<PAGE> 1
'97
Nationwide(R) VA Separate Account - B
December 31, 1997
[The BEST
of AMERICA LOGO]
ANNUAL REPORT
AMERICA'S
Exclusive
ANNUITY(SM)
[LOGO]
Nationwide Life and Annuity Insurance Company
Home Office: Columbus, Ohio
<PAGE> 2
[LOGO]
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY
ONE NATIONWIDE PLAZA, COLUMBUS, OHIO 43215 - 2220
[PICTURE OF JOSEPH J. GASPER]
PRESIDENT'S MESSAGE
We at Nationwide Life and Annuity Insurance Company are pleased to bring you the
1997 annual report of the Nationwide VA Separate Account-B.
Equity markets ended a volatile season to record the third straight year of
gains topping the 20 percent mark. Additionally, returns on fixed income
investments were buoyed by declining inflation, steady Federal Reserve policy
and the positive outlook for lower budget deficits.
The U.S. economy continues to be strong into 1998. However, there is still much
uncertainty about what effect the Southeast Asian crisis will have on our
economy during this year. The obvious result, we believe, will be a slowing of
economic growth due to reduced exports, restrained pricing flexibility and lower
corporate profits. We expect the Federal Reserve will continue to stay on the
sidelines as the Southeast Asian economic turmoil plays out. At the same time,
low inflation and low interest rates should continue to provide a healthy
environment for financial assets.
We are committed to our customers as our most valuable asset. Our commitment to
you is to continue to add value to our products and services to help you achieve
your financial planning and retirement goals. As always, we welcome and
encourage your feedback.
/s/ Joseph J. Gasper
Joseph J. Gasper, President
3
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<TABLE>
NATIONWIDE VA SEPARATE ACCOUNT-B
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY
DECEMBER 31, 1997
<S> <C>
ASSETS:
Investments at market value:
American Century VP - American Century VP Balanced (ACVPBal)
190,054 shares (cost $1,483,415) ................................................................... $ 1,566,049
American Century VP - American Century VP Capital Appreciation (ACVPCapAp)
137,815 shares (cost $1,378,410) ................................................................... 1,334,046
American Century VP - American Century VP International (ACVPInt)
720,696 shares (cost $4,793,362) ................................................................... 4,929,564
American Century VP - American Century VP Value (ACVPValue)
244,181 shares (cost $1,678,657) ................................................................... 1,692,172
The Dreyfus Socially Responsible Growth Fund, Inc. (DrySRGro)
134,318 shares (cost $3,383,690) ................................................................... 3,353,914
Dreyfus Stock Index Fund (DryStkIx)
628,044 shares (cost $15,638,679) .................................................................. 16,172,142
Dreyfus VIF - Capital Appreciation Portfolio (DryCapAp)
13,552 shares (cost $379,544) ...................................................................... 378,096
Dreyfus VIF - Growth and Income Portfolio (DryGrInc)
59,470 shares (cost $1,282,421) .................................................................... 1,235,780
Fidelity VIP - Equity-Income Portfolio (FidVIPEI)
1,213,251 shares (cost $25,854,072) ................................................................ 29,457,726
Fidelity VIP - Growth Portfolio (FidVIPGr)
661,176 shares (cost $22,268,498) .................................................................. 24,529,640
Fidelity VIP - High Income Portfolio (FidVIPHI)
1,488,608 shares (cost $19,111,149) ................................................................ 20,215,295
Fidelity VIP - Overseas Portfolio (FidVIPOv)
188,497 shares (cost $3,700,378) ................................................................... 3,619,147
Fidelity VIP-II - Asset Manager Portfolio (FidVIPAM)
269,138 shares (cost $4,456,767) ................................................................... 4,847,174
Fidelity VIP-II - Contrafund Portfolio (FidVIPCon)
1,078,487 shares (cost $19,699,408) ................................................................ 21,505,026
Fidelity VIP-III - Growth Opportunities Portfolio (FidVIPGrOp)
153,498 shares (cost $2,835,058) ................................................................... 2,957,905
</TABLE>
4
<PAGE> 4
<TABLE>
<S> <C>
Morgan Stanley - Emerging Markets Debt Portfolio (MSEmMkt)
11,044 shares (cost $115,001) ...................................................................... 106,793
Nationwide SAT - Capital Appreciation Fund (NSATCapAp)
216,453 shares (cost $4,346,686) ................................................................... 4,590,962
Nationwide SAT - Government Bond Fund (NSATGvtBd)
344,475 shares (cost $3,916,322) ................................................................... 3,920,125
Nationwide SAT - Money Market Fund (NSATMyMkt)
28,653,938 shares (cost $28,653,938) ............................................................... 28,653,938
Nationwide SAT - Small Company Fund (NSATSmCo)
376,394 shares (cost $5,943,953) ................................................................... 5,965,844
Nationwide SAT - Total Return Fund (NSATTotRe)
350,246 shares (cost $5,372,998) ................................................................... 5,737,027
Neuberger & Berman AMT - Growth Portfolio (NBAMTGro)
46,594 shares (cost $1,304,323) .................................................................... 1,422,968
Neuberger & Berman AMT - Limited Maturity Bond Portfolio (NBAMTLMat)
457,640 shares (cost $6,318,021) ................................................................... 6,461,880
Neuberger & Berman AMT - Partners Portfolio (NBAMTPart)
891,315 shares (cost $17,166,190) .................................................................. 18,361,093
Oppenheimer VAF - Bond Fund (OppBdFd)
357,304 shares (cost $4,203,595) ................................................................... 4,255,486
Oppenheimer VAF - Global Securities Fund (OppGlSec)
204,717 shares (cost $3,985,979) ................................................................... 4,374,809
Oppenheimer VAF - Growth Fund (OppGro)
4,389 shares (cost $143,605) ....................................................................... 142,379
Oppenheimer VAF - Multiple Strategies Fund (OppMult)
189,568 shares (cost $3,142,466) ................................................................... 3,224,548
Strong Opportunity Fund II, Inc. (StOpp2)
612,630 shares (cost $12,308,604) .................................................................. 13,294,075
Strong VIF - Strong Discovery Fund II (StDisc2)
91,534 shares (cost $1,137,826) .................................................................... 1,101,152
Strong VIF - Strong International Stock Fund II (StIntStk2)
310,248 shares (cost $3,430,958) ................................................................... 2,891,507
Van Eck WIT - Worldwide Bond Fund (VEWrldBd)
175,787 shares (cost $1,887,801) ................................................................... 1,931,899
Van Eck WIT - Worldwide Emerging Markets Fund (VEWrldEMkt)
140,263 shares (cost $1,930,299) ................................................................... 1,542,896
(Continued)
</TABLE>
5
<PAGE> 5
<TABLE>
<S> <C>
Van Eck WIT - Worldwide Hard Assets Fund (VEWrldHAs)
92,070 shares (cost $1,522,580) .................................................................... 1,447,333
Van Kampen American Capital LIT -
Morgan Stanley Real Estate Securities Portfolio (MSRESec)
469,049 shares (cost $7,348,786) ................................................................... 7,434,426
Warburg Pincus Trust - International Equity Portfolio (WPIntEq)
696,811 shares (cost $8,209,358) ................................................................... 7,309,552
Warburg Pincus Trust - Post Venture Capital Portfolio (WPPVenCap)
46,578 shares (cost $521,054) ...................................................................... 515,154
Warburg Pincus Trust - Small Company Growth Portfolio (WPSmCoGr)
527,076 shares (cost $7,768,534) ................................................................... 8,686,217
------------
Total investments ............................................................................... 271,165,739
Accounts receivable ...................................................................................... 396,253
------------
Total assets .................................................................................... 271,561,992
ACCOUNTS PAYABLE ............................................................................................ 16
------------
CONTRACT OWNERS' EQUITY (NOTE 4) ............................................................................ $271,561,976
============
</TABLE>
See accompanying notes to financial statements.
- -----------------------------------------------
6
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<TABLE>
<CAPTION>
NATIONWIDE VA SEPARATE ACCOUNT-B
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
YEAR ENDED DECEMBER 31, 1997 AND FOR THE PERIOD FEBRUARY 1, 1996
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1996
TOTAL ACVPBal
------------------------------ ------------------------------
1997 1996 1997 1996
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ....................................... $ 3,264,187 599,351 6,748 3,261
Mortality, expense and administration
charges (note 2) ......................................... (2,625,203) (502,691) (14,031) (3,237)
-------------- -------------- -------------- --------------
Net investment activity .................................. 638,984 96,660 (7,283) 24
-------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold ...................... 223,236,625 76,703,639 432,187 178,027
Cost of mutual fund shares sold ............................ (214,504,322) (75,779,842) (400,447) (168,902)
-------------- -------------- -------------- --------------
Realized gain (loss) on investments ...................... 8,732,303 923,797 31,740 9,125
Change in unrealized gain (loss) on investments ............ 10,048,773 2,494,576 65,584 17,050
-------------- -------------- -------------- --------------
Net gain (loss) on investments ........................... 18,781,076 3,418,373 97,324 26,175
-------------- -------------- -------------- --------------
Reinvested capital gains ................................... 4,937,879 204,775 28,016 -
-------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations ..................... 24,357,939 3,719,808 118,057 26,199
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .......................................... 169,332,709 95,174,558 762,078 501,901
Transfers between funds .................................... - - 262,407 9,439
Redemptions ................................................ (18,867,088) (2,157,551) (99,821) (11,452)
Adjustments to maintain reserves ........................... (2,565) 4,166 (2,476) 4
-------------- -------------- -------------- --------------
Net equity transactions ................................ 150,463,056 93,021,173 922,188 499,892
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ...................... 174,820,995 96,740,981 1,040,245 526,091
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ................ 96,740,981 - 526,091 -
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD ...................... $ 271,561,976 96,740,981 1,566,336 526,091
============== ============== ============== ==============
<CAPTION>
ACVPCapAp ACVPInt
------------------------------ ------------------------------
1997 1996 1997 1996
------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ....................................... - - 22,729 3,115
Mortality, expense and administration
charges (note 2) ......................................... (19,639) (7,009) (46,316) (6,649)
------------- -------------- -------------- --------------
Net investment activity .................................. (19,639) (7,009) (23,587) (3,534)
------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold ...................... 1,970,507 985,905 1,572,496 495,206
Cost of mutual fund shares sold ............................ (2,131,768) (979,960) (1,357,421) (476,619)
------------- -------------- -------------- --------------
Realized gain (loss) on investments ...................... (161,261) 5,945 215,075 18,587
Change in unrealized gain (loss) on investments ............ 18,432 (62,797) 78,372 57,830
------------- -------------- -------------- --------------
Net gain (loss) on investments ........................... (142,829) (56,852) 293,447 76,417
------------- -------------- -------------- --------------
Reinvested capital gains ................................... 17,313 129 43,835 1,038
------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations ..................... (145,155) (63,732) 313,695 73,921
------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .......................................... 604,929 978,621 2,980,677 1,075,760
Transfers between funds .................................... 3,613 319,535 638,549 33,262
Redemptions ................................................ (344,351) (19,242) (167,142) (19,209)
Adjustments to maintain reserves ........................... (179) 22 32 25
-------------- -------------- -------------- --------------
Net equity transactions ................................ 264,012 1,278,936 3,452,116 1,089,838
------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ...................... 118,857 1,215,204 3,765,811 1,163,759
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ................ 1,215,204 - 1,163,759 -
------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD ...................... 1,334,061 1,215,204 4,929,570 1,163,759
============= ============== ============== ==============
</TABLE>
7
<PAGE> 7
<TABLE>
<CAPTION>
NATIONWIDE VA SEPARATE ACCOUNT-B
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
YEAR ENDED DECEMBER 31, 1997 AND FOR THE PERIOD FEBRUARY 1, 1996
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1996
ACVPValue DrySRGro
-------------------------- ------------------------------
1997 1996 1997 1996
---------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................................. $ 1,292 - 12,102 874
Mortality, expense and administration
charges (note 2) .................................... (14,045) - (25,947) (1,520)
---------- -------------- -------------- --------------
Net investment activity ............................. (12,753) - (13,845) (646)
---------- -------------- -------------- --------------
Proceeds from mutual fund shares sold ................. 2,171,228 - 3,430,773 96,419
Cost of mutual fund shares sold ....................... (2,031,644) - (3,098,404) (88,012)
---------- -------------- -------------- --------------
Realized gain (loss) on investments ................. 139,584 - 332,369 8,407
Change in unrealized gain (loss) on investments ....... 13,515 - (19,478) (10,298)
---------- -------------- -------------- --------------
Net gain (loss) on investments ...................... 153,099 - 312,891 (1,891)
---------- -------------- -------------- --------------
Reinvested capital gains .............................. 2,414 - 94,837 15,508
---------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations ................ 142,760 - 393,883 12,971
---------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ..................................... 1,137,286 - 1,210,701 137,873
Transfers between funds ............................... 437,858 - 1,685,435 302,311
Redemptions ........................................... (25,736) - (387,613) (1,650)
Adjustments to maintain reserves ...................... 13 - 16 6
---------- -------------- -------------- --------------
Net equity transactions ........................... 1,549,421 - 2,508,539 438,540
---------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ................. 1,692,181 - 2,902,422 451,511
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ........... - - 451,511 -
---------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD ................. $1,692,181 - 3,353,933 451,511
========== ============== ============== ==============
<CAPTION>
DryStkIx DryCapAp
------------------------------ ------------------------------
1997 1996 1997 1996
------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................................. 167,679 20,443 2,624 -
Mortality, expense and administration
charges (note 2) .................................... (139,726) (11,785) (1,353) -
------------- -------------- -------------- --------------
Net investment activity ............................. 27,953 8,658 1,271 -
------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold ................. 6,868,998 1,304,525 35,302 -
Cost of mutual fund shares sold ....................... (5,807,826) (1,213,680) (34,746) -
------------- -------------- -------------- --------------
Realized gain (loss) on investments ................. 1,061,172 90,845 556 -
Change in unrealized gain (loss) on investments ....... 492,395 41,068 (1,448) -
------------- -------------- -------------- --------------
Net gain (loss) on investments ...................... 1,553,567 131,913 (892) -
------------- -------------- -------------- --------------
Reinvested capital gains .............................. 413,260 32,437 220 -
------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations ................ 1,994,780 173,008 599 -
------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ..................................... 9,290,153 2,131,083 188,858 -
Transfers between funds ............................... 2,880,855 877,923 193,079 -
Redemptions ........................................... (947,321) (228,466) (4,447) -
Adjustments to maintain reserves ...................... 273 52 (7) -
------------- -------------- -------------- --------------
Net equity transactions ........................... 11,223,960 2,780,592 377,483 -
------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ................. 13,218,740 2,953,600 378,082 -
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ........... 2,953,600 - - -
------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD ................. $ 16,172,340 2,953,600 378,082 -
============= ============== ============== ==============
</TABLE>
8
<PAGE> 8
<TABLE>
<CAPTION>
NATIONWIDE VA SEPARATE ACCOUNT-B
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
YEAR ENDED DECEMBER 31, 1997 AND FOR THE PERIOD FEBRUARY 1, 1996
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1996
DryGrInc FidVIPEI
------------------------- ------------------------------
1997 1996 1997 1996
--------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................................. $ 6,248 - 204,640 -
Mortality, expense and administration
charges (note 2) .................................... (6,686) - (288,383) (66,476)
--------- -------------- -------------- --------------
Net investment activity ............................. (438) - (83,743) (66,476)
--------- -------------- -------------- --------------
Proceeds from mutual fund shares sold ................. 477,409 - 4,034,511 1,752,115
Cost of mutual fund shares sold ....................... (459,619) - (3,594,772) (1,709,141)
--------- -------------- -------------- --------------
Realized gain (loss) on investments ................. 17,790 - 439,739 42,974
Change in unrealized gain (loss) on investments ....... (46,641) - 2,894,709 708,944
--------- -------------- -------------- --------------
Net gain (loss) on investments ...................... (28,851) - 3,334,448 751,918
--------- -------------- -------------- --------------
Reinvested capital gains .............................. 68,534 - 1,028,884 -
--------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations ................ 39,245 - 4,279,589 685,442
--------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ..................................... 489,118 - 13,782,024 10,013,478
Transfers between funds ............................... 720,972 - 1,770,973 400,487
Redemptions ........................................... (13,558) - (1,367,993) (109,409)
Adjustments to maintain reserves ...................... 5 - 2,091 1,483
--------- -------------- -------------- --------------
Net equity transactions ........................... 1,196,537 - 14,187,095 10,306,039
--------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ................. 1,235,782 - 18,466,684 10,991,481
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ........... - - 10,991,481 -
--------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD ................. $1,235,782 - 29,458,165 10,991,481
========= ============== ============== ==============
<CAPTION>
FidVIPGr FidVIPHI
------------------------------ ------------------------------
1997 1996 1997 1996
------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................................. 94,039 - 337,770 -
Mortality, expense and administration
charges (note 2) .................................... (276,160) (44,793) (144,268) (27,497)
------------- -------------- -------------- --------------
Net investment activity ............................. (182,121) (44,793) 193,502 (27,497)
------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold ................. 12,400,367 5,805,415 4,973,688 6,999,024
Cost of mutual fund shares sold ....................... (11,364,418) (5,768,910) (4,894,377) (6,877,491)
------------- -------------- -------------- --------------
Realized gain (loss) on investments ................. 1,035,949 36,505 79,311 121,533
Change in unrealized gain (loss) on investments ....... 2,154,124 107,018 975,597 128,550
------------- -------------- -------------- --------------
Net gain (loss) on investments ...................... 3,190,073 143,523 1,054,908 250,083
------------- -------------- -------------- --------------
Reinvested capital gains .............................. 420,937 - 41,747 -
------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations ................ 3,428,889 98,730 1,290,157 222,586
------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ..................................... 6,128,449 5,241,982 12,510,478 3,482,761
Transfers between funds ............................... 3,513,641 7,395,956 1,193,107 2,257,316
Redemptions ........................................... (1,163,627) (114,600) (678,694) (62,395)
Adjustments to maintain reserves ...................... 129 316 (65) 81
------------- -------------- -------------- --------------
Net equity transactions ........................... 8,478,592 12,523,654 13,024,826 5,677,763
------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ................. 11,907,481 12,622,384 14,314,983 5,900,349
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ........... 12,622,384 - 5,900,349 -
------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD ................. $ 24,529,865 12,622,384 20,215,332 5,900,349
============= ============== ============== ==============
</TABLE>
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<PAGE> 9
<TABLE>
<CAPTION>
NATIONWIDE VA SEPARATE ACCOUNT-B
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
Year Ended DECEMBER 31, 1997 AND FOR THE PERIOD FEBRUARY 1, 1996
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1996
FidVIPOv FidVIPAM
------------------------------ ------------------------------
1997 1996 1997 1996
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................................. $ 27,355 - 46,047 -
Mortality, expense and administration
charges (note 2) .................................... (41,098) (8,091) (42,376) (6,798)
-------------- -------------- -------------- --------------
Net investment activity ............................. (13,743) (8,091) 3,671 (6,798)
-------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold ................. 3,062,464 289,172 485,808 194,518
Cost of mutual fund shares sold ....................... (2,836,711) (281,039) (441,012) (183,795)
-------------- -------------- -------------- --------------
Realized gain (loss) on investments ................. 225,753 8,133 44,796 10,723
Change in unrealized gain (loss) on investments ....... (150,814) 69,582 326,514 63,893
-------------- -------------- -------------- --------------
Net gain (loss) on investments ...................... 74,939 77,715 371,310 74,616
-------------- -------------- -------------- --------------
Reinvested capital gains .............................. 108,590 - 115,507 -
-------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations ................ 169,786 69,624 490,488 67,818
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ..................................... 2,013,073 1,281,789 2,679,138 1,150,006
Transfers between funds ............................... 191,729 146,096 755,845 (85,254)
Redemptions ........................................... (195,586) (57,484) (203,214) (8,007)
Adjustments to maintain reserves ...................... 80 49 (46) 43
-------------- -------------- -------------- --------------
Net equity transactions ........................... 2,009,296 1,370,450 3,231,723 1,056,788
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ................. 2,179,082 1,440,074 3,722,211 1,124,606
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ........... 1,440,074 - 1,124,606 -
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD ................. $ 3,619,156 1,440,074 4,846,817 1,124,606
============== ============== ============== ==============
<CAPTION>
FidVIPCon FidVIPGrOp
------------------------------ ------------------------------
1997 1996 1997 1996
------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................................. 79,097 - - -
Mortality, expense and administration
charges (note 2) .................................... (206,479) (33,796) (9,973) -
------------- -------------- -------------- --------------
Net investment activity ............................. (127,382) (33,796) (9,973) -
------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold ................. 13,315,382 2,379,624 726,030 -
Cost of mutual fund shares sold ....................... (12,210,990) (2,200,887) (716,514) -
------------- -------------- -------------- --------------
Realized gain (loss) on investments ................. 1,104,392 178,737 9,516 -
Change in unrealized gain (loss) on investments ....... 1,439,401 366,217 122,846 -
------------- -------------- -------------- --------------
Net gain (loss) on investments ...................... 2,543,793 544,954 132,362 -
------------- -------------- -------------- --------------
Reinvested capital gains .............................. 209,041 - - -
------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations ................ 2,625,452 511,158 122,389 -
------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ..................................... 7,590,781 4,699,841 1,745,119 -
Transfers between funds ............................... 4,579,042 2,611,362 1,150,039 -
Redemptions ........................................... (1,044,227) (68,568) (59,495) -
Adjustments to maintain reserves ...................... 167 163 (184) -
------------- -------------- -------------- --------------
Net equity transactions ........................... 11,125,763 7,242,798 2,835,479 -
------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ................. 13,751,215 7,753,956 2,957,868 -
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ........... 7,753,956 - - -
------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD ................. 21,505,171 7,753,956 2,957,868 -
============= ============== ============== ==============
</TABLE>
10
<PAGE> 10
<TABLE>
<CAPTION>
NATIONWIDE VA SEPARATE ACCOUNT-B
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
Year Ended DECEMBER 31, 1997 AND FOR THE PERIOD FEBRUARY 1, 1996
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1996
MSEmMkt NSATCapAp
------------------------------ ------------------------------
1997 1996 1997 1996
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................................. $ 2,855 - 28,299 6,329
Mortality, expense and administration
charges (note 2) .................................... (826) - (36,484) (3,924)
-------------- -------------- -------------- --------------
Net investment activity ............................. 2,029 - (8,185) 2,405
-------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold ................. 163,852 - 2,917,900 880,473
Cost of mutual fund shares sold ....................... (173,412) - (2,600,662) (816,917)
-------------- -------------- -------------- --------------
Realized gain (loss) on investments ................. (9,560) - 317,238 63,556
Change in unrealized gain (loss) on investments ....... (8,208) - 246,705 (2,429)
-------------- -------------- -------------- --------------
Net gain (loss) on investments ...................... (17,768) - 563,943 61,127
-------------- -------------- -------------- --------------
Reinvested capital gains .............................. 1,239 - 97,097 55,159
-------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations ................ (14,500) - 652,855 118,691
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ..................................... 10,146 - 2,518,104 303,105
Transfers between funds ............................... 115,222 - 57,514 1,505,852
Redemptions ........................................... (4,078) - (557,273) (8,026)
Adjustments to maintain reserves - - 59 128
-------------- -------------- -------------- --------------
Net equity transactions ........................... 121,290 - 2,018,404 1,801,059
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ................. 106,790 - 2,671,259 1,919,750
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD - - 1,919,750 -
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD ................. $ 106,790 - 4,591,009 1,919,750
============== ============== ============== ==============
<CAPTION>
NSATGvtBd NSATMyMkt
------------------------------ ------------------------------
1997 1996 1997 1996
------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................................. 137,812 48,164 1,083,859 274,717
Mortality, expense and administration
charges (note 2) .................................... (29,398) (9,883) (307,636) (81,209)
------------- -------------- -------------- --------------
Net investment activity ............................. 108,414 38,281 776,223 193,508
------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold ................. 1,955,059 306,532 98,322,127 40,578,631
Cost of mutual fund shares sold ....................... (1,883,110) (307,285) (98,322,127) (40,578,631)
------------- -------------- -------------- --------------
Realized gain (loss) on investments ................. 71,949 (753) - -
Change in unrealized gain (loss) on investments ....... (11,975) 15,778 - -
------------- -------------- -------------- --------------
Net gain (loss) on investments ...................... 59,974 15,025 - -
------------- -------------- -------------- --------------
Reinvested capital gains .............................. - - - -
------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations ................ 168,388 53,306 776,223 193,508
------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ..................................... 1,694,494 1,213,578 57,123,968 35,272,121
Transfers between funds ............................... 1,216,393 43,219 (33,482,476) (25,073,360)
Redemptions ........................................... (465,572) (3,716) (4,787,228) (974,956)
Adjustments to maintain reserves 8 42 (404) 1,284
------------- -------------- -------------- --------------
Net equity transactions ........................... 2,445,323 1,253,123 18,853,860 9,225,089
------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ................. 2,613,711 1,306,429 19,630,083 9,418,597
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD 1,306,429 - 9,418,597 -
------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD ................. 3,920,140 1,306,429 29,048,680 9,418,597
============= ============== ============== ==============
(Continued)
</TABLE>
11
<PAGE> 11
<TABLE>
<CAPTION>
NATIONWIDE SEPARATE ACCOUNT-B
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
YEAR ENDED DECEMBER 31, 1997 AND FOR THE PERIOD FEBRUARY 1, 1996
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1996
NSATSmCo NSATTotRe
------------------------------ ------------------------------
1997 1996 1997 1996
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................................. $ - 3,752 51,421 9,424
Mortality, expense and administration
charges (note 2) .................................... (51,451) (8,901) (46,011) (5,767)
-------------- -------------- -------------- --------------
Net investment activity ............................. (51,451) (5,149) 5,410 3,657
-------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold ................. 2,809,142 1,578,449 639,641 507,524
Cost of mutual fund shares sold ....................... (2,497,219) (1,536,205) (521,320) (504,371)
-------------- -------------- -------------- --------------
Realized gain (loss) on investments ................. 311,923 42,244 118,321 3,153
Change in unrealized gain (loss) on investments ....... 5,784 16,108 329,844 34,184
-------------- -------------- -------------- --------------
Net gain (loss) on investments ...................... 317,707 58,352 448,165 37,337
-------------- -------------- -------------- --------------
Reinvested capital gains .............................. 163,972 7,889 180,642 39,481
-------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations ................ 430,228 61,092 634,217 80,475
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ..................................... 2,904,246 1,013,194 2,504,724 873,425
Transfers between funds ............................... 1,438,504 416,892 1,827,273 89,756
Redemptions ........................................... (257,483) (40,967) (274,662) 1,776
Adjustments to maintain reserves ...................... (39) 26 82 12
-------------- -------------- -------------- --------------
Net equity transactions ........................... 4,085,228 1,389,145 4,057,417 964,969
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ................. 4,515,456 1,450,237 4,691,634 1,045,444
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ........... 1,450,237 - 1,045,444 -
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD ................. $ 5,965,693 1,450,237 5,737,078 1,045,444
============== ============== ============== ==============
<CAPTION>
NBAMTGro NBAMTLMat
------------------------------ ------------------------------
1997 1996 1997 1996
------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................................. - 1 258,163 16,130
Mortality, expense and administration
charges (note 2) .................................... (20,908) (3,895) (71,942) (24,392)
------------- -------------- -------------- --------------
Net investment activity ............................. (20,908) (3,894) 186,221 (8,262)
------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold ................. 6,321,736 680,363 4,094,715 457,151
Cost of mutual fund shares sold ....................... (6,182,637) (670,336) (4,068,427) (462,260)
------------- -------------- -------------- --------------
Realized gain (loss) on investments ................. 139,099 10,027 26,288 (5,109)
Change in unrealized gain (loss) on investments ....... 103,035 15,609 34,840 109,020
------------- -------------- -------------- --------------
Net gain (loss) on investments ...................... 242,134 25,636 61,128 103,911
------------- -------------- -------------- --------------
Reinvested capital gains .............................. 65,376 255 - -
------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations ................ 286,602 21,997 247,349 95,649
------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ..................................... 557,548 412,644 5,079,839 4,232,524
Transfers between funds ............................... 130,489 178,170 (1,711,098) (178,697)
Redemptions ........................................... (161,294) (3,202) (1,222,649) (81,112)
Adjustments to maintain reserves ...................... 15 13 9 76
------------- -------------- -------------- --------------
Net equity transactions ........................... 526,758 587,625 2,146,101 3,972,791
------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ................. 813,360 609,622 2,393,450 4,068,440
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ........... 609,622 - 4,068,440 -
------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD ................. 1,422,982 609,622 6,461,890 4,068,440
============= ============== ============== ==============
</TABLE>
12
<PAGE> 12
<TABLE>
<CAPTION>
NATIONWIDE VA SEPARATE ACCOUNT-B
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
YEAR ENDED DECEMBER 31, 1997 AND FOR THE PERIOD FEBRUARY 1, 1996
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1996
NBAMTPart OppBdFd
------------------------------ ------------------------------
1997 1996 1997 1996
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................................. $ 20,903 364 197,133 71,205
Mortality, expense and administration
charges (note 2) .................................... (164,270) (18,809) (44,787) (13,291)
-------------- -------------- -------------- --------------
Net investment activity ............................. (143,367) (18,445) 152,346 57,914
-------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold ................. 13,279,727 2,205,480 2,061,340 556,412
Cost of mutual fund shares sold ....................... (11,966,396) (2,032,067) (2,018,985) (551,602)
-------------- -------------- -------------- --------------
Realized gain (loss) on investments ................. 1,313,331 173,413 42,355 4,810
Change in unrealized gain (loss) on investments ....... 1,003,571 191,332 48,032 3,859
-------------- -------------- -------------- --------------
Net gain (loss) on investments ...................... 2,316,902 364,745 90,387 8,669
-------------- -------------- -------------- --------------
Reinvested capital gains .............................. 321,907 4,547 8,144 120
-------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations ................ 2,495,442 350,847 250,877 66,703
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ..................................... 5,824,372 2,288,104 1,887,783 1,763,434
Transfers between funds ............................... 5,978,753 2,191,604 493,944 316,722
Redemptions ........................................... (733,276) (34,676) (511,176) (12,838)
Adjustments to maintain reserves ...................... 7 139 (7) 45
-------------- -------------- -------------- --------------
Net equity transactions ........................... 11,069,856 4,445,171 1,870,544 2,067,363
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ................. 13,565,298 4,796,018 2,121,421 2,134,066
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ........... 4,796,018 - 2,134,066 -
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD ................. $ 18,361,316 4,796,018 4,255,487 2,134,066
============== ============== ============== ==============
<CAPTION>
OppGiSec OppGro
------------------------------ ------------------------------
1997 1996 1997 1996
------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................................. 22,759 - - -
Mortality, expense and administration
charges (note 2) .................................... (43,231) (6,119) (429) -
------------- -------------- -------------- --------------
Net investment activity ............................. (20,472) (6,119) (429) -
------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold ................. 744,294 131,310 84,498 -
Cost of mutual fund shares sold ....................... (568,436) (127,107) (87,993) -
------------- -------------- -------------- --------------
Realized gain (loss) on investments ................. 175,858 4,203 (3,495) -
Change in unrealized gain (loss) on investments ....... 309,552 79,279 (1,226) -
------------- -------------- -------------- --------------
Net gain (loss) on investments ...................... 485,410 83,482 (4,721) -
------------- -------------- -------------- --------------
Reinvested capital gains .............................. - - - -
------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations ................ 464,938 77,363 (5,150) -
------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ..................................... 2,335,737 1,053,645 83,147 -
Transfers between funds ............................... 519,017 170,668 64,419 -
Redemptions ........................................... (236,334) (10,279) (37) -
Adjustments to maintain reserves ...................... 39 21 7 -
------------- -------------- -------------- --------------
Net equity transactions ........................... 2,618,459 1,214,055 147,536 -
------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ................. 3,083,397 1,291,418 142,386 -
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ........... 1,291,418 - - -
------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD ................. 4,374,815 1,291,418 142,386 -
============= ============== ============== ==============
(Continued)
</TABLE>
13
<PAGE> 13
<TABLE>
<CAPTION>
NATIONWIDE VA SEPARATE ACCOUNT-B
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
YEAR ENDED DECEMBER 31, 1997 AND FOR THE PERIOD FEBRUARY 1, 1996
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1996
OppMult StOpp2
------------------------------ ------------------------------
1997 1996 1997 1996
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................................. $ 75,849 8,349 33,272 14,747
Mortality, expense and administration
charges (note 2) .................................... (26,768) (2,185) (130,868) (23,617)
-------------- -------------- -------------- --------------
Net investment activity ............................. 49,081 6,164 (97,596) (8,870)
-------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold ................. 1,002,267 192,712 13,162,912 1,921,006
Cost of mutual fund shares sold ....................... (911,071) (181,320) (12,494,689) (1,854,665)
-------------- -------------- -------------- --------------
Realized gain (loss) on investments ................. 91,196 11,392 668,223 66,341
Change in unrealized gain (loss) on investments ....... 70,280 11,801 827,058 158,413
-------------- -------------- -------------- --------------
Net gain (loss) on investments ...................... 161,476 23,193 1,495,281 224,754
-------------- -------------- -------------- --------------
Reinvested capital gains .............................. 26,880 - 355,754 603
-------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations ................ 237,437 29,357 1,753,439 216,487
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ..................................... 2,187,072 523,113 3,964,068 2,801,281
Transfers between funds ............................... 413,253 (95,205) 1,274,003 3,997,175
Redemptions ........................................... (60,166) (10,111) (658,713) (53,475)
Adjustments to maintain reserves ...................... (186) (1) (124) 60
-------------- -------------- -------------- --------------
Net equity transactions ........................... 2,539,973 417,796 4,579,234 6,745,041
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ................. 2,777,410 447,153 6,332,673 6,961,528
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ........... 447,153 - 6,961,528 -
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD ................. $ 3,224,563 447,153 13,294,201 6,961,528
============== ============== ============== ==============
<CAPTION>
StDisc2 StIntStk2
------------------------------- ------------------------------
1997 1996 1997 1996
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................................. $ - 39,068 47,896 4,904
Mortality, expense and administration
charges (note 2) .................................... (19,756) (6,753) (43,210) (12,658)
-------------- -------------- -------------- --------------
Net investment activity ............................. (19,756) 32,315 4,686 (7,754)
-------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold ................. 4,012,306 1,034,138 1,174,862 227,465
Cost of mutual fund shares sold ....................... (3,727,265) (1,103,038) (1,210,804) (225,623)
-------------- -------------- -------------- --------------
Realized gain (loss) on investments ................. 285,041 (68,900) (35,942) 1,842
Change in unrealized gain (loss) on investments ....... (56,510) 19,836 (542,090) 2,640
-------------- -------------- -------------- --------------
Net gain (loss) on investments ...................... 228,531 (49,064) (578,032) 4,482
-------------- -------------- -------------- --------------
Reinvested capital gains .............................. - 14,620 69,509 -
-------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations ................ 208,775 (2,129) (503,837) (3,272)
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ..................................... 791,629 943,659 1,870,857 1,586,566
Transfers between funds ............................... (471,966) (112,020) (427,717) 750,557
Redemptions ........................................... (243,741) (13,048) (313,725) (66,919)
Adjustments to maintain reserves ...................... 38 (35) (1,009) 17
-------------- -------------- -------------- --------------
Net equity transactions ........................... 75,960 818,556 1,128,406 2,270,221
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ................. 284,735 816,427 624,569 2,266,949
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ........... 816,427 - 2,266,949 -
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD ................. $ 1,101,162 816,427 2,891,518 2,266,949
============== ============== ============== ==============
</TABLE>
14
<PAGE> 14
<TABLE>
<CAPTION>
NATIONWIDE VA SEPARATE ACCOUNT-B
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
YEAR ENDED DECEMBER 31, 1997 AND FOR THE PERIOD FEBRUARY 1, 1996
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1996
VEWrldBd VEWrldEMkt
------------------------------ ------------------------------
1997 1996 1997 1996
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................................. $ 30,017 3,196 3,520 -
Mortality, expense and administration
charges (note 2) .................................... (19,604) (3,479) (15,983) (2)
-------------- -------------- -------------- --------------
Net investment activity ............................. 10,413 (283) (12,463) (2)
-------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold ................. 475,287 115,540 2,611,677 -
Cost of mutual fund shares sold ....................... (481,377) (115,011) (2,534,542) -
-------------- -------------- -------------- --------------
Realized gain (loss) on investments ................. (6,090) 529 77,135 -
Change in unrealized gain (loss) on investments ....... 27,767 16,331 (387,463) 61
-------------- -------------- -------------- --------------
Net gain (loss) on investments ...................... 21,677 16,860 (310,328) 61
-------------- -------------- -------------- --------------
Reinvested capital gains .............................. - - - -
-------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations ................ 32,090 16,577 (322,791) 59
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ..................................... 1,130,555 712,819 1,226,712 7,500
Transfers between funds ............................... 48,037 48,432 882,679 -
Redemptions ........................................... (53,183) (3,435) (251,274) -
Adjustments to maintain reserves ...................... 20 7 - (1)
-------------- -------------- -------------- --------------
Net equity transactions ........................... 1,125,429 757,823 1,858,117 7,499
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ................. 1,157,519 774,400 1,535,326 7,558
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ........... 774,400 - 7,558 -
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD ................. $ 1,931,919 774,400 1,542,884 7,558
============== ============== ============== ==============
<CAPTION>
VEWrldHAs MSRESec
------------------------------ ------------------------------
1997 1996 1997 1996
------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................................. 14,354 1,287 189,133 18,236
Mortality, expense and administration
charges (note 2) .................................... (18,473) (4,097) (62,959) (6,352)
------------- -------------- -------------- --------------
Net investment activity ............................. (4,119) (2,810) 126,174 11,884
------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold ................. 1,170,448 999,109 1,455,763 771,558
Cost of mutual fund shares sold ....................... (1,170,355) (991,569) (1,231,322) (669,540)
------------- -------------- -------------- --------------
Realized gain (loss) on investments ................. 93 7,540 224,441 102,018
Change in unrealized gain (loss) on investments ....... (94,132) 18,885 (95,680) 181,319
------------- -------------- -------------- --------------
Net gain (loss) on investments ...................... (94,039) 26,425 128,761 283,337
------------- -------------- -------------- --------------
Reinvested capital gains .............................. 19,447 1,262 629,933 8,686
------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations ................ (78,711) 24,877 884,868 303,907
------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ..................................... 751,547 761,083 4,083,002 1,006,359
Transfers between funds ............................... 106,718 (38,954) 892,778 484,653
Redemptions ........................................... (49,249) (30,095) (186,537) (34,584)
Adjustments to maintain reserves ...................... 2 32 1 25
------------- -------------- -------------- --------------
Net equity transactions ........................... 809,018 692,066 4,789,244 1,456,453
------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ................. 730,307 716,943 5,674,112 1,760,360
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ........... 716,943 - 1,760,360 -
------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD ................. 1,447,250 716,943 7,434,472 1,760,360
============= ============== ============== ==============
(Continued)
</TABLE>
15
<PAGE> 15
<TABLE>
<CAPTION>
NATIONWIDE VA SEPARATE ACCOUNT-B
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
YEAR ENDED DECEMBER 31, 1997 AND FOR THE PERIOD FEBRUARY 1, 1996
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1996
WPIntEq WPPVenCap
------------------------------ ------------------------------
1997 1996 1997 1996
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ....................................... $ 58,498 51,785 74 -
Mortality, expense and administration
charges (note 2) ......................................... (93,063) (24,030) (4,887) (1)
-------------- -------------- -------------- --------------
Net investment activity .................................. (34,565) 27,755 (4,813) (1)
-------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold ...................... 998,275 721,268 2,232,029 -
Cost of mutual fund shares sold ............................ (933,450) (718,378) (2,262,483) -
-------------- -------------- -------------- --------------
Realized gain (loss) on investments ...................... 64,825 2,890 (30,454) -
Change in unrealized gain (loss) on investments ............ (915,087) 15,280 (5,984) 83
-------------- -------------- -------------- --------------
Net gain (loss) on investments ........................... (850,262) 18,170 (36,438) 83
-------------- -------------- -------------- --------------
Reinvested capital gains ................................... 404,844 23,041 - -
-------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations ..................... (479,983) 68,966 (41,251) 82
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .......................................... 3,807,280 3,837,363 380,854 -
Transfers between funds .................................... 490,876 201,958 181,949 7,300
Redemptions ................................................ (600,892) (15,852) (13,836) -
Adjustments to maintain reserves ........................... (294) 107 23 (3)
-------------- -------------- -------------- --------------
Net equity transactions ................................ 3,696,970 4,023,576 548,990 7,297
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ...................... 3,216,987 4,092,542 507,739 7,379
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ................ 4,092,542 - 7,379 -
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD ...................... $ 7,309,529 4,092,542 515,118 7,379
============== ============== ============== ==============
<CAPTION>
WPSmCoGr
------------------------------
1997 1996
------------- --------------
<S> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ....................................... - -
Mortality, expense and administration
charges (note 2) ......................................... (95,779) (25,676)
------------- --------------
Net investment activity .................................. (95,779) (25,676)
------------- --------------
Proceeds from mutual fund shares sold ...................... 5,589,618 2,358,568
Cost of mutual fund shares sold ............................ (5,275,571) (2,385,481)
------------- --------------
Realized gain (loss) on investments ...................... 314,047 (26,913)
Change in unrealized gain (loss) on investments ............ 797,552 120,130
------------- --------------
Net gain (loss) on investments ........................... 1,111,599 93,217
------------- --------------
Reinvested capital gains ................................... - -
------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations ..................... 1,015,820 67,541
------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .......................................... 3,502,163 3,873,946
Transfers between funds .................................... (15,708) 826,845
Redemptions ................................................ (521,885) (61,554)
Adjustments to maintain reserves ........................... (661) (72)
------------- --------------
Net equity transactions ................................ 2,963,909 4,639,165
------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY ...................... 3,979,729 4,706,706
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ................ 4,706,706 -
------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD ...................... 8,686,435 4,706,706
============= ==============
</TABLE>
See accompanying notes to financial statements.
16
<PAGE> 16
NATIONWIDE VA SEPARATE ACCOUNT-B
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 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:
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)
Portfolios of the Dreyfus Variable Investment Fund (Dreyfus VIF);
Dreyfus VIF - Capital Appreciation Portfolio (DryCapAp)
Dreyfus VIF - Growth and Income Portfolio (DryGrInc)
Portfolios of the Fidelity Variable Insurance Products Fund
(Fidelity VIP);
Fidelity VIP - Equity-Income Portfolio (FidVIPEI)
Fidelity VIP - Growth Portfolio (FidVIPGr)
Fidelity VIP - High Income Portfolio (FidVIPHI)
Fidelity VIP - Overseas Portfolio (FidVIPOv)
Portfolios of the Fidelity Variable Insurance Products Fund II
(Fidelity VIP-II);
Fidelity VIP-II - Asset Manager Portfolio (FidVIPAM)
Fidelity VIP-II - Contrafund Portfolio (FidVIPCon)
Portfolio of the Fidelity Variable Insurance Products Fund III
(Fidelity VIP-III);
Fidelity VIP-III - Growth Opportunities Portfolio (FidVIPGrOp)
Portfolio of the Morgan Stanley Universal Funds, Inc. (Morgan
Stanley);
Morgan Stanley - Emerging Markets Debt Portfolio (MSEmMkt)
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<PAGE> 17
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 AMT);
Neuberger & Berman AMT - Growth Portfolio (NBAMTGro)
Neuberger & Berman AMT - Limited Maturity Bond Portfolio
(NBAMTLMat)
Neuberger & Berman AMT - Partners Portfolio (NBAMTPart)
Funds of the Oppenheimer Variable Account Funds (Oppenheimer VAF);
Oppenheimer VAF - Bond Fund (OppBdFd)
Oppenheimer VAF - Global Securities Fund (OppGlSec)
Oppenheimer VAF - Growth Fund (OppGro)
Oppenheimer VAF - Multiple Strategies Fund (OppMult)
Strong Opportunity Fund II, Inc. (StOpp2)
(formerly Strong Special Fund II, Inc.)
Funds of the Strong Variable Insurance Funds, Inc. (Strong VIF);
Strong VIF - Strong Discovery Fund II (StDisc2)
Strong VIF - Strong International Stock Fund II (StIntStk2)
Funds of the Van Eck Worldwide Insurance Trust (Van Eck WIT);
Van Eck WIT - Worldwide Bond Fund (VEWrldBd)
Van Eck WIT - Worldwide Emerging Markets Fund (VEWrldEMkt)
Van Eck WIT - Worldwide Hard Assets Fund (VEWrldHAs)
(formerly Van Eck WIT - Gold and Natural Resources Fund)
Portfolio of the Van Kampen American Capital Life Investment Trust
(Van Kampen American Capital LIT);
Van Kampen American Capital LIT - Morgan Stanley Real Estate
Securities Portfolio (MSRESec) (formerly Van Kampen American
Capital LIT - Real Estate Securities Fund)
Portfolios of the Warburg Pincus Trust;
Warburg Pincus Trust - International Equity Portfolio (WPIntEq)
Warburg Pincus Trust - Post Venture Capital Portfolio
(WPPVenCap)
Warburg Pincus Trust - Small Company Growth Portfolio (WPSmCoGr)
At December 31, 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 December 31, 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.
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<PAGE> 18
(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
period presentation.
(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.
(3) RELATED PARTY TRANSACTIONS
The Company performs various services on behalf of the Mutual Fund
Companies in which the Account invests and may receive fees for the
services performed. These services include, among other things, shareholder
communications, preparation, postage, fund transfer agency and various
other record keeping and customer service functions. These fees are paid to
an affiliate of the Company.
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<PAGE> 19
(4) COMPONENTS OF CONTRACT OWNERS' EQUITY
The following is a summary of contract owners' equity at December 31, 1997.
<TABLE>
<CAPTION>
ANNUAL
Contract owners' equity represented by: UNITS UNIT VALUE RETURN
-------- --------- -------
<S> <C> <C> <C> <C>
American Century VP -
American Century VP Balanced:
Tax qualified ................................ 43,518 $ 12.407611 $ 539,954 14%
Non-tax qualified ............................ 82,722 12.407611 1,026,382 14%
American Century VP -
American Century VP Capital Appreciation:
Tax qualified ................................ 51,907 8.934300 463,753 (5)%
Non-tax qualified ............................ 97,412 8.934300 870,308 (5)%
American Century VP -
American Century VP International:
Tax qualified ................................ 111,405 13.027680 1,451,349 17%
Non-tax qualified ............................ 266,987 13.027680 3,478,221 17%
American Century VP -
American Century VP Value:
Tax qualified ................................ 19,668 12.602262 247,861 24%
Non-tax qualified ............................ 114,608 12.602262 1,444,320 24%
The Dreyfus Socially Responsible
Growth Fund, Inc.:
Tax qualified ................................ 105,131 14.432845 1,517,339 27%
Non-tax qualified ............................ 127,251 14.432845 1,836,594 27%
Dreyfus Stock Index Fund:
Tax qualified ................................ 355,678 15.258148 5,426,988 31%
Non-tax qualified ............................ 704,237 15.258148 10,745,352 31%
Dreyfus VIF - Capital Appreciation Portfolio:
Tax qualified ................................ 1,527 10.184856 15,552 2%(a)
Non-tax qualified ............................ 35,595 10.184856 362,530 2%(a)
Dreyfus VIF - Growth and Income Portfolio:
Tax qualified ................................ 43,110 11.437343 493,064 15%
Non-tax qualified ............................ 64,938 11.437343 742,718 15%
Fidelity VIP - Equity-Income Portfolio:
Tax qualified ................................ 629,906 13.835418 8,715,013 26%
Non-tax qualified ............................ 1,499,279 13.835418 20,743,152 26%
Fidelity VIP - Growth Portfolio:
Tax qualified ................................ 594,211 13.455923 7,995,657 22%
Non-tax qualified ............................ 1,228,768 13.455923 16,534,208 22%
Fidelity VIP - High Income Portfolio:
Tax qualified ................................ 538,510 12.721046 6,850,410 16%
Non-tax qualified ............................ 1,050,615 12.721046 13,364,922 16%
Fidelity VIP - Overseas Portfolio:
Tax qualified ................................ 125,092 12.000570 1,501,175 10%
Non-tax qualified ............................ 176,490 12.000570 2,117,981 10%
Fidelity VIP-II - Asset Manager Portfolio:
Tax qualified ................................ 95,815 13.114181 1,256,535 19%
Non-tax qualified ............................ 273,771 13.114181 3,590,282 19%
</TABLE>
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<PAGE> 20
<TABLE>
<S> <C> <C> <C> <C>
Fidelity VIP-II - Contrafund Portfolio:
Tax qualified ................................ 625,349 14.455907 9,039,987 22%
Non-tax qualified ............................ 862,290 14.455907 12,465,184 22%
Fidelity VIP-III -
Growth Opportunities Portfolio:
Tax qualified ................................ 57,285 10.924397 625,804 9%(a)
Non-tax qualified ............................ 213,473 10.924397 2,332,064 9%(a)
Morgan Stanley -
Emerging Markets Debt Portfolio:
Tax qualified ................................ 1,079 9.803540 10,578 (2)%(a)
Non-tax qualified ............................ 9,814 9.803540 96,212 (2)%(a)
Nationwide SAT - Capital Appreciation Fund:
Tax qualified ................................ 122,279 15.772381 1,928,631 33%
Non-tax qualified ............................ 168,800 15.772381 2,662,378 33%
Nationwide SAT - Government Bond Fund:
Tax qualified ................................ 112,607 10.968893 1,235,174 8%
Non-tax qualified ............................ 244,780 10.968893 2,684,966 8%
Nationwide SAT - Money Market Fund:
Tax qualified ................................ 638,508 10.711730 6,839,525 4%
Non-tax qualified ............................ 2,073,349 10.711730 22,209,155 4%
Nationwide SAT - Small Company Fund:
Tax qualified ................................ 140,739 14.053920 1,977,935 16%
Non-tax qualified ............................ 283,747 14.053920 3,987,758 16%
Nationwide SAT - Total Return Fund:
Tax qualified ................................ 157,002 14.846819 2,330,980 28%
Non-tax qualified ............................ 229,416 14.846819 3,406,098 28%
Neuberger & Berman AMT - Growth Portfolio:
Tax qualified ................................ 39,613 13.311087 527,292 27%
Non-tax qualified ............................ 67,289 13.311087 895,690 27%
Neuberger & Berman AMT -
Limited Maturity Bond Portfolio:
Tax qualified ................................ 232,553 10.739513 2,497,506 5%
Non-tax qualified ............................ 369,140 10.739513 3,964,384 5%
Neuberger & Berman AMT Partners Portfolio:
Tax qualified ................................ 551,365 15.843430 8,735,513 29%
Non-tax qualified ............................ 607,558 15.843430 9,625,803 29%
Oppenheimer VAF - Bond Fund:
Tax qualified ................................ 102,577 11.077843 1,136,332 8%
Non-tax qualified ............................ 281,567 11.077843 3,119,155 8%
Oppenheimer VAF - Global Securities Fund:
Tax qualified ................................ 96,027 13.545830 1,300,765 21%
Non-tax qualified ............................ 226,937 13.545830 3,074,050 21%
Oppenheimer VAF - Growth Fund:
Tax qualified ................................ 7,039 10.420499 73,350 4%(a)
Non-tax qualified ............................ 6,625 10.420499 69,036 4%(a)
Oppenheimer VAF - Multiple Strategies Fund:
Tax qualified ................................ 56,867 12.856596 731,116 16%
Non-tax qualified ............................ 193,943 12.856596 2,493,447 16%
(Continued)
</TABLE>
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<PAGE> 21
<TABLE>
<S> <C> <C> <C> <C>
Strong Opportunity Fund II, Inc.:
Tax qualified ................................ 436,276 13.995266 6,105,799 24%
Non-tax qualified ............................ 513,631 13.995266 7,188,402 24%
Strong VIF - Strong Discovery Fund II:
Tax qualified ................................ 27,509 10.870948 299,049 10%
Non-tax qualified ............................ 73,785 10.870948 802,113 10%
Strong VIF -
Strong International Stock Fund II:
Tax qualified ................................ 88,170 8.916485 786,166 (15)%
Non-tax qualified ............................ 236,119 8.916485 2,105,352 (15)%
Van Eck WIT - Worldwide Bond Fund:
Tax qualified ................................ 52,244 10.281856 537,165 1%
Non-tax qualified ............................ 135,652 10.281856 1,394,754 1%
Van Eck WIT -
Worldwide Emerging Markets Fund:
Tax qualified ................................ 65,901 8.778805 578,532 (13)%
Non-tax qualified ............................ 109,850 8.778805 964,352 (13)%
Van Eck WIT - Worldwide Hard Assets Fund:
Tax qualified ................................ 36,777 9.817789 361,069 (3)%
Non-tax qualified ............................ 110,634 9.817789 1,086,181 (3)%
Van Kampen American Capital LIT -
Morgan Stanley Real Estate Securities Portfolio:
Tax qualified ................................ 143,467 16.312466 2,340,301 20%
Non-tax qualified ............................ 312,287 16.312466 5,094,171 20%
Warburg Pincus Trust -
International Equity Portfolio:
Tax qualified ................................ 224,358 10.066530 2,258,507 (4)%
Non-tax qualified ............................ 501,764 10.066530 5,051,022 (4)%
Warburg Pincus Trust -
Post Venture Capital Portfolio:
Tax qualified ................................ 7,811 11.351955 88,670 12%
Non-tax qualified ............................ 37,566 11.351955 426,448 12%
Warburg Pincus Trust -
Small Company Growth Portfolio:
Tax qualified ................................ 182,340 12.800371 2,334,020 14%
Non-tax qualified ............................ 496,268 12.800371 6,352,415 14%
======== ========= -----------
$ 271,561,976
=============
</TABLE>
(a) This investment option was not being utilized for the entire period.
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<PAGE> 22
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,
1997, and the related statements of operations and changes in contract owners'
equity for the year then ended and the period February 1, 1996 (commencement of
operations) through December 31, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 1997, by correspondence with
the transfer agents of the underlying mutual funds. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Nationwide VA Separate
Account-B as of December 31, 1997, and the results of its operations and its
changes in contract owners' equity for the year then ended and 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 6, 1998
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NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY Bulk Rate
HOME OFFICE: ONE NATIONWIDE PLAZA - COLUMBUS, OHIO 43215-2220 U.S. Postage
PAID
Columbus, Ohio
Permit No. 521
Nationwide(R) is a registered federal service mark of
Nationwide Mutual Insurance Company
