<PAGE> 1
Nationwide(R) VLI
Separate Account-2
December 31, 1999
THE BEST OF AMERICA(R) [LOGO]
Life Planning Series(R)
'99
ANNUAL REPORT
[Nationwide(R) LOGO]
Nationwide Life Insurance Company
Home Office: Columbus, Ohio
VLOB-12-Y(12/99)
<PAGE> 2
[Nationwide(R) LOGO]
NATIONWIDE LIFE INSURANCE COMPANY
ONE NATIONWIDE PLAZA, COLUMBUS, OHIO 43215-2220
[PHOTO]
PRESIDENT'S MESSAGE
We at Nationwide Life Insurance Company are pleased to bring you the 1999 annual
report of the Nationwide VLI Separate Account-2.
During 1999 equity investments extended their spirited advance to a fifth
consecutive year. The S&P 500 was the laggard of the major indices with a
year-over-year change of a respectable 19.53%. The NASDAQ topped the list at
over 85% with the other indices falling into line nearer the lower end of the
range. Fixed earnings investments did not fare as well in the current
environment of rising interest rates.
The U.S. economy remains strong, inflation remains docile and the available
labor pool is incessantly tight. Against this good-news-bad-news backdrop, the
Federal Reserve is increasingly concerned that recent productivity gains will
subside and ignite wage inflation. To date, the Fed has hiked short-term
interest rates a quarter percentage point on four occasions since last June.
Prospectively, they may well become more aggressive in their preemptive efforts
to dampen economic growth and avoid a new round of inflation.
We believe some caution may be warranted at this juncture. Certain market
sectors are well extended and may inevitably retreat to less lofty valuation
levels. However, we remain bullish for the long-term prospects of financial
assets. Your variable insurance contract provides an excellent resource to help
you achieve your long-term retirement savings and financial planning objectives.
We appreciate your trust in our company and in our investment products, and we
welcome and encourage your feedback.
/s/ Joseph J. Gasper
Joseph J. Gasper, President
February 10, 2000
2
<PAGE> 3
NATIONWIDE VLI SEPARATE ACCOUNT-2
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY
DECEMBER 31, 1999
<TABLE>
<CAPTION>
ASSETS:
Investments at market value:
<S> <C>
American Century VP - American Century VP Balanced (ACVPBal)
795,028 shares (cost $6,183,088)................................................................. $ 6,193,268
American Century VP - American Century VP Capital Appreciation (ACVPCapAp)
1,310,237 shares (cost $14,199,026).............................................................. 19,443,915
American Century VP - American Century VP Income & Growth (ACVPIncGr)
602,907 shares (cost $4,444,143)................................................................. 4,823,253
American Century VP - American Century VP International (ACVPInt)
1,980,383 shares (cost $17,427,212).............................................................. 24,754,794
American Century VP - American Century VP Value (ACVPValue)
494,054 shares (cost $3,183,580)................................................................. 2,939,619
The Dreyfus Socially Responsible Growth Fund, Inc. (DrySRGro)
496,132 shares (cost $16,849,441)................................................................ 19,383,887
Dreyfus Stock Index Fund (DryStkIx)
2,927,576 shares (cost $90,937,184).............................................................. 112,565,296
Dreyfus VIF - Capital Appreciation Portfolio (DryCapAp)
197,915 shares (cost $7,452,341)................................................................. 7,890,857
Dreyfus VIF - Growth and Income Portfolio (DryGrInc)
111,700 shares (cost $2,578,826)................................................................. 2,846,128
Fidelity VIP - Equity-Income Portfolio (FidVIPEI)
3,387,044 shares (cost $77,450,139).............................................................. 87,080,913
Fidelity VIP - Growth Portfolio (FidVIPGr)
3,224,217 shares (cost $141,002,558)............................................................. 177,106,228
Fidelity VIP - High Income Portfolio (FidVIPHI)
2,300,605 shares (cost $25,431,881).............................................................. 26,019,837
Fidelity VIP - Overseas Portfolio (FidVIPOv)
1,124,389 shares (cost $24,103,083).............................................................. 30,853,234
Fidelity VIP-II - Asset Manager Portfolio (FidVIPAM)
1,773,556 shares (cost $28,218,185).............................................................. 33,112,294
Fidelity VIP-II - Contrafund Portfolio (FidVIPCon)
2,444,413 shares (cost $57,111,827).............................................................. 71,254,625
Fidelity VIP-III - Growth Opportunities Portfolio (FidVIPGrOp)
288,757 shares (cost $6,421,936)................................................................. 6,684,726
Morgan Stanley - Emerging Markets Debt Portfolio (MSEmMkt)
101,527 shares (cost $703,568)................................................................... 701,555
Nationwide SAT - Capital Appreciation Fund (NSATCapAp)
1,679,347 shares (cost $42,896,304).............................................................. 43,176,002
Nationwide SAT - Government Bond Fund (NSATGvtBd)
1,238,554 shares (cost $13,874,328).............................................................. 13,363,999
Nationwide SAT - Money Market Fund (NSATMyMkt)
55,921,557 shares (cost $55,921,557)............................................................. 55,921,557
Nationwide SAT - Small Cap Value Fund (NSATSmCapV)
311,019 shares (cost $3,169,694)................................................................. 3,023,109
(Continued)
</TABLE>
3
<PAGE> 4
NATIONWIDE VLI SEPARATE ACCOUNT-2
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY, CONTINUED
<TABLE>
<S> <C>
Nationwide SAT - Small Company Fund (NSATSmCo)
1,192,188 shares (cost $19,570,277)........................................................... 26,371,195
Nationwide SAT - Total Return Fund (NSATTotRe)
5,531,257 shares (cost $88,844,610)........................................................... 104,042,949
Neuberger &Berman AMT - Growth Portfolio (NBAMTGro)
833,852 shares (cost $22,437,375)............................................................. 31,077,667
Neuberger & Berman AMT - Guardian Portfolio (NBAMTGuard)
143,260 shares (cost $2,173,246).............................................................. 2,270,679
Neuberger &Berman AMT - Limited Maturity Bond Portfolio (NBAMTLMat)
372,342 shares (cost $5,060,841).............................................................. 4,929,804
Neuberger &Berman AMT - Partners Portfolio (NBAMTPart)
1,568,835 shares (cost $30,264,190)........................................................... 30,811,928
Oppenheimer VAF - Bond Fund (OppBdFd)
1,018,671 shares (cost $12,427,086)........................................................... 11,735,087
Oppenheimer VAF - Global Securities Fund (OppGlSec)
1,040,808 shares (cost $22,818,708)........................................................... 34,773,392
Oppenheimer VAF - Growth Fund (OppGro)
246,543 shares (cost $10,439,601)............................................................. 12,287,705
Oppenheimer VAF - Multiple Strategies Fund (OppMult)
855,203 shares (cost $13,847,823)............................................................. 14,931,853
Strong Opportunity Fund II, Inc. (StOpp2)
1,620,714 shares (cost $33,089,344)........................................................... 42,122,346
Strong VIF - Strong Discovery Fund II (StDisc2)
605,084 shares (cost $6,549,719).............................................................. 6,885,853
Strong VIF - Strong International Stock Fund II (StIntStk2)
456,221 shares (cost $6,079,530).............................................................. 7,468,345
Van Eck WIT - Worldwide Bond Fund (VEWrldBd)
254,593 shares (cost $2,789,543).............................................................. 2,721,595
Van Eck WIT - Worldwide Emerging Markets Fund (VEWrldEMkt)
711,484 shares (cost $8,097,955).............................................................. 10,145,756
Van Eck WIT - Worldwide Hard Assets Fund (VEWrldHAs)
391,871 shares (cost $4,137,692).............................................................. 4,294,901
Van Kampen LIT - Morgan Stanley Real Estate Securities Portfolio (VKMSRESec)
412,750 shares (cost $5,453,427).............................................................. 5,105,716
Warburg Pincus Trust - International Equity Portfolio (WPIntEq)
818,526 shares (cost $10,822,846)............................................................. 13,669,390
Warburg Pincus Trust - Post Venture Capital Portfolio (WPPVenCap)
230,203 shares (cost $3,879,342).............................................................. 4,433,707
Warburg Pincus Trust - Small Company Growth Portfolio (WPSmCoGr)
974,376 shares (cost $17,318,114)............................................................. 25,528,664
--------------
Total investments.......................................................................... 1,144,747,628
Accounts receivable -
--------------
Total assets............................................................................... 1,144,747,628
ACCOUNTS PAYABLE....................................................................................... 132,236
--------------
CONTRACT OWNERS' EQUITY (NOTE 7)....................................................................... $ 1,144,615,392
--------------
</TABLE>
See accompanying notes to financial statements.
4
<PAGE> 5
NATIONWIDE VLI SEPARATE ACCOUNT-2
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
TOTAL ACVPBal
--------------------------------------------- -------------------------------
1999 1998 1997 1999 1998
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........ $ 14,098,293 11,649,564 9,547,366 104,861 73,602
Mortality and expense charges
(note 3)................... (7,660,149) (6,238,523) (4,642,993) (43,480) (38,972)
-------------- -------------- -------------- -------------- -------------
Net investment activity.... 6,438,144 5,411,041 4,904,373 61,381 34,630
-------------- -------------- -------------- -------------- -------------
Proceeds from mutual fund
shares sold................ 955,670,735 760,513,313 443,749,426 971,140 1,247,480
Cost of mutual funds sold.... (897,919,980) (729,684,314) (409,583,997) (1,022,836) (1,152,261)
-------------- -------------- -------------- -------------- -------------
Realized gain (loss) on
investments.............. 57,750,755 30,828,999 34,165,429 (51,696) 95,219
Change in unrealized gain (loss)
on investments............. 93,482,590 26,818,372 31,280,650 (209,153) 37,264
-------------- -------------- -------------- -------------- -------------
Net gain (loss) on investments 151,233,345 57,647,371 65,446,079 (260,849) 132,483
-------------- -------------- -------------- -------------- -------------
Reinvested capital gains..... 39,898,769 43,742,310 19,594,720 723,542 456,397
-------------- -------------- -------------- -------------- -------------
Net change in contract owners'
equity resulting from
operations........ 197,570,258 106,800,722 89,945,172 524,074 623,510
-------------- -------------- -------------- -------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received
from contract owners....... 155,876,754 213,764,519 218,381,791 765,352 617,960
Transfers between funds ..... - - - (71,304) 1,045,491
Surrenders................... (29,241,082) (20,881,099) (11,960,967) (170,759) (139,847)
Death benefits (note 4)...... (5,189,106) (1,636,729) (664,672) (3,696) (12,665)
Policy loans (net of repayments)
(note 5)................... (16,840,767) (15,272,227) (9,898,715) (109,266) (97,880)
Deductions for surrender charges
(note 2d).................. (4,371,271) (2,374,941) (1,603,674) (25,527) (16,788)
Redemptions to pay cost of insurance
charges and administration
charges (notes 2b and 2c).. (46,509,797) (44,274,845) (34,553,252) (273,361) (164,907)
Asset charges (note 3):
MSP contracts ............. (560,395) (433,211) (203,697) (4,829) (2,706)
LSFP contracts ............ (275,681) (123,032) (23,838) (912) (769)
-------------- -------------- -------------- -------------- -------------
Net equity transactions.. 52,888,655 128,768,435 159,472,976 105,698 1,227,889
-------------- -------------- -------------- -------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY 250,458,913 235,569,157 249,418,148 629,772 1,851,399
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD.................... 894,156,479 658,587,322 409,169,174 5,562,859 3,711,460
-------------- -------------- -------------- -------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD $ 1,144,615,392 894,156,479 658,587,322 6,192,631 5,562,859
============== ============== ============== ============== =============
</TABLE>
<TABLE>
<CAPTION>
ACVPBal ACVPCapAp
------------- ---------------------------------------------
1997 1999 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........ 32,123 - - -
Mortality and expense charges
(note 3)................... (27,654) (108,580) (82,384) (104,781)
-------------- -------------- -------------- --------------
Net investment activity.... 4,469 (108,580) (82,384) (104,781)
-------------- -------------- -------------- --------------
Proceeds from mutual fund
shares sold................ 2,604,070 22,591,735 5,476,348 32,724,781
Cost of mutual funds sold.... (2,212,633) (21,828,544) (6,203,432) (32,719,977)
-------------- -------------- -------------- --------------
Realized gain (loss) on
investments.............. 391,437 763,191 (727,084) 4,804
Change in unrealized gain (loss)
on investments............. (79,247) 6,761,369 (95,403) (649,578)
-------------- -------------- -------------- --------------
Net gain (loss) on investments 312,190 7,524,560 (822,487) (644,774)
-------------- -------------- -------------- --------------
Reinvested capital gains..... 126,772 - 626,545 235,181
-------------- -------------- -------------- --------------
Net change in contract owners'
equity resulting from
operations........ 443,431 7,415,980 (278,326) (514,374)
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received
from contract owners....... 560,697 1,955,940 2,567,119 2,396,050
Transfers between funds ..... 402,250 261,755 (1,460,314) (731,351)
Surrenders................... (201,818) (723,035) (537,440) (294,647)
Death benefits (note 4)...... (18,479) (23,318) (1,791) (279)
Policy loans (net of repayments)
(note 5)................... (62,819) (241,323) (208,014) (317,723)
Deductions for surrender charges
(note 2d).................. (27,058) (108,087) (63,643) (39,505)
Redemptions to pay cost of insurance
charges and administration
charges (notes 2b and 2c).. (31,708) (687,205) (533,669) (354,495)
Asset charges (note 3):
MSP contracts ............. (1,148) (3,806) (5,721) (3,748)
LSFP contracts ............ (134) (1,392) (1,625) (439)
-------------- -------------- -------------- --------------
Net equity transactions.. 619,783 429,529 (245,098) 653,863
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY 1,063,214 7,845,509 (523,424) 139,489
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD.................... 2,648,246 11,594,653 12,118,077 11,978,588
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD 3,711,460 19,440,162 11,594,653 12,118,077
============== ============== ============== ==============
</TABLE>
5
<PAGE> 6
NATIONWIDE VLI SEPARATE ACCOUNT-2
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, CONTINUED
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
ACVPIncGr ACVPInt
--------------------------------------------- -------------------------------
1999 1998 1997 1999 1998
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........ $ 655 7,293 - - 48,574
Mortality and expense charges
(note 3)................... (27,101) (7,590) - (123,973) (100,304)
-------------- -------------- -------------- -------------- -------------
Net investment activity.... (26,446) (297) - (123,973) (51,730)
-------------- -------------- -------------- -------------- -------------
Proceeds from mutual fund
shares sold................ 4,520,179 579,403 - 25,003,227 26,953,998
Cost of mutual funds sold.... (4,059,023) (585,659) - (22,517,439) (26,717,868)
-------------- -------------- -------------- -------------- -------------
Realized gain (loss) on
investments.............. 461,156 (6,256) - 2,485,788 236,130
Change in unrealized gain (loss)
on investments............. 247,602 131,508 - 6,850,984 538,699
-------------- -------------- -------------- -------------- -------------
Net gain (loss) on investments 708,758 125,252 - 9,336,772 774,829
-------------- -------------- -------------- -------------- -------------
Reinvested capital gains..... - - - - 498,647
-------------- -------------- -------------- -------------- -------------
Net change in contract
owners' equity resulting
from operations........ 682,312 124,955 - 9,212,799 1,221,746
-------------- -------------- -------------- -------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received
from contract owners....... 482,154 115,227 - 1,793,620 1,075,296
Transfers between funds ..... 2,244,545 1,333,797 - 1,521,029 5,394,451
Surrenders................... (56,332) (9,343) - (363,715) (91,333)
Death benefits (note 4)...... - (1) - (15,489) (11,988)
Policy loans (net of repayments)
(note 5)................... 49,802 (3,122) - (508,785) (25,253)
Deductions for surrender charges
(note 2d).................. (8,421) (970) - (54,372) (7,357)
Redemptions to pay cost of insurance
charges and administration
charges (notes 2b and 2c).. (109,013) (14,226) - (578,192) (371,602)
Asset charges (note 3):
MSP contracts ............. (3,326) (527) - (9,808) (6,965)
LSFP contracts ............ (4,278) (150) - (5,962) (1,978)
-------------- -------------- -------------- -------------- -------------
Net equity transactions.. 2,595,131 1,420,685 - 1,778,326 5,953,271
-------------- -------------- -------------- -------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY 3,277,443 1,545,640 - 10,991,125 7,175,017
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD.................... 1,545,640 - - 13,761,213 6,586,196
-------------- -------------- -------------- -------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD $ 4,823,083 1,545,640 - 24,752,338 13,761,213
============== ============== ============== ============== =============
</TABLE>
<TABLE>
<CAPTION>
ACVPInt ACVPValue
-------------- ---------------------------------------------
1997 1999 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........ 39,611 26,285 14,238 1,245
Mortality and expense charges
(note 3)................... (43,589) (20,993) (19,998) (7,498)
-------------- -------------- -------------- --------------
Net investment activity.... (3,978) 5,292 (5,760) (6,253)
-------------- -------------- -------------- --------------
Proceeds from mutual fund
shares sold................ 12,528,472 10,125,505 3,978,821 2,118,031
Cost of mutual funds sold.... (11,671,277) (10,140,086) (4,072,379) (1,966,550)
-------------- -------------- -------------- --------------
Realized gain (loss) on
investments.............. 857,195 (14,581) (93,558) 151,481
Change in unrealized gain (loss)
on investments............. (221,309) (279,501) 7,367 28,166
-------------- -------------- -------------- --------------
Net gain (loss) on investments 635,886 (294,082) (86,191) 179,647
-------------- -------------- -------------- --------------
Reinvested capital gains..... 76,392 249,026 169,984 2,540
-------------- -------------- -------------- --------------
Net change in contract
owners' equity resulting
from operations........ 708,300 (39,764) 78,033 175,934
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received
from contract owners....... 827,281 536,794 402,104 111,600
Transfers between funds ..... 1,897,413 (10,220) 705,143 1,429,037
Surrenders................... (37,650) (44,773) (64,948) (4,196)
Death benefits (note 4)...... - (18,972) (2) -
Policy loans (net of repayments)
(note 5)................... (123,364) (46,175) (39,222) (2,706)
Deductions for surrender charges
(note 2d).................. (5,048) (6,693) (5,005) (563)
Redemptions to pay cost of insurance
charges and administration
charges (notes 2b and 2c).. (116,507) (138,847) (76,187) (2,525)
Asset charges (note 3):
MSP contracts ............. (2,038) (3,246) (1,389) (531)
LSFP contracts ............ (238) (1,972) (394) (62)
-------------- -------------- -------------- --------------
Net equity transactions.. 2,439,849 265,896 920,100 1,530,054
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY 3,148,149 226,132 998,133 1,705,988
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD.................... 3,438,047 2,713,250 1,715,117 9,129
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD 6,586,196 2,939,382 2,713,250 1,715,117
============== ============== ============== ==============
</TABLE>
6
<PAGE> 7
NATIONWIDE VLI SEPARATE ACCOUNT-2
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, CONTINUED
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
DrySRGro DryStkix
---------------------------------------------- --------------------------------
1999 1998 1997 1999 1998
-------------- -------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........ $ 2,403 18,491 24,764 1,066,045 840,788
Mortality and expense charges
(note 3)................... (114,846) (76,955) (44,201) (719,164) (508,329)
-------------- -------------- -------------- -------------- -------------
Net investment activity.... (112,443) (58,464) (19,437) 346,881 332,459
-------------- -------------- -------------- -------------- -------------
Proceeds from mutual fund
shares sold................ 17,180,969 30,530,607 6,036,906 20,339,759 34,044,658
Cost of mutual funds sold.... (15,391,528) (29,068,944) (5,411,329) (15,264,747) (26,882,152)
-------------- -------------- -------------- -------------- -------------
Realized gain (loss) on
investments.............. 1,789,441 1,461,663 625,577 5,075,012 7,162,506
Change in unrealized gain (loss)
on investments............. 1,688,692 619,023 301,151 11,113,462 6,892,116
-------------- -------------- -------------- -------------- -------------
Net gain (loss) on investments 3,478,133 2,080,686 926,728 16,188,474 14,054,622
-------------- -------------- -------------- -------------- -------------
Reinvested capital gains..... 646,972 429,304 192,785 920,361 156,109
-------------- -------------- -------------- -------------- -------------
Net change in contract
owners' equity resulting
from operations........ 4,012,662 2,451,526 1,100,076 17,455,716 14,543,190
-------------- -------------- -------------- -------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received
from contract owners....... 2,602,017 2,646,682 1,226,366 13,344,420 8,792,308
Transfers between funds ..... 2,581,796 1,547,337 2,303,963 11,928,413 15,454,943
Surrenders................... (387,508) (808,738) (145,994) (2,827,148) (489,388)
Death benefits (note 4)...... (31,507) (3,645) (6,412) (157,295) (395,851)
Policy loans (net of repayments)
(note 5)................... (488,829) (431,011) (107,480) (1,610,756) (500,204)
Deductions for surrender charges
(note 2d).................. (57,929) (101,807) (19,574) (422,632) (44,357)
Redemptions to pay cost of insurance
charges and administration
charges (notes 2b and 2c).. (879,312) (448,348) (82,935) (4,097,507) (2,263,707)
Asset charges (note 3):
MSP contracts ............. (7,129) (5,343) (2,232) (54,699) (35,299)
LSFP contracts ............ (5,332) (1,518) (261) (48,577) (10,025)
-------------- -------------- -------------- -------------- -------------
Net equity transactions.. 3,326,267 2,393,609 3,165,441 16,054,219 20,508,420
-------------- -------------- -------------- -------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY 7,338,929 4,845,135 4,265,517 33,509,935 35,051,610
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD.................... 12,060,375 7,215,240 2,949,723 79,041,506 43,989,896
-------------- -------------- -------------- -------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD $ 19,399,304 12,060,375 7,215,240 112,551,441 79,041,506
============== ============== ============== ============== =============
</TABLE>
<TABLE>
<CAPTION>
DryStkix DryCapAp
-------------- ---------------------------------------------
1997 1999 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........ $ 488,743 43,739 24,846 4,780
Mortality and expense charges
(note 3)................... (258,618) (57,406) (27,124) (1,877)
-------------- -------------- -------------- --------------
Net investment activity.... 230,125 (13,667) (2,278) 2,903
-------------- -------------- -------------- --------------
Proceeds from mutual fund
shares sold................ 12,995,115 6,550,844 20,319,146 3,153,711
Cost of mutual funds sold.... (10,012,154) (6,135,399) (19,666,415) (3,172,025)
-------------- -------------- -------------- --------------
Realized gain (loss) on
investments.............. 2,982,961 415,445 652,731 (18,314)
Change in unrealized gain (loss)
on investments............. 2,734,985 269,060 173,020 (3,579)
-------------- -------------- -------------- --------------
Net gain (loss) on investments 5,717,946 684,505 825,751 (21,893)
-------------- -------------- -------------- --------------
Reinvested capital gains..... 1,196,951 29,215 1,151 400
-------------- -------------- -------------- --------------
Net change in contract
owners' equity resulting
from operations........ 7,145,022 700,053 824,624 (18,590)
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received
from contract owners....... 6,007,824 1,147,358 502,552 26,933
Transfers between funds ..... 16,661,441 2,166,937 3,058,005 425,397
Surrenders................... (380,643) (296,009) (44,456) (1,058)
Death benefits (note 4)...... (33,328) (13,006) (4) -
Policy loans (net of repayments)
(note 5)................... (210,457) (134,352) (18,317) (33)
Deductions for surrender charges
(note 2d).................. (51,035) (44,251) (5,020) (142)
Redemptions to pay cost of insurance
charges and administration
charges (notes 2b and 2c).. (618,664) (299,558) (77,478) (762)
Asset charges (note 3):
MSP contracts ............. (13,606) (3,070) (1,883) (133)
LSFP contracts ............ (1,592) (2,988) (535) (16)
-------------- -------------- -------------- --------------
Net equity transactions.. 21,359,940 2,521,061 3,412,864 450,186
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY 28,504,962 3,221,114 4,237,488 431,596
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD.................... 15,484,934 4,669,084 431,596 -
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD $ 43,989,896 7,890,198 4,669,084 431,596
============== ============== ============== ==============
</TABLE>
7
<PAGE> 8
NATIONWIDE VLI SEPARATE ACCOUNT-2
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, CONTINUED
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
DryGrInc FidVIPEi
--------------------------------------------- ------------------------------
1999 1998 1997 1999 1998
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........ $ 16,508 17,968 8,082 1,233,625 997,915
Mortality and expense charges
(note 3)................... (15,950) (15,042) (5,230) (714,035) (614,949)
-------------- -------------- -------------- -------------- -------------
Net investment activity.... 558 2,926 2,852 519,590 382,966
-------------- -------------- -------------- -------------- -------------
Proceeds from mutual fund
shares sold................ 1,753,038 2,469,056 2,254,831 21,969,547 6,996,930
Cost of mutual funds sold.... (1,678,061) (2,437,658) (2,197,145) (15,562,997) (4,750,633)
-------------- -------------- -------------- -------------- -------------
Realized gain (loss) on
investments.............. 74,977 31,398 57,686 6,406,550 2,246,297
Change in unrealized gain (loss)
on investments............. 230,049 115,375 (78,166) (5,267,170) 1,497,328
-------------- -------------- -------------- -------------- -------------
Net gain (loss) on investments 305,026 146,773 (20,480) 1,139,380 3,743,625
-------------- -------------- -------------- -------------- -------------
Reinvested capital gains..... 87,323 29,897 70,270 2,726,961 3,551,403
-------------- -------------- -------------- -------------- -------------
Net change in contract
owners' equity resulting
from operations........ 392,907 179,596 52,642 4,385,931 7,677,994
-------------- -------------- -------------- -------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received
from contract owners....... 430,878 1,960,370 186,196 10,203,955 10,207,531
Transfers between funds ..... 18,919 533,213 972,727 (3,247,107) 2,383,113
Surrenders................... (34,300) (701,730) (2,948) (2,431,139) (904,020)
Death benefits (note 4)...... (18,064) (2) - (137,938) (80,375)
Policy loans (net of repayments)
(note 5)................... (18,736) (801,908) (3,749) (1,117,875) (597,978)
Deductions for surrender charges
(note 2d).................. (5,128) (90,325) (395) (363,433) (83,892)
Redemptions to pay cost of insurance
charges and administration
charges (notes 2b and 2c).. (129,582) (66,760) (1,204) (3,725,075) (4,711,838)
Asset charges (note 3):
MSP contracts ............. (3,346) (1,044) (372) (46,610) (42,703)
LSFP contracts ............ (1,645) (297) (44) (17,059) (12,127)
-------------- -------------- -------------- -------------- -------------
Net equity transactions.. 238,996 831,517 1,150,211 (882,281) 6,157,711
-------------- -------------- -------------- -------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY 631,903 1,011,113 1,202,853 3,503,650 13,835,705
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD.................... 2,213,966 1,202,853 - 83,564,278 69,728,573
-------------- -------------- -------------- -------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD $ 2,845,869 2,213,966 1,202,853 87,067,928 83,564,278
============== ============== ============== ============== =============
</TABLE>
<TABLE>
<CAPTION>
FidVIPEi FidVIPGr
------------- ---------------------------------------------
1997 1999 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........ $ 783,723 215,538 398,089 370,457
Mortality and expense charges
(note 3)................... (498,094) (1,145,435) (759,610) (560,322)
-------------- -------------- -------------- --------------
Net investment activity.... 285,629 (929,897) (361,521) (189,865)
-------------- -------------- -------------- --------------
Proceeds from mutual fund
shares sold................ 6,293,311 91,394,903 85,473,779 46,683,280
Cost of mutual funds sold.... (4,356,281) (75,684,409) (75,903,979) (40,913,295)
-------------- -------------- -------------- --------------
Realized gain (loss) on
investments.............. 1,937,030 15,710,494 9,569,800 5,769,985
Change in unrealized gain (loss)
on investments............. 7,168,421 17,198,414 10,952,975 5,352,235
-------------- -------------- -------------- --------------
Net gain (loss) on investments 9,105,451 32,908,908 20,522,775 11,122,220
-------------- -------------- -------------- --------------
Reinvested capital gains..... 3,940,387 13,551,946 10,413,177 1,658,235
-------------- -------------- -------------- --------------
Net change in contract
owners' equity resulting
from operations........ 13,331,467 45,530,957 30,574,431 12,590,590
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received
from contract owners....... 11,073,470 15,418,413 11,800,595 12,214,633
Transfers between funds ..... 7,046,924 13,284,488 6,611,922 1,631,518
Surrenders................... (1,110,322) (3,962,266) (1,541,170) (1,311,193)
Death benefits (note 4)...... (73,247) (299,356) (54,733) (86,298)
Policy loans (net of repayments)
(note 5)................... (781,383) (3,173,351) (593,726) (970,109)
Deductions for surrender charges
(note 2d).................. (148,867) (592,322) (161,482) (175,799)
Redemptions to pay cost of insurance
charges and administration
charges (notes 2b and 2c).. (4,404,162) (6,220,078) (4,387,847) (2,800,521)
Asset charges (note 3):
MSP contracts ............. (21,566) (50,059) (52,749) (23,186)
LSFP contracts ............ (2,524) (23,234) (14,980) (2,713)
-------------- -------------- -------------- --------------
Net equity transactions.. 11,578,323 14,382,235 11,605,830 8,476,332
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY 24,909,790 59,913,192 42,180,261 21,066,922
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD.................... 44,818,783 117,142,759 74,962,498 53,895,576
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD $ 69,728,573 177,055,951 117,142,759 74,962,498
============== ============== ============== ==============
</TABLE>
8
<PAGE> 9
NATIONWIDE VLI SEPARATE ACCOUNT-2
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, CONTINUED
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
FidVIPHi FidVIPOv
--------------------------------------------- --------------------------------
1999 1998 1997 1999 1998
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........ $ 2,570,090 1,930,736 1,246,428 332,184 372,727
Mortality and expense charges
(note 3)................... (197,828) (211,621) (183,573) (199,894) (167,806)
-------------- -------------- -------------- -------------- -------------
Net investment activity.... 2,372,262 1,719,115 1,062,855 132,290 204,921
-------------- -------------- -------------- -------------- -------------
Proceeds from mutual fund
shares sold................ 29,571,691 16,168,581 10,300,446 34,092,869 23,614,905
Cost of mutual funds sold.... (32,450,313) (16,734,695) (9,520,272) (31,976,653) (22,518,443)
-------------- -------------- -------------- -------------- -------------
Realized gain (loss) on
investments.............. (2,878,622) (566,114) 780,174 2,116,216 1,096,462
Change in unrealized gain (loss)
on investments............. 2,437,032 (3,958,695) 1,203,652 6,394,423 2,343
-------------- -------------- -------------- -------------- -------------
Net gain (loss) on investments (441,590) (4,524,809) 1,983,826 8,510,639 1,098,805
-------------- -------------- -------------- -------------- -------------
Reinvested capital gains..... 96,078 1,226,822 154,053 535,780 1,098,564
-------------- -------------- -------------- -------------- -------------
Net change in contract
owners' equity resulting
from operations........ 2,026,750 (1,578,872) 3,200,734 9,178,709 2,402,290
-------------- -------------- -------------- -------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received
from contract owners..... 3,767,754 5,333,328 6,155,268 2,603,811 3,170,855
Transfers between funds ..... (4,726,508) 1,830,834 2,316,320 (1,140,865) (323,986)
Surrenders................... (711,931) (481,342) (255,542) (511,027) (367,369)
Death benefits (note 4)...... (83,542) (9,509) (22,399) (42,803) (33,198)
Policy loans (net of repayments)
(note 5)................... (257,597) (379,699) (282,232) (436,230) (393,533)
Deductions for surrender charges
(note 2d).................. (106,427) (54,547) (34,262) (76,394) (41,687)
Redemptions to pay cost of insurance
charges and administration
charges (notes 2b and 2c).. (1,219,918) (2,449,174) (2,961,119) (936,056) (1,268,155)
Asset charges (note 3):
MSP contracts ............. (29,175) (14,696) (7,782) (9,310) (11,653)
LSFP contracts ............ (7,937) (4,173) (911) (4,398) (3,309)
-------------- -------------- -------------- -------------- -------------
Net equity transactions.. (3,375,281) 3,771,022 4,907,341 (553,272) 727,965
-------------- -------------- -------------- -------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY (1,348,531) 2,192,150 8,108,075 8,625,437 3,130,255
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD.................... 27,354,464 25,162,314 17,054,239 22,223,409 19,093,154
-------------- -------------- -------------- -------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD $ 26,005,933 27,354,464 25,162,314 30,848,846 22,223,409
============== ============== ============== ============== =============
</TABLE>
<TABLE>
<CAPTION>
FidVIPOv FidVIPAM
------------ ---------------------------------------------
1997 1999 1998 1997
------------ ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........ $ 285,975 1,040,155 894,977 787,310
Mortality and expense charges
(note 3)................... (153,477) (270,444) (239,207) (219,940)
------------- -------------- -------------- --------------
Net investment activity.... 132,498 769,711 655,770 567,370
------------- -------------- -------------- --------------
Proceeds from mutual fund
shares sold................ 13,404,627 4,829,331 3,554,904 2,514,749
Cost of mutual funds sold.... (11,354,404) (3,813,802) (2,948,897) (2,201,452)
------------- -------------- -------------- --------------
Realized gain (loss) on
investments.............. 2,050,223 1,015,529 606,007 313,297
Change in unrealized gain (loss)
on investments............. (1,243,832) 26,818 28,492 1,651,903
------------- -------------- -------------- --------------
Net gain (loss) on investments 806,391 1,042,347 634,499 1,965,200
------------- -------------- -------------- --------------
Reinvested capital gains..... 1,135,234 1,317,530 2,684,931 1,974,948
------------- -------------- -------------- --------------
Net change in contract
owners' equity resulting
from operations........ 2,074,123 3,129,588 3,975,200 4,507,518
------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received
from contract owners..... 3,466,918 2,909,351 2,483,246 2,672,468
Transfers between funds ..... (393,971) (2,311,042) 115,769 284,292
Surrenders................... (496,949) (832,733) (1,327,378) (659,510)
Death benefits (note 4)...... (56,932) (42,640) (17,947) (43,658)
Policy loans (net of repayments)
(note 5)................... (309,770) (659,859) (195,419) (323,969)
Deductions for surrender charges
(note 2d).................. (66,629) (124,486) (149,118) (88,424)
Redemptions to pay cost of insurance
charges and administration
charges (notes 2b and 2c).. (1,319,172) (1,199,744) (874,287) (389,701)
Asset charges (note 3):
MSP contracts ............. (5,905) (11,668) (16,611) (8,742)
LSFP contracts ............ (691) (2,332) (4,717) (1,023)
------------- -------------- -------------- --------------
Net equity transactions.. 816,899 (2,275,153) 13,538 1,441,733
------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY 2,891,022 854,435 3,988,738 5,949,251
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD.................... 16,202,132 32,253,287 28,264,549 22,315,298
------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD 19,093,154 33,107,722 32,253,287 28,264,549
============= ============== ============== ==============
</TABLE>
9
<PAGE> 10
NATIONWIDE VLI SEPARATE ACCOUNT-2
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, CONTINUED
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
FidVIPCon FidVIPGrOp
---------------------------------------------- ---------------------------
1999 1998 1997 1999 1998
-------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........ $ 261,343 208,958 131,312 58,964 20,203
Mortality and expense charges
(note 3)................... (460,248) (316,241) (184,659) (47,088) (35,749)
-------------- -------------- -------------- -------------- -------------
Net investment activity.... (198,905) (107,283) (53,347) 11,876 (15,546)
-------------- -------------- -------------- -------------- -------------
Proceeds from mutual fund
shares sold................ 25,340,625 5,270,262 2,972,056 3,165,507 6,596,939
Cost of mutual funds sold.... (16,733,032) (3,518,595) (2,266,444) (2,711,647) (6,370,749)
-------------- -------------- -------------- -------------- -------------
Realized gain (loss) on
investments.............. 8,607,593 1,751,667 705,612 453,860 226,190
Change in unrealized gain (loss)
on investments............. 2,632,252 6,821,820 3,432,249 (343,328) 577,416
-------------- -------------- -------------- -------------- -------------
Net gain (loss) on investments 11,239,845 8,573,487 4,137,861 110,532 803,606
-------------- -------------- -------------- -------------- -------------
Reinvested capital gains..... 1,916,516 1,537,336 347,039 110,237 70,230
-------------- -------------- -------------- -------------- -------------
Net change in contract
owners' equity resulting
from operations........ 12,957,456 10,003,540 4,431,553 232,645 858,290
-------------- -------------- -------------- -------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received
from contract owners....... 8,483,644 7,814,633 4,330,090 1,132,717 3,299,608
Transfers between funds ..... 5,291,011 7,442,220 7,341,211 12,561 3,732,648
Surrenders................... (1,395,137) (1,418,496) (274,806) (135,968) (1,598,688)
Death benefits (note 4)...... (199,019) (122,001) (39,015) (53,293) (9,225)
Policy loans (net of repayments)
(note 5)................... (834,500) (1,095,851) (292,640) (44,200) (1,157,827)
Deductions for surrender charges
(note 2d).................. (208,560) (175,050) (36,845) (20,326) (205,666)
Redemptions to pay cost of insurance
charges and administration
charges (notes 2b and 2c).. (2,643,787) (1,378,370) (300,404) (320,411) (136,692)
Asset charges (note 3):
MSP contracts ............. (36,244) (21,960) (8,910) (5,191) (2,482)
LSFP contracts ............ (18,084) (6,237) (1,043) (2,905) (705)
-------------- -------------- -------------- -------------- -------------
Net equity transactions.. 8,439,324 11,038,888 10,717,638 562,984 3,920,971
-------------- -------------- -------------- -------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY 21,396,780 21,042,428 15,149,191 795,629 4,779,261
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD.................... 49,850,235 28,807,807 13,658,616 5,888,280 1,109,019
-------------- -------------- -------------- -------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD $ 71,247,015 49,850,235 28,807,807 6,683,909 5,888,280
============== ============== ============== ============== =============
</TABLE>
<TABLE>
<CAPTION>
FidVIPGrOp MSEmMkt
--------------- -----------------------------------------
<S> <C> <C> <C> <C>
1997 1999 1998 1997
------------- ------------- ------------- -------------
INVESTMENT ACTIVITY:
Reinvested dividends ........ $ - 84,322 37,885 11,378
Mortality and expense charges
(note 3)................... (4,822) (3,195) (2,400) (1,095)
-------------- -------------- -------------- --------------
Net investment activity.... (4,822) 81,127 35,485 10,283
-------------- -------------- -------------- --------------
Proceeds from mutual fund
shares sold................ 1,418,908 1,067,995 2,208,004 1,348,011
Cost of mutual funds sold.... (1,383,237) (1,041,803) (2,302,818) (1,367,276)
-------------- -------------- -------------- --------------
Realized gain (loss) on
investments.............. 35,671 26,192 (94,814) (19,265)
Change in unrealized gain (loss)
on investments............. 28,661 29,379 (33,784) 2,383
-------------- -------------- -------------- --------------
Net gain (loss) on investments 64,332 55,571 (128,598) (16,882)
-------------- -------------- -------------- --------------
Reinvested capital gains..... - - - 4,938
-------------- -------------- -------------- --------------
Net change in contract
owners' equity resulting
from operations........ 59,510 136,698 (93,113) (1,661)
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received
from contract owners....... 43,645 106,804 398,199 10,188
Transfers between funds ..... 1,013,974 158,219 133,381 247,359
Surrenders................... (2,852) (6,693) (214,691) (617)
Death benefits (note 4)...... - - (9) -
Policy loans (net of repayments)
(note 5)................... (2,231) (7,238) (92,787) (2,742)
Deductions for surrender charges
(note 2d).................. (382) (1,001) (27,689) (83)
Redemptions to pay cost of insurance
charges and administration
charges (notes 2b and 2c).. (2,262) (24,247) (14,797) (471)
Asset charges (note 3):
MSP contracts ............. (343) (425) (167) (78)
LSFP contracts ............ (40) (885) (47) (9)
-------------- -------------- -------------- --------------
Net equity transactions.. 1,049,509 224,534 181,393 253,547
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY 1,109,019 361,232 88,280 251,886
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD.................... - 340,166 251,886 -
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD $ 1,109,019 701,398 340,166 251,886
============== ============== ============== ==============
</TABLE>
10
<PAGE> 11
NATIONWIDE VLI SEPARATE ACCOUNT-2
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, CONTINUED
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
NSATCapAp NSATGvtBd
--------------------------------------------- -----------------------------
1999 1998 1997 1999 1998
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........ $ 277,922 246,198 157,773 787,049 635,908
Mortality and expense charges
(note 3)................... (323,069) (258,178) (130,365) (121,678) (111,282)
-------------- -------------- -------------- -------------- -------------
Net investment activity.... (45,147) (11,980) 27,408 665,371 524,626
-------------- -------------- -------------- -------------- -------------
Proceeds from mutual fund
shares sold................ 14,859,491 41,145,976 22,800,149 29,946,083 43,945,372
Cost of mutual funds sold.... (13,314,168) (37,562,739) (19,539,881) (30,797,415) (43,540,184)
-------------- -------------- -------------- -------------- -------------
Realized gain (loss) on
investments.............. 1,545,323 3,583,237 3,260,268 (851,332) 405,188
Change in unrealized gain (loss)
on investments............. (2,937,651) 2,897,785 41,944 (301,600) (159,490)
-------------- -------------- -------------- -------------- -------------
Net gain (loss) on investments (1,392,328) 6,481,022 3,302,212 (1,152,932) 245,698
-------------- -------------- -------------- -------------- -------------
Reinvested capital gains..... 2,820,485 1,139,693 463,551 25,753 67,018
-------------- -------------- -------------- -------------- -------------
Net change in contract
owners' equity resulting
from operations........ 1,383,010 7,608,735 3,793,171 (461,808) 837,342
-------------- -------------- -------------- -------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received
from contract owners....... 6,414,922 4,921,929 2,643,340 755,607 1,866,413
Transfers between funds ..... (902,464) 9,212,515 8,096,052 381,498 3,757,206
Surrenders................... (1,464,698) (339,981) (225,077) (310,304) (140,551)
Death benefits (note 4)...... (26,646) (12,217) (5,534) (3,017) (50,211)
Policy loans (net of repayments)
(note 5)................... (839,186) (247,383) (353,707) (495,291) (220,482)
Deductions for surrender charges
(note 2d).................. (218,959) (30,979) (30,177) (46,387) (15,200)
Redemptions to pay cost of insurance
charges and administration
charges (notes 2b and 2c).. (2,416,248) (1,558,711) (385,883) (500,735) (989,812)
Asset charges (note 3):
MSP contracts ............. (26,238) (17,928) (6,728) (13,045) (7,727)
LSFP contracts ............ (15,764) (5,092) (787) (2,382) (2,195)
-------------- -------------- -------------- -------------- -------------
Net equity transactions.. 504,719 11,922,153 9,731,499 (234,056) 4,197,441
-------------- -------------- -------------- -------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY 1,887,729 19,530,888 13,524,670 (695,864) 5,034,783
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD.................... 41,283,344 21,752,456 8,227,786 14,057,773 9,022,990
-------------- -------------- -------------- -------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD $ 43,171,073 41,283,344 21,752,456 13,361,909 14,057,773
============== ============== ============== ============== =============
</TABLE>
<TABLE>
<CAPTION>
NSATGvtBd NSATMyMkt
------------- ---------------------------------------------
1997 1999 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........ $ 492,781 2,607,883 2,517,296 2,001,810
Mortality and expense charges
(note 3)................... (68,282) (415,133) (414,977) (359,665)
-------------- -------------- -------------- --------------
Net investment activity.... 424,499 2,192,750 2,102,319 1,642,145
-------------- -------------- -------------- --------------
Proceeds from mutual fund
shares sold................ 10,818,170 257,299,024 213,040,345 122,915,553
Cost of mutual funds sold.... (10,417,945) (257,299,024) (213,040,345) (122,915,553)
-------------- -------------- -------------- --------------
Realized gain (loss) on
investments.............. 400,225 - - -
Change in unrealized gain (loss)
on investments............. (140,391) - - -
-------------- -------------- -------------- --------------
Net gain (loss) on investments 259,834 - - -
-------------- -------------- -------------- --------------
Reinvested capital gains..... - - - -
-------------- -------------- -------------- --------------
Net change in contract
owners' equity resulting
from operations........ 684,333 2,192,750 2,102,319 1,642,145
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received
from contract owners....... 1,870,588 33,970,462 87,844,599 117,478,803
Transfers between funds ..... 1,527,412 (20,060,327) (81,357,019) (103,571,498)
Surrenders................... (132,876) (2,949,962) (1,151,432) (2,413,548)
Death benefits (note 4)...... (6,196) (1,748,315) (5,841) (37,820)
Policy loans (net of repayments)
(note 5)................... (245,452) 257,119 (233,125) (1,758,491)
Deductions for surrender charges
(note 2d).................. (17,815) (440,992) (117,086) (323,598)
Redemptions to pay cost of insurance
charges and administration
charges (notes 2b and 2c).. (1,333,897) (2,710,844) (3,968,229) (4,837,509)
Asset charges (note 3):
MSP contracts ............. (2,790) (55,122) (28,816) (13,745)
LSFP contracts ............ (327) (32,642) (8,184) (1,608)
-------------- -------------- -------------- --------------
Net equity transactions.. 1,658,647 6,229,377 974,867 4,520,986
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY 2,342,980 8,422,127 3,077,186 6,163,131
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD.................... 6,680,010 47,514,985 44,437,799 38,274,668
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD $ 9,022,990 55,937,112 47,514,985 44,437,799
============== ============== ============== ==============
</TABLE>
11
<PAGE> 12
NATIONWIDE VLI SEPARATE ACCOUNT-2
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, CONTINUED
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
NSATSmCapV NSATSmCo
--------------------------------------------- -----------------------------
1999 1998 1997 1999 1998
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........ $ - - - - -
Mortality and expense charges
(note 3)................... (12,857) (3,508) - (133,984) (115,584)
-------------- -------------- -------------- -------------- -------------
Net investment activity.... (12,857) (3,508) - (133,984) (115,584)
-------------- -------------- -------------- -------------- -------------
Proceeds from mutual fund
shares sold................ 38,165,993 1,549,129 - 12,258,303 12,262,712
Cost of mutual funds sold.... (37,730,603) (1,489,413) - (11,935,965) (13,098,101)
-------------- -------------- -------------- -------------- -------------
Realized gain (loss) on
investments.............. 435,390 59,716 - 322,338 (835,389)
Change in unrealized gain (loss)
on investments............. (178,227) 31,642 - 6,521,648 1,062,670
-------------- -------------- -------------- -------------- -------------
Net gain (loss) on investments 257,163 91,358 - 6,843,986 227,281
-------------- -------------- -------------- -------------- -------------
Reinvested capital gains..... 463,979 - - 1,017,362 -
-------------- -------------- -------------- -------------- -------------
Net change in contract
owners' equity resulting
from operations........ 708,285 87,850 - 7,727,364 111,697
-------------- -------------- -------------- -------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received
from contract owners....... 205,584 495,836 - 3,047,229 2,534,601
Transfers between funds ..... 1,364,159 742,114 - 108,189 2,008,259
Surrenders................... (9,301) (342,834) - (506,958) (175,480)
Death benefits (note 4)...... - (1) - (58,447) (24,329)
Policy loans (net of repayments)
(note 5)................... (17,764) (92,219) - (304,105) (112,094)
Deductions for surrender charges
(note 2d).................. (1,390) (44,169) - (75,786) (19,078)
Redemptions to pay cost of insurance
charges and administration
charges (notes 2b and 2c).. (60,914) (5,642) - (1,042,927) (497,764)
Asset charges (note 3):
MSP contracts ............. (3,844) (244) - (14,377) (8,027)
LSFP contracts ............ (2,270) (69) - (6,706) (2,279)
-------------- -------------- -------------- -------------- -------------
Net equity transactions.. 1,474,260 752,772 - 1,146,112 3,703,809
-------------- -------------- -------------- -------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY 2,182,545 840,622 - 8,873,476 3,815,506
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD.................... 840,622 - - 17,495,277 13,679,771
-------------- -------------- -------------- -------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD $ 3,023,167 840,622 - 26,368,753 17,495,277
============== ============== ============== ============== =============
</TABLE>
<TABLE>
<CAPTION>
NSATSmCo NSATTotRe
------------- ----------------------------------------------
1997 1999 1998 1997
------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........ $ - 663,979 923,892 906,286
Mortality and expense charges
(note 3)................... (251,559) (774,887) (673,496) (342,466)
-------------- -------------- -------------- --------------
Net investment activity.... (251,559) (110,908) 250,396 563,820
-------------- -------------- -------------- --------------
Proceeds from mutual fund
shares sold................ 16,417,304 7,683,042 17,758,523 7,806,204
Cost of mutual funds sold.... (14,437,205) (4,796,181) (10,907,631) (5,268,505)
-------------- -------------- -------------- --------------
Realized gain (loss) on
investments.............. 1,980,099 2,886,861 6,850,892 2,537,699
Change in unrealized gain (loss)
on investments............. (943,075) (615,625) 2,647,189 8,597,412
-------------- -------------- -------------- --------------
Net gain (loss) on investments 1,037,024 2,271,236 9,498,081 11,135,111
-------------- -------------- -------------- --------------
Reinvested capital gains..... 371,914 3,857,973 3,859,922 2,381,668
-------------- -------------- -------------- --------------
Net change in contract
owners' equity resulting
from operations........ 1,157,379 6,018,301 13,608,399 14,080,599
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received
from contract owners....... 2,031,832 14,477,695 18,994,728 21,089,542
Transfers between funds ..... 5,027,832 (3,544,992) 6,079,393 12,507,830
Surrenders................... (161,763) (2,714,451) (1,330,528) (993,966)
Death benefits (note 4)...... (40,234) (233,861) (120,757) (73,080)
Policy loans (net of repayments)
(note 5)................... (171,323) (2,351,544) (809,785) (1,397,247)
Deductions for surrender charges
(note 2d).................. (21,689) (405,785) (122,860) (133,267)
Redemptions to pay cost of insurance
charges and administration
charges (notes 2b and 2c).. (47,754) (6,266,041) (11,763,303) (12,793,173)
Asset charges (note 3):
MSP contracts ............. (4,231) (46,751) (46,769) (23,085)
LSFP contracts ............ (495) (17,691) (13,282) (2,702)
-------------- -------------- -------------- --------------
Net equity transactions.. 6,612,175 (1,103,421) 10,866,837 18,180,852
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY 7,769,554 4,914,880 24,475,236 32,261,451
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD.................... 5,910,217 99,115,362 74,640,126 42,378,675
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD $ 13,679,771 104,030,242 99,115,362 74,640,126
============== ============== ============== ==============
</TABLE>
12
<PAGE> 13
NATIONWIDE VLI SEPARATE ACCOUNT-2
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, CONTINUED
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
NBAMTGro NBAMTGuard
--------------------------------------------- -----------------------------
1999 1998 1997 1999 1998
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........ $ - - - 4,569 -
Mortality and expense charges
(note 3)................... (183,268) (153,887) (131,622) (12,787) (4,780)
------------- -------------- -------------- -------------- -------------
Net investment activity.... (183,268) (153,887) (131,622) (8,218) (4,780)
------------- -------------- -------------- -------------- -------------
Proceeds from mutual fund
shares sold................ 90,781,328 28,296,554 11,391,328 8,197,327 1,186,919
Cost of mutual funds sold.... (88,544,143) (30,054,251) (10,218,717) (8,110,096) (1,243,303)
------------- -------------- -------------- -------------- -------------
Realized gain (loss) on
investments.............. 2,237,185 (1,757,697) 1,172,611 87,231 (56,384)
Change in unrealized gain (loss)
on investments............. 7,073,105 273,491 1,144,227 43,771 53,662
------------- -------------- -------------- -------------- -------------
Net gain (loss) on investments 9,310,290 (1,484,206) 2,316,838 131,002 (2,722)
------------- -------------- -------------- -------------- -------------
Reinvested capital gains..... 1,124,154 4,778,935 1,172,597 - -
------------- -------------- -------------- -------------- -------------
Net change in contract
owners' equity resulting
from operations........ 10,251,176 3,140,842 3,357,813 122,784 (7,502)
------------- -------------- -------------- -------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received
from contract owners....... 2,741,841 3,124,257 2,009,831 241,772 149,649
Transfers between funds ..... (2,585,171) 3,739,437 498,211 1,149,560 831,617
Surrenders................... (733,093) (1,015,843) (419,539) (18,129) (64,538)
Death benefits (note 4)...... (1,410,172) (13,565) (7,880) (281) (1)
Policy loans (net of repayments)
(note 5)................... (530,684) (1,132,396) (305,567) (19,356) (25,325)
Deductions for surrender charges
(note 2d).................. (109,591) (120,721) (56,250) (2,710) (8,207)
Redemptions to pay cost of insurance
charges and administration
charges (notes 2b and 2c).. (1,049,294) (741,732) (249,631) (59,481) (17,066)
Asset charges (note 3):
MSP contracts ............. (9,624) (10,686) (5,427) (1,168) (332)
LSFP contracts ............ (4,427) (3,035) (635) (701) (94)
------------- -------------- -------------- -------------- -------------
Net equity transactions.. (3,690,215) 3,825,716 1,463,113 1,289,506 865,703
------------- -------------- -------------- -------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY 6,560,961 6,966,558 4,820,926 1,412,290 858,201
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD.................... 24,511,722 17,545,164 12,724,238 858,201 -
------------- -------------- -------------- -------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD $ 31,072,683 24,511,722 17,545,164 2,270,491 858,201
============= ============== ============== ============== =============
</TABLE>
<TABLE>
<CAPTION>
NBAMTGuard NBAMTLMat
-------------- ---------------------------------------------
1997 1999 1998 1997
-------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........ $ - 277,113 365,591 166,562
Mortality and expense charges
(note 3)................... - (35,738) (42,729) (37,669)
-------------- -------------- -------------- --------------
Net investment activity.... - 241,375 322,862 128,893
-------------- -------------- -------------- --------------
Proceeds from mutual fund
shares sold................ - 1,296,663 3,525,682 1,060,839
Cost of mutual funds sold.... - (1,370,958) (3,557,763) (1,087,427)
-------------- -------------- -------------- --------------
Realized gain (loss) on
investments.............. - (74,295) (32,081) (26,588)
Change in unrealized gain (loss)
on investments............. - (128,665) (88,989) 99,993
-------------- -------------- -------------- --------------
Net gain (loss) on investments - (202,960) (121,070) 73,405
-------------- -------------- -------------- --------------
Reinvested capital gains..... - - - -
-------------- -------------- -------------- --------------
Net change in contract
owners' equity resulting
from operations........ - 38,415 201,792 202,298
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received
from contract owners....... - 418,414 1,227,568 568,335
Transfers between funds ..... - (166,249) (1,104,263) 2,560,467
Surrenders................... - (82,093) (340,366) (49,744)
Death benefits (note 4)...... - (50,646) (168,478) (6,820)
Policy loans (net of repayments)
(note 5)................... - (66,552) (490,348) (50,416)
Deductions for surrender charges
(note 2d).................. - (12,272) (43,208) (6,669)
Redemptions to pay cost of insurance
charges and administration
charges (notes 2b and 2c).. - (161,822) (151,014) (95,419)
Asset charges (note 3):
MSP contracts ............. - (7,656) (2,967) (1,822)
LSFP contracts ............ - (487) (843) (213)
-------------- -------------- -------------- --------------
Net equity transactions.. - (129,363) (1,073,919) 2,917,699
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY - (90,948) (872,127) 3,119,997
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD.................... - 5,019,328 5,891,455 2,771,458
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD $ - 4,928,380 5,019,328 5,891,455
============== ============== ============== ==============
</TABLE>
13
<PAGE> 14
NATIONWIDE VLI SEPARATE ACCOUNT-2
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, CONTINUED
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
NBAMTPart OppBdFd
--------------------------------------------- -----------------------------
1999 1998 1997 1999 1998
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........ $ 395,343 123,869 38,636 563,814 177,251
Mortality and expense charges
(note 3)................... (234,549) (254,428) (171,233) (91,553) (91,564)
-------------- -------------- -------------- -------------- -------------
Net investment activity.... 160,794 (130,559) (132,597) 472,261 85,687
-------------- -------------- -------------- -------------- -------------
Proceeds from mutual fund
shares sold................ 10,213,406 16,262,946 14,044,895 3,691,017 25,959,216
Cost of mutual funds sold.... (10,762,285) (15,129,583) (11,426,520) (3,697,719) (25,616,936)
-------------- -------------- -------------- -------------- -------------
Realized gain (loss) on
investments.............. (548,879) 1,133,363 2,618,375 (6,702) 342,280
Change in unrealized gain (loss)
on investments............. 1,854,882 (3,917,798) 1,495,768 (794,086) 13,809
-------------- -------------- -------------- -------------- -------------
Net gain (loss) on investments 1,306,003 (2,784,435) 4,114,143 (800,788) 356,089
-------------- -------------- -------------- -------------- -------------
Reinvested capital gains..... 687,554 3,901,869 594,994 54,146 160,413
-------------- -------------- -------------- -------------- -------------
Net change in contract
owners' equity resulting
from operations........ 2,154,351 986,875 4,576,540 (274,381) 602,189
-------------- -------------- -------------- -------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received
from contract owners....... 5,441,082 5,722,483 3,058,953 1,530,602 1,446,313
Transfers between funds ..... (8,211,478) 2,646,725 11,362,270 (747,631) 2,081,829
Surrenders................... (949,302) (676,703) (291,383) (352,928) (168,318)
Death benefits (note 4)...... (94,956) (11,051) - (9,225) (24,489)
Policy loans (net of repayments)
(note 5)................... (473,894) (1,178,884) (215,128) (214,389) (23,153)
Deductions for surrender charges
(note 2d).................. (141,912) (78,170) (39,067) (52,759) (19,765)
Redemptions to pay cost of insurance
charges and administration
charges (notes 2b and 2c).. (1,823,914) (1,174,585) (364,291) (496,721) (348,809)
Asset charges (note 3):
MSP contracts ............. (23,724) (17,668) (8,885) (9,861) (6,358)
LSFP contracts ............ (10,391) (5,018) (1,040) (1,060) (1,806)
-------------- -------------- -------------- -------------- -------------
Net equity transactions.. (6,288,489) 5,227,129 13,501,429 (353,972) 2,935,444
-------------- -------------- -------------- -------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY (4,134,138) 6,214,004 18,077,969 (628,353) 3,537,633
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD.................... 34,942,331 28,728,327 10,650,358 12,362,107 8,824,474
-------------- -------------- -------------- -------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD $ 30,808,193 34,942,331 28,728,327 11,733,754 12,362,107
============== ============== ============== ============== =============
</TABLE>
<TABLE>
<CAPTION>
OppBdFd OppGlSec
------------- ---------------------------------------------
1997 1999 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........ $ 444,589 255,944 389,267 139,580
Mortality and expense charges
(note 3)................... (64,328) (190,529) (147,592) (115,087)
-------------- -------------- -------------- --------------
Net investment activity.... 380,261 65,415 241,675 24,493
-------------- -------------- -------------- --------------
Proceeds from mutual fund
shares sold................ 6,493,858 6,535,136 4,690,056 2,123,253
Cost of mutual funds sold.... (6,309,717) (4,397,501) (3,335,880) (1,585,760)
-------------- -------------- -------------- --------------
Realized gain (loss) on
investments.............. 184,141 2,137,635 1,354,176 537,493
Change in unrealized gain (loss)
on investments............. 7,331 9,595,322 (702,629) 1,880,371
-------------- -------------- -------------- --------------
Net gain (loss) on investments 191,472 11,732,957 651,547 2,417,864
-------------- -------------- -------------- --------------
Reinvested capital gains..... 20,983 717,222 1,465,275 -
-------------- -------------- -------------- --------------
Net change in contract
owners' equity resulting
from operations........ 592,716 12,515,594 2,358,497 2,442,357
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received
from contract owners....... 1,185,778 3,377,203 2,591,457 2,244,408
Transfers between funds ..... 1,429,093 127,319 1,052,407 2,806,084
Surrenders................... (151,014) (755,080) (390,303) (332,828)
Death benefits (note 4)...... (6,177) (44,903) (12,688) (1,951)
Policy loans (net of repayments)
(note 5)................... (97,629) (343,214) (265,465) (260,746)
Deductions for surrender charges
(note 2d).................. (20,247) (112,877) (46,476) (44,624)
Redemptions to pay cost of insurance
charges and administration
charges (notes 2b and 2c).. (74,240) (1,110,398) (696,092) (209,063)
Asset charges (note 3):
MSP contracts ............. (2,730) (9,874) (10,249) (5,120)
LSFP contracts ............ (319) (4,111) (2,911) (599)
-------------- -------------- -------------- --------------
Net equity transactions.. 2,262,515 1,124,065 2,219,680 4,195,561
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY 2,855,231 13,639,659 4,578,177 6,637,918
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD.................... 5,969,243 21,130,542 16,552,365 9,914,447
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD $ 8,824,474 34,770,201 21,130,542 16,552,365
============== ============== ============== ==============
</TABLE>
14
<PAGE> 15
NATIONWIDE VLI SEPARATE ACCOUNT-2
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, CONTINUED
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
OppGro OppMult
--------------------------------------------- -----------------------------
1999 1998 1997 1999 1998
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........ $ 16,006 9,433 - 480,400 116,421
Mortality and expense charges
(note 3)................... (48,619) (26,246) (2,691) (115,579) (104,971)
-------------- -------------- -------------- -------------- -------------
Net investment activity.... (32,613) (16,813) (2,691) 364,821 11,450
-------------- -------------- -------------- -------------- -------------
Proceeds from mutual fund
shares sold................ 25,212,861 5,173,603 346,058 2,796,637 1,906,489
Cost of mutual funds sold.... (24,502,814) (4,835,421) (340,426) (2,391,468) (1,502,365)
-------------- -------------- -------------- -------------- -------------
Realized gain (loss) on
investments.............. 710,047 338,182 5,632 405,169 404,124
Change in unrealized gain (loss)
on investments............. 1,735,399 109,336 3,346 10,270 (366,305)
-------------- -------------- -------------- -------------- -------------
Net gain (loss) on investments 2,445,446 447,518 8,978 415,439 37,819
-------------- -------------- -------------- -------------- -------------
Reinvested capital gains..... 175,824 113,813 - 694,901 675,242
-------------- -------------- -------------- -------------- -------------
Net change in contract
owners' equity resulting
from operations........ 2,588,657 544,518 6,287 1,475,161 724,511
-------------- -------------- -------------- -------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received
from contract owners....... 1,214,511 1,452,830 32,403 1,717,678 3,243,119
Transfers between funds ..... 3,004,317 4,492,087 586,430 (1,101,933) 706,703
Surrenders................... (60,102) (576,151) (2,135) (382,853) (1,061,880)
Death benefits (note 4)...... (6,703) (5) - (36,757) (182,084)
Policy loans (net of repayments)
(note 5)................... (111,846) (312,911) (3,203) (234,710) (1,005,743)
Deductions for surrender charges
(note 2d).................. (8,985) (73,520) (286) (57,233) (126,681)
Redemptions to pay cost of insurance
charges and administration
charges (notes 2b and 2c).. (351,903) (116,339) (433) (646,532) (435,809)
Asset charges (note 3):
MSP contracts ............. (4,217) (1,822) (192) (8,700) (7,289)
LSFP contracts ............ (3,718) (518) (22) (1,730) (2,070)
-------------- -------------- -------------- -------------- -------------
Net equity transactions.. 3,671,354 4,863,651 612,562 (752,770) 1,128,266
-------------- -------------- -------------- -------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY 6,260,011 5,408,169 618,849 722,391 1,852,777
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD.................... 6,027,018 618,849 - 14,207,759 12,354,982
-------------- -------------- -------------- -------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD $ 12,287,029 6,027,018 618,849 14,930,150 14,207,759
============== ============== ============== ============== =============
</TABLE>
<TABLE>
<CAPTION>
OppMult StOpp2
------------- ---------------------------------------------
1997 1999 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........ $ 401,123 - 71,635 79,875
Mortality and expense charges
(note 3)................... (88,369) (283,101) (220,760) (185,205)
-------------- -------------- -------------- --------------
Net investment activity.... 312,754 (283,101) (149,125) (105,330)
-------------- -------------- -------------- --------------
Proceeds from mutual fund
shares sold................ 1,256,650 6,031,119 3,215,306 3,417,734
Cost of mutual funds sold.... (1,026,967) (4,291,744) (2,191,788) (2,305,866)
-------------- -------------- -------------- --------------
Realized gain (loss) on
investments.............. 229,683 1,739,375 1,023,518 1,111,868
Change in unrealized gain (loss)
on investments............. 697,954 5,430,662 (1,078,872) 1,866,652
-------------- -------------- -------------- --------------
Net gain (loss) on investments 927,637 7,170,037 (55,354) 2,978,520
-------------- -------------- -------------- --------------
Reinvested capital gains..... 329,608 3,541,869 3,488,003 1,736,733
-------------- -------------- -------------- --------------
Net change in contract
owners' equity resulting
from operations........ 1,569,999 10,428,805 3,283,524 4,609,923
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received
from contract owners....... 1,361,025 4,448,212 5,452,015 3,291,881
Transfers between funds ..... 1,935,508 (12,621) 470,365 1,720,221
Surrenders................... (189,727) (1,148,838) (1,037,130) (584,361)
Death benefits (note 4)...... (18,581) (104,927) (143,979) (46,618)
Policy loans (net of repayments)
(note 5)................... (138,576) (753,805) (1,307,454) (446,793)
Deductions for surrender charges
(note 2d).................. (25,438) (171,741) (121,009) (78,349)
Redemptions to pay cost of insurance
charges and administration
charges (notes 2b and 2c).. (102,354) (1,589,094) (946,709) (237,366)
Asset charges (note 3):
MSP contracts ............. (3,822) (9,653) (15,330) (7,857)
LSFP contracts ............ (447) (4,177) (4,354) (920)
-------------- -------------- -------------- --------------
Net equity transactions.. 2,817,588 653,356 2,346,415 3,609,838
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY 4,387,587 11,082,161 5,629,939 8,219,761
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD.................... 7,967,395 31,035,784 25,405,845 17,186,084
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD $ 12,354,982 42,117,945 31,035,784 25,405,845
============== ============== ============== ==============
(Continued)
</TABLE>
15
<PAGE> 16
NATIONWIDE VLI SEPARATE ACCOUNT-2
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, CONTINUED
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
StDisc2 StintStk2
--------------------------------------------- -----------------------------
1999 1998 1997 1999 1998
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........ $ - - - 7,958 22,725
Mortality and expense charges
(note 3)................... (53,820) (58,150) (62,162) (22,468) (15,028)
-------------- -------------- -------------- -------------- -------------
Net investment activity.... (53,820) (58,150) (62,162) (14,510) 7,697
-------------- -------------- -------------- -------------- -------------
Proceeds from mutual fund
shares sold................ 8,370,593 4,234,899 6,947,379 12,615,085 4,328,033
Cost of mutual funds sold.... (9,362,894) (3,682,201) (7,014,226) (11,285,141) (4,573,810)
-------------- -------------- -------------- -------------- -------------
Realized gain (loss) on
investments.............. (992,301) 552,698 (66,847) 1,329,944 (245,777)
Change in unrealized gain (loss)
on investments............. 125,370 (128,321) 897,855 1,572,604 138,162
-------------- -------------- -------------- -------------- -------------
Net gain (loss) on investments (866,931) 424,377 831,008 2,902,548 (107,615)
-------------- -------------- -------------- -------------- -------------
Reinvested capital gains..... 1,035,670 120,028 - - -
-------------- -------------- -------------- -------------- -------------
Net change in contract
owners' equity resulting
from operations........ 114,919 486,255 768,846 2,888,038 (99,918)
-------------- -------------- -------------- -------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received
from contract owners....... 1,126,745 686,440 1,157,860 428,882 1,319,108
Transfers between funds ..... (2,017,437) 154,482 (800,200) 2,309,650 (186,236)
Surrenders................... (201,408) (128,257) (159,830) (56,239) (444,664)
Death benefits (note 4)...... (1,033) (23,649) (17,470) (4,048) (5,993)
Policy loans (net of repayments)
(note 5)................... (115,906) (104,497) (79,472) 52,892 (462,567)
Deductions for surrender charges
(note 2d).................. (30,109) (15,109) (21,429) (8,407) (56,530)
Redemptions to pay cost of insurance
charges and administration
charges (notes 2b and 2c).. (340,295) (244,196) (50,118) (125,810) (61,036)
Asset charges (note 3):
MSP contracts ............. (1,300) (4,038) (2,334) (2,085) (1,044)
LSFP contracts ............ (513) (1,147) (273) (1,753) (296)
-------------- -------------- -------------- -------------- -------------
Net equity transactions.. (1,581,256) 320,029 26,734 2,593,082 100,742
-------------- -------------- -------------- -------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY (1,466,337) 806,284 795,580 5,481,120 824
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD.................... 8,351,832 7,545,548 6,749,968 1,986,996 1,986,172
-------------- -------------- -------------- -------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD $ 6,885,495 8,351,832 7,545,548 7,468,116 1,986,996
============== ============== ============== ============== =============
</TABLE>
<TABLE>
<CAPTION>
StintStk2 VEWrldBd
------------- ---------------------------------------------
1997 1999 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........ $ 35,008 135,225 24,030 73,945
Mortality and expense charges
(note 3)................... (16,592) (25,601) (26,599) (20,793)
-------------- -------------- -------------- --------------
Net investment activity.... 18,416 109,624 (2,569) 53,152
-------------- -------------- -------------- --------------
Proceeds from mutual fund
shares sold................ 1,180,714 4,442,114 7,510,962 1,289,613
Cost of mutual funds sold.... (1,254,173) (4,822,035) (7,101,791) (1,326,687)
-------------- -------------- -------------- --------------
Realized gain (loss) on
investments.............. (73,459) (379,921) 409,171 (37,074)
Change in unrealized gain (loss)
on investments............. (320,243) (74,747) (35,624) 23,130
-------------- -------------- -------------- --------------
Net gain (loss) on investments (393,702) (454,668) 373,547 (13,944)
-------------- -------------- -------------- --------------
Reinvested capital gains..... 54,007 60,420 - -
-------------- -------------- -------------- --------------
Net change in contract
owners' equity resulting
from operations........ (321,279) (284,624) 370,978 39,208
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received
from contract owners....... 396,577 232,837 173,889 303,361
Transfers between funds ..... 159,418 (449,720) 663,078 89,247
Surrenders................... (39,345) (98,243) (47,678) (109,226)
Death benefits (note 4)...... - (25,665) (35,715) -
Policy loans (net of repayments)
(note 5)................... (28,189) (70,184) (21,466) (20,191)
Deductions for surrender charges
(note 2d).................. (5,275) (14,686) (5,615) (14,645)
Redemptions to pay cost of insurance
charges and administration
charges (notes 2b and 2c).. (4,583) (113,947) (77,084) (10,312)
Asset charges (note 3):
MSP contracts ............. (614) (1,809) (1,847) (782)
LSFP contracts ............ (72) (145) (525) (92)
-------------- -------------- -------------- --------------
Net equity transactions.. 477,917 (541,562) 647,037 237,360
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY 156,638 (826,186) 1,018,015 276,568
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD.................... 1,829,534 3,547,221 2,529,206 2,252,638
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD $ 1,986,172 2,721,035 3,547,221 2,529,206
============== ============== ============== ==============
</TABLE>
16
<PAGE> 17
NATIONWIDE VLI SEPARATE ACCOUNT-2
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, CONTINUED
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
VEWrldEMkt VEWrldHAs
--------------------------------------------- --------------------------------
1999 1998 1997 1999 1998
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........ $ - 20,182 1,791 61,762 35,945
Mortality and expense charges
(note 3)................... (32,044) (14,186) (10,449) (36,567) (38,345)
-------------- -------------- -------------- -------------- -------------
Net investment activity.... (32,044) 5,996 (8,658) 25,195 (2,400)
-------------- -------------- -------------- -------------- -------------
Proceeds from mutual fund
shares sold................ 26,145,515 4,758,410 3,744,118 19,298,812 13,571,199
Cost of mutual funds sold.... (24,002,878) (6,579,731) (3,668,967) (18,689,697) (17,132,731)
-------------- -------------- -------------- -------------- -------------
Realized gain (loss) on
investments.............. 2,142,637 (1,821,321) 75,151 609,115 (3,561,532)
Change in unrealized gain (loss)
on investments............. 1,939,640 923,464 (815,392) 199,401 644,209
-------------- -------------- -------------- -------------- -------------
Net gain (loss) on investments 4,082,277 (897,857) (740,241) 808,516 (2,917,323)
-------------- -------------- -------------- -------------- -------------
Reinvested capital gains..... - 17,939 - - 882,647
-------------- -------------- -------------- -------------- -------------
Net change in contract
owners' equity resulting
from operations........ 4,050,233 (873,922) (748,899) 833,711 (2,037,076)
-------------- -------------- -------------- -------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received
from contract owners....... 580,564 701,612 585,373 602,994 1,602,107
Transfers between funds ..... 4,022,991 (173,962) 2,650,105 (822,875) (1,198,538)
Surrenders................... (107,435) (41,678) (8,373) (289,205) (132,778)
Death benefits (note 4)...... - (4,922) - (1,818) (3,026)
Policy loans (net of repayments)
(note 5)................... (70,361) (80,091) (71,376) 77,240 (200,964)
Deductions for surrender charges
(note 2d).................. (16,061) (5,094) (1,123) (43,233) (13,168)
Redemptions to pay cost of insurance
charges and administration
charges (notes 2b and 2c).. (157,046) (68,777) (8,419) (189,825) (199,756)
Asset charges (note 3):
MSP contracts ............. (3,494) (985) (742) (1,809) (2,663)
LSFP contracts ............ (1,983) (280) (87) (322) (756)
-------------- -------------- -------------- -------------- -------------
Net equity transactions.. 4,247,175 325,823 3,145,358 (668,853) (149,542)
-------------- -------------- -------------- -------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY 8,297,408 (548,099) 2,396,459 164,858 (2,186,618)
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD.................... 1,851,575 2,399,674 3,215 4,129,585 6,316,203
-------------- -------------- -------------- -------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD $ 10,148,983 1,851,575 2,399,674 4,294,443 4,129,585
============== ============== ============== ============== =============
</TABLE>
<TABLE>
<CAPTION>
VEWrldHAs VKMSRESec
------------- ---------------------------------------------
1997 1999 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........ $ 118,188 400,217 12,298 193,749
Mortality and expense charges
(note 3)................... (54,934) (44,010) (52,029) (47,059)
-------------- -------------- -------------- --------------
Net investment activity.... 63,254 356,207 (39,731) 146,690
-------------- -------------- -------------- --------------
Proceeds from mutual fund
shares sold................ 19,348,273 6,089,310 4,635,925 8,117,619
Cost of mutual funds sold.... (18,769,875) (7,139,977) (5,200,298) (7,257,679)
-------------- -------------- -------------- --------------
Realized gain (loss) on
investments.............. 578,398 (1,050,667) (564,373) 859,940
Change in unrealized gain (loss)
on investments............. (898,401) 478,383 (513,939) (625,237)
-------------- -------------- -------------- --------------
Net gain (loss) on investments (320,003) (572,284) (1,078,312) 234,703
-------------- -------------- -------------- --------------
Reinvested capital gains..... 160,126 - 121,016 641,054
-------------- -------------- -------------- --------------
Net change in contract
owners' equity resulting
from operations........ (96,623) (216,077) (997,027) 1,022,447
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received
from contract owners....... 840,495 1,006,759 1,337,143 827,543
Transfers between funds ..... (282,076) (1,435,388) (908,402) 2,852,464
Surrenders................... (171,081) (187,346) (163,286) (100,507)
Death benefits (note 4)...... (99) (2,653) (22,389) -
Policy loans (net of repayments)
(note 5)................... (124,185) (131,155) (78,704) (85,370)
Deductions for surrender charges
(note 2d).................. (22,938) (28,007) (19,126) (13,476)
Redemptions to pay cost of insurance
charges and administration
charges (notes 2b and 2c).. (142,112) (432,919) (232,710) (65,828)
Asset charges (note 3):
MSP contracts ............. (1,953) (4,975) (3,613) (2,360)
LSFP contracts ............ (229) (2,459) (1,026) (276)
-------------- -------------- -------------- --------------
Net equity transactions.. 95,822 (1,218,143) (92,113) 3,412,190
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY (801) (1,434,220) (1,089,140) 4,434,637
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD.................... 6,317,004 6,539,291 7,628,431 3,193,794
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD $ 6,316,203 5,105,071 6,539,291 7,628,431
============== ============== ============== ==============
</TABLE>
17
<PAGE> 18
NATIONWIDE VLI SEPARATE ACCOUNT-2
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, CONTINUED
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
WPIntEq WPPVenCap
----------------------------------------- -----------------------------
1999 1998 1997 1999 1998
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........ $ 106,392 50,333 79,669 - -
Mortality and expense charges
(note 3)................... (70,225) (72,995) (79,873) (13,686) (6,193)
-------------- -------------- -------------- -------------- -------------
Net investment activity.... 36,167 (22,662) (204) (13,686) (6,193)
-------------- -------------- -------------- -------------- -------------
Proceeds from mutual fund
shares sold................ 19,261,615 9,538,799 7,769,039 11,451,361 4,879,898
Cost of mutual funds sold.... (18,047,381) (9,941,358) (7,238,368) (10,619,693) (4,873,755)
-------------- -------------- -------------- -------------- -------------
Realized gain (loss) on
investments.............. 1,214,234 (402,559) 530,671 831,668 6,143
Change in unrealized gain (loss)
on investments............. 3,271,039 929,287 (1,377,503) 489,466 66,492
-------------- -------------- -------------- -------------- -------------
Net gain (loss) on investments 4,485,273 526,728 (846,832) 1,321,134 72,635
-------------- -------------- -------------- -------------- -------------
Reinvested capital gains..... - - 551,360 - -
-------------- -------------- -------------- -------------- -------------
Net change in contract
owners' equity resulting
from operations........ 4,521,440 504,066 (295,676) 1,307,448 66,442
-------------- -------------- -------------- -------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received
from contract owners....... 1,411,984 1,111,024 1,506,986 139,661 105,973
Transfers between funds ..... (167,066) (1,578,624) 674,324 2,043,854 180,265
Surrenders................... (642,724) (168,491) (113,178) (28,894) (1,367)
Death benefits (note 4)...... (124,597) (7,848) (16,165) - (1)
Policy loans (net of repayments)
(note 5)................... (83,407) (259,475) (84,201) (72,651) 4,787
Deductions for surrender charges
(note 2d).................. (96,081) (18,111) (15,174) (4,319) (7)
Redemptions to pay cost of insurance
charges and administration
charges (notes 2b and 2c).. (427,942) (265,303) (65,212) (50,521) (21,553)
Asset charges (note 3):
MSP contracts ............. (8,596) (5,069) (3,086) (847) (430)
LSFP contracts ............ (3,905) (1,439) (361) (855) (122)
-------------- -------------- -------------- -------------- -------------
Net equity transactions.. (142,334) (1,193,336) 1,883,933 2,025,428 267,545
-------------- -------------- -------------- -------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY 4,379,106 (689,270) 1,588,257 3,332,876 333,987
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD.................... 9,289,108 9,978,378 8,390,121 1,100,662 766,675
-------------- -------------- -------------- -------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD $ 13,668,214 9,289,108 9,978,378 4,433,538 1,100,662
============== ============== ============== ============== =============
</TABLE>
<TABLE>
<CAPTION>
WPPVenCap WPSmCoGr
------------- ---------------------------------------------
1997 1999 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........ $ 70 - - -
Mortality and expense charges
(note 3)................... (3,334) (114,737) (106,735) (99,826)
-------------- -------------- -------------- --------------
Net investment activity.... (3,264) (114,737) (106,735) (99,826)
-------------- -------------- -------------- --------------
Proceeds from mutual fund
shares sold................ 1,898,871 12,560,036 11,652,539 13,210,500
Cost of mutual funds sold.... (1,856,944) (11,995,881) (11,657,359) (11,590,838)
-------------- -------------- -------------- --------------
Realized gain (loss) on
investments.............. 41,927 564,155 (4,820) 1,619,662
Change in unrealized gain (loss)
on investments............. (1,622) 8,391,845 (287,723) 18,436
-------------- -------------- -------------- --------------
Net gain (loss) on investments 40,305 8,956,000 (292,543) 1,638,098
-------------- -------------- -------------- --------------
Reinvested capital gains..... - 709,970 - -
-------------- -------------- -------------- --------------
Net change in contract
owners' equity resulting
from operations........ 37,041 9,551,233 (399,278) 1,538,272
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received
from contract owners....... 70,984 2,658,532 2,471,813 2,516,266
Transfers between funds ..... 668,066 (248,812) (1,849,405) 4,654,236
Surrenders................... (2,034) (301,023) (200,485) (128,687)
Death benefits (note 4)...... - (60,498) (10,544) -
Policy loans (net of repayments)
(note 5)................... (5,947) (288,744) 19,268 (162,099)
Deductions for surrender charges
(note 2d).................. (273) (45,000) (20,649) (17,254)
Redemptions to pay cost of insurance
charges and administration
charges (notes 2b and 2c).. (897) (902,731) (454,770) (88,146)
Asset charges (note 3):
MSP contracts ............. (237) (9,685) (7,412) (4,835)
LSFP contracts ............ (28) (5,597) (2,105) (566)
-------------- -------------- -------------- --------------
Net equity transactions.. 729,634 796,442 (54,289) 6,768,915
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY 766,675 10,347,675 (453,567) 8,307,187
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD.................... - 15,178,630 15,632,197 7,325,010
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD $ 766,675 25,526,305 15,178,630 15,632,197
============== ============== ============== ==============
</TABLE>
See accompanying notes to financial statements.
18
<PAGE> 19
NATIONWIDE VLI SEPARATE ACCOUNT-2
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Organization and Nature of Operations
The Nationwide VLISeparate Account-2 (the Account) was established
pursuant to a resolution of the Board of Directors of Nationwide Life
Insurance Company (the Company) on May 7, 1987. The Account has been
registered as a unit investment trust under the Investment Company Act
of 1940.
The Company offers Single Premium, Modified Single Premium, Flexible
Premium and Last Survivor Flexible Premium Variable Life Insurance
Policies through the Account. The primary distribution for the
contracts is through the brokerage community; however, other
distributors may be utilized.
(b) The Contracts
Prior to December 31, 1990, only contracts without a front-end sales
charge, but with a contingent deferred sales charge and certain other
fees, were offered for purchase. Beginning December 31, 1990, contracts
with a front-end sales charge, a contingent deferred sales charge and
certain other fees, are offered for purchase. See note 2 for a
discussion of policy charges, and note 3 for asset charges.
Contract owners may invest in the following:
Portfolios of the American Century Variable Portfolios, Inc.
(American Century VP);
American Century VP - American Century VP Balanced (ACVPBal)
American Century VP - American Century VP Capital Appreciation
(ACVPCapAp)
American Century VP - American Century VP Income & Growth
(ACVPIncGr)
American Century VP - American Century VP International
(ACVPInt)
American Century VP - American Century VP Value (ACVPValue)
The Dreyfus Socially Responsible Growth Fund, Inc. (DrySRGro)
Dreyfus Stock Index Fund (DryStkIx)
Portfolios of the Dreyfus Variable Investment Fund (Dreyfus VIF);
Dreyfus VIF - Capital Appreciation Portfolio (DryCapAp)
Dreyfus VIF - Growth and Income Portfolio (DryGrInc)
Portfolios of the Fidelity Variable Insurance Products Fund
(Fidelity VIP);
Fidelity VIP - Equity-Income Portfolio (FidVIPEI)
Fidelity VIP - Growth Portfolio (FidVIPGr)
Fidelity VIP - High Income Portfolio (FidVIPHI)
Fidelity VIP - Overseas Portfolio (FidVIPOv)
Portfolios of the Fidelity Variable Insurance Products Fund II
(Fidelity VIP-II);
Fidelity VIP-II - Asset Manager Portfolio (FidVIPAM)
Fidelity VIP-II - Contrafund Portfolio (FidVIPCon)
Portfolio of the Fidelity Variable Insurance Products Fund III
(Fidelity VIP-III);
Fidelity VIP-III - Growth Opportunities Portfolio (FidVIPGrOp)
Portfolio of the Morgan Stanley Universal Funds, Inc. (Morgan
Stanley);
Morgan Stanley - Emerging Markets Debt Portfolio (MSEmMkt)
19
<PAGE> 20
NATIONWIDE VLI SEPARATE ACCOUNT-2
NOTES TO FINANCIAL STATEMENTS, CONTINUED
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 - Small Cap Value Fund (NSATSmCapV)
Nationwide SAT - Small Company Fund (NSATSmCo)
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 - Guardian Portfolio (NBAMTGuard)
Neuberger & Berman AMT - Limited Maturity Bond Portfolio
(NBAMTLMat)
Neuberger & Berman AMT - Partners Portfolio (NBAMTPart)
Funds of the Oppenheimer Variable Account Funds (Oppenheimer VAF);
Oppenheimer VAF - Bond Fund (OppBdFd)
Oppenheimer VAF - Global Securities Fund (OppGlSec)
Oppenheimer VAF - Growth Fund (OppGro)
Oppenheimer VAF - Multiple Strategies Fund (OppMult)
Strong Opportunity Fund II, Inc. (StOpp2)
Funds of the Strong Variable Insurance Funds, Inc. (Strong VIF);
Strong VIF - Strong Discovery Fund II (StDisc2)
Strong VIF - Strong International Stock Fund II (StIntStk2)
Funds of the Van Eck Worldwide Insurance Trust (Van Eck WIT);
Van Eck WIT - Worldwide Bond Fund (VEWrldBd)
Van Eck WIT - Worldwide Emerging Markets Fund (VEWrldEMkt)
Van Eck WIT - Worldwide Hard Assets Fund (VEWrldHAs)
Portfolio of the Van Kampen Life Investment Trust (Van Kampen
LIT);
Van Kampen LIT - Morgan Stanley Real Estate Securities Portfolio
(VKMSRESec)
Portfolios of the Warburg Pincus Trust;
Warburg Pincus Trust - International Equity Portfolio (WPIntEq)
Warburg Pincus Trust - Post Venture Capital Portfolio
(WPPVenCap)
Warburg Pincus Trust - Small Company Growth Portfolio (WPSmCoGr)
At December 31, 1999, contract owners have invested in all of the above
funds. The contract owners' equity is affected by the investment
results of each fund, equity transactions by contract owners and
certain contract expenses (see notes 2 and 3). The accompanying
financial statements include only contract owners' purchase payments
pertaining to the variable portions of their contracts and exclude any
purchase payments for fixed dollar benefits, the latter being included
in the accounts of the Company.
A contract owner may choose from among a number of different underlying
mutual fund options. The underlying mutual fund options are not
available to the general public directly. The underlying mutual funds
are available as investment options in variable life insurance policies
or variable annuity contracts issued by life insurance companies or, in
some cases, through participation in certain qualified pension or
retirement plans.
Some of the underlying mutual funds have been established by investment
advisers which manage publicly traded mutual funds having similar names
and investment objectives. While some of the underlying mutual funds
may be similar to, and may in fact be modeled after, publicly traded
mutual funds, the underlying mutual funds are not otherwise directly
related to any publicly traded mutual fund. Consequently, the
investment performance of publicly traded mutual funds and any
corresponding underlying mutual funds may differ substantially.
20
<PAGE> 21
(c) Security Valuation, Transactions and Related Investment Income
The market value of the underlying mutual funds is based on the closing
net asset value per share at December 31, 1999. Fund purchases and
sales are accounted for on the trade date (date the order to buy or
sell is executed). The cost of investments sold is determined on a
specific identification basis, and dividends (which include capital
gain distributions) are accrued as of 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 provisions of the Internal Revenue Code.
The Company does not provide for income taxes within the Account. Taxes
are the responsibility of the contract owner upon termination or
withdrawal.
(e) Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally
accepted accounting principles may require management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities, if
any, at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
(f) Reclassifications
Certain prior year amounts have been reclassified to conform with the
current year presentation.
(2) POLICY CHARGES
(a) Deductions from Premiums
For single premium contracts, no deduction is made from any premium at
the time of payment. On multiple payment contracts and flexible premium
contracts, the Company deducts a charge for state premium taxes equal
to 2.5% of all premiums received to cover the payment of these premium
taxes. The Company also deducts a sales load from each premium payment
received not to exceed 3.5% of each premium payment.
On last survivor flexible premium contracts, the Company deducts a
charge for state premium taxes equal to 3.5% of all premiums received
to cover the payment of these premium taxes. The Company also deducts a
sales load from each premium payment received not to exceed 5% of each
premium payment during the first ten years and 1.5% of each premium
payment thereafter.
The Company may at its sole discretion reduce this sales loading.
(b) Cost of Insurance
A cost of insurance charge is assessed monthly against each contract by
liquidating units. The amount of the charge is based upon age, sex,
rate class and net amount at risk (death benefit less total contract
value).
For last survivor flexible premium contracts, the monthly cost of
insurance is determined in a manner that reflects the anticipated
mortality of the two insureds and the fact that the death benefit is
not payable until the death of the second insured policyholder.
(c) Administrative Charges
An administrative charge is assessed against each contract to recover
policy maintenance, accounting, record keeping and other administrative
expenses and is assessed against each contract by liquidating units.
(Continued)
21
<PAGE> 22
NATIONWIDE VLI SEPARATE ACCOUNT-2
NOTES TO FINANCIAL STATEMENTS, CONTINUED
For single premium contracts, the Company deducts an annual
administrative charge which is determined as follows:
Contracts issued prior to April 16, 1990: Purchase payments
totalling less than $25,000 - $10/month Purchase payments
totalling $25,000 or more - none
Contracts issued on or after April 16, 1990:
Purchase payments totalling less than $25,000 - $90/year
($65/year in New York) Purchase payments totalling $25,000 or
more - $50/year
For multiple payment contracts, the Company currently deducts a monthly
administrative charge of $5 (may deduct up to $7.50, maximum).
For flexible premium contracts, the Company currently deducts a monthly
administrative charge of $12.50 during the first policy year and $5 per
month thereafter (may deduct up to $7.50, maximum). Additionally, the
Company deducts an increase charge of $2.04 per year per $1,000 applied
to any increase in the specified amount during the first 12 months
after the increase becomes effective.
For modified single premium contracts, the monthly charge is equal to
an annual rate of .30% multiplied by the policy's cash value. For
policy years 11 and later, this monthly charge is reduced to an annual
rate of 0.15% of the policy's cash value. The monthly charge is subject
to a $10 minimum.
For last survivor flexible premium contracts, the Company deducts a
monthly administrative charge equal to the sum of the policy charge and
the basic coverage charge. For policy years one through ten the policy
charge is $10. Additionally, there is a $0.04 per $1000 basic coverage
charge (not less than $20 or more than $80 per policy). For policy
years eleven and after, the policy charge is $5. Additionally, there is
a $0.02 per $1000 basic coverage charge (not less than $10 or more than
$40 per policy). Additionally, the Company deducts a monthly increase
charge of $2.40 per $1000 applied to any increase in the specified
amount during the first 12 months after the increase becomes effective.
The charge may be raised to $3.60 per $1000 of increase per year at the
Company's discretion.
(d) Surrender Charges
Policy surrenders result in a redemption of the contract value from the
Account and payment of the surrender proceeds to the contract owner or
designee. The surrender proceeds consist of the contract value, less
any outstanding policy loans, and less a surrender charge, if
applicable. The charge is determined according to contract type.
For single premium contracts, the charge is determined based upon a
specified percentage of the original purchase payment. For single
premium contracts issued prior to April 16, 1990, the charge is 8% in
the first year and declines to 0% after the ninth year. For single
premium contracts issued on or after April 16, 1990, the charge is 8.5%
in the first year, and declines to 0% after the ninth year.
For multiple payment contracts and flexible premium contracts, the
amount charged is based upon a specified percentage of the initial
surrender charge, which varies by issue age, sex and rate class. The
charge is 100% of the initial surrender charge in the first year,
declining to 0% after the ninth year.
For modified single premium contracts, the amount charged is based on
the original purchase payment. The charge is 10% in the first year,
declining to 0% in the ninth year.
For last survivor flexible premium contracts, the charge is 100% of the
initial surrender charge, declining to 0% in the fourteenth year if the
average issue age is 74 or less. The charge is 100% of the initial
surrender charge, declining to 0% in the ninth year if the average
issue age is 75 or greater. For last survivor flexible payment
contracts, the initial surrender charge is comprised of two components,
an underwriting surrender charge and a sales surrender charge.
The Company may waive the surrender charge for certain contracts in
which the sales expenses normally associated with the distribution of a
contract are not incurred.
22
<PAGE> 23
(3) ASSET CHARGES
For single premium contracts, the Company deducts a charge from the
contract to cover mortality and expense risk charges related to operations,
and to recover policy maintenance and premium tax charges. For contracts
issued prior to April 16, 1990, the charge is equal to an annual rate of
.95% during the first ten policy years, and .50% thereafter. A reduction of
charges on these contracts is possible in policy years six through ten for
those contracts achieving certain investment performance criteria. For
single premium contracts issued on or after April 16, 1990, the charge is
equal to an annual rate of 1.30% during the first ten policy years, and
1.00% thereafter.
For multiple payment contracts and flexible premium contracts, the Company
deducts a charge equal to an annual rate of .80%, with certain exceptions,
to cover mortality and expense risk charges related to operations. The
above charges are assessed through the daily unit value calculation and are
reflected in the table below.
For modified single premium contracts (MSP), the Company deducts an annual
rate of .90% charged against the cash value of the contracts. This charge
is assessed monthly against each contract by liquidating units.
For last survivor flexible premium contracts (LSFP), the Company deducts an
annual rate of .80% in policy years one through ten. This charge is
assessed monthly by liquidating units. In policy years eleven and greater,
the Company deducts an annual rate of .80% if the cash value of the
contract is less than $100,000. If the cash value is greater than or equal
to $100,000, the Company reduces the annual asset fee rate to .30%. This
charge is assessed monthly against each contract by liquidating units.
The following table provides mortality and expense risk charges for all
single premium contracts and multiple payment and flexible payment
contracts for the year ended December 31, 1999:
<TABLE>
<CAPTION>
TOTAL ACVPBal ACVCapAp ACVPincGr ACVPint
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Single Premium contracts Issued
prior to April 16, 1990....... $ 22,217 126 315 79 360
Single Premium contracts issued
on or after April 16, 1990.... 1,597,906 9,070 22,650 5,653 25,861
Multiple Payment and Flexible
Premium contracts............. 6,040,026 34,284 85,615 21,369 97,752
------------ ------------ ------------ ------------ ------------
Total....................... $ 7,660,149 43,480 108,580 27,101 123,973
============ ============ ============ ============ ============
ACVPValue DrySRGro DryStkix DryCapAp DryGrinc
------------ ------------ ------------ ------------ ------------
Single Premium contracts Issued
prior to April 16, 1990....... $ 61 333 2,086 166 46
Single Premium contracts issued
on or after April 16, 1990.... 4,379 23,957 150,018 11,975 3,327
Multiple Payment and Flexible
Premium contracts............. 16,553 90,556 567,060 45,265 12,577
------------ ------------ ------------ ------------ ------------
Total....................... $ 20,993 114,846 719,164 57,406 15,950
============ ============ ============ ============ ============
FidVIPEI FidVIPGr FidVIPHI FidVIPOv FidVIPAM
------------ ------------ ------------ ------------ ------------
Single Premium contracts Issued
prior to April 16, 1990....... $ 2,071 3,322 574 580 784
Single Premium contracts issued
on or after April 16, 1990.... 148,948 238,938 41,267 41,698 56,415
Multiple Payment and Flexible
Premium contracts............. 563,016 903,175 155,987 157,616 213,245
------------ ------------ ------------ ------------ ------------
Total....................... $ 714,035 1,145,435 197,828 199,894 270,444
============ ============ ============ ============ ============
(Continued)
</TABLE>
23
<PAGE> 24
NATIONWIDE VLI SEPARATE ACCOUNT-2
NOTES TO FINANCIAL STATEMENTS, CONTINUED
<TABLE>
<CAPTION>
FidVIPCon FidVIPGrOp MSEmMkt NSATCapAp NSATGvtBd
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Single Premium contracts Issued
prior to April 16, 1990....... $ 1,335 137 9 937 352
Single Premium contracts issued
on or after April 16, 1990.... 96,008 9,823 666 67,386 25,386
Multiple Payment and Flexible
Premium contracts............. 362,905 37,128 2,520 254,746 95,940
------------ ------------ ------------ ------------ ------------
Total....................... $ 460,248 47,088 3,195 323,069 121,678
============ ============ ============ ============ ============
NSATMyMkt NSATSmCapV NSATSmCo NSATTotRe NBAMTGro
------------ ------------ ------------ ------------ ------------
Single Premium contracts Issued
prior to April 16, 1990....... $ 1,204 37 389 2,247 531
Single Premium contracts issued
on or after April 16, 1990.... 86,597 2,682 27,949 161,641 38,230
Multiple Payment and Flexible
Premium contracts............. 327,332 10,138 105,646 610,999 144,507
------------ ------------ ------------ ------------ ------------
Total....................... $ 415,133 12,857 133,984 774,887 183,268
============ ============ ============ ============ ============
NBAMTGuard NBAMTLMat NBAMTPart OppBdFd OppGlSec
------------ ------------ ------------ ------------ ------------
Single Premium contracts Issued
prior to April 16, 1990....... $ 37 104 680 266 553
Single Premium contracts issued
on or after April 16, 1990.... 2,667 7,455 48,927 19,098 39,744
Multiple Payment and Flexible
Premium contracts............. 10,083 28,179 184,942 72,189 150,232
------------ ------------ ------------ ------------ ------------
Total....................... $ 12,787 35,738 234,549 91,553 190,529
============ ============ ============ ============ ============
OppGro OppMult StOpp2 StDisc2 StintStk2
------------ ------------ ------------ ------------ ------------
Single Premium contracts Issued
prior to April 16, 1990....... $ 141 335 821 156 65
Single Premium contracts issued
on or after April 16, 1990.... 10,142 24,110 59,055 11,227 4,687
Multiple Payment and Flexible
Premium contracts............. 38,336 91,134 223,225 42,437 17,716
------------ ------------ ------------ ------------ ------------
Total....................... $ 48,619 115,579 283,101 53,820 22,468
============ ============ ============ ============ ============
VEWrldBd VEWrldEMkt VEWrldHAs VKMSRESec WPintEq
------------ ------------ ------------ ------------ ------------
Single Premium contracts Issued
prior to April 16, 1990....... $ 74 93 106 128 204
Single Premium contracts issued
on or after April 16, 1990.... 5,340 6,684 7,628 9,180 14,649
Multiple Payment and Flexible
Premium contracts............. 20,187 25,267 28,833 34,702 55,372
------------ ------------ ------------ ------------ ------------
Total....................... $ 25,601 32,044 36,567 44,010 70,225
============ ============ ============ ============ ============
WPPVenCap WPSMCoGr
------------ ------------
Single Premium contracts Issued
prior to April 16, 1990....... $ 40 333
Single Premium contracts issued
on or after April 16, 1990.... 2,855 23,934
Multiple Payment and Flexible
Premium contracts............. 10,791 90,470
------------ ------------
Total....................... $ 13,686 114,737
============ ============
</TABLE>
24
<PAGE> 25
The following table provides mortality and expense risk charges for all
single premium contracts and multiple payment and flexible payment
contracts for the year ended December 31, 1998:
<TABLE>
<CAPTION>
TOTAL ACVPBal ACVCapAp ACVPincGr ACVPint
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Single Premium contracts Issued
prior to April 16, 1990....... $ 19,963 - 1,274 - -
Single Premium contracts issued
on or after April 16, 1990.... 1,519,080 10,112 21,146 2,536 34,065
Multiple Payment and Flexible
Premium contracts............. 4,699,480 28,860 59,964 5,054 66,239
------------ ------------ ------------ ------------ ------------
Total....................... $ 6,238,523 38,972 82,384 7,590 100,304
============ ============ ============ ============ ============
ACVPValue DrySRGro DryStkix DryCapAp DryGrinc
------------ ------------ ------------ ------------ ------------
Single Premium contracts Issued
prior to April 16, 1990....... $ - - 3,655 102 -
Single Premium contracts issued
on or after April 16, 1990.... 4,104 9,572 112,048 10,336 2,255
Multiple Payment and Flexible
Premium contracts............. 15,894 67,383 392,626 16,686 12,787
------------ ------------ ------------ ------------ ------------
Total....................... $ 19,998 76,955 508,329 27,124 15,042
============ ============ ============ ============ ============
FidVIPEI FidVIPGr FidVIPHI FidVIPOv FidVIPAM
------------ ------------ ------------ ------------ ------------
Single Premium contracts Issued
prior to April 16, 1990....... $ 2,438 2,343 842 1,068 296
Single Premium contracts issued
on or after April 16, 1990.... 194,440 188,365 49,966 53,993 86,061
Multiple Payment and Flexible
Premium contracts............. 418,071 568,902 160,813 112,745 152,850
------------ ------------ ------------ ------------ ------------
Total....................... $ 614,949 759,610 211,621 167,806 239,207
============ ============ ============ ============ ============
FidVIPCon FidVIPGrOp MSEmMkt NSATCapAp NSATGvtBd
------------ ------------ ------------ ------------ ------------
Single Premium contracts Issued
prior to April 16, 1990....... $ 128 - - 654 305
Single Premium contracts issued
on or after April 16, 1990.... 71,967 10,876 635 43,608 65,744
Multiple Payment and Flexible
Premium contracts............. 244,146 24,873 1,765 213,916 45,233
------------ ------------ ------------ ------------ ------------
Total....................... $ 316,241 35,749 2,400 258,178 111,282
============ ============ ============ ============ ============
NSATMyMkt NSATSmCapV NSATSmCo NSATTotRe NBAMTGro
------------ ------------ ------------ ------------ ------------
Single Premium contracts Issued
prior to April 16, 1990....... $ 1,358 - - 1,584 1,581
Single Premium contracts issued
on or after April 16, 1990.... 137,439 3,094 13,672 58,566 43,543
Multiple Payment and Flexible
Premium contracts............. 276,180 414 101,912 613,346 108,763
------------ ------------ ------------ ------------ ------------
Total....................... $ 414,977 3,508 115,584 673,496 153,887
============ ============ ============ ============ ============
NBAMTGuard NBAMTLMat NBAMTPart OppBdFd OppGlSec
------------ ------------ ------------ ------------ ------------
Single Premium contracts Issued
prior to April 16, 1990....... $ - 930 - - -
Single Premium contracts issued
on or after April 16, 1990.... 553 14,562 50,988 20,073 20,102
Multiple Payment and Flexible
Premium contracts............. 4,227 27,237 203,440 71,491 127,490
------------ ------------ ------------ ------------ ------------
Total....................... $ 4,780 42,729 254,428 91,564 147,592
============ ============ ============ ============ ============
(Continued)
</TABLE>
25
<PAGE> 26
NATIONWIDE VLI SEPARATE ACCOUNT-2
NOTES TO FINANCIAL STATEMENTS, CONTINUED
<TABLE>
<CAPTION>
OppGro OppMult StOpp2 StDisc2 StintStk2
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Single Premium contracts Issued
prior to April 16, 1990....... $ - - 120 - -
Single Premium contracts issued
on or after April 16, 1990.... 4,182 31,490 41,028 13,873 4,013
Multiple Payment and Flexible
Premium contracts............. 22,064 73,481 179,612 44,277 11,015
------------ ------------ ------------ ------------ ------------
Total....................... $ 26,246 104,971 220,760 58,150 15,028
============ ============ ============ ============ ============
VEWrldBd VEWrldEMkt VEWrldHAs VKMSRESec WPintEq
------------ ------------ ------------ ------------ ------------
Single Premium contracts Issued
prior to April 16, 1990....... $ 39 - 486 575 185
Single Premium contracts issued
on or after April 16, 1990.... 11,374 1,792 17,613 13,117 13,450
Multiple Payment and Flexible
Premium contracts............. 15,186 12,394 20,246 38,337 59,360
------------ ------------ ------------ ------------ ------------
Total....................... $ 26,599 14,186 38,345 52,029 72,995
============ ============ ============ ============ ============
WPPVenCap WPSMCoGr
------------ ------------
Single Premium contracts Issued
prior to April 16, 1990....... $ - -
Single Premium contracts issued
on or after April 16, 1990.... 3,460 29,267
Multiple Payment and Flexible
Premium contracts............. 2,733 77,468
------------ ------------
Total....................... $ 6,193 106,735
============ ============
The following table provides mortality and expense risk charges for all
single premium contracts and multiple payment and flexible payment
contracts for the year ended December 31, 1997:
TOTAL ACVPBal ACVCapAp ACVPint ACVPValue
------------ ------------ ------------ ------------ ------------
Single Premium contracts Issued
prior to April 16, 1990....... $ 17,545 105 396 165 28
Single Premium contracts issued
on or after April 16, 1990.... 1,003,388 5,976 22,644 9,420 1,620
Multiple Payment and Flexible
Premium contracts............. 3,622,060 21,573 81,741 34,004 5,850
------------ ------------ ------------ ------------ ------------
Total....................... $ 4,642,993 27,654 104,781 43,589 7,498
============ ============ ============ ============ ============
DryCapAp DrySRGro DryStkix DryGrinc FidVIPEI
------------ ------------ ------------ ------------ ------------
Single Premium contracts Issued
prior to April 16, 1990....... $ 7 167 977 20 1,882
Single Premium contracts issued
on or after April 16, 1990.... 406 9,552 55,889 1,130 107,642
Multiple Payment and Flexible
Premium contracts............. 1,464 34,482 201,752 4,080 388,570
------------ ------------ ------------ ------------ ------------
Total....................... $ 1,877 44,201 258,618 5,230 498,094
============ ============ ============ ============ ============
</TABLE>
26
<PAGE> 27
<TABLE>
<CAPTION>
FidVIPGr FidVIPHI FidVIPOv FidVIPAM FidVIPCon
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Single Premium contracts Issued
prior to April 16, 1990....... $ 2,117 694 580 831 698
Single Premium contracts issued
on or after April 16, 1990.... 121,090 39,672 33,168 47,531 39,906
Multiple Payment and Flexible
Premium contracts............. 437,115 143,207 119,729 171,578 144,055
------------ ------------ ------------ ------------ ------------
Total....................... $ 560,322 183,573 153,477 219,940 184,659
============ ============ ============ ============ ============
FidVIPGrOp MSEmMkt NSATCapAp NSATGvtBd NSATMyMkt
------------ ------------ ------------ ------------ ------------
Single Premium contracts Issued
prior to April 16, 1990....... $ 18 4 493 258 1,358
Single Premium contracts issued
on or after April 16, 1990.... 1,042 237 28,173 14,750 77,730
Multiple Payment and Flexible
Premium contracts............. 3,762 854 101,699 53,274 280,577
------------ ------------ ------------ ------------ ------------
Total....................... $ 4,822 1,095 130,365 68,282 359,665
============ ============ ============ ============ ============
NSATSmCo NSATTotRe NBAMTGro NBAMTLMat NBAMTPart
------------ ------------ ------------ ------------ ------------
Single Premium contracts Issued
prior to April 16, 1990....... $ 951 1,294 497 142 647
Single Premium contracts issued
on or after April 16, 1990.... 54,364 74,010 28,445 8,141 37,005
Multiple Payment and Flexible
Premium contracts............. 196,244 267,162 102,680 29,386 133,581
------------ ------------ ------------ ------------ ------------
Total....................... $ 251,559 342,466 131,622 37,669 171,233
============ ============ ============ ============ ============
OppBdFd OppGlSec OppGro OppMult StOpp2
------------ ------------ ------------ ------------ ------------
Single Premium contracts Issued
prior to April 16, 1990....... $ 243 435 10 334 700
Single Premium contracts issued
on or after April 16, 1990.... 13,902 24,871 582 19,097 40,024
Multiple Payment and Flexible
Premium contracts............. 50,183 89,781 2,099 68,938 144,481
------------ ------------ ------------ ------------ ------------
Total....................... $ 64,328 115,087 2,691 88,369 185,205
============ ============ ============ ============ ============
StDisc2 StintStk2 VEWrldBd VEWrldEMkt VEWrldHAs
------------ ------------ ------------ ------------ ------------
Single Premium contracts Issued
prior to April 16, 1990....... $ 235 63 79 39 208
Single Premium contracts issued
on or after April 16, 1990.... 13,434 3,586 4,494 2,258 11,872
Multiple Payment and Flexible
Premium contracts............. 48,493 12,943 16,220 8,152 42,854
------------ ------------ ------------ ------------ ------------
Total....................... $ 62,162 16,592 20,793 10,449 54,934
============ ============ ============ ============ ============
VKMSRESec WPintEq WPPVenCap WPSMCoGr
------------ ------------ ------------ ------------
Single Premium contracts Issued
prior to April 16, 1990....... $ 178 302 13 377
Single Premium contracts issued
on or after April 16, 1990.... 10,170 17,261 721 21,573
Multiple Payment and Flexible
Premium contracts............. 36,711 62,310 2,600 77,876
------------ ------------ ------------ ------------
Total....................... $ 47,059 79,873 3,334 99,826
============ ============ ============ ============
(Continued)
</TABLE>
27
<PAGE> 28
NATIONWIDE VLI SEPARATE ACCOUNT-2
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(4) DEATH BENEFITS
Death benefit proceeds result in a redemption of the contract value from
the Account and payment of those proceeds, less any outstanding policy
loans (and policy charges), to the legal beneficiary. For last survivor
flexible premium contracts, the proceeds are payable on the death of the
last surviving insured. In the event that the guaranteed death benefit
exceeds the contract value on the date of death, the excess is paid by the
Company's general account.
(5) POLICY LOANS (NET OF REPAYMENTS)
Contract provisions allow contract owners to borrow up to 90% (50% during
first year of single and modified single premium contracts) of a policy's
cash surrender value. For single premium contracts issued prior to April
16, 1990, 6.5% interest is due and payable annually in advance. For single
premium contracts issued on or after April 16, 1990, multiple payment,
flexible premium, modified single and last survivor flexible premium
contracts, 6% interest is due and payable in advance on the policy
anniversary when there is a loan outstanding on the policy.
At the time the loan is granted, the amount of the loan is transferred from
the Account to the Company's general account as collateral for the
outstanding loan. Collateral amounts in the general account are credited
with the stated rate of interest in effect at the time the loan is made,
subject to a guaranteed minimum rate. Loan repayments result in a transfer
of collateral, including interest, back to the Account.
(6) RELATED PARTY TRANSACTIONS
The Company performs various services on behalf of the Mutual Fund
Companies in which the Account invests and may receive fees for the
services performed. These services include, among other things, shareholder
communications, preparation, postage, fund transfer agency and various
other record keeping and customer service functions. These fees are paid to
an affiliate of the Company.
28
<PAGE> 29
(7) Components of contract owners' equity
The following is a summary of contract owners' equity at December 31, 1999,
for each product in the accumulation phase.
Contract owners' equity represented by:
<TABLE>
<CAPTION>
ANNUAL
UNITS UNIT VALUE RETURN*
--------- ----------- ---------
<S> <C> <C> <C> <C>
Single Premium contracts issued prior to April 16, 1990:
American Century VP - American Century
VP Capital Appreciation 6,108 $ 36.406768 $ 222,373 63%
American Century VP -
American Century VP International 2,459 26.614141 65,444 62%
The Dreyfus Socially Responsible
Growth Fund, Inc. 1,699 36.209915 61,521 29%
Dreyfus Stock Index Fund 16,208 33.296352 539,667 19%
Dreyfus VIF -
Capital Appreciation Portfolio 868 14.538186 12,619 10%
Fidelity VIP - Equity-Income Portfolio 5,082 44.120448 224,220 5%
Fidelity VIP - Growth Portfolio 3,009 79.099308 238,010 36%
Fidelity VIP - High Income Portfolio 2,115 28.983767 61,301 7%
Fidelity VIP - Overseas Portfolio 4,084 34.268141 139,951 41%
Fidelity VIP-II - Asset Manager Portfolio 1,185 30.762893 36,454 10%
Fidelity VIP-II - Contrafund Portfolio 677 25.968332 17,581 23%
Fidelity VIP-III -
Growth Opportunities Portfolio 1,477 13.960952 20,620 3%
Morgan Stanley -
Emerging Markets Debt Portfolio 1,518 8.934183 13,562 28%
Nationwide SAT -
Capital Appreciation Fund 1,979 32.388538 64,097 3%
Nationwide SAT -
Government Bond Fund 1,747 22.492327 39,294 (3)%
Nationwide SAT - Money Market Fund 16,350 16.794246 274,586 4%
Nationwide SAT - Small Cap Value Fund 2,201 10.825871 23,828 27%
Nationwide SAT - Small Company Fund 913 23.047417 21,042 43%
Nationwide SAT - Total Return Fund 4,738 42.439374 201,078 6%
Neuberger & Berman AMT -
Growth Portfolio 3,041 54.109841 164,548 49%
Neuberger & Berman AMT -
Guardian Portfolio 561 10.593122 5,943 14%
Neuberger & Berman AMT -
Limited Maturity Bond Portfolio 5,986 18.060558 108,111 1%
Strong Opportunity Fund II, Inc. 450 40.018322 18,008 34%
Van Eck WIT - Worldwide Bond Fund 1,325 15.185599 20,121 (9)%
Van Eck WIT -
Worldwide Emerging Markets Fund 6,267 11.423096 71,589 98%
Van Eck WIT -
Worldwide Hard Assets Fund 10 11.984540 120 20%
(Continued)
</TABLE>
29
<PAGE> 30
NATIONWIDE VLI SEPARATE ACCOUNT-2
NOTES TO FINANCIAL STATEMENTS, CONTINUED
<TABLE>
<CAPTION>
ANNUAL
UNITS UNIT VALUE RETURN*
---------- ----------- ----------
<S> <C> <C> <C> <C>
Single Premium contracts issued on or after April 16, 1990:
American Century VP -
American Century VP Balanced 36,043 20.298769 731,629 9%
American Century VP - American Century
VP Capital Appreciation 134,822 24.209204 3,263,933 62%
American Century VP - American Century
VP Income & Growth 53,220 12.612413 671,233 16%
American Century VP -
American Century VP International 162,982 26.114709 4,256,228 62%
American Century VP -
American Century VP Value 26,781 12.781220 342,294 (2)%
The Dreyfus Socially Responsible
Growth Fund, Inc. 31,488 35.428815 1,115,583 28%
Dreyfus Stock Index Fund 315,343 32.576553 10,272,788 19%
Dreyfus VIF -
Capital Appreciation Portfolio 81,279 14.413356 1,171,503 10%
Dreyfus VIF -
Growth and Income Portfolio 9,941 14.588194 145,021 15%
Fidelity VIP - Equity-Income Portfolio 395,355 35.712129 14,118,969 5%
Fidelity VIP - Growth Portfolio 355,884 54.130524 19,264,187 36%
Fidelity VIP - High Income Portfolio 105,520 29.506936 3,113,572 7%
Fidelity VIP - Overseas Portfolio 213,601 24.423718 5,216,931 41%
Fidelity VIP-II - Asset Manager Portfolio 211,956 29.730624 6,301,584 10%
Fidelity VIP-II - Contrafund Portfolio 290,335 25.563198 7,421,891 23%
Fidelity VIP-III -
Growth Opportunities Portfolio 21,868 13.841079 302,677 3%
Morgan Stanley -
Emerging Markets Debt Portfolio 6,540 8.857388 57,927 28%
Nationwide SAT -
Capital Appreciation Fund 62,075 31.526314 1,956,996 3%
Nationwide SAT -
Government Bond Fund 240,383 18.452016 4,435,551 (4)%
Nationwide SAT - Money Market Fund 1,082,615 13.940225 15,091,897 3%
Nationwide SAT - Small Cap Value Fund 23,585 10.762831 253,841 26%
Nationwide SAT - Small Company Fund 66,890 22.712185 1,519,218 42%
Nationwide SAT - Total Return Fund 115,322 36.208762 4,175,667 6%
Neuberger &Berman AMT -
Growth Portfolio 97,552 37.771042 3,684,641 48%
Neuberger & Berman AMT -
Guardian Portfolio 2,945 10.531438 31,015 13%
Neuberger &Berman AMT -
Limited Maturity Bond Portfolio 58,827 15.321478 901,317 0%
</TABLE>
30
<PAGE> 31
<TABLE>
<CAPTION>
ANNUAL
UNITS UNIT VALUE RETURN*
--------- ----------- --------
<S> <C> <C> <C> <C>
Neuberger & Berman AMT -
Partners Portfolio 69,118 24.377639 1,684,934 6%
Oppenheimer VAF - Bond Fund 70,351 18.355321 1,291,315 (3)%
Oppenheimer VAF -
Global Securities Fund 99,036 28.256521 2,798,413 56%
Oppenheimer VAF - Growth Fund 60,384 17.847892 1,077,727 40%
Oppenheimer VAF -
Multiple Strategies Fund 106,259 25.139330 2,671,280 10%
Strong Opportunity Fund II, Inc. 102,073 38.955700 3,976,325 33%
Strong VIF - Strong Discovery Fund II 32,996 19.481837 642,823 4%
Strong VIF -
Strong International Stock Fund II 142,490 16.519505 2,353,864 85%
Van Eck WIT - Worldwide Bond Fund 34,273 14.675886 502,987 (9)%
Van Eck WIT -
Worldwide Emerging Markets Fund 123,914 11.302972 1,400,596 98%
Van Eck WIT -
Worldwide Hard Assets Fund 71,735 13.098076 939,590 19%
Van Kampen LIT - Morgan Stanley
Real Estate Securities Portfolio 39,678 14.898574 591,146 (5)%
Warburg Pincus Trust -
International Equity Portfolio 81,838 17.586224 1,439,221 51%
Warburg Pincus Trust -
Post Venture Capital Portfolio 88,739 19.293144 1,712,054 61%
Warburg Pincus Trust -
Small Company Growth Portfolio 114,996 25.533360 2,936,234 67%
Multiple Payment contracts and
Flexible Premium contracts:
American Century VP -
American Century VP Balanced 222,611 21.094348 4,695,834 9%
American Century VP - American Century
VP Capital Appreciation 643,372 23.303640 14,992,909 63%
American Century VP - American Century
VP Income & Growth 235,223 12.717991 2,991,564 17%
American Century VP -
American Century VP International 649,836 26.831062 17,435,790 63%
American Century VP -
American Century VP Value 156,791 12.975752 2,034,481 (2)%
The Dreyfus Socially Responsible
Growth Fund, Inc. 450,901 36.549891 16,480,382 29%
Dreyfus Stock Index Fund 2,592,791 33.609618 87,142,715 20%
Dreyfus VIF -
Capital Appreciation Portfolio 404,377 14.591996 5,900,668 11%
Dreyfus VIF -
Growth and Income Portfolio 138,815 14.810164 2,055,873 16%
</TABLE>
31
<PAGE> 32
NATIONWIDE VLI SEPARATE ACCOUNT-2
NOTES TO FINANCIAL STATEMENTS, CONTINUED
<TABLE>
<CAPTION>
ANNUAL
UNITS UNIT VALUE RETURN*
--------- ----------- ----------
<S> <C> <C> <C> <C>
Fidelity VIP - Equity-Income Portfolio 1,750,754 37.388084 65,457,338 5%
Fidelity VIP - Growth Portfolio 2,613,902 55.899014 146,114,544 36%
Fidelity VIP - High Income Portfolio 672,537 28.039263 18,857,442 7%
Fidelity VIP - Overseas Portfolio 863,446 26.840170 23,175,037 41%
Fidelity VIP-II - Asset Manager Portfolio 917,098 27.355020 25,087,234 10%
Fidelity VIP-II - Contrafund Portfolio 2,151,780 26.143948 56,256,024 23%
Fidelity VIP-III -
Growth Opportunities Portfolio 385,372 14.012663 5,400,088 3%
Morgan Stanley -
Emerging Markets Debt Portfolio 43,728 8.967304 392,122 28%
Nationwide SAT -
Capital Appreciation Fund 1,104,444 32.761545 36,183,292 3%
Nationwide SAT -
Government Bond Fund 402,906 17.516435 7,057,477 (3)%
Nationwide SAT - Money Market Fund 2,312,418 13.853330 32,034,690 4%
Nationwide SAT - Small Cap Value Fund 165,130 10.852975 1,792,152 27%
Nationwide SAT - Small Company Fund 907,754 23.192622 21,053,195 43%
Nationwide SAT - Total Return Fund 2,622,351 35.085217 92,005,754 6%
Neuberger & Berman AMT -
Growth Portfolio 660,524 37.818375 24,979,944 49%
Neuberger & Berman AMT -
Guardian Portfolio 181,217 10.619652 1,924,461 14%
Neuberger & Berman AMT -
Limited Maturity Bond Portfolio 203,409 14.959827 3,042,963 1%
Neuberger & Berman AMT -
Partners Portfolio 1,008,241 25.046437 25,252,845 7%
Oppenheimer VAF - Bond Fund 520,266 17.686402 9,201,634 (2)%
Oppenheimer VAF -
Global Securities Fund 1,018,848 29.152831 29,702,304 57%
Oppenheimer VAF - Growth Fund 535,283 18.069110 9,672,087 41%
Oppenheimer VAF -
Multiple Strategies Fund 437,927 25.171538 11,023,296 11%
Strong Opportunity Fund II, Inc. 898,106 40.478200 36,353,714 34%
Strong VIF - Strong Discovery Fund II 296,260 20.243703 5,997,399 4%
Strong VIF -
Strong International Stock Fund II 219,407 16.868902 3,701,155 86%
Van Eck WIT - Worldwide Bond Fund 143,676 14.003753 2,012,003 (9)%
Van Eck WIT -
Worldwide Emerging Markets Fund 576,742 11.474995 6,618,112 99%
Van Eck WIT -
Worldwide Hard Assets Fund 206,979 14.660562 3,034,428 20%
</TABLE>
32
<PAGE> 33
<TABLE>
<CAPTION>
ANNUAL
UNITS UNIT VALUE RETURN*
--------- ----------- ----------
<S> <C> <C> <C> <C>
Van Kampen LIT - Morgan Stanley
Real Estate Securities Portfolio 246,788 15.237208 3,760,360 (4)%
Warburg Pincus Trust -
International Equity Portfolio 555,966 17.985801 9,999,494 52%
Warburg Pincus Trust -
Post Venture Capital Portfolio 123,907 19.586645 2,426,922 62%
Warburg Pincus Trust -
Small Company Growth Portfolio 754,487 26.113570 19,702,349 68%
Modified Single Premium contracts and
Last Survivor Flexible Premium contracts:
American Century VP -
American Century VP Balanced 47,439 16.129489 765,167 10%
American Century VP - American Century
VP Capital Appreciation 67,671 14.200282 960,947 65%
American Century VP - American Century
VP Income & Growth 90,023 12.888778 1,160,286 18%
American Century VP -
American Century VP International 120,278 24.899615 2,994,876 64%
American Century VP -
American Century VP Value 42,323 13.293167 562,607 (1)%
The Dreyfus Socially Responsible
Growth Fund, Inc. 72,077 24.166067 1,741,818 30%
Dreyfus Stock Index Fund 619,532 23.560156 14,596,271 21%
Dreyfus VIF -
Capital Appreciation Portfolio 54,118 14.882433 805,408 11%
Dreyfus VIF -
Growth and Income Portfolio 42,510 15.172345 644,976 17%
Fidelity VIP - Equity-Income Portfolio 442,948 16.406894 7,267,401 6%
Fidelity VIP - Growth Portfolio 462,592 24.728511 11,439,211 37%
Fidelity VIP - High Income Portfolio 301,341 13.186454 3,973,619 8%
Fidelity VIP - Overseas Portfolio 121,065 19.137888 2,316,928 43%
Fidelity VIP-II - Asset Manager Portfolio 98,987 16.996678 1,682,450 11%
Fidelity VIP-II - Contrafund Portfolio 334,798 22.555449 7,551,519 24%
Fidelity VIP-III -
Growth Opportunities Portfolio 67,209 14.291602 960,524 4%
Morgan Stanley -
Emerging Markets Debt Portfolio 25,999 9.146001 237,787 29%
Nationwide SAT -
Capital Appreciation Fund 234,699 21.161942 4,966,687 4%
Nationwide SAT -
Government Bond Fund 146,891 12.455412 1,829,588 (2)%
Nationwide SAT - Money Market Fund 710,620 12.011954 8,535,935 5%
Nationwide SAT - Small Cap Value Fund 86,677 10.998838 953,346 28%
(Continued)
</TABLE>
33
<PAGE> 34
NATIONWIDE VLI SEPARATE ACCOUNT-2
NOTES TO FINANCIAL STATEMENTS, CONTINUED
<TABLE>
<CAPTION>
ANNUAL
UNITS UNIT VALUE RETURN*
--------- ----------- -------
<S> <C> <C> <C> <C>
Nationwide SAT - Small Company Fund 210,131 17.966399 3,775,297 44%
Nationwide SAT - Total Return Fund 408,867 18.704720 7,647,743 7%
Neuberger & Berman AMT -
Growth Portfolio 101,415 22.122463 2,243,550 50%
Neuberger & Berman AMT -
Guardian Portfolio 28,718 10.762335 309,073 15%
Neuberger & Berman AMT -
Limited Maturity Bond Portfolio 73,941 11.847132 875,989 1%
Neuberger & Berman AMT -
Partners Portfolio 229,651 16.853460 3,870,414 7%
Oppenheimer VAF - Bond Fund 101,438 12.232154 1,240,805 (2)%
Oppenheimer VAF -
Global Securities Fund 94,622 23.984739 2,269,484 58%
Oppenheimer VAF - Growth Fund 83,414 18.428739 1,537,215 42%
Oppenheimer VAF -
Multiple Strategies Fund 80,822 15.287602 1,235,575 12%
Strong Opportunity Fund II, Inc. 85,543 20.690172 1,769,899 35%
Strong VIF - Strong Discovery Fund II. 19,763 12.410693 245,273 5%
Strong VIF -
Strong International Stock Fund II 91,170 15.499580 1,413,097 87%
Van Eck WIT - Worldwide Bond Fund 16,613 11.191476 185,924 (8)%
Van Eck WIT -
Worldwide Emerging Markets Fund 175,122 11.755719 2,058,685 100%
Van Eck WIT -
Worldwide Hard Assets Fund 38,783 8.258894 320,305 21%
Van Kampen LIT - Morgan Stanley
Real Estate Securities Portfolio 53,125 14.184757 753,565 (3)%
Warburg Pincus Trust -
International Equity Portfolio 142,042 15.696053 2,229,499 53%
Warburg Pincus Trust -
Post Venture Capital Portfolio 14,680 20.065541 294,562 63%
Warburg Pincus Trust -
Small Company Growth Portfolio 154,684 18.668523 2,887,722 69%
======= ========= --------------
$1,144,615,392
==============
</TABLE>
* The annual return does not include contract charges satisfied by
surrendering units.
34
<PAGE> 35
Independent Auditors' Report
The Board of Directors of Nationwide Life Insurance Company and Contract Owners
of Nationwide VLI Separate Account-2:
We have audited the accompanying statement of assets, liabilities and
contract owners' equity of Nationwide VLI Separate Account-2 (comprised of the
sub-accounts listed in note 1(b)) (collectively, "the Account") as of December
31, 1999, and the related statements of operations and changes in contract
owners' equity for each of the years in the three year period then ended. These
financial statements are the responsibility of the Account's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 1999, by correspondence with
the transfer agents of the underlying mutual funds. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the Account as of December
31, 1999, and the results of its operations and its changes in contract owners'
equity for each of the years in the three year period then ended in conformity
with generally accepted accounting principles.
KPMG LLP
Columbus, Ohio
February 18, 2000
35
<PAGE> 36
NATIONWIDE LIFE INSURANCE COMPANY
HOME OFFICE: ONE NATIONWIDE PLAZA o COLUMBUS, OHIO 43215-2220
Bulk Rate
U.S. Postage
PAID
Columbus, Ohio
Permit No. 521
Nationwide(R) is a registered federal service mark of Nationwide Mutual
Insurance Company
