<PAGE> 1
'98
Nationwide(R) VA Separate Account - B
December 31, 1998
[The BEST of AMERICA(R) LOGO]
ANNUAL REPORT
AMERICA'S
Exclusive
ANNUITY(SM)
[LOGO]
Nationwide Life and Annuity Insurance Company
Home Office: Columbus, Ohio
<PAGE> 2
[NATIONWIDE LOGO]
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY
ONE NATIONWIDE PLAZA, COLUMBUS, OHIO 43215-2220
[PRESIDENT'S PICTURE]
PRESIDENT'S MESSAGE
We at Nationwide Life and Annuity Insurance Company are pleased to bring you the
1998 annual report of the Nationwide VA Separate Account-B.
Equity markets again defied the odds in 1998 to tally a fourth straight year of
double-digit gains, as measured by the major indices. This surprise came
following the breathtaking correction during the third quarter that gave us a
broad double-digit retreat. Fixed income investments also provided respectable
returns in 1998, supported by the continued low inflationary environment and
favorable Federal Reserve actions.
The performance of the American economy continues strong into 1999. However, we
believe the persisting slump in Asia and recent difficulties in Latin America
will inevitably take their toll and dampen growth in the United States. This
moderation, we think, will be healthy for our economy and get us back to a more
sustainable growth level. We look for interest rates to continue within the
range of the recent past, and we expect inflation to remain subdued. Moreover,
we remain optimistic about long-term prospects for U.S. business activity;
holders of financial assets should continue to profit from the anticipated
favorable investment climate.
We are pleased you have chosen our Company to provide the investment products
and services to help you meet your retirement savings and financial planning
goals.
/s/ Joseph J. Gasper
Joseph J. Gasper, President
February 16, 1999
2
<PAGE> 3
NATIONWIDE VA SEPARATE ACCOUNT-B
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY
DECEMBER 31, 1998
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments at market value:
American Century VP - American Century VP Balanced (ACVPBal)
477,539 shares (cost $3,775,070) ................................................................ $ 3,982,676
American Century VP - American Century VP Capital Appreciation (ACVPCapAp)
172,002 shares (cost $1,470,154) ................................................................ 1,551,459
American Century VP - American Century VP Income & Growth (ACVPIncGr)
365,805 shares (cost $2,304,831) ................................................................ 2,480,156
American Century VP - American Century VP International (ACVPInt)
1,792,850 shares (cost $12,805,392) ............................................................. 13,661,514
American Century VP - American Century VP Value (ACVPValue)
487,250 shares (cost $3,237,726) ................................................................ 3,279,192
The Dreyfus Socially Responsible Growth Fund, Inc. (DrySRGro)
175,374 shares (cost $5,038,308) ................................................................ 5,450,615
Dreyfus Stock Index Fund (DryStkIx)
1,663,418 shares (cost $48,502,031) ............................................................. 54,094,350
Dreyfus VIF - Capital Appreciation Portfolio (DryCapAp)
135,139 shares (cost $4,364,796) ................................................................ 4,879,867
Dreyfus VIF - Growth and Income Portfolio (DryGrInc)
152,633 shares (cost $3,211,720) ................................................................ 3,454,084
Fidelity VIP - Equity-Income Portfolio (FidVIPEI)
1,929,188 shares (cost $46,479,811) ............................................................. 49,039,964
Fidelity VIP - Growth Portfolio (FidVIPGr)
692,084 shares (cost $26,780,369) ............................................................... 31,053,812
Fidelity VIP - High Income Portfolio (FidVIPHI)
2,771,740 shares (cost $32,949,014) ............................................................. 31,958,161
Fidelity VIP - Overseas Portfolio (FidVIPOv)
283,588 shares (cost $5,514,054) ................................................................ 5,685,938
Fidelity VIP-II - Asset Manager Portfolio (FidVIPAM)
529,881 shares (cost $8,982,275) ................................................................ 9,622,631
Fidelity VIP-II - Contrafund Portfolio (FidVIPCon)
1,559,973 shares (cost $32,816,811) ............................................................. 38,125,751
</TABLE>
(Continued)
3
<PAGE> 4
<TABLE>
<S> <C>
Fidelity VIP-III - Growth Opportunities Portfolio (FidVIPGrOp)
940,163 shares (cost $18,680,207) ............................................................... 21,510,931
Morgan Stanley - Emerging Markets Debt Portfolio (MSEmMkt)
55,433 shares (cost $357,063) ................................................................... 338,139
Nationwide SAT - Capital Appreciation Fund (NSATCapAp)
1,114,253 shares (cost $27,767,193) ............................................................. 29,627,984
Nationwide SAT - Government Bond Fund (NSATGvtBd)
1,289,475 shares (cost $15,364,944) ............................................................. 15,073,960
Nationwide SAT - Money Market Fund (NSATMyMkt)
50,069,223 shares (cost $50,069,223) ............................................................ 50,069,223
Nationwide SAT - Small Cap Value Fund (NSATSmCapV)
52,327 shares (cost $479,709) ................................................................... 496,579
Nationwide SAT - Small Company Fund (NSATSmCo)
547,930 shares (cost $7,784,774) ................................................................ 8,772,363
Nationwide SAT - Total Return Fund (NSATTotRe)
717,083 shares (cost $12,579,450) ............................................................... 13,194,329
Neuberger &Berman AMT - Growth Portfolio (NBAMTGro)
124,021 shares (cost $2,923,736) ................................................................ 3,260,513
Neuberger & Berman AMT - Guardian Portfolio (NBAMTGuard)
49,970 shares (cost $619,318) ................................................................... 691,584
Neuberger &Berman AMT - Limited Maturity Bond Portfolio (NBAMTLMat)
644,612 shares (cost $8,880,370) ................................................................ 8,908,532
Neuberger &Berman AMT - Partners Portfolio (NBAMTPart)
1,300,066 shares (cost $23,290,016) ............................................................. 24,610,253
Oppenheimer VAF - Bond Fund (OppBdFd)
870,502 shares (cost $10,443,019) ............................................................... 10,724,588
Oppenheimer VAF - Global Securities Fund (OppGlSec)
450,692 shares (cost $9,332,374) ................................................................ 9,946,777
Oppenheimer VAF - Growth Fund (OppGro)
38,340 shares (cost $1,234,988) ................................................................. 1,405,944
Oppenheimer VAF - Multiple Strategies Fund (OppMult)
290,347 shares (cost $4,912,367) ................................................................ 4,950,408
Strong Opportunity Fund II, Inc. (StOpp2)
447,282 shares (cost $9,418,706) ................................................................ 9,714,968
Strong VIF - Strong Discovery Fund II (StDisc2)
89,517 shares (cost $1,131,940) ................................................................. 1,138,662
</TABLE>
4
<PAGE> 5
<TABLE>
<S> <C>
Strong VIF - Strong International Stock Fund II (StIntStk2)
156,637 shares (cost $1,500,406) ................................................................ 1,375,272
Van Eck WIT - Worldwide Bond Fund (VEWrldBd)
178,948 shares (cost $2,120,463) ................................................................ 2,197,486
Van Eck WIT - Worldwide Emerging Markets Fund (VEWrldEMkt)
150,411 shares (cost $1,022,807) ................................................................ 1,070,924
Van Eck WIT - Worldwide Hard Assets Fund (VEWrldHAs)
95,807 shares (cost $903,718) ................................................................... 881,425
Van Kampen American Capital LIT -
Morgan Stanley Real Estate Securities Portfolio (MSRESec)
476,765 shares (cost $7,332,885) ................................................................ 6,560,292
Warburg Pincus Trust - International Equity Portfolio (WPIntEq)
601,475 shares (cost $6,406,447) ................................................................ 6,610,206
Warburg Pincus Trust - Post Venture Capital Portfolio (WPPVenCap)
75,281 shares (cost $794,482) ................................................................... 886,811
Warburg Pincus Trust - Small Company Growth Portfolio (WPSmCoGr)
685,443 shares (cost $10,740,233) ............................................................... 10,973,937
------------
Total investments ............................................................................ 503,312,260
Accounts receivable ................................................................................... 1,074,827
------------
Total assets ................................................................................. 504,387,087
ACCOUNTS PAYABLE ......................................................................................... --
------------
CONTRACT OWNERS' EQUITY (NOTE 4) ......................................................................... $504,387,087
============
</TABLE>
See accompanying notes to financial statements.
================================================================================
5
<PAGE> 6
NATIONWIDE VA SEPARATE ACCOUNT-B
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
TOTAL ACVPBAL
--------------------------- ---------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 7,818,099 3,264,187 33,348 6,748
Mortality, expense and administration
charges (note 2)............................. (5,643,109) (2,625,203) (39,181) (14,031)
------------ ------------ ------------ ------------
Net investment activity...................... 2,174,990 638,984 (5,833) (7,283)
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold.......... 724,145,392 223,236,625 1,370,465 432,187
Cost of mutual fund shares sold................ (716,278,224) (214,504,322) (1,340,497) (400,447)
------------ ------------ ------------ ------------
Realized gain (loss) on investments.......... 7,867,168 8,732,303 29,968 31,740
Change in unrealized gain (loss) on investments 16,445,711 10,048,773 124,972 65,584
------------ ------------ ------------ ------------
Net gain (loss) on investments............... 24,312,879 18,781,076 154,940 97,324
------------ ------------ ------------ ------------
Reinvested capital gains....................... 13,663,741 4,937,879 206,788 28,016
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations......... 40,151,610 24,357,939 355,895 118,057
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners.............................. 241,794,992 169,332,709 1,611,751 762,078
Transfers between funds........................ -- -- 866,011 262,407
Redemptions.................................... (49,104,065) (18,867,088) (417,463) (99,821)
Annuity benefits .............................. (3,683) -- -- --
Adjustments to maintain reserves............... (13,743) (2,565) 169 (2,476)
------------ ------------ ------------ ------------
Net equity transactions.................... 192,673,501 150,463,056 2,060,468 922,188
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY............ 232,825,111 174,820,995 2,416,363 1,040,245
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD...... 271,561,976 96,740,981 1,566,336 526,091
------------ ------------ ------------ ------------
CONTRACT OWNERS' EQUITY END OF PERIOD............ $504,387,087 271,561,976 3,982,699 1,566,336
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
ACVPCAPAP ACVPINCGR
--------------------------- ---------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... -- -- 13,971 --
Mortality, expense and administration
charges (note 2)............................. (23,230) (19,639) (9,285) --
------------ ------------ ------------ ------------
Net investment activity...................... (23,230) (19,639) 4,686 --
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold.......... 1,861,327 1,970,507 3,462,801 --
Cost of mutual fund shares sold................ (2,002,979) (2,131,768) (3,421,020) --
------------ ------------ ------------ ------------
Realized gain (loss) on investments.......... (141,652) (161,261) 41,781 --
Change in unrealized gain (loss) on investments 125,669 18,432 175,325 --
------------ ------------ ------------ ------------
Net gain (loss) on investments............... (15,983) (142,829) 217,106 --
------------ ------------ ------------ ------------
Reinvested capital gains....................... 77,047 17,313 -- --
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations......... 37,834 (145,155) 221,792 --
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners.............................. 538,949 604,929 586,130 --
Transfers between funds........................ (186,436) 3,613 1,836,457 --
Redemptions.................................... (172,970) (344,351) (164,220) --
Annuity benefits .............................. -- -- -- --
Adjustments to maintain reserves............... 10 (179) (1,953) --
------------ ------------ ------------ ------------
Net equity transactions.................... 179,553 264,012 2,256,414 --
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY............ 217,387 118,857 2,478,206 --
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD...... 1,334,061 1,215,204 -- --
------------ ------------ ------------ ------------
CONTRACT OWNERS' EQUITY END OF PERIOD............ 1,551,448 1,334,061 2,478,206 --
============ ============ ============ ============
</TABLE>
6
<PAGE> 7
NATIONWIDE VA SEPARATE ACCOUNT-B
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
ACVPINT ACVPVALUE
--------------------------- ---------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 39,772 22,729 12,481 1,292
Mortality, expense and administration
charges (note 2)............................. (159,363) (46,316) (39,441) (14,045)
------------ ------------ ------------ ------------
Net investment activity...................... (119,591) (23,587) (26,960) (12,753)
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold.......... 31,356,628 1,572,496 3,069,812 2,171,228
Cost of mutual fund shares sold................ (31,185,304) (1,357,421) (3,124,822) (2,031,644)
------------ ------------ ------------ ------------
Realized gain (loss) on investments.......... 171,324 215,075 (55,010) 139,584
Change in unrealized gain (loss) on investments 719,921 78,372 27,951 13,515
------------ ------------ ------------ ------------
Net gain (loss) on investments............... 891,245 293,447 (27,059) 153,099
------------ ------------ ------------ ------------
Reinvested capital gains....................... 408,286 43,835 149,013 2,414
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations......... 1,179,940 313,695 94,994 142,760
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners.............................. 4,813,488 2,980,677 1,438,016 1,137,286
Transfers between funds........................ 3,543,125 638,549 333,167 437,858
Redemptions.................................... (803,970) (167,142) (278,803) (25,736)
Annuity benefits .............................. (542) -- (354) --
Adjustments to maintain reserves............... (221) 32 (438) 13
------------ ------------ ------------ ------------
Net equity transactions.................... 7,551,880 3,452,116 1,491,588 1,549,421
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY............ 8,731,820 3,765,811 1,586,582 1,692,181
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD...... 4,929,570 1,163,759 1,692,181 --
------------ ------------ ------------ ------------
CONTRACT OWNERS' EQUITY END OF PERIOD............ $ 13,661,390 4,929,570 3,278,763 1,692,181
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
DRYSRGRO DRYSTKIX
--------------------------- ---------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... 8,472 12,102 522,901 167,679
Mortality, expense and administration
charges (note 2)............................. (63,111) (25,947) (485,796) (139,726)
------------ ------------ ------------ ------------
Net investment activity...................... (54,639) (13,845) 37,105 27,953
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold.......... 6,586,671 3,430,773 39,332,503 6,868,998
Cost of mutual fund shares sold................ (6,462,288) (3,098,404) (36,715,362) (5,807,826)
------------ ------------ ------------ ------------
Realized gain (loss) on investments.......... 124,383 332,369 2,617,141 1,061,172
Change in unrealized gain (loss) on investments 442,083 (19,478) 5,058,856 492,395
------------ ------------ ------------ ------------
Net gain (loss) on investments............... 566,466 312,891 7,675,997 1,553,567
------------ ------------ ------------ ------------
Reinvested capital gains....................... 196,095 94,837 95,170 413,260
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations......... 707,922 393,883 7,808,272 1,994,780
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners.............................. 1,619,005 1,210,701 17,316,091 9,290,153
Transfers between funds........................ 95,845 1,685,435 15,572,652 2,880,855
Redemptions.................................... (326,063) (387,613) (2,773,953) (947,321)
Annuity benefits .............................. -- -- -- --
Adjustments to maintain reserves............... 28 16 (560) 273
------------ ------------ ------------ ------------
Net equity transactions.................... 1,388,815 2,508,539 30,114,230 11,223,960
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY............ 2,096,737 2,902,422 37,922,502 13,218,740
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD...... 3,353,933 451,511 16,172,340 2,953,600
------------ ------------ ------------ ------------
CONTRACT OWNERS' EQUITY END OF PERIOD............ 5,450,670 3,353,933 54,094,842 16,172,340
============ ============ ============ ============
</TABLE>
(Continued)
7
<PAGE> 8
NATIONWIDE VA SEPARATE ACCOUNT-B
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
DRYCAPAP DRYGRINC
--------------------------- ---------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 22,474 2,624 24,522 6,248
Mortality, expense and administration
charges (note 2)............................. (34,717) (1,353) (33,541) (6,686)
------------ ------------ ------------ ------------
Net investment activity...................... (12,243) 1,271 (9,019) (438)
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold.......... 5,604,652 35,302 2,360,951 477,409
Cost of mutual fund shares sold................ (5,779,706) (34,746) (2,425,101) (459,619)
------------ ------------ ------------ ------------
Realized gain (loss) on investments.......... (175,054) 556 (64,150) 17,790
Change in unrealized gain (loss) on investments 516,519 (1,448) 289,005 (46,641)
------------ ------------ ------------ ------------
Net gain (loss) on investments............... 341,465 (892) 224,855 (28,851)
------------ ------------ ------------ ------------
Reinvested capital gains....................... 574 220 33,632 68,534
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations......... 329,796 599 249,468 39,245
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners.............................. 1,296,381 188,858 1,731,959 489,118
Transfers between funds........................ 3,114,305 193,079 456,443 720,972
Redemptions.................................... (237,901) (4,447) (219,063) (13,558)
Annuity benefits .............................. -- -- -- --
Adjustments to maintain reserves............... (757) (7) (522) 5
------------ ------------ ------------ ------------
Net equity transactions.................... 4,172,028 377,483 1,968,817 1,196,537
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY............ 4,501,824 378,082 2,218,285 1,235,782
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD...... 378,082 -- 1,235,782 --
------------ ------------ ------------ ------------
CONTRACT OWNERS' EQUITY END OF PERIOD............ $ 4,879,906 378,082 3,454,067 1,235,782
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
FIDVIPEI FIDVIPGR
--------------------------- ---------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... 438,197 204,640 96,650 94,039
Mortality, expense and administration
charges (note 2)............................. (540,327) (288,383) (299,659) (276,160)
------------ ------------ ------------ ------------
Net investment activity...................... (102,130) (83,743) (203,009) (182,121)
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold.......... 34,659,555 4,034,511 49,056,647 12,400,367
Cost of mutual fund shares sold................ (31,406,671) (3,594,772) (46,848,717) (11,364,418)
------------ ------------ ------------ ------------
Realized gain (loss) on investments.......... 3,252,884 439,739 2,207,930 1,035,949
Change in unrealized gain (loss) on investments (1,043,501) 2,894,709 2,012,302 2,154,124
------------ ------------ ------------ ------------
Net gain (loss) on investments............... 2,209,383 3,334,448 4,220,232 3,190,073
------------ ------------ ------------ ------------
Reinvested capital gains....................... 1,559,466 1,028,884 2,528,165 420,937
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations......... 3,666,719 4,279,589 6,545,388 3,428,889
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners.............................. 17,187,231 13,782,024 6,866,625 6,128,449
Transfers between funds........................ 2,340,278 1,770,973 (4,825,633) 3,513,641
Redemptions.................................... (3,613,020) (1,367,993) (2,061,683) (1,163,627)
Annuity benefits .............................. (711) -- (783) --
Adjustments to maintain reserves............... 551 2,091 (188) 129
------------ ------------ ------------ ------------
Net equity transactions.................... 15,914,329 14,187,095 (21,662) 8,478,592
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY............ 19,581,048 18,466,684 6,523,726 11,907,481
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD...... 29,458,165 10,991,481 24,529,865 12,622,384
------------ ------------ ------------ ------------
CONTRACT OWNERS' EQUITY END OF PERIOD............ 49,039,213 29,458,165 31,053,591 24,529,865
============ ============ ============ ============
</TABLE>
8
<PAGE> 9
NATIONWIDE VA SEPARATE ACCOUNT-B
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
FIDVIPHI FIDVIPOV
--------------------------- ---------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 1,651,369 337,770 82,111 27,355
Mortality, expense and administration
charges (note 2)............................. (411,908) (144,268) (77,315) (41,098)
------------ ------------ ------------ ------------
Net investment activity...................... 1,239,461 193,502 4,796 (13,743)
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold.......... 34,216,558 4,973,688 29,186,608 3,062,464
Cost of mutual fund shares sold................ (36,081,568) (4,894,377) (28,928,508) (2,836,711)
------------ ------------ ------------ ------------
Realized gain (loss) on investments.......... (1,865,010) 79,311 258,100 225,753
Change in unrealized gain (loss) on investments (2,094,999) 975,597 253,115 (150,814)
------------ ------------ ------------ ------------
Net gain (loss) on investments............... (3,960,009) 1,054,908 511,215 74,939
------------ ------------ ------------ ------------
Reinvested capital gains....................... 1,049,307 41,747 242,012 108,590
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations......... (1,671,241) 1,290,157 758,023 169,786
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners.............................. 17,519,558 12,510,478 2,071,208 2,013,073
Transfers between funds........................ (1,398,748) 1,193,107 (270,743) 191,729
Redemptions.................................... (2,706,795) (678,694) (491,688) (195,586)
Annuity benefits .............................. ------------ ------------ ------------ ------------
Adjustments to maintain reserves............... (64) (65) 44 80
------------ ------------ ------------ ------------
Net equity transactions.................... 13,413,951 13,024,826 1,308,821 2,009,296
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY............ 11,742,710 14,314,983 2,066,844 2,179,082
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD...... 20,215,332 5,900,349 3,619,156 1,440,074
------------ ------------ ------------ ------------
CONTRACT OWNERS' EQUITY END OF PERIOD............ $ 31,958,042 20,215,332 5,686,000 3,619,156
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
FIDVIPAM FIDVIPCON
--------------------------- --------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... 169,515 46,047 111,354 79,097
Mortality, expense and administration
charges (note 2)............................. (111,292) (42,376) (355,761) (206,479)
------------ ------------ ------------ ------------
Net investment activity...................... 58,223 3,671 (244,407) (127,382)
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold.......... 2,252,969 485,808 29,737,118 13,315,382
Cost of mutual fund shares sold................ (2,135,006) (441,012) (27,128,669) (12,210,990)
------------ ------------ ------------ ------------
Realized gain (loss) on investments.......... 117,963 44,796 2,608,449 1,104,392
Change in unrealized gain (loss) on investments 249,950 326,514 3,503,323 1,439,401
------------ ------------ ------------ ------------
Net gain (loss) on investments............... 367,913 371,310 6,111,772 2,543,793
------------ ------------ ------------ ------------
Reinvested capital gains....................... 508,545 115,507 819,250 209,041
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations......... 934,681 490,488 6,686,615 2,625,452
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners.............................. 3,941,991 2,679,138 8,215,815 7,590,781
Transfers between funds........................ 359,310 755,845 3,891,022 4,579,042
Redemptions.................................... (460,173) (203,214) (2,172,888) (1,044,227)
Annuity benefits .............................. ------------ ------------ ------------ ------------
Adjustments to maintain reserves............... 63 (46) 427 167
------------ ------------ ------------ ------------
Net equity transactions.................... 3,841,191 3,231,723 9,934,376 11,125,763
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY............ 4,775,872 3,722,211 16,620,991 13,751,215
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD...... 4,846,817 1,124,606 21,505,171 7,753,956
------------ ------------ ------------ ------------
CONTRACT OWNERS' EQUITY END OF PERIOD............ 9,622,689 4,846,817 38,126,162 21,505,171
============ ============ ============ ============
</TABLE>
(Continued)
9
<PAGE> 10
NATIONWIDE VA SEPARATE ACCOUNT-B
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
FIDVIPGROP MSEMMKT
--------------------------- ---------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 44,124 -- 24,096 2,855
Mortality, expense and administration
charges (note 2)............................. (213,834) (9,973) (3,100) (826)
------------ ------------ ------------ ------------
Net investment activity...................... (169,710) (9,973) 20,996 2,029
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold.......... 5,537,239 726,030 975,706 163,852
Cost of mutual fund shares sold................ (5,154,732) (716,514) (1,073,479) (173,412)
------------ ------------ ------------ ------------
Realized gain (loss) on investments.......... 382,507 9,516 (97,773) (9,560)
Change in unrealized gain (loss) on investments 2,707,877 122,846 (10,716) (8,208)
------------ ------------ ------------ ------------
Net gain (loss) on investments............... 3,090,384 132,362 (108,489) (17,768)
------------ ------------ ------------ ------------
Reinvested capital gains....................... 153,385 -- -- 1,239
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations......... 3,074,059 122,389 (87,493) (14,500)
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners.............................. 5,943,854 1,745,119 140,519 10,146
Transfers between funds........................ 10,961,989 1,150,039 220,119 115,222
Redemptions.................................... (1,426,662) (59,495) (41,788) (4,078)
Annuity benefits .............................. ------------ ------------ ------------ ------------
Adjustments to maintain reserves............... (49) (184) (16) --
------------ ------------ ------------ ------------
Net equity transactions.................... 15,479,132 2,835,479 318,834 121,290
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY............ 18,553,191 2,957,868 231,341 106,790
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD...... 2,957,868 -- 106,790 --
------------ ------------ ------------ ------------
CONTRACT OWNERS' EQUITY END OF PERIOD............ $ 21,511,059 2,957,868 338,131 106,790
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
NSATCAPAP NSATGVTBD
--------------------------- ---------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... 121,205 28,299 530,836 137,812
Mortality, expense and administration
charges (note 2)............................. (194,651) (36,484) (129,786) (29,398)
------------ ------------ ------------ ------------
Net investment activity...................... (73,446) (8,185) 401,050 108,414
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold.......... 8,182,493 2,917,900 14,587,330 1,955,059
Cost of mutual fund shares sold................ (7,321,337) (2,600,662) (14,190,888) (1,883,110)
------------ ------------ ------------ ------------
Realized gain (loss) on investments.......... 861,156 317,238 396,442 71,949
Change in unrealized gain (loss) on investments 1,616,515 246,705 (294,787) (11,975)
------------ ------------ ------------ ------------
Net gain (loss) on investments............... 2,477,671 563,943 101,655 59,974
------------ ------------ ------------ ------------
Reinvested capital gains....................... 824,866 97,097 72,331 --
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations......... 3,229,091 652,855 575,036 168,388
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners.............................. 10,137,216 2,518,104 6,945,212 1,694,494
Transfers between funds........................ 12,658,826 57,514 4,673,391 1,216,393
Redemptions.................................... (987,832) (557,273) (1,039,812) (465,572)
Annuity benefits .............................. ------------ ------------ ------------ ------------
Adjustments to maintain reserves............... (148) 59 28 8
------------ ------------ ------------ ------------
Net equity transactions.................... 21,808,062 2,018,404 10,578,819 2,445,323
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY............ 25,037,153 2,671,259 11,153,855 2,613,711
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD...... 4,591,009 1,919,750 3,920,140 1,306,429
------------ ------------ ------------ ------------
CONTRACT OWNERS' EQUITY END OF PERIOD............ 29,628,162 4,591,009 15,073,995 3,920,140
============ ============ ============ ============
</TABLE>
10
<PAGE> 11
NATIONWIDE VA SEPARATE ACCOUNT-B
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
NSATMYMKT NSATSMCAPV
--------------------------- ---------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 2,938,981 1,083,859 -- --
Mortality, expense and administration
charges (note 2)............................. (833,529) (307,636) (3,866) --
------------ ------------ ------------ ------------
Net investment activity...................... 2,105,452 776,223 (3,866) --
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold.......... 295,687,265 98,322,127 3,943,236 --
Cost of mutual fund shares sold................ (295,687,265) (98,322,127) (3,883,376) --
------------ ------------ ------------ ------------
Realized gain (loss) on investments.......... -- -- 59,860 --
Change in unrealized gain (loss) on investments -- -- 16,870 --
------------ ------------ ------------ ------------
Net gain (loss) on investments............... -- -- 76,730 --
------------ ------------ ------------ ------------
Reinvested capital gains....................... -- -- -- --
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations......... 2,105,452 776,223 72,864 --
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners.............................. 82,240,994 57,123,968 38,202 --
Transfers between funds........................ (44,327,285) (33,482,476) 418,553 --
Redemptions.................................... (17,913,246) (4,787,228) (33,044) --
Annuity benefits .............................. -- -- -- --
Adjustments to maintain reserves............... (6,570) (404) 3 --
------------ ------------ ------------ ------------
Net equity transactions.................... 19,993,893 18,853,860 423,714 --
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY............ 22,099,345 19,630,083 496,578 --
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD...... 29,048,680 9,418,597 -- --
------------ ------------ ------------ ------------
CONTRACT OWNERS' EQUITY END OF PERIOD............ $ 51,148,025 29,048,680 496,578 --
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
NSATSMCO NSATTOTRE
--------------------------- ---------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... -- -- 106,763 51,421
Mortality, expense and administration
charges (note 2)............................. (113,941) (51,451) (140,429) (46,011)
------------ ------------ ------------ ------------
Net investment activity...................... (113,941) (51,451) (33,666) 5,410
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold.......... 12,581,286 2,809,142 3,147,742 639,641
Cost of mutual fund shares sold................ (13,368,773) (2,497,219) (2,495,533) (521,320)
------------ ------------ ------------ ------------
Realized gain (loss) on investments.......... (787,487) 311,923 652,209 118,321
Change in unrealized gain (loss) on investments 965,697 5,784 250,851 329,844
------------ ------------ ------------ ------------
Net gain (loss) on investments............... 178,210 317,707 903,060 448,165
------------ ------------ ------------ ------------
Reinvested capital gains....................... -- 163,972 507,144 180,642
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations......... 64,269 430,228 1,376,538 634,217
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners.............................. 3,669,854 2,904,246 5,926,331 2,504,724
Transfers between funds........................ (266,510) 1,438,504 1,236,248 1,827,273
Redemptions.................................... (660,591) (257,483) (1,081,832) (274,662)
Annuity benefits .............................. (369) -- -- --
Adjustments to maintain reserves............... (484) (39) 50 82
------------ ------------ ------------ ------------
Net equity transactions.................... 2,741,900 4,085,228 6,080,797 4,057,417
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY............ 2,806,169 4,515,456 7,457,335 4,691,634
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD...... 5,965,693 1,450,237 5,737,078 1,045,444
------------ ------------ ------------ ------------
CONTRACT OWNERS' EQUITY END OF PERIOD............ 8,771,862 5,965,693 13,194,413 5,737,078
============ ============ ============ ============
</TABLE>
(Continued)
11
<PAGE> 12
NATIONWIDE VA SEPARATE ACCOUNT-B
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
NBAMTGRO NBAMTGUARD
--------------------------- ---------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ -- -- -- --
Mortality, expense and administration
charges (note 2)............................. (24,594) (20,908) (4,269) --
------------ ------------ ------------ ------------
Net investment activity...................... (24,594) (20,908) (4,269) --
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold.......... 2,684,965 6,321,736 1,888,089 --
Cost of mutual fund shares sold................ (2,990,491) (6,182,637) (2,041,785) --
------------ ------------ ------------ ------------
Realized gain (loss) on investments.......... (305,526) 139,099 (153,696) --
Change in unrealized gain (loss) on investments 218,132 103,035 72,266 --
------------ ------------ ------------ ------------
Net gain (loss) on investments............... (87,394) 242,134 (81,430) --
------------ ------------ ------------ ------------
Reinvested capital gains....................... 353,652 65,376 -- --
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations......... 241,664 286,602 (85,699) --
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners.............................. 955,194 557,548 357,425 --
Transfers between funds........................ 862,118 130,489 438,620 --
Redemptions.................................... (221,438) (161,294) (18,761) --
Annuity benefits .............................. -- -- -- --
Adjustments to maintain reserves............... (1) 15 (6) --
------------ ------------ ------------ ------------
Net equity transactions.................... 1,595,873 526,758 777,278 --
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY............ 1,837,537 813,360 691,579 --
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD...... 1,422,982 609,622 -- --
------------ ------------ ------------ ------------
CONTRACT OWNERS' EQUITY END OF PERIOD............ $ 3,260,519 1,422,982 691,579 --
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
NBAMTLMAT NBAMTPART
--------------------------- ---------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... 383,662 258,163 51,137 20,903
Mortality, expense and administration
charges (note 2)............................. (100,735) (71,942) (292,955) (164,270)
------------ ------------ ------------ ------------
Net investment activity...................... 282,927 186,221 (241,818) (143,367)
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold.......... 4,392,774 4,094,715 31,975,759 13,279,727
Cost of mutual fund shares sold................ (4,372,745) (4,068,427) (33,531,240) (11,966,396)
------------ ------------ ------------ ------------
Realized gain (loss) on investments.......... 20,029 26,288 (1,555,481) 1,313,331
Change in unrealized gain (loss) on investments (115,698) 34,840 125,336 1,003,571
------------ ------------ ------------ ------------
Net gain (loss) on investments............... (95,669) 61,128 (1,430,145) 2,316,902
------------ ------------ ------------ ------------
Reinvested capital gains....................... -- -- 1,610,813 321,907
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations......... 187,258 247,349 (61,150) 2,495,442
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners.............................. 5,590,575 5,079,839 8,523,714 5,824,372
Transfers between funds........................ (2,604,986) (1,711,098) (492,756) 5,978,753
Redemptions.................................... (726,206) (1,222,649) (1,718,726) (733,276)
Annuity benefits .............................. -- -- (369) --
Adjustments to maintain reserves............... 16 9 (2,241) 7
------------ ------------ ------------ ------------
Net equity transactions.................... 2,259,399 2,146,101 6,309,622 11,069,856
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY............ 2,446,657 2,393,450 6,248,472 13,565,298
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD...... 6,461,890 4,068,440 18,361,316 4,796,018
------------ ------------ ------------ ------------
CONTRACT OWNERS' EQUITY END OF PERIOD............ 8,908,547 6,461,890 24,609,788 18,361,316
============ ============ ============ ============
</TABLE>
12
<PAGE> 13
NATIONWIDE VA SEPARATE ACCOUNT-B
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
OPPBDFD OPPGLSEC
--------------------------- ---------------------------
1998 1997 1998 1997
------------ ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 95,707 197,133 117,153 22,759
Mortality, expense and administration
charges (note 2)............................. (113,685) (44,787) (101,065) (43,231)
------------ ------------ ------------ ------------
Net investment activity...................... (17,978) 152,346 16,088 (20,472)
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold.......... 2,568,684 2,061,340 3,307,812 744,294
Cost of mutual fund shares sold................ (2,486,541) (2,018,985) (2,953,078) (568,436)
------------ ------------ ------------ ------------
Realized gain (loss) on investments.......... 82,143 42,355 354,734 175,858
Change in unrealized gain (loss) on investments 229,678 48,032 225,573 309,552
------------ ------------ ------------ ------------
Net gain (loss) on investments............... 311,821 90,387 580,307 485,410
------------ ------------ ------------ ------------
Reinvested capital gains....................... 86,615 8,144 440,985 --
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations......... 380,458 250,877 1,037,380 464,938
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners.............................. 4,816,861 1,887,783 4,409,750 2,335,737
Transfers between funds........................ 2,107,953 493,944 722,373 519,017
Redemptions.................................... (836,169) (511,176) (597,013) (236,334)
Annuity benefits .............................. -- -- (555) --
Adjustments to maintain reserves............... 22 (7) (259) 39
------------ ------------ ------------ ------------
Net equity transactions.................... 6,088,667 1,870,544 4,534,296 2,618,459
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY............ 6,469,125 2,121,421 5,571,676 3,083,397
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD...... 4,255,487 2,134,066 4,374,815 1,291,418
------------ ------------ ------------ ------------
CONTRACT OWNERS' EQUITY END OF PERIOD............ $ 10,724,612 4,255,487 9,946,491 4,374,815
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
OPPGRO OPPMULT
--------------------------- ---------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... 1,770 -- 32,207 75,849
Mortality, expense and administration
charges (note 2)............................. (9,900) (429) (63,381) (26,768)
------------ ------------ ------------ ------------
Net investment activity...................... (8,130) (429) (31,174) 49,081
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold.......... 327,310 84,498 1,047,503 1,002,267
Cost of mutual fund shares sold................ (334,321) (87,993) (1,009,629) (911,071)
------------ ------------ ------------ ------------
Realized gain (loss) on investments.......... (7,011) (3,495) 37,874 91,196
Change in unrealized gain (loss) on investments 172,182 (1,226) (44,041) 70,280
------------ ------------ ------------ ------------
Net gain (loss) on investments............... 165,171 (4,721) (6,167) 161,476
------------ ------------ ------------ ------------
Reinvested capital gains....................... 21,359 -- 186,801 26,880
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations......... 178,400 (5,150) 149,460 237,437
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners.............................. 677,648 83,147 1,721,887 2,187,072
Transfers between funds........................ 449,508 64,419 355,122 413,253
Redemptions.................................... (41,990) (37) (500,624) (60,166)
Annuity benefits .............................. -- -- -- --
Adjustments to maintain reserves............... 2 7 5 (186)
------------ ------------ ------------ ------------
Net equity transactions.................... 1,085,168 147,536 1,576,390 2,539,973
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY............ 1,263,568 142,386 1,725,850 2,777,410
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD...... 142,386 -- 3,224,563 447,153
------------ ------------ ------------ ------------
CONTRACT OWNERS' EQUITY END OF PERIOD............ 1,405,954 142,386 4,950,413 3,224,563
============ ============ ============ ============
</TABLE>
(Continued)
13
<PAGE> 14
NATIONWIDE VA SEPARATE ACCOUNT-B
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
STOPP2 STDISC2
--------------------------- ---------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 22,334 33,272 -- --
Mortality, expense and administration
charges (note 2)............................. (131,492) (130,868) (17,066) (19,756)
------------ ------------ ------------ ------------
Net investment activity...................... (109,158) (97,596) (17,066) (19,756)
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold.......... 11,862,831 13,162,912 1,375,858 4,012,306
Cost of mutual fund shares sold................ (10,831,437) (12,494,689) (1,352,631) (3,727,265)
------------ ------------ ------------ ------------
Realized gain (loss) on investments.......... 1,031,394 668,223 23,227 285,041
Change in unrealized gain (loss) on investments (689,209) 827,058 43,397 (56,510)
------------ ------------ ------------ ------------
Net gain (loss) on investments............... 342,185 1,495,281 66,624 228,531
------------ ------------ ------------ ------------
Reinvested capital gains....................... 1,068,077 355,754 17,503 --
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations......... 1,301,104 1,753,439 67,061 208,775
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners.............................. 4,070,443 3,964,068 408,343 791,629
Transfers between funds........................ (7,922,848) 1,274,003 (332,842) (471,966)
Redemptions.................................... (1,027,921) (658,713) (105,073) (243,741)
Annuity benefits .............................. ------------ ------------ ------------ ------------
Adjustments to maintain reserves............... 62 (124) -- 38
------------ ------------ ------------ ------------
Net equity transactions.................... (4,880,264) 4,579,234 (29,572) 75,960
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY............ (3,579,160) 6,332,673 37,489 284,735
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD...... 13,294,201 6,961,528 1,101,162 816,427
------------ ------------ ------------ ------------
CONTRACT OWNERS' EQUITY END OF PERIOD............ $ 9,715,041 13,294,201 1,138,651 1,101,162
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
STINTSTK2 VEWRLDBD
--------------------------- ---------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... 30,032 47,896 17,723 30,017
Mortality, expense and administration
charges (note 2)............................. (32,452) (43,210) (34,838) (19,604)
------------ ------------ ------------ ------------
Net investment activity...................... (2,420) 4,686 (17,115) 10,413
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold.......... 3,587,363 1,174,862 3,158,808 475,287
Cost of mutual fund shares sold................ (3,904,675) (1,210,804) (2,907,439) (481,377)
------------ ------------ ------------ ------------
Realized gain (loss) on investments.......... (317,312) (35,942) 251,369 (6,090)
Change in unrealized gain (loss) on investments 414,317 (542,090) 32,925 27,767
------------ ------------ ------------ ------------
Net gain (loss) on investments............... 97,005 (578,032) 284,294 21,677
------------ ------------ ------------ ------------
Reinvested capital gains....................... -- 69,509 -- --
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations......... 94,585 (503,837) 267,179 32,090
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners.............................. 728,870 1,870,857 514,516 1,130,555
Transfers between funds........................ (2,029,890) (427,717) (16,366) 48,037
Redemptions.................................... (309,814) (313,725) (499,763) (53,183)
Annuity benefits .............................. ------------ ------------ ------------ ------------
Adjustments to maintain reserves............... 13 (1,009) 32 20
------------ ------------ ------------ ------------
Net equity transactions.................... (1,610,821) 1,128,406 (1,581) 1,125,429
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY............ (1,516,236) 624,569 265,598 1,157,519
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD...... 2,891,518 2,266,949 1,931,919 774,400
------------ ------------ ------------ ------------
CONTRACT OWNERS' EQUITY END OF PERIOD............ 1,375,282 2,891,518 2,197,517 1,931,919
============ ============ ============ ============
</TABLE>
14
<PAGE> 15
NATIONWIDE VA SEPARATE ACCOUNT-B
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
VEWRLDEMKT VEWRLDHAS
--------------------------- ---------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 11,626 3,520 12,719 14,354
Mortality, expense and administration
charges (note 2)............................. (17,849) (15,983) (17,337) (18,473)
------------ ------------ ------------ ------------
Net investment activity...................... (6,223) (12,463) (4,618) (4,119)
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold.......... 2,802,893 2,611,677 4,026,414 1,170,448
Cost of mutual fund shares sold................ (3,745,736) (2,534,542) (4,792,158) (1,170,355)
------------ ------------ ------------ ------------
Realized gain (loss) on investments.......... (942,843) 77,135 (765,744) 93
Change in unrealized gain (loss) on investments 435,520 (387,463) 52,953 (94,132)
------------ ------------ ------------ ------------
Net gain (loss) on investments............... (507,323) (310,328) (712,791) (94,039)
------------ ------------ ------------ ------------
Reinvested capital gains....................... 10,334 -- 312,331 19,447
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations......... (503,212) (322,791) (405,078) (78,711)
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners.............................. 424,278 1,226,712 107,275 751,547
Transfers between funds........................ (249,999) 882,679 (196,342) 106,718
Redemptions.................................... (143,026) (251,274) (71,688) (49,249)
Annuity benefits .............................. ------------ ------------ ------------ ------------
Adjustments to maintain reserves............... 209 -- (938) 2
------------ ------------ ------------ ------------
Net equity transactions.................... 31,462 1,858,117 (161,693) 809,018
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY............ (471,750) 1,535,326 (566,771) 730,307
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD...... 1,542,884 7,558 1,447,250 716,943
------------ ------------ ------------ ------------
CONTRACT OWNERS' EQUITY END OF PERIOD............ $ 1,071,134 1,542,884 880,479 1,447,250
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
MSRESEC WPINTEQ
--------------------------- ---------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... 12,621 189,133 36,266 58,498
Mortality, expense and administration
charges (note 2)............................. (107,856) (62,959) (109,346) (93,063)
------------ ------------ ------------ ------------
Net investment activity...................... (95,235) 126,174 (73,080) (34,565)
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold.......... 4,004,520 1,455,763 19,997,179 998,275
Cost of mutual fund shares sold................ (4,232,713) (1,231,322) (20,633,499) (933,450)
------------ ------------ ------------ ------------
Realized gain (loss) on investments.......... (228,193) 224,441 (636,320) 64,825
Change in unrealized gain (loss) on investments (858,233) (95,680) 1,103,564 (915,087)
------------ ------------ ------------ ------------
Net gain (loss) on investments............... (1,086,426) 128,761 467,244 (850,262)
------------ ------------ ------------ ------------
Reinvested capital gains....................... 124,195 629,933 -- 404,844
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations......... (1,057,466) 884,868 394,164 (479,983)
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners.............................. 2,531,387 4,083,002 1,577,242 3,807,280
Transfers between funds........................ (1,647,687) 892,778 (2,035,796) 490,876
Redemptions.................................... (700,428) (186,537) (634,936) (600,892)
Annuity benefits .............................. ------------ ------------ ------------ ------------
Adjustments to maintain reserves............... (83) 1 60 (294)
------------ ------------ ------------ ------------
Net equity transactions.................... 183,189 4,789,244 (1,093,430) 3,696,970
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY............ (874,277) 5,674,112 (699,266) 3,216,987
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD...... 7,434,472 1,760,360 7,309,529 4,092,542
------------ ------------ ------------ ------------
CONTRACT OWNERS' EQUITY END OF PERIOD............ 6,560,195 7,434,472 6,610,263 7,309,529
============ ============ ============ ============
</TABLE>
(Continued)
15
<PAGE> 16
NATIONWIDE VA SEPARATE ACCOUNT-B
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
WPPVENCAP WPSMCOGR
--------------------------- ---------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ -- 74 -- --
Mortality, expense and administration
charges (note 2)............................. (10,924) (4,887) (136,302) (95,779)
------------ ------------ ------------ ------------
Net investment activity...................... (10,924) (4,813) (136,302) (95,779)
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold.......... 2,171,632 2,232,029 4,207,436 5,589,618
Cost of mutual fund shares sold................ (2,299,785) (2,262,483) (3,696,720) (5,275,571)
------------ ------------ ------------ ------------
Realized gain (loss) on investments.......... (128,153) (30,454) 510,716 314,047
Change in unrealized gain (loss) on investments 98,230 (5,984) (683,979) 797,552
------------ ------------ ------------ ------------
Net gain (loss) on investments............... (29,923) (36,438) (173,263) 1,111,599
------------ ------------ ------------ ------------
Reinvested capital gains....................... -- -- -- --
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations......... (40,847) (41,251) (309,565) 1,015,820
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners.............................. 201,805 380,854 2,381,399 3,502,163
Transfers between funds........................ 275,542 181,949 1,015,890 (15,708)
Redemptions.................................... (64,812) (13,836) (800,217) (521,885)
Annuity benefits .............................. -- -- -- --
Adjustments to maintain reserves............... 6 23 (45) (661)
------------ ------------ ------------ ------------
Net equity transactions.................... 412,541 548,990 2,597,027 2,963,909
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY............ 371,694 507,739 2,287,462 3,979,729
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD...... 515,118 7,379 8,686,435 4,706,706
------------ ------------ ------------ ------------
CONTRACT OWNERS' EQUITY END OF PERIOD............ $ 886,812 515,118 10,973,897 8,686,435
============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
16
<PAGE> 17
NATIONWIDE VA SEPARATE ACCOUNT-B
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
(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)
American Century VP - American Century VP Balanced (ACVPBal)
American Century VP - American Century VP Capital Appreciation
(ACVPCapAp)
American Century VP - American Century VP Income & Growth
(ACVPIncGr)
American Century VP - American Century VP International
(ACVPInt)
American Century VP - American Century VP Value (ACVPValue)
The Dreyfus Socially Responsible Growth Fund, Inc. (DrySRGro)
Dreyfus Stock Index Fund (DryStkIx)
Portfolios of the Dreyfus Variable Investment Fund (Dreyfus VIF);
Dreyfus VIF - Capital Appreciation Portfolio (DryCapAp)
Dreyfus VIF - Growth and Income Portfolio (DryGrInc)
Portfolios of the Fidelity Variable Insurance Products Fund
(Fidelity VIP);
Fidelity VIP - Equity-Income Portfolio (FidVIPEI)
Fidelity VIP - Growth Portfolio (FidVIPGr)
Fidelity VIP - High Income Portfolio (FidVIPHI)
Fidelity VIP - Overseas Portfolio (FidVIPOv)
Portfolios of the Fidelity Variable Insurance Products Fund II
(Fidelity VIP-II);
Fidelity VIP-II - Asset Manager Portfolio (FidVIPAM)
Fidelity VIP-II - Contrafund Portfolio (FidVIPCon)
Portfolio of the Fidelity Variable Insurance Products Fund III
(Fidelity VIP-III);
Fidelity VIP-III - Growth Opportunities Portfolio (FidVIPGrOp)
Portfolio of the Morgan Stanley Universal Funds, Inc. (Morgan
Stanley);
Morgan Stanley - Emerging Markets Debt Portfolio (MSEmMkt)
17
<PAGE> 18
Funds of the Nationwide Separate Account Trust (Nationwide SAT)
(managed for a fee by an affiliated investment advisor);
Nationwide SAT - Capital Appreciation Fund (NSATCapAp)
Nationwide SAT - Government Bond Fund (NSATGvtBd)
Nationwide SAT - Money Market Fund (NSATMyMkt)
Nationwide SAT - Small Cap Value Fund (NSATSmCapV)
Nationwide SAT - Small Company Fund (NSATSmCo)
Nationwide SAT - Total Return Fund (NSATTotRe)
Portfolios of the Neuberger & Berman Advisers Management Trust
(Neuberger &Berman AMT);
Neuberger & Berman AMT - Growth Portfolio (NBAMTGro)
Neuberger & Berman AMT - Guardian Portfolio (NBAMTGuard)
Neuberger & Berman AMT - Limited Maturity Bond Portfolio
(NBAMTLMat)
Neuberger & Berman AMT - Partners Portfolio (NBAMTPart)
Funds of the Oppenheimer Variable Account Funds (Oppenheimer VAF);
Oppenheimer VAF - Bond Fund (OppBdFd)
Oppenheimer VAF - Global Securities Fund (OppGlSec)
Oppenheimer VAF - Growth Fund (OppGro)
Oppenheimer VAF - Multiple Strategies Fund (OppMult)
Strong Opportunity Fund II, Inc. (StOpp2)
Funds of the Strong Variable Insurance Funds, Inc. (Strong VIF);
Strong VIF - Strong Discovery Fund II (StDisc2)
Strong VIF - Strong International Stock Fund II (StIntStk2)
Funds of the Van Eck Worldwide Insurance Trust (Van Eck WIT);
Van Eck WIT - Worldwide Bond Fund (VEWrldBd)
Van Eck WIT - Worldwide Emerging Markets Fund (VEWrldEMkt)
Van Eck WIT - Worldwide Hard Assets Fund (VEWrldHAs)
Portfolio of the Van Kampen American Capital Life Investment Trust
(Van Kampen American Capital LIT);
Van Kampen American Capital LIT - Morgan Stanley Real Estate
Securities Portfolio (MSRESec)
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, 1998, 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.
A contract owner may choose from among a number of different underlying
mutual fund options. The underlying mutual fund options are not
available to the general public directly. The underlying mutual funds
are available as investment options in variable life insurance policies
or variable annuity contracts issued by life insurance companies or, in
some cases, through participation in certain qualified pension or
retirement plans.
Some of the underlying mutual funds have been established by investment
advisers which manage publicly traded mutual funds having similar names
and investment objectives. While some of the underlying mutual funds
may be similar to, and may in fact be modeled after, publicly traded
mutual funds, the underlying mutual funds are not otherwise directly
related to any publicly traded mutual fund. Consequently, the
investment performance of publicly traded mutual funds and any
corresponding underlying mutual funds may differ substantially.
18
<PAGE> 19
(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, 1998. 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.
(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.
19
<PAGE> 20
(4) COMPONENTS OF CONTRACT OWNERS' EQUITY
The following is a summary of contract owners' equity at December 31, 1998.
<TABLE>
<CAPTION>
ANNUAL
Contract owners' equity represented by: UNITS UNIT VALUE RETURN(b)
-------- ---------- ---------
<S> <C> <C> <C> <C>
American Century VP -
American Century VP Balanced:
Tax qualified ............................ 88,999 $ 14.156329 $ 1,259,899 14%
Non-tax qualified ........................ 192,338 14.156329 2,722,800 14%
American Century VP -
American Century VP Capital Appreciation:
Tax qualified ............................ 53,093 8.614847 457,388 (4)%
Non-tax qualified ........................ 126,997 8.614847 1,094,060 (4)%
American Century VP -
American Century VP Income & Growth:
Tax qualified ............................ 48,895 10.814821 528,791 8%(a)
Non-tax qualified ........................ 180,254 10.814821 1,949,415 8%(a)
American Century VP -
American Century VP International:
Tax qualified ............................ 263,771 15.247438 4,021,832 17%
Non-tax qualified ........................ 631,540 15.247438 9,629,367 17%
American Century VP -
American Century VP Value:
Tax qualified ............................ 62,022 13.017145 807,349 3%
Non-tax qualified ........................ 189,388 13.017145 2,465,291 3%
The Dreyfus Socially Responsible
Growth Fund, Inc.:
Tax qualified ............................ 131,385 18.402864 2,417,860 28%
Non-tax qualified ........................ 164,801 18.402864 3,032,810 28%
Dreyfus Stock Index Fund:
Tax qualified ............................ 1,097,971 19.279341 21,168,157 26%
Non-tax qualified ........................ 1,707,874 19.279341 32,926,685 26%
Dreyfus VIF - Capital Appreciation Portfolio:
Tax qualified ............................ 129,414 13.070279 1,691,477 28%
Non-tax qualified ........................ 243,945 13.070279 3,188,429 28%
Dreyfus VIF - Growth and Income Portfolio:
Tax qualified ............................ 122,527 12.603139 1,544,225 10%
Non-tax qualified ........................ 151,537 12.603139 1,909,842 10%
Fidelity VIP - Equity-Income Portfolio:
Tax qualified ............................ 1,277,079 15.220240 19,437,449 10%
Non-tax qualified ........................ 1,944,054 15.220240 29,588,968 10%
Fidelity VIP - Growth Portfolio:
Tax qualified ............................ 670,173 18.497774 12,396,709 37%
Non-tax qualified ........................ 1,007,812 18.497774 18,642,279 37%
Fidelity VIP - High Income Portfolio:
Tax qualified ............................ 946,162 11.993921 11,348,192 (6)%
Non-tax qualified ........................ 1,718,358 11.993921 20,609,850 (6)%
Fidelity VIP - Overseas Portfolio:
Tax qualified ............................ 148,300 13.334585 1,977,519 11%
Non-tax qualified ........................ 278,110 13.334585 3,708,481 11%
Fidelity VIP-II - Asset Manager Portfolio:
Tax qualified ............................ 192,670 14.869310 2,864,870 13%
Non-tax qualified ........................ 454,481 14.869310 6,757,819 13%
</TABLE>
20
<PAGE> 21
<TABLE>
<S> <C> <C> <C> <C>
Fidelity VIP-II - Contrafund Portfolio:
Tax qualified .......................... 770,623 18.517428 14,269,956 28%
Non-tax qualified ...................... 1,288,311 18.517428 23,856,206 28%
Fidelity VIP-III -
Growth Opportunities Portfolio:
Tax qualified .......................... 292,587 13.416112 3,925,380 23%
Non-tax qualified ...................... 1,310,788 13.416112 17,585,679 23%
Morgan Stanley -
Emerging Markets Debt Portfolio:
Tax qualified .......................... 30,554 6.919419 211,416 (29)%
Non-tax qualified ...................... 18,313 6.919419 126,715 (29)%
Nationwide SAT - Capital Appreciation Fund:
Tax qualified .......................... 622,770 20.201552 12,580,921 28%
Non-tax qualified ...................... 843,858 20.201552 17,047,241 28%
Nationwide SAT - Government Bond Fund:
Tax qualified .......................... 463,915 11.772852 5,461,603 7%
Non-tax qualified ...................... 816,488 11.772852 9,612,392 7%
Nationwide SAT - Money Market Fund:
Tax qualified .......................... 1,007,530 11.112968 11,196,649 4%
Non-tax qualified ...................... 3,595,023 11.112968 39,951,376 4%
Nationwide SAT - Small Cap Value Fund:
Tax qualified .......................... 17,530 8.520115 149,358 (15)%(a)
Non-tax qualified ...................... 40,753 8.520115 347,220 (15)%(a)
Nationwide SAT - Small Company Fund:
Tax qualified .......................... 207,507 13.989917 2,903,006 0%
Non-tax qualified ...................... 419,008 13.989917 5,861,887 0%
Nationwide SAT - Total Return Fund:
Tax qualified .......................... 285,960 17.276235 4,940,312 16%
Non-tax qualified ...................... 477,772 17.276235 8,254,101 16%
Neuberger &Berman AMT - Growth Portfolio:
Tax qualified .......................... 54,978 15.154915 833,187 14%
Non-tax qualified ...................... 160,168 15.154915 2,427,332 14%
Neuberger & Berman AMT -
Guardian Portfolio:
Tax qualified .......................... 20,062 9.272982 186,035 (7)%(a)
Non-tax qualified ...................... 54,518 9.272982 505,544 (7)%(a)
Neuberger &Berman AMT -
Limited Maturity Bond Portfolio:
Tax qualified .......................... 250,457 11.048525 2,767,180 3%
Non-tax qualified ...................... 555,854 11.048525 6,141,367 3%
Neuberger &Berman AMT Partners Portfolio:
Tax qualified .......................... 613,192 16.270918 9,977,197 3%
Non-tax qualified ...................... 898,907 16.270918 14,626,042 3%
Oppenheimer VAF - Bond Fund:
Tax qualified .......................... 212,964 11.659886 2,483,136 5%
Non-tax qualified ...................... 706,823 11.659886 8,241,476 5%
Oppenheimer VAF - Global Securities Fund:
Tax qualified .......................... 273,864 15.232440 4,171,617 12%
Non-tax qualified ...................... 378,435 15.232440 5,764,488 12%
</TABLE>
(Continued)
21
<PAGE> 22
<TABLE>
<S> <C> <C> <C> <C>
Oppenheimer VAF - Growth Fund:
Tax qualified ............................... 42,851 12.734164 545,672 22%
Non-tax qualified ........................... 67,557 12.734164 860,282 22%
Oppenheimer VAF - Multiple Strategies Fund:
Tax qualified ............................... 92,773 13.513276 1,253,667 5%
Non-tax qualified ........................... 273,564 13.513276 3,696,746 5%
Strong Opportunity Fund II, Inc.:
Tax qualified ............................... 160,731 15.660253 2,517,088 12%
Non-tax qualified ........................... 459,632 15.660253 7,197,953 12%
Strong VIF - Strong Discovery Fund II:
Tax qualified ............................... 26,911 11.491081 309,236 6%
Non-tax qualified ........................... 72,179 11.491081 829,415 6%
Strong VIF -
Strong International Stock Fund II:
Tax qualified ............................... 45,767 8.367348 382,948 (6)%
Non-tax qualified ........................... 118,596 8.367348 992,334 (6)%
Van Eck WIT - Worldwide Bond Fund:
Tax qualified ............................... 54,874 11.425229 626,948 11%
Non-tax qualified ........................... 137,465 11.425229 1,570,569 11%
Van Eck WIT -
Worldwide Emerging Markets Fund:
Tax qualified ............................... 37,152 5.698612 211,715 (35)%
Non-tax qualified ........................... 150,812 5.698612 859,419 (35)%
Van Eck WIT - Worldwide Hard Assets Fund:
Tax qualified ............................... 27,382 6.678951 182,883 (32)%
Non-tax qualified ........................... 104,447 6.678951 697,596 (32)%
Van Kampen American Capital LIT-
Morgan Stanley Real Estate Securities Portfolio:
Tax qualified ............................... 126,607 14.207613 1,798,783 (13)%
Non-tax qualified ........................... 335,131 14.207613 4,761,412 (13)%
Warburg Pincus Trust -
International Equity Portfolio:
Tax qualified ............................... 190,052 10.451107 1,986,254 4%
Non-tax qualified ........................... 442,442 10.451107 4,624,009 4%
Warburg Pincus Trust -
Post Venture Capital Portfolio:
Tax qualified ............................... 20,180 11.915674 240,458 5%
Non-tax qualified ........................... 54,244 11.915674 646,354 5%
Warburg Pincus Trust -
Small Company Growth Portfolio:
Tax qualified ............................... 187,796 12.254943 2,301,429 (4)%
Non-tax qualified ........................... 707,671 12.254943 8,672,468 (4)%
================ ================
Reserve for annuity contracts in payout phase:
Tax qualified ............................... 67,617
----------------
$ 504,387,087
================
</TABLE>
(a) This investment option was not being utilized for the entire period.
Accordingly, the annual return was computed for such period as the
investment option was utilized.
(b) The annual return does not include contract charges satisfied by
surrendering units.
================================================================================
22
<PAGE> 23
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,
1998, and the related statements of operations and changes in contract owners'
equity for each of the years in the two year period then ended. 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, 1998, 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, 1998, and the results of its operations and its
changes in contract owners' equity for each of the years in the two year period
then ended in conformity with generally accepted accounting principles.
KPMG LLP
Columbus, Ohio
February 5, 1999
================================================================================
23
<PAGE> 24
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY
HOME OFFICE: ONE NATIONWIDE PLAZA * 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
