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[NATIONWIDE LOGO]
NATIONWIDE(R)
VA SEPARATE ACCOUNT-A
(FORMERLY FINANCIAL HORIZONS VA SEPARATE ACCOUNT-1)
ANNUAL REPORT
TO
CONTRACT OWNERS
DECEMBER 31, 1995
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY
HOME OFFICE: COLUMBUS, OHIO
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[NATIONWIDE LOGO]
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY
ONE NATIONWIDE PLAZA, COLUMBUS, OHIO 43216
[PHOTO]
PETER F. FENZER, PRESIDENT
PRESIDENT'S MESSAGE
Nationwide Life and Annuity Insurance Company is pleased to bring you the 1995
annual report of the Nationwide VA Separate Account-A.
Both equity and fixed income investments turned in a stellar performance during
1995. The major market indices ended the year fully one-third or more higher
than their levels at the beginning of the year. These results equate directly to
the returns enjoyed by our variable annuity participants and contract owners.
Low interest rates and modest inflation should provide a continued favorable
environment for stocks and fixed income investments during 1996. Slowing levels
of economic activity and uncertainty about corporate profits may, however,
dampen a repeat of the strong 1995 market performance. The diverse offering of
investment options within your contract should enable you to take advantage of
changing market conditions.
The year 1995 was a record-setting sales year for our variable investment
products. For this we thank you, our valued customer, for your confidence in the
Nationwide Insurance Enterprise and in our products. Please do not hesitate to
let us know how we can better serve your financial planning and retirement
needs.
/s/ Peter F. Frenzer
---------------------------
Peter F. Frenzer, President
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NATIONWIDE VA SEPARATE ACCOUNT-A
(FORMERLY FINANCIAL HORIZONS VA SEPARATE ACCOUNT-1)
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY
DECEMBER 31, 1995
<TABLE>
<CAPTION>
ASSETS:
<S> <C>
Investments at market value:
Fidelity VIP -- Growth Portfolio (FidGro)
2,052,052 shares (cost $45,063,600) ............... $ 59,919,917
Nationwide SAT -- Capital Appreciation Fund (NWCapApp)
403,688 shares (cost $4,461,117) .................. 5,441,716
Nationwide SAT -- Government Bond Fund (NWGvtBd)
3,442,859 shares (cost $38,698,540) ............... 39,110,875
Nationwide SAT -- Money Market Fund (NWMyMkt)
4,197,493 shares (cost $4,197,493) ................ 4,197,493
Nationwide SAT -- Total Return Fund (NWTotRet)
4,419,229 shares (cost $44,536,396) ............... 50,997,900
Neuberger & Berman -- Balanced Portfolio (NBBal)
1,401,677 shares (cost $21,055,241) ............... 24,557,389
TCI Portfolios -- TCI Advantage (TCIAdv)
2,080,958 shares (cost $11,232,468) ............... 12,881,131
------------
Total investments .............................. 197,106,421
Accounts receivable .................................... 36,830
------------
Total assets ................................... 197,143,251
ACCOUNTS PAYABLE ......................................... 45,442
------------
CONTRACT OWNERS' EQUITY .................................. $197,097,809
============
</TABLE>
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<TABLE>
<CAPTION>
Contract owners' equity represented by: UNITS UNIT VALUE
--------- ------------
<S> <C> <C> <C>
Contracts in accumulation phase:
Fidelity VIP -- Growth Portfolio:
Tax qualified ............................... 2,115,940 $ 17.260484 $ 36,522,149
Non-tax qualified ........................... 1,355,537 17.260484 23,397,225
Nationwide SAT -- Capital Appreciation Fund:
Tax qualified ............................... 225,959 14.442619 3,263,440
Non-tax qualified ........................... 150,819 14.442619 2,178,221
Nationwide SAT -- Government Bond Fund:
Tax qualified ............................... 1,126,015 17.796519 20,039,147
Non-tax qualified ........................... 1,070,693 17.796519 19,054,608
Nationwide SAT -- Money Market Fund:
Tax qualified ............................... 198,306 13.190835 2,615,822
Non-tax qualified ........................... 116,648 13.190835 1,538,685
Nationwide SAT -- Total Return Fund:
Tax qualified ............................... 1,532,690 19.046261 29,192,014
Non-tax qualified ........................... 1,144,873 19.046261 21,805,550
Neuberger & Berman -- Balanced Portfolio:
Tax qualified ............................... 1,005,274 14.230121 14,305,171
Non-tax qualified ........................... 720,442 14.230121 10,251,977
TCI Portfolios -- TCI Advantage:
Tax qualified ............................... 579,792 13.047149 7,564,633
Non-tax qualified ........................... 381,019 13.047149 4,971,212
Initial Funding by Depositor (note 1a) ...... 25,000 13.802855 345,071
========= ============
Reserves for annuity contracts in payout phase:
Tax qualified ............................... 37,132
Non-tax qualified ........................... 15,752
------------
$197,097,809
============
</TABLE>
See accompanying notes to financial statements.
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NATIONWIDE VA SEPARATE ACCOUNT-A
(FORMERLY FINANCIAL HORIZONS VA SEPARATE ACCOUNT-1)
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
------------ ----------- -----------
<S> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested capital gains and dividends ...... $ 8,050,692 7,721,041 3,667,080
------------ ----------- -----------
Gain (loss) on investments:
Proceeds from redemptions of mutual fund shares 20,313,766 19,817,630 11,126,106
Cost of mutual fund shares sold ........... (18,563,695) (19,721,355) (10,850,143)
------------ ----------- -----------
Realized gain (loss) on investments ....... 1,750,071 96,275 275,963
Change in unrealized gain (loss) on investments 31,434,577 (9,410,416) 4,689,238
------------ ----------- -----------
Net gain (loss) on investments .......... 33,184,648 (9,314,141) 4,965,201
------------ ----------- -----------
Net investment activity ............. 41,235,340 (1,593,100) 8,632,281
------------ ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from contract owners 13,686,421 47,925,144 74,786,373
Redemptions ................................. (16,686,757) (15,715,791) (4,882,071)
Annuity benefits ............................ (3,226) -- --
Adjustments to maintain reserves ............ (2,665) (2,326) (819)
------------ ----------- -----------
Net equity transactions ............. (3,006,227) 32,207,027 69,903,483
------------ ----------- -----------
EXPENSES (NOTE 2):
Contract charges ............................ (2,627,930) (2,251,121) (1,331,027)
Contingent deferred sales charges ........... (413,527) (445,574) (162,779)
------------ ----------- ------------
Total expenses ...................... (3,041,457) (2,696,695) (1,493,806)
------------ ----------- -----------
NET CHANGE IN CONTRACT OWNERS' EQUITY ......... 35,187,656 27,917,232 77,041,958
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ... 161,910,153 133,992,921 56,950,963
------------ ----------- -----------
CONTRACT OWNERS' EQUITY END OF PERIOD ......... $197,097,809 161,910,153 133,992,921
============ =========== ===========
</TABLE>
See accompanying notes to financial statements.
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NATIONWIDE VA SEPARATE ACCOUNT-A
(FORMERLY FINANCIAL HORIZONS VA SEPARATE ACCOUNT-1)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994 AND 1993
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Organization and Nature of Operations
Nationwide VA Separate Account-A (formerly Financial Horizons VA
Separate Account-1) (the Account) was established pursuant to a resolution of
the Board of Directors of Nationwide Life and Annuity Insurance Company
(formerly Financial Horizons Life Insurance Company) (the Company) on May 6,
1987. The Account has been registered as a unit investment trust under the
Investment Company Act of 1940. On August 21, 1991, the Company transferred to
the Account, 50,000 shares of the TCI Portfolios, Inc. -- TCI Advantage fund for
which the Account was credited with 25,000 accumulation units. The value of the
accumulation units purchased by the Company on August 21, 1991 was $250,000.
The Company offers tax qualified and non-tax qualified Individual
Deferred Variable Annuity Contracts through the Account. The primary
distribution for the contracts is through banks and other financial
institutions; however, other distributors may be utilized.
(b) The Contracts
Only contracts without a front-end sales charge, but with a contingent
deferred sales charge and certain other fees, are offered for purchase. See note
2 for a discussion of contract expenses.
With certain exceptions, contract owners in either the accumulation or
the payout phase may invest in any of the following funds:
Portfolio of the Fidelity Variable Insurance Products Fund
(Fidelity VIP);
Fidelity VIP -- Growth Portfolio (FidGro)
Funds of the Nationwide Separate Account Trust (Nationwide
SAT) (managed for a fee by an affiliated investment advisor);
Nationwide SAT -- Capital Appreciation Fund
(NWCapApp)
Nationwide SAT -- Government Bond Fund (NWGvtBd)
Nationwide SAT -- Money Market Fund (NWMyMkt)
Nationwide SAT -- Total Return Fund (NWTotRet)
Portfolio of the Neuberger & Berman Advisers Management Trust
(Neuberger & Berman);
Neuberger & Berman -- Balanced Portfolio (NBBal)
Portfolio of the TCI Portfolios, Inc. (TCI Portfolios);
TCI Portfolios -- TCI Advantage (TCIAdv)
At December 31, 1995, contract owners have invested in all of the above
funds. The contract owners' equity is affected by the investment results of each
fund, equity transactions by contract owners and certain contract expenses (see
note 2). The accompanying financial statements include only contract owners'
purchase payments pertaining to the variable portions of their contracts and
exclude any purchase payments for fixed dollar benefits, the latter being
included in the accounts of the Company.
(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, 1995. The cost of investments sold is
determined on a specific identification basis. Investment transactions are
accounted for on the trade date (date the order to buy or sell is executed) and
dividend income is recorded on the ex-dividend date.
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(d) Federal Income Taxes
Operations of the Account form a part of, and are taxed with,
operations of the Company which is taxed as a life insurance company under the
Internal Revenue Code.
The Company does not provide for income taxes within the Account. Taxes
are the responsibility of the contract owner upon termination or withdrawal.
(e) Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally
accepted accounting principles may require management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities, if any, at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
(2) EXPENSES
The Company does not deduct a sales charge from purchase payments
received from the contract owners. However, if any part of the contract value of
such contracts is surrendered, the Company will, with certain exceptions, deduct
from a contract owner's contract value a contingent deferred sales charge not to
exceed 7% of the lesser of purchase payments or the amount surrendered, such
charge declining 1% per year, to 0%, after the purchase payment has been held in
the contract for 84 months. No sales charges are deducted on redemptions used to
purchase units in the fixed investment options of the Company.
The following administrative charges are deducted by the Company: (a)
an annual contract maintenance charge of $30 which is satisfied by surrendering
units; and (b) a mortality risk charge, an expense risk charge and an
administration charge assessed through the daily unit value calculation equal to
an annual rate of 0.80%, 0.45% and 0.05%, respectively. No charges were deducted
from the initial funding, or from earnings thereon.
(3) SCHEDULE I
Schedule I presents the components of the change in the unit values,
which are the basis for contract owners' equity. This schedule is presented in
the following format:
- Beginning unit value - Jan. 1
- Reinvested capital gains and dividends
(This amount reflects the increase in the unit value due to capital
gains and dividend distributions from the underlying mutual funds.)
- Unrealized gain (loss)
(This amount reflects the increase (decrease) in the unit value
resulting from the market appreciation (depreciation) of the
underlying mutual funds.)
- Contract charges
(This amount reflects the decrease in the unit value due to the
mortality risk charge, expense risk charge and administration charge
discussed in note 2.)
- Ending unit value - Dec. 31
- Percentage increase (decrease) in unit value.
For contracts in the payout phase, an assumed investment return of
3.5%, used in the calculation of the annuity benefit payment amount, results in
a corresponding reduction in the components of the unit values as shown in
Schedule I.
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SCHEDULE I
NATIONWIDE VA SEPARATE ACCOUNT-A
(FORMERLY FINANCIAL HORIZONS VA SEPARATE ACCOUNT-1)
TAX QUALIFIED AND NON-TAX QUALIFIED
SCHEDULES OF CHANGES IN UNIT VALUE
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
FidGRo NWCapApp NWGvtBd NWMyMkt NWTotRet NBBal TCIAdv TCIAdv+
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1995
Beginning unit value - Jan. 1 $ 12.918431 11.311683 15.183984 12.648732 14.947703 11.649194 11.322395 11.822996
- ------------------------------------------------------------------------------------------------------------------------------------
Reinvested capital
gains and
dividends .071384 .642190 1.074443 .711093 1.480976 .296423 .410259 .431938
- ------------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) 4.475621 2.653706 1.754428 .000000 2.840889 2.458241 1.473947 1.547921
- ------------------------------------------------------------------------------------------------------------------------------------
Contract charges (.204952) (.164960) (.216336) (.168990) (.223307) (.173737) (.159452) .000000
- ------------------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $ 17.260484 14.442619 17.796519 13.190835 19.046261 14.230121 13.047149 13.802855
- ------------------------------------------------------------------------------------------------------------------------------------
Percentage increase
(decrease) in
unit value* 34% 28% 17% 4% 27% 22% 15% 17%
====================================================================================================================================
1994
Beginning unit value - Jan. 1 $ 13.090637 11.564256 15.897022 12.335970 14.983077 12.212412 11.353606 11.701906
- ------------------------------------------------------------------------------------------------------------------------------------
Reinvested capital
gains and
dividends .787428 .182737 .997259 .475683 .756008 .476225 .298215 .309969
- ------------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) (.794444) (.286833) (1.509724) .000000 (.594133) (.884641) (.181444) (.188879)
- ------------------------------------------------------------------------------------------------------------------------------------
Contract charges (.165190) (.148477) (.200573) (.162921) (.197249) (.154802) (.147982) .000000
- ------------------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $ 12.918431 11.311683 15.183984 12.648732 14.947703 11.649194 11.322395 11.822996
- ------------------------------------------------------------------------------------------------------------------------------------
Percentage increase
(decrease) in
unit value* (1)% (2)% (4)% 3% 0% (5)% 0% 1%
====================================================================================================================================
1993
Beginning unit value - Jan. 1 $ 11.110754 10.689287 14.706659 12.163583 13.685960 11.622919 10.766992 10.953160
- ------------------------------------------------------------------------------------------------------------------------------------
Reinvested capital
gains and
dividends .247096 .260100 .939435 .332875 .558349 .179151 .224925 .230690
- ------------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) 1.891810 .755961 .454883 .000000 .927064 .564497 .506735 .518056
- ------------------------------------------------------------------------------------------------------------------------------------
Contract charges (.159023) (.141092) (.203955) (.160488) (.188296) (.154155) (.145046) .000000
- ------------------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $ 13.090637 11.564256 15.897022 12.335970 14.983077 12.212412 11.353606 11.701906
- ------------------------------------------------------------------------------------------------------------------------------------
Percentage increase
(decrease) in
unit value* 18% 8% 8% 1% 9% 5% 5% 7%
====================================================================================================================================
</TABLE>
* An annualized rate of return cannot be determined as contract charges do not
include the annual contract maintenance charge discussed in note 2.
+ For Depositor, see note 1a.
SEE NOTE 3.
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Independent Auditors' Report
The Board of Directors and Contract Owners of
Nationwide VA Separate Account-A (formerly Financial Horizons VA Separate
Account-1)
Nationwide Life and Annuity Insurance Company (formerly Financial Horizons
Life Insurance Company):
We have audited the accompanying statement of assets, liabilities and
contract owners' equity of Nationwide VA Separate Account-A (formerly Financial
Horizons VA Separate Account-1) as of December 31, 1995, and the related
statements of operations and changes in contract owners' equity and schedules of
changes in unit value for each of the years in the three year period then ended.
These financial statements and schedules of changes in unit value are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and schedules of changes in unit value
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and schedules of
changes in unit value are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of December 31, 1995, by correspondence with the custodian and the
transfer agents of the underlying mutual funds. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and schedules of changes in
unit value referred to above present fairly, in all material respects, the
financial position of Nationwide VA Separate Account-A (formerly Financial
Horizons VA Separate Account-1) as of December 31, 1995, and the results of its
operations and its changes in contract owners' equity and the schedules of
changes in unit value for each of the years in the three year period then ended
in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Columbus, Ohio
February 6, 1996
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NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY
HOME OFFICE: ONE NATIONWIDE PLAZA - COLUMBUS, OHIO 49215-2220
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