECTUS
Item 1. Cover page............................................ 5
Item 2. Definitions........................................... 6
Item 3. Synopsis or Highlights................................ 19
Item 4. Condensed Financial Information....................... 20
Item 5. General Description of Registrant, Depositor, and
Portfolio Companies................................... 28
Item 6. Deductions and Expenses............................... 29
Item 7. General Description of Variable Annuity Contracts..... 31
Item 8. Annuity Period........................................ 35
Item 9. Death Benefit......................................... 36
Item 10. Purchases and Contract Value.......................... 34
Item 11. Redemptions........................................... 33
Item 12. Taxes................................................. 40
Item 13. Legal Proceedings..................................... 41
Item 14. Table of Contents of the Statement of Additional
Information........................................... 42
Part B INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
Item 15. Cover Page............................................ 50
Item 16. Table of Contents..................................... 50
Item 17. General Information and History....................... 50
Item 18. Services.............................................. 50
Item 19. Purchase of Securities Being Offered.................. 51
Item 20. Underwriters.......................................... 51
Item 21. Calculation of Performance............................ 51
Item 22. Annuity Payments...................................... 58
Item 23. Financial Statements.................................. 59
Part C OTHER INFORMATION
Item 24. Financial Statements and Exhibits..................... 143
Item 25. Directors and Officers of the Depositor............... 146
Item 26. Persons Controlled by or Under Common Control with the
Depositor or Registrant............................... 148
Item 27. Number of Contract Owners............................. 157
Item 28. Indemnification....................................... 157
Item 29. Principal Underwriters................................ 157
Item 30. Location of Accounts and Records...................... 159
Item 31. Management Services................................... 159
Item 32. Undertakings.......................................... 159
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<PAGE> 3
SUPPLEMENT DATED JANUARY 1, 1998 TO
PROSPECTUS DATED MAY 1, 1997 FOR
GROUP FLEXIBLE FUND RETIREMENT CONTRACTS
ISSUED BY
NATIONWIDE LIFE INSURANCE COMPANY
THROUGH ITS
NATIONWIDE DC VARIABLE ACCOUNT
This supplement updates certain information contained in your prospectus. Please
read it and keep it with your prospectus for future reference.
1. THE "UNDERLYING MUTUAL FUND ANNUAL EXPENSES" PROVISION AT PAGES 7 THROUGH 10
OF THE PROSPECTUS IS AMENDED TO REFLECT THE ADDITION OF THE FOLLOWING:
<TABLE>
<CAPTION>
=============================================================================
Management Other 12b-1 Total Fund
Fees Expenses Fees Annual Expenses
=============================================================================
<S> <C> <C> <C> <C>
American Century: 1.45% 0.00% 0.00% 1.45%
Twentieth Century
International Growth
-----------------------------------------------------------------------------
Janus Worldwide Fund 0.67% 0.30% 0.00% 0.97%
-----------------------------------------------------------------------------
Nationwide Separate 1.00% 0.10% 0.00% 1.10%
Account Trust -
Nationwide Small
Company Fund
-----------------------------------------------------------------------------
Neuberger & Berman 0.84% 0.00% 0.04% 0.88%
Equity Trust(R) -
Neuberger & Berman
Guardian Trust
-----------------------------------------------------------------------------
Warburg Pincus Emerging 0.90% 0.37% 0.00% 1.27%
Growth Fund
-----------------------------------------------------------------------------
</TABLE>
2. THE "EXAMPLE" AT PAGES 13 THROUGH 18 OF THE PROSPECTUS IS AMENDED BY
ADDING THE FOLLOWING INFORMATION:
<TABLE>
<CAPTION>
====================================
If you surrender your
Contract at the end of
the applicable time period
====================================
1 Yr. 3 Yrs. 5 Yrs. 10 Yrs.
- ----------------------------------------------====================================
<S> <C> <C> <C> <C>
American Century: Twentieth Century 75 128 183 333
International Growth
- ----------------------------------------------------------------------------------
Janus Worldwide Fund 70 113 158 282
- ----------------------------------------------------------------------------------
Nationwide Separate Account Trust - 72 117 164 296
Nationwide Small Company Fund
- ----------------------------------------------------------------------------------
Neuberger & Berman Equity Trust(R) - 69 110 153 272
Neuberger & Berman Guardian Trust
- ----------------------------------------------------------------------------------
Warburg Pincus Emerging Growth Fund 73 122 173 314
- ----------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
====================================
If you do not surrender
your Contract at the end
of the applicable time
period
====================================
1 Yr. 3 Yrs. 5 Yrs. 10 Yrs.
- ----------------------------------------------====================================
<S> <C> <C> <C> <C>
American Century: Twentieth Century 25 78 133 283
International Growth
- ----------------------------------------------------------------------------------
Janus Worldwide Fund 20 63 108 232
- ----------------------------------------------------------------------------------
Nationwide Separate Account Trust - 22 67 114 246
Nationwide Small Company Fund
- ----------------------------------------------------------------------------------
Neuberger & Berman Equity Trust(R) - 19 60 103 222
Neuberger & Berman Guardian Trust
- ----------------------------------------------------------------------------------
Warburg Pincus Emerging Growth Fund 23 72 123 264
- ----------------------------------------------------------------------------------
</TABLE>
3 of 177
<PAGE> 4
<TABLE>
<CAPTION>
====================================
If you annuitize your
Contract at the end of
the applicable time period
====================================
1 Yr. 3 Yrs. 5 Yrs. 10 Yrs.
- ----------------------------------------------====================================
<S> <C> <C> <C> <C>
American Century: Twentieth Century 25 78 133 283
International Growth
- ----------------------------------------------------------------------------------
Janus Worldwide Fund 20 63 108 232
- ----------------------------------------------------------------------------------
Nationwide Separate Account Trust - 22 67 114 246
Nationwide Small Company Fund
- ----------------------------------------------------------------------------------
Neuberger & Berman Equity Trust(R) - 19 60 103 222
Neuberger & Berman Guardian Trust
- ----------------------------------------------------------------------------------
Warburg Pincus Emerging Growth Fund 23 72 123 264
- ----------------------------------------------------------------------------------
</TABLE>
3. THE "CONDENSED FINANCIAL INFORMATION" AT PAGES 20 THROUGH 29 OF THE
PROSPECTUS IS AMENDED BY REPLACING THE EXPLANATORY INFORMATION AT PAGE 29
WITH THE FOLLOWING:
Unit value information is not available for American Century: Twentieth Century
International Growth Fund, Dreyfus S&P 500 Index Fund, Janus Worldwide Fund,
Nationwide Separate Account Trust - Nationwide Small Company Fund, Neuberger &
Berman Equity Trust(R) - Neuberger & Berman Guardian Trust, and Warburg Pincus
Emerging Growth Fund.
4. THE "APPENDIX - PARTICIPATING UNDERLYING MUTUAL FUNDS" AT PAGES 50 THROUGH 57
OF THE PROSPECTUS IS AMENDED BY ADDING THE FOLLOWING:
AMERICAN CENTURY: TWENTIETH CENTURY INTERNATIONAL GROWTH
The investment objective of the Fund is capital growth by investing in an
international portfolio of common stocks, primarily in developed markets; stocks
considered by the investment manager to have prospects for appreciation. The
Fund will invest primarily in common stocks (defined to include depository
receipts for common stocks) and other equity equivalents of such companies.
American Century Investment Management, Inc. serves as the Fund's investment
adviser.
JANUS WORLDWIDE FUND
The investment objective of the Fund is long-term growth of capital in a manner
consistent with the preservation of capital. The objective is pursued primarily
through investments in common stocks of foreign and domestic issuers. The Fund
may invest on a worldwide basis in companies and organizations of any size,
regardless of country of organization or place of principal business activity.
The Fund normally invests in issuers from at least five different countries.
Janus Capital Corporation serves as the Fund's investment adviser.
NATIONWIDE SEPARATE ACCOUNT TRUST - NATIONWIDE SMALL COMPANY FUND
The investment objective of the Fund is long-term growth of capital by investing
primarily in equity securities of domestic and foreign companies with market
capitalizations of less than $1 billion at the time of purchase. The
subadvisers, Dreyfus Corporation, Neuberger & Berman, L.P., Pictet International
Management Limited with Van Eck Associates Corporation, Strong Capital
Management, Inc. and Warburg Pincus Asset Management, Inc., were chosen because
they utilize a number of different investment styles when investing in small
company stocks. By utilizing different investment styles, the Fund's advisor
Nationwide Advisory Services, Inc., hopes to increase prospects for investment
return and to reduce market risk and volatility.
NEUBERGER & BERMAN EQUITY TRUST(R) - NEUBERGER & BERMAN GUARDIAN TRUST
The investment objective of the Fund is capital appreciation and, secondarily,
current income. The Fund seeks growth and income by investing primarily in
stocks of established, high-quality companies that are not well followed on Wall
Street or are temporarily out of favor. Neuberger & Berman Management
Incorporated serves as the Fund's investment adviser.
WARBURG PINCUS EMERGING GROWTH FUND
The investment objective of the Fund is maximum capital appreciation by
investing in equity securities of small-to-medium sized companies in the United
States with emerging or renewed growth potential. Warburg Pincus Asset
Management, Inc. serves as the Fund's investment adviser.
4 of 177
<PAGE> 5
NATIONWIDE LIFE INSURANCE COMPANY
Home Office
P. O. Box 16766
One Nationwide Plaza
Columbus, Ohio 43216
1-800-545-4730 (TTY: 1-800-848-0833)
GROUP FLEXIBLE FUND RETIREMENT CONTRACTS
ISSUED BY THE NATIONWIDE DC VARIABLE ACCOUNT OF
NATIONWIDE LIFE INSURANCE COMPANY
The Group Flexible Fund Retirement Contracts (the "Contract" or "Contracts")
described in this prospectus are designed for use in connection with
supplemental deferred compensation plans for employees of tax exempt entities.
Such Plans will generally qualify for favorable tax treatment under Sections
401, 403(b) or 457 of the Internal Revenue Code ("Code"), but may also include
other nonqualified deferred compensation plans. Contracts will be issued only to
fund deferred compensation plans to employers who are exempt from taxation. The
employees are generally not subject to tax until Distributions are received from
the Plan. Purchase Payments made at any time by or on behalf of any Participant
must be at least $20 per month. Rights and privileges under the Contracts may be
exercised by the Owner to the extent such rights are not specifically reserved
in the Plan for Participants as a group or as individuals. The Owner may not
take any action inconsistent with the rights of the Plan's Participants. The
Participants in such Plans have a contractual claim against the Owner for the
benefits promised by such Plans.
Purchase Payments are allocated to the Nationwide DC Variable Account (the
"Variable Account"). The Variable Account is a unit investment trust with 46
Sub-Accounts of unit values, each reflecting investment results of a different
management investment company. Amounts equivalent to the obligations of
Nationwide Life Insurance Company (the "Company") under each Sub-Account will be
invested in Underlying Mutual Funds (see Appendix of Participating Underlying
Mutual Funds).
This prospectus provides you with the basic information you should know about
the Group Flexible Fund Retirement Contracts issued by the Variable Account
before investing. You should read it and keep it for future reference. A
Statement of Additional Information dated May 1, 1997 containing further
information about the Contracts and the Variable Account has been filed with the
Securities and Exchange Commission. You can obtain a copy without charge from
the Company by calling the number listed above, or writing P. O. Box 16766, One
Nationwide Plaza, Columbus, Ohio 43216.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE STATEMENT OF ADDITIONAL INFORMATION, DATED MAY 1, 1997, IS INCORPORATED
HEREIN BY REFERENCE. THE TABLE OF CONTENTS FOR THE STATEMENT OF ADDITIONAL
INFORMATION APPEARS ON PAGE 38 OF THIS PROSPECTUS.
THE DATE OF THIS PROSPECTUS IS MAY 1, 1997.
0
5 of 177
<PAGE> 6
GLOSSARY OF TERMS
ACCUMULATION UNIT- A statistical index measuring the net investment results of
each Sub-Account of the Variable Account. It is the unit of measurement used to
determine the Contract Value and each Participant Account value.
ACTUARIAL RISK FEE- A charge made for mortality and expense risk and
administration of the Variable Account. It is computed on a daily basis and is
equal to an annual rate of .95% of the average Account value.
BENEFICIARY- The person named in the application to receive certain benefits
under the Contract upon the death of the designated annuitant. The Beneficiary
can be changed by the Owner as set forth in the Contract.
CODE- The Internal Revenue Code of 1986, as amended.
COMPANY- Nationwide Life Insurance Company.
CONTINGENT BENEFICIARY- The person named on the application to be the alternate
Beneficiary if the named Beneficiary is not living at the time of the death of
the designated annuitant.
CONTRACT- The Group Flexible Fund Retirement Contract issued by the Company to
the Owner under which the Company invests Purchase Payments made by the Owner
and assists the Owner in making retirement income payments at specified dates.
CONTRACT ANNIVERSARY- An anniversary of the date of issue of the Contract.
CONTRACT DATE- The date of issue shown on the Contract.
CONTRACT MAINTENANCE CHARGE- The maximum Contract Maintenance Charge is $15 per
Participant per year to reimburse the Company for certain administrative
expenses relating to the maintenance of individual Participant records and the
mailing of periodic statements to Participants.
CONTRACT VALUE- The sum of the value of all Variable Account Accumulation Units
attributable to the Contract plus any amount held under the Contract in the
General Account.
CONTRACT YEAR- Each period starting with either (1) the Contract Date or (2) a
Contract Anniversary. The Contract Year ends immediately prior to the next
Contract Anniversary.
DISTRIBUTION- Any payment by the Company of part or all of the Contract Value
under the Contract.
DISTRIBUTION PERIOD- The period during which payments are distributed from a
Participant Account.
GENERAL ACCOUNT- This is an account comprised of all assets of the Company other
than those in any segregated asset account.
GROUP FIXED CONTRACT- The Company's Group Fixed Fund Retirement Contract or
Group Fixed Tax Deferred Annuity Contract.
HOME OFFICE- The main office of the Company located in Columbus, Ohio.
NATIONWIDE DC VARIABLE ACCOUNT ("VARIABLE ACCOUNT")- A segregated investment
account established by the Company in which amounts equivalent to the Company's
obligations under the Contract are held for all Participants, and for those
Participants during retirement who have annuitized.
OPTIONAL RETIREMENT INCOME FORMS- The method for making annuity payments.
Several forms are available under the Contract.
OWNER- The employer or other entity to which the Contract is issued.
PARTICIPANT- An eligible employee, member, or other person who is entitled to
benefits under the Plan. Such persons are determined and reported to the Company
by the Owner.
PARTICIPANT ACCOUNT- An account established by the Company for each Participant
in which all financial transactions occurring with respect to a Participant,
under this Contract, other than the purchase and payment of an annuity made from
the Company's General Account, are recorded.
PARTICIPANT ACCOUNT YEAR- For each Participant, the Participant Account Year is
each one year period starting with either the Participant Effective Date or a
Participant Anniversary.
1
6 of 177
<PAGE> 7
PARTICIPANT ANNIVERSARY- An anniversary of the Participant Effective Date.
PARTICIPANT EFFECTIVE DATE- For each Participant, the Participant Effective Date
is the first date Accumulation Units are credited to the Participant's Account
on behalf of such Participant under the Contract.
PLAN- A retirement plan which receives favorable tax treatment under the
provisions of the Code. The Plan document is referred to in the Contract as the
Plan.
PURCHASE PAYMENT- A deposit of new value into the Contract. The term "Purchase
Payment" does not include transfers among the Sub-Accounts.
RETIREMENT COMMENCEMENT DATE- The date upon which Retirement Income Payments
commence.
RETIREMENT INCOME PAYMENTS- Periodic distributions from a Participant Account
made by the Company to the Owner during the Distribution Period.
RETIRED PARTICIPANT- A Participant for whom payments under an Optional
Retirement Income Form are being made.
SUB-ACCOUNT- A separate and distinct division of the Variable Account, to which
specific Underlying Mutual Fund shares are allocated and for which Accumulation
Units are separately maintained.
UNDERLYING MUTUAL FUND- The registered management investment company, specified
in the Contract application, in which the assets of a Sub-Account of the
Variable Account will be invested.
VALUATION DATE- Each day the New York Stock Exchange and the Company's Home
Office are open for business or any other day during which there is a sufficient
degree of trading of the Variable Account's Underlying Mutual Fund shares that
the current net asset value of its Accumulation Units might be materially
affected.
VALUATION PERIOD- The period of time commencing at the close of business of the
New York Stock Exchange and ending at the close of business for the next
succeeding Valuation Date.
2
7 of 177
<PAGE> 8
TABLE OF CONTENTS
GLOSSARY OF TERMS..............................................................2
SUMMARY OF CONTRACT EXPENSES...................................................5
UNDERLYING MUTUAL FUND ANNUAL EXPENSES.........................................5
SYNOPSIS......................................................................15
CONDENSED FINANCIAL INFORMATION...............................................16
NATIONWIDE LIFE INSURANCE COMPANY.............................................24
THE NATIONWIDE DC VARIABLE ACCOUNT............................................24
Voting Rights...........................................................24
PERIODIC REPORTS..............................................................24
VARIABLE ACCOUNT CHARGES AND OTHER DEDUCTIONS.................................25
Contingent Deferred Sales Charge........................................25
Contract Maintenance Charge.............................................25
Mortality Risk Charge, Expense Risk And Administration Charge...........26
Premium Taxes and Other Expenses........................................26
Experience Credits......................................................26
Expenses of the Variable Account........................................27
DESCRIPTION OF THE CONTRACTS..................................................27
A. General..............................................................27
Purpose of the Contracts.............................................27
Modification of the Contract.........................................28
Contract Rights and Privileges and Assignments.......................28
Exchange Privilege...................................................28
Suspension and Termination...........................................29
B. Participant Account Values...........................................29
Application of Purchase Payments.....................................29
Additional Purchase Payments Prior to Commencement of Annuity
Payment...........................................................29
Crediting Accumulation Units.........................................29
Variable Account Accumulation Unit Value.............................30
Allocation of Purchase Payments......................................30
Valuation of an Account..............................................30
C. Redemption of Participant Accounts ..................................30
D. Distribution of Participant Accounts (Retirement Period).............31
Retirement Income Payments...........................................31
Election of Income Form and Date.....................................31
Allocation of Retirement Income......................................31
Fixed Dollar Annuity.................................................31
Minimum Payment......................................................32
Death Benefit Before Retirement......................................32
Optional Retirement Income Forms.....................................32
Death of Retired Participant.........................................33
Withdrawal...........................................................33
Frequency of Payment.................................................33
Determination of Payments Under Options A1 & A2......................33
Determination of Payments Under Options B1 & B2......................33
Determination of Amount of Variable Monthly Payments For First Year..33
Determination of Amount of Variable Monthly Payments For the Second
and Subsequent Years..............................................34
Alternate Assumed Investment Rate....................................34
GENERAL INFORMATION...........................................................34
Substitution of Securities..............................................34
Performance Advertising.................................................34
Contract Owner Inquiries................................................36
Net Investment Factor...................................................36
Valuation of Assets.....................................................36
Federal Tax Status......................................................36
Contracts Issued Under the New York Model Plan..........................37
LEGAL PROCEEDINGS.............................................................37
TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION......................38
APPENDIX......................................................................39
3
8 of 177
<PAGE> 9
SUMMARY OF CONTRACT EXPENSES
PARTICIPANT TRANSACTION EXPENSES
Maximum Deferred Sales Charge(1)................................ 5%
(as a percentage of Purchase Payments)
CONTRACT MAINTENANCE CHARGE(2)........................................ $ 15
(Per Participant Anniversary)
VARIABLE ACCOUNT ANNUAL EXPENSES(3)
(as a percentage of average account value)
Mortality and Expense Risk Fees ................................ 0.50%
Administration Charge .......................................... 0.45%
Total Variable Account Annual Expenses ......................... 0.95%
UNDERLYING MUTUAL FUND ANNUAL EXPENSES(4)
(AFTER EXPENSE REIMBURSEMENT)
(as a percentage of Underlying Mutual Fund average net assets)
<TABLE>
<CAPTION>
===========================================================================
MANAGEMENT OTHER 12b-1 TOTAL FUND
FEES EXPENSES FEES ANNUAL
EXPENSES
===========================================================================
<S> <C> <C> <C> <C>
AIM Constellation Fund - 0.61% 0.05% 0.00% 0.66%
Institutional Class
---------------------------------------------------------------------------
AIM Weingarten Fund - 0.61% 0.04% 0.00% 0.65%
Institutional Class
---------------------------------------------------------------------------
American Century: Twentieth 1.00% 0.00% 0.00% 1.00%
Century Growth
---------------------------------------------------------------------------
American Century: Twentieth 1.00% 0.00% 0.00% 1.00%
Century Select
---------------------------------------------------------------------------
American Century: Twentieth 1.00% 0.00% 0.00% 1.00%
Century Ultra
---------------------------------------------------------------------------
The Bond Fund of America(SM), 0.35% 0.11% 0.25% 0.71%
Inc.
---------------------------------------------------------------------------
Davis New York Venture Fund, 0.59% 0.14% 0.14% 0.87%
Inc.
---------------------------------------------------------------------------
Delaware Group Decatur Fund, 0.49% 0.20% 0.00% 0.69%
Inc.-Decatur Income Fund
---------------------------------------------------------------------------
Dreyfus Cash Management - 0.20% 0.00% 0.00% 0.20%
Class A
---------------------------------------------------------------------------
Dreyfus S&P 500 Index Fund 0.30% 0.25% 0.00% 0.55%
---------------------------------------------------------------------------
Dreyfus Third Century Fund, 0.75% 0.36% 0.00% 1.11%
Inc.
---------------------------------------------------------------------------
Evergreen Income and Growth 0.98% 0.21% 0.00% 1.19%
Fund
---------------------------------------------------------------------------
Federated GNMA 0.40% 0.20% 0.00% 0.60%
Trust-Institutional Shares
---------------------------------------------------------------------------
Federated U.S. Government 0.40% 0.14% 0.00% 0.54%
Securities Fund: 2-5 Years
- Institutional Shares
---------------------------------------------------------------------------
Fidelity Asset Manager(TM) 0.68% 0.27% 0.00% 0.95%
---------------------------------------------------------------------------
Fidelity Capital & Income 0.62% 0.27% 0.00% 0.89%
Fund
---------------------------------------------------------------------------
Fidelity Contrafund 0.63% 0.27% 0.00% 0.90%
---------------------------------------------------------------------------
Fidelity Equity-Income Fund 0.45% 0.23% 0.00% 0.68%
---------------------------------------------------------------------------
Fidelity Growth & Income 0.51% 0.24% 0.00% 0.75%
Portfolio
---------------------------------------------------------------------------
Fidelity Magellan(R) Fund 0.47% 0.21% 0.00% 0.68%
---------------------------------------------------------------------------
Fidelity OTC Portfolio 0.53% 0.30% 0.00% 0.83%
---------------------------------------------------------------------------
Fidelity Puritan Fund 0.46% 0.28% 0.00% 0.74%
---------------------------------------------------------------------------
The Growth Fund of 0.37% 0.13% 0.24% 0.74%
America(R), Inc.
---------------------------------------------------------------------------
The Income Fund of 0.30% 0.09% 0.23% 0.62%
America(R), Inc.
---------------------------------------------------------------------------
INVESCO Industrial Income 0.51% 0.36% 0.25% 1.12%
Fund, Inc.
---------------------------------------------------------------------------
Janus Fund 0.65% 0.22% 0.00% 0.87%
---------------------------------------------------------------------------
</TABLE>
4
9 of 177
<PAGE> 10
UNDERLYING MUTUAL FUND ANNUAL EXPENSES (CONTINUED)
<TABLE>
<CAPTION>
===========================================================================
MANAGEMENT OTHER 12b-1 TOTAL FUND
FEES EXPENSES FEES ANNUAL
EXPENSES
===========================================================================
<S> <C> <C> <C> <C>
Janus Twenty Fund 0.66% 0.24% 0.00% 0.90%
---------------------------------------------------------------------------
MAS Funds Fixed Income 0.38% 0.11% 0.00% 0.49%
Portfolio
---------------------------------------------------------------------------
Massachusetts Investors 0.31% 0.23% 0.19% 0.73%
Growth Stock Fund - Class A
---------------------------------------------------------------------------
MFS(R) Growth Opportunities 0.90% 0.36% 0.25% 1.51%
Fund - Class A
---------------------------------------------------------------------------
MFS(R) High Income Fund - 0.45% 0.34% 0.26% 1.05%
Class A
---------------------------------------------------------------------------
Nationwide(R) Bond Fund 0.50% 0.20% 0.00% 0.70%
---------------------------------------------------------------------------
Nationwide(R) Fund 0.50% 0.11% 0.00% 0.61%
---------------------------------------------------------------------------
Nationwide(R) Growth Fund 0.50% 0.14% 0.00% 0.64%
---------------------------------------------------------------------------
Nationwide(R) Money Market 0.45% 0.15% 0.00% 0.60%
Fund
---------------------------------------------------------------------------
Neuberger & Berman Guardian 0.70% 0.12% 0.00% 0.82%
Fund, Inc.
---------------------------------------------------------------------------
Neuberger & Berman Manhattan 0.79% 0.19% 0.00% 0.98%
Fund, Inc.
---------------------------------------------------------------------------
Neuberger & Berman Partners 0.74% 0.10% 0.00% 0.84%
Fund, Inc.
---------------------------------------------------------------------------
Putnam Investors Fund - 0.59% 0.19% 0.25% 1.03%
Class A
---------------------------------------------------------------------------
Putnam Voyager Fund - Class A 0.51% 0.27% 0.25% 1.03%
---------------------------------------------------------------------------
SEI Index Funds -S&P 500 0.19% 0.06% 0.00% 0.25%
Index Portfolio
---------------------------------------------------------------------------
Seligman Growth Fund, Inc. - 0.70% 0.27% 0.23% 1.20%
Class A
---------------------------------------------------------------------------
Strong Common Stock Fund, 1.00% 0.12% 0.00% 1.12%
Inc.
---------------------------------------------------------------------------
T. Rowe Price International 0.68% 0.20% 0.00% 0.88%
Stock Fund(R)
---------------------------------------------------------------------------
Templeton Foreign Fund - 0.61% 0.26% 0.25% 1.12%
Class I
---------------------------------------------------------------------------
Templeton Global Smaller 0.75% 0.32% 0.20% 1.27%
Companies Growth Fund -
Class I
---------------------------------------------------------------------------
</TABLE>
(1) Imposed only when it is applicable (see "Contingent Deferred Sales Charge").
(2) The Contract Maintenance Charge, if applicable, will also be assessed on the
date that amounts held with respect to a Participant are fully withdrawn
from the Contract (see "Contract Maintenance Charge").
(3) If the total assets of a Plan as of June 30, 1996, or as of a later date
mutually agreeable to the Owner and the Company, exceed $10 million, the
0.45% Administration Charge and the total Variable Account Annual Expense
("Actuarial Risk Fee") will be reduced on a sliding scale on November 2,
1996, or on such later date mutually agreeable to the Owner and the Company,
as follows:
5
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<PAGE> 11
<TABLE>
<CAPTION>
=============================================================================
ADMINISTRATIVE CHARGE TOTAL
ASSETS (AS A PORTION OF ACTUARIAL
THE ACTUARIAL RISK FEE) RISK FEE
=============================================================================
<S> <C> <C>
Greater than $10 million but less than .40 .90
or equal to $25 million
- -----------------------------------------------------------------------------
Greater than $25 million but less than .30 .80
or equal to $50 million
- -----------------------------------------------------------------------------
Greater than $50 million but less than .20 .70
or equal to $150 million
- -----------------------------------------------------------------------------
Greater than $150 million .15 .65
- -----------------------------------------------------------------------------
</TABLE>
Following this initial reduction, if total assets of a Plan under the
Program as of December 31 of each year exceed $10 million, the
Administration Charge and the total Variable Account Annual Expense will be
reduced as set forth above on May 1 of each succeeding year, as applicable.
For new Contracts issued on or after the effective date of the reduction,
the Administration charge and correspondingly the Total Variable Account
Annual Expense (Total Actuarial Risk Fee) shall be determined at the
issuance of the Contract and thereafter each year based upon the total
assets of the Plan under the Program as of December 31. Any reduction or
increase based on assets on December 31 of each year will be effective on
May 1 of the succeeding year.
(4) The Mutual Fund expenses shown above are assessed at the Underlying Mutual
Fund level and are not direct charges against Variable Account assets or
reductions from Contract Values. These Underlying Mutual Fund expenses are
taken into consideration in computing each Underlying Mutual Fund's net
asset value, which is the share price used to calculate the Variable
Account's unit value. There are no front-end load fees (sales charges) at
the Underlying Mutual Fund level. The following funds are subject to fee
waivers or expense reimbursement arrangements:
<TABLE>
<CAPTION>
================================================================================
FUND EXPENSES WITHOUT
REIMBURSEMENT OR WAIVER
================================================================================
<S> <C>
AIM Constellation Fund - The Fund is currently waiving a portion of
Institutional Class its fees. Had there been no fee waivers
during the year, management fees would have
been 0.63% of average net assets.
- --------------------------------------------------------------------------------
AIM Weingarten Fund - Institutional The Fund is currently waiving a portion of
Class its fees. Had there been no fee waivers
during the year, management fees would have
been 0.63% of average net assets.
- --------------------------------------------------------------------------------
Federated GNMA Trust - The total operating expenses would have
Institutional Shares been 0.80% absent the voluntary waiver of
a portion of the shareholder service fee.
- --------------------------------------------------------------------------------
Federated U.S. Government The total operating expenses would have
Securities Fund: 2-5 Years - been 0.79% absent the voluntary waiver of
Institutional Shares a portion of the shareholder service fee.
- --------------------------------------------------------------------------------
Fidelity Equity-Income Fund The Fund has entered into arrangements
with its custodian and transfer agent
whereby interest earned on uninvested cash
balances is used to reduce custodian and
transfer agent expenses. Including these
reductions, the total operating expenses
presented in the table would have been
0.68%.
- --------------------------------------------------------------------------------
Fidelity Growth & Income Portfolio The Fund has entered into arrangements
with its custodian and transfer agent
whereby interest earned on uninvested cash
balances is used to reduce custodian and
transfer agent expenses. Including these
reductions, the total operating expenses
presented in the table would have been
0.75%.
- --------------------------------------------------------------------------------
Fidelity Magellan(R) Fund The Fund has entered into arrangements
with its custodian and transfer agent
whereby interest earned on uninvested cash
balances is used to reduce custodian and
transfer agent expenses. Including these
reductions, the total operating expenses
presented in the table would have been
0.95%.
- --------------------------------------------------------------------------------
Fidelity OTC Portfolio The Fund has entered into arrangements
with its custodian and transfer agent
whereby interest earned on uninvested cash
balances is used to reduce custodian and
transfer agent expenses. Including these
reductions, the total operating expenses
presented in the table would have been
0.83%.
- --------------------------------------------------------------------------------
</TABLE>
6
11 of 177
<PAGE> 12
<TABLE>
<CAPTION>
================================================================================
FUND EXPENSES WITHOUT
REIMBURSEMENT OR WAIVER
================================================================================
<S> <C>
Fidelity Puritan Fund The Fund has entered into arrangements
with its custodian and transfer agent
whereby interest earned on uninvested cash
balances is used to reduce custodian and
transfer agent expenses. Including these
reductions, the total operating expenses
presented in the table would have been
0.69%.
- --------------------------------------------------------------------------------
INVESCO Industrial Income Fund, Inc. The management fee paid by the Fund has
been reduced to an annual rate of 0.45% on
daily net assets over $2 billion, and to an
annual rate of 0.40% on daily net assets
over $4 billion. In the absence of the
voluntary expense limitation, the Fund's
"Management Fee" and "Total Fund Operating
Expenses" would have been 0.51% and 0.96%
respectively.
- --------------------------------------------------------------------------------
Nationwide(R) Money Market Fund The Fund will waive 0.05% of the total
0.50% management fee until further notice.
- --------------------------------------------------------------------------------
SEI Index Funds - S & P 500 Index The Fund's Manager has waived, on a
Portfolio voluntary basis, a portion of its fee, and
the management/advisory fees shown above
reflect said waiver. Absent such waiver,
the management/advisory fees would be .25%.
The Distributor has waived, on a voluntary
basis, all or a portion of its shareholder
servicing fee. Absent such waiver, the
shareholder servicing fee would be .25%.
Absent these fee waivers, total operating
expenses would be .56%.
- --------------------------------------------------------------------------------
</TABLE>
The information relating to the Underlying Mutual Fund expenses was provided
by the Underlying Mutual Fund and was not independently verified by the
Company.
7
12 of 177
<PAGE> 13
EXAMPLE
The following chart depicts the dollar amount of expenses that would be incurred
under the Contract assuming a $1000 initial Purchase Payment and a 5% annual
return on assets.
<TABLE>
<CAPTION>
=========================
If you surrender your
Contract at the end of
the applicable time
period
=========================
1 Yr. 3 Yrs.5 Yrs.10 Yrs.
- -----------------------------------------------------=========================
<S> <C> <C> <C> <C>
AIM Constellation Fund - Institutional Class 67 103 141 248
- ------------------------------------------------------------------------------
AIM Weingarten Fund - Institutional Class 67 102 140 247
- ------------------------------------------------------------------------------
American Century: Twentieth Century Growth 71 114 159 285
- ------------------------------------------------------------------------------
American Century: Twentieth Century Select 71 114 159 285
- ------------------------------------------------------------------------------
American Century: Twentieth Century Ultra 71 114 159 285
- ------------------------------------------------------------------------------
The Bond Fund of America(SM), Inc. 68 104 144 253
- ------------------------------------------------------------------------------
Davis New York Venture Fund, Inc. 69 109 152 271
- ------------------------------------------------------------------------------
Delaware Group Decatur Fund, Inc.-Decatur Income 67 104 142 251
Fund
- ------------------------------------------------------------------------------
Dreyfus Cash Management - Class A 62 88 116 195
- ------------------------------------------------------------------------------
Dreyfus S&P 500 Index Fund 66 99 135 235
- ------------------------------------------------------------------------------
Dreyfus Third Century Fund, Inc. 72 117 165 297
- ------------------------------------------------------------------------------
Evergreen Income and Growth Fund 73 120 169 306
- ------------------------------------------------------------------------------
Federated GNMA Trust-Institutional Shares 66 101 138 241
- ------------------------------------------------------------------------------
Federated U.S. Government Securities Fund: 2-5 66 99 134 234
Years - Institutional Shares
- ------------------------------------------------------------------------------
Fidelity Asset Manager(TM) 70 112 156 280
- ------------------------------------------------------------------------------
Fidelity Capital & Income Fund 69 110 153 273
- ------------------------------------------------------------------------------
Fidelity Contrafund 70 110 154 274
- ------------------------------------------------------------------------------
Fidelity Equity-Income Fund 67 103 142 250
- ------------------------------------------------------------------------------
Fidelity Growth & Income Portfolio 68 106 146 258
- ------------------------------------------------------------------------------
Fidelity Magellan(R) Fund 67 103 142 250
- ------------------------------------------------------------------------------
Fidelity OTC Portfolio 69 108 150 267
- ------------------------------------------------------------------------------
Fidelity Puritan Fund 68 105 145 257
- ------------------------------------------------------------------------------
The Growth Fund of America(R) Inc. 68 105 145 257
- ------------------------------------------------------------------------------
The Income Fund of America(R) Inc. 67 101 139 243
- ------------------------------------------------------------------------------
INVESCO Industrial Income Fund, Inc. 72 117 166 298
- ------------------------------------------------------------------------------
Janus Fund 69 110 152 271
- ------------------------------------------------------------------------------
Janus Twenty Fund 70 110 154 274
- ------------------------------------------------------------------------------
MAS Funds Fixed Income Portfolio 65 97 132 228
- ------------------------------------------------------------------------------
Massachusetts Investors Growth Stock Fund - Class A 68 105 145 256
- ------------------------------------------------------------------------------
MFS(R) Growth Opportunities Fund - Class A 76 130 186 339
- ------------------------------------------------------------------------------
MFS(R) High Income Fund - Class A 71 115 162 291
- ------------------------------------------------------------------------------
Nationwide(R) Bond Fund 67 104 143 252
- ------------------------------------------------------------------------------
Nationwide(R) Fund 66 101 138 242
- ------------------------------------------------------------------------------
Nationwide(R) Growth Fund 67 102 140 245
- ------------------------------------------------------------------------------
Nationwide(R) Money Market Fund 66 101 138 241
- ------------------------------------------------------------------------------
Neuberger & Berman Guardian Fund, Inc. 69 108 149 266
- ------------------------------------------------------------------------------
Neuberger & Berman Manhattan Fund, Inc. 70 113 158 283
- ------------------------------------------------------------------------------
</TABLE>
8
13 of 177
<PAGE> 14
<TABLE>
<CAPTION>
=========================
If you surrender your
Contract at the end of
the applicable time
period
=========================
1 Yr. 3 Yrs.5 Yrs.10 Yrs.
- -----------------------------------------------------=========================
<S> <C> <C> <C> <C>
Neuberger & Berman Partners Fund, Inc. 69 108 151 268
- ------------------------------------------------------------------------------
Putnam Investors Fund - Class A 71 115 161 289
- ------------------------------------------------------------------------------
Putnam Voyager Fund - Class A 71 115 161 289
- ------------------------------------------------------------------------------
SEI Index Funds-S&P 500 Index Portfolio 63 90 118 201
- ------------------------------------------------------------------------------
Seligman Growth Fund, Inc. - Class A 73 120 170 307
- ------------------------------------------------------------------------------
Strong Common Stock Fund, Inc. 72 117 166 298
- ------------------------------------------------------------------------------
T. Rowe Price International Stock Fund(R) 69 110 153 272
- ------------------------------------------------------------------------------
Templeton Foreign Fund - Class I 72 117 166 298
- ------------------------------------------------------------------------------
Templeton Global Smaller Companies Growth Fund - 73 122 173 314
Class I
- ------------------------------------------------------------------------------
</TABLE>
The Example should not be considered a representation of past or future
expenses. Actual expenses may be greater or lesser than those shown.
9
14 of 177
<PAGE> 15
EXAMPLE
(CONTINUED)
The following chart depicts the dollar amount of expenses that would be incurred
under the Contract assuming a $1000 initial Purchase Payment and a 5% annual
return on assets.
<TABLE>
<CAPTION>
=========================
If you do not surrender
your Contract at the
end of the applicable
time period
=========================
1 Yr.3 Yrs. 5 Yrs.10 Yrs.
- -----------------------------------------------------=========================
<S> <C> <C> <C> <C>
AIM Constellation Fund - Institutional Class 17 53 91 198
- ------------------------------------------------------------------------------
AIM Weingarten Fund - Institutional Class 17 52 90 197
- ------------------------------------------------------------------------------
American Century: Twentieth Century Growth 21 64 109 235
- ------------------------------------------------------------------------------
American Century: Twentieth Century Select 21 64 109 235
- ------------------------------------------------------------------------------
American Century: Twentieth Century Ultra 21 64 109 235
- ------------------------------------------------------------------------------
The Bond Fund of America(SM), Inc. 18 54 94 203
- ------------------------------------------------------------------------------
Davis New York Venture Fund, Inc. 19 59 102 221
- ------------------------------------------------------------------------------
Delaware Group Decatur Fund, Inc.-Decatur Income 17 54 92 201
Fund
- ------------------------------------------------------------------------------
Dreyfus Cash Management - Class A 12 38 66 145
- ------------------------------------------------------------------------------
Dreyfus S&P 500 Index Fund 16 49 85 185
- ------------------------------------------------------------------------------
Dreyfus Third Century Fund, Inc. 22 67 115 247
- ------------------------------------------------------------------------------
Evergreen Income and Growth Fund 23 70 119 256
- ------------------------------------------------------------------------------
Federated GNMA Trust-Institutional Shares 16 51 88 191
- ------------------------------------------------------------------------------
Federated U.S. Government Securities Fund: 2-5 16 49 84 184
Years - Institutional Shares
- ------------------------------------------------------------------------------
Fidelity Asset Manager(TM) 20 62 106 230
- ------------------------------------------------------------------------------
Fidelity Capital & Income Fund 19 60 103 223
- ------------------------------------------------------------------------------
Fidelity Contrafund 20 60 104 224
- ------------------------------------------------------------------------------
Fidelity Equity-Income Fund 17 53 92 200
- ------------------------------------------------------------------------------
Fidelity Growth & Income Portfolio 18 56 96 208
- ------------------------------------------------------------------------------
Fidelity Magellan(R) Fund 17 53 92 200
- ------------------------------------------------------------------------------
Fidelity OTC Portfolio 19 58 100 217
- ------------------------------------------------------------------------------
Fidelity Puritan Fund 18 55 95 207
- ------------------------------------------------------------------------------
The Growth Fund of America(R) Inc. 18 55 95 207
- ------------------------------------------------------------------------------
The Income Fund of America(R) Inc. 17 51 89 193
- ------------------------------------------------------------------------------
INVESCO Industrial Income Fund, Inc. 22 67 116 248
- ------------------------------------------------------------------------------
Janus Fund 19 60 102 221
- ------------------------------------------------------------------------------
Janus Twenty Fund 20 60 104 224
- ------------------------------------------------------------------------------
MAS Funds Fixed Income Portfolio 15 47 82 178
- ------------------------------------------------------------------------------
Massachusetts Investors Growth Stock Fund - Class A 18 55 95 206
- ------------------------------------------------------------------------------
MFS(R) Growth Opportunities Fund - Class A 26 80 136 289
- ------------------------------------------------------------------------------
MFS(R) High Income Fund - Class A 21 65 112 241
- ------------------------------------------------------------------------------
Nationwide(R) Bond Fund 17 54 93 202
- ------------------------------------------------------------------------------
Nationwide(R) Fund 16 51 88 192
- ------------------------------------------------------------------------------
Nationwide(R) Growth Fund 17 52 90 195
- ------------------------------------------------------------------------------
Nationwide(R) Money Market Fund 16 51 88 191
- ------------------------------------------------------------------------------
</TABLE>
10
15 of 177
<PAGE> 16
<TABLE>
<CAPTION>
=========================
If you do not surrender
your Contract at the
end of the applicable
time period
=========================
1 Yr.3 Yrs. 5 Yrs.10 Yrs.
- -----------------------------------------------------=========================
<S> <C> <C> <C> <C>
Neuberger & Berman Guardian Fund, Inc. 19 58 99 216
- ------------------------------------------------------------------------------
Neuberger & Berman Manhattan Fund, Inc. 20 63 108 233
- ------------------------------------------------------------------------------
Neuberger & Berman Partners Fund, Inc. 19 58 101 218
- ------------------------------------------------------------------------------
Putnam Investors Fund - Class A 21 65 111 239
- ------------------------------------------------------------------------------
Putnam Voyager Fund - Class A 21 65 111 239
- ------------------------------------------------------------------------------
SEI Index Funds-S&P 500 Index Portfolio 13 40 68 151
- ------------------------------------------------------------------------------
Seligman Growth Fund, Inc. - Class A 23 70 120 257
- ------------------------------------------------------------------------------
Strong Common Stock Fund, Inc. 22 67 116 248
- ------------------------------------------------------------------------------
T. Rowe Price International Stock Fund(R) 19 60 103 222
- ------------------------------------------------------------------------------
Templeton Foreign Fund - Class I 22 67 116 248
- ------------------------------------------------------------------------------
Templeton Global Smaller Companies Growth Fund - 23 72 123 264
Class I
- ------------------------------------------------------------------------------
</TABLE>
The Example should not be considered a representation of past or future
expenses. Actual expenses may be greater or lesser than those shown.
11
16 of 177
<PAGE> 17
EXAMPLE
(CONTINUED)
The following chart depicts the dollar amount of expenses that would be incurred
under the Contract assuming a $1000 initial Purchase Payment and a 5% annual
return on assets.
<TABLE>
<CAPTION>
=========================
If you annuitize your
Contract at the end of
the applicable time
period
=========================
1 Yr.3 Yrs. 5 Yrs.10 Yrs.
- -----------------------------------------------------=========================
<S> <C> <C> <C> <C>
AIM Constellation Fund - Institutional Class 17 53 91 198
- ------------------------------------------------------------------------------
AIM Weingarten Fund - Institutional Class 17 52 90 197
- ------------------------------------------------------------------------------
American Century: Twentieth Century Growth 21 64 109 235
- ------------------------------------------------------------------------------
American Century: Twentieth Century Select 21 64 109 235
- ------------------------------------------------------------------------------
American Century: Twentieth Century Ultra 21 64 109 235
- ------------------------------------------------------------------------------
The Bond Fund of America(SM), Inc. 18 54 94 203
- ------------------------------------------------------------------------------
Davis New York Venture Fund, Inc. 19 59 102 221
- ------------------------------------------------------------------------------
Delaware Group Decatur Fund, Inc.-Decatur Income 17 54 92 201
Fund
- ------------------------------------------------------------------------------
Dreyfus Cash Management - Class A 12 38 66 145
- ------------------------------------------------------------------------------
Dreyfus S&P 500 Index Fund 16 49 85 185
- ------------------------------------------------------------------------------
Dreyfus Third Century Fund, Inc. 22 67 115 247
- ------------------------------------------------------------------------------
Evergreen Income and Growth Fund 23 70 119 256
- ------------------------------------------------------------------------------
Federated GNMA Trust-Institutional Shares 16 51 88 191
- ------------------------------------------------------------------------------
Federated U.S. Government Securities Fund: 2-5 16 49 84 184
Years - Institutional Shares
- ------------------------------------------------------------------------------
Fidelity Asset Manager(TM) 20 62 106 230
- ------------------------------------------------------------------------------
Fidelity Capital & Income Fund 19 60 103 223
- ------------------------------------------------------------------------------
Fidelity Contrafund 20 60 104 224
- ------------------------------------------------------------------------------
Fidelity Equity-Income Fund 17 53 92 200
- ------------------------------------------------------------------------------
Fidelity Growth & Income Portfolio 18 56 96 208
- ------------------------------------------------------------------------------
Fidelity Magellan(R) Fund 17 53 92 200
- ------------------------------------------------------------------------------
Fidelity OTC Portfolio 19 58 100 217
- ------------------------------------------------------------------------------
Fidelity Puritan Fund 18 55 95 207
- ------------------------------------------------------------------------------
The Growth Fund of America(R) Inc. 18 55 95 207
- ------------------------------------------------------------------------------
The Income Fund of America(R) Inc. 17 51 89 193
- ------------------------------------------------------------------------------
INVESCO Industrial Income Fund, Inc. 22 67 116 248
- ------------------------------------------------------------------------------
Janus Fund 19 60 102 221
- ------------------------------------------------------------------------------
Janus Twenty Fund 20 60 104 224
- ------------------------------------------------------------------------------
MAS Funds Fixed Income Portfolio 15 47 82 178
- ------------------------------------------------------------------------------
Massachusetts Investors Growth Stock Fund - Class A 18 55 95 206
- ------------------------------------------------------------------------------
MFS(R) Growth Opportunities Fund - Class A 26 80 136 289
- ------------------------------------------------------------------------------
MFS(R) High Income Fund - Class A 21 65 112 241
- ------------------------------------------------------------------------------
Nationwide(R) Bond Fund 17 54 93 202
- ------------------------------------------------------------------------------
Nationwide(R) Fund 16 51 88 192
- ------------------------------------------------------------------------------
Nationwide(R) Growth Fund 17 52 90 195
- ------------------------------------------------------------------------------
Nationwide(R) Money Market Fund 16 51 88 191
- ------------------------------------------------------------------------------
</TABLE>
12
17 of 177
<PAGE> 18
<TABLE>
<CAPTION>
=========================
If you annuitize your
Contract at the end of
the applicable time
period
=========================
1 Yr.3 Yrs. 5 Yrs.10 Yrs.
- -----------------------------------------------------=========================
<S> <C> <C> <C> <C>
Neuberger & Berman Guardian Fund, Inc. 19 58 99 216
- ------------------------------------------------------------------------------
Neuberger & Berman Manhattan Fund, Inc. 20 63 108 233
- ------------------------------------------------------------------------------
Neuberger & Berman Partners Fund, Inc. 19 58 101 218
- ------------------------------------------------------------------------------
Putnam Investors Fund - Class A 21 65 111 239
- ------------------------------------------------------------------------------
Putnam Voyager Fund - Class A 21 65 111 239
- ------------------------------------------------------------------------------
SEI Index Funds-S&P 500 Index Portfolio 13 40 68 151
- ------------------------------------------------------------------------------
Seligman Growth Fund, Inc. - Class A 23 70 120 257
- ------------------------------------------------------------------------------
Strong Common Stock Fund, Inc. 22 67 116 248
- ------------------------------------------------------------------------------
T. Rowe Price International Stock Fund(R) 19 60 103 222
- ------------------------------------------------------------------------------
Templeton Foreign Fund - Class I 22 67 116 248
- ------------------------------------------------------------------------------
Templeton Global Smaller Companies Growth Fund - 23 72 123 264
Class I
- ------------------------------------------------------------------------------
</TABLE>
The Example should not be considered a representation of past or future
expenses. Actual expenses may be greater or lesser than those shown.
The purpose of the Summary of Contract Expenses and Example is to assist the
Participant in understanding the various costs and expenses that a Participant
will bear directly or indirectly when investing in the Contract. The Tables
reflect expenses of the Variable Account as well as the Underlying Mutual Fund
investment options. For a more detailed explanation of these expenses, see
"Charges and Other Deductions."
For more and complete information regarding expenses paid out of the assets of a
particular Underlying Mutual Fund, see the Underlying Mutual Fund's prospectus.
In addition to the expenses shown above, deductions for premium taxes may also
be applicable, depending upon the jurisdiction in which the Contract is sold
(see "Premium Taxes").
13
18 of 177
<PAGE> 19
SYNOPSIS
The Contracts described in this prospectus are designed for use in connection
with supplemental deferred compensation plans for employees of tax exempt
entities. Such Plans generally will qualify for favorable tax treatment under
Section 401, 403(b), or 457 of the Code, but may also include other nonqualified
deferred compensation plans. Contracts will be issued only to employers who are
exempt from taxation to fund deferred compensation plans. The employees
generally are not subject to federal income tax on amounts deferred under such
plans until Distributions are received from the Plan. Purchase Payments made at
any time by or on behalf of any Participant must be at least $20 per month.
Purchase Payments under the Contracts are placed in the Variable Account. The
Variable Account is a unit investment trust with 46 Sub-Accounts of unit values,
each reflecting investment results of a different Underlying Mutual Fund.
Amounts equivalent to the obligations of the Company under each Sub-Account will
be invested in the specified Underlying Mutual Fund (see "Appendix of
Participating Underlying Mutual Funds").
The Company does not deduct a sales charge from Purchase Payments made to
these Contracts. However, if any part of such Contracts is withdrawn, the
Company will, with certain exceptions, deduct from the Contract Value a
Contingent Deferred Sales Charge equal to not more than 5% of the lesser of the
total of all Purchase Payments made prior to the date of the request for
surrender, or the amount surrendered. This charge, when applicable, is imposed
to permit the Company to recover sales expenses which have been advanced by the
Company (see "Contingent Deferred Sales Charge").
A Contract Maintenance Charge may be deducted each year from a Participant
Account (see "Contract Maintenance Charge"). Any applicable premium taxes can be
deducted and will be charge against the Contracts. If any such premium taxes are
payable at the time Purchase Payments are made, the premium tax deduction will
be made from the Contract prior to allocation to any Underlying Mutual Fund
option (see "Premium Taxes".)
A daily deduction is made from the Variable Account in an amount equivalent
to 0.95% per year for the Company's contractual promises to accept the mortality
and expense risks and for administration of the Variable Account (see "Expense
Risk Charge", "Mortality Risk Charge" and "Administration Charge"). In addition,
the investment companies whose shares are purchased by the Variable Account make
certain deductions from their assets.
The Contracts provide that the deductions made from Purchase Payments,
Participants' Accounts, the Contingent Deferred Sales Charges, Contract
Maintenance Charges, Expense Risk Charges, Mortality Risk Charges and
Administration Charges may be decreased by the Company upon notice to the Owner
(see "Modification of the Contract").
14
19 of 177
<PAGE> 20
NATIONWIDE DC VARIABLE ACCOUNT
CONDENSED FINANCIAL INFORMATION
ACCUMULATION UNIT VALUES (FOR AN ACCUMULATION UNIT OUTSTANDING THROUGHOUT THE
PERIOD)
<TABLE>
<CAPTION>
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE UNIT VALUE ACCUMULATION
AT BEGINNING AT END UNITS
FUND OF PERIOD OF PERIOD OUTSTANDING YEAR
AT THE
END OF THE
PERIOD
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
AIM 1.776138 2.055366 6,309,167 1996
Constellation ------------------------------------------------------
Fund - 1.316836 1.776138 3,214,050 1995
Institutional ------------------------------------------------------
Class 1.305850 1.316836 1,607,538 1994
------------------------------------------------------
1.120568 1.305850 1,341,351 1993
------------------------------------------------------
1.000000 1.120568 0 1992
----------------------------------------------------------------------
AIM 1.389659 1.627524 1,300,655 1996
Weingarten ------------------------------------------------------
Fund - 1.035886 1.389659 1,097,067 1995
Institutional ------------------------------------------------------
Class 1.044414 1.035886 870,956 1994
------------------------------------------------------
1.034606 1.044414 936,998 1993
------------------------------------------------------
1.000000 1.034606 0 1992
----------------------------------------------------------------------
American 4.005400 4.562802 12,224,812 1996
Century: ------------------------------------------------------
Twentieth 3.359891 4.005400 37,335,163 1995
Century ------------------------------------------------------
Growth 3.443124 3.359891 41,134,943 1994
------------------------------------------------------
3.350122 3.443124 51,977,134 1993
------------------------------------------------------
3.533694 3.350122 58,356,370 1992
------------------------------------------------------
2.110582 3.533694 53,923,483 1991
------------------------------------------------------
2.216085 2.110582 67,311,152 1990
------------------------------------------------------
1.562983 2.216085 49,896,477 1989
------------------------------------------------------
1.536055 1.562983 51,598,758 1988
------------------------------------------------------
1.374167 1.536055 38,777,840 1987
------------------------------------------------------
1.164500 1.374167 23,661,751 1986
----------------------------------------------------------------------
American 1.331631 1.572461 41,014 1996
Century: ------------------------------------------------------
Twentieth 1.095899 1.331631 1,254,199 1995
Century ------------------------------------------------------
Select 1.202996 1.095899 194,231 1994
------------------------------------------------------
1.059075 1.202996 386,750 1993
------------------------------------------------------
1.118927 1.059075 383,487 1992
------------------------------------------------------
1.000000 1.118927 2,950 1991
----------------------------------------------------------------------
American 1.835553 2.069865 70,399,683 1996
Century: ------------------------------------------------------
Twentieth 1.345904 1.835553 105,140,475 1995
Century ------------------------------------------------------
Ultra 1.409710 1.345904 88,713,416 1994
------------------------------------------------------
1.168340 1.409710 68,551,255 1993
------------------------------------------------------
1.164722 1.168340 33,483,411 1992
------------------------------------------------------
1.000000 1.164722 11,412 1991
----------------------------------------------------------------------
The Bond Fund 2.039710 2.155739 3,518,054 1996
of America(SM), ------------------------------------------------------
Inc. 1.741422 2.039710 7,434,474 1995
------------------------------------------------------
1.850918 1.741422 7,880,903 1994
------------------------------------------------------
1.637181 1.850918 8,560,956 1993
------------------------------------------------------
1.484255 1.637181 6,077,266 1992
------------------------------------------------------
1.238222 1.484255 5,128,071 1991
------------------------------------------------------
1.208717 1.238222 5,102,901 1990
------------------------------------------------------
1.109668 1.208717 3,105,875 1989
------------------------------------------------------
1.011923 1.109668 1,113,940 1988
------------------------------------------------------
1.000000 1.011923 173,764 1987
----------------------------------------------------------------------
Davis New York 1.345221 1.686019 1,180,098 1996
Venture ------------------------------------------------------
Fund, Inc. 0.966146 1.345221 1,771,764 1995
------------------------------------------------------
0.994508 0.966146 720,917 1994
------------------------------------------------------
1.000000 0.994508 5,626 1993
----------------------------------------------------------------------
</TABLE>
15
20 of 177
<PAGE> 21
CONDENSED FINANCIAL INFORMATION
(CONTINUED)
<TABLE>
<CAPTION>
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE UNIT VALUE ACCUMULATION
AT BEGINNING AT END UNITS
FUND OF PERIOD OF PERIOD OUTSTANDING AT YEAR
THE
END OF THE
PERIOD
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Delaware Group 1.910384 2.280210 78,578 1996
Decatur Fund, ------------------------------------------------------
Inc. - 1.449372 1.910384 100,636 1995
Decatur Income ------------------------------------------------------
Fund 1.473401 1.449372 104,006 1994
Institutional ------------------------------------------------------
Class 1.289480 1.473401 281,500 1993
------------------------------------------------------
1.196471 1.289480 162,528 1992
------------------------------------------------------
0.991871 1.196471 106,856 1991
------------------------------------------------------
1.142606 0.991871 16,158 1990
------------------------------------------------------
1.000000 1.142606 0 1989
----------------------------------------------------------------------
Dreyfus 1.110383 1.159356 618,162 1996
Cash ------------------------------------------------------
Management* - 1.057458 1.110383 2,561,760 1995
Class A ------------------------------------------------------
1.025704 1.057458 2,324,960 1994
------------------------------------------------------
1.003770 1.025704 25,763 1993
------------------------------------------------------
1.000000 1.003770 0 1992
----------------------------------------------------------------------
Dreyfus 2.238323 2.756438 3,824,949 1996
Third Century ------------------------------------------------------
Fund, Inc. 1.663803 2.238323 6,501,520 1995
------------------------------------------------------
1.814915 1.663803 6,965,653 1994
------------------------------------------------------
1.740666 1.814915 8,765,880 1993
------------------------------------------------------
1.723855 1.740666 9,137,872 1992
------------------------------------------------------
1.259983 1.723855 5,165,976 1991
------------------------------------------------------
1.228377 1.259983 4,118,236 1990
------------------------------------------------------
1.057519 1.228377 1,659,197 1989
------------------------------------------------------
0.866121 1.057519 618,691 1988
------------------------------------------------------
1.000000 0.866121 63,671 1987
----------------------------------------------------------------------
Evergreen 1.741651 1.947502 1,146,375 1996
Income and ------------------------------------------------------
Growth 1.419467 1.741651 3,257,653 1995
Fund (formerly ------------------------------------------------------
Evergreen Total 1.531292 1.419467 4,439,096 1994
Return Fund) ------------------------------------------------------
1.368966 1.531292 7,948,202 1993
------------------------------------------------------
1.256090 1.368966 6,846,744 1992
------------------------------------------------------
1.031024 1.256090 7,328,719 1991
------------------------------------------------------
1.110904 1.031024 13,632,891 1990
------------------------------------------------------
0.959913 1.110904 10,256,138 1989
------------------------------------------------------
0.837244 0.959913 5,595,414 1988
------------------------------------------------------
1.000000 0.837244 2,115,006 1987
----------------------------------------------------------------------
Federated GNMA 1.243001 1.292380 548,815 1996
Trust-
Institutional ------------------------------------------------------
Shares 1.081229 1.243001 508,686 1995
------------------------------------------------------
1.119643 1.081229 422,171 1994
------------------------------------------------------
1.061001 1.119643 497,960 1993
------------------------------------------------------
1.000000 1.061001 305,851 1992
----------------------------------------------------------------------
Federated U.S. 1.115461 1.144380 1,214,422 1996
Government ------------------------------------------------------
Securities 0.991595 1.115461 1,877,483 1995
Fund: 2-5 ------------------------------------------------------
Years - 1.020623 0.991595 1,280,899 1994
Institutional ------------------------------------------------------
Shares 1.000000 1.020623 696,793 1993
----------------------------------------------------------------------
Fidelity Asset 1.121926 1.252704 2,611,685 1996
Manager(TM) ------------------------------------------------------
0.958564 1.121926 5,838,128 1995
------------------------------------------------------
1.036089 0.958564 3,916,306 1994
------------------------------------------------------
1.000000 1.036089 79,714 1993
----------------------------------------------------------------------
</TABLE>
*The 7-day yield on the Dreyfus Cash Management - Class A fund as of
December 31, 1996 was 5.29%.
16
21 of 177
<PAGE> 22
CONDENSED FINANCIAL INFORMATION
(CONTINUED)
<TABLE>
<CAPTION>
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE UNIT VALUE ACCUMULATION
AT BEGINNING AT END UNITS
FUND OF PERIOD OF PERIOD OUTSTANDING YEAR
AT THE
END OF THE
PERIOD
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fidelity 3.712491 4.096488 125,230 1996
Capital
& Income Fund ------------------------------------------------------
3,210584 3.712491 463,343 1995
------------------------------------------------------
3.397953 3.210584 561,985 1994
------------------------------------------------------
2.746533 3.397953 925,953 1993
------------------------------------------------------
2.165417 2.746533 1,032,492 1992
------------------------------------------------------
1.684020 2.165417 1,471,867 1991
------------------------------------------------------
1.768220 1.684020 4,160,164 1990
------------------------------------------------------
1.843890 1.768220 4,943,976 1989
------------------------------------------------------
1.653959 1.843890 4,248,205 1988
------------------------------------------------------
1.649063 1.653959 3,210,794 1987
------------------------------------------------------
1.411482 1.649063 1,810,114 1986
----------------------------------------------------------------------
Fidelity 1.705419 2.059778 56,288,590 1996
Contrafund ------------------------------------------------------
1.263308 1.705419 62,585,233 1995
------------------------------------------------------
1.289799 1.263308 40,927,857 1994
------------------------------------------------------
1.072342 1.289799 14,514,807 1993
------------------------------------------------------
1.000000 1.072342 186,872 1992
----------------------------------------------------------------------
Fidelity 4.471070 5.359692 18,493,235 1996
Equity-Income ------------------------------------------------------
Fund 3.424310 4.471070 35,553,370 1995
------------------------------------------------------
3.448520 3.424310 34,056,352 1994
------------------------------------------------------
2.869860 3.448520 41,743,016 1993
------------------------------------------------------
2.526472 2.869860 36,410,831 1992
------------------------------------------------------
1.971024 2.526472 40,239,204 1991
------------------------------------------------------
2.314450 1.971024 65,533,870 1990
------------------------------------------------------
1.968876 2.314450 62,489,636 1989
------------------------------------------------------
1.622650 1.968876 66,300,418 1988
------------------------------------------------------
1.665429 1.622650 55,094,558 1987
------------------------------------------------------
1.436150 1.665429 33,659,577 1986
----------------------------------------------------------------------
Fidelity 1.683805 2.001775 4,201,944 1996
Growth & ------------------------------------------------------
Income 1.255568 1.683805 4,155,413 1995
Portfolio ------------------------------------------------------
1.239420 1.255568 2,808,994 1994
------------------------------------------------------
1.046808 1.239420 1,219,293 1993
------------------------------------------------------
1.000000 1.046808 85,896 1992
----------------------------------------------------------------------
Fidelity 1.729361 1.913110 56,756,036 1996
Magellan(R) ------------------------------------------------------
Fund 1.275955 1.729361 92,049,788 1995
------------------------------------------------------
1.311856 1.275955 68,044,510 1994
------------------------------------------------------
1.062405 1.311856 43,203,753 1993
------------------------------------------------------
1.000000 1.062405 10,591,374 1992
----------------------------------------------------------------------
Fidelity OTC 1.219506 1.494616 0 1996
Portfolio
------------------------------------------------------
1.000000 1.219506 64,305 1995
----------------------------------------------------------------------
Fidelity 1.126715 1.285134 0 1996
Puritan Fund
------------------------------------------------------
1.000000 1.126715 0 1995
----------------------------------------------------------------------
</TABLE>
17
22 of 177
<PAGE> 23
CONDENSED FINANCIAL INFORMATION
(CONTINUED)
<TABLE>
<CAPTION>
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE UNIT VALUE ACCUMULATION
AT BEGINNING AT END UNITS
FUND OF PERIOD OF PERIOD OUTSTANDING YEAR
AT THE
END OF THE
PERIOD
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
The Growth 2.366626 2.691979 2,478,693 1996
Fund of -----------------------------------------------------
America(R), Inc. 1.840658 2.366626 6,716,573 1995
-----------------------------------------------------
1.857739 1.840658 5,646,915 1994
-----------------------------------------------------
1.638011 1.857739 5,353,392 1993
-----------------------------------------------------
1.539692 1.638011 3,840,212 1992
-----------------------------------------------------
1.144684 1.539692 1,551,711 1991
-----------------------------------------------------
1.205372 1.144684 105,320 1990
-----------------------------------------------------
1.000000 1.205372 0 1989
---------------------------------------------------------------------
The Income 1.893327 2.160929 5,291,391 1996
Fund of -----------------------------------------------------
America(R), Inc. 1.480756 1.893327 8,645,811 1995
-----------------------------------------------------
1.533299 1.480756 7,829,528 1994
-----------------------------------------------------
1.357846 1.533299 7,258,704 1993
-----------------------------------------------------
1.223786 1.357846 3,016,773 1992
-----------------------------------------------------
0.998504 1.223786 631,336 1991
-----------------------------------------------------
1.000000 0.998504 0 1990
---------------------------------------------------------------------
INVESCO 1.451889 1.678513 7,428,110 1996
Industrial -----------------------------------------------------
Income Fund, 1.151056 1.451889 10,632,818 1995
Inc. -----------------------------------------------------
1.208959 1.151056 8,239,738 1994
-----------------------------------------------------
1.045472 1.208959 3,039,640 1993
-----------------------------------------------------
1.000000 1.045472 17,289 1992
---------------------------------------------------------------------
Janus Fund 1.353271 1.603290 15,851,766 1996
-----------------------------------------------------
1.055481 1.353271 13,522,743 1995
-----------------------------------------------------
1.077425 1.055481 7,345,306 1994
-----------------------------------------------------
1.000000 1.077425 2,969,768 1993
---------------------------------------------------------------------
Janus Twenty 1.320040 1.671698 149,425 1996
Fund -----------------------------------------------------
0.978264 1.320040 31,831 1995
-----------------------------------------------------
1.058801 0.978264 11,285 1994
-----------------------------------------------------
1.000000 1.058801 0 1993
---------------------------------------------------------------------
MAS Funds Fixed 1.156444 1.229760 718,247 1996
Income -----------------------------------------------------
Portfolio 0.980782 1.156444 366,064 1995
-----------------------------------------------------
1.000000 0.980782 31,751 1994
---------------------------------------------------------------------
Massachusetts 8.942612 10.880822 164,786 1996
Investors -----------------------------------------------------
Growth 7.034148 8.942612 551,377 1995
Stock Fund - -----------------------------------------------------
Class A 7.613442 7.034148 604,020 1994
-----------------------------------------------------
6.714892 7.613442 891,831 1993
-----------------------------------------------------
6.368639 6.714892 914,534 1992
-----------------------------------------------------
4.352449 6.368639 1,056,566 1991
-----------------------------------------------------
4.612779 4.352449 1,577,501 1990
-----------------------------------------------------
3.430876 4.612779 1,393,742 1989
-----------------------------------------------------
3.326929 3.430876 2,091,280 1988
-----------------------------------------------------
3.173352 3.326929 2,154,700 1987
-----------------------------------------------------
2.847946 3.173352 2,334,606 1986
---------------------------------------------------------------------
</TABLE>
18
23 of 177
<PAGE> 24
CONDENSED FINANCIAL INFORMATION
(CONTINUED)
<TABLE>
<CAPTION>
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE UNIT VALUE ACCUMULATION
AT BEGINNING AT END UNITS
FUND OF PERIOD OF PERIOD OUTSTANDING YEAR
AT THE
END OF THE
PERIOD
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
MFS(R) Growth 6.114190 7.380232 843,158 1996
Opportunities ------------------------------------------------------
Fund - Class A 4.589533 6.114190 3,824,999 1995
------------------------------------------------------
4.834037 4.589533 4,635,532 1994
------------------------------------------------------
4.200054 4.834037 9,303,110 1993
------------------------------------------------------
3.936838 4.200054 10,600,796 1992
------------------------------------------------------
3.246855 3.936838 13,413,614 1991
------------------------------------------------------
3.427388 3.246855 23,047,089 1990
------------------------------------------------------
2.692907 3.427388 24,300,466 1989
------------------------------------------------------
2.493461 2.692907 28,164,998 1988
------------------------------------------------------
2.421913 2.493461 29,369,357 1987
------------------------------------------------------
2.312498 2.421913 38,069,020 1986
----------------------------------------------------------------------
MFS(R) High 4.949752 5.518160 164,395 1996
Income ------------------------------------------------------
Fund - 4.265493 4.949752 806,763 1995
Class A ------------------------------------------------------
4.422523 4.265493 877,250 1994
------------------------------------------------------
3.739642 4.422523 1,068,154 1993
------------------------------------------------------
3.225557 3.739642 1,036,507 1992
------------------------------------------------------
2.186959 3.225557 1,186,991 1991
------------------------------------------------------
2.651605 2.186959 2,159,639 1990
------------------------------------------------------
2.731036 2.651605 2,739,257 1989
------------------------------------------------------
2.453867 2.731036 2,747,679 1988
------------------------------------------------------
2.470209 2.453867 2,713,471 1987
------------------------------------------------------
2.248114 2.470209 3,349,170 1986
----------------------------------------------------------------------
Nationwide(R) 1.991196 2.001472 26,395 1996
Bond Fund ------------------------------------------------------
1.619166 1.991196 92,001 1995
------------------------------------------------------
1.778765 1.619166 51,492 1994
------------------------------------------------------
1.621957 1.778765 148,222 1993
------------------------------------------------------
1.516560 1.621957 197,350 1992
------------------------------------------------------
1.309926 1.516560 363,511 1991
------------------------------------------------------
1.222004 1.309926 420,858 1990
------------------------------------------------------
1.114209 1.222004 314,062 1989
------------------------------------------------------
1.039905 1.114209 188,045 1988
------------------------------------------------------
1.074676 1.039905 28,819 1987
---------------------------------------------------------------------
Nationwide(R) 12.191058 14.964379 1,316,219 1996
Fund ------------------------------------------------------
9.468045 12.191058 2,905,460 1995
------------------------------------------------------
9.502760 9.468045 3,036,527 1994
------------------------------------------------------
8.985447 9.502760 3,690,273 1993
------------------------------------------------------
8.810680 8.985447 4,218,392 1992
------------------------------------------------------
6.830443 8.810680 3,906,633 1991
------------------------------------------------------
6.875188 6.830443 3,792,110 1990
------------------------------------------------------
5.187286 6.875188 2,756,965 1989
------------------------------------------------------
4.485232 5.187286 3,174,211 1988
------------------------------------------------------
4.438511 4.485232 2,879,455 1987
------------------------------------------------------
3.809764 4.438511 3,446,791 1986
----------------------------------------------------------------------
</TABLE>
19
24 of 177
<PAGE> 25
CONDENSED FINANCIAL INFORMATION
(CONTINUED)
<TABLE>
<CAPTION>
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE UNIT VALUE ACCUMULATION
AT BEGINNING AT END UNITS
FUND OF PERIOD OF PERIOD OUTSTANDING YEAR
AT THE
END OF THE
PERIOD
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Nationwide(R) 2.667201 3.083008 1,156,065 1996
Growth Fund ------------------------------------------------------
2.092009 2.667201 3,668,270 1995
------------------------------------------------------
2.081399 2.092009 3,759,425 1994
------------------------------------------------------
1.887524 2.081399 5,928,120 1993
------------------------------------------------------
1.792687 1.887524 5,747,753 1992
------------------------------------------------------
1.330199 1.792687 5,108,711 1991
------------------------------------------------------
1.452973 1.330199 7,279,598 1990
------------------------------------------------------
1.276112 1.452973 4,762,338 1989
------------------------------------------------------
1.051373 1.276112 1,947,635 1988
------------------------------------------------------
1.236522 1.051373 352,893 1987
---------------------------------------------------------------------
Nationwide(R) 2.774433 2.884848 7,935,176 1996
Money Market ------------------------------------------------------
Fund* 2.654661 2.774433 20,350,850 1995
------------------------------------------------------
2.583387 2.654661 18,028,497 1994
------------------------------------------------------
2.542721 2.583387 20,122,594 1993
------------------------------------------------------
2.487178 2.542721 22,067,362 1992
------------------------------------------------------
2.377082 2.487178 33,612,374 1991
------------------------------------------------------
2.224557 2.377082 48,721,235 1990
------------------------------------------------------
2.062504 2.224557 43,599,432 1989
------------------------------------------------------
1.944054 2.062504 39,596,561 1988
------------------------------------------------------
1.848104 1.944054 35,995,910 1987
------------------------------------------------------
1.754559 1.848104 41,090,565 1986
---------------------------------------------------------------------
Neuberger & 1.169665 1.365700 0 1996
Berman ------------------------------------------------------
Guardian 1.000000 1.696655 0 1995
Fund, Inc.
---------------------------------------------------------------------
Neuberger & 2.259932 2.458922 119,922 1996
Berman ------------------------------------------------------
Manhattan 1.741549 2.259932 394,751 1995
Fund, Inc. ------------------------------------------------------
1.823796 1.741549 406,054 1994
------------------------------------------------------
1.673695 1.823796 317,549 1993
------------------------------------------------------
1.434738 1.673695 56,526 1992
------------------------------------------------------
1.106565 1.434738 7,124 1991
------------------------------------------------------
1.214940 1.106565 0 1990
------------------------------------------------------
1.000000 1.214940 0 1989
---------------------------------------------------------------------
Neuberger & 1.000000 1.139543 0 1996
Berman ------------------------------------------------------
Fund, Inc. ** ** ** 1995
---------------------------------------------------------------------
Putnam 11.305164 13.594501 713,005 1996
Investors ------------------------------------------------------
Fund - 8.297318 11.305164 3,422,356 1995
Class A ------------------------------------------------------
8.652501 8.297318 3,674,131 1994
------------------------------------------------------
7.410567 8.652501 4,311,483 1993
------------------------------------------------------
6.934213 7.410567 4,294,647 1992
------------------------------------------------------
5.445269 6.934213 4,745,398 1991
------------------------------------------------------
5.654203 5.445269 6,112,297 1990
------------------------------------------------------
4.262206 5.654203 5,893,052 1989
------------------------------------------------------
4.003173 4.262206 9,986,301 1988
------------------------------------------------------
3.885972 4.003173 10,268,895 1987
------------------------------------------------------
3.389459 3.885972 14,447,283 1986
---------------------------------------------------------------------
</TABLE>
*The 7-day yield on the Nationwide Money Market Fund as of December 31,
1996 was 3.89%.
**Unit information is not available for the year 1995.
20
25 of 177
<PAGE> 26
CONDENSED FINANCIAL INFORMATION
(CONTINUED)
<TABLE>
<CAPTION>
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE UNIT VALUE ACCUMULATION
AT BEGINNING AT END UNITS
FUND OF PERIOD OF PERIOD OUTSTANDING YEAR
AT THE
END OF THE
PERIOD
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Putnam Voyager 2.752130 3.074879 18,151,250 1996
Fund - Class A ------------------------------------------------------
1.982311 2.752130 21,036,155 1995
------------------------------------------------------
1.992379 1.982311 14,803,070 1994
------------------------------------------------------
1.698751 1.992379 11,820,145 1993
------------------------------------------------------
1.563079 1.698751 7,640,204 1992
------------------------------------------------------
1.049811 1.563079 4,622,048 1991
------------------------------------------------------
1.000000 1.049811 290,518 1990
----------------------------------------------------------------------
SEI Index 2.439184 2.962497 524,069 1996
Funds - S&P ------------------------------------------------------
500 1.792835 2.439184 1,072,618 1995
Index Portfolio ------------------------------------------------------
1.792223 1.792835 722,997 1994
------------------------------------------------------
1.647325 1.792223 509,498 1993
------------------------------------------------------
1.548965 1.647325 257,368 1992
------------------------------------------------------
1.203412 1.548965 121,485 1991
------------------------------------------------------
1.254560 1.203412 509 1990
------------------------------------------------------
1.000000 1.254560 0 1989
----------------------------------------------------------------------
Seligman 8.934609 10.720312 105,249 1996
Growth -------------------------------------------------------
Fund, Inc. - 7.020585 8.934609 277,527 1995
Class A -------------------------------------------------------
7.370495 7.020585 299,685 1994
-------------------------------------------------------
6.989639 7.370495 513,220 1993
-------------------------------------------------------
6.340967 6.989639 555,163 1992
-------------------------------------------------------
4.611005 6.340967 685,494 1991
-------------------------------------------------------
4.910683 4.611005 977,515 1990
-------------------------------------------------------
3.714452 4.910683 916,525 1989
-------------------------------------------------------
3.491789 3.714452 1,189,216 1988
-------------------------------------------------------
3.351057 3.491789 1,200,692 1987
-------------------------------------------------------
2.905343 3.351057 1,618,100 1986
-----------------------------------------------------------------------
Strong 1.315349 1.569484 2,665,795 1996
Common Stock -------------------------------------------------------
Fund, Inc. 1.002820 1.315349 1,353,697 1995
-------------------------------------------------------
1.017301 1.002820 742,264 1994
-------------------------------------------------------
1.000000 1.017301 16,364 1993
-----------------------------------------------------------------------
T. Rowe Price 1.577274 1.812062 8,220,403 1996
International -------------------------------------------------------
Stock Fund(R) 1.429428 1.577274 22,425,072 1995
-------------------------------------------------------
1.454045 1.429428 18,673,315 1994
-------------------------------------------------------
1.047655 1.454045 11,658,962 1993
-------------------------------------------------------
1.095728 1.047655 4,370,293 1992
-------------------------------------------------------
0.954695 1.095728 2,239,924 1991
-------------------------------------------------------
1.000000 0.954695 441,232 1990
-----------------------------------------------------------------------
</TABLE>
21
26 of 177
<PAGE> 27
CONDENSED FINANCIAL INFORMATION
(CONTINUED)
<TABLE>
<CAPTION>
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE UNIT VALUE ACCUMULATION
AT BEGINNING AT END UNITS
FUND OF PERIOD OF PERIOD OUTSTANDING YEAR
AT THE
END OF THE
PERIOD
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Templeton 1.518092 1.774294 27,327,650 1996
Foreign ------------------------------------------------------
Fund - Class I 1.378759 1.518092 32,915,364 1995
------------------------------------------------------
1.387073 1.378759 25,358,639 1994
------------------------------------------------------
1.023491 1.387073 6,636,629 1993
------------------------------------------------------
1.000000 1.023491 0 1992
----------------------------------------------------------------------
Templeton 1.490946 1.802963 524,340 1996
Smaller ------------------------------------------------------
Companies 1.279328 1.490946 382,441 1995
Growth Fund - ------------------------------------------------------
Class I 1.353616 1.279328 225,110 1994
------------------------------------------------------
1.036433 1.353616 117,690 1993
------------------------------------------------------
1.000000 1.036433 0 1992
----------------------------------------------------------------------
</TABLE>
Unit value information is not yet available for the Dreyfus S&P 500 Index
Fund.
22
27 of 177
<PAGE> 28
NATIONWIDE LIFE INSURANCE COMPANY
The Company is a stock life insurance company organized under the laws of the
State of Ohio in March, 1929. The Company is a member of the Nationwide
Insurance Enterprise, with its Home Office at One Nationwide Plaza, Columbus,
Ohio 43215. The Company offers a complete line of life insurance, including
annuities and accident and health insurance. It is admitted to do business in
all states, the District of Columbia, the Virgin Islands, and Puerto Rico.
NATIONWIDE DC VARIABLE ACCOUNT
Nationwide DC Variable Account (the "Variable Account") was established by
the Company on July 10, 1974, pursuant to the provisions of Ohio law. The
Variable Account was also registered with the Securities and Exchange Commission
as a unit investment trust pursuant to the provisions of the Investment Company
Act of 1940. Such registration does not involve supervision of the management of
the Variable Account or the Company by the Securities and Exchange Commission.
The net Purchase Payments applied to the Variable Account are invested in
shares of the Underlying Mutual Funds available under the terms of the Contract.
The Variable Account is divided into 46 Sub-Accounts, each of which represents a
separate Underlying Mutual Fund (see "Participating Underlying Mutual Funds in
the Appendix" for a description of the investment objective of each Underlying
Mutual Fund).
Each Sub-Account in the Variable Account is administered and accounted for as
a part of the separate account, but the income, capital gains or losses of each
Sub-Account are credited to or charged against the assets held for that
Sub-Account in accordance with the terms of each Contract, without regard to
other income, capital gains or losses of any other Sub-Account, or arising out
of any other business the Company may conduct. The assets within each
Sub-Account are not chargeable with liabilities arising out of the business
conducted by any other Sub-Account, nor will the Variable Account as a whole be
chargeable with liabilities arising out of any other business the Company may
conduct.
VOTING RIGHTS
The Variable Account will be owner of record of all Underlying Mutual Fund
shares purchased by the respective account until such Underlying Mutual Fund
shares are sold, but all securities will be held for the benefit of the Owners
of the Contracts. In accordance with its view of present applicable law, the
Company will vote the shares of the Underlying Mutual Funds held in the Variable
Account at regular and special meetings of the shareholders of Underlying Mutual
Funds in accordance with instructions received from the Owners. The Company will
mail to each Owner at its last known address all periodic reports and proxy
material of the applicable Underlying Mutual Fund(s), and a form with which to
give voting instructions. Any Underlying Mutual Fund shares as to which no
timely instructions are received will be voted by the Company in the same
proportion as the instructions received from all persons furnishing timely
instructions. An Owner's voting rights may decrease with the cancellation of
Accumulation Units to make annuity payments.
PERIODIC REPORTS
The Company will, semi-annually, provide to each person covered by a
Contract, a Statement of Assets, Liabilities and Contract Owners' Equity and a
Statement of Operations and Changes in Contract Owners' Equity of the Variable
Account. Each Participant and Retired Participant will also be informed,
periodically, of the number of Accumulation Units credited to his or her account
as well as the total account value.
The current prospectus of the Variable Account will be made available to
Participants through the Owner. In addition, the Owner may, under the terms of
the Plan, have an obligation to furnish additional information to Participants,
such as: a notice of any changes in the Plan, or tax status of the Plan and the
financial condition of the Owner as it relates to obligations under the Plan.
23
28 of 177
<PAGE> 29
VARIABLE ACCOUNT CHARGES AND OTHER DEDUCTIONS
CONTINGENT DEFERRED SALES CHARGE
No deduction for a sales charge is made from the Purchase Payments for these
Contracts. However, the Contingent Deferred Sales Charge, when it is applicable,
will be used to cover expenses relating to the sale of the Contracts, including
commissions paid to sales personnel, the costs of preparation of sales
literature, and other promotional activity. Gross commissions paid on the sale
of these Contracts vary depending upon the Contract of the general agent
performing the marketing and enrollment function in connection with a particular
Contract.
Should part or all of the Contract Value representing Participant Accounts
that have been established under the Contract and held in the Variable Account
for less than 16 years be surrendered, a Contingent Deferred Sales Charge will,
when it is applicable, be made by the Company. This charge will not exceed 5% of
the lesser of (1) the total of all Purchase Payments received on behalf of the
surrendering Participant or the withdrawing Owner prior to the date of the
request for surrender or (2) the amount surrendered. The cumulative sum of all
such charges, per Participant, shall never exceed 5% (or such lesser percentage,
if applicable) of the total Purchase Payments made on behalf of such Participant
during the period of up to 16 years prior to the date on which the surrender is
requested.
When a Contingent Deferred Sales Charge of less than 5% is negotiated and
assessed, the reduced charge will reflect actual variations in expenses, usually
resulting from reduced agent's commissions.
No Contingent Deferred Sales Charge will be imposed on Contract Value that is
paid under:
- any life income payment option;
- Designated Period payment options of 5 or more years for a
Participant who has a minimum of 5 Participant Account Years prior
to the time the benefit payments are to commence; and
- a one-sum or periodic payment payable because of a Participant's
death.
CONTRACT MAINTENANCE CHARGE
For Contracts with an effective date on or after May 1, 1991, the Company
will not assess the flat dollar Contract Maintenance Charge. In addition, for
those Contracts with an effective date prior to May 1, 1991, the Company will
eliminate the Contract Maintenance Charge at such time as the Company and the
Owner renegotiate the Company's continued participation as an annuity provider
under the Owner's Plan, and the Company issues a new Contract.
For Contracts with an effective date prior to May 1, 1991, the Company may
assess each Participant Account a maximum of $15 at the beginning of each
Participant Account Year for the preceding Participant Account Year, during both
the accumulation and annuity periods, as reimbursement for certain
administrative expenses relating to the maintenance of individual Participant
records and the mailing of periodic statements to Participants. The Contract
Maintenance Charges, which are guaranteed never to increase, are designed only
to help the Company offset such administrative expenses, and such charges will
not exceed the Company's actual administration expenses under the Contracts.
The Contract Maintenance Charge is made by canceling a number of Accumulation
Units at the beginning of each Participant Account Year during both the
accumulation and annuity periods, equal in value to the applicable Contract
Maintenance Charge. If a Participant Account includes more than one Sub-Account,
the deduction will be allocated among Sub-Accounts on the basis of relative
values at the time the deduction is made. For those Contracts where the Owner
has so elected, there will be no charge for the transfers among Sub-Accounts.
The Company will assess a Contract Maintenance Charge on the date (other than
a Participant Anniversary) that amounts held in respect of a Participant are
fully withdrawn from the Variable Account. In such case, the amount of the
Contract Maintenance Charge will be 1/12 of the applicable Contract Maintenance
Charge, multiplied by the number of whole or partial calendar months which have
elapsed between the Participant Anniversary (or the Participant Effective Date
during the first Participant Account Year) and the date of full withdrawal.
24
29 of 177
<PAGE> 30
For those Plans which provide this Contract and certain other investment
options (such as the Company's Group Fixed Fund Retirement Contract), the
Contract Maintenance Charge under this Contract may be reduced so that the total
of the Contract Maintenance Charges and any similar administrative charges
imposed under other investment options available under the Plan shall not exceed
the Contract Maintenance Charge assessed under this Contract. In this event,
such charge will be allocated among Sub-Accounts of the Variable Account and
amounts held in such other investment options available under the Plan on the
basis of the relative values of the Participant's Accounts at the time the
deduction is made. When a Contract Maintenance Charge of less than $15 is
otherwise negotiated and assessed, the reduced charge will reflect actual
variations in administrative expenses incurred by the Company, usually resulting
from an Owner or Plan administrator assuming certain administrative functions
otherwise required to be performed by the Company.
MORTALITY RISK CHARGE, EXPENSE RISK AND ADMINISTRATION CHARGE
The Contracts contain purchase rates applicable at and after retirement.
These purchase rates may be used to determine the retirement income payments to
be made by the Owner, to Participants, in accordance with the terms of the Plan.
However, the Owners have contracted with the Company to provide retirement
income payments.
Under the terms of the Contracts, the Company assumes the risk that: (i) the
actuarial estimate of mortality rates among Retired Participants may prove
erroneous and amounts set aside for retirement income benefits on the basis of
such estimate may prove inadequate; and (ii) deductions for sales and
Administrative Charges may be insufficient to cover the actual cost of these
items.
For the Company's contractual promise to accept these risks and for Charges
of the Variable Account, the Contracts provide for the daily deduction of an
Actuarial Risk Fee (see "Glossary of Terms") during the accumulation and annuity
periods. This charge is calculated as a percentage of assets and is deducted on
each Valuation Date from amounts held in the Variable Account. On an annual
basis, the percentage rate is equivalent to a maximum of 0.95% on an annual
basis (0.10% for the Mortality Risk Charge, 0.40% for the Expense Risk, and
0.45% for the Administration of the Variable Account). If this Actuarial Risk
Fee is insufficient to cover the actual cost of the mortality risk, the expense
risk, the administration of the Variable Account, or the Contract Maintenance
Charges, the loss will be borne by the Company. Conversely, if the Actuarial
Risk Fee proves more than sufficient, the excess will be a profit to the
Company. There is no necessary relationship between the amount of administration
charge imposed on a given Contract and the amount of expenses that may be
attributable to that Contract.
If total assets of the Plan exceed $10 million, as of the specified date each
year, the 0.45% administrative portion of the Actuarial Risk Fee will be reduced
on a sliding scale corresponding to total assets of the Plan. The reduction
reflects the lower cost per participant to administer larger asset pools (see
"Summary of Contract Expenses").
PREMIUM TAXES AND OTHER EXPENSES
The Company will charge against Purchase Payments or the Contract Value the
amount of any premium taxes levied by a state or any other governmental entity
upon annuity considerations received by the Company. Premium tax rates currently
in effect in certain states range from 0% to 3.5% per annum. This range is
subject to change. The Company is currently not deducting such taxes but
reserves the right to do so when such taxes are incurred. Purchase Payments may
be reduced or Accumulation Units canceled to provide for premium taxes assessed.
There are deductions and expenses paid out of the assets of the Underlying
Mutual Funds (see "Underlying Mutual Fund Annual Expenses") that are more fully
described in the Prospectus for the Underlying Mutual Funds.
EXPERIENCE CREDITS
The Contracts described herein may be participating or non-participating,
depending upon the state of issue. A participating Contract provides the right
to participate in the distribution of surplus of the Company. In the event that
Contract Maintenance Charges and Actuarial Risk Fees collected under this
Contract accrue to the Company in excess of an amount deemed necessary at the
sole discretion of the Company's Board of Directors, such excess may be
allocated to the Contract by purchasing additional Accumulation Units and
crediting such
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additional units of the Participant Accounts. There have not been any experience
credits to date. The Company cannot offer any assurance that there will be any
such experience credits on participating Contracts in the future. With respect
to non-participating Contracts, there is no right to participate in the
distribution of surplus.
EXPENSES OF THE VARIABLE ACCOUNT
The Variable Account's total expenses for the fiscal year ended December 31,
1996, were 0.97% of the average net assets. Deductions from and expenses paid
out of the assets of the Underlying Mutual Funds are described in the
prospectuses of each of the Underlying Mutual Fund.
DESCRIPTION OF THE CONTRACTS
A. GENERAL
PURPOSE OF THE CONTRACTS
The Contracts described in this prospectus are Group Flexible Fund
Retirement Contracts designed to fund certain Plans generally established
under either Section 401, 403(b) or 457 of the Code (although they may
include certain other nonqualified deferred compensation plans) for employees
of states and their political subdivisions thereof and certain other
organizations exempt from taxation.
For Section 457 Plans established for the benefit of any organization that
is exempt from the federal income tax, other than a governmental unit, all
amounts of compensation deferred under the Plan, all property and rights
purchased with such amounts, and all income attributable to such amounts,
property, or rights, remain (until made available to a Participant or other
Beneficiary) solely the property and the rights of the Owner (without being
restricted to the provision of benefits under the plan), subject only to the
claims of the Owner's general creditors.
For Section 457 Plans established by a state, a political subdivision of a
state, or any agency or instrumentality of a state or political subdivision
of a state after August 20, 1996, the assets and income of the Plan must be
held in trust for the exclusive benefit of the Participants and the
Beneficiaries of the Plan. For this purpose, custodial accounts and certain
annuity contracts are treated as trusts. Section 457 Plans that were in
existence on August 20, 1996 may be amended to satisfy the trust and
exclusive benefit requirements any time prior to January 1, 1999, and must be
amended not later than that date to continue to receive favorable tax
treatment. Until the effective date of such amendment, such Plans may
continue to qualify for favorable tax treatment by satisfying the
requirements set forth above for other tax exempt organizations.
A single group Contract is issued to the Owner, covering all present and
future participating employees. The Company will issue a certificate to the
Owner for delivery to each Retired Participant or other person for whom an
Optional Retirement Income Form is purchased, setting forth in substance the
benefits to which such person is entitled. In addition, if any applicable law
requires, the Company will issue a descriptive Certificate to the Owner for
delivery to any such person required by law to receive such Certificate,
setting forth in substance the benefits to which such person is entitled. For
purposes of determining benefits payable under the Plan, an individual
accumulation account is established for each Participant. The frequency of
Purchase Payments is normally monthly, but may be adjusted to fit the payroll
practices of the Owner. Purchase Payments made at any time by or on behalf of
any Participant must be at least $20 per month.
The basic objectives of the Contracts are to provide each Participant with
an initial retirement income payment, which will tend to reflect the changes
which have occurred in the cost of living during pre-retirement years
(without the necessity of increased Purchase Payments to keep pace with any
increase in the cost of living which might occur during those years), and to
provide subsequent retirement income payments which will tend to vary with
the cost of living changes during the lifetime of the retiree. The Company
seeks to accomplish these objectives by applying purchase rates contained in
the Contract to the amounts accumulated through investment in Underlying
Mutual Funds. Notwithstanding the foregoing, there is no assurance that these
objectives will be attained. Historically, the value of a diversified
portfolio of common stocks held for an extended period of time has tended to
rise during periods of inflation. There has, however, been no exact
correlation, and for some periods, the prices of securities have declined
while the cost of living was rising.
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MODIFICATION OF THE CONTRACT
Contract provisions with respect to the deductions made from Purchase
Payments, Participant Accounts, Contingent Deferred Sales Charges, if
applicable, Contract Maintenance Charges and Actuarial Risk Fees may be
decreased upon notice to the Owner.
Other than as set forth above, the Company may modify the Contract at any
time without consent of the Owner or Participants. No such modification shall
be retroactive or affect Retired Participants in any manner without their
written consent, unless such modification is considered necessary to obtain
the benefit of federal or state statutes or regulations or to maintain
qualification of the Plan.
CONTRACT RIGHTS AND PRIVILEGES AND ASSIGNMENTS
The Contract belongs to the Owner provided, however, that under Code
Section 457 Plans, the Owner must hold the Contract for the exclusive benefit
of the Plan's participants and beneficiaries. All contractual rights and
privileges may be exercised by the Owner, subject to any rights specifically
reserved in the Plan for Participants as a group or as individuals. With
respect to 457 Plans, the Owner may not take any action inconsistent with the
rights of such 457 Plan's participants. The Contract may not be assigned.
EXCHANGE PRIVILEGE
The Company will permit the Owner or the Participant, if the Plan so
provides, to exchange amounts among the Sub-Accounts as frequently as
permitted by the Plan, subject to the limits and rules set by each Underlying
Mutual Fund. For those Contracts where the Owner has elected an exchange
privilege, there will be no charge for exchanges among the Sub-Accounts.
The Company will also permit the Participant to utilize the Telephone
Exchange Privilege, for exchanging amounts among Sub-Accounts, if forms are
executed by the Owner and Participant agreeing with certain restrictions
applicable to such privilege. Telephone exchange requests must be received by
the Company prior to the close of the New York Stock Exchange in order to
receive that day's closing Sub-Account price. A telephone exchange request
may not be revoked once instructions have been recorded and accepted. The
Company will employ reasonable procedures to confirm that instructions
communicated by telephone are genuine. Such procedures may include any or all
of the following, or such other procedures as the Company may, from time to
time, deem reasonable: requesting identifying information, such as name,
contract number, Social Security Number, and/or personal identification
number; tape recording all telephone transactions; and providing written
confirmation thereof to the Owner or Participant and any agent of record, at
the last address of record. Failure to follow reasonable procedures may
result in the Company's liability for any losses due to unauthorized or
fraudulent telephone transfers. However, any losses incurred pursuant to
actions taken by the Company in reliance on telephone instructions reasonably
believed to be genuine shall be borne by the Participant. If the Participant
is unable to execute an exchange request by telephone (for example, during
times of unusual market activity), the Participant may consider placing the
exchange order by mail. The Company may determine to withdraw the Telephone
Exchange Privilege, upon a thirty (30) day written notice to Owners and
Participants.
On the date the Company receives an exchange request in good order, which
includes all of the information necessary for processing the request, the
Company will transfer the amount to be converted. Such transfers will be
based on the Accumulation Unit Values of the affected Sub-Accounts if
received at the Company's Home Office prior to the close of the New York
Stock Exchange on a day on which the New York Stock Exchange is open for
business. If the exchange request is received after the close of the New York
Stock Exchange on any day, or on a day the New York Stock Exchange is closed
for business, the transfer will be based on the next business day on which
the New York Stock Exchange is open.
For those Plans funded by this Contract and the Company's Group Fixed Fund
Retirement Contract, the Owner, or the Participant if the Plan so provides,
may exchange Accumulation Units between any Sub-Account of the Variable
Account and the Group Fixed Fund Retirement Contract. Exchanges from the
deposit fund to any Sub-Account of the Variable Account will be subject to
the limitations of the Group Fixed Fund Retirement Contract. Exchanges will
be effected when received in good order by the Company at its Home Office.
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SUSPENSION AND TERMINATION
The Contract may be suspended at the option of the Company upon written
notice to the Owner if: (a) the Owner has failed to remit to the Company any
Purchase Payment specified in the Plan, or (b) if the Company does not accept
an amendment to the Plan, filed with the Company by the Owner, which in the
Company's opinion would adversely affect its financial experience with
respect to the Contract. The Owner may suspend the Contract upon 90 days
written notice to the Company. Suspension of the Contract will become
effective as of the ninety-first (91st) day following receipt of written
notice by the Company. Suspension of the Contract shall mean that no further
Purchase Payments will be accepted by the Company except by mutual consent,
and all other terms of the Contract shall continue to apply. After suspension
of the Contract has become effective, the Owner may, upon 30 days written
notice, terminate the Contract. Upon termination of the Contract, the Company
will pay to the Owner the value of the Contract, subject to applicable
charges, in accordance with the terms of the Contract (see "Redemption of
Participant Accounts"). Upon such termination by the Owner, payment of
Contract Values will be subject to any applicable Contingent Deferred Sales
Charge.
B. PARTICIPANT ACCOUNT VALUES
APPLICATION OF PURCHASE PAYMENTS
The Company shall receive Purchase Payments from the Owner in accordance
with the requirements of the Plan. Net Purchase Payments received on behalf
of Participants will be applied by the Company to purchase Accumulation Units
of Sub-Accounts in the Variable Account in accordance with the instructions
of the Owner. Purchase Payments made at any time by or on behalf of each
Participant must be at least $20 per month. Purchase Payments must be no less
than monthly, unless agreed to by the Company.
An initial Purchase Payment will be priced not later than 2 business days
after receipt of an order to purchase, if the application of the Participant
and all information necessary for processing the purchase order are complete
upon receipt by the Company. The Company may retain the Purchase Payment for
up to 5 business days while attempting to complete an incomplete application.
If the application cannot be made complete within 5 business days, the Owner
will be informed of the reasons for the delay and the Purchase Payment will
be returned immediately unless the Owner consents to the Company retaining
the Purchase Payment until the application of the Participant is made
complete. Upon completion of such incomplete application, the Purchase
Payment will be priced within 2 business days.
Purchase Payments will not be priced on days when the New York Stock
Exchange is not open for business.
ADDITIONAL PURCHASE PAYMENT PRIOR TO COMMENCEMENT OF ANNUITY PAYMENTS
The Owner shall have the right to make one additional Purchase Payment in
respect to a Participant for the purpose of increasing retirement income
payments. Notice of such payment shall be given to the Company at the time
the notice to distribute is given, and such additional Purchase Payment must
be made no later than the last business day prior to the date upon which
retirement income payments are to commence. Any such additional Purchase
Payment shall be subject to any applicable premium taxes. The annuity rates
provided under this Contract at the time of issue shall be applicable to the
entire value, including any such additional Purchase Payment, of such account
which does not exceed five times the Purchase Payment allocated to such
account prior to the date notice to distribute is given. Any excess amount
may be applied at annuity rates then offered by the Company for contracts of
the same type as this Contract.
CREDITING ACCUMULATION UNITS
When a Purchase Payment is received by the Company, the net Purchase
Payment for each Sub-Account is applied separately to provide Accumulation
Units (calculated daily) which are credited to a Participant Account in
accordance with the instructions of the Owner. The number of Accumulation
Units credited to each Participant Account for each Sub-Account is determined
by dividing the net Purchase
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Payment allocated to that Sub-Account for that Participant by the value of
the Accumulation Unit for that Sub-Account next computed following receipt of
the Purchase Payment by the Company. The net Purchase Payment for each
Participant is the total Purchase Payment for that Participant less any taxes
then payable.
VARIABLE ACCOUNT ACCUMULATION UNIT VALUE
The value of an Accumulation Unit for each Sub-Account was established at
$1.00 as of the date Underlying Mutual Fund shares were available for
purchase for that Sub-Account. The value of Accumulation Units for any
Sub-Account for any subsequent business day is determined by multiplying the
value for the preceding business day by the Net Investment Factor for that
Sub-Account for the period since that day (see the section entitled "Net
Investment Factor"). A business day is any day on which the New York Stock
Exchange is open for trading or any other day during which there is a
sufficient degree of trading of the Underlying Mutual Fund shares that the
current net asset value of their Accumulation Units might be materially
affected. Accumulation Units are calculated on a daily basis.
ALLOCATION OF PURCHASE PAYMENTS
The Owner or Participant must specify the proportion of the Purchase
Payments to be applied to provide benefits under any Sub-Account of the
Variable Account. The Company will permit the Owner, or the Participant if
the Plan so permits, to change the allocation percentages among Sub-Accounts
for subsequent Purchase Payments, provided that no change may be made which
would result in an amount less than 1% of the payment being allocated to any
Sub-Account for any Participant. The Company will permit such allocation
changes as frequently as permitted by the Plan. A change in allocation
percentages will not affect Accumulation Units of any Sub-Account resulting
from Purchase Payments made before the change.
VALUATION OF AN ACCOUNT
The sum of the value of all Accumulation Units credited to the Participant
Account in respect of the Participant is the Participant Account Value.
Purchase Payments are allocated among the Sub-Accounts of the Variable
Account in accordance with the instructions of the Owner.
The value of a Participant's Account on any day can be determined by
multiplying the total number of Accumulation Units credited to the account
for each Sub-Account by the current Accumulation Unit Value for that
Sub-Account in respect of the Participant. Each Participant (or the Owner)
will be advised periodically of the number of Accumulation Units credited to
his or her account for each Sub-Account, the current Accumulation Unit
Values, and the total value of his or her account. Such reports to
Participants are for informational purposes only and should not be
interpreted to mean that a Participant has any rights with respect to his or
her account beyond that provided by the Owner in accordance with the terms of
the Plan.
The Participant and Owner should review the information in these reports
carefully. All errors or corrections must be reported to the Company
immediately to assure proper crediting to the Contract and appropriate
Sub-Account. The Company will assume all transactions are accurate unless the
Participant or the Owner notifies the Company otherwise within 30 days after
receipt of the report.
The principal underwriter and distributor of the Contracts is Nationwide
Advisory Services, Inc. ("NAS"), located at One Nationwide Plaza, Columbus,
Ohio, 43215.
C. REDEMPTION OF PARTICIPANT ACCOUNTS
The Owner's right to redeem Participant Accounts, either fully or
partially, will be governed by the terms of the Plan which the Contract is
issued to fund. It should be recognized that the value of the investment on
redemption can be more or less than its cost. All such payments will be made
by the Company to the Owner, after the assessment of any applicable
Contingent Deferred Sales Charge. It is the Owner's obligation to distribute
such payments to a Participant. The Company may undertake the obligation on
behalf of the Owner to distribute such payments, less the Contingent Deferred
Sales Charge, if any, directly to a Participant by agreement with the Owner.
To the extent permitted by the Plan, a Participant Account may be redeemed
fully or partially at any time prior to the date Retirement Income Payments
commence for the
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Participant under either Option B1 or B2, subject to the Contingent Deferred
Sales Charge. No partial redemption will directly affect future requirements
to make Purchase Payments. If the Contract is terminated by the Owner, all
Participant Accounts in the Variable Account will be redeemed to the extent
permitted by the Plan.
A request for a partial redemption of a Participant Account containing
more than one Sub-Account of Accumulation Units must specify the allocation
of the partial redemption among the Sub-Accounts of Accumulation Units.
However, if no such direction is contained in the request for a redemption,
the Company may pro-rate the redemption among the applicable Sub-Accounts of
Accumulation Units. Upon receipt at the Company's Home Office of a written
request for a full or partial redemption of a Participant Account, the
Company will determine the value of the number of Accumulation Units
redeemed, less any applicable Contingent Deferred Sales Charge, at the
Accumulation Unit Value next computed following receipt of such written
request by the Company. Payment of any such amount will be made to the Owner
within 7 days of the date the request is received by the Company. Payment of
redemption values may be suspended when redemption of the Underlying Mutual
Fund shares is suspended (i) during any period in which the New York Stock
Exchange is closed, or (ii) in the event that the Securities and Exchange
Commission may by order direct for the protection of Owners or Participants.
Instead of a lump sum Distribution of a full or partial redemption, the
Owner, or Participant if permitted by the Plan, may elect to have that amount
paid out in installments under Option A1 or A2, subject to the minimums
applicable to these options.
D. DISTRIBUTION OF PARTICIPANT ACCOUNTS (RETIREMENT PERIOD)
RETIREMENT INCOME PAYMENTS
The period during which a Participant Account is paid out in periodic
installments is known as the Distribution Period. Because periodic
Distributions will normally be made after the Participant retires, the
Distribution Period is also called the retirement period. All such periodic
Distributions will be made by the Company to the Owner. It is the Owner's
obligation to pay such amounts to a Participant. The Company may undertake
the obligation on behalf of the Owner to pay such amounts directly to a
Participant by agreement with the Owner. Retirement Income Payments under
Options B1 and B2 are determined on the basis of (i) the mortality tables
specified in the Contract, (ii) the adjusted age of the Retired Participants,
(iii) the type of Retirement Income Payment option(s) selected, and (iv) in
the case of variable payments, the investment performance of the specific
Sub-Accounts elected. While the Company may be obligated to make variable
Retirement Income Payments under the Contract, the amount of each such
payment is not guaranteed. The dollar amount of variable payments will
reflect investment gains and losses, and investment income of the
Sub-Accounts on which they are based, but they will not be affected by
adverse mortality experience or by an increase in the Company's expenses
above the amount provided for in the Contracts.
ELECTION OF INCOME FORM AND DATE
The Contracts provide for Retirement Income Payments to begin on the date
and under the retirement options elected in accordance with the Plan. At
least one month prior to a Participant's Retirement Commencement Date (see
"Glossary of Terms"), the Contract Owner may, by written election to the
Company at its Home Office, elect any one of the retirement income options
described in the "Optional Retirement Income Forms" section. The Plan may
restrict changes in election of retirement income options.
ALLOCATION OF RETIREMENT INCOME
At retirement, Accumulation Units in a Participant's Account may be used
to purchase a Fixed Dollar Annuity for the Participant. For Participants
electing Options A1 or A2 as described in the "Optional Retirement Income
Forms" section, Accumulation Units in a Participant's Account of any
Sub-Account in the Variable Account will be used to provide variable
Retirement Income Payments as described further in this prospectus.
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FIXED DOLLAR ANNUITY
A fixed dollar annuity is an annuity with payments which are guaranteed as
to dollar amount during the retirement period. The first fixed dollar payment
will be determined by applying the value of the General Account contract
value to the applicable Annuity Table in accordance with the Optional
Retirement Income Form elected. This will be done at the retirement date.
Fixed Dollar Annuity payments after the first such payment will not be less
than the first fixed dollar annuity payment. The availability of fixed dollar
annuity contracts under a particular Plan is subject to the election of the
Owner.
MINIMUM PAYMENT
If the present value of the Participant's accrued benefit at the time of
retirement is less than $3,500, the Company shall have the right to make a
lump sum Distribution to such Retired Participant.
DEATH BENEFIT BEFORE RETIREMENT
In the event a Participant dies before his or her retirement income
commences, a death benefit equal to the value of such Participant Account
will be paid as provided by the Plan upon (1) the Company's receipt of
verification and proof of death; and (2) the Company's verification of
Beneficiary designations. If the Plan so provides, a Beneficiary may elect
either to receive the value in a lump sum or to apply it under any of the
Optional Retirement Income Forms contained in the Contract, (subject to the
minimums applicable to such optional forms). Monthly payments due under such
options may be fixed, variable, or a combination of fixed and variable.
OPTIONAL RETIREMENT INCOME FORMS
The availability of the following Optional Retirement Income Forms are
subject to the election of the Owner.
OPTION A1- Payments for a Designated Period. Payments will be made monthly
for any specified number of years not to exceed 30. The amount of each
variable payment will be determined by multiplying (a) by (b) where (a) is
the Accumulation Unit Value for the date the payment is made and (b) is
the number of Accumulation Units applied under this option divided by the
number of payments selected. Exchanges between the investment options are
permitted subject to limitations outlined in the Company's Group Fixed
Fund Retirement Contract. A period certain payment period of less than 5
years for a Participant who has less than a minimum of 5 Participant
Account Years would result in imposition of the applicable Contingent
Deferred Sales Charge.
OPTION A2 - Payments of a Designated Amount. Payments will be made monthly
in equal installments (not less than $25 per month) until the amount
applied, adjusted each Valuation Date for investment results, is
exhausted. The final installment will be the sum remaining with the
Company. Exchanges between the investment options are permitted subject to
limitations outlined in the Company's Group Fixed Fund Retirement
Contract.
OPTION B1- Life Income with Payment Certain. Payments will be made at
least on an annual basis during the lifetime of a Participant. A period
certain of 60, 120, 180, 240, 300 or 360 months may be chosen. If the
Participant dies prior to the end of such period certain, payments will
continue to the designated Beneficiary for the remainder of the selected
period certain.
OPTION B2 - Joint and Survivor Life Income. Payments will be made monthly
during the joint lifetime of an individual and another named individual.
Payments will continue to be made as long as either is living. This option
will permit the choice of 100%, 75%, 66% or 50% of the original payment
amount to be paid to the Beneficiary. Payments will stop with the last
payment due prior to the death of the Beneficiary. If the Beneficiary
predeceases the designated annuitant, then payments continue at 100% to
the designated annuitant..
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OTHER FORMS AND BENEFIT PAYMENTS- With the consent of the Company, the
amount due upon Distribution may be applied on any other mutually
agreeable basis.
Exchanges processed while Participants are receiving payments pursuant to
Options A1 may change the number of Accumulation Units remaining. In this
event, the payment amount must be recalculated.
DEATH OF RETIRED PARTICIPANT
If any Retired Participant dies while receiving payments, any death
benefit payable will be determined in accordance with the retirement income
form elected. Calculation of the present value of any remaining payments
certain for purposes of making a lump sum payment will be based on the same
assumed investment rate used by the Company in determining the payments
certain prior to the death of the Retired Participant.
WITHDRAWAL
If permitted by the Plan, any amount remaining under Option A1 or A2 may
be withdrawn, or if that amount is at least $5,000, it may be applied under
either Option B1 or B2, subject to the minimum payment requirements described
previously. Unless prohibited by the Plan, a Beneficiary receiving payments
certain under Option B1 after the death of a Retired Participant may elect at
any time to receive the present value at the current dollar amount of the
remaining number of payments certain in a single payment, calculated on the
basis of the assumed investment rate used in computing the amount of the
previous payments.
FREQUENCY OF PAYMENT
At the election of the Retired Participant, and with the consent of the
Owner, payments made under any option may be made annually, semi-annually, or
quarterly instead of monthly. Any change in frequency of payments must be on
the anniversary of the commencement of Retirement Income Payments.
DETERMINATION OF PAYMENTS UNDER OPTIONS A1 AND A2
Monthly payments under Options A1 and A2 will be determined in the manner
set forth in the description of the options. As each payment is made under
either of these options, a number of Accumulation Units equal in value to the
payment will be canceled.
DETERMINATION OF PAYMENTS UNDER OPTIONS B1 AND B2
Variable monthly payments under Options B1 and B2 will be determined
annually and will remain level throughout the year. Each year, as of the
anniversary of the commencement of Retirement Income Payments, a new variable
monthly payment will be determined and that new payment will remain level for
that year. An adjusted age is used to determine the amount of monthly payment
for each year. Such adjusted age may not be the same as the actual age of the
Retired Participant.
DETERMINATION OF AMOUNT OF VARIABLE MONTHLY PAYMENTS FOR FIRST YEAR
In determining the amount of Retirement Income Payments under Options B1
and B2, the value held on behalf of a Participant is determined by
multiplying the number of Accumulation Units in each Sub-Account for that
account by the Accumulation Unit value for that Sub-Account on the last
business day of the second calendar week immediately preceding the date on
which the first payment is due.
The first year variable monthly payment for each Sub-Account is determined
by dividing the value of the Accumulation Units of that Sub-Account in the
Participant Account by the amount required to provide $1 per month (the
purchase rate).
Once the first year's variable monthly payment amount has been determined
for a Participant, the Company will deduct the annual premium from the
Participant Account. This deduction is made by canceling a number of
Accumulation Units in the Participant Account equal in value to the annual
premium. The
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allocation of the annual premium between Sub-Accounts will be in such
relationship as the monthly payments from each Sub-Accounts have to each
other.
The annual premium is calculated so that if there are no partial
redemption's (and therefore no Underlying Mutual Fund dividends have been
taken in cash) the payee will receive level annual payments if the net
investment factor, on an annual basis, is equal to the Assumed Investment
Rate plus an amount equal to the annual Contract Maintenance Charge. Payments
for subsequent years will be smaller than, equal to, or greater than the
payments received during the initial year, depending on whether the actual
net investment result on an annual basis of a Sub-Account is smaller than,
equal to, or greater than the Assumed Investment Rate.
DETERMINATION OF AMOUNT OF VARIABLE MONTHLY PAYMENTS FOR THE SECOND AND
SUBSEQUENT YEARS
As of the first anniversary of the commencement of Retirement Income
Payments, the second year variable monthly payments will be determined in
exactly the same manner as for the first year, using the purchase rates in
the Contract for the Retired Participant's age as then determined under the
terms of the Contract. As in the first year, an annual premium will be
deducted and transferred to the General Account from which Account the
Company will make the Retirement Income Payments. Subsequent annual
determinations will be made in the same manner.
Upon the death of any Retired Participant, the Participant Account will be
reduced by the number of Accumulation Units not required to provide further
payments during the remainder of a period certain, if any, or to a contingent
Retired Participant. Any Accumulation Units so canceled will either remain in
the Variable Account or be transferred to the Company's General Account,
depending on the Company's obligation.
ALTERNATE ASSUMED INVESTMENT RATE
The Contracts include purchase rates based on a 3.5% rate per annum. If
not prohibited by the laws and regulations of the states in which this
Contract is issued, an Owner may elect on the Contract Date to have all
variable benefits payable for all Participants determined on an Assumed
Investment Rate of 5% per annum. The Assumed Investment Rate basis in the
Contract is used merely to determine each periodic monthly payment from
investment experience of any of the Sub-Accounts. The choice of the Assumed
Investment Rate affects the pattern of retirement income payments. A higher
Assumed Investment Rate will produce a higher initial year payment, but a
more slowly rising Sub-Account of subsequent payments (or a more rapidly
falling Sub-Account of subsequent payments) than a lower Assumed Investment
Rate. Although a higher initial payment would be received under a higher
Assumed Investment Rate, there is a point in time after which payments under
a lower Assumed Investment Rate would be greater, assuming payment continues
after that point in time.
The objective of a variable retirement contract is to provide level
payments during periods when the economy is relatively stable and to reflect
as increased payments only the excess of investment results flowing from
inflation or an increase in productivity. The achievement of this objective
will depend in part upon the validity of the assumption that the net
investment result, on an annual basis, of a Sub-Account equals the Assumed
Investment Rate during periods of stable prices.
GENERAL INFORMATION
SUBSTITUTION OF SECURITIES
If the shares of any Underlying Mutual Fund should no longer be available
for investment by the Variable Account or, if in the judgment of the
Company's management, further investment in such Underlying Mutual Fund
shares should become inappropriate in view of the purposes of the Contract,
the Company may substitute shares of another Underlying Mutual Fund for
Underlying Mutual Fund shares already purchased or to be purchased in the
future by Purchase Payments under the Contract. No substitution of securities
in any Sub-Accounts may take place without prior approval of the Securities
and Exchange Commission, and under such requirements as it may impose.
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PERFORMANCE ADVERTISING
The Company may from time to time advertise several types of historical
performance for the Sub-Accounts of the Variable Account. A "yield" and
"effective yield" may be advertised for the Nationwide Money Market Fund
Sub-Account, the Dreyfus Cash Management Fund - Class A Sub-Account and the
Nationwide Separate Account Trust Money Market Fund Sub-Account. "Yield" is a
measure of the net dividend and interest income earned over a specific
seven-day period (which period will be stated in the advertisement) expressed
as a percentage of the offering price of the Sub-Account units. Yield is an
annualized figure, which means that it is assumed that the Sub-Account
generates the same level of net income each week over a 52-week period. The
"effective yield" is calculated similarly but includes the effect of assumed
compounding calculated under rules prescribed by the Securities and Exchange
Commission. The effective yield will be slightly higher than yield due to
this compounding effect.
The Company may also advertise for the Sub-Account's standardized "average
annual total return", calculated in a manner prescribed by the Securities and
Exchange Commission, and non-standardized "total return." "Average annual
total return" will show the percentage rate of return of a hypothetical
initial investment of $1,000 for rolling calendar quarters and will cover, at
least, the most recent one, five and ten year periods, or for a period from
inception to date if the Underlying Mutual Fund held in the Sub-Account has
not been in existence for one of the prescribed periods. This calculation
reflects the deduction of all applicable charges made to the Contracts except
for premium taxes, which may be imposed by certain states. Non-standardized
"total return" will be calculated in a similar manner as will average annual
total return except total return will not reflect the deduction of any
applicable Contract Maintenance Charge or Contingent Deferred Sales Charge,
which, if reflected, would decrease the level of performance shown.
The Company may also from time to time advertise the performance of the
Sub-Accounts of the Variable Account relative to the performance of other
variable annuity sub-accounts or mutual funds with similar or different
objectives, or the investment industry as a whole.
The Sub-Accounts of the Variable Account may also be compared to certain
market indexes, which may include, but are not limited to: S&P 500;
Shearson/Lehman Intermediate Government/Corporate Bond Index; Shearson/Lehman
Long-Term Government/Corporate Bond Index; Donoghue Money Fund Average; U.S.
Treasury Note Index; and Dow Jones Industrial Average.
Normally these rankings and ratings are published by independent tracking
services and publications of general interest including, but not limited to:
Lipper Analytical Services, Inc., CDA/Wiesenberger, Morningstar, Donoghue's,
magazines such as Money, Forbes, Kiplinger's Personal Finance Magazine,
Financial World, Consumer Reports, Business Week, Time, Newsweek, U.S. News
and World Report, National Underwriter; rating services such as LIMRA, Value,
Best's Agent Guide, Western Annuity Guide, Comparative Annuity Reports; and
other publications such as the Wall Street Journal, Barron's, Investor's
Daily, and Standard & Poor's Outlook. In addition, Variable Annuity Research
& Data Service (The VARDS Report) is an independent rating service that ranks
over 500 variable annuity funds based upon total return performance. These
rating services and publications rank the performance of the Underlying
Mutual Funds against all mutual funds over specified periods and against
mutual funds in specified categories. The rankings may or may not include the
effects of sales or other charges.
The Company is also ranked and rated by independent financial rating
services, among which are Moody's, Standard & Poor's and A.M. Best Company.
The purpose of these ratings is to reflect the financial strength or
claims-paying ability of the Company. The ratings are not intended to reflect
the investment experience or financial strength of the Variable Account. The
Company may advertise these ratings from time to time. In addition, the
Company may include in certain advertisements, endorsements in the form of a
list of organizations, individuals or other parties which recommend the
Company or the Contract. Furthermore, the Company may occasionally include in
advertisements comparisons of currently taxable and tax deferred investment
programs, based on selected tax brackets, or discussions of alternative
investment vehicles and general economic conditions.
ALL PERFORMANCE INFORMATION AND COMPARATIVE MATERIAL ADVERTISED BY THE
COMPANY IS HISTORICAL IN NATURE AND IS NOT INTENDED TO REPRESENT OR GUARANTEE
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FUTURE RESULTS. THE OWNER'S OR PARTICIPANT'S ACCOUNT VALUE AT REDEMPTION MAY
BE MORE OR LESS THAN ORIGINAL COST.
The Statement of Additional Information contains more detailed information
about the performance calculations, including actual examples for each type
of performance advertised.
CONTRACT OWNER INQUIRIES
Owner and Participant inquiries may be directed to the Company by writing
Nationwide Life Insurance Company P.O. Box 16766, One Nationwide Plaza,
Columbus, Ohio 43216, or calling 1-800-545-4730 (TTY: 1-800-848-0833).
NET INVESTMENT FACTOR
The Net Investment Factor for any Valuation Period is determined by
dividing (a) by (b) and subtracting (c) from the result where:
(a) is the net of:
(1)the net asset value per share of the Underlying Mutual Fund held in
the Sub-Account determined at the end of the current Valuation Period,
plus
(2)the per share amount of any dividend or capital gain distributions
made by the Underlying Mutual Fund held in the Sub-Account if the
"ex-dividend" date occurs during the current Valuation Period, plus or
minus
(3)a per share charge or credit for any taxes reserved for, which is
determined by the Company to have resulted from the investment
operations of the Sub-Account.
(b) is the net of:
(1)the net asset value per share of the Underlying Mutual Fund held in
the Sub-Account determined as of the end of the immediately preceding
Valuation Period, plus or minus
(2)the per share charge or credit, if any, for any taxes reserved for in
the immediately preceding Valuation Period.
(c) is a factor representing the daily Actuarial Risk Fee deducted from the
Variable Account. Such factor is equal to an annual rate of 0.95% of the
average Variable Account value.
For Underlying Mutual Funds that credit dividends on a daily basis and pay
such dividends once each month or quarter, (such as money market funds and
certain bond funds) the Net Investment Factor allows for the monthly or
quarterly reinvestment of these daily dividends.
The Net Investment Factor may be greater or less than one; therefore, the
value of an Accumulation Unit may increase or decrease. It should be noted
that changes in the Net Investment Factor may not be directly proportional to
changes in the net asset value of Underlying Mutual Fund shares, because of
the deduction for the Actuarial Risk Fee and the effect of the various
purchase and sale transactions on any particular day.
VALUATION OF ASSETS
Underlying Mutual Fund shares in the Variable Account will be purchased
and valued at their net asset value (daily bid price exclusive of any sales
charges). An Underlying Mutual Fund's net asset value per share is determined
by dividing the value of the total assets of the Underlying Mutual Fund, less
liabilities, by the number of shares outstanding, with no charge for sales
expense.
FEDERAL TAX STATUS
The following description of the federal tax status of these Contracts is
not exhaustive, and special rules are provided with respect to situations not
discussed herein. For complete information, consult a qualified tax Adviser.
The Company does not make any guarantee regarding the tax status of any
Contract or any
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transaction involving the Contracts. The Contracts are treated as a trust for
purposes of the Code under rules similar to the rules under Section 401(f) of
the Code.
For federal income tax purposes, the operations of the Variable Account
form a part of the Company's operations. Under existing federal income tax
law, no taxes are payable by the Company on the investment income of the
Variable Account to the extent it is credited to the Owners under the
Contracts. The Company is taxed as a life insurance company under Part One,
Subchapter L, of the Code.
Income and capital gains of the Variable Account would normally be taxable
to Owners whether or not taken by the Owners in cash. However, the Contracts
are issued only to organizations exempt from federal income tax.
The amounts received by the Participant under the Plan normally represent
the accumulation of Purchase Payments which were not previously included in
the Participant's gross income, and therefore any such amounts should be
included in gross income of a Participant or Beneficiary when such amounts
are received.
It is the responsibility of each Owner to determine that its Plan is
established and administered in accordance with the applicable provisions of
the Code.
CONTRACTS ISSUED UNDER THE NEW YORK MODEL PLAN
The following contract amendments are required by the Rules and
Regulations of the New York State Deferred Compensation Board in order to
market the Contracts to governmental employers for use in funding public
employee deferred compensation plans in the State of New York.
Throughout the prospectus, references to "annuity" payments are modified
to "benefit" payments.
The "Suspension and Termination" provisions are amended to permit a
Participant to "freeze" his or her account and maintain the account on
deposit with the Company notwithstanding the Owner's termination of its
contractual relationship with the Company. The assets of the Plan are part of
the general assets of the Owner, provided however that the Owner must hold
all such Plan assets for the exclusive benefit of the Plan's Participants and
beneficiaries.
All references throughout the prospectus to Optional Retirement Income
Forms A1, A2, B1 and B2 shall mean Option 1, Option 2, Option 3 and Option 4,
respectively. All references to "Contingent Deferred Sales Charge" are
deleted.
LEGAL PROCEEDINGS
From time to time the Company is a party to litigation and arbitration
proceedings in the ordinary course of its business, none of which is expected
to have a material adverse effect on the Company.
In recent years, life insurance companies have been named as defendants in
lawsuits, including class action lawsuits, relating to life insurance pricing
and sales practices. A number of these lawsuits have resulted in substantial
jury awards or settlements. In October 1996, a policyholder of Nationwide
Life filed a complaint in Alabama state court against Nationwide Life and an
agent of Nationwide Life (Wayne M. King v. Nationwide Life Insurance Company
and Danny Nix), related to the sale of a whole life policy on a "vanishing
premium" basis and seeking unspecified compensatory and punitive damages. In
February 1997, Nationwide Life was named as a defendant in a lawsuit filed in
New York Supreme Court also related to the sale of whole life policies on a
"vanishing premium" basis (John H. Snyder v. Nationwide Mutual Insurance
Company, Nationwide Mutual Insurance Co. and Nationwide Life Insurance Co.).
The plaintiff in such lawsuit seeks to represent a national class of
Nationwide Life policyholders and claims unspecified compensatory and
punitive damages. This lawsuit is in an early stage and has not been
certified as a class action. Nationwide Life intends to defend these cases
vigorously. There can be no assurance that any future litigation relating to
pricing and sales practices will not have a material adverse effect on the
Company.
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The General Distributor, Nationwide Advisory Services, Inc., is not
engaged in any litigation of any material nature.
TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION
PAGE
General Information and History..........................................1
Services.................................................................1
Purchase of Securities Being Offered.....................................2
Underwriters.............................................................2
Calculation of Performance...............................................2
Annuity Payments.........................................................9
Financial Statements....................................................10
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APPENDIX
PARTICIPATING UNDERLYING MUTUAL FUNDS
(THE COMPANY MAY LIMIT THE NUMBER OF UNDERLYING MUTUAL FUNDS SELECTED BY THE
OWNER, AND ALL UNDERLYING MUTUAL FUNDS MAY NOT BE AVAILABLE UNDER YOUR PLAN.)
A SUMMARY OF INVESTMENT OBJECTIVES IS CONTAINED IN THE DESCRIPTIONS OF EACH
UNDERLYING MUTUAL FUND BELOW. MORE DETAILED INFORMATION MAY BE FOUND IN THE
CURRENT PROSPECTUS FOR EACH UNDERLYING MUTUAL FUND. SUCH A PROSPECTUS FOR THE
UNDERLYING MUTUAL FUNDS BEING CONSIDERED SHOULD ACCOMPANY THE PROSPECTUS AND
SHOULD BE READ IN CONJUNCTION HEREWITH. A COPY OF EACH PROSPECTUS MAY BE
OBTAINED WITHOUT CHARGE FROM NATIONWIDE LIFE INSURANCE COMPANY.
THE FOLLOWING FUNDS ARE AVAILABLE ONLY FOR DEFERRED COMPENSATION CONTRACTS.
AIM WEINGARTEN FUND - INSTITUTIONAL CLASS
The investment objective of the Fund is to provide growth of capital
through investments primarily in common stocks of leading U.S. companies
considered by management to have strong earnings momentum. AIM Advisers, Inc.
serves as the Fund's investment Adviser.
AIM CONSTELLATION FUND - INSTITUTIONAL CLASS
The investment objective of the Fund is to provide capital appreciation
primarily through investments in common stocks with emphasis on medium-sized and
smaller emerging growth companies. AIM Advisers, Inc. serves as the Fund's
investment Adviser.
AMERICAN CENTURY: TWENTIETH CENTURY GROWTH
The investment objective of the Fund is capital growth through investment
in securities which the management considers to have better-than-average
prospects for appreciation. It is management's intention that the portfolio will
generally consist of common stocks of large, established companies. American
Century Investment Services, Inc. services as the Fund's investment Adviser.
AMERICAN CENTURY: TWENTIETH CENTURY SELECT
The investment objective of the Fund is capital growth by investing
primarily in common stocks that are considered by management to have
better-than-average prospects for appreciation. Common stocks chosen must have a
record of paying or having committed themselves to the payment of regular cash
dividends, but growth is the primary consideration, and the dividends may not be
significant. American Century Investment Services, Inc. services as the Fund's
investment Adviser.
AMERICAN CENTURY: TWENTIETH CENTURY ULTRA
The investment objective of the Fund is capital growth by investing
primarily in common stocks that are considered by management to have
better-than-average prospects for appreciation. It is management's intention
that the portfolio will generally consist of common stocks of medium-sized and
smaller companies. American Century Investment Services, Inc. services as the
Fund's investment Adviser.
DAVIS NEW YORK VENTURE FUND, INC.
The investment objective of the Fund is growth of capital. It invests
primarily in common stocks, and securities convertible into common stocks. The
Fund invests in securities subject to the risk of price fluctuations reflecting
both market evaluations of the business involved and general changes in the
equity markets. It invests in securities of foreign issuers, which involve
special risk factors, and may hedge currency fluctuation risks related thereto.
Davis Selected Advisers, L.P., serves as the Fund's investment Adviser.
DREYFUS CASH MANAGEMENT - CLASS A
The investment objective of the Fund is to provide investor with as high a
level of current income as is consistent with the preservation of capital and
the maintenance of liquidity. The Dreyfus Corporation serves as the Fund's
investment Adviser.
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DREYFUS S&P 500 INDEX FUND
The Fund's objective is to provide investment results that correspond to
the price and yield performance of publicly-traded common stocks in the
aggregate, as represented by the Standard & Poor's 500 Composite Stock Price
Index. The Dreyfus Corporation serves as the Fund's investment Adviser.
DREYFUS THIRD CENTURY FUND, INC.
The Fund's primary goal is to provide capital growth through equity
investment in companies that, in the opinion of the Fund's management, not only
meet traditional investment standards, but which also show evidence that they
conduct their business in a manner that contributes to the enhancement of the
quality of life in America. Current income is secondary to the primary goal. The
Dreyfus Corporation serves as the Fund's investment Adviser.
EVERGREEN INCOME AND GROWTH FUND (FORMERLY EVERGREEN TOTAL RETURN FUND)
The investment objective of the Fund is current income and capital
appreciation. The Fund invests primarily in common and preferred stocks,
securities convertible into or exchangeable for common stocks, and fixed income
securities. The Fund's objective is to maximize the "total return" on its
portfolio of investments. Evergreen Asset Management Corp. serves as the Fund's
investment Adviser.
FEDERATED GNMA TRUST-INSTITUTIONAL SHARES
The investment objective of the Fund is current income. The Fund pursues
this investment objective by investing primarily in instruments issued or
guaranteed by the Government National Mortgage Association ("GNMA"). Federated
Management serves as the Fund's investment Adviser.
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 2-5 YEARS - INSTITUTIONAL SHARES
The investment objective of the Fund is current income. The Fund pursues
this investment objective by investing in U.S. Government Securities with
remaining maturities of five years or less. Federated Management serves as the
Fund's investment Adviser.
FIDELITY ASSET MANAGER(TM)
The investment objective of the Fund is a high total return with reduced
risk over the long term by allocating its assets among domestic and foreign
stocks, bonds, and short-term instruments. Fidelity Management & Research
Company serves as the Fund's investment Adviser.
FIDELITY CONTRAFUND
The investment objective of the Fund is capital appreciation by investing
in securities that its manager believes are undervalued due to an overly
pessimistic appraisal by the public. Although the Fund will usually be invested
primarily in common stocks and securities convertible into common stock, the
percentage of its assets invested in other securities may vary. Fidelity
Management & Research Company serves as the Fund's investment Adviser.
FIDELITY EQUITY-INCOME FUND
The investment objective of the Fund is to obtain reasonable income from a
portfolio consisting primarily of income-producing equity securities. The Fund
seeks a yield which exceeds the composite yield on the securities comprising the
Standard & Poor's Composite Index of 500 Stocks. In pursuing this objective, the
Fund will also consider the potential for capital appreciation. Fidelity
Management & Research Company serves as the Fund's investment Adviser.
FIDELITY GROWTH & INCOME PORTFOLIO
The investment objective of the Fund is long term capital growth, current
income, and growth of income consistent with reasonable investment risk.
Fidelity Management & Research Company serves as the Fund's investment Adviser.
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FIDELITY MAGELLAN(R) FUND
The investment objective of the Fund is capital appreciation by investing
primarily in common stock and securities convertible into common stock. The Fund
may also invest in foreign securities, which involves additional risks. The Fund
may also invest in stock index futures and options both of which can be volatile
investments. Fidelity Management & Research Company serves as the Fund's
investment Adviser.
FIDELITY OTC PORTFOLIO
The investment objective of the Fund is to seek capital appreciation by
investing primarily in securities traded on the over-the counter (OTC)
securities market. Securities traded on the OTC include, among others,
industrial corporations, financial services institutions, public utilities, and
transportation companies, common and preferred stocks, securities convertible
into common stock, warrants and similar rights, and debt securities, and
obligations of the federal government. The fund does not place any weight on
dividend and interest income unless it believes this income will have a
favorable influence on the market value of a security. Fidelity Management &
Research Company serves as the Fund's investment Adviser.
FIDELITY PURITAN FUND
The investment objective of the Fund seeks to obtain as much income as
possible, consistent with the preservation and conservation of capital, by
investing in a broadly diversified portfolio of securities, including common
stocks, preferred stocks, and bonds. While emphasis on income is an important
objective, this does not preclude growth in capital since some securities
offering a better than average yield may also possess some growth possibilities.
Fidelity Management & Research Company serves as the Fund's investment Adviser.
INVESCO INDUSTRIAL INCOME FUND, INC. (FORMERLY "FINANCIAL INDUSTRIAL INCOME
FUND, INC.")
The investment objective of the Fund is to seek the best possible current
income while following sound investment practices by investing in securities
which will provide a relatively high yield and stable return and which, over a
period of years, may also provide capital appreciation. Capital growth potential
is a secondary factor in the selection of portfolio securities of the Fund. The
Fund invests in common stocks, as well as convertible bond and preferred stocks.
INVESCO Funds Group, Inc. serves as the Fund's investment Adviser.
JANUS FUND
The Janus Fund is a diversified fund that seeks long-term growth of
capital by investing primarily in common stocks of a large number of issuers of
any size. Janus Capital's fundamental analysis and selection process focuses on
stocks with earnings growth potential that may not be recognized by the market.
Such securities are selected solely for their capital growth potential;
investment income is not a consideration. Janus Capital Corporation serves as
the Fund's investment Adviser.
JANUS TWENTY FUND
The investment objective of the Fund is growth of capital in a manner
consistent with the preservation of capital. Under normal conditions, the Fund
will concentrate its investments in a core position of 20-30 common stocks.
However, the percentage of the Fund's assets invested in common stocks will
vary, depending upon its investment adviser's opinion of prevailing market,
financial and economic conditions. Consequently, the Fund may at times hold
substantial positions in cash, or interest-bearing securities. Janus Capital
Corporation serves as the Fund's investment Adviser.
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MAS FUNDS FIXED INCOME PORTFOLIO
The investment objective of the Fund is to achieve above-average total
return over a market cycle of three to five years, consistent with reasonable
risk, by investing in a diversified portfolio of U.S. Government securities,
corporate bonds (including bonds rated below investment grade commonly referred
to as "junk bonds"), foreign fixed-income securities and mortgage-backed
securities of domestic issuers and other fixed-income securities. The
portfolio's average weighted maturity will ordinarily be greater than five
years. Miller Anderson & Sherrerd, L.L.P. serves as the Fund's investment
Adviser.
MFS(R) GROWTH OPPORTUNITIES FUND - CLASS A (FORMERLY "MFS(R) CAPITAL DEVELOPMENT
FUND")
The investment objective of the Fund is growth of capital. Dividend
income, if any, is incidental to the objective of capital growth. To achieve
this objective, a flexible approach toward types of companies as well as types
of securities is maintained by the Fund, depending upon the economic environment
and the relative attractiveness of the various securities markets. Massachusetts
Financial Services Company serves as the Fund's investment Adviser.
MFS(R) HIGH INCOME FUND - CLASS A
The investment objective of the Fund is high current income by investing
primarily in a professionally managed diversified portfolio of fixed income
securities, some of which may involve equity features. Securities offering the
high current income sought by this Fund are ordinarily in the lower rating
categories of recognized rating agencies or are unrated and generally involve
greater volatility of price and risk of principal and income than securities in
the high rating categories. Capital growth, if any, is a consideration
incidental to the investment objective of high current income. Massachusetts
Financial Services Company serves as the Fund's investment Adviser.
MASSACHUSETTS INVESTORS GROWTH STOCK FUND - CLASS A
The investment objective of the Fund is long-term growth of capital and
future income rather that current income. Massachusetts Financial Services
Company serves as the Fund's investment Adviser.
NATIONWIDE(R) BOND FUND
The investment objective of the Fund is to generate a high level of
income, consistent with capital preservation, through investments in
high-quality bonds and other fixed income securities. Through investment in
long-term income obligations, including corporate debt securities, United States
and Canadian Government obligations and commercial paper, this Fund seeks to
serve those who are less willing to accept the risk associated with stocks.
Nationwide Advisory Services, Inc. serves as the Fund's investment Adviser.
NATIONWIDE(R) FUND
The investment objective of the Fund is to obtain a total return from a
flexible combination of current income and capital appreciation. Primary
emphasis is given to common stocks, but investments may also include convertible
issues, bonds and money market instruments. Nationwide Advisory Services, Inc.
serves as the Fund's investment Adviser.
NATIONWIDE(R) GROWTH FUND
The investment objective of the Fund is to achieve long-term capital
appreciation without emphasis on current return. Major emphasis in the selection
of securities is placed on companies which have capable management, and are in
fields where social and economic trends, technological developments, and new
processes or products indicate a potential for greater than average growth.
Nationwide Advisory Services, Inc. serves as the Fund's investment Adviser.
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NATIONWIDE(R) MONEY MARKET FUND
The investment objective of the Fund is to provide as high a level of
current income as is consistent with the preservation of capital and maintenance
of liquidity, through investment in a diversified portfolio of high quality
money market instruments maturing in 397 days or less. These instruments
include, but are not limited to, U.S. Government and Agency obligations,
obligations of large commercial and foreign banks, certificates of deposit of
large savings associations, taxable or partly taxable obligations of state,
county and local governments, highly rated commercial paper, highly rated
corporate obligations, and repurchase agreements in any of the above. Nationwide
Advisory Services, Inc. serves as the Fund's investment Adviser.
NEUBERGER & BERMAN GUARDIAN FUND, INC.
The Fund seeks capital appreciation through investments generally in
dividend-paying issues of established companies that its investment officers
believe are well managed. The emphasis of the Fund's investments is on common
stock. The Fund diversifies its holdings among different industries and
different companies in light of conditions prevailing at any given time. Current
income is a secondary objective. Neuberger&Berman Management Incorporated serves
as the Fund's investment Adviser.
NEUBERGER & BERMAN MANHATTAN FUND, INC.
The Fund seeks capital appreciation without regard to income. It invests,
through its corresponding Portfolio, in securities believed to have the maximum
potential for long-term capital appreciation. It does not seek to invest in
securities that pay dividends or interest, and any such income is incidental.
The Portfolio expects to be almost fully invested in common stocks, often of
companies that may be temporarily out of favor in the market. Its aggressive
growth investment program involves greater risks and share price volatility than
programs that invest in more conservative securities. Neuberger&Berman
Management Incorporated serves as the Fund's investment Adviser.
NEUBERGER & BERMAN PARTNERS FUND, INC.
The Fund seeks capital growth by investing in securities solely on the
basis of management's evaluation of their investment merit and potential for
growth using a value-oriented approach to the selection of individual
securities. The Fund's management believes that the Fund is an attractive
investment vehicle for conservative investors who are interested in long-term
appreciation from stock investments, but who have a low tolerance for risk.
Neuberger&Berman Management Incorporated serves as the Fund's investment
Adviser.
PUTNAM INVESTORS FUND - CLASS A
The investment objective of the Fund is long-term growth of capital and
any increased income resulting from such growth. The Fund is designed for
investors seeking long-term growth of capital from a portfolio consisting
primarily of common stocks. The Fund's management emphasizes investment in
quality growth stocks. Putnam Investment Management, Inc. serves as the Fund's
investment Adviser.
PUTNAM VOYAGER FUND - CLASS A
The investment objective of the Fund is capital appreciation. The Fund
invests primarily in common stocks believed by the Fund's Investment Manager,
Putnam Management, to have potential for capital appreciation significantly
greater than the market average. The Fund is designed for investors willing to
assume above-average risk in return for above-average capital growth potential.
Putnam Investment Management, Inc. serves as the Fund's investment Adviser.
SEI INDEX FUNDS-S&P 500 INDEX PORTFOLIO
The S&P 500 Index Portfolio seeks to provide investment results that
correspond to the aggregate price and dividend performance of the securities in
the Standard & Poor's 500 Composite Stock Price Index which is comprised of 500
selected common stocks, most of which are listed on the New York Stock Exchange.
The investment objective is a fundamental policy of the portfolio. There can be
no assurance that the Portfolio will achieve its investment objective. SEI Fund
Management serves as the Fund's investment Adviser.
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SELIGMAN GROWTH FUND, INC. - CLASS A
The investment objective of the Fund is longer-term growth in capital
value and an increase in future income. Fund assets have been invested primarily
in common stocks with the inherent investment risks tempered by portfolio
diversification. J. & W. Seligman & Co., Incorporated serves as the Fund's
investment Adviser.
STRONG COMMON STOCK FUND, INC.
The Strong Common Stock Fund seeks capital growth. It seeks to attain this
objective by investing in a diversified portfolio of equity securities which, in
the opinion of the Fund's investment Adviser, possess the potential for price
appreciation. Strong Capital Management, Inc. serves as the Fund's investment
Adviser.
TEMPLETON FOREIGN FUND - CLASS I
The investment objective of the Fund is long-term capital growth through a
flexible policy of investing in stocks and debt obligations of companies and
governments outside the United States. Any income realized will be incidental.
Templeton Investment Counsel, Inc. serves as the Fund's investment Adviser.
TEMPLETON GLOBAL SMALLER COMPANIES GROWTH FUND - CLASS I
The investment objective of the Fund is long-term capital growth,
primarily through investment in common stocks and all types of common stock
equivalents, including rights, warrants and preferred stock, of companies of
various nations throughout the world. Templeton Investment Counsel, Inc. serves
as the Fund's investment Adviser.
T. ROWE PRICE INTERNATIONAL STOCK FUND(R)
The Fund's objective is long-term growth of capital through investments
primarily in common stocks of established, non-U.S. companies. T. Rowe Price
Associates, Inc. serves as the Fund's investment Adviser.
THE FOLLOWING UNDERLYING MUTUAL FUNDS MAY NOT BE AVAILABLE TO ALL CONTRACT
OWNERS ON OR AFTER JANUARY 1, 1994:
THE BOND FUND OF AMERICA(SM), INC.
The Fund's investment objective is to provide as high a level of current
income as is consistent with the preservation of capital. The Fund invests
substantially all of its assets in marketable corporate debt securities, U.S.
Government securities, mortgage-related securities, other asset-backed
securities and cash or money market instruments. Normally, at least 65% of the
Fund's assets will be invested in bonds.
THE GROWTH FUND OF AMERICA(R), INC.
The investment objective of the Fund is growth of capital. The realization
of current income will not be a consideration. The Fund seeks to achieve its
objective by investing in a diversified portfolio consisting primarily of common
stocks. However, assets may also be held in securities convertible into common
stocks, cash or cash equivalents, straight debt securities (including U.S.
Government securities), or nonconvertible preferred stocks. The Fund will
maintain at least 65% of the value of its total assets in growth-type securities
under normal market conditions.
THE INCOME FUND OF AMERICA(R), INC.
The investment objective is to emphasize current income while secondarily
striving to attain capital growth. The Fund believes that a portfolio with
relatively high current income can also generate growth of capital.
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THE FOLLOWING UNDERLYING MUTUAL FUND IS NOT AVAILABLE FOR NEW CONTRACTS ISSUED
ON OR AFTER AUGUST 1, 1993:
DELAWARE GROUP DECATUR FUND, INC.-DECATUR INCOME FUND
The investment Objective of the Fund is to achieve the highest possible
current income by investing primarily in common stocks that provide the
potential for income and capital appreciation without undue risk to principal.
THE FOLLOWING UNDERLYING MUTUAL FUND IS NOT AVAILABLE FOR NEW CONTRACTS ISSUED
ON OR AFTER JANUARY 1, 1987:
FIDELITY CAPITAL & INCOME FUND (FORMERLY "FIDELITY HIGH INCOME FUND")
The investment objective of the Fund is to seek to provide a combination
of income and capital growth by investing primarily in debt instruments and
common and preferred stocks, with a focus on lower-quality debt securities and
securities of companies with uncertain financial positions.
Effective on and after May 1, 1991, the Company shall no longer permit
Owners or Participants to make additional Purchase Payments or to exchange
Contract Values into the Fidelity Capital & Income Fund Sub-Account. However,
Contract Values held in the Fidelity Capital & Income Fund Sub-Account as of May
1, 1991 may continue to be invested in that Sub-Account. Unless the Company is
notified otherwise, any Purchase Payments or exchanges which the Owner or
Participants directs the Company to invest in the Fidelity Capital & Income Fund
Sub-Account on and after May 1, 1991 shall instead be automatically invested in
the Nationwide Money Market Fund Sub-Account.
The Company has determined that further investment in the Fidelity Capital
& Income Fund Sub-Account is not in the best interests of the Owners and
Participants in view of the Fund's adoption, effective for shares purchased on
and after February 1, 1991, of a redemption fee equal to 1.5% of the net asset
value of any Fund shares redeemed which are held less than twelve months. Any
redemption fees which the Fund may assess against Fund shares held by the
Company in the Variable Account which were purchased from February 1, 1991 to
May 1, 1991 shall be paid by the Company from surplus and shall not be paid,
directly or indirectly, by Contract Owners, Participants or the Variable
Account.
44
49 of 177
<PAGE> 50
STATEMENT OF ADDITIONAL INFORMATION
MAY 1, 1997
GROUP FLEXIBLE FUND RETIREMENT CONTRACTS ISSUED
BY THE NATIONWIDE DC VARIABLE ACCOUNT OF
NATIONWIDE LIFE INSURANCE COMPANY
This Statement of Additional Information is not a prospectus. It contains
information in addition to and more detailed than set forth in the prospectus
and should be read in conjunction with the prospectus dated May 1, 1997. The
prospectus may be obtained from Nationwide Life Insurance Company, P.O. Box
16766, One Nationwide Plaza, Columbus, Ohio 43216, or by calling 1-800-545-4730
(TTY: 1-800-848-0833).
TABLE OF CONTENTS
PAGE
General Information and History......................................... 1
Services................................................................ 1
Purchase of Securities Being Offered.................................... 2
Underwriters............................................................ 2
Calculation of Performance.............................................. 2
Annuity Payments........................................................ 9
Financial Statements....................................................10
GENERAL INFORMATION AND HISTORY
The Nationwide DC Variable Account ("Variable Account") is a separate
investment account of Nationwide Life Insurance Company ("Company"). The Company
is a member of the Nationwide Insurance Enterprise and all of the Company's
common stock is owned by Nationwide Financial Services, Inc. ("NFS"), a holding
company. NFS has two classes of common stock outstanding with different voting
rights enabling Nationwide Corporation (the holder of all of the outstanding
Class B Common Stock) to control NFS. Nationwide Corporation is a holding
company as well. All of its common stock is held by Nationwide Mutual Insurance
Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%), the
ultimate controlling persons of Nationwide Insurance Enterprise.
SERVICES
The Company, which has responsibility for administration of the Contracts and
the Variable Account, maintains records of the name, address, taxpayer
identification number, and other pertinent information for each Owner and the
number and type of Contract issued to each such Owner and records with respect
to the Contract Value of each Contract.
All assets of the Variable Account are held in custody for safekeeping by the
Company. The assets of each Sub-Account will be kept physically segregated and
held separate and apart from assets of other Sub-Account and from assets of any
other firm, person, or corporation. The Company will maintain a record of all
purchases and redemption for shares of the Underlying Mutual Fund held in each
Sub-Account.
The Company, or affiliates of the Company may have entered into agreements
with either the investment adviser or distributor for several of the Underlying
Mutual Funds. The agreements relate to administrative services furnished by the
Company or an affiliate of the Company and provide for an annual fee based on
the average aggregate net assets of the Variable Account (and other separate
accounts of the Company or life insurance company subsidiaries of the Company)
invested in particular Underlying Mutual Funds. These fees in no way affect the
net asset value of the Underlying Mutual Funds or fees paid by the Contract
Owner.
50 of 177
<PAGE> 51
The financial statements and schedules have been included herein in reliance
upon the reports of KPMG Peat Marwick LLP, independent certified public
accountants, Two Nationwide Plaza, Columbus, Ohio 43215, and upon the authority
of said firm as experts in accounting and auditing.
PURCHASE OF SECURITIES BEING OFFERED
The Contracts will be sold by licensed insurance agents in the states where
the Contracts may be lawfully sold. Such agents will be registered
representatives of broker-dealers registered under the Securities Exchange Act
of 1934 who are members of the National Association of Securities Dealers, Inc.
For those Plans which provide this Contract and the Company's Group Fixed
Fund Retirement Contract, the Owner, or the Participant if the Plan so provides,
may exchange Accumulation Units between any Sub-Account of the Variable Account
and the deposit fund of the Group Fixed Fund Retirement Contract. Exchanges from
the deposit fund to any Sub-Account will be subject to the limitations of the
Group Fixed Fund Retirement Contract. Exchanges will be effected when received
in good order by the Company at its Home Office.
UNDERWRITERS
The Contracts, which are offered continuously, are distributed by Nationwide
Advisory Services, Inc. ("NAS"), One Nationwide Plaza, Columbus, Ohio 43215, a
wholly owned subsidiary of the Company. During the fiscal years ended December
31, 1996, 1995, 1994 and 1993, no underwriting commissions were paid by the
Company to NAS.
CALCULATION OF PERFORMANCE
Any current yield quotations of the Nationwide Money Market Fund Sub-Account
and the Dreyfus Cash Management Fund - Class A Sub-Account, subject to Rule 482
of the Securities Act of 1933, shall consist of a seven calendar day historical
yield, carried at least to the nearest hundredth of a percent. The yield shall
be calculated by determining the net change, exclusive of capital changes, in
the value of a hypothetical pre-existing account having a balance of one
accumulation unit at the beginning of the base period, subtracting a
hypothetical charge reflecting deductions from Owner accounts, and dividing the
net change in account value by the value of the account at the beginning of the
period to obtain a base period return, and multiplying the base period return by
(365/7) or (366/7) in a leap year. As of December 31, 1996, the Nationwide Money
Market Fund Sub-Account and the Dreyfus Cash Management Fund - Class A
Sub-Account seven-day current yield was 3.89% and 4.33% respectively. The
Nationwide Money Market Fund Sub-Account and the Dreyfus Cash Management Fund -
Class A Sub-Account effective yield is computed similarly but includes the
effect of assumed compounding on an annualized basis of the current yield
quotations of the Underlying Mutual Fund, and for the period ending December 31,
1996 was 3.96% and 4.43%, respectively.
The Nationwide Money Market Fund Sub-Account and the Dreyfus Cash Management
Fund Sub-Account yield and effective yield will fluctuate daily. Actual yields
will depend on factors such as the type of instruments in the Underlying Mutual
Funds' portfolio, portfolio quality and average maturity, changes in interest
rates, and the Underlying Mutual Funds' expenses. Although each Sub-Account
determines its yield on the basis of a seven calendar day period, it may use a
different time period on occasion. The yield quotes may reflect the expense
limitation described under "Investment Manager and Other Services" in the
Underlying Mutual Funds' Statement of Additional Information. There is no
assurance that the yields quoted on any give occasion will remain in effect for
any period of time and there is no guarantee that the net asset values will
remain constant. It should be noted that an Owner's investment in the Nationwide
Money Market Fund Sub-Account and the Dreyfus Cash Management Fund - Class A
Sub-Account are not guaranteed or insured. Yields of other money market funds
may not be comparable if a different base period or another method of
calculation is used.
All performance advertising shall include quotations of average annual total
return, calculated in accordance with a standard method prescribed by rules of
the Securities and Exchange Commission, to facilitate comparison with total
return quoted by other variable annuity separate accounts. Standardized average
annual total return advertised for a specific period is found by first taking a
hypothetical $1,000 investment in each of the Sub-Account's units on the first
day of the period at the offering price, which is the Accumulation Unit Value
per unit ("initial investment") and computing the ending redeemable value
("redeemable value") of that investment at the
51 of 177
<PAGE> 52
end of the period. The redeemable value is then divided by the initial
investment and this quotient is taken to the Nth root (N represents the number
of years in the period) and 1 is subtracted from the result which is then
expressed as a percentage, carried to at least the nearest hundredth of a
percent. Average annual total return reflects the deduction of a maximum $15
Contract Maintenance Charge and a 0.95% Actuarial Risk Fee. The redeemable value
also reflects the effect of any applicable Contingent Deferred Sales Charge that
may be imposed at the end of the period (see "Contingent Deferred Sales Charge"
located in the prospectus.) No deduction is made for premium taxes which may be
assessed by certain states. Non-standardized total return is calculated in a
manner similar to average annual total return except the total return does not
reflect the deduction of any applicable Contingent Deferred Sales Charge or
Contract Maintenance Charge, which, if reflected, would decrease the level of
the performance advertised.
The average annual total return and total return quotations will be current
to the last day of the calendar quarter preceding the date on which an
advertisement is submitted for publication. The standardized average annual
total return figures will be based on rolling calendar quarters and will cover
periods of, at least, one, five, and ten years, or a period covering the time a
Underlying Mutual Fund held in the Sub-Account has been in existence, if the
Underlying Mutual Fund has not been in existence for one of the prescribed
periods. The non-standardized total return will cover the cumulative current
calendar year and the most recently completed calendar year, and periods of
three, five and ten years on a rolling calendar quarter basis. For those
Underlying Mutual Funds which have not been held as Sub-Account within the
Variable Account for one of the quoted periods, the standardized average annual
total return and non-standardized total return quotations will show the
investment performance such Underlying Mutual Funds would have achieved (reduced
by the applicable charges) had they been held as Sub-Accounts for the period
quoted.
Quotations of average annual total return and total return are based upon
historical earnings and will fluctuate. Any quotation of performance, therefore,
should not be considered a guarantee of future performance. Factors affecting a
Sub-Accounts' performance include general market conditions, operating expenses
and investment management. When redeemed, a Contract Owner and Participant
Account may be more or less than original cost.
Below are quotations of average annual total return and total return,
calculated as described in this provision, for each of the Sub-Accounts
available.
SERIES PERFORMANCE SUMMARY
STANDARDIZED AVERAGE ANNUAL TOTAL RETURN - MONEY MARKET
<TABLE>
<CAPTION>
=============================================================================
SERIES OPTIONS CURRENT YIELD PERIOD EFFECTIVE YIELD PERIOD
ENDING 12/31/96 ENDING 12/31/96
=============================================================================
<S> <C> <C>
Dreyfus Cash Management - 4.33% 3.96%
Class A
- -----------------------------------------------------------------------------
Nationwide(R) Money Market 3.89% 4.43%
Fund
- -----------------------------------------------------------------------------
</TABLE>
52 of 177
<PAGE> 53
NATIONWIDE DC VARIABLE ACCOUNT
SERIES PERFORMANCE SUMMARY
STANDARDIZED AVERAGE ANNUAL TOTAL RETURN
(OTHER THAN MONEY MARKET)
<TABLE>
<CAPTION>
==========================================================================================
1 YEAR 3 YEAR 5 YEARS 10 YEARS
SERIES OPTIONS TO TO TO TO
12/31/96 12/31/96 12/31/96 12/31/96
==========================================================================================
<S> <C> <C> <C> <C>
AIM Constellation Fund - Institutional Class 9.22% 13.66% 14.10% 17.34%
- ------------------------------------------------------------------------------------------
AIM Weingarten Fund - Institutional Class 10.62% 13.24% 6.71% 13.12%
- ------------------------------------------------------------------------------------------
American Century: Twentieth Century Growth 7.42% 6.93% 2.81% 11.64%
- ------------------------------------------------------------------------------------------
American Century: Twentieth Century Select 11.59% 6.35% 4.72% 9.87%
- ------------------------------------------------------------------------------------------
American Century: Twentieth Century Ultra 6.27% 10.88% 10.18% 18.07%
- ------------------------------------------------------------------------------------------
The Bond Fund of America, Inc.SM -0.81% 2.13% 5.64% 6.51%
- ------------------------------------------------------------------------------------------
Davis New York Venture Fund, Inc. 18.83% 16.60% 15.09% 15.32%
- ------------------------------------------------------------------------------------------
Delaware Group Decatur Fund, Inc.-Decatur 12.86% 12.95% 11.84% 9.98%
Income Fund
- ------------------------------------------------------------------------------------------
Dreyfus S&P 500 Index Fund 14.66% 15.19% 11.65% N/A
- ------------------------------------------------------------------------------------------
Dreyfus Third Century Fund, Inc. 16.65% 12.15% 7.63% 11.23%
- ------------------------------------------------------------------------------------------
Evergreen Income and Growth Fund 5.32% 5.36% 7.08% 6.09%
- ------------------------------------------------------------------------------------------
Federated GNMA Trust-Institutional Shares -2.53% 1.82% 2.85% 5.78%
- ------------------------------------------------------------------------------------------
Federated U.S. Government Securities Fund: -3.91% 0.78% 2.35% 4.64%
2-5 Years - Institutional Shares
- ------------------------------------------------------------------------------------------
Fidelity Asset Manager(TM) 5.16% 3.47% 8.56% N/A
- ------------------------------------------------------------------------------------------
Fidelity Capital & Income Fund 3.84% 3.38% 11.85% 8.07%
- ------------------------------------------------------------------------------------------
Fidelity Contrafund 14.28% 14.20% 15.38% 18.15%
- ------------------------------------------------------------------------------------------
Fidelity Equity-Income Fund 13.37% 13.13% 14.45% 11.09%
- ------------------------------------------------------------------------------------------
Fidelity Growth & Income Portfolio 12.38% 14.68% 14.33% 15.15%
- ------------------------------------------------------------------------------------------
Fidelity Magellan(R) Fund 4.13% 10.64% 11.92% 14.04%
- ------------------------------------------------------------------------------------------
Fidelity OTC Portfolio 16.06% 14.70% 12.71% 14.80%
- ------------------------------------------------------------------------------------------
Fidelity Puritan Fund 7.56% 8.61% 11.92% 10.15%
- ------------------------------------------------------------------------------------------
The Growth Fund of America(R), Inc. 7.25% 10.39% 9.83% 12.51%
- ------------------------------------------------------------------------------------------
The Income Fund of America(R), Inc. 7.63% 9.29% 10.09% 9.57%
- ------------------------------------------------------------------------------------------
INVESCO Industrial Income Fund, Inc. 9.11% 8.69% 7.81% 12.58%
- ------------------------------------------------------------------------------------------
Janus Fund 11.98% 11.40% 9.55% 14.27%
- ------------------------------------------------------------------------------------------
Janus Twenty Fund 20.14% 13.68% 8.11% 14.33%
- ------------------------------------------------------------------------------------------
MAS Funds Fixed Income Portfolio -0.16% 2.43% 5.19% 6.84%
- ------------------------------------------------------------------------------------------
Massachusetts Investors Growth Stock Fund - 15.17% 9.77% 9.25% 11.91%
Class A
- ------------------------------------------------------------------------------------------
MFS(R) Growth Opportunities Fund - Class A 14.21% 12.39% 11.43% 10.49%
- ------------------------------------------------------------------------------------------
MFS(R) High Income Fund - Class A 4.98% 4.67% 9.42% 6.81%
- ------------------------------------------------------------------------------------------
Nationwide(R) Bond Fund -5.93% 0.88% 3.47% 5.16%
- ------------------------------------------------------------------------------------------
Nationwide(R) Fund 16.25% 13.64% 9.06% 11.73%
- ------------------------------------------------------------------------------------------
Nationwide(R) Growth Fund 9.09% 11.25% 9.42% 10.24%
- ------------------------------------------------------------------------------------------
Neuberger & Berman Guardian Fund, Inc. 10.26% 12.33% 13.43% 13.22%
- ------------------------------------------------------------------------------------------
Neuberger & Berman Partners Fund, Inc. 18.84% 15.10% 15.23% 12.40%
- ------------------------------------------------------------------------------------------
</TABLE>
53 of 177
<PAGE> 54
<TABLE>
<CAPTION>
==========================================================================================
1 YEAR 3 YEAR 5 YEARS 10 YEARS
SERIES OPTIONS TO TO TO TO
12/31/96 12/31/96 12/31/96 12/31/96
==========================================================================================
<S> <C> <C> <C> <C>
Neuberger & Berman Manhattan Fund, Inc. 2.31% 7.60% 9.43% 11.08%
- ------------------------------------------------------------------------------------------
Putnam Investors Fund - Class A 13.75% 13.54% 12.50% 12.12%
- ------------------------------------------------------------------------------------------
Putnam Voyager Fund - Class A 5.23% 12.88% 12.62% 15.38%
- ------------------------------------------------------------------------------------------
SEI Index Funds-S&P 500 Index Portfolio 14.95% 15.60% 11.88% 12.57%
- ------------------------------------------------------------------------------------------
Seligman Growth Fund, Inc. - Class A 13.49% 10.48% 9.02% 11.10%
- ------------------------------------------------------------------------------------------
Strong Common Stock Fund, Inc. 12.82% 12.83% 16.34% 19.70%
- ------------------------------------------------------------------------------------------
T. Rowe Price International Stock Fund(R) 8.39% 4.62% 8.56% 8.84%
- ------------------------------------------------------------------------------------------
Templeton Foreign Fund - Class I 10.38% 5.59% 9.44% 12.17%
- ------------------------------------------------------------------------------------------
Templeton Global Smaller Companies Growth 14.43% 7.08% 11.06% 9.33%
Fund, Inc. - Class I
- ------------------------------------------------------------------------------------------
</TABLE>
54 of 177
<PAGE> 55
NATIONWIDE DC VARIABLE ACCOUNT
SERIES PERFORMANCE SUMMARY
NON-STANDARDIZED AVERAGE TOTAL ANNUAL RETURN
(The total return figures shown below do not reflect the deduction of the
Contract Maintenance Charges or any applicable Contingent Deferred Sales
Charges)
<TABLE>
<CAPTION>
=======================================================================================
1 YEAR 3 YEARS 5 YEARS 10 YEARS
SERIES OPTIONS TO TO TO TO
12/31/96 12/31/96 12/31/96 12/31/96
=======================================================================================
<S> <C> <C> <C> <C>
AIM Constellation Fund - Institutional Class 15.72% 16.32% 15.90% 18.34%
- ---------------------------------------------------------------------------------------
AIM Weingarten Fund - Institutional Class 17.12% 15.94% 8.98% 14.21%
- ---------------------------------------------------------------------------------------
American Century: Twentieth Century Growth 13.92% 9.84% 5.24% 12.75%
- ---------------------------------------------------------------------------------------
American Century: Twentieth Century Select 18.09% 9.34% 7.04% 11.10%
- ---------------------------------------------------------------------------------------
American Century: Twentieth Century Ultra 12.77% 13.66% 12.19% 19.02%
- ---------------------------------------------------------------------------------------
The Bond Fund of America, Inc.SM 5.69% 5.21% 7.75% 7.96%
- ---------------------------------------------------------------------------------------
Davis New York Venture Fund, Inc. 25.33% 19.24% 16.91% 16.43%
- ---------------------------------------------------------------------------------------
Delaware Group Decatur Fund, Inc.-Decatur 19.36% 15.67% 13.77% 11.30%
Income Fund
- ---------------------------------------------------------------------------------------
Dreyfus S&P 500 Index Fund 21.16% 17.84% 13.62% N/A
- ---------------------------------------------------------------------------------------
Dreyfus Third Century Fund, Inc. 23.15% 14.95% 9.84% 12.45%
- ---------------------------------------------------------------------------------------
Evergreen Income and Growth Fund 11.82% 8.34% 9.17% 7.66%
- ---------------------------------------------------------------------------------------
Federated GNMA Trust-Institutional Shares 3.97% 4.90% 5.15% 7.24%
- ---------------------------------------------------------------------------------------
Federated U.S. Government Securities Fund: 2.59% 3.89% 4.66% 6.18%
2-5 Years - Institutional Shares
- ---------------------------------------------------------------------------------------
Fidelity Asset Manager(TM) 11.66% 6.53% 10.52% N/A
- ---------------------------------------------------------------------------------------
Fidelity Capital & Income Fund 10.34% 6.43% 13.60% 9.53%
- ---------------------------------------------------------------------------------------
Fidelity Contrafund 20.78% 16.89% 17.14% 19.14%
- ---------------------------------------------------------------------------------------
Fidelity Equity-Income Fund 19.87% 15.83% 16.23% 12.40%
- ---------------------------------------------------------------------------------------
Fidelity Growth & Income Portfolio 18.88% 17.33% 16.14% 16.21%
- ---------------------------------------------------------------------------------------
Fidelity Magellan(R) Fund 10.63% 13.40% 13.80% 15.13%
- ---------------------------------------------------------------------------------------
Fidelity OTC Portfolio 22.56% 17.38% 14.62% 15.89%
- ---------------------------------------------------------------------------------------
Fidelity Puritan Fund 14.06% 11.44% 13.75% 11.46%
- ---------------------------------------------------------------------------------------
The Growth Fund of America(R), Inc. 13.75% 13.16% 11.82% 13.63%
- ---------------------------------------------------------------------------------------
The Income Fund of America(R), Inc. 14.13% 12.12% 12.04% 10.89%
- ---------------------------------------------------------------------------------------
INVESCO Industrial Income Fund, Inc. 15.61% 11.56% 9.94% 13.70%
- ---------------------------------------------------------------------------------------
Janus Fund 18.48% 14.17% 11.59% 15.32%
- ---------------------------------------------------------------------------------------
Janus Twenty Fund 26.64% 16.44% 10.33% 15.47%
- ---------------------------------------------------------------------------------------
MAS Funds Fixed Income Portfolio 6.34% 5.51% 7.34% 8.26%
- ---------------------------------------------------------------------------------------
Massachusetts Investors Growth Stock Fund - 21.67% 12.64% 11.31% 13.11%
Class A
- ---------------------------------------------------------------------------------------
MFS(R) Growth Opportunities Fund - Class A 20.71% 15.15% 13.39% 11.79%
- ---------------------------------------------------------------------------------------
MFS(R) High Income Fund - Class A 11.48% 7.66% 11.34% 8.37%
- ---------------------------------------------------------------------------------------
Nationwide(R) Bond Fund 0.52% 4.01% 5.71% 6.69%
- ---------------------------------------------------------------------------------------
Nationwide(R) Fund 22.75% 16.34% 11.18% 12.92%
- ---------------------------------------------------------------------------------------
Nationwide(R) Growth Fund 15.59% 13.99% 11.45% 11.51%
- ---------------------------------------------------------------------------------------
</TABLE>
55 of 177
<PAGE> 56
<TABLE>
<CAPTION>
=======================================================================================
1 YEAR 3 YEARS 5 YEARS 10 YEARS
SERIES OPTIONS TO TO TO TO
12/31/96 12/31/96 12/31/96 12/31/96
=======================================================================================
<S> <C> <C> <C> <C>
Neuberger & Berman Guardian Fund, Inc. 16.76% 15.05% 15.23% 14.37%
- ---------------------------------------------------------------------------------------
Neuberger & Berman Partners Fund, Inc. 25.34% 17.78% 17.01% 13.63%
- ---------------------------------------------------------------------------------------
Neuberger & Berman Manhattan Fund, Inc. 8.81% 10.47% 11.38% 12.27%
- ---------------------------------------------------------------------------------------
Putnam Investors Fund - Class A 20.25% 16.25% 14.41% 13.34%
- ---------------------------------------------------------------------------------------
Putnam Voyager Fund - Class A 11.73% 15.56% 14.49% 16.42%
- ---------------------------------------------------------------------------------------
SEI Index Funds-S&P 500 Index Portfolio 21.45% 18.24% 13.85% 13.75%
- ---------------------------------------------------------------------------------------
Seligman Growth Fund, Inc. - Class A 19.99% 13.30% 11.07% 12.33%
- ---------------------------------------------------------------------------------------
Strong Common Stock Fund, Inc. 19.32% 15.55% 18.02% 19.90%
- ---------------------------------------------------------------------------------------
T. Rowe Price International Stock Fund(R) 14.89% 7.61% 10.58% 10.13%
- ---------------------------------------------------------------------------------------
Templeton Foreign Fund - Class I 16.88% 8.55% 11.42% 13.22%
- ---------------------------------------------------------------------------------------
Templeton Global Smaller Companies Growth 20.93% 10.03% 12.97% 10.73%
Fund, Inc. - Class I
- ---------------------------------------------------------------------------------------
</TABLE>
56 of 177
<PAGE> 57
NATIONWIDE DC VARIABLE ACCOUNT
SERIES PERFORMANCE SUMMARY
STANDARDIZED AVERAGE TOTAL ANNUAL RETURN
THE FOLLOWING FUNDS ARE IN CONJUNCTION WITH CONTRACTS ISSUED PURSUANT TO SECTION
403(b) OF THE CODE ("TAX-SHELTERED ANNUITY CONTRACTS"):
(The total return figures shown below do not reflect the deduction of the
Contract Maintenance Charges or any applicable Contingent Deferred Sales
Charges)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
YEAR ENDED 3 YEARS 5 YEARS 10 YEARS
SERIES OPTIONS 12/31/96 TO TO TO
12/31/96 12/31/96 12/31/96
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
American Century Variable Portfolios, 4.64% 7.06% 3.30% NA
Inc. - American Century VP Balanced
- -------------------------------------------------------------------------------------
American Century Variable Portfolios, -11.39% 3.45% 2.85% NA
Inc. - American Century VP Capital
Appreciation
- -------------------------------------------------------------------------------------
Dreyfus Socially Responsible 13.58% 14.52% NA NA
- -------------------------------------------------------------------------------------
Dreyfus Stock Index Fund 14.87% 15.36% 11.57% NA
- -------------------------------------------------------------------------------------
Fidelity Asset Manager Portfolio 7.02% 3.90% 8.21% NA
- -------------------------------------------------------------------------------------
Fidelity Overseas Portfolio 5.64% 4.08% 5.91% NA
- -------------------------------------------------------------------------------------
Fidelity VIP Equity Income Portfolio 6.70% 14.52% 15.13% NA
- -------------------------------------------------------------------------------------
Fidelity VIP Growth Portfolio 7.12% 11.97% 12.19% 12.90%
- -------------------------------------------------------------------------------------
Fidelity VIP High Income Portfolio 6.45% 6.67% 12.09% 8.63%
- -------------------------------------------------------------------------------------
Neuberger & Berman Growth Portfolio 1.60% 7.00% 6.65% 9.08%
- -------------------------------------------------------------------------------------
Neuberger & Berman Limited Maturity -3.19% 0.83% 1.98% 4.09%
Bond
- -------------------------------------------------------------------------------------
Neuberger & Berman Partners Portfolio 21.84% NA NA NA
- -------------------------------------------------------------------------------------
NSAT Capital Appreciation Fund 18.44% 13.44% NA NA
- -------------------------------------------------------------------------------------
NSAT Government Bond Fund -4.00% 1.87% 3.80% 5.91%
- -------------------------------------------------------------------------------------
NSAT Money Market Fund -2.39% 0.80% 0.74% 3.10%
- -------------------------------------------------------------------------------------
NSAT Total Return Fund 14.18% 12.89% 10.72% 10.21%
- -------------------------------------------------------------------------------------
</TABLE>
57 of 177
<PAGE> 58
NATIONWIDE DC VARIABLE ACCOUNT
SERIES PERFORMANCE SUMMARY
NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURN
THE FOLLOWING FUNDS ARE IN CONJUNCTION WITH CONTRACTS ISSUED PURSUANT TO SECTION
403(b) OF THE CODE ("TAX-SHELTERED ANNUITY CONTRACTS"):
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
YEAR ENDED 3 YEARS 5 YEARS 10 YEARS
SERIES OPTIONS 12/31/96 TO TO TO
12/31/96 12/31/96 12/31/96
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
American Century Variable Portfolios, 11.14% 9.94% 5.69% NA
Inc. - American Century VP Balanced
- -------------------------------------------------------------------------------------
American Century Variable Portfolios, -5.23% 6.41% 5.16% NA
Inc. - American Century VP Capital
Appreciation
- -------------------------------------------------------------------------------------
Dreyfus Socially Responsible 20.08% 17.18% NA NA
- -------------------------------------------------------------------------------------
Dreyfus Stock Index Fund 21.37% 18.00% 13.55% NA
- -------------------------------------------------------------------------------------
Fidelity Asset Manager Portfolio 13.52% 6.95% 10.20% NA
- -------------------------------------------------------------------------------------
Fidelity Overseas Portfolio 12.14% 7.07% 8.09% NA
- -------------------------------------------------------------------------------------
Fidelity VIP Equity Income Portfolio 13.20% 17.12% 16.86% 12.66%
- -------------------------------------------------------------------------------------
Fidelity VIP Growth Portfolio 13.62% 14.69% 14.07% 14.06%
- -------------------------------------------------------------------------------------
Fidelity VIP High Income Portfolio 12.95% 9.58% 13.87% 10.08%
- -------------------------------------------------------------------------------------
Neuberger & Berman Growth Portfolio 8.10% 9.90% 8.78% 10.38%
- -------------------------------------------------------------------------------------
Neuberger & Berman Limited Maturity 3.31% 3.94% 4.32% 5.66%
Bond
- -------------------------------------------------------------------------------------
Neuberger & Berman Partners Portfolio 28.34% NA NA NA
- -------------------------------------------------------------------------------------
NSAT Capital Appreciation Fund 24.94% 16.17% NA NA
- -------------------------------------------------------------------------------------
NSAT Government Bond Fund 2.50% 4.94% 6.02% 7.38%
- -------------------------------------------------------------------------------------
NSAT Money Market Fund 4.11% 3.89% 3.17% 4.73%
- -------------------------------------------------------------------------------------
NSAT Total Return Fund 20.68% 15.61% 12.71% 11.54%
- -------------------------------------------------------------------------------------
</TABLE>
ANNUITY PAYMENTS
See "Distribution of Participant Accounts (Retirement Period)" in the
prospectus.
58 of 177
<PAGE> 59
<PAGE> 1
Independent Auditors' Report
----------------------------
The Board of Directors of Nationwide Life Insurance Company and
Contract Owners of Nationwide DC Variable Account:
We have audited the accompanying statement of assets, liabilities and
contract owners' equity of Nationwide DC Variable Account as of December 31,
1996, and the related statements of operations and changes in contract owners'
equity and schedules of changes in unit value for each of the years in the three
year period then ended. These financial statements and schedules of changes in
unit value are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedules of changes in unit value 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 and schedules of
changes in unit value 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, 1996, 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 and schedules of changes in unit
value referred to above present fairly, in all material respects, the financial
position of Nationwide DC Variable Account as of December 31, 1996, and the
results of its operations and its changes in contract owners' equity and the
schedules of changes in unit value for each of the years in the three year
period then ended in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Columbus, Ohio
February 7, 1997
<PAGE> 2
<TABLE>
<CAPTION>
NATIONWIDE DC VARIABLE ACCOUNT
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY
DECEMBER 31, 1996
<S> <C> <C>
Assets:
Investments at market value:
AIM Equity Funds, Inc. - AIM Constellation Fund - Institutional Class (AIMCon)
602,399 shares (cost $14,259,665).................................................................. $ 15,559,969
AIM Equity Funds, Inc. - AIM Weingarten Fund - Institutional Class (AIMWein)
113,072 shares (cost $2,048,638)................................................................... 2,116,709
American Century: Twentieth Century Growth Fund (ACTCGro)
5,203,739 shares (cost $109,215,769)............................................................... 113,857,815
American Century: Twentieth Century Select Fund (ACTCSel)
40,443 shares (cost $1,416,625).................................................................... 1,558,259
American Century: Twentieth Century Ultra Fund (ACTCUltra)
8,735,760 shares (cost $212,141,067)............................................................... 245,387,499
The Bond Fund of America(SM), Inc. (BdFdAm)
840,412 shares (cost $11,259,293).................................................................. 11,555,669
Davis New York Venture Fund, Inc. - Class A (DNYVenFd)
126,565 shares (cost $2,030,048)................................................................... 2,214,889
Delaware Group Decatur Fund, Inc. -
Decatur Income Fund Institutional Class (DeDecInc)
12,108 shares (cost $211,000)...................................................................... 223,266
Dreyfus Cash Management - Class A (DryCsMgt)
1,189,156 shares (cost $1,189,156)................................................................. 1,189,156
The Dreyfus Third Century Fund, Inc. (Dry3dCen)
2,261,055 shares (cost $19,101,874)................................................................ 19,942,501
The Evergreen Total Return Fund - Class Y (EvTotRet)
202,570 shares (cost $3,888,943)................................................................... 4,320,811
The Institutional Shares of Federated GNMA Trust (FedGNMA)
63,790 shares (cost $696,766)...................................................................... 709,346
Federated U.S. Government Securities Fund: 2-5 Years -
Institutional Shares (FedUSGvt)
192,750 shares (cost $2,029,312)................................................................... 2,021,946
Fidelity Asset Manager(TM) (FidAsMgr)
305,054 shares (cost $4,735,169)................................................................... 5,024,243
Fidelity Capital & Income Fund (FidCapInc)
146,082 shares (cost $1,259,941)................................................................... 1,367,329
Fidelity Contrafund (FidContr)
3,834,444 shares (cost $138,785,424)............................................................... 161,621,829
Fidelity Equity-Income Fund (FidEqInc)
4,518,074 shares (cost $152,764,386)............................................................... 193,509,106
Fidelity Growth & Income Portfolio (FidGrInc)
343,592 shares (cost $9,236,919)................................................................... 10,558,574
Fidelity Magellan(R) Fund (FidMgln)
2,195,300 shares (cost $166,998,126)............................................................... 177,050,966
The Growth Fund of America(R), Inc. (GroFdAm)
590,243 shares (cost $9,339,439)................................................................... 9,780,334
The Income Fund of America(R), Inc. (IncFdAm)
921,410 shares (cost $13,855,652).................................................................. 15,221,687
INVESCO Industrial Income Fund, Inc. (InvIndlnc)
1,212,737 shares (cost $14,944,799)................................................................ 16,323,441
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C> <C>
Janus Fund (JanFund)
1,527,527 shares (cost $36,424,043) ......................................................... 37,348,026
Janus Twenty Fund (Jan20Fd)
9,094 shares (cost $285,317) ................................................................ 249,801
MAS Funds - Fixed Income Portfolio (MASFIP)
107,500 shares (cost $1,264,144) ............................................................ 1,263,128
MFS(R) Growth Opportunities Fund - Class A (MFSGrOpp)
1,752,439 shares (cost $19,624,736) ......................................................... 22,729,133
MFS(R) High Income Fund - Class A (MFSHiInc)
701,822 shares (cost $3,640,479) ............................................................ 3,747,729
Massachusetts Investors Growth Stock Fund - Class A (MFSGrStk)
502,595 shares (cost $5,442,276) ............................................................ 5,015,898
Nationwide(R) Bond Fund (NWBdFd)
17,202 shares (cost $162,082) ............................................................... 159,806
Nationwide(R) Fund (NWFund)
1,712,707 shares (cost $29,278,925) ......................................................... 34,596,672
Nationwide(R) Growth Fund (NWGroFd)
566,434 shares (cost $6,675,510) ............................................................ 7,533,572
Nationwide(R) Money Market Fund (NWMyMkt)
62,453,931 shares (cost $62,453,931) ........................................................ 62,453,931
Neuberger & Berman Guardian Fund (NBGuard)
5,824 shares (cost $146,180) ................................................................ 149,262
Neuberger & Berman Manhattan Fund (NBManhFd)
25,249 shares (cost $318,519) ............................................................... 294,903
Putnam Investors Fund - Class A (PutInvFd)
3,665,690 shares (cost $30,690,329) ......................................................... 33,761,008
Putnam Voyager Fund - Class A (PutVoyFd)
5,493,809 shares (cost $84,606,172) ......................................................... 88,560,196
SEI Index Funds - S&P 500 Index Portfolio (SEI500Ix)
165,867 shares (cost $3,663,081) ............................................................ 3,912,800
Seligman Growth Fund, Inc. - Class A (SelGroFd)
453,054 shares (cost $2,394,393) ............................................................ 2,650,366
Strong Common Stock Fund, Inc. (StComStk)
206,719 shares (cost $4,139,930) ............................................................ 4,183,996
T. Rowe Price International Funds, Inc. - International Stock Fund(R) (TRIntStk)
2,267,608 shares (cost $28,970,485) ......................................................... 31,292,985
Templeton Foreign Fund - Class I (TemForFd)
6,442,499 shares (cost $61,076,841) ......................................................... 66,744,287
Templeton Global Smaller Companies Fund, Inc. - Class I (TemGlSmCo)
113,746 shares (cost $943,791) .............................................................. 950,919
Dreyfus Stock Index Fund (DryStkIx)
1,344 shares (cost $24,480) ................................................................. 27,264
Fidelity VIP - Asset Manager Portfolio (FidVIPAM)
1,369 shares (cost $20,568) ................................................................. 23,169
Fidelity VIP - Equity-Income Portfolio (FidVIPEI)
4,373 shares (cost $81,552) ................................................................. 91,971
Fidelity VIP - Growth Portfolio (FidVIPGr)
2,601 shares (cost $70,852) ................................................................. 80,983
Fidelity VIP - High Income Portfolio (FidVIPHI)
1,918 shares (cost $22,802) 24,017
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
<S> <C> <C>
Fidelity VIP - Overseas Portfolio (FidVIPOv)
5,431 shares (cost $91,135) ................................................................. 102,317
Nationwide SAT - Government Bond Fund (NSATGvtBd)
1,143 shares (cost $12,490) ................................................................. 12,621
Nationwide SAT - Money Market Fund (NSATMyMkt)
36,420 shares (cost $36,420) ................................................................ 36,420
Nationwide SAT - Total Return Fund (NSATTotRe)
3,503 shares (cost $40,874) ................................................................. 46,487
Neuberger & Berman AMT - Growth Portfolio (NBAMTGro)
655 shares (cost $16,541) ................................................................... 16,880
Neuberger & Berman AMT - Limited Maturity Bond Portfolio (NBAMTLMat)
481 shares (cost $6,698) .................................................................... 6,755
Neuberger & Berman AMT - Partners Portfolio (NBAMTPart)
896 shares (cost $10,788) ................................................................... 14,773
TCI Portfolios - TCI Balanced (TCIBal)
545 shares (cost $3,825) .................................................................... 4,107
TCI Portfolios - TCI Growth (TCIGro)
8,263 shares (cost $86,210) ................................................................. 84,618
---------------
Total investments ......................................................................... 1,419,286,144
Accounts receivable ............................................................................... 10,213,748
---------------
Total assets .............................................................................. 1,429,499,892
Accounts payable ..................................................................................... 3,710,610
---------------
Contract owners' equity (note 4) ..................................................................... $ 1,425,789,282
===============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 5
<TABLE>
<CAPTION>
NATIONWIDE DC VARIABLE ACCOUNT
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
1996 1995 1994
------ ------ ------
<S> <C> <C> <C>
Investment activity:
Reinvested capital gains and dividends ........................ $ 111,787,963 86,971,463 61,302,838
Mortality and expense charges (note 2) ........................ (7,324,869) (5,230,867) (4,074,902)
Administration charge-Tier I (note 2) ......................... (3,675,030) (4,707,781) (3,667,411)
Administration charge-Tier II (note 2) ........................ (1,000,535) -- --
Administration charge-Tier III (note 2) ....................... (279,498) -- --
Administration charge-Tier IV (note 2) ........................ (128,485) -- --
Administration charge-Tier V (note 2) ......................... (361,137) -- --
--------------- ------------- -----------
Net investment activity .................................... 99,018,409 77,032,815 53,560,525
--------------- ------------- -----------
Proceeds from mutual fund shares sold ......................... 426,930,903 184,309,039 264,448,390
Cost of mutual fund shares sold ............................... (365,983,789) (162,128,137) (230,194,049)
--------------- ------------- -----------
Realized gain (loss) on investments ........................ 60,947,114 22,180,902 34,254,341
Change in unrealized gain (loss) on investments ............... 33,461,531 146,852,392 (110,099,526)
--------------- ------------- -----------
Net gain (loss) on investments ............................. 94,408,645 169,033,294 (75,845,185)
--------------- ------------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ..................... 193,427,054 246,066,109 (22,284,660)
--------------- ------------- -----------
Equity transactions:
Purchase payments received from contract owners ............... 391,105,511 313,176,439 283,645,521
Redemptions ................................................... (384,960,385) (174,184,814) (244,646,099)
Annual contract maintenance charge (note 2) ................... (109,548) (121,391) (132,768)
Contingent deferred sales charges (note 2) .................... (4,539) (160,870) (4,451)
Adjustments to maintain reserves .............................. (130,864) 137,602 (174,764)
--------------- ------------- -----------
Net equity transactions ................................. 5,900,175 138,846,966 38,687,439
--------------- ------------- -----------
Net change in contract owners' equity ............................ 199,327,229 384,913,075 16,402,779
Contract owners' equity beginning of period ...................... 1,226,462,053 841,548,978 825,146,199
--------------- ------------- -----------
Contract owners' equity end of period ............................ $ 1,425,789,282 1,226,462,053 841,548,978
=============== ============= ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 6
NATIONWIDE DC VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996, 1995 AND 1994
(1) Summary of Significant Accounting Policies
(a) Organization and Nature of Operations
Nationwide DC Variable Account (the Account) was established by resolution
of the Board of Directors of Nationwide Life Insurance Company (the Company) on
July 10, 1974. The Account has been registered as a unit investment trust under
the Investment Company Act of 1940.
The Company offers group flexible fund retirement contracts through the
Account. The primary distribution for the contracts is through an affiliated
sales organization; however, other distributors may be utilized.
(b) The Contracts
Participants in group flexible fund contracts may be invested in any of
the following funds:
AIM Equity Funds, Inc. - AIM Constellation Fund - Institutional Class
(AIMCon)
AIM Equity Funds, Inc. - AIM Weingarten Fund - Institutional Class
(AIMWein)
American Century: Twentieth Century Growth Fund (ACTCGro)
(formerly Twentieth Century Investors, Inc. - Growth Investors)
American Century: Twentieth Century Select Fund (ACTCSel)
(formerly Twentieth Century Investors, Inc. - Select Investors)
American Century: Twentieth Century Ultra Fund (ACTCUltra)
(formerly Twentieth Century Investors, Inc. - Ultra Investors)
The Bond Fund of America(SM), Inc. (BdFdAm) (only available for
certain contracts issued beginning January 1, 1994)
Davis New York Venture Fund, Inc. - Class A (DNYVenFd) (formerly New
York Venture Fund, Inc.)
Delaware Group Decatur Fund, Inc. - Decatur Income Fund Institutional
Class (DeDecInc) (not available for contracts issued on or after
August 1, 1993)
Dreyfus Cash Management - Class A (DryCsMgt)
The Dreyfus Third Century Fund, Inc. (Dry3dCen)
The Evergreen Total Return Fund - Class Y (EvTotRet)
The Institutional Shares of Federated GNMA Trust (FedGNMA)
Federated U.S. Government Securities Fund: 2-5 Years - Institutional
Shares (FedUSGvt) (formerly Federated Intermediate Government Trust)
Fidelity Asset Manager(TM) (FidAsMgr)
Fidelity Capital & Income Fund (FidCapInc) (not available for contracts
issued on or after January 1, 1987)
Fidelity Contrafund (FidContr)
Fidelity Equity-Income Fund (FidEqInc)
Fidelity Growth & Income Portfolio (FidGrInc)
Fidelity Magellan(R) Fund (FidMgln)
Fidelity OTC Portfolio (FidOTC)
Fidelity Puritan(R) Fund (FidPurtn)
The Growth Fund of America(R), Inc. (GroFdAm) (only available for
certain contracts issued beginning January 1, 1994)
The Income Fund of America(R), Inc. (IncFdAm) (only available for
certain contracts issued beginning January 1, 1994)
INVESCO Industrial Income Fund, Inc. (InvIndInc)
Janus Fund (JanFund)
Janus Twenty Fund (Jan20Fd) MAS Funds - Fixed Income Portfolio (MASFIP)
MFS(R) Growth Opportunities Fund - Class A (MFSGrOpp)
MFS(R) High
Income Fund - Class A (MFSHiInc)
Massachusetts Investors Growth Stock Fund - Class A (MFSGrStk)
<PAGE> 7
Nationwide(R) Bond Fund (NWBdFd) (managed for a fee by an affiliated
investment advisor)
Nationwide(R) Fund (NWFund) (managed for a fee by an affiliated
investment advisor)
Nationwide(R) Growth Fund (NWGroFd) (managed for a fee by an affiliated
investment advisor)
Nationwide(R) Money Market Fund (NWMyMkt) (managed for a fee by an
affiliated investment advisor)
Neuberger & Berman Guardian Fund (NBGuard)
Neuberger & Berman Manhattan Fund (NBManhFd)
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)
Strong Common Stock Fund, Inc. (StComStk)
T. Rowe Price International Funds, Inc. - International Stock Fund(R)
(TRIntStk)
Templeton Foreign Fund - Class I (TemForFd)
Templeton Global Smaller Companies Fund, Inc. - Class I (TemGlSmCo)
(formerly Templeton Smaller Companies Growth Fund, Inc.)
The following funds are available for investment only by Plans established
under Internal Revenue Code (IRC) Section 403(b).
The Dreyfus Socially Responsible Growth Fund, Inc. (DrySRGro)
Dreyfus Stock Index Fund (DryStkIx)
Portfolios of the Fidelity Variable Insurance Products Fund I & II
(Fidelity VIP)
Fidelity VIP - Asset Manager Portfolio (FidVIPAM)
Fidelity VIP - Equity-Income Portfolio (FidVIPEI)
Fidelity VIP - Growth Portfolio (FidVIPGr)
Fidelity VIP - High Income Portfolio (FidVIPHI)
Fidelity VIP - Overseas Portfolio (FidVIPOv)
Funds of the Nationwide Separate Account Trust (Nationwide SAT)
(managed for a fee by an affiliated investment advisor):
Nationwide SAT - Capital Appreciation Fund (NSATCapAp)
Nationwide SAT - Government Bond Fund (NSATGvtBd)
Nationwide SAT - Money Market Fund (NSATMyMkt)
Nationwide SAT - Total Return Fund (NSATTotRe)
Portfolios of the Neuberger & Berman Advisers Management Trust
(Neuberger & Berman AMT) Neuberger & Berman AMT - Growth Portfolio
(NBAMTGro) Neuberger & Berman AMT - Limited Maturity Bond Portfolio
(NBAMTLMat) Neuberger & Berman AMT - Partners Portfolio (NBAMTPart)
Portfolios of the TCI Portfolios, Inc. (TCI Portfolios)
TCI Portfolios - TCI Balanced (TCIBal)
TCI Portfolios - TCI Growth (TCIGro)
All of the above funds were being utilized as of December 31, 1996, except
The Dreyfus Socially Responsible Growth Fund, Inc. (DrySRGro), Fidelity
OTCPortfolio (FidOTC), Fidelity Puritan(R) Fund (FidPurtn), and Nationwide SAT -
Capital Appreciation Fund (NSATCapAp).
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, 1996. The cost of investments sold is
determined on the specific identification basis. Investment transactions are
accounted for on the trade date (date the order to buy or sell is executed) and
dividend income is recorded on the ex-dividend date.
(d) Federal Income Taxes
Operations of the Account form a part of, and are taxed with, operations of
the Company, which is taxed as a life insurance company under the IRC. 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
<PAGE> 8
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) Reclassifications
Certain 1995 and 1994 amounts have been reclassified to conform with the
current year presentation.
(2) Expenses
Net purchase payments received for contracts issued before July 1, 1980,
represent contributions by the contract owners less a sales charge by the
Company of not more than 5%, to cover sales expenses. The Company does not
deduct a sales charge from purchase payments for contracts issued after July 1,
1980. However, if any part of the contract value representing participant
accounts that have been established under the contracts and held in the Account
for less than sixteen (16) years is surrendered, the Company will, with certain
exceptions, assess a contingent deferred sales charge. This charge will be equal
to not more than 5% of the lesser of all purchase payments received on behalf of
the surrendering participant or contract owner prior to the date of the request
for surrender, or the amount surrendered. Sales charges or contingent deferred
sales charges of less than 5% reflect actual variations in expense (usually
reduced agents' commissions). 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.
The following contract charges are deducted by the Company on contracts
issued before July 1, 1980: (a) an annual contract maintenance charge of $8
assessed by surrendering units; (b) a charge for mortality and expense risk
assessed through the daily unit value calculation equal to an annual rate of
0.95%; and (c) a charge on complete redemption, equal to the lesser of $8 or 2%
of the value of the account, except when such redemption occurs within 31 days
of the anniversary date of the contract.
For contracts issued beginning July 1, 1980 through April 30, 1991,
contract charges include: (a) an annual contract maintenance charge of $12 or
$15, based upon administrative services provided, assessed by surrendering
units; and (b) a charge for mortality and expense risk assessed through the
daily unit value calculation equal to an annual rate of 0.95%.
For contracts issued on or after May 1, 1991, contract charges include a
mortality risk charge, an expense risk charge and an administration charge
assessed through the daily unit value calculation equal to an annual rate of
0.35%, 0.15% and 0.45% respectively. Beginning November 1, 1996, the
administration charge was based upon the aggregate balance of assets held under
the contract by each contract owner as follows:
<TABLE>
<CAPTION>
Expense Administration
Tier Assets (Millions) Charge
<S> <C> <C> <C>
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%
</TABLE>
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.
<PAGE> 9
(3) Schedule I
Schedule I presents the components of the change in the unit values, which
are the basis for contract owners' equity. This schedule is presented in the
following format:
o Beginning unit value - Jan. 1
o Reinvested capital gains and dividends
(This amount reflects the increase in the unit value due to
capital gains and dividend distributions from the underlying
mutual funds.)
o Unrealized gain (loss)
(This amount reflects the increase (decrease) in the unit value
resulting from the market appreciation (depreciation) of the
underlying mutual funds.)
o Contract charges
(This amount reflects the decrease in the unit value due to the
mortality risk charge, expense risk charge and administration
charge discussed in note 2.)
o Ending unit value - Dec. 31
o Percentage increase (decrease) in unit value.
<PAGE> 10
<TABLE>
<CAPTION>
(4) Components of Contract Owners' Equity
The following is a summary of contract owners' equity at December 31, 1996.
<S> <C> <C> <C>
Tier I Units Unit Value
- ------ -------- --------------
AIM Equity Funds, Inc. - AIM Constellation Fund -
Institutional Class ................................................ 6,309,167 $ 2.055366 $ 12,967,647
AIM Equity Funds, Inc. - AIM Weingarten Fund -
Institutional Class ................................................ 1,300,655 1.627524 2,116,847
American Century: Twentieth Century Growth Fund ....................... 12,224,812 4.562802 55,779,397
American Century: Twentieth Century Select Fund ....................... 41,014 1.572461 64,493
American Century: Twentieth Century Ultra Fund ........................ 70,399,683 2.069865 145,717,840
The Bond Fund of AmericaSM, Inc. ...................................... 3,518,054 2.155739 7,584,006
Davis New York Venture Fund, Inc. - Class A ........................... 1,180,098 1.686019 1,989,668
Delaware Group Decatur Fund, Inc. -
Decatur Income Fund Institutional Class ............................. 78,578 2.280210 179,174
Dreyfus Cash Management - Class A ..................................... 618,162 1.159356 716,670
The Dreyfus Third Century Fund, Inc. .................................. 3,824,949 2.756438 10,543,235
The Evergreen Total Return Fund - Class Y ............................. 1,146,375 1.947502 2,232,568
The Institutional Shares of Federated GNMA Trust ...................... 548,815 1.292380 709,278
Federated U.S. Government Securities Fund: 2-5 Years -
Institutional Shares ................................................ 1,214,422 1.144380 1,389,760
Fidelity Asset Manager(TM) ............................................ 2,611,685 1.252704 3,271,668
Fidelity Capital & Income Fund ........................................ 125,230 4.096488 513,003
Fidelity Contrafund ................................................... 56,288,590 2.059778 115,941,999
Fidelity Equity-Income Fund ........................................... 18,493,235 5.359692 99,118,044
Fidelity Growth & Income Portfolio .................................... 4,201,944 2.001775 8,411,346
Fidelity Magellan(R) Fund ............................................. 56,756,036 1.913110 108,580,540
The Growth Fund of America(R), Inc. ................................... 2,478,693 2.691979 6,672,590
The Income Fund of America(R), Inc. ................................... 5,291,391 2.160929 11,434,320
INVESCO Industrial Income Fund, Inc ................................... 7,428,110 1.678513 12,468,179
Janus Fund ............................................................ 15,851,766 1.603290 25,414,978
Janus Twenty Fund ..................................................... 149,425 1.671698 249,793
MAS Funds - Fixed Income Portfolio .................................... 718,247 1.229760 883,271
MFS(R) Growth Opportunities Fund - Class A ............................ 843,158 7.380232 6,222,702
MFS(R) High Income Fund - Class A ..................................... 164,395 5.518160 907,158
Massachusetts Investors Growth Stock Fund - Class A ................... 164,786 10.880822 1,793,007
Nationwide(R) Bond Fund ............................................... 26,395 2.001472 52,829
Nationwide(R) Fund .................................................... 1,316,219 14.964379 19,696,400
Nationwide(R) Growth Fund ............................................. 1,156,065 3.083008 3,564,158
Nationwide(R) Money Market Fund ....................................... 7,935,176 2.884848 22,891,777
Neuberger & Berman Manhattan Fund ..................................... 119,922 2.458922 294,879
Putnam Investors Fund - Class A ....................................... 713,005 13.594501 9,692,947
Putnam Voyager Fund - Class A ......................................... 18,151,250 3.074879 55,812,897
SEI Index Funds - S&P 500 Index Portfolio ............................. 524,069 2.962497 1,552,553
Seligman Growth Fund, Inc - Class A ................................... 105,249 10.720312 1,128,302
Strong Common Stock Fund, Inc. ........................................ 2,665,795 1.569484 4,183,923
T. Rowe Price International Funds, Inc. -
International Stock Fund(R) ........................................ 8,220,403 1.812062 14,895,880
Templeton Foreign Fund - Class I ...................................... 27,327,650 1.774294 48,487,285
Templeton Global Smaller Companies Fund, Inc. - Class I ............... 524,340 1.802963 945,366
Dreyfus Stock Index Fund .............................................. 16,988 1.604580 27,259
Fidelity VIP - Asset Manager Portfolio ................................ 18,427 1.257222 23,167
Fidelity VIP - Equity-Income Portfolio ................................ 62,324 1.475687 91,971
Fidelity VIP - Growth Portfolio ....................................... 52,165 1.552351 80,978
Fidelity VIP - High Income Portfolio .................................. 17,934 1.338939 24,013
Fidelity VIP - Overseas Portfolio ..................................... 88,581 1.154842 102,297
Nationwide SAT - Government Bond Fund ................................. 7,820 1.613565 12,618
Nationwide SAT - Money Market Fund .................................... 28,915 1.259556 36,420
Nationwide SAT - Total Return Fund .................................... 19,743 2.354356 46,482
Neuberger & Berman AMT - Growth Portfolio ............................. 9,399 1.795607 16,877
Neuberger & Berman AMT -
Limited Maturity Bond Portfolio .................................... 5,977 1.130160 6,755
Neuberger & Berman AMT - Partners Portfolio ........................... 8,811 1.676351 14,770
TCI Portfolios - TCI Balanced ......................................... 3,120 1.316124 4,106
TCI Portfolios - TCI Growth ........................................... 51,629 1.638699 84,604
Sub-Total Tier I ................................................... ========== ======== ------------
$827,644,694
------------
</TABLE>
<PAGE> 11
<TABLE>
<CAPTION>
Contract owners' equity - continued
Tier II Units Unit Value
- ------- ----------- ------------
<S> <C> <C> <C>
American Century: Twentieth Century Growth Fund ....................... 4,398,109 $ 4.563176 $ 20,069,345
American Century: Twentieth Century Ultra Fund ........................ 18,056,950 2.070035 37,378,518
The Bond Fund of America(SM), Inc. .................................... 1,040,496 2.155938 2,243,245
Davis New York Venture Fund, Inc. - Class A ........................... 133,664 1.686157 225,378
Delaware Group Decatur Fund, Inc. -
Decatur Income Fund Institutional Class ............................ 13,782 2.280397 31,428
Dreyfus Cash Management - Class A ..................................... 377,565 1.159453 437,769
The Dreyfus Third Century Fund, Inc. .................................. 967,536 2.756663 2,667,171
The Evergreen Total Return Fund - Class Y ............................. 470,751 1.947661 916,863
Federated U.S. Government Securities Fund: 2-5 Years -
Institutional Shares ................................................ 342,763 1.144477 392,284
Fidelity Asset Manager(TM) ............................................ 671,795 1.252806 841,629
Fidelity Capital & Income Fund ........................................ 77,649 4.096833 318,115
Fidelity Contrafund ................................................... 13,231,488 2.059947 27,256,164
Fidelity Equity-Income Fund ........................................... 6,443,316 5.360130 34,537,011
Fidelity Magellan(R) Fund ............................................. 11,002,403 1.913267 21,050,535
The Growth Fund of America(R), Inc. ................................... 553,730 2.692199 1,490,751
The Income Fund of America(R), Inc. ................................... 1,137,681 2.161106 2,458,649
INVESCO Industrial Income Fund, Inc ................................... 1,639,958 1.678650 2,752,915
Janus Fund ............................................................ 4,109,624 1.603421 6,589,457
MAS Funds - Fixed Income Portfolio .................................... 193,871 1.229861 238,434
MFS(R) Growth Opportunities Fund - Class A ............................ 361,634 7.380837 2,669,162
MFS(R) High Income Fund - Class A ..................................... 41,389 5.518624 228,410
Massachusetts Investors Growth Stock Fund - Class A ................... 13,452 10.881713 146,381
Nationwide(R) Fund .................................................... 336,341 14.965604 5,033,546
Nationwide(R) Growth Fund ............................................. 386,199 3.083261 1,190,752
Nationwide(R) Money Market Fund ....................................... 6,749,071 2.885091 19,471,684
Putnam Investors Fund - Class A ....................................... 153,709 13.595614 2,089,768
Putnam Voyager Fund - Class A ......................................... 5,117,342 3.075131 15,736,497
SEI Index Funds - S&P 500 Index Portfolio ............................. 71,085 2.962740 210,606
Seligman Growth Fund, Inc - Class A ................................... 17,582 10.721190 188,500
T. Rowe Price International Funds, Inc. -
International Stock Fund(R) ........................................ 1,718,457 1.812210 3,114,205
Templeton Foreign Fund - Class I ...................................... 6,594,135 1.774439 11,700,890
Sub-Total Tier II .................................................. ========== ======== ------------
$223,676,062
------------
</TABLE>
<PAGE> 12
<TABLE>
<CAPTION>
Contract owners' equity - continued
Tier III Units Unit Value
- ----------- --------- ------------
<S> <C> <C> <C>
American Century: Twentieth Century Growth Fund ........................ 1,586,526 $ 4.563925 $ 7,240,786
American Century: Twentieth Century Ultra Fund ......................... 9,866,856 2.070374 20,428,082
The Bond Fund of America(SM), Inc. ..................................... 281,942 2.156336 607,962
Delaware Group Decatur Fund, Inc. -
Decatur Income Fund Institutional Class ............................. 5,492 2.280770 12,526
The Dreyfus Third Century Fund, Inc. ................................... 603,861 2.757115 1,664,914
The Evergreen Total Return Fund - Class Y .............................. 78,598 1.947980 153,107
Federated U.S. Government Securities Fund: 2-5 Years -
Institutional Shares ................................................ 104,682 1.144669 119,826
Fidelity Asset Manager(TM) ............................................. 269,853 1.253012 338,129
Fidelity Capital & Income Fund ......................................... 23,351 4.097522 95,681
Fidelity Contrafund .................................................... 7,230,068 2.060284 14,895,993
Fidelity Equity-Income Fund ............................................ 2,555,440 5.361008 13,699,734
Fidelity Magellan(R) Fund .............................................. 5,622,628 1.913580 10,759,348
The Growth Fund of America(R), Inc. .................................... 441,833 2.692640 1,189,697
The Income Fund of America(R), Inc. .................................... 367,278 2.161460 793,857
INVESCO Industrial Income Fund, Inc .................................... 309,576 1.678925 519,755
Janus Fund ............................................................. 1,634,700 1.603684 2,621,542
MAS Funds - Fixed Income Portfolio ..................................... 87,227 1.230062 107,295
MFS(R) Growth Opportunities Fund - Class A ............................. 181,406 7.382046 1,339,147
MFS(R) High Income Fund - Class A ...................................... 6,455 5.519552 35,629
Massachusetts Investors Growth Stock Fund - Class A .................... 11,971 10.883496 130,286
Nationwide(R) Fund ..................................................... 195,684 14.968055 2,929,009
Nationwide(R) Growth Fund .............................................. 96,156 3.083766 296,523
Nationwide(R) Money Market Fund ........................................ 901,408 2.885576 2,601,081
Putnam Investors Fund - Class A ........................................ 38,905 13.597842 529,024
Putnam Voyager Fund - Class A .......................................... 2,559,117 3.075635 7,870,910
Seligman Growth Fund, Inc - Class A. ................................... 2,396 10.722947 25,692
T. Rowe Price International Funds, Inc. -
International Stock Fund(R) ......................................... 931,357 1.812507 1,688,091
Templeton Foreign Fund - Class I ....................................... 2,061,896 1.774730 3,659,309
Sub-Total Tier III ========= ======== ------------
$ 96,352,935
------------
</TABLE>
<PAGE> 13
Contract owners' equity - continued
<TABLE>
<CAPTION>
Tier IV Units Unit Value
- ------- -------- ----------
<S> <C> <C> <C>
American Century: Twentieth Century Growth Fund ......................... 735,112 $ 4.564673 $ 3,355,546
American Century: Twentieth Century Select Fund ......................... 949,510 1.573105 1,493,679
American Century: Twentieth Century Ultra Fund .......................... 3,956,021 2.070713 8,191,784
The Bond Fund of America(SM), Inc. ...................................... 46,844 2.156734 101,030
The Dreyfus Third Century Fund, Inc. .................................... 244,163 2.757567 673,296
The Evergreen Total Return Fund - Class Y ............................... 27,416 1.948299 53,415
Federated U.S. Government Securities Fund: 2-5 Years -
Institutional Shares .................................................. 104,637 1.144861 119,795
Fidelity Asset Manager(TM) .............................................. 456,745 1.253217 572,401
Fidelity Capital & Income Fund .......................................... 22,770 4.098210 93,316
Fidelity Contrafund ..................................................... 3,683,606 2.060621 7,590,516
Fidelity Equity-Income Fund ............................................. 1,989,159 5.361886 10,665,644
Fidelity Magellan(R) Fund ............................................... 3,295,811 1.913894 6,307,833
The Growth Fund of America(R), Inc. ..................................... 158,421 2.693081 426,641
The Income Fund of America(R), Inc. ..................................... 246,997 2.161814 533,962
INVESCO Industrial Income Fund, Inc ..................................... 346,238 1.679200 581,403
Janus Fund .............................................................. 1,696,374 1.603947 2,720,894
MAS Funds - Fixed Income Portfolio ...................................... 27,573 1.230264 33,922
MFS(R) Growth Opportunities Fund - Class A .............................. 7,294 7.383255 53,853
MFS(R) High Income Fund - Class A ....................................... 130 5.520479 718
Massachusetts Investors Growth Stock Fund - Class A ..................... 280 10.885279 3,048
Nationwide(R) Fund ...................................................... 54,398 14.970505 814,366
Nationwide(R) Growth Fund ............................................... 286,704 3.084270 884,273
Nationwide(R) Money Market Fund ......................................... 1,141,686 2.886060 3,294,974
Putnam Investors Fund - Class A ......................................... 4,735 13.600069 64,396
Putnam Voyager Fund - Class A ........................................... 1,979,411 3.076140 6,088,945
Seligman Growth Fund, Inc - Class A ..................................... 684 10.724703 7,336
T. Rowe Price International Funds, Inc. -
International Stock Fund(R) .......................................... 881,585 1.812803 1,598,140
Templeton Foreign Fund - Class I ........................................ 1,461,504 1.775020 2,594,199
=========== ============ -----------
Sub-Total Tier IV .................................................... $58,919,325
-----------
</TABLE>
<PAGE> 14
<TABLE>
<CAPTION>
Contract owners' equity - continued
<S> <C> <C> <C>
Tier V Units Unit Value
- ------ --------- ----------
AIM Equity Funds, Inc. - AIM Constellation Fund -
Institutional Class ............................................ 1,258,757 $ 2.057438 $ 2,589,814
American Century: Twentieth Century Growth Fund ................... 6,000,935 4.567401 27,408,677
American Century: Twentieth Century Ultra Fund .................... 16,258,739 2.071951 33,687,311
The Bond Fund of America(SM), Inc. ................................ 471,875 2.158056 1,018,333
The Dreyfus Third Century Fund, Inc. .............................. 1,592,562 2.759214 4,394,219
The Evergreen Total Return Fund - Class Y ......................... 494,994 1.949465 964,973
Fidelity Capital & Income Fund .................................... 84,610 4.100654 346,956
Fidelity Contrafund ............................................... 1,600,079 2.061853 3,299,128
Fidelity Equity-Income Fund ....................................... 6,613,425 5.365090 35,481,620
Fidelity Growth & Income Portfolio ................................ 1,071,573 2.003791 2,147,208
Fidelity Magellan(R) Fund .......................................... 15,847,180 1.915038 30,347,952
MFS(R) Growth Opportunities Fund - Class A ......................... 2,053,995 7.387670 15,174,237
MFS(R) High Income Fund - Class A .................................. 466,255 5.523771 2,575,486
Massachusetts Investors Growth Stock Fund - Class A ............... 270,135 10.891785 2,942,252
Nationwide(R) Bond Fund ............................................ 53,369 2.003508 106,925
Nationwide(R) Fund ................................................. 408,411 14.979448 6,117,771
Nationwide(R) Growth Fund .......................................... 517,548 3.086114 1,597,212
Nationwide(R) Money Market Fund .................................... 3,694,679 2.887782 10,669,428
Neuberger & Berman Guardian Fund .................................. 109,176 1.367075 149,252
Putnam Investors Fund - Class A ................................... 1,571,300 13.608194 21,382,555
Putnam Voyager Fund - Class A ..................................... 990,216 3.077980 3,047,865
SEI Index Funds - S&P 500 Index Portfolio ......................... 724,558 2.965481 2,148,663
Seligman Growth Fund, Inc - Class A ............................... 121,166 10.731114 1,300,246
T. Rowe Price International Funds, Inc. -
International Stock Fund(R) .................................... 5,512,814 1.813888 9,999,627
Templeton Foreign Fund - Class I .................................. 168,098 1.776082 298,556
Sub-Total Tier V ............................................... ========== ======== --------------
$ 219,196,266
--------------
Total Contract Owners' Equity ............................... $1,425,789,282
==============
</TABLE>
<PAGE> 15
<TABLE>
SCHEDULE 1
<CAPTION>
NATIONWIDE DC VARIABLE ACCOUNT
TIER I
SCHEDULES OF CHANGES IN UNIT VALUE
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
AIMCon AIMWein ACTCGro ACTCSel ACTCUltra BdFdAm DNYVenFd
------ ------- ------- ------- --------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
1996**
Beginning unit value - Jan. 1 $1.776138 1.389659 4.005400 1.331631 1.835553 2.039710 1.345221
- ----------------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .068204 .183484 .087806 .148352 .117544 .153233 .080821
- ----------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .229483 .068700 .510359 .106223 .135391 (.017387) .273992
- ----------------------------------------------------------------------------------------------------------------------------------
Contract charges (.018459) (.014319) (.040763) (.013745) (.018623) (.019817) (.014015)
- ----------------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $2.055366 1.627524 4.562802 1.572461 2.069865 2.155739 1.686019
- ----------------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease
in unit value* 16% 17% 14% 18% 13% 6% 25%
==================================================================================================================================
1995
Beginning unit value - Jan. 1 $1.316836 1.035886 3.359891 1.095899 1.345904 1.741422 .966146
- ----------------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .056462 .182030 .555289 .161686 .086850 .148075 .099553
- ----------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .418051 .183577 .127077 .085796 .418120 .168396 .290764
- ----------------------------------------------------------------------------------------------------------------------------------
Contract charges (.015211) (.011834) (.036857) (.011750) (.015321) (.018183) (.011242)
- ----------------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $1.776138 1.389659 4.005400 1.331631 1.835553 2.039710 1.345221
- ----------------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 35% 34% 19% 22% 36% 17% 39%
==================================================================================================================================
1994
Beginning unit value - Jan. 1 $1.305850 1.044414 3.443124 1.202996 1.409710 1.850918 .994508
- ----------------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .038234 .114765 .498592 .095333 .042137 .138760 .046949
- ----------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) (.014948) (.113428) (.549338) (.191608) (.093077) (.231366) (.065935)
- ----------------------------------------------------------------------------------------------------------------------------------
Contract charges (.012300) (.009865) (.032487) (.010822) (.012866) (.016890) (.009376)
- ----------------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $1.316836 1.035886 3.359891 1.095899 1.345904 1.741422 .966146
- ----------------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 1% (1)% (2)% (9)% (5)% (6)% (3)%
==================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
DeDecInc DryCsMgt Dry3dCen
-------- -------- --------
1996**
<S> <C> <C> <C>
Beginning unit value - Jan. 1 1.910384 1.110383 2.238323
- ---------------------------------------------------------------------------------
Reinvested capital gains
and dividends .365309 .059850 .380918
- ---------------------------------------------------------------------------------
Unrealized gain (loss) .024208 .000000 .160989
- ---------------------------------------------------------------------------------
Contract charges (.019691) (.010877) (.023792)
- ---------------------------------------------------------------------------------
Ending unit value -Dec. 31 2.280210 1.159356 2.756438
- ---------------------------------------------------------------------------------
Percentage increase(decrease
in unit value* 19% 4% 23%
=================================================================================
1995
Beginning unit value - Jan. 1 1.449372 1.057458 1.663803
- ---------------------------------------------------------------------------------
Reinvested capital gains
and dividends .199940 .063267 .156545
- ---------------------------------------------------------------------------------
Unrealized gain (loss) .277029 .000000 .436477
- ---------------------------------------------------------------------------------
Contract charges (.015957) (.010342) (.018502)
- ---------------------------------------------------------------------------------
Ending unit value - Dec. 31 1.910384 1.110383 2.238323
- ---------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 32% 5% 35%
=================================================================================
1994
Beginning unit value - Jan. 1 1.473401 1.025704 1.814915
- ---------------------------------------------------------------------------------
Reinvested capital gains
and dividends .102070 .041657 .233019
- ---------------------------------------------------------------------------------
Unrealized gain (loss) (.112176) .000000 (.367765)
- ---------------------------------------------------------------------------------
Contract charges (.013923) (.009903) (.016366)
- ---------------------------------------------------------------------------------
Ending unit value - Dec. 31 1.449372 1.057458 1.663803
- ---------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (2)% 3% (8)%
=================================================================================
<FN>
* An annualized rate of return cannot be determined as contract charges do not
include the annual contract maintenance charge discussed in note 2.
** No other investment options were being utilized.
</TABLE>
<PAGE> 16
<TABLE>
SCHEDULE 1, CONTINUED
<CAPTION>
NATIONWIDE DC VARIABLE ACCOUNT
TIER I
SCHEDULES OF CHANGES IN UNIT VALUE
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
EvTotRet FedGNMA FedUSGvt FidAsMgr FidCapIn
<S> <C> <C> <C> <C> <C>
1996**
Beginning unit value - Jan. 1 $1.741651 1.243001 1.115461 1.121926 3.712491
- ---------------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .097028 .083309 .059931 .098024 .331771
- ---------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .126113 (.021945) (.020301) .043893 .089597
- ---------------------------------------------------------------------------------------------------------------------------------
Contract charges (.017290) (.011985) (.010711) (.011139) (.037371)
- ---------------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $1.947502 1.292380 1.144380 1.252704 4.096488
- ---------------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 12% 4% 3% 12% 10%
=================================================================================================================================
1995
Beginning unit value - Jan. 1 $1.419467 1.081229 .991595 .958564 3.210584
- ---------------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .092352 .083381 .065310 .032047 .338236
- ---------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .244789 .089624 .068708 .141097 .197671
- ---------------------------------------------------------------------------------------------------------------------------------
Contract charges (.014957) (.011233) (.010152) (.009782) (.034000)
- ---------------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $1.741651 1.243001 1.115461 1.121926 3.712491
- ---------------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 23% 15% 12% 17% 16%
=================================================================================================================================
1994
Beginning unit value - Jan. 1 $1.531292 1.119643 1.020623 1.036089 3.397953
- ---------------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .106153 .080720 .050088 .038621 .285090
- ---------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) (.204194) (.108769) (.069585) (.106677) (.440620)
- ---------------------------------------------------------------------------------------------------------------------------------
Contract charges (.013784) (.010365) (.009531) (.009469) (.031839)
- ---------------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $1.419467 1.081229 .991595 .958564 3.210584
- ---------------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (7)% (3)% (3)% (7)% (6)%
=================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
FidContr FidEqInc FidGrInc
-------- -------- --------
<S> <C> <C> <C>
1996**
Beginning unit value - Jan. 1 1.705419 4.471070 1.683805
- -------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .175363 .342426 .098980
- -------------------------------------------------------------------------------------------
Unrealized gain (loss) .196681 .592510 .236381
- -------------------------------------------------------------------------------------------
Contract charges (.017685) (.046314) (.017391)
- -------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 2.059778 5.359692 2.001775
- -------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 21% 20% 19%
===========================================================================================
1995
Beginning unit value - Jan. 1 1.263308 3.424310 1.255568
- -------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .133103 .262606 .083036
- -------------------------------------------------------------------------------------------
Unrealized gain (loss) .323258 .821416 .358955
- -------------------------------------------------------------------------------------------
Contract charges (.014250) (.037262) (.013754)
- -------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 1.705419 4.471070 1.683805
- -------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 35% 31% 34%
===========================================================================================
1994
Beginning unit value - Jan. 1 1.289799 3.448520 1.239420
- -------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .009193 .333965 .092801
- -------------------------------------------------------------------------------------------
Unrealized gain (loss) (.023586) (.325363) (.064842)
- -------------------------------------------------------------------------------------------
Contract charges (.012098) (.032812) (.011811)
- -------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 1.263308 3.424310 1.255568
- -------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (2)% (1)% 1%
===========================================================================================
<FN>
* An annualized rate of return cannot be determined as contract charges do not
include the annual contract maintenance charge discussed in note 2.
** No other investment options were being utilized.
</TABLE>
<PAGE> 17
<TABLE>
<CAPTION>
SCHEDULE I, CONTINUED
NATIONWIDE DC VARIABLE ACCOUNT
TIER I
SCHEDULES OF CHANGES IN UNIT VALUE
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
FidMgIn GroFdAm IncFdAm InvIndInc JanFund Jan20Fd MASFIP
------- ------- ------- --------- ------- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
1996**
Beginning unit value - Jan. 1 $1.729361 2.366626 1.893327 1.451889 1.353271 1.320040 1.156444
- -----------------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .281779 .148981 .208243 .155929 .181980 .280194 .087565
- -----------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) (.081060) .200078 .078318 .085401 .082218 .085793 (.003056)
- -----------------------------------------------------------------------------------------------------------------------------------
Contract charges (.016970) (.023706) (.018959) (.014706) (.014179) (.014329) (.011193)
- -----------------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $1.913110 2.691979 2.160929 1.678513) 1.603290 1.671698 1.229760
- -----------------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value*(a) 11% 14% 14% 16% 18% 27% 6%
===================================================================================================================================
1995
Beginning unit value - Jan. 1 $1.275955 1.840658 1.480756 1.151056 1.055481 .978264 .980782
- -----------------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .100389 .182879 .115949 .070871 .070567 .224692 .073523
- -----------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .367790 .363801 .312609 .242345 .238735 .128222 .112302
- -----------------------------------------------------------------------------------------------------------------------------------
Contract charges (.014773) (.020712) (.015987) (.012383) (.011512) (.011138) (.010163)
- -----------------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $1.729361 2.366626 1.893327 1.451889 1.353271 1.320040 1.156444
- -----------------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value*(a) 36% 29% 28% 26% 28% 35% 18%
===================================================================================================================================
1994
Beginning unit value - Jan. 1 $1.311856 1.857739 1.533299 1.208959 1.077425 1.058801 1.000000
- -----------------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .051123 .083262 .097082 .097608 .021792 .002891 .029902
- -----------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) (.074747) (.082914) (.135450) (.144261) (.033660) (.073797) (.046046)
- -----------------------------------------------------------------------------------------------------------------------------------
Contract charges (.012277) (.017429) (.014175) (.011250) (.010076) (.009631) (.003074)
- -----------------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $1.275955 1.840658 1.480756 1.151056 1.055481 .978264 .980782
- -----------------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value*(a) (3)% (1)% (3)% (5)% (2)% (8)% 2%(b)
===================================================================================================================================
</TABLE>
<TABLE>
MFSGrOpp MFSHiInc MFSGrStk
-------- -------- --------
<S> <C> <C> <C>
1996**
Beginning unit value - Jan. 1 6.114190 4.949752 8.942612
- --------------------------------------------------------------------------------
Reinvested capital gains
and dividends .796398 .454249 2.580988
- --------------------------------------------------------------------------------
Unrealized gain (loss) .534047 .164181 (.547864)
- --------------------------------------------------------------------------------
Contract charges (.064403) (.050022) (.094914)
- --------------------------------------------------------------------------------
Ending unit value - Dec. 31 7.380232 5.518160 10.880822
- --------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value*(a) 21% 11% 22%
=============================================================================
1995
Beginning unit value - Jan. 1 4.589533 4.265493 7.034148
- --------------------------------------------------------------------------------
Reinvested capital gains
and dividends .768242 .403605 1.177905
- --------------------------------------------------------------------------------
Unrealized gain (loss) .807886 .325361 .807395
- --------------------------------------------------------------------------------
Contract charges (.051471) (.044707) (.076836)
- --------------------------------------------------------------------------------
Ending unit value - Dec. 31 6.114190 4.949752 8.942612
- --------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value*(a) 33% 16% 27%
================================================================================
1994
Beginning unit value - Jan. 1 4.834037 4.422523 7.613442
- --------------------------------------------------------------------------------
Reinvested capital gains
and dividends .376509 .374437 .717173
- --------------------------------------------------------------------------------
Unrealized gain (loss) (.576664) (.490350) (1.229319)
- --------------------------------------------------------------------------------
Contract charges (.044349) (.041117) (.067148)
- --------------------------------------------------------------------------------
Ending unit value - Dec. 31 4.589533 4.265493 7.034148
- --------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value*(a) (5)% (4)% (8)%
================================================================================
<FN>
* An annualized rate of return cannot be determined as:
(a)Contract charges do not include the annual contract maintenance charge
discussed in note 2; and
(b)This investment option was not being utilized for the entire year indicated.
** No other investment options were being utilized.
</TABLE>
<PAGE> 18
<TABLE>
<CAPTION>
SCHEDULE I, CONTINUED
NATIONWIDE DC VARIABLE ACCOUNT
TIER I
SCHEDULES OF CHANGES IN UNIT VALUE
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
NWBdFd NWFund NWGroFd NWMyMkt NBManhFd PutInvFd
------ ------ ------- ------- -------- --------
1996**
<S> <C> <C> <C> <C> <C> <C>
Beginning unit value - Jan. 1 $1.991196 12.191058 2.667201 2.774433 2.259932 11.305164
- ---------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .127761 1.119203 .234869 .137555 .306136 1.592658
- -----------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) (.098894) 1.782082 .208017 .000000 (.084784) .815178
- -----------------------------------------------------------------------------------------------------------------------------------
Contract charges (.018591) (.127964) (.027079) (.027140) (.022362) (.118499)
- -----------------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $2.001472 14.964379 3.083008 2.884848 2.458922 13.594501
- -----------------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 1% 23% 16% 4% 9% 20%
====================================================================================================================================
1995
Beginning unit value - Jan. 1 $1.619166 9.468045 2.092009 2.654661 1.741549 8.297318
- -----------------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .123140 .820350 .282003 .145674 .165618 1.391197
- -----------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .266262 2.003431 .316217 .000000 .372594 1.710170
- -----------------------------------------------------------------------------------------------------------------------------------
Contract charges (.017372) (.100768) (.023028) (.025902) (.019829) (.093521)
- -----------------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $1.991196 12.191058 2.667201 2.774433 2.259932 11.305164
- -----------------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 23% 29% 27% 5% 30% 36%
===================================================================================================================================
1994
Beginning unit value - Jan. 1 $1.778765 9.502760 2.081399 2.583387 1.823796 8.652501
- -----------------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .121459 .927943 .079372 .096188 .115456 .771381
- -----------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) (.265190) (.873192) (.049054) .000000 (.180865) (1.046752)
- -----------------------------------------------------------------------------------------------------------------------------------
Contract charges (.015868) (.089466) (.019708) (.024914) (.016838) (.079812)
- -----------------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $1.619166 9.468045 2.092009 2.654661 1.741549 8.297318
- -----------------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (9)% 0% 1% 3% (5)% (4)%
===================================================================================================================================
</TABLE>
<TABLE>
PutVoyFd SEI500Ix SelGroFd
-------- -------- --------
<S> <C> <C> <C>
1996**
Beginning unit value - Jan. 1 2.752130 2.439184 8.934609
- ----------------------------------------------------------------------------
Reinvested capital gains
and dividends .194543 .095147 .806272
- ----------------------------------------------------------------------------
Unrealized gain (loss .156646 .453595 1.073420
- ----------------------------------------------------------------------------
Contract charges (.028440) (.025429) (.093989)
- ----------------------------------------------------------------------------
Ending unit value - Dec. 31 3.074879 2.962497 10.720312
- ----------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 12% 21% 20%
============================================================================
1995
Beginning unit value - Jan. 1 1.982311 1.792835 7.020585
- ----------------------------------------------------------------------------
Reinvested capital gains
and dividends .146629 .086650 .931537
- ----------------------------------------------------------------------------
Unrealized gain (loss) .645332 .579852 1.057625
- ----------------------------------------------------------------------------
Contract charges (.022142) (.020153) (.075138)
- ----------------------------------------------------------------------------
Ending unit value - Dec. 31 2.752130 2.439184 8.934609
- ----------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 39% 36% 27%
============================================================================
1994
Beginning unit value - Jan. 1 1.992379 1.792223 7.370495
- ----------------------------------------------------------------------------
Reinvested capital gains
and dividends .083642 .101704 .708203
- ----------------------------------------------------------------------------
Unrealized gain (loss) (.075428) (.084212) (.990524)
- ----------------------------------------------------------------------------
Contract charges (.018282) (.016880) (.067589)
- ----------------------------------------------------------------------------
Ending unit value - Dec. 31 1.982311 1.792835 7.020585
- ----------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (1)% 0% (5)%
============================================================================
<FN>
* An annualized rate of return cannot be determined as contract charges do not
include the annual contract maintenance charge discussed in note 2.
** No other investment options were being utilized.
</TABLE>
<PAGE> 19
<TABLE>
<CAPTION>
SCHEDULE I, CONTINUED
NATIONWIDE DC VARIABLE ACCOUNT
TIER I
SCHEDULES OF CHANGES IN UNIT VALUE
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
StComStk TRIntStk TemForFd TemGISmCo DryStkIx FidVIPAM FidVIPEI
-------- -------- -------- --------- -------- -------- --------
1996**
<S> <C> <C> <C> <C> <C> <C> <C>
Beginning unit value - Jan. 1 $1.315349 1.577274 1.518092 1.490946 1.322035 1.107535 1.303642
- ---------------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .236157 .048548 .074298 .181637 .057158 .072883 .060157
- ---------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .031534 .202392 .197440 .146014 .239160 .087931 .124996
- ---------------------------------------------------------------------------------------------------------------------------------
Contract charges (.013556) (.016152) (.015536) (.015634) (.013773) (.011127) (.013108)
- ---------------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $1.569484 1.812062 1.774294 1.802963 1.604580 1.257222 1.475687
- ---------------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value*(a) 19% 15% 17% 21% 21% 14% 13%
=================================================================================================================================
1995
Beginning unit value - Jan. 1 $1.002820 1.429428 1.378759 1.279328 .975745 .955979 .974175
- ---------------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .140205 .047536 .095828 .193896 .035036 .020086 .076250
- ---------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .183299 .114284 .057277 .031012 .322198 .141130 .264015
- ---------------------------------------------------------------------------------------------------------------------------------
Contract charges (.010975) (.013974) (.013772) (.013290) (.010944) (.009660) (.010798)
- ---------------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $1.315349 1.577274 1.518092 1.490946 1.322035 1.107535 1.303642
- ---------------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value*(a) 31% 10% 10% 17% 35% 16% 34%
=================================================================================================================================
1994
Beginning unit value - Jan. 1 $1.017301 1.454045 1.387073 1.353616 1.000000 1.000000 1.000000
- ---------------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .063114 .087659 .098557 .032943 .016017 .000695 .011343
- ---------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) (.067992) (.098366) (.093448) (.094423) (.037213) (.041640) (.034096)
- ---------------------------------------------------------------------------------------------------------------------------------
Contract charges (.009603) (.013910) (.013423) (.012808) (.003059) (.003076) (.003072)
- ---------------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $1.002820 1.429428 1.378759 1.279328 .975745 .955979 .974175
- ---------------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (a) (1)% (2)% (1)% (5)% (2)%(b) (4)%(b) (3)%(b)
=================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
FidVIPGr FidVIPHI
-------- --------
1996**
<S> <C> <C>
Beginning unit value - Jan. 1 1.366323 1.185437
- -----------------------------------------------------------------
Reinvested capital gains
and dividends .098176 .108119
- -----------------------------------------------------------------
Unrealized gain (loss) .101895 .057435
- -----------------------------------------------------------------
Contract charges (.014043) (.012052)
- -----------------------------------------------------------------
Ending unit value - Dec. 31 1.552351 1.338939
- -----------------------------------------------------------------
Percentage increase (decrease)
in unit value*(a) 14% 13%
=================================================================
1995
Beginning unit value - Jan. 1 1.018963 .992271
- -----------------------------------------------------------------
Reinvested capital gains
and dividends .005632 .071867
- -----------------------------------------------------------------
Unrealized gain (loss) .353481 .131757
- -----------------------------------------------------------------
Contract charges (.011753) (.010458)
- -----------------------------------------------------------------
Ending unit value - Dec. 31 1.366323 1.185437
- -----------------------------------------------------------------
Percentage increase (decrease)
in unit value*(a) 34% 19%
=================================================================
1994
Beginning unit value - Jan. 1 1.000000 1.000000
- -----------------------------------------------------------------
Reinvested capital gains
and dividends .000000 .000000
- -----------------------------------------------------------------
Unrealized gain (loss) .022089 (.004613)
- -----------------------------------------------------------------
Contract charges (.003126) (.003116)
- -----------------------------------------------------------------
Ending unit value - Dec. 31 1.018963 .992271
- -----------------------------------------------------------------
Percentage increase (decrease)
in unit value* (a) 2%(b) (1)%(b)
=================================================================
<FN>
* An annualized rate of return cannot be determined as:
(a)Contract charges do not include the annual contract maintenance charge
discussed in note 2; and
(b)This investment option was not being utilized for the entire year indicated.
** No other investment options were being utilized.
</TABLE>
<PAGE> 20
<TABLE>
<CAPTION>
SCHEDULE I, CONTINUED
NATIONWIDE DC VARIABLE ACCOUNT
TIER I
SCHEDULES OF CHANGES IN UNIT VALUE
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
FidVIPOv NSATGvtBd NSATMyMkt NSATTotRe NBAMTGro NBAMTLMat NBAMTPart
-------- --------- --------- --------- -------- --------- ---------
1996***
<S> <C> <C> <C> <C> <C> <C> <C>
Beginning unit value - Jan. 1 $1.029809 1.574158 1.209790 1.950853 1.661013 1.093904 1.306186
- ------------------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .025345 .097615 .061618 .130389 .150704 .092066 .053229
- ------------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .110017 (.043342) .000000 .293296 .000296 (.045340) .330901
- ------------------------------------------------------------------------------------------------------------------------------------
Contract charges (.010329) (.014866) (.011852) (.020182) (.016406) (.010470) (.013965)
- ------------------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $1.154842 1.613565 1.259556 2.354356 1.795607 1.130160 1.676351
- ------------------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value*(a) 12% 3% 4% 21% 8% 3% 28%
====================================================================================================================================
1995
Beginning unit value - Jan. 1 $ .947883 1.338281 1.155984 1.525590 1.272940 .995462 .966223
- ------------------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .007252 .094912 .065092 .151626 .045057 .055297 .007900
- ------------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .083925 .154829 .000000 .290215 .357539 .053054 .342968
- ------------------------------------------------------------------------------------------------------------------------------------
Contract charges (.009251) (.013864) (.011286) (.016578) (.014523) (.009909) (.010905)
- ------------------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $1.029809 1.574158 1.209790 1.950853 1.661013 1.093904 1.306186
- ------------------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value*(a) 9% 18% 5% 28% 30% 10% 35%
====================================================================================================================================
1994
Beginning unit value - Jan. 1 $1.000000 1.396125 1.123427 1.523742 1.352530 1.000000 1.000000
- ------------------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .000000 .087782 .043407 .077107 .163043 .000000 .000000
- ------------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) (.049090) (.132815) .000000 (.060675) (.230291) (.001418) (.030724)
- ------------------------------------------------------------------------------------------------------------------------------------
Contract charges (.003027) (.012811) (.010850) (.014584) (.012342) (.003120) (.003053)
- ------------------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $ .947883 1.338281 1.155984 1.525590 1.272940 .995462 .966223
- ------------------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value*(a) (5)%(b) (4)% 3% 0% (6)% 0%(b) (3)%(b)
====================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
TCIBal TCIGro
------ ------
<S> <C> <C>
1996***
Beginning unit value - Jan. 1 1.184177 1.729155
- -------------------------------------------------------------------
Reinvested capital gains
and dividends .055995 .193969
- -------------------------------------------------------------------
Unrealized gain (loss) .087770 .268047
- -------------------------------------------------------------------
Contract charges (.011818) (.016378)
- -------------------------------------------------------------------
Ending unit value - Dec. 31 1.316124 1.638699
- -------------------------------------------------------------------
Percentage increase (decrease)
in unit value*(a) 11% (5)%
===================================================================
1995
Beginning unit value - Jan. 1 .986992 1.331537
- -------------------------------------------------------------------
Reinvested capital gains
and dividends .028002 .001532
- -------------------------------------------------------------------
Unrealized gain (loss) .179505 .410981
- -------------------------------------------------------------------
Contract charges (.010322) (.014895)
- -------------------------------------------------------------------
Ending unit value - Dec. 31 1.184177 1.729155
- -------------------------------------------------------------------
Percentage increase (decrease)
in unit value*(a) 20% 30%
===================================================================
1994
Beginning unit value - Jan. 1 ** 1.360119
- -------------------------------------------------------------------
Reinvested capital gains
and dividends .000146
- -------------------------------------------------------------------
Unrealized gain (loss) (.016072)
- -------------------------------------------------------------------
Contract charges (.012656)
- -------------------------------------------------------------------
Ending unit value - Dec. 31 1.331537
- -------------------------------------------------------------------
Percentage increase (decrease)
in unit value*(a) (2)%
===================================================================
<FN>
* An annualized rate of return cannot be determined as:
(a)Contract charges do not include the annual contract maintenance charge
discussed in note 2; and
(b)This investment option was not being utilized for the entire year indicated.
** This investment option was not utilized or was not available.
*** No other investment options were being utilized.
</TABLE>
<PAGE> 21
<TABLE>
<CAPTION>
SCHEDULE I, CONTINUED
NATIONWIDE DC VARIABLE ACCOUNT
TIER II +
SCHEDULES OF CHANGES IN UNIT VALUE
YEAR ENDED DECEMBER 31, 1996
ACTCGro ACTCUltra BdFdAm DNYVenFd DeDecInc DryCsMgt Dry3dCen
------- --------- ------ -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
1996**
Beginning unit value - Jan. 1 $4.005400 1.835553 2.039710 1.345221 1.910384 1.110383 2.238323
- ---------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .087812 117552 .153233 .080824 .365329 .059863 .380939
- ---------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .510348 .135379 (.017388) .273991 .024189 .000000 .160966
- ---------------------------------------------------------------------------------------------------------------------------
Contract charges (.040384) (.018449) (.019617) (.013879) (.019505) (.010793) (.023565)
- ---------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $4.563176 2.070035 2.155938 1.686157 2.280397 1.159453 2.756663
- ---------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 14% 13% 6% 25% 19% 4% 23%
===========================================================================================================================
EvTotRet FedUSGvt FidAsMgr FidCapInc
-------- -------- -------- ---------
<S> <C> <C> <C> <C>
1996**
Beginning unit value - Jan. 1 1.741651 1.115461 1.121926 3.712491
- ------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .097030 .059931 .098028 .331771
- ------------------------------------------------------------------------------------
Unrealized gain (loss) .126118 (.020303) .043887 .089599
- ------------------------------------------------------------------------------------
Contract charges (.017138) (.010612) (.011035) (.037028)
- ------------------------------------------------------------------------------------
Ending unit value - Dec. 31 1.947661 1.144477 1.252806 4.096833
- ------------------------------------------------------------------------------------
Percentage increase (decrease
in unit value* 12% 3% 12% 10%
====================================================================================
<CAPTION>
FidContr FidEqInc FidMgIn GroFdAm IncFdAm InvIndInc JanFund
-------- -------- ------- ------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1996**
Beginning unit value - Jan. 1 $1.705419 4.471070 1.729361 2.366626 1.893327 1.451889 1.353271
- ---------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .175369 .342436 .281780 .148989 .208253 .155937 .181994
- ---------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .196677 .592501 (.081059) .200075 .078308 .085395 .082203
- ---------------------------------------------------------------------------------------------------------------------------
Contract charges (.017518) (.045877) (.016815) (.023491) (.018782) (.014571) (.014047)
- ---------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $2.059947 5.360130 1.913267 2.692199 2.161106 1.678650 1.603421
- ---------------------------------------------------------------------------------------------------------------------------
Percentage increase
(decrease) in unit value* 21% 20% 11% 14% 14% 16% 18%
===========================================================================================================================
<CAPTION>
MASFIP MFSGrOpp MFSHiInc
------ -------- --------
1996**
<S> <C> <C> <C>
Beginning unit value - Jan. 1 1.156444 6.114190 4.949752
- ------------------------------------------------------------------------
Reinvested capital gains
and dividends .087567 .796451 .454253
- ------------------------------------------------------------------------
Unrealized gain (loss) (.003065) .533998 .164177
- ------------------------------------------------------------------------
Contract charges (.011085) (.063802) (.049558)
- ------------------------------------------------------------------------
Ending unit value - Dec. 31 1.229861 7.380837 5.518624
- ------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 6% 21% 11%
========================================================================
<CAPTION>
MFSGrStk NWFund NWGroFd NWMyMkt PutInvFd PutVoyFd SEI500Ix
-------- ------ ------- ------- -------- -------- --------
1996**
- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Beginning unit value - Jan. 1 $8.942612 12.191058 2.667201 2.774433 11.305164 2.752130 2.439184
- ---------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends 2.581161 1.119275 .234885 .137556 1.592747 .194555 .095149
- ---------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) (.548045) 1.782011 .208001 .000000 .815074 .156633 .453589
- ---------------------------------------------------------------------------------------------------------------------------
Contract charges (.094015) (.126740) (.026826) (.026898) (.117371) (.028187) (.025182)
- ---------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $10.881713 14.965604 3.083261 2.885091 13.595614 3.075131 2.962740
- ---------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 22% 23% 16% 4% 20% 12% 21%
===========================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
SelGroFd TRIntStk TemForFd
-------- -------- --------
1996**
- ------
<S> <C> <C> <C>
Beginning unit value - Jan. 1 8.934609 1.577274 1.518092
- ------------------------------------------------------------------------
Reinvested capital gains
and dividends .806286 .048552 .074298
- ------------------------------------------------------------------------
Unrealized gain (loss) 1.073404 .202388 .197443
- ------------------------------------------------------------------------
Contract charges (.093109) (.016004) (.015394)
- ------------------------------------------------------------------------
Ending unit value - Dec. 31 10.721190 1.812210 1.774439
- ------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 20% 15% 17%
========================================================================
<FN>
* An annualized rate of return cannot be determined as contract charges do
not include the annual contract maintenance charge discussed in note 2.
** No other investment options were being utilized.
+ See note 2
</TABLE>
<PAGE> 22
<TABLE>
SCHEDULE I, CONTINUED
<CAPTION>
NATIONWIDE DC VARIABLE ACCOUNT
TIER III+
SCHEDULES OF CHANGES IN UNIT VALUE
YEAR ENDED DECEMBER 31, 1996
ACTCGro ACTCUltra BdFdAm DeDecInc Dry3dCen EvTotRet FedUSGvt
------- --------- ------ -------- -------- -------- --------
1996**
<S> <C> <C> <C> <C> <C> <C> <C>
Beginning unit value - Jan. 1 $4.005400 1.835553 2.039710 1.910384 2.238323 1.741651 1.115461
- -------------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .087823 .117567 .153233 .365368 .380981 .097034 .059933
- -------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .510320 .135351 (.017390) .024153 .160920 .125977 (.020307)
- -------------------------------------------------------------------------------------------------------------------------------
Contract charges (.039618) (.018097) (.019217) (.019135) (.023109) (.016682) (.010418)
- -------------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $4.563925 2.070374 2.156336 2.280770 2.757115 1.947980 1.144669
- -------------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 14% 13% 6% 19% 23% 12% 3%
===============================================================================================================================
<CAPTION>
FidAsMgr FidCapInc FidContr
-------- --------- --------
1996**
<S> <C> <C> <C> <C>
Beginning unit value - Jan. 1 1.121926 3.712491 1.705419
- --------------------------------------------------------------------------
Reinvested capital gains
and dividends .098038 .331771 .175380
- --------------------------------------------------------------------------
Unrealized gain (loss) .043881 .089604 .196669
- --------------------------------------------------------------------------
Contract charges (.010833) (.036344) (.017184)
- --------------------------------------------------------------------------
Ending unit value - Dec. 31 1.253012 4.097522 2.060284
- --------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 12% 10% 21%
==========================================================================
<CAPTION>
FidEqInc FidMgIn GroFdAm IncFdAm InvIndInc JanFund
-------- ------- ------- ------- --------- -------
1996**
- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Beginning unit value - Jan. 1 $4.471070 1.729361 2.366626 1.893327 1.451889 1.353271
- -------------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .342458 .281781 .149006 .208273 .155950 .182021
- -------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .592488 (.081065) .200051 .078292 .085383 .082179
- -------------------------------------------------------------------------------------------------------------------------------
Contract charges (.045008) (.016497) (.023043) (.018432) (.014297) (.013787)
- -------------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $5.361008 1.913580 2.692640 2.161460 1.678925 1.603684
- -------------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 20% 11% 14% 14% 16% 19%
===============================================================================================================================
<CAPTION>
MASFIP MFSGrOpp MFSHiInc MFSGrStk
------ -------- -------- --------
1996**
- ------
<S> <C> <C> <C> <C> <C>
Beginning unit value - Jan. 1 1.156444 6.114190 4.949752 8.942612
- --------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .087571 .796558 .454458 2.581506
- --------------------------------------------------------------------------------------------
Unrealized gain (loss) (.003061) .533887 .163904 (.548408)
- --------------------------------------------------------------------------------------------
Contract charges (.010892) (.062589) (.048562) (.092214)
- --------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 1.230062 7.382046 5.519552 10.883496
- --------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 6% 21% 12% 22%
============================================================================================
<CAPTION>
NWFund NWGroFd NWMyMkt PutInvFd PutVoyFd SelGroFd
------ ------- ------- -------- -------- --------
1996**
<S> <C> <C> <C> <C> <C> <C> <C>
Beginning unit value - Jan. 1 $12.191058 2.667201 2.774433 11.305164 2.752130 8.934609
- -------------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends 1.119420 .234917 .137554 1.592926 .194581 .806315
- -------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) 1.781872 .207974 .000000 .814880 .156599 1.073372
- -------------------------------------------------------------------------------------------------------------------------------
Contract charges (.124295) (.026326) (.026411) (.115128) (.027675) (.091349)
- -------------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $14.968055 3.083766 2.885576 13.597842 3.075635 10.722947
- -------------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 23% 16% 4% 20% 12% 20%
===============================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
TRIntStk TemForFd
-------- --------
1996**
<S> <C> <C>
Beginning unit value - Jan. 1 1.577274 1.518092
- --------------------------------------------------------------------------
Reinvested capital gains
and dividends .048559 .074300
- --------------------------------------------------------------------------
Unrealized gain (loss) .202389 .197449
- --------------------------------------------------------------------------
Contract charges (.015715) (.015111)
- --------------------------------------------------------------------------
Ending unit value - Dec. 31 1.812507 1.774730
- --------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 15% 17%
==========================================================================
<FN>
* An annualized rate of return cannot be determined as contract charges do
not include the annual contract maintenance charge discussed in note 2.
** No other investment options were being utilized.
+ See note 2
</TABLE>
<PAGE> 23
<TABLE>
<CAPTION>
SCHEDULE I, CONTINUED
NATIONWIDE DC VARIABLE ACCOUNT
TIER IV+
SCHEDULES OF CHANGES IN UNIT VALUE
YEAR ENDED DECEMBER 31, 1996
ACTCGro ACTCSel ACTCUltra BdFdAm Dry3dCen EvTotRet FedUSGvt
------- ------- --------- ------ -------- -------- --------
1996**
<S> <C> <C> <C> <C> <C> <C> <C>
Beginning unit value - Jan. 1 $4.005400 1.331631 1.835553 2.039710 2.238323 1.741651 1.115461
- -------------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .087834 .148399 .117582 .153234 .381022 .097037 .059933
- -------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .510292 .106166 .135328 (.017388) .160874 .126116 (.020305)
- -------------------------------------------------------------------------------------------------------------------------------
Contract charges (.038853) (.013091) (.017750) (.018822) (.022652) (.016505) (.010228)
- -------------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $4.564673 1.573105 2.070713 2.156734 2.757567 1.948229 1.144861
- -------------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 14% 18% 13% 6% 23% 12% 3%
================================================================================================================================
<CAPTION>
FidAsMgr FidCapInc FidContr
-------- --------- --------
1996**
<S> <C> <C> <C>
Beginning unit value - Jan. 1 1.121926 3.712491 1.705419
- -------------------------------------------------------------------------------
Reinvested capital gains
and dividends .098047 .331772 .175391
- -------------------------------------------------------------------------------
Unrealized gain (loss) .043870 .089608 .196662
- -------------------------------------------------------------------------------
Contract charges (.010626) (.035661) (.016851)
- -------------------------------------------------------------------------------
Ending unit value - Dec. 31 1.253217 4.098210 2.060621
- -------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 12% 10% 21%
===============================================================================
<CAPTION>
FidEqInc FidMgIn GroFdAm IncFdAm InvIndInc JanFund MASFIP
-------- ------- ------- ------- --------- ------- ------
1996**
<S> <C> <C> <C> <C> <C> <C> <C>
Beginning unit value - Jan. 1 $4.471070 1.729361 2.366626 1.893327 1.451889 1.353271 1.156444
- -------------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .342479 .281783 .149022 .208293 .155964 .182048 .087575
- -------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .592476 (.081063) .200043 .078277 .085372 .082155 (.003066)
- -------------------------------------------------------------------------------------------------------------------------------
Contract charges (.044139) (.016187) (.022610) (.018083) (.014025) (.013527) (.010689)
- -------------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $5.361886 1.913894 2.693081 2.161814 1.679200 1.603947 1.230264
- -------------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 20% 11% 14% 14% 16% 19% 6%
================================================================================================================================
<CAPTION>
MFSGrOpp MFSHiInc
-------- --------
1996**
<S> <C> <C>
Beginning unit value - Jan. 1 6.114190 4.949752
- -------------------------------------------------------------------------------
Reinvested capital gains
and dividends .796664 .454255
- -------------------------------------------------------------------------------
Unrealized gain (loss) .533781 .164183
- -------------------------------------------------------------------------------
Contract charges (.061380) (.047711)
- -------------------------------------------------------------------------------
Ending unit value - Dec. 31 7.383255 5.520479
- -------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 21% 12%
===============================================================================
<CAPTION>
MFSGrStk NWFund NWGroFd NWMyMkt PutInvFd PutVoyFd
-------- ------ ------- ------- -------- --------
1996**
<S> <C> <C> <C> <C> <C> <C>
Beginning unit value - Jan. 1 $8.942612 12.191058 2.667201 2.774433 11.305164 2.752130
- -------------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends 2.581851 1.119564 .234950 .137553 1.593104 .194606
- -------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) (.548770) 1.781730 .207948 .000000 .814688 .156571
- -------------------------------------------------------------------------------------------------------------------------------
Contract charges (.090414) (.121847) (.025829) (.025926) (.112887) (.027167)
- -------------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 10.885279 14.970505 3.084270 $2.886060 13.600069 3.076140
- -------------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 22% 23% 16% 4% 20% 12%
================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
SelGroFd TRIntStk TemForFd
-------- -------- --------
1996**
<S> <C> <C> <C>
Beginning unit value - Jan. 1 8.934609 1.577274 1.518092
- -------------------------------------------------------------------------------
Reinvested capital gains
and dividends .806343 .048567 .074301
- -------------------------------------------------------------------------------
Unrealized gain (loss) 1.073337 .202387 .197454
- -------------------------------------------------------------------------------
Contract charges (.089586) (.015425) (.014827)
- -------------------------------------------------------------------------------
Ending unit value - Dec. 31 10.724703 1.812803 1.775020
- -------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 20% 15% 17%
===============================================================================
<FN>
* An annualized rate of return cannot be determined as contract charges do
not include the annual contract maintenance charge discussed in note 2.
** No other investment options were being utilized.
+ See note 2
</TABLE>
<PAGE> 24
<TABLE>
<CAPTION>
SCHEDULE 1, CONTINUED
NATIONWIDE DC VARIABLE ACCOUNT
TIER V+
SCHEDULES OF CHANGES IN UNIT VALUE
YEAR ENDED DECEMBER 31, 1996
AIMCon ACTCGro ACTCUltra BdFdAm Dry3dCen EvTotRet
------ ------- --------- ------ -------- --------
1996**
- ------
<S> <C> <C> <C> <C> <C> <C>
Beginning unit value - Jan. 1 $1.776138 4.005400 1.835553 2.039710 2.238323 1.741651
- -------------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .068263 .087885 .117650 .153258 .381239 .097058
- -------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .229451 .510308 .135286 (.017382) .160736 .126151
- -------------------------------------------------------------------------------------------------------------------------------
Contract charges (.016414) (.036192) (.016538) (.017530) (.021084) (.015395)
- -------------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $2.057438 4.567401 2.071951 2.158056 2.759214 1.949465
- -------------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 16% 14% 13% 6% 23% 12%
===============================================================================================================================
FidCapInc FidContr FidEqInc
<CAPTION>
--------- -------- --------
1996**
- ------
<S> <C> <C> <C>
Beginning unit value - Jan. 1 3.712491 1.705419 4.471070
- -------------------------------------------------------------------------------
Reinvested capital gains
and dividends .331796 .175441 .342592
- -------------------------------------------------------------------------------
Unrealized gain (loss) .089631 .196694 .592574
- -------------------------------------------------------------------------------
Contract charges (.033264) (.015701) (.041146)
- -------------------------------------------------------------------------------
Ending unit value - Dec. 31 4.100654 2.061853 5.365090
- -------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 10% 21% 20%
===============================================================================
<CAPTION>
FidGrInc FidMgIn MFSGrOpp MFSHiInc MFSGrStk NWBdFd
1996**
<S> <C> <C> <C> <C> <C> <C>
Beginning unit value - Jan. 1 $1.683805 1.729361 6.114190 4.949752 8.942612 1.991196
- -------------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .098999 .281791 .797129 .454312 2.583355 .127782
- -------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .236438 (.081008) .533537 .164197 (.550009) (.098900)
- -------------------------------------------------------------------------------------------------------------------------------
Contract charges (.015451) (.015106) (.057186) (.044490) (.084173) (.016570)
- -------------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $2.003791 1.915038 7.387670 5.523771 10.891785 2.003508
- -------------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 19% 11% 21% 12% 22% 1%
===============================================================================================================================
<CAPTION>
NWFund NWGroFd
1996**
<S> <C> <C>
Beginning unit value - Jan. 1 12.191058 2.667201
- -------------------------------------------------------------------------------
Reinvested capital gains
and dividends 1.120138 .235077
- -------------------------------------------------------------------------------
Unrealized gain (loss) 1.781742 .207926
- -------------------------------------------------------------------------------
Contract charges (.113490) (.024090)
- -------------------------------------------------------------------------------
Ending unit value - Dec. 31 14.979448 3.086114
- -------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 23% 16%
===============================================================================
<CAPTION>
NWMyMkt NBGuardTM PutInvFd PutVoyFd SEI500Ix SelGroFd
------- --------- -------- -------- -------- --------
1996**
<S> <C> <C> <C> <C> <C> <C>
Beginning unit value - Jan. 1 $2.774433 1.169665 11.305164 2.752130 2.439184 8.934609
- -------------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .137564 .076520 1.594014 .194720 .095184 .806773
- -------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .000000 .131365 .814112 .156454 .453672 1.073177
- -------------------------------------------------------------------------------------------------------------------------------
Contract charges (.024215) (.010475) (.105096) (.025324) (.022559) (.083445)
- -------------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $2.887782 1.367075 13.608194 3.077980 2.965481 10.731114
- -------------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 4% 17% 20% 12% 22% 20%
===============================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
TRIntStk TemForFd
-------- --------
1996**
<S> <C> <C>
Beginning unit value - Jan. 1 1.577274 1.518092
- -------------------------------------------------------------------------------
Reinvested capital gains
and dividends .048595 .074334
- -------------------------------------------------------------------------------
Unrealized gain (loss) .202414 .197488
- -------------------------------------------------------------------------------
Contract charges (.014395) (.013832)
- -------------------------------------------------------------------------------
Ending unit value - Dec. 31 1.813888 1.776082
- -------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 15% 17%
===============================================================================
<FN>
* An annualized rate of return cannot be determined as contract charges do
not include the annual contract maintenance charge discussed in note 2.
** No other investment options were being utilized
+ See note 2
See note 3
</TABLE>
<PAGE> 60
================================================================================
<TABLE>
<CAPTION>
NATIONWIDE DC VARIABLE ACCOUNT
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY
JUNE 30, 1997
(UNAUDITED)
<S> <C>
ASSETS:
Investments at market value:
AIM Equity Funds, Inc. - AIM Constellation Fund - Institutional Class (AIMCon)
614,391 shares (cost $15,468,773) .......................................... $ 17,184,529
AIM Equity Funds, Inc. - AIM Weingarten Fund - Institutional Class (AIMWein)
99,639 shares (cost $1,854,808) ............................................ 2,147,225
American Century: Twentieth Century Growth Fund (ACTCGro)
4,862,939 shares (cost $100,856,684) ....................................... 125,172,052
American Century: Twentieth Century Select Fund (ACTCSel)
41,335 shares (cost $1,473,271) ............................................ 1,930,757
American Century: Twentieth Century Ultra Fund (ACTCUltra)
9,171,224 shares (cost $230,269,014) ....................................... 299,899,036
The Bond Fund of AmericaSM, Inc. (BdFdAm)
831,002 shares (cost $11,310,968) .......................................... 11,476,135
Davis New York Venture Fund, Inc. - Class A (DNYVenFd)
222,369 shares (cost $4,050,722) ........................................... 4,629,719
Delaware Group Decatur Fund, Inc. -
Decatur Income Fund Institutional Class (DeDecInc)
11,918 shares (cost $209,913) .............................................. 253,129
Dreyfus Cash Management - Class A (DryCsMgt)
1,205,061 shares (cost $1,205,061) ......................................... 1,205,061
Dreyfus S&P 500 Index Fund (Dry500Ix)
125,518 shares (cost $3,262,913) ........................................... 3,353,847
The Dreyfus Third Century Fund, Inc. (Dry3dCen)
2,781,441 shares (cost $24,208,849) ........................................ 28,815,732
Evergreen Income and Growth Fund - Class Y (EvIncGro)
187,799 shares (cost $3,600,254) ........................................... 4,325,005
The Institutional Shares of Federated GNMA Trust (FedGNMA)
58,305 shares (cost $642,574) .............................................. 649,516
Federated U.S. Government Securities Fund: 2-5 Years -
Institutional Shares (FedUSGvt)
210,772 shares (cost $2,201,130) ........................................... 2,202,563
Fidelity Asset ManagerTM (FidAsMgr)
336,509 shares (cost $5,352,237) ........................................... 6,067,252
Fidelity Capital & Income Fund (FidCapInc)
140,908 shares (cost $1,237,953) ........................................... 1,341,448
Fidelity Contrafund (FidContr)
4,756,387 shares (cost $178,959,999) ....................................... 219,316,990
Fidelity Equity-Income Fund (FidEqInc)
5,045,919 shares (cost $179,087,002) ....................................... 248,208,749
</TABLE>
8
<PAGE> 61
<TABLE>
<S> <C>
Fidelity Growth & Income Portfolio (FidGrInc)
448,767 shares (cost $13,370,447) .......................................... 16,178,068
Fidelity Magellan(R) Fund (FidMgln)
2,269,583 shares (cost $174,012,024) ....................................... 206,645,493
The Growth Fund of America(R), Inc. (GroFdAm)
595,026 shares (cost $9,637,910) ........................................... 11,091,287
The Income Fund of America(R), Inc. (IncFdAm)
980,070 shares (cost $15,010,081) .......................................... 17,406,041
INVESCO Industrial Income Fund, Inc. (InvIndlnc)
1,359,895 shares (cost $17,116,496) ........................................ 20,819,986
Janus Fund (JanFund)
1,911,959 shares (cost $46,495,206) ........................................ 52,808,316
MAS Funds - Fixed Income Portfolio (MASFIP)
162,664 shares (cost $1,922,246) ........................................... 1,951,967
MFS(R) Growth Opportunities Fund - Class A (MFSGrOpp)
1,762,239 shares (cost $20,409,007) ........................................ 26,363,103
MFS(R) High Income Fund - Class A (MFSHiInc)
645,052 shares (cost $3,348,490) ........................................... 3,489,733
Massachusetts Investors Growth Stock Fund - Class A (MFSGrStk)
477,433 shares (cost $5,140,869) ........................................... 6,015,656
Nationwide(R) Bond Fund (NWBdFd)
13,504 shares (cost $125,632) .............................................. 124,376
Nationwide(R) Fund (NWFund)
2,117,202 shares (cost $38,907,160) ........................................ 52,421,924
Nationwide(R) Growth Fund (NWGroFd)
565,916 shares (cost $6,812,519) ........................................... 8,879,224
Nationwide(R) Money Market Fund (NWMyMkt)
65,266,291 shares (cost $65,266,291) ....................................... 65,266,291
Neuberger & Berman Guardian Fund (NBGuard)
22,120 shares (cost $606,361) .............................................. 639,713
Neuberger & Berman Manhattan Fund (NBManhFd)
7,817 shares (cost $95,509) ................................................ 107,253
Neuberger & Berman Partners Fund (NBPartFd)
40,677 shares (cost $1,124,715) ............................................ 1,189,386
Putnam Investors Fund - Class A (PutInvFd)
3,479,335 shares (cost $29,502,329) ........................................ 38,133,513
Putnam Voyager Fund - Class A (PutVoyFd)
6,090,887 shares (cost $95,351,347) ........................................ 109,331,422
SEI Index Funds - S&P 500 Index Portfolio (SEI500Ix)
400,264 shares (cost $10,017,937) .......................................... 11,279,438
Seligman Growth Fund, Inc. - Class A (SelGroFd)
424,772 shares (cost $2,238,371) ........................................... 2,799,245
Strong Common Stock Fund, Inc. (StComStk)
289,790 shares (cost $5,920,436) ........................................... 6,578,230
</TABLE>
9
<PAGE> 62
<TABLE>
<S> <C>
T. Rowe Price International Funds, Inc. - International Stock Fund(R)(TRIntStk)
2,437,297 shares (cost $32,233,305) ........................................ 37,631,858
Templeton Foreign Fund - Class I (TemForFd)
7,578,855 shares (cost $73,624,514) ........................................ 87,308,411
Templeton Global Smaller Companies Fund, Inc. - Class I (TemGlSmCo)
107,916 shares (cost $905,532) ............................................. 1,004,696
American Century VP - American Century VP Balanced (ACVPBal)
711 shares (cost $5,059) ................................................... 5,511
American Century VP - American Century VP Capital Appreciation (ACVPCapAp)
9,803 shares (cost $100,749) ............................................... 94,693
The Dreyfus Socially Responsible Growth Fund, Inc. (DrySRGro)
182 shares (cost $3,869) ................................................... 4,262
Dreyfus Stock Index Fund (DryStkIx)
1,557 shares (cost $29,161) ................................................ 37,737
Variable Insurance Products Fund II - Asset Manager Portfolio (FidVIPAM)
1,847 shares (cost $28,081) ................................................ 30,654
Variable Insurance Products Fund - Equity-Income Portfolio (FidVIPEI)
6,036 shares (cost $115,426) ............................................... 133,162
Variable Insurance Products Fund - Growth Portfolio (FidVIPGr)
3,175 shares (cost $89,673) ................................................ 108,595
Variable Insurance Products Fund - High Income Portfolio (FidVIPHI)
2,787 shares (cost $33,220) ................................................ 34,637
Variable Insurance Products - Overseas Portfolio (FidVIPOv)
7,025 shares (cost $119,953) ............................................... 140,771
Nationwide SAT - Government Bond Fund (NSATGvtBd)
1,110 shares (cost $12,239) ................................................ 12,206
Nationwide SAT - Money Market Fund (NSATMyMkt)
18,712 shares (cost $18,712) ............................................... 18,712
Nationwide SAT - Total Return Fund (NSATTotRe)
3,978 shares (cost $47,609) ................................................ 62,500
Neuberger & Berman AMT - Growth Portfolio (NBAMTGro)
826 shares (cost $20,992) .................................................. 22,906
Neuberger & Berman AMT - Limited Maturity Bond Portfolio (NBAMTLMat)
681 shares (cost $9,426) ................................................... 9,281
Neuberger & Berman AMT - Partners Portfolio (NBAMTPart)
1,096 shares (cost $14,132) ................................................ 19,907
-------------
Total investments ....................................................... 1,764,378,909
Accounts receivable .............................................................. 41,289
-------------
Total assets ............................................................ 1,764,420,198
ACCOUNTS PAYABLE .................................................................... 242,596
-------------
CONTRACT OWNERS' EQUITY (NOTE 3) .................................................... $1,764,177,602
==============
See accompanying notes to financial statements.
=======================================================================================================
</TABLE>
10
<PAGE> 63
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
NATIONWIDE DC VARIABLE ACCOUNT
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
Total AIMCon
----------------------------------- -----------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... $ 7,706,347 6,827,601 -- --
Mortality and expense charges .................. (3,898,039) (3,295,695) (41,021) (19,831)
Administration charge - Tier I ................. (1,968,784) (2,966,124) (29,501) (17,848)
Administration charge - Tier II ................ (524,183) -- -- --
Administration charge - Tier III ............... (168,929) -- -- --
Administration charge - Tier IV ................ (65,257) -- -- --
Administration charge - Tier V ................. (183,171) -- (2,473) --
--------------- --------------- --------------- ---------------
Net investment activity ...................... 897,984 565,782 (72,995) (37,679)
Proceeds from mutual fund shares sold .......... 127,538,887 107,755,110 5,097,633 285,029
Cost of mutual fund shares sold ................ (112,268,086) (94,486,876) (4,299,436) (203,697)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments ............ 15,270,801 13,268,234 798,197 81,332
Unrealized gain (loss) on investments .......... 184,132,014 43,292,920 415,452 709,746
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 199,402,815 56,561,154 1,213,649 791,078
Reinvested capital gains ....................... 8,663,127 33,344,947 -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 208,963,926 90,471,883 1,140,654 753,399
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 217,822,618 204,939,637 3,503,156 4,745,421
Redemptions .................................... (88,285,940) (87,140,587) (3,016,246) (755,885)
Annual contract maintenance charge (note 2) .... (1,931) (65,069) -- --
Contingent deferred sales charges .............. (10,104) (3,142) (372) (110)
Adjustments to maintain reserves ............... (100,249) (12,819) 845 528
--------------- --------------- --------------- ---------------
Net equity transactions .................... 129,424,394 117,718,020 487,383 3,989,954
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 338,388,320 208,189,903 1,628,037 4,743,353
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 1,425,789,282 1,226,462,053 15,557,461 5,708,596
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 1,764,177,602 1,434,651,956 17,185,498 10,451,949
=============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
AIMWein ACTCGro
----------------------------------- -----------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... -- -- -- --
Mortality and expense charges .................. (5,307) (4,299) (293,167) (367,299)
Administration charge - Tier I ................. (4,776) (3,869) (125,063) (330,569)
Administration charge - Tier II ................ -- -- (43,110) --
Administration charge - Tier III ............... -- -- (12,060) --
Administration charge - Tier IV ................ -- -- (3,460) --
Administration charge - Tier V ................. -- -- (21,471) --
--------------- --------------- --------------- ---------------
Net investment activity ...................... (10,083) (8,168) (498,331) (697,868)
Proceeds from mutual fund shares sold .......... 463,435 215,173 11,271,665 13,405,531
Cost of mutual fund shares sold ................ (404,516) (184,615) (11,860,026) (13,301,096)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments ............ 58,919 30,558 (588,361) 104,435
Unrealized gain (loss) on investments .......... 224,345 111,839 19,673,323 10,369,749
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 283,264 142,397 19,084,962 10,474,184
Reinvested capital gains ....................... -- -- -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 273,181 134,229 18,586,631 9,776,316
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 65,359 257,762 (312,767) (1,723,396)
Redemptions .................................... (308,173) (102,439) (6,954,783) (8,733,539)
Annual contract maintenance charge (note 2) .... -- -- (4) (14,754)
Contingent deferred sales charges .............. -- -- (367) (319)
Adjustments to maintain reserves ............... (358) 123 1,040 3,467
--------------- --------------- --------------- ---------------
Net equity transactions .................... (243,172) 155,446 (7,266,881) (10,468,541)
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 30,009 289,675 11,319,750 (692,225)
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 2,116,847 1,524,549 113,853,751 149,542,262
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ 2,146,856 1,814,224 125,173,501 148,850,037
=============== =============== =============== ===============
</TABLE>
11
<PAGE> 64
<TABLE>
<CAPTION>
NATIONWIDE DC VARIABLE ACCOUNT
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
ACTCSel ACTCUltra
----------------------------------- -----------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... $ -- -- -- --
Mortality and expense charges .................. (4,251) (3,563) (671,863) (527,692)
Administration charge - Tier I ................. (122) (3,207) (347,296) (474,923)
Administration charge - Tier II ................ -- -- (89,384) --
Administration charge - Tier III ............... -- -- (35,427) --
Administration charge - Tier IV ................ (1,646) -- (9,233) --
Administration charge - Tier V ................. -- -- (27,636) --
--------------- --------------- --------------- ---------------
Net investment activity ...................... (6,019) (6,770) (1,180,839) (1,002,615)
Proceeds from mutual fund shares sold .......... 85,295 504,907 18,487,083 14,409,156
Cost of mutual fund shares sold ................ (68,626) (449,443) (12,966,126) (10,067,133)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments ............ 16,669 55,464 5,520,957 4,342,023
Unrealized gain (loss) on investments .......... 315,852 54,521 36,383,589 13,663,354
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 332,521 109,985 41,904,546 18,005,377
Reinvested capital gains ....................... -- -- -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 326,502 103,215 40,723,707 17,002,762
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 99,406 (258,987) 26,777,345 43,900,102
Redemptions .................................... (53,315) (170,755) (13,005,968) (17,205,535)
Annual contract maintenance charge (note 2) .... -- -- (24) (36)
Contingent deferred sales charges .............. -- -- (1,129) (1,039)
Adjustments to maintain reserves ............... 1 (932) (27,467) 24,674
--------------- --------------- --------------- ---------------
Net equity transactions .................... 46,092 (430,674) 13,742,757 26,718,166
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 372,594 (327,459) 54,466,464 43,720,928
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 1,558,172 1,670,130 245,403,535 192,990,914
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 1,930,766 1,342,671 299,869,999 236,711,842
=============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
BdFdAm DNYVenFd
--------------------------------- -----------------------------
1997 1996 1997 1996
--------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... 411,668 540,089 - -
Mortality and expense charges .................. (28,890) (37,489) (8,525) (7,821)
Administration charge - Tier I ................. (16,468) (33,740) (7,105) (7,039)
Administration charge - Tier II ................ (4,607) - (505) -
Administration charge - Tier III ............... (1,078) - - -
Administration charge - Tier IV ................ (92) - - -
Administration charge - Tier V ................. (842) - - -
------------- ------------- ------------- -------------
Net investment activity ...................... 359,691 468,860 (16,135) (14,860)
Proceeds from mutual fund shares sold .......... 2,797,351 2,208,734 1,030,002 242,021
Cost of mutual fund shares sold ................ (2,615,750) (2,415,276) (878,348) (186,607)
------------- ------------- ------------- -------------
Realized gain (loss) on investments ............ 181,601 (206,542) 151,654 55,414
Unrealized gain (loss) on investments .......... (131,209) (245,008) 394,157 179,081
------------- ------------- ------------- -------------
Net gain (loss) on investments ............... 50,392 (451,550) 545,811 234,495
Reinvested capital gains ....................... - - - -
------------- ------------- ------------- -------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 410,083 17,310 529,676 219,635
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 371,695 1,385,999 3,206,481 1,495,231
Redemptions .................................... (848,693) (1,133,659) (1,321,499) (289,689)
Annual contract maintenance charge (note 2) .... (8) (1,927) - -
Contingent deferred sales charges .............. - - - -
Adjustments to maintain reserves ............... (180) 210 105 277
------------- ------------- ------------- -------------
Net equity transactions .................... (477,186) 250,623 1,885,087 1,205,819
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (67,103) 267,933 2,414,763 1,425,454
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 11,554,576 15,164,171 2,215,046 2,383,414
------------- ------------- ------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ 11,487,473 15,432,104 4,629,809 3,808,868
============= ============= ============= =============
</TABLE>
12
<PAGE> 65
<TABLE>
<CAPTION>
NATIONWIDE DC VARIABLE ACCOUNT
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
DeDecInc DryCsMgt
----------------------------------- -----------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... $ 3,796 4,001 28,154 69,397
Mortality and expense charges .................. (586) (521) (2,648) (6,550)
Administration charge - Tier I ................. (417) (469) (1,557) (5,895)
Administration charge - Tier II ................ (70) -- (734) --
Administration charge - Tier III ............... (21) -- -- --
Administration charge - Tier IV ................ -- -- -- --
Administration charge - Tier V ................. -- -- -- --
--------------- --------------- --------------- ---------------
Net investment activity ...................... 2,702 3,011 23,215 56,952
Proceeds from mutual fund shares sold .......... 18,915 768 3,463,566 1,693,927
Cost of mutual fund shares sold ................ (16,977) (744) (3,463,566) (1,693,927)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments ............ 1,938 24 -- --
Unrealized gain (loss) on investments .......... 30,950 9,754 -- --
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 32,888 9,778 -- --
Reinvested capital gains ....................... -- -- -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 35,590 12,789 23,215 56,952
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 13,946 15,615 193,830 (255,029)
Redemptions .................................... (19,529) (128) (136,585) (77,998)
Annual contract maintenance charge (note 2) .... -- (4) -- --
Contingent deferred sales charges .............. -- -- -- --
Adjustments to maintain reserves ............... (6) (84) 196 (65)
--------------- --------------- --------------- ---------------
Net equity transactions .................... (5,589) 15,399 57,441 (333,092)
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 30,001 28,188 80,656 (276,140)
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 223,128 192,253 1,154,439 2,844,535
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 253,129 220,441 1,235,095 2,568,395
=============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
Dry500Ix Dry3dCen
----------------------------------- -----------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... -- -- -- --
Mortality and expense charges .................. (1,421) -- (61,256) (39,473)
Administration charge - Tier I ................. (509) -- (27,368) (35,525)
Administration charge - Tier II ................ (341) -- (7,207) --
Administration charge - Tier III ............... (206) -- (3,408) --
Administration charge - Tier IV ................ (34) -- (993) --
Administration charge - Tier V ................. -- -- (4,103) --
--------------- --------------- --------------- ---------------
Net investment activity ...................... (2,511) -- (104,335) (74,998)
Proceeds from mutual fund shares sold .......... 554,133 -- 1,666,438 1,370,018
Cost of mutual fund shares sold ................ (534,142) -- (1,533,857) (1,217,403)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments ............ 19,991 -- 132,581 152,615
Unrealized gain (loss) on investments .......... 90,935 -- 3,766,256 1,399,924
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 110,926 -- 3,898,837 1,552,539
Reinvested capital gains ....................... -- -- -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 108,415 -- 3,794,502 1,477,541
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 3,248,776 -- 6,535,242 2,087,447
Redemptions .................................... (3,344) -- (1,456,877) (877,389)
Annual contract maintenance charge (note 2) .... -- -- -- --
Contingent deferred sales charges .............. -- -- -- --
Adjustments to maintain reserves ............... (606) -- (1,945) 703
--------------- --------------- --------------- ---------------
Net equity transactions .................... 3,244,826 -- 5,076,420 1,210,761
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 3,353,241 -- 8,870,922 2,688,302
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... -- -- 19,942,835 14,552,502
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ 3,353,241 -- 28,813,757 17,240,804
=============== =============== =============== ===============
</TABLE>
13
<PAGE> 66
<TABLE>
<CAPTION>
NATIONWIDE DC VARIABLE ACCOUNT
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
EvincGro FedGNMA
----------------------------------- -----------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... $ 102,820 78,179 22,306 21,149
Mortality and expense charges .................. (10,466) (13,320) (1,660) (1,590)
Administration charge - Tier I ................. (4,544) (11,988) (1,494) (1,431)
Administration charge - Tier II ................ (1,985) -- -- --
Administration charge - Tier III ............... (283) -- -- --
Administration charge - Tier IV ................ (51) -- -- --
Administration charge - Tier V ................. (701) -- -- --
--------------- --------------- --------------- ---------------
Net investment activity ...................... 84,790 52,871 19,152 18,128
Proceeds from mutual fund shares sold .......... 507,480 935,480 143,957 106,246
Cost of mutual fund shares sold ................ (479,285) (939,158) (138,566) (111,147)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments ............ 28,195 (3,678) 5,391 (4,901)
Unrealized gain (loss) on investments .......... 292,883 154,319 (5,638) (17,680)
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 321,078 150,641 (247) (22,581)
Reinvested capital gains ....................... -- -- -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 405,868 203,512 18,905 (4,453)
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... (208,503) (160,729) 56,621 84,475
Redemptions .................................... (193,293) (457,042) (135,281) (59,093)
Annual contract maintenance charge (note 2) .... -- -- -- --
Contingent deferred sales charges .............. -- -- -- (11)
Adjustments to maintain reserves ............... 21 63,157 (26) (17)
--------------- --------------- --------------- ---------------
Net equity transactions .................... (401,775) (554,614) (78,686) 25,354
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 4,093 (351,102) (59,781) 20,901
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 4,320,926 5,673,695 709,278 632,297
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 4,325,019 5,322,593 649,497 653,198
=============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
FedUSGvt FidAsMgr
----------------------------------- -----------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... 59,974 53,411 89,019 98,947
Mortality and expense charges .................. (5,339) (4,943) (13,402) (16,417)
Administration charge - Tier I ................. (3,212) (4,449) (7,871) (14,776)
Administration charge - Tier II ................ (930) -- (1,796) --
Administration charge - Tier III ............... (174) -- (525) --
Administration charge - Tier IV ................ (127) -- (614) --
Administration charge - Tier V ................. -- -- -- --
---------------- --------------- --------------- ---------------
Net investment activity ...................... 50,192 44,019 64,811 67,754
Proceeds from mutual fund shares sold .......... 701,802 885,484 414,467 869,683
Cost of mutual fund shares sold ................ (718,525) (854,486) (341,759) (791,338)
---------------- --------------- --------------- ---------------
Realized gain (loss) on investments ............ (16,723) 30,998 72,708 78,345
Unrealized gain (loss) on investments .......... 8,798 (91,883) 425,941 93,768
---------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... (7,925) (60,885) 498,649 172,113
Reinvested capital gains ....................... -- -- -- --
---------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 42,267 (16,866) 563,460 239,867
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 375,795 11,976 756,608 690,049
Redemptions .................................... (237,142) (161,564) (276,622) (620,983)
Annual contract maintenance charge (note 2) .... -- -- -- --
Contingent deferred sales charges .............. -- -- -- --
Adjustments to maintain reserves ............... (60) (125) (14) (16)
---------------- --------------- --------------- ---------------
Net equity transactions .................... 138,593 (149,713) 479,972 69,050
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 180,860 (166,579) 1,043,432 308,917
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 2,021,665 2,094,259 5,023,827 6,549,948
---------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ 2,202,525 1,927,680 6,067,259 6,858,865
================ =============== =============== ===============
</TABLE>
14
<PAGE> 67
<TABLE>
<CAPTION>
NATIONWIDE DC VARIABLE ACCOUNT
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
FidCapInc FidContr
----------------------------------- -----------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... $ 54,062 77,536 -- --
Mortality and expense charges .................. (3,376) (3,442) (476,998) (307,464)
Administration charge - Tier I ................. (1,136) (3,098) (282,862) (276,718)
Administration charge - Tier II ................ (313) -- (68,027) --
Administration charge - Tier III ............... (408) -- (25,686) --
Administration charge - Tier IV ................ (81) -- (8,532) --
Administration charge - Tier V ................. (252) -- (4,060) --
--------------- --------------- --------------- ---------------
Net investment activity ...................... 48,496 70,996 (866,165) (584,182)
Proceeds from mutual fund shares sold .......... 105,044 436,756 2,726,923 3,744,741
Cost of mutual fund shares sold ................ (77,996) (315,994) (2,063,676) (3,168,662)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments ............ 27,048 120,762 663,247 576,079
Unrealized gain (loss) on investments .......... (3,894) (135,741) 17,520,586 4,138,806
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 23,154 (14,979) 18,183,833 4,714,885
Reinvested capital gains ....................... -- -- 3,018,084 5,684,369
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 71,650 56,017 20,335,752 9,815,072
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... (11,896) (26,998) 38,392,212 33,116,346
Redemptions .................................... (85,358) (403,156) (8,383,935) (6,865,907)
Annual contract maintenance charge (note 2) .... -- -- -- --
Contingent deferred sales charges .............. -- -- -- --
Adjustments to maintain reserves ............... (33) (158) (13,704) (68,443)
--------------- --------------- --------------- ---------------
Net equity transactions .................... (97,287) (430,312) 29,994,573 26,181,996
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (25,637) (374,295) 50,330,325 35,997,068
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 1,367,071 1,720,157 168,983,800 106,734,045
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 1,341,434 1,345,862 219,314,125 142,731,113
=============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
FidEqInc FidGrInc
----------------------------------- -----------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... 2,519,112 2,194,879 95,150 41,378
Mortality and expense charges .................. (539,511) (427,596) (33,379) (13,966)
Administration charge - Tier I ................. (242,600) (384,833) (21,079) (12,570)
Administration charge - Tier II ................ (80,749) -- -- --
Administration charge - Tier III ............... (24,514) -- -- --
Administration charge - Tier IV ................ (11,985) -- -- --
Administration charge - Tier V ................. (29,459) -- (2,987) --
--------------- --------------- --------------- ---------------
Net investment activity ...................... 1,590,294 1,382,450 37,705 14,842
Proceeds from mutual fund shares sold .......... 4,974,081 6,614,979 2,277,778 2,930,551
Cost of mutual fund shares sold ................ (2,826,840) (4,112,116) (1,641,610) (2,393,972)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments ............ 2,147,241 2,502,863 636,168 536,579
Unrealized gain (loss) on investments .......... 28,377,028 7,475,688 1,485,966 (110,272)
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 30,524,269 9,978,551 2,122,134 426,307
Reinvested capital gains ....................... 2,314,658 2,203,152 -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 34,429,221 13,564,153 2,159,839 441,149
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 30,451,360 23,330,338 6,131,220 2,118,079
Redemptions .................................... (10,172,818) (11,049,206) (2,671,546) (3,047,544)
Annual contract maintenance charge (note 2) .... -- (10,436) -- --
Contingent deferred sales charges .............. (797) (92) -- --
Adjustments to maintain reserves ............... 768 2,132 928 275
--------------- --------------- --------------- ---------------
Net equity transactions .................... 20,278,513 12,272,736 3,460,602 (929,190)
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 54,707,734 25,836,889 5,620,441 (488,041)
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 193,502,053 158,961,606 10,558,554 6,996,905
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ 248,209,787 184,798,495 16,178,995 6,508,864
=============== =============== =============== ===============
</TABLE>
15
<PAGE> 68
<TABLE>
<CAPTION>
NATIONWIDE DC VARIABLE ACCOUNT
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
FidMgin FidOTC
----------------------------------- -----------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... $ 1,635,701 986,540 -- --
Mortality and expense charges .................. (463,415) (421,016) -- --
Administration charge - Tier I ................. (251,040) (378,914) -- --
Administration charge - Tier II ................ (47,809) -- -- --
Administration charge - Tier III ............... (17,711) -- -- --
Administration charge - Tier IV ................ (6,799) -- -- --
Administration charge - Tier V ................. (23,461) -- -- --
--------------- --------------- --------------- ---------------
Net investment activity ...................... 825,466 186,610 -- --
Proceeds from mutual fund shares sold .......... 6,429,730 7,473,653 -- 78,420
Cost of mutual fund shares sold ................ (5,803,273) (6,196,391) -- (80,480)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments ............ 626,457 1,277,262 -- (2,060)
Unrealized gain (loss) on investments .......... 22,580,629 (22,944,955) -- 2,064
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 23,207,086 (21,667,693) -- 4
Reinvested capital gains ....................... 3,184,164 25,354,072 -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 27,216,716 3,872,989 -- 4
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 9,659,880 19,351,529 -- --
Redemptions .................................... (7,275,908) (8,000,483) -- (78,420)
Annual contract maintenance charge (note 2) .... -- -- -- --
Contingent deferred sales charges .............. (1,160) (553) -- --
Adjustments to maintain reserves ............... (998) 4,574 -- (4)
--------------- --------------- --------------- ---------------
Net equity transactions .................... 2,381,814 11,355,067 -- (78,424)
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 29,598,530 15,228,056 -- (78,420)
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 177,046,208 159,187,313 -- 78,420
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 206,644,738 174,415,369 -- --
=============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
GroFdAm IncFdAm
----------------------------------- -----------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... -- -- 383,103 431,801
Mortality and expense charges .................. (25,670) (43,193) (40,337) (42,892)
Administration charge - Tier I ................. (15,257) (38,874) (26,398) (38,602)
Administration charge - Tier II ................ (3,494) -- (5,668) --
Administration charge - Tier III ............... (1,928) -- (1,486) --
Administration charge - Tier IV ................ (455) -- (578) --
Administration charge - Tier V ................. -- -- -- --
--------------- --------------- --------------- ---------------
Net investment activity ...................... (46,804) (82,067) 308,636 350,307
Proceeds from mutual fund shares sold .......... 1,043,143 910,382 953,714 1,070,396
Cost of mutual fund shares sold ................ (844,290) (645,755) (818,928) (949,582)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments ............ 198,853 264,627 134,786 120,814
Unrealized gain (loss) on investments .......... 1,012,483 625,675 1,029,925 221,067
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 1,211,336 890,302 1,164,711 341,881
Reinvested capital gains ....................... -- -- -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 1,164,532 808,235 1,473,347 692,188
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 744,068 2,515,115 1,681,856 1,980,021
Redemptions .................................... (596,949) (950,615) (969,906) (781,540)
Annual contract maintenance charge (note 2) .... -- (3,889) -- --
Contingent deferred sales charges .............. -- -- -- --
Adjustments to maintain reserves ............... (247) -- 240 96
--------------- --------------- --------------- ---------------
Net equity transactions .................... 146,872 1,560,611 712,190 1,198,577
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 1,311,404 2,368,846 2,185,537 1,890,765
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 9,779,679 15,895,616 15,220,788 16,369,347
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ 11,091,083 18,264,462 17,406,325 18,260,112
=============== =============== =============== ===============
</TABLE>
16
<PAGE> 69
<TABLE>
<CAPTION>
NATIONWIDE DC VARIABLE ACCOUNT
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
InvIndInc JanFund
----------------------------------- -----------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... $ 227,902 283,064 -- --
Mortality and expense charges .................. (45,491) (42,503) (112,318) (57,673)
Administration charge - Tier I ................. (30,421) (38,253) (65,995) (51,905)
Administration charge - Tier II ................ (6,776) -- (17,702) --
Administration charge - Tier III ............... (896) -- (5,221) --
Administration charge - Tier IV ................ (691) -- (3,264) --
Administration charge - Tier V ................. -- -- -- --
--------------- --------------- --------------- ---------------
Net investment activity ...................... 143,627 202,308 (204,500) (109,578)
Proceeds from mutual fund shares sold .......... 334,674 556,121 963,253 765,463
Cost of mutual fund shares sold ................ (270,121) (501,286) (736,224) (663,768)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments ............ 64,553 54,835 227,029 101,695
Unrealized gain (loss) on investments .......... 2,324,848 545,060 5,389,127 2,009,353
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 2,389,401 599,895 5,616,156 2,111,048
Reinvested capital gains ....................... -- -- -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 2,533,028 802,203 5,411,656 2,001,470
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 2,566,634 3,043,241 12,615,917 8,900,233
Redemptions .................................... (601,858) (747,914) (2,566,045) (1,247,350)
Annual contract maintenance charge (note 2) .... -- (1,902) -- --
Contingent deferred sales charges .............. -- -- -- --
Adjustments to maintain reserves ............... 63 (187) 657 166
--------------- --------------- --------------- ---------------
Net equity transactions .................... 1,964,839 2,293,238 10,050,529 7,653,049
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 4,497,867 3,095,441 15,462,185 9,654,519
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 16,322,252 15,437,671 37,346,871 18,299,936
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 20,820,119 18,533,112 52,809,056 27,954,455
=============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
Jan20Fd MASFIP
----------------------------------- -----------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... -- -- 27,516 9,386
Mortality and expense charges .................. (639) (151) (4,052) (1,549)
Administration charge - Tier I ................. (575) (136) (2,420) (1,395)
Administration charge - Tier II ................ -- -- (534) --
Administration charge - Tier III ............... -- -- (291) --
Administration charge - Tier IV ................ -- -- (84) --
Administration charge - Tier V ................. -- -- -- --
--------------- --------------- --------------- ---------------
Net investment activity ...................... (1,214) (287) 20,135 6,442
Proceeds from mutual fund shares sold .......... 571,046 19,853 501,360 197,618
Cost of mutual fund shares sold ................ (609,105) (17,692) (496,768) (195,863)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments ............ (38,059) 2,161 4,592 1,755
Unrealized gain (loss) on investments .......... 35,516 4,329 30,737 (5,559)
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... (2,543) 6,490 35,329 (3,804)
Reinvested capital gains ....................... -- -- -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... (3,757) 6,203 55,464 2,638
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 323,352 38,128 802,531 449,061
Redemptions .................................... (569,390) -- (168,950) (93,646)
Annual contract maintenance charge (note 2) .... -- -- -- --
Contingent deferred sales charges .............. -- -- -- --
Adjustments to maintain reserves ............... 2 -- 1,655 (154)
--------------- --------------- --------------- ---------------
Net equity transactions .................... (246,036) 38,128 635,236 355,261
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (249,793) 44,331 690,700 357,899
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 249,793 42,018 1,262,922 423,957
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ -- 86,349 1,953,622 781,856
=============== =============== =============== ===============
</TABLE>
17
<PAGE> 70
<TABLE>
<CAPTION>
NATIONWIDE DC VARIABLE ACCOUNT
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
MFSGrOpp MFSHiInc
----------------------------------- -----------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... $ -- -- 156,868 163,666
Mortality and expense charges .................. (63,398) (58,053) (8,935) (9,435)
Administration charge - Tier I ................. (11,725) (52,247) (1,470) (8,491)
Administration charge - Tier II ................ (5,363) -- (310) --
Administration charge - Tier III ............... (2,560) -- (204) --
Administration charge - Tier IV ................ (54) -- (1) --
Administration charge - Tier V ................. (11,780) -- (1,971) --
--------------- --------------- --------------- ---------------
Net investment activity ...................... (94,880) (110,300) 143,977 145,740
Proceeds from mutual fund shares sold .......... 3,308,423 2,426,270 1,171,543 861,623
Cost of mutual fund shares sold ................ (2,631,119) (2,213,013) (1,168,385) (827,910)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments ............ 677,304 213,257 3,158 33,713
Unrealized gain (loss) on investments .......... 2,849,698 2,567,339 33,993 (47,402)
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 3,527,002 2,780,596 37,151 (13,689)
Reinvested capital gains ....................... -- -- -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 3,432,122 2,670,296 181,128 132,051
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 48,059 211,822 124,836 (43,659)
Redemptions .................................... (2,553,849) (2,000,535) (563,601) (314,539)
Annual contract maintenance charge (note 2) .... -- (26) -- --
Contingent deferred sales charges .............. -- -- -- --
Adjustments to maintain reserves ............... (21,857) (33,495) 52 (121)
--------------- --------------- --------------- ---------------
Net equity transactions .................... (2,527,647) (1,822,234) (438,713) (358,319)
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 904,475 848,062 (257,585) (226,268)
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 25,459,101 23,386,771 3,747,401 3,993,277
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 26,363,576 24,234,833 3,489,816 3,767,009
=============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
MFSGrStk NWBdFd
----------------------------------- -----------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... -- -- 4,574 5,829
Mortality and expense charges .................. (13,327) (13,100) (348) (439)
Administration charge - Tier I ................. (3,971) (11,790) (76) (395)
Administration charge - Tier II ................ (413) -- -- --
Administration charge - Tier III ............... (219) -- -- --
Administration charge - Tier IV ................ (3) -- -- --
Administration charge - Tier V ................. (2,408) -- (79) --
---------------- --------------- --------------- ---------------
Net investment activity ...................... (20,341) (24,890) 4,071 4,995
Proceeds from mutual fund shares sold .......... 392,201 375,105 48,235 81,601
Cost of mutual fund shares sold ................ (433,770) (374,711) (51,364) (78,653)
---------------- --------------- --------------- ---------------
Realized gain (loss) on investments ............ (41,569) 394 (3,129) 2,948
Unrealized gain (loss) on investments .......... 1,301,165 654,894 1,021 (14,576)
---------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 1,259,596 655,288 (2,108) (11,628)
Reinvested capital gains ....................... -- -- -- --
---------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 1,239,255 630,398 1,963 (6,633)
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 48,977 295,852 5,983 50,656
Redemptions .................................... (286,788) (243,274) (43,333) (34,045)
Annual contract maintenance charge (note 2) .... (309) (337) -- --
Contingent deferred sales charges .............. (457) -- -- --
Adjustments to maintain reserves ............... (76) (497) (12) (24)
---------------- --------------- --------------- ---------------
Net equity transactions .................... (238,653) 51,744 (37,362) 16,587
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 1,000,602 682,142 (35,399) 9,954
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 5,014,974 4,930,751 159,754 183,192
---------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ 6,015,576 5,612,893 124,355 193,146
================ =============== =============== ===============
</TABLE>
18
<PAGE> 71
<TABLE>
<CAPTION>
NATIONWIDE DC VARIABLE ACCOUNT
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
NWFund NWGroFd
----------------------------------- -----------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... $ 308,964 308,134 39,535 54,628
Mortality and expense charges .................. (104,218) (90,842) (19,771) (24,391)
Administration charge - Tier I ................. (49,489) (81,758) (8,006) (21,952)
Administration charge - Tier II ................ (14,261) -- (2,569) --
Administration charge - Tier III ............... (5,768) -- (575) --
Administration charge - Tier IV ................ (1,274) -- (943) --
Administration charge - Tier V ................. (5,582) -- (1,305) --
--------------- --------------- --------------- ---------------
Net investment activity ...................... 128,372 135,534 6,366 8,285
Proceeds from mutual fund shares sold .......... 2,198,366 7,002,390 564,487 1,944,032
Cost of mutual fund shares sold ................ (1,632,961) (5,705,245) (430,683) (1,474,599)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments ............ 565,405 1,297,145 133,804 469,433
Unrealized gain (loss) on investments .......... 8,197,017 1,887,561 1,208,644 182,478
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 8,762,422 3,184,706 1,342,448 651,911
Reinvested capital gains ....................... -- -- -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 8,890,794 3,320,240 1,348,814 660,196
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 11,434,240 (1,148,235) 295,092 (240,693)
Redemptions .................................... (2,492,931) (3,485,846) (297,558) (1,183,647)
Annual contract maintenance charge (note 2) .... (694) (2,998) -- (951)
Contingent deferred sales charges .............. (759) (996) -- --
Adjustments to maintain reserves ............... (22,088) (2,580) (72) (357)
--------------- --------------- --------------- ---------------
Net equity transactions .................... 8,917,768 (4,640,655) (2,538) (1,425,648)
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 17,808,562 (1,320,415) 1,346,276 (765,452)
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 34,591,092 35,420,631 7,532,918 9,784,013
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 52,399,654 34,100,216 8,879,194 9,018,561
=============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
NWMyMkt NBGuard
----------------------------------- -----------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... 1,478,230 1,362,329 1,334 --
Mortality and expense charges .................. (149,678) (140,423) (1,077) --
Administration charge - Tier I ................. (48,809) (126,381) -- --
Administration charge - Tier II ................ (40,450) -- -- --
Administration charge - Tier III ............... (4,374) -- -- --
Administration charge - Tier IV ................ (3,536) -- -- --
Administration charge - Tier V ................. (8,626) -- (323) --
--------------- --------------- --------------- ---------------
Net investment activity ...................... 1,222,757 1,095,525 (66) --
Proceeds from mutual fund shares sold .......... 34,314,179 22,428,811 210,004 --
Cost of mutual fund shares sold ................ (34,314,179) (22,428,811) (197,049) --
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments ............ -- -- 12,955 --
Unrealized gain (loss) on investments .......... -- -- 30,269 --
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... -- -- 43,224 --
Reinvested capital gains ....................... -- -- -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 1,222,757 1,095,525 43,158 --
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 8,504,848 5,696,135 499,509 --
Redemptions .................................... (3,563,577) (5,056,930) (52,205) --
Annual contract maintenance charge (note 2) .... (15) (3,564) -- --
Contingent deferred sales charges .............. (2,217) -- -- --
Adjustments to maintain reserves ............... 980 (404) (14) --
--------------- --------------- --------------- ---------------
Net equity transactions .................... 4,940,019 635,237 447,290 --
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 6,162,776 1,730,762 490,448 --
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 58,928,944 56,462,070 149,252 --
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ 65,091,720 58,192,832 639,700 --
=============== =============== =============== ===============
</TABLE>
19
<PAGE> 72
<TABLE>
<CAPTION>
NATIONWIDE DC VARIABLE ACCOUNT
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
NBManhFd NBPartFd
----------------------------------- -----------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... $ -- -- -- --
Mortality and expense charges .................. (506) (1,028) (749) --
Administration charge - Tier I ................. (455) (925) (674) --
Administration charge - Tier II ................ -- -- -- --
Administration charge - Tier III ............... -- -- -- --
Administration charge - Tier IV ................ -- -- -- --
Administration charge - Tier V ................. -- -- -- --
--------------- --------------- --------------- ---------------
Net investment activity ...................... (961) (1,953) (1,423) --
Proceeds from mutual fund shares sold .......... 221,879 528,276 87,348 --
Cost of mutual fund shares sold ................ (232,008) (461,849) (77,745) --
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments ............ (10,129) 66,427 9,603 --
Unrealized gain (loss) on investments .......... 35,360 (44,180) 64,671 --
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 25,231 22,247 74,274 --
Reinvested capital gains ....................... -- -- -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 24,270 20,294 72,851 --
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... (43,085) 12,514 1,214,154 --
Redemptions .................................... (168,826) (511,172) (97,619) --
Annual contract maintenance charge (note 2) .... -- -- -- --
Contingent deferred sales charges .............. -- -- -- --
Adjustments to maintain reserves ............... (10) 10 (54) --
--------------- --------------- --------------- ---------------
Net equity transactions .................... (211,921) (498,648) 1,116,481 --
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (187,651) (478,354) 1,189,332 --
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 294,879 892,110 -- --
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 107,228 413,756 1,189,332 --
=============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
PutInvFd PutVoyFd
----------------------------------- -----------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... -- -- -- --
Mortality and expense charges .................. (88,461) (101,768) (238,656) (177,617)
Administration charge - Tier I ................. (19,942) (91,591) (132,107) (159,855)
Administration charge - Tier II ................ (4,357) -- (36,668) --
Administration charge - Tier III ............... (1,077) -- (13,001) --
Administration charge - Tier IV ................ (69) -- (6,172) --
Administration charge - Tier V ................. (17,666) -- (2,681) --
--------------- --------------- --------------- ---------------
Net investment activity ...................... (131,572) (193,359) (429,285) (337,472)
Proceeds from mutual fund shares sold .......... 3,615,046 1,460,090 2,779,322 1,416,581
Cost of mutual fund shares sold ................ (3,104,274) (1,304,926) (1,999,201) (886,641)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments ............ 510,772 155,164 780,121 529,940
Unrealized gain (loss) on investments .......... 5,560,504 3,902,723 10,026,052 6,990,178
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 6,071,276 4,057,887 10,806,173 7,520,118
Reinvested capital gains ....................... -- -- -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 5,939,704 3,864,528 10,376,888 7,182,646
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 1,959,423 2,817,214 15,433,014 26,260,371
Redemptions .................................... (3,521,025) (1,737,240) (5,035,438) (2,903,689)
Annual contract maintenance charge (note 2) .... (616) (4,900) -- (12,021)
Contingent deferred sales charges .............. (2,787) (13) -- --
Adjustments to maintain reserves ............... (748) 185 (5,408) 1,252
--------------- --------------- --------------- ---------------
Net equity transactions .................... (1,565,753) 1,075,246 10,392,168 23,345,913
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 4,373,951 4,939,774 20,769,056 30,528,559
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 33,758,690 38,690,296 88,557,114 57,894,233
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ 38,132,641 43,630,070 109,326,170 88,422,792
=============== =============== =============== ===============
</TABLE>
20
<PAGE> 73
<TABLE>
<CAPTION>
NATIONWIDE DC VARIABLE ACCOUNT
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
SEI500Ix SelGroFd
----------------------------------- -----------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... $ 46,532 29,790 -- --
Mortality and expense charges .................. (18,256) (8,136) (6,655) (6,161)
Administration charge - Tier I ................. (4,941) (7,323) (2,485) (5,545)
Administration charge - Tier II ................ (294) -- (257) --
Administration charge - Tier III ............... -- -- (152) --
Administration charge - Tier IV ................ -- -- (8) --
Administration charge - Tier V ................. (3,720) -- (990) --
--------------- --------------- --------------- ---------------
Net investment activity ...................... 19,321 14,331 (10,547) (11,706)
Proceeds from mutual fund shares sold .......... 2,105,555 437,199 279,036 279,235
Cost of mutual fund shares sold ................ (1,740,147) (341,271) (264,669) (311,379)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments ............ 365,408 95,928 14,367 (32,144)
Unrealized gain (loss) on investments .......... 1,011,782 175,640 304,901 311,220
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 1,377,190 271,568 319,268 279,076
Reinvested capital gains ....................... -- -- -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 1,396,511 285,899 308,721 267,370
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 7,352,360 1,295,674 (733) 99,789
Redemptions .................................... (1,381,164) (307,261) (158,602) (226,745)
Annual contract maintenance charge (note 2) .... -- -- (217) (230)
Contingent deferred sales charges .............. -- -- -- --
Adjustments to maintain reserves ............... 483 (680) (37) (97)
--------------- --------------- --------------- ---------------
Net equity transactions .................... 5,971,679 987,733 (159,589) (127,283)
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 7,368,190 1,273,632 149,132 140,087
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 3,911,822 2,616,313 2,650,076 2,479,595
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 11,280,012 3,889,945 2,799,208 2,619,682
=============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
StComStk TRIntStk
----------------------------------- -----------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... 700 9,427 -- --
Mortality and expense charges .................. (13,110) (5,919) (82,701) (101,658)
Administration charge - Tier I ................. (11,799) (5,327) (34,881) (91,492)
Administration charge - Tier II ................ -- -- (7,584) --
Administration charge - Tier III ............... -- -- (2,753) --
Administration charge - Tier IV ................ -- -- (1,555) --
Administration charge - Tier V ................. -- -- (7,796) --
--------------- --------------- --------------- ---------------
Net investment activity ...................... (24,209) (1,819) (137,270) (193,150)
Proceeds from mutual fund shares sold .......... 189,774 52,331 5,688,837 4,099,823
Cost of mutual fund shares sold ................ (163,480) (45,235) (4,856,344) (3,968,458)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments ............ 26,294 7,096 832,493 131,365
Unrealized gain (loss) on investments .......... 613,728 53,416 3,076,052 3,600,819
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 640,022 60,512 3,908,545 3,732,184
Reinvested capital gains ....................... 121,492 81,282 -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 737,305 139,975 3,771,275 3,539,034
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 1,979,606 1,298,395 4,784,593 10,949,552
Redemptions .................................... (322,600) (96,750) (2,219,970) (3,386,527)
Annual contract maintenance charge (note 2) .... -- -- -- (7,058)
Contingent deferred sales charges .............. -- -- -- --
Adjustments to maintain reserves ............... 79 119 (11,728) (843)
--------------- --------------- --------------- ---------------
Net equity transactions .................... 1,657,085 1,201,764 2,552,895 7,555,124
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 2,394,390 1,341,739 6,324,170 11,094,158
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 4,183,923 1,780,584 31,295,943 35,370,483
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ 6,578,313 3,122,323 37,620,113 46,464,641
=============== =============== =============== ===============
</TABLE>
21
<PAGE> 74
<TABLE>
<CAPTION>
NATIONWIDE DC VARIABLE ACCOUNT
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
TemForFd TemGISmCo
----------------------------------- -----------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... $ -- -- -- --
Mortality and expense charges .................. (189,124) (141,721) (2,471) (1,666)
Administration charge - Tier I ................. (117,196) (127,549) (2,224) (1,500)
Administration charge - Tier II ................ (29,916) -- -- --
Administration charge - Tier III ............... (6,923) -- -- --
Administration charge - Tier IV ................ (2,923) -- -- --
Administration charge - Tier V ................. (799) -- -- --
--------------- --------------- --------------- ---------------
Net investment activity ...................... (346,881) (269,270) (4,695) (3,166)
Proceeds from mutual fund shares sold .......... 2,411,751 2,291,675 339,972 117,265
Cost of mutual fund shares sold ................ (2,104,544) (2,266,087) (329,821) (120,976)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments ............ 307,207 25,588 10,151 (3,711)
Unrealized gain (loss) on investments .......... 8,016,450 4,775,120 92,036 85,774
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 8,323,657 4,800,708 102,187 82,063
Reinvested capital gains ....................... -- -- -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 7,976,776 4,531,438 97,492 78,897
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 15,801,336 9,843,837 223,062 325,483
Redemptions .................................... (3,209,779) (1,613,636) (261,029) (111,716)
Annual contract maintenance charge (note 2) .... -- -- -- --
Contingent deferred sales charges .............. (59) (9) -- --
Adjustments to maintain reserves ............... (446) (649) (169) (4,865)
--------------- --------------- --------------- ---------------
Net equity transactions .................... 12,591,052 8,229,543 (38,136) 208,902
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 20,567,828 12,760,981 59,356 287,799
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 66,740,239 49,968,551 945,366 570,199
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 87,308,067 62,729,532 1,004,722 857,998
=============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
ACVPBal ACVPCapAp
----------------------------------- -----------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... 51 31 -- --
Mortality and expense charges .................. (12) (6) (212) (252)
Administration charge - Tier I ................. (10) (5) (191) (227)
Administration charge - Tier II ................ -- -- -- --
Administration charge - Tier III ............... -- -- -- --
Administration charge - Tier IV ................ -- -- -- --
Administration charge - Tier V ................. -- -- -- --
--------------- --------------- --------------- ---------------
Net investment activity ...................... 29 20 (403) (479)
Proceeds from mutual fund shares sold .......... -- -- 644 308
Cost of mutual fund shares sold ................ -- -- (608) (205)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments ............ -- -- 36 103
Unrealized gain (loss) on investments .......... 170 27 (4,463) (9,658)
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 170 27 (4,427) (9,555)
Reinvested capital gains ....................... 203 64 1,834 11,221
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 402 111 (2,996) 1,187
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 1,002 1,002 13,418 19,646
Redemptions .................................... -- -- (327) --
Annual contract maintenance charge (note 2) .... -- -- (12) (18)
Contingent deferred sales charges .............. -- -- -- --
Adjustments to maintain reserves ............... -- -- -- 5
--------------- --------------- --------------- ---------------
Net equity transactions .................... 1,002 1,002 13,079 19,633
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 1,404 1,113 10,083 20,820
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 4,106 1,781 84,604 87,998
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ 5,510 2,894 94,687 108,818
=============== =============== =============== ===============
</TABLE>
22
<PAGE> 75
<TABLE>
<CAPTION>
NATIONWIDE DC VARIABLE ACCOUNT
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
DrySRGro DryStkix
----------------------------------- -----------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... $ -- -- 271 106
Mortality and expense charges .................. (4) -- (80) (23)
Administration charge - Tier I ................. (3) -- (72) (21)
Administration charge - Tier II ................ -- -- -- --
Administration charge - Tier III ............... -- -- -- --
Administration charge - Tier IV ................ -- -- -- --
Administration charge - Tier V ................. -- -- -- --
--------------- --------------- --------------- ---------------
Net investment activity ...................... (7) -- 119 62
Proceeds from mutual fund shares sold .......... -- -- -- --
Cost of mutual fund shares sold ................ -- -- -- --
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments ............ -- -- -- --
Unrealized gain (loss) on investments .......... 393 -- 5,793 737
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 393 -- 5,793 737
Reinvested capital gains ....................... -- -- -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 386 -- 5,912 799
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 3,876 -- 4,563 3,858
Redemptions .................................... -- -- -- --
Annual contract maintenance charge (note 2) .... -- -- -- --
Contingent deferred sales charges .............. -- -- -- --
Adjustments to maintain reserves ............... -- -- -- --
--------------- --------------- --------------- ---------------
Net equity transactions .................... 3,876 -- 4,563 3,858
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 4,262 -- 10,475 4,657
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... -- -- 27,259 6,892
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 4,262 -- 37,734 11,549
=============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
FidVIPAM FidVIPEI
----------------------------------- -----------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... 832 443 1,638 81
Mortality and expense charges .................. (66) (35) (273) (143)
Administration charge - Tier I ................. (59) (31) (246) (129)
Administration charge - Tier II ................ -- -- -- --
Administration charge - Tier III ............... -- -- -- --
Administration charge - Tier IV ................ -- -- -- --
Administration charge - Tier V ................. -- -- -- --
--------------- --------------- --------------- ---------------
Net investment activity ...................... 707 377 1,119 (191)
Proceeds from mutual fund shares sold .......... -- -- 361 6,458
Cost of mutual fund shares sold ................ -- -- (266) (5,183)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments ............ -- -- 95 1,275
Unrealized gain (loss) on investments .......... (28) (18) 7,317 (579)
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... (28) (18) 7,412 696
Reinvested capital gains ....................... 2,087 365 8,234 2,319
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 2,766 724 16,765 2,824
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 4,719 4,535 24,415 20,864
Redemptions .................................... -- -- -- (7,854)
Annual contract maintenance charge (note 2) .... -- -- -- --
Contingent deferred sales charges .............. -- -- -- --
Adjustments to maintain reserves ............... (1) 3 1 13
--------------- --------------- --------------- ---------------
Net equity transactions .................... 4,718 4,538 24,416 13,023
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 7,484 5,262 41,181 15,847
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 23,167 11,609 91,971 49,272
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ 30,651 16,871 133,152 65,119
=============== =============== =============== ===============
</TABLE>
23
<PAGE> 76
<TABLE>
<CAPTION>
NATIONWIDE DC VARIABLE ACCOUNT
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
FidVIPGr FidVIPHI
----------------------------------- -----------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... $ 565 117 1,817 1,014
Mortality and expense charges .................. (230) (126) (72) (32)
Administration charge - Tier I ................. (207) (114) (65) (29)
Administration charge - Tier II ................ -- -- -- --
Administration charge - Tier III ............... -- -- -- --
Administration charge - Tier IV ................ -- -- -- --
Administration charge - Tier V ................. -- -- -- --
--------------- --------------- --------------- ---------------
Net investment activity ...................... 128 (123) 1,680 953
Proceeds from mutual fund shares sold .......... 1,823 595 -- 5,916
Cost of mutual fund shares sold ................ (1,284) (415) -- (5,666)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments ............ 539 180 -- 250
Unrealized gain (loss) on investments .......... 8,790 1,747 201 (589)
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 9,329 1,927 201 (339)
Reinvested capital gains ....................... 2,531 2,957 225 198
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 11,988 4,761 2,106 812
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 15,619 16,216 8,515 7,108
Redemptions .................................... -- (485) -- (6,450)
Annual contract maintenance charge (note 2) .... -- -- -- --
Contingent deferred sales charges .............. -- -- -- --
Adjustments to maintain reserves ............... 2 5 -- 1
--------------- --------------- --------------- ---------------
Net equity transactions .................... 15,621 15,736 8,515 659
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 27,609 20,497 10,621 1,471
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 80,978 40,363 24,013 12,429
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 108,587 60,860 34,634 13,900
=============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
FidVIPOv NSATGvBd
----------------------------------- -----------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... 1,845 741 401 308
Mortality and expense charges .................. (291) (171) (33) (23)
Administration charge - Tier I ................. (262) (154) (30) (21)
Administration charge - Tier II ................ -- -- -- --
Administration charge - Tier III ............... -- -- -- --
Administration charge - Tier IV ................ -- -- -- --
Administration charge - Tier V ................. -- -- -- --
--------------- --------------- --------------- ---------------
Net investment activity ...................... 1,292 416 338 264
Proceeds from mutual fund shares sold .......... 824 5,414 2,513 --
Cost of mutual fund shares sold ................ (706) (5,140) (2,354) --
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments ............ 118 274 159 --
Unrealized gain (loss) on investments .......... 9,637 2,973 (164) (448)
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 9,755 3,247 (5) (448)
Reinvested capital gains ....................... 7,326 816 -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 18,373 4,479 333 (184)
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 20,555 18,854 1,788 1,518
Redemptions .................................... (443) (296) (2,506) --
Annual contract maintenance charge (note 2) .... -- -- (27) (12)
Contingent deferred sales charges .............. -- -- -- --
Adjustments to maintain reserves ............... 2 (3) (1) (1)
--------------- --------------- --------------- ---------------
Net equity transactions .................... 20,114 18,555 (746) 1,505
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 38,487 23,034 (413) 1,321
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 102,297 57,384 12,618 8,995
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ 140,784 80,418 12,205 10,316
=============== =============== =============== ===============
</TABLE>
24
<PAGE> 77
<TABLE>
<CAPTION>
NATIONWIDE DC VARIABLE ACCOUNT
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
NSATMyMkt NSATTotRe
----------------------------------- -----------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... $ 938 528 481 336
Mortality and expense charges .................. (92) (53) (133) (75)
Administration charge - Tier I ................. (83) (48) (120) (68)
Administration charge - Tier II ................ -- -- -- --
Administration charge - Tier III ............... -- -- -- --
Administration charge - Tier IV ................ -- -- -- --
Administration charge - Tier V ................. -- -- -- --
--------------- --------------- --------------- ---------------
Net investment activity ...................... 763 427 228 193
Proceeds from mutual fund shares sold .......... 22,774 2,529 22 --
Cost of mutual fund shares sold ................ (22,774) (2,529) (15) --
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments ............ -- -- 7 --
Unrealized gain (loss) on investments .......... -- -- 9,277 1,955
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... -- -- 9,284 1,955
Reinvested capital gains ....................... -- -- -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 763 427 9,512 2,148
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 4,290 10,182 6,500 11,528
Redemptions .................................... (22,757) -- -- --
Annual contract maintenance charge (note 2) .... (5) -- -- --
Contingent deferred sales charges .............. -- -- -- --
Adjustments to maintain reserves ............... (4) 4 1 1
--------------- --------------- --------------- ---------------
Net equity transactions .................... (18,476) 10,186 6,501 11,529
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (17,713) 10,613 16,013 13,677
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 36,420 17,556 46,482 22,954
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 18,707 28,169 62,495 36,631
=============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
NBAMTGro NBAMTLMat
----------------------------------- -----------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... -- 16 441 294
Mortality and expense charges .................. (49) (113) (20) (9)
Administration charge - Tier I ................. (44) (101) (18) (8)
Administration charge - Tier II ................ -- -- -- --
Administration charge - Tier III ............... -- -- -- --
Administration charge - Tier IV ................ -- -- -- --
Administration charge - Tier V ................. -- -- -- --
--------------- --------------- --------------- ---------------
Net investment activity ...................... (93) (198) 403 277
Proceeds from mutual fund shares sold .......... -- 21 -- --
Cost of mutual fund shares sold ................ -- (16) -- --
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments ............ -- 5 -- --
Unrealized gain (loss) on investments .......... 1,575 (1,492) (202) (280)
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 1,575 (1,487) (202) (280)
Reinvested capital gains ....................... 1,560 3,808 -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 3,042 2,123 201 (3)
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 2,985 4,855 2,325 1,188
Redemptions .................................... -- -- -- --
Annual contract maintenance charge (note 2) .... -- (6) -- --
Contingent deferred sales charges .............. -- -- -- --
Adjustments to maintain reserves ............... -- 2 (1) (1)
--------------- --------------- --------------- ---------------
Net equity transactions .................... 2,985 4,851 2,324 1,187
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 6,027 6,974 2,525 1,184
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 16,877 40,369 6,755 3,129
--------------- --------------- --------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ 22,904 47,343 9,280 4,313
=============== =============== =============== ===============
</TABLE>
25
<PAGE> 78
<TABLE>
<CAPTION>
NATIONWIDE DC VARIABLE ACCOUNT
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
NBAMTPART
-----------------------------------
1997 1996
--------------- ---------------
<S> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................... $ 47 26
Mortality and expense charges .................. (43) (24)
Administration charge - Tier I ................. (38) (21)
Administration charge - Tier II ................ -- --
Administration charge - Tier III ............... -- --
Administration charge - Tier IV ................ -- --
Administration charge - Tier V ................. -- --
--------------- ---------------
Net investment activity ...................... (34) (19)
Proceeds from mutual fund shares sold .......... -- 472
Cost of mutual fund shares sold ................ -- (327)
--------------- ---------------
Realized gain (loss) on investments ............ -- 145
Unrealized gain (loss) on investments .......... 1,790 542
--------------- ---------------
Net gain (loss) on investments ............... 1,790 687
Reinvested capital gains ....................... 729 324
--------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 2,485 992
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ...... 2,650 2,547
Redemptions .................................... -- (471)
Annual contract maintenance charge (note 2) .... -- --
Contingent deferred sales charges .............. -- --
Adjustments to maintain reserves ............... -- 1
--------------- ---------------
Net equity transactions .................... 2,650 2,077
NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 5,135 3,069
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...... 14,770 7,737
--------------- ---------------
CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 19,905 10,806
=============== ===============
</TABLE>
26
<PAGE> 79
- --------------------------------------------------------------------------------
NATIONWIDE DC VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
June 30, 1997 and 1996
(UNAUDITED)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Organization and Nature of Operations
Nationwide DC Variable Account (the Account) was established by
resolution of the Board of Directors of Nationwide Life Insurance
Company (the Company) on July 10, 1974. The Account has been registered
as a unit investment trust under the Investment Company Act of 1940.
The Company offers group flexible fund retirement contracts through the
Account. The primary distribution for the contracts is through an
affiliated sales organization; however, other distributors may be
utilized.
(b) The Contracts
<TABLE>
<CAPTION>
<S> <C> <C>
Participants in group flexible fund contracts may be invested in any of
the following funds:
AIM Equity Funds, Inc. - AIM Constellation Fund - Institutional Class (AIMCon)
AIM Equity Funds, Inc. - AIM Weingarten Fund - Institutional Class (AIMWein)
American Century: Twentieth Century Growth Fund (ACTCGro)
(formerly Twentieth Century Investors, Inc. - Growth Investors)
American Century: Twentieth Century Select Fund (ACTCSel)
(formerly Twentieth Century Investors, Inc. - Select Investors)
American Century: Twentieth Century Ultra Fund (ACTCUltra)
(formerly Twentieth Century Investors, Inc. - Ultra Investors)
The Bond Fund of AmericaSM, Inc. (BdFdAm)
(only available for certain contracts issued beginning January 1, 1994)
Davis New York Venture Fund, Inc. - Class A (DNYVenFd)
Delaware Group Decatur Fund, Inc. - Decatur Income Fund Institutional Class (DeDecInc)
(not available for contracts issued on or after August 1, 1993)
Dreyfus Cash Management - Class A (DryCsMgt)
Dreyfus S&P 500 Index Fund (Dry500Ix)
The Dreyfus Third Century Fund, Inc. (Dry3dCen)
Evergreen Income and Growth Fund - Class Y (EvIncGro) (formerly
The Evergreen Total Return Fund - Class Y)
The Institutional Shares of Federated GNMA Trust (FedGNMA)
Federated U.S. Government Securities Fund: 2-5 Years - Institutional Shares (FedUSGvt)
Fidelity Asset ManagerTM (FidAsMgr)
Fidelity Capital & Income Fund (FidCapInc)
(not available for contracts issued on or after January 1, 1987)
Fidelity Contrafund (FidContr)
Fidelity Equity-Income Fund (FidEqInc)
Fidelity Growth & Income Portfolio (FidGrInc)
</TABLE>
27
<PAGE> 80
<TABLE>
<S> <C>
Fidelity Magellan(R) Fund (FidMgln)
Fidelity OTC Portfolio (FidOTC)
Fidelity Puritan(R) Fund (FidPurtn)
The Growth Fund of America(R), Inc. (GroFdAm)
(only available for certain contracts issued beginning January 1, 1994)
The Income Fund of America(R), Inc. (IncFdAm)
(only available for certain contracts issued beginning January 1, 1994)
INVESCO Industrial Income Fund, Inc. (InvIndInc)
Janus Fund (JanFund)
Janus Twenty Fund (Jan20Fd)
MAS Funds - Fixed Income Portfolio (MASFIP)
MFS(R) Growth Opportunities Fund - Class A (MFSGrOpp)
MFS(R) High Income Fund - Class A (MFSHiInc)
Massachusetts Investors Growth Stock Fund - Class A (MFSGrStk)
Nationwide(R) Bond Fund (NWBdFd) (managed for a fee by an affiliated investment advisor)
Nationwide(R) Fund (NWFund) (managed for a fee by an affiliated investment advisor)
Nationwide(R) Growth Fund (NWGroFd) (managed for a fee by an affiliated investment advisor)
Nationwide(R) Money Market Fund (NWMyMkt) (managed for a fee by an affiliated investment advisor)
Neuberger & Berman Guardian Fund (NBGuard)
Neuberger & Berman Manhattan Fund (NBManhFd)
Neuberger & Berman Partners Fund (NBPartFd)
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)
Strong Common Stock Fund, Inc. (StComStk)
T. Rowe Price International Funds, Inc. - International Stock Fund(R) (TRIntStk)
Templeton Foreign Fund - Class I (TemForFd)
Templeton Global Smaller Companies Fund, Inc. - Class I (TemGlSmCo)
(formerly Templeton Smaller Companies Growth Fund, Inc.)
The following funds are available for investment only by Plans established under Internal Revenue Code
(IRC) Section 403(b).
Portfolios of the American Century Variable Portfolios, Inc. (American Century VP)
(formerly TCI Portfolios, Inc.);
American Century VP - American Century VP Balanced (ACVPBal)
(formerly TCI Portfolios - TCI Balanced)
American Century VP - American Century VP Capital Appreciation (ACVPCapAp)
(formerly TCI Portfolios - TCI Growth)
The Dreyfus Socially Responsible Growth Fund, Inc. (DrySRGro)
Dreyfus Stock Index Fund (DryStkIx)
</TABLE>
28
<PAGE> 81
<TABLE>
<S> <C>
Portfolios of the Fidelity Variable Insurance Products Fund I & II (Fidelity VIP);
Fidelity VIP - Asset Manager Portfolio (FidVIPAM)
Fidelity VIP - Equity-Income Portfolio (FidVIPEI)
Fidelity VIP - Growth Portfolio (FidVIPGr)
Fidelity VIP - High Income Portfolio (FidVIPHI)
Fidelity VIP - Overseas Portfolio (FidVIPOv)
Funds of the Nationwide(R) Separate Account Trust (Nationwide SAT)
(managed for a fee by an affiliated investment advisor);
Nationwide SAT - Capital Appreciation Fund (NSATCapAp)
Nationwide SAT - Government Bond Fund (NSATGvtBd)
Nationwide SAT - Money Market Fund (NSATMyMkt)
Nationwide SAT - Total Return Fund (NSATTotRe)
Portfolios of the Neuberger & Berman Advisers Management Trust (Neuberger & Berman AMT);
Neuberger & Berman AMT - Growth Portfolio (NBAMTGro)
Neuberger & Berman AMT - Limited Maturity Bond Portfolio (NBAMTLMat)
Neuberger & Berman AMT - Partners Portfolio (NBAMTPart)
</TABLE>
All of the above funds were being utilized as of June 30, 1997, except
Fidelity OTCPortfolio (FidOTC), Fidelity Puritan(R) Fund (FidPurtn),
Janus Twenty Fund (Jan20Fd), and Nationwide SAT - Capital Appreciation
Fund (NSATCapAp).
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 June 30, 1997. The cost of investments
sold is determined on the specific identification basis. Investment
transactions are accounted for on the trade date (date the order to buy
or sell is executed) and dividend income is recorded on the ex-dividend
date.
(d) Federal Income Taxes
Operations of the Account form a part of, and are taxed with,
operations of the Company, which is taxed as a life insurance company
under the IRC. 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) Reclassifications
Certain 1996 amounts have been reclassified to conform with the current
year presentation.
29
<PAGE> 82
(2) EXPENSES
Net purchase payments received for contracts issued before July 1, 1980,
represent contributions by the contract owners less a sales charge by the
Company of not more than 5%, to cover sales expenses. The Company does not
deduct a sales charge from purchase payments for contracts issued after
July 1, 1980. However, if any part of the contract value representing
participant accounts that have been established under the contracts and
held in the Account for less than sixteen (16) years is surrendered, the
Company will, with certain exceptions, assess a contingent deferred sales
charge. This charge will be equal to not more than 5% of the lesser of all
purchase payments received on behalf of the surrendering participant or
contract owner prior to the date of the request for surrender, or the
amount surrendered. Sales charges or contingent deferred sales charges of
less than 5% reflect actual variations in expense (usually reduced agents'
commissions). 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.
The following contract charges are deducted by the Company on contracts
issued before July 1, 1980: (a) an annual contract maintenance charge of $8
assessed by surrendering units; (b) a charge for mortality and expense risk
assessed through the daily unit value calculation equal to an annual rate
of 0.95%; and (c) a charge on complete redemption, equal to the lesser of
$8 or 2% of the value of the account, except when such redemption occurs
within 31 days of the anniversary date of the contract.
For contracts issued beginning July 1, 1980 through April 30, 1991,
contract charges include: (a) an annual contract maintenance charge of $12
or $15, based upon administrative services provided, assessed by
surrendering units; and (b) a charge for mortality and expense risk
assessed through the daily unit value calculation equal to an annual rate
of 0.95%.
For contracts issued on or after May 1, 1991, contract charges include a
mortality risk charge, an expense risk charge and an administration charge
assessed through the daily unit value calculation equal to an annual rate
of 0.35%, 0.15% and 0.45% respectively. Beginning November 1, 1996, the
administration charge was based upon the aggregate balance of assets held
under the contract by each contract owner as follows:
<TABLE>
<CAPTION>
Expense Administration
Tier Assets (Millions) Charge
<S> <C> <C> <C>
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%
</TABLE>
The administration charge assessed on November 1, 1996 was based on the
June 30, 1996 asset balance. Thereafter, the administrative charge will be
determined using the December 31 asset balance and is effective at the next
expense tier on the following May 1.
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.
30
<PAGE> 83
(3) COMPONENTS OF CONTRACT OWNERS' EQUITY
The following is a summary of contract owners' equity at June 30, 1997.
<TABLE>
<CAPTION>
TIER I (JUNE 30, 1996, SEE NOTE 2) UNITS UNIT VALUE
---------------------------------- ------------- ------------
<S> <C> <C> <C>
AIM Equity Funds, Inc. - AIM Constellation Fund -
Institutional Class ................................ 5,956,935 $ 2.215190 $ 13,195,743
AIM Equity Funds, Inc. - AIM Weingarten Fund -
Institutional Class ................................ 1,151,275 1.864764 2,146,856
American Century: Twentieth Century Growth Fund ....... 11,017,987 5.342551 58,864,157
American Century: Twentieth Century Select Fund ....... 22,513 1.897349 42,715
American Century: Twentieth Century Ultra Fund ........ 72,349,784 2.398248 173,512,725
The Bond Fund of AmericaSM, Inc. ...................... 3,311,556 2.232512 7,393,089
Davis New York Venture Fund, Inc. - Class A ........... 2,168,031 1.996464 4,328,396
Delaware Group Decatur Fund, Inc. -
Decatur Income Fund Institutional Class ............ 74,606 2.656106 198,161
Dreyfus Cash Management - Class A ..................... 768,517 1.184759 910,507
Dreyfus S&P 500 Index Fund ............................ 1,274,562 1.109289 1,413,858
The Dreyfus Third Century Fund, Inc. .................. 4,418,505 3.222516 14,238,703
Evergreen Income and Growth Fund - Class Y ............ 971,015 2.144336 2,082,182
The Institutional Shares of Federated GNMA Trust ...... 487,503 1.332293 649,497
Federated U.S. Government Securities Fund:
2-5 Years - Institutional Shares ................... 1,250,718 1.166734 1,459,255
Fidelity Asset ManagerTM .............................. 2,883,496 1.386944 3,999,247
Fidelity Capital & Income Fund ........................ 108,297 4.317074 467,526
Fidelity Contrafund ................................... 63,425,850 2.280139 144,619,754
Fidelity Equity-Income Fund ........................... 19,811,209 6.261622 124,050,302
Fidelity Growth & Income Portfolio .................... 4,464,938 2.352296 10,502,856
Fidelity Magellan(R)Fund .............................. 56,391,911 2.206879 124,450,124
The Growth Fund of America(R), Inc. ................... 2,435,508 3.014050 7,340,743
The Income Fund of America(R), Inc. ................... 5,309,866 2.365774 12,561,943
INVESCO Industrial Income Fund, Inc ................... 8,069,026 1.923143 15,517,891
Janus Fund ............................................ 19,168,347 1.802653 34,553,878
MAS Funds - Fixed Income Portfolio .................... 986,725 1.271592 1,254,712
MFS(R)Growth Opportunities Fund - Class A ............. 520,467 8.472605 4,409,711
MFS(R)High Income Fund - Class A ...................... 82,353 5.812741 478,694
Massachusetts Investors Growth Stock Fund - Class A ... 139,238 13.672832 1,903,778
Nationwide(R)Bond Fund ................................ 7,092 2.040378 14,470
Nationwide(R)Fund ..................................... 1,467,619 18.380924 26,976,193
Nationwide(R)Growth Fund .............................. 1,078,548 3.637361 3,923,068
Nationwide(R)Money Market Fund ........................ 8,044,978 2.942520 23,672,509
Neuberger & Berman Manhattan Fund ..................... 37,299 2.874830 107,228
Neuberger & Berman Partners Fund ...................... 903,373 1.316546 1,189,332
Putnam Investors Fund - Class A ....................... 511,822 16.101629 8,241,168
Putnam Voyager Fund - Class A ......................... 19,855,978 3.407862 67,666,433
SEI Index Funds - S&P 500 Index Portfolio ............. 802,885 3.555051 2,854,297
</TABLE>
31
<PAGE> 84
<TABLE>
<S> <C> <C> <C>
Seligman Growth Fund, Inc - Class A ................... 93,963 12.019665 1,129,404
Strong Common Stock Fund, Inc. ........................ 3,664,039 1.795372 6,578,313
T. Rowe Price International Funds, Inc. -
International Stock Fund(R) ........................ 8,795,809 2.017885 17,748,931
Templeton Foreign Fund - Class I ...................... 30,140,561 1.963694 59,186,839
Templeton Global Smaller Companies Fund, Inc. -
Class I ............................................ 502,759 1.998416 1,004,722
American Century VP - American Century VP Balanced .... 3,862 1.426792 5,510
American Century VP - American Century VP
Capital Appreciation ............................... 60,134 1.574594 94,687
The Dreyfus Socially Responsible Growth Fund, Inc. .... 2,353 1.811300 4,262
Dreyfus Stock Index Fund .............................. 19,617 1.923519 37,734
Fidelity VIP - Asset Manager Portfolio ................ 22,027 1.391525 30,651
Fidelity VIP - Equity-Income Portfolio ................ 77,887 1.709549 133,152
Fidelity VIP - Growth Portfolio ....................... 61,742 1.758718 108,587
Fidelity VIP - High Income Portfolio .................. 24,130 1.435289 34,634
Fidelity VIP - Overseas Portfolio ..................... 105,194 1.338332 140,784
Nationwide SAT - Government Bond Fund ................. 7,390 1.651555 12,205
Nationwide SAT - Money Market Fund .................... 14,553 1.285463 18,707
Nationwide SAT - Total Return Fund .................... 22,334 2.798178 62,495
Neuberger & Berman AMT - Growth Portfolio ............. 10,937 2.094174 22,904
Neuberger & Berman AMT -
Limited Maturity Bond Portfolio .................... 8,013 1.158167 9,280
Neuberger & Berman AMT - Partners Portfolio ........... 10,305 1.931558 19,905
============ ============ ------------
Sub-Total Tier I (June 30, 1996) .................... $987,575,407
============
</TABLE>
32
<PAGE> 85
Contract owners' equity - continued
<TABLE>
<CAPTION>
TIER II (JUNE 30, 1996, SEE NOTE 2) UNITS UNIT VALUE
---------------------------------- ------------- ------------
<S> <C> <C> <C>
American Century: Twentieth Century Growth Fund ....... 3,968,160 $ 5.344313 $ 21,207,089
American Century: Twentieth Century Ultra Fund ........ 18,221,899 2.399039 43,715,046
The Bond Fund of AmericaSM, Inc. ...................... 788,641 2.233277 1,761,254
Davis New York Venture Fund, Inc. - Class A ........... 150,924 1.997121 301,413
Delaware Group Decatur Fund, Inc. -
Decatur Income Fund Institutional Class ............ 14,640 2.656981 38,898
Dreyfus Cash Management - Class A ..................... 273,878 1.185155 324,588
Dreyfus S&P 500 Index Fund ............................ 611,693 1.109380 678,600
The Dreyfus Third Century Fund, Inc. .................. 1,162,449 3.223578 3,747,245
Evergreen Income and Growth Fund - Class Y ............ 415,954 2.145043 892,239
Federated U.S. Government Securities Fund:
2-5 Years - Institutional Shares ................... 378,539 1.167124 441,802
Fidelity Asset ManagerTM .............................. 662,023 1.387401 918,491
Fidelity Capital & Income Fund ........................ 37,574 4.318518 162,264
Fidelity Contrafund ................................... 14,758,927 2.280891 33,663,504
Fidelity Equity-Income Fund ........................... 6,905,035 6.263685 43,250,964
Fidelity Magellan(R)Fund .............................. 10,948,471 2.207607 24,169,921
The Growth Fund of America(R), Inc. ................... 588,913 3.015044 1,775,599
The Income Fund of America(R), Inc. ................... 1,215,465 2.366554 2,876,464
INVESCO Industrial Income Fund, Inc ................... 1,756,039 1.923777 3,378,227
Janus Fund ............................................ 5,059,299 1.803247 9,123,166
MAS Funds - Fixed Income Portfolio .................... 236,671 1.272012 301,048
MFS(R)Growth Opportunities Fund - Class A ............. 322,294 8.475398 2,731,570
MFS(R)High Income Fund - Class A ...................... 25,332 5.814685 147,298
Massachusetts Investors Growth Stock Fund - Class A ... 14,940 13.677338 204,339
Nationwide(R)Fund ..................................... 418,041 18.386980 7,686,512
Nationwide(R)Growth Fund .............................. 372,021 3.638560 1,353,621
Nationwide(R)Money Market Fund ........................ 7,141,646 2.943504 21,021,464
Putnam Investors Fund - Class A ....................... 136,082 16.106938 2,191,864
Putnam Voyager Fund - Class A ......................... 5,501,264 3.408986 18,753,732
SEI Index Funds - S&P 500 Index Portfolio ............. 42,635 3.556222 151,620
Seligman Growth Fund, Inc - Class A ................... 11,233 12.023628 135,061
T. Rowe Price International Funds, Inc. -
International Stock Fund(R) ........................ 1,994,767 2.018550 4,026,537
Templeton Foreign Fund - Class I ...................... 8,001,155 1.964341 15,716,997
============ ============ ------------
Sub-Total Tier II (June 30, 1996) ................... $266,848,437
============
</TABLE>
33
<PAGE> 86
<TABLE>
<CAPTION>
TIER II (JUNE 30, 1996, SEE NOTE 2) UNITS UNIT VALUE
---------------------------------- ------------- ------------
<S> <C> <C> <C>
American Century: Twentieth Century Growth Fund ....... 326,729 $ 5.342996 $ 1,745,712
American Century: Twentieth Century Ultra Fund ........ 2,193,952 2.398448 5,262,080
The Bond Fund of AmericaSM, Inc. ...................... 101,219 2.232716 225,993
Delaware Group Decatur Fund, Inc. -
Decatur Income Fund Institutional Class ............ 262 2.656328 695
Dreyfus S&P 500 Index Fund ............................ 128,255 1.109380 142,284
The Dreyfus Third Century Fund, Inc. .................. 149,388 3.222784 481,445
Evergreen Income and Growth Fund - Class Y ............ 61,602 2.144515 132,106
Federated U.S. Government Securities Fund:
2-5 Years - Institutional Shares ................... 38,773 1.166832 45,242
Fidelity Asset ManagerTM .............................. 57,135 1.387060 79,250
Fidelity Capital & Income Fund ........................ 386 4.317438 1,667
Fidelity Contrafund ................................... 2,015,849 2.280329 4,596,799
Fidelity Equity-Income Fund ........................... 555,833 6.262144 3,480,706
Fidelity Magellan(R)Fund .............................. 1,165,486 2.207063 2,572,301
The Growth Fund of America(R), Inc. ................... 44,832 3.014301 135,137
The Income Fund of America(R), Inc. ................... 94,655 2.365972 223,951
INVESCO Industrial Income Fund, Inc ................... 225,685 1.923304 434,061
Janus Fund ............................................ 685,475 1.802803 1,235,776
MAS Funds - Fixed Income Portfolio .................... 4,605 1.271698 5,856
MFS(R)Growth Opportunities Fund - Class A ............. 27,652 8.473311 234,304
MFS(R)High Income Fund - Class A ...................... 2,578 5.813231 14,987
Massachusetts Investors Growth Stock Fund - Class A ... 3,371 13.673971 46,095
Nationwide(R)Fund ..................................... 66,167 18.382456 1,216,312
Nationwide(R)Growth Fund .............................. 26,409 3.637664 96,067
Nationwide(R)Money Market Fund ........................ 314,408 2.942768 925,230
Putnam Investors Fund - Class A ....................... 12,296 16.102971 198,002
Putnam Voyager Fund - Class A ......................... 569,376 3.408146 1,940,517
Seligman Growth Fund, Inc - Class A ................... 126 12.020667 1,515
T. Rowe Price International Funds, Inc. -
International Stock Fund(R) ........................ 203,552 2.018053 410,779
Templeton Foreign Fund - Class I ...................... 1,011,988 1.963858 1,987,401
============ ============ ------------
Sub-Total Tier II (December 31, 1996) ............... $ 27,872,270
============
</TABLE>
34
<PAGE> 87
Contract owners' equity - continued
<TABLE>
<CAPTION>
TIER III (JUNE 30, 1996, SEE NOTE 2) UNITS UNIT VALUE
----------------------------------- ------------- ------------
<S> <C> <C> <C>
American Century: Twentieth Century Growth Fund ....... 1,472,486 $ 5.347838 $ 7,874,617
American Century: Twentieth Century Ultra Fund ........ 10,618,512 2.400621 25,491,023
The Bond Fund of AmericaSM, Inc. ...................... 305,660 2.234807 683,091
Delaware Group Decatur Fund, Inc. -
Decatur Income Fund Institutional Class ............ 5,783 2.658733 15,375
Dreyfus S&P 500 Index Fund ............................ 707,124 1.109562 784,598
The Dreyfus Third Century Fund, Inc. .................. 796,286 3.225704 2,568,583
Evergreen Income and Growth Fund - Class Y ............ 79,748 2.146458 171,176
Federated U.S. Government Securities Fund:
2-5 Years - Institutional Shares ................... 98,636 1.167904 115,197
Fidelity Asset ManagerTM .............................. 273,598 1.388316 379,840
Fidelity Capital & Income Fund ........................ 22,306 4.321404 96,393
Fidelity Contrafund ................................... 8,417,666 2.282395 19,212,439
Fidelity Equity-Income Fund ........................... 2,850,209 6.267815 17,864,583
Fidelity Magellan(R)Fund .............................. 5,680,717 2.209063 12,549,062
The Growth Fund of America(R), Inc. ................... 444,518 3.017032 1,341,125
The Income Fund of America(R), Inc. ................... 432,380 2.368115 1,023,926
INVESCO Industrial Income Fund, Inc ................... 342,835 1.925045 659,973
Janus Fund ............................................ 2,110,479 1.804437 3,808,226
MAS Funds - Fixed Income Portfolio .................... 212,606 1.272851 270,616
MFS(R)Growth Opportunities Fund - Class A ............. 179,568 8.480989 1,522,914
MFS(R)High Income Fund - Class A ...................... 6,521 5.818571 37,943
Massachusetts Investors Growth Stock Fund - Class A ... 12,077 13.686355 165,290
Nationwide(R)Fund ..................................... 255,530 18.399099 4,701,522
Nationwide(R)Growth Fund .............................. 92,171 3.640959 335,591
Nationwide(R)Money Market Fund ........................ 1,200,656 2.945471 3,536,497
Putnam Investors Fund - Class A ....................... 39,047 16.117561 629,342
Putnam Voyager Fund - Class A ......................... 2,800,343 3.411236 9,552,631
Seligman Growth Fund, Inc - Class A ................... 2,437 12.031559 29,321
T. Rowe Price International Funds, Inc. -
International Stock Fund(R) ........................ 1,066,163 2.019881 2,153,522
Templeton Foreign Fund - Class I ...................... 2,498,003 1.965637 4,910,167
============ ============ ------------
Sub-Total Tier III (June 30, 1996) .................. $122,484,583
============
</TABLE>
35
<PAGE> 88
Contract owners' equity - continued
<TABLE>
<CAPTION>
TIER III (DECEMBER 31, 1996, SEE NOTE 2) UNITS UNIT VALUE
---------------------------------------- ------------- ------------
<S> <C> <C> <C>
American Century: Twentieth Century Growth Fund ....... 104,414 $ 5.345203 $ 558,114
American Century: Twentieth Century Ultra Fund ........ 262,277 2.399439 629,318
The Bond Fund of AmericaSM, Inc. ...................... 17,614 2.233685 39,344
Dreyfus S&P 500 Index Fund ............................ 6,004 1.109562 6,662
The Dreyfus Third Century Fund, Inc. .................. 18,508 3.224115 59,672
Evergreen Income and Growth Fund - Class Y ............ 11,567 2.145401 24,816
Federated U.S. Government Securities Fund:
2-5 Years - Institutional Shares ................... 1,273 1.167321 1,486
Fidelity Asset ManagerTM .............................. 5,297 1.387633 7,350
Fidelity Capital & Income Fund ........................ 39,699 4.319246 171,470
Fidelity Contrafund ................................... 159,985 2.281271 364,969
Fidelity Equity-Income Fund ........................... 176,206 6.264730 1,103,883
Fidelity Magellan(R)Fund .............................. 251,318 2.207975 554,904
The Growth Fund of America(R), Inc. ................... 6,253 3.015546 18,856
The Income Fund of America(R), Inc. ................... 25,948 2.366949 61,418
INVESCO Industrial Income Fund, Inc ................... 3,983 1.924098 7,664
Janus Fund ............................................ 152,268 1.803548 274,623
MAS Funds - Fixed Income Portfolio .................... 6,791 1.272224 8,640
MFS(R)Growth Opportunities Fund - Class A ............. 37,024 8.476811 313,845
MFS(R)High Income Fund - Class A ...................... 16,640 5.815665 96,773
Massachusetts Investors Growth Stock Fund - Class A ... 150 13.679617 2,052
Nationwide(R)Fund ..................................... 16,086 18.390046 295,822
Nationwide(R)Growth Fund .............................. 22,849 3.639166 83,151
Nationwide(R)Money Market Fund ........................ 82,283 2.944000 242,241
Putnam Investors Fund - Class A ....................... 9,530 16.109624 153,525
Putnam Voyager Fund - Class A ......................... 81,470 3.409554 277,776
Seligman Growth Fund, Inc - Class A ................... 6,277 12.025633 75,485
T. Rowe Price International Funds, Inc. -
International Stock Fund(R) ........................ 17,144 2.018887 34,612
Templeton Foreign Fund - Class I ...................... 202,790 1.964669 398,415
============ ============ ------------
Sub-Total Tier III (Decmber 31, 1996)................ $ 5,866,886
============
</TABLE>
36
<PAGE> 89
Contract owners' equity - continued
<TABLE>
<CAPTION>
TIER IV (JUNE 30, 1996, SEE NOTE 2) UNITS UNIT VALUE
----------------------------------- ------------- ------------
<S> <C> <C> <C>
American Century: Twentieth Century Growth Fund ....... 695,532 $ 5.351365 $ 3,722,046
American Century: Twentieth Century Select Fund ....... 993,461 1.900478 1,888,051
American Century: Twentieth Century Ultra Fund ........ 4,320,818 2.402205 10,379,491
The Bond Fund of AmericaSM, Inc. ...................... 40,145 2.236337 89,778
Dreyfus S&P 500 Index Fund ............................ 294,878 1.109744 327,239
The Dreyfus Third Century Fund, Inc. .................. 372,398 3.227832 1,202,038
Evergreen Income and Growth Fund - Class Y ............ 22,594 2.147874 48,529
Federated U.S. Government Securities Fund:
2-5 Years - Institutional Shares ................... 119,402 1.168684 139,543
Fidelity Asset ManagerTM .............................. 491,697 1.389232 683,081
Fidelity Capital & Income Fund ........................ 22,307 4.324290 96,462
Fidelity Contrafund ................................... 4,279,112 2.283901 9,773,068
Fidelity Equity-Income Fund ........................... 2,217,418 6.271947 13,907,528
Fidelity Magellan(R)Fund .............................. 3,500,987 2.210519 7,738,998
The Growth Fund of America(R), Inc. ................... 158,867 3.019022 479,623
The Income Fund of America(R), Inc. ................... 277,938 2.369676 658,623
INVESCO Industrial Income Fund, Inc ................... 426,879 1.926315 822,303
Janus Fund ............................................ 2,111,946 1.805627 3,813,387
MAS Funds - Fixed Income Portfolio .................... 88,522 1.273691 112,750
MFS(R)Growth Opportunities Fund - Class A ............. 6,001 8.486582 50,928
MFS(R)High Income Fund - Class A ...................... 105 5.822457 611
Massachusetts Investors Growth Stock Fund - Class A ... 283 13.695378 3,876
Nationwide(R)Fund ..................................... 104,719 18.411225 1,928,005
Nationwide(R)Growth Fund .............................. 288,836 3.643359 1,052,333
Nationwide(R)Money Market Fund ........................ 1,290,529 2.947438 3,803,754
Putnam Investors Fund - Class A ....................... 4,757 16.128192 76,722
Putnam Voyager Fund - Class A ......................... 2,031,236 3.413487 6,933,598
Seligman Growth Fund, Inc - Class A ................... 684 12.039495 8,235
T. Rowe Price International Funds, Inc. -
International Stock Fund(R) ........................ 856,198 2.021214 1,730,559
Templeton Foreign Fund - Class I ...................... 1,739,144 1.966933 3,420,780
============ ============ ------------
Sub-Total Tier IV (June 30, 1996) ................... $ 74,891,939
============
</TABLE>
37
<PAGE> 90
<TABLE>
<CAPTION>
Contract owners' equity - continued
TIER V (JUNE 30, 1996, SEE NOTE 2) UNITS UNIT VALUE
----------------------------------- ------------- ------------
<S> <C> <C> <C>
AIM Equity Funds, Inc. - AIM Constellation Fund -
Institutional Class ................................ 1,796,600 $ 2.220725 $ 3,989,755
American Century: Twentieth Century Growth Fund ....... 5,825,692 5.355890 31,201,766
American Century: Twentieth Century Ultra Fund ........ 17,003,461 2.404235 40,880,316
The Bond Fund of AmericaSM, Inc. ...................... 578,539 2.238266 1,294,924
The Dreyfus Third Century Fund, Inc. .................. 2,017,009 3.230561 6,516,071
Evergreen Income and Growth Fund - Class Y ............ 453,075 2.149691 973,971
Fidelity Capital & Income Fund ........................ 79,865 4.327949 345,652
Fidelity Contrafund ................................... 3,098,912 2.285832 7,083,592
Fidelity Equity-Income Fund ........................... 7,097,348 6.277249 44,551,821
Fidelity Growth & Income Portfolio .................... 2,407,013 2.358167 5,676,139
Fidelity Magellan(R)Fund .............................. 15,643,471 2.212388 34,609,428
MFS(R)Growth Opportunities Fund - Class A ............. 2,013,278 8.493762 17,100,304
MFS(R)High Income Fund - Class A ...................... 465,648 5.827384 2,713,510
Massachusetts Investors Growth Stock Fund - Class A ... 269,217 13.706957 3,690,146
Nationwide(R)Bond Fund ................................ 53,720 2.045518 109,885
Nationwide(R)Fund ..................................... 520,725 18.426785 9,595,288
Nationwide(R)Growth Fund .............................. 558,178 3.646441 2,035,363
Nationwide(R)Money Market Fund ........................ 4,030,610 2.949932 11,890,025
Neuberger & Berman Guardian Fund ...................... 414,962 1.541586 639,700
Putnam Investors Fund - Class A ....................... 1,650,496 16.141825 26,642,018
Putnam Voyager Fund - Class A ......................... 1,229,807 3.416376 4,201,483
SEI Index Funds - S&P 500 Index Portfolio ............. 2,321,627 3.563921 8,274,095
Seligman Growth Fund, Inc - Class A ................... 117,861 12.049677 1,420,187
T. Rowe Price International Funds, Inc. -
International Stock Fund(R) ........................ 5,692,341 2.022924 11,515,173
Templeton Foreign Fund - Class I ...................... 857,193 1.968597 1,687,468
============ ============ ------------
Sub-Total Tier V (June 30, 1996) .................... 278,638,080
==============
Total Contract Owners' Equity ..................... $1,764,177,602
==============
</TABLE>
================================================================================
38
<PAGE> 91
<PAGE> 1
INDEPENDENT AUDITORS' REPORT
----------------------------
The Board of Directors
Nationwide Life Insurance Company:
We have audited the accompanying consolidated balance sheets of Nationwide Life
Insurance Company and subsidiaries (collectively the Company) as of December 31,
1996 and 1995, and the related consolidated statements of income, shareholder's
equity and cash flows for each of the years in the three-year period ended
December 31, 1996. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated 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. 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Nationwide Life
Insurance Company and subsidiaries as of December 31, 1996 and 1995, and the
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 1996, in conformity with generally accepted
accounting principles.
In 1994, the Company adopted the provisions of the Financial Accounting
Standards Board's Statement of Financial Accounting Standards No. 115,
Accounting for Certain Investments in Debt and Equity Securities.
KPMG Peat Marwick LLP
Columbus, Ohio
January 31, 1997
<PAGE> 2
<TABLE>
<CAPTION>
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, 1996 and 1995
($000's omitted)
Assets 1996 1995
------ ----------------- ----------------
<S> <C> <C>
Investments (notes 5, 8 and 9):
Securities available-for-sale, at fair value:
Fixed maturity securities (cost $11,970,878 in 1996; $11,862,556 in 1995) $12,304,639 12,485,564
Equity securities (cost $43,890 in 1996; $23,617 in 1995) 59,131 29,953
Mortgage loans on real estate, net 5,272,119 4,602,764
Real estate, net 265,759 229,442
Policy loans 371,816 336,356
Other long-term investments 28,668 61,989
Short-term investments (note 13) 4,789 32,792
----------------- ----------------
18,306,921 17,778,860
----------------- ----------------
Cash 43,784 9,455
Accrued investment income 210,182 212,963
Deferred policy acquisition costs 1,366,509 1,020,356
Investment in subsidiaries classified as discontinued operations (notes 1 and 2) 485,707 506,677
Other assets (note 6) 426,441 388,214
Assets held in Separate Accounts (note 8) 26,926,702 18,591,108
----------------- ----------------
$47,766,246 38,507,633
================= ================
Liabilities and Shareholder's Equity
------------------------------------
Future policy benefits and claims (notes 6 and 8) $17,179,060 16,358,614
Policyholders' dividend accumulations 361,401 348,027
Other policyholder funds 60,073 65,297
Accrued federal income tax (note 7):
Current 30,170 35,301
Deferred 162,212 246,627
----------------- ----------------
192,382 281,928
----------------- ----------------
Dividend payable to shareholder (notes 1 and 2) 485,707 -
Other liabilities 423,047 234,147
Liabilities related to Separate Accounts (note 8) 26,926,702 18,591,108
----------------- ----------------
45,628,372 35,879,121
----------------- ----------------
Commitments and contingencies (notes 6, 9 and 15)
Shareholder's equity (notes 3, 4, 5, 12 and 13):
Capital shares, $1 par value. Authorized 5,000,000 shares, issued and
outstanding 3,814,779 shares 3,815 3,815
Additional paid-in capital 527,874 657,118
Retained earnings 1,432,593 1,583,275
Unrealized gains on securities available-for-sale, net 173,592 384,304
----------------- ----------------
2,137,874 2,628,512
----------------- ----------------
$47,766,246 38,507,633
================= ================
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 3
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
Consolidated Statements of Income
Years ended December 31, 1996, 1995 and 1994
($000's omitted)
<TABLE>
<CAPTION>
1996 1995 1994
--------------- -------------- -------------
<S> <C> <C> <C>
Revenues (note 16):
Investment product and universal life insurance product policy charges $ 400,902 286,534 217,245
Traditional life insurance premiums 198,642 199,106 176,658
Net investment income (note 5) 1,357,759 1,294,033 1,210,811
Realized losses on investments (note 5) (326) (1,724) (16,527)
Other income 35,861 20,702 11,312
--------------- -------------- -------------
1,992,838 1,798,651 1,599,499
--------------- -------------- -------------
Benefits and expenses:
Benefits and claims 1,160,580 1,115,493 992,667
Provision for policyholders' dividends on participating policies (note 12) 40,973 39,937 38,754
Amortization of deferred policy acquisition costs 133,394 82,695 85,568
Other operating expenses (note 13) 342,394 272,954 240,652
--------------- -------------- -------------
1,677,341 1,511,079 1,357,641
--------------- -------------- -------------
Income from continuing operations before federal income tax expense 315,497 287,572 241,858
--------------- -------------- -------------
Federal income tax expense (benefit) (note 7):
Current 116,512 88,700 73,559
Deferred (5,623) 11,108 5,030
--------------- -------------- -------------
110,889 99,808 78,589
--------------- -------------- -------------
Income from continuing operations 204,608 187,764 163,269
Income from discontinued operations (less federal income tax expense of
$4,453, $7,446 and $10,915 in 1996, 1995 and 1994, respectively) (note 2) 11,324 24,714 20,459
--------------- -------------- -------------
Net income $ 215,932 212,478 183,728
=============== ============== =============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 4
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
Consolidated Statements of Shareholder's Equity
Years ended December 31, 1996, 1995 and 1994
($000's omitted)
<TABLE>
<CAPTION>
Unrealized
gains (losses)
Additional on securities Total
Capital paid-in Retained available-for- shareholder's
shares capital earnings sale, net equity
----------- ------------- --------------- ----------------- ---------------
<S> <C> <C> <C> <C> <C>
1994:
Balance, beginning of year $3,815 406,089 1,194,519 6,745 1,611,168
Capital contribution - 200,000 - - 200,000
Net income - - 183,728 - 183,728
Adjustment for change in accounting for
certain investments in debt and equity
securities, net (note 4) - - - 212,553 212,553
Unrealized losses on securities available-
for-sale, net - - - (338,971) (338,971)
----------- ------------- --------------- ----------------- ---------------
Balance, end of year $3,815 606,089 1,378,247 (119,673) 1,868,478
=========== ============= =============== ================= ===============
1995:
Balance, beginning of year 3,815 606,089 1,378,247 (119,673) 1,868,478
Capital contribution (note 13) - 51,029 - (4,111) 46,918
Dividends to shareholder - - (7,450) - (7,450)
Net income - - 212,478 - 212,478
Unrealized gains on securities available-
for-sale, net - - - 508,088 508,088
----------- ------------- --------------- ----------------- ---------------
Balance, end of year $3,815 657,118 1,583,275 384,304 2,628,512
=========== ============= =============== ================= ===============
1996:
Balance, beginning of year 3,815 657,118 1,583,275 384,304 2,628,512
Capital contribution (note 13) - 25 5 - 30
Dividends to shareholder - (129,269) (366,619) (39,819) (535,707)
Net income - - 215,932 - 215,932
Unrealized losses on securities available-
for-sale, net - - - (170,893) (170,893)
----------- ------------- --------------- ----------------- ---------------
Balance, end of year $3,815 527,874 1,432,593 173,592 2,137,874
=========== ============= =============== ================= ===============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 5
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Years ended December 31, 1996, 1995 and 1994
($000's omitted)
<TABLE>
<CAPTION>
1996 1995 1994
---------------- --------------- ---------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 215,932 212,478 183,728
Adjustments to reconcile net income to net cash provided by operating
activities:
Capitalization of deferred policy acquisition costs (422,572) (321,327) (242,431)
Amortization of deferred policy acquisition costs 133,394 82,695 85,568
Amortization and depreciation 6,962 10,234 3,603
Realized (gains) losses on invested assets, net (284) 3,250 16,094
Deferred federal income tax expense (benefit) 7,603 (30,673) 9,946
Decrease (increase) in accrued investment income 2,781 (16,999) (12,808)
(Increase) decrease in other assets (38,876) 39,880 (102,676)
Increase in policy liabilities 305,755 135,937 118,361
Increase in policyholders' dividend accumulations 13,374 12,639 15,298
(Decrease) increase in accrued federal income tax payable (5,131) 30,836 (5,714)
Increase in other liabilities 188,900 26,851 506
Other, net (61,679) 1,832 (29,595)
--------------- --------------- ---------------
Net cash provided by operating activities 346,159 187,633 39,880
---------------- --------------- ---------------
Cash flows from investing activities:
Proceeds from maturity of securities available-for-sale 1,162,766 634,553 544,843
Proceeds from sale of securities available-for-sale 299,558 107,345 228,308
Proceeds from maturity of fixed maturity securities held-to-maturity - 564,450 491,862
Proceeds from repayments of mortgage loans on real estate 309,050 207,832 190,574
Proceeds from sale of real estate 18,519 48,331 46,713
Proceeds from repayments of policy loans and sale of other invested assets 22,795 53,587 120,506
Cost of securities available-for-sale acquired (1,573,640) (1,942,413) (1,816,370)
Cost of fixed maturity securities held-to-maturity acquired - (593,636) (410,379)
Cost of mortgage loans on real estate acquired (972,776) (796,026) (471,570)
Cost of real estate acquired (7,862) (10,928) (6,385)
Policy loans issued and other invested assets acquired (57,740) (75,910) (65,302)
Short-term investments, net 28,003 77,837 (89,376)
Purchase of affiliate (note 13) - - (155,000)
---------------- --------------- ---------------
Net cash used in investing activities (771,327) (1,724,978) (1,391,576)
---------------- --------------- ---------------
Cash flows from financing activities:
Proceeds from capital contributions 30 - 200,000
Dividends paid to shareholder (50,000) (7,450) -
Increase in investment product and universal life insurance
product account balances 2,293,933 2,809,385 3,547,976
Decrease in investment product and universal life insurance
product account balances (1,784,466) (1,258,758) (2,412,595)
---------------- --------------- --------------
Net cash provided by financing activities 459,497 1,543,177 1,335,381
---------------- --------------- --------------
Net increase (decrease) in cash 34,329 5,832 (16,315)
---------------- --------------- ---------------
Cash, beginning of year 9,455 3,623 19,938
---------------- --------------- ---------------
Cash, end of year $ 43,784 9,455 3,623
================ =============== ===============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 6
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1996, 1995 and 1994
($000's omitted)
(1) Organization and Description of Business
----------------------------------------
Nationwide Life Insurance Company (NLIC) is a wholly owned subsidiary
of Nationwide Corporation (Nationwide Corp.). Wholly owned subsidiaries
of NLIC include Nationwide Life and Annuity Insurance Company (NLAIC),
Employers Life Insurance Company of Wausau and subsidiaries (ELICW),
National Casualty Company (NCC), West Coast Life Insurance Company
(WCLIC), Nationwide Advisory Services, Inc. (formerly Nationwide
Financial Services, Inc.), Nationwide Investment Services Corporation
(formerly PEBSCO Securities Corporation) (NISC) and NWE, Inc. NLIC and
its subsidiaries are collectively referred to as "the Company."
Nationwide Corp. formed Nationwide Financial Services, Inc. (NFS) in
November 1996 as a holding company for NLIC and the other companies of
the Nationwide Insurance Enterprise that offer or distribute long-term
savings and retirement products. On January 27, 1997, Nationwide Corp.
contributed to NFS the common stock of NLIC and three marketing and
distribution companies. NFS is planning an initial public offering of
its Class A common stock during the first quarter of 1997.
In anticipation of the restructuring described above, on September 24,
1996, NLIC's Board of Directors declared a dividend payable January 1,
1997 to Nationwide Corp. consisting of the outstanding shares of common
stock of certain subsidiaries (ELICW, NCC and WCLIC) that do not offer
or distribute long-term savings and retirement products. In addition,
during 1996, NLIC entered into two reinsurance agreements whereby all
of NLIC's accident and health and group life insurance business was
ceded to ELICW and another affiliate effective January 1, 1996. These
subsidiaries and all accident and health and group life insurance
business have been accounted for as discontinued operations for all
periods presented. See notes 2 and 13.
In addition, as part of the restructuring described above, NLIC intends
to make an $850,000 distribution to NFS which will then make an
equivalent distribution to Nationwide Corp.
The Company is a leading provider of long-term savings and retirement
products to retail and institutional customers and is subject to
competition from other financial services providers throughout the
United States. The Company is subject to regulation by the Insurance
Departments of states in which it is licensed, and undergoes periodic
examinations by those departments.
The following is a description of the most significant risks facing
life insurers and how the Company mitigates those risks:
LEGAL/REGULATORY RISK is the risk that changes in the legal or
regulatory environment in which an insurer operates will create
additional expenses not anticipated by the insurer in pricing its
products. That is, regulatory initiatives, new legal theories or
insurance company insolvencies through guaranty fund assessments
may create costs for the insurer beyond those currently recorded
in the consolidated financial statements. The Company mitigates
this risk by offering a wide range of products and by operating
throughout the United States, thus reducing its exposure to any
single product or jurisdiction, and also by employing underwriting
practices which identify and minimize the adverse impact of this
risk.
CREDIT RISK is the risk that issuers of securities owned by the
Company or mortgagors on mortgage loans on real estate owned by
the Company will default or that other parties, including
reinsurers, which owe the Company money, will not pay. The Company
minimizes this risk by adhering to a conservative investment
strategy, by maintaining reinsurance and credit and collection
policies and by providing for any amounts deemed uncollectible.
<PAGE> 7
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
INTEREST RATE RISK is the risk that interest rates will change and
cause a decrease in the value of an insurer's investments. This
change in rates may cause certain interest-sensitive products to
become uncompetitive or may cause disintermediation. The Company
mitigates this risk by charging fees for non-conformance with
certain policy provisions, by offering products that transfer this
risk to the purchaser, and/or by attempting to match the maturity
schedule of its assets with the expected payouts of its
liabilities. To the extent that liabilities come due more quickly
than assets mature, an insurer would have to borrow funds or sell
assets prior to maturity and potentially recognize a gain or loss.
(2) Discontinued Operations
-----------------------
As discussed in note 1, NFS is a holding company for NLIC and certain
other companies that offer or distribute long-term savings and
retirement products. Prior to the contribution by Nationwide Corp. to
NFS of the outstanding common stock of NLIC and other companies, NLIC
effected certain transactions with respect to certain subsidiaries and
lines of business that were unrelated to long-term savings and
retirement products.
On September 24, 1996, NLIC's Board of Directors declared a dividend to
Nationwide Corp. consisting of the outstanding shares of common stock
of three subsidiaries: ELICW, NCC and WCLIC. ELICW writes group
accident and health and group life insurance business and maintains it
offices in Wausau, Wisconsin. NCC is a property and casualty company
that serves as a fronting company for a property and casualty
subsidiary of Nationwide Mutual Insurance Company (NMIC), an affiliate.
NCC maintains its offices in Scottsdale, Arizona. WCLIC writes high
dollar term life insurance policies and is located in San Francisco,
California. ELICW, NCC and WCLIC have been accounted for as
discontinued operations for all periods presented. NLIC did not
recognize any gain or loss on the disposal of these subsidiaries.
A summary of the combined results of operations, including the results
of the accident and health and group life insurance business ELICW
assumed from NLIC in 1996, and assets and liabilities of ELICW, NCC and
WCLIC as of and for the years ended December 31, 1996, 1995 and 1994 is
as follows:
<TABLE>
<CAPTION>
1996 1995 1994
------------ ----------- -----------
<S> <C> <C> <C>
Revenues $ 668,870 422,149 84,226
Net income 11,324 26,456 11,753
Assets, consisting primarily of investments 3,029,293 2,967,326 2,537,692
Liabilities, consisting primarily of policy benefits and claims 2,543,586 2,460,649 2,179,263
</TABLE>
During 1996, NLIC entered into two reinsurance agreements whereby all
of NLIC's accident and health and group life insurance business was
ceded to ELICW and NMIC, effective January 1, 1996. See note 13 for a
complete discussion of the reinsurance agreements. NLIC has
discontinued its accident and health and group life insurance business
and in connection therewith has entered into reinsurance agreements to
cede all existing and any future writings to other affiliated companies
and will cease writing any new business prior to December 31, 1997.
NLIC's accident and health and group life insurance business is
accounted for as discontinued operations for all periods presented.
NLIC did not recognize any gain or loss on the disposal of the accident
and health and group life insurance business. The assets, liabilities,
results of operations and activities of discontinued operations are
distinguished physically, operationally and for financial reporting
purposes from the remaining assets, liabilities, results of operations
and activities of NLIC.
<PAGE> 8
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
A summary of the results of operations, net of amounts ceded to ELICW
and NMIC in 1996, and assets and liabilities of NLIC's accident and
health and group life insurance business as of and for the years ended
December 31, 1996, 1995 and 1994 is as follows:
<TABLE>
<CAPTION>
1996 1995 1994
------------ ----------- -----------
<S> <C> <C> <C>
Revenues $ - 354,788 362,476
Net income (loss) - (1,742) 8,706
Assets, consisting primarily of investments 259,185 239,426 234,082
Liabilities, consisting primarily of policy benefits and claims 259,185 239,426 234,082
</TABLE>
(3) Summary of Significant Accounting Policies
------------------------------------------
The significant accounting policies followed by the Company that
materially affect financial reporting are summarized below. The
accompanying consolidated financial statements have been prepared in
accordance with generally accepted accounting principles (GAAP) which
differ from statutory accounting practices prescribed or permitted by
regulatory authorities. Annual Statements for NLIC and its insurance
subsidiaries, filed with the department of insurance of each insurance
company's state of domicile, are prepared on the basis of accounting
practices prescribed or permitted by each department. Prescribed
statutory accounting practices include a variety of publications of the
National Association of Insurance Commissioners (NAIC), as well as
state laws, regulations and general administrative rules. Permitted
statutory accounting practices encompass all accounting practices not
so prescribed. The Company has no material permitted statutory
accounting practices.
In preparing the consolidated financial statements, management is
required to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosures of contingent
assets and liabilities as of the date of the consolidated financial
statements and the reported amounts of revenues and expenses for the
reporting period. Actual results could differ significantly from those
estimates.
The most significant estimates include those used in determining
deferred policy acquisition costs, valuation allowances for mortgage
loans on real estate and real estate investments and the liability for
future policy benefits and claims. Although some variability is
inherent in these estimates, management believes the amounts provided
are adequate.
(a) Consolidation Policy
--------------------
The consolidated financial statements include the accounts of NLIC
and its wholly owned subsidiaries. Subsidiaries that are
classified and reported as discontinued operations are not
consolidated but rather are reported as "Investment in
Subsidiaries Classified as Discontinued Operations" in the
accompanying consolidated balance sheets and "Income for
Discontinued Operations" in the accompanying consolidated
statements of income. All significant intercompany balances and
transactions have been eliminated.
(b) Valuation of Investments and Related Gains and Losses
-----------------------------------------------------
The Company is required to classify its fixed maturity securities
and equity securities as either held-to-maturity,
available-for-sale or trading. Fixed maturity securities are
classified as held-to-maturity when the Company has the positive
intent and ability to hold the securities to maturity and are
stated at amortized cost. Fixed maturity securities not classified
as held-to-maturity and all equity securities are classified as
available-for-sale and are stated at fair value, with the
unrealized gains and losses, net of adjustments to deferred policy
acquisition costs and deferred federal income tax, reported as a
separate component of shareholder's equity. The adjustment to
deferred policy acquisition costs represents the change in
amortization of deferred policy acquisition costs that would have
been required as a charge or credit to operations had such
unrealized amounts been realized. The Company has no fixed
maturity securities classified as held-to-maturity or trading as
of December 31, 1996 or 1995.
<PAGE> 9
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
Mortgage loans on real estate are carried at the unpaid principal
balance less valuation allowances. The Company provides valuation
allowances for impairments of mortgage loans on real estate based
on a review by portfolio managers. The measurement of impaired
loans is based on the present value of expected future cash flows
discounted at the loan's effective interest rate or, as a
practical expedient, at the fair value of the collateral, if the
loan is collateral dependent. Loans in foreclosure and loans
considered to be impaired are placed on non-accrual status.
Interest received on non-accrual status mortgage loans on real
estate are included in interest income in the period received.
Real estate is carried at cost less accumulated depreciation and
valuation allowances. Other long-term investments are carried on
the equity basis, adjusted for valuation allowances. Impairment
losses are recorded on long-lived assets used in operations when
indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the
assets' carrying amount.
Realized gains and losses on the sale of investments are
determined on the basis of specific security identification.
Estimates for valuation allowances and other than temporary
declines are included in realized gains and losses on investments.
(c) Revenues and Benefits
---------------------
INVESTMENT PRODUCTS AND UNIVERSAL LIFE INSURANCE PRODUCTS:
Investment products consist primarily of individual and group
variable and fixed annuities, annuities without life contingencies
and guaranteed investment contracts. Universal life insurance
products include universal life insurance, variable universal life
insurance and other interest-sensitive life insurance policies.
Revenues for investment products and universal life insurance
products consist of net investment income, asset fees, cost of
insurance, policy administration and surrender charges that have
been earned and assessed against policy account balances during
the period. Policy benefits and claims that are charged to expense
include interest credited to policy account balances and benefits
and claims incurred in the period in excess of related policy
account balances.
TRADITIONAL LIFE INSURANCE PRODUCTS: Traditional life insurance
products include those products with fixed and guaranteed premiums
and benefits and consist primarily of whole life insurance,
limited-payment life insurance, term life insurance and certain
annuities with life contingencies. Premiums for traditional life
insurance products are recognized as revenue when due. Benefits
and expenses are associated with earned premiums so as to result
in recognition of profits over the life of the contract. This
association is accomplished by the provision for future policy
benefits and the deferral and amortization of policy acquisition
costs.
ACCIDENT AND HEALTH INSURANCE PRODUCTS: Accident and health
insurance premiums are recognized as revenue over the terms of the
policies. Policy claims are charged to expense in the period that
the claims are incurred. All accident and health insurance
business is accounted for as discontinued operations. See note 2.
(d) Deferred Policy Acquisition Costs
---------------------------------
The costs of acquiring new business, principally commissions,
certain expenses of the policy issue and underwriting department
and certain variable agency expenses have been deferred. For
investment products and universal life insurance products,
deferred policy acquisition costs are being amortized with
interest over the lives of the policies in relation to the present
value of estimated future gross profits from projected interest
margins, asset fees, cost of insurance, policy administration and
surrender charges. For years in which gross profits are negative,
deferred policy acquisition costs are amortized based on the
present value of gross revenues. For traditional life products,
these deferred policy acquisition costs are predominantly being
amortized with interest over the premium paying period of the
related policies in proportion to the ratio of actual annual
premium revenue to the anticipated total premium revenue. Such
anticipated premium revenue was estimated using the same
assumptions as were used for computing liabilities for future
policy benefits. Deferred policy acquisition costs are adjusted to
reflect the impact of unrealized gains and losses on fixed
maturity securities available-for-sale as described in note 3(b).
<PAGE> 10
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(e) Separate Accounts
-----------------
Separate Account assets and liabilities represent contractholders'
funds which have been segregated into accounts with specific
investment objectives. The investment income and gains or losses
of these accounts accrue directly to the contractholders. The
activity of the Separate Accounts is not reflected in the
consolidated statements of income and cash flows except for the
fees the Company receives.
(f) Future Policy Benefits
----------------------
Future policy benefits for investment products in the accumulation
phase, universal life insurance and variable universal life
insurance policies have been calculated based on participants'
contributions plus interest credited less applicable contract
charges.
Future policy benefits for traditional life insurance policies
have been calculated using a net level premium method based on
estimates of mortality, morbidity, investment yields and
withdrawals which were used or which were being experienced at the
time the policies were issued, rather than the assumptions
prescribed by state regulatory authorities. See note 6.
Future policy benefits and claims for collectively renewable
long-term disability policies and group long-term disability
policies are the present value of amounts not yet due on reported
claims and an estimate of amounts to be paid on incurred but
unreported claims. The impact of reserve discounting is not
material. Future policy benefits and claims on other group health
insurance policies are not discounted. All health insurance
business is accounted for as discontinued operations. See note 2.
(g) Participating Business
----------------------
Participating business represents approximately 52% in 1996 (54%
in 1995 and 55% in 1994) of the Company's life insurance in force,
78% in 1996 (79% in 1995 and 79% in 1994) of the number of life
insurance policies in force, and 40% in 1996 (47% in 1995 and 51%
in 1994) of life insurance premiums. The provision for
policyholder dividends is based on current dividend scales. Future
dividends are provided for ratably in future policy benefits based
on dividend scales in effect at the time the policies were issued.
(h) Federal Income Tax
------------------
The Company, with the exception of ELICW, files a consolidated
federal income tax return with NMIC, the majority shareholder of
Nationwide Corp. The members of the consolidated tax return group
have a tax sharing arrangement which provides, in effect, for each
member to bear essentially the same federal income tax liability
as if separate tax returns were filed. Through 1994, ELICW filed a
consolidated federal income tax return with Employers Insurance of
Wausau A Mutual Company, an affiliate. Beginning in 1995, ELICW
files a separate federal income tax return.
The Company utilizes the asset and liability method of accounting
for income tax. Under this method, deferred tax assets and
liabilities are recognized for the future tax consequences
attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their
respective tax bases and operating loss and tax credit
carryforwards. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be
recovered or settled. Under this method, the effect on deferred
tax assets and liabilities of a change in tax rates is recognized
in income in the period that includes the enactment date.
Valuation allowances are established when necessary to reduce the
deferred tax assets to the amounts expected to be realized.
<PAGE> 11
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(i) Reinsurance Ceded
-----------------
Reinsurance premiums ceded and reinsurance recoveries on benefits
and claims incurred are deducted from the respective income and
expense accounts. Assets and liabilities related to reinsurance
ceded are reported on a gross basis. All of the Company's accident
and health and group life insurance business is ceded to
affiliates and is accounted for as discontinued operations. See
notes 2 and 13.
(j) Reclassification
----------------
Certain items in the 1995 and 1994 consolidated financial
statements have been reclassified to conform to the 1996
presentation.
(4) Change in Accounting Principle
------------------------------
Effective January 1, 1994, the Company changed its method of accounting
for certain investments in debt and equity securities in connection
with the issuance of STATEMENT OF FINANCIAL ACCOUNTING STANDARDS (SFAS)
NO. 115 - ACCOUNTING FOR CERTAIN INVESTMENTS IN DEBT AND EQUITY
SECURITIES. As of January 1, 1994, the Company classified fixed
maturity securities with amortized cost and fair value of $6,299,665
and $6,721,714, respectively, as available-for-sale and recorded the
securities at fair value. Previously, these securities were recorded at
amortized cost. The effect as of January 1, 1994 has been recorded as a
direct credit to shareholder's equity as follows:
<TABLE>
<CAPTION>
<S> <C>
Excess of fair value over amortized cost of fixed maturity
securities available-for-sale $ 422,049
Adjustment to deferred policy acquisition costs (95,044)
Deferred federal income tax (114,452)
--------------
$ 212,553
==============
</TABLE>
(5) Investments
-----------
The amortized cost and estimated fair value of securities
available-for-sale were as follows as of December 31, 1996:
<TABLE>
<CAPTION>
Gross Gross
Amortized unrealized unrealized Estimated
cost gains losses fair value
------------ ---------- ----------- -----------
<S> <C> <C> <C> <C>
1996:
Fixed maturity securities:
U.S. Treasury securities and obligations of
U.S. government corporations and agencies $ 275,696 4,795 (1,340) 279,151
Obligations of states and political subdivisions 6,242 450 (2) 6,690
Debt securities issued by foreign governments 100,656 2,141 (857) 101,940
Corporate securities 7,999,310 285,946 (33,686) 8,251,570
Mortgage-backed securities 3,588,974 91,438 (15,124) 3,665,288
------------ ---------- ------------ ------------
Total fixed maturity securities 11,970,878 384,770 (51,009) 12,304,639
Equity securities 43,890 15,571 (330) 59,131
------------ ---------- ------------ ------------
$12,014,768 400,341 (51,339) 12,363,770
============ ========== ============ ============
</TABLE>
<PAGE> 12
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
The amortized cost and estimated fair value of securities
available-for-sale were as follows as of December 31, 1995:
<TABLE>
<CAPTION>
Gross Gross
Amortized unrealized unrealized Estimated
cost gains losses fair value
------------ ---------- ----------- ---------------
<S> <C> <C> <C> <C>
1995:
Fixed maturity securities:
U.S. Treasury securities and obligations of
U.S. government corporations and agencies $ 310,186 12,764 (1) 322,949
Obligations of states and political subdivisions 8,655 1,205 (1) 9,859
Debt securities issued by foreign governments 101,414 4,387 (66) 105,735
Corporate securities 7,888,440 473,681 (25,742) 8,336,379
Mortgage-backed securities 3,553,861 165,169 (8,388) 3,710,642
------------ ---------- ----------- ---------------
Total fixed maturity securities 11,862,556 657,206 (34,198) 12,485,564
Equity securities 23,617 6,382 (46) 29,953
------------ ---------- ----------- ---------------
$11,886,173 663,588 (34,244) 12,515,517
============ ========== =========== ===============
</TABLE>
The amortized cost and estimated fair value of fixed maturity
securities available-for-sale as of December 31, 1996, by contractual
maturity, are shown below. Expected maturities will differ from
contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>
Amortized Estimated
cost fair value
--------------- --------------
<S> <C> <C>
Fixed maturity securities available-for-sale:
Due in one year or less $ 440,235 444,214
Due after one year through five years 3,937,010 4,053,152
Due after five years through ten years 2,809,813 2,871,806
Due after ten years 1,194,846 1,270,179
--------------- --------------
8,381,904 8,639,351
Mortgage-backed securities 3,588,974 3,665,288
--------------- --------------
$11,970,878 12,304,639
=============== ==============
</TABLE>
The components of unrealized gains on securities available-for-sale,
net, were as follows as of December 31:
<TABLE>
<CAPTION>
1996 1995
--------------- --------------
<S> <C> <C>
Gross unrealized gains $349,002 629,344
Adjustment to deferred policy acquisition costs (81,939) (138,914)
Deferred federal income tax (93,471) (171,649)
--------------- --------------
173,592 318,781
Unrealized gains on securities available-for-sale, net, of
subsidiaries classified as discontinued operations (note 2) - 65,523
--------------- --------------
$173,592 384,304
=============== ==============
</TABLE>
<PAGE> 13
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
An analysis of the change in gross unrealized gains (losses) on
securities available-for-sale and fixed maturity securities
held-to-maturity follows for the years ended December 31:
<TABLE>
<CAPTION>
1996 1995 1994
--------------- ------------- --------------
<S> <C> <C> <C>
Securities available-for-sale:
Fixed maturity securities $(289,247) 876,332 (675,373)
Equity securities 8,905 (26) (1,927)
Fixed maturity securities held-to-maturity - 75,626 (398,183)
--------------- ------------- --------------
$(280,342) 951,932 (1,075,483)
=============== ============= ==============
</TABLE>
Proceeds from the sale of securities available-for-sale during 1996,
1995 and 1994 were $299,558, $107,345 and $228,308, respectively.
During 1996, gross gains of $6,606 ($4,838 and $3,045 in 1995 and 1994,
respectively) and gross losses of $6,925 ($2,147 and $21,280 in 1995
and 1994, respectively) were realized on those sales.
During 1995, the Company transferred fixed maturity securities
classified as held-to-maturity with amortized cost of $25,429 to
available-for-sale securities due to evidence of a significant
deterioration in the issuer's creditworthiness. The transfer of those
fixed maturity securities resulted in a gross unrealized loss of
$3,535.
As permitted by the Financial Accounting Standards Board's Special
Report, A GUIDE TO IMPLEMENTATION OF STATEMENT 115 ON ACCOUNTING FOR
CERTAIN INVESTMENTS IN DEBT AND EQUITY SECURITIES, issued in November
1995 the Company transferred all of its fixed maturity securities
previously classified as held-to-maturity to available-for-sale. As of
December 14, 1995, the date of transfer, the fixed maturity securities
had amortized cost of $3,320,093, resulting in a gross unrealized gain
of $155,940.
Investments that were non-income producing for the twelve month period
preceding December 31, 1996 amounted to $26,805 ($27,712 in 1995) and
consisted of $248 ($6,982 in 1995) in fixed maturity securities,
$20,633 ($14,740 in 1995) in real estate and $5,924 ($5,990 in 1995) in
other long-term investments.
Real estate is presented at cost less accumulated depreciation of
$30,338 as of December 31, 1996 ($30,482 as of December 31, 1995) and
valuation allowances of $15,219 as of December 31, 1996 ($25,819 as of
December 31, 1995).
The recorded investment of mortgage loans on real estate considered to
be impaired (under SFAS NO. 114 - ACCOUNTING BY CREDITORS FOR
IMPAIRMENT OF A LOAN as amended by SFAS NO. 118 - ACCOUNTING BY
CREDITORS FOR IMPAIRMENT OF A LOAN-INCOME RECOGNITION AND DISCLOSURE)
as of December 31, 1996 was $51,765 ($44,409 as of December 31, 1995),
which includes $41,663 ($23,975 as of December 31, 1995) of impaired
mortgage loans on real estate for which the related valuation allowance
was $8,485 ($5,276 as of December 31, 1995) and $10,102 ($20,434 as of
December 31, 1995) of impaired mortgage loans on real estate for which
there was no valuation allowance. During 1996, the average recorded
investment in impaired mortgage loans on real estate was approximately
$39,674 ($22,181 in 1995) and interest income recognized on those loans
was $2,103 ($387 in 1995), which is equal to interest income recognized
using a cash-basis method of income recognition.
Activity in the valuation allowance account for mortgage loans on real
estate is summarized for the years ended December 31:
<TABLE>
<CAPTION>
1996 1995
------------- --------------
<S> <C> <C>
Allowance, beginning of year $49,128 46,381
Additions charged to operations 4,497 7,433
Direct write-downs charged against the allowance (2,587) (4,686)
------------- -------------
Allowance, end of year $51,038 49,128
============= ==============
</TABLE>
<PAGE> 14
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
An analysis of investment income by investment type follows for the
years ended December 31:
<TABLE>
<CAPTION>
1996 1995 1994
--------------- ------------- ------------
<S> <C> <C> <C>
Gross investment income:
Securities available-for-sale:
Fixed maturity securities $ 917,135 685,787 647,927
Equity securities 1,291 1,330 509
Fixed maturity securities held-to-maturity - 201,808 185,938
Mortgage loans on real estate 432,815 395,478 372,734
Real estate 44,332 38,344 40,170
Short-term investments 4,155 10,576 6,141
Other 3,998 7,239 2,121
--------------- ------------- --------------
Total investment income 1,403,726 1,340,562 1,255,540
Less investment expenses 45,967 46,529 44,729
--------------- ------------- ---------------
Net investment income $1,357,759 1,294,033 1,210,811
=============== ============= ==============
</TABLE>
An analysis of realized gains (losses) on investments, net of valuation
allowances, by investment type follows for the years ended December 31:
<TABLE>
<CAPTION>
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
Securities available-for-sale:
Fixed maturity securities $(3,462) 4,213 (7,296)
Equity securities 3,143 3,386 1,422
Mortgage loans on real estate (4,115) (7,091) (20,446)
Real estate and other 4,108 (2,232) 9,793
------------ ------------ ------------
$ (326) (1,724) (16,527)
============ ============ ============
</TABLE>
Fixed maturity securities with an amortized cost of $6,161 and $5,592
as of December 31, 1996 and 1995, respectively, were on deposit with
various regulatory agencies as required by law.
(6) Future Policy Benefits and Claims
---------------------------------
The liability for future policy benefits for investment contracts
represents approximately 87% and 87% of the total liability for future
policy benefits as of December 31, 1996 and 1995, respectively. The
average interest rate credited on investment product policies was
approximately 6.3%, 6.6% and 6.5% for the years ended December 31,
1996, 1995 and 1994, respectively.
The liability for future policy benefits for traditional life insurance
policies has been established based upon the following assumptions:
Interest rates: Interest rates vary as follows:
--------------
<TABLE>
<CAPTION>
Year of issue Interest rates
----------------- ----------------------------------------
<S> <C>
1996 6.6%, not graded
1984-1995 6.0% to 10.5%, not graded
1966-1983 6.0% to 8.1%, graded over 20 years to 4.0% to 6.6%
1965 and prior generally lower than post 1965 issues
</TABLE>
<PAGE> 15
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
WITHDRAWALS: Rates, which vary by issue age, type of coverage
and policy duration, are based on Company experience.
MORTALITY: Mortality and morbidity rates are based on
published tables, modified for the Company's actual
experience.
The Company has entered into a reinsurance contract to cede a portion
of its general account individual annuity business to The Franklin Life
Insurance Company (Franklin). Total recoveries due from Franklin were
$240,451 and $245,255 as of December 31, 1996 and 1995, respectively.
The contract is immaterial to the Company's results of operations. The
ceding of risk does not discharge the original insurer from its primary
obligation to the policyholder. Under the terms of the contract,
Franklin has established a trust as collateral for the recoveries. The
trust assets are invested in investment grade securities, the market
value of which must at all times be greater than or equal to 102% of
the reinsured reserves.
The Company has reinsurance agreements with certain affiliates as
described in note 13. All other reinsurance agreements are not material
to either premiums or reinsurance recoverables.
(7) Federal Income Tax
-------------------
The tax effects of temporary differences that give rise to significant
components of the net deferred tax liability as of December 31, 1996
and 1995 are as follows:
<TABLE>
<CAPTION>
1996 1995
----------------- ---------------
<S> <C> <C>
Deferred tax assets:
Future policy benefits $175,571 149,192
Liabilities in Separate Accounts 188,426 129,120
Mortgage loans on real estate and real estate 23,366 25,165
Other policyholder funds 7,407 7,424
Other assets and other liabilities 53,757 41,847
----------------- ---------------
Total gross deferred tax assets 448,527 352,748
Less valuation allowances (7,000) (7,000)
----------------- ---------------
Net deferred tax assets 441,527 345,748
================= ===============
Deferred tax liabilities:
Deferred policy acquisition costs 399,345 299,579
Fixed maturity securities 133,210 227,345
Deferred tax on realized investment gains 37,597 40,634
Equity securities and other long-term investments 8,210 3,780
Other 25,377 21,037
----------------- ---------------
Total gross deferred tax liabilities 603,739 592,375
----------------- ---------------
$162,212 246,627
================= ===============
</TABLE>
In assessing the realizability of deferred tax assets, management
considers whether it is more likely than not that some portion of the
total gross deferred tax assets will not be realized. Nearly all future
deductible amounts can be offset by future taxable amounts or recovery
of federal income tax paid within the statutory carryback period. There
has been no change in the valuation allowance for the years ended
December 31, 1996, 1995 and 1994.
<PAGE> 16
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
Total federal income tax expense for the years ended December 31, 1996,
1995 and 1994 differs from the amount computed by applying the U.S.
federal income tax rate to income before tax as follows:
<TABLE>
<CAPTION>
1996 1995 1994
---------------------- ---------------------- ----------------------
Amount % Amount % Amount %
---------------------- ---------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C>
Computed (expected) tax expense $110,424 35.0 $100,650 35.0 $84,650 35.0
Tax exempt interest and dividends
received deduction (212) (0.1) (18) (0.0) (130) (0.1)
Other, net 677 0.3 (824) (0.3) (5,931) (2.5)
------------ -------- ------------- -------- ------------- --------
Total (effective rate of each year) $110,889 35.2 $ 99,808 34.7 $78,589 32.5
============ ======== ============= ======== ============= ========
</TABLE>
Total federal income tax paid was $115,839, $51,840 and $83,239
during the years ended December 31, 1996, 1995 and 1994,
respectively.
(8) Disclosures about Fair Value of Financial Instruments
-----------------------------------------------------
SFAS NO. 107 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
(SFAS 107) requires disclosure of fair value information about existing
on and off-balance sheet financial instruments. SFAS 107 defines the
fair value of a financial instrument as the amount at which the
financial instrument could be exchanged in a current transaction
between willing parties. In cases where quoted market prices are not
available, fair value is based on estimates using present value or
other valuation techniques.
These techniques are significantly affected by the assumptions used,
including the discount rate and estimates of future cash flows.
Although fair value estimates are calculated using assumptions that
management believes are appropriate, changes in assumptions could cause
these estimates to vary materially. In that regard, the derived fair
value estimates cannot be substantiated by comparison to independent
markets and, in many cases, could not be realized in the immediate
settlement of the instruments. SFAS 107 excludes certain assets and
liabilities from its disclosure requirements. Accordingly, the
aggregate fair value amounts presented do not represent the underlying
value of the Company.
Although insurance contracts, other than policies such as annuities
that are classified as investment contracts, are specifically exempted
from SFAS 107 disclosures, estimated fair value of policy reserves on
life insurance contracts is provided to make the fair value disclosures
more meaningful.
The tax ramifications of the related unrealized gains and losses can
have a significant effect on fair value estimates and have not been
considered in the estimates.
The following methods and assumptions were used by the Company in
estimating its fair value disclosures:
CASH, SHORT-TERM INVESTMENTS AND POLICY LOANS: The carrying amount
reported in the consolidated balance sheets for these instruments
approximates their fair value.
FIXED MATURITY AND EQUITY SECURITIES: Fair value for fixed
maturity securities is based on quoted market prices, where
available. For fixed maturity securities not actively traded, fair
value is estimated using values obtained from independent pricing
services or, in the case of private placements, is estimated by
discounting expected future cash flows using a current market rate
applicable to the yield, credit quality and maturity of the
investments. The fair value for equity securities is based on
quoted market prices.
SEPARATE ACCOUNT ASSETS AND LIABILITIES: The fair value of assets
held in Separate Accounts is based on quoted market prices. The
fair value of liabilities related to Separate Accounts is the
amount payable on demand, which includes certain surrender
charges.
<PAGE> 17
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
MORTGAGE LOANS ON REAL ESTATE: The fair value for mortgage loans
on real estate is estimated using discounted cash flow analyses,
using interest rates currently being offered for similar loans to
borrowers with similar credit ratings. Loans with similar
characteristics are aggregated for purposes of the calculations.
Fair value for mortgages in default is the estimated fair value of
the underlying collateral.
INVESTMENT CONTRACTS: Fair value for the Company's liabilities
under investment type contracts is disclosed using two methods.
For investment contracts without defined maturities, fair value is
the amount payable on demand. For investment contracts with known
or determined maturities, fair value is estimated using discounted
cash flow analyses. Interest rates used are similar to currently
offered contracts with maturities consistent with those remaining
for the contracts being valued.
POLICY RESERVES ON LIFE INSURANCE CONTRACTS: Included are
disclosures for individual life insurance, universal life
insurance and supplementary contracts with life contingencies for
which the estimated fair value is the amount payable on demand.
Also included are disclosures for the Company's limited payment
policies, which the Company has used discounted cash flow analyses
similar to those used for investment contracts with known
maturities to estimate fair value.
POLICYHOLDERS' DIVIDEND ACCUMULATIONS AND OTHER POLICYHOLDER
FUNDS: The carrying amount reported in the consolidated balance
sheets for these instruments approximates their fair value.
COMMITMENTS TO EXTEND CREDIT: Commitments to extend credit have
nominal fair value because of the short-term nature of such
commitments. See note 9.
Carrying amount and estimated fair value of financial instruments
subject to SFAS 107 and policy reserves on life insurance contracts
were as follows as of December 31, 1996 and 1995:
<TABLE>
<CAPTION>
1996 1995
------------------------------ -------------------------------
Carrying Estimated Carrying Estimated
amount fair value amount fair value
------------------------------ --------------- ---------------
<S> <C> <C> <C> <C>
Assets
------
Investments:
Securities available-for-sale:
Fixed maturity securities $12,304,639 12,304,639 12,485,564 12,485,564
Equity securities 59,131 59,131 29,953 29,953
Mortgage loans on real estate, net 5,272,119 5,397,865 4,602,764 4,961,655
Policy loans 371,816 371,816 336,356 336,356
Short-term investments 4,789 4,789 32,792 32,792
Cash 43,784 43,784 9,455 9,455
Assets held in Separate Accounts 26,926,702 26,926,702 18,591,108 18,591,108
Liabilities
-----------
Investment contracts 13,914,441 13,484,526 13,229,360 12,876,798
Policy reserves on life insurance contracts 2,971,337 2,775,991 2,836,323 2,733,486
Policyholders' dividend accumulations 361,401 361,401 348,027 348,027
Other policyholder funds 60,073 60,073 65,297 65,297
Liabilities related to Separate Accounts 26,926,702 26,164,213 18,591,108 18,052,362
</TABLE>
(9) Additional Financial Instruments Disclosures
--------------------------------------------
FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK: The Company is a
party to financial instruments with off-balance-sheet risk in the
normal course of business through management of its investment
portfolio. These financial instruments include commitments to extend
credit in the form of loans. These instruments involve, to varying
degrees, elements of credit risk in excess of amounts recognized on the
consolidated balance sheets.
<PAGE> 18
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
Commitments to fund fixed rate mortgage loans on real estate are
agreements to lend to a borrower, and are subject to conditions
established in the contract. Commitments generally have fixed
expiration dates or other termination clauses and may require payment
of a deposit. Commitments extended by the Company are based on
management's case-by-case credit evaluation of the borrower and the
borrower's loan collateral. The underlying mortgage property represents
the collateral if the commitment is funded. The Company's policy for
new mortgage loans on real estate is to lend no more than 75% of
collateral value. Should the commitment be funded, the Company's
exposure to credit loss in the event of nonperformance by the borrower
is represented by the contractual amounts of these commitments less the
net realizable value of the collateral. The contractual amounts also
represent the cash requirements for all unfunded commitments.
Commitments on mortgage loans on real estate of $327,456 extending into
1997 were outstanding as of December 31, 1996.
SIGNIFICANT CONCENTRATIONS OF CREDIT RISK: The Company grants mainly
commercial mortgage loans on real estate to customers throughout the
United States. The Company has a diversified portfolio with no more
than 21% (20% in 1995) in any geographic area and no more than 2% (2%
in 1995) with any one borrower as of December 31, 1996.
The Company had a significant reinsurance recoverable balance from one
reinsurer as of December 31, 1996 and 1995. See note 6.
The summary below depicts loans by remaining principal balance as of
December 31, 1996 and 1995:
<TABLE>
<CAPTION>
Apartment
Office Warehouse Retail & other Total
------------ ------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
1996:
East North Central $139,518 119,069 549,064 215,038 1,022,689
East South Central 33,267 22,252 172,968 90,623 319,110
Mountain 17,972 43,027 113,292 73,390 247,681
Middle Atlantic 129,077 54,046 160,833 18,498 362,454
New England 33,348 43,581 161,960 - 238,889
Pacific 202,562 325,046 424,295 110,108 1,062,011
South Atlantic 103,889 134,492 482,934 385,185 1,106,500
West North Central 126,467 2,441 75,180 40,529 244,617
West South Central 104,877 120,314 197,090 304,256 726,537
------------- ------------- ------------- -------------- ------------
$890,977 864,268 2,337,616 1,237,627 5,330,488
============ ============= ============= =============
Less valuation allowances and unamortized discount 58,369
--------------
Total mortgage loans on real estate, net $5,272,119
==============
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
1995:
East North Central $138,965 101,925 514,995 175,213 931,098
East South Central 21,329 13,053 180,858 82,383 297,623
Mountain - 17,219 138,220 45,274 200,713
Middle Atlantic 116,187 64,813 158,252 10,793 350,045
New England 9,559 39,525 148,449 1 197,534
Pacific 183,206 233,186 374,915 105,419 896,726
South Atlantic 106,246 73,541 446,800 278,265 904,852
West North Central 133,899 14,205 78,065 36,651 262,820
West South Central 69,140 92,594 190,299 267,268 619,301
------------ ------------ ------------- ------------- --------------
$778,531 650,061 2,230,853 1,001,267 4,660,712
============ ============= ============= =============
Less valuation allowances and unamortized discount 57,948
--------------
Total mortgage loans on real estate, net $4,602,764
==============
</TABLE>
<PAGE> 19
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(10) Pension Plan
------------
The Company is a participant, together with other affiliated companies,
in a pension plan covering all employees who have completed at least
one thousand hours of service within a twelve-month period and who have
met certain age requirements. Benefits are based upon the highest
average annual salary of a specified number of consecutive years of the
last ten years of service. The Company funds pension costs accrued for
direct employees plus an allocation of pension costs accrued for
employees of affiliates whose work efforts benefit the Company.
Effective January 1, 1995, the plan was amended to provide enhanced
benefits for participants who met certain eligibility requirements and
elected early retirement no later than March 15, 1995. The entire cost
of the enhanced benefit was borne by NMIC and certain of its property
and casualty insurance company affiliates.
Effective December 31, 1995, the Nationwide Insurance Companies and
Affiliates Retirement Plan was merged with the Farmland Mutual
Insurance Company Employees' Retirement Plan and the Wausau Insurance
Companies Pension Plan to form the Nationwide Insurance Enterprise
Retirement Plan. Immediately prior to the merger, the plans were
amended to provide consistent benefits for service after January 1,
1996. These amendments had no significant impact on the accumulated
benefit obligation or projected benefit obligation as of December 31,
1995.
Pension costs charged to operations by the Company during the years
ended December 31, 1996, 1995 and 1994 were $7,381, $10,478 and
$10,063, respectively.
The Company's net accrued pension expense as of December 31, 1996 and
1995 was $1,075 and $1,392, respectively.
The net periodic pension cost for the Nationwide Insurance Enterprise
Retirement Plan as a whole for the year ended December 31, 1996 and for
the Nationwide Insurance Companies and Affiliates Retirement Plan as a
whole for the years ended December 31, 1995 and 1994 follows:
<TABLE>
<CAPTION>
1996 1995 1994
--------------- --------------- ---------------
<S> <C> <C> <C>
Service cost (benefits earned during the period) $ 75,466 64,524 64,740
Interest cost on projected benefit obligation 105,511 95,283 73,951
Actual return on plan assets (210,583) (249,294) (21,495)
Net amortization and deferral 101,795 143,353 (62,150)
--------------- --------------- ---------------
$ 72,189 53,866 55,046
=============== =============== ===============
</TABLE>
Basis for measurements, net periodic pension cost:
<TABLE>
<CAPTION>
1996 1995 1994
--------------- --------------- ---------------
<S> <C> <C> <C>
Weighted average discount rate 6.00% 7.50% 5.75%
Rate of increase in future compensation levels 4.25% 6.25% 4.50%
Expected long-term rate of return on plan assets 6.75% 8.75% 7.00%
</TABLE>
<PAGE> 20
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
Information regarding the funded status of the Nationwide Insurance
Enterprise Retirement Plan as a whole as of December 31, 1996 and 1995
follows:
<TABLE>
<CAPTION>
1996 1995
--------------- ---------------
<S> <C> <C>
Accumulated benefit obligation:
Vested $1,338,554 1,236,730
Nonvested 11,149 26,503
--------------- ---------------
$1,349,703 1,263,233
=============== ===============
Net accrued pension expense:
Projected benefit obligation for services rendered to
date $1,847,828 1,780,616
Plan assets at fair value 1,947,933 1,738,004
--------------- ---------------
Plan assets in excess of (less than) projected benefit
obligation 100,105 (42,612)
Unrecognized prior service cost 37,870 42,845
Unrecognized net gains (201,952) (63,130)
Unrecognized net asset at transition 37,158 41,305
--------------- ---------------
$ (26,819) (21,592)
=============== ===============
</TABLE>
Basis for measurements, funded status of plan:
<TABLE>
<CAPTION>
1996 1995
--------------- ---------------
<S> <C> <C>
Weighted average discount rate 6.50% 6.00%
Rate of increase in future compensation levels 4.75% 4.25%
</TABLE>
Assets of the Nationwide Insurance Enterprise Retirement Plan are
invested in group annuity contracts of NLIC and ELICW.
(11) Postretirement Benefits Other Than Pensions
-------------------------------------------
In addition to the defined benefit pension plan, the Company, together
with other affiliated companies, participates in life and health care
defined benefit plans for qualifying retirees. Postretirement life and
health care benefits are contributory and generally available to full
time employees who have attained age 55 and have accumulated 15 years
of service with the Company after reaching age 40. Postretirement
health care benefit contributions are adjusted annually and contain
cost-sharing features such as deductibles and coinsurance. In addition,
there are caps on the Company's portion of the per-participant cost of
the postretirement health care benefits. These caps can increase
annually, but not more than three percent. The Company's policy is to
fund the cost of health care benefits in amounts determined at the
discretion of management. Plan assets are invested primarily in group
annuity contracts of NLIC.
The Company elected to immediately recognize its estimated accumulated
postretirement benefit obligation; however, certain affiliated
companies elected to amortize their initial transition obligation over
periods ranging from 10 to 20 years.
The Company's accrued postretirement benefit expense as of December 31,
1996 and 1995 was $34,884 and $33,537, respectively, and the net
periodic postretirement benefit cost (NPPBC) for 1996, 1995 and 1994
was $3,286, $3,132 and $4,284, respectively.
<PAGE> 21
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
The amount of NPPBC for the plan as a whole for the years ended
December 31, 1996, 1995 and 1994 was as follows:
<TABLE>
<CAPTION>
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Service cost (benefits attributed to employee service during the year) $ 6,541 6,235 8,586
Interest cost on accumulated postretirement benefit obligation 13,679 14,151 14,011
Actual return on plan assets (4,348) (2,657) (1,622)
Amortization of unrecognized transition obligation of affiliates 173 2,966 568
Net amortization and deferral 1,830 (1,619) 1,622
----------- ----------- -----------
$17,875 19,076 23,165
=========== =========== ===========
</TABLE>
Information regarding the funded status of the plan as a whole as of
December 31, 1996 and 1995 follows:
<TABLE>
<CAPTION>
1996 1995
--------------- ---------------
<S> <C> <C>
Accrued postretirement benefit expense:
Retirees $ 92,954 88,680
Fully eligible, active plan participants 23,749 28,793
Other active plan participants 83,986 90,375
--------------- ---------------
Accumulated postretirement benefit obligation (APBO) 200,689 207,848
Plan assets at fair value 63,044 54,325
--------------- ---------------
Plan assets less than accumulated postretirement benefit obligation (137,645) (153,523)
Unrecognized transition obligation of affiliates 1,654 1,827
Unrecognized net gains (23,225) (1,038)
--------------- ---------------
$(159,216) (152,734)
=============== ===============
</TABLE>
Actuarial assumptions used for the measurement of the APBO as of
December 31, 1996 and 1995 and the NPPBC for 1996, 1995 and 1994 were
as follows:
<TABLE>
<CAPTION>
1996 1996 1995 1995 1994
APBO NPPBC APBO NPPBC NPPBC
------------ ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Discount rate 7.25% 6.65% 6.75% 8.00% 7.00%
Long-term rate of return on plan
assets, net of tax - 4.80% - 8.00% N/A
Assumed health care cost trend rate:
Initial rate 11.00% 11.00% 11.00% 10.00% 12.00%
Ultimate rate 6.00% 6.00% 6.00% 6.00% 6.00%
Uniform declining period 12 Years 12 Years 12 Years 12 Years 12 Years
</TABLE>
The health care cost trend rate assumption has an effect on the amounts
reported. For the plan as a whole, a one percentage point increase in
the assumed health care cost trend rate would increase the APBO as of
December 31, 1996 by $701 and the NPPBC for the year ended December 31,
1996 by $83.
(12) Shareholder's Equity, Regulatory Risk-Based Capital, Retained Earnings
and Dividend Restrictions
---------------------------------------------------------------------
Each insurance company's state of domicile imposes minimum risk-based
capital requirements that were developed by the NAIC. The formulas for
determining the amount of risk-based capital specify various weighting
factors that are applied to financial balances or various levels of
activity based on the perceived degree of risk. Regulatory compliance
is determined by a ratio of the company's regulatory total adjusted
capital, as defined by the NAIC, to its authorized control level
risk-based capital, as defined by the NAIC. Companies below specific
trigger points or ratios are classified within certain levels, each of
which requires specified corrective action. NLIC and each of its
insurance company subsidiaries exceed the minimum risk-based capital
requirements.
<PAGE> 22
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
The statutory capital shares and surplus of NLIC as of December 31,
1996, 1995 and 1994 was $1,000,647, $1,363,031 and $1,262,861,
respectively. The statutory net income of NLIC for the years ended
December 31, 1996, 1995 and 1994 was $73,218, $86,529 and $76,532,
respectively.
NLIC is limited in the amount of shareholder dividends it may pay
without prior approval by the Department of Insurance of the State of
Ohio (the Department). NLIC's dividend of the outstanding shares of
common stock of certain companies which was declared on September 24,
1996 and the anticipated $850,000 dividend (as discussed in note 1) are
deemed extraordinary under Ohio insurance laws. As a result of such
dividends, any dividend paid by NLIC during the 12-month period
immediately following the $850,000 dividend would also be an
extraordinary dividend under Ohio insurance laws. Accordingly, no such
dividend could be paid without prior regulatory approval.
In addition, the payment of dividends by NLIC may also be subject to
restrictions set forth in the insurance laws of New York that limit the
amount of statutory profits on NLIC's participating policies (measured
before dividends to policyholders) that can inure to the benefit of the
Company and its stockholder.
The Company currently does not expect such regulatory requirements to
impair its ability to pay operating expenses and stockholder dividends
in the future.
(13) Transactions With Affiliates
----------------------------
The Company leases office space from NMIC and certain of its
subsidiaries. For the years ended December 31, 1996, 1995 and 1994, the
Company made lease payments to NMIC and its subsidiaries of $9,065,
$8,986 and $8,133, respectively.
Pursuant to a cost sharing agreement among NMIC and certain of its
direct and indirect subsidiaries, including the Company, NMIC provides
certain operational and administrative services, such as sales support,
advertising, personnel and general management services, to those
subsidiaries. Expenses covered by this agreement are subject to
allocation among NMIC, the Company and other affiliates. Amounts
allocated to the Company were $101,584, $107,112, and $100,601 in 1996,
1995 and 1994, respectively. The allocations are based on techniques
and procedures in accordance with insurance regulatory guidelines.
Measures used to allocate expenses among companies include individual
employee estimates of time spent, special cost studies, salary expense,
commissions expense and other methods agreed to by the participating
companies that are within industry guidelines and practices. The
Company believes these allocation methods are reasonable. In addition,
the Company does not believe that expenses recognized under the
intercompany agreements are materially different than expenses that
would have been recognized had the Company operated on a stand alone
basis. Amounts payable to NMIC from the Company under the cost sharing
agreement were $15,111 and $1,186 as of December 31, 1996 and 1995,
respectively.
The Company also participates in intercompany repurchase agreements
with affiliates whereby the seller will transfer securities to the
buyer at a stated value. Upon demand or a stated period, the securities
will be repurchased by the seller at the original sales price plus a
price differential. Transactions under the agreements during 1996 and
1995 were not material. The Company believes that the terms of the
repurchase agreements are materially consistent with what the Company
could have obtained with unaffiliated parties.
<PAGE> 23
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
Intercompany reinsurance contracts exist between NLIC and, respectively
NMIC and ELICW whereby all of NLIC's accident and health and group life
insurance business is ceded on a modified coinsurance basis. NLIC
entered into the reinsurance agreements during 1996 because the
accident and health and group life insurance business was unrelated to
NLIC's long-term savings and retirement products. Accordingly, the
accident and health and group life insurance business has been
accounted for as discontinued operations for all periods presented.
Under modified coinsurance agreements, invested assets are retained by
the ceding company and investment earnings are paid to the reinsurer.
Under the terms of NLIC's agreements, the investment risk associated
with changes in interest rates is borne by NMIC or ELICW, as the case
may be. Risk of asset default is retained by NLIC, although a fee is
paid by NMIC or ELICW, as the case may be, to NLIC for the NLIC's
retention of such risk. The agreements will remain in force until all
policy obligations are settled. However, with respect to the agreement
between NLIC and NMIC, either party may terminate the contract on
January 1 of any year with prior notice. The ceding of risk does not
discharge the original insurer from its primary obligation to the
policyholder. NLIC believes that the terms of the modified coinsurance
agreements are consistent in all material respects with what NLIC could
have obtained with unaffiliated parties.
Amounts ceded to ELICW in 1996 are included in ELICW's results of
operations for 1996 which, combined with the results of WCLIC and NCC,
are summarized in note 2. Amounts ceded to ELICW in 1996 include
premiums of $224,224, net investment income and other revenue of
$14,833, and benefits, claims and other expenses of $246,641. Amounts
ceded to NMIC in 1996 include premiums of $97,331, net investment
income of $10,890, and benefits, claims and other expenses of $100,476.
The Company and various affiliates entered into agreements with
Nationwide Cash Management Company (NCMC) and California Cash
Management Company (CCMC), both affiliates, under which NCMC and CCMC
act as common agents in handling the purchase and sale of short-term
securities for the respective accounts of the participants. Amounts on
deposit with NCMC and CCMC were $4,789 and $9,654 as of December 31,
1996 and 1995, respectively, and are included in short-term investments
on the accompanying consolidated balance sheets.
On April, 5 1996, Nationwide Corp. contributed all of the outstanding
shares, with shareholder equity value of $30, of NISC to NLIC. NLIC
contributed an additional $500 to NISC on August 30, 1996.
On March 1, 1995, Nationwide Corp. contributed all of the outstanding
shares of common stock of Farmland Life Insurance Company (Farmland) to
NLIC. Farmland merged into WCLIC effective June 30, 1995. The
contribution resulted in a direct increase to consolidated
shareholder's equity of $46,918. As discussed in note 2, WCLIC is
accounted for as discontinued operations.
Effective December 31, 1994, NLIC purchased all of the outstanding
shares of common stock of ELICW from Wausau Service Corporation (WSC)
for $155,000. NLIC transferred fixed maturity securities and cash with
a fair value of $155,000 to WSC on December 28, 1994, which resulted in
a realized loss of $19,239 on the disposition of the securities. The
purchase price approximated both the historical cost basis and fair
value of net assets of ELICW. ELICW has and will continue to share home
office, other facilities, equipment and common management and
administrative services with WSC. As discussed in note 2, ELICW is
accounted for as discontinued operations.
Certain annuity products are sold through three affiliated companies
which are also subsidiaries of Nationwide Corp. Total commissions and
fees paid to these affiliates for the years ended December 31, 1996,
1995 and 1994 were $76,922, $57,280 and $50,168, respectively.
(14) Bank Lines of Credit
--------------------
In August 1996, NLIC, along with NMIC, established a $600,000 revolving
credit facility which provides for a $600,000 loan over a five year
term on a fully revolving basis with a group of national financial
institutions. The credit facility provides for several and not joint
liability with respect to any amount drawn by either NLIC or NMIC. NLIC
and NMIC pay facility and usage fees to the financial institutions to
maintain the revolving credit facility. All previously existing line of
credit agreements were canceled.
<PAGE> 24
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(15) Contingencies
-------------
The Company is a defendant in various lawsuits. In the opinion of
management, the effects, if any, of such lawsuits are not expected to
be material to the Company's financial position or results of
operations.
(16) Segment Information
-------------------
The Company has three primary segments: Variable Annuities, Fixed
Annuities and Life Insurance. The Variable Annuities segment consists
of annuity contracts that provide the customer with the opportunity to
invest in mutual funds managed by the Company and independent
investment managers, with the investment returns accumulating on a
tax-deferred basis. The Fixed Annuities segment consists of annuity
contracts that generate a return for the customer at a specified
interest rate, fixed for a prescribed period, with returns accumulating
on a tax-deferred basis. The Life Insurance segment consists of
insurance products that provide a death benefit and may also allow the
customer to build cash value on a tax-deferred basis. In addition, the
Company reports corporate expenses and investments, and the related
investment income supporting capital not specifically allocated to its
product segments in a Corporate and Other segment. In addition, all
realized gains and losses, investment management fees and other revenue
earned from mutual funds, other than the portion allocated to the
variable annuities and life insurance segments, are reported in the
Corporate and Other segment.
During 1996, the Company changed its reporting segments to better
reflect the way the businesses are managed. Prior periods have been
restated to reflect these changes.
The following table summarizes the revenues and income from continuing
operations before federal income tax expense for the years ended
December 31, 1996, 1995 and 1994 and assets as of December 31, 1996,
1995 and 1994, by business segment.
<TABLE>
<CAPTION>
1996 1995 1994
----------------- --------------- ---------------
<S> <C> <C> <C>
Revenues:
Variable Annuities $ 284,638 189,071 132,687
Fixed Annuities 1,092,566 1,051,970 939,868
Life Insurance 435,657 409,135 383,150
Corporate and Other 179,977 148,475 143,794
----------------- --------------- ---------------
$ 1,992,838 1,798,651 1,599,499
================= =============== ===============
Income from continuing operations before federal income tax
expense:
Variable Annuities 90,244 50,837 24,574
Fixed Annuities 135,405 137,000 138,950
Life Insurance 67,242 67,590 53,046
Corporate and Other 22,606 32,145 25,288
----------------- --------------- ---------------
$ 315,497 287,572 241,858
================= =============== ===============
Assets:
Variable Annuities 25,069,725 17,333,039 11,146,465
Fixed Annuities 13,994,715 13,250,359 11,668,973
Life Insurance 3,353,286 3,027,420 2,752,283
Corporate and Other 5,348,520 4,896,815 3,678,303
----------------- --------------- ---------------
$47,766,246 38,507,633 29,246,024
================= =============== ===============
</TABLE>
<PAGE> 25
<TABLE>
SCHEDULE I
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
Consolidated Summary of Investments -
Other Than Investments in Related Parties
As of December 31, 1996
($000's omitted)
<CAPTION>
- --------------------------------------------------------------- --------------- -------------- -----------------
Column A Column B Column C Column D
- --------------------------------------------------------------- --------------- -------------- -----------------
Amount at which
shown in the
consolidated
Type of Investment Cost Market value balance sheet
- --------------------------------------------------------------- --------------- -------------- -----------------
<S> <C> <C> <C>
Fixed maturity securities available-for-sale:
Bonds:
U.S. Government and government agencies and authorities $ 3,757,887 3,834,762 3,834,762
States, municipalities and political subdivisions 6,242 6,690 6,690
Foreign governments 100,656 101,940 101,940
Public utilities 1,798,736 1,843,938 1,843,938
All other corporate 6,307,357 6,517,309 6,517,309
--------------- -------------- -----------------
Total fixed maturity securities available-for-sale 11,970,878 12,304,639 12,304,639
--------------- -------------- -----------------
Equity securities available-for-sale:
Common stocks:
Industrial, miscellaneous and all other 43,501 50,405 50,405
Non-redeemable preferred stock 389 8,726 8,726
--------------- -------------- -----------------
Total equity securities available-for-sale 43,890 59,131 59,131
--------------- -------------- -----------------
Mortgage loans on real estate, net 5,327,317 5,272,119 (1)
Real estate, net:
Investment properties 253,383 217,611 (1)
Acquired in satisfaction of debt 57,933 48,148 (1)
Policy loans 371,816 371,816
Other long-term investments 27,370 28,668 (2)
Short-term investments 4,789 4,789
--------------- ----------------
Total investments $18,057,376 18,306,921
=============== ================
<FN>
- ----------
(1) Difference from Column B is primarily due to valuation allowances due to
impairments on mortgage loans on real estate and due to accumulated
depreciation and valuation allowances due to impairments on real estate.
See note 5 to the consolidated financial statements.
(2) Difference from Column B is primarily due to operating gains of investments
in limited partnerships.
</TABLE>
See accompanying independent auditors' report.
<PAGE> 26
<TABLE>
<CAPTION>
SCHEDULE III
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
Supplemental Insurance Information
As of December 31, 1996, 1995 and 1994
and for each of the years then ended
($000's omitted)
- ----------------------------------- -------------- ------------------ ----------------- ------------------ ---------------
Column A Column B Column C Column D Column E Column F
- ----------------------------------- -------------- ------------------ ----------------- ----------------- ---------------
Deferred Future policy Other policy
policy benefits, losses, claims and
acquisition claims and Unearned premiums benefits payable Premium
Segment costs loss expenses (1) (2) revenue
- ----------------------------------- -------------- ------------------ ----------------- ---------------- --------------
<C> <C> <C> <C> <C> <C>
1996: Variable Annuities $ 791,611 - - -
Fixed Annuities 242,421 14,952,877 687 24,030
Life Insurance 414,417 1,995,802 395,739 174,612
Corporate and Other (81,940) 230,381 25,048 -
-------------- ------------------ ---------------- --------------
Total $1,366,509 17,179,060 421,474 198,642
============== ================== ================ ==============
1995: Variable Annuities 571,283 - - -
Fixed Annuities 221,111 14,221,622 455 32,774
Life Insurance 366,876 1,898,641 383,983 166,332
Corporate and Other (138,914) 238,351 28,886 -
-------------- ------------------ ---------------- --------------
Total $1,020,356 16,358,614 413,324 199,106
============== ================== ================ ==============
1994: Variable Annuities 395,397 - - -
Fixed Annuities 198,639 12,633,253 240 20,134
Life Insurance 327,079 1,806,762 371,984 156,524
Corporate and Other 74,445 233,569 26,927 -
-------------- ------------------ ---------------- --------------
Total $ 995,560 14,673,584 399,151 176,658
============== ================== ================ ==============
<CAPTION>
- ----------------------------------- -------------- ------------------- ----------------- ---------------- --------------
Column A Column G Column H Column I Column J Column K
- ----------------------------------- -------------- ------------------- ----------------- ---------------- --------------
Net Amortization Other
investment Benefits, claims, of deferred operating
income losses and policy expenses Premiums
Segment (3) settlement expenses acquisition costs (3) written
- ----------------------------------- -------------- ------------------- ----------------- ----------------- --------------
1996: Variable Annuities $ (21,449) 4,624 57,412 132,357
Fixed Annuities 1,050,557 838,533 38,635 79,737
Life Insurance 174,002 211,386 37,347 78,965
Corporate and Other 154,649 106,037 - 51,335
-------------- ------------------- ----------------- -----------------
Total $1,357,759 1,160,580 133,394 342,394
============== =================== ================= =================
1995: Variable Annuities (17,640) 2,881 26,264 109,089
Fixed Annuities 1,002,718 804,980 29,499 80,260
Life Insurance 171,255 201,986 31,021 68,832
Corporate and Other 137,700 105,646 (4,089) 14,773
-------------- ------------------- ----------------- -----------------
Total $1,294,033 1,115,493 82,695 272,954
============== =================== ================= =================
1994: Variable Annuities (13,415) 2,277 22,135 83,701
Fixed Annuities 903,572 702,082 29,849 69,975
Life Insurance 166,329 191,006 29,495 69,861
Corporate and Other 154,325 97,302 4,089 17,115
-------------- ------------------- ----------------- -----------------
Total $1,210,811 992,667 85,568 240,652
============== =================== ================= =================
<FN>
- ----------
(1) Unearned premiums are included in Column C amounts.
(2) Column E agrees to the sum of the Balance Sheet captions, Policyholders'
dividend accumulations and Other policyholder funds.
(3) Allocations of net investment income and certain general expenses are based
on a number of assumptions and estimates, and reported operating results
would change by segment if different methods were applied.
</TABLE>
See accompanying independent auditors' report.
<PAGE> 27
SCHEDULE IV
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
Reinsurance
As of December 31, 1996, 1995 and 1994
and for each of the years then ended
($000's omitted)
<TABLE>
<CAPTION>
- ------------------------------- ----------------- ----------------- ---------------- ---------------- ---------------
Column A Column B Column C Column D Column E Column F
- ------------------------------- ----------------- ----------------- ---------------- ---------------- ---------------
Percentage
Ceded to Assumed from of amount
Gross amount other companies other companies Net amount assumed to net
----------------- ----------------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C>
1996:
Life insurance in force $47,071,264 6,633,567 288,593 40,726,290 0.7%
================= ================= ================ ================ ===============
Premiums:
Life insurance 225,615 29,282 2,309 198,642 1.2%
Accident and health insurance 291,871 305,789 13,918 - N/A
----------------- ----------------- ---------------- ---------------- ---------------
Total $ 517,486 335,071 16,227 198,642 8.2%
================= ================= ================ ================ ===============
1995:
Life Insurance in force $41,087,025 8,935,743 391,174 32,542,456 1.2%
================= ================= ================ ================ ===============
Premiums:
Life insurance 221,257 24,360 2,209 199,106 1.1%
Accident and health insurance 298,058 313,036 14,978 - N/A
----------------- ----------------- ---------------- ---------------- ---------------
Total $ 519,315 337,396 17,187 199,106 8.6%
================= ================= ================ ================ ===============
1994:
Life Insurance in force $35,926,633 7,550,623 829,742 29,205,752 2.8%
================= ================= ================ ================ ===============
Premiums:
Life insurance 198,705 24,912 2,865 176,658 1.6%
Accident and health insurance 303,435 321,696 18,261 - N/A
----------------- ----------------- ---------------- ---------------- ---------------
Total $ 502,140 346,608 21,126 176,658 12.0%
================= ================= ================ ================ ===============
<FN>
- ----------
Note: The life insurance caption represents principally premiums from
traditional life insurance and life-contingent immediate annuities and
excludes deposits on invesment products and universal life insurance
products.
</TABLE>
See accompanying independent auditors' report.
<PAGE> 28
<TABLE>
<CAPTION>
SCHEDULE V
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
Valuation and Qualifying Accounts
Years ended December 31, 1996, 1995 and 1994
($000's omitted)
- ------------------------------------------------- ------------ ----------------------------- ------------ -------------
Column A Column B Column C Column D Column E
- ------------------------------------------------- ------------ ----------------------------- ------------ -------------
Balance at Charged to Balance at
beginning of costs and Charged to Deductions end of
Description period expenses other accounts (1) period
- ------------------------------------------------- ------------ ------------ -------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
1996:
Valuation allowances - mortgage loans on real
estate $49,128 4,497 - 2,587 51,038
Valuation allowances - real estate 25,819 (10,600) - - 15,219
------------ ------------ -------------- ------------ -------------
Total $74,947 (6,103) - 2,587 66,257
============ ============ ============== ============ =============
1995:
Valuation allowances - fixed maturity securities - 8,908 - 8,908 -
Valuation allowances - mortgage loans on real
estate 46,381 7,433 - 4,686 49,128
Valuation allowances - real estate 27,330 (1,511) - - 25,819
------------ ------------ -------------- ------------ -------------
Total $73,711 14,830 - 13,594 74,947
============ ============ ============== ============ =============
1994:
Valuation allowances - fixed maturity securities 4,800 (4,800) - - -
Valuation allowances - mortgage loans on real
estate 42,150 20,445 - 16,214 46,381
Valuation allowances - real estate 31,357 (4,027) - - 27,330
------------ ------------ -------------- ------------ -------------
Total $78,307 11,618 - 16,214 73,711
============ ============ ============== ============ =============
<FN>
- ----------
(1) Amounts represent direct write-downs charged against the valuation allowance.
</TABLE>
See accompanying independent auditors' report.
<PAGE> 92
<PAGE>
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Consolidated Balance Sheets
(in millions of dollars, except per share amounts)
<TABLE>
<CAPTION>
(Unaudited)
September 30, December 31,
ASSETS 1997 1996
------------- ------------
<S> <C> <C>
Investments:
Securities available-for-sale, at fair value:
Fixed maturity securities (cost $12,313.6 in 1997; $11,970.9 in 1996) $12,738.7 12,304.6
Equity securities (cost $60.8 in 1997; $43.9 in 1996) 73.8 59.1
Mortgage loans on real estate, net 5,135.4 5,272.1
Real estate, net 305.1 265.8
Policy loans 403.9 371.8
Other long-term investments 23.0 28.7
Short-term investments 431.8 4.8
--------- ---------
19,111.7 18,306.9
--------- ---------
Cash 100.7 43.8
Accrued investment income 221.3 210.2
Deferred policy acquisition costs 1,570.0 1,366.5
Investment in subsidiaries classified as discontinued operations - 485.7
Other assets 394.6 426.5
Assets held in Separate Accounts 36,791.6 26,926.7
--------- ---------
$58,189.9 47,766.3
--------- ---------
--------- ---------
LIABILITIES AND SHAREHOLDER'S EQUITY
Future policy benefits and claims $17,817.8 17,179.1
Policyholders' dividend accumulations 369.4 361.4
Other policyholder funds 59.7 60.1
Accrued federal income tax:
Current 46.3 30.2
Deferred 207.1 162.2
--------- ---------
253.4 192.4
--------- ---------
Dividend payable - 485.7
Other liabilities 536.2 423.0
Liabilities related to Separate Accounts 36,791.6 26,926.7
--------- ---------
55,828.1 45,628.4
--------- ---------
Shareholder's equity:
Capital shares, $1.00 par value. Authorized 5.0 million shares,
issued and outstanding 3.8 million shares 3.8 3.8
Additional paid-in capital 914.7 527.9
Retained earnings 1,229.9 1,432.6
Unrealized gains on securities available-for-sale, net 213.4 173.6
--------- ---------
2,361.8 2,137.9
--------- ---------
$58,189.9 47,766.3
--------- ---------
--------- ---------
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
<PAGE>
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Consolidated Statements of Income
(Unaudited)
(in millions of dollars)
<TABLE>
<CAPTION>
Three months Nine months
ended ended
September 30, September 30,
----------------------- -----------------------
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues:
Investment product and universal life insurance product
policy charges $143.3 102.3 393.4 288.8
Life insurance premiums 50.2 47.2 155.9 150.3
Net investment income 355.3 339.9 1,047.6 1,009.6
Realized gains (losses) on investments (4.8) (5.1) 4.3 4.3
Other income 12.4 9.9 38.2 28.5
------- ------- ------- -------
556.4 494.2 1,639.4 1,481.5
------- ------- ------- -------
Benefits and expenses:
Interest credited 256.0 245.6 756.9 732.9
Other benefits and claims 41.8 51.5 134.3 139.4
Provision for policyholders' dividends on
participating policies 9.1 8.7 31.3 31.5
Amortization of deferred policy acquisition costs 43.7 25.7 126.7 96.8
Other operating expenses 97.9 91.8 286.0 239.9
------- ------- ------- -------
448.5 423.3 1,335.2 1,240.5
------- ------- ------- -------
Income from continuing operations before federal
income tax expense 107.9 70.9 304.2 241.0
------- ------- ------- -------
Federal income tax expense (benefit):
Current 28.2 35.3 83.4 93.9
Deferred 9.5 (10.0) 23.5 (9.4)
------- ------- ------- -------
37.7 25.3 106.9 84.5
------- ------- ------- -------
Income from continuing operations 70.2 45.6 197.3 156.5
Income from discontinued operations (less federal income
tax expense of $1.0 and $5.0 in 1996) - 2.3 - 9.6
------- ------- ------- -------
Net income $ 70.2 47.9 197.3 166.1
------- ------- ------- -------
------- ------- ------- -------
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
<PAGE>
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Consolidated Statements of Shareholder's Equity
(Unaudited)
Nine Months Ended September 30, 1997 and 1996
(in millions of dollars)
<TABLE>
<CAPTION>
Unrealized
gains (losses)
Additional on securities Total
Capital paid-in Retained available-for- shareholder's
shares capital earnings sale, net equity
--------- ---------- -------- ------------- -------------
<S> <C> <C> <C> <C> <C>
1996:
Balance, January 1, 1996 $3.8 657.1 1,583.3 384.3 2,628.5
Dividends to shareholder - (79.3) (356.3) (28.6) (464.2)
Net income - - 166.1 - 166.1
Unrealized losses on securities
available-for-sale, net - - - (249.8) (249.8)
------ ------- -------- ------- --------
Balance, September 30, 1996 $3.8 577.8 1,393.1 105.9 2,080.6
------ ------- -------- ------- --------
------ ------- -------- ------- --------
1997:
Balance, January 1, 1997 3.8 527.9 1,432.6 173.6 2,137.9
Capital contributions - 836.8 - - 836.8
Dividends to shareholder - (450.0) (400.0) - (850.0)
Net income - - 197.3 - 197.3
Unrealized gains on securities
available-for-sale, net - - - 39.8 39.8
------ ------- -------- ------- --------
Balance, September 30, 1997 $3.8 914.7 1,229.9 213.4 2,361.8
------ ------- -------- ------- --------
------ ------- -------- ------- --------
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
<PAGE>
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended September 30, 1997 and 1996
(in millions of dollars)
<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 197.3 166.1
Adjustments to reconcile net income to net cash provided
by operating activities:
Capitalization of deferred policy acquisition costs (358.2) (313.7)
Amortization of deferred policy acquisition costs 126.7 96.8
Amortization and depreciation (0.5) 5.2
Realized gains on investments, net (4.3) (4.3)
Deferred federal income tax 23.5 15.1
Increase in accrued investment income (11.1) (2.5)
Decrease (increase) in other assets 31.4 (36.0)
Increase in policyholder account balances 58.2 233.3
Increase in policyholders' dividend accumulations 8.0 10.0
Increase (decrease) in accrued federal income tax payable 16.1 (0.6)
Increase in other liabilities 113.2 176.6
Other, net (3.9) (19.3)
---------- ----------
Net cash provided by operating activities 196.4 326.7
---------- ----------
Cash flows from investing activities:
Proceeds from maturity of securities available-for-sale 640.8 917.4
Proceeds from sale of securities available-for-sale 248.7 223.3
Proceeds from repayments of mortgage loans on real estate 296.1 191.1
Proceeds from sale of real estate 23.2 16.1
Proceeds from repayments of policy loans and sale of
other invested assets 19.8 18.6
Cost of securities available-for-sale acquired (1,732.1) (1,047.9)
Cost of mortgage loans on real estate acquired (552.2) (721.7)
Cost of real estate acquired (24.3) (4.8)
Policy loans issued and other invested assets acquired (48.2) (43.1)
Short-term investments, net (428.2) (62.3)
---------- ----------
Net cash used in investing activities (1,556.4) (513.3)
---------- ----------
Cash flows from financing activities:
Proceeds from capital contributions 836.8 -
Increase in investment product and universal
life insurance product account balances 2,343.1 1,851.3
Decrease in investment product and universal
life insurance product account balances (1,763.0) (1,597.0)
---------- ----------
Net cash provided by financing activities 1,416.9 254.3
---------- ----------
Net increase in cash 56.9 67.7
Cash, beginning of period 43.8 9.4
---------- ----------
Cash, end of period $ 100.7 77.1
---------- ----------
---------- ----------
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
<PAGE>
Notes to Unaudited Consolidated Financial Statements
Nine Months Ended September 30, 1997
(1) ORGANIZATION AND BASIS OF PRESENTATION
Prior to January 27, 1997, Nationwide Life Insurance Company (NLIC) was a
wholly owned subsidiary of Nationwide Corporation (Nationwide Corp.). On
January 27, 1997, Nationwide Corp. contributed the common stock of NLIC to
Nationwide Financial Services, Inc. (NFS). NFS was formed by Nationwide
Corp. in November 1996 as a holding company for members of the Nationwide
Insurance Enterprise that offer or distribute long-term savings and
retirement products. NLIC and its subsidiaries are collectively referred
to as "the Company."
The accompanying unaudited consolidated financial statements of the Company
have been prepared in accordance with generally accepted accounting
principles, which differ from statutory accounting practices prescribed or
permitted by regulatory authorities, for interim financial information and
with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all information and footnotes required by
generally accepted accounting principles for complete financial statements.
The financial information included herein reflects all adjustments (all of
which are normal and recurring in nature) which are, in the opinion of
management, necessary for a fair presentation of financial position and
results of operations. Operating results for all periods presented are not
necessarily indicative of the results that may be expected for the full
year. All significant intercompany balances and transactions have been
eliminated. The accompanying unaudited consolidated financial statements
should be read in conjunction with the audited consolidated financial
statements and related notes for the year ended December 31, 1996 included
in the Company's annual report on Form 10-K.
Certain items in the prior period consolidated financial statements have
been reclassified to conform to the current period presentation.
(2) DIVIDENDS AND CAPITAL CONTRIBUTIONS
On September 24, 1996, NLIC's Board of Directors declared a dividend to
Nationwide Corp. consisting of the common stock of certain subsidiaries
classified as discontinued operations. As of and during the year ended
December 31, 1996, these previously wholly owned subsidiaries of NLIC were
classified as discontinued operations since they do not offer or distribute
long-term savings and retirement products. The dividend was paid by NLIC
on January 1, 1997.
On February 24, 1997, NLIC paid a dividend to NFS, which made an equivalent
dividend to Nationwide Corp., consisting of securities having an aggregate
fair value of $850.0 million. NLIC recognized a gain of $14.4 million on
the transfer of securities.
On March 10, 1997 and March 11, 1997, NFS made cash capital contributions
to NLIC totaling $836.8 million.
<PAGE> 93
PART C. OTHER INFORMATION
<TABLE>
<CAPTION>
<S> <C> <C>
Item 24. FINANCIAL STATEMENTS AND EXHIBITS
(a)Financial Statements:
(1)Financial statements and schedule included
in Prospectus. (Part A):
Condensed Financial Information. 20
(2)Financial statements and schedule included
in Part B:
Those financial statements and schedule
required by Item 23 to be included in Part B
have been incorporated therein by reference
to the Prospectus (Part A). 59
Nationwide DC Variable Account:
Independent Auditors' Report. 59
Statement of Assets, Liabilities and Contract
Owners' Equity as of December 31, 1996 60
Statements of Operations and Changes in
Contract Owners' Equity for the years ended
December 31, 1996, 1995 and 1994. 63
Notes to Financial Statements. 64
Schedules of Changes in Unit Values. 73
Statements of Assets, Liabilities and Contract
Owners' Equity, June 30, 1997 (unaudited). 83
Statements of Operations and Changes in Contract
Owners' Equity, Six Month Periods Ended June 30,
1997 and 1996 (unaudited). 86
Notes to Financial Statements, June 30, 1997 and
1996 (unaudited). 102
Nationwide Life Insurance Company:
Independent Auditors' Report. 114
Consolidated Balance Sheets as of December
31, 1996 and 1995. 115
Consolidated Statements of Income for the
years ended December 31, 1996, 1995 and
1994. 116
Consolidated Statements of Shareholder's
Equity for the years ended December 31,
1996, 1995 and 1994. 117
Consolidated Statements of Cash Flows for
the years ended December 31, 1996, 1995
and 1994. 118
Notes to Consolidated Financial Statements. 119
Consolidated Balance Sheets (unaudited) for nine
months ended September 30, 1997 and 1996. 138
Consolidated Statements of Income (unaudited) for
three and nine months ended September 30, 1997. 139
Consolidated Statements of Shareholder's Equity
(unaudited) for nine months ended September 30,
1997 and 1996. 140
Consolidated Statements of Cash Flows (unaudited)
for nine months ended September 30, 1997 and 1996. 141
</TABLE>
143 of 177
<PAGE> 94
<TABLE>
<CAPTION>
<S> <C>
Notes to Unaudited Consolidated Financial Statements
for six months ended September 30, 1997. 142
Schedule I - Consolidated Summary of Investments -
Other Than Investments in Related Parties. 174
Schedule III - Supplementary Insurance Information. 175
Schedule IV - Reinsurance. 176
Schedule V - Valuation and Qualifying Accounts. 177
</TABLE>
144 of 177
<PAGE> 95
Item 24. (b) Exhibits
(1) Resolution of the Depositor's Board of
Directors authorizing the establishment of
the Registrant - Filed previously with Registration
Statement (File No. 2-51911) and is hereby incorporated
by reference.
(2) Not Applicable
(3) Underwriting or Distribution of contracts
between the Registrant and Principal
Underwriter - Filed previously with Registration Statement
(File No. 2-51911) and is hereby incorporated by reference.
(4) The form of the variable annuity contract Filed previously
with Registration Statement (File No. 2-51911) and is hereby
incorporated by reference.
(5) Variable Annuity Application - Filed previously with the
Registration Statement (File No. 2-51911) and is hereby
incorporated by reference.
(6) Articles of Incorporation of Depositor - Filed previously
with Registration Statement (File No. 2-51911) and is hereby
incorporated by reference.
(7) Not Applicable
(8) Not Applicable
(9) Opinion of Counsel - Filed previously with Registration
Statement (File No. 2-51911) and is hereby incorporated by
reference.
(10) Not Applicable
(11) Not Applicable
(12) Not Applicable
(13) Not Applicable
145 of 177
<PAGE> 96
Item 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
NAME AND PRINCIPAL POSITIONS AND OFFICES
BUSINESS ADDRESS WITH DEPOSITOR
Lewis J. Alphin Director
519 Bethel Church Road
Mount Olive, NC 28365
Keith W. Eckel Director
1647 Falls Road
Clarks Summit, PA 18411
Willard J. Engel Director
1100 East Main Street
Marshall, MN 56258
Fred C. Finney Director
1558 West Moreland Road
Wooster, OH 44691
Charles L. Fuellgraf, Jr. Director
600 South Washington Street
Butler, PA 16001
Joseph J. Gasper President and Chief Operating Officer
One Nationwide Plaza and Director
Columbus, OH 43215
Henry S. Holloway Chairman of the Board
1247 Stafford Road and Director
Darlington, MD 21034
Dimon Richard McFerson Chairman and Chief Executive Officer-
One Nationwide Plaza Nationwide Insurance Enterprise
Columbus, OH 43215 and Director
David O. Miller Director
115 Sprague Drive
Hebron, OH 43025
C. Ray Noecker Director
2770 Winchester Southern S.
Ashville, OH 43103
James F. Patterson Director
8765 Mulberry Road
Chesterland, OH 44026
146 of 177
<PAGE> 97
NAME AND PRINCIPAL POSITIONS AND OFFICES
BUSINESS ADDRESS WITH DEPOSITOR
Arden L. Shisler Director
1356 North Wenger Road
Dalton, OH 44618
Robert L. Stewart Director
88740 Fairview Road
Jewett, OH 43986
Nancy C. Thomas Director
10835 Georgetown Street NE
Louisville, OH 44641
Harold W. Weihl Director
14282 King Road
Bowling Green, OH 43402
Gordon E. McCutchan Executive Vice President,
One Nationwide Plaza Law and Corporate Services
Columbus, OH 43215 and Secretary
Robert A. Oakley Executive Vice President-
One Nationwide Plaza Chief Financial Officer
Columbus, OH 43215
Robert J. Woodward, Jr. Executive Vice President -
One Nationwide Plaza Chief Investment Officer
Columbus, OH 43215
James E. Brock Senior Vice President -
One Nationwide Plaza Life Company Operations
Columbus, OH 43215
W. Sidney Druen Senior Vice President and General
One Nationwide Plaza Counsel and Assistant Secretary
Columbus, OH 43215
Harvey S. Galloway, Jr. Senior Vice President-Chief Actuary-
One Nationwide Plaza Life, Health and Annuities
Columbus, OH 43215
Richard A. Karas Senior Vice President - Sales -
One Nationwide Plaza Financial Services
Columbus, OH 43215
Michael D. Bleiweiss Vice President-
One Nationwide Plaza Individual Annuity Operations
Columbus, OH 43215
147 of 177
<PAGE> 98
NAME AND PRINCIPAL POSITIONS AND OFFICES
BUSINESS ADDRESS WITH DEPOSITOR
Matthew S. Easley Vice President - Marketing, Innovation
One Nationwide Plaza and Compliance
Columbus, OH 43215
Ronald L. Eppley Vice President-
One Nationwide Plaza Applications Services
Columbus, OH 43215
Timothy E. Murphy Vice President-
One Nationwide Plaza Strategic Marketing
Columbus, Ohio 43215
R. Dennis Noice Vice President-
One Nationwide Plaza Retail Operations
Columbus, OH 43215
Joseph P. Rath Vice President - Product
One Nationwide Plaza and Market Compliance
Columbus, OH 43215
Item 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR
REGISTRANT.
* Subsidiaries for which separate financial statements are filed
** Subsidiaries included in the respective consolidated financial
statements
*** Subsidiaries included in the respective group financial
statements filed for unconsolidated subsidiaries
****other subsidiaries
148 of 177
<PAGE> 99
NO. VOTING
SECURITIES
STATE (SEE
OF ATTACHED
COMPANY ORGANIZATION CHART) PRINCIPAL BUSINESS
UNLESS
OTHERWISE
INDICATED
Affiliate Agency of Ohio Life Insurance Agency
Ohio, Inc. Delaware Life Insurance Agency
Affiliate Agency, Inc. Ohio Promotes cooperative
Allnations, Inc. insurance corporations
worldwide
American Marine Florida Underwriting Manager
Underwriters, Inc.
Auto Direkt Insurance Germany Insurance Company
Company
California Cash California Investment Securities
Management Company Agent
Colonial County Mutual Texas Insurance Company
insurance Company
Colonial Insurance California Insurance Company
Company of California
Columbus Insurance Germany Insurance Broker
Brokerage and Service
GMBH
Companies Agency California Insurance Broker
Insurance Services of
California
Companies Agency of Alabama Insurance Broker
Alabama, Inc.
Companies Agency of Idaho Insurance Broker
Idaho, Inc.
Companies Agency of Illinois Acts as Collection Agent
Illinois, Inc. for Policies placed
through Brokers
Companies Agency of Kentucky Insurance Broker
Kentucky, Inc.
Companies Agency of Massachusetts Insurance Broker
Massachusetts, Inc.
Companies Agency of New New York Insurance Broker
York, Inc.
Companies Agency of Pennsylvania Insurance Broker
Pennsylvania, Inc.
Companies Agency of Arizona Insurance Broker
Phoenix, Inc.
Companies Agency of Texas Insurance Broker
Texas, Inc.
Companies Agency, Inc. Wisconsin Insurance Broker
Companies Annuity Agency Texas Insurance Broker
of Texas, Inc.
Countrywide Services Delaware Products Liability,
Corporation Investigative and Claims
Management Services
Employers Insurance of Wisconsin Insurance Company
Wausau A Mutual Company
** Employers Life Insurance Wisconsin Life Insurance Company
Company of Wausau
F & B, Inc. Iowa Insurance Agency
Farmland Mutual Iowa Insurance Company
Insurance Company
149 of 177
<PAGE> 100
<TABLE>
<CAPTION>
NO. VOTING
SECURITIES
(SEE ATTACHED
STATE CHART) UNLESS
OF OTHERWISE
COMPANY ORGANIZATION INDICATED PRINCIPAL BUSINESS
<S> <C> <C> <C>
Financial Horizons Alabama Life Insurance Agency
Distributors Agency of
Alabama, Inc.
Financial Horizons Ohio Life Insurance Agency
Distributors Agency of
Ohio, Inc.
Financial Horizons Oklahoma Life Insurance Agency
Distributors Agency of
Oklahoma, Inc.
Financial Horizons Texas Life Insurance Agency
Distributors Agency of
Texas, Inc.
* Financial Horizons Massachusetts Investment Company
Investment Trust
Financial Horizons Oklahoma Broker Dealer
Securities Corporation
Gates, McDonald & Company Ohio Cost Control Business
Gates, McDonald & Nevada Self-Insurance
Company of Nevada Administration Claims
Examinations and Data
Processing Services
Gates, McDonald & New York Workers Compensation
Company of New York, Inc. Claims Administration
Gates, McDonald Health Ohio Managed Care
Plus, Inc. Organization
Greater La Crosse Health Wisconsin Writes Commercial Health
Plans, Inc. and Medicare Supplement
Insurance
Insurance Ohio Insurance Broker and
Intermediaries, Inc. Insurance Agency
Key Health Plan, Inc. California Pre-paid health plans
Landmark Financial New York Life Insurance Agency
Services of New York,
Inc.
Leben Direkt Insurance Germany Life Insurance Company
Company
Lone Star General Texas Insurance Agency
Agency, Inc.
** MRM Investments, Inc. Ohio Owns and operates a
Recreational Ski
Facility
** National Casualty Company Michigan Insurance Company
National Casualty Great Britain Insurance Company
Company of America, Ltd.
** National Premium and Delaware Insurance Administrative
Benefit Administration Services
Company
** Nationwide Advisory Ohio Registered
Services, Inc. Broker-Dealer,
Investment Manager and
Administrator
Nationwide Agency, Inc. Ohio Insurance Agency
Nationwide Agribusiness Iowa Insurance Company
Insurance Company
** Nationwide Asset Massachusetts Investment Company
Allocation Trust
Nationwide Cash Ohio Investment Securities
Management Company Agent
Nationwide Ohio Radio Broadcasting
Communications, Inc. Business
Nationwide Community Ohio Redevelopment of
Urban Redevelopment blighted areas within
Corporation the City of Columbus,
Ohio
</TABLE>
150 of 177
<PAGE> 101
NO. VOTING
SECURITIES
STATE (SEE ATTACHED
OF CHART) UNLESS
COMPANY ORGANIZATION OTHERWISE PRINCIPAL BUSINESS
INDICATED
Nationwide Corporation Ohio Organized for the
purpose of acquiring,
holding, encumbering,
transferring, or
otherwise disposing
of shares, bonds,
and other evidences
of indebtedness,
securities, and
contracts of other
persons,
associations,
corporations,
domestic or foreign
and to form or
acquire the control
of other
corporations
* Nationwide Development Ohio Owns, leases and manages
Company commercial real estate
Nationwide Financial Delaware Insurance Agency
Institution Distributors
Agency, Inc.
Nationwide Financial Delaware Holding Company
Services, Inc.
Nationwide General Ohio Insurance Company
Insurance Company
Nationwide HMO, Inc. Ohio Health Maintenance
Organization
* Nationwide Indemnity Ohio Reinsurance Company
Company
Nationwide Insurance Ohio Membership Non-Profit
Enterprise Foundation Corporation
Nationwide Insurance Ohio Membership Non-Profit
Golf Charities, Inc. Corporation
* Nationwide Investing Massachusetts Investment Company
Foundation II
Nationwide Investing Michigan Investment Company
Foundation
Nationwide Investment Oklahoma Registered Broker-Dealer
Services Corporation in Deferred Compensation
Market
Nationwide Investors Ohio Stock Transfer Agent
Services, Inc.
** Nationwide Life and Ohio Life Insurance Company
Annuity Insurance Company
** Nationwide Life Ohio Life Insurance Company
Insurance Company
Nationwide Lloyds Texas Texas Lloyds Company
Nationwide Management Ohio Develops and operates
Systems, Inc. Managed Care Delivery
System
Nationwide Mutual Fire Ohio Insurance Company
Insurance Company
Nationwide Mutual Ohio Insurance Company
Insurance Company
Nationwide Properties, Ohio Develops, owns and
Ltd. operates real estate and
real estate investments.
Nationwide Property and Ohio Insurance Company
Casualty Insurance
Company
Nationwide Realty Ohio Develops, owns and
Investors, Ltd. operates real estate and
real estate investments.
* Nationwide Separate Massachusetts Investment Company
Account Trust
NEA Valuebuilder Alabama Life Insurance Agency
Investor Services of
Alabama, Inc.
NEA Valuebuilder Arizona Life Insurance Agency
Investor Services of
Arizona, Inc.
151 of 177
<PAGE> 102
NO. VOTING
SECURITIES
STATE (SEE ATTACHED
OF CHART) UNLESS
COMPANY ORGANIZATION OTHERWISE PRINCIPAL BUSINESS
INDICATED
NEA Valuebuilder Montana Life Insurance Agency
Investor Services of
Montana, Inc.
NEA Valuebuilder Nevada Life Insurance Agency
Investor Services of
Nevada, Inc.
NEA Valuebuilder Ohio Life Insurance Agency
Investor Services of
Ohio, Inc.
NEA Valuebuilder Oklahoma Life Insurance Agency
Investor Services of
Oklahoma, Inc.
NEA Valuebuilder Texas Life Insurance Agency
Investor Services of
Texas, Inc.
NEA Valuebuilder Wyoming Life Insurance Agency
Investor Services of
Wyoming, Inc.
NEA Valuebuilder Delaware Life Insurance Agency
Investor Services, Inc.
NEA Valuebuilder Massachusetts Life Insurance Agency
Services Insurance
Agency, Inc.
Neckura General Germany Insurance Company
Insurance Company
Neckura Holding Company Germany Administrative Service
for Neckura Insurance
Group
Neckura Insurance Company Germany Insurance Company
Neckura Life Insurance Germany Life Insurance Company
Company
NWE, Inc. Ohio Special Investments
PEBSCO of Massachusetts Massachusetts Markets and Administers
Insurance Agency, Inc. Deferred Compensation
Plans for Public
Employees
PEBSCO of Texas, Inc. Texas Markets and Administers
Deferred Compensation
Plans for Public
Employees
Pension Associates of Wisconsin Pension plan
Wausau, Inc. administration, record
keeping and consulting
and compensation
consulting
Physicians Plus Wisconsin Health Maintenance
Insurance Corporation organization
Prevea Health Insurance Wisconsin Health Maintenance
Plan, Inc. organization
Public Employees Benefit Delaware Markets and
Services Corporation Administraters Deferred
Compensation Plans for
Public Employees
Public Employees Benefit Alabama Markets and Administers
Services Corporation of Deferred Compensation
Alabama Plans for Public
Employees
Public Employees Benefit Arkansas Markets and Administers
Services Corporation of Deferred Compensation
Arkansas Plans for Public
Employees
Public Employees Benefit Montana Markets and Administers
Services Corporation of Deferred Compensation
Montana Plans for Public
Employees
Public Employees Benefit New Mexico Markets and Administers
Services Corporation of Deferred Compensation
New Mexico Plans for Public
Employees
Scottsdale Indemnity Ohio Insurance Company
Company
Scottsdale Insurance Ohio Excess and surplus lines
Company insurance company
Scottsdale Surplus Lines Arizona Excess and surplus lines
Insurance Company insurance company
SVM Sales GmbH, Neckura Germany Sales support for
Insurance Group Neckura Insurance Group
152 of 177
<PAGE> 103
NO. VOTING
SECURITIES
STATE (SEE ATTACHED
OF CHART) UNLESS
COMPANY ORGANIZATION OTHERWISE PRINCIPAL BUSINESS
INDICATED
The Beak and Wire Ohio Radio Tower Joint
Corporation Venture
Wausau Business Wisconsin Insurance Company
Insurance Company
Wausau General Insurance Illinois Insurance Company
Company
Wausau Insurance Company United Insurance and
(U.K.) Limited Kingdom Reinsurance Company
Wausau International California Special Risks, Excess
Underwriters and Surplus Lines
Insurance Underwriting
Manager
** Wausau Preferred Health Wisconsin Insurance and
Insurance Company Reinsurance Company
Wausau Service Wisconsin Holding Company
Corporation
Wausau Underwriters Wisconsin Insurance Company
Insurance Company
** West Coast Life California Life Insurance Company
Insurance Company
153 of 177
<PAGE> 104
<TABLE>
<CAPTION>
NO. VOTING SECURITIES
(SEE ATTACHED CHART)
STATE UNLESS OTHERWISE
OF INDICATED
COMPANY ORGANIZATION PRINCIPAL BUSINESS
<S> <C> <C> <C>
* MFS Variable Account Ohio Nationwide Life Issuer of Annuity
Separate Account Contracts
* NACo Variable Account Ohio Nationwide Life Issuer of Annuity
Separate Account Contracts
* Nationwide DC Variable Ohio Nationwide Life Issuer of Annuity
Account Separate Account Contracts
* Nationwide DCVA-II Ohio Nationwide Life Issuer of Annuity
Separate Account Contracts
* Nationwide Fidelity Ohio Nationwide Life Issuer of Annuity
Advisor Variable Account Separate Account Contracts
* Nationwide Life Separate Ohio Nationwide Life Issuer of Annuity
Account No. 1 Separate Account Contracts
* Nationwide Multi-Flex Ohio Nationwide Life Issuer of Annuity
Variable Account Separate Account Contracts
* Nationwide VA Separate Ohio Nationwide Life and Issuer of Annuity
Account-A Annuity Separate Contracts
Account
* Nationwide VA Separate Ohio Nationwide Life and Issuer of Annuity
Account-B Annuity Separate Contracts
Account
Nationwide VA Separate Ohio Nationwide Life and Issuer of Annuity
Account-C Annuity Separate Contracts
Account
* Nationwide VA Separate Ohio Nationwide Life and Issuer of Annuity
Account-Q Annuity Separate Contracts
Account
* Nationwide Variable Ohio Nationwide Life Issuer of Annuity
Account Separate Account Contracts
* Nationwide Variable Ohio Nationwide Life Issuer of Annuity
Account-3 Separate Account Contracts
* Nationwide Variable Ohio Nationwide Life Issuer of Annuity
Account-4 Separate Account Contracts
* Nationwide Variable Ohio Nationwide Life Issuer of Annuity
Account-5 Separate Account Contracts
* Nationwide Variable Ohio Nationwide Life Issuer of Annuity
Account-6 Separate Account Contracts
* Nationwide Variable Ohio Nationwide Life Issuer of Annuity
Account-8 Separate Account Contracts
* Nationwide Variable Ohio Nationwide Life Issuer of Annuity
Account-9 Separate Account Contracts
* Nationwide Variable Ohio Nationwide Life Issuer of Annuity
Account-II Separate Account Contracts
* Nationwide VL Separate Ohio Nationwide Life and Issuer of Life
Account-B Annunity Separate Insurance Policies
Account
* Nationwide VL Separate Ohio Naitonwide Life and Issuer of Life
Account-C Annuity Separate Insurance Policies
Account
* Nationwide VL Separate Ohio Nationwide Life and Issuer of Life
Account-A Annuity Separate Insurance Policies
Account
* Nationwide VLI Separate Ohio Nationwide Life Issuer of Life
Account Separate Account Insurance Policies
* Nationwide VLI Separate Ohio Nationwide Life Issuer of Life
Account-2 Separate Account Insurance Policies
* Nationwide VLI Separate Ohio Nationwide Life Issuer of Life
Account-3 Separate Account Insurance Policies
* Nationwide VLI Separate Ohio Nationwide Life Issuer of Life
Account-4 Separate Account Insurance Policies
</TABLE>
154 of 177
<PAGE> 105
<TABLE>
<CAPTION>
NATIONWIDE INSURANCE ENTERPRISE(R) (left side)
<S> <C> <C> <C>
- ------------------------
| NATIONWIDE INSURANCE |
| GOLF CHARITIES, INC. |
| |
| MEMBERSHIP |
| NONPROFIT |
| CORPORATION |
- ------------------------
------------------------------------------
| EMPLOYERS INSURANCE OF WAUSAU |
| A MUTUAL COMPANY |
| (EMPLOYERS) |
| |========================================
| Contribution Note Cost |
| ----------------- ---- |
| Casualty $400,000,000 |
------------------------------------------
|
-----------------------------------------------------------------------
| | |
- --------------------------- --------------------------- ---------------------------- ---------------------------
| SAN DIEGO LOTUS | | WAUSAU INSURANCE CO. | | WAUSAU SERVICE | | |
| CORPORATION | | (U.K.) LIMITED | | CORPORATION (WSC) | | NATIONWIDE LLOYDS |
|Common Stock: 748,212 | |Common Stock: 8,506,800 | |Common Stock: 1,000 Shares| | |
|------------ Shares | |------------ Shares | |------------ | | |
| | | | | |=========| |
| Cost | | Cost | | Cost | || | A TEXAS LLOYDS |
| ---- | | ---- | | ---- | || | |
|Employers- | |Employers- | |Employers- | || | |
|100% $29,000,000| |100% $18,683,300| |100% $176,763,000| || | |
- --------------------------- --------------------------- ---------------------------- || ---------------------------
| ||
--------------------------------------------------------------------- ||
| | | ||
- --------------------------- | --------------------------- | ---------------------------- | || ---------------------------
| WAUSAU BUSINESS | | | COMPANIES AGENCY | | | COUNTRYWIDE SERVICES | | || | |
| INSURANCE COMPANY | | | OF KENTUCKY, INC. | | | CORPORATION | | || | |
|Common Stock: 10,900,000 | | |Common Stock: 1,000 | | |Common Stock: 100 Shares | | || | COMPANIES |
|------------ Shares | | |------------ Shares | | |------------ | | || | AGENCY OF |
| |---|---| | |---| | | ||==| TEXAS, INC. |
| Cost | | | Cost | | | Cost | | || | |
| ---- | | | ---- | | | ---- | | || | |
|WSC-100% $33,800,000| | |WSC-100% $1,000 | | |WSC-100% $145,852 | | || | |
- --------------------------- | --------------------------- | ---------------------------- | || ---------------------------
| | | ||
- --------------------------- | --------------------------- | ---------------------------- | || ---------------------------
| WAUSAU UNDERWRITERS | | | COMPANIES AGENCY | | | WAUSAU GENERAL | | || | |
| INSURANCE COMPANY | | | OF MASSACHUSETTS, INC. | | | INSURANCE COMPANY | | || | |
|Common Stock: 8,750 | | |Common Stock: 1,000 | | |Common Stock: 200,000 | | || | COMPANIES ANNUITY |
|------------ Shares | | |------------ Shares | | |------------ Shares | | || | AGENCY OF |
| |---|---| | |---| | | ====| TEXAS, INC. |
| Cost | | | Cost | | | Cost | | | |
| ---- | | | ---- | | | ---- | | | |
|WSC-100% $69,560,006| | |WSC-100% $1,000 | | |WSC-100% $39,000,000 | | | |
- --------------------------- | --------------------------- | ---------------------------- | ---------------------------
| | |
- --------------------------- | --------------------------- | ---------------------------- | ---------------------------
| GREATER LA CROSSE | | | COMPANIES AGENCY | | | WAUSAU INTERNATIONAL | | | AMERICAN MARINE |
| HEALTH PLANS, INC. | | | OF NEW YORK, INC. | | | UNDERWRITERS | | | UNDERWRITERS, INC. |
|Common Stock: 3,000 | | |Common Stock: 1,000 | | |Common Stock: 1,000 | | |Common Stock: 20 |
|------------ Shares | | |------------ Shares | | |------------ Shares | | |------------ Shares |
| |---|---| | |---| | |------| |
| Cost | | | Cost | | | Cost | | | Cost |
| ---- | | | ---- | | | ---- | | | ---- |
|WSC-33.3% $861,761 | | |WSC-100% $1,000 | | |WSC-100% $10,000 | | |WSC-100% $248,222 |
- --------------------------- | --------------------------- | ---------------------------- | ---------------------------
| | |
- --------------------------- | --------------------------- | ---------------------------- | ---------------------------
| COMPANIES AGENCY | | | COMPANIES AGENCY | | | COMPANIES AGENCY | | | COMPANIES AGENCY |
| OF ALABAMA, INC. | | | OF PENNSYLVANIA, INC. | | | INSURANCE SERVICES | | | OF ILLINOIS, INC. |
| | | | | | | OF CALIFORNIA | | | |
|Common Stock: 1,000 | | |Common Stock: 1,000 | | |Common Stock: 1,000 | | |Common Stock: 250 |
|------------ Shares | | |------------ Shares | |---|------------ Shares | |------|------------ Shares |
| |---|---| | | | | | | |
| Cost | | | Cost | | | Cost | | | Cost |
| ---- | | | ---- | | | ---- | | | ---- |
|WSC-100% $100 | | |WSC-100% $100 | | |WSC-100% $1,000 | | |WSC-100% $2,500 |
- --------------------------- | --------------------------- | ---------------------------- | ---------------------------
| | |
- --------------------------- | --------------------------- | ---------------------------- | ---------------------------
| COMPANIES AGENCY | | | COMPANIES AGENCY | | | PHYSICIANS PLUS | | | COMPANIES |
| OF IDAHO, INC. | | | OF PHOENIX, INC. | | | INSURANCE | | | AGENCY, INC. |
| | | | | | | CORPORATION | | | |
|Common Stock: 1,000 | | |Common Stock: 1,000 | | |Common Stock: 7,150 | | |Common Stock: 100 |
|------------ Shares | | |------------ Shares | | |------------ Shares | | |------------ Shares |
| |-------| | |---|Preferred Stock: 11,540 | |------| |
| | | | | |--------------- Shares | | | |
| | | | | | | | | |
| Cost | | Cost | | | Cost | | | Cost |
| ---- | | ---- | | | ---- | | | ---- |
|WSC-100% $1,000 | |WSC-100% $1,000 | | |WSC-33 1/3% $6,215,459| | |WSC-100% $10,000 |
- --------------------------- --------------------------- | ---------------------------- | ---------------------------
| |
| ---------------------------- | ---------------------------
| | PREVEA HEALTH | | | PENSION ASSOCIATES |
| | INSURANCE PLAN, INC. | | | OF WAUSAU, INC. |
| |Common Stock: 3,000 Shares| | |Common Stock: 1,000 |
| |------------ | | |------------ Shares |
----| | -------| |
| | | |
| Cost | |Companies Cost |
| ---- | |Agency, Inc. ---- |
|WSC-33 1/3% $500,000 | |(Wisconsin)-100% $10,000 |
---------------------------- ---------------------------
</TABLE>
<PAGE> 106
<TABLE>
<CAPTION>
NATIONWIDE INSURANCE ENTERPRISE(R) (middle)
<S> <C> <C>
-----------------------------------------------------------------------------
| |
| |
| NATIONWIDE MUTUAL |
=======| INSURANCE COMPANY |================================================
| (CASUALTY) |
| |
| |
-----------------------------------------------------------------------------
| || |
| || -------------------------------------------------------------
| || ---------------------------------------------------------------------------------------
| || | |
- -------------------------------- || | -------------------------------- --------------------------------
| ALLNATIONS, INC. | || | | NATIONWIDE GENERAL | | NECKURA HOLDING |
|Common Stock: 3,136 Shares | || | | INSURANCE COMPANY | | COMPANY (NECKURA) |
|------------ | || | | | | |
| Cost | || | |Common Stock: 20,000 | |Common Stock: 10,000 |
| ---- | || | |------------ Shares | |------------ Shares |
|Casualty-24.5% $88,320 | || | | Cost | | Cost |
|Fire-24.5% $88,463 | || | | ---- | | ---- |
|Preferred Stock: 1,466 Shares | || |----|Casualty-100% $5,944,422 | ---------|Casualty-100% $87,943,140 |
|--------------- | || | | | | | |
| Cost | || | | | | | |
| ---- | || | | | | | |
|Casualty-7.7% $100,000 | || | | | | | |
|Fire-7.7% $100,000 | || | | | | | |
- -------------------------------- || | -------------------------------- | --------------------------------
|| | |
- -------------------------------- || | -------------------------------- | --------------------------------
| FARMLAND MUTUAL | || | | NATIONWIDE PROPERTY | | | NECKURA |
| INSURANCE COMPANY | || | | AND CASUALTY | | | INSURANCE COMPANY |
|Guaranty Fund | || | | INSURANCE COMPANY | | | |
|------------ |========= |----|Common Stock: 60,000 | |--------|Common Stock: 6,000 |
|Certificate | | |------------ Shares | | |------------ Shares |
|----------- Cost | | | Cost | | | Cost |
| ---- | | | ---- | | |Neckura- ---- |
|Casualty $500,000 | | |Casualty-100% $6,000,000 | | |100% DM 6,000,000 |
- -------------------------------- | -------------------------------- | --------------------------------
| | |
- -------------------------------- | -------------------------------- | --------------------------------
| F & B, INC. | | | COLONIAL INSURANCE | | | NECKURA LIFE |
| | | | COMPANY OF CALIFORNIA | | | INSURANCE COMPANY |
|Common Stock: 1 Share | | | (COLONIAL) | | | |
|------------ | |----|Common Stock: 1,750 | |--------|Common Stock: 4,000 |
| Cost | | |------------ Shares | | |------------ Shares |
| ---- | | | Cost | | | Cost |
|Farmland | | | ---- | | | ---- |
|Mutual-100% $10 | | |Casualty-100% $11,750,000 | | |Neckura-100% DM 15,825,681 |
- -------------------------------- | -------------------------------- | --------------------------------
| |
- -------------------------------- | -------------------------------- | --------------------------------
| NATIONWIDE AGRIBUSINESS | | | SCOTTSDALE | | | NECKURA GENERAL |
| INSURANCE COMPANY | | | INSURANCE COMPANY | | | INSURANCE COMPANY |
|Common Stock: 1,000,000 | | | | | | |
|------------ Shares | | |Common Stock: 30,136 | | |Common Stock: 1,500 |
| Cost |------------------|------------ Shares | |--------|------------ Shares |
| ---- | | Cost | | | Cost |
|Casualty-99.9% $26,714,335 | | ---- | | | ---- |
|Other Capital: | |Casualty-100% $150,000,000 | | |Neckura-100% DM 1,656,925 |
|------------- | | | | | |
|Casualty-Ptd. $ 713,567 | | | | | |
- -------------------------------- -------------------------------- | --------------------------------
| |
-------------------------------- | --------------------------------
| SCOTTSDALE | | | COLUMBUS INSURANCE |
| SURPLUS LINES | | | BROKERAGE AND SERVICE |
| INSURANCE COMPANY | | | GmbH |
| | | |Common Stock: 1 Share |
| | |--------|------------ |
| "NEWLY FORMED" | | | Cost |
| | | | ---- |
| | | |Neckura-100% DM 51,639 |
| | | | |
| | | | |
-------------------------------- | --------------------------------
| |
-------------------------------- | --------------------------------
| NATIONAL PREMIUM & | | | LEBEN DIREKT |
| BENEFIT ADMINISTRATION | | | INSURANCE COMPANY |
| COMPANY | | | |
|Common Stock: 10,000 | | |Common Stock: 4,000 Shares |
|------------ Shares |------------------|------------ |
| Cost | | Cost |
| ---- | | ---- |
|Scottsdale-100% $10,000 | |Neckura-100% DM 4,000,000 |
| | | |
| | | |
-------------------------------- --------------------------------
-------------------------------- --------------------------------
| SVM SALES | | AUTO DIREKT |
| GmbH | | INSURANCE COMPANY |
| | | |
|Common Stock: 50 Shares | |Common Stock: 1,500 Shares |
|------------ | |------------ |
| Cost | | Cost |
| ---- | | ---- |
|Neckura-100% DM 50,000 | |Neckura-100% DM 1,643,149 |
| | | |
| | | |
-------------------------------- --------------------------------
</TABLE>
<PAGE> 107
<TABLE>
<CAPTION>
NATIONWIDE INSURANCE ENTERPRISE(R) (right side)
<S> <C> <C> <C>
------------------------
| NATIONWIDE INSURANCE |
| ENTERPRISE FOUNDATION|
| |
| MEMBERSHIP |
| NONPROFIT |
| CORPORATION |
------------------------
-----------------------------------------------------------------------------
| |
| |
| NATIONWIDE MUTUAL |
=======| FIRE INSURANCE COMPANY |
| (FIRE) |
| |
| |
-----------------------------------------------------------------------------
|
- --------------- --------------------------------------------------
| |
- ----------------------------------------------------------------------------------------------------------------- |
| | | |
| -------------------------------- | -------------------------------- ----------------------------------
| | SCOTTSDALE | | | NATIONWIDE | | NATIONWIDE |
| | INDEMNITY COMPANY | | | COMMUNITY URBAN | | CORPORATION |
| | | | | REDEVELOPMENT | | |
| | | | | CORPORATION | |Common Stock: Control: |
| |Common Stock: 50,000 | | |Common Stock: 10 Shares | |------------ ------- |
|-----|------------ Shares | |----|------------ | |$13,642,432 100% |
| | Cost | | | Cost | | Shares Cost |
| | ---- | | | ---- | | ------ ---- |
| |Casualty-100% $8,800,000 | | |Casualty-100% $1,000 | |Casualty 12,992,922 $751,352,485|
| | | | | | |Fire 649,510 24,007,936|
| | | | | | | (See Page 2) |
| -------------------------------- | -------------------------------- ----------------------------------
| |
| -------------------------------- | --------------------------------
| | NATIONWIDE | | | INSURANCE |
| | INDEMNITY COMPANY | | | INTERMEDIARIES, INC. |
| | | | | |
|-----|Common Stock: 28,000 | |----|Common Stock: 1,615 |
| |------------ Shares | | |------------ Shares |
| | Cost | | | Cost |
| | ---- | | | ---- |
| |Casualty-100% $294,529,000 | | |Casualty-100% $1,615,000 |
| -------------------------------- | --------------------------------
| |
| -------------------------------- | --------------------------------
| | LONE STAR | | | NATIONWIDE CASH |
| | GENERAL AGENCY, INC. | | | MANAGEMENT COMPANY |
| | | | |Common Stock: 100 Shares |
------|Common Stock: 1,000 | |----|------------ |
|------------ Shares | | | Cost |
| Cost | | | ---- |
| ---- | | |Casualty-90% $9,000 |
|Casualty-100% $5,000,000 | | |NW Adv. Serv. 1,000 |
-------------------------------- | --------------------------------
|| |
-------------------------------- | --------------------------------
| COLONIAL COUNTY MUTUAL | | | CALIFORNIA CASH |
| INSURANCE COMPANY | | | MANAGEMENT |
| | | | |
|Surplus Debentures | | |Common Stock: 90 Shares |
|------------------ | |----|------------ |
| Cost | | | Cost |
| ---- | | | ---- |
|Colonial $500,000 | | |Casualty-100% $9,000 |
|Lone Star 150,000 | | | |
-------------------------------- | --------------------------------
|
| -------------------------------- --------------------------------
| | NATIONWIDE | | THE BEAK AND |
| | COMMUNICATIONS, INC. | | WIRE CORPORATION |
| |Common Stock: 14,750 | | |
| |------------ Shares | |Common Stock: 750 Shares |
-----| Cost |------------------|------------ |
| ---- | | Cost |
|Casualty-100% $11,510,000 | | ---- |
|Other Capital: | |NW Comm-100% $531,000 |
|------------- | | |
|Casualty-Ptd. 1,000,000 | | |
-------------------------------- --------------------------------
Subsidiary Companies -- Solid Line
Contractual Association -- Double Lines
March 6, 1997
</TABLE>
<PAGE> 108
<TABLE>
<CAPTION>
(Left Side)
NATIONWIDE INSURANCE ENTERPRISE(R)
------------------------------------------------
| EMPLOYERS INSURANCE |
| OF WAUSAU |==========================================
| A MUTUAL COMPANY |
------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------
| | |
--------------------------- --------------------------- ---------------------------
| NATIONWIDE LIFE INSURANCE | | NATIONWIDE | | NATIONWIDE FINANCIAL |
| COMPANY (NW LIFE) | | FINANCIAL SERVICES | | INSTITUTION DISTRIBUTORS |
| | | CAPITAL TRUST | | AGENCY, INC. (NFIDAI) |
| Common Stock: 3,814,779 | | Preferred Stock: | | Common Stock: 1,000 |
| ------------ Shares | | --------------- | | ------------ Shares |
| | | | | |
| NFS--100% | | NFS--100% | | NFS--100% |
--------------------------- --------------------------- ---------------------------
| ||
--------------------------- | --------------------------- --------------------------- || --------------------------
| NATIONWIDE LIFE AND | | | NATIONWIDE | | FINANCIAL HORIZONS | || | |
| ANNUITY INSURANCE COMPANY | | | ADVISORY SERVICES | | DISTRIBUTORS AGENCY | || | |
| (NW LIFE) | | | (NW ADV. SERV.) | | OF ALABAMA, INC. | || | |
| Common Stock: 68,000 | | | Common Stock: 7,676 | | Common Stock: 10,000 | || | FINANCIAL HORIZONS |
| ------------ Shares |--|--| ------------ Shares |==|| | ------------ Shares |--||==| DISTRIBUTORS AGENCY |
| | | | | || | | || | OF OHIO, INC. |
| Cost | | | Cost | || | Cost | || | |
| ---- | | | ---- | || | ---- | || | |
| NW Life--100% $58,070,003 | | | NW Life--100% $5,996,261 | || | NFIDIA--100% $100 | || | |
--------------------------- | --------------------------- || --------------------------- || --------------------------
| || ||
--------------------------- | --------------------------- || --------------------------- || --------------------------
| NWE, INC. | | | NATIONWIDE | || | LANDMARK FINANCIAL | || | |
| | | | INVESTOR SERVICES, INC. | || | SERVICES OF | || | |
| | | | | || | NEW YORK, INC. | || | |
| Common Stock: 100 | | | Common Stock: 5 | || | Common Stock: 10,000 | || | FINANCIAL HORIZONS |
| ------------ Shares |--| | ------------ Shares |==|| | ------------ Shares | ||==| DISTRIBUTORS AGENCY |
| | | | | || | | || | OF OKLAHOMA, INC. |
| Cost | | | Cost | || | Cost | || | |
| ---- | | | ---- | || | ---- | || | |
| NW Life--100% $35,971,375 | | | NW Adv. Serv.--100% $5,000| || | NFIDIA--100% $10,100 | || | |
--------------------------- | --------------------------- || --------------------------- || --------------------------
| || ||
--------------------------- | --------------------------- || --------------------------- || --------------------------
| NATIONWIDE INVESTMENT | | | FINANCIAL HORIZONS | || | FINANCIAL HORIZONS | || | |
| SERVICES CORPORATION | | | INVESTMENT TRUST | || | SECURITIES CORP. | || | |
| | | | | || | | || | |
| Common Stock: 5,000 | | | | || | Common Stock: 10,000 | || | FINANCIAL HORIZONS |
| ------------ Shares |--| | |==|| | ------------ Shares | ||==| DISTRIBUTORS AGENCY |
| | | | | || | | || | OF TEXAS, INC. |
| Cost | | | | || | Cost | || | |
| ---- | | | | || | ---- | || | |
| NW Life--100% $529,728 | | | COMMON LAW TRUST | || | NFIDIA--100% $153,000 | || | |
--------------------------- | --------------------------- || --------------------------- || --------------------------
| || ||
--------------------------- | --------------------------- || --------------------------- || --------------------------
| NATIONWIDE LIFE INSURANCE | | | NATIONWIDE | || | AFFILIATE AGENCY, INC. | || | |
| COMPANY OF NEW YORK | | | INVESTING | || | | || | |
| | | | FOUNDATION | || | | || | |
| Common Stock: | | | | || | Common Stock: 100 | || | AFFILIATE |
| ------------ Shares |--| | |==|| | ------------ Shares |__||==| AGENCY OF |
| Cost | | | | || | | | OHIO, INC. |
| ---- | | | | || | Cost | | |
| NW Life--100% | | | | || | ---- | | |
| (Proposed) | | | COMMON LAW TRUST | || | NFIDIA--100% $100 | | |
--------------------------- | --------------------------- || --------------------------- --------------------------
| ||
--------------------------- | --------------------------- ||
| NATIONWIDE REALTY | | | NATIONWIDE | ||
| INVESTORS, LTD. | | | INVESTING | ||
| | | | FOUNDATION II | ||
| Units: | | | | ||
| ------ | | | |==||
| | | | | ||
| | | | | ||
| NW Life--90% | | | | ||
| NW Mutual--10% | | | COMMON LAW TRUST | ||
--------------------------- | --------------------------- ||
| ||
--------------------------- | --------------------------- ||
| NATIONWIDE REALTY | | | NATIONWIDE | ||
| INVESTORS, LTD. | | | SEPARATE ACCOUNT | ||
| | | | TRUST | ||
| Units: | | | | ||
| ------ |__| | |__||
| | | |
| | | |
| NW Life--97.6% | | |
| NW Mutual--2.4% | | COMMON LAW TRUST |
--------------------------- ---------------------------
</TABLE>
<PAGE> 109
<TABLE>
<CAPTION>
(Center)
<S> <C> <C> <C> <C> <C> <C>
------------------------------------------------
| NATIONWIDE MUTUAL |
========================================| INSURANCE COMPANY |==========================================
| (CASUALTY) |
------------------------------------------------
|
| ----------------------------------------------------
| |
---------------------------------------
| NATIONWIDE CORPORATION (NW CORP) |
| Common Stock: Control |
| ------------ ------- |
| 13,642,432 100% |
| Shares Cost |
| ------ ---- |
| Casualty 12,992,922 $751,352,485 |
| Fire 649,510 24,007,936 |
---------------------------------------
|
----------------------------------------------------------------------------------------------------------------------
| | | |
--------------------------- -------------------------- ----------------------------- ----------------------------
| NATIONWIDE FINANCIAL | | MRM INVESTMENTS, INC. | | WEST COAST LIFE | | NATIONAL CASUALTY |
| SERVICES, INC. (NFS) | | | | INSURANCE COMPANY | | COMPANY |
| | | | | | | (NC) |
| Common Stock: Control | | Common Stock: 1 | | Common Stock: 1,000,000 | | Common Stock: 100 |
| ------------ ------- | | ------------ Share | | ------------ Shares | | ------------ Shares |
| | | | | | | |
| | | Cost | | Cost | | Cost |
| Class A Public--100% | | ---- | | ---- | | ---- |
| Class B NW Corp--100% | | NW Corp.--100% $1,339,218 | | NW Corp.--100% $152,946,930 | | NW Corp.--100% $73,442,439 |
--------------------------- --------------------------- ----------------------------- ----------------------------
| |
- -------------------------------------------------------------------------------- |
| | |
--------------------------- --------------------------- ----------------------------
| PUBLIC EMPLOYEES BENEFIT | | NEA VALUEBUILDER | | NCC OF AMERICA, INC. |
| SERVICES CORPORATION | | INVESTOR SERVICES, INC. | | (INACTIVE) |
| (PEBSCO) | | (NEA) | | |
| Common Stock: 236,494 |==|| | Common Stock: 500 | | |
| ------------ Shares | || | ------------ Shares | | |
| | || | | | |
| NFS--100% | || | NFS--100% | | NFS--100% |
--------------------------- || ----------------------------- ----------------------------
|| ||
--------------------------- || --------------------------- ||
| PEBSCO OF | || | NEA VALUEBUILDER | ||
| ALABAMA | || | INVESTOR SERVICES | ||
| | || | OF ALABAMA, INC. | ||
| Common Stock: 100,000 | || | Common Stock: 500 | ||
| ------------ Shares |--|| | ------------ Shares |--||
| | || | | ||
| Cost | || | Cost | ||
| ---- | || | ---- | ||
| PEBSCO--100% $1,000 | || | NEA--100% $5,000 | ||
--------------------------- || --------------------------- ||
|| ||
--------------------------- || --------------------------- ||
| PEBSCO OF | || | NEA VALUEBUILDER | ||
| ARKANSAS | || | INVESTOR SERVICES | ||
| | || | OF ARIZONA, INC | ||
| Common Stock: 50,000 | || | Common Stock: 100 | ||
| ------------ Shares |--|| | ------------ Shares |--||
| | || | | ||
| Cost | || | Cost | ||
| ---- | || | ---- | ||
| PEBSCO--100% $500 | || | NEA--100% $1,000 | ||
--------------------------- || --------------------------- ||
|| ||
--------------------------- || --------------------------- ||
| PEBSCO OF MASSACHUSETTS | || | NEA VALUEBUILDER | ||
| INSURANCE AGENCY, INC. | || | INVESTOR SERVICES | ||
| | || | OF MONTANA, INC. | ||
| Common Stock: 1,000 | || | Common Stock: 500 | ||
| ------------ Shares |--|| | ------------ Shares |--||
| | || | | ||
| Cost | || | Cost | ||
| ---- | || | ---- | ||
| PEBSCO--100% $1,000 | || | NEA--100% $500 | ||
--------------------------- || --------------------------- ||
|| ||
--------------------------- || --------------------------- || ---------------------------
| PEBSCO OF | || | NEA VALUEBUILDER | || | |
| MONTANA | || | INVESTOR SERVICES | || | |
| | || | OF NEVADA, INC. | || | NEA VALUEBUILDER |
| Common Stock: 500 | || | Common Stock: 500 | || | INVESTOR SERVICES |
| ------------ Shares |--|| | ------------ Shares | ||==| OF OHIO, INC. |
| | || | | || | |
| Cost | || | Cost | || | |
| ---- | || | ---- | || | |
| PEBSCO--100% $500 | || | NEA--100% $500 | || | |
--------------------------- || --------------------------- || ---------------------------
|| ||
--------------------------- || --------------------------- || ---------------------------
| PEBSCO OF | || | NEA VALUEBUILDER | || | |
| NEW MEXICO | || | INVESTOR SERVICES | || | |
| | || | OF WYOMING, INC. | || | NEA VALUEBUILDER |
| Common Stock: 1,000 | || | Common Stock: 500 | || | INVESTOR SERVICES |
| ------------ Shares |--|| | ------------ Shares | ||==| OF OKLAHOMA, INC. |
| | || | | || | |
| Cost | || | Cost | || | |
| ---- | || | ---- | || | |
| PEBSCO--100% $1,000 | || | NEA--100% $500 | || | |
--------------------------- || --------------------------- || ---------------------------
|| ||
--------------------------- || --------------------------- || ----------------------------
| | || | NEA VALUEBUILDER | || | |
| | || | SERVICES INSURANCE | || | |
| PEBSCO OF | || | AGENCY, INC. | || | NEA VALUEBUILDER |
| TEXAS, INC. | || | Common Stock: 100 | || | INVESTOR SERVICES |
| |==|| | ------------ Shares |__||==| OF TEXAS, INC. |
| | | | | |
| | | Cost | | |
| | | ---- | | |
| | | NEA--100% $1,000 | | |
--------------------------- --------------------------- ----------------------------
</TABLE>
<PAGE> 110
<TABLE>
<CAPTION>
(Right)
<S> <C> <C> <C> <C> <C> <C>
------------------------------------------------
| NATIONWIDE MUTUAL |
========================================| FIRE INSURANCE COMPANY |
| (FIRE) |
------------------------------------------------
|
- -----------------------------------------------------------------|
- ----------------------------------------------------------------------------------------------
| | |
--------------------------- ------------------------------ ------------------------------
| GATES, MCDONALD | | EMPLOYERS LIFE INSURANCE | | NATIONWIDE HMO, INC. |
| & COMPANY (GATES) | | OF WAUSAU (ELIOW) | | (NW HMO) |
| | | | | |
| Common Stock: 254 | | Common Stock: 250,000 | | Common Stock: 100 |
|-- | ------------ Shares | |--| ------------ Shares | |--| ------------ Shares |
| | | | | | | | |
| | Cost | | | Cost | | | Cost |
| | ---- | | | ---- | | | ---- |
| | NW CORP.--100% $25,683,532 | | | NW CORP.--100% $126,509,480 | | | NW CORP.--100% $14,603,732 |
| ----------------------------- | ------------------------------ | ------------------------------
| | |
| --------------------------- | ------------------------------ | ------------------------------
| | GATES, MCDONALD & COMPANY | | | WAUSAU PREFERRED | | | NATIONWIDE MANAGEMENT |
| | OF NEW YORK, INC. | | | HEALTH INSURANCE CO. | | | SYSTEMS, INC. |
| | | | | | | | |
| | Common Stock: 3 | | | Common Stock: 250,000 | | | Common Stock: 100 |
|-- | ------------ Shares | |--| ------------ Shares | |--| ------------ Shares |
| | | | | | | | |
| | Cost | | | Cost | | | NW HMO Cost |
| | ---- | | | ---- | | | ---- |
| | GATES--100% $106,947 | | | NW CORP.--100% $57,413,193 | | | Inc.--100% $25,149 |
| ----------------------------- | ------------------------------ | ------------------------------
| | |
| ----------------------------- | ------------------------------ | ------------------------------
| | GATES, MCDONALD & COMPANY | | | KEY HEALTH PLAN, INC. | | | NATIONWIDE |
| | OF NEVADA | | | | | | AGENCY, INC. |
| | | | | | | | |
| | Common Stock: 40 | | | Common Stock: 1,000 | | | Common Stock: 100 |
|-- | ------------ Shares | |--| ------------ Shares | |--| ------------ Shares |
| | | | | | | |
| | Cost | | Cost | | | NW HMO Cost |
| | ---- | | ---- | | | ---- |
| | Gates--100% $93,750 | | ELIOPW--80% $2,700,000 | | | Inc.--99% $116,077 |
| ----------------------------- ------------------------------ | ------------------------------
|
| -----------------------------
| | GATES, MCDONALD |
| | HEALTH PLUS, INC. |
| | |
| | Common Stock: 200 |
|-- | ------------ Shares |
| |
| Cost |
| ---- |
| NW CORP.--100% $2,000,000 |
-----------------------------
Subsidiary Companies -- Solid Line
Contractual Association -- Double Line
Partnership Interest -- Dotted Line
March 6, 1997
Page 2
</TABLE>
<PAGE> 111
ITEM 27. NUMBER OF CONTRACT OWNERS
The number of Owners of Contracts as of February 28, 1997 was 3092.
ITEM 28. INDEMNIFICATION
Provision is made in the Company's Amended and Restated Code of
Regulations and expressly authorized by the General Corporation Law of the
State of Ohio, for indemnification by the Company of any person who was or
is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative by reason of the fact that such person is
or was a director, officer or employee of the Company, against expenses,
including attorneys' fees, judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such
action, suit or proceeding, to the extent and under the circumstances
permitted by the General Corporation Law of the State of Ohio.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 ("Act") may be permitted to directors, officers or persons
controlling the Company pursuant to the foregoing provisions, the Company
has been informed that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in
the Act and is, therefore, unenforceable.
ITEM 29. PRINCIPAL UNDERWRITER
(a) Nationwide Advisory Services, Inc. ("NAS") acts as principal
underwriter and general distributor for the Nationwide DC Variable
Account, Nationwide Multi-Flex Variable Account, Nationwide
DCVA-II, Nationwide Variable Account-II, Nationwide Variable
Account-5, Nationwide Variable Account-6, Nationwide Variable
Account-8, Nationwide Variable Account-9, Nationwide VA Separate
Account-A, Nationwide VA Separate Account-B, Nationwide VA
Separate Account-C, Nationwide VL Separate Account-A, Nationwide
VL Separate Account-B, Nationwide VL Separate Account-C,
Nationwide VLI Separate Account-2, Nationwide VLI Separate
Account-3, Nationwide VLI Separate Account-4, NACo Variable
Account and Nationwide Variable Account, all of which are separate
investment accounts of the Company or its affiliates.
NAS also acts as principal underwriter for the Nationwide
Investing Foundation, Nationwide Separate Account Trust, Financial
Horizons Investment Trust, and Nationwide Investing Foundation II
and Nationwide Asset Allocation Trust, which are open-end
management investment companies.
(b) NATIONWIDE ADVISORY SERVICES, INC.
DIRECTORS AND OFFICERS
POSITIONS AND OFFICES
NAME AND BUSINESS ADDRESS WITH UNDERWRITER
Joseph J. Gasper President and Director
One Nationwide Plaza
Columbus, OH 43215
Dimon Richard McFerson Chairman of the Board of
One Nationwide Plaza Directors and Chairman and
Columbus, OH 43215 Chief Executive
Officer--Nationwide Insurance
Enterprise and Director
Gordon E. McCutchan
One Nationwide Plaza Executive Vice President-Law
Columbus, OH 43215 and
Corporate Services and
Director
Robert A. Oakley Executive Vice President -
One Nationwide Plaza Chief Financial Officer and
Columbus, OH 43215 Director
157 of 177
<PAGE> 112
Robert J. Woodward, Jr. Executive Vice President -
One Nationwide Plaza Chief Investment Officer and
Columbus, OH 43215 Director
W. Sidney Druen Senior Vice President and
One Nationwide Plaza General Counsel and
Columbus, OH 43215 Assistant Secretary
James F. Laird, Jr. Vice President - General
One Nationwide Plaza Manager and Acting Treasurer
Columbus, OH 43215
Edwin P. McCausland Vice President -
One Nationwide Plaza Fixed Income Securities
Columbus, OH 43215
Harry S. Schermer Vice President - Investments
One Nationwide Plaza
Columbus, OH 43215
Joseph P. Rath Vice President - Compliance
One Nationwide Plaza
Columbus, OH 43215
William G. Goslee Vice President
One Nationwide Plaza
Columbus, OH 43215
Peter J. Neckermann Vice President
One Nationwide Plaza
Columbus, OH 43215
Rae M. Pollina Secretary
One Nationwide Plaza
Columbus, OH 43215
(c) NAME OF NET UNDERWRITING COMPENSATION ON
PRINCIPAL DISCOUNTS AND REDEMPTION OR BROKERAGE
UNDERWRITER COMMISSIONS ANNUITIZATION COMMISSIONS COMPENSATION
Nationwide N/A N/A N/A N/A
Advisory
Services,
Inc.
158 of 177
<PAGE> 113
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
Robert O. Cline
Nationwide Life Insurance Company
One Nationwide Plaza
Columbus, OH 43215
ITEM 31. MANAGEMENT SERVICES
Not Applicable
ITEM 32. UNDERTAKINGS
The Registrant hereby undertakes to:
(a) File a post-effective amendment to this registration statement as
frequently as is necessary to ensure that the audited financial
statements in the registration statement are never more than 16
months old for so long as payments under the variable annuity
contracts may be accepted;
(b) Include either (1) as part of any application to purchase a contract
offered by the prospectus, a space that an applicant can check to
request a Statement of Additional Information, or (2) a post card or
similar written communication affixed to or included in the
prospectus that the applicant can remove to send for a Statement of
Additional Information; and
(c) Deliver any Statement of Additional Information and any financial
statements required to be made available under this Form promptly
upon written or oral request.
(d) Represent that any contract offered by the prospectus and which is
issued pursuant to Section 403(b) of the Code, is issued by the
Registrant in reliance upon, and in compliance with, the Securities
and Exchange Commission's no-action letter to the American Council
of Life Insurance (publicly available November 28, 1988) which
permits withdrawal restrictions to the extent necessary to comply
with IRC Section 403(b)(11).
The Depositor hereby represents:
(a) That the fees and charges deducted under the Contract in the
aggregate are reasonable in relation to the services rendered, the
expenses expected to be incurred, and the risks assumed by the
Company.
159 of 177
<PAGE> 114
OFFERED BY
NATIONWIDE
LIFE INSURANCE COMPANY
Group
Flexible Fund
Retirement
Contracts
PROSPECTUS
MAY 1, 1997
160 of 177
<PAGE> 115
NATIONWIDE LIFE INSURANCE COMPANY
GROUP FLEXIBLE FUND RETIREMENT CONTRACTS
ISSUED THROUGH THE NATIONWIDE DC VARIABLE ACCOUNT
(Supplement Dated May 1, 1997 to Prospectus Dated May 1, 1997)
THIS SUPPLEMENT UPDATES CERTAIN INFORMATION CONTAINED IN THE PROSPECTUS AND
SHOULD BE KEPT FOR FUTURE REFERENCE. THIS SUPPLEMENT IS FOR USE ONLY WITH
CONTRACTS ISSUED PURSUANT TO SECTION 403(b) OF THE CODE ("TAX-SHELTERED ANNUITY
CONTRACTS").
1. The section entitled "SUMMARY OF CONTRACT EXPENSES" in the prospectus is
amended by including the following Underlying Mutual Fund options available
only for Tax-Sheltered Annuity Contracts.
<TABLE>
<CAPTION>
SUMMARY OF CONTRACT EXPENSES
<S> <C>
PARTICIPANT TRANSACTION EXPENSES
Maximum Contingent Deferred Sales Charge.......................... 5%
(as a percentage of Purchase Payments)
ANNUAL CONTRACT MAINTENANCE CHARGE(1)................................... $ 15
VARIABLE ACCOUNT ANNUAL EXPENSES
(as a percentage of average account value)
Mortality and Expense Risk Fee.................................... 0.50%
Administration Charge............................................. 0.45%
Total Variable Account Annual Expenses............................ 0.95%
UNDERLYING MUTUAL FUND ANNUAL EXPENSES(2)
(as a percentage of Underlying Mutual Fund average net assets)
</TABLE>
<TABLE>
<CAPTION>
------------------------------------
Management Other Total
Fees Expenses Underlying
Mutual Fund
Expenses
<S> <C> <C> <C>
- -------------------------------------------------------------------------------
American Century Variable Portfolios, 1.00% 0.00% 1.00%
Inc. - American Century VP Balanced
- -------------------------------------------------------------------------------
American Century Variable Portfolios, 1.00% 0.00% 1.00%
Inc. - American Century VP Capital
Appreciation
- -------------------------------------------------------------------------------
Dreyfus Socially Responsible Growth Fund, 0.72% 0.24% 0.96%
Inc.
- -------------------------------------------------------------------------------
Dreyfus Stock Index Fund 0.25% 0.05% 0.30%
- -------------------------------------------------------------------------------
Fidelity VIP Equity Income Portfolio 0.51% 0.07% 0.58%
- -------------------------------------------------------------------------------
Fidelity VIP Growth Portfolio 0.61% 0.08% 0.69%
- -------------------------------------------------------------------------------
Fidelity VIP High Income Portfolio(3) 0.59% 0.12% 0.71%
- -------------------------------------------------------------------------------
Fidelity VIP Overseas Portfolio 0.76% 0.17% 0.93%
- -------------------------------------------------------------------------------
Fidelity VIP II Asset Manager Portfolio 0.64% 0.10% 0.74%
- -------------------------------------------------------------------------------
Neuberger & Berman Growth Portfolio 0.83% 0.09% 0.92%
- -------------------------------------------------------------------------------
Neuberger & Berman Limited Maturity Bond 0.65% 0.13% 0.78%
Portfolio
- -------------------------------------------------------------------------------
Neuberger & Berman Partners Portfolio 0.84% 0.11% 0.95%
- -------------------------------------------------------------------------------
NSAT Capital Appreciation Fund 0.50% 0.02% 0.52%
- -------------------------------------------------------------------------------
NSAT Government Bond Fund 0.50% 0.01% 0.51%
- -------------------------------------------------------------------------------
NSAT Money Market Fund 0.50% 0.03% 0.53%
- -------------------------------------------------------------------------------
NSAT Total Return Fund 0.50% 0.02% 0.52%
------------------------------------
</TABLE>
(1) The Annual Contract Maintenance Charge will also be assessed on the date
that amounts held with respect to a Participant are fully withdrawn from the
Contract.
(2) The Underlying Mutual Fund expenses shown above are assessed at the
Underlying Mutual Fund level and are not direct charges against Variable
Account assets or reductions from Contract Values. These Underlying Mutual
Fund expenses are taken into consideration in computing each Underlying
Mutual Fund's net asset value, which is the share price used to calculate
the Variable Account's unit value. None of the above Underlying Mutual Fund
options are subject to 12b-1 fees.
(3) The Fidelity Investments Variable Insurance Products Fund - High Income
Portfolio may invest in lower quality debt securities commonly referred to
as junk bonds.
161 of 177
<PAGE> 116
EXAMPLE
The following chart depicts the dollar amount of expenses that would be incurred
under this Contract assuming a $1000 initial Purchase Payment and 5% annual
return on assets.
<TABLE>
<CAPTION>
---------------------------------------
If you surrender your Contract
at the end of the applicable time
period
---------------------------------------
1 Yr. 3 Yrs. 5 Yrs. 10 Yrs.
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------
American Century Variable 71 114 159 285
Portfolios, Inc. - American
Century VP Balanced
- ----------------------------------------------------------------------
American Century Variable 71 114 159 285
Portfolios, Inc. - American
Century VP Capital
Appreciation
- ----------------------------------------------------------------------
Dreyfus Socially Responsible 70 112 157 281
Growth Fund, Inc.
- ----------------------------------------------------------------------
Dreyfus Stock Index Fund 63 91 121 206
- ----------------------------------------------------------------------
Fidelity VIP Equity Income 66 100 137 239
Portfolio
- ----------------------------------------------------------------------
Fidelity VIP Growth Portfolio 67 104 142 251
- ----------------------------------------------------------------------
Fidelity VIP High Income 68 104 144 253
Portfolio
- ----------------------------------------------------------------------
Fidelity VIP Overseas 70 111 155 278
Portfolio
- ----------------------------------------------------------------------
Fidelity VIP II Asset Manager 68 105 145 257
Portfolio
- ----------------------------------------------------------------------
Neuberger & Berman Growth 70 111 155 277
Portfolio
- ----------------------------------------------------------------------
Neuberger & Berman Limited 68 107 147 261
Maturity Bond Portfolio
- ----------------------------------------------------------------------
Neuberger & Berman Partners 70 112 156 280
Portfolio
- ----------------------------------------------------------------------
NSAT Capital Appreciation Fund 66 98 133 232
- ----------------------------------------------------------------------
NSAT Government Bond Fund 65 98 133 231
- ----------------------------------------------------------------------
NSAT Money Market Fund 66 99 134 233
- ----------------------------------------------------------------------
NSAT Total Return Fund 66 98 133 232
- ----------------------------------------------------------------------
</TABLE>
(continued on next page)
162 of 177
<PAGE> 117
EXAMPLE (continued)
The following chart depicts the dollar amount of expenses that would be incurred
under this Contract assuming a $1000 initial Purchase Payment and 5% annual
return on assets.
<TABLE>
<CAPTION>
---------------------------------------
If you do not surrender your Contract
at the end of the applicable time
period
---------------------------------------
1 Yr. 3 Yrs. 5 Yrs. 10 Yrs.
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------
American Century Variable 21 64 109 235
Portfolios, Inc. - American
Century VP Balanced
- ----------------------------------------------------------------------
American Century Variable 21 64 109 235
Portfolios, Inc. - American
Century VP Capital
Appreciation
- ----------------------------------------------------------------------
Dreyfus Socially Responsible 20 62 107 231
Growth Fund, Inc.
- ----------------------------------------------------------------------
Dreyfus Stock Index Fund 13 41 71 156
- ----------------------------------------------------------------------
Fidelity VIP Equity Income 16 50 87 189
Portfolio
- ----------------------------------------------------------------------
Fidelity VIP Growth Portfolio 17 54 92 201
- ----------------------------------------------------------------------
Fidelity VIP High Income 18 54 94 203
Portfolio
- ----------------------------------------------------------------------
Fidelity VIP Overseas 20 61 105 228
Portfolio
- ----------------------------------------------------------------------
Fidelity VIP II Asset Manager 18 55 95 207
Portfolio
- ----------------------------------------------------------------------
Neuberger & Berman Growth 20 61 105 227
Portfolio
- ----------------------------------------------------------------------
Neuberger & Berman Limited 18 57 97 211
Maturity Bond Portfolio
- ----------------------------------------------------------------------
Neuberger & Berman Partners 20 62 106 230
Portfolio
- ----------------------------------------------------------------------
NSAT Capital Appreciation Fund 16 48 83 182
- ----------------------------------------------------------------------
NSAT Government Bond Fund 15 48 83 181
- ----------------------------------------------------------------------
NSAT Money Market Fund 16 49 84 183
- ----------------------------------------------------------------------
NSAT Total Return Fund 16 48 83 182
- ----------------------------------------------------------------------
</TABLE>
(continued on next page)
163 of 177
<PAGE> 118
EXAMPLE (continued)
The following chart depicts the dollar amount of expenses that would be incurred
under this Contract assuming a $1000 initial Purchase Payment and 5% annual
return on assets.
<TABLE>
<CAPTION>
---------------------------------------
If you annuitize your Contract
at the end of the applicable time
period
---------------------------------------
1 Yr. 3 Yrs. 5 Yrs. 10 Yrs.
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------
American Century Variable 21 64 109 235
Portfolios, Inc. - American
Century VP Balanced
- ----------------------------------------------------------------------
American Century Variable 21 64 109 235
Portfolios, Inc. - American
Century VP Capital
Appreciation
- ----------------------------------------------------------------------
Dreyfus Socially Responsible 20 62 107 231
Growth Fund, Inc.
- ----------------------------------------------------------------------
Dreyfus Stock Index Fund 13 41 71 156
- ----------------------------------------------------------------------
Fidelity VIP Equity Income 16 50 87 189
Portfolio
- ----------------------------------------------------------------------
Fidelity VIP Growth Portfolio 17 54 92 201
- ----------------------------------------------------------------------
Fidelity VIP High Income 18 54 94 203
Portfolio
- ----------------------------------------------------------------------
Fidelity VIP Overseas 20 61 105 228
Portfolio
- ----------------------------------------------------------------------
Fidelity VIP II Asset Manager 18 55 95 207
Portfolio
- ----------------------------------------------------------------------
Neuberger & Berman Growth 20 61 105 227
Portfolio
- ----------------------------------------------------------------------
Neuberger & Berman Limited 18 57 97 211
Maturity Bond Portfolio
- ----------------------------------------------------------------------
Neuberger & Berman Partners 20 62 106 230
Portfolio
- ----------------------------------------------------------------------
NSAT Capital Appreciation Fund 16 48 83 182
- ----------------------------------------------------------------------
NSAT Government Bond Fund 15 48 83 181
- ----------------------------------------------------------------------
NSAT Money Market Fund 16 49 84 183
- ----------------------------------------------------------------------
NSAT Total Return Fund 16 48 83 182
- ----------------------------------------------------------------------
</TABLE>
The Example should not be considered a representation of past or future
expenses. Actual expenses may be greater or lesser than those shown.
The purpose of the Summary of Contract Expenses and Example is to assist the
Participant in understanding the various costs and expenses that a Participant
will bear directly or indirectly when investing in the Contract. The table
reflects expenses of the Variable Account as well as the Underlying Mutual Fund
investment options. For a more detailed explanation of these expenses, see
"Variable Account Charges and Other Deductions" in the prospectus. In addition
to the expenses shown above, deductions for premium taxes may also be
applicable, depending upon the jurisdiction in which the Contract is sold (see
"Premium Taxes" in the prospectus).
164 of 177
<PAGE> 119
2. The section entitled "CONDENSED FINANCIAL INFORMATION" in the prospectus is
amended by adding the following information about the Underlying Mutual Fund
options available for Tax-Sheltered Annuity Contracts.
CONDENSED FINANCIAL INFORMATION
Accumulation Unit Values (For an Accumulation Unit outstanding throughout the
period)
<TABLE>
<CAPTION>
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE UNIT VALUE ACCUMULATION
AT BEGINNING AT END UNITS
FUND OF PERIOD OF PERIOD OUTSTANDING AT YEAR
THE
END OF THE PERIOD
<S> <C> <C> <C> <C>
================================================================================
American Century 1.184177 1.316124 3,120 1996
Variable ---------------------------------------------------------------
Portfolios, 0.986992 1.184177 1,504 1995
Inc. - American ---------------------------------------------------------------
Century VP 1.000000 0.986992 0 1994
Balanced
================================================================================
American Century 1.729155 1.638699 51,629 1996
Variable ---------------------------------------------------------------
Portfolios 1.331537 1.729155 50,891 1995
Inc. - American ---------------------------------------------------------------
Century VP 1.360119 1.331537 38,898 1994
Capital ---------------------------------------------------------------
Appreciation 1.244720 1.360119 33,128 1993
---------------------------------------------------------------
1.273681 1.244720 21,051 1992
---------------------------------------------------------------
0.906306 1.273681 10,348 1991
---------------------------------------------------------------
1.000000 0.906306 4,711 1990
================================================================================
Dreyfus Stock 1.322035 1.604580 16,988 1996
Index ---------------------------------------------------------------
Fund 0.975745 1.322035 5,213 1995
---------------------------------------------------------------
1.000000 0.975745 782 1994
================================================================================
Dreyfus Socially 1.302837 1.564429 0 1996
Responsible ---------------------------------------------------------------
Growth Fund 0.977428 1.302837 0 1995
---------------------------------------------------------------
1.000000 0.977428 0 1994
================================================================================
Fidelity VIP 1.366323 1.552351 52,165 1996
Growth Portfolio ---------------------------------------------------------------
1.018963 1.366323 29,541 1995
---------------------------------------------------------------
1.000000 1.018963 7,026 1994
================================================================================
Fidelity VIP 1.303642 1.475687 62,324 1996
Equity Income ---------------------------------------------------------------
Portfolio 0.974175 1.303642 37,796 1995
---------------------------------------------------------------
1.000000 0.974175 5,699 1994
================================================================================
Fidelity VIP 1.185437 1.338939 17,934 1996
High Income ---------------------------------------------------------------
Portfolio 0.992271 1.185437 10,485 1995
---------------------------------------------------------------
1.000000 0.992271 1,484 1994
================================================================================
Fidelity VIP 1.029809 1.154842 88,581 1996
Overseas ---------------------------------------------------------------
Portfolio 0.947883 1.029809 55,723 1995
---------------------------------------------------------------
1.000000 0.947883 10,984 1994
================================================================================
Fidelity VIP II 1.107535 1.257222 18,427 1996
Asset Manager ---------------------------------------------------------------
Portfolio 0.955979 1.107535 10,482 1995
---------------------------------------------------------------
1.000000 0.955979 2,037 1994
================================================================================
Neuberger & 1.661013 1.795607 9,399 1996
Berman ---------------------------------------------------------------
Growth Portfolio 1.272940 1.661013 24,304 1995
---------------------------------------------------------------
1.352530 1.272940 17,238 1994
---------------------------------------------------------------
1.278609 1.352530 12,520 1993
---------------------------------------------------------------
1.178398 1.278609 8,757 1992
---------------------------------------------------------------
0.917001 1.178398 4,358 1991
---------------------------------------------------------------
1.000000 0.917001 0 1990
================================================================================
</TABLE>
165 of 177
<PAGE> 120
CONDENSED FINANCIAL INFORMATION, Continued
<TABLE>
<CAPTION>
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE UNIT VALUE ACCUM. UNITS
AT BEGINNING AT END OUTSTANDING AT
FUND OF PERIOD OF PERIOD THE END OF THE YEAR
PERIOD
<S> <C> <C> <C> <C>
================================================================================
Neuberger & 1.093904 1.130160 5,977 1996
Berman --------------------------------------------------------------
Limited Maturity 0.995462 1.093904 2,860 1995
Bond Portfolio --------------------------------------------------------------
1.000000 0.995462 597 1994
================================================================================
Neuberger & 1.306186 1.676351 8,811 1996
Berman --------------------------------------------------------------
Partners 0.966223 1.306186 5,923 1995
Portfolio --------------------------------------------------------------
1.000000 0.966223 3,237 1994
================================================================================
NSAT Government 1.574158 1.613565 7,820 1996
Bond Fund --------------------------------------------------------------
1.338281 1.574158 5,714 1995
--------------------------------------------------------------
1.396125 1.338281 971 1994
--------------------------------------------------------------
1.286974 1.396125 632 1993
--------------------------------------------------------------
1.204500 1.286974 1,660 1992
--------------------------------------------------------------
1.041986 1.204500 527 1991
--------------------------------------------------------------
1.000000 1.041986 0 1990
================================================================================
NSAT Capital 1.208468 1.509879 0 1996
Appreciation Fund --------------------------------------------------------------
1.000000 1.208468 0 1995
================================================================================
NSAT Money 1.209790 1.259556 28,915 1996
Market Fund --------------------------------------------------------------
1.155984 1.209790 14,512 1995
--------------------------------------------------------------
1.123427 1.155984 2,543 1994
--------------------------------------------------------------
1.103814 1.123427 0 1993
--------------------------------------------------------------
1.077714 1.103814 0 1992
--------------------------------------------------------------
1.028111 1.077714 0 1991
--------------------------------------------------------------
1.000000 1.028111 0 1990
================================================================================
NSAT Total 1.950853 2.354356 19,743 1996
Return Fund --------------------------------------------------------------
(formerly 1.525590 1.950853 11,766 1995
"Common --------------------------------------------------------------
Stock Fund") 1.523742 1.525590 3,996 1994
--------------------------------------------------------------
1.386859 1.523742 845 1993
--------------------------------------------------------------
1.294230 1.386859 500 1992
--------------------------------------------------------------
0.943464 1.294230 69 1991
--------------------------------------------------------------
1.000000 0.943464 0 1990
================================================================================
</TABLE>
166 of 177
<PAGE> 121
3. The section entitled "CONTRACT MAINTENANCE CHARGE" in the prospectus is
amended by adding the following paragraph:
For Tax-Sheltered Annuity Contracts, the Company will make a maximum
charge of $15 per Participant per year to reimburse the Company for certain
administrative expenses relating to the maintenance of individual Participant
records and the mailing of periodic statements to Participants. The Contract
Maintenance Charges, which are guaranteed never to increase, are designed
only to help the Company offset such administrative expenses, and such
charges will not exceed the Company's actual administration expenses under
the Contracts.
4. The section entitled "DESCRIPTION OF THE CONTRACTS" in the prospectus is
amended by adding the following new section:
PARTICIPANT RIGHTS UNDER TAX-SHELTERED ANNUITY CONTRACTS
Participant rights under the Contract are set forth in the Plan, if any,
and are described more fully in the Certificate of Participation issued to
each Participant by the Company and which describes the rights and benefits
to which the Participant is entitled under the Contract. The term Owner, as
used throughout the Contract, refers to the purchaser and the holder of the
Contract. However, the Owner's rights are limited by the Plan, if any, the
Code and applicable regulations. Participant Accounts held under the Contract
shall be non-forfeitable at all times. No amounts payable under the Contract
with respect to a Participant may be sold, assigned, discounted, or pledged
as collateral for a loan or as a security for the performance of an
obligation or for any other purpose to any person other than the Company. In
addition, to the extent permitted by law, no such sum shall in any way be
subject to legal process requiring the payment of any claim against the
payee. The Company will accept direction only from the Participant except as
otherwise specifically provided in the Plan, if any. The Company shall be
entitled to rely on any action taken or omitted by the Participant, pursuant
to the terms of the Contract.
5. The section entitled "SUSPENSION AND TERMINATION" in the prospectus is
amended by deleting the last two sentences of that section.
6. The section entitled "APPLICATION OF PURCHASE PAYMENTS" in the prospectus is
amended by adding the following paragraph at the end:
With respect to Tax-Sheltered Annuity Contracts, Purchase Payments for
each Participant may not exceed the Contract's allowable portion of the
lesser of the maximum exclusion allowance under Code Section 403(b), or the
elective deferral limits set forth in Code Section 402(g), except for amounts
eligible for rollover, transfer or exchange treatment under the Code. In no
event may the Purchase Payments exceed the limits described in Code Section
415. The amount of the Purchase Payments and earnings thereon in excess of
the limits set forth in Code Section 402(g) ("excess deferrals") shall be
returned in accordance with that section to the Participant upon written
request, without application of the Contingent Deferred Sales Charge, if any,
and in accordance with the Plan, if any. The Company may change the required
minimum annual Purchase Payment to any amount which does not violate the
applicable provisions of the Code.
7. The section entitled "REDEMPTION OF PARTICIPANT ACCOUNTS (TERMINATION)" in
the prospectus is amended by adding the following paragraph at the end:
With respect to Tax-Sheltered Annuity Contracts, Section 403(b)(11) of the
Code prohibits redemptions of Purchase Payments made pursuant to a salary
reduction agreement (within the meaning of 402(g)(3)(C) of the Code) before
the person reaches age 59-1/2, separates from service, dies, becomes disabled
(within the meaning of Code Section 72(m)(7)), or faces a financial hardship
as defined by the Plan, or, if no Plan is specified, as used in Section
403(b)(11)(B) of the Code and applicable regulations. This prohibition
applies to Purchase Payments made in years beginning after December 31, 1988,
to earnings on those Purchase Payments, and to earnings on amounts held as of
December 31, 1988. Hardship redemptions are limited to the amount of Purchase
Payments attributable to Participant elective contributions and earnings on
Purchase Payments held as of December 31, 1988, and may be subject to a 10%
tax penalty. The value of contracts issued pursuant to Section 403(b) may be
transferred to other contracts of other carriers. However, the exchange,
under Section 1035 of the Code, of a contract which had an accumulated value
prior to
167 of 177
<PAGE> 122
January 1, 1989, for a new contract may subject the pre-1989 value to the
limits of Section 403(b)(11). The Company issues this Contract in reliance
upon, and in compliance with, a Securities and Exchange Commission
industry-wide no-action letter (publicly available November 28, 1988) which
permits withdrawal restrictions to the extent necessary to comply with
Section 403(b)(11).
8. The section entitled "DISTRIBUTION OF PARTICIPANT ACCOUNTS (RETIREMENT
PERIOD)" in the prospectus is amended by Including the following section:
REQUIRED DISTRIBUTION FOR TAX-SHELTERED ANNUITY CONTRACTS
The entire interest of a Participant under a Contract issued pursuant to
Code Section 403(b) accruing after December 31, 1986, will, notwithstanding
anything else contained herein, be distributed to the Participant under the
Optional Retirement Income Form selected over-
A. the life of the Participant or the lives of the Participant and the
Participant's designated Beneficiary; or
B. a period not extending beyond the life expectancy of the Participant or
the life expectancy of the Participant and the Participant's designated
Beneficiary.
If the Participant's entire interest is to be distributed in equal or
substantially equal payments over a period described in A or B, such payments
will commence no later than the first day of April following the calendar
year In which the Participant attains age 70-1/2 (the Required Beginning
Date). In the case of a governmental plan or church plan (as defined in Code
Section 89(i)(4)), the Required Beginning Date will be the later of the dates
determined under the preceding sentence or April 1 of the calendar year
following the calendar year in which the Participant retires.
Payments commencing on the Required Beginning Date will not be less than
the lesser of the quotient obtained by dividing the entire interest of the
Participant by the life expectancy of the Participant, or the joint and last
survivor expectancy of the Participant and the Participant's designated
Beneficiary (whichever is applicable). Life expectancy and joint and last
survivor expectancy are computed by the use of return multiples contained in
Section 1.72-9 of the Treasury Regulations.
All Optional Retirement Income Forms described in the prospectus must
comply with the minimum Distribution and incidental death benefit provision
of Code Section 401(a)(9) and applicable regulations.
9. The section entitled "DEATH BENEFIT BEFORE RETIREMENT" in the prospectus is
deleted in its entirety and replaced with the following:
DEATH BENEFIT BEFORE RETIREMENT
If the Participant dies before his or her retirement income commences,
generally the entire Participant Account Value must be distributed within
five years after the Participant's death. There are two exceptions: (1) if
payments are to be made to the Participant's designated Beneficiary and the
Distributions begin within one year of the Participant's death, payments may
be extended over the life (or a period not exceeding the life expectancy) of
the Beneficiary; and (2) if the Beneficiary is the surviving spouse and the
Distributions begin by the time the Participant would have reached age
70-1/2, payments may be made over the life (or a period not exceeding life
expectancy) of the surviving spouse.
10. References throughout the Prospectus to the "GROUP FIXED FUND RETIREMENT
CONTRACT" are hereby changed to "GROUP FIXED TAX DEFERRED ANNUITY CONTRACT."
11.The Appendix of Participating Underlying Mutual Funds in the prospectus is
amended in its entirety by the following Underlying Mutual Funds. These
Underlying Mutual Funds are available only to serve as the Underlying
investment for variable annuity and variable life contracts issued through
separate accounts of life Insurance companies which may or may not be
affiliated. A full description of the Underlying Mutual Funds, their
investment policies and restrictions, risks, charges and expenses and all
other aspects of their operation is contained in the prospectuses of the
Underlying Mutual Funds, which should be read in conjunction with this
prospectus before investing.
168 of 177
<PAGE> 123
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC., A MEMBER OF AMERICAN CENTURY(SM)
INVESTMENTS
American Century Variable Portfolios, Inc. (formerly TCI Portfolios, Inc.)
was organized as a Maryland corporation in 1987. It is a diversified,
open-end investment company, designed only to provide investment vehicles for
variable annuity and variable life insurance products of insurance companies.
The investment manager is American Century Investment Management, Inc. which
is wholly owned by American Century Companies, Inc., and also manages
American Century(SM) Investments.
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC. - AMERICAN CENTURY VP BALANCED
The investment objective of the Fund is capital growth and current
income. The fund will seek to achieve its objective by maintaining
approximately 60% of the assets of the fund in common stocks (including
securities convertible into common stocks and other equity equivalents)
that are considered by management to have better-than-average prospects
for appreciation and approximately 40% in fixed income securities. A
minimum of 25% of the fixed income portion of the fund will be invested in
fixed income senior securities. There can be no assurance that the Fund
will achieve its investment objective.
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC. - AMERICAN CENTURY VP CAPITAL
APPRECIATION
The investment objective of the Fund is capital growth. The Fund
will seek to achieve its objective by investing primarily in common stocks
(including securities convertible into common stocks and other equity
equivalents) that meet certain fundamental and technical standards of
selection and, in the opinion of the Fund's management have better than
average potential for appreciation. The Fund tries to stay fully invested
in such stocks, regardless of the movement of stock prices generally.
The Fund may invest in cash and cash equivalents temporarily or when
it is unable to find common stocks meeting its criteria of selection. It
may purchase securities only of companies that have a record of at least
three years continuous operation. All securities in the Fund's portfolio
are listed on major stock exchanges or traded over-the-counter.
(Although the Statement of Additional Information concerning
American Century Variable Portfolios, Inc. refers to redemptions of
securities in kind under certain conditions, all surrendering or redeeming
Owners will receive cash from the Company.)
DREYFUS STOCK FUND INDEX
The Dreyfus Stock Index Fund, Inc. is an open-end, non-diversified,
management investment company. It was incorporated under Maryland law on
January 24, 1989 and commenced operations on September 29, 1989. Wells Fargo
Nikko Investment Advisers serves as the Fund's index fund manager. As of May
1, 1994, the Dreyfus Life and Annuity Index Fund began doing business as the
Dreyfus Stock Index Fund.
The investment objective of the Fund is to provide investment results that
correspond to the price and yield performance of publicly traded common
stocks in the aggregate, as represented by the Standard & Poor's Composite
Index of 500 Stocks. The Fund is neither sponsored by nor affiliated with
Standard & Poor's Corporation.
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND
The Dreyfus Socially Responsible Growth Fund, Inc. is an open-end,
diversified, management investment company. It was incorporated under
Maryland law on July 20, 1992, and commenced operations on October 7, 1993.
The Dreyfus Corporation serves as the Fund's investment Adviser. NCN Capital
Management Group, Inc. serves as the Fund's sub-investment adviser and
provides day-to-day management of the Fund's portfolio.
The investment objective of the Fund is to provide capital growth equity
investment in companies that, in the opinion of the Fund's management, not
only meet traditional investment standards, but which also show evidence that
they conduct their business in a manner that contributed to the enhancement
of the quality of life in America. Current income is secondary to the primary
goal.
169 of 177
<PAGE> 124
FIDELITY INVESTMENTS VARIABLE INSURANCE PRODUCTS FUND
The fund is an open-end, diversified, management investment company
organized as a Massachusetts business trust on November 13, 1981. The funds
shares are purchased by insurance companies to fund benefits under variable
insurance and annuity policies. Fidelity Management & Research Company
("FMR") is the Fund's manager.
EQUITY-INCOME PORTFOLIO
The investment objective of the Fund is to seek reasonable income by
investing primarily in income-producing equity securities. In choosing
these securities FMR also will consider the potential for capital
appreciation. The Portfolio's goal is to achieve a yield which exceeds the
composite yield on the securities comprising the Standard & Poor's
Composite Index of 500 Stocks.
GROWTH PORTFOLIO
The investment objective of the Fund seeks to achieve capital
appreciation. This Portfolio will invest in the securities of both
well-known and established companies, and smaller, less well-known
companies which may have a narrow product line or whose securities are
thinly traded. These latter securities will often involve greater risk
than may be found in the ordinary investment security. FMR's analysis and
expertise plays an integral role in the selection of securities and,
therefore, the performance of the Portfolio. Many securities which FMR
believes would have the greatest potential may be regarded as speculative,
and investment in the Portfolio may involve greater risk than is inherent
in other mutual funds. It is also important to point out that the
Portfolio makes most sense for you if you can afford to ride out changes
in the stock market, because it invests primarily in common stocks. FMR
also can make temporary investments in securities such as investment-grade
bonds, high-quality preferred stocks and short-term notes, for defensive
purposes when it believes market conditions warrant.
HIGH INCOME PORTFOLIO
The investment objective of the Fund seeks to obtain a high level of
current income by investing primarily in high-risk, lower-rated,
high-yielding, fixed-income securities, while also considering growth of
capital. The Portfolio manager will seek high current income normally by
investing the Portfolio's assets as follows:
- at least 65% in income-producing debt securities and preferred stocks,
including convertible securities
- up to 20% in common stocks and other equity securities when consistent
with the Portfolio's primary objective or acquired as part of a unit
combining fixed-income and equity securities.
Higher yields are usually available on securities that are
lower-rated or that are unrated. Lower-rated securities are usually
defined as Baa or lower by Moody's; BBB or lower by Standard & Poor's and
may be deemed to be of a speculative nature. The Portfolio may also
purchase lower-quality bonds such as those rated Ca3 by Moody's or C- by
Standard & Poor's which provide poor protection for payment of principal
and interest (commonly referred to as "junk bonds"). For a further
discussion of lower-rated securities, please see the "Risks of Lower-Rated
Debt Securities" section of the Portfolio's prospectus.
OVERSEAS PORTFOLIO
The investment objective of the Fund is to seek long term growth of
capital primarily through investments in foreign securities. The Overseas
Portfolio provides a means for investors to diversify their own portfolios
by participating in companies and economies outside of the United States.
FIDELITY INVESTMENTS VARIABLE INSURANCE PRODUCTS FUND II:
The Variable Insurance Products Fund II is an open-end, diversified,
management investment company organized as a Massachusetts business trust on
March 21, 1988. The Fund's shares are purchased by insurance companies to
fund benefits under variable insurance and annuity policies. FMR is the
Fund's manager.
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ASSET MANAGER PORTFOLIO
The investment objective of the Fund is to seek high total return
with reduced risk over the long-term by allocating its assets among
domestic and foreign stocks, bonds and short-term fixed income
instruments.
NATIONWIDE SEPARATE ACCOUNT TRUST
Nationwide Separate Account Trust (the "Trust") is a diversified
open-end investment company created under the laws of Massachusetts. The
Trust offers shares in the four separate Funds listed below, each with its
own investment objectives. Currently, shares of the Trust will be sold only
to life insurance company separate accounts to fund the benefits under
variable insurance or annuity policies issued by life Insurance companies.
The assets of the Trust are managed by Nationwide Advisory Services, Inc. of
One Nationwide Plaza, Columbus, Ohio 43215, a wholly-owned subsidiary of
Nationwide Life Insurance Company.
CAPITAL APPRECIATION FUND
The Fund is designed for investors who are interested in long-term
growth. The Fund seeks to meet its objectives primarily through a
diversified portfolio of the common stock of companies which the
investment manager determines to have a better-than-average potential for
sustained capital growth over the long-term.
GOVERNMENT BOND FUND
The investment objective of the Fund is to provide as high a level
of income as is consistent with the preservation of capital. It seeks to
achieve its objective by investing in a diversified portfolio of
securities issued or backed by the U.S. Government, its agencies or
instrumentalities.
TOTAL RETURN FUND (FORMERLY "COMMON STOCK FUND")
The investment objective of the Fund is to obtain a reasonable
long-term total return (i.e., earnings growth plus potential dividend
yield) on invested capital from a flexible combination of current return
and capital gains through investments in common stocks, convertible
issues, money market instruments and bonds with a primary emphasis on
common stocks.
MONEY MARKET FUND
The investment objective of the Fund is to seek as high a level of
current income as is considered consistent with the preservation of
capital and liquidity by investing primarily In money market instruments.
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST
Neuberger & Berman Advisers Management Trust is an open-ended
diversified management investment company established as a Massachusetts
business trust on December 14, 1983. The Distribution of trust shares is only
in connection with certain variable annuity contracts and variable life
insurance policies issued through the insurance company separate accounts.
The investment adviser is Neuberger & Berman Management Incorporated.
GROWTH PORTFOLIO
The investment objective of the Fund is capital growth through
investments in common stocks of companies that the investment adviser
believes will have above average earnings or otherwise provide investors
with above average potential for capital appreciation. To maximize this
potential, the investment adviser may also utilize, from time to time,
securities convertible into common stocks, warrants and options to
purchase such stocks.
LIMITED MATURITY BOND PORTFOLIO
The investment objective of the Fund is to provide the highest level
of current income, consistent with low risk to principal and liquidity. As
a secondary objective, it also seeks to enhance its total return through
capital appreciation when market factors, such as falling interest rates
and rising bond prices,
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indicate that capital appreciation may be available without significant
risk to principal. It seeks to achieve its objectives through investments
in a diversified portfolio of limited maturity debt securities.
PARTNERS PORTFOLIO
The investment objective of the Fund is to seek capital growth
through an investment approach designed to increase capital with
reasonable risk. The Fund uses the value-oriented investment approach
investing primarily in common stocks of established companies. Its
investment program seeks securities believed to be undervalued based on
factors such as low price-to-earnings ratios, consistent cash flow, and
support from asset values.
12. The section entitled "FEDERAL TAX STATUS" in the prospectus is amended by
adding the following paragraphs at the end:
Recent changes to the Code permit the rollover of most Distributions
from qualified Plans to other qualified Plans, Individual Retirement
Accounts, or Individual Retirement Annuities. Most Distributions from Tax
Sheltered Annuities may be rolled over to other Tax Sheltered Annuities,
Individual Retirement Accounts or Individual Retirement Annuities.
Distributions which may not be rolled over are those which are:
1. one of series of substantially equal annual (or more frequent)
payments made: a) over the life (or life expectancy) of the
employee, b) the joint lives (or joint life expectancies) of the
employee and the employee's designated Beneficiary, or c) for a
specified period of ten years or more; and
2. a required minimum Distribution
Any Distribution eligible for rollover will be subject to federal tax
withholding at a 20 percent rate unless the Distribution is transferred
directly to a Qualified Plan, Individual Retirement Account, or Individual
Retirement Annuity.
You should consult your financial or tax consultant to discuss in detail
your particular tax situation and the use of the Contracts.
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ACCOUNTANTS' CONSENT AND INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENT
SCHEDULES
The Board of Directors of Nationwide Life Insurance Company and Contract Owners
of Nationwide DC Variable Account:
The audits referred to in our report on Nationwide Life Insurance Company (the
Company) dated January 31, 1997, included the related financial statement
schedules as of December 31, 1996, and for each of the years in the three-year
period ended December 31, 1996, included in the registration statement. These
financial statement schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statement schedules based on our audits. In our opinion, such financial
statement schedules, when considered in relation to the basic consolidated
financial statements taken as a whole, present fairly in all material respects
the information set forth therein.
We consent to the use of our reports included herein and to the reference to our
firm under the heading "Services" in the Statement of Additional Information.
KPMG Peat Marwick LLP
Columbus, Ohio
April 24, 1997
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SIGNATURES
As required by the Securities Act of 1933, and the Investment Company Act
of 1940, the Registrant, NATIONWIDE DC VARIABLE ACCOUNT, certifies that it meets
the requirements of Securities Act Rule 485(b) for effectiveness of the
Post-Effective Amendment and has caused this Post-Effective Amendment to be
signed on its behalf in the City of Columbus, and State of Ohio, on this 30th
day of December, 1997.
NATIONWIDE DC VARIABLE ACCOUNT
-----------------------------------
(Registrant)
NATIONWIDE LIFE INSURANCE COMPANY
-----------------------------------
(Depositor)
By /s/ JOSEPH P. RATH
-----------------------------------
Joseph P. Rath
Vice President-Product
and Market Compliance
As required by the Securities Act of 1933, this Post-Effective Amendment
has been signed by the following persons in the capacities indicated on the 30th
day of December, 1997.
SIGNATURE TITLE
LEWIS J. ALPHIN Director
- ------------------------------
Lewis J. Alphin
KEITH W. ECKEL Director
- ------------------------------
Keith W. Eckel
WILLARD J. ENGEL Director
- ------------------------------
Willard J. Engel
FRED C. FINNEY Director
- ------------------------------
Fred C. Finney
JOSEPH J. GASPER President/Chief
- ------------------------------Operating Officer and Director
Joseph J. Gasper
CHARLES L. FUELLGRAF, JR. Director
- ------------------------------
Charles L. Fuellgraf, Jr.
HENRY S. HOLLOWAY Chairman of the Board
- ------------------------------ and Director
Henry S. Holloway
DIMON RICHARD McFERSON Chairman and Chief Executive
- ------------------------------Officer-Nationwide Insurance
Dimon Richard McFerson Enterprise and Director
DAVID O. MILLER Director
- ------------------------------
David O. Miller
C. RAY NOECKER Director
- ------------------------------
C. Ray Noecker
ROBERT A. OAKLEY Executive Vice President-
- ------------------------------ Chief Financial Officer
Robert A. Oakley
JAMES F. PATTERSON Director By: JOSEPH P. RATH
- ------------------------------ -----------------------
James F. Patterson Joseph P. Rath,
Attorney-in-Fact
ARDEN L. SHISLER Director
- ------------------------------
Arden L. Shisler
ROBERT L. STEWART Director
- ------------------------------
Robert L. Stewart
NANCY C. THOMAS Director
- ------------------------------
Nancy C. Thomas
HAROLD W. WEIHL Director
- ------------------------------
Harold W. Weihl
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POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENTS, that each of the undersigned as
directors and/or officers of NATIONWIDE LIFE INSURANCE COMPANY, and NATIONWIDE
LIFE AND ANNUITY INSURANCE COMPANY, both Ohio corporations, which have filed or
will file with the U.S. Securities and Exchange Commission under the provisions
of the Securities Act of 1933, as amended, various Registration Statements and
amendments thereto for the registration under said Act of Individual Deferred
Variable Annuity Contracts in connection with MFS Variable Account, Nationwide
Variable Account, Nationwide Variable Account-II, Nationwide Variable Account-3,
Nationwide Variable Account-4, Nationwide Variable Account-5, Nationwide
Variable Account-6, Nationwide Fidelity Advisor Variable Account, Nationwide
Multi-Flex Variable Account, Nationwide Variable Account-8, Nationwide Variable
Account-9, Nationwide VA Separate Account-A, Nationwide VA Separate Account-B,
Nationwide VA Separate Account-C and Nationwide VA Separate Account-Q; and the
registration of fixed interest rate options subject to a market value adjustment
offered under some or all of the aforementioned individual Variable Annuity
Contracts in connection with Nationwide Multiple Maturity Separate Account and
Nationwide Multiple Maturity Separate Account-A, and the registration of Group
Flexible Fund Retirement Contracts in connection with Nationwide DC Variable
Account, Nationwide DCVA-II, and NACo Variable Account; and the registration of
Group Common Stock Variable Annuity Contracts in connection with Separate
Account No. 1; and the registration of variable life insurance policies in
connection with Nationwide VLI Separate Account, Nationwide VLI Separate
Account-2, Nationwide VLI Separate Account-3, Nationwide VLI Separate Account-4,
Nationwide VL Separate Account-A, Nationwide VL Separate Account-B, and
Nationwide VL Separate Account-C, and hereby constitutes and appoints Dimon R.
McFerson, Joseph J. Gasper, W. Sidney Druen, Mark R. Thresher, and Joseph P.
Rath, and each of them with power to act without the others, his/her attorney,
with full power of substitution and resubstitution, for and in his/her name,
place and stead, in any and all capacities, to approve, and sign such
Registration Statements and any and all amendments thereto, with power to affix
the corporate seal of said corporation thereto and to attest said seal and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the U.S. Securities and Exchange Commission, hereby granting
unto said attorneys, and each of them, full power and authority to do and
perform all and every act and thing requisite to all intents and purposes as
he/she might or could do in person, hereby ratifying and confirming that which
said attorneys, or any of them, may lawfully do or cause to be done by virtue
hereof. This instrument may be executed in one or more counterparts.
IN WITNESS WHEREOF, the undersigned have herewith set their names and
seals as of this 22nd day of July, 1997.
<TABLE>
<CAPTION>
<S> <C>
/s/ Lewis J. Alphin /s/ David O. Miller
- ------------------------------------------------- --------------------------------------------------
Lewis J. Alphin, Director David O. Miller, Director
/s/ Keith W. Eckel /s/ C. Ray Noecker
- ------------------------------------------------- -------------------------------------------------
Keith W. Eckel, Director C. Ray Noecker, Director
/s/ Willard J. Engel /s/ Robert A. Oakley
- ------------------------------------------------- --------------------------------------------------
Willard J. Engel, Director Robert A. Oakley, Executive Vice President - Chief
Financial Officer
/s/ Fred C. Finney /s/ James F. Patterson
- ------------------------------------------------- --------------------------------------------------
Fred C. Finney, Director James F. Patterson, Director
/s/ Charles L. Fuellgraf /s/ Arden L. Shisler
- ------------------------------------------------- --------------------------------------------------
Charles L. Fuellgraf, Jr., Director Arden L. Shisler, Director
/s/ Joseph J. Gasper /s/ Robert L. Stewart
- ------------------------------------------------- --------------------------------------------------
Joseph J. Gasper, President and Chief Operating Officer Robert L. Stewart, Director
and Director
/s/ Henry S. Holloway /s/ Nancy C. Thomas
- ------------------------------------------------- --------------------------------------------------
Henry S. Holloway, Chairman of the Board, Director Nancy C. Thomas, Director
/s/ Dimon Richard McFerson /s/ Harold W. Weihl
- ------------------------------------------------- --------------------------------------------------
Dimon R. McFerson, Chairman and Chief Executive Harold W. Weihl, Director
Officer-Nationwide Insurance Enterprise and Director
</TABLE>
