<PAGE> 1
[Nationwide Logo]
NATIONWIDE(R)
VA SEPARATE ACCOUNT-C
SEMI-ANNUAL REPORT
TO
CONTRACT OWNERS
JUNE 30, 2000
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY
HOME OFFICE: COLUMBUS, OHIO
FHL-474-L (06/00)
<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
2000 semi-annual report of the Nationwide VA Separate Account-C.
During the first half of 2000 fixed income and equity markets took a hiatus from
their recent advances. It appears the Federal Reserve's interest rate hikers are
accomplishing the intended purpose. Recent economic statistics show some
moderation in the areas of home and vehicles sales because of the higher
interest costs. And, there are other favorable indications that the Fed may yet
"glide" the economy to a soft landing. Inflation remains low. Sustained
increases in worker productivity continue to dampen pricing pressures of an
increasingly tight labor pool. Corporate profitability growth remains viable. An
improving global economy bodes well for U.S. exporting businesses. While all
this provides a positive backdrop, we expect the markets will continue jittery
and volatile during the second half of the year as uncertainty over further Fed
actions persists. However, we believe patient investors in financial assets will
be amply rewarded when we move beyond this temporary respite.
Nationwide Life was a forerunner in the variable annuity and variable life
insurance business. We continue to develop new and innovative investment
products to better meet your financial planning and retirement needs. And, we
are equally committed to providing you, our valued customer, the exceptional
level of customer service you expect and deserve.
/s/ Joseph J. Gasper
Joseph J. Gasper, President
August 16, 2000
2
<PAGE> 3
HOW TO READ THE SEMI-ANNUAL REPORT
This semi-annual report is a presentation of the variable account as a whole and
only describes the underlying contracts and products of the variable account in
general terms. Please note the variable account may have more than one variable
product available. Such products may have different underlying mutual funds
available than those available in your contract. Therefore, not all funds listed
in this report may be available in your contract. Please refer to your most
recent account statement for specific information about your investment in the
Nationwide VA Separate Account-C. Rules and regulations of the United States
Securities and Exchange Commission and recognized conventions of Generally
Accepted Accounting Principals prescribe the format and content of this report.
We also invite you to call our service center at 1-800-860-3946 if you have
questions about your account, or you may access your account using our voice
response unit. And, please visit our web-site at www.nwservicecenter.com for
additional information about your contract and to learn more about other
products and services offered by Nationwide Financial.
THE ANNUAL REPORT HAS FOUR MAJOR FINANCIAL SECTIONS:
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNER'S EQUITY
This statement begins on page 4 and lists all of the underlying mutual funds of
the variable account, the number of shares owned, the amount paid for the shares
and their market value as of the close of business on June 30, 2000. The mutual
funds are listed in alphabetical order. The market value of the assets changes
as the underlying mutual funds change in value. As contract owners make exchange
transactions between the funds, the number of shares increases or decreases
accordingly. When money is deposited or withdrawn by a contract owner, shares
are correspondingly purchased or redeemed. The total market value of the funds
is equal to the TOTAL INVESTMENTS of the variable account.
ACCOUNTS RECEIVABLE, if applicable, represents an asset of the variable account
for money market fund shares purchased by contract owners and reinvested
dividend shares added to contract owners' accounts, but not yet added to Total
investments. Total investments plus Accounts receivable equal TOTAL ASSETS of
the variable account.
ACCOUNTS PAYABLE, if applicable, is a liability of the variable account for
money market fund shares redeemed by contract owners' but not yet deducted from
Total investments.
Total assets minus Accounts payable equals CONTRACT OWNERS' EQUITY. A summary of
Contract owners' equity by funds series may be found on page 5. This summary
also includes investment return for the reporting period for each fund series.
STATEMENTS OF OPERATIONS AND STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY
These statements begin on page 6 and present the financial activity of each
underlying mutual fund sub-account of the variable account, for the periods
indicated.
The INVESTMENT ACTIVITY section shows income to the variable account for
reinvested dividends and capital gain distributions paid by the underlying
mutual funds. Also shown are the mortality, expense and administration charges
which are assessed through the daily unit value calculation and which represent
an expense to the variable account and its contract owners. This section also
shows the realized gain or loss as mutual fund shares are sold, and the change
in unrealized gain or loss, which represents the changes in market value of the
underlying fund shares.
The EQUITY TRANSACTIONS section illustrates the receipt of purchase payments, as
new contracts are sold or additional payments made to existing contracts. Also
presented are deductions from the variable account when the contract owners
withdraw money.
The sum of the above two sections represents the NET CHANGE IN CONTRACT OWNERS'
EQUITY which when added to the beginning Contract owners' equity equals Contract
owners' equity at the end of the reporting period.
NOTES TO FINANCIAL STATEMENTS, beginning on page 10, provide further disclosures
about the variable account and its underlying contract provisions.
3
<PAGE> 4
NATIONWIDE VA SEPARATE ACCOUNT-C
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY
JUNE 30, 2000
(UNAUDITED)
<TABLE>
ASSETS:
<S> <C>
Investments at market value:
Fidelity VIP - Equity-Income Portfolio (FidVIPEI)
5,284,180 shares (cost $117,844,150) ................................................. $ 121,060,568
Fidelity VIP - Overseas Portfolio (FidVIPOv)
1,194,107 shares (cost $24,159,201) .................................................. 28,013,762
Nationwide SAT - Money Market Fund (NSATMyMkt)
15,184,385 shares (cost $15,184,385) ................................................. 15,184,385
Nationwide SAT - Total Return Fund (NSATTotRe)
4,771,856 shares (cost $76,767,299) .................................................. 92,526,290
One Group - Balanced Portfolio - Class A (OGBal)
12,709,521 shares (cost $184,414,409) ................................................ 201,573,003
One Group - Bond Portfolio - Class A (OGBond)
1,992,415 shares (cost $20,068,630) .................................................. 20,063,618
One Group - Diversified Equity Portfolio - Class A (OGDivEq)
1,398,104 shares (cost $24,623,695) .................................................. 24,984,110
One Group - Diversified Mid Cap Portfolio - Class A (OGDivMidCap)
700,088 shares (cost $11,139,057) .................................................... 11,621,457
One Group - Equity Index Portfolio - Class A (OGEqIx)
6,320,877 shares (cost $74,870,757) .................................................. 79,516,633
One Group - Government Bond Portfolio - Class A (OGGvtBd)
7,314,373 shares (cost $75,814,205) .................................................. 73,363,158
One Group - Large Cap Growth Portfolio - Class A (OGLgCapGr)
13,840,302 shares (cost $278,438,115) ................................................ 361,508,694
One Group - Mid Cap Growth Portfolio - Class A (OGMidCapGr)
8,079,406 shares (cost $135,794,350) ................................................. 186,230,301
One Group - Mid Cap Value Portfolio - Class A (OGMidCapV)
1,451,838 shares (cost $15,185,738) .................................................. 15,607,257
-------------
Total investments ................................................................. 1,231,253,236
Accounts receivable ........................................................................... 3,075,584
-------------
Total assets ...................................................................... 1,234,328,820
ACCOUNTS PAYABLE .............................................................................. 8,945
-------------
CONTRACT OWNERS' EQUITY ....................................................................... $ 1,234,319,875
=============
</TABLE>
4
<PAGE> 5
<TABLE>
<CAPTION>
NATIONWIDE VA SEPARATE ACCOUNT-C
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY, CONTINUED
PERIOD
Contract owners' equity represented by: UNITS UNIT VALUE RETURN(*)
----- ---------- ---------
<S> <C> <C> <C> <C>
Fidelity VIP - Equity-Income Portfolio:
Tax qualified ............................ 1,853,177 $ 21.544687 $ 39,926,118 (3)%
Non-tax qualified ........................ 3,757,348 21.544687 80,950,887 (3)%
Fidelity VIP - Overseas Portfolio:
Tax qualified ............................ 402,209 18.779911 7,553,449 (6)%
Non-tax qualified ........................ 1,080,272 18.779911 20,287,412 (6)%
Nationwide SAT - Money Market Fund:
Tax qualified ............................ 488,054 12.512952 6,106,996 2%
Non-tax qualified ........................ 725,455 12.512952 9,077,584 2%
Nationwide SAT - Total Return Fund:
Tax qualified ............................ 1,251,230 24.151274 30,218,799 3%
Non-tax qualified ........................ 2,571,906 24.151274 62,114,807 3%
One Group - Balanced Portfolio - Class A:
Tax qualified ............................ 2,882,274 20.095844 57,921,729 2%
Non-tax qualified ........................ 7,212,422 20.095844 144,939,707 2%
One Group - Bond Portfolio - Class A:
Tax qualified ............................ 621,807 10.355257 6,438,971 3%
Non-tax qualified ........................ 1,344,242 10.355257 13,919,971 3%
One Group -
Diversified Equity Portfolio - Class A:
Tax qualified ............................ 717,484 10.703972 7,679,929 1%
Non-tax qualified ........................ 1,619,434 10.703972 17,334,376 1%
One Group -
Diversified Mid Cap Portfolio - Class A:
Tax qualified ............................ 299,226 12.018518 3,596,253 10%
Non-tax qualified ........................ 669,118 12.018518 8,041,807 10%
One Group - Equity Index Portfolio - Class A:
Tax qualified ............................ 1,715,189 12.913512 22,149,114 (1)%
Non-tax qualified ........................ 4,443,862 12.913512 57,385,865 (1)%
One Group -
Government Bond Portfolio - Class A:
Tax qualified ............................ 1,701,087 13.275145 22,582,177 3%
Non-tax qualified ........................ 3,907,416 13.275145 51,871,514 3%
One Group -
Large Cap Growth Portfolio - Class A:
Tax qualified ............................ 3,273,113 32.566769 106,594,715 0%
Non-tax qualified ........................ 7,828,217 32.566769 254,939,735 0%
One Group -
Mid Cap Growth Portfolio - Class A:
Tax qualified ............................ 1,629,851 33.459413 54,533,858 14%
Non-tax qualified ........................ 3,936,572 33,459413 131,715,388 14%
One Group Mid Cap Value Portfolio - Class A:
Tax qualified ............................ 454,773 10.497837 4,774,133 3%
Non-tax qualified ........................ 1,035,842 10.497837 10,874,100 3%
========= =========
Reserves for annuity contracts in payout phase:
Non-tax qualified ........................ 790,481
-------------
$ 1,234,319,875
=============
(*) The period return does not include contract charges satisfied by
surrendering units.
See accompanying notes to financial statements.
======================================================================================================================
</TABLE>
5
<PAGE> 6
NATIONWIDE VA SEPARATE ACCOUNT-C
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY
STATEMENTS OF OPERATIONS
SIX MONTH PERIODS ENDED JUNE 30, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
TOTAL FIdVIPEI
----------------------------- ---------------------------
2000 1999 2000 1999
------------- ------------- ------------- -----------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................. $ 9,608,781 5,918,868 2,149,250 1,797,880
Mortality, expense and administration
charges (note 2)..................... (7,376,864) (4,847,928) (805,215) (832,785)
------------ ------------ ---------- ----------
Net investment activity.............. 2,231,917 1,070,940 1,344,035 965,095
------------ ------------ ---------- ----------
Proceeds from mutual fund shares sold.. 26,330,971 7,540,500 9,058,805 919,192
Cost of mutual fund shares sold........ (21,655,648) (6,277,464) (7,382,956) (598,903)
------------ ------------ ---------- ----------
Realized gain (loss) on investments.. 4,675,323 1,263,036 1,675,849 320,289
Change in unrealized gain (loss) on
investments.......................... (5,390,171) 53,535,690 (15,785,042) 9,507,708
------------ ------------ ---------- ----------
Net gain (loss) on investments....... (714,848) 54,798,726 (14,109,193) 9,827,997
------------ ------------ ---------- ----------
Reinvested capital gains............... 23,329,618 4,901,173 8,265,251 3,974,261
------------ ------------ ---------- ----------
Net increase (decrease) in
contract owners' equity
resulting from operations........ 24,846,687 60,770,839 (4,499,907) 14,767,353
------------ ------------ ---------- ----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners...................... 189,528,730 159,107,690 3,420,622 12,742,966
Transfers between funds................ - - (5,009,836) (2,212,669)
Redemptions............................ (40,289,323) (21,556,235) (5,228,115) (3,966,310)
Annuity benefits....................... (59,245) (412) (14,662) (77)
Contingent deferred sales charges
(note 2)............................. (1,089,847) (679,423) (112,870) (104,820)
Adjustments to maintain reserves........ (30,935) (34,704) 48,135 (7,086)
------------- ------------ ----------- -----------
Net equity transactions............ 148,059,380 136,836,916 (6,896,726) 6,452,004
------------- ------------ ----------- -----------
NET CHANGE IN CONTRACT OWNERS' EQUITY.... 172,906,067 197,607,755 (11,396,633) 21,219,357
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD.............................. 1,061,413,808 682,001,942 132,467,377 119,435,568
------------- ------------ ----------- -----------
CONTRACT OWNERS' EQUITY END OF PERIOD.... $ 1,234,319,875 879,609,697 121,070,744 140,654,925
============= ============ =========== ===========
</TABLE>
<TABLE>
<CAPTION>
FidVIPOv NSATMyMkt
--------------------------- ---------------------------
2000 1999 2000 1999
------------- ----------- ------------- ----------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................. 392,497 293,246 448,986 227,793
Mortality, expense and administration
charges (note 2)..................... (184,096) (128,655) (105,583) (65,183)
--------- ---------- ----------- ----------
Net investment activity.............. 208,401 164,591 343,403 162,610
--------- ---------- ----------- ----------
Proceeds from mutual fund shares sold.. 1,279,147 691,618 7,913,821 3,520,462
Cost of mutual fund shares sold........ (906,109) (562,733) (7,913,821) (3,520,462)
--------- ---------- ----------- ----------
Realized gain (loss) on investments.. 373,038 128,885 - -
Change in unrealized gain (loss) on
investments.......................... (4,730,861) 662,764 - -
--------- ---------- ----------- ----------
Net gain (loss) on investments....... (4,357,823) 791,649 - -
--------- ---------- ----------- ----------
Reinvested capital gains............... 2,471,671 472,977 - -
--------- ---------- ----------- ----------
Net increase (decrease) in
contract owners' equity
resulting from operations........ (1,677,751) 1,429,217 343,403 162,610
--------- ---------- ----------- ----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners...................... 833,735 1,726,272 1,645,786 1,654,924
Transfers between funds................ 1,739,912 (267,357) (5,014,322) (134,817)
Redemptions............................ (1,086,015) (752,400) (1,239,355) (509,110)
Annuity benefits....................... (15,038) - - -
Contingent deferred sales charges
(note 2)............................. (22,682) (26,169) (32,942) (12,662)
Adjustments to maintain reserves........ 22,414 135 200 218
----------- ----------- ----------- ----------
Net equity transactions............ 1,472,326 680,481 (4,640,633) 998,553
----------- ----------- ----------- ----------
NET CHANGE IN CONTRACT OWNERS' EQUITY.... (205,425) 2,109,698 (4,297,230) 1,161,163
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD.............................. 28,241,421 19,014,038 19,481,812 9,730,579
----------- ---------- ----------- ----------
CONTRACT OWNERS' EQUITY END OF PERIOD.... 28,035,996 21,123,736 15,184,582 10,891,742
=========== ========== =========== ==========
</TABLE>
6
<PAGE> 7
NATIONWIDE VA SEPARATE ACCOUNT-C
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, CONTINUED
SIX MONTH PERIODS ENDED JUNE 30,2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
NSATTotRe OGBal
--------------------------- ---------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ 246,675 339,622 3,087,595 1,551,556
Mortality, expense and administration
charges (note 2) .............................. (586,293) (557,578) (1,247,685) (793,358)
----------- ----------- ----------- -----------
Net investment activity ....................... (339,618) (217,956) 1,839,910 758,198
----------- ----------- ----------- -----------
Proceeds from mutual fund shares sold ........... 4,720,491 392,774 1,005,257 85,779
Cost of mutual fund shares sold ................. (3,010,196) (233,428) (675,113) (55,824)
----------- ----------- ----------- -----------
Realized gain (loss) on investments ........... 1,710,295 159,346 330,144 29,955
Change in unrealized gain (loss) on investments . 982,323 8,467,223 2,060,240 4,959,482
----------- ----------- ----------- -----------
Net gain (loss) on investments ................ 2,692,618 8,626,569 2,390,384 4,989,437
----------- ----------- ----------- -----------
Reinvested capital gains ........................ -- 38,609 136,329 396,595
----------- ----------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations .......... 2,353,000 8,447,222 4,366,623 6,144,230
----------- ----------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ............................... 3,328,184 9,567,591 22,108,220 43,086,023
Transfers between funds ......................... (1,753,544) (950,033) (1,289,299) 969,898
Redemptions ..................................... (3,817,190) (2,211,325) (5,525,876) (2,944,336)
Annuity benefits ................................ (14,730) (87) -- (80)
Contingent deferred sales charges (note 2) ...... (91,042) (62,706) (165,237) (94,838)
Adjustments to maintain reserves ................ 11,179 (8,521) 10,284 (7,049)
----------- ----------- ----------- -----------
Net equity transactions ..................... (2,337,143) 6,334,919 15,138,092 41,009,618
----------- ----------- ----------- -----------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............. 15,857 14,782,141 19,504,715 47,153,848
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ....... 92,522,015 79,971,072 183,356,734 103,052,096
----------- ----------- ----------- -----------
CONTRACT OWNERS' EQUITY END OF PERIOD ............. $ 92,537,872 94,753,213 202,861,449 150,205,944
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
OGBond OGDivEq
------------------- ---------------------
2000 1999 2000 1999
---------- ------- --------- --------
<S> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ 529,872 - 40,077 --
Mortality, expense and administration
charges (note 2) .............................. (77,789) - (96,332) --
---------- ------- ---------- --------
Net investment activity ....................... 452,083 - (56,255) --
---------- ------- ---------- --------
Proceeds from mutual fund shares sold ........... -- - -- --
Cost of mutual fund shares sold ................. -- - -- --
---------- ------- ---------- --------
Realized gain (loss) on investments ........... -- - -- --
Change in unrealized gain (loss) on investments . 97,976 - 570,443 --
---------- ------- ---------- --------
Net gain (loss) on investments ................ 97,976 - 570,443 --
---------- ------- ---------- --------
Reinvested capital gains ........................ -- - -- --
---------- ------- ---------- --------
Net increase (decrease) in contract owners'
equity resulting from operations .......... 550,059 - 514,188 --
---------- ------- ---------- --------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ............................... 15,066,518 - 18,095,263 --
Transfers between funds ......................... (251,118) - 34,022 --
Redemptions ..................................... (242,753) - (333,452) --
Annuity benefits ................................ -- - -- --
Contingent deferred sales charges (note 2) ...... (5,585) - (11,174) --
Adjustments to maintain reserves ................ (50,633) - 2,974 --
---------- ------- ---------- --------
Net equity transactions ..................... 14,516,429 - 17,787,633 --
---------- ------- ---------- --------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............. 15,066,488 - 18,301,821 --
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ....... 5,292,462 - 6,712,487 --
---------- ------- ---------- --------
CONTRACT OWNERS' EQUITY END OF PERIOD ............. 20,358,950 - 25,014,308 --
========== ======= ========== ========
(Continued)
</TABLE>
7
<PAGE> 8
NATIONWIDE VA SEPARATE ACCOUNT-C
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, CONTINUED
SIX MONTH PERIODS ENDED JUNE 30,2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
OGDivMidCap OGEqIx
------------------------------- -------------------------
2000 1999 2000 1999
----------- ------------- --------- ----------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ 23,987 - 400,443 158,861
Mortality, expense and administration
charges (note 2) .............................. (43,682) - (433,761) (121,097)
----------- ------------ ----------- ----------
Net investment activity ....................... (19,695) - (33,318) 37,764
----------- ------------ ----------- ----------
Proceeds from mutual fund shares sold ........... -- - 14,691 81,281
Cost of mutual fund shares sold ................. -- - (12,259) (70,039)
----------- ------------ ----------- ----------
Realized gain (loss) on investments ........... -- - 2,432 11,242
Change in unrealized gain (loss) on investments . 451,183 - (1,430,839) 2,457,888
----------- ------------ ----------- ----------
Net gain (loss) on investments ................ 451,183 - (1,428,407) 2,469,130
----------- ------------ ----------- ----------
Reinvested capital gains ........................ 259,972 - 1,054,653 --
----------- ------------ ----------- ----------
Net increase (decrease) in contract owners'
equity resulting from operations .......... 691,460 - (407,072) 2,506,894
----------- ------------ ----------- ----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ............................... 8,333,203 - 24,308,074 15,146,454
Transfers between funds ......................... 142,179 - 3,946,009 920,813
Redemptions ..................................... (189,390) - (2,107,942) (273,570)
Annuity benefits ................................ -- - (14,815) --
Contingent deferred sales charges (note 2) ...... (7,048) - (66,280) (13,773)
Adjustments to maintain reserves ................ (129,582) - 15,738 209
----------- ------------ ----------- ----------
Net equity transactions ..................... 8,149,362 - 26,080,784 15,780,133
----------- ------------ ----------- ----------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............. 8,840,822 - 25,673,712 18,287,027
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ....... 2,797,178 - 54,058,615 13,702,629
----------- ------------ ----------- ----------
CONTRACT OWNERS' EQUITY END OF PERIOD ............. $ 11,638,000 - 79,732,327 31,989,656
=========== ============ =========== ==========
</TABLE>
<TABLE>
<CAPTION>
OGGvtBd OGLgCapGr
----------------------------- ---------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ 2,214,672 1,351,503 -- 198,407
Mortality, expense and administration
charges (note 2) .............................. (440,209) (277,658) (2,212,569) (1,458,233)
---------- ---------- ----------- -----------
Net investment activity ....................... 1,774,463 1,073,845 (2,212,569) (1,259,826)
---------- ---------- ----------- -----------
Proceeds from mutual fund shares sold ........... 1,284,720 696,965 926,477 725,725
Cost of mutual fund shares sold ................. (1,306,965) (699,426) (383,544) (298,198)
---------- ---------- ----------- -----------
Realized gain (loss) on investments ........... (22,245) (2,461) 542,933 427,527
Change in unrealized gain (loss) on investments . 485,485 (2,157,025) (5,910,952) 24,818,009
---------- ---------- ----------- -----------
Net gain (loss) on investments ................ 463,240 (2,159,486) (5,368,019) 25,245,536
---------- ---------- ----------- -----------
Reinvested capital gains ........................ -- 2,360 6,914,049 16,371
---------- ---------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations .......... 2,237,703 (1,083,281) (666,539) 24,002,081
---------- ---------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ............................... 17,944,928 17,475,813 39,154,190 44,933,143
Transfers between funds ......................... (5,688,614) (87,588) 6,105,335 2,112,069
Redemptions ..................................... (3,110,246) (1,399,679) (12,287,418) (6,820,268)
Annuity benefits ................................ -- (61) -- (107)
Contingent deferred sales charges (note 2) ...... (101,403) (39,352) (337,485) (226,627)
Adjustments to maintain reserves ................ 864 (5,694) 24,988 (7,775)
---------- ---------- ----------- -----------
Net equity transactions ..................... 9,045,529 15,943,439 32,659,610 39,990,435
---------- ---------- ----------- -----------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............. 11,283,232 14,860,158 31,993,071 63,992,516
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ....... 63,170,455 42,239,580 329,541,396 202,191,833
---------- ---------- ----------- -----------
CONTRACT OWNERS' EQUITY END OF PERIOD ............. 74,453,687 57,099,738 361,534,467 266,184,349
========== ========== =========== ===========
</TABLE>
8
<PAGE> 9
NATIONWIDE VA SEPARATE ACCOUNT-C
STATEMENTS OF CHANGES IN
CONTRACT OWNERS' EQUITY, CONTINUED
STATEMENTS OF OPERATIONS, CONTINUED
SIX MONTH PERIODS ENDED JUNE 30,2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
OGMidCapGr OGMidCapV
----------------------------- -------------------------
2000 1999 2000 1999
----------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ............................ $ -- -- 74,727 --
Mortality, expense and administration
charges (note 2) .............................. (1,082,682) (613,381) (60,968) --
------------ ----------- ----------- ----------
Net investment activity ....................... (1,082,682) (613,381) 13,759 --
------------ ----------- ----------- ----------
Proceeds from mutual fund shares sold ........... 127,562 426,704 -- --
Cost of mutual fund shares sold ................. (64,685) (238,451) -- --
------------ ----------- ----------- ----------
Realized gain (loss) on investments ........... 62,877 188,253 -- --
Change in unrealized gain (loss) on investments . 17,574,143 4,819,641 245,730 --
------------ ----------- ----------- ----------
Net gain (loss) on investments ................ 17,637,020 5,007,894 245,730 --
------------ ----------- ----------- ----------
Reinvested capital gains ........................ 4,225,947 -- 1,746 --
------------ ----------- ----------- ----------
Net increase (decrease) in contract owners'
equity resulting from operations .......... 20,780,285 4,394,513 261,235 --
------------ ----------- ----------- ----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners ............................... 23,760,872 12,774,504 11,529,135 --
Transfers between funds ......................... 6,977,735 (350,316) 61,541 --
Redemptions ..................................... (4,893,525) (2,679,237) (228,046) --
Annuity benefits ................................ -- -- -- --
Contingent deferred sales charges (note 2) ...... (128,328) (98,476) (7,771) --
Adjustments to maintain reserves ................ 19,242 859 (6,738) --
------------ ----------- ----------- ----------
Net equity transactions ..................... 25,735,996 9,647,334 11,348,121 --
------------ ----------- ----------- ----------
NET CHANGE IN CONTRACT OWNERS' EQUITY ............. 46,516,281 14,041,847 11,609,356 --
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ....... 139,732,977 92,664,547 4,038,879 --
------------ ----------- ----------- ----------
CONTRACT OWNERS' EQUITY END OF PERIOD ............. $ 186,249,258 106,706,394 15,648,235 --
============ =========== =========== ==========
</TABLE>
See accompanying notes to financial statements.
9
<PAGE> 10
NATIONWIDE VA SEPARATE ACCOUNT-C
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Organization and Nature of Operations
Nationwide VASeparate Account-C (the Account) was established pursuant
to a resolution of the Board of Directors of Nationwide Life and
Annuity Insurance Company (the Company) on July 24, 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 banks and other financial
institutions.
(b) The Contracts
Only contracts without a front-end sales charge, but with a contingent
deferred sales charge and certain other fees, are offered for
purchase. See note 2 for a discussion of contract expenses.
With certain exceptions, contract owners in either the accumulation or
the payout phase may invest in any of the following funds:
<TABLE>
<S> <C>
Portfolios of the Fidelity Variable Insurance Products Fund (Fidelity VIP);
Fidelity VIP - Equity-Income Portfolio (FidVIPEI)
Fidelity VIP - Overseas Portfolio (FidVIPOv)
Funds of the Nationwide Separate Account Trust (Nationwide SAT)
(managed for a fee by an affiliated investment advisor);
Nationwide SAT - Money Market Fund (NSATMyMkt)
Nationwide SAT - Total Return Fund (NSATTotRe)
Funds of The One Group(R) Investment Trust (One Group);
One Group - Balanced Portfolio (OGBal) (formerly One Group - Asset Allocation Fund)
One Group - Bond Portfolio (OGBond)
One Group - Diversified Equity Portfolio (OGDivEq)
One Group - Diversified Mid Cap Portfolio (OGDivMidCap)
One Group - Equity Index Portfolio (OGEqIx)
(formerly One Group - Equity Index Fund)
One Group - Government Bond Portfolio (OGGvtBd)
(formerly One Group - Government Bond Fund)
One Group - Large Cap Growth Portfolio (OGLgCapGr)
(formerly One Group - Large Company Growth Fund))
One Group - Mid Cap Growth Portfolio (OGMidCapGr)
(formerly One Group - Growth Opportunities Fund)
One Group - Mid Cap Value Portfolio (OGMidCapV)
</TABLE>
At June 30, 2000, 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.
10
<PAGE> 11
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.
(c) Security Valuation, Transactions and Related Investment Income
The market value of the underlying mutual funds is based on the
closing net asset value per share at June 30, 2000. The cost of
investments sold is determined on a specific identification basis.
Investment transactions are accounted for on the trade date (date the
order to buy or sell is executed) and dividend income is recorded on
the ex-dividend date.
(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 provisions of the Internal Revenue Code.
The Company does not provide for income taxes within the Account.
Taxes are the responsibility of the contract owner upon termination or
withdrawal.
(e) Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally
accepted accounting principles may require management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities,
if any, at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
(f) Calculation of Annuity Reserves
Annuity reserves are computed for contracts in the variable payout
stage according to industry standard mortality tables. The assumed
investment return is 3.5 percent unless the annuitant elects
otherwise, in which case the rate may vary from 3.5 percent to 7
percent, as regulated by the laws of the respective states. The
mortality risk is fully borne by the Company and may result in
additional amounts being transferred into the Account by the Company
to cover greater longevity of annuitants than expected. Conversely, if
reserves exceed amounts required, transfers may be made to the
Company.
(2) EXPENSES
The Company does not deduct a sales charge from purchase payments received
from the contract owners. However, if any part of the contract value of
such contracts is surrendered, the Company will, with certain exceptions,
deduct from a contract owner's contract value a contingent deferred sales
charge not to exceed 7% of the lesser of purchase payments or the amount
surrendered, such charge declining 1% per year, to 0%, after the purchase
payment has been held in the contract for 84 months. No sales charges are
deducted on redemptions used to purchase units in the fixed investment
options of the Company.
The Company deducts a mortality risk charge, an expense risk charge and an
administration charge assessed through the daily unit value calculation
equal to an annual rate of 0.80%, 0.45% and 0.05%, respectively. No charges
are deducted from the initial funding by the Depositor, or from earnings
thereon.
(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.
11
<PAGE> 12
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY Bulk Rate
HOME OFFICE: ONE NATIONWIDE PLAZA - COLUMBUS, OHIO 43215-2220 U.S. Postage
P A I D
Columbus, Ohio
Permit No. 521
Nationwide(R) is a registered federal service mark of Nationwide Mutual
Insurance Company
