<PAGE> 1
Nationwide(R) VA Separate Account - B
June 30, 1997
[THE BEST OF AMERICA(R) LOGO]
SEMI-ANNUAL REPORT
AMERICA'S
Exclusive
ANNUITY(SM)
[NATIONWIDE LOGO]
Nationwide Life and Annuity Insurance Company
Home Office: Columbus, Ohio
<PAGE> 2
[NATIONWIDE LOGO]
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY
ONE NATIONWIDE PLAZA, COLUMBUS, OHIO 43215-2220
PRESIDENT'S MESSAGE
We are pleased to present the 1997 semi-annual report of the Nationwide VA
Separate Account-B.
Our Enterprise Vision statement states: "We exist to serve our customers."
Everything we do is focused on you, our customer, and on your needs.
We recognize that your expectations have changed and your standards for value
and service are higher than ever before. You are being asked to take more
responsibility for your own financial future, as employers and government
programs provide fewer guarantees.
We know that you expect service and products customized to fit your needs -
including financial advice - and you expect to receive service at any time,
anywhere and any way you choose.
We are responding to your changing needs and expectations with innovative
product offerings, continuing investment in the training and professional
development of our people, and our investment in technology to enable us to
serve you faster, better and more cost effectively.
Equity investments produced solid gains for the first half of 1997 with the Dow
Jones Industrial Average breaking the 8,000 mark on July 16. The U.S. economy,
in its seventh year of expansion, is growing vigorously and corporate profits
are better than anticipated.
Interest rates and inflation are still at very low levels. However, the risk of
a temporary spike remains as the Federal Reserve might be forced to raise
interest rates in order to keep our economy on an inflation-free growth path.
Even such policy actions are not expected to end the prosperous times which we
now enjoy. In the long run, equity valuations will reflect these excellent
economic conditions.
Thank you for giving Nationwide Life and Annuity Insurance Company the
opportunity to meet your investment needs.
/s/ Joseph J. Gasper
Joseph J. Gasper, President
3
<PAGE> 3
NATIONWIDE VA SEPARATE ACCOUNT-B
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments at market value:
American Century VP - American Century VP Balanced (ACVPBal)
114,527 shares (cost $853,365)....................................................................... $ 887,583
American Century VP - American Century VP Capital Appreciation (ACVPCapAp)
110,800 shares (cost $1,096,268)..................................................................... 1,070,331
American Century VP - American Century VP International (ACVPInt)
452,502 shares (cost $2,775,380)..................................................................... 3,099,641
American Century VP - American Century VP Value (ACVPValue)
108,713 shares (cost $620,590)....................................................................... 677,283
The Dreyfus Socially Responsible Growth Fund, Inc. (DrySRGro)
89,361 shares (cost $1,882,865)...................................................................... 2,088,363
Dreyfus Stock Index Fund (DryStkIx)
395,262 shares (cost $8,633,842)..................................................................... 9,577,198
Dreyfus VIF - Growth and Income Portfolio (DryGroInc)
16,483 shares (cost $323,579)........................................................................ 345,316
Fidelity VIP - Equity-Income Portfolio (FidVIPEI)
887,869 shares (cost $17,854,806).................................................................... 19,586,386
Fidelity VIP - Growth Portfolio (FidVIPGr)
583,141 shares (cost $18,487,607).................................................................... 19,943,406
Fidelity VIP - High Income Portfolio (FidVIPHI)
561,472 shares (cost $6,806,147)..................................................................... 6,979,095
Fidelity VIP - Overseas Portfolio (FidVIPOv)
154,152 shares (cost $2,798,248)..................................................................... 3,089,214
Fidelity VIP-II - Asset Manager Portfolio (FidVIPAM)
190,979 shares (cost $3,044,148)..................................................................... 3,170,248
Fidelity VIP-II - Contrafund Portfolio (FidVIPCon)
798,050 shares (cost $13,334,971).................................................................... 14,309,037
Nationwide SAT - Capital Appreciation Fund (NSATCapAp)
122,471 shares (cost $2,177,590)..................................................................... 2,395,528
Nationwide SAT - Government Bond Fund (NSATGvtBd)
142,656 shares (cost $1,561,388)..................................................................... 1,569,215
Nationwide SAT - Money Market Fund (NSATMyMkt)
17,237,931 shares (cost $17,237,931)................................................................. 17,237,931
Nationwide SAT - Small Company Fund (NSATSmCo)
212,150 shares (cost $2,937,162)..................................................................... 3,216,193
Nationwide SAT - Total Return Fund (NSATTotRe)
195,142 shares (cost $2,721,903)..................................................................... 3,065,687
</TABLE>
4
<PAGE> 4
<TABLE>
<S> <C>
Neuberger & Berman - Growth Portfolio (NBAMTGro)
53,682 shares (cost $1,350,872)..................................................................... 1,489,133
Neuberger & Berman - Limited Maturity Bond Portfolio (NBAMTLMat)
391,395 shares (cost $5,358,732).................................................................... 5,330,804
Neuberger & Berman - Partners Portfolio (NBAMTPart)
633,315 shares (cost $10,784,251)................................................................... 11,507,336
Oppenheimer - Bond Fund (OppBdFd)
269,511 shares (cost $3,128,450).................................................................... 3,112,851
Oppenheimer - Global Securities Fund (OppGlSec)
152,603 shares (cost $2,718,088).................................................................... 3,097,849
Oppenheimer - Multiple Strategies Fund (OppMult)
112,636 shares (cost $1,753,378).................................................................... 1,816,820
Strong Special Fund II, Inc. (StSpec2)
480,715 shares (cost $8,925,958).................................................................... 9,229,730
Strong VIF - Strong Discovery Fund II (StDisc2)
152,920 shares (cost $1,595,257).................................................................... 1,721,877
Strong VIF - Strong International Stock Fund II (StIntStk2)
289,445 shares (cost $3,268,392).................................................................... 3,389,397
Van Eck - Worldwide Bond Fund (VEWrldBd)
133,312 shares (cost $1,431,785).................................................................... 1,418,440
Van Eck - Worldwide Emerging Markets Fund (VEWrldEMkt)
77,607 shares (cost $1,084,667)..................................................................... 1,186,603
Van Eck - Worldwide Hard Assets Fund (VEWrldHAs)
82,857 shares (cost $1,324,690)..................................................................... 1,320,734
Van Kampen American Capital - Real Estate Securities Fund (VKACRESec)
253,555 shares (cost $3,713,576).................................................................... 3,973,203
Warburg Pincus - International Equity Portfolio (WPIntEq)
522,842 shares (cost $6,079,095).................................................................... 6,901,509
Warburg Pincus - Post Venture Capital Portfolio (WPPVenCap)
21,044 shares (cost $193,618)....................................................................... 212,334
Warburg Pincus - Small Company Growth Portfolio (WPSmCoGr)
430,996 shares (cost $5,850,086).................................................................... 6,301,158
-------------
Total investments................................................................................ 174,317,433
Accounts receivable....................................................................................... --
-------------
Total assets..................................................................................... 174,317,433
ACCOUNTS PAYABLE............................................................................................. 256,629
-------------
CONTRACT OWNERS' EQUITY (NOTE 3)............................................................................. $ 174,060,804
=============
</TABLE>
See accompanying notes to financial statements.
5
<PAGE> 5
NATIONWIDE VA SEPARATE ACCOUNT-B
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIOD ENDED JUNE 30, 1997 AND FOR THE PERIOD FEBRUARY 1, 1996
(COMMENCEMENT OF OPERATIONS) THROUGH JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
TOTAL ACVPBal
------------------------------ ----------------------
1997 1996 1997 1996
------------- ----------- -------- --------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 1,988,556 132,294 6,748 1,163
Mortality, expense and administration
charges (note 2) ............................ (958,712) (65,525) (4,859) (409)
------------- ----------- -------- --------
Net investment activity ..................... 1,029,844 66,769 1,889 754
------------- ----------- -------- --------
Proceeds from mutual fund shares sold ......... 112,119,641 8,561,853 223,769 28,195
Cost of mutual fund shares sold ............... (110,867,547) (8,529,573) (209,866) (27,940)
------------- ----------- -------- --------
Realized gain (loss) on investments ......... 1,252,094 32,280 13,903 255
Change in unrealized gain (loss) on investments 8,109,595 27,867 17,168 2,564
------------- ----------- -------- --------
Net gain (loss) on investments .............. 9,361,689 60,147 31,071 2,819
------------- ----------- -------- --------
Reinvested capital gains ...................... 2,893,555 22,575 28,016 --
------------- ----------- -------- --------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 13,285,088 149,491 60,976 3,573
------------- ----------- -------- --------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ..... 72,222,938 29,215,948 346,166 190,671
Redemptions ................................... (8,184,735) (138,364) (45,644) (316)
Annuity benefits .............................. -- -- -- --
Adjustments to maintain reserves .............. (3,468) 2,713 (10) --
------------- ----------- -------- --------
Net equity transactions ................... 64,034,735 29,080,297 300,512 190,355
------------- ----------- -------- --------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... 77,319,823 29,229,788 361,488 193,928
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 96,740,981 -- 526,088 --
------------- ----------- -------- --------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... $ 174,060,804 29,229,788 887,576 193,928
============= =========== ======== ========
<CAPTION>
ACVPCapAp ACVPint
------------------------ ------------------------
1997 1996 1997 1996
---------- -------- ---------- --------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... -- -- 22,729 3,114
Mortality, expense and administration
charges (note 2) ............................ (9,146) (594) (15,070) (656)
---------- -------- ---------- --------
Net investment activity ..................... (9,146) (594) 7,659 2,458
---------- -------- ---------- --------
Proceeds from mutual fund shares sold ......... 1,642,634 242 511,260 22,292
Cost of mutual fund shares sold ............... (1,800,185) (256) (450,635) (21,599)
---------- -------- ---------- --------
Realized gain (loss) on investments ......... (157,551) (14) 60,625 693
Change in unrealized gain (loss) on investments 36,860 (10,567) 266,431 2,798
---------- -------- ---------- --------
Net gain (loss) on investments .............. (120,691) (10,581) 327,056 3,491
---------- -------- ---------- --------
Reinvested capital gains ...................... 17,313 129 43,835 1,038
---------- -------- ---------- --------
Net increase (decrease) in contract owners'
equity resulting from operations ........ (112,524) (11,046) 378,550 6,987
---------- -------- ---------- --------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ..... 145,192 347,640 1,598,779 424,448
Redemptions ................................... (177,524) (503) (41,445) (725)
Annuity benefits .............................. -- -- -- --
Adjustments to maintain reserves .............. (38) 8 12 6
---------- -------- ---------- --------
Net equity transactions ................... (32,370) 347,145 1,557,346 423,729
---------- -------- ---------- --------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... (144,894) 336,099 1,935,896 430,716
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 1,215,206 -- 1,163,757 --
---------- -------- ---------- --------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... 1,070,312 336,099 3,099,653 430,716
========== ======== ========== ========
</TABLE>
6
<PAGE> 6
NATIONWIDE VA SEPARATE ACCOUNT-B
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIOD ENDED JUNE 30, 1997 AND FOR THE PERIOD FEBRUARY 1, 1996
(COMMENCEMENT OF OPERATIONS) THROUGH JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
ACVPValue DrySRGro
--------------------- --------------------------
1997 1996 1997 1996
---------- ------- ---------- ----------
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 1,292 - -- --
Mortality, expense and administration
charges (note 2) ............................ (2,518) - (7,432) (38)
---------- ------- ---------- ----------
Net investment activity ..................... (1,226) - (7,432) (38)
---------- ------- ---------- ----------
Proceeds from mutual fund shares sold ......... 243,316 - 1,550,776 30
Cost of mutual fund shares sold ............... (241,390) - (1,498,783) (30)
---------- ------- ---------- ----------
Realized gain (loss) on investments ......... 1,926 - 51,993 --
Change in unrealized gain (loss) on investments 56,693 - 215,796 162
---------- ------- ---------- ----------
Net gain (loss) on investments .............. 58,619 - 267,789 162
---------- ------- ---------- ----------
Reinvested capital gains ...................... 2,414 - -- --
---------- ------- ---------- ----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 59,807 - 260,357 124
---------- ------- ---------- ----------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ..... 618,116 - 1,555,687 15,391
Redemptions ................................... (639) - (179,188) --
Annuity benefits .............................. -- - -- --
Adjustments to maintain reserves .............. (5) - 13 (6)
---------- ------- ---------- ----------
Net equity transactions ................... 617,472 - 1,376,512 15,385
---------- ------- ---------- ----------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... 677,279 - 1,636,869 15,509
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... -- - 451,511 --
---------- ------- ---------- ----------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... $ 677,279 - 2,088,380 15,509
========== ======= ========== ==========
<CAPTION>
DRYStkix DryGroinc
-------------------------- ---------------------
1997 1996 1997 1996
---------- ---------- ---------- -------
<S> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... 56,989 1,853 1,932 -
Mortality, expense and administration
charges (note 2) ............................ (40,997) (734) (1,134) -
---------- ---------- ---------- -------
Net investment activity ..................... 15,992 1,119 798 -
---------- ---------- ---------- -------
Proceeds from mutual fund shares sold ......... 1,056,526 218,447 295,056 -
Cost of mutual fund shares sold ............... (935,729) (213,943) (301,796) -
---------- ---------- ---------- -------
Realized gain (loss) on investments ......... 120,797 4,504 (6,740) -
Change in unrealized gain (loss) on investments 902,289 (1,621) 21,737 -
---------- ---------- ---------- -------
Net gain (loss) on investments .............. 1,023,086 2,883 14,997 -
---------- ---------- ---------- -------
Reinvested capital gains ...................... -- -- 1,330 -
---------- ---------- ---------- -------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 1,039,078 4,002 17,125 -
---------- ---------- ---------- -------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ..... 5,780,736 323,587 329,437 -
Redemptions ................................... (196,198) -- (1,247) -
Annuity benefits .............................. -- -- -- -
Adjustments to maintain reserves .............. 49 4 9 -
---------- ---------- ---------- -------
Net equity transactions ................... 5,584,587 323,591 328,199 -
---------- ---------- ---------- -------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... 6,623,665 327,593 345,324 -
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 2,953,599 -- -- -
---------- ---------- ---------- -
CONTRACT OWNERS' EQUITY END OF PERIOD ........... 9,577,264 327,593 345,324 -
========== ========== ========== =======
</TABLE>
7
<PAGE> 7
NATIONWIDE VA SEPARATE ACCOUNT-B
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIOD ENDED JUNE 30, 1997 AND FOR THE PERIOD FEBRUARY 1, 1996
(COMMENCEMENT OF OPERATIONS) THROUGH JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
FidVIPEI FidVIPGr
------------------------------ ------------------------------
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 204,640 -- 94,039 --
Mortality, expense and administration
charges (note 2) ............................ (105,896) (9,543) (108,906) (11,133)
------------ ------------ ------------ ------------
Net investment activity ..................... 98,744 (9,543) (14,867) (11,133)
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold ......... 1,729,053 540,758 5,861,393 252,294
Cost of mutual fund shares sold ............... (1,650,589) (535,578) (5,683,744) (241,407)
------------ ------------ ------------ ------------
Realized gain (loss) on investments ......... 78,464 5,180 177,649 10,887
Change in unrealized gain (loss) on investments 1,022,634 13,246 1,348,782 62,233
------------ ------------ ------------ ------------
Net gain (loss) on investments .............. 1,101,098 18,426 1,526,431 73,120
------------ ------------ ------------ ------------
Reinvested capital gains ...................... 1,028,884 -- 420,937 --
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 2,228,726 8,883 1,932,501 61,987
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ..... 6,907,037 4,467,707 5,735,393 4,980,284
Redemptions ................................... (540,835) (3,306) (346,653) (31,105)
Annuity benefits .............................. -- -- -- --
Adjustments to maintain reserves .............. 80 1,282 (134) 236
------------ ------------ ------------ ------------
Net equity transactions ................... 6,366,282 4,465,683 5,388,606 4,949,415
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... 8,595,008 4,474,566 7,321,107 5,011,402
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 10,991,482 -- 12,622,385 --
------------ ------------ ------------ ------------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... $ 19,586,490 4,474,566 19,943,492 5,011,402
============ ============ ============ ============
<CAPTION>
FidVIPHI FidVIPOv
------------------------------ ------------------------------
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... 337,770 -- 27,355 --
Mortality, expense and administration
charges (note 2) ............................ (40,161) (2,393) (14,820) (929)
------------ ------------ ------------ ------------
Net investment activity ..................... 297,609 (2,393) 12,535 (929)
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold ......... 3,776,035 1,783,529 1,070,217 13,587
Cost of mutual fund shares sold ............... (3,782,509) (1,784,406) (1,063,297) (12,882)
------------ ------------ ------------ ------------
Realized gain (loss) on investments ......... (6,474) (877) 6,920 705
Change in unrealized gain (loss) on investments 44,398 13,166 221,384 7,627
------------ ------------ ------------ ------------
Net gain (loss) on investments .............. 37,924 12,289 228,304 8,332
------------ ------------ ------------ ------------
Reinvested capital gains ...................... 41,747 -- 108,590 --
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 377,280 9,896 349,429 7,403
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ..... 1,004,817 856,020 1,407,597 565,511
Redemptions ................................... (303,287) (1,359) (107,886) (560)
Annuity benefits .............................. -- -- -- --
Adjustments to maintain reserves .............. (51) 2 5 16
------------ ------------ ------------ ------------
Net equity transactions ................... 701,479 854,663 1,299,716 564,967
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... 1,078,759 864,559 1,649,145 572,370
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 5,900,349 -- 1,440,074 --
------------ ------------ ------------ ------------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... 6,979,108 864,559 3,089,219 572,370
============ ============ ============ ============
</TABLE>
8
<PAGE> 8
NATIONWIDE VA SEPARATE ACCOUNT-B
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIOD ENDED JUNE 30, 1997 AND FOR THE PERIOD FEBRUARY 1, 1996
(COMMENCEMENT OF OPERATIONS) THROUGH JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
FidVIPAM FidVIPCon
---------------------------- ----------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 46,047 -- 79,097 --
Mortality, expense and administration
charges (note 2) ............................ (13,707) (1,057) (71,858) (2,693)
----------- ----------- ----------- -----------
Net investment activity ..................... 32,340 (1,057) 7,239 (2,693)
----------- ----------- ----------- -----------
Proceeds from mutual fund shares sold ......... 120,878 72,638 6,867,634 167,806
Cost of mutual fund shares sold ............... (115,306) (71,147) (6,529,979) (162,178)
----------- ----------- ----------- -----------
Realized gain (loss) on investments ......... 5,572 1,491 337,655 5,628
Change in unrealized gain (loss) on investments 62,207 5,926 607,848 11,334
----------- ----------- ----------- -----------
Net gain (loss) on investments .............. 67,779 7,417 945,503 16,962
----------- ----------- ----------- -----------
Reinvested capital gains ...................... 115,507 -- 209,041 --
----------- ----------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 215,626 6,360 1,161,783 14,269
----------- ----------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ..... 1,856,420 470,207 5,758,289 1,523,205
Redemptions ................................... (26,715) (768) (364,968) (954)
Annuity benefits .............................. -- -- -- --
Adjustments to maintain reserves .............. (35) 21 26 63
----------- ----------- ----------- -----------
Net equity transactions ................... 1,829,670 469,460 5,393,347 1,522,314
----------- ----------- ----------- -----------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... 2,045,296 475,820 6,555,130 1,536,583
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 1,124,607 -- 7,753,957 --
----------- ----------- ----------- -----------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... $ 3,169,903 475,820 14,309,087 1,536,583
=========== =========== =========== ===========
<CAPTION>
NSATCapAp NSATGvtBd
---------------------------- ----------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... 8,027 284 47,589 10,691
Mortality, expense and administration
charges (note 2) ............................ (10,313) (234) (10,821) (1,609)
----------- ----------- ----------- -----------
Net investment activity ..................... (2,286) 50 36,768 9,082
----------- ----------- ----------- -----------
Proceeds from mutual fund shares sold ......... 1,805,428 76,240 333,576 76,534
Cost of mutual fund shares sold ............... (1,699,870) (74,193) (327,644) (77,025)
----------- ----------- ----------- -----------
Realized gain (loss) on investments ......... 105,558 2,047 5,932 (491)
Change in unrealized gain (loss) on investments 220,367 745 (7,951) (2,106)
----------- ----------- ----------- -----------
Net gain (loss) on investments .............. 325,925 2,792 (2,019) (2,597)
----------- ----------- ----------- -----------
Reinvested capital gains ...................... -- -- -- --
----------- ----------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 323,639 2,842 34,749 6,485
----------- ----------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ..... 462,747 63,287 259,652 660,479
Redemptions ................................... (310,611) -- (31,615) --
Annuity benefits .............................. -- -- -- --
Adjustments to maintain reserves .............. 12 111 3 16
----------- ----------- ----------- -----------
Net equity transactions ................... 152,148 63,398 228,040 660,495
----------- ----------- ----------- -----------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... 475,787 66,240 262,789 666,980
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 1,919,750 -- 1,306,429 --
----------- ----------- ----------- -----------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... 2,395,537 66,240 1,569,218 666,980
=========== =========== =========== ===========
</TABLE>
9
<PAGE> 9
NATIONWIDE VA SEPARATE ACCOUNT-B
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIOD ENDED JUNE 30, 1997 AND FOR THE PERIOD FEBRUARY 1, 1996
(COMMENCEMENT OF OPERATIONS) THROUGH JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
NSATMyMkt NSATSmCo
------------------------------ ------------------------------
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 505,967 43,335 -- 657
Mortality, expense and administration
charges (note 2) ............................ (144,828) (12,907) (15,443) (982)
------------ ------------ ------------ ------------
Net investment activity ..................... 361,139 30,428 (15,443) (325)
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold ......... 52,948,936 4,490,895 878,356 62,859
Cost of mutual fund shares sold ............... (52,948,936) (4,490,895) (875,885) (58,567)
------------ ------------ ------------ ------------
Realized gain (loss) on investments ......... -- -- 2,471 4,292
Change in unrealized gain (loss) on investments -- -- 262,924 4,966
------------ ------------ ------------ ------------
Net gain (loss) on investments .............. -- -- 265,395 9,258
------------ ------------ ------------ ------------
Reinvested capital gains ...................... -- -- -- --
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 361,139 30,428 249,952 8,933
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ..... 10,662,140 3,431,135 1,584,005 575,433
Redemptions ................................... (3,453,251) (97,384) (68,048) --
Annuity benefits .............................. -- -- -- --
Adjustments to maintain reserves .............. (2,756) 982 (30) 3
------------ ------------ ------------ ------------
Net equity transactions ................... 7,206,133 3,334,733 1,515,927 575,436
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... 7,567,272 3,365,161 1,765,879 584,369
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 9,418,597 -- 1,450,237 --
------------ ------------ ------------ ------------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... $ 16,985,869 3,365,161 3,216,116 584,369
============ ============ ============ ============
<CAPTION>
NSATTotRe NBAMTGro
------------------------------ ------------------------------
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... 19,677 1,042 -- 1
Mortality, expense and administration
charges (note 2) ............................ (13,462) (443) (11,299) (280)
------------ ------------ ------------ ------------
Net investment activity ..................... 6,215 599 (11,299) (279)
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold ......... 310,251 188,066 5,364,212 5,081
Cost of mutual fund shares sold ............... (272,286) (187,867) (5,381,569) (5,213)
------------ ------------ ------------ ------------
Realized gain (loss) on investments ......... 37,965 199 (17,357) (132)
Change in unrealized gain (loss) on investments 309,600 (1,508) 122,652 (4,884)
------------ ------------ ------------ ------------
Net gain (loss) on investments .............. 347,565 (1,309) 105,295 (5,016)
------------ ------------ ------------ ------------
Reinvested capital gains ...................... -- -- 65,376 255
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 353,780 (710) 159,372 (5,040)
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ..... 1,758,914 214,264 834,174 136,249
Redemptions ................................... (92,476) -- (114,026) (50)
Annuity benefits .............................. -- -- -- --
Adjustments to maintain reserves .............. 36 5 7 3
------------ ------------ ------------ ------------
Net equity transactions ................... 1,666,474 214,269 720,155 136,202
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... 2,020,254 213,559 879,527 131,162
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 1,045,444 -- 609,622 --
------------ ------------ ------------ ------------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... 3,065,698 213,559 1,489,149 131,162
============ ============ ============ ============
</TABLE>
10
<PAGE> 10
NATIONWIDE VA SEPARATE ACCOUNT-B
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIOD ENDED JUNE 30, 1997 AND FOR THE PERIOD FEBRUARY 1, 1996
(COMMENCEMENT OF OPERATIONS) THROUGH JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
NBAMTLMat NBAMTPart
---------------------------- ----------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 258,163 16,130 20,903 364
Mortality, expense and administration
charges (note 2) ............................ (32,169) (3,100) (51,250) (1,480)
----------- ----------- ----------- -----------
Net investment activity ..................... 225,994 13,030 (30,347) (1,116)
----------- ----------- ----------- -----------
Proceeds from mutual fund shares sold ......... 1,301,568 52,140 5,910,254 19,744
Cost of mutual fund shares sold ............... (1,294,242) (57,510) (5,690,596) (19,115)
----------- ----------- ----------- -----------
Realized gain (loss) on investments ......... 7,326 (5,370) 219,658 629
Change in unrealized gain (loss) on investments (136,948) (3,532) 531,753 561
----------- ----------- ----------- -----------
Net gain (loss) on investments .............. (129,622) (8,902) 751,411 1,190
----------- ----------- ----------- -----------
Reinvested capital gains ...................... -- -- 321,907 4,547
----------- ----------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 96,372 4,128 1,042,971 4,621
----------- ----------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ..... 1,461,021 1,419,776 5,868,736 837,048
Redemptions ................................... (295,030) (253) (200,343) (95)
Annuity benefits .............................. -- -- -- --
Adjustments to maintain reserves .............. (4) 16 20 65
----------- ----------- ----------- -----------
Net equity transactions ................... 1,165,987 1,419,539 5,668,413 837,018
----------- ----------- ----------- -----------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... 1,262,359 1,423,667 6,711,384 841,639
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 4,068,440 -- 4,796,018 --
----------- ----------- ----------- -----------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... $ 5,330,799 1,423,667 11,507,402 841,639
=========== =========== =========== ===========
<CAPTION>
OppBdFd OppGlSec
---------------------------- ----------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... 84,034 16,075 22,759 --
Mortality, expense and administration
charges (note 2) ............................ (17,865) (2,515) (15,041) (631)
----------- ----------- ----------- -----------
Net investment activity ..................... 66,169 13,560 7,718 (631)
----------- ----------- ----------- -----------
Proceeds from mutual fund shares sold ......... 358,342 85,174 88,582 60,743
Cost of mutual fund shares sold ............... (354,774) (85,746) (76,981) (58,389)
----------- ----------- ----------- -----------
Realized gain (loss) on investments ......... 3,568 (572) 11,601 2,354
Change in unrealized gain (loss) on investments (19,458) (5,640) 295,905 108
----------- ----------- ----------- -----------
Net gain (loss) on investments .............. (15,890) (6,212) 307,506 2,462
----------- ----------- ----------- -----------
Reinvested capital gains ...................... 8,144 120 -- --
----------- ----------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 58,423 7,468 315,224 1,831
----------- ----------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ..... 1,031,024 892,931 1,591,654 263,422
Redemptions ................................... (110,652) -- (104,991) --
Annuity benefits .............................. -- -- -- --
Adjustments to maintain reserves .............. (11) 6 (35) 1
----------- ----------- ----------- -----------
Net equity transactions ................... 920,361 892,937 1,486,628 263,423
----------- ----------- ----------- -----------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... 978,784 900,405 1,801,852 265,254
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 2,134,066 -- 1,291,418 --
----------- ----------- ----------- -----------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... 3,112,850 900,405 3,093,270 265,254
=========== =========== =========== ===========
</TABLE>
11
<PAGE> 11
NATIONWIDE VA SEPARATE ACCOUNT-B
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIOD ENDED JUNE 30, 1997 AND FOR THE PERIOD FEBRUARY 1, 1996
(COMMENCEMENT OF OPERATIONS) THROUGH JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
OppMult StSpec2
---------------------------- ----------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 22,838 501 19,759 1,602
Mortality, expense and administration
charges (note 2) ............................ (6,922) (51) (46,717) (1,969)
----------- ----------- ----------- -----------
Net investment activity ..................... 15,916 450 (26,958) (367)
----------- ----------- ----------- -----------
Proceeds from mutual fund shares sold ......... 65,117 25,556 7,555,189 1,369
Cost of mutual fund shares sold ............... (61,213) (25,438) (7,371,519) (1,358)
----------- ----------- ----------- -----------
Realized gain (loss) on investments ......... 3,904 118 183,670 11
Change in unrealized gain (loss) on investments 51,640 (435) 145,359 (13,805)
----------- ----------- ----------- -----------
Net gain (loss) on investments .............. 55,544 (317) 329,029 (13,794)
----------- ----------- ----------- -----------
Reinvested capital gains ...................... 26,880 -- 355,754 603
----------- ----------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 98,340 133 657,825 (13,558)
----------- ----------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ..... 1,287,082 36,546 1,835,677 1,244,582
Redemptions ................................... (15,753) -- (225,186) (132)
Annuity benefits .............................. -- -- -- --
Adjustments to maintain reserves .............. 4 (6) (78) (14)
----------- ----------- ----------- -----------
Net equity transactions ................... 1,271,333 36,540 1,610,413 1,244,436
----------- ----------- ----------- -----------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... 1,369,673 36,673 2,268,238 1,230,878
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 447,153 -- 6,961,528 --
----------- ----------- ----------- -----------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... $ 1,816,826 36,673 9,229,766 1,230,878
=========== =========== =========== ===========
<CAPTION>
StDisc2 SUntStk2
---------------------------- ----------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... -- 30,282 47,896 712
Mortality, expense and administration
charges (note 2) ............................ (8,046) (1,558) (20,602) (723)
----------- ----------- ----------- -----------
Net investment activity ..................... (8,046) 28,724 27,294 (11)
----------- ----------- ----------- -----------
Proceeds from mutual fund shares sold ......... 952,515 116,801 533,903 22,054
Cost of mutual fund shares sold ............... (957,464) (119,077) (534,993) (21,486)
----------- ----------- ----------- -----------
Realized gain (loss) on investments ......... (4,949) (2,276) (1,090) 568
Change in unrealized gain (loss) on investments 106,785 (62,208) 118,365 11,172
----------- ----------- ----------- -----------
Net gain (loss) on investments .............. 101,836 (64,484) 117,275 11,740
----------- ----------- ----------- -----------
Reinvested capital gains ...................... -- 14,620 69,509 --
----------- ----------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 93,790 (21,140) 214,078 11,729
----------- ----------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ..... 830,418 683,048 996,407 521,736
Redemptions ................................... (18,784) (323) (87,410) --
Annuity benefits .............................. -- -- -- --
Adjustments to maintain reserves .............. 24 (50) (633) (11)
----------- ----------- ----------- -----------
Net equity transactions ................... 811,658 682,675 908,364 521,725
----------- ----------- ----------- -----------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... 905,448 661,535 1,122,442 533,454
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 816,427 -- 2,266,949 --
----------- ----------- ----------- -----------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... 1,721,875 661,535 3,389,391 533,454
=========== =========== =========== ===========
</TABLE>
12
<PAGE> 12
NATIONWIDE VA SEPARATE ACCOUNT-B
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIOD ENDED JUNE 30, 1997 AND FOR THE PERIOD FEBRUARY 1, 1996
(COMMENCEMENT OF OPERATIONS) THROUGH JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
VEWrldBd VEWrldEMkt
---------------------------- ------------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................ $ 30,017 3,196 3,520 --
Mortality, expense and administration
charges (note 2) .......................... (7,529) (350) (5,636) --
----------- ----------- ----------- -----------
Net investment activity ................... 22,488 2,846 (2,116) --
----------- ----------- ----------- -----------
Proceeds from mutual fund shares sold ....... 278,516 9,752 2,073,645 --
Cost of mutual fund shares sold ............. (281,819) (10,079) (2,008,044) --
----------- ----------- ----------- -----------
Realized gain (loss) on investments ....... (3,303) (327) 65,601 --
Change in unrealized gain (loss) on investments (29,677) (2,050) 101,876
----------- ----------- ----------- -----------
Net gain (loss) on investments ............ (32,980) (2,377) 167,477 --
----------- ----------- -----------
Reinvested capital gains .................... -- -- -- --
----------- ----------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ...... (10,492) 469 165,361 --
----------- ----------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ... 673,368 208,485 1,199,845 --
Redemptions ................................. (18,837) -- (186,161) --
Annuity benefits ............................ -- -- -- --
Adjustments to maintain reserves ............ 28 5 27 --
----------- ----------- ----------- -----------
Net equity transactions ................. 654,559 208,490 1,013,711 --
----------- ----------- ----------- -----------
NET CHANGE IN CONTRACT OWNERS' EQUITY ......... 644,067 208,959 1,179,072 --
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ... 774,400 -- 7,558 --
----------- ----------- ----------- -----------
CONTRACT OWNERS' EQUITY END OF PERIOD ......... $ 1,418,467 208,959 1,186,630 --
=========== =========== =========== ===========
<CAPTION>
VEWrldHAs VKACRESec
---------------------------- ------------------------
1997 1996 1997 1996
----------- ----------- ----------- -------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................ 14,354 1,287 4,415 5
Mortality, expense and administration
charges (note 2) .......................... (7,202) (333) (20,398) (120)
----------- ----------- ----------- -------
Net investment activity ................... 7,152 954 (15,983) (115)
----------- ----------- ----------- -------
Proceeds from mutual fund shares sold ....... 517,356 64,892 963,437 1,257
Cost of mutual fund shares sold ............. (522,883) (68,459) (840,627) (1,212)
----------- ----------- ----------- -------
Realized gain (loss) on investments ....... (5,527) (3,567) 122,810 45
Change in unrealized gain (loss) on investments (22,842) (7,737) 78,308 2,662
----------- ----------- ----------- -------
Net gain (loss) on investments ............ (28,369) (11,304) 201,118 2,707
----------- ----------- ----------- -------
Reinvested capital gains .................... 19,447 1,263 8,924 --
----------- ----------- ----------- -------
Net increase (decrease) in contract owners' s'
equity resulting from operations ...... (1,770) (9,087) 194,059 2,592
----------- ----------- ----------- -------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ... 612,987 209,187 2,111,597 144,055
Redemptions ................................. (7,510) -- (92,792) --
Annuity benefits ............................ -- -- -- --
Adjustments to maintain reserves ............ 13 20 (5) 3
----------- ----------- ----------- -------
Net equity transactions ................. 605,490 209,207 2,018,800 144,058
----------- ----------- ----------- -------
NET CHANGE IN CONTRACT OWNERS' EQUITY ......... 603,720 200,120 2,212,859 146,650
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ... 716,943 -- 1,760,360 --
----------- ----------- ----------- -------
CONTRACT OWNERS' EQUITY END OF PERIOD ......... 1,320,663 200,120 3,973,219 146,650
=========== =========== =========== =======
</TABLE>
13
<PAGE> 13
NATIONWIDE VA SEPARATE ACCOUNT-B
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIOD ENDED JUNE 30, 1997 AND FOR THE PERIOD FEBRUARY 1, 1996
(COMMENCEMENT OF OPERATIONS) THROUGH JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
WPintEq WPPVenCap WPSmCoGr
-------------------------- -------------------- --------------------------
1997 1996 1997 1996 1997 1996
----------- ----------- --------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ - - - - - -
Mortality, expense and administration
charges (note 2) ............................ (38,803) (3,375) (1,511) - (36,351) (2,686)
----------- ----------- ----------- ----- ----------- -----------
Net investment activity ..................... (38,803) (3,375) (1,511) - (36,351) (2,686)
----------- ----------- ----------- ----- ----------- -----------
Proceeds from mutual fund shares sold ......... 305,605 50,873 1,878,160 - 2,748,146 52,005
Cost of mutual fund shares sold ............... (293,969) (48,562) (1,959,165) - (2,849,260) (48,016)
----------- ----------- ----------- ----- ----------- -----------
Realized gain (loss) on investments ......... 11,636 2,311 (81,005) - (101,114) 3,989
Change in unrealized gain (loss) on investments 807,134 26,526 18,634 - 330,942 (21,836)
----------- ----------- ----------- ----- ----------- -----------
Net gain (loss) on investments .............. 818,770 28,837 (62,371) - 229,828 (17,847)
----------- ----------- ----------- ----- ----------- -----------
Reinvested capital gains ...................... - - - - - -
----------- ----------- ----------- ----- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 779,967 25,462 (63,882) - 193,477 (20,533)
----------- ----------- ----------- ----- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ..... 2,261,363 1,772,817 276,805 - 1,579,656 1,736,797
Redemptions ................................... (232,352) (275) (8,051) - (178,627) (256)
Annuity benefits .............................. - - - - - -
Adjustments to maintain reserves .............. 26 43 24 - (61) (117)
----------- ----------- ----------- ----- ----------- -----------
Net equity transactions ................... 2,029,037 1,772,585 268,778 - 1,400,968 1,736,424
----------- ----------- ----------- ----- ----------- -----------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... 2,809,004 1,798,047 204,896 - 1,594,445 1,715,891
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 4,092,542 - 7,379 - 4,706,706 -
----------- ----------- ----------- ----- ----------- -----------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... $6,901,546 1,798,047 212,275 - 6,301,151 1,715,891
=========== =========== =========== ===== =========== ===========
</TABLE>
See accompanying notes to financial statements.
14
<PAGE> 14
NATIONWIDE VA SEPARATE ACCOUNT-B
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997 AND 1996
(UNAUDITED)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Organization and Nature of Operations
The Nationwide VA Separate Account-B (the Account) was established
pursuant to a resolution of the Board of Directors of Nationwide Life
and Annuity Insurance Company (the Company) on March 6, 1991. The
Account has been registered as a unit investment trust under the
Investment Company Act of 1940.
The Company offers tax qualified and non-tax qualified Individual
Deferred Variable Annuity Contracts through the Account. The primary
distribution for the contracts is through the brokerage community;
however, other distributors are utilized.
(b) The Contracts
Only contracts without a sales charge, but with certain other fees are
offered for purchase. See note 2 for a discussion of contract expenses.
Contract owners in either the accumulation or payout phase may invest
in the following:
Portfolios of the American Century Variable Portfolios, Inc.
(American Century VP) (formerly TCI Portfolios, Inc.);
American Century VP - American Century VP Balanced (ACVPBal)
(formerly TCI Portfolios - TCI Balanced)
American Century VP - American Century VP Capital Appreciation
(ACVPCapAp) (formerly TCI Portfolios - TCI Growth)
American Century VP - American Century VP International
(ACVPInt) (formerly TCI Portfolios - TCI International)
American Century VP - American Century VP Value (ACVPValue)
(formerly TCI Portfolios - TCI Value)
The Dreyfus Socially Responsible Growth Fund, Inc. (DrySRGro)
Dreyfus Stock Index Fund (DryStkIx)
Portfolio of the Dreyfus Variable Investment Fund (Dreyfus VIF);
Dreyfus VIF - Growth andIncome Portfolio (DryGroInc)
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)
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 Company Fund (NSATSmCo)
Nationwide SAT - Total Return Fund (NSATTotRe)
15
<PAGE> 15
Portfolios of the Neuberger & Berman Advisers Management Trust
(Neuberger &Berman);
Neuberger & Berman - Growth Portfolio (NBAMTGro)
Neuberger & Berman - Limited Maturity Bond Portfolio (NBAMTLMat)
Neuberger & Berman - Partners Portfolio (NBAMTPart)
Funds of the Oppenheimer Variable Account Funds (Oppenheimer);
Oppenheimer - Bond Fund (OppBdFd)
Oppenheimer - Global Securities Fund (OppGlSec)
Oppenheimer - Multiple Strategies Fund (OppMult)
Strong Special Fund II, Inc. (StSpec2)
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);
Van Eck - Worldwide Bond Fund (VEWrldBd)
Van Eck - Worldwide Emerging Markets Fund (VEWrldEMkt)
Van Eck - Worldwide Hard Assets Fund (VEWrldHAs)
(formerly Van Eck - Gold and Natural Resources Fund)
Fund of the Van Kampen American Capital Life Investment Trust
(Van Kampen American Capital);
Van Kampen American Capital - Real Estate Securities Fund
(VKACRESec)
Portfolios of the Warburg Pincus Trust (Warburg Pincus);
Warburg Pincus - International Equity Portfolio (WPIntEq)
Warburg Pincus - Post Venture Capital Portfolio (WPPVenCap)
Warburg Pincus - Small Company Growth Portfolio (WPSmCoGr)
At June 30, 1997, 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 June 30, 1997. The cost of investments
sold is determined on the specific identification basis. Investment
transactions are accounted for on the trade date (date the order to buy
or sell is executed) and dividend income is recorded on the ex-dividend
date.
(d) Federal Income Taxes
Operations of the Account form a part of, and are taxed with,
operations of the Company which is taxed as a life insurance company
under the 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 1996 amounts have been reclassified to conform with the current
year presentation.
16
<PAGE> 16
(2) EXPENSES
The Company does not deduct a sales charge from purchase payments made for
these contracts, nor is any sales charge deducted upon the surrender of the
contract.
The following contract charges are deducted by the Company: 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 0.20%, respectively.
17
<PAGE> 17
(3) COMPONENTS OF CONTRACT OWNERS' EQUITY
The following is a summary of contract owners' equity at June 30, 1997.
<TABLE>
<CAPTION>
Contract owners' equity represented by: UNITS UNIT VALUE
-------- ---------
<S> <C> <C> <C>
American Century VP - American Century VP Balanced:
Tax qualified ....................................... 23,814 $ 11.755965 $279,957
Non-tax qualified ................................... 51,686 11.755965 607,619
American Century VP - American Century VP
Capital Appreciation:
Tax qualified ....................................... 31,486 8.981763 282,800
Non-tax qualified ................................... 87,679 8.981763 787,512
American Century VP - American Century VP International:
Tax qualified ....................................... 58,578 13.143143 769,899
Non-tax qualified ................................... 177,260 13.143143 2,329,754
American Century VP - American Century VP Value:
Tax qualified ....................................... 8,052 11.412949 91,897
Non-tax qualified ................................... 51,291 11.412949 585,382
The Dreyfus Socially Responsible Growth Fund, Inc.:
Tax qualified ....................................... 72,603 13.168674 956,085
Non-tax qualified ................................... 85,984 13.168674 1,132,295
Dreyfus Stock Index Fund:
Tax qualified ....................................... 214,047 13.923944 2,980,378
Non-tax qualified ................................... 473,780 13.923944 6,596,886
Dreyfus VIF - Growth and Income Portfolio:
Tax qualified ....................................... 11,916 10.829276 129,042
Non-tax qualified ................................... 19,972 10.829276 216,282
Fidelity VIP - Equity-Income Portfolio:
Tax qualified ....................................... 453,750 12.663185 5,745,920
Non-tax qualified ................................... 1,092,977 12.663185 13,840,570
Fidelity VIP - Growth Portfolio:
Tax qualified ....................................... 470,366 12.495695 5,877,550
Non-tax qualified ................................... 1,125,663 12.495695 14,065,942
Fidelity VIP - High Income Portfolio:
Tax qualified ....................................... 225,822 11.729790 2,648,845
Non-tax qualified ................................... 369,168 11.729790 4,330,263
Fidelity VIP - Overseas Portfolio:
Tax qualified ....................................... 81,505 12.618176 1,028,444
Non-tax qualified ................................... 163,318 12.618176 2,060,775
Fidelity VIP-II - Asset Manager Portfolio:
Tax qualified ....................................... 53,429 12.176712 650,590
Non-tax qualified ................................... 206,896 12.176712 2,519,313
Fidelity VIP-II - Contrafund Portfolio:
Tax qualified ....................................... 447,033 13.094686 5,853,757
Non-tax qualified ................................... 645,707 13.094686 8,455,330
Nationwide SAT - Capital Appreciation Fund:
Tax qualified ....................................... 82,984 14.270954 1,184,261
Non-tax qualified ................................... 84,877 14.270954 1,211,276
Nationwide SAT - Government Bond Fund:
Tax qualified ....................................... 37,775 10.361842 391,419
Non-tax qualified ................................... 113,667 10.361842 1,177,799
Nationwide SAT - Money Market Fund:
Tax qualified ....................................... 524,424 10.512228 5,512,865
Non-tax qualified ................................... 1,091,396 10.512228 11,473,004
Nationwide SAT - Small Company Fund:
Tax qualified ....................................... 88,854 13.167687 1,170,002
Non-tax qualified ................................... 155,389 13.167687 2,046,114
Nationwide SAT - Total Return Fund:
Tax qualified ....................................... 87,519 13.798825 1,207,659
Non-tax qualified ................................... 134,652 13.798825 1,858,039
</TABLE>
18
<PAGE> 18
<TABLE>
<S> <C> <C> <C>
Neuberger & Berman - Growth Portfolio:
Tax qualified ....................................... 44,072 12.179984 536,796
Non-tax qualified ................................... 78,190 12.179984 952,353
Neuberger & Berman - Limited Maturity Bond Portfolio:
Tax qualified ....................................... 137,509 10.435748 1,435,009
Non-tax qualified ................................... 373,312 10.435748 3,895,790
Neuberger & Berman - Partners Portfolio:
Tax qualified ....................................... 380,811 14.077641 5,360,921
Non-tax qualified ................................... 436,613 14.077641 6,146,481
Oppenheimer - Bond Fund:
Tax qualified ....................................... 72,454 10.509319 761,442
Non-tax qualified ................................... 223,745 10.509319 2,351,408
Oppenheimer - Global Securities Fund:
Tax qualified ....................................... 77,501 12.943474 1,003,132
Non-tax qualified ................................... 161,482 12.943474 2,090,138
Oppenheimer - Multiple Strategies Fund:
Tax qualified ....................................... 42,532 12.059917 512,932
Non-tax qualified ................................... 108,118 12.059917 1,303,894
Strong Special Fund II, Inc.:
Tax qualified ....................................... 356,533 12.461239 4,442,843
Non-tax qualified ................................... 384,145 12.461239 4,786,923
Strong VIF - Strong Discovery Fund II:
Tax qualified ....................................... 77,233 10.250289 791,661
Non-tax qualified ................................... 90,750 10.250289 930,214
Strong VIF - Strong International Stock Fund II:
Tax qualified ....................................... 77,911 11.285972 879,301
Non-tax qualified ................................... 222,408 11.285972 2,510,090
Van Eck - Worldwide Bond Fund:
Tax qualified ....................................... 47,627 10.027975 477,602
Non-tax qualified ................................... 93,824 10.027975 940,865
Van Eck - Worldwide Emerging Markets Fund:
Tax qualified ....................................... 24,229 12.292983 297,847
Non-tax qualified ................................... 72,300 12.292983 888,783
Van Eck - Worldwide Hard Assets Fund:
Tax qualified ....................................... 27,782 10.028807 278,620
Non-tax qualified ................................... 103,905 10.028807 1,042,043
Van Kampen American Capital -
Real Estate Securities Fund:
Tax qualified ....................................... 94,301 14.408563 1,358,742
Non-tax qualified ................................... 181,453 14.408563 2,614,477
Warburg Pincus - International Equity Portfolio:
Tax qualified ....................................... 159,274 11.929637 1,900,081
Non-tax qualified ................................... 419,247 11.929637 5,001,465
Warburg Pincus - Post Venture Capital Portfolio:
Tax qualified ....................................... 6,104 10.431228 63,672
Non-tax qualified ................................... 14,246 10.431228 148,603
Warburg Pincus - Small Company Growth Portfolio:
Tax qualified ....................................... 157,914 11.439501 1,806,457
Non-tax qualified ................................... 392,910 11.439501 4,494,694
======== ========== ---------
$ 174,060,804
=============
</TABLE>
19
<PAGE> 19
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY Bulk Rate
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