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[LOGO]
NATIONWIDE(R)
VARIABLE
ACCOUNT-5
SEMI-ANNUAL REPORT
TO
CONTRACT OWNERS
JUNE 30, 1997
NATIONWIDE LIFE INSURANCE COMPANY
HOME OFFICE: COLUMBUS, OHIO
APO-2750-F(6/97)
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[LOGO]
NATIONWIDE LIFE INSURANCE COMPANY
ONE NATIONWIDE PLAZA, COLUMBUS, OHIO 43215-2220
[Joseph J. Gasper PHOTO]
PRESIDENT'S MESSAGE
We are pleased to present the 1997 semi-annual report of the Nationwide Variable
Account-5.
Our Enterprise Vision statement states: "We exist to serve our customers."
Everything we do is focused on you, our customer, and on your needs.
We recognize that your expectations have changed and your standards for value
and service are higher than ever before. You are being asked to take more
responsibility for your own financial future, as employers and government
programs provide fewer guarantees.
We know that you expect service and products customized to fit your needs -
including financial advice - and you expect to receive service at any time,
anywhere and any way you choose.
We are responding to your changing needs and expectations with innovative
product offerings, continuing investment in the training and professional
development of our people, and our investment in technology to enable us to
serve you faster, better and more cost effectively.
Equity investments produced solid gains for the first half of 1997 with the Dow
Jones Industrial Average breaking the 8,000 mark on July 16. The U.S. economy,
in its seventh year of expansion, is growing vigorously and corporate profits
are better than anticipated.
Interest rates and inflation are still at very low levels. However, the risk of
a temporary spike remains as the Federal Reserve might be forced to raise
interest rates in order to keep our economy on an inflation-free growth path.
Even such policy actions are not expected to end the prosperous times which we
now enjoy. In the long run, equity valuations will reflect these excellent
economic conditions.
Thank you for giving Nationwide Life Insurance Company the opportunity to meet
your investment needs.
/s/ Joseph J. Gasper
Joseph J. Gasper, President
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<TABLE>
<CAPTION>
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NATIONWIDE VARIABLE ACCOUNT-5
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY
JUNE 30, 1997
(UNAUDITED)
ASSETS:
<S> <C>
Investments at market value:
American Century VP - American Century VP Advantage (ACVPAdv)
41,954 shares (cost $243,376) ......................................... $ 261,794
American Century VP - American Century VP Capital Appreciation (ACVPCapAp)
134,006 shares (cost $1,353,162) ...................................... 1,294,500
Dreyfus Stock Index Fund (DryStkIx)
68,766 shares (cost $1,192,569) ....................................... 1,666,196
Fidelity VIP - Equity-Income Portfolio (FidVIPEI)
210,281 shares (cost $3,661,639) ...................................... 4,638,794
Nationwide SAT - Government Bond Fund (NSATGvtBd)
68,313 shares (cost $734,048) ......................................... 751,440
Nationwide SAT - Money Market Fund (NSATMyMkt)
471,152 shares (cost $471,152) ........................................ 471,152
Nationwide SAT - Total Return Fund (NSATTotRe)
157,840 shares (cost $1,810,388) ...................................... 2,479,674
Neuberger &Berman - Balanced Portfolio (NBAMTBal)
54,057 shares (cost $841,738) ......................................... 896,263
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Total investments .................................................. 12,459,813
Accounts receivable ......................................................... 3
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Total assets ....................................................... 12,459,816
ACCOUNTS PAYABLE ............................................................... --
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CONTRACT OWNERS' EQUITY ........................................................ $12,459,816
===========
</TABLE>
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<TABLE>
<CAPTION>
Contract owners' equity represented by: UNITS UNIT VALUE
-------- ---------
<S> <C> <C> <C>
American Century VP - American Century VP Advantage:
Tax qualified ........................ 9,798 $ 14.895913 $ 145,950
Non-tax qualified .................... 7,777 14.895913 115,846
American Century VP - American Century VP
Capital Appreciation:
Tax qualified ........................ 76,417 14.897166 1,138,397
Non-tax qualified .................... 10,478 14.897166 156,093
Dreyfus Stock Index Fund:
Tax qualified ........................ 68,541 19.981826 1,369,574
Non-tax qualified .................... 14,845 19.981826 296,630
Fidelity VIP - Equity-Income Portfolio:
Tax qualified ........................ 211,005 18.798061 3,966,485
Non-tax qualified .................... 35,767 18.798061 672,350
Nationwide SAT - Government Bond Fund:
Tax qualified ........................ 14,622 30.746290 449,572
Non-tax qualified .................... 9,815 30.757627 301,886
Nationwide SAT - Money Market Fund:
Tax qualified ........................ 22,743 20.711249 471,036
Nationwide SAT - Total Return Fund:
Tax qualified ........................ 28,227 73.759455 2,082,008
Non-tax qualified .................... 5,552 71.637923 397,734
Neuberger & Berman - Balanced Portfolio:
Tax qualified ........................ 48,649 17.204573 836,985
Non-tax qualified .................... 3,445 17.204573 59,270
======= =========== ------------
$ 12,459,816
============
</TABLE>
See accompanying notes to financial statements.
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<TABLE>
<CAPTION>
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NATIONWIDE VARIABLE ACCOUNT-5
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
TOTAL ACVPADV
------------------------------ ------------------------------
1997 1996 1997 1996
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................. $ 149,713 76,900 3,776 3,774
Mortality, expense and administration
charges (note 2)..................... (73,146) (55,250) (1,611) (1,460)
-------------- -------------- -------------- --------------
Net investment activity.............. 76,567 21,650 2,165 2,314
-------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold.. 854,978 300,290 25,566 15,973
Cost of mutual fund shares sold........ (721,154) (253,053) (22,616) (14,668)
-------------- -------------- -------------- --------------
Realized gain (loss) on investments.. 133,824 47,237 2,950 1,305
Change in unrealized gain (loss) on
investments 679,768 (103,665) (3,691) (7,452)
-------------- -------------- -------------- --------------
Net gain (loss) on investments....... 813,592 (56,428) (741) (6,147)
-------------- -------------- -------------- --------------
Reinvested capital gains............... 408,765 373,290 13,186 10,732
-------------- -------------- -------------- --------------
Net increase (decrease) in contract
owners' equity resulting from
operations. 1,298,924 338,512 14,610 6,899
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds 1,490,731 1,359,879 19,011 15,275
Redemptions............................ (631,907) (285,692) (16,075) (4,782)
Annuity benefits....................... - - - -
Annual contract maintenance charge (note 2) (12,598) (11,092) (394) (280)
Contingent deferred sales charges (note 2) (10,860) (11,390) (612) (206)
Adjustments to maintain reserves....... 108 320 (5) 10
-------------- -------------- -------------- --------------
Net equity transactions............ 835,474 1,052,025 1,925 10,017
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY.... 2,134,398 1,390,537 16,535 16,916
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD 10,325,418 7,728,444 245,261 218,083
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD.... $ 12,459,816 9,118,981 261,796 234,999
============== ============== ============== ==============
<CAPTION>
ACVPCAPAP DRYSTKIX
------------------------------ ------------------------------
1997 1996 1997 1996
------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................. - - 11,871 7,859
Mortality, expense and administration
charges (note 2)..................... (8,468) (8,729) (8,935) (4,662)
------------- -------------- -------------- --------------
Net investment activity.............. (8,468) (8,729) 2,936 3,197
------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold.. 225,070 40,461 45,335 19,661
Cost of mutual fund shares sold........ (217,380) (31,897) (26,616) (13,807)
------------- -------------- -------------- --------------
Realized gain (loss) on investments.. 7,690 8,564 18,719 5,854
Change in unrealized gain (loss) on
investments (93,779) (138,860) 229,727 53,192
------------- -------------- -------------- --------------
Net gain (loss) on investments....... (86,089) (130,296) 248,446 59,046
------------- -------------- -------------- --------------
Reinvested capital gains............... 27,829 148,311 - -
------------- -------------- -------------- --------------
Net increase (decrease) in contract
owners' equity resulting
from operations.................. (66,728) 9,286 251,382 62,243
------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds 1,512 217,783 438,300 177,395
Redemptions............................ (60,361) (59,673) (69,110) (19,656)
Annuity benefits....................... - - - -
Annual contract maintenance charge (note 2) (1,589) (1,889) (1,330) (876)
Contingent deferred sales charges (note 2) (1,814) (2,362) (683) (991)
Adjustments to maintain reserves....... (3) 123 46 22
------------- -------------- -------------- --------------
Net equity transactions............ (62,255) 153,982 367,223 155,894
------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY.... (128,983) 163,268 618,605 218,137
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD 1,423,473 1,242,915 1,047,599 613,443
------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD.... 1,294,490 1,406,183 1,666,204 831,580
============= ============== ============== ==============
</TABLE>
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<TABLE>
<CAPTION>
NATIONWIDE VARIABLE ACCOUNT-5
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
FIDVIPEI NSATGVTBD
------------------------------ ------------------------------
1997 1996 1997 1996
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................. $ 65,141 4,263 23,054 20,694
Mortality, expense and administration
charges (note 2)..................... (27,026) (19,602) (4,709) (4,281)
-------------- -------------- -------------- --------------
Net investment activity.............. 38,115 (15,339) 18,345 16,413
-------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold.. 232,470 81,045 21,619 16,795
Cost of mutual fund shares sold........ (170,000) (60,836) (20,870) (16,257)
-------------- -------------- -------------- --------------
Realized gain (loss) on investments.. 62,470 20,209 749 538
Change in unrealized gain (loss) on investments 183,723 17,944 (3,187) (31,782)
-------------- -------------- -------------- --------------
Net gain (loss) on investments....... 246,193 38,153 (2,438) (31,244)
-------------- -------------- -------------- --------------
Reinvested capital gains............... 327,513 122,194 - -
-------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations. 611,821 145,008 15,907 (14,831)
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds 509,138 559,075 44,151 37,280
Redemptions............................ (251,263) (111,447) (15,635) (12,013)
Annuity benefits....................... - - - -
Annual contract maintenance charge (note 2) (4,787) (4,101) (552) (562)
Contingent deferred sales charges (note 2) (3,507) (4,690) (416) (196)
Adjustments to maintain reserves....... 23 47 (2) 26
-------------- -------------- -------------- --------------
Net equity transactions............ 249,604 438,884 27,546 24,535
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY.... 861,425 583,892 43,453 9,704
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD 3,777,410 2,691,711 708,005 658,204
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD.... $ 4,638,835 3,275,603 751,458 667,908
============== ============== ============== ==============
<CAPTION>
NSATMYMKT NSATTOTRE
--------------------------- -----------------------------
1997 1996 1997 1996
------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................. 10,915 8,227 19,279 15,529
Mortality, expense and administration
charges (note 2)..................... (2,821) (2,160) (13,961) (9,548)
------------- -------------- -------------- --------------
Net investment activity.............. 8,094 6,067 5,318 5,981
------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold.. 69,186 49,841 113,586 39,356
Cost of mutual fund shares sold........ (69,186) (49,841) (81,029) (32,641)
------------- -------------- -------------- --------------
Realized gain (loss) on investments.. - - 32,557 6,715
Change in unrealized gain (loss) on investments - - 340,071 95,060
------------- -------------- -------------- --------------
Net gain (loss) on investments....... - - 372,628 101,775
------------- -------------- -------------- --------------
Reinvested capital gains............... - - - -
------------- -------------- -------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations. 8,094 6,067 377,946 107,756
------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds 92,465 31,083 316,727 231,190
Redemptions............................ (20,672) (14,639) (107,925) (43,052)
Annuity benefits....................... - - - -
Annual contract maintenance charge (note 2) (563) (485) (2,272) (1,942)
Contingent deferred sales charges (note 2) (27) (278) (1,834) (1,926)
Adjustments to maintain reserves....... 11 17 57 55
------------- -------------- -------------- --------------
Net equity transactions............ 71,214 15,698 204,753 184,325
------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY.... 79,308 21,765 582,699 292,081
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD 391,728 312,063 1,897,043 1,306,376
------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD.... 471,036 333,828 2,479,742 1,598,457
============= ============== ============== ==============
</TABLE>
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NATIONWIDE VARIABLE ACCOUNT-5
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
<TABLE>
<CAPTION>
NBAMTBAL
-----------------------------
1997 1996
------------- -------------
<S> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................. $ 15,677 16,554
Mortality, expense and administration
charges (note 2)..................... (5,615) (4,808)
-------------- --------------
Net investment activity.............. 10,062 11,746
-------------- --------------
Proceeds from mutual fund shares sold.. 122,146 37,158
Cost of mutual fund shares sold........ (113,457) (33,106)
-------------- --------------
Realized gain (loss) on investments.. 8,689 4,052
Change in unrealized gain (loss) on investments 26,904 (91,767)
-------------- --------------
Net gain (loss) on investments....... 35,593 (87,715)
-------------- --------------
Reinvested capital gains............... 40,237 92,053
-------------- --------------
Net increase (decrease) in contract owners'
equity resulting from operations. 85,892 16,084
-------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds 69,427 90,798
Redemptions............................ (90,866) (20,430)
Annuity benefits....................... - -
Annual contract maintenance charge (note 2) (1,111) (957)
Contingent deferred sales charges (note 2) (1,967) (741)
Adjustments to maintain reserves....... (19) 20
-------------- --------------
Net equity transactions............ (24,536) 68,690
-------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY.... 61,356 84,774
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD 834,899 685,649
------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD.... $ 896,255 770,423
============= ==============
</TABLE>
See accompanying notes to financial statements.
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NATIONWIDE VARIABLE ACCOUNT-5
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997 AND 1996
(UNAUDITED)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Organization and Nature of Operations
Nationwide Variable Account-5 (the Account) was established pursuant to
a resolution of the Board of Directors of Nationwide Life Insurance
Company (the Company) on November 1, 1989. The Account has been
registered as a unit investment trust under the Investment Company Act
of 1940. On December 31, 1993, the accumulation unit values for each
fund sub-account of Nationwide Variable Account-5 were established at a
unit value equal to the accumulation unit values of the corresponding
fund sub-account of the Nationwide Multi-Flex Variable Account. The
first deposits were received by the Account on May 4, 1994.
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. Contract owners in
either the accumulation or payout phase may invest in any of the
following:
Portfolios of the American Century Variable Portfolios, Inc.
(American Century VP)(formerly TCI Portfolios, Inc.);
American Century VP - American Century VP Advantage (ACVPAdv)
(formerly TCI Portfolios - TCI Advantage)
American Century VP - American Century VP Capital Appreciation
(ACVPCapAp) (formerly TCI Portfolios - TCI Growth)
Dreyfus Stock Index Fund (DryStkIx)
Portfolio of the Fidelity Variable Insurance Products Fund
(Fidelity VIP);
Fidelity VIP - Equity-Income Portfolio (FidVIPEI)
Funds of the Nationwide Separate Account Trust (Nationwide SAT)
(managed for a fee by an affiliated investment advisor);
Nationwide SAT - Government Bond Fund (NSATGvtBd)
Nationwide SAT - Money Market Fund (NSATMyMkt)
Nationwide SAT - Total Return Fund (NSATTotRe)
Portfolio of the Neuberger &Berman Advisers Management Trust
(Neuberger &Berman); Neuberger &Berman - Balanced Portfolio
(NBAMTBal)
At June 30, 1997, contract owners have invested in all of the above
funds. The contract owners' equity is affected by the investment
results of each fund, equity transactions by contract owners and
certain contract expenses (see note 2). The accompanying financial
statements include only contract owners' purchase payments pertaining
to the variable portions of their contracts and exclude any purchase
payments for fixed dollar benefits, the latter being included in the
accounts of the Company.
(c) Security Valuation, Transactions and Related Investment Income
The market value of the underlying mutual funds is based on the closing
net asset value per share at June 30, 1997. The cost of investments
sold is determined on 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.
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(d) Federal Income Taxes
Operations of the Account form a part of, and are taxed with,
operations of the Company which is taxed as a life insurance company
under the Internal Revenue Code.
The Company does not provide for income taxes within the Account. Taxes
are the responsibility of the contract owner upon termination or
withdrawal.
(e) Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally
accepted accounting principles may require management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities, if
any, at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
(f) Reclassifications
Certain 1996 amounts have been reclassified to conform with the current
year presentation.
(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 following contract charges are deducted by the Company: (a) an annual
contract maintenance charge of $30, with certain exceptions, which is
satisfied by surrendering units; and (b) 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.
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<CAPTION>
<S> <C>
NATIONWIDE LIFE INSURANCE COMPANY -----------------
HOME OFFICE: ONE NATIONWIDE PLAZA o COLUMBUS, OHIO 43215-2220 Bulk Rate
U.S. Postage
PAID
Columbus, Ohio
Permit No. 521
-----------------
Nationwide(R) is a registered federal service mark of Nationwide Mutual Insurance Company
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