<PAGE> 1
'96
- --------------------------------------------------------------------------------
Nationwide(R) VA Separate Account - B
December 31, 1996
[GRAPHIC]
THE BEST OF AMERICA(R)
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
[PHOTO OF PRESIDENT]
PRESIDENT'S MESSAGE
On behalf of Nationwide Life and Annuity Insurance Company, we are pleased to
bring you the 1996 annual report of the Nationwide VA Separate Account-B.
The U.S. economy is enjoying the rewards of a stable political system and a
globally competitive business sector. These good times will last, although not
all years will show the stellar performance of the last two years. 1997 may be
the year in which normalcy will return.
The economic expansion has lasted six years already, and all resources are more
or less fully employed. The job market in particular is showing some strains,
and wages are rising a bit faster than before. Also, the competitive pressures
from abroad are increasing due to a sharp rise in the exchange value of our
currency. Business will be hard pressed under those conditions to continue
showing above-average profit increases. For the economy as a whole, inflation
has hit the low point in this business cycle and will slowly but surely be a
more important variable for monetary policy.
In the last few years, and especially in 1996, our economy expanded faster than
the natural rate of growth. This cannot continue without creating bottlenecks
that in turn induce price increases. Either the economy will slow under its own
weight or the Federal Reserve will have to step in. Some indicators point to a
softening of business activity. But whether this is enough will be a close call.
Again, the long-term trend is very positive for the U.S., its business activity,
and its financial markets. However, 1997 might turn out to have some more
surprises than anticipated right now.
/s/ Joseph J. Gasper
Joseph J. Gasper, President
3
<PAGE> 3
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NATIONWIDE VA SEPARATE ACCOUNT-B
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY
December 31, 1996
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments at market value:
The Dreyfus Socially Responsible Growth Fund, Inc. (DrySRGro)
22,475 shares (cost $461,821) .............................. $ 451,523
Dreyfus Stock Index Fund (DryStkIx)
145,638 shares (cost $2,912,479) ........................... 2,953,547
Fidelity VIP - Equity-Income Portfolio (FidVIPEI)
522,646 shares (cost $10,282,309) .......................... 10,991,255
Fidelity VIP - Growth Portfolio (FidVIPGr)
405,339 shares (cost $12,515,252) .......................... 12,622,269
Fidelity VIP - High Income Portfolio (FidVIPHI)
471,267 shares (cost $5,771,718) ........................... 5,900,268
Fidelity VIP - Overseas Portfolio (FidVIPOv)
76,436 shares (cost $1,370,463) ............................ 1,440,045
Fidelity VIP-II - Asset Manager Portfolio (FidVIPAM)
66,425 shares (cost $1,060,690) ............................ 1,124,582
Fidelity VIP-II - Contrafund Portfolio (FidVIPCon)
468,227 shares (cost $7,387,625) ........................... 7,753,842
Nationwide SAT - Capital Appreciation Fund (NSATCapAp)
117,920 shares (cost $1,922,166) ........................... 1,919,737
Nationwide SAT - Government Bond Fund (NSATGvtBd)
118,335 shares (cost $1,290,642) ........................... 1,306,420
Nationwide SAT - Money Market Fund (NSATMyMkt)
10,277,985 shares (cost $10,277,985) ....................... 10,277,985
Nationwide SAT - Small Company Fund (NSATSmCo)
104,407 shares (cost $1,434,104) ........................... 1,450,211
Nationwide SAT - Total Return Fund (NSATTotRe)
78,782 shares (cost $1,011,248) ............................ 1,045,432
Neuberger & Berman - Growth Portfolio (NBAMTGro)
23,647 shares (cost $594,000) .............................. 609,609
Neuberger & Berman - Limited Maturity Bond Portfolio (NBAMTLMat)
289,563 shares (cost $3,959,347) ........................... 4,068,367
Neuberger & Berman - Partners Portfolio (NBAMTPart)
291,016 shares (cost $4,604,615) ........................... 4,795,946
Oppenheimer - Bond Fund (OppBdFd)
183,493 shares (cost $2,130,162) ........................... 2,134,021
</TABLE>
4
<PAGE> 4
<TABLE>
<CAPTION>
<S> <C>
Oppenheimer - Global Securities Fund (OppGlSec)
73,250 shares (cost $1,212,117) .................................. 1,291,396
Oppenheimer - Multiple Strategies Fund (OppMult)
28,609 shares (cost $435,353) .................................... 447,154
Strong Special Fund II, Inc. (StSpec2)
361,822 shares (cost $6,803,040) ................................. 6,961,452
Strong VIF - Strong Discovery Fund II (StDisc2)
75,593 shares (cost $796,573) .................................... 816,409
Strong VIF - Strong International Stock Fund II (StIntStk2)
201,863 shares (cost $2,264,287) ................................. 2,266,927
TCI Portfolios - TCI Balanced (TCIBal)
69,775 shares (cost $509,056) .................................... 526,105
TCI Portfolios - TCI Growth (TCIGro)
118,671 shares (cost $1,277,993) ................................. 1,215,196
TCI Portfolios - TCI International (TCIInt)
195,257 shares (cost $1,105,902) ................................. 1,163,732
Van Eck - Gold and Natural Resources Fund (VEGoldNR)
42,877 shares (cost $698,026) .................................... 716,912
Van Eck - Worldwide Bond Fund (VEWrldBd)
69,765 shares (cost $758,062) .................................... 774,393
Van Eck - Worldwide Emerging Markets Fund (VEWrldEMkt)
605 shares (cost $7,500) ......................................... 7,561
Van Kampen American Capital - Real Estate Securities Fund (VKACRESec)
119,102 shares (cost $1,579,015) ................................. 1,760,335
Warburg Pincus - International Equity Portfolio (WPIntEq)
356,487 shares (cost $4,077,193) ................................. 4,092,473
Warburg Pincus - Post Venture Capital Portfolio (WPPVenCap)
756 shares (cost $7,300) ......................................... 7,383
Warburg Pincus - Small Company Growth Portfolio (WPSmCoGr)
330,291 shares (cost $4,586,521) ................................. 4,706,652
-----------
Total investments ................................................ 97,599,139
Accounts receivable .................................................... 2,557
-----------
Total assets ..................................................... 97,601,696
ACCOUNTS PAYABLE .......................................................... 860,715
-----------
CONTRACT OWNERS' EQUITY (NOTE 4) .......................................... $96,740,981
===========
</TABLE>
See accompanying notes to financial statements.
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5
<PAGE> 5
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NATIONWIDE VA SEPARATE ACCOUNT-B
STATEMENT OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
For the Period February 1, 1996 (commencement of operations)
Through December 31, 1996
<TABLE>
<CAPTION>
1996
------------
<S> <C>
INVESTMENT ACTIVITY:
Reinvested capital gains and dividends ............... $ 804,126
Mortality, expense and administration charges (note 2) (502,691)
------------
Net investment activity ........................... 301,435
------------
Proceeds from mutual fund shares sold ................ 76,703,639
Cost of mutual fund shares sold ...................... (75,779,842)
------------
Realized gain (loss) on investments ............... 923,797
Change in unrealized gain (loss) on investments ...... 2,494,576
------------
Net gain (loss) on investments .................... 3,418,373
------------
Net increase (decrease) in contract owners'
equity resulting from operations ............ 3,719,808
------------
EQUITY TRANSACTIONS:
Purchase payments received from contract owners ...... 95,174,558
Redemptions .......................................... (2,157,551)
Adjustments to maintain reserves ..................... 4,166
------------
Net equity transactions ........................ 93,021,173
------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ................... 96,740,981
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............. --
------------
CONTRACT OWNERS' EQUITY END OF PERIOD ................... $ 96,740,981
============
</TABLE>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
6
<PAGE> 6
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NATIONWIDE VA SEPARATE ACCOUNT-B
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
(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:
Portfolio of Dreyfus Variable Investment Fund (Dreyfus);
Dreyfus - Growth andIncome Portfolio (DryGroInc)
The Dreyfus Socially Responsible Growth Fund, Inc. (DrySRGro)
Dreyfus Stock Index Fund (DryStkIx)
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)
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)
7
<PAGE> 7
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)
Portfolios of the TCI Portfolios, Inc. (TCI Portfolios);
TCI Portfolios - TCI Balanced (TCIBal)
TCI Portfolios - TCI Growth (TCIGro)
TCI Portfolios - TCI International (TCIInt)
TCI Portfolios - TCI Value (TCIValue)
Funds of the Van Eck Worldwide Insurance Trust (Van Eck);
Van Eck - Gold and Natural Resources Fund (VEGoldNR)
Van Eck - Worldwide Bond Fund (VEWrldBd)
Van Eck - Worldwide Emerging Markets Fund (VEWrldEMkt)
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 December 31, 1996, contract owners have invested in all of the above
funds except the Dreyfus - Growth andIncome Portfolio and the TCI Portfolios -
TCI Value. 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, 1996. The cost of investments sold is
determined on the specific identification basis. Investment transactions are
accounted for on the trade date (date the order to buy or sell is executed) and
dividend income is recorded on the ex-dividend date.
(d) Federal Income Taxes
Operations of the Account form a part of, and are taxed with, operations
of the Company which is taxed as a life insurance company under the 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 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.
8
<PAGE> 8
(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 for each
series, as applicable, in the following format:
- Beginning unit value - Feb. 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, an expense risk charge and an
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.
9
<PAGE> 9
(4) COMPONENTS OF CONTRACT OWNERS' EQUITY
The following is a summary of contract owners' equity at December 31, 1996.
<TABLE>
<CAPTION>
Contract owners' equity represented by: UNITS UNIT VALUE
------- ----------
<S> <C> <C> <C>
The Dreyfus Socially Responsible Growth Fund, Inc.:
Tax qualified ................................... 10,096 $ 11.402663 $ 115,121
Non-tax qualified ............................... 29,501 11.402663 336,390
Dreyfus Stock Index Fund:
Tax qualified ................................... 64,418 11.644617 750,123
Non-tax qualified ............................... 189,227 11.644617 2,203,476
Fidelity VIP - Equity-Income Portfolio:
Tax qualified ................................... 320,026 10.958584 3,507,032
Non-tax qualified ............................... 682,976 10.958584 7,484,450
Fidelity VIP - Growth Portfolio:
Tax qualified ................................... 230,586 11.057399 2,549,681
Non-tax qualified ............................... 910,947 11.057399 10,072,704
Fidelity VIP - High Income Portfolio:
Tax qualified ................................... 291,879 10.970108 3,201,944
Non-tax qualified ............................... 245,978 10.970108 2,698,405
Fidelity VIP - Overseas Portfolio:
Tax qualified ................................... 36,697 10.915770 400,576
Non-tax qualified ............................... 95,229 10.915770 1,039,498
Fidelity VIP-II - Asset Manager Portfolio:
Tax qualified ................................... 38,401 11.029343 423,538
Non-tax qualified ............................... 63,564 11.029343 701,069
Fidelity VIP-II - Contrafund Portfolio:
Tax qualified ................................... 255,409 11.815914 3,017,891
Non-tax qualified ............................... 400,821 11.815914 4,736,066
Nationwide SAT - Capital Appreciation Fund:
Tax qualified ................................... 89,481 11.899746 1,064,801
Non-tax qualified ............................... 71,846 11.899746 854,949
Nationwide SAT - Government Bond Fund:
Tax qualified ................................... 30,956 10.149155 314,177
Non-tax qualified ............................... 97,767 10.149155 992,252
Nationwide SAT - Money Market Fund:
Tax qualified ................................... 283,411 10.326243 2,926,571
Non-tax qualified ............................... 628,692 10.326243 6,492,026
Nationwide SAT - Small Company Fund:
Tax qualified ................................... 49,485 12.152247 601,354
Non-tax qualified ............................... 69,854 12.152247 848,883
Nationwide SAT - Total Return Fund:
Tax qualified ................................... 32,415 11.639579 377,297
Non-tax qualified ............................... 57,403 11.639579 668,147
Neuberger & Berman - Growth Portfolio:
Tax qualified ................................... 7,597 10.469935 79,540
Non-tax qualified ............................... 50,629 10.469935 530,082
Neuberger & Berman - Limited Maturity Bond Portfolio:
Tax qualified ................................... 123,635 10.209208 1,262,215
Non-tax qualified ............................... 274,872 10.209208 2,806,225
Neuberger & Berman - Partners Portfolio:
Tax qualified ................................... 177,265 12.248582 2,171,245
Non-tax qualified ............................... 214,292 12.248582 2,624,773
</TABLE>
10
<PAGE> 10
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Oppenheimer - Bond Fund:
Tax qualified ............................... 55,343 10.288722 569,409
Non-tax qualified ........................... 152,075 10.288722 1,564,657
Oppenheimer - Global Securities Fund:
Tax qualified ............................... 40,161 11.201956 449,882
Non-tax qualified ........................... 75,124 11.201956 841,536
Oppenheimer - Multiple Strategies Fund:
Tax qualified ............................... 6,127 11.129020 68,188
Non-tax qualified ........................... 34,052 11.129020 378,965
Strong Special Fund II, Inc.:
Tax qualified ............................... 312,712 11.319705 3,539,808
Non-tax qualified ........................... 302,280 11.319705 3,421,720
Strong VIF - Strong Discovery Fund II:
Tax qualified ............................... 27,130 9.903046 268,670
Non-tax qualified ........................... 55,312 9.903046 547,757
Strong VIF - Strong International Stock Fund II:
Tax qualified ............................... 61,841 10.462103 646,987
Non-tax qualified ........................... 154,841 10.462103 1,619,962
TCI Portfolios - TCI Balanced:
Tax qualified ............................... 13,228 10.871600 143,810
Non-tax qualified ........................... 35,163 10.871600 382,278
TCI Portfolios - TCI Growth:
Tax qualified ............................... 46,612 9.371161 436,809
Non-tax qualified ........................... 83,063 9.371161 778,397
TCI Portfolios - TCI International:
Tax qualified ............................... 27,097 11.142834 301,937
Non-tax qualified ........................... 77,343 11.142834 861,820
Van Eck - Gold and Natural Resources Fund:
Tax qualified ............................... 22,227 10.132333 225,211
Non-tax qualified ........................... 48,531 10.132333 491,732
Van Eck - Worldwide Bond Fund:
Tax qualified ............................... 39,599 10.189870 403,509
Non-tax qualified ........................... 36,398 10.189870 370,891
Van Eck - Worldwide Emerging Markets Fund:
Non-tax qualified ........................... 750 10.077496 7,558
Van Kampen American Capital-Real Estate
Securities Fund:
Tax qualified ............................... 63,345 13.626341 863,161
Non-tax qualified ........................... 65,843 13.626341 897,199
Warburg Pincus - International Equity Portfolio:
Tax qualified ............................... 113,387 10.450529 1,184,954
Non-tax qualified ........................... 278,224 10.450529 2,907,588
Warburg Pincus - Post Venture Capital Portfolio:
Non-tax qualified ........................... 726 10.163437 7,379
Warburg Pincus - Small Company Growth Portfolio:
Tax qualified ............................... 104,843 11.231071 1,177,499
Non-tax qualified ........................... 314,236 11.231071 3,529,207
------- --------- ---------
$96,740,981
===========
</TABLE>
- --------------------------------------------------------------------------------
11
<PAGE> 11
- --------------------------------------------------------------------------------
SCHEDULE I
NATIONWIDE VA SEPARATE ACCOUNT-B
TAX QUALIFIED and NON-TAX QUALIFIED
SCHEDULE OF CHANGES IN UNIT VALUE
For the Period February 1, 1996 (commencement of operations)
Through December 31, 1996
<TABLE>
<CAPTION>
DrySRGro DryStkix FidVIPEI FidVIPGr FidVIPHI FidVIPOv
-------- -------- -------- -------- -------- --------
1996
<S> <C> <C> <C> <C> <C> <C>
Beginning unit value - Feb. 1 $10.000000 10.000000 10.000000 10.000000 10.000000 10.000000
- ----------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .492388 .415384 .448815 .702576 .889968 .240688
- ----------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) 1.050316 1.370272 .646554 .496044 .218835 .812340
- ----------------------------------------------------------------------------------------------------------------------
Contract charges (.140041) (.141039) (.136785) (.141221) (.138695) (.137258)
- ----------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $11.402663 11.644617 10.958584 11.057399 10.970108 10.915770
- ----------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 14% 16% 10% 11% 10% 9%
======================================================================================================================
<CAPTION>
FidVIPAM FidVIPCon NSATCapAp NSATGvtBd
-------- --------- --------- ---------
1996
<S> <C> <C> <C> <C>
Beginning unit value - Feb. 1 10.000000 10.000000 10.000000 10.000000
- ----------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .642372 .093123 .495879 .615172
- ----------------------------------------------------------------------------------------
Unrealized gain (loss) .524178 1.865417 1.546079 (.335408)
- ----------------------------------------------------------------------------------------
Contract charges (.137207) (.142626) (.142212) (.130609)
- ----------------------------------------------------------------------------------------
Ending unit value - Dec. 31 11.029343 11.815914 11.899746 10.149155
- ----------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 10% 18% 19% 1%
========================================================================================
* This is not an annualized rate of return as it is the change for the period
indicated.
</TABLE>
12
<PAGE> 12
SCHEDULE I, CONTINUED
NATIONWIDE VA SEPARATE ACCOUNT-B
TAX QUALIFIED and NON-TAX QUALIFIED
SCHEDULE OF CHANGES IN UNIT VALUE
For the Period February 1, 1996 (commencement of operations)
Through December 31, 1996
<TABLE>
<CAPTION>
NSATMyMkt NSATSmCo NSATTotRe NBAMTGro NBAMTLMat NBAMTPart OppBdFd OppGLSec
--------- -------- --------- -------- --------- --------- ------- --------
1996
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Beginning unit value - Feb. 1 $10.000000 10.000000 10.000000 10.000000 10.000000 10.000000 10.000000 10.000000
- ---------------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .460992 .117127 .645040 .882507 .835242 .390600 .638603 .000000
- ---------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .000000 2.186677 1.135114 (.278131) (.493540) 2.002277 (.217537) 1.340389
- ---------------------------------------------------------------------------------------------------------------------------------
Contract charges (.134749) (.151557) (.140575) (.134441) (.132494) (.144295) (.132344) (.138433)
- ---------------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $10.326243 12.152247 11.639579 10.469935 10.209208 12.248582 10.288722 11.201956
- ---------------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 3% 22% 16% 5% 2% 22% 3% 12%
=================================================================================================================================
<CAPTION>
OppMult St.Spec2 StDisc2 StintStk2
------- -------- ------- ---------
1996
<S> <C> <C> <C> <C>
Beginning unit value - Feb. 1 10.000000 10.000000 10.000000 10.000000
- ---------------------------------------------------------------------------------
Reinvested capital gains
and dividends .742762 .456697 2.028193 .047861
- ---------------------------------------------------------------------------------
Unrealized gain (loss) .524984 1.002196 (1.996989) .552209
- ---------------------------------------------------------------------------------
Contract charges (.138726) (.139188) (.128158) (.137967)
- ---------------------------------------------------------------------------------
Ending unit value - Dec. 31 11.129020 11.319705 9.903046 10.462103
- ---------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 11% 13% (1)% 5%
=================================================================================
<FN>
* This is not an annualized rate of return as it is the change for the period
indicated.
</TABLE>
13
<PAGE> 13
SCHEDULE I, CONTINUED
NATIONWIDE VA SEPARATE ACCOUNT-B
TAX QUALIFIED and NON-TAX QUALIFIED
SCHEDULE OF CHANGES IN UNIT VALUE
For the Period February 1, 1996 (commencement of operations)
Through December 31, 1996
<TABLE>
<CAPTION>
TCIBal TCIGro TCIint VEGoldNR VEWrldBd VEWrldEMkt
------ ------ ------ -------- -------- ----------
1996
<S> <C> <C> <C> <C> <C> <C>
Beginning unit value - Feb. 1 $10.000000 10.000000 10.000000 10.000000 10.000000 10.000000
- -----------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .464101 1.113558 .234571 .184293 .274473 .000000
- -----------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .544727 (1.611001) 1.046291 .078725 .047392 .080691
- -----------------------------------------------------------------------------------------------------------------------
Contract charges (.137228) (.131396) (.138028) (.130685) (.131995) (.003195)
- -----------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $10.871600 9.371161 11.142834 10.132333 10.189870 10.077496
- -----------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (a) 9% (6)% 11% 1% 2% 1%(b)
=======================================================================================================================
<CAPTION>
VKACRESec WPlntEq WPPVenCap WPSmCoGr
--------- ------- --------- --------
1996
<S> <C> <C> <C> <C>
Beginning unit value - Feb. 1 10.000000 10.000000 10.000000 10.000000
- -----------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .262264 .203841 .000000 .000000
- -----------------------------------------------------------------------------------------
Unrealized gain (loss) 3.509141 .382585 .166644 1.376228
- -----------------------------------------------------------------------------------------
Contract charges (.145064) (.135897) (.003207) (.145157)
- -----------------------------------------------------------------------------------------
Ending unit value - Dec. 31 13.626341 10.450529 10.163437 11.231071
- -----------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (a) 36% 5% 2%(b) 12%
==========================================================================================
<FN>
* An annualized rate of return cannot be determined as:
(a)This is the change for the period indicated; and
(b)This investment option was not being utilized for the entire period
indicated.
</TABLE>
See note 3.
- --------------------------------------------------------------------------------
14
<PAGE> 14
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Independent Auditors' Report
----------------------------
The Board of Directors of Nationwide Life and Annuity Insurance Company and
Contract Owners of Nationwide VA Separate Account-B:
We have audited the accompanying statement of assets, liabilities and
contract owners' equity of Nationwide VA Separate Account-B as of December 31,
1996, and the related statement of operations and changes in contract owners'
equity and schedule of changes in unit value for the period February 1, 1996
(commencement of operations) through December 31, 1996. These financial
statements and schedule 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 schedule of changes in unit value based on our audit.
We conducted our audit 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 schedule of
changes in unit value are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures include confirmation of securities
owned as of December 31, 1996, by correspondence with the transfer agents of the
underlying mutual funds. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and schedule of changes in unit
value referred to above present fairly, in all material respects, the financial
position of Nationwide VA Separate Account-B as of December 31, 1996, and the
results of its operations and its changes in contract owners' equity and the
schedule of changes in unit value for the period February 1, 1996 (commencement
of operations) through December 31, 1996, in conformity with generally accepted
accounting principles.
KPMG Peat Marwick LLP
Columbus, Ohio
February 7, 1997
- --------------------------------------------------------------------------------
15
<PAGE> 15
NATIONWIDE LIFE AND ANNUITY 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
