<PAGE> 1
[LOGO]
NATIONWIDE(R)
VARIABLE
ACCOUNT-6
SEMI-ANNUAL REPORT
TO
CONTRACT OWNERS
JUNE 30, 1997
NATIONWIDE LIFE INSURANCE COMPANY
HOME OFFICE: COLUMBUS, OHIO
<PAGE> 2
[LOGO]
NATIONWIDE LIFE INSURANCE COMPANY
ONE NATIONWIDE PLAZA, COLUMBUS, OHIO 43215-2220
PRESIDENT'S MESSAGE
We are pleased to present the 1997 semi-annual report of the Nationwide Variable
Account-6.
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.
Joseph J. Gasper, President
3
<PAGE> 3
NATIONWIDE VARIABLE ACCOUNT-6
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments at market value:
Evergreen - VA Aggressive Growth Fund (EvAggrGro)
110,249 shares (cost $1,097,776) .......................... $ 1,132,257
Evergreen - VA Foundation Fund (EvFound)
1,491,972 shares (cost $15,515,022) ....................... 19,112,166
Evergreen - VA Fund (EvFund)
832,483 shares (cost $8,945,716) .......................... 11,188,575
Evergreen - VA Global Leaders Fund (EvGloLead)
119,944 shares (cost $1,206,623) .......................... 1,321,781
Evergreen - VA Growth and Income Fund (EvGrInc)
1,252,572 shares (cost $13,857,425) ....................... 17,285,492
Evergreen - VA Strategic Income Fund (EvStratInc)
111,510 shares (cost $1,115,544) .......................... 1,128,482
Fidelity VIP - High Income Portfolio (FidVIPHI)
133,460 shares (cost $1,590,089) .......................... 1,658,909
Fidelity VIP - Overseas Portfolio (FidVIPOv)
114,267 shares (cost $2,055,473) .......................... 2,289,920
Fidelity VIP-II - Asset Manager Portfolio (FidVIPAM)
102,339 shares (cost $1,603,534) .......................... 1,698,825
Fidelity VIP-II - Contrafund Portfolio (FidVIPCon)
29,496 shares (cost $495,704) ............................. 528,868
Fidelity VIP-III - Growth Opportunities Portfolio (FidVIPGrOp)
47,903 shares (cost $755,353) ............................. 820,097
Nationwide SAT - Government Bond Fund (NSATGvtBd)
20,662 shares (cost $225,695) ............................. 227,281
Nationwide SAT - Money Market Fund (NSATMyMkt)
2,074,920 shares (cost $2,074,920) ........................ 2,074,920
-----------
Total investments ...................................... 60,467,573
Accounts receivable ............................................. --
-----------
Total assets ........................................... 60,467,573
ACCOUNTS PAYABLE ................................................... 31,033
-----------
CONTRACT OWNERS' EQUITY ............................................ $60,436,540
===========
</TABLE>
4
<PAGE> 4
<TABLE>
<CAPTION>
Contract owners' equity represented by: UNITS UNIT VALUE
----- ----------
<S> <C> <C> <C>
Contracts in accumulation phase:
Evergreen Contracts:
Evergreen - VA Aggressive Growth Fund:
Tax qualified ................................. 4,533 $ 10.22288$ $ 46,340
Non-tax qualified ............................. 5,758 10.22288 58,863
Initial Funding by Depositor .................. 100,000 10.27000 1,027,000
Evergreen - VA Foundation Fund:
Tax qualified ................................. 351,570 12.81450 4,505,196
Non-tax qualified ............................. 1,037,362 12.81450 13,293,283
Initial Funding by Depositor .................. 100,000 13.05677 1,305,678
Evergreen - VA Fund:
Tax qualified ................................. 164,890 13.27852 2,189,496
Non-tax qualified ............................. 575,503 13.27852 7,641,831
Initial Funding by Depositor .................. 100,000 13.52952 1,352,952
Evergreen - VA Global Leaders Fund:
Tax qualified ................................. 7,784 10.96950 85,387
Non-tax qualified ............................. 12,248 10.96950 134,354
Initial Funding by Depositor .................. 100,000 11.02000 1,102,000
Evergreen - VA Growth and Income Fund:
Tax qualified ................................. 281,163 13.62268 3,830,196
Non-tax qualified ............................. 885,320 13.62268 12,060,437
Initial Funding by Depositor .................. 100,000 13.88021 1,388,022
Evergreen - VA Strategic Income Fund:
Tax qualified ................................. 3,517 10.07359 35,429
Non-tax qualified ............................. 8,042 10.07359 81,012
Initial Funding by Depositor .................. 100,000 10.12000 1,012,000
Fidelity VIP - High Income Portfolio:
Tax qualified ................................. 29,612 11.56820 342,558
Non-tax qualified ............................. 113,729 11.56820 1,315,641
Fidelity VIP - Overseas Portfolio:
Tax qualified ................................. 30,221 12.59765 380,714
Non-tax qualified ............................. 151,477 12.59765 1,908,254
Fidelity VIP-II - Asset Manager Portfolio:
Tax qualified ................................. 35,323 12.26118 433,102
Non-tax qualified ............................. 103,167 12.26118 1,264,949
Fidelity VIP-II - Contrafund Portfolio:
Tax qualified ................................. 6,009 10.72398 64,440
Non-tax qualified ............................. 43,297 10.72398 464,316
Fidelity VIP-III - Growth Opportunities Portfolio:
Tax qualified ................................. 6,448 10.91280 70,366
Non-tax qualified ............................. 68,688 10.91280 749,579
Nationwide SAT - Government Bond Fund:
Tax qualified ................................. 8,706 10.53758 91,740
Non-tax qualified ............................. 12,852 10.53758 135,429
Nationwide SAT - Money Market Fund:
Tax qualified ................................. 113,231 10.48974 1,187,764
Non-tax qualified ............................. 83,721 10.48974 878,212
========= ========= -----------
$60,436,540
===========
</TABLE>
See accompanying notes to financial statements.
5
<PAGE> 5
NATIONWIDE VARIABLE ACCOUNT-6
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIOD ENDED JUNE 30, 1997 AND FOR THE
PERIOD FEBRUARY 28, 1996 (COMMENCEMENT OF
OPERATIONS) THROUGH JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
TOTAL EVAGGRGRO
------------------------------ ---------------------------
1997 1996 1997 1996
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................. $ 196,240 12,970 - -
Mortality, expense and administration
charges (note 2)..................... (274,614) (53,396) (339) -
-------------- -------------- -------------- --------------
Net investment activity.............. (78,374) (40,426) (339) -
-------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold.. 2,106,726 1,229,684 32,605 -
Cost of mutual fund shares sold........ (1,999,173) (1,185,225) (32,643) -
-------------- -------------- -------------- --------------
Realized gain (loss) on investments.. 107,553 44,459 (38) -
Change in unrealized gain (loss)
on investments....................... 6,296,866 677,509 34,481 -
-------------- -------------- -------------- --------------
Net gain (loss) on investments....... 6,404,419 721,968 34,443 -
-------------- -------------- -------------- --------------
Reinvested capital gains............... 224,096 - - -
-------------- -------------- -------------- --------------
Net increase (decrease) in
contract owners' equity
resulting from operations........ 6,550,141 681,542 34,104 -
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds 17,238,573 23,383,369 1,098,126 -
Redemptions............................ (520,967) (64,055) - -
Annuity benefits....................... - - - -
Annual contract maintenance charge (note 2) - - - -
Contingent deferred sales charges (note 2) (10,993) (1,472) - -
Adjustments to maintain reserves....... (23,144) (3,603) (27) -
-------------- -------------- -------------- --------------
Net equity transactions............ 16,683,469 23,314,239 1,098,099 -
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY.... 23,233,610 23,995,781 1,132,203 -
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD 37,202,930 - - -
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD.... $ 60,436,540 23,995,781 1,132,203 -
============== ============== ============== ==============
<CAPTION>
EVFOUND EVFUND
------------------------------ ------------------------------
1997 1996 1997 1996
------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................. - - - -
Mortality, expense and administration
charges (note 2)..................... (97,328) (22,107) (51,376) (10,908)
------------- -------------- -------------- --------------
Net investment activity.............. (97,328) (22,107) (51,376) (10,908)
------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold.. 186,986 256,210 179,388 504,096
Cost of mutual fund shares sold........ (151,304) (248,803) (141,186) (476,050)
------------- -------------- -------------- --------------
Realized gain (loss) on investments.. 35,682 7,407 38,202 28,046
Change in unrealized gain (loss)
on investments....................... 2,067,982 194,424 1,535,132 211,061
------------- -------------- -------------- --------------
Net gain (loss) on investments....... 2,103,664 201,831 1,573,334 239,107
------------- -------------- -------------- --------------
Reinvested capital gains............... - - - -
------------- -------------- -------------- --------------
Net increase (decrease) in
contract owners' equity resulting
from operations.................. 2,006,336 179,724 1,521,958 228,199
------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds 3,257,621 9,210,367 2,427,920 4,947,952
Redemptions............................ (141,324) (31,808) (44,760) (5,569)
Annuity benefits....................... - - - -
Annual contract maintenance charge (note 2) - - - -
Contingent deferred sales charges (note 2) (3,437) (1,280) (300) (3)
Adjustments to maintain reserves....... (8,253) (1,486) (4,465) (803)
------------- -------------- -------------- --------------
Net equity transactions............ 3,104,607 9,175,793 2,378,395 4,941,577
------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY.... 5,110,943 9,355,517 3,900,353 5,169,776
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD 13,993,214 - 7,283,926 -
------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD.... 19,104,157 9,355,517 11,184,279 5,169,776
============= ============== ============== ==============
</TABLE>
6
<PAGE> 6
NATIONWIDE VARIABLE ACCOUNT-6
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIOD ENDED JUNE 30, 1997 AND FOR THE
PERIOD FEBRUARY 28, 1996 (COMMENCEMENT OF
OPERATIONS) THROUGH JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
EVGLOLEAD EVGRINC
------------------------------ ------------------------------
1997 1996 1997 1996
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................. $ - - - -
Mortality, expense and administration
charges (note 2)..................... (420) - (80,877) (13,600)
-------------- -------------- -------------- --------------
Net investment activity.............. (420) - (80,877) (13,600)
-------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold.. 501 - 139,869 189,340
Cost of mutual fund shares sold........ (493) - (116,468) (182,672)
-------------- -------------- -------------- --------------
Realized gain (loss) on investments.. 8 - 23,401 6,668
Change in unrealized gain (loss)
on investments....................... 115,158 - 2,261,545 235,214
-------------- -------------- -------------- --------------
Net gain (loss) on investments....... 115,166 - 2,284,946 241,882
-------------- -------------- -------------- --------------
Reinvested capital gains............... - - - -
-------------- -------------- -------------- --------------
Net increase (decrease) in
contract owners' equity resulting
from operations.................. 114,746 - 2,204,069 228,282
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds 1,207,064 - 4,339,088 6,214,874
Redemptions............................ (30) - (116,185) (9,689)
Annuity benefits....................... - - - -
Annual contract maintenance charge (note 2) - - - -
Contingent deferred sales charges (note 2) - - (3,299) (3)
Adjustments to maintain reserves....... (39) - (6,982) (1,031)
-------------- -------------- -------------- --------------
Net equity transactions............ 1,206,995 - 4,212,622 6,204,151
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY.... 1,321,741 - 6,416,691 6,432,433
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD - - 10,861,964 -
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD.... $ 1,321,741 - 17,278,655 6,432,433
============== ============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
EVSTRATINC FIDVIPHI
--------------------------- -------------------------------
1997 1996 1997 1996
------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................. - - 81,089 -
Mortality, expense and administration
charges (note 2)..................... (329) - (8,805) (1,190)
------------- -------------- -------------- --------------
Net investment activity.............. (329) - 72,284 (1,190)
------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold.. 232 - 85,878 1,050
Cost of mutual fund shares sold........ (230) - (81,279) (1,023)
------------- -------------- -------------- --------------
Realized gain (loss) on investments.. 2 - 4,599 27
Change in unrealized gain (loss)
on investments....................... 12,939 - 12,882 12,496
------------- -------------- -------------- --------------
Net gain (loss) on investments....... 12,941 - 17,481 12,523
------------- -------------- -------------- --------------
Reinvested capital gains............... - - 10,022 -
------------- -------------- -------------- --------------
Net increase (decrease) in
contract owners' equity resulting
from operations.................. 12,612 - 99,787 11,333
------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds 1,115,859 - 457,969 513,357
Redemptions............................ - - (21,463) (873)
Annuity benefits....................... - - - -
Annual contract maintenance charge (note 2) - - - -
Contingent deferred sales charges (note 2) - - (951) (3)
Adjustments to maintain reserves....... (30) - (715) (94)
------------- -------------- -------------- --------------
Net equity transactions............ 1,115,829 - 434,840 512,387
------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY.... 1,128,441 - 534,627 523,720
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD - - 1,123,572 -
------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD.... 1,128,441 - 1,658,199 523,720
============= ============== ============== ==============
</TABLE>
<PAGE> 7
<TABLE>
<CAPTION>
NATIONWIDE VARIABLE ACCOUNT-6
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIOD ENDED JUNE 30, 1997 AND FOR THE
PERIOD FEBRUARY 28, 1996 (COMMENCEMENT OF
OPERATIONS) THROUGH JUNE 30, 1996
(UNAUDITED)
FIDVIPOV FIDVIPAM
----------------------------- -----------------------------
1997 1996 1997 1996
------------- -------------- -------------- --------------
INVESTMENT ACTIVITY:
<S> <C> <C> <C> <C>
Reinvested dividends .................. $ 25,789 - 44,528 -
Mortality, expense and administration
charges (note 2)..................... (11,217) (1,406) (9,452) (1,440)
------------- -------------- -------------- --------------
Net investment activity.............. 14,572 (1,406) 35,076 (1,440)
------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold.. 76,858 43,600 80,703 735
Cost of mutual fund sharessold........ (74,389) (41,292) (78,911) (715)
------------- -------------- -------------- --------------
Realized gain (loss) on investments.. 2,469 2,308 1,792 20
Change in unrealized gain (loss)
on investments....................... 159,741 11,123 450 14,175
------------- -------------- -------------- --------------
Net gain (loss) on investments....... 162,210 13,431 2,242 14,195
------------- -------------- -------------- --------------
Reinvested capital gains............... 102,376 - 111,698 -
------------- -------------- -------------- --------------
Net increase (decrease) in
contract owners' equity resulting
from operations.................. 279,158 12,025 149,016 12,755
------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds 712,029 802,927 364,995 630,922
Redemptions............................ (28,913) (207) (33,227) -
Annuity benefits....................... - - - -
Annual contract maintenance charge (note 2) - - - -
Contingent deferred sales charges (note 2) (1,148) - (1,793) -
Adjustments to maintain reserves....... (935) (96) (790) (25)
------------- -------------- -------------- --------------
Net equity transactions............ 681,033 802,624 329,185 630,897
------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY.... 960,191 814,649 478,201 643,652
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD 1,328,777 - 1,219,850 -
------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD.... $ 2,288,968 814,649 1,698,051 643,652
============= ============== ============== ==============
<CAPTION>
FIDVIPCON FIDVIPGROP
--------------------------- -------------------------------
1997 1996 1997 1996
------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................. - - - -
Mortality, expense and administration
charges (note 2)..................... (1,338) - (1,885) -
------------- -------------- -------------- --------------
Net investment activity.............. (1,338) - (1,885) -
------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold.. 33,866 - 1,079 -
Cost of mutual fund sharessold........ (33,044) - (1,041) -
------------- -------------- -------------- --------------
Realized gain (loss) on investments.. 822 - 38 -
Change in unrealized gain (loss)
on investments....................... 33,164 - 64,744 -
------------- -------------- -------------- --------------
Net gain (loss) on investments....... 33,986 - 64,782 -
------------- -------------- -------------- --------------
Reinvested capital gains............... - - - -
------------- -------------- -------------- --------------
Net increase (decrease) in
contract owners' equity resulting
from operations.................. 32,648 - 62,897 -
------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds 502,847 - 757,249 -
Redemptions............................ (6,627) - (48) -
Annuity benefits....................... - - - -
Annual contract maintenance charge (note 2) - - - -
Contingent deferred sales charges (note 2) - - - -
Adjustments to maintain reserves....... (112) - (153) -
------------- -------------- -------------- --------------
Net equity transactions............ 496,108 - 757,048 -
------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY.... 528,756 - 819,945 -
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD - - - -
------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD.... 528,756 - 819,945 -
============= ============== ============== ==============
</TABLE>
8
<PAGE> 8
<TABLE>
<CAPTION>
NATIONWIDE VARIABLE ACCOUNT-6
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIOD ENDED JUNE 30, 1997 AND FOR THE
PERIOD FEBRUARY 28, 1996 (COMMENCEMENT OF
OPERATIONS) THROUGH JUNE 30, 1996
(UNAUDITED)
NSATGVTBD NSATMYMKT
------------------------------ -------------------------------
1997 1996 1997 1996
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................. $ 6,859 4,298 37,975 8,672
Mortality, expense and administration
charges (note 2)..................... (1,371) (475) (9,877) (2,270)
-------------- -------------- -------------- --------------
Net investment activity.............. 5,488 3,823 28,098 6,402
-------------- -------------- -------------- --------------
Proceeds from mutual fund shares sold.. 54,578 820 1,234,183 233,833
Cost of mutual fund shares sold........ (54,002) (837) (1,234,183) (233,833)
-------------- -------------- -------------- --------------
Realized gain (loss) on investments.. 576 (17) - -
Change in unrealized gain (loss)
on investments....................... (1,352) (984) - -
-------------- -------------- -------------- --------------
Net gain (loss) on investments....... (776) (1,001) - -
-------------- -------------- -------------- --------------
Reinvested capital gains............... - - - -
-------------- -------------- -------------- --------------
Net increase (decrease) in
contract owners' equity resulting
from operations.................. 4,712 2,822 28,098 6,402
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds 9,427 198,727 988,379 864,243
Redemptions............................ (3,207) (577) (125,183) (15,332)
Annuity benefits....................... - - - -
Annual contract maintenance charge (note 2) - - - -
Contingent deferred sales charges (note 2) (65) - - (183)
Adjustments to maintain reserves....... (112) 17 (531) (85)
-------------- -------------- -------------- --------------
Net equity transactions............ 6,043 198,167 862,665 848,643
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT OWNERS' EQUITY.... 10,755 200,989 890,763 855,045
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD 216,414 - 1,175,213 -
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END OF PERIOD.... $ 227,169 200,989 2,065,976 855,045
============== ============== ============== ==============
See accompanying notes to financial statements.
</TABLE>
9
<PAGE> 9
NATIONWIDE VARIABLE ACCOUNT-6
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-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.
On March 3, 1997, the Company (Depositor) transferred to the Account,
100,000 shares of the Evergreen - VA Aggressive Growth Fund, 100,000
shares of the Evergreen - VA Global Leaders Fund and 100,000 shares of
the Evergreen - VA Strategic Income Fund, for which the Account was
credited with 100,000 units of each of the foregoing Evergreen Funds.
The value of the units purchased by the Company on March 3, 1997 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
Aggressive Growth Fund (EvAggrGro) Evergreen - VA Foundation
Fund (EvFound) Evergreen - VA Fund (EvFund) Evergreen - VA
Global Leaders Fund (EvGloLead) Evergreen - VA Growth and Income
Fund (EvGrInc) Evergreen - VA Strategic Income Fund (EvStratInc)
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)
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)
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 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.
10
<PAGE> 10
(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 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.
(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 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.
11
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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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