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[LOGO]
NATIONWIDE(R)
VARIABLE
ACCOUNT-6
ANNUAL REPORT
TO
CONTRACT OWNERS
DECEMBER 31, 1996
NATIONWIDE LIFE INSURANCE COMPANY
HOME OFFICE: COLUMBUS, OHIO
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[LOGO]
[PHOTO]
PRESIDENT'S MESSAGE
On behalf of Nationwide Life Insurance Company, we are pleased to bring you the
1996 annual report of the Nationwide Variable Account-6.
The U.S. economy is enjoying the rewards of a stable political system and a
globally competitive business sector. These good times will last, although not
all years will show the stellar performance of the last two years. 1997 may be
the year in which normalcy will return.
The economic expansion has lasted six years already, and all resources are more
or less fully employed. The job market in particular is showing some strains,
and wages are rising a bit faster than before. Also, the competitive pressures
from abroad are increasing due to a sharp rise in the exchange value of our
currency. Business will be hard pressed under those conditions to continue
showing above-average profit increases. For the economy as a whole, inflation
has hit the low point in this business cycle and will slowly but surely be a
more important variable for monetary policy.
In the last few years, and especially in 1996, our economy expanded faster than
the natural rate of growth. This cannot continue without creating bottlenecks
that in turn induce price increases. Either the economy will slow under its own
weight or the Federal Reserve will have to step in. Some indicators point to a
softening of business activity. But whether this is enough will be a close call.
Again, the long-term trend is very positive for the U.S., its business activity,
and its financial markets. However, 1997 might turn out to have some more
surprises than anticipated right now.
/s/ JOSEPH J. GASPER
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Joseph J. Gasper,
President
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NATIONWIDE VARIABLE ACCOUNT-6
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY
DECEMBER 31, 1996
<TABLE>
<S> <C>
Assets:
Investments at market value:
Evergreen - VA Foundation Fund (EvFound)
1,237,902 shares (cost $12,471,513)............................. $ 14,000,675
Evergreen - VA Fund (EvFund)
638,693 shares (cost $6,579,760)................................ 7,287,487
Evergreen - VA Growth and Income Fund (EvGrInc)
918,603 shares (cost $9,700,551)................................ 10,867,072
Fidelity VIP - High Income Portfolio (FidVIPHI)
89,780 shares (cost $1,068,105)................................. 1,124,044
Fidelity VIP - Overseas Portfolio (FidVIPOv)
70,565 shares (cost $1,254,736)................................. 1,329,442
Fidelity VIP-II - Asset Manager Portfolio (FidVIPAM)
72,089 shares (cost $1,125,619)................................. 1,220,460
Nationwide SAT - Government Bond Fund (NSATGvtBd)
19,616 shares (cost $213,623)................................... 216,561
Nationwide SAT - Money Market Fund (NSATMyMkt)
1,175,690 shares (cost $1,175,690).............................. 1,175,690
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Total assets.................................................. 37,221,431
Accounts payable....................................................... 18,501
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Contract owners' equity................................................ $37,202,930
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</TABLE>
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<TABLE>
Contract owners' equity represented by: Units Unit Value
------- ------------
<S> <C> <C> <C>
Evergreen - VA Foundation Fund:
Tax qualified............................. 291,176 $ 11.393285 $ 3,317,451
Non-tax qualified......................... 835,841 11.393285 9,522,975
Initial Funding by Depositor (note 1a).... 100,000 11.527881 1,152,788
Evergreen - VA Fund:
Tax qualified............................. 121,148 11.351897 1,375,260
Non-tax qualified......................... 419,319 11.351897 4,760,066
Initial Funding by Depositor (note 1a).... 100,000 11.486000 1,148,600
Evergreen - VA Growth and Income Fund:
Tax qualified............................. 200,982 11.759862 2,363,521
Non-tax qualified......................... 621,484 11.759862 7,308,566
Initial Funding by Depositor (note 1a).... 100,000 11.898767 1,189,877
Fidelity VIP - High Income Portfolio:
Tax qualified............................. 26,822 10.816268 290,114
Non-tax qualified......................... 77,056 10.816268 833,458
Fidelity VIP - Overseas Portfolio:
Tax qualified............................. 22,959 10.895270 250,145
Non-tax qualified......................... 99,000 10.895270 1,078,632
Fidelity VIP-II - Asset Manager Portfolio:
Tax qualified............................. 32,538 11.103069 361,272
Non-tax qualified......................... 77,328 11.103069 858,578
Nationwide SAT - Government Bond Fund:
Tax qualified............................. 8,959 10.318689 92,445
Non-tax qualified......................... 12,014 10.318689 123,969
Nationwide SAT - Money Market Fund:
Tax qualified............................. 25,641 10.301567 264,142
Non-tax qualified......................... 88,440 10.301567 911,071
======= ========= ------------
$ 37,202,930
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</TABLE>
See accompanying notes to financial statements.
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NATIONWIDE VARIABLE ACCOUNT-6
STATEMENT OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
FOR THE PERIOD FEBRUARY 28, 1996 (COMMENCEMENT OF OPERATIONS) THROUGH
DECEMBER 31, 1996
<TABLE>
1996
--------
<S> <C>
Investment activity:
Reinvested capital gains and dividends.................... $ 414,340
Mortality, expense and administration charges (note 2).... (230,324)
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Net investment activity................................. 184,016
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Proceeds from mutual fund shares sold..................... 3,463,306
Cost of mutual fund shares sold........................... (3,318,706)
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Realized gain (loss) on investments..................... 144,600
Change in unrealized gain (loss) on investments........... 3,631,834
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Net gain (loss) on investments.......................... 3,776,434
Net increase (decrease) in contract owners'
equity resulting from operations.................... 3,960,450
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Equity transactions:
Purchase payments received from contract owners........... 34,210,736
Redemptions............................................... (939,197)
Contingent deferred sales charges (note 2)................ (10,938)
Adjustments to maintain reserves.......................... (18,121)
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Net equity transactions............................... 33,242,480
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Net change in contract owners' equity....................... 37,202,930
Contract owners' equity beginning of period................. --
------------
Contract owners' equity end of period....................... $ 37,202,930
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</TABLE>
See accompanying notes to financial statements.
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NATIONWIDE VARIABLE ACCOUNT-6
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
(1) Summary of Significant Accounting Policies
(a) Organization and Nature of Operations
Nationwide Variable Account-6 (the Account) was established pursuant
to a resolution of the Board of Directors of Nationwide Life Insurance
Company (the Company) on February 2, 1994. The Account has been
registered as a unit investment trust under the Investment Company Act
of 1940.
On February 28, 1996, the Company (Depositor) transferred to
the Account, 100,000 shares of the Evergreen - VA Foundation Fund,
100,000 shares of the Evergreen - VA Fund and 100,000 shares of the
Evergreen - VA Growth and Income Fund, for which the Account was
credited with 100,000 units of each of the foregoing Evergreen Funds.
These amounts represent the initial funding of the Account. The value
of the units purchased by the Company on February 28, 1996 was
$3,000,000.
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:
Funds of the Evergreen Variable Trust (Evergreen);
Evergreen - VA Foundation Fund (EvFound)
Evergreen - VA Fund (EvFund)
Evergreen - VA Growth and Income Fund (EvGrInc)
Portfolios of the Fidelity Variable Insurance Products Fund
(Fidelity VIP);
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)
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)
At December 31, 1996, 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.
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(c) Security Valuation, Transactions and Related Investment Income
The market value of the underlying mutual funds is based on the closing
net asset value per share at December 31, 1996. The cost of investments
sold is determined on the specific identification basis. Investment
transactions are accounted for on the trade date (date the order to buy
or sell is executed) and dividend income is recorded on the ex-dividend
date.
(d) Federal Income Taxes
Operations of the Account form a part of, and are taxed with,
operations of the Company which is taxed as a life insurance company
under the Internal Revenue Code.
The Company does not provide for income taxes within the Account. Taxes
are the responsibility of the contract owner upon termination or
withdrawal.
(e) Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally
accepted accounting principles may require management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities, if
any, at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
(2) Expenses
The Company does not deduct a sales charge from purchase payments 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 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 0.15%, respectively. No charges are deducted from the initial
funding by the Depositor, or from earnings thereon.
(3) Schedule I
Schedule I presents the components of the change in the unit values, which
are the basis for contract owners' equity. This schedule is presented in
the following format:
o Beginning unit value - Feb. 28
o Reinvested capital gains and dividends
(This amount reflects the increase in the unit value due to capital
gains and dividend distributions from the underlying mutual funds.)
o Unrealized gain (loss)
(This amount reflects the increase (decrease) in the unit value
resulting from the market appreciation (depreciation) of the underlying
mutual funds.)
o Contract charges
(This amount reflects the decrease in the unit value due to the
mortality risk charge, expense risk charge and administration charge
discussed in note 2.)
o Ending unit value - Dec. 31
o Percentage increase (decrease) in unit value.
For contracts in the payout phase, an assumed investment return of 3.5%, used
in the calculation of the annuity benefit payment amount, results in a
corresponding reduction in the components of the unit values as shown in
Schedule I.
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Schedule I
NATIONWIDE VARIABLE ACCOUNT-6
TAX QUALIFIED AND NON-TAX QUALIFIED
SCHEDULE OF CHANGES IN UNIT VALUE
For the Period February 28, 1996 (commencement of operations) Through
December 31, 1996
<TABLE>
<CAPTION>
EvFound EvFund EvGrInc FidVIPHI FidVIPOv FidVIPAM
1996 ------- -------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Beginning unit value - Feb. 28 $10.000000 10.000000 10.000000 10.000000 10.000000 10.000000
- ------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .217465 .075124 .068205 .000000 .000000 .000000
- ------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) 1.295980 1.400058 1.817329 .937105 1.016294 1.225132
- ------------------------------------------------------------------------------------------------------------
Contract charges (.120160) (.123285) (.125672) (.120837) (.121024) (.122063)
- ------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $11.393285 11.351897 11.759862 10.816268 10.895270 11.103069
- ------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 14% 14% 18% 8% 9% 11%
============================================================================================================
</TABLE>
* This is not an annualized rate of return as it is the change for the period
indicated.
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Schedule I, continued
NATIONWIDE VARIABLE ACCOUNT-6
TAX QUALIFIED AND NON-TAX QUALIFIED
SCHEDULE OF CHANGES IN UNIT VALUE
For the Period February 28, 1996 (commencement of operations) Through
December 31, 1996
<TABLE>
<CAPTION>
NSATGvtBd NSATMyMkt EvFound+ EvFund+ EvGrInc+
1996 --------- --------- -------- ------- --------
<S> <C> <C> <C> <C> <C>
Beginning unit value - Feb. 28 $10.000000 10.000000 10.000000 10.000000 10.000000
- -----------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .625330 .421075 .220000 .076000 .069000
- -----------------------------------------------------------------------------------------------------
Unrealized gain (loss) (.189759) .000000 1.307881 1.410000 1.829767
- -----------------------------------------------------------------------------------------------------
Contract charges (.116882) (.119508) .000000 .000000 .000000
- -----------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $10.318689 10.301567 11.527881 11.486000 11.898767
- -----------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 3% 3% 15% 15% 19%
=====================================================================================================
</TABLE>
* This is not an annualized rate of return as it is the change for the period
indicated.
+ For Depositor, see note 1a.
See note 3.
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Independent Auditors' Report
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The Board of Directors of Nationwide Life Insurance Company and
Contract Owners of Nationwide Variable Account-6:
We have audited the accompanying statement of assets, liabilities and
contract owners' equity of Nationwide Variable Account-6 as of December 31,
1996, and the related statement of operations and changes in contract owners'
equity and schedule of changes in unit value for the period February 28, 1996
(commencement of operations) through December 31, 1996. These financial
statements and schedule of changes in unit value are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and schedule of changes in unit value based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and schedule of
changes in unit value are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of December 31, 1996, by correspondence with the transfer agents of the
underlying mutual funds. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and schedule of changes in unit
value referred to above present fairly, in all material respects, the financial
position of Nationwide Variable Account-6 as of December 31, 1996, and the
results of its operations and its changes in contract owners' equity and the
schedule of changes in unit value for the period February 28, 1996 (commencement
of operations) through December 31, 1996, in conformity with generally accepted
accounting principles.
KPMG Peat Marwick LLP
Columbus, Ohio
February 7, 1997
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NATIONWIDE LIFE INSURANCE COMPANY
HOME OFFICE: ONE NATIONWIDE PLAZA - COLUMBUS, OHIO 43215-2220
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